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BWD Securities PLC (RBG)


Thursday 07 February, 2002

BWD Securities PLC

Final Results

BWD Securities PLC
7 February 2002

                              7 February 2002

                           BWD SECURITIES PLC ('BWD')
                                30 NOVEMBER 2001

BWD, the Investment Management and Administration Services Group

Key Points:

•        Profit before tax* of £8.1m (2000: £10.4m)

•        Basic earnings per share* of 26.8p (2000: 36.1p)

•        Total dividend of 18.0p per share (2000: 18.0p)

•        Turnover of £37.9m (2000: £38.4m)

•        Group fee and other recurring income of £22.4 m (2000: £20.2m)

•        Group managed funds of £4.0bn (2000: £3.9bn)

•        Integration of Dennis Murphy Campbell proceeding well

Mike Burns, Chief Executive of BWD Securities, commented:

'Against the background of challenging trading conditions over the year, we are
very pleased with the performance of all our offices.  The integration of our
new London office is proceeding well, providing BWD with an excellent platform
from which to expand its business in the South.  We continue to reap the
benefits of our strategy to reposition our main business as an investment
management business, rather than a traditional stockbroker and believe our
business is on solid foundations from which we can move forward in 2002.'

*figures stated before goodwill amortisation and profit on disposal of

For further information, please contact:

BWD Securities PLC
Michael Burns, Chief Executive                                Tel: 0151 227 2030

Hudson Sandler
Nick Lyon/Jessica Rouleau                                     Tel: 020 7796 4133


Financial Results

The year to 30 November 2001 produced challenging trading conditions as investor
confidence,  already weakened by falling financial markets, was then further
affected by the events of 11 September.  Against such a backdrop, it is
satisfying to be able to report profits before tax of £8.1 million (2000: £10.4
million) and basic earnings per share of 26.8p (2000: 36.1p).   These figures
are prior to goodwill amortisation of £622,000 (2000: £482,000) and an
exceptional profit of £261,000 (2000: nil) arising from property disposals.


The Directors are recommending a final dividend for the year of 12p (2000: 12p)
which taken together with the interim dividend of 6p (2000: 6p), produces a
total dividend for the year of 18p (2000: 18p).


In the latter half of the financial year BWD Rensburg acquired Dennis Murphy
Campbell, a long established stockbroking business based in the City of London.
This acquisition has not had a material impact on the 2001 financial results,
which reflect only four months of trading but do include the full cost of
integration.  We expect to move this business into new larger premises in early
summer 2002 as we fully intend to increase our presence in the City.  Further
details of this promising acquisition are provided in the Chief Executive's

Board and Employees

I would like to take this opportunity to acknowledge the skill and commitment
demonstrated by the Group's employees throughout the past year.  This is
evidenced by a further increase in fee and other recurring income being
achieved, despite the adverse market conditions.


Whilst recognising that difficult trading conditions may continue, the Board
remains confident that all businesses within the Group will continue to trade
profitably and are well positioned to take advantage as markets stabilise and
investor confidence recovers.

Alan Bottomley
6 February 2002


Group fee and other recurring income increased by 11% to £22.4 million (2000:
£20.2 million) despite a marginal decrease in group turnover to £37.9 million
(2000: £38.4 million).  Group fee and other recurring income now represents 73%
of group operating expenses (2000: 70%).

The last two years have been difficult for the securities industry.  They have
included the boom and bust of the bubble, recession in Europe, the
collapse of the Japanese economy and the appalling events of 11 September, which
occurred as the US economy was already weakening.  Against this background, it
is not surprising that the UK stock market has faltered.  In the circumstances,
I am very satisfied with the continuing advance of our fee and other recurring
income.  Most commentators have expressed confidence in the UK economy for the
foreseeable future and consequently the outlook for investors looks positive.

Behind the scenes, we, along with many others, have been busy preparing for the
new regulator, the Financial Services Authority, which duly came into being on 1
December 2001.  We genuinely hope that their risk-based approach to regulation,
with which we agree in principle, remains uppermost in their minds.  As we start
the year we are conscious that there is a whole list of EU Directives that will
further impact on our industry and for which we must begin to prepare.

