Interim Results

RNS Number : 1135T

Falkland Islands Holdings PLC

01 December 2011

 



1 December 2011

Falkland Islands Holdings plc

 ("FIH" or the "Group")

Results for the six months ended 30 September 2011

FIH, the AIM quoted international services group which owns essential services businesses focused on transport and logistics, and which has a material shareholding in AIM quoted oil exploration company Falkland Oil and Gas Limited, is pleased to announce its unaudited results for the six months ended 30 September 2011 (the "Period").

Financial Highlights

·      Group sales up 15% to £16.5 million (H1 2010: £14.4 million)

·      Reported Profit Before Tax up 4.5% to £0.99 million  (H1 2010: £0.95 million)

·      Underlying Profit Before Tax* of £1.19 million (H1 2010: £1.15 million)

·      Diluted earnings per share on underlying earnings increased to 9.0p (H1 2010: 8.9p)

·      Interim dividend maintained at 4.0p per share (H1 2010: 4.0p per share)

·      Net bank borrowings at 30 September 2011 reduced to £1.1 million (31 March 2011: £1.9 million)

*Underlying profit before tax is defined as profit before tax and amortisation.

Operating Highlights

Falkland Islands Company

·      Sales up 7.7% to £7.0 million (H1 2010: £6.5 million)

·      Profit Before Tax marginally lower at £0.51 million (H1 2010: £0.55 million)

·      Retail sales slightly down to £4.3 million (H1 2010: £4.4 million)

·      30% growth in revenue from support services businesses

Portsmouth Harbour Ferry Company

·      Sales up 5.9% to £2.1 million (H1 2010: £2.0 million)

·      Profit Before Tax maintained at £0.4 million (H1 2010: £0.4 million)

·      New Gosport pontoon installed 27 June 2011

·      Fares increased to offset  rental costs of new pontoon

Momart

·      Sales increased by 26.4% to £7.4 million (H1 2010: £5.8 million)

·      Profit Before Tax and amortisation increased by 38% to £0.3 million (H1 2010: £0.2 million)

·      Exhibitions sales recovered , growing by 30%

·      Gallery Services sales grew by 28%

Falkland Oil & Gas Limited ('FOGL')

·      FIH shareholding unchanged at 12 million shares

·      Market value of FIH's 5.8% stake at 30 September 2011 was £5.6 million (31 March 2011: £10.7   million)

·      Leiv Eiriksson rig expected to arrive in Falklands waters in February 2012

·      FOGL drilling expected to commence in Q2 2012

David Hudd, Chairman of FIH, said:

"Whilst the economic environment remains challenging, we are confident that the Group's businesses will continue to perform well. 

"The Group's trading businesses demonstrated resilience in the tough market conditions. Momart's performance has improved. The Portsmouth Harbour Ferry Company saw modest declines in passenger numbers, however fare increases meant that profits were maintained.

"In the Falklands, we anticipate a typical second half weighting with a seasonal uplift of demand with the arrival of the Austral summer. We believe that the likelihood of commercial oil production has increased and we are working on our plans to expand and strengthen our business units to take advantage of the opportunities which would follow.

-

Enquiries:

Falkland Islands Holdings plc
David Hudd, Chairman	Tel: [phone]
John Foster, Managing Director	Tel: [phone]
Altium	Tel: [phone]
Tim Richardson / Katherine Hobbs
FTI Consulting	Tel: [phone]
Billy Clegg / Edward Westropp / Georgina Bonham

Copies of the Interim Report will be available on the Company's website www.fihplc.com

Chairman's and Managing Director's Review

Group overview

The Group is pleased to report encouraging results for the six months to 30 September 2011.

Group revenue increased by 15% to £16.51 million (H1 2010: £14.35 million) and underlying Profit Before Tax (before amortisation) grew by 3.5% to £1.19 million (H1 2010: £1.15 million).

