Interim Results

Liontrust Asset Management PLC Interim Statement for the six months to 30th September 2004 Core operating profits rose by 39% to £4.93 million, compared with £3.54 million for the same period a year ago. Unlike last year no performance related fees have been earned during the period so the core and total operating profits are the same. The average level of funds under management over the six month period was £5.05 billion compared to £3.48 billion for the six months to September 2003. On 30th September 2004 our funds under management stood at £5.023 billion and £4.97 billion on 28th October 2004. There are currently no funds in transition. The First Income unit trust, based on our Value Dynamic investment process, has grown to over £950 million from £500 million this time last year. We have lost four institutional accounts during the period from 1st April 2004 to 28th October 2004 worth £277 million. Net sales of proprietary unit trusts during this period were £137 million. Core and total earnings per share are the same at 11.30p. Core earnings per share are 16% up on a year ago and 42% more on an equivalent basis as last year which benefited from a lower tax charge. Once again we have kept a tight control on our costs and as a result the cost: income ratio on our core business has fallen to 63.7% from 65.6% at the same time last year. Total compensation costs as a percentage of pre-compensation profit are targeted to remain around 55% for this full year. Your board has declared an interim dividend of 2.0p per share compared with 1.5p a year ago. The dividend will be paid on 30th November to shareholders on the register on 12th November with an ex-dividend date of 10th November. Relative performance of our four investment processes has continued to vary. The Small Cap and Value investment processes have outperformed their benchmarks during 2004 while the Large Cap and Growth investment processes have underperformed their benchmarks. All institutional mandates with performance fee structures are based on either the Large Cap or Growth investment processes. Our average headcount during the period was 37. Recent experience continues to support our view that the combination of a simple business model, built around clearly articulated investment processes, with a few able and motivated people is a powerful formula for adding value. We continue to explore opportunities for profitable growth and remain enthusiastic about our prospects. Bernard Asher Chairman 28th October 2004 Enquiries: NigelLegge, Chief Executive, Liontrust Asset Management PLC 020 7412 1700 Richard Locke, Cazenove& Co. Ltd 020 7155 4706 LIONTRUST ASSET MANAGEMENT PLC Consolidated Profit and Loss Account Six months to 30th September 2004 Six Six Twelve months months months to to 30.9.04 to 30.9.03 31.3.04 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Turnover (Gross profit) 13,592 10,948 24,485 Staff costs (6,471) (4,966) (11,363) Exceptional staff costs 2 - (272) (189) Total staff costs (6,471) (5,238) (11,552) Other operating charges (2,188) (2,150) (4,327) Operating profit 4,933 3,560 8,606 Interest receivable 397 200 464 Profit on ordinary activities 5,330 3,760 9,070 before taxation Tax on profit on ordinary 3 (1,589) (564) (1,536) activities Profit on ordinary activities 3,741 3,196 7,534 after taxation Dividends paid and proposed (662) (685) (2,890) Profit for the period transferred 3,079 2,511 4,644 to reserves Pence Pence Pence Basic earnings per share 4 11.30 9.70 22.98 Basic earnings per share 4 11.30 10.40 23.39 (adjusted) Basic earnings per share 4 11.30 9.66 22.65 (core) Diluted earnings per share 4 11.16 9.40 22.29 Diluted earnings per share 4 11.16 10.08 22.68 (adjusted) Diluted earnings per share 4 11.16 9.35 21.97 (core) Six Six Twelve months months months to 30.9.04 to 30.9.03 to 31.3.04 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Core earnings 4,933 3,544 8,452 Performance related earnings - 288 343 4,933 3,382 8,795 Exceptional staff costs - (272) (189) Operating profit 4,933 3,560 8,606 LIONTRUST ASSET MANAGEMENT PLC Consolidated Balance Sheet At 30th September 2004 30.9.04 30.9.03 31.3.04 (unaudited) (unaudited) (audited) (restated) (restated) £'000 £'000 £'000 Fixed assets 261 329 299 Current assets Short term investments 208 183 197 Debtors 15,223 15,827 23,615 Cash at bank and in hand 17,465 11,595 15,813 32,896 27,605 39,625 Creditors - amounts falling due within one year (20,682) (19,218) (30,529) Net current assets 12,214 8,387 9,096 Total assets less current liabilities 12,475 8,716 9,395 Capital and reserves Called up ordinary share capital 350 349 350 Share premium account 8,630 8,373 8,630 Profit and loss account 10,162 5,028 7,082 Own shares held by the Liontrust Asset Management