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REG-Trafficmaster PLC Half Yearly Report
Released:27/08/2009
RNS Number : 0800Y
Trafficmaster PLC
27 August 2009
27 August 2009
Trafficmaster Plc
Interim results
Trafficmaster Plc, the leading supplier of intelligent driving services, today
announces its interim results for the period 1 January 2009 to 30 June 2009.
Financial highlights*
• Revenue up 6% to £28.9m (2008 H1: £27.2m)
• EBITDA up 14% to £5.9m (2008 H1: £5.2m)
• Operating profit up 4% to £2.9m (2008 H1: £2.8m)
• Profit before tax up 43% to £3.4m (2008 H1: £2.4m)
• Basic EPS up 43% to 2.52p (2008 H1: 1.76p)
• Capital expenditure down 42% to £2.0m (2008: £3.4m)
• Net debt at 30 June 2009 £10.9m (30 June 2008: £11.6m)
*As announced on 20 May 2009, these interim results use a new accounting
methodology for revenue recognition. Comparatives have been restated
accordingly. Further detail is provided below and in note 1.
Operational highlights
• Strong growth in Business Services, with EBITDA more than doubled.
• Notable success in winning larger fleet accounts in the US and significant
numbers of smaller businesses in the US and UK.
• Consumer Services continues trading at similar level from H2 2008, with
margin improvement in Stolen Vehicle Tracking.
• Trafficmaster Mobile services launched, which offers Trafficmaster's
dynamic navigation services on GPS enabled mobile phones
Alan McWalter, Chairman of Trafficmaster Plc, commented:
'Trafficmaster has performed well in the first half of 2009, particularly as
the comparative period in 2008 was before the impact of the global recession
had begun to take effect. Despite extremely tough economic conditions, the
company continues to make good progress on a range of measures, including revenue,
EBITDA, operating profit and earnings per share. We are very encouraged that
customers continue to recognise the benefits of Trafficmaster's capabilities.'
Tony Eales, Chief Executive of Trafficmaster Plc, commented:
'We are pleased with these results, which are in line with our plans and show the
benefit of having a balanced business, both in terms of geography and business
line. Our Business Services division grew revenue by 32% and more than doubled
its profitability, which has offset continued challenging trading conditions
in our Consumer Services division.
As a group we grew revenue and profit in difficult trading conditions. We
continue to manage the business very tightly. In the first half we contained
capital expenditure, reduced cash outflow and inventory levels, and these
disciplines will remain in place in the future. We continue to see strategic
opportunities for growth, and will invest where we believe long-term
sustainable value can be created. We expect to continue to encounter tough
market conditions, but we believe we are well placed to meet expectations
for the year.'
ENDS
For further information please contact:
Trafficmaster Plc 01234 759 300
Tony Eales, Chief Executive
Tim Coleman, Finance Director
Cubitt Consulting 020 7367 5100
Simon Brocklebank-Fowler
Michael Henman
James Verstringhe
About Trafficmaster Plc
Trafficmaster is an expert in intelligent driving. The Group comprises US-based
Teletrac Inc. and Trafficmaster Plc in the UK. It operates through two divisions
which provide intelligent vehicle services to enhance the driving experience and
improve business performance by saving companies and drivers time and money
and reducing their environmental impact.
Business Services provides fleet tracking and dynamic navigation capabilities
to business users.
Consumer Services provides users with traffic and journey time data, stolen
vehicle tracking and other telematics services.
Chief Executive's statement
Trafficmaster has made good progress in the first half of 2009. We are pleased
to report group revenue has increased by 6% to £28.9m (2008: £27.2m), and
operating profit has grown by 4% to £2.9m (2008: £2.8m). Profitability at the
EBITDA level grew by 14% to £5.9m (2008: £5.2m) as we continue to manage
day-to-day operations very tightly. This performance is particularly notable
as trading in the comparable period of 2008 had not yet been particularly
affected by the global economic downturn, which took effect dramatically
in the second half of the year.
Both of our trading divisions have performed well; Business Services has
grown revenues and profits as more fleet operators have chosen to benefit from
our Fleet Director service, and whilst trading in our Consumer Services division
is down compared to the first half of 2008, it remains at the same run-rate as
the second half of 2008. This is a good result given the depressed level of
UK motor sales.
