ARSENAL HOLDINGS PLC: Half-yearly Report

Arsenal Holdings plc 
Results for the six months ended 30 November 2012 
ARSENAL ANNOUNCE HALF YEAR RESULTS 
* Group profit before tax was £17.8 million (2011 - £49.5 million). 


      * Profit on sale of player registrations amounted to £42.5 million (2011 - 
    £63.0 million).
      * £40.9 million of investment in new players and extended contracts pushed
    amortisation charges up to £19.9 million (2011 - £17.3 million).
      * The resulting profit from player trading was £23.2 million (2011 - £46.1
    million).


  * Turnover from football fell to £106.1 million (2011 - £113.5 million) as 
a 


    consequence of there being four fewer home fixtures.
      * As a result of this change in football turnover and increased wage costs,
    operating profits (before depreciation and player trading) from football
    decreased to £5.0 million (2011 - £15.2 million).
      * Property revenues were boosted to £32.3 million (2011 - £3.2 million) by
    the sale of the market housing site at Queensland Road. However, the
    Queensland Road sale was essentially at break even in profit and loss
    terms. Overall operating profits from property increased to £1.9 million
    (2011 - £0.5 million).
      * The Group has no short-term debt and continues to have a robust financial
    platform from cash reserves of £123.3 million (2011 - £115.2 million).
      * Confirmed extension to Emirates partnership worth up to £150 million.


Commenting on the results for the six months, Peter Hill-Wood, non-executive
Chairman, said: 
"Our ability to compete at the top of the game here and in Europe is
underpinned by our financial performance which gives the club strength and
independence. Our desire is to make everyone connected with Arsenal proud of
the Club. We know that comes through winning trophies but also through the way
we do things and that will remain our constant guide." 
CHAIRMAN'S STATEMENT 
I would like to start by thanking all of you who have sent me your best wishes
in recent weeks. I am glad to report I am recovering well. This is due in no
small part to the support of my family, friends and Arsenal colleagues who have
been a wonderful source of strength. 
Despite being unable to attend matches recently due to my health, I have been
following the team's fortunes closely and am looking forward to another
exciting end to the season. We are competing for a place in the top four of the
Premier League and, for a tenth consecutive season, are involved in the UEFA
Champions League Round of 16. 
Whilst we have our sights set on a 16th straight season in the Champions
League, our aims are higher; our ambition is to win trophies. No-one is more
focussed on that than our manager Arsène Wenger, our majority shareholder Stan
Kroenke and the Board and it is what we work towards every day. 
Our ability to compete at the top of the game here and in Europe is underpinned
by our financial performance. The financial results are covered in more detail
later in this report but show a total pre-tax profit of £17.8 million for the
six month period to November 30th 2012. 
Player sales in the summer 2012 transfer window contributed £42.5 million. Let
me be quite clear that our intention is to keep our best players and recruit
new talent to make us stronger. 
Although we were disappointed to see Robin van Persie leave the club, we have
taken steps to secure our best players going forward and have recently signed
Jack Wilshere, Theo Walcott, Kieran Gibbs, Aaron Ramsey, Alex
Oxlade-Chamberlain and Carl Jenkinson to new long-term contracts. During this
financial period we also invested £40.9 million in the acquisition of new
players, Lukas Podolski, Santi Cazorla and Olivier Giroud, and the extension of
other player contracts. More recently we added Nacho Monreal to our ranks from
Malaga. 
This is a strong indicator of our ambition to compete and win trophies and,
looking ahead, this will be further underpinned financially as a result of our
extended partnership with Emirates. This will be worth up to £150 million over
the next five years. It is one of the biggest sponsorship deals in the game and
is an endorsement of the commercial approach we are taking. Emirates know us as
well as anyone and the fact they have been prepared to invest this substantial
sum over this period of time shows their strong belief in what we are trying to
achieve and our way of working. Our financial position will be further
strengthened as a result of the new Premier League broadcast rights deal. 
Central to our ethos is our self-sustaining model which gives the club strength
and independence. The Board remains fully committed to this path and the rest
of the football world is increasingly realising the strength of this model. As
an early proponent, we welcome the development of Financial Fair Play rules in
the Premier League, in addition to those adopted by UEFA. These new rules will
be good for us, good for the Premier League and good for the game as a whole. 
It is important that we maintain the quality and level of competition if the
game is to continue being a compelling spectacle and we believe the
introduction of tighter financial regulation will assist all clubs to compete
while remaining financially responsible. 
Once again we have been delighted by the level of support we have received home
and away. My thanks go to all supporters for their continued support for the
Club. 
We fully recognise the time and money it takes for supporters to follow us,
particularly in the current economic circumstances, and this has played a big
part in our decision to hold our ticket prices at this year's level for next
season (2013/14). It also informed our decision to introduce a new pricing
structure at the start of this season which has created 90,000 cheaper tickets
for home and away supporters. 
Looking further afield we continue to make excellent progress in developing our
supporter base all over the world. Last summer's tour of Malaysia and China was
a great success and we have already announced a game in Indonesia this summer
with more to follow. 
In all this, our aim is to bring Arsenal supporters together to share their
passion for the Club wherever they may be in the world. Our Facebook following
has passed 13 million while we have 2 million people following us on Twitter.
We have recently launched a new version of our website www.Arsenal.com. In
addition we have a website running in China http://arsenal.qq.com/ and have
more than 1 million followers on Weibo - China's equivalent of Twitter. 
As we move towards the centenary of the Club's arrival in Islington, we
continue to ensure we play a prominent role in making a difference in the
community through the work of The Arsenal Foundation, which focuses on raising
money and giving grants to help transform the lives of young people. In any
given week 2,160 young people are engaged through Arsenal in the Community
projects in the Islington area and in addition we continue to work with our
global charity partner, Save the Children to make a difference both here in
London and further afield in China. Once again many of you have provided great
support to our fundraising activities for which we are very grateful. To learn
more about our activities or to make a donation please visit http://
www.arsenal.com/thearsenalfoundation/donate. 
FINANCIAL REVIEW 
The financial results for the six months ended 30 November 2012, show a profit
before tax of £17.8 million (2011 - full year profit of £36.6 million). 
Once again the half year results have been significantly influenced by the
changes in the squad which occurred in the summer transfer window. Profits from
sale of player registrations contributed an amount of £42.5 million although
this was significantly lower than the £63.0 million gain accounted for in the
comparative period last year. 
During the period we invested £40.9 million in the acquisition of new players
and, to a lesser extent, extended contracts for certain existing players. The
cost of this investment will be charged against profit over the life of the
underlying player contracts and, as a consequence, the amortisation charge for
the six month period has again increased to £19.9 million (2011 - £17.3
million). 
The changes in playing personnel have also contributed to an increased wage
bill. However, the full wage impact of the revised contracts awarded to a
number of key young players - including Walcott, Wilshere, Ramsey, Gibbs,
Jenkinson and Oxlade-Chamberlain - will not come through until the second half
of the year and subsequent periods. 


