Interim Results
Rensburg plc
29 June 2004
29 June 2004
Rensburg plc ('Rensburg')
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2004
Rensburg, (formerly BWD Securities PLC), the Investment Management Group -
Key Points:
• Profit before tax, goodwill amortisation and exceptional items of £4.2m
(2003: £3.0m), an increase of 40%.
• Basic earnings per share before goodwill amortisation and exceptional
items of 13.3p (2003: 9.5p), an increase of 40%.
• Interim dividend unchanged at 6.0p per share.
• Fee and other recurring income at £11.7m (2003: £9.4m) an increase of 24%
• Group funds under management at £3.91bn (2003: £3.51bn) an increase of
11%.
Mike Burns, Chief Executive of Rensburg, commented:
'It is pleasing to report results which reflect on the marked improvement in
trading conditions over the comparable period in 2003. The strong capital base
of the Group means we remain well positioned to take advantage of any increase
in acquisition opportunities.'
For further information, please contact:
Mike Burns, Chief Executive Tel: 0151 227 2030
Rensburg plc
Nick Lyon Tel: 020 7796 4133
Hudson Sandler
INTERIM STATEMENT
Financial results & dividend
It is pleasing to report results which reflect on the marked improvement in
trading conditions over the comparable period in 2003. In particular, the
relatively stable environment in the first half of the current year contrasts
sharply with the volatility experienced in the UK financial markets during the
equivalent period of the prior year.
The Group's profit before tax, goodwill amortisation and exceptional items for
the six months ended 31 May 2004 was £4.2 million (2003: £3.0 million), from a
total income of £18.2 million (2003: £16.0 million). Fee and other recurring
income increased to £11.7 million (2003: £10.3 million). Basic earnings per
share before goodwill amortisation and exceptional items were 13.3p (2003:
9.5p).
Excluding the contribution in the prior first half-year from the Administration
Services division, which was disposed of in February 2003, the total income of
£18.2 million represents an underlying increase of 23% over the prior
corresponding period; more importantly, on this basis, fee and other recurring
income of £11.7 million represents an increase of 24%.
The Directors have declared an unchanged interim dividend of 6.0p payable on 1
October 2004 to shareholders on the register at 20 August 2004.
Name change
Following shareholder approval given at the Company's Annual General Meeting on
30 March 2004, the name of the Company was changed to Rensburg plc on 28 May
2004. Simultaneously, BWD Rensburg Limited became Rensburg Investment
Management Limited and BWD Rensburg Unit Trust Managers Limited became Rensburg
Fund Management Limited.
Operations
Rensburg Investment Management increased managed clients' funds by 9.8% to £3.46
billion (2003: £3.15 billion). This compares to an increase in the FTSE /
APCIMS Private Investors Balanced index of 6.9% over the year. Fee-paying funds
included in these figures increased by 20.5% to £1.88 billion (2003: £1.56
billion).
At the beginning of the period, our in-house Self-Invested Personal Pension ('
SIPP') administration system became fully operational and the initial clients
have now moved smoothly onto this new service. This, combined with our financial
planning service, assists in ensuring that we are able to offer our clients an
increasingly comprehensive approach to the management of their wealth.
Mid-way through the period an established team of three institutional sales
traders joined our London office and have settled in well. The positive changes
announced in the recent Budget with regard to investment in Venture Capital
Trusts ('VCTs') should assist our VCT management division.
Rensburg Fund Management increased the value of funds under management by 26% to
£448 million (2003: £356 million). As implied by its change of name, this
business is looking to expand its services beyond purely managing unit trusts;
in particular, it is presently seeking opportunities to run segregated mandates.
Outlook
The summer of 2003 was unusually busy, as markets recovered their poise all over
the world. This year we do not expect further dramatic re-ratings and the
economic and political outlook is more than usually opaque as economies grapple
with increased oil prices, rising interest rates and the troubled Middle Eastern
situation, which all affect investors' confidence. Nevertheless, the strong
capital base of the Group means we remain well positioned to take advantage of
any increase in acquisition opportunities.
C.G. Clarke M.H. Burns
Chairman Chief Executive
28 June 2004
Consolidated Profit and Loss Account
2004 2003 2003
6 months 6 months 12 months
ended ended ended
31 May 31 May 30 Nov
£'000 £'000 £'000
Note
Turnover
Continuing operations 18,203 14,787 32,005
Discontinued operations - 1,245 1,245
18,203 16,032 33,250
Operating expenses (14,692) (13,475) (27,555)
Goodwill amortisation (434) (482) (917)
Total administrative expenses (15,126) (13,957) (28,472)
_______ _______ _______
Operating profit
Continuing operations 3,077 1,966 4,669
Discontinued operations - 109 109
_______ _______ _______
3,077 2,075 4,778
Profit on disposal of subsidiaries - 10,472 10,472
Profit on disposal of fixed asset investments - - 390
Net interest receivable 710 451 1,150
_______ _______ _______
Profit on ordinary activities before taxation 3,787 12,998 16,790
Tax on profit on ordinary activities (1,309) (942) (1,928)
_______ _______ _______
Profit on ordinary activities after taxation 2,478 12,056 14,862
Dividends (1,313) (1,308) (3,933)
_______ _______ _______
Retained profit for the period 1,165 10,748 10,929
_______ _______ _______
Earnings per share before goodwill 1
amortisation and exceptional items
-Basic 13.3p 9.5p 22.6p
-Diluted 13.0p 9.4p 22.1p
Earnings per share 1
-Basic 11.3p 55.4p 68.2p
-Diluted 11.1p 54.6p 66.8p
Dividend per share 6.0p 6.0p 18.0p
The Group has no recognised gains and losses other than those included in the
profits above and therefore no separate statement of total recognised gains and
losses is presented.
