TIDMAVS
RNS Number : 9426Z
Avesco Group PLC
14 March 2013
EMBARGOED UNTIL 7.00am, 14 March 2013
AVESCO GROUP plc
Results for the three months ended 31 December 2012
Avesco Group plc ("Avesco" or the "Group") (AIM: AVS), the
international provider of services to the corporate presentation,
entertainment and broadcast markets, announces its preliminary
results for the three months ended 31 December 2012.
KEY HIGHLIGHTS
-- Revenue of GBP30.1m (three months ended 31 December 2011: GBP33.6m)
-- Operating loss of GBP0.2m (three months ended 31 December 2011: loss of GBP0.3m)
-- Trading loss of GBP0.1m (three months ended 31 December 2011: profit of GBP0.1m)*
-- Trading EBITDA of GBP4.3m (three months ended 31 December 2011: GBP4.7m)*
-- Basic losses per share of 2.2p (three months ended 31 December 2011: loss per share of 2.6p)
-- Adjusted basic losses per share of 2.1p (three months ended
31 December 2011: loss per share of 1.2p)*
-- Disney litigation funds now at the collection stage
* As described in note 3, the Group uses certain non-GAAP
alternative measures to assess underlying operating
performance.
Richard Murray, Chairman, commented:
"Although the financial year 2012/13 has started slowly, with
lower capital expenditure requirements this year and promising
signs for much improved trading in the Far East, we remain positive
regarding the outlook for the year as a whole. Our focus remains to
generate cash, reduce debt and grow dividends, whilst maintaining a
sound balance sheet.
The Group is well positioned, with the financial and operational
capabilities in place, to continue its progress through 2013 and
beyond.
The judgement in the Disney litigation, in which the Group
maintains an interest, is now collectible although it is expected
that there may be a delay of a few months before receipt of funds
by the Group. The Group's net interest in the award is estimated at
approximately $60m."
For further information please contact:
Avesco Group plc
Richard Murray, Chairman 01293 583400
John Christmas, Group Finance
Director
finnCap
Ed Frisby/Rose Herbert,
Corporate Finance
Brian Patient/Victoria
Bates, Corporate Broking 020 7220 0500
Chairman's statement
As reported in my statement in January, the financial year
2012/13 has started slowly. In the UK some corporations appeared to
have used much of their 2012 budgets on the Olympics, while
continuing economic problems in the Eurozone and uncertainties in
the US linked to the presidential elections and the "fiscal cliff"
have all contributed to a reduction in activity, which is reflected
in the Group's results when compared to the equivalent quarter in
2011.
Results
Revenue in the three months ended 31 December 2012 fell 10% to
GBP30.1m (three months ended 31 December 2011: GBP33.6m). The
quarter did benefit from the inclusion of the Paris Motor show
whereas the prior year included two major events in the Middle East
(the Arab Games and the UAE 40th Anniversary celebrations).
Excluding these events from the comparison between the two periods
and adjusting for the disposal of our Full Service business in
Monaco shows a 4% decrease in the underlying revenue.
Operating losses were GBP0.2m (three months ended 31 December
2011: operating loss of GBP0.3m). Gross margins improved to 35%
(three months ended 31 December 2011: 32%). Excluding restructuring
costs and the loss on disposal of the Monaco business, trading
EBITDA reduced to GBP4.3m (three months ended 31 December 2011:
GBP4.7m) and the trading loss was GBP0.1m, (three months ended 31
December 2011: trading profit of GBP0.1m). On this basis, the
adjusted losses per share were 2.1p (three months ended 31 December
2011: loss of 1.2p).
