Interim Results
Teather & Greenwood Holdings PLC
14 December 2000
Teather & Greenwood Holdings plc
Interim results for the six months ended 31 October 2000
HIGHLIGHTS
- Strong growth across all business areas
- Turnover £18,205,000 (1999: £9,189,000), up 98%
- Operating profit £3,599,000 (1999: £1,958,000), up
84%
- Profit before tax £3,665,000 (1999: £2,022,000), up
81%
- Earnings per share 8.7p (1999: 5.0p), up 74%
- Maiden interim dividend of 0.5p
- Net cash of £5,503,000 (1999: £2,731,000)
- The corporate client list grew to 78 (1999: 67)
- 22 corporate transactions (1999: 14), with
£164,800,000 (1999: £111,000,000) raised on behalf of
clients
Jeremy Delmar-Morgan, Chairman, comments:
'The first half of the year produced very profitable
growth. We have historically generated the majority of
our profits during the second half of the year, which has
started well. We continue to view the future with
considerable optimism.'
For further information, please contact:
Teather & Greenwood Limited 020 7426 9000
Jeremy Delmar-Morgan, Chairman
Ken Ford, Chief Executive
Brian Rowbotham, Finance Director
Tim Davis, Director of Corporate Affairs
NOTE TO EDITORS
Teather & Greenwood Limited is one of the UK's leading
independent stockbrokers, specialising in providing
corporate finance (including M&A), institutional sales,
research and market making services for an increasing
number of growing smaller and mid-cap public companies.
In addition, it provides institutional sales and research
coverage of significant UK and international equities and
has dedicated teams for closed-end funds, contracts for
difference, bonds and fixed-interest instruments.
Private clients are offered discretionary, advisory and
execution-only broking services and a range of tax-
efficient products.
Teather & Greenwood Limited is the principal operating
company of Teather & Greenwood Holdings plc.
For more information on Teather & Greenwood Limited and
its services, please visit the company's website:
www.teathers.com
CHAIRMAN'S STATEMENT
I am delighted to be able to report on further progress
across the company during the six months ended 31 October
2000. Teather & Greenwood Limited has again increased its
range of services and grown its client bases across the
various business areas with a consequent improvement in
profitability.
This progress was referred to in August's Annual General
Meeting statement when shareholders were advised that
since the publication of full-year results in June,
revenues from all divisions of Teather & Greenwood Limited
had exceeded the Board's expectations and that
profitability in the first quarter of the new financial
year was considerably better than the corresponding period
last year.
FINANCIAL HIGHLIGHTS AND DIVIDEND
Turnover increased to £18,205,000 (1999: £9,189,000),
producing operating profit of £3,599,000 (1999:
£1,958,000). Profit before taxation increased to
£3,665,000 (1999: £2,022,000). The balance sheet at the
half-year end was equally sound, with net cash of
£5,503,000 (1999: £2,731,000).
These results take into account significant investment
made during the period in a number of revenue-generating
areas. We have added a bonds and fixed-interest team and
expanded our closed-end funds and contracts for difference
teams. As is always the case, the priority when making
such investments is for an early contribution to
profitability and these teams are proving no exception to
that rule. We have also invested in information
technology and substantially developed our on-line trading
service.
Earnings per share grew to 8.7p (1999: 5.0p). The Board
is recommending a maiden interim dividend of 0.5p, which
will be payable on 31 January 2001 to shareholders on the
register at 3 January 2001. The Board believe that this
dividend reflects a balance between profitability during
the period, our confidence in the future and the need to
reinvest in the continuing development of Teather &
Greenwood Limited.
TEATHER & GREENWOOD LIMITED
The corporate finance department, which specialises in
advising smaller and growing public companies, had another
very successful period. The department completed 22
transactions, raising a total of £164.8 million on behalf
of clients. Overall, the client list grew by 11 to 78.
