Interim Results

RNS Number : 2005Z

Cenkos Securities PLC

17 September 2009

 



Cenkos Securities plc        

Unaudited interim results for the six month period ended 30 June 2009

Financial Highlights

• Revenue for the period is up 12% to £21.2 million (2008: £18.9 million).

• Profit before tax for the period is 13% up to £6.2 million (2008: £5.5 million). Profit before tax before non recurring items for the period is 1% up to £5.6 million (2008: £5.5 million).

• Profit after tax after non recurring items is up 30% to £5.1 million (2008: £3.9 million).

• Basic and Diluted earnings per share are up 22% to 6.6p (2008: 5.4p).

• Reduction in net trading investments to £6.8 million (2008: £16.0 million), reflecting the Group's strategy to lower its exposure to market risk.

• £10.6 million was received by the Group on 17 July 2009 from the paying up of previously partly paid shares.  This increased the Group's regulatory capital by £8.3 million and so enabled it to more fully distribute retained earnings. 

• The board proposes an interim dividend of 15p reflecting the Company's stated dividend policy and the performance of the Group in the six months to 30 June 2009. 

Business Highlights 

• The addition of an experienced credit markets team who, though with us for a short period of time, have already made a positive contribution to the Group's results

• Continued recruitment of well-regarded individuals to our institutional equities department.

• We continue in difficult markets to raise funds for our clients - £440 million in the period (2008: £359 million)

• The Group was nominated adviser or corporate broker to 66 companies (2008: 56).

• The Company was ranked first in respect of the number of AIM clients by market capitalisation according to the latest statistics in the Hemscott AIM Advisers Rankings Guide (July 2009).

Chairman's statement

I am pleased to announce a strong performance by Cenkos Securities plc (the 'Company') and its subsidiaries (together the 'Group') in the six months to 30 June 2009. The result represents a very significant recovery from the second half of 2008 and whilst general market conditions have improved recently, for most of the period we are reporting on they have been difficult.

Global stock markets have risen during the period but the increase in asset values has been driven on low volumes. It is still unclear whether corporate earnings will come through to justify this re-rating. As a result investors remain nervous and exceptionally averse to risk. There are signs that the credit crunch is easing but banks are still behaving erratically and indecisively. There continues to be concern over levels of government debt and its effect on future growth prospects.  This means that confidence is growing but remains fragile.

The lack of confidence affects the markets in which we operate. However, even when there was little or no confidence we were able to raise much needed capital for our clients. For example, in January we raised £130 million in one transaction and we have continued to raise significant amounts for our clients.  We believe that our ability to perform in this area is based on our strong links with the institutional investor community, aligned with a deep understanding of our corporate client base.

During the period I am pleased to say that we have capitalised on our position in the market and been able to attract high-quality individuals. We believe these individuals will fit in well with the Cenkos culture and add value to the Group, so enabling us to continue to grow and diversify our income streams. During this period, we have not changed our basic remuneration policy and have not given any bonus guarantees, as we continue to believe that bonuses have to be justified by the individual's actual performance and contribution.

I am also pleased to confirm that as announced on 30 June 2009 Andy Stewart commenced in his new position as Executive Deputy Chairman and that Simon Melling previously the Group Finance Director succeeded Andy and became the Chief Executive Officer.

On 17 July 2009, the Group received £10.6 million from the paying up of previously partly paid shares.  This increased the Group's regulatory capital by £8.3 million and so enabled it to more fully distribute retained earnings. The board therefore proposes an interim dividend of 15p reflecting the Company's stated dividend policy and the performance of the Group in the six months to 30 June 2009. 

John Hodson
Chairman

17 September 2009 

Business and Financial Review

As set out in the Chairman's Statement, during the period we experienced difficult conditions particularly in the first quarter. However, due to our robust business model and the quality, dedication and experience of our employees, we have performed well, being profitable throughout the period. This was achieved by being able to raise money for our corporate clients even in the bleak early months of the year. Revenue for the period was up 12% to £21.2 million (2008: £18.7 million) which, given the prevailing economic climate, is a strong performance and bodes well for our future development. The table below shows the revenue split.