                                     2012                      2011           
                                      £m                        £m            


                                                                          
Turnover                                                                       
                                                                          
Football                             106.1                     113.5           
                                                                          
Property development                 32.3                       3.2            
                                                                          
Total turnover                       138.4                     116.7           
                                                                          
Operating profits*                                                             
                                                                          
Football*                             5.0                      15.2            
                                                                          
Property development                  1.9                       0.5            
                                                                          
Total operating profit*               6.9                      15.7            
                                                                          
Player trading                       22.6                      45.8            
                                                                          
Depreciation                         (5.6)                     (5.8)           
                                                                          
Joint venture                         0.4                       0.5            
                                                                          
Net finance charges                  (6.5)                     (6.7)           
                                                                          
Profit before tax                    17.8                      49.5            
                                                                          
*= operating profits before depreciation and player trading                    
Broadcasting revenues for the period were slightly down on the previous year at
£40.1 million (2011 - £40.6 million) which reflects the fact we were not
involved in the qualifying Champions League round and a reduction in the UEFA
market pool for English clubs for this season. 
The first six months of the year saw continued growth in our Commercial revenue
line with the addition of Airtel and Malta Guinness to our partnership
portfolio and additional sponsorships connected to the pre-season tour. In the
second half of the year Commercial revenues will increase significantly as we
will start to account for the extended partnership contract with Emirates;
revenues from the £150 million contract extension will be combined with the
remaining revenues from the original contract and spread evenly over the
revised contract term. 
Compared to the same period for last year, there were four fewer home games (1
Premier League, 1 UEFA Champions League (qualifying round) and 2 Capital One
Cup) although the Premier League fixture is only a scheduling difference with
that game being played in the second half of the year. At the half year stage
we had played 10 of the 26 fixtures we are so far certain of playing for the
full season. As a result of the lower number of home games the Club's match day
revenues for the half year fell by £8.1 million and this is the principal
factor behind lower total football revenues of £106.1 million (2011 - £113.5
million). 
The impact of the new player signings and contract extensions previously
referred to is an increase in our player wage costs. The Group's employment
costs are the principal driver for the increase in football operating costs to
£101.1 million (2011 - £98.4 million). Operating profits from football 
(before
depreciation and player trading) were decreased to £5.0 million from £15.2
million for the prior half year. 
Revenues from the Group's property business were significantly increased to £
32.3 million (2011 - £3.2 million). 
This included the completion of the sale of the north-east section of
Queensland Road to Barratts for a consideration of some £27 million and
Barratts have subsequently started work to construct three towers of market
residential accommodation. This site had previously been re-valued in the
Group's books, to reflect its expected sale price, and as such the transaction
is effectively at break-even in profit and loss terms. Of the proceeds, £20
million is receivable in instalments over a two year period. 
At Highbury Square we completed the sale of three apartments to leave a single
remaining unit, which is currently expected to be retained by the Group. The
final phase of the Highbury development, a mix of 21 new / refurbished property
units with addresses on Avenell Road, Gillespie Road and Highbury Hill, is also
progressing well and 8 apartment sales were completed in the half year
generating revenue of £2.9 million. 10 houses will be released for sale in the
near future as the final stage of this project. 
The property business made an overall contribution to operating profits of 
£1.9
million (2011 - £0.5 million). There is an ongoing dialogue with Islington
Council in relation to the planning consents for our remaining property sites
on Hornsey Road and Holloway Road. 
The Group continues to have a strong balance sheet. £6.5 million of stadium
finance bonds were repaid in the period and, other than next year's annual
instalment on the bonds, the Group has no short-term debt. Cash balances at
30th November amounted to £123.3 million (2011 - £115.2 million). 
The Group enters into a number of transactions, relating mainly to its
participation in European competition (UEFA Champions League distributions are
paid in €) and player transfers, which create exposure to movements or
volatility in foreign exchange, including €. The Group monitors this foreign
exchange exposure on a continuous basis and will usually hedge any significant
exposure in its currency receivables and payables. 
SUMMARY 
The Group's overall after tax profit for the six months was £14.9 million 
(2011
- profit of £38.0 million). 
Historically the financial results of the football business are better for the
second half of the year as the timing differences around gate and broadcasting
revenue come back in balance. As always, the actual outcome for the second half
will be strongly influenced by the extent of progress in the knock-out
competitions and final Premier League position. We expect the overall result
for the year to be fully compliant with the requirements of UEFA's financial
regulatory regime and to provide a strong base for any further financial
regulations imposed within the Premier League. They will also put us in a good
position for further re-investment in the team. 
In closing, I repeat our desire is to make everyone connected with Arsenal
proud of the Club. We know that comes through winning trophies but also through
the way we do things and that will remain our constant guide. 
Thank you again for your continued support and your best wishes for my health.
I hope you all enjoy the rest of the season. 
P D Hill-Wood 
Chairman 
25 February 2013 


                                                                               
                                                                               
                                                                               

Arsenal Holdings Plc

Consolidated profit and loss account

For the six months ended 30 November 2012
                                                                 Six months     
       


                                                                  to 30  
Year ended 
                                                               November     
 31 May 
                           Six months to 30 November 2012          2011      
2012 
                                     Unaudited                Unaudited     
Audited 


                               Operations                                       
       
                               excluding                                        
       
                                  player    Player                              
       


                             trading   trading      Total       Total       
Total   


                         Notes     £'000     £'000      £'000       £'000   
    £'000  
                                                                                


   
Turnover of the Group            139,000       564    139,564     118,001     
245,478  
including its share of                                                           
   
joint ventures                                                                   


       
                                                                                


