Final Results
Cenkos Securities PLC
20 March 2008
Cenkos Securities plc ('the Company') together with its subsidiaries ('the Group')
PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS OF THE GROUP FOR THE YEAR ENDED 31 DECEMBER 2007
Cenkos Securities plc today announced its audited preliminary results for the year to 31 December 2007. The highlights
of the results comparing them with the last accounting period (which was for thirteen months) and these figures
produced on a pro-forma basis (to illustrate the effect on the Group's profit had all individual members of Cenkos LLP
been employed by the Group) are:
Financial Highlights
• Revenue up 65% to £53.8 million (2006: £32.7 million)
• Profit before tax for the year based on the figures presented within the attached preliminary
information are up 14% to £23.8 million (2006: £20.8 million)
• Profit before tax for the year is up 81% to £23.5 million (2006: £13.0 million) based on the pro
forma accounts set out in the operating and financial review.
• Underlying diluted EPS up 26% to 20.4p per share from 16.2p per share. This figure has been
adjusted for the non-recurring items so as to give a better view of the Group's performance on an on-going
basis (see note 7)
• Diluted EPS up 40% to 22.6p per share from 16.2p per share
• Other gains of £1.7 million has been recognised in the accounts relating to the profit on the
part disposal of our Guernsey based subsidiary
• The Board proposes a final dividend of 12p per share. This equals a total dividend of 22p per share for
the year and reflects the Company's dividend policy of having a low dividend cover, reflecting the cash
generative nature of the business. Equally the dividend levels take account of regulatory capital requirements
and are set so as not to constrain the growth of the business
Business Highlights
• Continued success in attracting new institutional and corporate clients
• The new teams recruited in the second half of 2006 have made a significant contribution to the
present set of results
• The successful flotation of our Guernsey based subsidiary on the Channel Island Stock Exchange
and part disposal of our holding in this company.
• The establishment of a fund management operation, recruitment of a team charged with setting up
a private client operation in Jersey.
• Delaying tactics by target company forced us to withdraw from a bid for Close Brothers Group plc.
Andrew Stewart - Chief Executive Officer
commented:
'This set of strong results clearly demonstrates that the Cenkos business model works and whilst successfully expanding
our Group we have managed to maintain the partnership ethos throughout all the businesses.
Whilst the markets in which we operate are difficult at the moment, the skill and commitment of our employees reduce
the impact of these conditions and indeed give rise to opportunities'.
Enquiries: Andrew Stewart - CEO Tel: +44 (0) 20 7397 8900
Further information on the Group and its activities is available on the Group's website www.cenkos.com
Chairman's Statement
It gives me great pleasure to announce a very strong set of results for the year ended 31 December 2007. This is the
first full year of trading since we floated on the Alternative Investment Market (AIM) in October 2006. Revenue has
increased by 65% from £32.7 million to £53.8 million. This increase is more impressive given that the comparison is
made against a thirteen month period and that it was achieved whilst the problems of the 'credit crunch' were
significantly affecting the markets in which we operate. The strength of these results, I believe, reflects the fact
that by the addition of high quality new teams in the latter part of 2006 and 2007, we have diversified our earnings.
This also bodes well for the future. These teams include ones specialising in investment funds, small cap companies,
institutional equities, fund management in the UK and wealth management in Jersey. During the year our teams completed
36 transactions raising some £1.7 billion of funds for our clients. These funds raisings covered a number of industry
sectors including media, clean energy, technology and investment funds.
At 31 December 2007 we had a client base which includes 72 (2006: 53) listed companies with a combined market
capitalisation of approximately £10.2 billion (2006: £8 billion). This represents a net increase of 19 clients during
the year. It is very much the Group's intention to continue to enlarge this base by adding good quality businesses
that meet our strict take on procedures. The present downturn in markets in our view increases our ability to recruit
further teams who have proven track records and who will respond to the Cenkos environment.