	Unaudited  6 months to 30 June 2009 £000's	Unaudited 6 months to 30 June 2008 £000's
Placing fees	9,515	10,708
Corporate finance fees	5,240	4,683
Commission income	2,665	2,598
Market making	2,016	(170)
Wealth management	1,751	1,047
Total Revenue	21,187	18,866

This table shows there has been diversification of income streams and whilst placing fees are still a major component of our revenue, commission income from secondary trading, corporate finance fees and fees from our wealth management business made a significant contribution to total revenue.

Corporate Broking and Advisory

The results during this period have inevitably been affected by the general lack of equity capital-raising activity. We are therefore pleased to announce that our clients raised through equity issues a total of £430 million (2008: £230 million). These issues were secondary market transactions, which is not surprising given the almost total lack of primary market activity.  According to the latest statistics in the Hemscott AIM Advisers Rankings Guide (July 2009), the Company was ranked third by the number of AIM clients advised and first in respect of the number of AIM clients by market capitalisation.  During the period we continued to increase the number of retained corporate clients. The Group was nominated advisor or corporate broker to 66 companies (2008: 56) as at 30 June 2009 with a market capitalisation of £3.86 billion.  We continue to attract new clients from our competitors, which has enabled us to increase the level of recurring income in this business area. In the period we also increased the amount of M&A corporate finance fees as opposed to those related to placings, being involved in 11 transactions.

Institutional Equities

The institutional equities team provides research driven investment recommendations to institutional clients.  While many of our clients continue to pay for our research services directly, more are choosing to transact business through Cenkos as well. The demise of the trading capacity of the large international houses has levelled the playing field for other firms; what matters to institutional investors is being able to get their trades executed (this is no longer the domain of the big firms). In the same way that Cenkos specialises in researching certain areas of the market, we now specialise in facilitating business in these same areas.

The first half saw us add expertise in building and construction research as well as strengthening our retail team. We now cover research in the areas of business services, retail, food retail and building/construction and look to add to that capability when the opportunity arises.

Our execution business is strictly focused on client facilitation.  We do not engage in proprietary trading. I believe that the continued organic growth of this area will enhance Cenkos' overall service to its expanding client base. The department's income also increases the proportion of recurring revenue coming into the Group.

Investment Funds

The team provides a broad range of services to investment companies including primary and secondary sales, market making, research, corporate broking and corporate finance advice. The sales team services both institutional and wealth manager clients; its secondary activities have remained robust despite thin trading volumes, but primary sales opportunities have all but disappeared as investors have shunned new issues in favour of trading existing investment companies rated at discounts to net asset values. The team is market maker to approximately 150 investment company securities and is retained broker to 39 investment companies. Our corporate finance team has been involved heavily in restructuring work and in various equity alternative issues including investment company subscription shares and convertible bonds.

Market Making

The Group continues to undertake market making activities in order to support the other services it provides to its clients.  The Group makes markets in the securities of all the companies where it has a broking relationship. During the period we have taken the active decision to commit less of the Group's capital to this activity, which has reduced our market risk exposure significantly without adversely affecting the revenue generated. The Group does not engage in proprietary trading and applies position limits and monitoring procedures to ensure controls. The Group does from time to time take stock in lieu of fees and the market movement on these items is also included in this income stream.

Offshore Wealth Management and Stockbroking Services

Offshore wealth management and stockbroking services are provided through Cenkos Channel Islands Limited, a 50%-owned subsidiary based in Guernsey and its own subsidiary based in Jersey. Varying levels of stockbroking services are offered from fully discretionary to execution only to high net worth individuals, financial intermediaries and institutions. The team recruited in the second half of 2008 has been successfully integrated. We are in the process of building an offshore asset management business, which we believe will make a positive contribution to the full year, having recently launched a number of funds. The business during the year has grown both in terms of the number of clients and funds managed. These now stand at 1,500 and £658 million respectively.