Employee Trust (6,667) (5,034) (6,667) Shareholders' funds (all equity 12,475 8,716 9,395 interests) LIONTRUST ASSET MANAGEMENT PLC Consolidated Cash Flow Statement Six months to 30th September 2004 Six Six Twelve months months months to 30.9.04 to 30.9.03 to 31.3.04 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Operating profit 4,933 3,560 8,606 Exceptional staff costs - (314) (314) Depreciation charges 55 49 104 (Increase) in short term investments (11) (9) (23) Decrease in debtors 8,392 16,179 8,391 (Decrease) in creditors (9,090) (12,859) (3,493) Net cash inflow from operating activities 4,279 6,606 13,271 Net cash inflow from operating activities 4,279 6,606 13,271 Returns on investment and servicing of finance 397 200 464 Taxation (773) (1,329) (2,066) Capital expenditure and financial (17) (1,672) (3,330) investment Equity dividends paid (2,234) (3,799) (4,294) 1,652 6 4,045 Financing - 1,674 1,853 Increase in cash 1,652 1,680 5,898 LIONTRUST ASSET MANAGEMENT PLC Notes to the Financial Statements Basis of preparation and restatement of comparatives The unaudited interim financial information, which has been approved by the Board of Directors, has been prepared on the basis of the accounting policies set out in the Group's accounts for the year ended 31st March 2004, except as set out below. The financial information for the year ended 31st March 2004 has been abridged from the financial statements which received an unqualified audit report and which have been filed with the Registrar of Companies. UITF Abstract 38, Accounting for ESOP trusts, came into effect for accounting periods ending on or after 22nd June 2004, superceding UITF Abstract 13. As a consequence, the value of shares in Liontrust Asset Management PLC held by the Liontrust Asset Management Employee Trust is now presented as a deduction in calculating Shareholders' Funds as opposed to an asset. Comparative figures have been restated appropriately. Exceptional staff costs Exceptional staff costs were accrued in respect of the potential employer's National Insurance liability on unapproved share options issued on the Company's flotation. The final tranche of these options were exercised in the year ended 31st March 2004. Exceptional staff costs: 30.9.04 30.9.03 31.3.04 £'000 £'000 £'000 Cost for National Insurance on unapproved share options - 272 189 - 272 189 Taxation The interim tax charge has been calculated at the estimated full year effective corporation tax rate of 30% (2003: 15%). The effective tax charge for 2003 took into account relief arising from the gains on exercised share options. LIONTRUST ASSET MANAGEMENT PLC Earnings per share The calculation of basic earnings per share is based on profit after taxation and the weighted number of ordinary shares in issue for each period, excluding the shares held by the Liontrust Asset Management Employee Trust. The weighted average number of ordinary shares was 33,099,510 for the six months ended 30th September 2004, 32,948,794 for the six months ended 30th September 2003 and 32,781,687 for the year ended 31st March 2004. In accordance with the methodology set out in the Annual Report & Accounts we have stated two further measures of basic earnings per share. The adjusted figure is calculated after removing the exceptional item and associated tax charge/ credit. The core figure is calculated after removing the exceptional item, the performance related fees and costs and related tax charges. The calculation of diluted earnings per share is based on profit after taxation and the weighted average number of ordinary shares in issue for each period, as above, adjusted for the effect of options to subscribe for shares that were in existence at 30th September 2004. The adjusted weighted average number of ordinary shares so calculated was 33,510,931 for the six months ended 30th September 2004, 34,014,808 for the six months ended 30th September 2003 and 33,797,605 for the year ended 31st March 2004. 5. Dividends The directors propose to pay an interim dividend in respect of the current period of 2.0 pence per share (2003: 1.5 pence) payable on 30th November 2004 to shareholders on the register at the close of business on 12th November 2004. This preliminary announcement constitutes non-statutory accounts under section 240 of the Companies Act 1985. The results for the six months ended 30th September 2004 are unaudited. As stated in Note 1 above, the financial information for the year ended 31st March 2004 has been abridged from the financial statements which received an unqualified audit report and which has been filed with the Registrar of Companies and did not contain a statement under section 237(2) or (3) of the Companies Act, 1985.
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