Business Review

 

2010 Performance

The Group again delivered a robust performance in generally challenging economic conditions.

 

The first half benefitted from UK Government fiscal stimulus, whilst the second half was more challenging in the UK due to the uncertainty created around the Comprehensive Spending Review in October.  Second half trading was stronger in our overseas markets and as a result of a better than expected final two months in our overseas galvanizing businesses, underlying profit before tax was maintained at the prior year level and marginally ahead of that indicated in the Interim Management Statement of 11 November 2010.  Overseas operations now account for 55% of total underlying operating profit.

 

Revenue decreased by 4.0% to £374.2m (2009: £389.7m) of which 1.8% was due to the disposal of a non-core business in the prior year.  Increased revenues in Galvanizing Services were offset by lower revenues in Infrastructure Products.  Underlying operating profit of £45.9m was marginally below the prior year (2009: £47.0m), reflecting record profits from Galvanizing Services, a lower contribution from Infrastructure Products and Building and Construction Products broadly unchanged.  Underlying operating margins improved 20 basis points to 12.3% (2009: 12.1%) a reflection of our cost reduction initiatives implemented in both 2009 and 2010.  There was no material impact from exchange movements.

 

Underlying profit before taxation was unchanged at £42.2m (2009: £42.2m) and profit before taxation was £35.3m (2009: £39.7m).

 

Group Strategy

These resilient results, in the face of challenging trading conditions, demonstrate the benefits of the way in which we have continued to reshape and grow the Group internationally and at the same time strengthen its financial position.

 

The Group continues to create and exploit niche positions for Infrastructure Products, which together with the Galvanizing Services division, gives us strong international presence in the core businesses of roads and utilities.  Long term growth in these businesses is being driven by a combination of infrastructure spending, energy consumption and regulatory change.

 

The Group's geographical footprint has been progressively broadened with operations in the UK, France, USA, Thailand and China, and a developing position in India.  As a result 55% of underlying operating profit in 2010 was generated by operations outside of the UK (compared to 2% four years ago).  The benefits of the recent investment in our US Galvanizing Services businesses are showing through with strong trading in this market. 

 

Our pipe supports facility in China, commissioned in 2009 to serve the fast growing utilities market, contributed to profit in 2010 and we are now in the process of commissioning a plant in India, again to serve an emerging market.

 

Major Acquisition

The acquisition of The Paterson Group, announced today, further strengthens our strategy to create a global pipe supports business.  This acquisition not only allows the Group access to the North American markets but more importantly one of its businesses, Bergen-Power Pipe Supports, Inc. has significant experience in the nuclear pipe supports market and has an ASME nuclear certification.  Bergen has supplied nuclear pipe supports to 49 of the 104 nuclear plants in the USA over the past 50 years.  This acquisition, combined with our current ability to manufacture in China, Thailand and the UK, will allow us to fully leverage the potential of the increasing demand for nuclear and thermal power generation pipe supports throughout the world.

 

The strength of our balance sheet allows us to continue to pursue acquisition opportunities which bring new products and technologies to the Group, further strengthen our market positions and extend our geographic footprint.  Our focus is on businesses that fit with our strategy for operating in markets where the right macro growth dynamics exist for our Infrastructure Products and Galvanizing Services.

Operational Review

 

Infrastructure Products

The division is focused on supplying engineered products to the roads and utilities markets in geographies where there is long term investment in infrastructure.  In 2010, the division accounted for 50.9% (2009: 52.0%) of the Group's revenue and 42.7% (2009: 52.2%) of the Group's underlying operating profit.

 

Revenues decreased by 5.9% to £190.5m (2009: £202.5m). Margins declined by 180 basis points to 10.3% (2009: 12.1%) due to reduced volume, as customer capital expenditure plans were put on hold in 2009 and 2010. Underlying operating profit decreased by 20.0% to £19.6m (2009: £24.5m). 

