Scott Wilson Group plc

26 June 2008

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Preliminary Results for the 52 week period ended 27 April 2008

Another Record Year and Strong Outlook

Highlights

	2008	2007	Change
Revenue, including share of joint ventures	£324.2m	£261.0m	+24.2%
Group revenue	£308.7m	£249.5m	+23.7%
Operating profit	£19.1m	£14.7m	+29.9%
Adjusted* operating profit	£22.6m	£16.3m	+38.7%
Adjusted* operating margin	7.0%	6.2%	+12.9%
Adjusted* diluted earnings per share	20.3p	14.5p	+40.0%
Total dividend per share	3.6p	3.3p	+9.1%
Order book	£280m	£257m	+8.9%

 

• Another consecutive year of strong revenue, profit and margin growth reflecting the strength of the core business and enhanced international performance
• Organic revenue growth of 10 per cent in line with strategic plan
• Successful acquisition strategy continues to develop the depth and diversity of the business
• Net borrowings reduced to £7.0 million; committed bank facilities increased to £70 million
• Appointment of Hugh Blackwood as sole Group Chief Executive
• Strong start to the new financial year with confirmed orders representing some 60% the Group’s targeted revenue for 2009

 

Geoff French, Chairman of Scott Wilson, commented:

“These are another set of excellent results that demonstrate once again the strength of Scott Wilson’s underlying business and the ongoing demand for our services around the world. We continue to execute a successful growth strategy which in the last twelve months has led to a significant improvement in our international business, delivered several more acquisitions and improved our internal infrastructure by reducing the size of our senior executive team.  

Despite concerns for the global economy, the demand for improved infrastructure around the globe is being driven by population growth and increased urbanisation. The new financial year has started well and we remain confident in our ability to deliver another year of strong progress and superior returns for our shareholders.“  

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* The Directors believe that the presentation of adjusted operating profit, adjusted operating margin and adjusted earnings per share assists with the understanding of the performance of the Group.

• Adjusted operating profit is operating profit adjusted for the impact of amortisation of business combination intangibles, change in the fair value of derivative financial instruments, retention bonuses arising from acquisitions and the Group’s share of taxation in relation to joint ventures.
• Adjusted operating margin is adjusted operating profit expressed as a percentage of revenue including share of joint ventures.
• Adjusted profit before taxation is profit before taxation adjusted for the impact of amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions and the Group’s share of taxation in relation to joint ventures.
• Adjusted earnings per share is earnings per share adjusted for the impact of amortisation of business combination intangibles, changes in the fair value of derivative financial instruments and retention bonuses arising from acquisitions.

Reconciliations of these measures to operating profit, operating margin and earnings per share are set out in notes 8 and 12.

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Scott Wilson Group plc

Scott Wilson Group plc, with over 6,000 members of staff, is a multi-disciplinary international design and engineering consultancy for the built and natural environments.  The Group has doubled in size over the past few years and from its UK headquarters currently controls a worldwide network of 80 offices.

http://www.scottwilson.com/

Chairman’s Statement

Introduction

I am very pleased to report another year of record results and very strong progress for the Group. Once again our results show further substantial improvement both in revenue and operating margin.  It is especially pleasing that all parts of the business have contributed significantly to these record results.  We have made two selective acquisitions and further strengthened our presence in China with the establishment of an additional joint venture.  Once again, our order book stands at a record level.

Operations and Strategy

Our strategic plan objectives are to maintain our growth to ensure that we retain and improve our position as one of the premier consultancies in each of our chosen sectors.  This is being achieved by ensuring our business can respond rapidly to the demands of a global client base, across a broad range of sectors, anywhere in the world.  These objectives are being met by a combination of organic growth and selective acquisitions.

At the same time as growing revenue we plan to continue to improve our operating margin.  This will be achieved by improved internal management at all stages of our projects, taking full advantage of the synergies with our acquisitions and maximising the benefits of our global presence. 

We are being assisted in achieving these objectives by the high levels of global demand for new and improved infrastructure driven by population growth and urbanisation, with the added requirement for sustainability issues to be fully considered. These characteristics apply particularly to the emerging economies where the pace of growth and urbanisation is most rapid.

In the second half of the year concerns increased about the state of the economy in the UK following the sub-prime mortgage issues in the USA.  So far we have seen very little impact of this on our work in the UK with strong demand being maintained in all our operating regions.  

