(WGB.L) Walker Greenbank PLC Buy/Sell

Terry Stannard, the Chairman of Walker Greenbank, said: "Whilst trading conditions remain uncertain, we have addressed our cost base, sustained the profitability of the Group and kept tight control of cash. We have a strong balance sheet and are well positioned to take advantage of an upturn in our marketplace.

"We have seen a gradually reducing shortfall in brand revenues each month since the end of March and a return to profitability in our manufacturing in the second quarter. This has continued into the opening weeks of the second half and, whilst we are cautious about the stability of the marketplace, we remain comfortable that we will meet market expectations."

For further information:

Walker Greenbank PLC 0844 543 4667

John Sach, Chief Executive Alan Dix, Finance Director Julian Wilson, Company Secretary

Arden Partners plc 020 7398 1600

Chris Hardie/Adrian Trimmings

Buchanan Communications 020 7466 5000

Mark Court/Suzanne Brocks/Miranda Higham

CHAIRMAN'S STATEMENT

Overview

As anticipated at the year end, market conditions in the first half have been particularly challenging and consequently revenues are significantly down on the prior half year. However we are encouraged by a gradually improving sales trend in our brands during the six month period. Our continued commitment to design excellence and our broad range of brands has seen us stem the rate of revenue decline progressively since the end of March.

Total revenues declined 12% against the same period last year, a time during which trading was particularly strong.

External Worldwide brand revenues declined 10%, whilst third party manufacturing suffered a more severe decline of 18% due to difficult market conditions and customer de-stocking. Within the luxury interior furnishings market, our range of mid market brands, Harlequin, Sanderson and Morris & Co, have performed more strongly than our premium-end brand Zoffany.

The largest market for our brands, the UK, experienced an 8% revenue decline, whereas the US and Europe were down 31% and 20% respectively in local currency.

During the period we have taken firm action to reduce costs to mitigate the sales decline and to sustain the profitability of the Group. In addition we continued to strengthen our balance sheet, reducing net debt to £6,727,000 from £9,302,000 a year ago.

Financials

Revenue decreased 12% to £29,139,000 from £33,007,000 over the same period last year. The operating profit for the half

year, before exceptional redundancy costs of £246,000 and exceptional insurance recovery of £210,000, decreased 51% to £1,049,000 (2008: £2,141,000). Net finance costs on borrowings reduced to £145,000 (2008: £385,000) due to reduced levels of borrowings and lower interest rates. Net defined benefit pension charge increased to £300,000 (2008: £34,000) due to higher discount rates on liabilities and lower investment returns on scheme assets both based on actuarial estimates at the start of the year. The profit before tax decreased 67% to £568,000 (2008: £1,722,000). Profit after tax fell to £422,000 (2008: £936,000).

Interest cover (excluding net defined benefit pension charge) increased to 7.0 times compared with 5.6 times for the first half of 2008.

The earnings per share were 0.77p (2008: 1.70p).

The Group's net indebtedness at the period end was £6,727,000 (2008: £9,302,000). This represents a reduction in gearing to 31% (2008: 43%). Despite the reduced profit from operations of £1,013,000 (2008: £2,141,000) the cash inflow from operating activities in the six month period was £117,000 (2008: cash outflow £1,081,000) reflecting tight working capital control and reduced interest charges.

Dividend

At the interim stage, the Board does not recommend the payment of a dividend. We will continue to review our dividend policy with the objective of paying a dividend at the earliest appropriate opportunity.

People

On behalf of the Board, I would like to offer thanks to all our employees for their enthusiasm, commitment and loyalty in a challenging environment. We are very grateful to them for their continued support.

Outlook

Whilst trading conditions remain uncertain, we have addressed our cost base, sustained the profitability of the Group and kept tight control of cash. We have a strong balance sheet and are well positioned to take advantage of an upturn in our market place.

We have seen a gradually reducing shortfall in brand revenues each month since the end of March and a return to profitability in our manufacturing in the second quarter. This has continued into the opening weeks of the second half and whilst we are cautious about the stability of the marketplace we remain comfortable that we will meet market expectations.

