Interim Results

Berry Birch & Noble PLC
29 September 2000

 
Berry Birch & Noble, a leading independent financial services group, today
announced interim results for the half year ended 31 July 2000.  
 
Berry Birch & Noble plc - results for the half year ended 31 July 2000.  
 
Financial highlights  
                                                                              
                      Unaudited half   Unaudited half             Audited year
                       year ended 31    year ended 31                 ended 31
                         July 2000        July 1999               January 2000
                              £'000            £'000                          
                                                        Change          £'000 
  Turnover                    5,534            4,537      +22%          9,340 
  Operating profit              386              373       +3%            873 
  before                                                                      
  exceptional item                                                            
  Profit before                 402              411       -3%            943 
  exceptional item                                                            
  and taxation                                                                
  Profit (loss)                 402              411       -3%        (1,357) 
  before taxation                                                             
  Basic earnings               5.8p             5.9p       -2%          11.8p 
  per share before                                                            
  exceptional item                                                            
                                                       
  Interim dividend                -             1.0p                       
                                                                              
  Net (debt) funds            (435)              545                    (310) 
 
Group results

The Group profit before taxation for the half year ended 31 July 2000 was
£402,000 (1999: £411,000).  The result represents a small decline of 2% as
compared to the same period last year.  Whilst the results at the interim
stage were slightly below our expectations, short-term profits growth has had
to be put on hold in order to allow the Group to progress with its' strategy
of expansion.

Earlier this year when we announced our final results for the year to 31
January 2000, turnover was growing at an annualised rate of 23%.  We are
pleased to confirm that this momentum has continued and turnover grew during
the half year to 31 July 2000 by some 22%.  The Board is aware that long-term
shareholder value can only be created by expanding at a faster rate than the
Group has been able to achieve in recent years, and the Board believe that the
Group is in the process of accomplishing this transition.

A significant proportion of the increased turnover and operating costs
resulted from the acquisitions completed in the previous year, specifically
the business acquired from Bradstock plc.  Whilst the acquired businesses will
result in a positive contribution in the full year to 31 January 2001, the
need to re-organise and relocate a number of offices has had the consequence
of the Group absorbing approximately £50,000 in non-recurring costs relating
to this integration process.  Equally, much management time has been taken up,
and now that this task is nearing completion, more effort can be devoted into
growing the acquired businesses further.

In respect of the Pensions Review, a full assessment of the Group's exposure
was completed back in May 2000 at the time when we announced last year's
results, and a further provision of £2,300,000 was made.  Progress has been
made to expedite the Pensions Review which will be completed by June 2002, in
line with the dead-line set by our regulator, the Financial Services
Authority.  Between now and then, as we make further progress in achieving
this goal, the quantum of the total liability will become more certain.  The
Board has taken much care in trying to assess the likely redress payments that
will become payable under this review, and provided for these accordingly,
however, the final amount of compensation to be paid will only be certain as
the Pensions Review draws to a close.  With uncertainty still existing, the
directors believe it inappropriate to change the provision at the interim
stage, but will re-assess the provision already made at the time when our full
year results are announced in April 2001.

As a result of the slightly lower Group profit after taxation of £381,000
(1999: £384,000), earnings per share for the half year fell by 2% to 5.8p per
share (1999: 5.9p).

Review of Operations

The current half year has principally been one of consolidation.  In October
1999 and prior to the current financial year, the Group acquired the major
part of the financial services business of Bradstock plc.  This enabled the
Group to expand its' representation across the United Kingdom by a further
five locations, four of which were in City centre locations in Birmingham,
Nottingham, Manchester and Glasgow.  The current year has seen the need to
re-organise these operations and new premises have been obtained in
Nottingham, Manchester, and Birmingham, the latter being an amalgamation of
our existing Droitwich and former Birmingham offices.  In addition,
negotiations are nearing completion for our Harrow and Glasgow operations to
relocate into new premises.  Once achieved, this will complete the integration
of the business acquired from Bradstock plc.

