Interim Results

Date : 09/25/2008 @ 4:00AM
Source : UK Regulatory (RNS & others)
Stock : Water Hall Group Plc (WTH)
Quote : 3.5  0.0 (0.00%) @ 2:00AM
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Interim Results

    RNS Number : 2779E
  Water Hall Group Plc
  25 September 2008
   


    Water Hall Group plc

    Interim Results for the half-year ended 30 June 2008

    Chairman's Statement

    Overview
    In my statement at the AGM held on 4 June 2008, I informed shareholders that 2008 would be a year of transition. I also provided an
update on the key challenges facing the board now that a significant proportion of the Group's trading activities have ceased and on the
actions being taken by your board to develop the Group and mitigate the impact of the current reduced scale of activities.

    On the positive side, I am pleased to report that at a meeting of Hertfordshire County Council's ("HCC") planning and development
committee held on 23 September 2008, members approved the Company's resubmitted application to vary an existing planning consent. The
existing consent linked the Materials Recovery Facility ("MRF") activities to the Southfield Wood Landfill ("SFW") which is now closed. The
variation amends the consent to link the MRF to the operations of the Bunkers Landfill ("Bunkers") for which the consented period runs to
2014. The recently approved planning application permits the Company to construct a modern recycling facility.

    Trading conditions during the first half of the year were difficult reflecting the impact of the well documented 'credit crunch',
increasing fuel prices, poor weather conditions and the downturn in the construction industry. 
    In June the inert soil recycling activity ceased due to poor operating results and this has been treated in these accounts as a
discontinued operation. The board expects tonnages in the remaining continuing operation, Bunkers, to be lower than last year. As a
consequence of both these factors measures were implemented, during the first half and after the period end, which have significantly
reduced the head count, reduced the operational cost base and resulted in the disposal of surplus plant and equipment.

    In spite of these poor trading conditions, the Group's balance sheet remained strong with cash and available-for-sale-assets at similar
levels to those at 31 December 2007.

    It remains your board's objective to make an acquisition capable of providing sustained earnings coupled with the potential to achieve
further growth. I am pleased to report that a number of targets are presently under review. Your board is encouraged that vendors appear to
be taking a much more realistic attitude in assessing the valuations placed on their businesses, recognising that they are operating in a
more difficult trading environment than over the past few years and also the reduced availability of acquisition finance.

    The board also continues to monitor the Company's investment in Petards Group plc ("Petards") whose shares, which are quoted on AIM,
have been suspended since 25 June 2008 pending the release of the accounts for the year to 31 December 2007. The board of Petards announced
on 31 July 2008 that it expected to be in a position to make proposals to shareholders relating to a possible offer or refinancing in
September 2008. In light of the suspension of Petards shares, provision has been made to write down the carrying value of this asset to
£70,000, pending clarification of Petards financial position, giving rise to a charge in the income statement for the period of £168,000.
      
    Discussions continue with HCC over the restoration of SFW, the Group's objective being to return the restored areas to prime
agricultural land. In the meantime, as part of the restoration programme, the capping of Cell 5 has been largely completed and the capping
of Cell 2 has commenced.  The capping will enable a gas collection system to be installed which in turn will provide the Group with better
information on the potential for commercial use of the gas.

    The board continues to keep under review the opportunities for the development of other parts of the Group's estate, in particular the
exploitation of the gravel reserves in Bunkers South and its potential restoration with inert waste, both presently held under a royalty
option. The date for the public inquiry into HCC's Waste Plan has yet to be set and there is little in this area that can be done at this
stage. In regard to the HCC adopted Hertfordshire Local Minerals Plan ("Minerals Plan"), the board is presently reviewing it for any
deficiencies in the County Council's statutory obligations. If, on advice, the board feels that the Minerals Plan is flawed and the Group's
mineral reserves could become consented, then a planning application will be considered during 2009.