Terry Stannard

Non-Executive Chairman

6 October 2009

CHIEF EXECUTIVE'S REVIEW

Overview

Walker Greenbank has maintained carefully measured levels of product investment in the first half of this year in its four luxury interior furnishings brands - Harlequin, Zoffany, Sanderson and Morris & Co. - with tight control over discretionary expenditure. This combined with the considerable investment made in previous years has enabled the Group to maintain its focus on design and product excellence and customer service despite extraordinarily tough market conditions.

Our Brand segment revenues declined 11% and our Overseas segment revenues declined 10% benefiting from the weakness of sterling in the first half. Brand revenues in the UK retail market declined 8%, this being our most important market, accounting for 41% of overall Group revenues. Much tougher conditions were experienced at the upper end of our marketplace, with our mid-market brands Harlequin and Sanderson performing relatively well. In mainland Europe, retail revenues were down 7%, equating to a 20% decline in constant currency. Our US retail business, whilst still a small part of overall Group revenues, proved to be the most demanding business unit with revenues down 11%, equating to 31% in constant currency. The Rest of the World revenues were down 16%. We have continued to invest in the strategic development of our Contract business although market conditions have led to an 8% decline in revenues. We continue to develop the licensing opportunities that exist for our brands, with licensing revenues being broadly maintained in the first half.

Our Manufacturing segment revenues declined 18%, suffering from significantly reduced volumes and customer de-stocking, particularly in the first quarter. A reduction in the cost base to align the manufacturing to these reduced volumes returned our manufacturing businesses to profitability in the second quarter.

The Brands

Walker Greenbank has a strong portfolio of brands covering a wide variety of market segments in the mid to upper end of the premium interior furnishings market. The brands segment performed relatively well in the current trading environment, with revenues down by 11% over the same period last year. We embarked on a cost reduction exercise in the final quarter of last year and the early part of the current year in response to these market conditions. This, combined with improved margins, has helped reduce the impact of the revenue decline, leading to a 26% fall in operating profits after exceptional items over the same period last year.

Harlequin's continued focus on design excellence and new product launches has underpinned its position as the leading mid-market contemporary brand in the UK. Pleasingly "Arkona", a contemporary range of wallpapers, prints and woven fabrics and part of last year's autumn launch has become the best selling Harlequin collection in the past five years despite the current market place. Overall revenues fell 10% over the same period last year but the fall has been steadily reducing since the end of March. As the contract market becomes more cost conscious in the current trading environment, Harlequin has seen its contract revenues grow 15% on the same period last year. The UK has performed slightly better than export markets with revenues down 8% compared with 11% for export. Within export, Europe is down 21% in constant currency, with the important markets of Ireland and Spain being hardest hit. Revenues within the Rest of the World were only down 1%, with solid progress being made in the Middle East. More than half of Harlequin revenues are from woven product, which is sourced primarily from Europe and consequently the gross margins have declined slightly due to the strengthening of the Euro.

Zoffany, which is positioned at the upper end of the premium market, has seen revenues fall 21% as customers appear to be trading down or deferring investment. The fall has been across all markets, with the UK down 19%. Zoffany has been particularly hard hit in its export markets where the decline in its most important market of Southern Ireland contributed significantly to a 26% fall in constant currency in Europe. It has also suffered from a significant decline in its contract business and a fall in constant currency of 33% in the USA and 43% in the Rest of World.

Arthur Sanderson & Sons incorporating the Morris & Co brand has continued its strong investment in product. The successful spring launch of "Options 10", its flagship triennial collection, combined with the unrivalled global recognition of the brand to give Sanderson an overall revenue fall of only 4%, compared with a particularly strong growth period last year. The fall has been steadily reducing since the end of April. The UK suffered only a 1% revenue fall with European revenues increasing by 4% but declining 5% on a constant currency basis. The US market fell 24% on a constant currency basis, albeit from a relatively small base. The Rest of the World experienced a fall in revenues of 10%. Gross margins improved as the strengthening Euro benefited margins, there being a higher proportion of European sales for these brands compared with Harlequin and Zoffany.

Overseas

The US market has been extremely challenging with revenues in the US business falling 11%, equating to 31% in constant

currency. The US still forms an important part of the Group's medium to long term growth strategy but currently represents only 14% of overall Group revenues. Investment in marketing, patterning and sample support has been reduced to reflect the market conditions. The reduced investment and the impact of improved margins due to the strength of the dollar have led to a small profit in the first half.