Onshore Fund Management Business

Onshore fund management business is provided by Cenkos Fund Management Limited. This operation has an investment management agreement with an AIM-quoted fund. The fund specialises in investing principally in unquoted companies where we see an exit route. A significant amount of the fund is invested and the Company made a positive contribution to the Group during the period.

Credit Markets

During the period we recruited an experienced team of credit market experts. The team delivers a professional execution service to financial institutions. It focuses on structured products such as residential mortgage bonds, collateralised loan obligations and the financial and corporate bond markets. All transactions are carried out on an agency basis. The team joined us in April 2009 and has already made a positive contribution to the Group.

Income Statements

The Group's revenue of £21.2 million compared to the first six months of last year's £18.9 million and pre-tax profits before non recurring items rose slightly from £5.5 million to £5.6 million. As mentioned in the Chairman's Statement, this has been earned during a period of uncertainty and poor economic conditions. We therefore believe this represents a considerable achievement.

Cenkos continues to pursue a policy of maintaining a low fixed cost base and a remuneration policy of low basic salaries and rewarding income generation. Our headcount has increased during the period and these recruits have been income-generating.

Profit after tax for the period is up 30% to £5.1 million (2008: £3.9 million). Basic and diluted earnings per share are up 22% to 6.6p (2008: 5.4p).

Balance Sheet

As mentioned we have reduced the amount of capital we have committed to our market making activities. This has led to net trading investments being reduced by £9.2 million from £16 million to £6.8 million.  The available for sale investments item is represented by our 5.6% holding in the share capital of Plus Markets Group plc and in the six months to 30 June 2009 the value has increased by £357,000. This increase has been recognised as a movement through reserves. We currently hold cash of £27.4 million.

Our regulatory capital ratios continue to be strong and reflect the implementation of the new Internal Capital Adequacy Assessment Process (ICAAP) regime, which has been approved by the FSA.

Partly Paid Shares

As set out in our admission document and subsequent financial statements, we had at 30 June 2009 18.5 million of partly paid B shares, held by employees. On 17 July 2009 10.6 million shares were paid up, resulting in a cash inflow of £10.5 million. The shares under the terms of the original subscription agreement were converted into ordinary shares and listed. The resulting shares were placed with a number of institutional investors. The selling employees were granted options over the Company's shares, with the exercise price being the price at which the institutions bought the converted shares.  The employees also are entitled to receive a cash bonus equivalent to the dividend stream they would have received. As a result of these transactions our regulatory capital has increased by £8.3 million and we have surplus operational capital.  

Dividend

As we have always stated, we only intend to retain sufficient capital and reserves to meet the Group's regulatory capital and operational cash requirements. We therefore propose to pay an interim dividend of 15p per share reflecting the Company's dividend policy and the performance of the Group in the six months to 30 June 2009.  The dividend will be paid on 6 November 2009 to all shareholders on the register at 9 October 2009.

People

Cenkos is only able to grow and deliver value to its shareholders due to its people. I believe we have an excellent team of highly competent individuals who are able and committed to expanding the business by consistently providing our clients with a high quality service.

Outlook

As our Chairman has stated, confidence is growing but is still fragile.  This may continue for some time. There are encouraging signs and we are finding it easier to transact business for our clients. However, in my view, this could quickly change particularly if corporate profits fall behind expectations. Cenkos is in a very good position to take advantage of any potential uplift in the economy but equally can cope in the event of a downturn.