With the acquisition of the financial services business from Bradstock, the
Group's capacity to deal with corporate and individual clients over a larger
geographical spread has increased substantially.  Equally this expansion has
broadened the scope of the Group's financial planning business by reducing our
reliance on introductions from our major corporate connections through a more
balanced portfolio of clients, as well as strengthening our existing and new
corporate connections with the resultant increase in activity on employee
counselling.  The integration of the new branches has been achieved smoothly,
with excellent client and staff retention.  The morale of the staff has been
particularly high in this transitional period.

Our group employee benefit business has seen much activity and the
introduction of the stakeholder pension will have a significant influence. 
Despite the very modest margins involved in the stakeholder proposals,
employers are seeking our advice.

We have for a number of years offered mortgage advice, with our mortgage
consultants providing a personalised service to clients.  As the market
changes and with endowment mortgages now out of favour, further pressure has
been felt on our margins.  We have therefore been forced to reduce the number
of our specialised mortgage consultants.  However, advice is still available,
on demand, via a mortgage desk, and we are experiencing increasing demand for
advice through the various internet and intranet sites which we maintain.

Our insurance broking operation has experienced a sharp increase in activity,
particularly in relation to our personal lines business, and the launch of our
insurance services to the 'over 50's'.  Not only has our turnover risen
significantly following this launch, but also new business will continue to be
written in our second half as individuals, having made inquiries and having
received our competitive quotes, switch their insurance at their renewal
dates.  The operation is also reviewing and assessing the cross-selling
opportunities that exist in relation to the new insurance customers that are
signing up every month.

Dividend

Taking into account the cash requirements needed to meet the further expansion
plans of the Group, as well as the substantial sums paid out it in respect of
redress during the half year, the directors believe that the payment of an
interim dividend at this time would be inappropriate.  Therefore, the
directors do not recommend that the Company pay an interim dividend.

Outlook

Whilst the first half of the financial year has been focused on the
consolidation of our ongoing activities, we anticipate that the second half
will witness the further profitable expansion of the Group, organically and by
acquisition.  In order to achieve these objectives the Group will seek to
attract additional quality advisers to complement our current growing team.

Staff Members

The Board recognises that the progress that the Group has made in the half
year could not have been achieved without the support and loyalty of our
staff.  For that reason, we would like to express our appreciation to all
staff members for their contribution that has made our current result
possible.

Sir Jeremy Black                  Derek Berry
Chairman                          Chief Executive
29 September 2000


Consolidated profit and loss account  
for the half year ended 31 July 2000  
                                                                              
                                  Notes     Unaudited    Unaudited     Audited
                                            half year    half year        year
                                             ended 31     ended 31    ended 31
                                          July 2000    July 1999       January
                                               £'000        £'000       2000  
                                                                        £'000 
  Turnover                                     5,534        4,537       9,340 
  Operating costs                            (5,148)      (4,164)     (8,467) 
  Operating profit before                        386          373         873 
  exceptional item                                                            
  Exceptional item - Pensions         3            -            -     (2,300) 
  Review                                                                      
  Operating profit (loss)                        386          373     (1,427) 
  Net interest receivable                         16           38          70 
  Profit (loss) on ordinary                      402          411     (1,357) 
  activities before taxation                                                  
  Taxation                            4         (21)         (27)          18 
  Profit (loss) on ordinary                      381          384     (1,339) 
  activities after taxation                                                   
  Dividends                           6            -         (65)        (65) 
  Retain profit (loss)                           381          319     (1,404) 
  Earnings per share                                                          
  -     basic before                  5         5.8p         5.9p       11.8p 
  exceptional item                                                            
  -     basic                         5         5.8p         5.9p     (20.5p) 
                                                                              
  -     diluted before                5         5.8p         5.9p       11.8p 
  exceptional item                                                            
  -     diluted                       5         5.8p         5.9p     (20.5p) 
 

  Consolidated statement of total recognised gains and losses 
  for the half year ended 31 July 2000                                        
                       
                           Unaudited half     Unaudited half      Audited Year
                            year ended 31      year ended 31          ended 31
                               July 2000          July 1999      January 2000 
                                  £'000              £'000              £'000 
  Profit (loss) after                381                384           (1,339) 
  taxation                                                                    
  Surplus on                           -                  -               482 
  revaluation of                                                              
  property                                                                    
  Total recognised                   381                384             (857) 
  gains and losses                                                            

