Interim Results
Berry Birch & Noble PLC
10 December 2001
PART 1
BERRY BIRCH & NOBLE PLC
(Registered in England No. 788306)
Proposed Acquisition, by way of Share Offer, of the entire issued and to be
issued ordinary share capital of
BERKELEY FINANCIAL SERVICES GROUP PLC
Related Party Transaction
Proposed Change of Name to Berkeley Berry Birch plc
Adoption of Share Option Schemes
Announcement of Interim Results
Notice of Extraordinary General Meeting
Sponsored by
BREWIN DOLPHIN SECURITIES LIMITED
1. Introduction
It was announced on 29 October 2001 that Berry Birch & Noble was in
discussions with regard to the proposed acquisition of Berkeley. The boards of
Berry Birch & Noble and Berkeley announce that they have now agreed the terms
of an offer, to be made by Brewin Dolphin Securities on behalf of Berry Birch
& Noble, to acquire the entire issued and to be issued ordinary share capital
of Berkeley. The Offer is conditional, inter alia, on Berkeley raising £10
million of new funds (before expenses) (which is expected to be concluded
within 28 days) and on Berry Birch & Noble Shareholders' approval. The total
consideration for the Acquisition is £47.75 million and values Berry Birch &
Noble at £6.48 million (based on a price of 90p per Ordinary Share,
representing a premium of 7p per Ordinary Share over the closing mid-market
price on the business day immediately prior to the October announcement). The
consideration is to be satisfied in full by the issue, credited as fully paid,
to the Berkeley Shareholders who accept the Offer, of Consideration Shares in
the proportions described in paragraph 7 below, which will represent
approximately 88 per cent. of the Enlarged Share Capital (on the basis that
all of the Consideration Shares are issued pursuant to the Offer).
In view of the size of the Acquisition, which is classified as a reverse
takeover for the purpose of the Listing Rules and consequently requires the
Enlarged Group to re-apply for listing, dealings in the Existing Ordinary
Shares were, at the request of the Company, suspended on 29 October 2001 by
the UKLA pending the despatch of Listing Particulars relating to the Company.
Dealings are expected to re- commence in the Existing Ordinary Shares on 10
December 2001. Dealings in the Consideration Shares are expected to commence
on the first business day following the day on which the Offer becomes or is
declared unconditional in all respects.
As a result of the interests of the Related Parties (Messrs Lockyer, Butcher,
Ingledew and Herring) in the share capital of Berkeley, the Acquisition will
constitute a related party transaction under the Listing Rules which is
referred to in more detail below. The Related Parties are not entitled to vote
on certain of the Resolutions set out in the Notice of EGM.
2. Background to the Acquisition
There are a number of market trends which the Directors believe are
accelerating change in the market for independent financial advice, including:
* growing demand from high value consumers ('cash rich and time poor') and
employers for independent financial advice;
* the continuing relative success of the IFA channel compared to other
distribution methods;
* the implications of the anticipated changes to the current regulatory
regime;
* the increasing importance of new technology in financial services
distribution; and
* reducing margins on certain financial products (e.g. pensions, with the
introduction of stakeholder pensions).
The Board believes that the combined effects of these market trends will
present opportunities for larger financial services distributors which have
access to high value consumers. The Board believes that this will result in
the consolidation of IFA Firms as they pool resources to create economies of
scale.
3. Reasons for and summary of the Acquisition
The total consideration for Berkeley is £47.75 million, to be satisfied in
full by the issue of the Consideration Shares pursuant to the terms of the
Offer.
I noted in my Chairman's statement for the financial year ended 31 January
2001 that the Group had begun to make fundamental changes to strengthen its
position and deliver improved performance in future. Specifically, I commended
to you the new executive management team of Clifford Lockyer, Craig Butcher
and Stephen Ingledew. During their tenure, progress has been made in seeking
to address the Group's business difficulties, managing its financial position
and implementing operational solutions. In addition, the new management team
has proposed and the Board adopted a new strategic plan for the Group with the
objective of delivering increased shareholder value.
Prior to the introduction of the new management team at the end of the last
financial year the Group's business strategy and direction was uncertain. The
Directors consider that this uncertainty was due to the following:
* difficulties in board succession planning;
* a Pensions Review problem, which was crystallising as a significant
financial burden;
* a limited capital base; and
* administrative difficulties in integrating recent acquisitions,
resulting in stagnant operational performance.
