Interim Results

Man Group PLC 2 November 2000 UNAUDITED INTERIM RESULTS FOR HALF YEAR ENDED 30 SEPTEMBER 2000 HALF YEAR BUSINESS SUMMARY * Asset Management recurring net management fee income up 16% to £31.5 million * Brokerage result up 37% to £14.0 million * Underlying earnings per share up 32% to 13.7 pence ** * Interim dividend up 7% to 4.6 pence * Change of name to Man Group plc effective 29 September * Funds under management at 30 September £2.8 billion ($4.2 billion) * Further strategic development of both Asset Management and Brokerage activities since 30 September: * Completion of the acquisition of Glenwood, a leading US alternative investment fund of funds manager * Completion of the First American acquisition, a US private client futures and options broker * Funds under management at 31 October, including Glenwood, £3.6 billion ($5.2 billion)*** ** Underlying earnings per share represents earnings from continuing operations excluding net performance income from Asset Management, Sugar Australia and goodwill amortisation *** Estimated, including funds under advice FINANCIAL HIGHLIGHTS Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 Asset Management net management fee income £31.5m £27.1m £55.5m Asset Management net performance fee income £1.0m £15.7m £30.2m Brokerage £14.0m £10.2m £23.7m Sugar Australia £1.0m £0.7m £2.1m Profit before tax - continuing operations £47.5m £53.7m £111.5m Loss before tax and exceptional items - - (£10.6m) (£34.5m) discontinued operations Profit before tax and exceptional items £47.5m £43.1m £77.0m Exceptional items - discontinues operations (£6.8m) (£42.8m) (£113.5m) Profit before tax £40.7m £0.3m (£36.5m) Man Group plc is a world leader in the fast growing field of alternative investment products where it has a powerful market presence and a strategic position in the high-margin private client sector. The Group is also amongst the world's leading providers of brokerage services in futures and options for both institutional and private clients, and is also an intermediary in the world's metals, foreign exchange and equities markets. Stanley Fink, Chief Executive said: 'We have made significant progress in both our businesses. The recurring component of Group profits has been substantially increased and we have made two strategic acquisitions. Investor interest in alternative investment products continues to broaden and the acquisition of Glenwood provides our Asset Management business with a US based fund of funds product that is in strong demand, and which is complementary to our existing manager styles. Our Brokerage business continues to capitalise on its international customer base, and the order flows that this generates leaves us well positioned to benefit from industry consolidation and the expansion of electronic trading on world exchanges. The Board is pleased with the developments in the first half and are confident about the Group's prospects.' Enquiries Man Group 020 7285 3000 Stanley Fink Peter Clarke Gavin Anderson 020 7457 2345 Marc Popiolek Lindsey Harrison HALF YEAR REVIEW to 30 September 2000 Group strategy and overview Man has become a focused Financial Services group following the disposal of its Agricultural Products activities in March 2000, and now comprises a specialist Asset Management business and an international Brokerage operation. To reflect this change, and following shareholder approval at the Annual General Meeting in August, the Group changed its name to Man Group plc with effect from 29 September 2000. Our businesses have continued to capitalise on their strong market positions and international scale. Although continuing Group pre-tax profit at £47.5 million is down slightly on the comparable period, these businesses have together made significant progress in the first half of the year, increasing the recurring component of profits and continuing to improve the quality of the Group's income. Compared to the prior year, net management fee income from Asset Management is up 16% and the Brokerage result is up 37%. The total contribution from Asset Management in the first half is less than for the comparable period due to lower overall product performance from AHL, in common with other managed futures funds, resulting in reduced performance related income. Glenwood, and some of our other new managers, did see positive performance in the first half but overall performance related income was modest. Since 30 