The department's dedicated mergers and acquisitions,
smaller companies institutional sales, dealing and market
making teams also contributed strongly to this success and
the department currently has a very healthy pipeline of
potential transactions.
The equities research department continued to expand the
number of analysts and companies followed. This expansion
reflects the growing corporate client list and increasing
coverage of non-client stocks, both large and small, which
has the dual benefit of increasing the company's appeal to
a wider range of institutional clients. In so doing, it
also provides opportunities to generate higher levels of
commission. Consequently, our larger companies sales and
dealing teams had an extremely successful and profitable
period.
Teather & Greenwood Limited's membership of the European
Securities Network is also proving very beneficial,
particularly in respect of widening further the non-UK
institutional client base. Yet perhaps the best
endorsement of the quality of our research is winning, for
the third year in succession, the AIM Awards' Best
Research Award.
Elsewhere, the market making team now provides coverage of
almost all corporate clients, with further additions
planned. The closed-end funds team improved profitability
and completed its first corporate transaction during the
period.
The private client department has responded well to the
operational review and subsequent reorganisation that has
taken place. Given the new direction of this department
and the nature of the business it is now developing, it
has been renamed Teather & Greenwood Investment
Management.
To support this expansion and to ensure we have adequate
operational flexibility in the future, considerable
further investment is currently being made in systems
renewal, development and support.
MOVE TO THE OFFICIAL LIST AND SHARE BONUS ISSUE
As part of Teather & Greenwood Holdings plc's continuing
corporate development, the Group moved in July to the
Official List of the London Stock Exchange. This incurred
costs of £152,000 and was an appropriate step for Teather
& Greenwood Holdings plc. This was followed in August by
a two-for-one share bonus to improve liquidity of the
shares.
BOARD AND EMPLOYEES
In August, the Board announced the appointment of Nicholas
Stagg as a non-executive director. He is Managing
Director of W S Atkins International Ltd and a Non-
executive Director of Inventive Leisure plc.
On behalf of the Board, I would like to welcome those
employees who have joined since June and thank everybody
for their continuing dedication and effort in building a
very successful business.
FUTURE DEVELOPMENTS
A number of other complementary activities such as fund
management products are currently under review. Given
the often high prices attached to businesses within the
financial sector, our preferred route remains the
recruitment of individuals or teams who quickly can
develop new business areas.
During 2001, we expect to launch our proprietary on-line
share trading system. This service will be a premium
service to be made available to existing institutional and
private clients as well as being marketed extensively in
its own right.
OUTLOOK
The first half of the year produced very profitable
growth. We have historically generated the majority of
our profits during the second half of the year, which has
started well. We continue to view the future with
considerable optimism.
Jeremy Delmar-Morgan
Chairman
14 December 2000
Group profit and loss account for the six months ended 31
October 2000
6 months 6 months Year
ended ended ended
31.10.00 31.10.99 30.04.00
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
TURNOVER 18,205 9,189 30,904