The Group's distribution businesses in Rome, for Zoffany and Harlequin, and in Paris, for Zoffany and Sanderson, remain relatively small. The French business remained robust with revenue growing by 6% but the Italian business suffered a decline of 14%. Overall the European businesses have remained profitable.

Manufacturing

Manufacturing experienced extremely tough market conditions, with third party revenues falling 18% on the same period last year. This was reflected with a similar reduction in revenues within the Group's brands. The most significant decline was for export customers where the decline was 47%, with US customers reducing stock levels and new product launches more significantly than others. To mitigate the lower volumes, headcount was reduced through a redundancy programme, predominantly in the first quarter. This, combined with a slight easing in market conditions, helped return manufacturing to profitability in the second quarter.

Anstey, our wallpaper printing factory, experienced de-stocking by its customers and reduced levels of new product launches. Overall revenues fell by 23% with external revenues falling 27% and revenues from the Group's brands down 20%. The most significant decline suffered was in export markets where revenues fell 56%, representing 10% of total revenues. These revenue declines led to an overall breakeven result in the first half with Anstey returning to profitability in the second quarter.

Standfast, our fabric printing factory, continued to experience extremely challenging market conditions in the first half of the current year. Overall revenues were down 13% over the same period last year, with an 11% fall in third party revenues and a 15% fall in Group revenues. This reduced activity placed further pressure on factory throughput and operating margins leading to a small overall loss in the first half. However, a further reduction in headcount through a redundancy programme in the first quarter, combined with Standfast's main competitor going into administration and emerging in a significantly reduced form, helped to turn a significant first quarter loss into a second quarter profit.

Eliminations and Unallocated (including central costs)

The Group hedges dollar revenues from its overseas distribution business. The average rate of these contracts during the first half of the year compared with spot rates led to an exchange loss. However, tight cost control has reduced central costs to £1,142,000 (2008: £1,502,000).

Summary

We remain committed to our strategy which continues to be underpinned by five key elements: organic growth within the UK, geographic expansion, contract sales growth, development of further licensing arrangements and a willingness to evaluate acquisition opportunities. We remain focused on cash generation and building the strength of our balance sheet. Whilst the market place makes current growth difficult we remain confident about the progress the Group will make in the medium term given the global recognition of its brands and the robustness of the Group's finances.

John Sach Group Chief Executive 6 October 2009

Walker Greenbank plc

Unaudited Consolidated Income Statement

For the six months ended 31 July 2009
Note 6 months to 31 July 6 months to 31 July 12 months
2009 2008 to 31 Jan
£000 £000 2009
£000
Revenue 2 29,139 33,007 63,698

Profit from operations before 1,049 2,141 3,857

exceptional items Exceptional items:

Net defined benefit pension 5 (300) (34) (79)
charge (133) (373) (669)
Net borrowing costs (12) (12) (26)

Amortisation of issue costs
Net finance costs (445) (419) (774)

Profit before taxation 568 1,722 2,787

Current tax (6) (11) (57)
Deferred tax - exceptional - (320) (320)
Deferred tax - other (140) (455) (788)
(146) (786) (1,165)
Total tax (charge)/credit 6

422 936 1,622

Profit for the period
Earnings per share - Total 7 0.77p 1.70p 2.96p

basic and diluted

Unaudited Consolidated Statement of Comprehensive Income

For the six months ended 31 July 2009

6 months to 6 months to Year to
31 July 2009 31 July 2008 31 Jan 2009
£000 £000 £000
Profit for the period 422 936 1,622

Other Comprehensive Income:
Actuarial losses on scheme - - (7,458)

assets
Other actuarial gains on - - 5,458

scheme liabilities
Currency translation 192 30 (350)

differences
Cash flow hedges 905 65 (702)
Recognition/(reduction) of - (175) 211

deferred tax asset relating to pension scheme liability
Other comprehensive income for 1,097 (80) (2,841)

the period, net of tax
Total comprehensive income for 1,519 856 (1,219)

the period attributable to the owners of the parent

Unaudited Consolidated Balance Sheet

As at 31 July 2009

As at As at As at
31 July 2009 31 July 2008 31 Jan 2009
£000 £000 £000
Note

Non-current assets
Intangible assets 5,821 5,778 5,877
Property, plant & equipment 8,382 8,921 8,734
Deferred income tax assets 5,018 5,105 5,158
Trade and other receivables 6 17 12
19,227 19,821 19,781

