Interim Results - Part 2

Man Group PLC
8 November 2001


PART 2 
 
NOTES TO THE INTERIM FINANCIAL STATEMENTS 
 
1. Basis of preparation 
The unaudited results for the half year to 30 September 2001 have been
prepared in accordance with UK generally accepted accounting principles. The
accounting policies applied are those set out in the Group's Annual Report
for the year to 31 March 2001, except for the adoption of the new financial
reporting standard on deferred tax (FRS 19). The comparative figures for
deferred tax have not been restated as the effect is not material.  
 
The September 2000 figures have been restated, in accordance with the change
made in the 2001 Annual Report to the way in which net trading interest
income and goodwill amortisation are presented in the financial statements.
Net trading interest income, previously included in net interest income, is
disclosed as part of net operating income. Goodwill amortisation, previously
included in net operating income, is separately disclosed. The reasons for
these restatements are discussed in the Accounting Policies note in the 2001
Annual Report. 
 
2. Net operating income 
 

                                                                              
                                     Half year           Half year       Year  
                                         to 30     to 30 September      to 31  
                                     September                2000      March 
                                           2001         (Restated)       2001 
                                             £m                 £m         £m 
  Continuing operations                                                       
  Fees and commissions receivable        285.7              199.2      504.7  
  Fees and commissions payable          (128.0)            (115.7)    (230.4) 
  Net trading interest income             20.4               20.7       44.7  
                                         178.1              104.2      319.0  
  Other operating income                  20.0               12.0       28.1  
  Net operating income                   198.1              116.2      347.1  
           
3. Segmental analysis 
(a) Segmental analysis of net operating income 

                                                                         
                                                                         
                                  Half year          Half year      Year  
                                      to 30    to 30 September     to 31  
                                  September               2000     March 
                                       2001         (Restated)      2001 
                                         £m                 £m        £m 
       Business segment                                                  
       Continuing operations                                             
       Asset Management              120.3               53.4     214.2  
       Brokerage                      77.8               62.8     132.9  
                                                        
                                     198.1              116.2     347.1  
 
(b) Segmental analysis of profit on ordinary activities before taxation 
 
                                       Half year          Half year      Year  
                                           to 30    to 30 September     to 31  
                                       September               2000     March 
                                            2001         (Restated)      2001 
                                              £m                 £m        £m 
  Business segment                                                            
  Continuing operations                                                       
  Asset Management - management            49.0               31.5      70.7  
  fee income                                                                  
  Asset Management - performance           33.5                1.0      76.0  
  fee income                                                                  
  Brokerage                                18.7               14.7      30.2  
  Goodwill amortisation                    (4.7)              (0.7)     (4.7) 
  Financial Services                       96.5               46.5     172.2  
  Sugar Australia                           0.5                1.0       1.8  
                                           97.0               47.5     174.0  
  Discontinued operations                  (3.6)              (6.8)    (15.0) 
                                                       
                                           93.4               40.7     159.0  
 
Goodwill amortisation comprises Asset Management £3.5m (30 September 2000:
£nil, 31 March 2001: £3.2m) and Brokerage £1.2m (30 September 2000: £0.7m, 31
March 2001: £1.5m). 
 
4. Exceptional items 
 
The loss on sale of the Agricultural Products business of £3.6m (£3.6m net of
tax) represents an adjustment to the loss on sale reported in March 2000,
incurred in accordance with the provisions of the management buyout disposal
documentation. 
 
For the half year to 30 September 2000 the loss on sale of the Agricultural
Products businesses of £5.2m (£4.3m net of tax) represents an adjustment of
£3.9m (£3.9m net of tax) to the loss on sale reported in March 2000, and
£1.3m (£0.4m net of tax) in respect of the sale of US nuts activities.
Further Agricultural Products restructuring costs of £1.6m (£1.1m net of tax)
were also incurred. 
 
For the year to 31 March 2001 the loss on sale of the Agricultural Products
businesses of £13.1m (£12.9m net of tax) represents an adjustment of £11.3m
(£11.3m net of tax) to the loss on sale reported in March 2000, and £1.8m
(£1.6m net of tax) in respect of the sale of US nuts activities. Further
Agricultural Products restructuring costs of £1.9m (£1.9m net of tax) were
also incurred. 
 