The acquisitions that we have made in recent years have produced a much more balanced business by reducing our dependence on any single market sector or customer.  These acquisitions have all integrated well into the business and have made significant contributions to these record results.  The margin in our International division has improved as planned and we see opportunities to generate significantly higher rates of organic growth within our international business whilst continuing to improve operating margins.

The successful achievement of financial targets set in previous years has resulted in new, more challenging, targets in our latest strategic plan.  Key elements of that plan are to:

• Achieve organic growth of at least 10 per cent per annum
• Increase operating margin to 10 per cent overall by 2013
• Supplement organic growth with further selective acquisitions
• Maximise benefits from global integration

Our Board of Directors monitors the progress towards these targets by reference to a number of key performance indicators.

Results

The financial results for the year are significantly ahead of the prior year.   Revenue, including our share of joint ventures, increased by 24.2 per cent to £324.2m (2007: £261.0m), 10 per cent of which was organic growth and the remainder resulting from the acquisitions made in the previous year.  Group revenues increased from £249.5m to £308.7m, a rise of 23.7 per cent.

Adjusted* operating profit increased by 38.7 per cent to £22.6m (2007:£16.3m) with the adjusted* operating margin improving from 6.2 per cent to 7.0 per cent.

Basic earnings per share are 17.7p (2007: 13.9p) and diluted earnings per share are 17.1p (2007:13.4p).  Adjusted* diluted earnings per share, our preferred measure of Group earnings, were 20.3p (2007: 14.5p).

Net debt at the year end reduced by £7.6m to £7.0m, whilst our committed bank facility has increased to £70.0m.

Dividend

The Board recommends a final dividend of 2.4p per share for approval by shareholders to be paid on 5 October 2008 to Ordinary Shareholders on the register on 1 September 2008.  The total dividend for the year is 3.6p (2007: 3.3p).

It remains our intention to have a progressive dividend policy balancing growth in earnings, investment plans and dividend cover levels.

Acquisitions

In May 2007 we acquired DCL Consulting Engineers Ltd, a leading building services consultancy in South West England with headquarters in Plymouth.  In July 2007 the acquisition of McLay Collier significantly enhanced our capability in the buildings & infrastructure sector in Central Scotland.  These acquisitions and those made last year are integrating very well and continue to deliver significant operating synergies.

In April 2008 the Group announced a strategic joint venture with the Chongqing Communications Planning Survey & Design Institute in South West China.  The joint venture, Chongqing Scott Wilson, will capitalise on the combined strength of the two organisations and create additional business opportunities across the region. It also further consolidates the Group’s position as the leading UK engineering consultant in China.

Two further acquisitions have been completed since the end of our financial year.  The Terence Lee Partnership, a mechanical and electrical consultancy with particular expertise in underground railways, will form an important part of a new metro division we are establishing.  Strategic Leisure is a management consultancy specialising in strategic advice to public authorities and private leisure organisations.

Board of Directors

Sean Cummins was appointed Group Finance Director on 1 October 2007, adding further FTSE 250 experience to our Board and providing a clear demonstration of our significant growth ambitions.  The Board would like to record its thanks to Stephen Kimmett, the previous Group Finance Director, for all he did for Scott Wilson.

The Board concluded that the time was now right for the Group to have a sole Group Chief Executive and Hugh Blackwood took up the role on 1 May 2008.  Ron Wall, joint Chief Executive, stepped down from the Board at the end of the financial year.  Ron Wall has played an increasingly important role in Scott Wilson over the last 20 years and, while thanking him for all he has done, we are delighted that his skills and expertise remain available to the Group on a consultancy basis.

Employees

At the end of April 2008 we had 6,270 staff, a significant increase from the 5,547 at the end of April 2007.  We know that the quality of our employees is one of the Group’s key attributes. They remain critical to our reputation, our continuing innovation and to the delivery of these record results.

Our people are at the heart of our brand, they are ambitious, passionate, collaborative and knowledgeable.  On behalf of the Board, I would like to thank all our members of staff for their outstanding contributions to Scott Wilson over the last year.

Corporate and Social Responsibility

We clearly recognise the fundamental importance of sustainability and integrity to our business and are committed to continual improvement in our social, environmental and ethical performance.  This is supported by having environmental, social inclusion and equality, health and safety skills in-house and by our corporate commitment to the UN Global Compact, the world’s largest CSR initiative.

We have been proud to significantly increase our support for the staff-led Scott Wilson Millennium Project, a registered charity which focuses on the relief of poverty, hardship and distress among children in developing countries.

We also give corporate support as a patron to the RedR charity and its humanitarian relief efforts.