After the Group's significant spend on new equipment last year,
we are planning a much reduced net investment during 2012/13. As a
result, net investment in fixed assets for the quarter fell to
GBP6.2m (three months ended 31 December 2011: GBP10.6m). When
combined with a reduction in working capital of GBP0.2m (three
months ended 31 December 2011: an increase of GBP4.4m), the payment
of an interim dividend in October 2012 of GBP0.3m (three months
ended 31 December 2011: nil) and other minor factors, our net debt
cash outflow reduced to GBP2.6m (three months ended 31 December
2011: GBP10.6m) leaving net debt of GBP27.7m at the end of the
quarter (three months ended 31 December 2011: GBP22.7m). As a
result, the Group's gearing (being net debt divided by net assets)
ended the quarter at 73% (three months ended 31 December 2011:
62%), although we expect this level to reduce significantly by the
end of the financial year.
On 31 December 2012, the net assets of the Group were GBP37.9m
(31 December 2011: GBP36.4m) or GBP1.49 per share (31 December
2011: GBP1.44 per share).
The Group's underlying trading since the start of the second
quarter has shown encouraging signs, and, with our operations in
China now trading profitably, we remain positive regarding the
outlook for the year as a whole.
On 27 February 2013, we announced that the United States Ninth
Circuit Court of Appeals voted to deny Disney's petition for a
rehearing en banc in relation to the judgment and award in the
litigation in which the Group maintains an interest, and on 7 March
2013 the Court issued its order returning the case to the trial
court, an act which had the legal effect of making the judgement
collectible by Celador International Inc. ("Celador"). The Group's
net interest in the award is estimated at approximately $60m.
Payment to the Group is via a third party under the terms of a sale
and purchase agreement dated 1 December 2006, by which Avesco sold
its interest in Celador. It is expected that there may be a delay
of a few months before receipt of funds by the Group.
The Avesco Group's businesses continue to be widely regarded as
leaders in their fields and, following substantial investment in
new equipment during 2012, the Group is well placed to maintain the
high levels of service that our customers around the world have
come to expect. With lower capital expenditure requirements this
year and promising signs for much improved trading in the Far East,
our focus remains to generate cash, reduce debt and grow dividends,
whist maintaining a sound balance sheet. The Group is well
positioned, with the financial and operational capabilities in
place, to continue its progress through 2013 and beyond.
Unaudited condensed consolidated income statement
For the three months ended 31 December 2012
Year
Three months ended
ended 31 December 30 September
2012 2011 2012
GBP000s GBP000s GBP000s
----------------------------- ----------- ----------- --------------
Continuing operations
Revenue 30,145 33,550 143,452
Cost of sales (19,558) (22,693) (93,246)
----------------------------- ----------- ----------- --------------
Gross profit 10,587 10,857 50,206
Operating expenses (10,724) (11,141) (45,979)
Share of associate's
(loss)/profit (15) - 271
----------------------------- ----------- ----------- --------------
Operating (loss)/profit (152) (284) 4,498
Finance income 1 2 51
Finance costs (412) (324) (1,586)
----------------------------- ----------- ----------- --------------
(Loss)/profit before
income tax (563) (606) 2,963
Income tax expense (1) (52) (1,108)
-----------------------------
(Loss)/profit for the
financial period (564) (658) 1,855
----------------------------- ----------- ----------- --------------
Pence Pence Pence
per share per share per share
(Losses)/profit per share
attributable to the equity
holders of the company
- basic (2.2)p (2.6)p 7.3p
- diluted (2.2)p (2.6)p 7.0p
Alternative performance measures (non-GAAP)
For the three months ended 31 December 2012
Year
Three months ended
ended 31 December 30 September
2012 2011 2012
GBP000s GBP000s GBP000s
---------------------------- -------------------------- ----------- --------------
Operating (loss)/profit (152) (284) 4,498
Adjusted to exclude:
Restructuring costs and
compensation for loss
of office 17 - 2,458
Other non-recurring costs - 350 428
Trading (loss)/profit (135) 66 7,384
Net finance costs (411) (322) (1,535)
Trading (loss)/profit
after net finance costs (546) (256) 5,849
---------------------------- -------------------------- ----------- --------------
Current tax expense (1) (52) (346)
Trading (loss)/profit
after net finance costs
and current tax expense (547) (308) 5,503
---------------------------- -------------------------- ----------- --------------
Trading EBITDA 4,328 4,732 27,147
---------------------------- -------------------------- ----------- --------------
Adjusted (losses)/earnings Pence Pence Pence
per share per share per share per share
---------------------------- -------------------------- ----------- --------------
- basic (2.1)p (1.2)p 21.7p
- diluted (2.1)p (1.2)p 20.8p
Refer to note 3 for a full description of the alternative
performance measures adopted by the Group.