In the second half of the year we, along with our partner Landsbanki Islands hf, mounted a much publicised bid for
Close Brothers Group plc. We spent a considerable amount of time in putting this offer together and I am pleased to
report it had the full support of both our equity and debt providers. Our approach was welcomed by a number of
significant shareholders in and employees of Close Brothers Group plc. We were therefore extremely disappointed that
the transaction could not be completed and we note the movement in Close Brothers Group plc's shares since our
withdrawal. We will continue to look for other businesses where there can be significant shareholder value creation by
implementing the Cenkos business model within the target companies.
At the time of announcing our interim results to 30 June 2007 I discussed the uncertainty caused by concerns over the
US sub-prime market, a market to which we have no direct exposure. In most people's views general market conditions
have deteriorated further since I made these comments. Whilst Cenkos is not immune from these uncertainties and the
resulting lack of confidence within the investor community, we have an exciting pipeline which, allied with our low
fixed cost base and an overall remuneration package heavily skewed towards performance, we are in a better position
than most to deal with such events.
As I have mentioned before, the Directors intend to retain sufficient profits to meet the Group's regulatory capital
requirements and intend only to retain further profits where they consider that attractive investment opportunities
have been identified, which should be financed by the Group's internal resources. The Board are proposing a final
dividend of 12p per share. This equals a total dividend of 22p per share for the year. If approved at the Company's
AGM on 27 May 2008 we intend paying this dividend on 5 June 2008 to all shareholders on the register at 9 May 2008. In
the view of your Board, after this distribution the Group still has sufficient funds to pursue its growth strategy and
meet its regulatory capital obligations.
John Hodson
Chairman
20th March 2008
Financial Review
In order to provide greater clarity about the 2007 and 2006 performance, set out below is unaudited pro forma financial
information. The pro forma statement of profits has been prepared to illustrate the effect on the profits of the Group
if all individual members of Cenkos Securities LLP had been employed by the Group during the period to 31 December 2006
and year to 31 December 2007. On the basis of these pro forma figures revenue in the year ended 31 December 2007 rose
by 65% to £53.8 million (13 month period to 31 December 2006: £32.7 million) and profit before tax increased by 81% to
£23.5 million (13 month period to 31 December 2006: £13.0 million).
Pro forma Unaudited
1 January 07 1 December 05
to to
31 December 07 31 December 06
£ £
Continuing Operations
Revenue 53,791,053 32,670,329
Administrative expenses (33,960,937) (20,477,994)
Operating profit 19,830,116 12,192,335
Investment revenues - interest receivable 1,997,303 811,526
Finance costs - interest payable (13,686) (13,740)
Other gains and losses 1,708,518 -
Profit before tax 23,522,251 12,990,121
Tax (7,056,863) (3,978,747)
Profit for the year 16,465,388 9,011,374
Profit for period
Attributable to:
Equity holders of the parent 16,551,534 9,011,374
Minority interests (86,146)
-
16,465,388 9,011,374
Earnings per share
Basic 22.8p 16.2p
Diluted 22.6p 16.2p
In the statements for each period the administrative expenses have been increased by the amount of the minority
interest related to Cenkos LLP (31 December 2007: £296,167, 31 December 2006: £7,762,584) as this would be the
estimated increase in the Group's costs if all members of Cenkos LLP were to be employed by the Group. As at the 31
December 2007 the final partner resigned and was employed by Cenkos Securities plc.
We are delighted by this year's performance with earnings being up 83% to £16.5 million from £9.0 million. The table
below sets out the various income streams which make up our total revenue.
1 January 07 1 December 05
to to
31 December 07 31 December 06
£ £
Placing fees 32,146,030 21,408,581
Corporate Finance Fees 10,109,268 4,362,676
Commission income 7,679,972 2,210,026
Market Making 1,969,021 3,415,943
Wealth Management 1,886,762 1,273,103
53,791,053 32,670,329
This table demonstrates the point made in the Chairman's statement concerning the growing diversification of income and
whilst placing fees are still a major component of our revenue, M&A Corporate Finance fees and commission income from
secondary trading have grown significantly. The Board is proposing a final dividend of 12 p per share. The level of
dividend payout reflects the policy set by the Board which was set out in our last annual report and accounts.