Outlook

In the second half of the year concerns increased about the state of the global economy following the sub-prime mortgage issues in the USA.  The impact on our business has been very limited with continued high levels of global demand for new and improved infrastructure.  This has been driven by population growth and further urbanisation with, for the first time ever, more than half the world’s population now living in urban areas.

The Group has already started the new financial year in a strong position, with confirmed orders representing some 60 per cent of our targeted revenue for the year.  The ongoing benefits flowing from the acquisitions, combined with our robust underlying business and strong demand for our services around the world mean that we are confident of meeting our strategic objectives and delivering further growth and value for our shareholders in the year ahead. 

Geoff French

Group Chairman
26 June 2008

Business Review – CEO Report

Review by Division

Scott Wilson brings together a range of technical and management expertise to address our clients’ projects in the built and natural environments.  Many of our clients are responsible for developing the infrastructure within which our global societies carry out their day-to-day lives.  Our passion is sharing our clients’ challenges with them and applying knowledge and expertise to produce positive results.

Over the past financial year the global demand for infrastructure has continued to grow, despite a weakening economic outlook in the UK.  Pressure on infrastructure and resources continues to be driven by increased economic activity, population growth, greater urbanisation, enhanced level of expectation and a higher demand for travel.  This pressure is set against a growing anxiety about issues such as sustainability and climate change.

The Scott Wilson business is increasingly well equipped and well positioned to engage with these emerging challenges.

Over the past financial year the Group has continued to progress in line with our long term strategic objectives.  Driven by our clients, a substantial amount of our global revenue is generated from projects outside the UK.  The restructuring of our International regional businesses has resulted in them meeting profit benchmarks set in 2006 and establishes a solid platform from which to continue the pursuit of our objective of creating an integrated global enterprise.  A new business was established in Brisbane, Australia based around the rail and mining sectors, which provides the Group’s first presence there since 2003 and an additional joint venture arrangement in China strengthened our buildings & infrastructure and environment sector portfolios in that region.

Double digit organic revenue growth was achieved in China, India, the Middle East and some of our UK businesses.  Acquisitions completed during the previous financial year have been substantially integrated and are all delivering a range of financial and non-financial benefits to the organisation.  Acquisition activity has slowed somewhat over the past year due to an uncertain market but the introduction of new organisations to the Group remains central to the Scott Wilson growth strategy and the pursuit of high quality targets is continuing.

The operating divisions are watchful for any impact of uncertainties in the financial markets but apart from some reduction in the overheating within the residential property market, order book and opportunities remain at record levels.

The Group currently manages and reports its business activities in five geographic Divisions.

UK Central Division has again exceeded its growth targets in both revenue and operating profit during the past year.  A 23 per cent increase in revenue, including share of joint ventures, has been achieved by the Division’s management team and its staff working together to focus on its target markets.  Factors that have contributed to this growth include the consolidation of the Group’s acquisition of DGP in December 2006 and taking advantage of that company’s market position in both the nuclear power and waste sub-sectors to achieve market penetration and secure major projects in these markets. The Division also secured places on several successful local authority waste PFI projects in the northwest during 2007/2008.

Significant growth has also been achieved by leveraging the Division’s market leader position in the Highways Management and Major Roads markets.  Collaborative working with our contractor partners and our major client body, the Highways Agency, has enabled Central Division to continue to deliver significant projects for the Highways Agency, both through the Early Contractor Involvement (ECI) Programme and the Managing Agent Contractor (MAC) contracts.  Such projects have included the A30 Bodmin to Indian Queens ECI project which has won 3 major civil engineering awards and shortlisted for various others during the past year. The A30 Bodmin to Indian Queens construction team was also awarded a Silver Award under the Considerate Constructors Scheme.  While it is true that part of the Highways Agency’s ECI programme falls within its spending review, the impact on Central Division’s order book is minimal, since the procurement of further options studies on projects such as the M1 widening between Luton and Bedford is expected to maintain orders and extend design periods.  In addition detailed design has already commenced on the £184m A421 Bedford to M1 Junction 13 project.

Similar collaborative work has delivered new opportunities in the Highways Management MAC sector. Central Division is seeking to renew its existing Area 7 MAC contract with its new joint venture partner Skanska, and is also bidding for the Area 4 MAC with the same partner.  The Three Counties Alliance (3CA) Local Authority Framework demonstrates how our staff’s detailed knowledge of local highways management issues and our commitment to delivering practical solutions is recognised by our clients as being ‘Best in Class’, bringing benefits to both our clients and to their own stakeholders.