These uncertainties had led to limited investment in the operational
infrastructure and an inability to recruit key new management. The Group's
financial weakness has been exacerbated by the requirement for the Group to
make provision for potential liabilities arising from the Pensions Review.
These provisions have resulted in the Group having been unable to meet the
Regulator's Capital Adequacy requirements for a period of 23 months. The
Interim Results of the Group are set out below and a further provision has
been made in respect of these liabilities. The new management team has taken
steps to restore and improve the prospects for the business.
The Board proposes to acquire Berkeley in order to put the Enlarged Group on a
sound financial footing. In addition the Directors believe the Acquisition
will give the Enlarged Group an exciting future strategy which has the
opportunity to benefit from the market trends identified above. The Directors
intend to create a sizeable multi-channel business which they believe will be
unique in the distribution of financial services products within the UK.
4. Information on Berkeley
Founded in 1990, the Berkeley Group primarily focuses on supporting IFA Firms
by providing various services to Network Members. The Berkeley Network
experienced significant growth during the 1990's and in 1999 began a period of
consolidation which included investment in personnel and its infrastructure.
Berkeley IA is the fourth largest IFA Network group in the UK both by turnover
and number of Registered Individuals. On joining the Berkeley Network, Network
Members become Appointed Representatives of Berkeley IA. Berkeley IA is
authorised by the FSA to carry on investment business.
The Berkeley Network Members primarily provide personal financial planning
advice to high net worth individuals and corporate financial planning advice
to businesses. The Berkeley Network currently comprises 270 IFA Firms which,
in turn, collectively employ or contract the services of over 550 Registered
Individuals.
Current trading
For the first seven months of the Berkeley Group's current financial year,
approximately 110 Registered Individuals have been added to its membership.
The Berkeley Group's turnover for the first seven months of its current
financial year was £22.6 million. During the three year period to 31 March
2001, the average number of Registered Individuals within the Berkeley Group,
working for Network Members, increased from approximately 279 to 415. The
aggregated net asset value of the Berkeley Group as at 31 August 2001, was £
904,000. As at 31 October 2001 the number of Registered Individuals in the
Berkeley Network was 551. The following table (which has been extracted
without material adjustment from the Accountants' Report on the Berkeley
Subsidiaries set out in Part IV of the Listing Particulars) provides a summary
of the key indicators of the recent growth of the Berkeley Subsidiaries:
Year ended Year ended Year ended
31 March 1999 31 March 2000 31 March 2001
£'000 £'000 £'000
Turnover 18,550 23,297 34,243
(Loss)/profit before taxation (443 ) (12 ) 395
Berkeley Fundraising
Berkeley has placed 40,000,000 ordinary shares in Berkeley at a price of 25p
per share which will raise £10 million (before expenses) of new capital to
support its strategic plans and the working capital requirements of the
Enlarged Group. The Berkeley Fundraising will proceed by way of a placing
subject to clawback under an offer for subscription. The Placees are 5
significant institutional investors, being Norwich Union, Friends Provident,
Clerical Medical, Scottish Widows and Skandia.
At the same time, Clifford Lockyer proposes to sell up to 10,000,000 ordinary
shares in Berkeley at a price of 25p per share.
Berkeley has received firm commitments from each of the Placees to subscribe
for in aggregate 40,000,000 Berkeley Shares at 25p per share, subject to
clawback in relation to applications received in respect of the offer for
subscription. Berkeley has made an offer for subscription, inviting Berkeley
Group employees and Registered Individuals, who operate through a Berkeley
Network Member, to apply for new Berkeley Shares at a price of 25p per share.
The offer for subscription has been made in respect of up to 10,000,000 new
Berkeley Shares and the closing date for applications under the offer for
subscription is 27 December 2001.
Subject to the Offer becoming unconditional in all respects, the Directors
believe that the Berkeley Fundraising will:
* resolve the Capital Adequacy shortfall of Berry Birch & Noble FS and
provide sufficient working capital for the present requirements of the
Enlarged Group;
* facilitate the Enlarged Group's proposed growth;
* provide an opportunity for Berkeley Group employees and Registered
Individuals operating through Network Members to acquire shares in
Berkeley. The Directors believe that this will serve to incentivise those
Berkeley Group employees, Registered Individuals and the Network Members
through which they operate, and increase their loyalty to the Enlarged
Group; and
* widen the shareholder base of the Enlarged Group.