Current assets
Inventories 13,180 13,910 13,887
Trade and other receivables 11,893 13,908 12,552
Cash and cash equivalents 2,039 3,203 1,050
Derivative financial instruments 93 - -
27,205 31,021 27,489
Total assets 46,432 50,842 47,270

Current liabilities
Borrowings 8 (5,966) (400) (400)
Trade and other payables (12,426) (13,730) (15,118)
Derivative financial instruments - (45) (812)
(18,392) (14,175) (16,330)
Net current assets 8,813 16,846 11,159

Non-current liabilities
Borrowings 8 (2,800) (12,105) (6,868)
Retirement benefit obligation 10 (3,810) (2,783) (4,161)
(6,610) (14,888) (11,029)
Total liabilities (25,002) (29,063) (27,359)
Net assets 21,430 21,779 19,911

Equity
Share capital 590 590 590
Share premium account 457 457 457
Foreign currency translation (144) 40 (340)

reserve
Accumulated losses (20,073) (19,770) (20,491)
Other reserves 40,600 40,462 39,695
Total equity 21,430 21,779 19,911

Unaudited Consolidated Cash Flow Statement

For the six months ended 31 July 2009

6 months to 6 months to Year to
31 July 2009 31 July 2008 31 Jan 2009
£000 £000 £000
Note

Cash flows from operating activities
Cash generated/(utilised) from 9 276 (691) 3,536

operations
Interest paid (153) (407) (704)
Interest received - 28 35
Income tax paid (6) (11) (37)
117 (1,081) 2,830

Cash flows from investing activities
Purchase of intangible fixed (161) (210) (420)

assets
Purchase of property, plant & (459) (647) (1,267)

equipment
Proceeds on sale of property, - - 7

plant and equipment
(620) (857) (1,680)

Cash flows from financing activities
Purchase of treasury shares - (83) (83)
Net drawdown/ (repayment) of 1,498 3,199 (2,064)

borrowings
1,498 3,116 (2,147)

Net increase/ (decrease) in
cash, cash equivalents and 995 1,178 (997)

bank overdrafts

Cash, cash equivalents and 1,050 2,017 2,017

bank overdrafts at beginning of period
Exchange (losses)/gains on (6) 8 30

cash and bank overdrafts

Cash, cash equivalents and
bank overdrafts at the end of 2,039 3,203 1,050

the period

Unaudited Consolidated Statement of Changes in Equity

Other reserves
Share premium Accumulated losses Hedge Reserve Total
Share capital account £000 Capital reserve Merger reserve £000 Translation £000
£000 £000 £000 £000 reserve
£000
Balance at 1 February 2009 590 457 (20,491) 43,457 (2,950) (812) (340) 19,911
Profit for the period - - 422 - - - - 422

Other comprehensive Income:
Currency translation - - - - - - 196 196

differences
Cash flow hedging reserve - - - - - - 458 - 458

released to Income Statement
Cash flow hedging reserve - - - - - - 447 - 447

recognised in equity during the period
Net comprehensive - 422 - - 905 196 1,523

Income/(expense)

-

Transactions with owners:
Reserve for long term - - (4) - - - - (4)

incentive charge
Balance at 31 July 2009 590 457 (20,073) 43,457 (2,950) 93 (144) 21,430
Other reserves
Share premium Accumulated losses Hedge Reserve Total
Share capital account £000 Capital reserve Merger reserve £000 Translation £000
£000 £000 £000 £000 reserve
£000
Balance at 1 February 2008 590 457 (20,655) 43,457 (2,950) (110) 10 20,799
Profit for the period - - 936 - - - - 936

Other comprehensive Income:
Deferred tax relating to - - (175) - - - - (175)

pension scheme liability
Currency translation - - - - - - 30 30

differences
Cash flow hedging reserve - - - - - - 52 - 52

released to Income Statement
Cash flow hedging reserve - - - - - - 13 - 13

recognised in equity during the period
Net comprehensive - 761 - - 65 30 856

Income/(expense)