Business Services
Our Business Services division provides customers with our award-winning
fleet management service, Fleet Director. It operates predominantly in the
US through our Teletrac business, and was launched successfully in the UK
in late 2007. Revenue grew by 32% to £19.4m (2008: £14.6m) in the first
half of the year despite much tougher trading conditions, with operating
profit growing by 208% to £2.7m (2008: £0.9m). The relative weakness of
sterling in the first half of the year has benefitted reported performance;
on a constant currency basis, Business Services revenues were modestly ahead
of the same period in 2008, and operating profit more than doubled.
Our core smaller business market in both the US and the UK experienced very
difficult conditions, and although potential customers understand the
significant cost benefits that Fleet Director can bring to their organisations,
they have deferred decision-making in many instances until confidence in the
economy returns. Despite this, we have continued to win significant numbers
of smaller business customers.
We achieved some notable successes in winning larger accounts in the period,
and are delighted to be working with significant fleet operators such as
United Site Services and United Road Towing in the US, and South Tyneside
Council and Liebherr in the UK. We have strengthened our sales teams in both
the UK and the US to develop larger accounts, which continues to gain traction.
Our relationships with key partners such as Citroen and Ryder remain strong
despite the difficult prevailing trading conditions. We continue to believe
that OEM partnerships will provide a significant source of growth in the future,
and are actively involved in a number of ongoing discussions with potential
partners.
Consumer Services
Our Consumer Services division is predominantly UK based, and provides
customers with Traffic, Stolen Vehicle Tracking, Navigation and a range of
other telematics services. Overall revenue in our core, recurring businesses
(Stolen Vehicle Tracking and Traffic) was flat due to market share gains
offsetting weaker market conditions, and profitability increased as we
continued to manage the business tightly. As expected, and reflecting the
project-based nature of the revenue stream, there was a substantial reduction
in Emerging Products contribution which, nonetheless, remains healthily positive.
Overall Consumer Services revenue fell 25% to £9.5m (2008: £12.6m), with
operating profit falling to £1.2m (2008: £3.3m).
Revenue from our Stolen Vehicle Tracking business grew 13% to £5.7m in the first
half (2008: £5.1m), as market share gained in 2008 helped protect the business
from the severe depression in automotive sales. Profitability improved as we
continue to manage our costs tightly in line with trading levels, and enabled
us to increase EBITDA to £1.6m (2008: £0.2m). Our relationship with BMW continue
d to develop, and we were delighted to launch a new service allowing drivers to
locate their vehicle on demand, and to automate business/private mileage analysis
via a web-based service.
Our Traffic business experienced a revenue decline of 23% to £2.6m (2008: £3.3m),
and continued to generate positive EBITDA of £0.5m (2008: £0.7m). The Traffic
business is trading at the same levels as seen in the second half of 2008, and
is very well positioned to take advantage of market growth once confidence
returns. We have made good progress in developing additional revenue streams to
take advantage of our market-leading Traffic services, which position us well
over the medium term.
Progress in our Emerging Products area was encouraging. Emerging Products
activities are highly innovative in nature and the contracts supported tend
to be project-based, and therefore do not display run-rate characteristics.
In the first half of the year we reported revenue of £1.2m and operating profit
of £0.7m. We remain excited about the long-term prospects for these activities,
and continue to invest in innovative new development.
Financial Results
Overall group revenues were up 6% to £28.9m (2008: £27.2m), and, as expected,
a strong performance from Business Services offset weakness in Consumer Services.
Due to the variable profile of capital expenditure and depreciation in the group,
the management team focuses on EBITDA as a core profitability measure. Group
EBITDA improved by 14% to £5.9m (2008: £5.2m) in the first half of the year as
operating costs continued to be managed very tightly. Depreciation and
amortisation charges grew by 25% to £3.0m leaving operating profit of £2.9m,
up 4% on the same period in 2008.
Net financial income was £0.5m compared to a £0.4m expense in the first half
of 2008. As previously reported, we redenominated a significant element of
our net debt into US dollars in December 2008 at a prevailing exchange rate
of $1.45. As sterling has strengthened in 2009 this has resulted in a
reduction in debt in sterling terms, and a gain has been booked in our income
statement as part of financial income. Excluding this, underlying finance
charges were flat year on year at £0.4m. Profit before tax was 43% ahead of
prior year at £3.4m (2008: £2.4m). We recorded no tax charge during the half
year as we utilised tax losses from prior periods.