 

Roads

The UK roads programme generated strong demand in the first half, through the Highways Agency Managed Motorway Programme and additional fiscal stimulus spend.  The second half was more challenging due to the uncertainty created around the Comprehensive Spending Review where projects previously planned were either put on hold, spread over a longer period or cancelled.

 

The outcome of the Comprehensive Spending Review in October confirmed a marked reduction in spending on new road projects in the UK.  We were however, pleased to see confirmation that the Managed Motorwary Programme will proceed, albeit on a more protracted timescale, with the first scheme starting in the final quarter of 2011.

 

During the year rental of Varioguard, our temporary barrier, achieved record utilisation levels. This will continue in 2011 as our product is deployed in large quantities on the M25 widening and on the M1 J10-13 around Luton.

 

Our permanent vehicle restraint systems: Flexbeam, Brifen and VGAN had another excellent year, both in the UK and in the export markets of Scandinavia and the Middle East.  We continue to explore markets where there is strong forecast infrastructure spend and a necessity to upgrade existing road networks as we develop and test new vehicle restraint products to satisfy European and American Standards, which are widely recognised around the world.

 

Our lighting column operation in France had an encouraging year with increased volumes and benefitted from our investment in automated manufacture contributing to greater profitability.  With over 65% of columns now requiring a secondary coating we are further investing in a new powder coating plant on the Conimast site in Saint Florentin.  This will enable us to coat both our own production and external work from our galvanizing customers.

 

In the UK our lighting column operation commenced the supply of the Surrey, South Coast and Coventry PFIs, all of which have secured long term business and offset the reduction in local authority spending experienced in the second half.

 

We continue to make progress in the USA with Zoneguard, our temporary steel vehicle restraint system.  In a number of key states such as Pennsylvania, where a large road construction programme is planned, Zoneguard has been given approval for use on construction projects. Throughout the year we increased our rental fleet as high utilisation was experienced during the construction season of May to November.

 

Utilities

The requirement for new power generation in emerging economies and the replacement of infrastructure in developed countries provides us with a great platform for the Group's infrastructure businesses to supply the utilities market.

 

The Group's pipe supports business supplies large industrial pipe supports for petrochemical, gas, coal and nuclear power plants around the world.  Combining this existing established business with the recent acquisition of The Paterson Group, Inc. and related companies will enable us to become a global leading supplier in this marketplace.  

In 2010 the pipe supports business started the year with a lower order book, due to the reduction of new major project awards in 2009; consequently the first half produced lower revenue and profitability, compared with the same period in 2009.  However, the business delivered an excellent performance in the third quarter and by the end of 2010 orders for 2011 were back at peak 2007/08 levels.  Current orders include pipe hangers for a number of power plants in India and cryogenic pipe supports for a new LNG plant in Singapore.  The investment in China moved into profit in 2010 and enters 2011 with a robust level of orders.  The order intake for India now stands at £9m as we enter the first phase of construction for our new manufacturing facility in Sri, north of Chennai.

 

The UK water industry's AMP5 (Asset Management Programme) started slowly in April, but gained momentum giving us a strong order book as we enter 2011, including a £1.8m contract to supply pipework for Crossness sewage treatment works in London.  The requirement for storm water attenuation for new housing developments increased in 2010 and whilst not back to 2008 levels, signs are encouraging as the need to prevent flooding is a high priority for the water authorities.

 

In the USA our utilities fabrication business experienced lower demand levels resulting in revenue and profitability being substantially below the prior year.  Notwithstanding a slight recovery in the fourth quarter we have taken the decision to rationalise the business onto two sites, closing a third site in Alabama.  This rationalisation gives us a leaner operation and we are encouraged by the trading and order book in the first two months of 2011.

 

Galvanizing Services

Offering corrosion protection services to the steel fabrication industry with multi-plant facilities in three countries, Galvanizing Services now accounts for 30.8% (2009: 29.0%) of the Group's revenue and more significantly 54.5% (2009: 45.5%) of the Group's underlying operating profit.

