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15 May 2007
LIVERMORE INVESTMENTS GROUP ("Livermore" or "Company")
UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2007
Livermore Investments Group Limited (the "Company" or "Livermore") todayannounces its interim results for the six months ended 30 June 2007.SUMMARY• Annualised gross return on opening shareholders funds before administration costs and share option amortisation of 14.6%.• Profit after tax from continuing operations - $11.9m (2006 : $4.7m).• Profit after tax for the period - $11.9m (2006 : $253.1m).• Net Asset Value per share of $0.95 as at 30 June 2007; $0.94 as at 31 December 2006; $0.92 as at 31 August 2007.• First real estate investment completed in July 2007; sale and lease back of 34,000 square metres of commercial freehold property from the Swiss national railway company SBB for CHF 93m and a related residential project totalling some CHF 15m.• Development of infrastructure for the newly formed investment company and recruitment of a professional investment management team.Commenting on the results, Noam Lanir, CEO of Livermore Investments GroupLimited, said: "Good progress has been made in transitioning to an investmentcompany. I am particularly pleased with the return on shareholder funds of 14.6%before administration costs and share option amortisation in this first periodas an investment company."For further investor information please go to www.livermore-inv.com.Enquiries:Livermore Investments Group Limited + 357 25 847 700Noam Lanir, Chief Executive OfficerRon Baron, Chief Investment Officer + 41 433 443 200Hudson Sandler +44 (0) 20 7796 4133Michael SandlerChairman's and Chief Executive's ReviewIntroductionThe first six months of 2007 have been an exciting period of transition forLivermore Investments Group Limited. Significant progress has been made inestablishing the infrastructure of the investment group, recruiting a newinvestment team and in deploying the capital of the Company.The annualised gross return on opening shareholders funds for the first sixmonths of 2007 was 14.6% calculated before deducting administration costs andshare option amortisation and including unrealised gains. The annualised netreturn on opening shareholders funds before share option amortisation was 12.8%.Operational reviewThe Company focused, during the first half of 2007, on forming and starting toimplement its investment strategy. The first stages have been successfullycompleted by establishing a portfolio which is well diversified across assetclasses, currencies and geography. Management aims to establish an investmentportfolio which will focus on areas of potential high growth in the mid to longterm through a top down investment approach and partnerships with top tiermanagers and investment partners. Management is confident that through carefuland patient selection of absolute return opportunities across its selected areasand a stringent and focused investment decision-making process, it will be ableto construct a robust investment portfolio which will generate stable abovemarket returns for its investors.In July 2007 the Company finalised its first real estate investment through thepurchase and leaseback of Wyler Park from SBB, the Swiss national railwaycompany. The purchase followed a bid process of over 6 months in which over 20parties participated. The property was purchased for CHF 93m through a newlyestablished Swiss special purchase vehicle. Non recourse finance of some CHF 80mwas provided by Merrill Lynch. As part of this commercial investment the Companyis developing a residential project including 39 residential apartments to becompleted in July 2008. The total cost of the residential development project isapproximately CHF 15m. The project includes additional development rights, whichthe Company expects to utilise in the future. This high profile investment haspositioned the Company well in the Swiss market and has generated significantdeal flow opportunities in the property sector. Some of these projects arecurrently under various stages of review and negotiation.In the first half of 2007, gains of $9.0m have been made in global tradingactivities mainly through selective stock picking (long and short) in thenatural resources sectors and the Asian markets. The Company also invested witha few single hedge funds managers, who outperformed their peer group.Interest income for the period of some $3.7m was derived from the fixed incomeportfolio, which comprises mainly of money market instruments and highly ratedbonds. Additional investment income was derived from our diversified portfolioof structured credit products. These investments, which amount to 13% of thetotal portfolio include rated and equity tranches, mostly of collateralised loanobligations (CLOs). The exposure of CLO positions to the US residential realestate market is small (less than 1.5% of the total Company