Capital expenditure reduced in the first half by 42% to £2.0m (2008: £3.4m)
as we reached the end of a significant product development phase, and took
advantage of technological improvements to reduce investment in customer supporting
infrastructure. While we continue to manage our capital programmes tightly, we
remain committed to investment and product development for long-term value creation.
Inventory levels reduced further during the half, however we made the final
payment of an inventory commitment made in 2008, which contributed to cash
out-flow. Sales of lower-margin hardware have also been below historic levels
which, despite not materially affecting profits, has reduced the rate at which
inventory is turned into cash. The proportion of long-term contracts funded
by our internal lease-book increased, reflecting a lower appetite for such deals
in the wider credit market. Our relationships with our external leasing partners
remains strong, and we have expanded the facilities available to us.
Net debt at 30 June 2009 was £10.9m, compared to £11.6m at the same point in the
prior year, and £8.2m at 31 December 2008. The group traded within its banking
covenants during the period.
Revenue recognition
The Group has revised the methodology it uses to recognise revenue. The revised
approach, based on fair values of the individual components, recognises less
revenue on initial unit sales and a greater proportion of contract revenue over
the contract duration in line with services delivered. This has necessitated a
restatement of prior year's accounts. The impact on previously reported results
for the year ended 31 December 2008 is to reduce revenue by £0.7m (1%) and
operating profit by £0.3m (5%). Deferred income on the balance sheet at
31 December 2008 is increased by £26.0m to £34.5m, and net assets reduced
by £25.8m to £28.7m. Restated 2008 comparatives are shown in this interim
statement. Further details are provided in note 1.
Management believes that the new methodology better reflects the underlying
recurring nature of the group's business, and provides more relevant information
about future revenue streams. Deferred income of £30.0m at 30 June 2009 will
be recognised over a period of up to four years, with £17.4m of that balance
due to be recognised within 12 months.
Outlook
Our business plans are not predicated on an upturn in the global economy, and
we continue to encounter tough market conditions. Market share gains and the
strengths of our products and services have allowed us to maintain progress in
the first half, and we are well placed to benefit once confidence begins to
return to our markets. In the meantime we continue to manage the business
very tightly, whilst continuing to invest in our core capabilities to ensure
we take advantage of opportunities as they develop. We believe we are well
positioned to meet expectations for the year.
Tony Eales
Chief Executive
Trafficmaster Plc
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2009
Unaudited Unaudited Audited
6 Months to 6 Months to year to
30 June 2009 30 June 2008 31 December 2008
(Restated) (Restated)
£000 £000 £000
Revenue 28,872 27,220 55,051
Cost of sales (10,283) (10,863) (20,623)
Gross profit 18,589 16,357 34,428
Other operating income 70 70 140
Selling and distribution costs (5,171) (3,984) (8,351)
Administrative expenses (10,575) (9,645) (20,838)
Operating profit excluding
non-recurring items 2,913 2,798 5,830
Non-recurring items - - (451)
Operating profit 2,913 2,798 5,379
Financial income 1,411 320 724
Financial expenses (885) (721) (1,595)
Profit before tax 3,439 2,397 4,508
Taxation - - 150
Profit for the period 3,439 2,397 4,658
Other comprehensive income
Foreign exchange translation differences (2,298) 12 3,162
Effective portion of changes in fair
value cash flow hedges 55 - (258)
Other comprehensive income for the
period (2,243) 12 2,904
Total comprehensive income 1,196 2,409 7,562
Basic earnings per share 2.52p 1.76p 3.41p
Diluted earnings per share 2.51p 1.75p 3.41p
Trafficmaster Plc
Condensed consolidated statement of financial position
As at 30 June 2009
Unaudited at Unaudited at Audited at
30 June 2009 30 June 2008 31 December 2008
(Restated) (Restated)
£000 £000 £000
Assets
Property, plant and equipment 13,216 14,207 14,588
Intangible assets 16,061 12,527 16,632
Lease prepayments 1,435 1,442 1,439
Deferred tax asset 1,313 1,078 1,313
Total non-current assets 32,025 29,254 33,972
Inventories 10,193 12,853 11,887
Trade and other receivables 11,266 14,219 9,821
Lease receivables 29,070 15,091 29,720
Cash and cash equivalents - - 2,619
Total current assets 50,529 42,163 54,047
Total assets 82,554 71,417 88,019
Liabilities
Bank overdraft 1,409 325 -
Other interest bearing loans 833 834 833
Trade and other payables 10,034 9,937 12,486
