Interim Results

Falkland Islands Holdings PLC 10 December 2003 FALKLAND ISLANDS HOLDINGS PLC Interim Results for the six months ended 30 September 2003 HIGHLIGHTS Falkland Islands Holdings PLC, a UK quoted company operating in the Falkland Islands in general trading activities, announces interim results for the six months ended 30 September 2003. â€¢ First half financial performance impacted by reduced shipping profits: - Turnover of Â£4.9m (2002: Â£5.3m) - Pre-tax profits of Â£300,000(2002: Â£421,000) - Basic earnings per share of 3.2p(2002:4.6p) â€¢ Stronger start and outlook for second half: - Shipping revenues restored to normal levels - Retailing benefiting from redevelopment and food hall extension - Agreement to act as sole agents for Caribbean Alliance Insurance Company - Plans under consideration for use of Group land for housing development (subject to relevant planning and other permissions) â€¢ Continued exploration activity: - Oil: Several large leads identified; talks underway with potential joint partners - Minerals - Future work programme being drawn up David Hudd, Chairman of Falkland Islands Holdings plc commented: 'Whilst the first half of the year was disappointing due to the poor shipping result, the fishing season activities in 2002/3 have restored confidence and trading conditions overall have improved and we believe the Group will generate a positive result for the year. The Group is also investing in a number of new developments, which have the potential to generate significant growth in the longer term.' 10 December 2003 Enquiries: Falkland Islands Holdings PLC Tel: 07771 893 267 David Hudd, Chairman College Hill Tel: 020 7457 2020 James Henderson Chairman's Interim Statement For the six months ended 30 September 2003 Review of results As we anticipated, the first half of the year produced lower profits than last year. Profit before tax fell to Â£300,000 (2002: Â£421,000) on turnover 7% lower at Â£4.9m (2002: Â£5.3m).Earnings per share were 3.2p (2002: 4.6p) . The fall in profit was attributable to reduced shipping revenues, in the aftermath of the poor fishing season in 2001/2 which we referred to at the time of the announcement of our year end results. However, activity levels have now been restored and a satisfactory result is anticipated for the year. The directors are not recommending payment of an interim dividend but, in the absence of unforeseen events, they would anticipate paying a final dividend of not less than 5.5p in respect of the year ended 31 March 2004. Cash generation remains strong and the Group maintained net cash balances of Â£452,000, the same level as at 31 March 2003. Capital expenditure of approximately Â£389,000, primarily relating to the West Store redevelopment, was financed from cash flow. Operations Operating profits declined to Â£304,000 from Â£435,000. Retailing profits were maintained despite the disruption resulting from the extensive building work at the West Store. Management services, the fishing agency and the automotive operations, produced results comparable to last year. The shortfall in profits was largely attributable to the decline in shipping activities and a disappointing result from the Upland Goose Hotel. Three voyages were completed in the period (2002:3). However, bulk freight cargoes were at low levels reflecting the reduction in infrastructure and capital spending by the Islanders which followed the 2001/2 fishing results. Shipping costs were significantly higher as a result of increased bunkering costs and the decline of sterling against the euro. Occupancy levels at the Upland Goose were lower this year ; the hotel benefited last year from increased visitor numbers linked to the 20th anniversary of the 1982 conflict. Developments The West Store extension and fit out was completed in July at an overall cost of Â£550,000. The extension provides a 65% increase in the food hall floor area. The introduction of the Waitrose own label range, which was one of the key drivers in the decision to carry out the development, has proved popular with customers. For the first time the Falklands has a store offering a comprehensive range of products in surroundings comparable to retail food outlets in the UK. The Group has successfully concluded an agreement to act as agents for Caribbean Alliance Insurance Company (CAIC) which is replacing Royal & Sun Alliance (RSA) as the main provider of insurance cover for the Islands.CAIC is a former subsidiary of RSA and the approval of the Falklands Government has been secured for the change. CAIC specialises in providing insurance cover for island communities. We believe that their appointment will lead to a significant increase in the range of insurance products for our clients. Given the forecast shortage of available housing in Stanley, the Group is in the process of drawing up plans to utilise some of its landbank for housing development. Any such developments will be subject to planning and other necessary approvals. Exploration Activities Both the oil and gas and the mineral exploration licences have been the subject of much activity over the last 6 months and your directors remain committed to ensuring that the Company participates in future exploration activity. The Hydrocarbon oil and gas consortium, in which the Group has a 20% interest, has completed the reprocessing and analysis of some 1,000km of the 4,460 km of seismic data which was purchased last year. Several large leads have been identified which the consortium believes warrant further investigation and it is likely that additional seismic will be