5. Information on Berry Birch & Noble Group
The Berry Birch & Noble Group is a financial services intermediary and its
principal business activities are the provision of independent financial
advice and insurance broking services, primarily to employees and senior
management of large corporations.
6. The Enlarged Group
The Directors propose to change the name of the Company to Berkeley Berry
Birch plc conditionally on completion of the Acquisition.
The Enlarged Group is expected to have the following characteristics:
* multi-channel financial services distribution;
* a financially sound capital base;
* a management team with a proven track record;
* a recognised brand and market presence; and
* approximately 600 Registered Individuals.
The Directors believe that the above structure should enable the Enlarged
Group to recruit and retain quality Registered Individuals in the light of
market and regulatory changes to financial services distribution. In addition,
the Directors propose to establish new share incentive arrangements. Further
details are set out below.
7. Principal terms of the Acquisition
Subject to the terms and conditions set out in the Offer Document, Berry Birch
& Noble and Berkeley have agreed the terms of a conditional share offer, to be
made by Brewin Dolphin Securities on behalf of Berry Birch & Noble, to acquire
the entire issued and to be issued ordinary share capital of Berkeley. The
Offer, which is subject to the conditions and further terms set out in the
Offer Document and the Form of Acceptance, is being made on the following
basis:
for every 18 Berkeley Shares 5 Consideration Shares in Berry Birch & Noble
Berkeley Shares will be acquired by Berry Birch & Noble pursuant to the terms
of the Offer fully paid and free from all encumbrances and third party rights.
Fractions of Consideration Shares will not be allotted, but will be rounded
down. The Offer extends to any Berkeley Shares which are issued or
unconditionally allotted before the Offer becomes or is declared unconditional
or by such earlier date as Berry Birch & Noble may, subject to the City Code,
decide. The Consideration Shares will be issued credited as fully paid.
Further details of the Offer are set out in a separate announcement released
today by the Company and in the Offer Document and Form of Acceptance.
8. Irrevocable undertakings and lock-ins
The Berkeley Directors and persons connected with the Berkeley Directors and
other shareholders of Berkeley have irrevocably undertaken to accept the Offer
in respect of their entire holdings of Berkeley Shares, amounting to, in
aggregate, a maximum of 132,700,000 Berkeley Shares, representing a maximum of
87.88 per cent. of the issued ordinary share capital of Berkeley, following
the Berkeley Fundraising. Such undertakings will remain binding in the event
of a higher competing offer being made for the Berkeley Shares, unless the
Offer lapses or is withdrawn.
The Related Parties have undertaken to the Company and Brewin Dolphin
Securities not to dispose of their respective interests in Ordinary Shares of
Berry Birch & Noble for a period of 12 months from the date of the Listing
Particulars, subject to certain exceptions or with the prior permission of the
Company and Brewin Dolphin Securities.
9. Dividend policy
When profits permit, the Directors will consider the payment of dividends. The
payment of any future dividends will depend on the Enlarged Group's financial
performance, cash requirements, future prospects, the profits available for
distribution and other factors deemed relevant at that time.
10. Current trading of the Group
The financial performance of the Group for the first six months of the current
financial year is shown in the unaudited interim results set out below. Your
attention is drawn to the Chairman's statement in this announcement. The Group
has sufficient funds to meet its operational obligations in the expectation
that Admission occurs no later than 15 January 2002 (the longstop date in the
Sponsor's Agreement). The Enlarged Group is able to make the working capital
statement in paragraph 12 of Part VII of the Circular on the basis that the
Acquisition proceeds and Berkeley Fundraising has occured by that time.
11. Prospects for the Enlarged Group
On completion of the Acquisition, the members of the Berkeley Group will be
run as wholly owned subsidiaries of the Enlarged Group. The Directors believe
that the focus of the Berkeley Group business on different customer segments
from the other businesses of the Enlarged Group should enable the Enlarged
Group to reach a broader range of high value customers whilst sharing core
business capabilities such as administration and compliance.
The Board believes that consolidation in the IFA sector and the amalgamation
of IFA Firms (under IFA Networks and national IFA Firms) will continue. Your
Directors believe that the prospects for the future growth of the Enlarged
Group are encouraging and that the Acquisition of Berkeley should enable Berry
Birch & Noble to become a leading financial services distributor, which can
exploit the changes in the market and achieve enhanced shareholder value.