A summary of Group revenue and Underlying Profit Before Tax by business is shown below:

Revenue
Six months ended 30 September	2011 £ million	2010 £ million	Change %
Falkland Islands Company	6.99	6.49	7.7%
Portsmouth Harbour Ferry	2.15	2.03	5.9%
Momart	7.37	5.83	26.4%
Total	16.51	14.35	15.0%

Underlying Profit Before Tax Six months ended 30 September	2011 £ million	2010 £ million	Change  %
Falkland Islands Company	0.51	0.55	-7.3%
Portsmouth Harbour Ferry	0.39	0.39	0.0%
Momart	0.29	0.21	38.1%
Total	1.19	1.15	3.5%

After charging £0.2 million for the amortisation of intangibles, reported profits before tax were £0.99 million (H1 2010: £0.95 million). Diluted earnings per share based on reported earnings were 6.8p (H1 2010: 6.7p) and based on underlying earnings were 9.0p (H1 2010: 8.9p).

The Board is proposing an unchanged interim dividend of 4.0p per share which will be paid on 27 January 2012 to shareholders on the register at the close of business on 16 December 2011.

The Group's financial position remains strong with bank borrowings of £3.5 million at the Period end (31 March 2011: £4.0 million), cash balances of £2.4million (31 March 2011 £2.1million) and a positive cash flow.

Net financing costs for the six months to 30 September 2011 were £0.16 million (H1 2010: £0.13 million) and were covered 7.3 times by Operating Profit.

Operating Review

Falkland Islands Company (FIC)

Following the strong growth experienced in 2009/10, FIC consolidated its position over the Period, with operating profits slightly lower at £0.52 million (H1 2010: £0.59 million). After the allocation of finance charges and income, Profit Before Tax was £0.51million (H1 2010: £0.55 million).

Helped by an encouraging illex squid catch in April / May 2011, FIC revenues grew by 7.7% to £7.0 million (H1 2010: £6.5 million). Offshore oil exploration continued to augment local demand but overall retail sales fell slightly by 1.6% to £4.3 million (H1 2010 £4.4million) as Falkland Islanders became more cautious and  local competition intensified. Significant increases in energy and other costs meant that retail profits declined by £0.3 million in the Period.

FIC's retail outlet at the Mount Pleasant military base (MPA) was transformed at a cost of £0.3 million with retail space increased by 50% and the addition of a new customer café. The new "West Store at MPA" opened in November 2011 and initial results are encouraging

Motor sales including vehicle hire increased by 6% to £0.7million.

Rental income from FIC's portfolio of investment properties increased by 70% in the Period to £0.18 million, with the letting of eight of the nine retained units at Marmont Row. The sale of a third unit at Marmont Row in July 2011 resulted in profits from property sales remaining unchanged at £0.03 million. No further property sales are currently envisaged and, although government subsidies currently make the development of large scale housing uneconomic, opportunities remain to develop some viable sites in Central Stanley.

Sales from other support services activities demonstrated healthy growth. Insurance commission increased by 9%, agency revenue linked to the improved squid catch increased by 79% and stevedoring revenues rose by 12%. Total revenue from all support services activities grew by an encouraging 30% to £1.3 million (H1 2010: £1.0 million).

Third party freight revenues benefited from increased northbound cargoes linked to oil exploration increasing by 66% to £0.5 million.

During the Period there was more positive news from Rockhopper Exploration which increased its estimate of the potential recoverable reserves from its Sea Lion prospect to almost 400 million barrels. We believe that the probability that there will be commercial oil production in the Falkland Islands has now increased significantly and we are working on our plans to expand and strengthen our existing business units to take advantage of the business opportunities which will follow.

Portsmouth Harbour Ferry Company (PHFC)

PHFC continued to perform well and, despite difficult economic conditions, Profit Before Tax was maintained at £0.39 million.

The new Gosport pontoon was installed on 27 June 2011 and fares were raised by an average of 17.5% to offset its rental costs. The £5 million cash cost for the new pontoon was met by Gosport Borough Council which has responsibility under the 1983 Hampshire Act to ensure the provision of a ferry service across the harbour. PHFC has secured a 50 year lease from the Council with fixed rental payments. The pontoon has been capitalised in the Group's balance sheet at £5 million with a matching finance lease obligation. The lease allows us to spread the cash cost of the pontoon over a much greater period than a normal commercial mortgage and also confers security of tenure and the commercial benefits of effective ownership.