Consolidated Balance Sheet
2004 2003 2003
31 May 31 May 30 Nov
£'000 £'000 £'000
Fixed assets
Intangible assets 14,121 14,990 14,555
Tangible assets 3,552 3,088 3,267
Investments 500 500 500
_______ _______ _______
18,173 18,578 18,322
_______ _______ _______
Current assets
Debtors 25,705 26,111 23,662
Cash at bank and in hand 36,444 32,845 35,420
_______ _______ _______
62,149 58,956 59,082
Creditors
Amounts falling due within one year (34,546) (32,486) (32,108)
_______ _______ _______
Net current assets 27,603 26,470 26,974
_______ _______ _______
Total assets less current liabilities 45,776 45,048 45,296
Creditors
Amounts falling due after more than one year (2,660) (3,272) (3,340)
Provisions for liabilities and charges (83) (103) (92)
_______ _______ _______
Net assets 43,033 41,673 41,864
_______ _______ _______
Capital and reserves
Called up share capital 2,208 2,208 2,208
Reserves 40,825 39,465 39,656
_______ _______ _______
Equity shareholders' funds 43,033 41,673 41,864
_______ _______ _______
Consolidated Cash Flow Statement
2004 2003 2003
6 months 6 months 12 months
ended ended ended
31 May 31 May 30 Nov
£'000 £'000 £'000
Note
Net cash inflow from operating
activities (a) 4,268 1,633 6,813
Returns on investment and servicing of finance
Interest received 1,106 570 1,240
Interest paid (34) (138) (313)
Taxation paid (1,204) (1,045) (2,022)
Capital expenditure and financial investment
Purchase of tangible fixed assets (496) (495) (817)
Proceeds from sale of tangible fixed assets 2 1,430 1,432
Proceeds from sale of fixed asset investments - - 390
Acquisitions and disposals
Proceeds from sale of subsidiary undertakings - 18,469 18,469
Costs associated with disposal - (704) (704)
Cash disposed of with subsidiary undertakings - (1,704) (1,704)
Equity dividends paid (2,622) (2,609) (3,920)
_______ _______ _______
Cash inflow before financing 1,020 15,407 18,864
Financing
Issue of ordinary share capital 4 - 10
Decrease in debt - (4,000) (4,000)
Redemption of loan notes - (180) (1,072)
_______ _______ _______
Increase in cash in the period (b) 1,024 11,227 13,802
_______ _______ _______
Notes to the Cash Flow Statement
a. Reconciliation of operating profit to operating cash flows
2004 2003 2003
6 months 6 months 12 months
ended ended ended
31 May 31 May 30 Nov
£'000 £'000 £'000
Operating profit 3,077 2,075 4,778
Amortisation of goodwill 434 482 917
Depreciation 211 279 462
Profit on disposal of tangible fixed assets (2) (5) (47)
(Increase)/decrease in debtors (2,332) (571) 2,157
Increase/(decrease) in creditors and provisions 2,880 (627) (1,454)
_______ _______ _______
Net cash inflow from operating activities 4,268 1,633 6,813
_______ _______ _______
Net cash inflow from operating activities
comprises:
Continuing operations 4,268 1,776 6,956
Discontinued operations - (143) (143)
_______ _______ _______
4,268 1,633 6,813
_______ _______ _______
b. Analysis and reconciliation of net funds
At 1 Dec Cash Other At 31 May
2003 flows changes 2004
£'000 £'000 £'000 £'000
Cash and deposits 35,420 1,024 - 36,444
Debt due after one year (982) - 750 (232)
Debt due within one year (844) - (750) (1,594)
_______ _______ _______ _______
Net funds 33,594 1,024 - 34,618
_______ _______ _______ _______
2004 2003 2003
6 months 6 months 12 months
ended ended ended
31 May 31 May 30 Nov
£'000 £'000 £'000
Increase in cash in the period 1,024 11,227 13,802
Repayment of debt - 4,180 5,072
Issue of loan notes - (2,482) (2,482)
_______ _______ _______
Movement in net funds in the period 1,024 12,925 16,392
Net funds at beginning of period 33,594 17,202 17,202
_______ _______ _______
Net funds at end of period 34,618 30,127 33,594
_______ _______ _______
Notes
1. Basic earnings per share before goodwill amortisation and exceptional items
is calculated with reference to earnings for shareholders of £2,912,000 (May
2003: £2,066,000; Nov 2003: £4,917,000) and the weighted average number of
shares in issue during the period of 21,856,987 (May 2003: 21,762,412; Nov 2003:
21,796,791). Basic earnings per share is calculated with reference to earnings
for shareholders of £2,478,000 (May 2003: £12,056,000; Nov 2003: £14,862,000).
Diluted earnings per share is the basic earnings per share, adjusted for the
effect of the conversion into fully paid shares of the weighted average number
of all employee share options outstanding during the period. The number of
additional shares used for the diluted calculation is 534,030 (May 2003:
312,992; Nov 2003: 438,568).
2. The information contained in the 30 November 2003 consolidated balance
sheet, profit and loss account and cash flow statement does not constitute full
financial statements and has been extracted from the latest published financial
statements for year ended 30 November 2003, which have been delivered to the
Registrar of Companies. The report of the auditor on these financial statements
was unqualified. The consolidated profit and loss accounts and cash flow
statements for the six month periods and the consolidated balance sheets at 31
May 2003 and 31 May 2004 are unaudited.
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