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BWD Securities PLC (RBG)


Wednesday 07 February, 2001

BWD Securities PLC

Final Results

BWD Securities PLC
7 February 2001

                           BWD SECURITIES PLC (BWD)
                               30 NOVEMBER 2000

BWD, the Investment Management and Administration Services Group - Key

  * Profit before tax and goodwill amortisation at £10.4m          - up 55%

  * Basic earnings per share before goodwill amortisation 36.1p    - up 34%
    (1999: 26.9p)                                                       

  * Total dividend of 18.0p per share (1999: 14.5p)                - up 24%

  * Turnover at £38.4m (1999: £27.0m)                              - up 42%

  * Group fee income at £20.2m (1999: £14.2m)                      - up 42%

  * BWD Rensburg managed client funds at £3.5bn (1999: £2.4bn)     - up 46%

  * BWD Rensburg Unit Trusts at £284m (1999: £203m)                - up 40%

Mike Burns, Chief Executive of BWD Securities, commented:

'We are very pleased with the performance of all our offices, which are
reaping the benefits of our strategy to reposition our main business as an
investment management business, rather than a traditional stockbroker.'

For further information, please contact:
Michael Burns, Chief Executive                  Tel: 0151 227 2030
BWD Securities PLC
Nick Lyon/Jessica Rouleau                       Tel: 020 7796 4133
Hudson Sandler


Financial Results

In my first year as Chairman I am pleased to report a 55% increase in the
Group's profit before tax from £6.7 million to £10.4 million for the year
ended 30 November 2000 and a 34% increase in basic earnings per share to
36.1p. These figures are all prior to goodwill amortisation.

The prior year tax charge was reduced through the operation of an employee
share scheme, which resulted in an exceptional increase in the 1999 basic
earnings per share of 2.5p. The current year tax charge has now returned to
its expected level; this primarily explains the differential between year on
year growth in profits and earnings.


The directors are recommending an increase in the total dividend per share for
the year of 24% to 18p.

Board and Employees

I became Chairman following the last Annual General Meeting and on behalf of
the Board I would like to pay tribute to my predecessor Peter Stanley, who led
the Group during five years of impressive growth.

Michael Dickinson retired as Finance Director on 30 November 2000, a position
he held since the Company floated on the Stock Market in 1988. I would like to
thank Michael for the significant contribution he made to the development of
the Group during this twelve year period.

I am pleased to report that Jonathan Wragg joined the Board as Finance
Director on 1 December 2000. Jonathan has four years experience within the
Group as Financial Controller and since May 1999, additionally as Company

This year has seen unprecedented levels of activity in the markets in which we
operate. On behalf of the Board and the shareholders, I would like to thank
all employees across the Group for their tremendous efforts during this time,
particularly in ensuring that the high standards of client service upon which
we pride ourselves were upheld throughout.

London Stock Exchange

During the past year the London Stock Exchange (LSE) demutualised. As a
consequence the Group received 100,000 shares in the LSE which are included
within the Group's balance sheet at nil historical cost. The Board recognises
that as a user of the LSE, it is important at this critical time that we
retain a voice regarding its future direction and development.


The current year has started well across all Group businesses and the Board
are confident that there are significant opportunities for future growth.

Alan Bottomley
7 February 2001


I am delighted to report that the past year has been an extremely busy and
successful period for the Group in all its areas of operation. Over recent
years we have pursued a consistent strategy of repositioning our main business
as an investment management business rather than a traditional stockbroker.
Turnover increased by 42% to £38.4 million, with an even balance between first
and second halves. Given particularly active markets in the first half of the
year, this achievement deserves recognition as it emphasises the Group's
continuing progress towards its strategic goal of increasing fee income and
becoming less dependent on transaction based revenue.

I welcome the alterations to PEP regulations outlined by the Chancellor in his
November statement which will take effect from 6 April 2001. Introducing
equivalent investment criteria for PEPs and ISAs, together with allowing
Single Company and General PEPs to be combined into one portfolio, is a
welcome simplification of this area. Another area which I would urge the
Chancellor to address is Capital Gains Tax, which the majority of clients,
investment advisers and accountants find increasingly complex.

Since demutualising last summer, the London Stock Exchange (LSE) has suffered
poor publicity. This has arisen predominantly out of the contentious, aborted
merger with Deutsche Borse and a failed bid from the Swedish company, OM
Gruppen. Rumours of other alliances involving the LSE have also featured
regularly in the financial press.

This situation is unsettling for users and clients of the LSE which operates
as the main UK market. Whilst I do not believe that this market can remain in
its present form, I would prefer to see a joint venture as the precursor to
the creation of a larger market involving European and possibly US exchanges.

There is a danger that the development of alternative markets such as
Tradepoint and JIWAY will, by fragmenting liquidity, increase market
volatility. It does appear contradictory that whilst the Financial Services
Authority is presently consolidating the numerous UK regulatory authorities
under one umbrella, a move which I welcome, UK markets are moving in the
opposite direction.