   
Share of turnover of              (1,132)        -     (1,132)     (1,276)     
(2,465) 
joint ventures                                                                   


       
                                                                                
       


                            ________  ________    _______    ________    
________   
                                                                             
   
Group turnover              4    137,868       564    138,432     116,725      
243,013  
                                                                             
   
Operating expenses                                                               


       
                                                                                


   
- other                         (137,190)         -  (137,190)   (106,817)   
(217,018)  
                                                                             
   
- amortisation of player               -   (19,904)   (19,904)    (17,266)    
(42,319) 
registrations                                                                    


       
                                                                                
       
                                                                                
       
                                                                                


   
Total operating expenses    5   (137,190)  (19,904)  (157,094)   (124,083)   
(259,337)  


                                                                                
       


                            ________  ________    _______    ________    
________   
                                                                             
   
Operating profit/(loss)              678   (19,340)   (18,662)     (7,358)    
(16,324)  
                                                                             
   
Share of operating                   403         -        403         528       
  952  
profit of joint venture                                                          


       
                                                                                


   
Profit on disposal of                  -    42,501     42,501      63,010      
65,456  
player registrations                                                             


       
                                                                                
       


                            ________  ________    _______    ________    
________   
                                                                             
   
Profit on ordinary                                                               
   
activities before net                                                            


       
                                                                                


   
finance charges                    1,081    23,161     24,242      56,180      
50,084   


                                                                                
       
                                ________  ________                              
       
                                                                                


   
Net finance charges         6                          (6,467)     (6,717)    
(13,496)  


                                                                                
       


                                                 ________    ________    
________   
                                                                             
   
Profit on ordinary                                                               
   
activities                                                                       


       
                                                                                


   
before taxation                                        17,775      49,463      
36,588   
                                                                             
   
Taxation                    7                          (2,873)    (11,414)     
(6,995)  


                                                                                
       


                                                 ________    ________    
________   
                                                                             
   
Profit after taxation                                                            
   
retained for                                                                     


       
                                                                                


   
the financial period                                   14,902      38,049      
29,593   


                                                                                
       


                                                 ________    ________    
________   
                                                                             
   
Earnings per share          8                         £239.52     £611.55     
£475.64   


                                                                                
       


                                                 ________    ________    
________   
All trading resulted from continuing operations. 
There are no recognised gains or losses other than those included in the profit
and loss account and, accordingly, no consolidated statement of total
recognised gains and losses is presented. 
The accompanying notes are an integral part of these statements. 
Arsenal Holdings Plc 
Consolidated balance sheet 
At 30 November 2012 


                                       Notes        30 November         31 May 
                                                    2012       2011       2012 
                                               Unaudited  Unaudited    Audited 


                                               £'000      £'000      
£'000  
                                                                           
Fixed assets                                                                    
                                                                           
Tangible assets                           9      424,890    430,357    427,157  
                                                                           
Intangible assets                        10      104,951    107,159     85,708  
                                                                           
Investment in joint venture                        2,677      2,176      2,326  


                                                                               
                                                ________   ________   ________ 
                                                                               
                                                 532,518    539,692    515,191 
                                                                               
                                                ________   ________   ________ 


                                                                           
Current assets                                                                  
                                                                           
Stock - Development properties           11       14,783     36,815     37,595  
                                                                           
Stock - Retail merchandise                         2,694      3,024      1,681  
                                                                           
Debtors - Due within one year            12       69,739     52,652     52,332  
                                                                           
Debtors - Due after one year             12       21,075      5,905      5,201  
                                                                           
Cash and short-term deposits             13      123,374    115,150    153,625  


                                                                               
                                                ________   ________   ________ 
                                                                               
                                                 231,665    213,546    250,434 


                                                                           
Creditors: Amounts falling due           14     (141,454)  (123,321)  (145,159)
within one year                                                                 


                                                                               
                                                ________   ________   ________ 


                                                                           
Net current assets                                90,211     90,225    105,275  


                                                                               
                                                ________   ________   ________ 


                                                                           
Total assets less current                        622,729    629,917    620,466 
liabilities                                                                     
                                                                           
Creditors: Amounts falling due after     15     (255,754)  (263,181)  (268,066)
more than one year                                                              
                                                                           
Provisions for liabilities               16      (54,525)   (60,732)   (54,852) 


                                                                               
                                                ________   ________   ________ 


                                                                           
Net assets                                       312,450    306,004    297,548  


                                                                               
                                                ________   ________   ________ 


                                                                           
Capital and reserves                                                            
                                                                           
Called up share capital                               62         62         62  
                                                                           
Share premium                                     29,997     29,997     29,997  
                                                                           
Merger reserve                                    26,699     26,699     26,699  
                                                                           
Profit and loss account                  17      255,692    249,246    240,790  


                                                                               
                                                ________   ________   ________ 


                                                                           
Shareholders' funds                      18      312,450    306,004    297,548  


                                                                               
                                                ________   ________   ________ 
                                                                               

The accompanying notes are an integral part of this consolidated balance sheet.

Arsenal Holdings Plc

Consolidated cash flow statement

For the six months ended 30 November 2012


                                         Six months to 30 November Year 
ended  
                                                                       31 
May  
                                                 2012        2011        
2012  
                                           Unaudited    Unaudited     
Audited  
                                               £'000        £'000       
£'000  
                                                                             
Net cash (outflow)/inflow from operating         (5,767)      (21,822)     
27,694 
activities                                                                       
                                                                                
Player registrations                              (8,061)         399      
(1,785) 
                                                                             
Returns on investment and servicing of            (6,279)      (6,629)    
(13,071)
finance                                                                          
                                                                                
Taxation                                              (5)      (4,681)     
(4,624) 
                                                                             
Capital expenditure                               (3,591)      (6,138)     
(8,610) 
                                                                             
                                                ________     ________    
________ 
                                                                             
Cash (outflow) before financing                  (23,703)     (38,871)       
(396) 
                                                                             
Financing                                         (6,548)      (6,208)     
(6,208) 
                                                                             
Management of liquid resources                    17,481      (61,319)    
(79,633) 
                                                                             
                                                ________     ________    
________ 
                                                                             
Change in cash in the period                     (12,770)   (106,398)     
(86,237) 
                                                                             