Simon Melling

Chief Executive Officer

17 September 2009

Condensed consolidated income statement for the six month period ended 30 June 2009
			Unaudited 1 January 2009							Unaudited		Audited
			to 30 June 2009							1 January		1 January
			Before non			Non		After non		2008 to		2008 to
	Notes		recurring			recurring		recurring		30 June		31 December
			item			item (note 2)		item		2008		2008
			£ 000's			£ 000's		£ 000's		£ 000's		£ 000's
Continuing Operations
Revenue			21,187			-		21,187		18,866		28,275
Administrative expenses			(15,779)			(540)		(16,319)		(13,985)		(24,317)
Operating profit			5,408			(540)		4,868		4,881		3,958
Investment income - interest receivable			459			1,147		1,606		716		1,277
Finance costs - interest payable			(255)			-		(255)		(56)		(111)
Profit before tax			5,612			607		6,219		5,541		5,124
Tax	3		(1,128)			-		(1,128)		(1,597)		(1,404)
Profit for the period			4,484			607		5,091		3,944		3,720
Attributable to:
Equity holders of the parent			4,197			607		4,804		3,900		3,545
Minority interests			287			-		287		44		175
			4,484			607		5,091		3,944		3,720
Earnings per share
Basic	5		5.8p					6.6p		5.4p		4.9p
Diluted	5		5.8p					6.6p		5.4p		4.9p
All amounts shown in the consolidated financial statements derive from continuing operations of the Group.
Condensed consolidated statement of comprehensive income
for the six month period ended 30 June 2009
								Unaudited		Unaudited		Audited
								1 January		1 January		1 January
								2009 to		2008 to		2008 to
								30 June		30 June		31 December
								2009		2008		2008
								£ 000's		£ 000's		£ 000's
Profit for the period								5,091		3,944		3,720
Available-for-sale financial assets:
Gains/(Losses) arising during the period								357		(1,390)		(2,780)
Tax relating to Available-for-sale financial assets								(32)		417		761
								325		(973)		(2,019)
Total comprehensive income for the period								5,416		2,971		1,701
Attributable to:
Equity holders of the parent								5,129		2,927		1,526
Minority interests								287		44		175
								5,416		2,971		1,701
Condensed consolidated balance sheet as at 30 June 2009
								Unaudited		Unaudited		Audited
								30 June		30 June		31 December
	Notes							2009		2008		2008
								£ 000's		£ 000's		£ 000's
Non-current assets
Property, plant and equipment	6							970		1,191		1,111
Available for sale investments								1,105		2,153		763
Deferred tax assets								224		199		67
								2,299		3,543		1,941
Current assets
Trading investments - long positions								8,158		21,062		11,392
Trade and other receivables								72,421		54,160		41,493
Cash and cash equivalents								4,909		3,378		6,337
								85,488		78,600		59,222
Total assets								87,787		82,143		61,163
Current liabilities
Trading investments - short positions								(1,397)		(5,112)		(2,506)
Trade and other payables								(48,839)		(37,015)		(23,430)
								(50,236)		(42,127)		(25,936)
Net current assets								35,252		36,473		33,286
Non-current liabilities
Deferred tax liabilities								(32)		(344)		-
Total liabilities								(50,268)		(42,471)		(25,936)
Net assets								37,519		39,672		35,227
Equity
Share capital	7							727		726		727
Share premium account								22,700		22,700		22,700
Revaluation reserves								82		803		(243)
Retained earnings								13,298		15,125		11,614
Equity attributable to equity holders of the parent
								36,807		39,354		34,798
Minority interests								712		318		429
Total equity								37,519		39,672		35,227
Condensed consolidated cash flow statement for the six month period ended 30 June 2009
								Unaudited		Unaudited		Audited
								1 January		1 January		1 January
								2009 to		2008 to		2008 to
								30 June		30 June		31 December
								2009		2008		2008
								£ 000's		£ 000's		£ 000's
Profit for the period								5,091		3,944		3,720
Adjustments for:
Finance costs								(1,351)		(659)		(1,165)
Tax								1,128		1,596		1,404
Depreciation of property, plant and equipment								168		172		341
Share-based payment expense								546		438		928
Operating cash flows before movements in working capital								5,582		5,491		5,228
Net increase in trading investments								2,125		(1,155)		5,909
