Interim Results

Solitaire Group PLC 25 September 2002 25 September 2002 SOLITAIRE GROUP Plc Solitaire is a leading national provider of property management services INTERIM RESULTS 'GROWTH ACROSS MOST OPERATIONS' Highlights Change Six months ended Six months ended 30 June 2002 30 June 2001 Turnover +26.3% £2,882,000 £2,282,000 Profit before tax, amortisation & interest +5.9% £857,000 £809,000 Profit before tax +4.3% £729,000 £699,000 Earnings per share before amortisation +1.7% 11.9p 11.7p Earnings per share +2.9% 10.7p 10.4p Interim dividend +9.1% 3.00p 2.75p • Solitaire properties under management increased by over 1,200 or 5% in the six months • New instructions for property management continue at record levels • Moss Kaye Pembertons is trading in line with expectations • New office in Leicester opened to deal with upsurge in business in the Midlands • Recent enactment of Commonhold & Leasehold Reform Act 2002 offers opportunity to win new business George Brutton, Chairman of Solitaire Group Plc, commented: 'We are seeing growth in management instructions from both existing and new clients across most of our business. Moss Kaye Pembertons, our recently acquired property consultancy, is trading in line with expectations, whilst the residential property management operation continues to attract a very satisfactory level of instructions.' For further information: Graham Shapiro, Joint Managing Director Tel: 020 8364 8497 Solitaire Group Plc Tarquin Edwards / Simon Rothschild Tel: 020 7929 5599 Holborn Chairman's Statement I am pleased to report a satisfactory first half with an increase in operating profit for the six months to 30 June 2002. The results show a continuing rise in the income from property management and also include full six months revenue and expenses from Moss Kaye Pembertons against one month in 2001. Results and dividend The operating profit for the six months ended 30 June 2002, before charging amortisation, increased by 5.9% to £857,000 (2001: £809,000). Turnover increased by 26.3% to £2,882,000 (2001: £2,282,000). Earnings per share increased by 2.9% to 10.7p (2001: 10.4p). Adjusted earnings per share, before amortisation was up 1.7% to 11.9p (2001: 11.7p). Accordingly after interest and amortisation, pre-tax profits increased by 4.3% to £729,000 (2001: £699,000) The board is recommending the payment of an increased interim dividend of 3.00p (2001: 2.75p) per share, which will be paid on 22 November 2002 to shareholders on the register on 25 October 2002, reflecting a measure of the board's confidence in the future. Review of operations Residential property management Solitaire is one of the largest managers of residential property in the United Kingdom. It continues to receive instructions on a substantial number of new developments from both national and regional developers. The period from initial contract to receipt of income from new developments can be between eighteen months and two years. We have recently opened a new office in Leicester to deal with the surge in new business in the Midlands, which will allow the company to provide a better service to our developer clients and residents. Professional and commercial services Moss Kaye Pembertons has had a satisfactory six months and is trading in line with budget. It continues to offer high level residential and commercial property management and professional services to the property industry as well as commercial estate agency. All divisions of Moss Kaye Pembertons continue to receive a substantial level of new instructions from existing and new clients. Additional professional staff have been recruited to handle the increase in the volume of new business. Insurance services The portfolio valuation of properties managed by the group for insurance purposes amounts to some £1.3 billion. The insurance market remains volatile and increasing premiums are being asked on both property and professional indemnity cover. Solitaire continues to use its buying power to obtain competitive terms and reduce the impact on its clients whenever possible. Buy-to-Let Property Investment Portfolio Services (PIPS) is still attracting new clients from overseas keen to invest in the UK property market. The increase though in property prices, without a corresponding increase in rental, has made the achievement of good returns for our clients even more dependent on our property selection skills. Management of residential rented property The income from the management of rental property continues to reduce. We are still actively pursuing new rented property instructions so as to strengthen this side of our management business and are looking at ways to expand it and promote new initiatives. Current trading and prospects We are seeing steady growth in management instructions from both existing and new clients across most of our business. Moss Kaye Pembertons, our recently acquired property consultancy, is trading in line with expectations, whilst the residential property management operation continues to attract a very satisfactory level of instructions. With the enactment of the Commonhold and Leasehold Reform Act 2002, residential leaseholders have an enhanced opportunity to assume responsibility for the management of their blocks. We believe that this presents your company with an exciting opportunity to win new business. George Brutton, FRICS Chairman 25 September 2002 Unaudited consolidated profit and loss account Six months Six months Year to to 30 June to 30 June 31 Dec 2002 2001 2001 Notes £'000 £'000 £'000 _______ _______ _______ Revenue 2,882 2,282 5,062 Operating expenses External fees and commissions 158 75 245 Other administration expenses 1,867 1,398 3,166 _______ _______ _______ 857 809 1,651 Amortisation of goodwill and development costs 57 60 140 Exceptional costs - - 233 _______ _______ _______ Operating profit 800 749 1,278 Interest receivable 4 8 8 Interest payable (75) (58) (127) _______ _______ _______ Profit on ordinary activities before taxation 729 699 1,159 Taxation on ordinary activities 233 225 354 _______ _______ _______ Profit on ordinary activities after taxation 496 474 805 Dividends 2 138 125 433 _______ _______ _______ Retained profit for the period 358 349 372 _______ _______ _______ Basic and diluted earnings per share 3 10.7p 10.4p 17.6p Adjustment for amortisation 1.2p 1.3p 3.1p Adjustment for exceptional costs - - 5.1p _______ _______ _______ Adjusted earnings per share 3 11.9p 11.7p 25.8p _______ _______ _______ Dividend per share 3.00p 2.75p 9.5p _______ _______ _______ Unaudited consolidated balance sheet 30 June 30 June 31 Dec 2002 2001 2001 £'000 £'000 £'000 _______ _______ _______ Assets employed Fixed assets Intangible assets 1,840 1,907 1,880 Tangible assets 9,842 6,328 9,642 _______ _______ _______ 11,682 8,235 11,522 _______ _______ _______ Current assets Debtors 1,946 1,859 1,976 Cash and deposits 301 366 226 _______ _______ _______ 2,247 2,225 2,202 _______ _______ _______ Creditors: amounts falling due within one year 2,450 2,340 2,527 _______ _______ _______ Net current liabilities (203) (115) (325) _______ _______ _______ Total assets less current liabilities 11,479 8,120 11,197 Creditors: amounts falling due after more than one year 1,583 1,771 1,659 _______ _______ _______ 9,896 6,349 9,538 _______ _______ _______ Financed by Called-up share capital 462 456 462 Share premium 2,647 2,486 2,647 Revaluation reserve 4,731 1,731 4,731 Profit and loss account 2,056 1,676 1,698 _______ _______ _______ Equity shareholders' funds 9,896 6,349 9,538 _______ _______ _______ Consolidated cash flow statement Six months Six months Year to to 30 June to 30 June 31 Dec 2002 2001 2001 Cash flow from operating activities 1,401 1,090 1,283 Returns on investments and servicing of finance (71) (51) (119) Taxation (346) (225) (384) Capital expenditure and financial investment (241) (468) (824) Acquisition of subsidiary (17) (960) (1,015) Equity dividends paid (308) (284) (411) ________ ________ ________ Cash (outflow) / inflow before use of liquid resources and financing 418 (898) (1,470) Financing (76) 775 786 ________ ________ ________ Increase / (Decrease) in cash in the period 342 (123) (684) ________ ________ ________ Reconciliation of net cash flow to movement in net debt Increase / (Decrease) in cash in the period 342 (123) (684) Cash flow from financing 76 (775) (662) ________ ________ ________ Changes in net funds resulting from cash flows 418 (898) (1,346) Net debt at the beginning of the period (2,467) (1,121) (1,121) ________ ________ ________ Net debt at the end of the year (2,049) (2,019) (2,467) ________ ________ ________ Reconciliation of operating profit to net cash inflow from operating activities Operating profit 800 749 1,278 Amortisation of goodwill 57 60 140 Depreciation of fixed assets 41 38 81 Shares issued for non cash consideration - - 43 Decrease / (increase) in debtors 32 (167) (283) Increase (decrease) in creditors 471 410 24 _______ _______ _______ Net cash flow from operating activities 1,401 1,090 1,283 _______ _______ _______ SOLITAIRE GROUP Plc Notes 1. Basis of preparation of unaudited interim information The results for the six months ended 30 June 2002 have been reviewed by MacIntyre Hudson and have been prepared on the basis of the accounting policies set out in the consolidated financial statements at 31 December 2001. The comparatives for the year ended 31 December 2001 have been extracted from the audited consolidated financial statements for that period. The comparative numbers in the cash flow for the reconciliation of net debt have been adjusted to reflect a change in the method of displaying the funds arising from the issue of shares under the groups share option scheme. The audited consolidated financial statements for the year ended 31 December 2001 have been filed with the Registrar of Companies and include an unqualified audit report. The comparatives included in this report do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 2. Dividends The board has declared an interim dividend of 3.00p (2001: 2.75p) per ordinary share, payable on 22 November 2002 to shareholders on the register on 25 October 2002. 3. Earnings per ordinary share The calculation of earnings per share for the six months ended 30 June 2002 is based upon a profit of £496,000 (2001: £474,000) and the average number of ordinary 10p shares in issue of 4,623,581 (2001: 4,561,831). The group considers that the additional disclosure of the adjusted earnings per share before the effect of amortisation more truly reflects its operational performance. 4. Interim report Copies of the interim report for the six months ended 30 June 2002 will be sent to shareholders on 22 October 2002. Further copies will be available from the Company Secretary, Solitaire Group Plc, Lynwood House, 10 Victors Way, Barnet, Hertfordshire, EN5 5TZ and at the group's website, www.solitairegroup.com. This information is provided by RNS The company news service from the London Stock Exchange

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