Unaudited condensed consolidated statement of comprehensive
income
For the three months ended 31 December 2012
Year
Three months ended
ended 31 December 30 September
2012 2011 2012
GBP000s GBP000s GBP000s
-------------------------------------- ---------- --------- --------------
(Loss)/profit for the
period (564) (658) 1,855
Other comprehensive expense
Currency translation
differences (8) (126) (143)
Total comprehensive (expense)/income
for the period (572) (784) 1,712
-------------------------------------- ---------- --------- --------------
Unaudited condensed consolidated balance sheet
As at 31 December 2012
31 December 31 December 30 September
2012 2011 2012
GBP000s GBP000s GBP000s
-------------------------------- ------------ ------------ -------------
Assets
Non-current assets
Property, plant and
equipment 63,738 60,478 61,786
Intangible assets 146 158 130
Investment in associate 256 - 271
Deferred income tax
assets 6,718 6,100 6,707
Trade and other receivables 206 145 159
-------------------------------- ------------ ------------ -------------
71,064 66,881 69,053
Current assets
Inventories 1,779 1,996 1,794
Trade and other receivables 19,957 21,977 26,573
Current income tax assets 107 88 86
Cash and cash equivalents 6,586 5,504 4,345
-------------------------------- ------------ ------------ -------------
28,429 29,565 32,798
-------------------------------- ------------ ------------ -------------
Total assets 99,493 96,446 101,851
-------------------------------- ------------ ------------ -------------
Liabilities
Non-current liabilities
Borrowings and loans 26,277 22,444 21,662
Deferred income tax
liabilities 4,425 3,049 4,425
Provisions for other
liabilities and charges 98 488 432
-------------------------------- ------------ ------------ -------------
30,800 25,981 26,519
Current liabilities
Trade and other payables 21,920 27,462 28,540
Current income tax liabilities 497 590 544
Borrowings and loans 7,980 5,730 7,448
Provisions for other
liabilities and charges 376 241 189
-------------------------------- ------------ ------------ -------------
30,773 34,023 36,721
-------------------------------- ------------ ------------ -------------
Total liabilities 61,573 60,004 63,240
-------------------------------- ------------ ------------ -------------
Total assets less total
liabilities 37,920 36,442 38,611
-------------------------------- ------------ ------------ -------------
Equity
Capital and reserves
attributable to equity
holders of the company
Ordinary shares 2,599 2,599 2,599
Share premium 23,286 23,286 23,286
Translation reserves (35) (10) (27)
Retained earnings 12,070 10,567 12,753
-------------------------------- ------------ ------------ -------------
Total equity 37,920 36,442 38,611
-------------------------------- ------------ ------------ -------------
Unaudited condensed consolidated statement of changes in
equity
For the three months ended 31 December 2012
Share Share
capital premium Other Retained
account account reserves earnings Total
GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Balance at 1 October
2012 2,599 23,286 (27) 12,753 38,611
Loss for the period - - - (564) (564)
Other comprehensive
expense, net of
tax - - (8) - (8)
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Total comprehensive
expense for the
period - - (8) (564) (572)
Transactions with
owners in their
capacity as owners:
External dividends
paid - - - (254) (254)
LTIP and share
options - - - 135 135
Balance at 31 December
2012 2,599 23,286 (35) 12,070 37,920
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Share Share
capital premium Other Retained
account account reserves earnings Total
GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Balance at 1 October
2011 2,599 23,286 116 11,072 37,073
Loss for the period - - - (658) (658)
Other comprehensive
expense, net of
tax - - (126) - (126)
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Total comprehensive
expense for the
period - - (126) (658) (784)