Deferred income 17,365 13,733 20,046
Total current liabilities 29,641 24,829 33,365
Other interest bearing loans 8,697 10,416 10,000
Deferred income 12,612 11,462 14,451
Provisions 1,558 1,524 1,541
Total non-current liabilities 22,867 23,402 25,992
Total liabilities 52,508 48,231 59,357
Net assets 30,046 23,186 28,662
Equity
Share capital 6,833 6,819 6,832
Share premium 255 208 254
Other reserve 2,248 2,248 2,248
Foreign exchange translation
reserve (1,186) (2,038) 1,112
Fair value reserve 168 371 113
Retained earnings 21,728 15,578 18,103
Total equity 30,046 23,186 28,662
Trafficmaster Plc
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2008
Share capital Share premium Other reserve Translation reserve Fair value reserve Retained earnings Total
£000 £000 £000 £000 £000 £000 £000
Balance at 1 January 2008 as
previously reported 6,819 208 2,248 (1,741) 371 32,849 40,754
Prior year restatement (note 1) - - - (309) - (19,928) (20,237)
Balance at 1 January 2008 6,819 208 2,248 (2,050) 371 12,921 20,517
Total comprehensive income for
the period
Profit for the period - - - - - 2,397 2,397
Other comprehensive income
Foreign exchange translation
differences - - - 12 - - 12
Contributions by and distribution to owners
Share-based payments - - - - - 260 260
Balance at 30 June 2008 6,819 208 2,248 (2,038) 371 15,578 23,186
For the six months ended 30 June 2009
Share capital Share premium Other reserve Translation reserve Fair value reserve Retained earnings Total
£000 £000 £000 £000 £000 £000 £000
Balance at 1 January 2009 as
previously reported 6,832 254 2,248 6,772 113 38,329 54,548
Prior year restatement (note 1) - - - (5,660) - (20,226) (25,886)
Balance at 1 January 2009 6,832 254 2,248 1,112 113 18,103 28,662
Total comprehensive income
for the period
Profit for the period - - - - - 3,439 3,439
Other comprehensive income
Foreign exchange translation
differences - - - (2,298) - - (2,298)
Effective portion of changes in
fair value cash flow hedges - - - - 55 - 55
Contributions by and distribution to owners
Share-based payments - - - - - 186 186
Shares issued 1 1 - - - - 2
Balance at 30 June 2009 6,833 255 2,248 (1,186) 168 21,728 30,046
Trafficmaster Plc
Condensed consolidated statement of cash flows
For the six months ended 30 June 2009
Unaudited Unaudited Audited
6 Months to 6 Months to year to
30 June 2009 30 June 2008 31 December 2008
(Restated) (Restated)
£000 £000 £000
Cash flows from operating activities
Operating profit 2,913 2,798 5,379
Depreciation and amortisation 2,993 2,399 5,068
EBITDA 5,906 5,197 10,447
Gain on sale of property, plant and
equipment (2) (1) (10)
Equity settled share-based payments 186 260 524
Operating profit before changes in
working capital and provisions 6,090 5,456 10,961
Increase in trade and other receivables (1,767) (7,113) (7.248)
Decrease/(increase) in inventories 1,384 (1,538) 813
(Decrease)/increase in trade and other
payables (6,857) 3,587 2,285
Cash flows from operations (1,150) 392 6,811
Interest paid (868) (694) (1,560)
Net cash flows from operating
activities (2,018) (302) 5,251
Cash flows from investing activities
Proceeds from sale of property, plant
and equipment 2 1 12
Interest received 513 321 724
Acquisition of property, plant and
equipment (361) (983) (1,562)
Development expenditure capitalised as
intangible assets (1,607) (2,398) (4,481)
Acquisition of investment in subsidiary - - (359)
Net cash flows from investing activities (1,453) (3,059) (5,666)
Cash flows from financing activities
Proceeds from the issue of share
capital 2 - 59
(Repayments)/drawdowns of bank
borrowings (417) 7,083 6,666
Net cash flows from financing
activities (415) 7,083 6,725
Net (decrease)/increase in cash and
cash equivalents (3,886) 3,722 6,310
Cash and cash equivalents at beginning
of period 2,619 (4,051) (4,051)
Effect of exchange rate fluctuations on
cash held (142) 4 360
Cash and cash equivalents at end of
period (1,409) (325) 2,619
Notes to the condensed consolidated interim financial statements
1. Basis of preparation
The accounting policies applied by the Group in these condensed consolidated
interim financial statements are the same as those applied by the Group in
its consolidated financial statements as at and for the year ended
31 December 2008 except for the following accounting standards and interpretations,
which are effective from 1 January 2009:
• Amendments to International Accounting Standard (IAS) 1 'Presentation
of financial statements - A revised presentation'. This requires the
presentation of a new statement of comprehensive income and also requires
a consolidated statement of changes in equity as a primary statement
rather than as a note. Since this change is presentational only, there
is no impact on profit or earnings per share.