With the benefit of the pontoon related fare increases at the end of June 2011, revenues during the Period increased by 5.9% to £2.15 million (H1 2010: £2.03 million). Given the significant fare increases and weak local demand for discretionary weekend travel, passenger numbers declined by 4.1% to 1.75 million (H1 2010: 1.82 million) which was in line with our projections. However, the fare increases offset the decline in passengers and the increased rental costs such that Profit Before Tax was maintained.

Momart International

Momart achieved a much improved performance during the Period. Overall revenue increased by 26% to £7.37 million (H1 2010:£5.83 million), helped by a large international contract which contributed £0.9 million to sales.

Notable exhibitions in the Period included: The Cult of Beauty at the V&A, Gerhardt Richter at Tate Modern, George Condo at the Hayward Gallery, Wilhelm Sasnal at the Whitechapel Gallery and a Maddox Brown exhibition at the Manchester Art Gallery.

In response to the decline in Exhibition revenues last year, pricing policies were adjusted and sales to museums and institutions demonstrated a strong recovery, increasing by 30% to £3.4 million. Competitive pressure saw gross margins fall 3.8% but the increased sales helped the overall contribution from Exhibitions to increase by 13% compared to H1 2010.

Gallery Services (GS) revenue increased by 28% to £3.2 million which, despite margin dilution from the large international contract, ensured that the divisional contribution from GS increased by 18% compared to H1 2010.

Revenues from art storage activities increased by 7% to £0.77million as rate increases were passed on to clients. 

Despite margin pressure, the strong recovery in revenue, tight control over costs helped deliver a 38% increase in Profit Before Tax for the Period to £0.29 million (H1 2010: £0.21 million).

Falkland Oil and Gas Limited (FOGL)

The Group retains its holding of 12 million shares in AIM quoted oil and gas exploration company FOGL. Following FOGL's share placing in April 2011, which raised £32 million, the Group's holding represents 5.8% of FOGL's issued share capital.

At 30 September 2011, the market value of FIH's shareholding in FOGL was £5.6 million (based on a FOGL share price at that time of 47p) or 61p per FIH share. The historic cost of the FOGL stake is £1.9 million or 16p per share.

Together with Borders & Southern Petroleum, FOGL has contracted the Leiv Eiriksson, an advanced 5^th generation, harsh environment, deep water exploration rig, which is expected to arrive in the South Atlantic in early February 2012. After Borders and Southern has drilled two wells, FOGL is expected to spud its first well on its Loligo prospect during Q2 2012. We look forward to the results of the 2012 drilling programme.

Balance Sheet and Cash Flow

At 30 September 2011 the Group had bank borrowings of £3.5 million (31 March 2011: £4.0 million) and HP liabilities of £0.25 million (31 March 2011: £0.2 million). With cash balances of £2.4 million (31 March 2011: £2.1 million) net bank borrowings at 30 September 2011 (excluding HP liabilities) were £1.1 million (31 March 2011: £1.9million).

At 30 September 2011, net borrowings (including the £5 million pontoon lease) amounted to £6.3million (31 March 2011: £2.1million).

Outlook

Although the economic backdrop remains challenging, we are confident that the Group's portfolio of businesses will continue to perform well.

The government funded museum exhibitions market appears to have stabilised and the commercial art market offers Momart further opportunities for growth albeit in a competitive environment.

Further modest declines in PHFC passenger volumes are anticipated but recent fare increases should largely offset both this and the rental costs of the new pontoon.

At FIC, we anticipate a similar pattern to that seen in H2 2010, with the seasonal uplift of demand in the second half resulting from tourism and fishing. The deep water drilling programme expected to take place from February to August 2012, should ensure that the Falkland Islands remains in the spotlight. A further discovery would magnify the opportunities for the Group and your board is focussed on developing plans to fully realise that potential.