Corporate broking and advisory
We have seen another year of growth, not only in turnover but also in the number of transactions completed and funds
raised. We continue to grow the number of retained corporate clients and have a clear defined strategy in place to
attract new clients. The Group was nominated adviser or corporate broker to 45 (2006: 32) companies as at 31 December
2007. During the year, the Group also raised some £ 1.1 billion (2006: £0.8 billion) for its clients. During the year
we have continued to add staff to these teams which we believe will enable us to organically grow this revenue area.
Institutional equities
The institutional equities team currently provides research driven investment recommendations to institutional clients.
At present, the team has particular expertise in the business services and consumer sectors, having recruited
professionals who were previously top ranked analysts in these sectors. Given that this activity is affected by the
move to unbundled services it is encouraging to note that the research produced is perceived by clients to be important
to them and a number have now elected to pay for research separately in addition to paying commission. The success of
this team has contributed to the significant increase in commission income during the year.
Market Making
The Group has market making capabilities to support the other services that it provides to its clients. The Group
makes markets in the securities of all companies where it has a broking relationship, its strategy being to take small
positions in a wide range of stocks, thereby providing liquidity. The Group does not engage in propriety trading and,
applies a range of position limits and monitoring procedures to any positions taken. By following this strategy we
have not experienced significant losses on our market making positions as a result of the recent instability in world
stock markets.
Investment Funds
In 2006, the Group recruited an Investment Funds Team. This team provides a broad range of services including
corporate broking, corporate finance, market making, and sales, with a sole focus on investment funds. They act as
counterparty for a large number of investment fund investors, and have a detailed knowledge of their asset allocation
strategies enabling successful secondary distributions and primary sales. The Group currently makes markets in
approximately 200 (2006: 200) investment fund securities, and by 31 December 2007, the Group has been appointed as
corporate broker to 27 (2006: 14) investment funds raising over £0.6 billion (2006: £0.1 billion), having completed 7
(2006: 2) transactions.
Offshore wealth management and stockbroking services
Offshore wealth management and stockbroking services are primarily provided through Cenkos Channel Islands Limited, a
50 per cent. owned subsidiary of the Company, which is based in Guernsey. Varying levels of stockbroking services,
from discretionary to execution-only, are provided primarily to high net-worth individuals, and also to financial
intermediaries and institutions. The business during the year has grown both in terms of the number of clients and
funds managed. These now stand at 530 (2006: 272) and £186 million (2006: £147 million) respectively. We have now
opened up an office in Jersey servicing the stockbroking requirements of high net worth private clients on that Island.
The office is staffed by experienced professionals recruited from Rathbones and we are in the process of recruiting
further teams of brokers.
In addition to the significant progress made during the year, we successfully floated the company on the Channel Island
Stock Exchange. We feel that this is an important step in the history of the company as it has created the only quoted
broker on the islands, serving the needs of that community. It also shows how we enable the worker-owners of the
business to be incentivised in a way that aligns their interests with the shareholders'. During the process of
listing, we took the opportunity to realise some of the value that had been created and reduced our holding from 75% to
50%.
Fund Management Business
During the year through a subsidiary, Cenkos Fund Management Limited, we set up a fund management business. This
operation already has an investment management agreement with an AIM quoted fund, which has a market capitalisation of
circa £60 million. The fund, The Rapid Realisations Fund Limited, specialises in making investments in pre-IPO
companies. The team we have recruited to run this business has a well established track record in this particular
area. Whilst we believe that this business will be a valuable contributor to the Group in the future it is unlikely to
make a positive contribution to the Group until 2008.
Balance Sheet
As can be seen from the balance sheet, the investment fund team uses (and will continue to use) significant levels of
capital to take position in the shares of quoted investment funds. These positions primarily facilitate institutional
client trading and support the strategies of its investment fund clients. As the investment funds business grows, the
level of capital used is expected to increase.
As mentioned before, during the year, we have increased the amount of secondary trading we undertake. This has caused
a significant increase in both our trade receivables and payables. The amounts included represent outstanding trades
at the balance sheet date. The balance sheet also shows a healthy increase in our cash resources, especially given the
increase in secondary trading positions.
People
We have continued to invest in our staff whilst maintaining a tight control over our overhead base and are looking to
acquire further high quality teams and businesses. Like our present teams, we believe that these teams should be
rewarded by a mixture of bonus and equity based payments that align their interests with those of our shareholders. We
have assembled an excellent team and I would like to thank them all for their achievements and hard work. We have made
a commitment to grow the business and we look forward to their continued support.