shot in 2004/5. The Group intends to limit its capital expenditure on this oil and gas exploration activity through the introduction of a farm-in partner and is in discussion with a number of potential partners. The Onshore mineral Joint venture, in which the Group holds a 33% interest, has a prospecting licence covering the whole of the Falkland Islands. Discussions are continuing on the future work programme with potential joint venture partners. Outlook The Falklands economy has recovered from the uncertainty earlier in the year and the trading performance of the Group has improved since the end of the first half. The Group is pursuing a number of new developments which your Board believes will generate long term growth. The board is confident that the Group will achieve a satisfactory result for the year. UNAUDITED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT Notes Unaudited Unaudited Audited 6 Months to 6 Months to Year ended 30 September 30 September 31 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Turnover 4905 5284 11447 Cost of sales (3338) (3608) (7871) Gross Profit 1567 1676 3576 Administrative expenses (1363) (1338) (2789) Other Operating Income 100 97 265 Operating profit 304 435 1052 1 Net Interest (4) (14) (27) Profit on ordinary activities before taxation 300 421 1025 Taxation on profit on ordinary (102) (139) (308) activities 2 Profit on ordinary activities after taxation 2 198 282 717 Dividends - - (336) Retained profit for the financial period 198 282 381 Earnings per share 3 - basic 3.2p 4.6p 11.8p - fully diluted 3.2p 4.6p 11.2p UNAUDITED CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 30 September 30 September 31 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Fixed assets Intangible assets 81 22 63 Tangible assets 3555 3127 3275 Investments 112 112 112 3748 3261 3450 Current assets Stocks 2793 3355 2858 Debtors 1222 1249 1715 Cash at bank and in hand 952 615 957 4967 5219 5530 Creditors: amounts falling due within one year (3643) (3568) (4214) Net current assets 1324 1651 1316 Total assets less current liabilities 5072 4912 4766 Creditors: amount falling due after more than one year (352) (639) (250) Provision for liabilities and charges (1136) (1011) (1130) Net Assets 3584 3262 3386 Capital and reserves Called up share capital 617 615 617 Share Premium account 54 31 54 Other Reserves 703 703 703 Profit and loss account 2210 1913 2012 3584 3262 3386 UNAUDITED CONSOLIDATED CASH FLOW for the six months ended 30 September 2003 Unaudited Audited Unaudited 6 months to Year to 6 months to 30 September 2002 '31 March 2003 30 September 2003 Notes Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Cash flow from operating 403 137 1600 activities Returns on investment and sevicing of finance Interest received 9 7 14 Interest paid (13) (21) (40) (4) (14) (26) Taxation UK Corporation tax - - (30) Overseas taxation paid - (91) (343) 0 (91) (373) Capital Expenditure Purchase of tangible fixed (389) (139) (396) assets Purchase of intangible fixed (18) (22) (63) assets disposal of fixed assets 3 - (404) (161) (459) Equity dividends paid - - (304) Cash inflow/(outflow) before (5) (129) 438 financing Financing Shares issued - - 25 Repayment of secured loan - - (250) (Decrease)/ increase in cash (5) (129) 213 NOTES TO THE UNAUDITED CONSOLIDATED CASH FLOW for the six months ended 30 September 2003 Unaudited Unaudited Audited 6 Months to 6 Months to Year ended 30 September 30 September 31 March 2003 2002 2003 Notes Â£'000 Â£'000 Â£'000 Reconciliation of net cash flow to movment in net funds/(debt) (Decrease)/increase in cash in the (5) (129) 213 period Cash outflow from decrease in debt - - 250 Movement in net debt in period (5) (129) 463 Net cash/(debt) at start of period 457 (6) (6) Net cash/(debt) at 30 September 452 (135) 457 Reconciliation of operating profit to operating cash flows Operating profit 304 435 1052 Depreciation charges 106 98 207 Decrease/(increase) in stocks 65 (199) 298 Decrease/(increase) in debtors 493 311 (156) (Decrease)/increase in creditors (565) (508) 199 and provisions Net cash inflow from operating 403 137 1600 activities Analysis of change in net debt As at As at 31 March Cash 30 September 2003 Flows 2003 Â£'000 Â£'000 Â£'000 Cash at bank and in hand 957 (5) 952 Debt due within one year (250) (250) Debt due after one year (250) (250) Total 457 (5) 452 Notes: 1. All significant turnover, profits and net assets are generated from general trading in the Falkland Islands. 2. The taxation charge has been estimated at 32.5%. 3. Earnings per share has been calculated on profit after tax of Â£198,000 (2002: Â£282,000) based on the weighted average number of shares in issue, excluding shares held in the Employee Share Ownership Plan of 6,095,037 (2002: 6,070,037). The fully diluted earnings have been further adjusted by the dilutive outstanding share options resulting in a weighted average number of shares of 6,154,943 (2002:6,170,722) 4. The interim report has been prepared on the basis of the accounting policies set out in the group's 2003 Annual Report. 5. The results for the year ended 31 March 2003 as shown in the statement do not constitute statutory accounts but are an abridged version of the Company's 2003 accounts which have filed with the Registrar of Companies and upon which the audit report was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. The Interim report was approved by the Board on 10 December 2003. This information is provided by RNS The company news service from the London Stock Exchange

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