    Results
    Sales for continuing operations for the half-year were £880,000 (2007 - £575,000). Cost of sales was £452,000 (2007 - £246,000)
resulting in a gross profit of £428,000 (2007 - £329,000) representing 48.64% (2007 - 57.22%) of sales, the fall mainly reflecting the
additional costs of processing soils after receipt. After administrative expenses of £674,000 (2007 - £610,000) and other losses of £145,000
(2007 - £nil), mainly the Petards impairment provision, the operating loss for the period was £391,000 (2007 - £281,000). Finance income was
£89,000 (2007 - £29,000), resulting in a pre-tax loss from continuing operations of £302,000 (2007 - £252,000). Discontinued operations
incurred a loss of £6,000 (2007 - profit of £362,000) arising from the trading losses of the soil recycling activity discontinued in the
period and from the losses and closure costs of the skip collections business discontinued in 2007. These losses and costs were mostly
offset by the gains on the sale of plant and equipment used in those activities discontinued in 2007. The result of all operations for the period was a loss of £308,000 (2007 - profit £110,000).   

    No tax is payable in respect of either period. 

    Basic earnings per share were a loss of 0.54p for the period (2007 - profit of 0.20p per share) and fully diluted earnings per share
were a loss of 0.51p per share (2007 - profit of 0.18p per share).

    As it remains the board's objective to make an acquisition which would be expected to provide sustainable earnings growth, no dividend
has been declared in respect of the period.

    Cash outflow from operating activities of £310,000 (2007 - inflow of £87,000) was offset by income from investing activities of £401,000
(2007 - expenditure of £182,000). The cash inflow during 2008 primarily arose from the disposal of surplus plant and equipment which
generated income of £441,000 (2007 - £nil) Capital expenditure of £140,000 (2007 - £55,000) includes planning costs of £121,000 (2007 -
£nil) in respect of the MRF planning application.  The increase in free cash and cash equivalents during the half-year was £91,000 (2007 -
decrease of £95,000).

    At 30 June 2008, the Group had cash and cash equivalents of £5.312m (31 December 2007 - £5.187m) including balances held in escrow
accounts of £1.289 million (31 December 2007 - £1.255 m). 

    Total equity at 30 June 2008 was £4.521 million (31 December 2007 - £4.800 million), equating to basic net assets of 7.97p per ordinary
share (31 December 2007 - 8.47p), the reduction reflecting the loss for the period. 

    Risks & Uncertainties
    The principal risks and uncertainties affecting the business activities of the Group remain those detailed on page 11 of the 2007 Annual
Report. In the view of the Board these properly reflect the uncertainties which may have a material effect on the Group's performance in the
second-half of the year.

    Future
    While the board believes that any significant recovery in the construction industry is likely to be slow, it is actively reviewing plans
designed to accelerate the cash flow from Bunkers, the sole remaining activity.

    The Group's strong asset base and cash resources place it in a good position to acquire a business provided other factors relating to
quality, profitability and sustainability are met. The board's view is that any acquisition should be funded from its cash resources as far
as is realistic and that debt to equity ratios should be consistent with available free cash flow on a conservative basis. During the
intervening period the board will continue to make short to medium term investments where it believes the returns will be greater than from
cash on deposit. The board is also looking at suitable alternatives to holding cash in escrow accounts, in particular that in respect of SFW
which represents the majority of funds held in such accounts. 

    Trading for the first three months of the second half has been poor and is below the board's expectations. It is anticipated that there
will be some asset sales in the second half of the year but they will be less than those in the first half of the year. Being a single site
operation, current market conditions make it difficult for the board to predict with any degree of accuracy the outcome for the year.
However, the substantial reduction in the cost base and the enthusiasm of the remaining employees lead the board to believe that the Group
is now better positioned to cope in the present economic climate.

