Print   



London Town plc

('London Town' or 'the Company')

Interim Results for the six months ended 28 June 2009

The Board of London Town announces the results of the Company for the six months ended 28 June 2009 and confirms that its Interim Results are available on its website, at www.londontownplc.co.uk. 

Enquiries: 

Nicholas Wells/Max Hartley 

Cenkos Securities plc                         0207 397 8900

Business Review

Principal activities

The principal activities of London Town plc ('the Company') and its subsidiaries ('the Group') comprise the operation of pubs either under lease and tenancy agreements or through the direct management of pubs, principally on a temporary basis, as well as the direct management of certain freehold and leasehold pubs owned by the Group.  The Group's agreements with tenants in the leased estate comprise both tied and free of tie arrangements and generate income from rents, sales of beer and other drinks, and through profit share arrangements for income from leisure machines.  The direct management of pubs for other pub owners generates income from a number of different management fees and profit shares. The entitlement to revenues and the responsibility for costs varies by agreement. The direct management of the Group's own freehold and leasehold pubs generates income directly from beer and other drink sales as well as food sales. The Group receives all revenues generated by the pubs and is responsible for costs. At 28 June 2009 the Group operated 407 pubs of which 157 were leased pubs, 241 were managed pubs and a further 9 were held for sale.

Results for the six months ended 28 June 2009

The consolidated income statement for the six months ended 28 June 2009 is set out below. Revenues amounted to £13.6 million (2008 - £13.4 million), this is relatively unchanged on the previous year but reflects a change in mix of pub numbers that is now more weighted towards the managed division. EBITDA1 amounted to £1.7 million (2008 - £0.7 million) showing an improving trend on the prior year. After net finance costs of £4.0 million, the loss for the period is £2.6 million (2008 - Loss of £5.2 million).

The Group balance sheet at 28 June 2009 showed net liabilities of £13.2 million as a result of accumulated losses to date in excess of total equity. The Directors are engaged in discussions with both lenders and shareholders and exploring all options with a view to securing the long term financing of the business.

Adjusted EBITDA for the period to 28 June 2009 comprises the following:  

            

			Unaudited		Unaudited		Audited
		Six months to		Six months to			Period to
		28 June			30 June	28  December
			2009		2008		2008
			£'000		£'000		£'000
Revenue
Leased pubs			4,787		5,277		10,058
Managed pubs			8,773		8,083		15,884
Total revenue			13,560		13,360		25,942
Gross profit
Leased pubs			2,933		3,120		6,299
Managed pubs			5,355		4,431		8,841
Total gross profit			8,288		7,551		15,140
Adjusted operating expenses2
Leased pubs			591		1,008		2,411
Managed pubs			5,454		4,436		9,315
Unallocated costs			549		1,435		1,900
Total adjusted operating expenses2			6,594		6,879		13,626
Adjusted EBITDA1
Leased pubs			2,342		2,112		3,888
Managed pubs			(99)		(5)		(474)
Unallocated costs			(549)		(1,435)		(1,900)
Total adjusted EBITDA1			1,694		672		1,514

            

• Adjusted earnings before interest, tax, depreciation and amortisation and provisions for impairment and onerous leases, losses on disposal of properties held for sale and share based payment expense('Adjusted EBITDA')

2.     Adjusted operating expenses excluding depreciation and amortisation and provisions for impairment and
       onerous leases, losses on disposal of properties held for sale and share based payment expenses ('Adjusted
       operating expenses')

Adjusted EBITDA for the leased pubs at £2.3m (2008: £2.1m) reflects a reduction in operating expenses principally as a result of the transition to in-house management of this division, reduced closed pub costs and lower bad debt provision. Rents at £1.7m (2008: £1.7m) are unchanged on the prior year. Wet income at £2.9m (2008: £3.4m) was down 14% reflecting reduced number of pubs as well as a general industry decline in wet sales. During the period 18 pubs have moved across to the managed division which has avoided the immediate closure of these pubs. 

Adjusted EBITDA for the managed pubs at a loss of £99,000 (2008: £5,000) reflects continuing difficult trading conditions generally across the sector as well as the inclusion of certain loss-making units where the Group is the lessee or tenant. A number of these agreements have been assigned during the course of the year and others have been terminated at the end of the lease or tenancy. The Group will continue to review all options with regard to these units. This division also includes an increasing number of pubs managed for other pub owners with income derived from a number of different arrangements including management fees and profit shares. In the period since 28 December 2008 a further 120 managed pubs have joined this division of which 102 pubs were under management for other pub owners. The growth of this third party business is expected to continue.