portfolio, and theeffect of developments in credit markets on our portfolio has been minimal.Overall the fixed income portfolio which includes a mix of top tier managers andhas a wide sector spread performed within management expectations.Some initial investments have been made in private equity. These have beenminority stakes in specialist investment funds focusing on the developingeconomies of India and the Far East. Such investments include commercial realestate, hospitality projects and logistics in India.The Company's investment portfolio at 30th June 2007 was valued at some $290m and was invested according to the following distribution (comparative information for the end of August 2007 included).Investment category Percentage Percentage 30 June 2007 31 August 2007Cash and money markets 27% 24%Equities 27% 14%Bonds 21% 16%Alternative investments 19% 18%Real estate investments 3% 23%Derivatives 1% 3%Other assets 1% 1%Current assets 1% 1% ______________ ______________Total portfolio $290m $347mSince 30 June, 2007 the Company significantly reduced its equity exposure, as also illustrated in the table above.Board ChangesRon Baron was appointed as Executive Director and Chief Investment Officer on 10August 2007. Ron has wide investments and M&A experience. From 2001 to 2006 Ronserved as member of management at Bank Leumi, Switzerland and was responsiblefor portfolio management activity. Prior to this he spent five years as acommercial lawyer at Kantor, Elhanani, Tal & Co. Law Offices in Tel Aviv,Israel, advising banks and large corporations on transactions, buy-outs andprivatisations. He holds an MBA from INSEAD Fontainebleau and a LLB (LAW) and BAin Economics from Tel Aviv University.As announced on 27 June, Andrew Burns, formerly our CFO, left the Company at theend of August. The Board would like to thank Andrew for his contribution to thedevelopment of the Company and wish him well in his new role.Repurchase of sharesOn 27 April 2007 the Company repurchased 8,750,000 shares for $0.820 per share.Further share buy backs will be considered in the future having regard to thediscount to net asset value per share.DividendsThe final dividend for 2006 of $0.034 per share, totalling $9.7m, was paid on 29June 2007. For 2007 the Company's dividend policy remains unchanged. Livermorewill continue allocating 50% of its net profit to shareholder dividends, basedon the Company's performance. Dividends will be calculated and paid based on thefull year end results.Richard Rosenberg Noam LanirChairman Chief Executive24 September 2007* Livermore Investments Group Limited was formerly known as Empire OnlineLimited. Shareholders approved a special resolution to change the Company's nameat the EGM held on 28 February 2007.Livermore Investment Group LimitedConsolidated Income Statementfor the Six months ended 30 June 2007 Discontinued Discontinued Operations Operations Six months Six months Six months Year Year ended ended ended ended ended 30 June 30 June 30 June 31 December 31 December 2007 2006 2006 2006 2006 Note Unaudited Unaudited Unaudited Audited Audited $000 $000 $000 $000 $000Net gaming revenue - 38,203 - 59,850 -Investment revenue 3 12,569 - - - 2,301Cost of sales - (20,560) - (30,256) - ________ __________ ________ ________ ________Gross profit 12,569 17,643 - 29,594 2,301Amortisation and non 2 (1,351) (3,527) - (11,054) -recurring itemsAdministrative expenses (2,497) (2,353) - (3,483) (995) ________ __________ ________ ________ ________Operating profit / (loss) 8,721 11,763 - 15,057 1,306Finance expenditure (335) - - - (170)Finance income 3,508 - 4,722 - 9,892 ________ __________ ________ ________ ________Profit before taxation 11,894 11,763 4,722 15,057 11,028Taxation (1) (4) - (7) - ________ __________ ________ ________ ________Profit for the year after 11,893 4,722 11,028taxation from continuingoperationsProfit after taxation 11,759 - 15,050 -from discontinuedoperationsProfit from disposal of 4 236,657 - 36,642 -discontinued operations __________ ________Profit for discontinued - 248,416 248,416 51,692 51,692operation ________ ________ ________Profit for period 11,893 253,138 62,720 ======== ======== ========Earnings per shareBasic earnings per share ($) 7 0.04 0.85 0.86 0.18 0.21 ======== ======== ======== ======== ========Diluted earnings per share ($) 7 0.04 0.81 0.83 0.17 0.21 ======== ======== ======== ======== ========DividendsProposed interim dividend per share ($) $0.0 $0.017 $0.034 ======== ======== ========Proposed interim dividend ($000) - 4,977 10,000 ======== ======== ========Dividends paid during the period per share ($) $0.033 $0 $0.085 ======== ======== ========Dividends paid during the period ($000) 9,657 - 24,887 ======== ======== ========Livermore Investments Group LimitedConsolidated Balance Sheetas at 30 June 2007 30 June 30 June 31 December 2007 2006 2006 Note Unaudited Unaudited Audited $000 $000 $000AssetsNon-current assetsProperty, plant