Final Results

Summit Corporation plc ("Summit plc" or "the Company") PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JANUARY 2008 Oxford, UK, 3 June 2008 - Summit Corporation plc (AIM: SUMM), a leading UK biotechnology company, today reports its preliminary results for the year ended 31 January 2008. These results have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS") as adopted for use by the European Union. A presentation to analysts will be held today at 10.00hrs at the offices of Panmure Gordon, Moorgate Hall, 155 Moorgate, London EC2M 6XB. Conference call dial-in details are as follows: UK dial: 0845 301 4080 International dial: +44 207 663 4862 Participant access code: 923077# A copy of the presentation is available by request from Summit's strategy is to generate returns for its shareholders via a combination of early stage licensing deals from its attractive drug pipeline and value creation from its two world-leading technology platforms: carbohydrate chemistry and zebrafish. Highlights of 2007/08 Progress across our high-quality drug pipeline. Initial early stage programme deal signed * SMT C1100 nominated as lead candidate in Duchenne muscular dystrophy programme * Preclinical results show SMT C1100 improves muscle strength and function * Positive results from Phase I clinical trial of SMT D002 targeting acne * $10 million programme collaboration deal signed with Evolva Biotech for SMT 14400 in infectious diseases Two innovative and profitable technology platforms to support the Company's drug discovery programmes and to generate value via collaborations and service revenues * Acquisition of two UK biotechnology companies, Dextra and Daniolabs, to become industry leaders in carbohydrate chemistry and zebrafish biology technologies, respectively * Strategic evaluation and incorporation of new assets with the aim of creating a stronger, more focused business * Profitable services business growing, currently counts seven of the world's top ten pharmaceutical companies as clients Financial summary * Trebling of revenues to £3.0 million from services business * Cash position of £10.1 million at 31 January 2008 Operational developments * Consultation period entered with a view to the closure of Cambridge facility to bring operational efficiencies, particularly in zebrafish technologies, and long-term cost savings Steven Lee, PhD, Chief Executive Officer of Summit, commented on the results: "The past 18 months have seen us build a business with much greater scale and potential. This has been achieved via a combination of acquisitions and organic success. We have nearly completed the integration and consolidation of our acquisitions and as a result Summit is well placed to deliver sustainable value for shareholders via a clearer and more focused business model. Our long-term strategy for delivering value is through the signing of early stage licensing deals for our drug programmes and we continue to expect important progress on this front during the remainder of 2008." -- ENDS -- For more information, please contact: Summit plc Steven Lee, PhD, Chief Executive Officer Darren Millington, ACMA, Chief Financial Officer Richard Pye, PhD, Investor Relations Tel: +44 (0)1235 443951; +44 (0)7825 313476 Citigate Dewe Rogerson Mark Swallow, PhD / David Dible / Sylvie Berrebi / Emma Palmer Tel: +44 (0)207 638 9571; +44 (0)7903 737703 Panmure Gordon Andrew Burnett / Rakesh Sharma (Corporate Finance) Ashton Clanfield (Corporate Broking) Tel: +44 (0)207 459 3600 About Summit plc Summit plc is a leading UK biotechnology company with a broad preclinical and clinical pipeline, two world-leading technology platforms and an innovative business model that is expected to generate sustainable value for investors. Summit is developing multiple drug programmes that target unmet medical needs from which it intends to generate value by out-licensing attractive late preclinical or early clinical stage programmes in return for upfront, milestone and royalty payments. Summit uses its scientific expertise to target orphan diseases, neuro-disorders and infectious diseases. Underpinning Summit's drug pipeline are two innovative technology platforms: carbohydrate chemistry and zebrafish biology. These platforms support existing programmes and also will be the source of future programmes to replenish Summit's drug pipeline. These platform technologies also form the basis of the Company's profitable service business. The company listed on the alternative investment market (AIM) of the London Stock Exchange in October 2004 - symbol: SUMM. Further information about the company is available at Chairman's Statement Over the past 18 months, your Company has undergone considerable growth and development. During the period, via a combination of acquisitions and organic success, we have strengthened our drug pipeline and confirmed Summit's world-leading position in two innovative and valuable technology platforms that, we believe, have the potential to make a major positive contribution to the drug discovery and development process. Consequently, the business is now in a strong position to capitalise on the potential of these exciting assets and technologies and to realise our ambition of improving the risk-reward ratio traditionally associated with investing in the biotechnology sector. We remain confident that Summit's approach based on early stage licensing deals and growing service revenues will deliver sustainable value to investors. Growth through acquisition