Morse said sales were poor in the first half of the year but it expects things to pick up during the second half. It expects a greater proportion than before to be earned in the second half of the year, due to its shift away from pure reselling.

In a statement to the Stock Exchange ahead of its AGM this morning Morse said: "The evolving shape of the business is likely to lead to some changes in its net cash and working capital profile. While the Group continues to generate operating cash, as outlined in the September preliminary results statement net cash in the first half will be impacted by the FY06 cash element of the FY05 restructuring of the UK business and by the payment of the FY05 final dividend."®

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