 

Revenues at constant currency increased 3.6% to £115.4m (2009: £113.2m). Underlying operating profit at constant currency improved 19.0% to £25.0m (2009: £21.4m) resulting in an improved operating margin of 21.7% (2009: 18.9%).

 

Overall galvanizing volumes were broadly in line with 2009, with the first half showing favourable uplifts in France and the UK, offset by weaker demand in USA.  This position reversed in the second half as the USA provided a strong finish to the year.

 

Overall, margins remained strong, with the overseas plants in particular benefitting from the strong supply chain management, lower operational cost management and ongoing efficiency initiatives.

 

USA

Located in the North East of the country, we are the market leader with six plants offering local services and extensive support to fabricators and manufacturers of highway bridges, construction, utilities, OEM and the transportation markets.

 

Volumes were up 6.9% year on year despite a slow start in the first half of 2010 (down 5.3%). However, from May the demand improved and the second half produced volumes up by 19.8%.  Raw material cost increases were carefully managed and as volumes increased the operating efficiency gain improved profitability.  Our recent investment in the Delaware and Taunton plants, which have shown the most improvement in 2010, demonstrated the benefit of investment in new modern plants that produce high quality product, high levels of service and operating efficiency.  This market continues to provide further opportunity for growth as more infrastructure projects convert from painting to the longer lasting cost effective solution of galvanizing.

 

France

The business has ten strategically located galvanizing plants serving each local market.   As part of the manufacturing supply chain, we have delivered high levels of service and quality to maintain our position as market leaders.

 

Volumes in 2010 were similar to those for 2009, and despite the increased zinc prices, the business achieved a level of profitability in line with the excellent performance for 2009.

 

Investments in two powder coating paint facilities at our existing plants were approved and are currently being constructed to become operational in the second half of 2011.  This will give us the ability to offer the options of powder coating and galvanizing services to our customers.

UK

Our UK galvanizing business is located on nine sites, four of which are strategically adjacent to our steel fabrication facilities.

 

Year on year, volumes were down 3.8%, driven by lower construction activity in the final quarter, which was affected by the bad weather in December.  This was further exacerbated by the overall reduction in construction projects.

 

As part of the ongoing cost management programme we closed a galvanizing facility in Oldbury in June, with production being transferred to a sister plant in Telford.

 

Building and Construction Products

This is our smallest division, accounting for 18.3% (2009: 19.0%) of Group revenue and 2.8% (2009: 2.3%) of underlying operating profit.  The division supplies roofing systems, safety handrails and flooring, lintels and residential doors for a range of UK construction projects, including housing, schools and industrial buildings.

 

Revenues were £68.3m, £1.4m ahead of the prior year, after adjusting for the disposal of Ash & Lacy Perforators Limited (sold in December 2009).  Underlying operating profit of £1.3m was slightly ahead of 2009 in spite of the reduced demand and profitability in the industrial flooring business.  In December we completed a rationalisation of the manufacturing sites producing industrial flooring by closing the facility at Tipton and moving production to our plant in Middlesbrough.  The lower operational cost base that this rationalisation provides is expected to improve profitability on similar volumes.

 

Recovery in the housing market provided additional volumes for the steel lintel and residential door business which combined with the lower operating costs, increased profitability.

 

Financial Review

 

Cash generation and financing

Continued focus on cash generation and its management was again evident in 2010 with some £51.7m of cash generated from operations (2009: £71.0m).  Working capital was tightly managed, in spite of marginally higher investment and significantly higher zinc and steel raw material costs.  Capital expenditure at £15.2m (2009: £11.7m) was more reflective of the expected run rate and represents a multiple of depreciation and amortisation of 1.1 times (2009: 0.8 times).  The Group continues to invest in organic growth opportunities where returns exceed internal benchmarks.