All areas of the business were significantly strengthened early in 2007 following the acquisition of two UK companies, Dextra Laboratories and Daniolabs, for a combined total of £16.5 million in new shares. The two companies were a synergistic fit with our existing capabilities in carbohydrate chemistry and zebrafish biology, respectively, and strengthened our industry-leading position in these two technology platforms, both of which underpin the development of our pipeline and form the basis of our profitable services business. In addition, Summit also acquired a range of clinical, preclinical and discovery stage programmes that enhances our existing drug portfolio. Following the acquisitions, a period of strategic evaluation to assess the potential value of the new assets has taken place to ensure the Company remains focused and efficient in its operations to give it the maximum opportunity to deliver value for shareholders. Targeting early stage deals One of our key strategies for generating long-term and sustainable value is to sign early stage licensing deals with partners in the pharmaceutical and biotechnology industry. This strategy has been developed to capitalise on a trend that Summit was early to recognise, namely that the pharmaceutical industry is increasingly signing early stage licensing deals in order to meet the industry's urgent need to replenish its existing drug pipelines. Equally importantly, industry data suggest that earlier stage deals give a higher return on cumulative development costs than later stage deals, with preclinical deals typically generating the biggest returns using upfront and headline deal figures. Accordingly, Summit focuses its expertise and technology resources to select a steady stream of promising drug candidates to take through preclinical and the first clinical stages of development with the clear target of early out-licensing. The Company's target is to deliver early stage deals with upfront and near-term milestone payments that provide a several-fold return on any investment made in the programmes; Summit will also retain an interest in the long-term success of out-licensed programmes through sales and royalty payments. Currently we have a number of promising programmes at these stages of development and have intensified our out-licensing activities accordingly. In addition, the pharmaceutical industry continues to invest in innovative technology platforms that can help identify new drug candidates with the aim of improving success rates in the discovery and development process. Increasingly the advantages and value our two technologies can bring to the process are being recognised by the industry. This is clearly reflected by the strong organic growth of our service revenues. This progress increases our belief that they represent, in their own right, an important source of long-term value for investors. Outlook It is my belief that Summit has matured into a robust business with a focused strategy that places the Company in a strong position to deliver sustainable value for shareholders. I recognise though that the pharmaceutical and biotechnology sector can be a difficult area for investors. Various factors have undermined the perceived value of the sector including a decline in the number of new drugs reaching the market, higher regulatory hurdles and high-profile issues with marketed products. The current problems in the global financial markets are further exacerbating the situation, often leading investors into more defensive stocks. However, the need to discover and develop new medicines remains as strong as ever with many serious and fatal diseases lacking adequate treatment. I firmly believe Summit is a business with the expertise and technologies capable of meeting these challenges for the benefit of patients, and our shareholders. The coming year will be an important and exciting time for Summit and I look forward to reporting later in the year on continued progress being made within our business including, most importantly, progress towards a significant programme licensing deal. Finally, I would like to thank all members of staff for their efforts and dedication in helping to create a business that is capable of fulfilling our vision of developing new medicines to treat serious diseases. Barry Price, PhD Chairman 3 June 2008 Chief Executive Officer's Statement The past 18 months has been a period of substantial growth, development and consolidation within the business that leaves the Company poised to deliver our vision of building significant and sustainable value for shareholders. Our strategy focuses on advancing multiple drug programmes in areas of high unmet medical need to an early stage of development and signing licensing deals with partners to further develop these promising candidates towards the market. This approach aims to improve the risk-reward ratio normally associated with biotechnology companies by not exposing the business to the high costs and risks associated with later stage Phase IIb and pivotal Phase III clinical trials. Underpinning our drug discovery and development capabilities and programmes are two world-leading and innovative technology platforms in carbohydrate chemistry and zebrafish biology. These technologies are expected to improve the chances of success in our existing programmes, give rise to new programmes to maintain our strong drug pipeline, and are expected to be a long-term source of value in their own right. Building value