    Raschid Abdullah
    Chairman
    25 September 2008


    Enquiries:

 Raschid Abdullah   Chairman               Water Hall Group plc    07768 905004

 John Wakefield     Director, Corporate    BlueOar Securities Plc  0117 933 0020
                    Finance


      
 Income Statement                                                         
 for the half-year ended 30                                               
 June 2008                                                                
                                                     Unaudited                       Audited
                                            Half-year to    Half-year to             Year to
                                            30 June 2008    30 June 2007    31 December 2007
                                   Notes                       (restated  
                                                             see note 2)  
                                                    £000            £000                £000
 Continuing operations                                                    
                                                                          
 Revenue                             3               880             575               1,839
                                                                          
 Cost of sales                                     (452)           (246)               (473)
                                                                          
 Gross profit                                        428             329               1,366
                                                                          
 Administrative expenses                           (674)           (610)             (1,215)
 Other (losses) / gains - net        4             (145)               -                 669
                                                                          
 Operating (loss) / profit                         (391)           (281)                 820
                                                                          
 Finance income                      5                89              29                  95
                                                                          
 (Loss) / profit before income       3             (302)           (252)                 915
 tax                                                                      
                                                                          
 Income tax expense                  6                 -               -                   -
                                                                          
 (Loss) / profit from                3             (302)           (252)                 915
 continuing operations                                                    
                                                                          
                                                                          
 Discontinued operations                                                  
 (Loss) / profit from                3               (6)             362               (245)
 discontinued operations                                                  
                                                                          
 (Loss) / profit for the period      3             (308)             110                 670
                                                                          
                                                                          
 (Loss) / earnings per ordinary      7                                    
 share                                                                    
 From continuing and                                                      
 discontinued operations                                                  
 Basic                                           (0.54)p           0.20p               1.18p
 Diluted                                         (0.51)p           0.18p               1.09p
                                                                          
 From continuing operations                                               
 Basic                                           (0.53)p         (0.45)p               1.61p
 Diluted                                         (0.50)p         (0.41)p               1.49p

      
 Statement of Recognised Income and Expense
 for the half-year ended 30 June                                   
 2008                                                              
                                        Unaudited       Unaudited        Audited
                                     Half-year to    Half-year to        Year to
                                          30 June         30 June    31 December
                                             2008            2007           2007
                                             £000            £000           £000
 Fair value (losses) / gains net                                   
 of tax :                                                          
 on available-for-sale financial               29              84           (29)
 assets                                                            
 reversal of previously                         -               -          (279)
 recognised fair value gain                                        
 following disposal of                                             
 available-for-sale financial                                      
 assets                                                            
                                                                   
 Net (charge) / income recognised              29              84          (308)
 directly in equity                                                
                                                                   
 (Loss) / profit for the period             (308)             110            670
                                                                      
 Total recognised (charge) /                (279)             194            362
 income for the period                                             

      
 Balance Sheet                                                     
 for the half-year ended 30 June                                   
 2008                                                              
                                                   Unaudited             Audited
                                               30 June    30 June    31 December
                                                  2008       2007           2007
                                      Notes       £000       £000           £000
                                                                   
 Assets                                                            
 Non-current assets                                                
 Property, plant and equipment          8        1,129      1,167          1,084
 Available-for-sale financial           9           70      1,560            209
 assets                                                            
 Total non-current assets                        1,199      2,727          1,293
                                                                   
 Current assets                                                    
 Inventories                                         -         62              -
 Trade and other receivables                       964        607            986
 Cash - escrow deposits                10        1,289      1,220          1,255
 Cash and cash equivalents             10        4,023      2,646          3,932
                                                 6,276      4,535          6,173
                                                                   
 Non-current assets held-for-sale      11           17          -             63
                                                 6,293      4,535          6,236
                                                                   
 Total assets                                    7,492      7,262          7,529
                                                                   
                                                                   
 Equity and liabilities                                            
 Share capital                         12          567        563            567
 Share premium                         12            8          -              8
 Other reserves                                    106        363             77
 Retained earnings                               3,840      3,667          4,148
 Total equity                                    4,521      4,593          4,800
                                                                   
 Non-current liabilities                                           
 Provisions for liabilities and        13        1,578      1,804          1,749
 charges                                                           
 Total non-current liabilities                   1,578      1,804          1,749
                                                                   
 Current liabilities                                               
 Trade and other payables                        1,025        603            641
 Provisions for liabilities and        13          368        262            339
 charges                                                           
 Total current liabilities                       1,393        865            980
                                                                   
