Interim Results - 6 Months to 30 September 1999

Falkland Islands Holdings PLC 8 December 1999 Interim Results For The Six Months Ended 30 September 1999 Chairman's Statement Financial Summary The interim results for the six month period to 30 September 1999 were broadly similar to those for the same period of the previous year. Turnover of £5.2 million (1998: £5.1 million) generated an operating profit of £560,000 (1998: £583,000). Profit after interest and tax was £369,000 (1998: £351,000) yielding an earnings per share of 6.0p (1998: 5.7p). Net assets increased to £2.4 million from £2.1 million at 31 March 1999. Bank debt was reduced from £1.75 million to £1.25 million. The Directors are not recommending an interim dividend, however if the full year results are in line with expectations it is anticipated a final dividend of not less than last year's will be proposed. Review of Activities As reported previously, the 1999 fishing season started well with record catches of Ilex squid. This level of activity continued for the whole of the season. As a consequence, fishing support activities with our Far Eastern clients show a significant increase over the same period last year. Development of infrastructure projects including housing construction by the Falkland Islands Government continued. This impacted positively upon retail sales which increased as did income from vehicle supply and servicing. Port services and management suffered a reduction in activity with the departure of the oil company exploration rig and support vessels. Hotel operations experienced a quiet time which is normal during the South Atlantic winter period and shipping operations were lower due to a reduction in cargo demand to the Islands. Three voyages were completed in the period as compared with four in the same period last year. Overall the Group's performance was in line with expectations. Current Trading and Prospects There are indications that the recovering fortunes of our Far Eastern clients will ensure their greater participation in the Falkland Islands fishery during the 2000 season. This will impact favourably upon our agency services and the level of revenue collected by the Falkland Islands Government for the fishing licences. Resumption of the air links with South America in August 1999 is expected to result in an increase in the number of tourists visiting the Islands. The full benefits are unlikely to be seen until the year 2000 austral summer period as the tour companies plan well ahead. Visitors to the Islands arriving by sea in this summer period are expected to increase by up to 10% providing further opportunities for the Group's hotel and retailing services. The oil companies which drilled exploratory wells within the Falkland waters continued to analyse the data acquired, with early information offering encouraging signs. During the period the Company completed a Joint Venture Agreement with Cambridge Mineral Resources and onshore mineral exploration in the Islands continues. We have recently been advised that HR Holdings ('HRH') has been successful in its tender to the Ministry of Defence ('MOD') for the Falkland Islands Re-Supply Contract. The contract will be a five-year appointment based on three years from 1 January 2000, with an MOD option for a two year extension. An extension was achieved on the existing contract. We expect to gain significant benefits from being appointed as its sub-contractor in the Islands to service this contract. We will now be re-starting discussions with HRH with a view to combining our operations. However, it is unlikely, even if the talks are successful, that we will be in a position to put proposals to shareholders before the end of the current financial year. The Group continues to seek further opportunities for commercial expansion within the area of the South Atlantic as well as within its area of expertise in the UK. Shareholders Register As in the previous year, in July 1999 the Company offered a free dealing service for the holders of 100 shares or less. This resulted in the shareholder register being reduced by approximately 400. The Company has now approximately 7,600 shareholders of which 5,700 hold 100 shares or less. J H Gainham Chairman Enquiries Falkland Islands Holdings plc 01279 461630 John Gainham, Chairman Square Mile Communications 0207 601 1000 Kevin Smith Falkland Islands Holdings plc Interim Results For The Six Months Ended 30 September 1999 Unaudited Interim Consolidated Profit and Loss Account Unaudited Unaudited Audited 30 30 31 March September September 1999 1998 1999 £000 £000 £000 Turnover 5,194 5,068 10,941 Cost of sales (3,678) (3,562) (7,589) ------------------------------------------------------------------------------ Gross profit 1,516 1,506 3,352 Administrative expenses (1,141) (1,110) (2,348) Other operating income 185 187 352 ------------------------------------------------------------------------------ Operating profit (note 1) 560 583 1,356 Net interest (13) (63) (105) ------------------------------------------------------------------------------ Profit on ordinary activities before taxation 547 520 1,251 Taxation on profit on ordinary activities (note 2) (178) (169) (388) ------------------------------------------------------------------------------ Profit on ordinary activities after taxation 369 351 863 Dividend - - (244) ------------------------------------------------------------------------------ Retained profit for the financial period 369 351 619 ------------------------------------------------------------------------------ Earnings per share (note 3) 6.0p 5.7p 14.1p ------------------------------------------------------------------------------ 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 The calculation of the earnings per ordinary share is based on a profit of £369,000 (1998: £351,000) and ordinary shares of 6,110,037 (1998: 6,110,037) being the weighted average number of shares in issue during the period. The fully diluted earnings per share is not materially different from the basic earnings per share disclosed. 4 The interim report has been prepared on the basis of the accounting policies set out in the Group's 1999 Annual Report. 5 The results for the year ended 31 March 1999 as shown in the statement do not constitute statutory accounts but are an abridged version of the Company's 1999 accounts which have been filed with the Registrar of Companies and upon which the audit report was unqualified. Falkland Islands Holdings plc Interim Results For The Six Months Ended 30 September 1999 Unaudited Interim Consolidated Balance Sheet Unaudited Unaudited Audited 30 30 31 March September September 1999 1998 1999 £000 £000 £000 Fixed assets Tangible assets 2,990 2,919 2,948 ------------------------------------------------------------------------------ Current assets Stocks 2,780 3,110 2,663 Debtors 1,429 1,046 1,655 Cash at bank and in hand 1,354 1,288 1,703 ------------------------------------------------------------------------------ 5,563 5,444 6,021 Creditors: amounts falling due within one year (3,779) (3,771) (4,153) ------------------------------------------------------------------------------ Net current assets 1,784 1,673 1,868 ------------------------------------------------------------------------------ Total assets less current liabilities 4,774 4,592 4,816 Creditors: amounts falling due after more than one year (1,428) (1,919) (1,857) Provisions for liabilities and charges (902) (866) (884) ------------------------------------------------------------------------------ Net assets 2,444 1,807 2,075 ------------------------------------------------------------------------------ Capital and Reserves Called up share capital 611 611 611 Other reserves 703 703 703 Profit and loss account 1,130 493 761 ------------------------------------------------------------------------------ 2,444 1,807 2,075 ------------------------------------------------------------------------------

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