UK South Division has continued the trend of significantly improving operating margins during the current financial year and all parts of the Division have performed well.  The focus during the year has been on consolidating the major acquisitions into the business combined with increased emphasis on organic growth.  In addition, the Division has progressed two minor acquisitions. In May, 2007 DCL Consulting Engineers Ltd was brought into the business to strengthen our position in the South West and enhance our building services capability.  During the early part of 2008 agreement was reached to acquire Strategic Leisure Ltd, a consultancy business providing leisure planning to both the private and public sectors.  This acquisition was completed in June 2008.  Overall the Division achieved a 49 per cent increase in revenue and a 68 per cent growth in adjusted* operating profit. 

This year Scott Wilson has concentrated on greater inter-Divisional cooperation to enable us to tackle larger and more exciting projects.  The passion within the business comes from working on challenging projects, which require the staff to draw on the Group’s extensive knowledge.  The Division has used its strength to assist International Division to move into new and more profitable markets associated with the oil and gas sectors.

The Division is particularly strong in the buildings & infrastructure sector. Following early signs of a slow-down in the housing market during the summer of 2007, the divisional board implemented a strategy to place greater emphasis on our areas of traditional strength.  We are leading players in education, health and buildings & infrastructure designs associated with airports, ports, railways and waste facilities.

The Division has also focused on improving Scott Wilson’s capability to deliver exceptional projects.  A good example of this is the National Industrial Symbiosis Programme which helps drive sustainability by challenging convention and using knowledge through a collaborative network. The Water group completed the very significant Ground Water Investigations Project in southern England and are now well placed to take advantage of the next 5 year expenditure programme.   

Scotland & Ireland Division achieved a revenue increase of  42 per cent and an increase in adjusted* operating profit of 52 per cent with an adjusted* operating margin of 8 per cent.  Over the last two years, revenue has grown by 135 per cent as a result of both organic growth and the acquisition policy.  This year the acquisition of McLay Collier increased our buildings & infrastructure capability in Scotland and has helped deliver a broader based business.

The Division remains dominant in the roads sector with an involvement in three major DBFO (Design, Build, Finance and Operate) projects; one in the North of England and two in Northern Ireland. We are also involved in major road projects in Ireland including the improvement to the M8/ N8 over a 40km length. The majority of our work remains on the client side.  Involvement in the business & infrastructure sector was essentially focused on healthcare, education and other public sector projects; exposure to private sector housing and retail is limited.  In Scotland the prestigious Eden Court Theatre in Inverness was opened during the year and three schools will be opened in the Borders later this year. In Northern Ireland our involvement is progressing on the Down Hospital and on the Critical Care Centre at the Royal Victoria Infirmary in Belfast.

The environment, landscape and tourism and leisure sub-sectors remained very buoyant.  Design has commenced on the external works for the National Sports Arena in Glasgow, part of the Commonwealth Games programme.  In Northern Ireland, Lough Key Visitors Centre with its treetop walk was opened and in Dublin design commenced on a major public realm scheme.  Our Scottish Water Framework provided an increasing flow of projects and this was complemented by winning a new framework for Northumberland Water.  In Ireland, the North Coast Wastewater Treatment Scheme opened and the next phase of the Lough Mourne Water Supply Scheme in Donegal is now anticipated.  In the renewable energy sector our framework agreement with Scottish Power proved fruitful both to the engineering and environment disciplines.

Within the UK Railways Division the year was dominated by the buoyant but turbulent market in the major project arena.  This involved the ongoing delivery of several long term multidisciplinary major projects.  These included the West Coast Route Modernisation and Crossrail feasibility studies, whilst the sudden loss of Edinburgh Airport Rail Link, through a political change, and related reduction in volume on Edinburgh Tram was partially offset by an upturn in volume on the East London Line.  In addition, the Division had their contract to cover detailed design on the Airdrie to Bathgate Re-opening extended and also secured work on the next stage of the Waverley Railway Re-opening, two of the key priorities for rail investment in Scotland.  As a result, revenue generated by the Division during the year increased by 13 per cent, including work in which other divisions participated. 

A number of major framework agreements were secured with Network Rail, The Department for Transport, the Olympic Development Agency and Metronet (TFL).  International projects comprise approximately 10 per cent of revenue with projects in Jamaica, Greece, Romania, Saudi Arabia and Australia, the latter bolstered by a successful office opening in Brisbane during the year.