Change in short-term deposits                    (17,481)      61,319      
79,633  
                                                                             
                                                ________     ________    
________ 
                                                                             
(Decrease) in cash and short-term deposits      (30,251)      (45,079)     
(6,604) 
                                                                             
                                                ________     ________    
________ 
                                                                             
Arsenal Holdings Plc 
Notes to the cash flow statement 
                                         Six months to 30 November Year 
ended  
                                                                       31 
May  
                                                2012         2011        
2012  
                                           Unaudited    Unaudited     
Audited  
                                               £'000        £'000       
£'000  
                                                                             
a)  Reconciliation of operating loss to net                                      
cash (outflow)/inflow from operating                                             
activities                                                                       
                                                                                
Operating loss                                   (18,662)     (7,358)    
(16,324)  
                                                                             
Profit on disposal of tangible fixed assets          (14)            -        
(12) 
                                                                             
Depreciation (net of grant amortisation)           5,629        5,780      
11,391  
                                                                             
Amortisation of player registrations              19,904       17,266      
36,802  
                                                                             
Impairment of player registrations                      -            -       
5,517 
                                                                             
Decrease/(increase) in stock                      21,799      (5,265)     
(4,702)  
                                                                             
(Increase) in debtors                           (18,354)     (10,478)    
(11,894)  
                                                                             
(Decrease)/increase in creditors                 (16,069)     (21,767)       
6,916 
                                                                             
                                               ________     ________    
________  
                                                                             
Net cash (outflow)/inflow from operating         (5,767)      (21,822)     
27,694 
activities                                                                       
                                                                                
                                               ________     ________    
________  
                                                                             
b)  Reconciliation of net cash flow to                                           
movement in net debt                                                             
                                                                                
(Decrease) in cash and short term deposits      (30,251)     (45,079)     
(6,604)  
                                                                             
Cash outflow from decrease in debt                 6,548        6,208       
6,208  
                                                                             
                                               ________     ________    
________  
                                                                             
Change in net debt resulting from cash flows    (23,703)      (38,871)      
(396)  
                                                                             
Increase in debt resulting from non cash            (345)        (349)       
(695)
changes                                                                          
                                                                                
Net debt at start of period                      (98,918)     (97,827)    
(97,827) 
                                                                             
                                               ________     ________    
________  
                                                                             
Net debt at close of period                     (122,966)    (137,047)    
(98,918) 
                                                                             
                                               ________     ________    
________  


                                                                                
    c)  Analysis of changes in net debt


                            At 1 June   Non cash        Cash  At 30 
November  
                                 2012    changes       flows            
2012  
                                £'000      £'000       £'000           
£'000  
                                                                             
Cash at bank and in hand           29,272          -    (12,770)          
16,502  
                                                                             
Short-term deposits               124,353          -    (17,481)         
106,872  
                                                                             
                                _______    _______     _______         
_______  
                                                                             
                                153,625          -    (30,251)         
123,374  
                                                                             
Debt due within one year (         (5,937)         -       (364)          
(6,301)
bonds)                                                                           
                                                                               
Debt due after more than one     (219,496)      (166)      6,909        
(212,753)
year (bonds)                                                                     
                                                                               
Debt due after more than one                                                     
year                                                                             
                                                                               
(debenture subscriptions)         (27,110)      (179)          3         
(27,286) 
                                                                             
                                _______    _______     _______         
_______  
                                                                             
Net debt                          (98,918)      (345)   (23,703)        
(122,966) 
                                                                             
                                _______    _______     _______         
_______  
Non cash changes represent £306,000 in respect of the amortisation of costs of
raising finance, £179,000 in respect of rolled up, unpaid debenture interest
for the period less £140,000 in respect of amortisation of the premium on
certain of the Group's interest rate swaps. 
d)  Gross cash flows 
                                        Six months to 30 November Year 
ended  
                                                                      31 
May  
                                               2012         2011        
2012  
                                          Unaudited    Unaudited     
Audited  
                                              £'000        £'000       
£'000  
                                                                             
Player registrations:                                                            
                                                                               
Payments for purchase of players                (37,116)     (50,299)    
(57,406) 
                                                                             
Receipts from sale of players                    29,055       50,698      
55,621  
                                                                             
                                              _______      _______     
_______  
                                                                             
                                               (8,061)          399     
(1,785) 
                                                                             
                                              _______      _______     
_______  
                                                                             
Returns on investment and servicing of                                           
finance:                                                                         
                                                                               
Interest received                                   567          416         
832  
                                                                             
Interest paid                                    (6,846)      (7,045)    
(13,903) 
                                                                             
                                              _______      _______     
_______  
                                                                             
                                               (6,279)      (6,629)    
(13,071) 
                                                                             
                                              _______      _______     
_______  
                                                                             
Capital expenditure:                                                             
                                                                               
Payments to acquire tangible fixed assets        (3,615)      (6,138)     
(8,629) 
                                                                             
Receipts from sale of tangible fixed assets          24            -          
19  
                                                                             
                                              _______      _______     
_______  
                                                                             
                                               (3,591)      (6,138)     
(8,610) 
                                                                             
                                              _______      _______     
_______  
                                                                             
Financing:                                                                       
                                                                               
Repayment of borrowings                          (6,548)      (6,208)     
(6,208) 
                                                                             
                                              _______      _______     
_______  
                                                                             
Total debt repayment                             (6,548)      (6,208)     
(6,208) 
                                                                             
