Interim Results

Fiske PLC 24 January 2003 Chairman's Statement There has been no overall improvement in trading conditions since I reported to you in August 2002. Markets continue to be volatile and depressed. The general economic conditions are still not conducive to a resumption in levels of private client activity which is the core of our business. Net losses for the half-year ended 30 November 2002 were Â£413,000. These net losses are arrived at after making provisions of Â£425,000 for the writing down of goodwill which are further referred to below. They also take account of an exceptional profit of Â£319,000 arising on the sale of a part of our shareholding in the London Stock Exchange. The acquisition of the fund management business of Ionian, which we completed in June 2002, and the subsequent acquisition of the business of one of our associates, Leslie Harmon, have proved to be successful albeit in the present difficult climate. We anticipate further benefits to accrue in the future. Since the Ionian acquisition occurred in the first half of this current year, we have carefully considered the carrying forward of goodwill arising on consolidation. Bearing in mind the Stock Market values of quoted fund management groups and the reduction in value of funds under management, we have concluded that the most appropriate and prudent policy at the outset is to write this down to a realistic figure and then to provide by equal annual instalments for the writing off of the remaining balance over a period of ten years. This gives rise to a write-off of Â£395,000 which has been provided in the first half of this year and goodwill carried forward of Â£753,000 to be provided for in equal annual instalments of Â£75,000 thereafter. In the case of the Harmon acquisition, goodwill will be written off over four years giving rise to a provision in the first half of Â£30,000 and an annual charge thereafter of Â£75,000. The total provision for goodwill in the first half is thus Â£425,000. Since 30 November 2002, being the second half of the current year, we have sold a further 25,000 shares in the London Stock Exchange to produce a profit of Â£78,500 and now retain 75,000 shares held at nil cost, which were quoted at 344.75p per share on 23 January 2003. We have continued to closely monitor our overheads and savings have been made wherever possible. We are not pessimistic about the future and we believe that value will emerge in the equity markets for our clients once this period of global economic uncertainty is over. Bearing in mind the strength of our balance sheet, we have decided to pay an interim dividend, out of Revenue Reserves, of 1p per share reduced from 2p for the first half of last year. G Maitland Smith Chairman 24 January 2003 Independent Review Report to Fiske plc Introduction We have been instructed by the company to review the financial information for the six months ended 30 November 2002 which comprises the consolidated profit and loss account, the consolidated balance sheet, the consolidated cash flow statement and related notes (1 to 6). 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. The directors are also responsible for ensuring 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 30 November 2002. Deloitte & Touche Chartered Accountants London 24 January 2003 Consolidated Profit and Loss Account for the six months ended 30 November 2002 Six months ended Six months ended Year ended 30 November 2002 30 November 2001 31 May 2002 Unaudited Unaudited Audited Notes Â£'000 Â£'000 Â£'000 TURNOVER Gross commission receivable 1,138 1,312 2,326 Commission payable (327) (525) (904) Other income 122 206 301 Continuing operations 740 993 1,723 Acquisitions 193 - - 933 993 1,723 OPERATING COSTS Goodwill write-off (exceptional) 1 (395) - - Staff costs (638) (554) (987) Depreciation (51) (54) (111) Other operating charges (659) (727) (1,469) (1,743) (1,335) (2,567) Continuing operations (424) (342) (844) Acquisitions (including goodwill write-off) (386) - - OPERATING LOSS (810) (342) (844) Gain on disposal of fixed asset investment 319 1,097 1,097 Other income from fixed asset investments 33 13 19 Interest receivable and similar income 56 113 186 Interest payable (1) - (1) 407 1,223 1,301 (LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION (403) 881 457 Taxation on (loss)/profit on ordinary activities (10) (282) (162) (LOSS)/PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION (413) 599 295 Dividends paid and proposed 4 (80) (130) (429) Retained (loss)/profit for the period/year (493) 469 (134) Retained profit brought forward 1,672 1,806 1,806 Retained profit carried forward 1,179 2,275 1,672 Basic (losses)/earnings per share 3 (5.2)p 9.2p 4.5p Diluted (losses)/earnings per share 3 (5.2)p 9.2p 4.4p Headline losses per share 3 (3.2)p (3.3)p (7.3)p Headline diluted losses per share 3 (3.2)p (3.3)p (7.3)p Consolidated Balance Sheet 