 

The cash generation during the year resulted in Group net debt at 31 December 2010 being £70.6m, a reduction of £17.0m against 31 December 2009 (£87.6m). The Group's net debt remains principally denominated in Euros and US Dollars which act as a hedge against the net asset investments in overseas businesses.  Net debt decreased year on year by £0.7m due to exchange rate movements.

 

 

 

Change in Net Debt	2010	2009
	£m	£m
Operating profit	39.6	44.9
Depreciation & amortisation*	15.0	15.0
Working capital movement	(1.3)	11.8
Pensions and provisions	(2.3)	(1.2)
Non cash items	0.7	0.5
Operating cash flow	51.7	71.0
Tax paid	(9.4)	(9.6)
Interest paid (net)	(3.4)	(3.7)
Capital expenditure	(15.2)	(11.7)
Sale of fixed assets	0.9	0.6
Free cash flow	24.6	46.6
Dividends	(8.8)	(7.5)
Acquisitions and disposals	0.1	7.1
Net issue of shares	0.4	0.7
Change in net debt	16.3	46.9
Opening net debt	(87.6)	(146.2)
Exchange	0.7	11.7
Closing net debt	(70.6)	(87.6)

*  includes £0.9m (2009: £0.9m) in respect of acquisition intangibles.

 

At the year end the Group had committed debt facilities available of £154.9m and a further £26.6m in overdrafts and other on demand facilities.  Subsequent to the year end, £24.0m of the on demand facilities have been converted to committed facilities, expiring March 2012.  The conversion was undertaken at minimal cost to the Group.  The Group's principal debt facility is a £150m multi currency facility signed in June 2007 and which runs to June 2012.  Funding available under this facility at 31 December 2010 amounted to £128.4m.  The facility amortises throughout its existence with £21.3m falling due for repayment in 2011.  The Group has already commenced negotiations with carefully selected providers of new debt facilities in order to replace the principal facility which, as noted above, expires in June 2012.  Whilst the margin applicable to any new facility is expected to be marginally above the current cost, the availability of finance on favourable terms is not expected to be an issue.

 

The principal debt facility is subject to covenants which are tested semi-annually on 30 June and 31 December.  The covenants require the ratio of EBITDA (adjusted profit before interest, tax, depreciation and amortisation as defined in the facility agreement) to net interest costs must exceed four times and require the ratio of net debt to EBITDA to be no more than three times.

 

The results of the covenant calculations at 31 December 2010 were:

 

	Actual	Covenant
Interest Cover	16.2 times	4.0 times
Net debt to EBITDA	1.2 times	3.0 times

 

Appropriate monitoring procedures are in place to ensure continuing compliance with banking covenants and, based on our current estimates, we expect to comply with the covenants in the foreseeable future.  The facilities at its disposal provide significant headroom against the Group's expected funding requirements.

 

Finance costs

Net financing costs fell by £0.9m to £4.3m, principally reflecting lower levels of average net debt and lower interest margins resulting from stronger covenant ratios.  The net cost from pension fund financing under IAS19 was £0.6m (2009: £0.5m) and given its non cash nature continues to be treated as 'Non-Underlying' in the Consolidated Income Statement.  The cash element of net financing costs is £3.7m (2009: £4.8m). Underlying operating profit covered net cash interest 12.4 times (2009: 9.8 times).

The Group has approximately 59% of its gross debt of £97.6m at fixed interest rates, either through interest rate swaps or finance leases.  The interest rate swaps have expiry dates in 2011-2015 and further details are contained in Note 19 to the Financial Statements.

 

Exchange rates

Given the increasingly diverse nature of its geographical footprint the Group is exposed to movements in exchange rates when translating the results of international operations into Sterling.  However, during 2010 the translational benefit of the appreciation of the US Dollar was broadly offset by the depreciation of the Euro against Sterling resulting in a minimal impact year on year.  Retranslating 2009 revenue and underlying operating profit using 2010 average exchange rates would have reduced the prior year results by £1.3m and £0.1m respectively.