                                              _______      _______     
_______  
Arsenal Holdings Plc 
Notes to the interim accounts 
30 November 2012 
1   Basis of preparation of Group financial statements 
The Group financial statements consolidate the assets, liabilities and results
of the company and its subsidiary undertakings made up to 30 November 2012. The
Group has two classes of business - the principal activity of operating a
professional football club and property development. 
The interim results have been prepared, in accordance with United Kingdom
Generally Accepted Accounting Practice, on the same basis and using the same
accounting policies as those used in the preparation of the full year's
accounts to 31 May 2012. The status of the Group's financing arrangements is
reported in notes 14 and 15 and is summarised in the Chairman's Statement. The
directors have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future and the
financial statements continue to be prepared on the going concern basis. 
2   Significant accounting policies 
Income recognition 
Gate and other match day revenue is recognised over the period of the football
season as games are played and events are staged. Sponsorship and similar
commercial income is recognised over the duration of the respective contracts.
The fixed element of broadcasting revenues is recognised over the duration of
the football season whilst facility fees for live coverage or highlights are
taken when earned at the point of broadcast. Merit awards are accounted for
only when known at the end of the financial period. UEFA pool distributions
relating to participation in the Champions League are spread over the matches
played in the competition whilst distributions relating to match performance
are taken when earned; these distributions are classified as broadcasting
revenues. Fees receivable in respect of the loan of players are included in
turnover over the period of the loan. 
Income from the sale of development properties is recognised on legal 
completion of the relevant sale contract. Where elements of the sale price are
subject to retentions by the purchaser the retained element of the sale price
is not recognised until such time as all of the conditions relating to the
retention have been satisfied. 
Player registrations 
The costs associated with acquiring players' registrations or extending their
contracts, including agents' fees, are capitalised and amortised, in equal
instalments, over the period of the respective players' contracts. Where a
contract life is renegotiated the unamortised costs, together with the new
costs relating to the contract extension, are amortised over the term of the
new contract. Where the acquisition of a player registration involves a
non-cash consideration, such as an exchange for another player registration,
the transaction is accounted for using an estimate of market value for the
non-cash consideration. Under the conditions of certain transfer agreements or
contract renegotiations, further fees will be payable in the event of the
players concerned making a certain number of First Team appearances or on the
occurrence of certain other specified future events. Liabilities in respect of
these additional fees are accounted for, as provisions, when it becomes
probable that the number of appearances will be achieved or the specified
future events will occur. The additional costs are capitalised and amortised as
set out above. 
3   Segmental analysis 
Class of business                                           Football             
                                                                                 
                                              Six months to 30 November Year 
ended  
                                                                        31 
May  
                                                  2012        2011        
2012  
                                            Unaudited    Unaudited     
Audited  
                                                £'000        £'000       
£'000  
                                                                             
Turnover                                          106,145      113,541     
235,329  
                                                                             
                                                  _______      _______     
_______  
                                                                             
Profit on ordinary activities before taxation      15,616       48,864      
34,089  
                                                                             
                                                  _______      _______     
_______  
                                                                             
Segment net assets                                278,023      275,761     
265,280  
                                                                             
                                                  _______      _______     
_______  
Class of business                                     Property development       
                                                                                 
                                              Six months to 30 November Year 
ended  
                                                                        31 
May  
                                                 2012         2011        
2012  
                                            Unaudited    Unaudited     
Audited  
                                                £'000        £'000       
£'000  
                                                                             
Turnover                                           32,287        3,184       
7,684  
                                                                             
                                                  _______      _______     
_______  
                                                                             
Profit on ordinary activities before taxation       2,159          599       
2,499  
                                                                             
                                                  _______      _______     
_______  
                                                                             
Segment net assets                                 34,427       30,243      
32,268  
                                                                             
                                                  _______      _______     
_______  
Class of business                                             Group              
                                                                                 
                                              Six months to 30 November Year 
ended  
                                                                        31 
May  
                                                 2012         2011        
2012  
                                            Unaudited    Unaudited     
Audited  
                                                £'000        £'000       
£'000  
                                                                             
Turnover                                          138,432      116,725     
243,013  
                                                                             
                                                  _______      _______     
_______  
                                                                             
Profit on ordinary activities before taxation      17,775       49,463      
36,588  
                                                                             
                                                  _______      _______     
_______  
                                                                             
Net assets                                        312,450      306,004     
297,548  
                                                                             
                                                  _______      _______     
_______  
4   Turnover 
                                         Six months to 30 November Year 
ended  
                                                                       31 
May  
                                                2012         2011        
2012  
                                           Unaudited    Unaudited     
Audited  
                                               £'000        £'000       
£'000  
                                                                             
Gate and other match day revenues                 37,785       45,954      
95,212  
                                                                             
Player trading                                       564          394       
2,901  
                                                                             
Broadcasting                                      40,108       40,642      
84,701  
                                                                             
Retail and licensing income                        9,813        9,776      
18,303  
                                                                             
Commercial                                        17,875       16,775      
34,212  
                                                                             
Property development                              32,287        3,184       
7,684  
                                                                             
                                                _______      _______     
_______  
                                                                             
                                                138,432      116,725     
243,013  
                                                                             
                                                _______      _______     
_______  
5   Operating costs 
                                         Six months to 30 November Year 
ended  
                                                                       31 
May  
                                                2012         2011        
2012  
                                           Unaudited    Unaudited     
Audited  
                                               £'000        £'000       
£'000  
                                                                             
Football - amortisation and depreciation          25,533       23,046      
48,193  
                                                                             
Football - impairment                                  -            -       
5,517  
                                                                             
Football - other operating costs                  101,136       98,353     
200,164 
                                                                             
Property development - operating costs            30,425        2,684       
5,463  
                                                                             
                                                _______      _______     
_______  
                                                                             
                                                157,094      124,083     
259,337  
                                                                             
                                                _______      _______     
_______  
6   Net finance charges 
                                         Six months to 30 November Year 
ended  
                                                                       31 
May  
                                                2012         2011        
2012  
                                           Unaudited    Unaudited     
Audited 
Interest payable and similar charges:              £'000        £'000       
£'000  
                                                                             
Bank loans and overdrafts                             (1)          (4)        
(16) 
                                                                             
Fixed/floating rate bonds                         (6,571)      (6,614)    
(13,265) 
                                                                             
Other                                               (179)        (175)       
(385) 
                                                                             
Costs of raising long-term finance                  (359)        (393)       
(785) 
                                                                             
                                                _______      _______     
_______  
                                                                             
Total interest payable and similar charges        (7,110)      (7,186)    
(14,451) 
                                                                             
Interest receivable                                  643          469         
955  
                                                                             
                                                _______      _______     
_______  
                                                                             
Net finance charges                               (6,467)      (6,717)    
(13,496) 
                                                                             
                                                _______      _______     
_______  
                                                                             
7   Taxation 
The charge for taxation is based on the estimated effective tax rate for the
year as a whole. 
                                         Six months to 30 November Year 
ended  
                                                                       31 
May  
                                                2012         2011        
2012  
                                           Unaudited    Unaudited     
Audited  
                                               £'000        £'000       
£'000  
                                                                             