 
Consolidated balance sheet  
at 31 July 2000  

                           Unaudited at 31    Unaudited at 31    Audited at 31
                               July 2000          July 1999     January 2000  
                                    £'000              £'000            £'000 
  Fixed assets                                                                
  Intangible assets -                 
  goodwill                            495                 98              506 
  Tangible assets                   1,898              1,521            1,862 
                                                              
                                    2,393              1,619            2,368 
  Current assets                                                              
  Debtors                           2,521              2,774            2,472 
  Cash at bank                        540              1,340              690 
                                    3,061              4,114            3,162 
  Creditors: amounts                                                          
  falling due within
  one year
  Borrowings                        (550)              (795)            (550) 
  Other                           (2,010)            (2,839)          (1,720) 
                                                                              
                                                  
                                  (2,560)            (3,634)          (2,270) 
  
  Net current assets                  501                480              892 
  
  Total assets less                 2,894              2,099           3,260  
  current liabilities                                                        
  
  Creditors: amounts                                                          
  falling due after                                                           
  more than one year                                                          
  Borrowings                        (425)                  -            (450) 
                                    2,469              2,099            2,810 
  Provisions for                  (1,914)              (700)          (2,652) 
  liabilities and                                                             
  charges                                                                     
  Net assets                          555              1,399              158 
  
  Capital and reserves                                                        
                                    
  Called up share                                                             
  capital                             654                652              652 
                                                                  
  Share premium                        92                 78               78 
  account                                                                     
  Revaluation reserve                 482                  -              482 
  Profit and loss                   (673)                669          (1,054) 
  account                                                                     
  Equity shareholders'                555              1,399              158 
  funds                                                                       
 

Reconciliation of movements in shareholders' funds  
                                                                              
                                             Unaudited half year ended 31 July
                                                                        2000  
                                                                        £'000 
  Profit for the period                                                   381 
  Issue of ordinary share capital                                          16 
  Net increase in shareholders' funds                                     397 
  Opening shareholders' funds                                             158 
  Closing shareholders' funds                                             555 
 

Consolidated cash flow statement  
for the half year ended 31 July 2000  
                                                                              
                            Unaudited half     Unaudited half     Audited year
                             year ended 31      year ended 31         ended 31
                               July 2000          July 1999     January 2000  
                                    £'000              £'000            £'000 
  Net cash (outflow)                  (3)                224            (177) 
  inflow from                                                                 
  operating                                                                   
  activities (Note 7)                                                         
                                                                              
  Returns on                                                                  
  investments and                  
  servicing of                                                                
  finance                                                                     
  
  Interest received                    63                 54               99 
                                         
  Interest paid                      (47)               (16)             (29) 
  
  Net cash inflow                      16                 38               70 
  from returns on                    
  investments and                                                             
  servicing of                                                                
  finance                                                                     
  Taxation                                                                    
  Tax recovered                         -                 11               11 
  Capital expenditure                                                         
  and financial                                                               
  investment                                                                  
  Purchase of                       (218)              (158)            (415) 
  tangible fixed assets                                                       
     
  Purchase of                        (15)              (100)            (522) 
  goodwill                                                                    
  Sale of tangible                     79                 58              317 
  fixed assets                                                                
  Net cash outflow                  (154)              (200)            (620) 
  from capital                                                                
  expenditure                                                                 
  Dividends paid                        -              (130)            (196) 
  Net cash outflow                  (141)               (57)            (912) 
  before financing                                                            
  Financing                                                                   
  Issue of ordinary                    16                  -                - 
  share capital                                                               
  Net (decrease)                     (25)               (71)              134 
  increase in debt                                                            
  Decrease in cash in               (150)              (128)            (778) 
  the period                                                                  
 