(Increase)/decrease in trade and other receivables								(30,983)		2,537		15,198
Increase/(decrease) in trade and other payables								25,039		(8,218)		(20,358)
Net cash inflow/(outflow) from operating activities								1,763		(1,345)		5,977
Interest paid								(255)		(56)		(111)
Taxation paid								(903)		(3,138)		(4,272)
Net cash inflow/(outflow) from operating activities								605		(4,539)		1,594
Investing activities
Interest received								1,661		782		1,348
Net proceeds from the part disposal of a subsidiary								6		-		-
Purchase of property, plant and equipment								(28)		(420)		(508)
Proceeds of the sale of available-for-sale investments								15		-		-
Net cash generated by investing activities								1,654		362		840
Financing activities
Dividends paid								(3,687)		(8,711)		(12,344)
Proceeds from issue of equity shares								-		-		1
Increase in investment in subsidiary								-		-		(20)
Issue of capital by subsidiary to minority interests								-		22		22
Net cash used in financing activities								(3,687)		(8,689)		(12,341)
Net decrease in cash and cash equivalents								(1,428)		(12,866)		(9,907)
Cash and cash equivalents at beginning of period								6,337		16,244		16,244
Cash and cash equivalents at end of period								4,909		3,378		6,337
Condensed consolidated statement of changes in equity for the six month period ended 30 June 2009
		Share capital		Share premium	Revaluation reserve		Retained earnings		Total excluding Minority Interests		Minority Interests		Total
		£ 000's		£ 000's	£ 000's		£ 000's		£ 000's		£ 000's		£ 000's
Attributable to equity holders of the parent at 1 January 2008		726		22,700	1,776		19,633		44,835		252		45,087
													-
Retained profit for the period		-		-	-		3,900		3,900		-		3,900
Revaluation of available-for-sale investments		-		-	(1,390)		-		(1,390)		-		(1,390)
Deferred tax liability arising on fair valuation of available-for-sale investments		-		-	417		-		417		-		417
Profit allocated to minority interests		-		-	-				-		44		44
Issue of capital by subsidiary to minority interests		-		-	-		-		-		22		22
Credit to equity for equity settled share-based payments		-		-	-		438		438		-		438
Deferred tax asset arising on share-based payments charged to equity		-		-	-		(135)		(135)		-		(135)
Dividends paid		-		-	-		(8,711)		(8,711)		-		(8,711)
Attributable to equity holders of the parent at 30 June 2008		726		22,700	803		15,125		39,354		318		39,672
Shares issued		1		-	-		-		1		-		1
Increase in investment in subsidiary		-		-	-		-		-		(20)		(20)
Retained loss for the period		-		-	-		(355)		(355)		-		(355)
Revaluation of available-for-sale investments		-		-	(1,390)		-		(1,390)		-		(1,390)
Deferred tax liability arising on fair valuation of available-for-sale investments		-		-	344		-		344		-		344
Credit to equity for equity settled share-based payments		-		-	-		490		490		-		490
Deferred tax asset arising on share-based payments charged to equity		-		-	-		(13)		(13)		-		(13)
Dividends paid		-		-	-		(3,633)		(3,633)		-		(3,633)
Profit allocated to minority interests		-		-	-		-		-		131		131
Attributable to equity holders of the parent at 31 December 2008		727		22,700	(243)		11,614		34,798		429		35,227
Retained profit for the period		-		-	-		4,804		4,804		-		4,804
Profit allocated to minority interests		-		-	-		-		-		287		287
Revaluation of available-for-sale investments		-		-	357		-		357		-		357
Deferred tax liability arising on fair valuation of available-for-sale investments		-		-	(32)		-		(32)		-		(32)
Interest acquired by minority interest		-		-	-		9		9		(4)		5
Credit to equity for equity-settled share-based payments		-		-	-		546		546		-		546
Deferred tax asset arising on share-based payments charged to equity		-		-	-		12		12		-		12
Dividends paid		-		-	-		(3,687)		(3,687)		-		(3,687)
Attributable to equity holders of the parent at 30 June 2009		727		22,700	82		13,298		36,807		712		37,519
Total comprehensive income of £5,129,000 (31 December 2008: £1,526,000, 30 June 2008: £2,927,000) attributable to equity holders of the parent and of £287,000 (31 December 2008: £175,000, 30 June 2008: £44,000) attributable to minority interest has been recognised in the statement of changes in equity.