Transactions with
owners in their
capacity as owners:
LTIP and share
options - - - 153 153
Balance at 31 December
2011 2,599 23,286 (10) 10,567 36,442
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Share Share
capital premium Other Retained
account account reserves earnings Total
GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Balance at 1 October
2011 2,599 23,286 116 11,072 37,073
Profit for the
period - - - 1,855 1,855
Other comprehensive
expense, net of
tax - - (143) - (143)
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Total comprehensive
income for the
period - - (143) 1,855 1,712
Transactions with
owners in their
capacity as owners:
External dividends
paid - - - (761) (761)
LTIP and share
options - - - 587 587
Balance at 30 September
2012 2,599 23,286 (27) 12,753 38,611
------------------------- ---------------- ---------------- ---------------- ---------------- --------
Unaudited condensed consolidated cash flow statement
For the three months ended 31 December 2012
Year
Three months ended
ended 31 December 30 September
2012 2011 2012
GBP000s GBP000s GBP000s
-------------------------------- -------------------------- -------------------------- ----------------------
Cash flows from operating
activities
Cash generated from operations 4,479 318 19,715
Net interest paid (463) (369) (1,517)
Income tax paid (69) (122) (466)
Net cash generated/(used)
from operating activities 3,947 (173) 17,732
-------------------------------- -------------------------- -------------------------- ----------------------
Cash flows from investing
activities
Purchases of property,
plant and equipment (7,259) (10,994) (32,539)
Proceeds from sale of
property, plant and equipment 1,041 428 1,831
Proceeds from disposal
of investments - 360 403
Net cash used in investing
activities (6,218) (10,206) (30,305)
-------------------------------- -------------------------- -------------------------- ----------------------
Cash flows from financing
activities
Proceeds from borrowings 7,097 10,046 18,128
Repayments of borrowings (2,054) (1,591) (8,258)
Dividends paid to Company's
shareholders (254) - (761)
Net cash generated in
financing activities 4,789 8,455 9,109
-------------------------------- -------------------------- -------------------------- ----------------------
Cash (used) from discontinued
operations (62) (191) (247)
-------------------------------- -------------------------- -------------------------- ----------------------
Net increase/(decrease)
in cash, cash equivalents
and bank overdrafts 2,456 (2,115) (3,711)
Cash, cash equivalents
and bank overdrafts at
beginning of period 4,116 7,501 7,501
Exchange (losses)/gains
on cash and bank overdrafts (235) (27) 326
Cash, cash equivalents
and bank overdrafts at
end of period 6,337 5,359 4,116
Bank overdrafts 249 145 229
Cash, cash equivalents
at end of period 6,586 5,504 4,345
-------------------------------- -------------------------- -------------------------- ----------------------
Notes to the interim report and accounts
1. General information
Avesco Group plc ('the Company') and its subsidiaries (together
'the Group') is an international media services business. The Group
has subsidiaries around the world and sells in the UK, USA, Europe,
Asia Pacific and the Middle East.
The Company is a public limited company which is admitted to
trading on the AIM Market of the London Stock Exchange and is
incorporated and domiciled in the UK. The address of its registered
office is Unit E2, Sussex Manor Business Park, Gatwick Road,
Crawley, West Sussex, RH10 9NH.
The registered number of the Company is 01788363.
2. Status of interim report and accounts
The interim report and accounts are unaudited but have been
reviewed by the auditors, Ernst & Young LLP, and their
independent review report is appended to this document. The interim
report and accounts, which were approved by the Board of Directors
on 14 March 2013, are not full accounts within the meaning of
section 434 of the Companies Act 2006.