David Hudd	John Foster
Chairman	Managing Director

1 December 2011

Condensed Interim Consolidated Income Statement

FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2011

Notes		Unaudited 6 months to 30 September 2011 £'000	Unaudited 6 months to 30 September 2010 £'000	Audited Year ended 31 March 2011 £'000
2	Revenue	16,510	14,348	31,841
	Cost of sales	(10,235)	(8,469)	(19,294)
	Gross profit	6,275	5,879	12,547
	Other administrative expenses	(4,929)	(4,607)	(9,627)
	Amortisation of intangible assets	(198)	(198)	(398)
	Administrative expenses	(5,127)	(4,805)	(10,025)
	Other income	0	1	15
	Other operating income	0	1	15
	Operating profit	1,148	1,075	2,537
	Finance income	64	53	117
	Finance expense	(222)	(181)	(324)
3	Net financing costs	(158)	(128)	(207)
	Profit before tax from continuing operations	990	947	2,330
4	Taxation	(357)	(315)	(710)
	Profit attributable to equity holders of the Company	633	632	1,620
5	Earnings per share
	Basic	6.9p	6.9p	17.7p
	Diluted	6.8p	6.7p	17.5p

See note 5 for an analysis of earnings per share on underlying profit (defined as profit after tax before amortisation and non-trading items).

Condensed Consolidated Balance Sheet

AT 30 SEPTEMBER 2011

Notes		Unaudited 30 September 2011 £'000	Unaudited 30 September 2010 £'000	Audited 31 March 2011 £'000
	Non-current assets
	Intangible assets	12,913	13,311	13,111
	Property, plant and equipment	12,839	7,281	7,489
	Investment properties	1,464	1,759	1,721
6	Financial assets - available for sale equity securities	5,641	14,940	10,710
	Non-current assets held for sale	20	20	20
	Other financial assets	118	60	60
	Deferred tax assets	554	621	554
	Total non-current assets	33,549	37,992	33,665
	Current assets
	Trading inventories	3,994	3,816	4,215
	Property inventories	1,006	1,221	1,204
	Inventories	5,000	5,037	5,419
	Trade and other receivables	5,473	3,990	5,811
	Other financial assets	337	228	252
	Cash and cash equivalents	2,376	2,288	2,062
	Total current assets	13,186	11,543	13,544
	TOTAL ASSETS	46,735	49,535	47,209
	Current liabilities
	Interest bearing loans and borrowings	(1,116)	(1,076)	(1,058)
	Income tax payable	(666)	(622)	(569)
	Trade and other payables	(8,100)	(6,248)	(8,334)
	Total current liabilities	(9,882)	(7,946)	(9,961)
	Non-current liabilities
	Interest bearing loans and liabilities	(7,555)	(3,521)	(3,104)
7	Employee benefits	(2,130)	(2,233)	(2,130)
	Deferred tax liabilities	(1,415)	(1,615)	(1,413)
	Total non-current liabilities	(11,100)	(7,369)	(6,647)
	TOTAL LIABILITIES	(20,982)	(15,315)	(16,608)
	Net assets	25,753	34,220	30,601
	Capital and reserves
	Equity share capital	922	922	922
	Share premium account	7,618	7,615	7,618
	Other reserves	1,162	1,162	1,162
	Retained earnings	12,371	11,544	12,150
	Financial assets fair value reserve	3,680	12,977	8,749
	Total equity	25,753	34,220	30,601