 Total liabilities                               2,971      2,669          2,729
                                                                   
 Total equity and liabilities                    7,492      7,262          7,529

      
 Cash Flow Statement                                                      
 for the half-year ended 30                                               
 June 2008                                                                
                                                     Unaudited                  Audited
                                            Half-year to    Half-year to        Year to
                                                 30 June         30 June    31 December
                                                    2008            2007           2007
                                   Notes            £000            £000           £000
 Cash flows from operating                                                
 activities                                                               
 (Loss) / profit from                              (391)           (281)            820
 operations - continuing                                                  
 operations                                                               
 (Loss) / profit from                                (6)             362          (245)
 operations - discontinued                                                
 operations                                                               
 (Loss) / profit from                              (397)              81            575
 operations                                                               
                                                                          
 Adjustments for:                                                         
 Depreciation of property,           8                78              64            104
 plant and equipment                                                      
 Impairment charges                  9               168               -              -
 Share-based payment charge                            -               -             27
 Gain on disposal of property,                     (378)               -          (100)
 plant and equipment                                                      
 Gain on disposal of                                   -               -          (669)
 available-for-sale financial                                             
 assets                                                                   
 Decrease in provisions                            (187)           (226)          (260)
 Operating cash outflows before                    (716)            (81)          (323)
 movements in working capital                                             
                                                                          
 (Increase) / decrease in                              -             (6)             56
 inventories                                                              
 Decrease in receivables                              22             802            423
 Increase / (decrease) in                            384           (628)          (589)
 payables                                                                 
 Cash (used in) / generated                        (310)              87          (433)
 from operations                                                          
                                                                          
 Cash flows from investing                                                
 activities                                                               
 Purchase of property, plant                       (140)            (55)           (75)
 and equipment                                                            
 Proceeds from sale of                               441               -            100
 property, plant and equipment                                            
 Purchase of available-for-sale                        -           (199)        (1,959)
 financial assets                                                         
 Proceeds from sale of                                 -               -          3,388
 available-for-sale financial                                             
 assets                                                                   
 Interest received                                   134             107            228
 Amounts added to Environment                       (34)            (35)           (70)
 Agency escrow accounts                                                   
 Net cash from / (used in)                           401           (182)          1,612
 investing activities                                                     
                                                                          
 Cash flows from financing                                                
 activities                                                               
 Proceeds from issue of equity                         -               -             12
 shares                                                                   
 Net cash from financing                               -               -             12
 activities                                                               
                                                                             
 Net increase / (decrease) in                         91            (95)          1,191
 cash and cash equivalents                                                
                                                                             
 Cash and cash equivalents at       10             3,932           2,741          2,741
 the beginning of the period                                              
                                                                          
 Cash and cash equivalents at       10             4,023           2,646          3,932
 the end of the period                                                    

    During the year discontinued operations utilised £348,000 (2007 - generated £365,000) of the Group's net operating cash flows, received
£243,000 (2007 - utilised £26,000) in respect of investing activities and paid £nil (2007 - £nil) in respect of financing activities.

       
    Notes to the Interim Statement

    1.  General information
    Water Hall Group plc is a public limited company ("Company") incorporated in the United Kingdom under the Companies Act 1985 (registered
in England number 438328). The Company is domiciled in the United Kingdom and its registered address is Parallel House, 32 London Road,
Guildford, GU1 2AB. The Company's ordinary shares are traded on the Alternative Investment Market ("AIM"). The Group's principal activity is
waste management.

    The interim financial statements for the half-year ended 30 June 2008 have been reviewed, not audited, and were approved for issue by
the Board on 25 September 2008. The financial information contained in these interim financial statements does not constitute statutory
accounts as defined in section 240 of the Companies Act 1985. The financial information for the year ended 31 December 2007 has been
extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 31 December 2007, upon which the
auditors have given an unqualified audit report and made no statements under Sections 237(2) or (3) of the Companies Act 1985, have been
filed with the Registrar of Companies. Further copies of the report are available from the Company Secretary at the registered office and on
the Company's website at www.waterhallgroupplc.com.


    2.  Basis of preparation
    The interim financial statements for the half-year ended 30 June 2008 have been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union ("EU") and in accordance with IAS34 Interim Financial Reporting. They should
be read in conjunction with the annual financial statements for the year ended 31 December 2007.