5. Net interest income 
 

                                                                        
                                                                        
                                 Half year          Half year      Year  
                                     to 30    to 30 September     to 31  
                                 September               2000     March 
                                      2001         (Restated)      2001 
                                        £m                 £m        £m 
        Interest receivable          24.3               27.1      60.7  
        Interest payable            (16.1)             (18.5)    (48.2) 
                                      8.2                8.6      12.5  
      
6.     Dividends 

                                                                              
                                                                              
                                           Half year    Half year       Year  
                                 to 30 September 2001        to 30     to 31  
                                                         September     March 
                                                              2000      2001 
                                                   £m           £m        £m 
  Ordinary shares                                                             
  Interim - 5.5 pence (2001:                    14.6          11.5      11.5  
  4.6 pence)                                                                  
  Final - (2001: 10.9 pence)                       -             -      28.0  
                                                14.6          11.5      39.5  
 
 
An interim dividend of 5.5p per share will be paid on 3 January 2002 to
shareholders on the register at the close of business on 16 November 2001.
The shares will be quoted ex-dividend from 14 November 2001. The final
election date for participation in the Group's Dividend Reinvestment Plan in
relation to the interim dividend is 3.00pm on 17 December 2001.  
 
7. Earnings per share 
 
The calculation of basic earnings per ordinary share is based on a profit for
the period of £74.0m (30 September 2000: £30.7m, 31 March 2001: £124.2m) and
on 258,582,429 (30 September 2000: 246,276,308, 31 March 2001: 249,329,463)
ordinary shares, being the weighted average number of ordinary shares in
issue during the period after excluding the shares owned by the Man Group plc
employee trusts.  
 
The diluted earnings per share is based on a profit for the period of £74.0m
(30 September 2000: £30.7m, 31 March 2001: £124.2m) and on 267,583,560 (30
September 2000: 255,935,797, 31 March 2001: 258,168,532) ordinary shares,
calculated as follows: 
 

                                                                              
                                                                              
                           30 September 2001               30              31 
                                      Number    September 2000          March 
                                                        Number           2001 
                                                                       Number 
  Basic weighted                 258,582,429       246,276,308    249,329,463 
  average number of                                                           
  shares                                                                      
  Dilutive potential                                                          
  ordinary shares                                                             
  Share awards under               9,001,131         8,725,433      8,109,220 
  incentive schemes                                                           
  Employee share                           -           934,056        729,849 
  options                                                                     
                                 267,583,560       255,935,797    258,168,532 
 
The following tables reconcile the earnings per share on the total result
with the earnings per share on continuing operations and underlying earnings
per share. Underlying earnings per share excludes the net performance fee
income from our Asset Management business, the result of our Sugar Australia
operations and goodwill amortisation.  
 

                                                                              
                                               Half year to 30 September 2001 
                                              Basic earnings           Diluted
                                                  per share       earnings per
                                 Earnings             pence            share  
                                       £m                               pence 
  Earnings                          74.0              28.6              27.7  
  Loss on discontinued               3.6               1.4               1.3  
  operations                                                                  
  Earnings per share -              77.6              30.0              29.0  
  continuing                                                                  
  operations                                                                  
  Performance related              (27.5)            (10.6)            (10.3) 
  income                                                                      
  Sugar Australia                   (0.3)             (0.1)             (0.1) 
  Goodwill                           3.2               1.2               1.2  
  amortisation                                                                
  Underlying earnings               53.0              20.5              19.8  
 

                                                                              
                                    Half year to 30 September 2000 
                                              Basic earnings          Diluted
                                                  per share      earnings per
                                 Earnings             pence             share  
                                       £m                               pence 
  Earnings                          30.7              12.4              12.0  
  Loss on discontinued               5.4               2.3               2.1  
  operations                                                                  
  Earnings per share -              36.1              14.7              14.1  
  continuing                                                                  
  operations                                                                  
  Performance related               (0.8)             (0.3)             (0.3) 
  income                                                                      
  Sugar Australia                   (0.5)             (0.2)             (0.2) 
  Goodwill                           0.4               0.1                0.1 
  amortisation                                                                
  Underlying earnings               35.2              14.3               13.7 
 

                                                                              
                                          Year to 31 March 2001 
                                              Basic earnings          Diluted
                                                  per share      earnings per
                                 Earnings             pence             share  
                                       £m                               pence 
  Earnings                         124.2              49.8              48.1  
  Loss on discontinued              14.8               5.9               5.7  
  operations                                                                  
  Earnings per share -             139.0              55.7              53.8  
  continuing                                                                  
  operations                                                                  
  Performance related              (62.3)            (25.0)            (24.1) 
  income                                                                      
  Sugar Australia                   (1.1)             (0.4)             (0.4) 
  Goodwill                           2.8               1.1               1.1  
  amortisation                                                                
  Underlying earnings               78.4              31.4              30.4  
 
 
8. Debtors 

                                                                              
                                                                              