and equipment 29 167 49Intangible assets 51 221,778 73Financial assets 8 195,588 - 124,491 _______ _______ _______ 195,668 221,945 124,613 _______ _______ _______Current assetsTrade and other receivables 9,611 7,092 50,795Cash and cash equivalents 9 84,994 262,114 137,715 _______ _______ _______ 94,605 269,206 188,510 _______ _______ _______Total assets 290,273 491,151 313,123 ======= ======= =======EquityShare capital 10 - - -Reserves 210,907 211,535 212,483Retained earnings 63,999 275,435 61,763 _______ _______ _______Total equity 274,906 486,970 274,246 _______ _______ _______LiabilitiesCurrent liabilitiesBank overdrafts 11 8,008 - 4,960Trade and other payables 7,358 4,171 33,910Current tax payable 1 10 7 _______ _______ _______Total liabilities 15,367 4,181 38,877 _______ _______ _______Total equity and liabilities 290,273 491,151 313,123 ======= ======= =======Net assets valuation per shareBasic net assets valuation per share ($) 0.95 1.66 0.94 ======= ======= =======Diluted net assets valuation per share ($) 0.91 1.59 0.91 ======= ======= =======Livermore Investments Group LimitedConsolidated Statement of Changes in Equityfor the period ended 30 June 2007 Note Share Share Share Investment Retained Total capital premium option revaluation earnings reserve reserve $000 $000 $000 $000 $000 $000Balance at 1 January 2006 - 209,807 277 - 22,297 232,381 Net profit for the year - - - - 62,720 62,720Share option reserve - - 3,150 - - 3,150Share options forfeited - - (1,633) - 1,633 -Revaluation reserve - - - 882 - 882Dividends paid - - - - (24,887) (24,887) ______ ______ ______ ______ ________ _______Balance at 31 December 2006 - 209,807 1,794 882 61,763 274,246 Net profit for the period - - - - 11,893 11,893 Share option reserve - - 1,850 - - 1,850 Purchase of own shares (7,172) - - - (7,172)Revaluation reserve - - - 3,746 - 3,746Dividends paid - - - - (9,657) (9,657) ______ ______ ______ ______ ________ ________Balance at 30 June 2007 - 202,635 3,644 4,628 63,999 274,906 ______ ______ ______ ______ ________ _______Comparative Period Note Share Share Share Investment Retained Total capital premium option revaluation earnings reserve reserve $000 $000 $000 $000 $000 $000Balance at 1 January 2006 - 209,807 277 - 22,297 232,381Net profit for the period - - - - 253,138 253,138Share option reserve - - 1,451 - - 1,451 ______ ______ ______ ______ ______ ______Balance at 30 June 2006 - 209,807 1,728 - 275,435 486,970 ______ ______ ______ ______ ______ ______Livermore Investments Group LimitedConsolidated Statement of Cash Flowsfor the period ended 30 June 2007 Note Six months Six months Year ended ended 30 June ended 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited $000 $000 $000Cash flows from operating activitiesProfit after tax 11,893 253,142 62,720Adjustments forDepreciation and amortisation 38 2,508 3,298Goodwill fair value adjustment - 798 797Profit on sale of property, plant and equipment 7 - -Investment revenue 3 (12,569) - (2,301)Finance income (3,104) (4,682) (9,660)Interest expense 335 68 170Equity settled share options 1,850 1,451 3,150Profit on disposal 4 - (236,657) (36,642) ______ ______ ______ (1,550) 16,628 21,532 ______ ______ ______Changes in working capitalDecrease in trade and other receivables 41,184 4,339 8,612Decrease in trade and other payables (26,557) (15,917) (11,830) ______ ______ ______ 14,627 (11,578) (3,218) ______ ______ ______Net cash generated from operating activities 13,077 5,050 18,314 ______ ______ ______Cash flows from investing activitiesPurchase of property, plant and equipment - (83) (113)Purchase of intangible assets - (421) (916)Acquisition of investments (67,355) - (123,609)Disposal of business assets 4 - 236,657 235,878Investment revenue received 3 12,569 - 2,301Finance income received 3,104 4,682 9,660 ______ ______ ______Net cash used in investing activities (51,682) 240,835 123,201 ______ ______ ______Cash flows from financing activitiesDividends paid (9,657) - (24,887)Purchases of own shares (7,172) - -Interest paid (335) (68) (170) ______ ______ ______Net cash used in financing activities (17,164) (68) (25,057) ______ ______ ______Net (decrease)/increase in cash and cash equivalents (55,769) 245,817 116,458Cash and cash equivalents at the beginning of the year 132,755 16,297 16,297 ______ ______ ______Cash and cash equivalents at the end of the year 76,986 262,114 132,755 ====== ====== ======Notes to the Financial Statements1. Accounting policiesThe Interim financial statements of Livermore Investments Group Limited havebeen prepared on the basis of the accounting policies stated in the AnnualReport 2006, available on www.livermore-inv.com. The financial information has been prepared in accordance with IAS 34 "Interim Financial Reporting".Basis of consolidationThe consolidated financial statements include the accounts of the Company andits subsidiaries. The subsidiaries are companies