The figures for the year ended 30 September 2012 have been
extracted from the audited annual report and accounts that have
been delivered to the Registrar of Companies. The auditors, Ernst
& Young LLP, reported on those accounts under section 495 of
the Companies Act 2006. Their report was unqualified and did not
contain a statement under section 498 of that Act.
3. Basis of preparation
The interim report and accounts have been prepared using the
accounting policies to be applied in the annual report and accounts
for the year ending 30 September 2013. These are consistent with
those included in the previously published annual report and
accounts for the year ended 30 September 2012, which have been
prepared in accordance with IFRS as adopted by the European
Union.
The directors have a reasonable expectation that the Group has
adequate resources to continue operating for the foreseeable
future, and for this reason they have adopted the going concern
basis of preparation in the consolidated quarterly financial
statements.
Alternative performance measures
The Group uses alternative non-Generally Accepted Accounting
Practice ("non-GAAP") financial measures which are not defined
within IFRS. The Directors use these measures in order to assess
the underlying operational performance of the Group and as such,
these measures are important and should be considered alongside the
IFRS measures. The following non-GAAP measures are referred to in
these interim report and accounts.
a) Trading profit/loss
'Trading profit/loss' is separately disclosed, being defined as
operating profit adjusted to exclude restructuring costs and
compensation for loss of office and other non-recurring costs.
Other non-recurring costs relate to items which management believe
do not accurately reflect the underlying trading performance of the
business in the period. Examples of other non-recurring costs are
profit/loss on disposal of investments and one off consultancy and
legal costs incurred which management believe do not accurately
reflect the trading performance of the business. The Directors
believe that trading profit/loss is an important measure of the
underlying performance of the Group.
b) Adjusted earnings per share
'Adjusted earnings per share' is calculated by dividing the
profit for the period excluding restructuring costs and
compensation for loss of office, other non-recurring costs and the
deferred tax charge/credit by the weighted average number of
ordinary shares in issue during the period. The Directors believe
that adjusted earnings per share provides an important measure of
the underlying performance of the Group.
c) Trading EBITDA
Trading earnings before interest, taxation, depreciation and
amortisation ('EBITDA') is separately disclosed, being defined as
trading profit/loss adjusted to exclude depreciation and
amortisation of software. The Directors believe that trading EBITDA
is an important measure of the underlying performance of the
Group.
4. Segmental information
Three months Year ended
ended 31 December 30 September
2012 2011 2012
GBP000s GBP000s GBP000s
--------------------------- ---------- --------- --------------
Revenue
Creative Technology 18,982 22,430 96,232
Full Service 4,819 5,197 19,988
Broadcast 7,187 6,851 29,653
Inter Segment revenue (843) (928) (2,421)
--------------------------- ---------- --------- --------------
Group revenue 30,145 33,550 143,452
--------------------------- ---------- --------- --------------
Operating profit
Creative Technology (439) (153) 4,526
Full Service 328 291 1,055
Broadcast 143 (75) 2,293
Head Office (167) 3 (490)
--------------------------- ---------- --------- --------------
Trading (loss)/profit (135) 66 7,384
Restructuring costs and
compensation for loss
of office (17) - (2,458)
Other non-recurring costs - (350) (428)
Operating (loss)/profit (152) (284) 4,498
--------------------------- ---------- --------- --------------
5. Trading earnings before interest, taxation, depreciation and amortisation ('EBITDA')
Three months Year ended
ended 31 December 30 September
2012 2011 2012
GBP000s GBP000s GBP000s
-------------------------- ---------- --------- --------------
Trading (loss)/profit (135) 66 7,384
Depreciation 4,440 4,631 19,645
Amortisation of software 23 35 118
Trading EBITDA 4,328 4,732 27,147
-------------------------- ---------- --------- --------------
Trading EBITDA is defined in note 3.
