Interim Results

Trio Holdings PLC 01 May 2003 1 May 2003 TRIO HOLDINGS PLC Interim Report for the six months ended 31 March 2003 CHAIRMAN'S STATEMENT Highlights for the six months ended 31 March 2003: • Profit before tax £0.51 million (2002 - £2.21 million) • Interim dividend 0.25p per share (2002 - 0.25p per share) • Net Assets at 31 March 2003 of £11.17 million (2002 - £10.00 million) • Cash balances £10.24 million (2002 - £10.58 million) • Turnover £15.64 million (2002 - £17.60 million) I indicated in my statement to shareholders on 21 January 2003 that volumes of trading had lessened in the autumn, and these reduced trading levels prevailed throughout most of this reporting period, causing a decline in turnover to £15.64 million. Happily there were indications of more robust trading at the tail end of the period, as the prognosis for the situation in the Middle East became clearer after some months of uncertainty. Under the circumstances I am therefore modestly pleased to announce a profit before taxation for the six months of £0.51 million. During the period the prevailing lack of short-term interest rate volatility and uncertainty of direction tempered normal trading activity by our principal customer base, the banks. Compounding these phenomena, this customer base understandably restrained speculative trading activity during the prolonged and uncertain run-up period to the resolution of events in Iraq. More recently, however, our core foreign exchange, money and derivative markets, so dependant on volatility in short term interest rates, have been less restrained: attention is refocusing on the economic fundamentals of the global markets which is establishing a better climate for increased activity going forward. We have retained our strong balance sheet with net assets at £11.17 million, including substantial cash balances of £10.24 million and, combined with modestly better current trading, this has enabled the Board to maintain the interim dividend at 0.25p per share. The dividend will be paid on 16 June 2003 to shareholders on the register on 16 May 2003. During the period we have started to enjoy the benefits last autumn's re-equipment and re-location to our new office at Cannon Bridge, which gave us an open-plan, flexible, re-equipped dealing room. Over the last four months, we have taken advantage of this flexibility to add, by careful recruitment, a new ' Credit' division. This division currently employs nine brokers, specialising particularly in the comparatively new international market in Credit Default Swaps. The costs of organically growing such a new specialisation weigh adversely on the profit and loss account during the initial establishment period, but early indications for longer-term success in this fast-growing product area are encouraging, and the positive reaction to the daily research output of this new team has already underpinned their professional broking profile. Our secure electronic transactional dealing system www.UK-Locals.com for Local Authority treasurers, building societies and banks, celebrated the second anniversary of its launch in March, showing a 60% increase in trades from its first year, a 35% increase in web-site hits, and a 30% increase in registrants. I am pleased to announce that, since the end of the period, April 2003 showed yet another record month for the transactional system. Developed entirely in-house by our talented team at Trio Internet Systems Limited ('TIS'), enthusiasm for the system has enlarged our Local Authority customer base in general, and raised the broking team's profile and relationships in particular in this niche area. This has resulted in the additional benefit of an increased level of completed longer-term re-structuring deals, further contributing to profitability for that section. A beta-test version of the all-new 'Arbitrage' system from TIS has been in use by some of our brokers since early in the calendar year. The development team remain confident that the fully-developed package will totally replace the current arbitrage and other third-party software used in our dealing rooms by the autumn. Strategies for possible external commercialisation of Trio Insight ' Vantage' and 'Vision' will follow the full in-house installation. Despite the several early months of subdued trading conditions, as presaged in earlier statements, Trio continues in a healthy state with good technology and infrastructure, excellent broking staff, and a very sound financial base. Interestingly in January 2003 the listed stock broking company Collins Stewart plc acquired Tullett plc, a large competitor money broking group: also in the same month, ICAP plc announced the acquisition of BrokerTec, an electronic interdealer broker in the global fixed income markets. Indeed a climate of consolidation persists in this highly competitive industry. In conclusion, assuming that markets now continue to return to being moderately active, I view the future with cautious confidence. Enquiries to: DAVID HAGAN Tel: 020 7469 9100 Executive Chairman, TRIO Holdings PLC PATRICK TOYNE SEWELL Tel: 020 7638 9571 Citigate Dewe Rogerson TRIO HOLDINGS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended 31 March 2003 (unaudited) 6 months to 6 months to Year to 31 March 31 March 30 Sept 2003 2002 2002 £000s £000s £000s Turnover 15,643 17,605 34,426 Net recurring operating expenses (15,224) (15,662) (30,596) Operating profit before exceptional item 419 1,943 3,830 Exceptional item - - 1,270 Operating profit 419 1,943 5,100 Share of loss of associated company (69) (14) (81) Net interest receivable less payable 156 200 267 Profit on sale of investment - 77 77 Profit on ordinary activities before taxation 506 2,206 5,363 Taxation UK (384) (1,003) (2,211) Overseas - - (77) Profit for the period 122 1,203 3,075 Dividends paid and proposed (209) (209) (835) Retained (loss)/profit for the period transferred to reserves (87) 994 2,240 Earnings per share 0.15p 1.44p 3.68p Diluted earnings per share 0.15p 1.44p 3.68p Dividends per share 0.25p 0.25p 1.00p There were no acquisitions or discontinued operations in the current or prior period STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 6 months 6 months Year to to to 31 March 31 March 30 Sept 2003 2002 2002 £000s £000s £000s Profit for the period 122 1,203 3,075 Foreign exchange translation differences on foreign currency investment in subsidiaries 3 (4) - Total recognised gains and losses 125 1,199 3,075 RECONCILIATION OF CONSOLIDATED MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS 6 months 6 months Year to to to 31 March 31 March 30 Sept 2003 2002 2002 £000s £000s £000s Profit for the period 122 1,203 3,075 Dividends paid and proposed (209) (209) (835) (87) 994 2,240 Other recognised gains and losses 3 (4) - Net (reduction from)/addition to equity shareholders' funds (84) 990 2,240 Opening equity shareholders' funds 11,253 9,013 9,013 Closing equity shareholders' funds 11,169 10,003 11,253 TRIO HOLDINGS PLC CONSOLIDATED BALANCE SHEET as at 31 March 2003 (unaudited) 31 March 31 March 30 Sept 2003 2002 2002 £000s £000s £000s Fixed Assets Tangible assets 2,201 658 2,422 Investments 95 57 165 2,296 715 2,587 Current Assets Stock 91 75 92 Debtors 4,950 5,486 5,176 Cash at bank and in hand 10,244 10,578 11,463 15,285 16,139 16,731 Creditors: due within one year (5,640) (6,722) (6,885) Net Current Assets 9,645 9,417 9,846 Creditors: due after more than one year (771) (128) (1,179) Equity minority interests (1) (1) (1) Net Assets 11,169 10,003 11,253 Capital and Reserves Share capital 4,174 4,174 4,174 Distributable reserves 2,474 2,474 2,474 Profit and loss account 4,521 3,355 4,605 Equity Shareholders' Funds 11,169 10,003 11,253 Notes 1. Profit and Loss Account There were no acquired or discontinued activities during the current or prior period. The result arises from continuing operations. The results in foreign currencies are translated into Sterling at the average exchange rates ruling in the period. 2. Taxation Taxation has been estimated on the basis that the six month period forms an integral part of an annual reporting period. 3. Earnings per share The profit per share is based on the net profit after taxation attributable to ordinary shareholders and on a weighted average of the number of shares in issue in the period: 83,484,325 (2002: 83,484,325). 4. Unaudited accounts The interim results have been prepared in accordance with accounting policies set out in the accounts for the year ended 30 September 2002. The financial information in this report does not constitute full accounts as defined by section 240 of the Companies Act 1985. The figures and the financial information for the year ended 30 September 2002 have been compiled from an extract of the latest published accounts and do not constitute statutory accounts for the year. Those accounts have been delivered to the Registrar of Companies and included the report of the independent auditors which was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. TRIO HOLDINGS PLC CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31 March 2003 (unaudited) 6 months to 6 months to Year to 31 March 31 March 30 Sept 2003 2002 2002 £000s £000s £000s Net cash inflow from operating activities 755 3,468 7,620 Returns on investments and servicing of finance 156 140 267 Taxation (1,256) (725) (1,873) Capital expenditure and financial investment (27) (251) (830) Acquisitions and disposals - 83 (93) Dividends paid (626) (167) (376) Net cash flow before financing (998) 2,548 4,715 Financing (221) (80) (1,362) (Decrease)/increase in cash in the period (1,219) 2,468 3,353 Reconciliation of operating profit to net cash inflow from operating results 6 months to 6 months to Year to 31 March 31 March 30 Sept 2003 2002 2002 £000s £000s £000s Operating profit, including exceptional operating items 419 2,020 5,100 Depreciation charges 250 161 304 Loss on disposal of fixed assets - - 122 Decrease in debtors 226 740 1,057 (Decrease)/increase in creditors (144) 552 1,055 Decrease/(increase) in stock 1 (1) (18) Exchange rate movements 3 (4) - Net cash inflow from operating activities 755 3,468 7,620 Reconciliation of net cash flow to movement in net funds 6 months to 6 months to Year to 31 March 31 March 30 Sept 2003 2002 2002 £000s £000s £000s (Decrease)/increase in cash in the period (1,219) 2,468 3,353 Cash inflow from decrease in debt and lease financing 221 80 1,362 Change in net funds resulting from cash flows (998) 2,548 4,715 New finance leases - (51) (1,501) Movement in net funds in the period (998) 2,497 3,214 Opening net funds 10,179 6,965 6,965 Closing net funds 9,181 9,462 10,179 Analysis of net funds At Cash At 1.10.02 flow 31.3.03 £000s £000s £000s Cash in hand and at bank 11,463 (1,219) 10,244 Finance leases (1,284) 221 (1,063) Total 10,179 (999) 9,181 TRIO HOLDINGS PLC REVIEW REPORT OF THE INDEPENDENT AUDITORS Introduction We have been instructed by the company to review the financial information for the six months ended 31 March 2003 which comprises the consolidated profit and loss account, the consolidated statement of total recognised gains and losses, the reconciliation of consolidated movements in equity shareholders funds, the consolidated balance sheet, the consolidated cash flow statement and related notes 1 to 4. 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. This report is made solely to the company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. 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 responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require 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 31 March 2003. Deloitte & Touche Chartered Accountants London 1 May 2003 This information is provided by RNS The company news service from the London Stock Exchange

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