Pub assets

Pub numbers:

The movements in pub numbers are as follows:

	Leased	Managed	Held for sale	Total
At 28 December 2008	176	124	14	314
Additions	-	102	-	102
Transfers	-	(3)	(6)	(9)
Disposals	(19)	18	1	-
At 28 June 2009	157	241	9	407

            

Geographic location:

The regional distribution of the pubs at 28 June 2009 was as follows:

Location	Leased Estate	Managed Estate	Properties held for sale	Total	Percentage
Scotland	1	11	-	12	3%
North East	2	15	-	17	4%
North West	56	33	5	94	23%
York/Humber	17	60	1	78	19%
East Midlands	2	15	-	17	4%
West Midlands	31	23	2	56	13%
Wales	4	6	-	10	3%
East of England	3	38	1	42	11%
South East	11	22	-	33	8%
South West	30	15	-	45	11%
London	0	3	-	3	1%
Total	157	241	9	407	100%

Financing 

The Group's pub assets are financed by a combination of bank debt, deep discount bonds, short term loans and shareholders' equity.

Bank debt at 28 June 2009 amounted to £82.2 million (2008 - £85.6 million). At 28 June 2009, 100% (2008 - 99%) of the interest rate risk of this debt was hedged with derivative financial instruments.

The deep discount bonds amounted to £17.9 million at 28 June 2009 (2008 - £ 16.3 million). The discount rate is 10% per annum which is accrued in the consolidated income statement and not paid until the bond is redeemed. The Group has the option to redeem these bonds with discount accrued to date at any time and without penalty. The bonds are held by the three principal shareholders of the Group. 

The Directors are engaged in ongoing discussions relating to the terms and covenants on the Group's bank loans. Further details relating to this are included in notes 1 and 7.

Board and senior management

The following board changes have taken place:

On 18 February 2009 Richard Gundry resigned as Development director of the Group.

On 30 July 2009 Kailayapillai Ranjan resigned as a Non-executive director of the Group.

Principal risks and uncertainties

Going concern

During 2008 and 2009 the covenants on the Group's bank loans were breached and have therefore been reclassified as current, despite their scheduled repayment date being September 2011. The Directors' expectations are that negotiations with the bank will be satisfactorily concluded and the facility will be continued. The Group financial statements have been prepared on a going concern basis to reflect this. 

Economic climate

The current economic recession continues to impact consumers ability to spend money on leisure activities generally including visiting pubs. However there are many other factors involved in the ability of individual pubs to attract customers and the Group continues to work with its managers and tenants to enhance each pubs trading potential.

Recruitment and retention of managers, lessees and tenants

The recruitment and retention of managers, lessees and tenants continues to be a principal focus of the Group's management team since this is a key driver for the overall quality and profitability of the business. The market for good managers, lessees and tenants is a competitive one and the Group continues to work closely with current and prospective managers, lessees and tenants to ensure that the Group offers the right physical and business environment for all parties to prosper.  

Interest rate risk 

The Group borrows at a floating rate of interest at a margin above LIBOR and uses derivative financial instruments principally comprising interest rate caps and swaps for 100% (2008 - 99%) of its outstanding borrowing to limit the Group's exposure to increasing interest rates.

Current trading and outlook

The Group continues to trade in line with the Board's expectations in what remains a challenging market place for the pub industry. Since the 28 June 2009 the number of pubs under management for other pub owners has continued to grow.  

The Group will continue to focus on the growth of its managed pubs division as well as continuing to review further opportunities for business growth possibly through selective acquisitions where appropriate.

The Group will also benefit from a significantly lower and fixed interest cost on its bank debt as a result of recent interest rate swap agreements.

Approved by the Board on 25 September 2009.

  CONSOLIDATED INCOME STATEMENT

For the six months ended 28 June 2009

			Unaudited		Unaudited		Audited
		Six months to		Six months to			Period to
		28 June			30 June	28  December
	Notes		2009		2008		2008
			£'000		£'000		£'000
Revenue	2		13,560		13,360		25,942
Cost of sales			(5,272)		(5,809)		(10,802)
Gross profit			8,288		7,551		15,140
Operating expenses			(6,958)		(9,569)		(29,750)
Operating profit/(loss)			1,330		(2,018)		(14,610)
Finance income	3		6		1,276		64
Finance expense	3		(3,983)		(4,417)		(10,352)
Loss before tax			(2,647)		(5,159)		(24,898)
Tax credit			-		-		230
Loss for the period attributable to
Equity holders of the parent company			(2,647)		(5,159)		(24,668)
Loss per share:
Basic and diluted	4		(9.01p)		(17.55p)		(83.96p)

There are no other items of recognised income and expense other than those shown in the income statement.

