Interim Results

W.H. Ireland Group PLC 15 August 2002 W.H. IRELAND GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS TO 31 MAY 2002 Key Points • Turnover of £3.4 million (2001: £3.9 million) • Pre-tax loss of £469,000 (2001: profit of £367,000) • Net assets of £8.4 million or 58.1p per share • Interim dividend of 0.5p per share (2001: 1.0p) Chairman, Sir David Trippier, commenting on prospects, said, 'It is to be hoped that the recent fall in the stockmarket will not further erode consumer confidence. On a historical perspective, it would be normal for the bear market we have seen over the last two and a half years to run its course and for more stable times to be approaching. Markets are more volatile than in the past and any upturn might prove as rapid as some of the recent falls. However, I can report that with a strong balance sheet and a sound management team, we are now considerably better placed to benefit from an upturn in the market.' Press enquiries: W.H. Ireland Group plc Tel: 0161 832 6644 David Youngman, managing director Derek Ashford, finance director Biddicks Tel: 020 7448 1000 Katie Tzouliadis CHAIRMAN'S STATEMENT As we are all aware, market conditions have been extremely difficult throughout the period under review and volatile markets, doubts over pensions and problems in America have all contributed to substantial stockmarket falls in the UK. Against this background, results for the half year under review show turnover reduced by 13% to £3.4 million (2001: £3.9 million) and a pre-tax loss of £469,000 (2001: profit of £367,000). I am, however, pleased to report that shareholders' funds have remained broadly similar to last year, which is due to the increase in the value of our investments. Net assets per share at the period end stood at 58.1p compared with 56.0p at the year end. Corporate Finance activities have been strong against a weak market backdrop and we have successfully completed a number of AIM introductions, including in early June, Ultimate Finance Group PLC, a factoring and invoice discounting company, in which we have taken a strategic equity stake of 26%. We have also acted in a number of fundraising and corporate issues. That trend has continued into the second half and we are now brokers to 18 fully listed or AIM traded companies. We continue to control overheads tightly and refocus the firm with the emphasis being on income-producing areas. The office in Lancaster has commenced trading satisfactorily following its opening in the Spring and we shall be opening a new office in the city of Preston in September. In the London office, Stockholm Investments, the advisory and discretionary portfolio management business which we acquired in October 2001, has integrated well and we are pleased with its performance. We are now examining ways of further developing this service in other parts of the Group. It is to be hoped that the recent fall in the stockmarket will not further erode consumer confidence. On a historical perspective, it would be normal for the bear market we have seen over the last two and a half years to run its course and for more stable times to be approaching. Markets are more volatile than in the past and any upturn might prove as rapid as some of the recent falls. However, I can report that with a strong balance sheet and a sound management team, we are now considerably better placed to benefit from an upturn in the market. I would like to thank all our staff for their hard work and loyalty during unsettling times in the market. In the light of our strong balance sheet but taking account of current trading, an interim dividend of 0.5p per share will be paid on 25 October 2002 to all shareholders on the register at 5 October 2002. Sir David Trippier, Chairman Consolidated Profit and Loss Account For the six months ended 31 May 2002 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 Nov 2001 31 May 2002 31 May 2001 (Restated) £'000 £'000 £'000 Group turnover 3,386 3,874 6,969 Administration expenses (3,773) (3,625) (7,656) Group operating (loss)/profit (387) 249 (687) Share of operating loss in joint venture (41) - (5) (428) 249 (692) Other interest receivable and similar income 66 166 285 Interest payable and similar charges (107) (48) (94) (Loss)/profit on ordinary activities before taxation (469) 367 (501) Tax on (loss)/profit on ordinary activities 59 (119) 22 (Loss)/profit on ordinary activities after taxation (410) 248 (479) Dividends on equity shares (72) (140) (284) Retained (loss)/profit for the period for group (482) 108 (763) Earnings per share - in accordance with FRS 14 - Basic (2.86)p 1.79p (3.45)p - Diluted (2.78)p 1.71p (3.29)p Earnings per share - in accordance with guidelines issued by UK Society of Investment Professionals - Basic (2.50)p 1.89p (3.21)p - Diluted (2.43)p 1.80p (3.07)p Statement of Total Recognised Gains and Losses Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 Nov 2001 31 May 2002 31 May 2001 Restated £'000 £'000 £'000 (Loss)/profit for the period (482) 108 (763) Unrealised surplus on revaluation of fixed asset investments 746 1,176 473 Realised surplus on revaluation of fixed asset investments 48 - 691 Taxation on realised surplus on revaluation of fixed asset investments (10) - (207) Foreign exchange difference on the carrying value of the joint venture 3 - (3) Total recognised gain for the period 305 1,284 191 Prior period adjustment - 2,404 2,404 305 3,688 2,595 Note of Historical Cost Profits and Losses Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 Nov 2001 31 May 2002 31 May 2001 Restated £'000 £'000 £'000 Reported (loss)/profit on ordinary activities before taxation (469) 367 (501) Realisation of fixed asset investment revaluation gains 48 - 691 Historical cost profit on ordinary activities before taxation (421) 367 190 Historical cost (loss)/profit retained for the period (441) 108 (279) after the provision for taxation and dividends Consolidated Balance Sheet As at 31 May 2002 Unaudited Unaudited 31 May 2001 Audited 31 May 2002 (Restated) 30 Nov 2001 £'000 £'000 £'000 Fixed assets Intangible assets 1,904 435 1,955 Tangible assets 4,926 801 926 Investments 4,005 3,880 3,190 Investment in joint venture 12 58 50 10,847 5,174 6,121 Current assets Debtors 26,769 53,417 45,327 Investments 15 89 22 Cash at bank and in hand 4,362 5,649 5,962 31,146 59,155 51,311 Creditors due within one year (28,489) (54,815) (48,513) Net current assets 2,657 