• International Financial Reporting Standard (IFRS) 8 'Operating segments'.
The impact of this is explained in note 2. Since this change is presentational
only, there is no impact on profit or earnings per share.
Prior year restatement
During the period the group has revised the basis on which revenue is allocated
to components of certain multiple-element revenue arrangements. These changes
have been reflected as a prior year restatement as follows. Revenues for the
year ended 31 December 2008 have been revised from £55.8m to £55.1m, amortisation
of intangible assets included in cost of goods sold has been revised from £nil
to £0.2m and other cost of goods sold revised from £21.1m to £20.5m. The net
effect is to revise gross profit from £34.7m to £34.4m, operating profit from
£5.7m to £5.4m and profit after tax from £5.0m to £4.7m. In addition at
31 December 2008 deferred income is revised from £8.5m to £34.5m (31 December 2007
from £4.8m to £25.4m), intangible assets are revised from £16.0m to £16.6m (31
December 2007 from £11.1m to £11.3m). There are no tax effects of these changes
as the group has tax losses brought forward. Together, these changes revise net
assets and equity from £54.5m to £28.7m (31 December 2007 revised from £40.8m
to £20.5m). The effect of the restatement revises basic earnings per share
for 2008 from 3.63p to 3.41p, and diluted earnings per share from 3.63p to 3.41p.
In respect of the half year to 30 June 2008, revenues have been revised from
£26.8m to £27.2m, gross profit from £15.7m to £16.4m, operating profit from
£2.1m to £2.8m, profit after tax from £1.7m to £2.4m, deferred revenue from
£5.6m to £25.2m and net assets from £42.7m to £23.2m.
As a consequence of the revised revenue allocation, the amount of revenue
allocated to the sale of units (and software) in respect of some contracts is
less than the cost of those goods. Any excess of directly attributable costs
incurred over the revenue allocated to the delivered goods is expected to be
recovered over the contract term and is recognised as an intangible asset,
amortised over the initial, non-cancellable, contract term.
Going concern
The group meets its day to day working capital requirements through a revolving
credit facility which is due for renewal in February 2011. The current economic
conditions create uncertainty particularly over (a) the level of demand for the
group's products; (b) the exchange rate between sterling and the US dollar with
the consequences its US dollar denominated earnings; and (c) the availability
of bank finance in the foreseeable future.
The group has considerable financial resources together with long term contracts
with a number of customers and suppliers across different geographic areas and
industries. The group's forecasts and projections, taking account of reasonably
possible changes in trading performance, show that the group should be able to
operate within the level of its current facility. Further information regarding
the group's business activities, together with the factors likely to affect
its future development, performance and position is set out in the Chief
Executive's statement.
After making enquiries, the directors have a reasonable expectation that the
group has adequate resources to continue in operational existence for the
foreseeable future. As a consequence, the directors believe that the group is
well placed to manage its business risks successfully despite the current
uncertain economic outlook and therefore continue to adopt the going concern
basis in preparing these condensed consolidated interim financial statements.
These condensed consolidated interim financial statements for the six months
ended 30 June 2009 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and International
Accounting Standard 34 'Interim Financial Reporting' as adopted by the European
Union.
The comparative figures for the financial year ended 31 December 2008 are not the
company's statutory accounts for that financial year. Those accounts have been
reported on by the company's auditors and delivered to the registrar of companies.
The report of the auditors was (i) unqualified, (ii) did not include a reference
to any matters to which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement under section
237 (2) or (3) of the Companies Act 1985.
The interim report for the period ended 30 June 2009 was approved by the board
of directors on 26 August 2009.
2. Segment reporting
IFRS 8 'Operating segments' requires operating segments to be identified on
the basis of information that internally is provided to the Board of Directors,
which is considered to be the Group's chief operating decision maker.
Following the adoption of IFRS 8, the Consumer Services division is now shown
as three separate operating segments. Since this change is presentational only,
there is no impact on profit or earnings per share.