Since the beginning of 2007, we have worked hard on building a robust business with multiple opportunities to generate value. This has been accomplished through a strategy of focused acquisitions and solid organic growth. The acquisition of DanioLabs in March 2007 strengthened our zebrafish platform as its technology fits synergistically with our existing capabilities, forming the world's largest and most sophisticated zebrafish technology platform. Additionally, our drug pipeline was enhanced with a selection of clinical, preclinical and discovery stage programmes that Daniolabs had generated using its zebrafish expertise. At the same time, we acquired Dextra Laboratories to enhance our carbohydrate technology platform, an area that we believe will become an important source of new pharmaceuticals. As a result of the acquisition, Summit now has carbohydrate drug discovery and development capabilities from the earliest stages of discovery up to and including the production of GMP material suitable for use in Phase II clinical trials. Following the acquisition, Dextra became the brand name for our carbohydrates service business. Since the completion of these acquisitions, the Company has been focused on fully evaluating the new assets and ensuring that those that enhance our business are integrated into our operations. The outcome from these efforts has been to create a strong, efficient business that is now well placed to deliver value. A key part of this process has been to create a clearer operating structure. This has resulted in our own research activities being split from the two business units providing carbohydrate and zebrafish services to pharmaceutical and biotechnology customers. It has also led to our decision to move our zebrafish activities to Oxford and the planned closure of the Cambridge facility that we acquired with Daniolabs. Pipeline progress A key component in the successful execution of our strategy of signing early stage deals is a strong drug pipeline and 2007/08 saw solid progress being made in this area. In May 2007, SMT C1100 was nominated as our lead candidate for the treatment of the fatal genetic disease Duchenne muscular dystrophy (DMD). The selection of this lead candidate was a major achievement within this preclinical programme and also for the Company as it demonstrated that we can take novel academic research and transform it, entirely in-house, into an exciting and valuable commercial opportunity. SMT C1100 is currently making excellent progress through preclinical development with data being produced that shows it significantly improves the strength and function of muscles in in vivo models. Our plan is to conclude preclinical development towards the end of 2008 and for SMT C1100 to enter human clinical trials at the beginning of 2009. A Phase I trial was successfully completed with our candidate SMT D002 for the treatment of seborrhoea or excess sebum production, a condition that is a primary cause of acne. It is also a common problem for patients with Parkinson's disease. In March 2008, the results from this Phase I trial met the primary endpoints and proved statistically significant with SMT D002 suppressing levels of sebum production by up to 90%. This new data supported an earlier Phase I study to further enhance the value of this programme. We are now actively seeking a commercial partner to finance the candidate's future development. Our second clinical programme is SMT D001, a candidate that targets the treatment of sialorrhoea or excessive drooling in patients with Parkinson's disease. In January 2008, this candidate entered into a Phase IIa clinical trial in 40 patients and the results from this trial are anticipated during 2009. A Phase I study with this candidate indicated that SMT D001 reduces saliva production by up to 40%. Both SMT D002 and SMT D001 were acquired as part of the Daniolabs acquisition. Also in our programme portfolio is the preclinical candidate SMT 14400, which is being developed for infectious diseases. This candidate is a carbohydrate-based compound known as an imino sugar, and is being developed in the infectious diseases area in partnership with the Swiss company, Evolva Biotech. We are further investigating the potential of SMT 14400 in other indications. SMT 14400 was one of the assets that Summit acquired from MNL Pharma in late 2006. To maintain our healthy early stage pipeline, Summit is evaluating a range of exciting discovery stage projects from which it expects new commercial opportunities to emerge. These projects are focused in the Company's areas of expertise including orphan diseases, neuro-disorders and infectious diseases. In addition, Summit expects its unique imino sugar library, part of our carbohydrate technology platform which came from MNL Pharma, will be a significant source of new drug programmes. This novel carbohydrate library is currently being assessed against a range of therapeutic indications including lysosomal storage disorders. Targeting early deals Our intention is to sign licensing deals, from preclinical through to early clinical development, with partners who have the financial resources and the commitment to take our programmes beyond the Phase IIa stage. This approach will allow Summit to benefit from upfront and near-term milestone fees, which provide a sizeable return on any investment made in a programme, while avoiding the risks and costs associated with running Phase IIb and pivotal Phase III trials. The type of deals Summit