September we have seen positive performance, with AHL on average up nearly 4% for the month of October. The bulk of AHL fund products are now about 6% below incentive fee highs. The Board's strategy is to enhance shareholder value through continuing to improve the financial performance of its existing businesses and expanding them both organically and through acquisition. The first half has seen progress in both elements of this strategy. The Group's primary financial objective is growth in underlying earnings per share, comprising the recurring net management fees from Asset Management and income from Brokerage. On this measure, diluted earnings per share are up 32% on the comparable period last year. The Board also strives for continual improvement in return on capital. Annualised post-tax return on capital for the first half is 26.1% compared to 20.8% for the equivalent period last year. Both businesses have seen further development through acquisition since 30 September 2000. On 4 October we completed the acquisition of Glenwood for £74.3 million ($110 million). Glenwood provides the Group with additional product structuring skills and complementary investment management styles whose performance is uncorrelated with our other main manager AHL. Glenwood is a long-established Chicago-based alternative investment fund of funds manager with over £0.9 billion ($1.4 billion) of funds under management and £203 million ($300 million) of funds under advice. The Group has had a joint venture with Glenwood for over five years, marketing Glenwood products to the Group's non-US client base. The Glenwood acquisition is expected to be earnings enhancing in the second half of this year before amortisation of goodwill. In Brokerage, we announced on 4 October the further expansion of our US operations through the acquisition of the customer accounts of First American, a private client futures and options brokerage business based in Chicago. The integration of First American into Man's existing operations should access economies of scale and is expected to be earnings enhancing in the second half of this year. The Group incurred total exceptional costs of £6.8 million in the first half, relating to the disposal of its Agricultural Products activities, as detailed in 'Financial summary' below. Dividend To reflect the progress made in the first half the Board proposes to increase the interim dividend by 7% to 4.6p per share. The interim dividend will be paid on 10 January 2001 to shareholders on the register at the close of business on 17 November 2000. Man shares will be quoted ex-dividend from 13 November 2000. The Board has decided not to continue the scrip dividend scheme, given the low level of take-up over the last few years. In its place however, shareholders can participate in a dividend re-investment plan, details of which will be sent to shareholders on 24 November 2000. Outlook The market for alternative investment products continues to grow strongly. Our Asset Management business has been offering this style of investment product, principally to high net worth private investors, for nearly 20 years. Our long track record and international sales network leave us well placed to continue to participate in this growth. The acquisition of Glenwood is strategically important, allowing direct access to a wide range of complementary investment management styles and a successful US institutional marketing team. Our Brokerage business continues to benefit from increased activity on the world's financial markets, and is well placed to take advantage of industry consolidation triggered by the adoption of electronic trading by many leading exchanges. The Board is excited by the prospects for both these businesses and pleased with the recent strategic developments. The Group remains on track to achieve its financial objectives for the year. Asset Management Continued progress has been made by Asset Management, with the level of recurring net management fee income increasing 16% to £31.5 million in the first half. The total Asset Management result was £32.5 million compared to £42.8 million last first half since we were unable to match the high level of performance related income generated in the comparable period given slightly negative performance by most of our AHL products. These trading systems suffered from range bound markets for the first four months of the first half, and although performance