 

Non-Underlying items

The total non-underlying items charged to operating profit in the Consolidated Income Statement amounted to £6.3m (2009: £2.1m) and were made up of the following:

 

-     Business reorganisation costs £5.7m (2009: £1.8m) - principally relating to the closure of three manufacturing plants, two in the UK and one in the USA, and other redundancy costs.  Included is an asset impairment charge of £0.4m.  Cash costs of £2.2m were incurred in 2010 with a further £2.2m expected to be expended over the period 2011-2014.  In total, some 193 people left the Group due to business reorganisation in 2010.

-     Release of environmental provisions £1.3m (2009: £nil) - a review of environmental issues and provisions principally relating to the 2007 acquisition of Zinkinvent GmbH identified that the Group was carrying provisions for potential issues which have either been remedied or for which spend is expected to be less than that originally provided for.

-     Amortisation of acquired intangible fixed assets £0.9m (2009: £0.9m) - the charge relates to the non-cash amortisation of intangible assets arising from acquisitions.  There were no material acquisitions during 2010 and, as a result, there was no change compared to 2009.

-     Acquisition related expenses £1.0m (2009: £nil) - costs associated with acquisitions (whether aborted, completed or on-going) expensed to the Consolidated Income Statement following adoption of IFRS3 (Revised) during 2010.

 

Tax

The Group's tax charge for the year was £10.7m (2009: £12.2m). The underlying effective tax rate for the Group was 29% compared to 31% for 2009 reflecting improvements in the Group's legal and financing structure.  The international nature of our operations does mean that the mix of profits in a particular year can impact the effective rate of tax that we pay. 

 

Pensions

The Hill & Smith Executive Pension Scheme and the Hill & Smith Pension Scheme (the 'Schemes') remain the largest employee benefit obligations within the Group.  In common with many other UK companies, the Schemes are mature having significantly more pensioners and deferred pensioners than active participating members.

 

The Group has agreed deficit recovery plans in place that require cash contributions over and above the current service accrual amounting to £1.9m for the three years to April 2013, followed by payments of £2.3m for a further seven years.  The date of the next triennial review is 5 April 2012.

 

The IAS19 deficit at 31 December 2010 for the Group's defined benefit plans was £10.9m, down from £16.7m in the prior year.  The decrease principally reflects employer deficit contributions together with increased investment returns offset by more onerous mortality assumptions.  No account has been taken of the change in inflation assumption moving to CPI from RPI.  The expected impact of the change is to reduce liabilities, and therefore the IAS19 deficit, in the order of c. £1.0m.  The change will be reflected in the 2011 Consolidated Financial Statements.

 

Small Acquisitions

The Group made two small bolt-on acquisitions during the year.  In July, the Group acquired the trade and certain assets of Ascolit Limited (In Administration) from the Administrator for a consideration of £0.2m, including deferred consideration of up to £0.1m.  The business was absorbed into Ash & Lacy Building Systems Limited.  In December we acquired all the shares of MB Tech Limited (and subsidiary) for an initial cash consideration of £0.2m.  Further deferred consideration up to £0.3m will fall due within two years on the achievement of certain agreed revenue and margin targets.  The business of MB Tech has been absorbed into the Group's UK flooring business based in Middlesbrough.

 

Outlook

As reported in our Interim Management Statement in November 2010, the current trading environment and outlook for 2011 remains mixed.

 

Overall, volumes in Galvanizing are at similar levels to 2010.  There are signs of sustained underlying improvement in the USA but to date this has been offset by the reduced volumes experienced in the UK.

 

In our utilities business, order intake has improved strongly since November, driven by significant contract wins in India and China.  The US utilities market also shows signs of recovery and there are healthy levels of activity associated with the UK water industry's latest AMP5 (Asset Management Plan) programme. The order book for our utilities business bodes well for the future and benefits are expected to start materialising in the second half.  