Investment Management - Turnover £33.2 million; Operating profit before
goodwill amortisation £8.2 million.

BWD Rensburg - Fee paying clients' funds have increased by 34% to £1.5

This figure includes ISA and PEP funds of £436 million, which have increased
by 37%. Other managed funds now stand at £2 billion, putting total clients'
funds under management at £3.5 billion.

In common with other world financial markets, the UK is reducing settlement
periods. On 5 February 2001 this period was further shortened to three days
(T+3). Clients who have traditionally used certificates and transfer forms are
now finding that the best way of meeting the new deadlines is by using our
nominee company. As a result more of our clients are moving to fee paying
services and benefiting from a broader number of other services.

The integration of Nicholson Barber, which was acquired towards the end of
1999 has now been successfully completed. In particular, our two Sheffield
operations were brought together in April onto a prestigious new site. The
organic growth of our offices continues to strengthen our position as a
leading regional investment management business.

We continue to develop our services, with each of our offices now being able
to offer personal financial planning to their clientele. This development is a
further step towards improving and enlarging the service we provide to all our

Unit Trust Managers - Funds under management have grown by 40% to £284
million. Against the backdrop of the markets, this is an excellent result. We
continue to expand not only the investment team, but also the sales and
marketing effort as we grow our sales into the key IFA market.

Capital for Companies - This business has been very active throughout the
year. In the first half of the year £10.6 million was raised for BWD Aim VCT
and funds under management at the year end were £39 million. More recently a
prospectus has been issued to raise an additional £8 million for Capital for
Companies VCT.

Administration Services - Turnover £5.2 million; Operating profit before
goodwill amortisation £1.2 million.

Northern Registrars - Has had its busiest year ever. This is due to the
significant volume increases in share transfer activity, to a full corporate
events diary, and as a consequence of continuing to attract new business.
Development of new services to clients together with the maintenance of
existing high standards of client service remain the business's priority.

Northern Administration - This business is still at an early stage in its
development and we are confident of its potential for profitable growth. I am
delighted to report that we have recently reached agreement with Kleinwort
Benson Unit Trusts Limited for the transfer of the whole of their unit trust
administration, during the second quarter of 2001.

Following such a busy year, my review would be incomplete without thanking
both the Group's employees, who have worked tirelessly as a team during the
past year to produce these excellent results, together with all our clients
for their support. Given the proven ability of our employees and the
opportunities that lie ahead, I look forward to the future with confidence.

Michael Burns
7 February 2001

Consolidated Profit and Loss Account
for the year ended 30 November 2000
                                                Note             2000      1999
                                                                £'000      £'000
Turnover                                                      38,373      26,960
Operating expenses                                           (29,006)   (21,293)
Goodwill amortisation                                           (482)       (48)
                                                             _______     _______
Operating profit                                               8,885       5,619
Net interest receivable                                          987         991
                                                             _______     _______
Profit on ordinary activities before taxation                  9,872       6,610
Tax on profit on ordinary activities               1          (3,185)    (1,527)
                                                             _______     _______
Profit on ordinary activities after taxation                   6,687       5,083
Dividends                                          2          (3,580)    (2,853)
                                                             _______     _______
Retained profit for the year                                   3,107       2,230
                                                             _______     _______
Basic earnings per share                           3
- before goodwill amortisation                                 36.1p       26.9p
- after goodwill amortisation                                  33.7p       26.7p
Diluted earnings per share                         3
- before goodwill amortisation                                 35.2p       26.1p
- after goodwill amortisation                                  32.8p       25.8p
                                                           _________    ________

Turnover and operating profit relate entirely to continuing operations.

Statement of Total Recognised Gains and Losses

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.

Consolidated Balance Sheet
at 30 November 2000
                                                                2000        1999
                                                               £'000       £'000
Fixed Assets
Intangible assets                                                8,669    9,151
Tangible assets                                                  6,135    5,606
Investments                                                        769      514
                                                               _______  _______
                                                                15,573   15,271
                                                               _______  _______
Current Assets
Debtors                                                         36,977   41,939
Investments                                                      1,162    1,162
Cash at bank and in hand                                        15,366   12,514
                                                               _______  _______
                                                                53,505   55,615
Amounts falling due within one year                            (46,280) (51,253)

                                                               _______  _______
Net Current Assets                                               7,225    4,362
                                                               _______  _______
Total Assets less Current Liabilities                           22,798   19,633
Amounts falling due after more than one                         (3,529)  (3,529)
Provisions for Liabilities and Charges                            (251)    (244)
                                                               _______  _______
Net Assets                                                      19,018   15,860
                                                               _______  _______
Capital and Reserves
Called up share capital                                          2,032    2,027
Share premium account                                            3,686    5,671
Capital redemption reserve                                         100      100
Revaluation reserve                                                275      275
Other reserves                                                   2,185      154
Profit and loss account                                         10,740    7,633
                                                               _______  _______
Equity Shareholders' Funds                                      19,018   15,860
                                                               _______  _______