-

Transactions with owners:
Purchase of treasury shares - - (83) - - - - (83)
Reserve for long term - - 207 - - - - 207

incentive plan
Balance at 31 July 2008 590 457 (19,770) 43,457 (2,950) (45) 40 21,779

Unaudited Consolidated Statement of Changes in Equity (Continued)

Other reserves
Share premium Accumulated losses Hedge Reserve Total
Share capital account £000 Capital reserve Merger reserve £000 Translation £000
£000 £000 £000 £000 reserve
£000
Balance at 1 February 2008 590 457 (20,655) 43,457 (2,950) (110) 10 20,799
Profit for the year - - 1,622 - - - - 1,622

Other comprehensive Income:
Actuarial losses on scheme - - (7,458) - - - - (7,458)

assets
Other actuarial gains on - - 5,458 - - - - 5,458

scheme liabilities
Deferred tax relating to - - 211 - - - - 211

pension scheme liability
Currency translation - - - - - - (350) (350)

differences
Cash flow hedging reserve - - - - - - 110 - 110

released to income statement
Cash flow hedging reserve - - - - - - (812) - (812)

recognised in equity during the period
Net comprehensive - - (167) - - (702) (350) (1,219)

Income/(expense) Transactions with owners:
Reserve for long-term - - 414 - - - - 414

incentive plan
Purchase of treasury shares - - (83) - - - - (83)
Balance at 31 January 2009 590 457 (20,491) 43,457 (2,950) (812) (340) 19,911

Unaudited Notes to the Accounts 1 Basis of preparation of interim statements

The interim financial statements have been prepared in accordance with the

accounting policies that the Group expects to apply in its annual financial

statements for the year ending 31 January 2010. The directors have continued

to apply the going concern basis of accounting because they remain confident

in the future performance of the business and of the replacement of those

borrowing facilities which are due to expire within 12 months of the balance

sheet date (refer note 8).

The Group's accounting policies are based on International Financial

Reporting Standards ("IFRS") adopted for use by the European Union ("EU")

and interpretive guidance from the International Financial Reporting

Interpretations Committee ("IFRIC"). These standards and interpretations are

subject to ongoing review and endorsement by the EU or possible amendment by

further interpretive guidance from IFRIC and are therefore still subject to

change.

The Group has chosen not to adopt IAS 34 'Interim Financial Reporting' in

preparing these interim financial statements for the period to 31 July 2009

as it is not mandatory for AIM listed companies.

Since the Group's previous annual financial report for the year ended 31

January 2009 a number of authoritative pronouncements issued by the

International Accounting Standards Board and IFRIC are now effective for

financial years ending 31 January 2010, and additional authoritative

pronouncements have been issued and will become effective in later years.

Except as indicated below, pronouncements now effective for the year ending

31 January 2010 have had no material impact on these interim financial

statements and pronouncements due to become effective in later years have

not been early adopted by the Group.

The Group will apply the following accounting standards for the first time

in its financial statements for the year ending 31 January 2010, and the

principles of these standards have also been applied in these interim

financial statements:

standard will result in presentational changes to the primary financial

statements. Under IAS 1 (revised), entities can choose to present one

performance statement (the Statement of Comprehensive Income) or two

performance statements (the Income Statement and the Statement of

Comprehensive Income). The group has elected to produce two statements: the

Income Statement and Statement of Comprehensive Income.

changes to the reportable segments of the Group.

Further details of authoritative pronouncements effective for financial

years ending 31 January 2010 and additional authoritative pronouncements

that have been issued and will become effective in later years will be set

out in the financial statements of the Group for the year ending 31 January

2010.

The interim financial statements do not represent statutory accounts for the

purposes of S434 of the Companies Act 2006. The financial information for

the year ended 31 January 2009 is based on the statutory accounts for the

financial year ended 31 January 2009, on which the auditors issued an

Unaudited Notes to the Accounts (continued)

2. Segmental analysis

The Board of Walker Greenbank PLC predominantly manages the operations of the Group as two divisions which are the Brands and Manufacturing, which has been the basis of segment information disclosed in previous financial periods. Following the adoption of the principles set out in IFRS 8 'Operating Segments' the Group has identified its operating segments and applied aggregation criteria, as set out in IFRS 8, and has determined that the reportable segments of the Group are as follows:

Other group wide activities and expenses, predominantly related to corporate head office costs, long term incentive plan expenses, taxation and eliminations of intersegment items, are presented within 'Eliminations and unallocated'.