The Company recognises the skills, technical ability and experience of the
existing management and employees of the Berkeley Group and of the Group. The
Board has confirmed that the existing rights, including any pension rights, of
all employees of the Group and the Berkeley Group will be fully safeguarded.
In addition, as the Berkeley Directors are Directors of Berry Birch & Noble,
new service agreements reflecting their roles as Directors of the Enlarged
Group have been put into place. These agreements are conditional upon
Admission.
12. Related party transaction
Each of Messrs Lockyer, Butcher, Ingledew and Herring are related parties for
the purposes of the Listing Rules since, as well as being a director of Berry
Birch & Noble, each of them is also a director of Berkeley and/or Berkeley
Subsidiaries. The effect of this is that the Listing Rules require the prior
approval of Berry Birch & Noble Shareholders to the Acquisition, which is
being sought in any event since the Acquisition comprises a reverse takeover
under the Listing Rules. The Related Parties must abstain, and take all
reasonable steps to ensure that their associates abstain, from voting on
Resolutions 1 and 2 as set out in the Notice of EGM.
13. The City Code
The Acquisition gives rise to certain considerations under the City Code.
Brief details of the Panel, the City Code and the protections they afford to
holders of Ordinary Shares are described below.
The City Code has not, and does not seek to have, the force the law. It has,
however, been acknowledged by both the UK government and other UK regulatory
authorities that those who seek to take advantage of the facilities of the
securities market in the UK should conduct themselves in matters relating to
takeovers in accordance with the City Code.
The City Code is issued and administered by the Panel. The City Code applies
to all takeovers and merger transactions, however effected, where the offeree
company is, inter alia, a listed or unlisted public company resident in the
UK, and to certain categories of private limited companies.
Under rule 9 of the City Code, when any person and/or companies acting in
concert (as defined in the City Code) acquire shares in a company which is
subject to the City Code and such shares, when taken together with shares
already held, would result in such person(s) holding shares carrying 30 per
cent. or more of the voting rights if the company, such person or group is
normally obliged to make a general offer to all of the company's shareholders
to acquire the remaining equity share capital at the highest price paid by any
member of such concert party within the preceding 12 months.
Rule 9 also states that if any concert party holds not less than 30 per cent.,
but more than 50 per cent., of the voting rights of a company which is subject
to the City Code, such person, or any person acting in concert with such
person, is normally obliged by the Panel to make a general offer to all
shareholders if he, she or it acquires any further shares in the Company at
the highest price paid by such concert party within the preceding 12 months.
The Panel has deemed that the shareholders forming the Concert Party will be
treated as acting as a concert party in relation to the Company for the
purposes of rule 9. Assuming that all the Consideration Shares are issued, the
Concert Party would hold in aggregate 39,841,882 Ordinary Shares representing
approximately 66.12 per cent. of the issued Ordinary Shares following the
Acquisition.
The Panel has however agreed in this instance, subject to Resolution 2 being
passed on a poll at the EGM by the Company's Independent Shareholders, to
waive any obligation of the concert party or any member thereof to make a
general offer for shares in the Company which would otherwise arise as a
result of the Acquisition. Accordingly, a poll will be held on Resolution 2,
which will be proposed as an ordinary resolution at the EGM for the purpose of
waiving any requirement that the Concert Party, or any member thereof, should
make a general offer to holders of Existing Ordinary Shares for the issued
share capital of the Company arising out of the issue to them of the
Consideration Shares.
The holders of Existing Ordinary Shares should note that, if the Resolutions
are passed, the Concert Party will control in excess of 50 per cent. of the
issued share capital of the Company. Accordingly, for so long as it remains in
concert and above 50 per cent. the Concert Party and each member of the
Concert Party will be entitled to increase his or hers or its interest in the
share capital of the Company without incurring a further obligation under rule
9 of the Code to make a general offer, provided that no individual member of
the Concert Party acquires 30 per cent. or more, whereupon a rule 9 obligation
may arise. In particular, notwithstanding the grant of the Waiver, no
individual member of the Concert Party holding less than 30 per cent. of the
Enlarged Share Capital may increase their shareholding in Berry Birch & Noble
such that they hold 30 per cent. or more of the Company's issued voting share
capital without incurring an obligation under rule 9 of the City Code to make
a general offer to all shareholders.