Corporation tax on result for the period at         (52)      (2,607)       
(483) 
23.83%                                                                           
                                                                                
Movement in deferred taxation                    (2,821)      (8,807)      
(6,512) 
                                                                             
                                                _______      _______     
_______  
                                                                             
Total tax charge                                 (2,873)      (11,414)    
(6,995)  
                                                                             
                                                _______      _______     
_______  
                                                                             
From 1 April 2013 the rate of UK corporation tax will reduce from 24% to 23%.
The Group's deferred tax liabilities have been revalued based on the 23% rate.
The impact of the rate change is a deferred tax credit of £1.62 million. 
The comparative rates of corporation tax were 25.83% for the six months ended
30 November 2011 and 25.67% for the year ended 31 May 2012. 
8   Earnings per share 
The calculation of earnings per share is based on the profit for the period
divided by the weighted average number of ordinary shares in issue being 62,217
(period to 30 November 2011 - 62,217 shares and year to 31 May 2012 - 62,217 
shares). 
9   Tangible fixed assets 


                                      Freehold  Leasehold  Plant and           
                                      property   property  equipment      Total


                                     £'000      £'000      £'000      
£'000 
                                                                           
Cost                                                                            
                                                                           
At 1 June 2012                        400,956      6,608     92,498    500,062  
                                                                           
Additions                                 709         68      2,654      3,431  
                                                                           
Disposals                                   -          -       (89)        (89) 


                                                                               
                                      _______    _______    _______    _______ 


                                                                           
At 30 November 2012                   401,665      6,676     95,063    503,404  


                                                                               
                                      _______    _______    _______    _______ 


                                                                           
Depreciation                                                                    
                                                                           
At 1 June 2012                         34,565      3,087     35,253     72,905  
                                                                           
Charge for period                       2,811        154      2,723      5,688  
                                                                           
Disposals                                   -          -        (79)       (79) 


                                                                               
                                      _______    _______    _______    _______ 


                                                                           
At 30 November 2012                    37,376      3,241     37,897     78,514  


                                                                               
                                      _______    _______    _______    _______ 


                                                                           
Net book value                                                                  
                                                                           
At 30 November 2012                   364,289      3,435     57,166    424,890  


                                                                               
                                      _______    _______    _______    _______ 


                                                                           
At 31 May 2012                        366,391      3,521     57,245    427,157  
                                                                            


                                      _______    _______    _______    _______ 

10   Intangible fixed assets
                                                                         £'000 


                                                                           
Cost of player registrations                                                    
                                                                           
At 1 June 2012                                                         189,685  
                                                                           
Additions                                                               40,889  
                                                                           
Disposals                                                              (13,071) 


                                                                               
                                                                        _______


                                                                           
At 30 November 2012                                                    217,503  


                                                                               
                                                                        _______


                                                                           
Amortisation of player registrations                                            
                                                                           
At 1 June 2012                                                         103,977  
                                                                           
Charge for the period                                                   19,904  
                                                                           
Disposals                                                              (11,329) 


                                                                               
                                                                        _______


                                                                           
At 30 November 2012                                                    112,552  


                                                                               
                                                                        _______


                                                                           
Net book amount                                                                 
                                                                           
At 30 November 2012                                                    104,951  


                                                                               
                                                                       _______ 


                                                                           
At 31 May 2012                                                          85,708  


                                                                               
                                                                       _______ 
                                                                               

11   Stock - Development properties

Properties are held for resale and are recorded at the lower of cost and net
realisable value. The directors consider the net realisable value of
development property stocks to be greater than their book value.

12   Debtors
                                                    30 November         31 May 
                                                    2012       2011       2012 
                                               Unaudited  Unaudited    Audited 


                                               £'000      £'000      
£'000  
                                                                           
Amounts recoverable within one year:                                            
                                                                           
Trade debtors                                     15,443      5,897     20,394  
                                                                           
Other debtors                                     23,973     16,392     14,347  
                                                                           
Prepayments and accrued income                    30,323     30,363     17,591  


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                  69,739     52,652     52,332 
                                                                               
                                                 _______    _______    _______ 


                                                                           
Amounts recoverable after more than one year:                                   
                                                                           
Trade debtors                                      10,000          -          - 
                                                                           
Other debtors                                      9,480      3,799      3,570  
                                                                           
Prepayments and accrued income                     1,595      2,106      1,631  


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                  21,075      5,905      5,201 
                                                                               
                                                 _______    _______    _______ 
                                                                               

Other debtors of £33.5 million, include £31.4 million in respect of player
transfers (30 November 2011 £19.0 million and 31 May 2012 £16.5 million) of
which £8.4 million is recoverable after more than one year.

13   Cash at bank and in hand
                                                    30 November         31 May 
                                                    2012       2011       2012 
                                               Unaudited  Unaudited    Audited 


                                               £'000      £'000      
£'000  
                                                                           
Debt service reserve accounts                     23,696     23,056     33,538  
                                                                           
Other accounts                                    99,678     92,094    120,087  


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                 123,374    115,150    153,625 
                                                                               
                                                 _______    _______    _______ 
                                                                               

The Group is required under the terms of its fixed and floating rate bonds to
maintain specified amounts on bank deposit as security against future payments
of interest and principal. Accordingly the use of these debt service reserve
accounts is restricted to that purpose. Included in other accounts is a balance
of £1.2 million (30 November 2011 £2.3 million and 31 May 2012 £1.0 million)
which is held in connection with the site works at Queensland Road. The use of
this deposit is restricted to that purpose and Newlon Housing Trust is a joint
signatory.

The Group uses short-term bank treasury deposits as a means of maximising the
interest earned on its cash balances.
                                                    30 November         31 May 
                                                    2012       2011       2012 
                                               Unaudited  Unaudited    Audited 


                                               £'000      £'000      
£'000  
                                                                           
Cash at bank and in hand                          16,502      9,111     29,272  
                                                                           
Short-term deposits                              106,872    106,039    124,353  


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                 123,374    115,150    153,625 
                                                                               
                                                 _______    _______    _______ 
                                                                               

14   Creditors: Amounts falling due within one year
                                                    30 November         31 May 
                                                    2012       2011       2012 
                                               Unaudited  Unaudited    Audited 


                                               £'000      £'000      
£'000  
                                                                           
Fixed rate bonds - secured                         6,301      5,928      5,937  
                                                                           
Trade creditors                                   10,527     11,309     10,983  
                                                                           
Corporation tax                                      195       2,537       200  
                                                                           
Other tax and social security                      6,181      5,190     17,312  
                                                                           
Other creditors                                   32,070     23,627     23,915  
                                                                           
Accruals and deferred income                      86,180     74,730     86,812  


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                 141,454    123,321     145,159
                                                                               
                                                 _______    _______    _______ 

Other creditors, above and as disclosed in note 15, include £31.6 million (30
November 2011 £22.9 million and 31 May 2012 £23.6 million) in respect of 
player
transfers.