   

CONSOLIDATED BALANCE SHEET

At 28 June 2009

Consolidated balance sheet			Unaudited		Unaudited		Audited
			28 June		30 June	28 December
	Notes		2009		2008		2008
Assets			£'000		£'000		£'000
Non-current assets
Property, plant and equipment	5		93,655		103,500		94,304
Goodwill			2,928		3,228		2,928
Intangible assets			1,450		2,309		1,577
Derivative financial assets			148		1,536		126
			98,181		110,573		98,935
Current assets
Inventories			437		382		425
Trade and other receivables			2,176		1,872		1,556
Cash and cash equivalents			2,210		1,074		5,011
			4,823		3,328		6,992
Non-current assets classified as held for sale	6		3,213		8,736		3,185
Total assets			106,217		122,637		109,112
Liabilities
Current liabilities
Trade and other payables			6,211		5.046		6,769
Corporation tax payable			-		14		-
Loans and borrowings	7		93,055		5,569		93,957
Provisions			541		62		545
			99,807		10,691		101,271
Non-current liabilities
Derivative financial liabilities			1,641		-		1,258
Loans and borrowings	7		17,866		101,826		17,033
Deferred tax liabilities			143		373		143
			19,650		102,199		18,434
Total liabilities			119,457		112,890		119,705
Total net (liabilities)/assets			(13,240)		9,747		(10,593)

Equity
Called up share capital			1,469		1,469		1,469
Share premium reserve			22,505		22,505		22,505
Merger reserve			2,282		2,282		2,282
Shares to be issued			-		875		-
Retained earnings			(39,496)		(17,384)		(36,849)
Total equity attributable to equity holders
of the parent company			(13,240)		9,747		(10,593)

CONSOLIDATED CASH FLOW

For the six months ended 28 June 2009

			Unaudited			Unaudited			Audited
		Six months to Six months to			Six months to				Period to
				28 June			30 June	28 December
				2009			2008		2008
				£'000			£'000		£'000
Operating activities
Loss for the period				(2,647)			(5,159)		(24,668)
Provision for loss on disposal of properties
held for sale				-			2,458		1,469
Impairment of property, plant and equipment				-			-		12,672
Depreciation and amortisation				425			307		918
(Profit)/loss on disposal of property, plant and
equipment				(61)			(75)		704
Taxation				-			-		(230)
Finance income				(6)			(1,276)		(64)
Finance expense				3,983			4,417		10,352
Share based payment charge				-			-		43
Provision for onerous leases				-			-		318
Cash inflow before changes in working capital				1,694			672		1,514
(Increase)/decrease in trade and other receivables				(274)			(253)		177
(Decrease)/increase in trade and other payables				(377)			(621)		988
(Increase)/decrease  in inventories				(12)			192		149
Cash inflow/(outflow) from operating activities				1,031			(10)		2,828
Investing activities
Purchase of property, plant and equipment				(709)			(607)		(1,266)
Purchase of intangible assets: operating leases				-			(22)		-
Proceeds from sale of property, plant and
equipment				- -			73		68
Proceeds from sale of non current assets
classified as held for sale				1,171			2,368		4,739
Cash inflow from investing activities				462			1,812		3,541
Financing activities
Proceeds from short term loan				-			2,500		7,500
Repayment of bank borrowings				(1,641)			(2,360)		(4,785)
Interest paid				(2,659)			(3,387)		(6,626)
Interest received				6			30		64
Cash (outflow)/ inflow from financing activities				(4,294)			(3,217)		(3,847)
Decrease)/increase in cash and cash
equivalents				(2,801)			(1,415)		2,522
Cash and cash equivalents at beginning of period				5,011			2,489		2,489
Cash and cash equivalents at end of period				2,210			1,074		5,011
Cash and cash equivalents comprise:
Cash at bank and in hand				2,210			1,074		5,011
Bank overdrafts				-			-		-
Cash and cash equivalents at end of period				2,210			1,074		5,011

NOTES TO THE FINANCIAL STATEMENTS 

For the six months ended 28 June 2009

1    Accounting policies

Basis of preparation

These interim financial statements have been prepared using, on a consistent basis, the accounting policies set out in the Group's Annual Report and Financial Statements for the period ended 28 December 2008, and which are expected to apply at 27 December 2009 which is consistent with International Financial Reporting Standards endorsed for use in the European Union and which are expected to apply here. These interim financial statements were authorised for issue by the Board of Directors on 25 September 2009.   