    The accounting policies adopted are consistent with those of the year ended 31 December 2007 as described in those financial statements.
Comparative amounts in the income statement for the half-year ended 30 June 2007 have been restated following the classification of
quarrying and skip collections as discontinued operations in the financial statements for the year ended 31 December 2007.

    IAS 1 Presentation of Financial Statements (Revised 2007), IAS 23 Borrowing Costs (Revised 2007), IRFIC 11 IFRS 2 Group and Treasury
Share Transactions, IFRIC 12 Service Concession Arrangements, IFRIC 13 Customer Loyalty Programmes and IFRIC 14 IAS 19 The Limit of the
Defined Benefit Asset, Minimum Funding Requirements and their Interaction were either in issue but not yet effective or not yet adopted by
the EU at 30 June 2008. IFRIC15 Agreements for the Construction of Real Estate and IFRIC 16 Hedges of a Net Investment in a Foreign
Operation were issued on 3 July 2008 and therefore in issue at the date of authorisation of these interim financial statements but not yet
effective.

    The directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the
financial statements of the Group.


      3.  Segmental analysis

    Segmental results
    During 2008 waste management has been the only business segment. In 2007 quarry sales, previously regarded as a separate segment, ceased
when the supply of consented aggregates from Bunkers Hill quarry was exhausted, and the skip collections business, part of the waste
management segment, was closed.

    During 2008, the Materials Recycling Facility, the inert soil processing part of waste management, was also closed. All activities that
ceased during 2007 and 2008 are included as discontinued operations in these financial statements.

    The following is an analysis of the Group's revenue and results from continuing and discontinued operations by reportable segment:

 Half-year ended 30 June 2008      Continuing operations    Discontinued operations    Total
                                                    £000                       £000     £000
   Revenue                                                                           
   Waste Management                                  880                        178    1,058
   Quarrying                                           -                          6        6
                                                     880                        184    1,064
                                                                                     
   Segment profit / (loss)                                                           
   Waste Management                                  139                      (361)    (222)
                                                                                     
   Corporate expenses                              (385)                          -    (385)
                                                                                     
   Other (losses) / gains (note                    (145)                        355      210
 4)                                                                                  
   Finance income (note 5)                            89                          -       89
    Loss for the half-year                         (302)                        (6)    (308)
                                                                                     
                                                                                     
 Half-year ended 30 June 2007      Continuing operations    Discontinued operations    Total
                                                    £000                       £000     £000
   Revenue                                                                           
   Waste Management                                  575                      1,077    1,652
   Quarrying                                           -                        275      275
                                                     575                      1,352    1,927
                                                                                     
   Segment profit / (loss)                                                           
   Waste Management                                 (32)                        254      222
   Quarrying                                           -                        108      108
                                                                                     
   Corporate expenses                              (249)                          -    (249)
                                                                                     
   Finance income (note 5)                            29                          -       29
   (Loss) / profit for the                         (252)                        362      110
 half-year                                                                           

      
 Year ended 31 December 2007       Continuing operations    Discontinued operations     Total
                                                    £000                       £000      £000
   Revenue                                                                           
   Waste Management                                1,839                      1,134     2,973
   Quarrying                                           -                        512       512
                                                   1,839                      1,646    3,485 
                                                                                     
   Segment profit / (loss)                                                           
   Waste Management                                  718                      (514)       204
   Quarrying                                           -                        169       169
                                                                                     
   Corporate expenses                              (567)                          -     (567)
                                                                                     
   Other gains (note 4)                              669                        100       769
   Finance income (note 5)                            95                          -        95
    Profit / (loss) for the                          915                      (245)       670
 year                                                                                


    4.  Other (losses) and gains
                                                       Unaudited        Audited
                                   Half year to    Half year to         Year to
                                        30 June          30 June    31 December
                                           2008             2007           2007
                                           £000             £000           £000
 Continuing operations                                            
 Gain on disposal of                          -                -            669
 available-for-sale financial                                     
 asset,                                                           
 net of related expenses                                          
 Impairment losses on                     (168)                -              -
 available-for-sale financial                                     
 asset                                                            
 Gain on disposal of plant &                 23                -              -
 equipment                                                        
                                          (145)                -            669
                                                                  