                                           At 30    At 30 September     At 31  
                                       September               2000     March 
                                            2001                         2001 
                                              £m                 £m        £m 
  Trade debtors                                                               
  Amounts owed by broker dealers on                                           
  secured stock lending and                 58.7              396.2      33.1 
  borrowing                                                                   
  Securities transactions in the            43.2               89.6      86.9 
  course of settlement                                                        
  Futures transactions                     256.3              183.9     168.3 
  Other trade                               94.3               29.3     123.3 
  Amounts owed by funds                    333.7              206.3      99.9 
  Other categories of debtors              188.5              181.4     192.1 
                                           974.7            1,086.7     703.6 
 
 
9. Creditors 
 

                                                                              
                                                                              
                                           At 30    At 30 September     At 31  
                                       September               2000     March 
                                            2001                         2001 
                                              £m                 £m        £m 
  Amounts falling due within one                                              
  year                                                                        
  Bank loans and overdrafts                 31.2               36.7     158.4 
  Private placement notes                      -                3.4         - 
  Trade creditors                                                             
  Amounts owed to broker dealers on                                           
  secured stock lending and                 40.9              373.7      10.4 
  borrowing                                                                   
  Securities transactions in the           175.4              101.4     177.9 
  course of settlement                                                        
  Futures transactions                     166.7              157.3      63.5 
  Other trade                               47.6               30.6      20.7 
  Other categories of creditors            277.1              244.8     360.4 
                                           738.9              947.9     791.3 
 
Other categories of creditors includes £106.4m relating to commodity
financing transactions (30 September 2000: £139.3m, 31 March 2001: £134.6m). 
 

                                                                              
                                                                              
                                           At 30    At 30 September    At 31  
                                       September               2000     March 
                                            2001                         2001 
                                              £m                 £m        £m 
  Amounts falling due after more                                              
  than one year                                                               
  Loans                                                                       
  Bank loans                               295.8              310.9         - 
  Private placement notes                   10.2               10.1      10.5 
  Other creditors                            9.0                9.5       8.7 
                                           315.0              330.5      19.2 
 
10.     Segregated funds 
 
As required by the United Kingdom Financial Services Act and by the US
Commodity Exchange Act, the Group maintains certain balances on behalf of
clients with banks, exchanges, clearing houses and brokers in segregated
accounts totalling £2,346m (30 September 2000: £1,939m, 31 March 2001:
£2,209m). These amounts and the related liabilities to clients, whose
recourse is limited to the segregated accounts, are not included in the Group
balance sheet. 

11. Cash flow from operating activities 
 

                                                                              
                                                                              
                                      Half year          Half year      Year  
                                 to 30 September   to 30 September     to 31  
                                           2001               2000     March 
                                                        (Restated)      2001 
                                            £m                 £m         £m 
  Operating profit                        85.0               35.9      155.4  
  Depreciation of tangible                 4.2                3.8        9.9  
  fixed assets                                                                
  Amortisation of goodwill                 4.7                0.7        4.7  
  Profit on sale of tangible                 -                  -       (2.6) 
  fixed assets                                                                
  Profit on sale of fixed                 (0.3)              (1.0)      (0.2) 
  asset investments                                                           
  Decrease in stocks                         -                0.2        0.1  
  (Increase)/decrease in                (311.8)             287.4      714.4  
  debtors                                                                     
  Decrease/(increase) in                                                      
  securities purchased under              82.8                  -     (100.6) 
  agreements to resell                                                        
  Decrease/(increase) in                  22.4              (84.4)     (68.8) 
  short-term investments                                                      
  Increase/(decrease) in                 101.0             (267.9)    (623.4) 
  creditors                                                                   
  Restructuring costs                        -               (2.9)      (4.1) 
  Net cash (outflow)/inflow              (12.0)             (28.2)      84.8  
  from operating activities                                                   
 
12.     Analysis of net debt  
 

                                                                              
                                            At               At           At  
                              30 September 2001    30 September     31 March  
                                                           2000         2001 
                                             £m              £m           £m 
  Cash at bank and in                    264.9            242.4        133.7  
  hand                                                                        
  Overdrafts                              (2.3)           (36.7)        (3.8) 
  Loans due within one                   (28.9)            (3.4)      (154.6) 
  year                                                                        
  Loans due after one                                                         
  year                                                                        
  Bank loans                            (295.8)          (310.9)           -  
  Private placement                      (10.2)           (10.1)       (10.5) 
  notes                                                                       
  Closing net debt                       (72.3)          (118.7)       (35.2) 
 
13.     Exchange rates 
The following US dollar exchange rates have been used in the preparation of
this financial information: 
      

                                                                             
                               30 September    30 September 2000    31 March 
                                       2001                             2001 
  Average exchange rate                1.43                 1.49        1.47 
  Period end exchange rate             1.47                 1.48        1.42