6 months to 30 June 2009
Business Consumer
Services Services
Fleet
Tracking Stolen Traffic Emerging Consumer Group Total
Vehicle Products Services costs
Tracking Total
£000 £000 £000 £000 £000 £000 £000
Revenue 19,391 5,739 2,559 1,183 9,481 - 28,872
EBITDA 3,937 1,628 469 817 2,914 (945) 5,906
Operating profit 2,695 672 (197) 701 1,176 (958) 2,913
Financial income 1,411
Financial expenses (885)
Profit before tax 3,439
6 months to 30 June 2008
Business Consumer
Services Services
Fleet
Tracking Stolen Traffic Emerging Consumer Group Total
Vehicle Products Services costs
Tracking Total
£000 £000 £000 £000 £000 £000 £000
Revenue 14,647 5,061 3,310 4,202 12,573 - 27,220
EBITDA 1,667 195 710 4,021 4,926 (1,396) 5,197
Operating profit 876 (750) 107 3,965 3,322 (1,400) 2,798
Financial income 320
Financial expenses (721)
Profit before tax 2,397
12 months to 31 December 2008
Business Consumer
Services Services
Fleet
Tracking Stolen Traffic Emerging Consumer Group Total
Vehicle Products Services costs
Tracking Total
£000 £000 £000 £000 £000 £000 £000
Revenue 32,644 10,420 6,307 5,680 22,407 - 55,051
EBITDA 4,782 1,175 1,617 5,088 7,880 (2,215) 10,447
Segment operating profit 3,056 (360) 373 4,979 4,992 (2,218) 5,830
Non-recurring items (451)
Operating profit 5,379
Financial income 724
Financial expenses (1,595)
Profit before tax 4,508
.
3. Earnings per share
The calculation of basic earnings per ordinary share for the six months ended 30
June 2009 was based on the profit attributable to ordinary shareholders of
£3,439,000 (2008 restated: £2,397,000) and the weighted average number of
ordinary shares in issue during the period of 136,652,394 (2008: 136,382,394 ).
Diluted earnings per ordinary share have been calculated after adjusting the
weighted number of shares in issue in each period for the dilutive effect of
shares held under unexercised share options. The calculation of diluted earnings
per ordinary share assumes that all associated performance criteria are achieved
in full.
4. Dividends
No dividends have been paid or proposed in any period.
5. Property, plant and equipment
During the six months ended 30 June 2009, the Group acquired property, plant and
equipment with a cost of £361,000 (2008: £983,000). A fully depreciated asset
has been sold during the same period for the net proceeds of £2,000 (2008:
£1,000).
6. Borrowings
The Group has available a £10,000,000 revolving multicurrency credit facility
which expires in February 2011. This facility is subject to floating rates of
interest and is secured by a first legal charge over the freehold building and
leasehold land, and an upstream guarantee from a subsidiary. As at 30 June 2009,
£8,022,000 of this facility has been utilised by the Group.
During the six month period to 30 June 2009, the Group repaid £417,000 of the
existing seven year term loan.
As at 30 June 2009, all bank covenants related to the Group's borrowings have
been satisfied.
Directors' responsibility statement
This interim report complies with the Disclosure and Transparency Rules (DTR) of
the United Kingdom's Financial Services Authority in respect of the requirements
to produce a half-yearly financial report. The interim report is the
responsibility of, and has been approved by, the Directors of Trafficmaster
Plc.
The Directors of Trafficmaster Plc confirm that to the best of their knowledge
* the condensed set of financial statements has been prepared in accordance
with IAS 34 as adopted by the European Union
* the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months of 2009 and description of principal risks and uncertainties for the
remaining six months)
* the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of any material related party transactions
and changes therein).
On behalf of the Board
Tim Coleman
Group Finance Director
26 August 2009
Independent review report to Trafficmaster plc
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June
2009 which comprise the condensed consolidated statement of comprehensive
income, condensed consolidated statement of financial position, condensed
consolidated statement of changes in equity, condensed consolidated statement of
cash flows and the related explanatory notes. We have read the other information
contained in the half-yearly financial report and considered whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Services Authority
("the UK FSA"). Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this half-yearly financial report has been
prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the
EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2009 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK
FSA.
JD Leech
For and on behalf of KPMG Audit Plc
Chartered Accountants
1 Waterloo Way
Leicester
LE1 6LP
26 August 2009
This information is provided by RNS
The company news service from the London Stock Exchange
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