Notes to the condensed consolidated financial statements
1. Accounting policies
General Information
Cenkos Securities plc (the 'Company') is a company incorporated in United Kingdom under the Companies Act 1985. The Company's principal activity is investment banking. These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates.
Basis of Accounting
The condensed set of financial statements has been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs). The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, except for as described below:
Changes in accounting policy
In the current financial year, the Group has adopted International Accounting Standard 1 'Presentation of Financial Statements' (revised 2007) ('IAS 1').  IAS 1 requires the presentation of a statement of changes in equity as a primary statement, separate from the income statement and statement of comprehensive income.  As a result, a condensed consolidated statement of changes in equity has been included in the primary statements, showing changes in each component of equity for each period presented.
While the financial figures included in this half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.
The financial information contained in this interim report does not constitute the Company's statutory accounts within the meaning of section 435 of the Companies Act 2006. The comparative information contained in this report for the year ended 31 December 2008 does not constitute the statutory accounts for that financial period. Those accounts have been reported on by the Company's auditors, Deloitte LLP, and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The interim financial information is unaudited and was approved by the board of directors on 17 September 2009.
These financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those of estimates.
Going concern
The directors believe the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities. After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed consolidated financial statements.
2. Non recurring items
On 21 May 2009, at the AGM, the Company resolved to extend the repayment term of the unpaid share premium and loans due from staff from 1 July 2011 to 1 July 2013. In addition, on 17 July 2009 the loans relating to 10.6 million B shares were repaid and the shares listed. These changes to the expected cash flows have been reflected in the adjustments made to the carrying amount of the loans as at 30 June 2009 and result in a credit of £1.147 million from the acceleration of the discount due to the early repayment of the loans relating to the shares listed and a debit of £0.54 from the extension of the repayment term of the remaining loans.
3. Tax				Unaudited	Unaudited	Audited
The tax charge comprises:				30 June	30 June	31 December
				2009	2008	2008
				£ 000's	£ 000's	£ 000's
Current tax
United Kingdom corporation tax at 28% (2008 - 28.5%) based on the profit for the period				1,607	1,609	1,391
Overseas tax charge borne by subsidiaries operating in other jurisdictions				-	-	6
Adjustment in respect of prior period				(334)	-	(99)
Total current tax				1,273	1,609	1,298
Deferred tax
Credit on account of timing differences				(145)	(12)	-
Charge on account of timing differences				-	-	106
Total deferred tax				(145)	(12)	106
Total tax on profit on ordinary activities				1,128	1,597	1,404
The tax charge for the period differs from that resulting from applying the standard rate of UK corporation tax of 28% to the profit before tax for the reasons set out in the following reconciliation.
				Unaudited	Unaudited	Audited
				30 June	30 June	31 December
				2009	2008	2008
				£ 000's	£ 000's	£ 000's
Profit on ordinary activities before tax				6,219	5,541	5,124
Tax on profit on ordinary activities at the UK corporation tax rate of 28% (2008: 28.5%)				1,741	1,580	1,460
Tax effect of:
Depreciation in excess of capital allowances				13	11	25
Expenses that are not deductible in determining taxable profits				386	96	411
Different tax rates of subsidiaries operating in other jurisdictions				(70)	(73)	(150)
Income not subject to corporation tax				(441)	(47)	(396)
Adjustment for IFRS 2 relating to staff options				(112)	(14)	106
Deferred Tax on IFRS2 share based payments				(33)	2	-
Adjustment for loss relief not claimed				(36)	42	47
Group adjustment for dividends paid				14	-	-
Adjustment in respect of prior period				(334)	-	(99)
Tax expense for the period				1,128	1,597	1,404