controlled by LivermoreInvestments Group Limited. Control exists where the Company has the power togovern the financial and operating policies of an investee entity so as toobtain benefits from its activities. Subsidiaries are consolidated from thedate the parent gained control until such time as control ceases.The financial statements of the subsidiaries are included in the consolidatedfinancial statements using the acquisition method of accounting. On the date ofthe acquisition the assets and liabilities of a subsidiary are measured attheir fair values and any excess of the cost of acquisition over the fair valuesof the identifiable net assets acquired is recognised as goodwill. Intercompanytransactions and balances are eliminated on consolidation.Basis of preparationThese results have been prepared on the basis of the accounting policiesexpected to be adopted in the Company's full year financial statements, whichare expected to be prepared in accordance with International Financial ReportingStandards ("IFRS") as adopted by the European Union. There are no materialdifferences between the accounting policies set out in the financial statementsfor the year ended 31 December 2006 and the accounting policies the Companyexpects to adopt in the next year's statements.Goodwill is initially measured at cost, being the excess of the considerationpaid over the net fair value of the assets acquired. Following initialrecognition, goodwill is measured at cost less any accumulated impairmentlosses. Goodwill is not amortised. Goodwill is reviewed annually or morefrequently if events or changes in circumstances indicate that the carryingvalue may be impaired.The financial information for the period ending 30 June 2006 is extracted fromthe Group's financial statements for the year ended 31 December 2006.2. Amortisation and non recurring itemsAmortisation and non-recurring items refer to: Six months Six months Year ended ended 30 June ended 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited $000 $000 $000Amortisation of intangible assets 22 2,076 2,315Amortisation of share options 1,850 1,451 3,150Non recurring expenses 16 - 1,144Compensation to third parties - - 4,445Income from PartyGaming plc service agreement (231) - -Additional income from online gaming business prior to completion of disposal (306) - - ______ ______ ______ 1,351 3,527 11,054 ====== ====== ======3. Investment revenue Six months Six months 31 December ended 30 June ended 30 June 2006 2007 2006 Audited Unaudited Unaudited $000 $000 $000Interest on available for sale investments 3,695 - 2,193Dividend Income 232 - -Loss on sale of available for sale investments (129) - -Gain on sale of shares 9,003 - 108Loss on derivative instruments (232) - - ______ ______ ______ 12,569 - 2,301 ====== ====== ======4. Disposal of business assets Six months Empire Six months Empire Disposal Year ended ended 30 Poker ended Poker of 31 December June 30 June 2006 business 2006 2007 Unaudited Audited Unaudited 2007 2006 2006 2006 2006 2006 $000 $000 $000 $000 $000 $000Disposal proceeds received - 250,000 250,000 250,000 37,972 287,972Legal and professional expenses - (11,800) (11,800) - (944) (944)Compensations to third parties - (1,543) (1,543) (14,122) (12,705) (26,827)Warranties provision - - - - (2,000) (2,000)Assets written off - - - - (221,559) (221,559) ______ ______ ______ ______ ______ ______Profit from disposal to PartyGaming Plc - 236,657 236,657 235,878 (199,236) 36,642 ====== ====== ====== ====== ======= ======On 14 February 2006 the Group sold certain business assets to PartyGaming Plcpursuant to a settlement agreement for a total consideration of $250m. Businessassets included in the disposal were certain domain names and brand names. Thesebrands and domain names were used by the Group to direct poker and casinoplayers to PartyGaming's websites creating net gaming revenue for the Group. Theconsideration represented $250m, which was all in the form of cash.On 29 December 2006, the Company agreed to dispose of its remaining operationsto PartyGaming plc.On 19 January 2007, the Company completed the sale to PartyGaming plc of itsremaining operating business. This agreement was signed on 28 December 2006 andwas subject to certain conditions including approval of the Company'sshareholders at an EGM on 17 January 2007.Between signing and completion the Company continued to operate the business,however during this period restrictions were placed on the operation of thebusiness by PartyGaming plc. Business assets included in the disposal werecertain domain names, players data and brand names. Assets written off,principally comprise of acquired goodwill relating to the acquisition of thebusiness of Tradal Limited in May 2005 and the acquisition of Club Dice casinosin September 2005.The Group received a consideration for the disposal of the business of83,325,934 PartyGaming shares representing a gross value of $47.9m. 17,374,637PartyGaming shares were transferred to agents as compensation resulting in netdisposal proceeds to the Group of $38.0m. The transaction was conditional on afurther payment by the Group to a marketing service provider of $10m.5. DividendFor the interim period the Group's dividend policy remains unchanged. TheCompany intends to allocate 50% of its net profit to Dividend. Dividendallotment for this year will be done after the year end results.6. Segmental information for the periodCurrently the Company has only one segment, being the management of itsinvestment portfolio. In the prior year the Company's segments consisted ofCasino and Poker activities, which are now discontinued.Business segmentsThe Groups' performance as it is analysed by its business segments is givenbelowRevenue by business segment Six months Six months Year ended ended 30 June ended 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited $000 $000 $000Investment PortfolioInvestment Revenue 12,569 - - ======= ======= =======CasinoNet gaming revenue - 30,209 48,616 ======= ======= =======Segmental result - 15,754 27,667 ======= ======= =======PokerNet gaming revenue - 7,994 11,234 ======= ======= =======Segmental result - 3,163 4,128 ======= ======= =======ConsolidatedInvestment Revenue 12,569Net gaming revenue - 38,203 59,850 ======= ======= =======Segmental results 12,569 18,917 31,795Central costs - (1,274) (2,201) _______ _______ _______Gross profit 12,569 17,643 29,594Amortisation and non recurring items (1,351) (3,527) (11,054)Administrative expenses (2,497) (2,353) (3,483) _______ _______ _______Operating profit 8,721 11,763 15,057 ======= ======= =======7. Earnings per shareBasic earnings per share has been calculated by dividing the net profitattributable to ordinary shareholders (profit for the year) by the weightedaverage number of shares in issue during the relevant financial periods.Diluted earnings per share is calculated after taking into consideration thepotentially dilutive shares in existence during the period. Six months Discontinued Six months Discontinued Year ended ended 30 June Operations ended 30 June Operations 31 December 2007 Six months 2006 Year ended 2006 Unaudited ended 30 June Unaudited 31 December Audited 2006 2006 Unaudited AuditedNet profit attributable 11,893 248,416 253,138 51,692 62,720to ordinary shareholders ($000) =========== =========== =========== ============ ===========Weighted average number of ordinary shares in issue 289,861,105 292,777,772 292,777,772 292,777,772 292,777,772 =========== =========== =========== ============ ===========Basic earnings per share ($) 0.04 0.85 0.86 0.18 0.21 =========== =========== =========== ============ ===========Weighted average number 302,806,660 305,767,612 305,767,612 299,723,327 299,723,327of ordinary shares includingthe effect of potentially diluted shares =========== =========== =========== ============ ===========Diluted earnings per share ($) 0.04 0.81 0.83 0.17 0.21 =========== =========== =========== ============ ===========Number of SharesWeighted average number 289,861,105 292,777,772 292,777,772 292,777,772 292,777,772of ordinary shares in issue Effect of dilutive potentialordinary shares:Share options 12,945,555 12,989,840 12,989,840 6,945,555 6,945,555 ___________ ___________ ___________ ____________ ___________ Weighted average number 302,806,660 305,767,612 305,767,612 299,723,327 299,723,327of ordinary shares including the effect of potentially diluted shares =========== =========== =========== ============ ===========8. Financial assets 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited $000 $000 $000Fixed return investments 61,092 - 100,976Equity investments 70,166 23,515Alternative Investments 55,895 - -Other investments 8,435 - - ______ ______ ______ 195,588 - 124,491 ====== ====== ======Financial assets relate to investments in bonds and equity classified asavailable for sale. Financial assets are held in the balance sheet at the periodend at fair value. Fair value is measured by reference to the market value ofthe assets at the balance sheet date as they are openly traded on a publicmarket.9. Cash and cash equivalentsCash and cash equivalents included in the cash flow statement comprise thefollowing at the balance sheet date: 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited $000 $000 $000Short term deposits 78,510 229,533 136,522Cash at bank 6,484 32,581 1,193 ______ ______ ______ 84,994 262,114 137,715 ====== ====== ======10. Share CapitalThe Company has issued share capital of 292,777,772 ordinary shares of no parvalue. On 27 April 2007 the Company purchased 8,750,000 ordinary shares at aprice of $0.820 (£0.407) per share. On 30 June 2007 the Company held theseshares in treasury.The Company has 12,945,555 outstanding share options at the end of the period.Options are normally exercisable in three equal tranches, on the first, secondand third