will seek to sign broadly fall into two categories: major headline deals and smaller, co-development deals. The first co-development deal This year saw good progress being made in signing early stage licensing deals from within our programme portfolio. In July 2007, a $10 million co-development deal for SMT 14400 in infectious diseases was signed with the Swiss company, Evolva Biotech. Evolva has been granted over $50 million of funding from the Defense Threat Reduction Agency (DTRA), a US government funded body that targets new treatments for use against biological weapons. Evolva's remit is to find novel candidates with the potential to protect against a range of biological agents, including anthrax, ebola virus, and E. coli; Evolva identified SMT 14400 as one such candidate. Under the terms of the agreement, Summit received an upfront payment and will be entitled to development funding for SMT 14400 while retaining 50% ownership of the programme in a multi-billion dollar indication. In addition we retain the exclusive rights to the product for its use in other indications. Summit will always look to sign creative deals with external partners to maximise the potential of our drug pipeline and this is highlighted through this deal. Our challenge for the coming year is to sign a major programme licensing deal from within our pipeline and with a focused and experienced commercial team actively engaging with potential partners, I am confident we can deliver on this commitment. Technology platforms: adding value in drug discovery Underpinning our drug discovery and development capabilities and pipeline are our two world-leading and innovative technology platforms, in carbohydrate chemistry and zebrafish biology. These platforms support current programmes by helping to improve the chances of success while they are also expected to identify future programmes to replenish our pipeline. Technology platforms: profitable service revenues In addition, these two technology platforms form the basis of our profitable services business, whereby third-party clients from the pharmaceutical and life sciences industries can pay to access our expertise and capabilities to enhance their own development pipelines. In 2007/08, our service businesses generated revenues of £3 million, three times the level of the previous year, partly boosted by acquisitions. The growth of this business is a significant validation of the potential that both these technologies bring to the discovery and development of new drugs. During the year, we worked with 30 customers, including some of the world's largest pharmaceutical companies. As I mentioned earlier our two service businesses have been split from our own research activities to ensure that they are focused on delivering the revenues that we anticipate from these world-leading technology platforms. Service business: Carbohydrate chemistry Dextra, our carbohydrate chemistry services business, made a sizeable impact to our revenues for the year following its integration into Summit. This included the signing of a royalty-paying deal with a US healthcare company for which the Company earned $450,000 in fees and will receive a 5% royalty on product supply from 2009. In July, our scale-up and GMP (Good Manufacturing Practice) synthetic chemistry laboratory became operational. This is an important new facility as it is capable of producing high-grade material in sufficient quantities to support clients' projects from early discovery through to Phase II clinical trials. This facility will not only further enhance our carbohydrate chemistry platform but will also serve to reduce internal costs and development times by using this manufacturing capability to advance our own drug programmes. Services business: Zebrafish biology In zebrafish biology, we signed a number of higher-value service agreements with several pharma and biotech companies. This demonstrates an increasing recognition within the industry of the potential benefits the use of this technology can bring throughout the early stages of drug discovery and development. We have now engaged with seven of the world's top 10 pharmaceutical companies with a $450,000 pilot study signed in October 2007 being our largest zebrafish deal to date. Our challenge for the coming year is to convert these promising early interactions into higher-value longer-term contracts and I am pleased to report that progress is already being made on this front. Outlook The coming year will be an exciting and challenging period for Summit. Our efforts to date have been focused on building and consolidating the infrastructure of the business following the recent acquisitions. Our commitment to shareholders is to build a focused business to steadily deliver substantial value to our shareholders. A major programme deal from our drug pipeline is our primary objective for 2008 and there are several opportunities that I believe make this both a very realistic and achievable target. In addition, I anticipate that our two more-focused service businesses will generate more value through the signing of creative collaboration deals, which will supplement the expected continued growth in service revenues, as our pharmaceutical and biotechnology customers increasingly recognise the considerable benefits that our two key technologies can deliver. I would like to thank all members of staff at Summit for the dedication and hard work that has been essential to achieve the progress the business has made this