The Panel has ruled that certain shareholders, whose details are set out in
paragraph 8.1.2 of Part VII of the Listing Particulars, who are not members of
the Concert Party but who are not independent of members of the Concert Party
will not be permitted to vote on Resolution 2.
14. Relationship deed
Mr Lockyer has entered into a Relationship Deed with the Company in which he
has undertaken that, for so long as he is a holder of Ordinary Shares carrying
over 30 per cent. of the voting rights of the Company (a ''Controlling
Shareholder''), he will ensure that at all times the Company and its
subsidiaries can carry on its business independently of the control which he
would otherwise be able to exercise by virtue of his shareholding.
15. The Board and share incentive arrangements
Following the Offer becoming or being declared unconditional in all respects,
there will be no immediate changes to the Board of Berry Birch & Noble.
Share incentive arrangements
The Company proposes to establish the Approved Plan, Executive Plan and EMI
Plan to be used for the future incentivisation of key executives through the
grant of share options. The approval of the Berry Birch & Noble Shareholders
to their adoption will be sought at the EGM.
The holders of Berkeley Options, details of which are set out in paragraph 10
of Part VII of the Circular, are to be offered the opportunity to roll-over
their options into unapproved New Options over new Ordinary Shares. These New
Options do not comply with the Association of British Insurers' guidelines.
Further details of the terms of the New Options are contained in paragraph 10
of Part VII of the Circular.
16. Proposed change of name and change of financial year end
As mentioned above, the Directors believe that it would be appropriate to
change the name of the Company to Berkeley Berry Birch plc. This will reflect
the combination of the two businesses. Accordingly a special resolution is to
be proposed at the EGM to approve the name change conditionally on completion
of the Acquisition. Following the change of name, existing share certificates
will remain valid, however Berkeley Shareholders accepting the Offer will
receive share certificates which reflect the change of name. New share
certificates will be sent to Berkeley Shareholders accepting the Offer as soon
as reasonably practicable following Admission.
Following completion of the Acquisition, the Company's accounting reference
date will be changed from 31 January to 31 March in each year to coincide with
that of the Berkeley Group. Accordingly the next set of published results for
the Enlarged Group is expected to be for the fourteen month period ending 31
March 2002.
17. Consequences of the Acquisition not proceeding
If the Acquisition does not proceed, then the Directors believe that the
following are the likely consequences:
* the Regulator's Investment Firms Division will require realistic
alternative proposals to address the Capital Adequacy shortfall in Berry
Birch & Noble FS within a short timescale. If such proposals are not
forthcoming then the Regulator is likely to ask for a managed wind down of
the Berry Birch & Noble FS business, which is the core business of the
Group. If this occurs it is very likely that the Group will not survive in
its current form, if at all;
* if access to additional working capital is not secured via the
Acquisition and the associated Berkeley Fundraising, an immediate
substantial capital injection will be required to recapitalise the Group
which will, in addition, be liable for substantial advisory costs in
relation to the proposals set out in this document. Given the Group's
financial position, the Independent Directors believe that such capital
injection is unlikely to be forthcoming; and
* the recent success in attracting high calibre individuals, with relevant
financial services experience, into the Group is likely to be reversed.
The executive management team will not be able to deliver their strategic
vision in the time frame envisaged, if at all.
A Circular, which comprises listing particulars and includes a notice of EGM
of the Company, to be held at 10.30 am on 4 January 2002, is expected to be
posted to shareholders of Berry Birch & Noble Shareholders shortly. Further
details of the proposals are set out in that document.
UNAUDITED INTERIM RESULTS OF THE GROUP FOR THE
HALF YEAR ENDED 31 JULY 2001
INTERIM RESULTS STATEMENT FROM
THE CHAIRMAN OF BERRY BIRCH & NOBLE PLC
Financial Highlights Unaudited half Unaudited half Audited
year ended year ended
year
31 July 31 July
ended
2001 2000
Change 31
£'000 £'000 January
2001
£'000
Turnover 5,870 5,534 +6% 10,799
Turnover excluding exceptional 5,368 5,534 -3% 10,799
items
Operating (loss)/profit before (626 ) 386 -262% (334 )
exceptional items
(Loss)/profit before exceptional (629 ) 402 -256% (297 )
items & taxation
Exceptional items 58 -- -- (1,640 )
(Loss)/profit on ordinary (571 ) 402 -242% (1,937 )
activities before taxation
Basic (loss)/earnings per share (8.8p ) 5.8p -252% (6.2p )
before exceptional items
Net debt (737 ) (435 ) -69% (687 )
Chairman's Statement
Group Results
The Group's loss before taxation for the half year ended 31 July 2001 was £
571,000 (2000: profit £402,000). The result represents a decrease of 242%
compared with the same period last year.
