eaga plc (eaga) has reported revenues of GBP339.4 million for the first half of fiscal 2009, up 9.8%, compared with the revenues of GBP309.1 million in the year-ago period. It has also reported a profit of GBP12.4 million, or 4.89 pence per diluted share, for the first half of fiscal 2009, compared with the profit of GBP9.1 million, or 3.57 pence per diluted share, in the year-ago period.

Results:

The company’s EBITA before exceptional costs and ePT-funded charges increased by 13.5% to GBP21.4 million (2007: GBP18.9 million).

Profit before tax, amortization of intangible assets, exceptional costs and ePT-funded charges increased by 13.0% to GBP21.7 million (2007: GBP19.2 million). After deducting amortization of intangible assets, exceptional costs and ePTfunded charges profit before tax is GBP17.4 million (2007: GBP14.5 million).

Taxation:

The underlying effective tax rate of 28.6% (2007: 30.4%) is above the UK tax rate of 28.0% (2007: 29.7%), largely due to disallowable expenditure incurred by the group.

Earnings per Share:

Underlying fully diluted earnings per share (adjusting for amortization of intangible assets, exceptional costs and ePT-funded charges) increased by 15.5% to 6.12p (2007: 5.30p).

Exceptional costs:

Exceptional costs in the six months to 30 November 2008 relate to a share-based payments charge arising in respect of the fair value of share options granted to certain key management under the IPO Key Management Plan by ePT. These awards were made solely in relation to successful admission of the Company’s shares to the London Stock Exchange.

ePT-funded charges:

The group operates a SIP under which qualifying employees may receive free shares. During the 6 month period ended 30 November 2008 ePT waived its interim and final dividends amounting to GBP2.8 million in respect of the year ended 31 May 2008, and these funds were used to fund the SIP. This funding was utilized by the SIP trustee in October 2008 to acquire a number of shares in eaga plc to be held in order to meet the future commitment of the SIP.

Treasury:

The group generated GBP10.9 million (2007: GBP11.9 million) cash from operations. The group remains net cash positive at the balance sheet date, with cash balances having increased during the six months by GBP0.3 million to GBP15.7 million.

The group has an existing GBP35 million revolving credit facility in place until 1 December 2009. Advanced discussions are underway with a number of potential lenders with a view to establishing renewed facilities before the end of the current financial year.

Acquisitions:

The group acquired Protocol Communications Management Limited (“Protocol”) on 14 October 2008. Protocol is a fulfillment and distribution company based in Blackburn. The acquisition joined our Specialist Support Services segment and offers a cost effective solution to print management, direct marketing activities and distribution.

Risks and uncertainties:

The group faces a number of risks and uncertainties across a range of commercial, operational and financial areas which are monitored and evaluated by a risk review board. Those that the board considers may impact on the group’s performance over the second half of the financial year are set out below:

The level of competition in the markets in which it operates which may affect the group’s revenue and market share;

Decisions and changes in the group’s regulatory environment;

Management of commercial relationships to avoid contractual loss/disputes;

Restriction of the availability of banking facilities due to destabilisation in the financial markets;

Significant change in Government’s policies in the area of fuel poverty and social inclusion;

The non-achievement of expected benefits from business acquisitions; and

Non-supply of equipment or services by a major supplier.

In addition to the above, the group is exposed to financial risks arising from external factors including the movements in foreign exchange rates, interest rates and other factors such as long term economic growth rates, all of which may impact the group’s financial performance. Additionally, the level of borrowings and the related finance costs are monitored through a central treasury function to mitigate the potential for credit and liquidity risk.

Any of the above and/or changes in assumptions underlying the carrying value of certain group assets could result in asset impairments.