picked up in August, some of this was offset by the effects of government intervention in world currency and energy markets in September. However, Glenwood and certain of our other managers had positive performance in the period, producing £1.0 million of performance related income for us in the first half. Investor interest in alternative investment products has continued to broaden. Given recent performance of our main manager AHL, sales have been below their recent high levels but are in line with our expectations. £236 million ($351 million) of new money was raised in the first half, principally from our high net worth private client base. New money has been raised primarily in Europe, and the Middle East and Asia Pacific. Our sales network continues to expand and we now have 730 intermediaries globally. Six funds have been launched in the first half, with an average launch size of £31 million ($46 million). Redemption levels for the first half were within the range we have experienced over the long term. In addition however, one of our oldest managers, MINT, whose main trading system has not been marketed by Man for a number of years, is in the process of being closed and the £214 million ($342 million) it had under management has largely been returned to investors. MINT has not contributed any significant net management fee income to the Group for several years and its closure is not financially material. Overall, the impact of the closure of MINT and negative investment performance means that funds under management stood at £2.8 billion ($4.2 billion) as at 30 September, against £2.9 billion ($4.7 billion) at 31 March 2000. In US dollars, funds under management have also been impacted by adverse currency movements. On 4 October 2000 we completed the acquisition of Glenwood for £74.3 million ($110 million) in cash. We have had a 60% interest in an offshore US joint venture with Glenwood for a number of years. The recent acquisition was of the 40% joint venture interest we did not already own, together with 100% of Glenwood's on-shore US business. At 30 September 2000 the Glenwood joint venture accounted for £589 million ($870 million) of the Group's stated funds under management. On-shore US, Glenwood managed a further £338 million ($500 million), and it also had £203 million ($300 million) of money under advice from Japanese investors. Including Glenwood, funds under management and under advice as at 31 October were £3.6 billion ($5.2 billion). The acquisition of Glenwood is of strategic importance to the Group. Glenwood specialises in constructing, and actively managing, hedge fund portfolios using a risk-averse, multi- strategy, multi-adviser approach. Using its extensive database of investment managers and its 13 years of experience, Glenwood allocates funds across a range of strategies and selects advisers expert in the utilisation of these strategies on a dynamic basis. Glenwood provides Asset Management with a valuable combination of specialist product structuring skills and US institutional marketing expertise. Furthermore, Glenwood and AHL products have almost no correlation to each other in terms of investment performance. This will provide the Group with more stability in overall performance related income and allow us to offer clients an extended range of complementary products. Brokerage The first half has seen a strong result from our Brokerage business, up 37% to £14.0 million. Our established market positions on the world's principal futures exchanges have allowed us to benefit from the high levels of trading activity across many markets during the first six months. Additionally, we have seen positive contributions from several of our recent acquisitions, most notably Tullet & Tokyo futures. We enjoyed a broadly based contribution from our product lines. Financial futures, energy and securities all made particularly strong contributions, along with our growing private client business. Across our major product lines we have maintained or improved market share. Our international scale provides us with effective market access and substantial customer order flows. This has enabled us to benefit from the transition of many European exchanges to electronic trading in a number of ways. First it has led to a consolidation in the industry, with many smaller participants either unable to maintain critical mass, or to invest in the requisite trading platforms. Secondly we