Condensed Consolidated Cash Flow Statement

FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2011

	Notes			Unaudited 6 months to 30 September 2011 £'000	Unaudited 6 months to 30 September 2010 £'000	Audited Year ended 31 March 2011 £'000
			Profit for the period	633	632	1,620
			Adjusted for:
			(i) Non-cash items:
			Depreciation	507	437	846
			Amortisation	198	198	398
			Amortisation of loan fees	0	15	30
			Expected return on pension scheme assets	(8)	(8)	(29)
			Interest cost on pension scheme liabilities	73	80	144
			Net settlement gain recognised on pension	0	0	(10)
			Equity-settled share-based payment expenses	95	111	207
			Non-cash items adjustment	865	833	1,586
			(ii) Other items:
			Bank interest receivable	(2)	(4)	(4)
			Bank interest payable	74	86	138
			Finance lease interest payable	75	0	0
			Profit on disposal of investment property	0	0	(80)
			Dividend approved not paid	(507)	(459)	0
			Enhanced transfer value exercise payments	0	0	(140)
			Income tax expense	357	315	710
			Other adjustments	(3)	(62)	624
			Operating cash flow before changes in working capital and provisions	1,495	1,403	3,830
			Decrease/(increase) in trade and other receivables	338	545	(1,276)
			Decrease/(increase) in property inventories	198	(1)	16
			Decrease/(increase) in trading inventories	221	(327)	(726)
			(Decrease)/increase in trade and other payables	(232)	(1,971)	115
			(Decrease) in provisions and employee benefits	0	(93)	(134)
			Changes in working capital and provisions	525	(1,847)	(2,005)
			Cash generated from operations	2,020	(444)	1,825
			Income taxes paid	(260)	(376)	(1,008)
			Net cash from operating activities	1,760	(820)	817
			Cash flows from investing activities
			Purchase of property, plant and equipment	(5,726)	(215)	(815)
			Purchase of investment properties	0	(2)	0
		Proceeds from disposal of property, plant & equipment		126	0	99
		Interest received		2	4	4
		Net cash from investing activities		(5,598)	(213)	(712)
		Cash flow from financing activities
		Increase in other financial assets		(143)	(30)	(54)
		Repayment of secured loan		(448)	(676)	(1,141)
		Proceeds from new loan		4,957	0	0
		Interest paid		(214)	(86)	(138)
		Proceeds from the issue of ordinary share capital		0	303	306
		Dividends paid		0	0	(826)
		Net cash from financing activities		4,152	(489)	(1,853)
		Net increase/(decrease) in cash and cash equivalents		314	(1,522)	(1,748)
		Cash and cash equivalents at start of period		2,062	3,810	3,810
		Cash and cash equivalents at end of period		2,376	2,288	2,062

Condensed Consolidated Statement of Comprehensive Income

FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2011

Notes		Unaudited 6 months to 30 September 2011 £'000	Unaudited 6 months to 30 September 2010 £'000	Audited Year ended 31 March 2011 £'000
6	(Loss) / gain on valuation of available-for-sale equity securities	(5,069)	(604)	(4,832)
7	Net actuarial loss on pension schemes net of tax	0	0	(111)
	Other comprehensive (expense) / income	(5,069)	(604)	(4,943)
	Profit for the period	633	632	1,620
	Total comprehensive income	(4,436)	28	(3,323)

Condensed Consolidated Statement of Changes in Shareholders' Equity

FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2011

	Unaudited 6 months to 30 September 2011 £'000	Unaudited 6 months to 30 September 2010 £'000	Audited Year ended 31 March 2010 £'000
Shareholders' funds at beginning of period	30,601	34,237	34,237
Profit for the period	633	632	1,620
Change in fair value of available-for-sale financial assets	(5,069)	(604)	(4,832)
Net actuarial loss on pension schemes net of tax	0	0	(111)
Total comprehensive income	(4,436)	28	(3,323)
Dividends paid or approved by shareholders	(507)	(459)	(826)
Proceeds from the issue of share capital	0	303	306
Share-based payments	95	111	207
Shareholders' funds at end of period	25,753	34,220	30,601

Notes to the Unaudited Interim Statements

1. Basis of preparation

This interim financial information comprises the condensed consolidated balance sheets at 30 September 2011, 30 September 2010 and 31 March 2011 and condensed consolidated statements of income, comprehensive income, cash flows and changes in shareholders' equity for the periods then ended and related notes of Falkland Islands Holdings plc (hereinafter 'the interim financial information').

The interim financial information has been prepared in accordance with the accounting policies set out in the Group's 2011 financial statements.  As permitted, these interim financial statements have been prepared in accordance with AIM rules and not in accordance with IAS34 'Interim Financial Reporting'.

The adopted International Financial Reporting Standards ('IFRS') that will be effective (or available for early adoption) in the annual financial statements for the year ending 31 March 2012 are still subject to change and to additional interpretations and therefore cannot be determined with certainty. Accordingly, the accounting policies for that annual period will be determined finally only when the annual financial statements are prepared for the year ending 31 March 2012.

The Interim Report was approved by the Board on 1 December 2011.