30 November 2002 As at As at As at 30 November 2002 30 November 2001 31 May 2002 Unaudited Unaudited Audited Note Â£'000 Â£'000 Â£'000 FIXED ASSETS Tangible assets 120 208 159 Intangible assets 2 1,122 - - Investments 347 115 387 1,589 323 546 CURRENT ASSETS Market and client debtors 7,151 7,237 6,424 Other debtors 203 160 132 Cash at bank and in hand 2,868 4,675 3,716 10,222 12,072 10,272 CREDITORS: amounts falling due within one year Market and client creditors (6,950) (7,293) (6,507) Other creditors (559) (852) (664) (7,509) (8,145) (7,171) NET CURRENT ASSETS 2,713 3,927 3,101 TOTAL ASSETS LESS CURRENT LIABILITIES 4,302 4,250 3,647 CAPITAL AND RESERVES Called up share capital 1,996 1,630 1,630 Share premium account 1,127 345 345 Profit and loss account 1,179 2,275 1,672 EQUITY SHAREHOLDERS' FUNDS 4,302 4,250 3,647 Consolidated Cash Flow Statement for the six months ended 30 November 2002 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Six months ended Six months ended Year ended 30 November 2002 30 November 2001 31 May 2002 Unaudited Unaudited Audited Â£'000 Â£'000 Â£'000 Operating loss (810) (342) (844) Depreciation charges 51 54 111 Amortisation 30 - - Goodwill write-off (exceptional) 395 - - (Increase)/decrease in debtors (451) 2,631 3,471 Increase/(decrease) in creditors 322 (2,788) (3,502) Net cash outflow from operating activities (463) (445) (764) CASH FLOW STATEMENT Six months ended Six months ended Year ended 30 November 2002 30 November 2001 31 May 2002 Unaudited Unaudited Audited Â£'000 Â£'000 Â£'000 Net cash outflow from operating activities (463) (445) (764) Returns on investment and servicing of finance 68 126 204 Taxation UK corporation tax repaid/(paid) 145 (182) (488) Capital expenditure and financial investment (27) 1,073 791 Acquisitions (272) - - Equity dividends paid (299) (244) (374) (Decrease)/increase in cash (848) 328 (631) (Decrease)/increase in cash in the period (848) 328 (631) Change in net cash (848) 328 (631) Net funds brought forward 3,716 4,347 4,347 Net funds carried forward 2,868 4,675 3,716 Notes for the six months ended 30 November 2002 1.Goodwill In respect of the acquisition of Ionian Group Limited, a fund management business, on 5 June 2002 for Â£1.58 million, Fiske plc has decided, following a review of the business at 30 November 2002, to make a provision of Â£395,000 for impairment of the value of the business acquired. The balance of the goodwill resulting from the acquisition will be amortised in equal parts over the next ten years. In respect of the acquisition of the goodwill of the business of Mr Leslie Harmon and Mr Matthew Shock on 1 August 2002 for a consideration of Â£300,000, Fiske plc has decided to write off this goodwill in equal parts over four years. 2.Intangible Assets As at 30 November 2002 Â£'000 Fund management acquisition 753 Other acquisition 270 Fiscal Licence 99 1,122 3. Earnings per ordinary share Headline earnings per share has been calculated in accordance with the definition in the Institute of Investment Management Research ('IIMR') Statement of Investment Practice No. 1, 'The definition of IIMR Headline Earnings', in order to eliminate the exceptional gain arising on the disposal of London Stock Exchange shares and any effects of goodwill as follows: Six months ended Six months ended Year ended 30 November 2002 30 November 2001 31 May 2002 Unaudited Unaudited Audited Basic (losses)/earnings per ordinary share (5.2)p 9.2p 4.5p Add: Goodwill write-off 5.2p - - Less: Gain on disposal of fixed asset investment after taxation 3.2p 12.5p 11.8p Headline losses per ordinary share (3.2)p (3.3)p (7.3)p Diluted (losses)/earnings per ordinary (5.2)p 9.2p 4.4p share Add: Goodwill write-off 5.2p - - Less: Gain on disposal of fixed asset investment after taxation 3.2p 12.5p 11.7p Headline diluted losses per ordinary share (3.2)p (3.3)p (7.3)p 4. Dividend The interim dividend of 1p per share will be paid on 28 February 2003 to shareholders on the register on 7 February 2003. The shares will be marked ex-dividend on 5 February 2003. 5. Contingent Liability The group has received a small number of claims. The maximum exposure to the group is Â£350,000. The directors are of the opinion that the majority of these claims will not be sustained. 6. Basis of preparation Financial information for the year ended 31 May 2002 has been extracted from the Company's statutory accounts which have been delivered to the Registrar of Companies. The audit report on the accounts for the year ended 31 May 2002 was unqualified. The financial information contained in this Interim Report does not constitute the Company's statutory accounts within the meaning of section 240 of the Companies Act 1985. Enquiries: Clive Harrison - Chief Executive - (020) 7448 4700 This information is provided by RNS The company news service from the London Stock Exchange

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