have been able to reduce costs, whilst maintaining or enhancing customer service levels. In addition, our international customer order flows allow us to provide advice, product structuring and liquidity through order matching where required. Today over 90% of our European futures and options trades are executed electronically. In the US, where the transition of exchanges to electronic trading is at an early stage, we expect to benefit from cost savings and further market consolidation when it occurs. Across our various retail businesses, over 75% of customer orders are now transmitted or routed electronically, either to electronic exchanges or to open outcry markets. Our proprietary Internet account data retrieval product, eMIDAS, has allowed us to enhance customer service levels and significantly increase our clearing capability with minimal additional staffing costs. On 4 October 2000, we announced the acquisition of the customer accounts of First American, a Chicago based private client futures and options brokerage business, which was completed on 27 October 2000. First American has over 3,000 active trading accounts and its integration into Man's existing private client operations will allow us to access economies of scale through the expansion of the client base without material increase in the cost base. The acquisition is expected to be earnings enhancing in the second half of the current year. Financial summary The first half exceptional costs of £6.8 million relate to the disposal of the Agricultural Products activities comprising adjustments of £3.9 million to the loss on sale reported last year, which have been incurred in accordance with the management buyout disposal documentation, £1.3 million in respect of the sale of the US Nuts activities after year-end and further Agricultural Products restructuring costs of £1.6 million. The tax charge for the first half amounted to £10.0 million with an effective tax rate for continuing operations of 24.0%, compared with 22.9% for the first half last year. We had a net cash inflow of £31.6 million in the first half before the impact of an increase in Group loans to funds managed by our Asset Management business. Most of our fund products have credit facilities provided by third parties but in some cases the Group has extended facilities directly. Negative investment performance for some funds in the first half has resulted in these funds increasing drawings under Group facilities by £87.7 million. Group cash outflow was £56.1 million. At 30 September, shareholders' funds were up 12% since year-end at £280.9 million and net debt was £118.7 million giving gearing of 42.3%. Stanley Fink Chief Executive Peter Clarke Finance Director GROUP PROFIT AND LOSS ACCOUNT Half year to 30 September 2000 Half year to 30 September 1999 Note Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total £m £m £m £m £m £m Net operating income 2,3 94.8 - 94.8 105.7 53.5 159.2 Operating expense (79.6) - (79.6) (68.9) (54.0)(122.9) Exceptional operating expense - - - - - - Operating profit/(loss) 15.2 - 15.2 36.8 (0.5) 36.3 Share of operating profit/(loss) from joint ventures and associates 3.0 - 3.0 3.4 0.1 3.5 Total operating profit/(loss) 18.2 - 18.2 40.2 (0.4) 39.8 Exceptional items Loss on sale of Agricultural Products businesses 4 - (5.2) (5.2) - - - Restructuring costs 4 - (1.6) (1.6) - (42.8) (42.8) Net interest income/(expense) 5 29.3 - 29.3 13.5 (10.2) 3.3 Profit/(loss) on ordinary activities before taxation 3 47.5 (6.8) 40.7 53.7 (53.4) 0.3 Taxation (11.4) 1.4 (10.0) (12.3) 6.8 (5.5) Profit/(loss) on ordinary activities after taxation 36.1 (5.4) 30.7 41.4 (46.6) (5.2) Equity minority interests - - - (0.3) (1.0) (1.3) Profit/(loss) for the period 36.1 (5.4) 30.7 41.1 (47.6) (6.5) Ordinary dividends 6 (11.5) (11.0) Dividend in specie 6 - - Retained profit/(loss) for the period 19.2 (17.5) Earnings per share on continuing operations 7 Basic 14.7p 16.3p Diluted 14.1p 15.3p Underlying earnings per share 7 Basic 14.3p 11.1p Diluted 13.7p 10.4p Earnings/(loss) per share including exceptional items 7 Basic 12.4p (2.6p) Diluted 12.0p (2.4p) Dividends per share 4.6p 4.3p Historical cost profits and losses are not materially different from those shown above. GROUP PROFIT AND LOSS ACCOUNT continued Year to 31 March 2000 Continuing Discontinuted operations operations Total Note £m £m £m Net operating income 2,3 216.2 107.6 323.8 Operating expense (141.5) (109.6) (251.1) Exceptional operating expense - (3.0) (3.0) Operating profit/(loss) 74.7 (5.0) 69.7 Share of operating profit/(loss) from joint ventures and associates 6.7 (0.7) 6.0 Total operating profit/(loss) 81.4 (5.7) 75.7 Exceptional items Loss on sale of Agricultural Products businesses 4 - (69.2) (69.2) Restructuring costs 4 - (44.3) (44.3) Net interest income/(expense) 5 30.1 (28.8) 1.3 Profit/(loss)on ordinary activities before taxation 3 111.5 (148.0) (36.5) Taxation (24.5) 7.8 (16.7) Profit/(loss) on ordinary activities activities after taxation 87.0 (140.2) (53.2) Equity minority interests - (1.1) (1.1) Profit/(loss) for the period 87.0 (141.3) (54.3) Ordinary dividends 6 (33.8) Dividend in specie 6 (60.2) Retained profit/(loss) for the period (148.3) Earnings per share on continuing operations 7 Basic 34.2p Diluted 32.3p Underlying earnings per share 7 Basic 24.5p Diluted 23.2p Earnings/(loss) per share including exceptional items 7 Basic (21.3p) Diluted (20.2p) Dividends per share 13.6p Historical cost profits and losses are not materially different from those shown above. GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Profit/(loss) for the period 30.7 (6.5) (54.3) Currency translation differences taken directly to reserves 9.8 (7.5) (3.1) Tax on translation differences taken through reserves - - (0.1) Total recognised gains and losses relating to the period 40.5 (14.0) (57.5) GROUP BALANCE SHEET At 30 At 30 At 31 September September March 2000 1999 2000 Note £m £m £m Fixed assets Intangible fixed assets 8.5 8.4 6.5 Tangible fixed assets 23.3 138.9 27.8 Investments Investments in joint ventures Share of gross assets 11.7 43.9 12.1 Share of gross liabilities (2.1) (21.5) (2.7) 9.6 22.4 9.4 Investments 18.2 38.3 17.0 in associates Other investments 14.6 19.5 13.3 74.2 227.5 74.0 Current assets Stocks - 321.2 3.0 Debtors 8 1,086.7 1,290.6 1,277.7 Investments 165.8 132.0 75.0 Cash at bank and in hand 242.4 142.7 268.1 1,494.9 1,886.5 1,623.8 Creditors: amounts falling due within one year 9 (947.9) (1,594.7) (1,164.3) Net current assets 547.0 291.8 459.5 Total assets less current liabilities 621.2 519.3 533.5 Creditors: amounts falling due after more than one year 9 (330.5) (140.2) (275.7) Provisions for liabilities and charges (9.8) (15.6) (7.5) Net assets 280.9 363.5 250.3 Capital and reserves Called up share capital 25.5 26.9 27.0 Share premium account 36.3 35.5 36.1 Capital reserve 1.6 0.1 0.1 Profit and loss account 217.5 290.4 187.1 Shareholders' funds (including non-equity interests) 280.9 352.9 250.3 Equity minority interests - 10.6 - 280.9 363.5 250.3 GROUP CASH FLOW STATEMENT Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 Note £m £m £m Net cash outflow from operating activities 11 (48.9) (0.1) (12.8) Dividends from joint ventures 0.4 - - Dividends from associates - 3.9 9.3 Returns on investments and servicing of finance 21.9 1.7 (5.5) Taxation paid (3.9) (1.6) (13.9) Capital expenditure and financial investment (7.6) (11.3) (17.1) Acquisitions and disposals 3.4 4.4 (17.3) Equity dividends paid (21.4) (19.1) (28.8) Net cash outflow (56.1) (22.1) (86.1) Management of liquid resources (8.1) (53.8) (7.5) Financing 41.6 46.2 200.7 (Decrease)/ increase in cash (22.6) (29.7) 107.1 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 Note £m £m £m (Decrease)/ increase in cash (22.6) (29.7) 107.1 Cash inflow from movement in debt (41.3) (46.2) (200.0) Cash outflow from movement in liquid resources 8.1 53.8 7.5 Change in net debt resulting from cash flows (55.8) (22.1) (85.4) Net debt of businesses and subsidiaries acquired - - (9.2) Debt disposed of with facilities, businesses and subsidiaries 3.7 3.4 582.2 Currency translation difference (5.2) 10.9 (2.1) Movement in net debt (57.3) (7.8) 485.5 Opening net debt (61.4) (546.9) (546.9) Closing net debt 12 (118.7) (554.7) (61.4) RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Profit/(loss) for the period 30.7 (6.5) (54.3) Ordinary dividends (11.5) (11.0) (33.8) Dividend in specie - - (60.2) Retained earnings/(loss) 19.2 (17.5) (148.3) Other recognised gains and losses relating to the period 9.8 (7.5) (3.2) Issue of ordinary share capital 0.2 - 0.7 Amount added back in respect of scrip dividends 1.4 3.0 4.0 Goodwill written back on disposals - (0.1) 22.1 Net increase/ (decrease) in shareholders' funds 30.6 (22.1) (124.7) Opening shareholders'funds 250.3 375.0 375.0 Closing shareholders'funds 280.9 352.9 250.3 NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Basis of preparation The unaudited results for the half year to 30 September 2000 have been prepared in accordance with UK generally accepted accounting principles. The accounting policies applied are those set out in the Group's Annual Report for the year to 31 March 2000. The financial information contained herein is abridged and does not constitute statutory accounts as defined by Section 240 of the Companies Act 1985. Statutory accounts for the year to 31 March 2000, upon which the auditors have given an unqualified opinion, have been delivered to the Registrar of Companies. In accordance with Section 272(4) of the Companies Act 1985, a profit and loss account for the Company for the period to 30 September 2000 and a balance sheet as at that date have been delivered to the Registrar of Companies. 2. Net operating income Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Continuing operations Fees and commissions receivable 199.2 186.5 391.7 Fees and commissions payable (115.7) (102.9) (212.8) 83.5 83.6 178.9 Other operating income 11.3 22.1 37.3 Total continuing operations 94.8 105.7 216.2 Discontinued operations - 53.5 107.6 Net operating income 94.8 159.2 323.8 3. Segmental analysis (a) Segmental analysis of net operating income Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Business segment Continuing operations Asset Management 49.3 62.5 126.4 Brokerage 45.5 43.2 89.8 Financial Services 94.8 105.7 216.2 Discontinued operations - 53.5 107.6 94.8 159.2 323.8 NOTES continued 3. Segmental analysis continued (b) Segmental analysis of profit on ordinary activities before taxation Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Business segment Continuing operations Asset Management - management fee income 31.5 27.1 55.5 Asset Management - performance fee income 1.0 15.7 30.2 Brokerage 14.0 10.2 23.7 Financial Services 46.5 53.0 109.4 Sugar Australia 1.0 0.7 2.1 47.5 53.7 111.5 Discontinued operations (6.8) (53.4) (148.0) 40.7 0.3 (36.5) 4. Exceptional items The loss on sale of the Agricultural Products businesses of £5.2m (£4.3m net of tax) represents an adjustment of £3.9m (£3.9m net of tax) to the loss on sale reported last year incurred in accordance with the management buyout disposal documentation, and £1.3m (£0.4m net of tax) is in respect of the sale of the US Nuts activities which took place after year-end. Further Agricultural Products restructuring costs of £1.6m (£1.1m net of tax) were also incurred. 5. Net interest income/(expense) Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Interest receivable 47.8 36.5 83.4 Interest payable (18.5) (33.2) (82.1) 29.3 3.3 1.3 NOTES continued 6. Dividends Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Ordinary shares Interim 11.5 11.0 11.0 Final - - 22.8 11.5 11.0 33.8 Under the scrip dividend arrangements, £1.4m of the final dividend for the year to 31 March 2000 was paid by way of shares and has therefore been added back to reserves. In addition, on 24 March 2000 a dividend in specie of £60.2m was paid to holders of E D & F Man Group plc 'A' ordinary shares. An interim dividend of 4.6p per share will be paid on 10 January 2001 to shareholders on the register at the close of business on 17 November 2000. The shares will be quoted ex-dividend from 13 November 2000. 7. Earnings per share The calculation of basic earnings per ordinary share is based on profit for the period of £30.7m (30 September 1999: £6.5m loss, 31 March 2000: £54.3m loss) and on 246,276,308 (30 September 1999: 252,336,022, 31 March 2000: 254,438,521) ordinary shares, being the weighted average number of ordinary shares in issue during the period after excluding the shares owned by the Man Group plc employee trusts. The diluted earnings per share is based on profit for the period of £30.7m (30 September 1999: £6.5m loss, 31 March 2000: £54.3m loss) and on 255,935,797 (30 September 1999: 268,795,732, 31 March 2000: 269,061,048) ordinary shares, calculated as follows: 30 30 31 September September March 2000 1999 2000 Number Number Number Basic weighted average number of shares 246,276,308 252,336,022 254,438,521 Dilutive potential ordinary shares Share awards under incentive schemes 8,725,433 15,513,173 13,713,935 Employee share options 934,056 946,537 908,592 255,935,797 268,795,732 269,061,048 The following tables reconcile the earnings per share on the total result with the earnings per share