15   Creditors: Amounts falling due after more than one year
                                                    30 November         31 May 
                                                    2012       2011       2012 
                                               Unaudited  Unaudited    Audited 


                                               £'000      £'000      
£'000  
                                                                           
Fixed rate bonds - secured                       159,968    166,406    166,640  
                                                                           
Floating rate bonds - secured                     52,785     52,928     52,856  
                                                                           
Debentures                                        27,286     26,935     27,110  
                                                                           
Other creditors                                    6,181      4,323      4,772  
                                                                           
Grants                                             3,930      4,063      3,989  
                                                                           
Deferred income                                    5,604      8,526     12,699  


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                 255,754    263,181    268,066 
                                                                               
                                                 _______    _______    _______ 
                                                                               

The fixed rate bonds comprise:
                                                    30 November         31 May 
                                                    2012       2011       2012 
                                               Unaudited  Unaudited    Audited 


                                               £'000      £'000      
£'000  
                                                                           
Fixed rate bonds                                 170,674    177,220    177,220  
                                                                           
Costs of raising finance                          (4,405)    (4,886)    (4,643) 


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                 166,269    172,334    172,577 
                                                                               
                                                 _______    _______    _______ 


                                                                           
Due within one year (see note 14)                  6,301      5,928      5,937  
                                                                           
Due after more than one year                     159,968    166,406    166,640  


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                 166,269    172,334    172,577 
                                                                               
                                                 _______    _______    _______ 

The fixed rate bonds bear interest at 5.1418% per annum.

The floating rate bonds above comprise:
                                                    30 November         31 May 
                                                    2012       2011       2012 
                                               Unaudited  Unaudited    Audited 


                                               £'000      £'000      
£'000  
                                                                           
Floating rate bonds                               50,000     50,000     50,000  
                                                                           
Interest rate swap                                 5,225      5,505      5,365  
                                                                           
Costs of raising finance                          (2,440)    (2,577)    (2,509) 


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                  52,785     52,928     52,856 
                                                                               
                                                 _______    _______    _______ 


                                                                           
Due within one year                                     -         -          -  
                                                                           
Due after more than one year                      52,785     52,928     52,856  


                                                                               
                                                 _______    _______    _______ 
                                                                               
                                                  52,785     52,928     52,856 
                                                                               
                                                 _______    _______    _______ 

The floating rate bonds bear interest at LIBOR for three month deposits plus a
margin of 0.22% and the Group has entered into interest rate swaps which fix
the LIBOR element of this cost at 5.75%. The fixed rate bonds and floating rate
bonds are guaranteed as to scheduled payments of principal and interest by
certain members of the Group and by Ambac Assurance UK Limited. The Group pays
Ambac Assurance UK Limited annual guarantee fees at a rate of 0.65% of the bond
principal outstanding.

The costs of raising debt finance, in the form of fixed and floating rate
bonds, are amortised to the profit and loss account over the term of the debt.
The amortisation charge for the period was £306,000 (period to 30 November 
2011
£315,000 and year ended 31 May 2012 £626,000).

The Group's fixed rate bonds and floating rate bonds are secured by a mixture
of legal mortgages and fixed charges on certain freehold and leasehold property
and certain plant and machinery owned by the Group, by fixed charges over
certain of the Group's trade debtors and the related bank guarantees, by fixed
charges over £27.5 million (30 November 2011 £28.5 million, 31 May 2012 £
49.6 million) of the Group's bank deposits, by legal mortgages or fixed charges
over the share capital and intellectual property rights of certain subsidiary
companies and fixed and floating charges over the other assets of certain
subsidiary companies.

The Group's financial liabilities/debt is          30 November           31 May 

repayable as follows:                                                           
                                                   2012        2011        2012 
                                              Unaudited   Unaudited     Audited 


                                              £'000       £'000       
£'000  
                                                                             
Between one and two years                         7,274       6,900       6,900  
                                                                             
Between two and five years                       24,274      23,026      23,026  


                                                                                

After five years                                209,647     217,995     218,170 
                                                                                
                                             __________  __________  __________ 
                                                                                
                                                241,195     247,921     248,096 
                                                                                

Within one year                                   6,900       6,545       6,545 
                                                                                
                                             __________  __________  __________ 
                                                                                
                                                248,095     254,466     254,641 
                                                                                
                                             __________  __________  __________ 


Interest rate profile

After taking into account interest rate swaps, the interest rate profile of the
Group's financial liabilities at 30 November 2012 was as follows:


                                                                     
Weighted 
                                                                      
average 
                     Fixed  Floating  Interest            Weighted period 
for 
                      rate      rate      free     Total   average which 
rate 
                 Unaudited Unaudited Unaudited Unaudited     fixed   is 
fixed 
                                                              rate           
                        2012      2012      2012      2012 Unaudited  
Unaudited 
                     £'000     £'000     £'000     £'000         %      
  Yrs 
                                                                             
Bonds - fixed rate    170,674         -         -   170,674       5.8       
16.5  
                                                                             
Bonds - floating       50,000         -         -    50,000       6.6       
18.5 
rate                                                                             
                                                                               
Debentures             12,991         -    14,430    27,421       2.8       
15.5  


                                                                                
                        _______   _______   _______   _______                     
                                                                                  
                        233,665         -    14,430   248,095                     
                                                                                  


                    _______   _______   _______   _______                      
Changes in the fair value of interest rate swaps, which are used as hedges, are
not recognised in the financial statements until the hedged position matures.
At 30 November 2012 the total unrecognised loss on the Group's interest rate
swaps was £19.8 million (31 May 2012: £18.1 million). 
The interest rate profile at 30 November 2011 for comparative purposes was: 
                                                                     