 Discontinued operations                                          
 Gain on disposal of plant &                355                -            100
 equipment                                                        


    5.  Finance income and costs
                                                       Unaudited        Audited
                                   Half year to    Half year to         Year to
                                        30 June          30 June    31 December
                                           2008             2007           2007
                                           £000             £000           £000
                                                                  
 Interest on escrow deposits                 35               33             69
 Bank interest receivable                    99               73            159
                                            134              106            228
                                                                               
 Unwinding of discount on                  (45)             (77)          (133)
 provisions                                                       
 Net finance income                          89               29             95


      6.  Taxation
    Income tax expense and deferred income tax are reduced to £nil by utilising tax losses brought forward.


    7.  (Loss) / earnings per ordinary share
                                                                            Unaudited         Audited
                                                       Half year to     Half year to          Year to
                                                            30 June           30 June     31 December
                                                               2008              2007            2007
 The calculation of (loss) /
 earnings per ordinary share is
 based on:

 The basic weighted average number of Ordinary shares    56,691,100        56,291,100      56,656,656
 in 
 issue during the period.
 Dilutive effect of share                                 4,084,829         5,031,016       4,877,793
 options

 The dilutive weighted average number of Ordinary        60,775,929        61,322,116      61,534,448
 shares in 
 issue during the period


                                                               £000              £000            £000
 (Loss) / profit for the period                               (302)             (252)             915
 - continuing operations
 (Loss) / profit for the period                                 (6)               362           (245)
 - discontinued operations
 (Loss) / profit for the period                               (308)               110             670

 Interest on share option                                         7                 7              14
 receipts - continuing
 operations

 (Loss) / profit for the                                      (301)               117             684
 purpose of diluted earnings
 per share


      8.  Property, plant and equipment
    During the half-year to 30 June 2008 additions comprised mainly planning costs associated with obtaining new consents for the materials
recycling facility.

                                               £000
 Half-year ended 30 June 2007               
 Opening net book amount at 1 January 2007    1,176
 Additions                                       55
 Depreciation                                  (64)
 At 30 June 2007                              1,167
                                            
 Year ended 31 December 2007                
 Additions                                       20
 Reclassified as held-for-sale                 (63)
 Depreciation                                  (40)
 At 31 December 2007                          1,084
                                            
 Half-year ended 30 June 2008               
 Additions                                      140
 Reclassified as held-for-sale                 (17)
 Depreciation                                  (78)
 Closing net book amount at 30 June 2008      1,129


    9.  Available-for-sale financial assets
    The available-for-sale financial asset represents the Group's holding of 46,500,000 ordinary shares in Petards Group plc ('Petards') an
AIM listed company. Petards principal activities are the development, supply and maintenance of technologies used in security and
surveillance systems. The shares represent 7.3 % of Petards issued ordinary share capital and were acquired during 2007 for £238,000 at an
average cost per share of 0.51p. 

    At 30 June 2008 the shares were suspended in accordance with AIM rules as Petards had not published its Report and Accounts for the year
ended 31 December 2007 within six months of the year end, pending a proposed equity re-financing. At the time of suspension the mid-market
price was 0.33p per share. Provision of £168,000 has been made during the period for the estimated impairment loss to reduce the carrying
value to £70,000.

    At 30 June 2007 the available-for-sale financial asset represented the Group's holding of 690,000 ordinary shares in Premier Asset
Management plc, which was subsequently sold during the second half of 2007.

      10.  Cash and cash equivalents
    Escrow deposits comprise £1.289m (December 2007 - £1.255m) deposited in five bank accounts held jointly with the Environment Agency in
escrow. These escrow accounts are to be used specifically for restoration and aftercare purposes and have been excluded from cash resources
in the cash flow statement.