on continuing operations and underlying earnings per share. Underlying earnings per share excludes the net performance fee income from our Asset Management business, the result of our Sugar Australia operations and goodwill amortisation. NOTES continued 7. Earnings per share continued Half year to 30 September 2000 Basic Diluted earnings per earnings per Earnings share share £m Pence Pence Earnings per share 30.7 12.4 12.0 Loss on discontinued operations 5.4 2.3 2.1 Earnings per share continuing operations 36.1 14.7 14.1 Performance related income and Sugar Australia (1.3) (0.5) (0.5) Goodwill amortisation 0.4 0.1 0.1 Underlying earnings per share 35.2 14.3 13.7 Half year to 30 September 1999 Basic Diluted earnings per earnings Earnings share share £m Pence Pence Earnings per share (6.5) (2.6) (2.4) Loss on discontinuted operations 47.6 18.9 17.7 Earnings per share -continuing operations 41.1 16.3 15.3 Performance related income and Sugar Australia (13.3) (5.3) (5.0) Goodwill amortisation 0.2 0.1 0.1 Underlying earnings per share 28.0 11.1 10.4 Year to 31 March 2000 Restated Basic Diluted earnings per earnings per Earnings share share £m Pence Pence Earnings per share (54.3) (21.3) (20.2) Loss on discontinued operations 141.3 55.5 52.5 Earnings per share - continuing operations 87.0 34.2 32.3 Performance related income and Sugar Australia (25.2) (9.9) (9.3) Goodwill amortisation 0.6 0.2 0.2 Underlying earnings per share 62.4 24.5 23.2 8. Debtors At 30 At 30 At 31 September September March 2000 1999 2000 £m £m £m Trade debtors Amounts owed by broker dealers on secured stock lending and borrowing 396.2 266.5 576.5 Securities transactions in the course of settlement 89.6 175.9 183.9 Futures transactions 183.9 162.2 198.3 Other trade 29.3 444.4 38.1 Amounts owed by funds 206.3 123.9 118.6 Other categories of debtors 181.4 117.7 162.3 1,086.7 1,290.6 1,277.7 NOTES continued 9. Creditors At 30 At 30 At 31 September September March 2000 1999 2000 £m £m £m Amounts falling due within one year Bank loans and overdrafts 36.7 570.6 62.8 Private placement notes 3.4 - 3.1 Trade creditors Amounts owed to broker dealers on secured stock lending and borrowing 373.7 280.9 551.6 Securities transactions in the course of settlement 101.4 108.9 169.0 Futures transactions 157.3 154.6 63.2 Other trade 30.6 128.6 41.5 Other categories of creditors 244.8 351.1 273.1 947.9 1,594.7 1,164.3 At 30 At 30 At 31 September September March 2000 1999 2000 £m £m £m Amounts falling due after more than one year Loans Bank loans 310.9 89.9 250.8 Private placement notes 10.1 30.3 9.4 Other - 6.6 3.4 Other creditors 9.5 13.4 12.1 330.5 140.2 275.7 10. Segregated funds As required by the United Kingdom Financial Services Act and by the US Commodity Exchange Act, the Group maintains certain balances on behalf of clients with banks, exchanges, clearing houses and brokers in segregated accounts totalling £1,939m (30 September 1999: £1,619m, 31 March 2000: £1,631m). These amounts and the related liabilities to clients, whose recourse is limited to the segregated accounts, are not included in the Group balance sheet. NOTES continued 11. Net cash outflow from operating activities Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Operating profit 15.2 36.3 69.7 Depreciation of tangible fixed assets 3.8 9.8 20.5 Amortisation of goodwill 0.7 0.5 1.0 Loss on sale of tangible fixed assets - - 0.1 Profit on sale of fixed asset investments (1.0) - - Decrease in stocks 0.2 51.2 8.4 Decrease/(increase) in debtors 287.4 (264.3) (565.3) (Increase)/decrease in investments (84.4) (13.6) 43.8 (Decrease)/increase in creditors (267.9) 182.8 413.5 Restructuring costs (2.9) (2.8) (4.5) Net cash outflow from operating activities (48.9) (0.1) (12.8) 12. Analysis of net debt Half year Half year Year to 30 to 30 to 31 September September March 2000 1999 2000 £m £m £m Cash at bank and in hand 242.4 142.7 268.1 Overdrafts (36.7) (9.4) (38.9) Loans due within one year (3.4) (561.2) (27.0) Loans due after one year Bank loans (310.9) (89.9) (250.8) Private placement notes (10.1) (30.3) (9.4) Other loans - (6.6) (3.4) Closing net debt (118.7) (554.7) (61.4) 13. Exchange rates The following US dollar exchange rates have been used in the preparation of this financial information: 30 September 30 September 31 March 2000 1999 2000 Average exchange rate 1.49 1.60 1.61 Period end exchange rate 1.48 1.65 1.60

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