During last year the London Stock Exchange failed in its bid for LIFFE, which
was sold to Euronext.  Currently, Deutsche Borse plans to acquire the remaining
shareholding in Clearstream, a European settlement system.  Thus exchanges,
clearing and settlement across Europe will continue to be actively discussed
within the financial sector.  This and the previous paragraph highlight the
significant changes that we have adjusted to over the past year and provide an
indication of the increasing level of resources necessary to ensure that we
remain up to date with regard to the way business is both transacted and

Investment Management - Turnover £32.6 million; Operating profit before goodwill
amortisation £6.1 million.

BWD Rensburg - Fee paying clients' funds increased to £1.6 billion (2000: £1.5
billion) inclusive of ISA and PEP funds of £457 million (2000: £436 million).
Other managed funds remained at £2 billion, bringing total clients' funds under
management to £3.6 billion (2000: £3.5 billion).

The acquisition of Dennis Murphy Campbell, an established City of London private
client stockbroking business, was completed in July 2001.  The consideration
payable comprised an initial consideration of £5.97 million, with a deferred
consideration of up to £4 million dependent upon performance over the period to
30 November 2004.  This acquisition gives the business an excellent platform
from which to expand its portfolio management activities in the South.  I am
pleased to report that the integration of this business into BWD Rensburg is
proceeding well, with genuine enthusiasm being shown by our new colleagues for
our fee based culture.

Elsewhere in BWD Rensburg, steady progress continues to be made in transferring
the remainder of clients into fee services and nominee accounts.  In excess of
80% of all trades carried out in the business last year were nominee based.

Capital for Companies had year end funds under management of £36 million (2000:
£39 million) including an additional £8 million raised for Capital for Companies
VCT plc during the year.  Despite difficult market conditions, the business has
continued to make selective investments on behalf of the two Venture Capital
Trusts it manages, whilst providing attractive tax efficient returns to their

Unit Trust Managers - Net sales of £44 million over the year contributed to
funds under management of £294 million (2000: £284 million).  Given the testing
market conditions this is a creditable result and reflects continued confidence
in the ability of the investment team.  As part of the business' commitment to
further develop its product range, an Aggressive Growth Trust was successfully
launched in September 2001.

Administration Services - Turnover £5.3 million; Operating profit before
goodwill amortisation £1.1 million.

Northern Registrars - Has continued to steadily develop both the size and
quality of its client base over the year.  This growth has contributed to the
business being able to achieve 93% of both prior year turnover and operating
profits, despite market conditions having led to reduced levels of share
transfer activity and corporate event work.

Northern Administration - Collective funds administered on behalf of third
parties increased by 60% to £0.9 billion. As its reputation in the market place
has continued to grow, this business, which was established only four years ago,
is now attracting the attention of an increasing number of potential clients.
We remain firmly of the view that the scope for this business to expand is

During the past year I have been delighted with the manner in which the Group's
employees have met the particular challenges that have arisen from the adverse
trading environment.  The loyal support of our clients has also played a central
role in the Group's continued success over this period and for this I would like
to offer my gratitude.  Given the solid foundations from which we are moving
forward, I view the future with confidence.

Michael Burns
6 February 2002

Consolidated profit and loss account
for the year ended 30 November 2001

                                           Note                          2001                          2000
                                                     Continuing operations
                                                     Acquisitions                      Total
                                                           £'000        £'000          £'000          £'000

Turnover                                                37,095            761         37,856         38,373

Operating expenses                                     (29,987)          (653)       (30,640)       (29,006)

Goodwill amortisation                                     (483)          (139)          (622)          (482)

Total administrative expenses                          (30,470)          (792)       (31,262)       (29,488)
                                                       _______        _______        _______        _______
Operating profit                                         6,625            (31)         6,594          8,885