year. Finally, I would like to thank all Summit shareholders for their continued support and I look forward to reporting to you in the future about our continued growth and success. Steven Lee, PhD Chief Executive Officer 3 June 2008 Financial Review Acquisitions In March 2007, Summit completed two acquisitions that had the immediate effect of enhancing the value of our drug pipeline with two clinical development programmes and consolidating our position as world leaders in two technology platforms. DanioLabs Limited was acquired on 23 March 2007 for £15.0 million in an all-share transaction (10% of the transaction price was deferred for 12 months from the date of transaction and has now been paid in full). DanioLabs was a UKbased biotechnology company focused on developing new technologies for the use of zebrafish in safety pharmacology, an emerging market for the life sciences industry. Dextra Laboratories Limited was acquired on 23 March 2007 for £1.5 million in an all-share transaction. Dextra has been based in Reading, UK since 1989 and has become a recognised expert in the provision of highly specialised, carbohydrate-chemistry based services to the pharmaceutical and life science industries. As a result of its acquisition and subsequent integration into the Summit Group, all of our carbohydrate chemistry services now operate out of our state-of-the-art Reading facility. This division of the Group has been profitable since acquisition. Revenues Total revenues for the year ended 31 January 2008 were £3.03 million (2006/07: £1.03 million). The majority of these revenues were generated from our profitable pharmaceutical services businesses, which are based on our two technology platforms. We have worked hard to attract clients from around the world and have seen revenues split evenly between the UK, Continental Europe and the USA. The rapid growth of the services business has been pleasing and has been built mainly on pilot or trial projects as clients validate our innovative technologies. In the coming year, our aim is to convert these pilot projects into higher-value, longer-term collaborations. Summit's cash generative and profitable services businesses are an important, differentiating component of our robust business model and it allows the Company to support our investment in our proprietary R&D pipeline. Losses The Company's losses of £9.9 million (2006/07: £3.0 million) were in line with our expectations and are primarily due to the R&D investment that was necessary to advance our drug programmes. This included our programme targeting sialorrhoea, a distressing symptom of Parkinson's disease entering Phase II clinical trials; our programme in seborrhoea, a primary cause of acne and also a symptom of Parkinson's disease successfully completing a Phase I trial and our Duchenne muscular dystrophy programme starting preclinical development. R&D expenditure over the coming period is anticipated to fall when the current and future development status across all our drug programmes is reviewed. Taxation The Group continues to maximise the benefits of UK Research and Development tax credit scheme by electing to take the cash equivalent amount, rather than increase the deferred tax benefit. For the year to 2007/08 the Group will seek to reclaim £1.1 million (2006/07: £0.5 million). Cash flow Our cash and short-term deposits at 31 January 2008 were £10.1 million (2006/07: £18.3 million). Net cash outflow during the year due to capital expenditure was £1.8 million (2006/07: £1.6 million). Summit made a number of one-off capital investments during the year to further strengthen our services businesses. The most significant investment was the commissioning of a new GMP-compliant facility at our Dextra business unit, enabling the Company to produce high-quality drug compounds for preclinical research and clinical trials (up to Phase II). This new facility represents an important differentiator to our carbohydrate service offerings and allows us to immediately attract higher margin work. We retain a tight control over cash flow and operating costs and future capital expenditure in the services business units will be supported only when we are confident of a high return on investment in a short period of time. Our capital expenditure for R&D purposes is largely complete with future investment made only to replace or repair existing assets. Interest received decreased from £0.79 million to £0.78 million, due to the decrease in funds during the period. IFRS This set of accounts is the Group's first produced under International Financial Reporting Standards (IFRS). The transition to IFRS from UK Financial Reporting Standards was monitored throughout the year by the Company's Audit Committee. The Group has borne one-off costs in relation to the adoption of IFRS and these have been expensed through administration costs. Post-balance sheet events On 27 March 2008 the Group issued 1,173,233 new ordinary 10p shares in relation to the final deferred payment to the vendors of DanioLabs Limited. Darren Millington, ACMA Chief Financial Officer and Company Secretary 3 June 2008 Consolidated Income Statement For the year ended 31 January 2008 2008 2007 £000s £000s Revenue 3,030 1,034 Cost of sales (1,623) (304) Gross profit 1,407 730 Other operating income 1,079 80 Administrative expenses Research and development (8,407) (2,952) General and administration (2,622) (950) Sales and marketing (1,091) (510) Depreciation and amortisation (1,650) (376) Share based