More than 50 per cent of the world’s population now live in urban areas. This and the increasing acknowledgement of the green credentials of rail is bringing a huge increase in metro investment around the world.  Recognising this and the engineering complexity of metro planning and design, a new metro team has been set up within UK Railways to bring together a core technical competency for the Group, building on our burgeoning successful track record in this area.

The metro team will initially focus on three areas: civil/structural engineering, mechanical & electrical (M&E) engineering and engineering integration.  It will draw on existing expertise in Railways, some staff transfers from UK South and all of the staff from the recently acquired Terence Lee Partnership (TLP).  TLP have been working on London Underground M & E work for the past fifteen years and a considerable amount of this work has been in conjunction with Scott Wilson.  The metro team will also act as the informed buyer, both internally and externally, of the many other disciplines required within the Metro environment. 

Although revenue for the International Division increased by just under 8 per cent over the previous year, there was a very significant 239 percent growth in adjusted* operating profit with an increase in adjusted* operating margin to 5 percent.  The results demonstrate the continuing improvement in the performance of the International operations and come despite the reduced activity and residual costs of restructuring in Southern Africa and investment in the rapidly expanding Middle East.  It also means that the 5 per cent internal target which was set for the International business in 2006 has been achieved.

China/Hong Kong and India both returned strong organic revenue growth, with the Middle East and UK International business units also exhibiting double digit increases.

All international markets Scott Wilson operates in have remained strong, being buoyed by ongoing urbanisation and the increase in oil and mineral prices.  New orders received during the year were above sales recorded in 2007/08, which leaves a healthy order book for 2008/09.

The Scott Wilson mining group has grown to number five in the world, with revenue increasing by 57 per cent.  The core business is strategic technical and financial service to global mining clients and we are now in the process of cross selling our wider engineering services to these clients for their mining developments.

Our Eastern Europe business continued to grow and the strong order book in the transportation sector for next year is expected to yield improved margins.

The India business now has expanded into four offices, Delhi (HQ), Mumbai, Bangalore and Chennai and some 33 project offices in 18 states, with workload expanding from the core highways sector into ports, railways, airports and urban infrastructure.  Operating margin has moved strongly into double figures.  Having established a dominant market position the Group is very well placed to access India’s planned £240bn spend on infrastructure in the next five years and also the increasing foreign direct investment by global clients and investors.

Revenue, including share of joint ventures, and operating profit from our China/Hong Kong  business grew by 30 per cent and 159 per cent respectively from the previous year and delivered a much improved operating margin of 5 per cent.  This was achieved as a result of the continuing growth in China’s domestic economy and the recent upturn in Hong Kong’s infrastructure markets.  Asian economies have been and are expected to remain robust and  they continue to expand. 

A new joint venture business has been established in Chongqing (the world’s largest metropolitan area with a population 32 million) whilst additional office space has been leased in six of our eight offices in China, reflecting our expansion in staff numbers to over 900.

A feature of the last year has been the diversification in type of work with a growing Chinese international client base and increased building & infrastructure sector order book.  Many of our China clients are using our services as they expand internationally in search of raw materials and new markets.

With the continuing demand for infrastructure and environmental improvements in China, private funds are looking to invest more in Asia and larger infrastructure projects beginning in Hong Kong.  Revenue is expected to grow by at least 15 per cent in 2008/09.

Transportation remains our largest sector by revenue and includes major roads projects in Greece, Poland, China, India, Serbia and Africa.  Ports work continues unabated with the Khalifa Port in Abu Dhabi, the Millford Haven project for Qatar Gas, several projects for Sonangol in Angola and Port Botany in Australia.

The year saw rapid development in our international business model toward our vision of becoming an Integrated Global Enterprise.  Collaboration grew among our extensive network of offices sharing resources, knowledge and clients around the world.  Market opportunities remain enormous and International Division has created a sound platform on which to build for the future.

Our forward strategy will remain clear and unaltered:  to pursue continuing revenue growth to improve our operating margin and to manage fluctuations in the market by our geographic and sector diversity.

The outlook for the international market in general remains extremely positive.  Despite a possible short-term slowdown in the UK economies, the global opportunities in the infrastructure market will continue, driven largely by the emerging economies of China and India, where the Group is well placed to expand its activities.  The priorities for the international business are to continue to take advantage of the globalisation of demand for our services by building revenue in our indigenous businesses and focusing on continuing to improve our operating margins.