Reconciliation of net cash flow to movement in net (debt) funds  
                                                                              
                            Unaudited half     Unaudited half   Audited year  
                              year ended         year ended           ended 31
                            31 July 2000        31 July 1999     January 2000 
                                    £'000              £'000            £'000 
  Decrease in cash in               (150)              (128)            (778) 
  the period                                                                  
  Capital element of                    -                 71              366 
  finance lease                                                               
  repayments                                                                  
  Change in net cash                (150)               (57)            (412) 
  resulting from cash                                                         
  flows                                                                       
  Bank Loan                            25                  -            (500) 
  Movement in net debt              (125)               (57)            (912) 
  in the period                                                               
  Net (debt) funds at               (310)                602              602 
  commencement of                                                             
  period                                                                      
  Net (debt) funds at               (435)                545            (310) 
  end of period                                                               
 
Notes to the interim results  
 
1.     Basis of preparation of interim financial information  
 
The interim financial information has been prepared on the basis of the
accounting policies set out in the Group's statutory accounts for the year
ended 31 January 2000. 
 
2.     Segmental information  
                                                                              
                          Unaudited half      Unaudited half    Audited year  
                            year ended          year ended            ended 31
                          31 July 2000         31 July 1999      January 2000 
                                  £'000               £'000             £'000 
  Turnover by                                                                 
  business                        
  Financial
  Services                        4,345               3,598             7,270 
                                          
  Insurance broking               1,189                 939             2,070 
                                                                              
                                  5,534               4,537             9,340 
  Profit before                                                               
  taxation by                       
  business
  Financial
  services                          265                 308           (1,522) 
                                            
  Insurance broking                 137                 103               165 
                                                                              
                                    402                 411           (1,357) 
 
3.     Exceptional item  
 
The exceptional item relates to provisions made in respect of the Pensions
Review. The amount included at 31 January 2000 was calculated to include
amounts relating to both phase 1 and phase 2 of the Review. At present no
further change in the provision is considered appropriate.  
 
4.     Taxation  
 
The taxation charge is calculated by applying estimated rates, based on the
anticipated rate for the full year, and is arrived at after taking into
account prior year tax losses and after writing back advance corporation tax
previously written off.  
 
5.     Earnings per share  
 
The calculation of the basic earnings per share of 5.8p (1999 : 5.9p) is
based on profit after taxation of £381,000 (1999 : £384,000) divided by the
weighted average of 6,525,221 (1999 : 6,516,836) shares in issue during the
period. The diluted earnings per share of 5.8p (1999 : 5.9p) is based on the
same profit after taxation of £381,000 (1999 : £384,000) divided by the
weighted average of 6,530,478 (1999 : 6,516,836) shares.  
 
6.     Dividend 
 
The Directors do not propose the payment of an interim dividend.  
 
7.     Reconciliation of operating profit to net cash (outflow) inflow from
operating activities 
                                                                              
                             Unaudited half     Unaudited half  Audited year  
                               year ended         year ended          ended 31
                             31 July 2000        31 July 1999    January 2000 
                                     £'000              £'000           £'000 
  Operating profit                     386                373             873 
  before exceptional item  
  Exceptional item                                                            
  -     Pensions Review              (738)              (252)           (961) 
  payments made net of                                                        
  recoveries                                                                  
  Amortisation of                       26                  -              16 
  goodwill                                                                    
  Depreciation charges                 100                128             257 
  Loss on sale of                        3                 12              20 
  tangible fixed assets                                                       
                                                                              
  Increase in debtors                 (49)              (618)           (532) 
  Increase in creditors                269                581             150 
  and provisions  
  Net cash (outflow)                   (3)                224           (177) 
  inflow from operating                                                       
  activities                                                                  
 
8.     Analysis of net debt  
                                                                         
                        At 1 February 2000     Cash flow              At 
                                      £'000                 31 July 2000 
                                                                   £'000 
       Cash at bank                     690        (150)             540 
       Loans                        (1,000)           25           (975) 
       Net debt                       (310)        (125)           (435) 
 
9.     General  
 
The interim report was approved by the Board of Directors on 29 September
2000.  

The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the full preceding year is extracted from
the statutory accounts for the financial year ended 31 January 2000. Those
accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.  

This report will be sent to shareholders and will be made available to the
public, upon request, at the registered office of Berry Birch & Noble plc,
22-26 Station Road, West Wickham, Kent, BR4 0PS.