6. Earnings per share
Three months Year ended
ended 31 December 30 September
2012 2011 2012
GBP000s GBP000s GBP000s
----------------------------- --------------------------- -------------------------- --------------------
(Loss)/profit for the
period (564) (658) 1,855
Restructuring costs and
compensation for loss
of office 17 - 2,458
Other non-recurring costs - 350 428
Deferred tax credit - - 762
Trading (loss)/profit
after net finance costs
and income tax expense (547) (308) 5,503
----------------------------- --------------------------- -------------------------- --------------------
Weighted average number
of shares (net of treasury
shares)
For basic earnings per
share (000's) 25,444 25,372 25,393
Effect of dilutive share
options (000's) - - 1,020
For diluted earnings
per share (000's) 25,444 25,372 26,413
----------------------------- --------------------------- -------------------------- --------------------
(Losses)/earnings per
share
Basic (2.2)p (2.6)p 7.3p
Diluted (2.2)p (2.6)p 7.0p
----------------------------- --------------------------- -------------------------- --------------------
Adjusted basic (2.1)p (1.2)p 21.7p
Adjusted diluted (2.1)p (1.2)p 20.8p
----------------------------- --------------------------- -------------------------- --------------------
Basic earnings per share have been calculated by dividing loss
for the period by the weighted average number of ordinary shares in
issue during the period.
Diluted earnings per share have been calculated by dividing
profit/loss for the period by the weighted average number of
ordinary shares in issue during the period, adjusted for any awards
under the Company's Long Term Incentive Plan ("LTIP") where
pre-specified performance conditions have been satisfied and any
required conversion of dilutive potential options.
Adjusted earnings per share have been calculated as per note
3.
7. Analysis of net debt
Other At
At non Currency 31
1 October Cash cash translation December
2012 flow changes differences 2012
GBP000s GBP000s GBP000s GBP000s GBP000s
----------------- ---------------- --------- ---------------- ---------------- -----------
Cash at bank
and in hand 4,345 2,470 - (229) 6,586
Bank overdrafts (229) (14) - (6) (249)
----------------- ---------------- --------- ---------------- ---------------- -----------
Net cash 4,116 2,456 - (235) 6,337
Bank loans
due in more
than one year (13,645) (4,022) - (44) (17,711)
Hire purchase
obligations
due in less
than one year (7,219) 1,044 (1,538) (18) (7,731)
Hire purchase
obligations
due in more
than one year (8,017) (2,065) 1,538 (22) (8,566)
Net debt (24,765) (2,587) - (319) (27,671)
----------------- ---------------- --------- ---------------- ---------------- -----------
Other At
At non Currency 31
1 October Cash cash translation December
2011 flow changes differences 2011
GBP000s GBP000s GBP000s GBP000s GBP000s
----------------- ---------------- --------- ---------------- ---------------- -----------
Cash at bank
and in hand 7,501 (1,970) - (27) 5,504
Bank overdrafts - (145) - - (145)
----------------- ---------------- --------- ---------------- ---------------- -----------
Net cash 7,501 (2,115) - (27) 5,359
Bank loans
due in more
than one year (10,020) (8,000) - 88 (17,932)
Hire purchase
obligations
due in less
than one year (5,483) 917 (1,003) (16) (5,585)
Hire purchase
obligations
due in more
than one year (4,137) (1,372) 1,003 (6) (4,512)
Net debt (12,139) (10,570) - 39 (22,670)
----------------- ---------------- --------- ---------------- ---------------- -----------
Other At
At non Currency 30
1 October Cash cash translation September
2011 flow changes differences 2012
GBP000s GBP000s GBP000s GBP000s GBP000s
----------------- ---------------- --------- ---------------- ---------------- -----------
Cash at bank
and in hand 7,501 (3,484) - 328 4,345
Bank overdrafts - (227) (2) (229)
----------------- ---------------- --------- ---------------- ---------------- -----------
Net cash 7,501 (3,711) - 326 4,116
Bank loans
due in more
than one year (10,020) (4,000) - 375 (13,645)
Hire purchase
obligations
due in less
than one year (5,483) 3,549 (5,405) 120 (7,219)
Hire purchase
obligations
due in more
than one year (4,137) (9,419) 5,405 134 (8,017)
-----------
Net debt (12,139) (13,581) - 955 (24,765)
----------------- ---------------- --------- ---------------- ---------------- -----------
8. Interim and final dividends
A final dividend for the year ended 30 September 2012 of 3.0p
per share has been proposed and, subject to shareholders' approval,
will be paid on 8 April 2013 to shareholders on the register at the
close of business on 15 March 2013.