                                                       _______        _______
Profit on disposal of properties                                                         261              -

Net interest receivable                                                                  885            987
                                                                                     _______        _______
Profit on ordinary activities before                                                   7,740          9,872

Tax on profit on ordinary activities         1                                        (2,615)        (3,185)
                                                                                     _______        _______

Profit on ordinary activities after                                                    5,125          6,687

Dividends                                    2                                        (3,789)        (3,580)
                                                                                     _______        _______
Retained profit for the year                                                           1,336          3,107

                                                                                     _______        _______

Earnings per share before goodwill

amortisation and profit on disposal
of properties                                3

Basic                                                                                   26.8p          36.1p

Diluted                                                                                 26.2p          35.2p

Earnings per share                           3

Basic                                                                                   24.9p          33.7p

Diluted                                                                                 24.4p          32.8p

The Group has no material recognised gains and losses other than those included
in the profits above and therefore no separate statement of total recognised
gains and losses is presented.

There is no material difference between the profit on ordinary activities before
taxation and the retained profit for the year stated above and their historical
cost equivalents.

Consolidated balance sheet
at 30 November 2001

                                                                                     2001       2000
                                                                                    £'000      £'000
Fixed assets

Intangible assets                                                                 16,375           8,669

Tangible assets                                                                    6,279           6,135

Investments                                                                          511             769
                                                                                 _______         _______

                                                                                  23,165          15,573
                                                                                 _______         _______

Current assets

Debtors                                                                           31,318          36,977

Investments                                                                            -           1,162

Cash at bank and in hand                                                          22,468          15,366
                                                                                 _______         _______
                                                                                  53,786          53,505

Amounts falling due within one year                                              (37,722)        (46,280)
                                                                                 _______         _______
Net current assets                                                                16,064           7,225

                                                                                 _______         _______
Total assets less current liabilities                                             39,229          22,798


Amounts falling due after more than one year                                      (9,064)         (3,529)

Provisions for liabilities and charges                                              (238)           (251)

                                                                                 _______         _______
Net assets                                                                        29,927          19,018

                                                                                 _______         _______
Capital and reserves

Called up share capital                                                            2,204           2,032

Share premium account                                                              9,186           3,686

Capital redemption reserve                                                           100             100

Revaluation reserve                                                                  275             275

Other reserves                                                                     6,086           2,185

Profit and loss account                                                           12,076          10,740
                                                                                 _______         _______
Equity shareholders' funds                                                        29,927          19,018
                                                                                 _______         _______

Consolidated cash flow statement
for the year ended 30 November 2001
                                                                     Note                 2001          2000
                                                                                         £'000         £'000

Net cash inflow from operating activities                          a                     6,946        10,844

Returns on investment and servicing of finance

Interest received                                                                        1,076         1,169

Interest paid                                                                             (456)         (182)

Taxation paid                                                                           (3,559)       (1,875)

Capital expenditure and financial investment

Purchase of tangible fixed assets                                                       (1,362)       (1,745)

Purchase of fixed asset investments                                                          -          (257)

Net proceeds from sale of properties                                                     1,423             -

Proceeds from sale of tangible fixed assets                                                117           158

Proceeds from sale of fixed asset investments                                               10             2

Acquisitions and disposals

Purchase of subsidiary undertakings                                                     (2,000)            -

Costs associated with acquisition                                                         (301)            -

Equity dividends paid                                                                   (3,582)       (3,177)

                                                                                       _______       _______
Cash (outflow)/inflow before financing                                                  (1,688)        4,937


Issue of ordinary share capital                                                          5,603            51

Increase/(decrease) in debt                                                              4,000          (362)

Redemption of loan notes                                                                  (813)            _
                                                                                       _______       _______

Increase in cash in the year                                       b                     7,102         4,626

                                                                                       _______       _______

Notes to the consolidated cash flow statement
a. Reconciliation of operating profit to operating cash flows

                                                                                       2001          2000
                                                                                      £'000         £'000

Operating profit                                                                     6,594         8,885