In the period ending 27 December 2009, the Group will be adopting IFRS 7 'Financial instruments: disclosures'. The impact of the new standard will be to expand the disclosures provided in the financial statements for the period ending 27 December 2009 regarding the Group's financial instruments.  

These interim financial statements are unaudited. The figures for the period ended 28 December 2008 have been extracted from the Annual Report and Financial Statements for the period ended 28 December 2008, which have been reported on by the Group's auditors and filed with the Registrar of Companies. The report of the auditors was unqualified but did include an emphasis of matter in relation to the going concern status of the Group because of its non-compliance with financial covenants on borrowings of £82.2m. The auditors noted that this resulted in the Group being reliant on its bankers for their continued support and that although the Directors expected to be able to renegotiate the bank facility on acceptable terms they had no agreement from the bank.  

The financial information in this document does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The interim financial statements have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.

Going concern 

The Group reported in its 28 December 2008 financial statements that its results have been such that the financial covenants relating to bank loans were breached during that year and this has continued in the period to 28 June 2009. As a result of the loan covenant breach, under the terms of the bank loan agreement the lender is entitled to seek repayment of the loan on demand and therefore the bank loans have been classified in the balance sheet as a current liability even though the loan would not otherwise be due for repayment until September 2011. The Group is in regular discussion with its bankers who, whilst not waiving their right or ability to seek a remedy for the breach of loan covenants, have expressed a willingness to enter into negotiations on the Group's banking facilities such that the loan covenants can be complied with in future periods.  

The details of the revised facilities have not yet been discussed with the bank and therefore the Group is currently reliant on the continued support of its bankers. It cannot be guaranteed that an acceptable agreement will be reached but the Directors are confident that a satisfactory agreement will be reached.  

The Directors have prepared financial projections for the Group using current expectations for trading and cash flows. The Directors have also considered the likelihood of the continued availability of loans from related parties (£10.87m which are due in July 2010) and are exploring all options with a view to securing the long term financing of the Group. On the basis of these projections and the expectation that bank facilities will continue to be available in the same amount, the directors have concluded that the Group is a going concern and will be able to meet its liabilities as they fall due for at least the next twelve months. Accordingly these interim financial statements have been prepared on a going concern basis. These conditions indicate the existence of a material uncertainty which may cast doubt about the Group's ability to continue as a going concern. The interim financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

2    Segment information

The Group operates in two business segments: leased pubs and managed pubs. There is only one geographic segment as all activities are conducted in the United Kingdom.

	Six months to 28 June 2009 (Unaudited)
	Leased	Managed	Unallocated	Total
	£'000	£'000	£'000	£'000
Revenue:
Rent	1,699	-	-	1,699
Sale of beer and other drinks	2,926	7,205	-	10,131
Sale of food	-	380	-	380
Income from accommodation	-	85	-	85
Income from leisure machines	150	228	-	378
Other income	12	875	-	887
Total revenue	4,787	8,773	-	13,560
Cost of sales	(1,854)	(3,418)	-	(5,272)
Gross profit	2,933	5,355	-	8,288
Operating expenses	(635)	(5,645)	(678)	(6,958)
Segment result	2,298	(290)	(678)	1,330
Finance income	-	-	6	6
Finance expense	-	-	(3,983)	(3,983)
Loss before taxation	2,298	(290)	(4,655)	(2,647)
Taxation	-	-	-	-
Loss for period	2,298	(290)	(4,655)	(2,647)
Assets and liabilities
Total assets	96,803	5,250	4,164	106,217
Total liabilities	(3,056)	(3,287)	(113,114)	(119,457)
Net assets/(liabilities)	93,747	1,963	(108,950)	(13,240)
Other information
Capital expenditure	514	113	82	709