4,340 2,798 Total assets less current liabilities 13,504 9,514 8,919 Creditors due after one year (5,148) (1,060) (868) Net assets 8,356 8,454 8,051 Capital & reserves Called up share capital 946 924 946 Shares to be issued 425 - 425 Share premium account 1,300 1,056 1,300 Investment revaluation reserve 3,623 3,580 2,877 Other reserves 544 544 544 Retained profits 1,518 2,350 1,959 Equity shareholders funds 8,356 8,454 8,051 Net assets per share 58.09p 60.56p 55.97p Consolidated Cash Flow Statement Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 Nov 2001 31 May 2002 31 May 2001 Restated £'000 £'000 £'000 Net cash (outflow)/inflow from operating activities (1,190) (224) 571 Returns on investments and servicing of finance (35) 126 200 Taxation 3 (370) (701) Capital expenditure and financial investment (4,207) (301) 31 Acquisitions and disposals - - (425) Cash outflow before management of liquid resources and financing (5,429) (769) (324) Equity dividends paid (144) (126) (265) Financing 3,973 (13) (6) Decrease in cash in the period (1,600) (908) (595) Reconciliation of operating profit to operating cash flow Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 Nov 2001 31 May 2002 31 May 2001 Restated Operating (loss)/profit (387) 249 (687) Depreciation 192 145 311 Amortisation 51 13 33 Profit on sale of fixed assets (7) 1 (5) Decrease/(increase) in debtors 18,551 (12,017) (3,958) (Decrease)/increase in creditors (19,597) 11,438 4,800 Decrease/(increase) in current asset investments 7 (53) 77 (1,190) (224) 571 Analysis of net cash At beginning of the Cash flow At end of the period period Cash at bank and in hand 5,962 (1,600) 4,362 Debt due after one year (500) (4,296) (4,796) Debt due within one year (500) 306 (194) Finance leases (53) 17 (36) 4,909 (5,573) (664) NOTES 1. The interim report, which is the responsibility of the directors and has not been audited, was approved by the directors on 12 August 2002. 2. The figures for the six months ended 31 May 2002 have been prepared using the same accounting policies as for the year ended 30th November 2001 and the accounts for the six months ended 31 May 2001 have been restated to take account of the treatment of the acquisition of Readycount Limited and changes in accounting policy. As detailed in the audited accounts for the year ended 30 November 2001 the acquisition of Readycount Limited on 24 September 2001 has been accounted for under merger accounting principles. Accordingly the accounts for the six month period ended 31 May 2001 have been restated to include the results of Readycount Limited as if it had been part of the Group from the beginning of the period. During 2001 the directors changed the accounting policy in relation to the presentation of turnover. Previously, interest receivable and interest payable arising in the normal course of investment business were shown net below operating profit within interest receivable. Under the revised accounting policy, the company follows generally accepted industry practice and the financial statements show interest receivable and payable in the normal course of investment business within turnover. 3. These unaudited interim financial statements do not constitute statutory accounts. They have, however, been reviewed by the auditors whose report is included. The figures for the year ended 30 November 2001 have been extracted from the audited accounts for that year. The comparative figures for the financial year ended 30 November 2001 are not the company's statutory accounts for that year. Those accounts have been reported on by the company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section S237(2) or (3) of the Companies Act 1985. 4. Fixed Assets Property Motor Computers Total Vehicles Fixtures & Fittings £'000 £'000 £'000 £'000 Cost At beginning of period 321 1,250 1,571 Additions 4,080 61 61 4,202 Disposals (37) (37) At end of period 4,080 345 1,311 5,736 Depreciation At beginning of period 102 543 645 Charge for period 41 151 192 On disposals (27) (27) 116 694 810 Net Book Value At 31 May 2002 4,080 229 617 4,926 At 30 November 2001 - 219 707 926 5. The company has now adopted FRS19 'Deferred Tax' for the six months ended 31 May 2002, but adopting this policy has no material effect on the comparative figures for the six months ended 31 May 2001 and the year ended 30 November 2001. The company has no current plans to sell any of the Fixed Asset Investments, but should they be sold at the revalued amount included in the Balance Sheet at 31 May 2002, tax of approximately £1,087,000 would be payable. 6. A final dividend for the year ended 30 November 2001 of 1p per share costing £143,849 was paid on 13 May 2002. It is proposed that an interim dividend for the year ending 30 November 2002 of 0.5p per share costing £71,925 be paid on 25 October 2002 to shareholders on the register on 4 October 2002. 7. The basic earnings per share for the period has been calculated by dividing the profit on ordinary activities after taxation by the weighted average number of shares in issue during the period being 14,319,506 (six months to 31 May 2001, 13,840,084 and year ended 31st November 2001, 13,897,535). 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 share options and warrants outstanding during the year. The additional weighted average number of shares used for the diluted calculation is 448,058 (six months to 31 May 2001 691,520, and year ended 30 November 2001 661,732). INDEPENDENT REVIEW REPORT BY KPMG AUDIT PLC Introduction We have been instructed by the company to review the financial information for the six months ended 31 May 2002, which comprises: the consolidated profit and loss account; statement of total recognised gains and losses; note of historical cost profits and losses; consolidated balance sheet; consolidated cash flow statement; reconciliation of operating profit to operating cash flow; analysis of net cash and notes 1 to 7. 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. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing Practices Board. 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 is substantially less in scope than an audit performed in accordance with 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 May 2002. KPMG Audit Plc Chartered Accountants Leeds This information is provided by RNS The company news service from the London Stock Exchange

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