 

In November, the UK Government reaffirmed its commitment to the Managed Motorway Programme, but on a more protracted timescale.  As previously stated this delay means that our UK roads infrastructure business will have a slower year in 2011.  We are, however, well positioned on these programmes, which represent an excellent medium term opportunity.

 

Our Building and Construction businesses will benefit from any continued recovery in their markets and from the operating plant rationalisation undertaken in 2010.

 

As expected, trading in the first two months of the year has continued to be challenging.  However, we have recently seen a strong order intake in our utilities businesses and, therefore, our views of the overall results for the full year remain unchanged.

 

In the medium to longer term, we remain confident that our business model and strategy for international expansion will continue to deliver attractive growth and value. We will continue to seek out profitable long term growth opportunities where we can leverage our scale and expertise. We were therefore delighted to announce the acquisition of a North American pipes supports business, The Paterson Group, Inc,. which not only gives us a well established presence in the US nuclear and thermal power generation market but, when combined with our existing pipe supports businesses, creates a leading global player in this niche market.

 

The Group is lean, well financed, has excellent positions in its core markets of Infrastructure Products and Galvanizing Services, and a clear focus on further expansion in international markets with clear long term growth dynamics. 

 

 

 

 

Derek Muir                                            Mark Pegler

Group Chief Executive                            Group Finance Director

 

 

9 March 2011

 

Consolidated Income Statement

Year ended 31 December 2010

 

		2010			2009
	Notes	Underlying £m	Non- Underlying* £m	Total £m	Underlying £m	Non- Underlying* £m	Total £m
Revenue	2	374.2	-	374.2	389.7	-	389.7
Trading profit		45.9	(1.0)	44.9	47.0	(0.5)	46.5
Amortisation of acquisition intangibles		-	(0.9)	(0.9)	-	(0.9)	(0.9)
Business reorganisation costs	3	-	(4.4)	(4.4)	-	(1.8)	(1.8)
Gain on disposal of available for sale financial assets	3	-	-	-	-	1.0	1.0
Profit on sale of properties	3	-	-	-	-	0.1	0.1
Operating profit	2	45.9	(6.3)	39.6	47.0	(2.1)	44.9
Financial income	4	0.6	3.4	4.0	0.7	3.4	4.1
Financial expense	4	(4.3)	(4.0)	(8.3)	(5.5)	(3.8)	(9.3)
Profit before taxation		42.2	(6.9)	35.3	42.2	(2.5)	39.7
Taxation	5	(12.2)	1.5	(10.7)	(13.2)	1.0	(12.2)
Profit for the year		30.0	(5.4)	24.6	29.0	(1.5)	27.5
Attributable to:
Equity holders of the parent				24.6			27.5
Minority interest				-			-
Profit for the year				24.6			27.5
Basic earnings per share	6	39.0p		32.0p	38.3p		36.3p
Diluted earnings per share	6			31.7p			35.9p
Dividend per share - Interim	7			5.2p			4.7p
Dividend per share - Final proposed	7			7.5p			6.8p
Total	7			12.7p			11.5p

 

*    Non-Underlying items represent business reorganisation costs, acquisition related expenses, property items, amortisation of acquisition intangibles, impairments, gains on disposal of available for sale financial assets, change in the value of financial instruments and net financing return on pension obligations.