Amortisation of goodwill                                                               622           482

Depreciation                                                                         1,113         1,026

(Profit)/loss on disposal of tangible fixed assets                                     (12)           32

Profit on disposal of fixed asset investments                                           (8)            -

Shares subject to grant of a nil cost option                                           256             -

Decrease in debtors                                                                  5,912         4,976

Decrease in creditors and provisions                                                (7,531)       (4,557)
                                                                                   _______       _______

Net cash inflow from operating activities                                            6,946        10,844
                                                                                   _______       _______

b. Analysis and reconciliation of net funds

                                                      At 1 Dec           Cash        Other At 30 Nov

                                                          2000           Flow      Changes          2001
                                                         £'000          £'000        £'000         £'000

Cash and deposits                                      15,366          7,102            -        22,468

Debt due after one year                                (3,529)        (4,000)       3,113        (4,416)

Debt due within one year                               (1,000)           813         (563)         (750)
                                                      _______        _______      _______       _______
Net Funds                                              10,837          3,915        2,550        17,302
                                                      _______        _______      _______       _______

The net effect of other changes above of £2,550,000 represents the reclassification of deferred
consideration in respect of the acquisition of Nicholson Barber Limited during the year ended 30
November 1999, which does not represent borrowings until such time as the deferred
consideration becomes payable.

                                                                                      2001          2000
                                                                                     £'000         £'000

Increase in cash                                                                    7,102         4,626

Repayment of debt                                                                     813           362

Loans drawn down                                                                   (4,000)            -

Reclassification of deferred consideration                                          2,550             -
                                                                                   _______       _______

Movement in net funds in the year                                                   6,465         4,988

Net funds at 1 December 2000                                                       10,837         5,849
                                                                                   _______       _______

Net funds at 30 November 2001                                                      17,302        10,837
                                                                                   _______       _______


1.        Corporation tax

Corporation tax at 30% (2000: 30%)

2.         Dividends

                                                                                          2001          2000
                                                                                         £'000         £'000

Interim paid of 6.0p per share (2000: 6.0p)                                              1,195         1,193

Proposed final of 12.0p per share (2000: 12.0p)                                          2,594         2,387
                                                                                       _______       _______

                                                                                         3,789         3,580
                                                                                       _______       _______

The Directors are recommending a final dividend of 12.0p per share (2000:
12.0p), which together with the interim dividend of 6.0p per share (2000: 6.0p)
makes a total dividend for the year of 18.0p per share (2000: 18.0p).  The
proposed dividend, to be paid on 8 April 2002 to shareholders that are on the
register at the close of business on 15 March 2002, is calculated on 21,615,811
ordinary shares.  This excludes 421,250 ordinary shares held by the Employee
Share Ownership Trust for which all dividends have been waived.

3.         Earnings per share

Basic earnings per share before goodwill amortisation and profit on disposal of
properties is calculated with reference to earnings for shareholders of
£5,516,000 (2000: £7,169,000) and the weighted average number of shares in issue
during the year of 20,585,873 (2000: 19,865,843).  Basic earnings per share is
calculated with reference to earnings for shareholders of £5,125,000 (2000:

Diluted earnings per share is the basic earnings per share, adjusted for the
effect of the conversion into fully paid shares of the weighted average number
of all employee share options outstanding during the year.  The number of
additional shares used for the diluted calculation is 443,699 shares (2000:

Basis of preparation

The financial information in this press release does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985, but is
derived from the accounts.  Statutory accounts for 2000 have been delivered to
the Register of Companies, and those for 2001 will be delivered following the
Company's Annual General Meeting.  The independent auditors have reported on the
accounts for both 2000 and 2001; their reports were unqualified and did not
contain statements under section 237 (2) or (3) of the Companies Act 1985.

Full Accounts

The full accounts will be posted to shareholders on 26 February 2002 and will be
available at the Company's registered office from this date, and on the Group's
website at

                      This information is provided by RNS
            The company news service from the London Stock Exchange


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