Interim Results

Walker,Crips,Weddle,Beck PLC 08 November 2002 For Immediate release: 8 November 2002 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2002 Walker, Crips, Weddle, Beck plc ('WCWB'), the fully listed stock and share broker, announces Interim results for the six months ended 30 September 2002. KEY POINTS • Turnover £4.7 million (6 months to 30 September 2001: £4.1 million) • Operating loss £175,000 (6 months to 30 September 2001: loss £366,000) • Pre-tax loss on ordinary activities of £252,000 (6 months to 30 September 2001: pre-tax loss £296,000) • Interim dividend maintained at 2.25 pence per share (6 months to 30 September 2001: 2.25p) demonstrating the importance attributed to shareholder distributions • Shareholders funds of £9.5 million (30 September 2001: £9.3 million) • Continued positive contribution to revenues from Corporate Finance and Financial Services. Fee-based revenues now contribute 23.6% of Turnover • Encouraging initial performance of WCWB UK Growth Fund, which earns S&P 4 Star rating. New WCWB Corporate Bond Fund launched in September 2002 Commenting on the results, Graham Kennedy, Chairman of WCWB, said: 'Having taken the necessary steps to lower our cost base we will continue to explore opportunities to grow our agency stockbroking business and extend further the effort to develop fee based revenues.' For further information please contact: Michael Sunderland, Chief Executive David Foxman Rodney Fitzgerald, Finance Director Tracy Young Walker, Crips, Weddle, Beck plc Tavistock Communications Tel: 020 7253 7502 Tel: 020 7600 2288 CHAIRMAN'S STATEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2002 During the first half of the year the leading FTSE 100 Index declined from 5029 to 3722 at the end of September, a fall of 26% - adverse stock markets contributed to deteriorating investor sentiment with the result that Private Client activity on the London Stock Exchange remained at a low level. Results for the 6 months to September 2002 show turnover of £4,736,000 for the group against £4,127,000 for the comparable period last year, resulting in a group operating loss of £175,000 against losses of £366,000 for the comparative period. The Keith, Bayley, Rogers (KBR) business was acquired in November 2001, so the results of that business do not appear in the half year period for 2001. The combined effect of the integration with KBR and implementation of cost cutting measures towards the end of the last financial year enabled over £700,000 of annualised cost savings to be made; these savings are all now coming through and are partly reflected in the current half year's administration expenses. Although the significant decrease in the level of losses in the first half demonstrates important operational progress, we have taken action since the reporting date to further reduce overheads, primarily in employment costs, which are expected to produce additional savings in excess of £500,000 on an annualised basis. We are also, of course, conscious of the need to maintain our ability to handle increased business when market conditions improve. Cost cutting measures have been tempered accordingly. The group has realised a gain of £467,000 on the sale of some of its holding in the London Stock Exchange. As this investment was revalued at our previous reporting date at a higher value than the proceeds generated from the sale, a loss of £72,000 is included in the loss on ordinary activities before taxation. The remaining realised pre-tax gain of £539,000 less tax of £176,000 results in £363,000 being transferred from revaluation reserves to the profit and loss account. At 30 September 2002 our remaining holding of 575,000 LSE shares had a value of £1.96m. We are pleased to report that the interim dividend has been maintained at 2.25p per share as a demonstration of the importance your Board attributes to Shareholder distributions and also in light of the substantial profits made on the sales of part of our previously revalued holding of London Stock Exchange shares. The dividend will be paid on 16 December 2002 to those shareholders on the register at the close of business on 6 December 2002. The group has continued to place an emphasis on growing the fee based revenue stream, which now represents 23.6% of turnover. Corporate Finance contributed well having had a busy first half and the Financial Services Division is now structured to deliver a wide range of advice on pensions and insurance to our broad client base - Self Invested Personal Pensions (SIPPs) are now a particular area of keen interest. Our two new unit trusts, the UK Growth and Corporate Bond Funds, referred to at our AGM, have progressed well in terms of performance and development of funds under management. Standard & Poors have attributed a 4 star rating to the UK Growth Fund in recognition of its positive performance. The Board consider that, in light of the KBR acquisition and our plans for continued expansion as the market improves, it is appropriate to restructure management to distinguish between the day to day operation of the business and the strategic role of the holding company. This will clarify the roles of those engaged in the various divisions and enhance the accountability and efficiency of the management process. Accordingly, it is our intention to restructure the Board of Directors before the end of the current year so that a wider divisional emphasis is given to Stockbroking, Corporate Finance, Financial Services and Fund Management operating within a revised corporate organisation structure. There will be a restricted number of executive directors serving on the Main Board with the majority of the current executive directors serving on the Board of the key Stockbroking subsidiary. Although it is by no means certain that a market recovery is imminent, there have been signs that a floor has been reached and the New Year paves the way for the traditionally busier January to April period. Having taken the necessary steps to lower our cost base we will continue to explore opportunities to grow our Agency Stockbroking business and extend further the effort