	Six months to 28 June 2008 (Unaudited)
	Leased	Managed	Unallocated	Total
	£'000	£'000	£'000	£'000
Revenue:
Rent	1,696	-	-	1,696
Sale of beer and other drinks	3,412	7,234	-	10,646
Income from leisure machines	169	250	-	419
Food income	-	431	-	431
Accommodation income	-	168	-	168
Total revenue	5,277	8,083	-	13,360
Cost of sales	(2,157)	(3,652)	-	(5,809)
Gross profit	3,120	4,431	-	7,551
Operating expenses	(3,418)	(4,716)	(1,435)	(9,569)
Segment result	(298)	(285)	(1,435)	(2,018)
Finance income	-	-	1,276	1,276
Finance expense	-	-	(4,417)	(4,417)
Loss before taxation	(298)	(285)	(4,576)	(5,159)
Taxation	-	-	-	-
Loss for period	(298)	(285)	(4,576)	(5,159)
Assets and liabilities
Total assets	111,905	4,351	6,591	122,847
Total liabilities	(1,841)	(2,387)	(108,872)	(113,100)
Net assets	110,064	1,964	(102,281)	9,747
Other information
Capital expenditure	277	194	136	607

	Period to 28 December 2009 (Audited)
	Leased	Managed	Unallocated	Total
	£'000	£'000	£'000	£'000
Revenue:
Rent	3,335	-	-	3,335
Sale of beer and other drinks	6,352	14,049	-	20,401
Sale of food	-	836	-	836
Income from accommodation	-	267	-	267
Income from leisure machines	371	440	-	811
Other income	-	292	-	292
Total revenue	10,058	15,884	-	25,942
Cost of sales	(3,759)	(7,043)	-	(10,802)
Gross profit	6,299	8,841	-	15,140
Operating expenses	(17,605)	(10,153)	(1,992)	(29,750)
Segment result	(11,306)	(1,312)	(1,992)	(14,610)
Finance income	-	-	64	64
Finance expense	-	-	(10,352)	(10,352)
Loss before taxation	(11,306)	(1,312)	(12,280)	(24,898)
Taxation	-	-	230	230
Loss for period	(11,306)	(1,312)	(12,050)	(24,668)
Assets and liabilities
Total assets	98,982	3,973	6,157	109,112
Total liabilities	(3,638)	(3,587)	(112,480)	(119,705)
Net assets/(liabilities)	95,344	386	(106,323)	(10,593)
Other information
Capital expenditure	711	378	177	1,266
Share based payment charge	43	-	-	43

	Six months to 28 June 2009 (Unaudited)
	Leased	Managed	Unallocated	Total
	£'000	£'000	£'000	£'000
Segment result	2,298	(290)	(678)	1,330
Add back:
Depreciation and amortisation	107	189	129	425
(Profit)/loss on disposal of property, plant
and equipment	(63)	(2)	-	61
	_______	_______	_______	_______
Adjusted EBITDA	2,342	(99)	(549)	1,694
	_______	_______	_______	_______

	Six months to 28 June 2008 (Unaudited)
	Leased	Managed	Unallocated	Total
	£'000	£'000	£'000	£'000
Segment result	(298)	(285)	(1,435)	(2,018)
Add back:
Depreciation and amortisation	36	271	-	307
(Profit)/loss on disposal of property, plant
and equipment	(84)	9	-	(75)
Provision for loss on disposal of properties held for sale	2,458	-	-	2,458
	_______	_______	_______	_______
Adjusted EBITDA	2,112	(5)	(1,435)	672
	_______	_______	_______	_______

	Period to 28 December 2009 (Audited)
	Leased	Managed	Unallocated	Total
	£'000	£'000	£'000	£'000
Segment result	(11,306)	(1,312)	(1,992)	(14,610)
Add back:
Share based payment	-	-	43	43
Depreciation and amortisation	346	523	49	918
Impairment of property, plant and equipment	12,672	-	-	12,672
(Profit)/loss on disposal of property, plant
and equipment	707	(3)	-	704
Provision for loss on disposal of properties held for sale	1,469	-	-	1,469
Provision for onerous leases	-	318	-	318
	_______	_______	_______	_______
Adjusted EBITDA	3,888	(474)	(1,900)	1,514
	_______	_______	_______	_______

    

    