In addition to the amount credited to the income statement, deferred tax relating to the fair value of the Group's available for sale investments amounting to £31,844 has been charged directly to comprehensive income (2008: £417,101 credited directly to comprehensive income) and deferred tax relating to staff share options amounting to £11,548 has been credited directly to equity (2008: £134,592 charged directly to equity).
4. Dividends
Amounts recognised as distributions to equity holders in the period:				Unaudited	Unaudited	Audited
				30 June	30 June	31 December
				2009	2008	2008
				£ 000's	£ 000's	£ 000's
Final dividend for the year ended 31 December 2008 of 5p (31 December 2007: 12p) per share
				3,687	8,711	12,344
The proposed interim dividend for 2009 of 15p (2008: 5p) per share was approved by the Board on 15 September 2009 and has not been included as a liability as at 30 June 2009. The dividend will be payable on 6 November 2009 to all shareholders on the register at 9 October 2009.
5. Earnings per share
The calculation of the basis and diluted earnings per share is based on the following data:
				30 June	30 June	31 December
				2009	2008	2008
				£ 000's	£ 000's	£ 000's
Earnings
Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent				4,804	3,900	3,545
Effect of dilutive potential ordinary shares:
Share options				-	-	-
Earnings for the purpose of diluted earnings per share				4,804	3,900	3,545
				No.	No.	No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per share				72,697,410	72,593,670	72,616,990
Effect of dilutive potential ordinary shares:
Share options				-	255,537	95,060
Weighted average number of ordinary shares for the purpose of diluted earnings per share				72,697,410	72,849,207	72,712,050
The weighted average number of shares considered for the period also includes the total number of B shares, even though they are partly paid shares, as these shares are entitled to a full dividend payout.
6. Property, plant & equipment
During the period, the Group spent approximately £28,000 (2008: £420,000) on property, plant and equipment. This mostly related to the cost of IT equipment.
7. Share capital
The issued share capital as at 30 June 2009 amounted to £727,359 (2008: £725,936).
1 January 2008 to 31 December 2008
On 5 September 2008, 71,125 ordinary shares of 1p each were issued following the exercise of 71,125 options in accordance with the pre 2006 share option plan.
On 14 November 2008, 70,000 B shares of 1p each were converted to 70,000 ordinary shares of 1p each.
1 January 2009 to 30 June 2009
On 8 April 2009, 71,125 ordinary shares of 1p each were issued following the exercise of 71,125 options in accordance with the pre 2006 share option plan.
On 15 April 2009, 40,000 B shares of 1p each were converted to 40,000 ordinary shares of 1p each.

Forward-looking statements

These financial statements contain forward-looking statements with respect to the financial condition, results, operations and businesses of Cenkos Securities plc. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Such statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by forward-looking statements and forecasts. Forward-looking statements and forecasts are based on the Directors' current view and information known to them at the date of this statement. The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Independent Review Report to Cenkos Securities plc

We have been engaged by the company to review the condensed consolidated set of financial statements in the half-yearly financial report for the six months ended 30 June 2009 which comprises the income statement, the balance sheet, the cash flow statement, the statement of changes in equity, the statement of comprehensive income and related notes 1 to 7. 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 condensed consolidated set of financial statements.

This report is made solely to the company 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. Our work has been undertaken so that we might state to the company those matters we are required to state to them 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 AIM Rules of the London Stock Exchange.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated set of 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 condensed consolidated set of 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 condensed consolidated set of financial statements in the half-yearly financial report for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.

Deloitte LLP

Chartered Accountants and Statutory Auditors

London, United Kingdom

17 September 2009

 

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