Segment information for the comparative periods for the six months ended 31 July 2008 and year ended 31 January 2009 have been restated to ensure a consistent form of presentation following the adoption of IFRS 8 principles.

a. Reportable segment
information
6 months to 31 July 2008 Brands Manufacturing Overseas Eliminations Total
and
unallocated
£000 £000 £000 £000 £000
Revenue - External 20,041 5,494 3,604 - 29,139
Revenue - Internal 720 5,011 - (5,731) -

Total Revenue 20,761 10,505 3,604 (5,731) 29,139

Operating profit/(loss) before exceptional 2,151 (84) 124 (1,142) 1,049

items Exceptional items (refer note 4):

Unaudited Notes to the Accounts (continued)

2 Segmental analysis

(continued) a. Reportable segment information

(continued)

6 months to 31 July 2008 Eliminations and
unallocated
Brands Manufacturing Overseas Total
£000 £000 £000 £000 £000
Revenue - External 22,341 6,683 3,983 - 33,007
Revenue - Internal 1,044 6,090 - (7,134) -
Total Revenue 23,385 12,773 3,983 (7,134) 33,007
Operating profit/(loss) 3,090 672 (119) (1,502) 2,141
Financial costs - - - (385) (385)
Net pension charge - - - (34) (34)
Profit/(loss) before tax 3,090 672 (119) (1,921) 1,722
Tax (786) (786)
Profit/(loss) for the period 3,090 672 (119) (2,707) 936
Eliminations
12 months to 31 January 2009 and
unallocated
Brands Manufacturing Overseas Total
£000 £000 £000 £000 £000
Revenue - External 42,766 12,963 7,969 - 63,698
Revenue - Internal 1,942 10,992 - (12,934) -
Total Revenue 44,708 23,955 7,969 (12,934) 63,698
Operating profit/(loss) before exceptional 5,240 931 (8) (2,306) 3,857

items Exceptional items (refer note 4):

Unaudited Notes to the Accounts (continued)

3 Analysis of operating profit by function of expense
6 6 months to 12 months
months 31 July 2008 to 31 January 2009
to
31 July

£000 £000 £000
Revenue 29,139 33,007 63,698
Cost of sales (11,747) (13,294) (25,567)
Gross profit 17,392 19,713 38,131
Net operating (16,379) (17,572) (34,570)

expenses

Operating profit 1,013 2,141 3,561

4 Exceptional

Items that are both material and whose nature is sufficient to warrant separate disclosure and identification are disclosed within the financial statements and classified within their relevant income statement category. In the current period, "Redundancy expenses" and net income from an insurance claim for marketing material products held at third party's premises which were destroyed in a fire in the previous year have been presented as exceptional as these items fall within the group's accounting policy for exceptional items. The insurance loss in the previous year arose due to the uncertainty over the level of insurance settlement recoverable.

5 Net defined benefit pension

costs
6 months to 6 months to 12 months to
31 July 31 July 31 January

£000 £000 £000
Expected return on pension 1,160 1,430 2,829

scheme assets

Interest on pension scheme (1,315) (1,326) (2,633)

liabilities

Scheme expenses (145) (138) (275)

6 Taxation
6 months to 6 months to 12 months to
31 July 31 July 31 January 2009

£000 £000 £000
UK Corporation tax - current year - - -

at 28% (2008:28%)

Overseas taxation - current year (6) (11) (57)

Deferred tax - current year (140) (455) (788)

Tax (charge)/credit

on profit on (146) (786) (1,165)

ordinary activities

Other than overseas taxation, there was no current tax arising in the year to 31 January 2009, as taxable profits arising in the year were offset against available losses from prior years. Because of the previous recognition of deferred tax assets relating to losses of prior years, the Group's taxable profits earned in the six months to 31 July 2009, and in future periods, will result in deferred tax charges being recognised as losses are utilised and as temporary differences originate and reverse. A deferred tax charge of £140,000 (2008: £455,000) arose in the period to 31 July 2009. The tax at the half year has been based on a forecast full year effective tax rate.