 

 

Consolidated Statement of Comprehensive Income

Year ended 31 December 2010

 

	Notes	2010 £m	2009 £m
Profit for the year		24.6	27.5
Exchange differences on translation of overseas operations		0.3	(15.1)
Exchange differences on foreign currency borrowings denominated as net investment hedges		1.1	10.8
Effective portion of changes in fair value of cash flow hedges		(0.3)	(0.6)
Net change in fair value of available for sale financial assets		-	1.0
Net change in fair value of available for sale financial assets transferred to profit or loss		-	(1.0)
Actuarial gain/(loss) on defined benefit pension schemes		4.6	(5.7)
Taxation on items taken directly to other comprehensive income	5	(1.4)	1.8
Other comprehensive income for the year		4.3	(8.8)
Total comprehensive income for the year		28.9	18.7
Attributable to:
Equity holders of the parent		28.9	19.0
Minority interest		-	(0.3)
Total comprehensive income for the year		28.9	18.7

 

Consolidated Balance Sheet

As at 31 December 2010

 

	Notes	2010 £m	2009 £m
Non-current assets
Intangible assets		109.7	109.8
Property, plant and equipment		102.9	105.1
Other receivables		-	1.1
		212.6	216.0
Current assets
Inventories		46.4	43.8
Trade and other receivables		74.9	76.8
Cash and cash equivalents	8	27.0	41.1
		148.3	161.7
Total assets	2	360.9	377.7
Current liabilities
Trade and other liabilities		(72.2)	(74.7)
Current tax liabilities		(7.6)	(8.3)
Provisions for liabilities and charges		(0.8)	-
Interest bearing borrowings	8	(27.0)	(31.2)
		(107.6)	(114.2)
Net current assets		40.7	47.5
Non-current liabilities
Other liabilities		(0.2)	(0.2)
Provisions for liabilities and charges		(3.6)	(5.0)
Deferred tax liability		(15.9)	(12.7)
Retirement benefit obligation		(10.9)	(16.7)
Interest bearing borrowings	8	(70.6)	(97.5)
		(101.2)	(132.1)
Total liabilities		(208.8)	(246.3)
Net assets		152.1	131.4
Equity
Share capital		19.2	19.0
Share premium		29.1	28.5
Other reserves		4.5	4.5
Translation reserve		6.6	5.2
Hedge reserve		(0.9)	(0.6)
Retained earnings		93.6	74.8
Total equity		152.1	131.4

 

Approved by the Board of Directors on 9 March 2011 and signed on its behalf by:

 

D W Muir

Director

 

M Pegler

Director

 

Consolidated Statement of Changes in Equity

Year ended 31 December 2010

 

 

	Note	Share capital £m	Share premium £m	Other reserves † £m	Translation reserves £m	Hedge  reserve £m	Retained earnings £m	Minority interest £m	Total equity £m
At 1 January 2009		18.9	27.9	4.5	9.2	-	57.7	2.1	120.3
Profit for the year		-	-	-	-	-	27.5	-	27.5
Other comprehensive income for the year		-	-	-	(4.0)	(0.6)	(3.9)	(0.3)	(8.8)
Dividends	7	-	-	-	-	-	(7.5)	-	(7.5)
Change in ownership interest in subsidiaries		-	-	-	-	-	-	(1.8)	(1.8)
Credit to equity of share-based payments		-	-	-	-	-	0.5	-	0.5
Tax taken directly to the Consolidated Statement of Changes in Equity	5	-	-	-	-	-	0.5	-	0.5
Shares issued		0.1	0.6	-	-	-	-	-	0.7
At 31 December 2009		19.0	28.5	4.5	5.2	(0.6)	74.8	-	131.4
Profit for the year		-	-	-	-	-	24.6	-	24.6
Other comprehensive income for the year		-	-	-	1.4	(0.3)	3.2	-	4.3
Dividends	7	-	-	-	-	-	(8.8)	-	(8.8)
Credit to equity of share-based payments		-	-	-	-	-	0.2	-	0.2
Satisfaction of long term incentive plan		-	-	-	-	-	(0.4)	-	(0.4)
Shares issued		0.2	0.6	-	-	-	-	-	0.8
At 31 December 2010		19.2	29.1	4.5	6.6	(0.9)	93.6	-	152.1

 

†  Other reserves represent the premium on shares issued in exchange for shares of subsidiaries acquired and £0.2m (2009: £0.2m) capital redemption reserve.