Weighted 
                                                                      
average 
                     Fixed  Floating  Interest            Weighted period 
for 
                      Rate      rate      free     Total   average which 
rate 
                                                                           
is 
                 Unaudited Unaudited Unaudited Unaudited     fixed      
fixed 
                                                              rate           
                        2011      2011      2011      2011 Unaudited  
Unaudited 
                     £'000     £'000     £'000     £'000         %      
  Yrs 
                                                                             
Bonds - fixed rate    177,220         -         -   177,220       5.8       
17.5  
                                                                             
Bonds - floating       50,000         -         -    50,000       6.6       
19.5 
rate                                                                             
                                                                               
Debentures             12,816         -    14,430    27,246       2.8       
16.5  


                                                                                
                        _______   _______   _______   _______                     
                                                                                  
                        240,036         -    14,430   254,466                     
                                                                                  


                    _______   _______   _______   _______                      
The interest rate profile at 31 May 2012 for comparative purposes was: 


                                                                       Weighted
                                                                        average
                         Fixed Floating Interest           Weighted  period for
                          rate     rate     free    Total   average  which rate
                                                                             is
                       Audited  Audited  Audited  Audited     fixed       fixed
                                                               rate            
                          2012     2012     2012     2012   Audited     Audited


                     £'000    £'000    £'000    £'000         %         
Yrs 
                                                                           
Bonds - fixed rate    177,220        -        -  177,220       5.8          17  
                                                                           
Bonds - floating rate  50,000        -        -   50,000       6.6          19  
                                                                           
Debentures             12,991        -   14,430   27,421       2.8          16  


                                                                               
                      _______  _______  _______  _______                       
                                                                               
                      240,211        -   14,430  254,641                       
                                                                               
                      _______  _______  _______  _______                       
                                                                               

16   Provisions for liabilities
                                                   30 November           31 May 
                                                   2012        2011        2012 
                                              Unaudited   Unaudited     Audited 


                                              £'000       £'000       
£'000  
                                                                             
Pensions provision                                2,834         867       2,993  
                                                                             
Transfers provision                              10,114      18,810      13,103  


                                                                                

Deferred taxation                                41,577      41,055      38,756 
                                                                                
                                             __________  __________  __________ 
                                                                                
                                                 54,525      60,732      54,852 
                                                                                
                                             __________  __________  __________ 
                                                                                


The pensions provision relates to the expected contribution required towards
making good the Minimum Funding Requirements deficit which exists in the
Football League Pension and Life Assurance Scheme less payments made to the
scheme in this respect.

The transfers provision relates to the probable additional fees payable based
on the players concerned achieving a specified number of appearances.

17   Profit and loss account
                                                   30 November           31 May 
                                                   2012        2011        2012 
                                              Unaudited   Unaudited     Audited 


                                              £'000       £'000       
£'000  
                                                                             
At start of period                              240,790     211,197     211,197  


                                                                                

Profit for the period                            14,902      38,049      29,593 
                                                                                
                                             __________  __________  __________ 
                                                                                

Balance at end of period                        255,692     249,246     240,790 
                                                                                
                                             __________  __________  __________ 
                                                                                


18   Reconciliation of shareholders' funds
                                                   30 November           31 May 
                                                   2012        2011        2012 
                                              Unaudited   Unaudited     Audited 


                                              £'000       £'000       
£'000  
                                                                             
Opening shareholders' funds                     297,548     267,955     267,955  


                                                                                

Profit for the period                            14,902      38,049      29,593 
                                                                                
                                             __________  __________  __________ 
                                                                                

Closing shareholders' funds                     312,450     306,004     297,548 
                                                                                
                                             __________  __________  __________ 
                                                                                


19   Contingent liabilities

Under the conditions of certain transfer agreements in respect of players
purchased, further transfer fees will be payable to the vendors in the event of
the players concerned making a certain number of First Team appearances or in
the event of certain other future events specified in the transfer agreements.
The maximum unprovided potential liability is £7.8 million (30 November 2011 
£
11.0 million, 31 May 2012 £7.8 million).

The Group has commitments outstanding under letters of credit, issued to
guarantee its performance of certain future contractual obligations in relation
to its new stadium and property development projects, of £0.3 million (30
November 2011 £0.3 million, 31 May 2012 £0.3 million).

20   Additional information

a)  The interim financial statements do not constitute statutory financial
statements within the meaning of Section 435 of the Companies Act 2006. The
financial information for the year ended 31 May 2012 has been extracted from
the statutory accounts for the year then ended which have been filed with the
Registrar of Companies. The audit report on these accounts was unqualified and
did not contain any statements under Section 498 (2) or (3) Companies Act 2006.

b)  These results will be announced to ICAP Securities & Derivatives Exchange
(ISDX Growth Market) on 25 February 2013 and posted to all shareholders on the
register at 22 February 20 13. Copies of this interim report will be available
from the company's registered office at Highbury House, 75 Drayton Park, London
N5 1BU.

INDEPENDENT REVIEW REPORT TO ARSENAL HOLDINGS PLC

We have been engaged by the company to review the interim financial statements
in the half-yearly financial report for the six months ended 30 November 2012
which comprises the consolidated profit and loss account, the consolidated
balance sheet, the consolidated cash flow statement, the notes to the cash flow
statement and related notes 1 to 20. 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 interim financial statements.

This report is made solely to the company in accordance with International
Standard on Review Engagements (UK and Ireland) 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 it 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 ISDX Growth Market Rules
for Issuers and the ASB Statement Half-Yearly Financial Reports. As disclosed
in note 1, the annual financial statements of the company are prepared in
accordance with United Kingdom Generally Accepted Accounting Practice. The
interim financial statements included in this half-yearly financial report have
been prepared in accordance with the accounting policies the group intends to
use in preparing its next annual financial statements.

Our responsibility

Our responsibility is to express to the Company a conclusion on the interim
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 interim financial statements in the half-yearly financial
report for the six months ended 30 November 2012 is not prepared, in all
material respects, in accordance with the ISDX Growth Market Rules for Issuers
and the ASB Statement Half-Yearly Financial Reports.

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, United Kingdom

25 February 2013



END

-0- Feb/25/2013 16:00 GMT


 
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