Unaudited Notes to the Accounts (continued)

7 Earnings per share

The basic and diluted earnings per share are based on a profit after

taxation of £422,000 (2008: £936,000) and 54,859,000 ordinary shares

(2008: 54,995,000), being the weighted average number of the shares in

issue during the period, excluding those held in the Employee Share Trust

and in treasury, which are treated as cancelled.

The basic and diluted earnings per share for the year ended 31 January

2009 were based on a profit for the year amounting to £1,622,000 and the

weighted average of 54,880,000 ordinary shares in issue during the year.

Earnings Weighted Average Per share amount
£000 number of shares pence
(000's)
Basic and diluted
EPS:
Earnings attributable to ordinary equity shareholders for the
periods to:

- 6 months to 31 422 54,859 0.77
July 2009
- 6 months to 31 936 54,995 1.70
July 2008
- 12 months to 31 1,622 54,880 2.96
January 2009

8 Analysis of net debt
Reclassifications of Borrowings
1 February 2009 Cash flow Working capital Current portion of Exchange movement 31 July 2009
£000 £000 facilities term loans £000 £000
(see note below) £000
£000
Cash at bank and in 1,050 995 - (6) 2,039

hand

Borrowings due (400) 200 (5,566) (200) - (5,966)

within 1 year

Borrowings due after (6,868) (1,698) 5,566 200 - (2,800)

1 year
(7,268) (1,498) - - - (8,766)
Net debt (6,218) (503) - - (6) (6,727)

The current working capital facilities provided by Barclays will end their initial three year term in July 2010. Negotiations to renew these facilities have commenced. The borrowings under these facilities as at 31 July 2009 were £5,566,000 and have been classified as Borrowings due within 1 year. The directors expect to replace existing working capital facilities before their expiry date.

Unaudited Notes to the Accounts (continued)

9 Cash generated/(utilised) from operations
6 months to 6 months to 12 months to
31 July 31 July 31 January 2009
2009 2008 £000
£000 £000
Operating profit 1,013 2,141 3,561
Depreciation 782 709 1,470
Amortisation 217 265 376
(Credit)/charge for long-term incentive (4) 207 414

plan recognised in equity

Loss/(profit) on disposal of property, - - 6

plant and equipment

Unrealised foreign exchange (gains)/losses 227 - (499)

included in operating profit

Changes in working capital

Decrease /(Increase) in inventories 707 (1,364) (1,341)
Decrease/(Increase) in trade and other 665 (197) 1,164

receivables

(Decrease)/ Increase in trade and other (2,680) (1,792) (288)

payables

Defined benefit pension cash contributions (651) (660) (1,327)
Cash generated/(utilised) from operating 276 (691) 3,536

activities

10 Retirement benefit obligations

The Group operates the following funded pension schemes in the UK: the

Walker Greenbank Pension Plan, the Abaris Holdings Limited Pension Scheme

and the WG Senior Management Pension Scheme. The Walker Greenbank Pension

Plan is the biggest scheme. All schemes contain defined benefits

sections, which are closed to new members and the accrual of future

benefits, however the Abaris Holdings Limited Pension Scheme also

contains a defined contribution section, although this section is

relatively small.

The pension costs relating to the UK defined benefit schemes are assessed

in accordance with the advice of an independent qualified actuary using

the projected unit method. These schemes are subject to triennial

actuarial reviews with the most recent ones having been April 2006. An

updated valuation for IAS 19 financial reporting purposes was completed

for the previous annual financial statements to 31 January 2009.

The assumptions applied for valuation of the defined benefit schemes are

fully disclosed in the annual financial statements for the year ended 31

January 2009 and continue to be applied in the half year to 31 July 2009.

The net defined benefit pension charge recognised in the half year

represents the relevant proportion of the annual amounts expected to be

recognised for the year ending 31 January 2010, and are based on previous

actuarial estimates. The net retirement benefit obligation recognised at

31 July 2009 is based on the actuarial valuation under IAS 19 at 31

January 2009 updated for movements in net defined benefit pension charge

and contributions paid during the half year period. The deferred tax

effect of movements in the net retirement benefit obligation has also

been recognised in the half year. A full valuation for IAS 19 financial

reporting purposes will be completed for the next annual financial

statements for the year ending 31 January 2010, at which time any

actuarial gains and losses arising due to the recent market volatility

throughout the year will be recognised.

This information is provided by RNS The company news service from the London Stock Exchange

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