This poor financial performance is a result of two factors. Firstly, turnover,
excluding the commuted commission of £502,000, decreased by 3% compared to the
same period last year. Secondly, total operating costs (excluding exceptional
items) increased by 16% compared with same period last year. This latter
increase was exacerbated by the necessity to incur additional costs as the new
management team assessed the true financial position of the business and began
to implement strategies to turn this around. As a consequence, significant
costs were incurred in settling outstanding legal disputes; effecting
redundancy programs; as well as seeking appropriate legal and professional
advice.
In respect of the Pensions Review, for the year ended 31 January 2001 it was
decided to increase the Pensions Review provision by a further £1.64 million.
Following a detailed assessment and a continuation of this work in the last
six months, the Board has decided to make a further provision of £444,000.
Following this the outstanding estimated liabilities of the subsidiary Berry
Birch & Noble FS are approximately £2.8 million.
On the basis of these results Berry Birch & Noble FS has a Capital Adequacy
shortfall of approximately £3.7 million as at 31 July 2001.
Dividend
The Directors do not recommend that the Company pays an interim dividend.
Review of Operations
You may recall that in my Chairman's statement for the Group's financial year
ended 31 January 2001, I mentioned that the Group had begun to make
fundamental changes in order to strengthen the Group's position and deliver
improved performance in future years.
The first six months of the new financial year has seen a period of
consolidation and transition for the Group.
I can confirm that the new management team has made significant progress in
identifying the reasons for the Group's business and financial difficulties
and has begun to implement operational solutions to improve the business
performance and enhance shareholder value. For example:
* £775,000 (gross of expenses) has been raised through the introduction of
NewMedia Spark BV as a new institutional investor. The share placement in
February 2001 was important in order to stabilise the financial position
of the Group at that time, whilst the new management team carried out a
complete review of the business operations;
* a commutation of trail and renewal income was procured from CGNU, with
the appropriate authorisation from the FSA, which crystallised £502,000 in
exceptional revenue and cash;
* four further commutations of trail and renewal income are being sought
which will crystalise circa £800,000 in exceptional revenue and cash in
the second half of the year; and
* a redundancy program was initiated that will reduce the Berry Birch &
Noble FS workforce by approximately 12.5%. This will procure estimated
gross annualised savings of approximately £850,000.
In addition, the new executive management team has achieved:
* completion of an independent business and financial review of the Group;
* the production and adoption by the Board of a new strategic plan for the
Group; and
* a realignment of Berry Birch & Noble FS sales activity towards areas
which the Directors believe are more likely to support the desired
strategic direction of the business.
Outlook
However, despite the actions to improve business performance, the current
financial weakness of Berry Birch & Noble has been exacerbated by liabilities
arising from the regulatory Pensions Review.
The Board has explored a number of options and believes that the interests of
Shareholders would be best served by acquiring a soundly based business with a
complimentary business model. We propose, therefore, to acquire Berkeley in
order to put the Enlarged Group back on a sound financial footing and present
an exciting future strategy.
Shareholders should note the seriousness of failing to comply with the
Regulator's Capital Adequacy requirements. The Board views the Acquisition as
presenting the most attractive route forward for Shareholders, customers and
staff.