An interim dividend for the year ended 30 September 2012 of 1.0p
per share amounting to a total of GBP254,000 was approved and was
paid on 1 October 2012 to shareholders on the Register at 6.00pm on
14 September 2012.
9. Contingent liabilities and assets
Contingent liabilities
InvestinMedia Holdings Limited ("InvestinMedia"), a subsidiary
of the Company, sold its investment in Complete Communications
Corporation Limited ("Complete") on 20 December 2006. In connection
with the sale, InvestinMedia and other vendors gave certain
warranties and indemnities to the buyer, liability in respect of
which runs for periods of up to seven years from the date of
completion. So far as the Company is aware, no legal claims have
been brought against any company in the Complete group that are
outstanding and would give rise to liability on the part of
InvestinMedia and other vendors under the warranties and
indemnities.
Contingent assets
On 8 July 2010, the Company announced that the jury in a US
legal action had reached a unanimous verdict favourable to
InvestinMedia and the other vendors of Complete. Subsequent appeals
and other motions by the defendant to set aside the judgement have
been unsuccessful. On 7 March 2013, the United States Ninth Circuit
Court of Appeals issued an order returning the case to the trial
court, an act which had the legal effect of making the judgement
collectible by Celador International Inc. ("Celador"). Payment to
the Group is via a third party under the terms of a sale and
purchase agreement dated 1 December 2006, by which Avesco sold its
interest in Celador. It is expected that there may be a delay of a
few months before receipt of funds by the Group. If the award is
paid in full, the Group's interest (after costs but including
pre-judgement interest) is estimated at approximately $60m. No
credit has been taken in these accounts to reflect this verdict as
the appeal process had not concluded prior to 31 December 2012.
Provision has already been made for the costs of this litigation
and any additional costs are not expected to be material.
10. Distribution of interim report and accounts
Copies of this interim report and accounts are available from
the Company's web site (www.avesco.com) or from the Company's
registered office: Avesco Group plc, Unit E2, Sussex Manor Business
Park, Gatwick Road, Crawley,
West Sussex, RH10 9NH. Telephone: +44 (0) 1293 583 400. Fax: +44 (0) 1293 583 410. E-mail: mail@avesco.com.
INDEPENDENT REVIEW REPORT TO AVESCO GROUP PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the Interim Report and Accounts for the
three months ended 31 December 2012, which comprises the
consolidated income statement, consolidated statement of
comprehensive income, consolidated balance sheet, consolidated
statement of changes in equity and consolidated cash flow statement
and the related explanatory notes that have been reviewed. We have
read the other information contained in the Interim Report and
Accounts and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the Company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The Interim Report and Accounts is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the Interim Report and Accounts in accordance with
the AIM Rules issued by the London Stock Exchange which require
that it is presented and prepared in a form consistent with that
which will be adopted in the Company's annual accounts having
regard to the accounting standards applicable to such annual
accounts.
As disclosed in note 3, 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 Interim Report and Accounts has been prepared in accordance
with the AIM Rules issued by the London Stock Exchange.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the Interim Report and
Accounts based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the Interim Report and Accounts for the three months ended 31
December 2012 is not prepared, in all material respects, in
accordance with the accounting policies outlined in Note 3, which
comply with IFRS's as adopted by the European Union and in
accordance with the AIM Rules issued by the London Stock
Exchange.
Ernst & Young LLP
Reading
14 March 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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