    The cash resources are held as follows:

                                     Unaudited        Audited
                            30 June    30 June    31 December
                               2008       2007           2007
                               £000       £000           £000
                                                
 Escrow deposits              1,289      1,220          1,255
                                                
 Short term bank deposit      3,809      2,475          3,768
 Current account                214        171            164
                              4,023      2,646          3,932

    The cash and cash equivalents may be analysed between fixed and floating rate by currency as follows:

                                            30 June    30 June    31 December
                                               2008       2007           2007
 Floating rate cash and cash equivalents                        
 Sterling - £'000's                             214        171            164
                                                                
 Fixed rate cash and cash equivalents                           
 Sterling - £'000's                           3,809      2,475          3,768
                                                                
                                              4,023      2,646          3,932

    Refer to Note 14 Post Balance Sheet Events which sets out details of the purchase of an available-for sale financial asset during
September 2008.


    11.  Non-current assets classified as held-for-sale
                                             30 June    30 June    31 December
                                                2008       2007           2007
                                                £000       £000           £000
 Plant and equipment attributable to              17          -             63
 discontinued activities                                         


      12.  Share capital
                                   Number of shares    Ordinary shares    Share premium    Total
                                        (thousands)               £000             £000     £000
 At 1 January 2007 and 30 June               56,291                563                -      563
 2007                                                                                    
                                                                                         
 Executive share option scheme:                                                          
  - Proceeds from shares issued                 400                  4                8       12
 At 31 December 2007 and 30                  56,691                567                8      575
 June 2008                                                                               

    The total authorised number of ordinary shares is 155,001,961 shares with a par value of 1p per share. All issued shares are fully paid.
400,000 ordinary shares were issued in November 2007 at a price of 3p per share on the exercise of options pursuant to the rules of the
Water Hall Group plc Executive Share Option Scheme 2004.


    13.  Provisions for other liabilities and charges
                                   Restoration and aftercare
                                                        £000
 At 1 January 2007                                     2,215
 Additional provisions                                     7
 Unwinding of discount                                    77
 Utilised during the period                            (233)
 At 30 June 2007                                       2,066
                                 
 Additional provisions                                     3
 Unwinding of discount                                    56
 Utilised during the period                             (37)
 At 31 December 2007                                   2,088
                                 
 Additional provisions                                     5
 Unwinding of discount                                    45
 Utilised during the period                            (192)
 At 30 June 2008                                       1,946
                                 
                                 
 Analysis of total provisions :  
 Current                                                 368
 Non-current                                           1,578
                                                       1,946

    The restoration and aftercare provisions relate to the costs of restoring and reinstating land from which the mineral resources are
extracted, addressing environmental issues at quarry and landfill sites and planning and related matters. These costs are expected to be
incurred at varying times between 2008 and 2069.


    14.  Post balance sheet events
    During 2008 it was decided to discontinue the processing of inert waste at the Materials Recycling Facility and the closure process was
completed during the third quarter of 2008. Closure costs, mainly redundancy payments, are expected to be more than offset by the gain
arising on the sale of plant and equipment.

    During September 2008 the Company purchased listed investments at a total cost of £1.269m.

      
    Statement of Directors' Responsibilities
    The directors confirm that the condensed set of financial statements has been prepared in accordance with all major aspects of IAS 34
Interim Financial Reporting.

    The directors of Water Hall Group plc are listed in the annual report for 31 December 2007 and there have been no changes during the
period. The list of current directors is maintained on the Water Hall Group plc website: www.waterhallgroupplc.com .

    By order of the board

    Raschid Abdullah
    Chairman
    25 September 2008

      Independent Review Report to Water Hall Group plc

    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 2008 which comprises the income statement, the statement of recognised income and expense, the balance sheet, the cash
flow statement and related notes 1 to 14. 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 International Standard on Review Engagements 2410 issued by the Auditing
Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an
independent review 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 formed.

    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 AIM Rules of the London Stock Exchange.

    As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European
Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with
International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

    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 United
Kingdom. A review of interim financial information consists of making inquiries, 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 2008 is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European Union and the AIM Rules of the London Stock Exchange.

    Deloitte & Touche LLP
    Chartered Accountants and Registered Auditors
    Reading, United Kingdom
    25 September 2008


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