Close Brothers Group plc ('Close')
In November 2007 we, together with our partners Landsbanki Islands hf, made an indicative cash offer at a substantial
premium to the then share price for the entire equity of Close, as we believed a new incentivisation of the management
of the subsidiaries would lead to creating value and removing excessive costs. The directors of Close refused to meet
with us in spite of engaging with other parties who had not launched any bid at any price.
In January 2008, in spite of the turbulent markets we had the consideration firmly in place to increase our bid. It
quickly became obvious that in the period from November some Close directors had sought to undermine the Cenkos
approach with many of their staff to enable them to continue to dismiss the approach and had little intention of
pursuing this to a conclusion.
I am saddened by the total reluctance of Close to even talk to us whilst this was clearly against the expressed wishes
of a significant number of their shareholders.
We are a small company without large corporate overhead departments and therefore conducted a considerable amount of
work on this takeover internally. The majority of our 'costs' were personal ones but that said we incurred fees
relating to the bid of approximately £841,000 which have been fully expensed in 2007.
Outlook
Whilst the markets in which we operate are difficult at the moment, the skill and commitment of our employees reduce
the impact of these conditions and indeed give rise to opportunities. We will continue to expand our corporate client
base and believe that our ability to attract high quality individuals will serve the Group well in its objective of
being a first class, relationship based stock broking business.
Andrew Stewart
Chief Executive Officer
20 March 2008
Consolidated income statement
for the year ended 31 December 2007
1 January 07 1 December 05
to to
31 December 07 31 December 06
Note £ £
Revenue 53,791,053 32,670,329
Administrative expenses (33,664,770) (12,715,410)
Operating profit 20,126,283 19,954,919
Investment income - interest 2 1,997,303 811,526
receivable
Finance costs - interest payable 3 (13,686) (13,740)
Other gains and losses 4 1,708,518 -
Profit before tax 23,818,418 20,752,705
Tax 5 (7,056,863) (3,978,747)
Profit for the year 16,761,555 16,773,958
Attributable to:
Equity holders of the parent 16,551,534 9,011,374
Minority interests 210,021 7,762,584
16,761,555 16,773,958
Earnings per share
Basic 7 22.8p 16.2p
Diluted 7 22.6p 16.2p
All amounts shown in the consolidated income statement derive from continuing operations of the Group.
The profit attributable to the company in the year ended 31 December 2007 was £16,571,015 (13 month period ended 31
December 2006, £8,762,275)
Consolidated balance sheet
31 December 2007
31 December 07 31 December 06
£ £
Non-current assets
Property, plant and equipment 943,602 737,174
Available for sale investments 3,543,111 3,229,164
Deferred tax asset 320,996 158,356
4,807,709 4,124,694
Current assets
Trading investments - long positions 26,597,490 13,123,643
Trade and other receivables 56,762,723 39,620,045
Cash and cash equivalents 16,244,160 9,780,584
99,604,373 62,524,272
Total assets 104,412,082 66,648,966
Current liabilities
Trading investments - short (11,802,867) (5,127,238)
positions
Trade and other payables (46,761,366) (26,968,091)
(58,564,233) (32,095,329)
Net current assets 41,040,140 30,428,943
Non-current liabilities
Deferred tax liabilities (761,216) (669,032)
Total liabilities (59,325,449) (32,764,361)
Net assets 45,086,633 33,884,605
Equity
Share capital 725,936 725,936
Share premium account 22,699,777 22,733,114
Available for sale reserve 1,776,171 1,556,408
Retained earnings 19,632,501 8,843,146
Equity attributable to equity holders of the
parent 44,834,385 33,858,604
Minority interests 252,248 26,001
Total equity 45,086,633 33,884,605
Consolidated cash flow statement
for the year ended 31 December 2007
1 January 07 1 December 05
to to
31 December 07 31 December 06
£ £
Operating activities