We will continue to pursue substantial organic growth across our markets, supported by acquisition.  As we move toward our vision of becoming an Integrated Global Enterprise, our strategy is clear and our course is set to strengthen the business and to fill the gaps in our geographic and service coverage.

The Group enters the new financial year with our order book at record levels and a stronger market sector position as a result of recent acquisitions and a continuing demand for our services worldwide.

Hugh Blackwood

Group Chief Executive
26 June 2008

Business Review – Finance Report

Income Statement

Revenue, including our share of joint ventures, increased by 24 per cent to £324.2m, driven by strong organic growth of 10 per cent, along with the full year benefit of the acquisitions made in the previous year. The development of activities outside the UK is a key priority for the Group, therefore it is pleasing to see revenue in the international market increased by 12 per cent to £85m.

Adjusted* operating profit of £22.6m benefited from improved levels of staff utilisation and cost savings arising from the integration of recently acquired businesses. Adjusted* operating margin progressed to 7.0 per cent compared to 6.2 per cent in the corresponding period.

To provide a clearer indication of the Group’s underlying, or adjusted, performance, it is necessary to highlight, and disclose in a separate column, a number of items. The significant issues in the year relate to (i) amortisation of business combination intangibles, (ii) one-off retention bonuses paid to key staff following acquisition, (iii) change in the fair value of derivative financial instruments, which do not qualify for IAS 39 hedge accounting and (iv) the re-presentation of tax on joint venture income to present operating profit on a consistent basis.

Average borrowings for the period were higher than 2007 which, combined with an upward movement in UK interest rates, resulted in an increased net interest charge of £1.7m. The impact of this was more than off-set by the positive movement in the net finance income on the pension schemes, leading to overall net interest income of £1.3m (2007: £0.7m).

The adjusted* taxation charge, including that related to joint ventures, amounts to £8.0m which represents an effective tax rate of 33.5 per cent. This is higher than the UK headline rate of 30 per cent principally as a result of disallowed expenses, the revaluation of the brought forward deferred tax asset and tax losses in overseas entities.

Additional shares have been issued in partial settlement of recent acquisitions and new share options were granted during the year. This has increased the dilutive impact on adjusted* earnings per share, which at 20.3 pence remains a very creditable increase of 40 per cent.

A final dividend of 2.4 pence per share has been proposed by the Board, which would take the full year payout to 3.6 pence, an increase of 9 per cent. The dividend is covered 5.6 times by adjusted* diluted earnings per share.  It remains our intention to pursue a progressive dividend policy balancing growth in earnings, investment plans and dividend cover.

Borrowings

Net borrowings at the year end were £7.0m, an improvement of £7.6m during the year.

The Group has invested in a number of office relocations, as we combine and expand offices both to support the increasing headcount and to facilitate greater operational efficiency. This has contributed to capital expenditure exceeding depreciation by £3.7m, a situation that is likely to be repeated in the current year.

In a business with high rates of organic growth, it is essential that we maintain focus on working capital, particularly as we expand in the international arena. This has been achieved in the current year, with a modest £0.1m overall working capital improvement.

Taxation paid during the year was £1.7m. This relatively low level is mainly due to tax relief on the special pension payments made in 2006 and 2007 from which the Group will see a reduced benefit in the current financial year, returning to a more normal payment pattern thereafter.

Just after the year end the Group extended its committed bank facilities, increasing the amount available to £70m on more favourable terms. This provides the financing necessary to deliver our five year strategic plan, through a mixture of continued organic growth and selective acquisitions, whilst confirming the excellent support we enjoy from our primary bank.

Pensions

The Group has operated two defined benefit schemes, both of which are closed to new members, and a defined contribution scheme throughout the period. The aggregate deficit on the defined benefit schemes at 27 April 2008 was £19.9m (2007: £12.4m). Mortality assumptions used in the year end valuation have been adjusted to recognise improvements to life expectancy which, combined with lower investment returns from volatile stock markets, had an adverse impact on the deficit.

Post balance sheet events

On 5 June 2008, the Group acquired the business of Strategic Leisure Limited, a management consultancy specialising in strategic advice to public and private sector leisure organisations, for a total potential consideration of £0.6m.  On 6 June 2008, the Group acquired the business and assets of Terence Lee Partnership, a mechanical and electrical building services consultancy based in London, for a total potential consideration of £1.3m.

Sean Cummins

Group Finance Director
26 June 2008

For press enquiries, please contact Lak Siriwardene on + 00 (44) 078 2431 1762 or email lak.siriwardene@scottwilson.com