payment (486) (404) Total administrative expenses (14,256) (5,192) Operating loss (11,770) (4,382) Finance income 775 879 Finance cost (38) (6) Loss before taxation (11,033) (3,509) Taxation 911 489 Loss for the year attributable to equity shareholders of the parent (10,122) (3,020) Basic and diluted loss per ordinary share (21.25p) (8.29p) Consolidated balance sheet For the year ended 31 January 2008 2008 2007 £000s £000s ASSETS Non-current assets Goodwill 9,767 - Intangible assets 8,131 1,458 Property, plant and equipment 4,268 2,624 22,166 4,082 Current assets Inventories 337 188 Trade and other receivables 1,581 645 Current tax 719 472 Cash and cash equivalents 10,088 18,289 12,725 19,594 Total assets 34,891 23,676 LIABILITIES Current liabilities Trade and other payables (3,226) (1,382) Borrowings (188) (66) Total current liabilities (3,414) (1,448) Non-current liabilities Provisions (1,180) (1,180) Borrowings (1,222) (598) Deferred tax (1,879) - Total non-current liabilities (4,281) (1,778) Total liabilities (7,695) (3,226) Net assets 27,196 20,450 EQUITY Share capital 4,967 3,722 Share premium account 22,750 22,327 Shares to be issued 1,443 - Share based payment reserve 964 478 Merger reserve 11,328 (1,943) Retained earnings (14,256) (4,134) Total equity attributable to the equity shareholders of the Parent 27,196 20,450 Consolidated cash flow statement For the year ended 31 January 2008 2008 2007 £000s £000s Cash flows from operating activities Loss before tax (11,033) (3,509) Adjusted for: Finance income (775) (879) Finance cost 38 6 Depreciation 766 340 Amortisation of intangible fixed assets 884 36 Share based payment 486 404 Adjusted loss from operations before changes in (9,634) (3,602) working capital and provisions Increase/(decrease) in trade and other receivables (189) (171) Increase in inventories (79) (160) Increase in trade and other payables 1,376 727 Cash used by operations (8,526) (3,206) Taxation Received 454 168 Net cash used in operating activities (8,072) (3,038) Investing activities Acquisition of businesses net of cash acquired 406 (255) Purchase of property, plant and equipment (1,846) (1,648) Purchase of intangible assets (97) (71) Interest received 775 790 Net cash used in investing activities (762) (1,184) Financing activities Proceeds from issue of share capital 142 9,971 Proceeds from receipt of loan 600 - Repayment of debt during the period (71) (93) Interest paid (38) Net cash generated from financing activities 633 9,878 Net (decrease)/increase in cash and cash equivalents (8,201) 5,656 Cash and cash equivalents at beginning of period 18,289 12,633 Cash and cash equivalents at end of year 10,088 18,289 Notes to the financial statements for the year ended 31 January 2008 1. Basis of accounting The financial information for the year ended 31 January 2008 has been computed in accordance with International Financial Reporting Standards as endorsed for use in the EU (IFRSs). This is the first financial period for which IFRSs have applied. Comparative financial information for the year ended 31 January 2007 has been restated accordingly. IFRS 1 First-time adoption permits companies adopting IFRS for the first time to take some exemptions from the full requirements of IFRS and also make certain elections in the transition period. The exemptions and elections adopted by the Group together with full details of the Group's IFRS accounting policies are disclosed in the Group's Interim Results for the 6 months ended 31 July 2007, which is available on the Group's website The financial information set out above does not constitute the company's statutory accounts for the years ended 31 January 2008 or 2007. Statutory accounts for 2007, which were prepared under UK GAAP, have been delivered to the Registrar of Companies. The statutory accounts for 2008 which are prepared in accordance with IFRS as endorsed for use in the EU will be delivered to the Registrar of Companies following the company's annual general meeting. The auditors have reported on the 2008 and 2007 accounts; their reports were unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 2. Shareholders' funds and statement in changes in shareholders' equity For the year ended 31 January 2008 Share Share Shares based Share premium to be payment Merger Retained capital account Issued reserve reserve earnings Group £000s £000s £000s £000s £000s £000s Total £000s At 1 February 2007 3,722 22,327 - 478 (1,943) (4,134) 20,450 New share capital issued 1,245 423 - - - - 1,668 Share based payment - - - 486 - - 486 New shares to be issued 1,443 1,443 Share issue eligible for merger relief - - - - 13,271 - 13,271 Loss for the period - - - - - (10,122) (10,122) At 31 January 2008 4,967 22,750 1,443 964 11,328 (14,256) 27,196 For the year ended 31 January 2007 Share Share based Share premium payment Merger Retained capital account reserve reserve earnings Group £000s £000s £000s £000s £000s Total £000s At 1 February 2006 3,131 12,947 74 (1,943) (1,114) 13,095 New share capital issued 591 9,380 - - - 9,971 Share based payment - - 404 - - 404 Loss for the year - - - - (3,020) (3,020) At 31 January 2007 3,722 22,327 478 (1,943) (4,134) 20,450 3. Annual General Meeting The accounts will be distributed to shareholders by 6 June 2008, prior to the Annual General Meeting due to be held at 09.30hrs on 9 July 2008 at the offices of the Company's public relations advisers: Citigate Dewe Rogerson, 3 London Wall Buildings, London Wall, London, EC2M 5SY. ---END OF MESSAGE---