Section 245 Statement

The comparative figures for the financial year ended 31 March 2011 are not the Company's full statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies.  The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or 498 (3) of the Companies Act 2006.

2. Segmental revenue and profit analysis

	Unaudited 6 months to 30 September 2011					Unaudited 6 months to 30 September 2010
	General trading (Falklands) £'000	Ferry services (Portsmouth) £'000	Arts logistics & storage (UK) £'000	Total £'000		General trading (Falklands) £'000	Ferry services (Portsmouth) £'000	Arts logistics & storage (UK) £'000	Total £'000
External revenue	6,989	2,148	7,373	16,510		6,492	2,030	5,826	14,348
Segment operating profit
before amortisation	518	482	346	1,346		585	412	276	1,273
Amortisation of intangible assets	0	0	(198)	(198)		0	0	(198)	(198)
Amortisation and
non-trading items	0	0	(198)	(198)		0	0	(198)	(198)
Segment operating profit	518	482	148	1,148		585	412	78	1,075
Finance income	54	0	2	56		41	10	2	53
Finance expense	(57)	(96)	(61)	(214)		(75)	(39)	(67)	(181)
Segment  profit
before tax	515	386	89	990		551	383	13	947
Taxation	(154)	(116)	(87)	(357)		(152)	(105)	(58)	(315)
Segment profit after tax	361	270	2	633		400	278	(45)	632
Assets and liabilities
Segment assets	11,836	12,917	12,681	37,434		11,341	8,157	12,763	32,261
Segment liabilities	(7,410)	(6,983)	(4,368)	(18,761)		(7,074)	(2,410)	(3,802)	(13,286)
Unallocated assets and liabilities				7,078					15,245
Segment net assets	4,426	5,934	8,313	25,751		4,267	5,747	8,961	34,220
Other segment information
Capital expenditure:
Property, plant and
equipment	370	5,054	302	5,726		167	32	16	215
Investment   properties	0	0	0	0		2	0	0	2
Depreciation:
Property, plant and
equipment	196	160	151	507		177	109	131	417
Investment properties	0	0	0	0		20	0	0	20
Amortisation	0	0	(198)	(198)		0	0	-198	-198
Underlying profit before tax			Arts					Arts
	General	Ferry	logistics &			General	Ferry	logistics &
	trading	services	storage			trading	services	storage
	(Falklands)	(Portsmouth)	(UK)	Total		(Falklands)	(Portsmouth)	(UK)	Total
	£'000	£'000	£'000	£'000		£'000	£'000	£'000	£'000
Segment operating profit before tax,
amortisation and non-trading items	518	482	346	1,346		585	412	276	1,273
Finance income	54	0	2	56		41	10	2	53
Finance expense	(57)	(96)	(61)	(214)		(75)	(39)	(67)	(181)
Segment underlying profit
before tax	515	386	287	1,188		551	383	211	1,145

2. Segmental revenue and profit analysis (continued)

	Audited Year ended 31 March 2011
	General trading (Falklands) £'000	Ferry services (Portsmouth) £'000	Arts logistics & storage (UK) £'000	Total £'000
External revenue	14,921	3,734	13,186	31,841
Operating profit
before amortisation and
non-trading items	1,613	790	532	2,935
Amortisation of intangible assets	0	0	(398)	(398)
Amortisation and
non-trading items	0	0	(398)	(398)
Segment operating profit	1,613	790	134	2,537
Finance income	88	29	0	117
Finance expense	(129)	(70)	(125)	(324)
Segment profit
before tax	1,572	749	9	2,330
Taxation	(314)	(326)	(70)	(710)
Segment profit after tax	1,258	423	(61)	1,620
Assets and liabilities
Segment assets	12,856	8,029	12,268	33,153
Segment liabilities	(7,972)	(1,993)	(4,519)	(14,484)
Unallocated assets and
liabilities				11,932
Segment net assets	4,884	6,036	7,749	30,601
Other segment information
Capital expenditure:
Property, plant and
equipment	419	69	327	815
Investment properties	0	0	0	0
Depreciation:
Property, plant and
equipment	326	215	268	809
Investment properties	37	0	0	37
Amortisation	0	0	398	398
Underlying profit before tax	General trading (Falklands) £'000	Ferry services (Portsmouth) £'000	Arts logistics & storage (UK) £'000	Total £'000
Segment operating profit before tax,
amortisation and non-trading items	1,613	790	532	2,935
Finance income	88	29	0	117
Finance expense	(129)	(70)	(125)	(324)
Segment underlying profit
before tax	1,572	749	407	2,728