Profit for the period 16,761,556 16,773,958
Adjustments for:
Net finance income (1,983,617) (797,786)
Tax expense 7,056,863 3,978,747
Depreciation of property, plant and equipment 227,546 133,552
Other gains and losses (1,708,517) -
Share based payment expense 1,349,126 372,832
Operating cash flows before movements in working capital 21,702,957 20,461,303
Increase in net trading investments (6,798,218) (7,973,865)
Increase in trade and other (17,056,353) (14,198,456)
receivables
Increase in trade and other payables 18,573,611 13,452,715
Distributions to former members of a subsidiary (208,500) (7,762,584)
Net cash flow from operating activities before tax and interest 16,213,497 3,979,113
Interest paid (13,686) (13,605)
Taxation paid (5,942,443) (2,891,208)
Net cash generated from operating activities 10,257,368 1,074,300
Investing activities
Interest received 1,911,625 535,729
Net proceeds from the part disposal of 2,021,261 -
subsidiary
Purchase of property, plant and equipment (433,974) (506,281)
Net cash generated in investing activities 3,498,912 29,448
Financing activities
Dividends paid (7,259,367) (4,822,834)
Proceeds from issue of equity shares - 1,612,147
Fees related to issue of equity (33,337) -
shares
Redemption of preference shares - (400,000)
Issue of capital by subsidiary to minority interests - 26,000
Net cash used in financing activities (7,292,704) (3,584,687)
Net increase/(decrease) in cash and cash equivalents 6,463,576 (2,480,939)
Cash and cash equivalents at beginning of period 9,780,584 12,261,523
Cash and cash equivalents at end of period 16,244,160 9,780,584
Consolidated statement of changes in equity
for the year ended 31 December 2007
Share Share Available Retained Minority Total
capital premium for sale earnings Interests
account reserve
£ £ £ £ £ £
At 1 December 2005 440,283 3,962,551 2,325,452 4,281,774 6,001 11,016,061
Shares issued 285,653 20,819,945 - - - 21,105,598
Capital contributed by minority - - - - 26,000 26,000
interest
Profit for the period - - - 9,011,374 - 9,011,374
Profit allocated to minority - - - - 7,762,584 7,762,584
interests
Distribution of profit to former - - - - (7,762,584) (7,762,584)
members of a subsidiary
Transfer of amounts to payables on - - - - (6,000) (6,000)
retirement of minority interest
members
Revaluation of available-for-sale - - (1,098,634) - - (1,098,634)
investments
Reversal of deferred tax liability - - 329,590 - - 329,590
on revaluation of available-for-sale
investments
Credit to equity for equity settled - - - 372,832 - 372,832
share based payments
Share issue costs taken through - (2,049,382) - - - (2,049,382)
premium
Dividends paid - - - (4,822,834) - (4,822,834)
At 31 December 2006 725,936 22,733,114 1,556,408 8,843,146 26,001 33,884,605
Interest acquired by minority - - - - 313,393 313,393
interest
Profit for the period - - - 16,551,534 - 16,551,534
Profit allocated to minority - - - - 210,021 210,021
interests
Distribution of profit to former - - - - (208,500) (208,500)
members of a subsidiary
Transfer of amounts to payables on - - - - (88,667) (88,667)
retirement of minority interest
members
Revaluation of available-for-sale - - 313,947 - - 313,947
investments
Deferred tax liability on - - (94,184) - - (94,184)
revaluation of available-for-sale
investments
Credit to equity for equity settled - - - 1,349,126 - 1,349,126
share based payments
Deferred Tax on share based payments - - - 148,062 - 148,062
Share issue costs taken through - (33,337) - - - (33,337)
premium
Dividends paid - - - (7,259,367) - (7,259,367)
At 31 December 2007 725,936 22,699,777 1,776,171 19,632,501 252,248 45,086,633
Notes to the financial information
for the year ended 31 December 2007
1. Accounting policies
General information
Cenkos Securities plc is a company incorporated in the United Kingdom under the Companies Act 1985. The Group's
principal activity is the provision of investment banking services. This financial information is presented in pounds
sterling because that is the currency of the primary economic environment in which the Group operates.