--------- --------- ---------
OPERATING COSTS (14,606) (7,321) (21,274)
--------- --------- ---------
OPERATING PROFIT 3,599 1,958 9,630
--------- --------- ---------
Profit on disposal of
investment properties - 12 7
--------- --------- ---------
Profit on ordinary
activities before 3,599 1,970 9,637
interest
Net interest receivable 66 52 96
--------- --------- ---------
Profit on ordinary
activities before 3,665 2,022 9,733
taxation
Taxation on profit on
ordinary activities (1,257) (692) (3,030)
--------- --------- ---------
Profit for the 2,408 1,330 6,703
period/year
Equity dividend (139) - (370)
--------- --------- ---------
Profit transferred to
reserves 2,269 1,330 6,333
========= ========= =========
EARNINGS PER SHARE 8.7P 5.0P 24.8P
========= ========= =========
DILUTED EARNINGS PER 8.0P 4.7P 23.2P
SHARE
========= ========= =========
DIVIDEND PER SHARE 0.5P - 1.3P
========= ========= =========
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Profit for the
financial period 2,408 1,330 6,703
========= ========= =========
Balance sheet as at 31 October 2000
31.10.00 31.10.99 30.4.00
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
FIXED ASSETS
Tangible assets 1,395 459 972
Investments 750 100 100
--------- --------- ---------
2,145 559 1,072
--------- --------- ---------
CURRENT ASSETS
Trading positions 8,153 992 3,073
Debtors 166,753 71,323 181,166
Cash 7,627 3,721 9,622
--------- --------- ---------
182,533 76,036 193,861
--------- --------- ---------
CREDITORS: AMOUNTS
FALLING DUE WITHIN ONE 170,034 70,877 182,601
YEAR
--------- --------- ---------
NET CURRENT ASSETS 12,499 5,159 11,260
--------- --------- ---------
Total assets less
current liabilities 14,644 5,718 12,332
========= ========= =========
CAPITAL AND RESERVES
Called up share capital 2,788 881 925
Share premium account 2,229 1,683 4,049
Other reserves 14 814 14
Profit and loss account 9,613 2,340 7,344
--------- --------- ---------
EQUITY SHAREHOLDERS' 14,644 5,718 12,332
FUNDS
========= ========= =========
Group cash flow statement for the six months ended 31
October 2000
6 months 6 months Year to
to to 30.4.00
31.10.00 31.10.99 (audited)
(unaudited) (unaudited)
£'000 £'000 £'000
NET CASH
INFLOW/(OUTFLOW) FROM 3,858 (2,361) (262)
OPERATING ACTIVITIES
RETURNS ON INVESTMENTS
AND SERVICING OF
FINANCE
Interest received 66 53 97
Interest paid - (1) (1)
--------- --------- ---------
Net cash inflow from
returns on investments
and servicing of 66 52 96
finance
TAXATION
Corporation tax
(paid)/recovered (1,298) 7 (1,229)
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT
Receipts from sales of
tangible fixed assets - 824 1,048
Payments to acquire
tangible fixed assets (698) (102) (1,022)
Purchase of trade (650) - -
investments
--------- --------- ---------
Net cash
(outflow)/inflow from (1,348) 722 26
capital expenditure
EQUITY DIVIDEND PAID (370) (112) (112)
FINANCING
Issue of ordinary share
capital 42 - 1,611
--------- --------- ---------
INCREASE/(DECREASE) IN 950 (1,692) 130
CASH
========= ========= =========
NOTES
1. TURNOVER AND SEGMENTAL ANALYSIS
6 MONTHS ENDED 31.10.00
OPERATING
TURNOVER PROFIT/(LOSS)
£'000 £'000
Financial services 18,205 3,599
Other income
--------- ---------
18,205 3,599
========= =========
6 MONTHS ENDED 31.10.99
OPERATING
TURNOVER PROFIT/(LOSS)
£'000 £'000
Financial services 9,182 2,014
Other income 7 (56)
--------- ---------
9,189 1,958
========= =========
YEAR ENDED 30.04.00
OPERATING
TURNOVER PROFIT/(LOSS)
£'000 £'000
Financial services 30,897 9,774
Other income 7 (144)
--------- ---------
30,904 9,630
========= =========
The net gain on trading in financial instruments is shown
below and is included in the turnover for financial
services.