3. Finance income and expense

	Unaudited 6 months to 30 September 2011 £'000	Unaudited 6 months to 30 September 2010 £'000	Audited Year ended 31 March 2011 £'000
Bank interest receivable	2	4	4
Finance lease interest receivable	54	41	84
Expected return on pension scheme assets	8	8	29
Total financial income	64	53	117
Interest payable on bank loans	(74)	(86)	(138)
Interest cost on pension scheme liabilities	(73)	(80)	(144)
Amortisation of loan fees	0	(15)	(30)
Notional interest on deferred consideration payable	0	0	(12)
Finance lease interest payable	(75)	0	0
Total financial expense	(222)	(181)	(324)
Net financing cost	(158)	(128)	(207)

4. Taxation

The taxation charge has been estimated to be 30.0% (2010: 28.5%).

5. Earnings per share 

Earnings per share have been calculated on profit after tax of £633,000 (6 months to September 2010 : £632,000; Year to 31 March 2011: £1,620,000) based on the weighted average number of shares in issue, excluding shares held in the Employee Share Ownership Plan, of 9,183,915 (6 months to 30 September 2010: 9,133,396; Year to 31 March 2011: 9,183,915).  The diluted earnings have been further adjusted to assume the full exercise of share options in issue, to the extent that they are dilutive.

Earnings per share on underlying profit

To provide a comparison of earnings per share on underlying performance, the table below sets out basic and diluted earnings per share based on profits after tax before amortisation ('underlying profit after tax'): 

			Year ended 31 March 2011 £'000
	6 months to 30 September:
	2011 £'000	2010 £'000
Underlying profit before tax	1,188	1,145	2,728
Tax thereon	(357)	(315)	(821)
Underlying profit after tax	831	830	1,907
Basic earnings per share on underlying profit	9.1p	9.1p	20.9p
Diluted earnings per share on underlying profit	9.0p	8.9p	20.6p

6      Financial assets - available for sale equity securities

(a)  At fair value

The Group has an investment of 12,000,000 (2010:12,000,000) shares in the AIM quoted company Falkland Oil and Gas Limited ('FOGL').

	30 September 2011 £'000	30 September 2010 £'000	31 March 2011 £'000
FOGL share price	47.0p	124.5p	89.3p
Investment stated at fair value:
Falkland Oil and Gas Limited	5,641	14,940	10,710

An unrealised loss of £5,071,000 (2010: loss of £602,000) has been recognised in the period and transferred to the Financial assets fair value reserve as a component of shareholders' funds.

(b) At cost

	£'000	£'000	£'000
Investment at cost:
Falkland Oil and Gas Limited	1,963	1,963	1,963

7      Employee benefits

The Company has elected to follow precedent and decided not to revalue its pension obligations at the half-year end.  The Group's principal pension obligation, the Falkland Islands Company Limited Pension Scheme, is unfunded and therefore not subject to valuation volatility as a result of stock market fluctuations.  At 31 March 2011 the Group's other pension fund, The Portsmouth Harbour Ferry Company Plc (1975) Retirement Scheme, showed a net deficit of £17,000.

8      Analysis of change in debt

	As at 1 April 2011 £'000	Cash flows £'000	As at 30 September 2011 £'000	As at 30 September 2010 £'000
Cash at bank and in hand	2,062	314	2,376	2,288
Debt due within one year	(1,058)	(58)	(1,116)	(1,076)
Debt due after one year - Bank loans	(2,971)	504	(2,467)	(3,451)
Debt due after one year - Hire Purchase	(133)	45	(88)	(70)
Debt due after one year - Pontoon Lease	0	(5,000)	(5,000)	0
Net debt at end of period	(2,100)	(4,195)	(6,295)	(2,309)

 

END

 

 

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