Basis of accounting
The accounting policies used in arriving at the preliminary figures are consistent with those which were set out in the
audited financial statements for the thirteen month period ended 31 December 2006. Whilst the financial information
included in this preliminary annoucement has been computed in accordance with International Finacnial Reporting
Standards (IFRSs) as adopted by the European Union, this announcement does not itself contain sufficient information to
comply with IFRSs. The Group's 2007 Statutory Accounts comply with IFRSs.
Adoption of new and revised standards
In the current year, the Group has adopted IFRS 7: Financial Instruments Disclosures, which is effective for annual
reporting periods beginning on or after 1 January 2007, and the related amendment to IAS 1 Presentation of Financial
Statements. The impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand the disclosures provided
in these financial statements regarding the Group's financial instruments and management of capital.
All financial information has been prepared in accordance with IFRSs for use in the European Union. Up until 30
November 2005, the Group prepared its financial statements under UK Generally Accepted Accounting Principles ('UK
GAAP'). From 1 December 2005, the Group consolidated financial statements are prepared in accordance with IFRS and
International Financial Reporting Interpretations Committee ('IFRIC') interpretations adopted by the European Union,
and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS, with the prior period
being presented on the same basis.
At the date of authorisation of this financial information, the following Standards and Interpretations which have not
been applied in these financial statements were in issue but not yet effective:
IFRS 8 - Operating Segments
IFRIC 11 IFRS 2 - Group and Treasury Share Transactions
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no
material impact on the financial statements of the Group.
2. Investment income - interest receivable 1 January 07 1 December 05
to to
31 December 07 31 December 06
£ £
Interest income generated from:
Bank deposits 584,357 535,866
Other loans and receivables 1,412,946 275,660
Total Interest revenue 1,997,303 811,526
Interest income generated from other loans and receivables represents the recognition of the unwinding of the discount
factor applied to the amount due in respect of the partly paid B shares.
3. Finance costs - interest payable 1 January 07 1 December 05
to to
31 December 07 31 December 06
£ £
Interest on bank overdrafts and 13,686 13,740
loans
4. Other gains and losses 1 January 07 1 December 05
to to
31 December 07 31 December 06
Revenue Expenses Net gain Net gain
£ £ £ £
Gain on part disposal of a 2,150,161 (441,643) 1,708,518 -
subsidiary
Part disposal of subsidiary
On 15th November 2007, the Group disposed of part of its holding in Cenkos Channel Islands Limited, amounting to 11% of
its share capital. A further 14% was disposed of on 11th December 2007, when Cenkos Channels Islands Limited was
successfully floated on the Channel Islands Stock Exchange. These disposals of shares have reduced the Group's holding
from 75% to 50%, however control is still maintained by the parent and as such the results of Cenkos Channel Islands
Limited have continued to be consolidated.
15 November 07 11 December 07 31 December 07
£ £ £
Non-current assets 18,187 17,227 15,616
Current assets 2,813,102 3,160,526 2,227,040
Cash & cash equivalents 1,369,761 1,057,469 1,125,295
Current liabilities (3,524,976) (3,561,251) (2,734,561)
Net assets at date of disposal 676,074 673,971 633,390
15 November 07 11 December 07 Total
£ £ £
Share of net assets disposed 218,387 94,356 312,743
Fees related to disposal - 128,900 128,900
Cost of sale 218,387 223,256 441,643
Gain on disposal 531,613 1,176,905 1,708,518
Total Consideration 750,000 1,400,161 2,150,161
Satisfied by Cash 750,000 1,400,161 2,150,161
Net cash inflow arising on disposal:
Cash consideration 750,000 1,400,161 2,150,161
5. Tax
The tax charge comprises: 1 January 07 1 December 05
to to
31 December 07 31 December 06
£ £
Current tax
United Kingdom corporation tax at 30% (2006 - 30%) based on the profit for the period 7,071,441 4,091,258
Adjustment in respect of prior period - 43,845
Total current tax 7,071,441 4,135,103
Deferred Tax
Credit on account of timing (14,578) (158,356)
differences
Charge on account of timing - 2,000
differences
Total deferred tax (14,578) (156,356)
Total tax on profit on ordinary activities 7,056,863 3,978,747
The tax charge for the period differs from that resulting from applying the standard rate of UK corporation tax of 30%
to the profit before tax for the reasons set out in the following reconciliation.