Sir Jeremy Black
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE HALF YEAR ENDED 31 JULY 2001
Unaudited Unaudited Audited
half year half year year
ended ended ended
31 July 31 July 31
January
2001 2000
2001
£'000 £'000
£'000
Turnover 5,870 5,534 10,799
Operating costs (6,438 ) (5,148 ) (12,773 )
Operational (loss)/profit before exceptional (626 ) 386 (334 )
items
Exceptional item -- Commission commutation 502 -- --
Exceptional item -- Pensions Review provision (444 ) -- (1,640 )
Operating (loss)/profit (568 ) 386 (1,974 )
Net interest (payable)/receivable (3 ) 16 37
(Loss)/profit on ordinary activities before (571 ) 402 (1,937 )
taxation
Taxation -- (21 ) (108 )
(Loss)/profit on ordinary activities after (571 ) 381 (2,045 )
taxation
Dividends -- -- --
Retained (loss)/profit (571 ) 381 (2,045 )
(Loss)/earnings per share
- basic before exceptional items (8.8p ) 5.8p (6.2p )
- basic (8.0p ) 5.8p (31.3p )
- diluted before exceptional items (8.8p ) 5.8p (6.2p )
- diluted (8.0p ) 5.8p (31.3p )
--------- --------- ---------
All recognised gains and losses have been included in the profit and loss
account.
CONSOLIDATED BALANCE SHEET AT 31 JULY 2001
Unaudited Unaudited Audited
at at at
31 July 31 July 31
January
2001 2000
2001
£'000 £'000
£'000
Fixed assets
Intangible assets -- goodwill 451 495 479
Tangible assets 1,806 1,898 1,831
2,257 2,393 2,310
Current assets
Debtors 2,091 2,521 2,494
Cash at bank 864 540 780
2,955 3,061 3,274
Creditors: amounts falling due within one year
Borrowings (813 ) (550 ) (560 )
Other (2,594 ) (2,010 ) (3,039 )
(3,407 ) (2,560 ) (3,599 )
Net current (liabilities)/assets (452 ) 501 (325 )
Total assets less current liabilities 1,805 2,894 1,985
Creditors: amounts falling due after more than
one year
Borrowings (611 ) (425 ) (645 )
Provisions for liabilities and charges (2,850 ) (1,914 ) (3,200 )
Net (liabilities)/assets (1,656 ) 555 (1,860 )
Capital and reserves
Called-up share capital 720 654 655
Share premium account 812 92 102
Revaluation reserve 482 482 482
Profit and loss account (3,670 ) (673 ) (3,099 )
Equity shareholders' funds (1,656 ) 555 (1,860 )
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS FOR THE HALF YEAR ENDED 31
JULY 2001
Unaudited half year ended
31 July
2001
£'000
Loss for the period (571 )
Issue of ordinary share capital 65
Increase in share premium account 710
Net increase in shareholders' funds 204
Opening shareholders' funds (1,860 )
Closing shareholders' funds (1,656 )
CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF YEAR ENDED 31 JULY 2001
Unaudited Unaudited Audited
Half year half year year
ended ended ended
31 July 31 July 31
January
2001 2000
2001
£'000 £'000
£'000
Net cash outflow from operating activities (note 6) (747 ) (3 ) (220 )
Returns on investments and servicing of finance
Interest received 43 63 101
Interest paid (28 ) (47 ) (64 )
Net cash inflow from returns on investments and 15 16 37
servicing of finance
Capital expenditure and financial investment
Purchase of tangible fixed assets (93 ) (218 ) (247 )
Purchase of goodwill -- (15 ) (32 )
Sale of tangible fixed assets -- 79 58
Net cash outflow from capital expenditure (93 ) (154 ) (221 )
Net cash outflow before financing (825 ) (141 ) (404 )
Financing
Issue of ordinary share capital 775 16 --
Incremental bank loan -- -- 250
Other loans -- -- 250
Loan repayments (32 ) -- (45 )
Exercise of share options -- -- 27
Net decrease in debt -- (25 ) --
Net cash inflow/(outflow) from financing 743 (9 ) 482
(Decrease)/increase in cash in period (82 ) (150 ) 78
Balance at beginning of period 768 690 690
Balance at end of period 686 540 768
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS FOR THE HALF
YEAR ENDED 31 JULY 2001
Unaudited Unaudited Audited
half year half year year
ended ended ended
31 July 31 July 31 January
2001 2000 2001
£'000 £'000 £'000
(Decrease)/increase in cash in the period (82 ) (150 ) 78
Cash inflow/(outflow) from increase in debt 32 25 (455 )
Change in net cash resulting from cash flows (50 ) (125 ) (377 )
Net debt at commencement of period (687 ) (310 ) (310 )
Net debt at end of period (737 ) (435 ) (687 )
MORE TO FOLLOW
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