6 MONTHS 6 MONTHS YEAR ENDED
ENDED ENDED 30.04.00
31.10.00 31.10.99 £'000
£'000 £'000
2,304 1,205 4,349
========= ========= =========
2.EARNINGS PER SHARE
The earnings and numbers of shares in issue or to be
issued used in calculating the earnings and diluted
earnings per share were as follows:
31.10.00
DILUTED
EARNINGS EARNINGS
£'000 £'000
Earnings 2,408 2,408
========== ==========
Number of shares 30,005,888 27,777,012
========== ==========
Earnings per share 8.0p 8.7p
========== ==========
31.10.99
DILUTED
EARNINGS EARNINGS
£'000 £'000
Earnings 1,330 1,330
========== ==========
Number of shares 28,220,136 26,418,345
========== ==========
Earnings per share 4.7p 5.0p
========== ==========
30.04.00
DILUTED
EARNINGS EARNINGS
£'000 £'000
Earnings 6,703 6,703
========== ==========
Number of shares 28,865,427 27,042,705
========== ==========
Earnings per share 23.2p 24.8p
========== ==========
The number of shares and earnings per share reflect the
bonus issue of 2 for 1 made on 4 August 2000. The earlier
periods have been adjusted accordingly.
Calculation of number of shares at 31 October 2000.
31.10.00
DILUTED
EARNINGS EARNINGS
£'000 £'000
At 1 May 2000 9,246,415 9,246,415
Bonus issue 4 August 18,492,830 18,492,830
2000
Weighted average number
of shares issued during 37,767 37,767
period
Dilutive effect of
share option schemes 2,228,876
----------- -----------
30,005,888 27,777,012
31.10.99
DILUTED
EARNINGS EARNINGS
£'000 £'000
At 1 May 2000 7,472,782 7,472,782
Shares issued 5 August 1,333,333 1,333,333
1999
Dilutive effect of
share option schemes 600,597
----------- -----------
9,406,712 8,806,115
Comparatives restated
as a result of bonus
issue on 4 August 2000 28,220,136 26,418,345
30.04.00
DILUTED
EARNINGS EARNINGS
£'000 £'000
At 1 May 2000 7,472,782 7,472,782
Shares issued 5 August 1,333,333 1,333,333
1999
Weighted average number
of shares issued during 208,120 208,120
period
Dilutive effect of
share option schemes 607,574
----------- -----------
9,621,809 9,014,235
Comparatives restated
as a result of bonus
issue on 4 August 2000 28,865,427 27,042,705
3.RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW
FROM OPERATING ACTIVITIES
6 MONTHS 6 MONTHS 12 MONTHS
TO TO TO
30.10.00 30.10.99 30.04.00
£'000 £'000 £'000
Operating profit 3,599 1,958 9,630
Depreciation 274 66 242
(Increase) in trading
positions (5,080) (23) (2,028)
Decrease/(increase) in 14,413 46,864 (62,979)
debtors
(Decrease)/increase in
creditors (9,348) (51,226) 54,873
--------- --------- ---------
NET CASH
INFLOW/(OUTFLOW) FROM 3,858 (2,361) (262)
OPERATING ACTIVITIES
========= ========= =========
4.NET FUNDS AT THE END OF THE PERIOD
6 MONTHS 6 MONTHS 12 MONTHS
TO TO TO
30.10.00 30.10.99 30.04.00
£'000
£'000 £'000
Bank balances 7,627 3,721 9,622
Loan and overdraft (2,124) (990) (5,069)
--------- --------- ---------
5,503 2,731 4,553
========= ========= =========
5. INVESTMENTS
The company is the beneficial owner of 100,000 London
Stock Exchange ordinary shares of 5p, each which have been
included in the balance sheet at the cost of £1 (1999 -
£1).
The financial information for the year ended 30 April 2000
and the period ended 31 October 2000 does not constitute
statutory accounts as defined in Section 240 of the
Companies Act 1985. Statutory accounts for the year ended
30 April 2000 have been delivered to the Registrar of
Companies. These statutory accounts were audited by
Deloitte & Touche and their report thereon was
unqualified. Copies of the interim results are available,
free of charge to the public on any week day at the
registered office of the Company (Beaufort House, 15 St
Botolph Street, London EC3A 7QR) and at the offices of the
Company's financial adviser and stockbroker, ING Barings
Limited, 60 London Wall, London EC2M 5TQ.
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