to develop fee based revenues. G.N. Kennedy CVO Chairman November 2002 Interim unaudited consolidated profit and loss account For the six months ended 30 September 2002 Continuing Continuing Continuing Operations Operations Operations 6 months 6 months Year Ended Ended Ended 30 September 30 September 31 March 2002 2001 2002 £'000 £'000 £'000 Turnover 4,736 4,127 9,050 Commission payable (1,271) (1,002) (2,310) Gross Profit 3,465 3,125 6,740 Administrative expenses - ongoing (3,640) (3,423) (7,355) Administrative expenses - exceptional items 0 (68) (619) Total administrative expenses (3,640) (3,491) (7,974) Operating loss (175) (366) (1,234) (Loss)/profit on disposal of fixed assets (72) 71 301 Interest payable and similar charges (5) (1) (9) Loss on ordinary activities before taxation (252) (296) (942) Tax credit on loss on ordinary activities 52 86 277 Loss on ordinary activities after taxation (200) (210) (665) Dividends paid and proposed (230) (207) (618) Retained loss for the year (430) (417) (1,283) Realised gain on sale of revalued investment 363 201 604 Retained profit brought forward 2,683 3,362 3,362 Retained profit carried forward 2,616 3,146 2,683 Loss per share -basic (2.0p) (3.2p) (6.9p) -diluted (2.0p) (3.2p) (6.9p) Weighted average number of shares in issue -basic 10,238,654 9,190,389 9,613,529 -diluted 10,766,710 9,270,225 10,173,152 Dividends paid and disposed 2.25p 2.25p 6.25p Interim unaudited consolidated balance sheet As at 30 September 2002 As at As at As at 30 Sep 30 Sep 31 March 2002 2001 2002 £000 £000 £000 Fixed Assets Goodwill 2,395 - 2,687 Tangible 614 897 817 Investments 2,034 3,117 3,097 5,043 4,014 6,601 Current Assets Debtors 28,789 28,137 41,345 Cash at bank and in hand 2,925 4,219 3,749 31,714 32,356 45,094 Creditors:amounts falling due within one year (27,221) (27,052) (40,796) Net current assets 4,493 5,304 4,298 Net assets 9,536 9,318 10,899 Capital and reserves Called-up share capital 2,048 1,844 2,048 Shares to be issued 609 - 842 Share premium account 2,222 1,204 2,222 Profit and loss account 2,616 3,146 2,683 Revaluation reserve 1,959 3,042 3,022 Other reserves 82 82 82 Shareholders' funds 9,536 9,318 10,899 Interim unaudited consolidated cash flow statement For six months ended 30 September 2002 6 months 6 months Year Ended Ended Ended 30 September 30 September 31 March 2002 2001 2002 £'000 £'000 £'000 Net cash (outflow)/inflow from operating activities (735) 1,041 1,061 Returns on investments and servicing of finance (5) (1) (9) Taxation 29 (6) (389) Capital expenditure and financial investment 444 301 941 Acquisition of subsidiary - - (691) Equity dividends paid (410) (367) (575) Cash (outflow)/inflow before management of liquid resources and financing (677) 968 338 Management of liquid resources 1,350 (950) (550) Financing - 25 37 Increase/(decrease) in cash in the period 673 43 (175) Notes to the interim unaudited financial statements 1. This interim statement has been prepared on the basis of the accounting policies set out in the most recent set of annual financial statements. In preparing the interim statement the directors have implemented any new accounting standards. These do not have a material impact on the financial statements. 2. 2001 and 2002 half year figures are unaudited. The accounts for the year to 31 March 2002 are abridged and non-statutory. Full accounts for that year, on which the auditors of the company made an unqualified report, have been delivered to the Registrar of Companies. A copy of these statements is available at the company's registered office at Sophia House, 76/80 City Road, London EC1Y 2EQ or on the website www.wcwb.co.uk. A copy has been posted to all shareholders. 3. The acquisition of Keith Bayley Rogers (KBR) in November 2001 has had the following impact on the amounts shown in the consolidated profit & loss account, balance sheet and cash flow statement:- 6 months to 30 September 2002 Full inclusion of KBR results 6 months to 30 September 2001 No inclusion of KBR results Year ended 31 March 2002 Inclusion of 4 months KBR results from November 2001 4. The profit and loss account for the 6 months ended 30 September 2001 has been restated to show the tax credit arising from trading losses, which were offset against the gains on the prior year disposal of London Stock Exchange shares. This treatment is consistent with that adopted in the 31 March 2002 audited accounts; the tax attributable to the gain on disposal of the shares was reflected in the statement of total recognised gains and losses for the year ended 31 March 2002. 5. Additional consideration in shares of up to £3,000,000 in value based upon notional share prices of £1.50 to £2.00 may be payable depending on the results of the business purchased over the four-year period ending 25 April 2003. Based on information currently available, the directors estimate that the fair value of this additional consideration is £609,000 calculated using the share price on 2 November 2001. The directors are adjusting the estimate for deferred consideration and the resulting impact on goodwill over time in line with the actual results. 6. The company owns 575,000 ordinary shares in the London Stock Exchange plc (LSE), which have been included on the balance sheet at their fair value of £1,959,000 (March 2002: £3,022,000). During the period, the company disposed of 125,000 shares, realising a pre-tax gain of £467,000, of which £363,000 after tax (£539,000 pre-tax less tax of £176,000), being the gain attributable to the period up to 31 March 2002, has been transferred from revaluation reserves to the profit and loss account. The format of the profit and loss account has been expanded to show this transfer and the movement in retained earnings. 7. Reconciliation of shareholders' Funds £'000 Balance at 31 March 2002 10,899 Loss for the period (200) Gain on disposal of LSE shares 363 Dividends paid and proposed (230) Revaluation (1,063) Shares to be issued (233) Balance at 30 September 2002 9,536 This information is provided by RNS The company news service from the London Stock Exchange

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