Consolidated Cash Flow Statement
for the year ended 30 November 2000
                                                                  2000     1999
                                                Note             £'000    £'000
Net cash inflow from operating
activities                                             a       10,844    7,340
Returns on investment and servicing of finance
Interest received                                               1,169    1,052
Interest paid                                                    (182)       -
Taxation paid                                                  (1,875)  (1,780)
Capital expenditure and financial investment
Purchase of tangible fixed assets                              (1,745)  (1,824)
Purchase of fixed asset investments                              (257)    (204)
Proceeds from sale of tangible fixed assets                       158       96
Proceeds from sale of fixed asset investments                       2       38
Acquisitions and disposals
Purchase of subsidiary undertakings                                 -   (2,500)
Net cash acquired with subsidiary undertakings                       -     454
Equity dividends paid                                          (3,177)  (2,470)
                                                              _______  _______
Cash inflow before financing                                    4,937      202
Issue of ordinary share capital                                    51      432
Decrease in debt                                                 (362)       -
                                                              _______  _______
Increase in cash in the year                           b        4,626      634
                                                              _______  _______

Notes to the Consolidated Cash Flow Statement
a. Reconciliation of operating profit to operating cash flows
                                                                2000       1999
                                                               £'000      £'000
Operating profit                                              8,885      5,619
Amortisation of goodwill                                        482         48
Depreciation charges                                          1,026        825
Loss/(Profit) on disposal of tangible                            32        (51)
fixed assets
Profit on disposal of fixed asset                                 -        (11)
Shares subject to grant of a nil cost                              -       257
Decrease/(Increase) in debtors                                4,976    (20,992)
(Decrease)/Increase in creditors and                         (4,557)    21,645
                                                            _______    _______
Net cash inflow from operating                               10,844      7,340
                                                            _______    _______
b. Analysis and reconciliation of net
                                             At 1 Dec           Cash  At 30 Nov
                                                 1999           Flow       2000
                                                £'000          £'000      £'000
Cash in hand, at bank                         12,514          2,852     15,366
Overdrafts                                    (1,774)         1,774          -
Debt due after one year                       (3,529)             -     (3,529)
Debt due within one year                      (1,362)           362     (1,000)
                                             _______        _______    _______
Net Funds                                      5,849          4,988     10,837
                                             _______        _______    _______

                                                                 2000      1999
                                                                £'000     £'000
Increase in cash in the year                                    4,626      634
Repayment of debt                                                 362        -
Loans acquired with subsidiary                                      -     (362)
Loan notes issued upon acquisition                                  -   (4,529)
                                                              _______  _______
Movement in net funds in the year                               4,988   (4,257)
Net funds at 1 December 1999                                    5,849   10,106
                                                               _______  _______
Net funds at 30 November 2000                                  10,837    5,849
                                                              _______  _______


 1. Corporation tax

Corporation tax at 30% (1999 30.33%)

 2. Dividends
                                                                 2000       1999
                                                                £'000      £'000

    Interim paid of 6.0p per share (1999: 4.5p)                 1,193        869

    Proposed final of 12.0p per share (1999: 10.0p)             2,387      1,984
                                                              _______    _______
                                                                3,580      2,853
                                                              _______    _______

    The directors are recommending a final dividend of 12.0p per share (1999:
    10.0p), which together with the interim dividend of 6.0p per share (1999:
    4.5p) makes a total dividend for the year of 18.0p per share (1999:
    14.5p). The proposed dividend to be paid on 9 April 2001 to shareholders
    that are on the register at the close of business on 16 March 2001 is
    calculated on 19,889,365 ordinary shares. This excludes 430,000 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 is calculated with
reference to earnings for shareholders of £7,169,000 (1999: £5,131,000) and
the weighted average number of shares in issue during the year of 19,865,843
(1999: 19,046,421). Basic earnings per share after goodwill amortisation is
calculated with reference to earnings for shareholders of £6,687,000 (1999: £

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 505,873 shares (1999:
619,096). All share capital held at 30 November 2000 by the Employee Share
Ownership Trust, for which a nil cost option had not been granted, is excluded
from the calculation of diluted earnings per share.


The results are an abridged extract from the financial statements for the year
ended 30 November 2000 which have not yet been delivered to the Registrar of
Companies. The auditor's report on the full financial statements has yet to be

The results have been prepared on a basis consistent with the accounting
policies set out on page 24 of BWD Securities PLC's annual report and
financial statements for the year ended 30 November 1999. The preliminary
financial statements should therefore be read in conjunction with the 1999
annual report and financial statements.

The financial information as set out in this report is unaudited and does not
comprise statutory accounts for the purposes of Section 240 of the Companies
Act 1985.

The comparative figures for the year ended 30 November 1999 have been taken
from, but do not constitute, the Company's statutory financial statements for
that financial year. Those financial statements have been reported on by the
Company's auditors and delivered to the Registrar of Companies. The report was

Full Accounts

The full accounts will be posted to shareholders on 26 February 2001 and will
be available at the Company's registered office from this date.


a d v e r t i s e m e n t