Interim Results

Trio Holdings PLC 04 May 2004 4 May 2004 TRIO HOLDINGS PLC Interim Report for the six months ended 31 March 2004 CHAIRMAN'S STATEMENT Highlights for the six months ended 31 March 2004: Profit before tax Â£0.45 million (2003 - Â£0.51 million) Interim dividend 0.25p per share (2003 - 0.25p per share) Net assets at 31 March 2004 of Â£11.54 million (2003 - Â£11.17 million) Cash balances Â£10.29 million (2003 - Â£10.24 million) Turnover Â£16.05 million (2003 - Â£15.64 million) The six months under review can be characterised as 'uneventful'. In October 2003, moderately active trading was underpinned by the general expectation of rising US Dollar interest rates, but the unexpected US Employment statistics published in November 2003 tempered such expectations and a climate of low and stable rates has prevailed until recently. The 'money market' side of our business thrives on volatility in the shorter end of the yield curve, and therefore trading conditions during the period for traditional brokers in these product areas were becalmed. Happily these conditions led to material volatility in exchange rates, reciprocally providing lively trading conditions for our excellent Forward foreign exchange broking teams. A vivid example is that the US $/Â£ Stg spot exchange rate at the beginning of the period was 1.6630 then rising to a peak of 1.9140 in mid-February just under five months later, easing to 1.7745 today. A significant proportion of our revenue is calculated in US Dollars, and a lesser proportion in Euros. Our expenditure is inherently in Sterling. Overall there was therefore an adverse effect on the revenue/expense model of the Group that, although difficult to quantify precisely, was in the region of Â£250,000. Also during the last two months under review some preliminary expenditure of approximately Â£60,000 was incurred with a view to the establishment of a small satellite broking office in Switzerland. Therefore in this comparatively uneventful six months and despite the above factors, I am pleased that turnover overall, and indeed market share in Forward foreign exchange, improved modestly. The consolidated results for the Group show turnover of Â£16.05 million, and a profit before taxation of Â£0.45 million. Relative to the scale of our business, our very sizable and liquid balance sheet continues to underpin the Group. Net assets were Â£11.54 million, including the substantial cash balances of Â£10.29 million. In addition, trading since the half-year end is in line with expectations and the Board will therefore maintain the traditional interim dividend at 0.25p per share, which will be paid on 14 June 2004 to shareholders on the register on 14 May 2004. As mentioned above initial steps have been taken for the establishment of a small satellite broking office in Switzerland. Our strategy looks forward in the light of the growing appetite, inter alia, of particularly our indigenous European customer base, for Euro-expressed overnight index swaps known as EONIAs. We are presently engaged in the judicious and opportunistic employment of a few key brokers. Small premises have been secured, telephone dealer boards and the necessary Reuter, Bloomberg and computer facilities have been installed, and our expert IT team in London have created a virtual private network such that substantially all the back office functions can be provided remotely from London, at low marginal cost. In parallel with the establishment of this new Swiss office, the relevant interest rate product desks in London have been appropriately restructured to enable us to take advantage in due course of the expected enhanced complimentary order flows. Inherently such organic growth weighs onerously on operating profitability during the establishment period, which can be a significant length of time. But this modest expansionist move reflects our growing confidence in the longer-term viability of money broking within a 'hybrid' model, supporting traditional voice broking with the highest levels of technology and IT sophistication. I am once again pleased to report the continuing good performance of our 'Locals and Commercials' team, and particularly the success of our secure electronic transactional dealing system www.UK-Locals.com for Local Authority treasurers, building societies and banks, now extending to housing associations and universities. There were further landmarks in the period. We effected the first external sale directly to a bank of Trio Vantage, the sophisticated multi-instrument pricing, analytics and arbitrage software developed by our expert team within Trio Internet Systems Limited www.triointernetsystems.com. In March 2004, our small but highly professional OTC equity option broking team in Trio Equity Derivatives Limited, achieved a record month following a relatively quiet period. Corporate rumour and speculation continue to abound in this sector, where further consolidation is perhaps overdue, and competition for the attraction and retention of competent staff remains fierce, often to the advantage of only the legal profession. However we will continue to nurture and protect our recognised areas of niche excellence, and our balance sheet strength: therefore my cautiously confident view of the longer term future is undiminished. Enquiries to: DAVID HAGAN Executive Chairman, TRIO Holdings PLC Tel: 020 7469 9100 www.trio.co.uk www.uk-locals.com www.martin-brokers.com www.triointernetsystems.com www.acx.aero TRIO HOLDINGS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended 31 March 2004 (unaudited) 6 months 6 months Year to to to 31 March 31 March 30 Sept 2004 2003 2003 Â£000s Â£000s Â£000s Turnover 16,046 15,643 32,860 Net operating expenses (15,660) (15,224) (31,159) Operating profit 386 419 1,701 Share of loss of associated company (70) (69) (94) Net interest receivable less payable 131 156 246 Profit on ordinary activities before taxation 447 506 1,853 Taxation on profit on ordinary activities (346) (384) (834) Profit on ordinary activities after taxation 101 122 1,019 Dividends paid and proposed (209) (209) (626) Retained (loss)/profit for the period transferred to reserves (108) (87) 393 Basic earnings per share 0.12p 0.15p 1.22p Diluted earnings per share 0.12p 0.15p 1.22p Dividends per share 0.25p 0.25p 0.75p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 6 months 6 months Year to to to 31 March 31 March 30 Sept 2004 2003 2003 Â£000s Â£000s Â£000s Profit for the period 101 122 1,019 Foreign exchange translation differences on foreign currency investment in subsidiaries - 3 2 Total recognised gains and losses 101 125 1,021 TRIO HOLDINGS PLC CONSOLIDATED BALANCE SHEET as at 31 March 2004 (unaudited) 31 March 31 March 30 Sept 2004 2003 2003 Â£000s Â£000s Â£000s Fixed Assets Tangible assets 1,865 2,201 1,993 Investments 1 95 71 1,866 2,296 2,064 Current Assets Stock - 91 - Investments 277 - 277 Debtors: due within one year 5,016 4,950 5,062 Cash at bank and in hand 10,290 10,244 10,376 15,583 15,285 15,715 Creditors: due within one year (5,479) (5,640) (5,449) Net Current Assets 10,104 9,645 10,266 Total Assets Less Current Liabilities 11,970 11,941 12,330 Creditors: due after more than one year (429) (771) (681) Equity minority interests (1) (1) (1) Net Assets 11,540 11,169 11,648 Capital and Reserves Called up share capital 4,174 4,174 4,174 Capital reserve 2,474 2,474 2,474 Profit and loss account 4,892 4,521 5,000 Equity Shareholders' Funds 11,540 11,169 11,648 RECONCILIATION OF CONSOLIDATED MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS 6 months 6 months Year to to to 31 March 31 March 30 Sept 2004 2003 2003 Â£000s Â£000s Â£000s Profit for the period 101 122 1,019 Dividends paid and proposed (209) (209) (626) (108) (87) 393 Other recognised gains and losses - 3 2 Net (reduction in)/addition to equity shareholders' funds (108) (84) 395 Opening equity shareholders' funds 11,648 11,253 11,253 Closing equity shareholders' funds 11,540 11,169 11,648 TRIO HOLDINGS PLC CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31 March 2004 (unaudited) 6 months 6 months Year to to to 31 March 31 March 30 Sept 2004 2003 2003 Â£000s Â£000s Â£000s Net cash inflow from operating activities 1,126 755 1,917 Returns on investments and servicing of finance 131 156 246 Taxation (600) (1,256) (1,770) Capital expenditure and financial investment (107) (27) (69) Acquisitions and disposals - - (141) Dividends paid (417) (626) (835) Net cash flow before financing 133 (998) (652) Financing (219) (221) (435) Decrease in cash in the period (86) (1,219) (1,087) NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31 March 2004 (unaudited) 1. Reconciliation of operating profit to net cash inflow from operating results 6 months 6 months Year to to to 31 March 31 March 30 Sept 2004 2003 2003 Â£000s Â£000s Â£000s Operating profit 386 419 1,701 Depreciation charges 235 250 483 Decrease in debtors 46 226 167 Increase/(decrease) in creditors 459 (144) (449) Decrease in stock - 1 13 Exchange rate movements - 3 2 Net cash inflow from operating activities 1,126 755 1,917 2. Reconciliation of net cash flow to movement in net funds 6 months 6 months Year to to to 31 March 31 March 30 Sept 2004 2003 2003 Â£000s Â£000s Â£000s Decrease in cash in the period (86) (1,219) (1,087) Cash inflow from decrease in debt and lease financing 219 221 435 Movement in net funds in the period 133 (998) (652) Opening net funds 9,527 10,179 10,179 Closing net funds 9,660 9,181 9,527 NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31 March 2004 (unaudited) 3. Analysis of net funds At 1.10.03 Cash flow At 31.3.04 Â£000s Â£000s Â£000s Cash in hand and at bank 10,376 (86) 10,290 Finance leases (849) 219 (630) Total 9,527 133 9,660 NOTES TO THE ACCOUNTS For the six months ended 31 March 2004 (unaudited) 1. Profit and Loss Account There were no acquired or discontinued activities during the current period. The result arises from continuing operations. The results in foreign currencies are translated into Sterling at the average exchange rates ruling in the period. 2. Taxation Taxation has been estimated on the basis that the six month period forms an integral part of an annual reporting period. 3. Earnings per share The profit per share is based on the net profit after taxation attributable to ordinary shareholders and on a weighted average of the number of shares in issue in the period: 83,484,325 (2003: 83,484,325). 4. Unaudited accounts The interim results have been prepared in accordance with accounting policies set out in the accounts for the year ended 30 September 2003. The financial information in this report does not constitute full accounts as defined by section 240 of the Companies Act 1985. The figures and the financial information for the year ended 30 September 2003 have been compiled from an extract of the latest published accounts and do not constitute statutory accounts for the year. Those accounts have been delivered to the Registrar of Companies and included the report of the independent auditors which was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. TRIO HOLDINGS PLC REVIEW REPORT OF THE INDEPENDENT AUDITORS Introduction We have been instructed by the company to review the financial information for the six months ended 31 March 2004 which comprises the consolidated profit and loss account, the consolidated statement of total recognised gains and losses, the reconciliation of consolidated movements in equity shareholders funds, the consolidated balance sheet, the consolidated cash flow statement and related notes 1 to 4. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures are consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom auditing standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 March 2004. Deloitte & Touche LLP Chartered Accountants London 30 April 2004 This information is provided by RNS The company news service from the London Stock Exchange

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