3    Net finance income / (expense)

			Unaudited		Unaudited		Audited
			Six months to		Six months to		Period to
			28 June		30 June		28 December
			2009		2008		2008
			£'000		£'000		£'000
Finance income
Interest receivable on bank deposits			6		24		64
Other interest receivable			-		6		-
Profit on derivatives used to manage fair value interest
rate risk			-		1,246		-
			6		1,276		64
Finance expense Interest receivable
Interest payable on bank loans			2,035		3,343		6,583
Amortisation of debt issue costs			107		107		215
Interest payable on short term loans			641		190		567
Discount on deep discount bonds			833		772		1,553
Hire purchase interest			7		5		12
			3,623		4,417		8,930
Loss on derivatives used to manage fair value interest
rate risk			360		-		1,422
			3,983		4,417		10,352

4    Loss per share

The basic loss per share is calculated in accordance with International Accounting Standard 33 on the loss for the period of £2,647,000 (December 2008 - £24,668,000; June 2008 - £5,159,000) and 29,383,368 being the weighted average number of shares in issue. Share options in place during the period are deemed to be anti-dilutive as the Group has reported a loss for the year. 

 5      Property, plant and equipment

			Unaudited		Unaudited		Audited
			28 June		30 June		28 December
			2009		2008		2008
			£'000		£'000		£'000
Land and buildings			91,726		102,005		92,624
Public house fixtures and fittings			1,708		1,308		1,494
Motor vehicles			57		91		68
Office equipment			164		96		118
			93,655		103,500		94,304

 

6      Non-current assets classified as held for sale

			Unaudited		Unaudited		Audited
			28 June		30 June		28 December
			2009		2008		2008
			£'000		£'000		£'000
Non-current assets classified as held for sale			5,493		16,077		7,360
Provision for loss on properties held for sale			(2,280)		(7,341)		(4,175)
			3,213		8,736		3,185

The movement in non-current assets held for sale in the 6 months ended 28 June 2009 represents net transfers from land and buildings of £1,134,000 less disposals in the period of £1,106,000.

7    Loans and borrowings - current

        

			Unaudited		Unaudited		Audited
			28 June		30 June		28 December
			2009		2008		2008
			£'000		£'000		£'000
Bank loan (secured)			82,186		569		83,710
Unsecured loans			10,869		5,000		10,247
			93,055		5,569		93,957

The following loans from related parties are included within unsecured loans:-

• £2,747,000 from Anne Street Partners Limited inclusive of compounded interest of £247,000 which is repayable with interest at 10%, calculated at quarterly rests, by 31 July 2010. There is no penalty for early repayment.

• £2,750,000 from Burac Trade and Invest Corp inclusive of compounded interest of £250,000 which is repayable with interest at 10%, calculated at quarterly rests, by 31 July 2010. There is no penalty for early repayment.

• £3,804,000 from Burac Trade and Invest Corp inclusive of compounded interest of £264,000 which is repayable with interest at 15%, calculated at quarterly rests, by 31 July 2010. There is no penalty for early repayment.

• £1,568,000 from Robar Limited inclusive of compounded interest of £108,000 which is repayable with interest at 15%, calculated at quarterly rests, by 31 July 2010. There is no penalty for early repayment.

    The bank loans are secured by a fixed charge over the Group's freehold property and bear interest at floating rates of three month LIBOR plus 1.65%. The bank loans are for a 5 year term ending on 26 September 2011. The covenants on the Group's bank loans were breached during 2008 and this has continued into 2009. The Group's bank loans have been classified as current, despite their scheduled repayment date being September 2011, because the breach of loan covenants enables the bank to seek immediate repayment of the bank loan. 

    The Directors are engaged in continuing discussions relating to the terms and covenants of the Group's bank loans and anticipate that new covenants can be agreed that will reflect the current operations and business structure of the Group. 

7    Loans and borrowings - non-current

			Unaudited		Unaudited		Audited
			28 June		30 June		28 December
			2009		2008		2008
			£'000		£'000		£'000
Secured bank loans			-		85,574		-
Deep discount bonds			17,866		16,252		17,033
			17,866		101,826		17,033

    

The deep discount bonds are secured by a fixed and floating charge over the assets and liabilities of the Company, subject to the priority of the secured bank loans. The deep discount bonds are redeemable at the option of the Company at any time subject to the priority and consent of the bank. The deep discount bonds accrue discount at 10% per annum on a compound basis. Details of the bonds issued are summarised below: 

		Subscription	Redemption
Issue date	Redemption date	price	price
		£'000	£'000
20 December 2006	20 December 2011	14,030	22,597
		_______	_______

8    Dividends

The directors do not propose to pay an interim dividend.

ENDIR LIMPTMMMTBIL