1 January 07 1 December 05
to to
31 December 07 31 December 06
£ £
Profit on ordinary activities before tax 23,818,418 20,752,705
Tax on profit on ordinary activities at the UK corporation tax rate of 30% (2006: 30%) 7,145,525 6,225,812
Tax effect of:
Depreciation in excess of capital allowances 1,801 (22,990)
Expenses that are not deductible in determining taxable profits 595,504 91,161
Different tax rates of subsidiaries operating in other jurisdictions (13,294) (31,632)
Income not subject to corporation tax (733,850) (2,327,449)
Adjustment for IFRS 2 relating to staff options 21,905 -
Adjustment for IFRS 2 relating to staff options due to tax rate change 3,436 -
Adjustment for loss relief not claimed 35,836 -
-
Adjustment in respect of prior period - 43,845
Tax expense and effective tax rate for the period 7,056,863 3,978,747
In addition to the amount charged to the income statement, deferred tax relating to the fair value of the Group's
available for sales investments amounting to £94,184 (2006: £329,590 credited directly to equity) has been charged
directly to equity.
6. Dividends 1 January 07 1 December 05
Amounts recognised as distributions to equity holders in the period: to to
31 December 07 31 December 06
£ £
Interim dividend for the year ended 30 June 2007 of 10p (May 2006: 100p) per share 7,259,367 4,822,834
Proposed final dividend for the year ended 31 December 2007 of 12p (2006: Nil) per share.
The proposed final dividend has not been included as a liability in these financial statements. Subject to shareholders
approval at the Annual General Meeting, the final dividend will be paid on 5th June 2008 to all shareholders on the
register of members as at 9th May 2008.
The Annual General Meeting of the Company will be held 27th May 2008 at 12 noon at 6.7.8. Tokenhouse Yard, London, EC2R
7AS.
7. Earnings per share 1 January 07 1 December 05
The calculation of the basis and diluted earnings per share is based on the following to to
data:
31 December 07 31 December 06
£ £
Earnings
Earnings for the purposes of basic earnings per share being net profit attributable to 16,551,534 9,011,374
equity holders of the parent
Effect of dilutive potential ordinary shares: - -
Earnings for the purposes of diluted earnings per share 16,551,534 9,011,374
Number of shares No. No.
Weighted average number of ordinary shares for the purposes of basic earnings per share 72,593,670 55,503,588
Effect of dilutive potential ordinary shares:
Share options 520,806 57,870
Weighted average number of ordinary shares for the purpose of diluted earnings per share 73,114,476 55,561,458
The denominators for the purposes of calculating both basic and diluted earnings per share have been adjusted to
reflect the sub-division of shares on 31 October 2006. The weighted average number of shares considered for the current
period also includes the total number of B shares, even though they are partly paid shares, as these shares are
entitled to a full dividend payout.
In the calculation above earnings includes other gains and losses. In the view of the Board, these are non-recurring
items and as a result should be excluded to present the true on-going earnings of the Group. The table below shows the
results of this adjustment:
Earnings
Earnings for the purposes of basic & diluted earnings per share 16,551,534 9,011,374
Other gains and losses (1,708,518) -
Costs associated with aborted takeover bid 841,313 -
Gain from disposal of employee B shares (803,593) -
Underlying earnings for the purposes of basic and diluted earnings per share 14,880,736 9,011,374
Underlying EPS
Basic 20.5p 16.2p
Diluted 20.4p 16.2p
Additional Information
The financial information in this announcement does not constitute statutory accounts within the meaning of section 240
of the Companies Act 1985 but is derived from those accounts. The auditors have reported on the statutory accounts for
the year ended 31 December 2007. Their report was unqualified and did not contain statements under section 237 (2) or
(3) of the Companies Act 1985. Those accounts have not been delivered to the Registrar of Companies, but will be
delivered following the Company's Annual General Meeting.
Statutory accounts for the thirteen month period ended 31 December 2006 have been delivered to the Registrar of
Companies. The auditors have reported on those accounts. Their report was unqualified and did not contain statements
under section 237 (2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
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