anniversary of the grant. There have been no changes to the term ofoptions in issue during the period.11. Bank Overdrafts 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited $000 $000 $000Short term bank overdrafts 8,008 - 4,960 ______ ______ ______ 8,008 - 4,960 ====== ====== ======12. Related party transactions 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited $000 $000 $000Amounts owed to Directors 66 143 391 ======= ======= =======Administration services provided by 132 305 660Tradal Ltd ======= ======= =======Key Management compensation*Salaries and other short-term employee 387 493 1,562benefitsShare based payments 1,807 71 1,608 ======= ======= =======* These payments were made in respect of members of key management eitherdirectly to them or to companies to which they are related.Tradal Ltd is a related party by virtue of common ownership with LivermoreInvestments Group Limited.The directors do not consider any party to have ultimate control of the group.13. LitigationA trademark dispute with La Societe des Bains de Mer et du Circle des Etrangersa Monaco was settled in January 2007 when the Group agreed to an out of courtsettlement of $3.4m.14. Post balance sheet eventsIn July 2007 the Group purchased a 34,000 square metre commercial freeholdproperty, Wylerpark, in Bern Switzerland from the Swiss national railwayCompany, SBB. The acquisition was made on a sale and lease back basis for $76.8m.15. Preparation of interim statementsThe financial information does not constitute statutory accounts within themeaning of the BVI International Business Companies Act 1984 (as amended).Financial Statements for Livermore Investments Group Limited for the year ended31 December 2006, prepared in accordance with International Financial ReportingStandards as adopted by the European Union, on which the auditors gave anunqualified audit report are available from the Company's website,www.livermore-inv.comINDEPENDENT REVIEW report to Livermore Investments group limitedIntroductionWe have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30 June2007 which comprises the consolidated income statement, the consolidated balancesheet, the consolidated statement of changes in equity, the consolidatedstatement of cash flows and the related notes 1 to 15. We have read the otherinformation contained in the interim report which comprises only the highlightsand the Chairman's and Chief Executive's review and considered whether itcontains any apparent misstatements or material inconsistencies with theinformation in the condensed set of financial statements.This report is made solely to the company in accordance with guidance containedin International Standard on Review Engagements (ISRE) (UK and Ireland) 2410"Review of Interim Financial Information Performed by the Independent Auditor ofthe Entity" issued by the Auditing Practices Board. Our review work has beenundertaken so that we might state to the company those matters we are requiredto state to them in a review report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the company, for our review work, for this report, or for theconclusion we have formed.Directors' responsibilitiesThe half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report.As disclosed in note 1, the annual financial statements of the group areprepared in accordance with International Financial Reporting Standards ("IFRS")as adopted by the European Union. This interim report has been prepared inaccordance with International Accounting Standard 34, "Interim FinancialReporting", as adopted by the European Union.Our responsibilityOur responsibility is to the express to the company a conclusion on thecondensed set of financial statements in the half-yearly financial report basedon our review.Scope of reviewWe conducted our review in accordance with guidance contained in InternationalStandard on Review Engagements (ISRE) (UK and Ireland) 2410 "Review of InterimFinancial Information Performed by the Independent Auditor of the Entity" issuedby the Auditing Practices Board for use in the United Kingdom. A review ofinterim financial information consists of making enquiries, primarily of personsresponsible for financial and accounting matters, and applying analytical andother review procedures. A review is substantially less in scope than an auditconducted in accordance with International Standards on Auditing (UK andIreland) and consequently does not enable us to obtain assurance that we wouldbecome aware of all significant matters that might be identified in an audit.Accordingly, we do not express an audit opinion.ConclusionBased on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 30 June 2007 is not prepared, in all materialrespects, in accordance with International Accounting Standard 34 as adopted bythe European Union.GRANT THORNTON UK LLPCHARTERED ACCOUNTANTSSlough21 September 2007
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