Final Results

CCH International plc 21 June 2006 Press Release 21 June 2006 CCH International plc ('CCH' or 'the Company' or 'the Group') Final results for the fourteen months ended 31 December 2005 CCH International plc (AIM: CCH), the trade finance group, today announces its final results for the fourteen months ended 31 December 2005. Highlights • pre-tax profit increased significantly to £689,554 (2004: £37,116) • gross profit increased more than five times to £2,382,570 (2004: £451,495) • earnings per share increased to 1.21 pence (2004: 0.08 pence) • swift integration of CCH Europe GmbH and CCH Holdings SPC in Bahrain • financed more than £142million (US$250 million) of short term receivables in 2005 • expert in Sharia-based instruments and Islamic Finance Highlights from the current trading period • A$80 million five-year trade finance facility signed with Bill Express Limited • signed a one year US$30 million export finance facility with Basaran Gida Ticaret ve Turizm Isletmeleri • commitment to increase liquidity in the Company's shares this year Commenting on the 2005 final results, Eren Nil, Managing Director of CCH, said: 'These results represent a very good performance for the Group. We have had good deal flow and this has translated into strong profitability. Furthermore we are pleased that there is increasing market appetite for our Sharia compliant trade financing services. We look forward to increasing liquidity in our shares and delivering ongoing growth for our shareholders.' - ends - For further information, please contact: CCH International plc www.cch-international.com Eren Nil, Managing Director Tel: +44 (0) 20 8334 0871 Richard Fossett, Director and COO eren@cch-international.com r.fossett@cch-international.com Media enquiries: Abchurch Communications www.abchurch-group.com Heather Salmond / Franziska Bohnke Tel: +44 (0) 20 7398 7700 franziska.boehnke@abchurch-group.com Chairman's statement The Board is pleased to announce that the Group's pre tax profit for the 14 months ended 31 December 2005 has increased to £689,554 which represents a dramatic increase over the 2004 pre-tax profit of £37,116. The Group's gross profit increased to £2,382,570 from £451,495. Basic earnings per share increased to 1.21 pence from 0.08 pence. CCH enjoyed significant market growth during the course of 2005 which, assisted by the effects of streamlining the Group's operating structure during 2003/2004, has resulted in a significant upturn in profits. This success also reflects the swift integration of CCH Europe GmbH into the Group which has strengthened our core activities. The addition of CCH Holdings SPC in Bahrain also gave us a foothold in the all-important Gulf Co-Operation Council (GCC) which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and The United Arab Emirates. We expect this to provide new opportunities both in strengthening our existing relationships and providing occasions when we can consider holding proprietary equity positions. Our key funding base, which is entrenched in Sharia compliant Islamic Finance, has become the focus of much discussion recently in the press. It is evident that as a by-product of the huge liquidity in the GCC, Sharia compliant instruments such as those offered by CCH are at the forefront of a new wave of Trade Finance opportunities which are set to grow. CCH believes that with our in depth knowledge of Islamic Finance we are in an excellent position to capitalise on this anticipated growth. Moving forward, our strategy also benefits from our ability to identify, analyse and respond quickly to Trade Finance opportunities. I would like to thank all our partners with whom we network, our shareholders who share our vision, and my fellow directors without whose contribution our accelerated growth would not have been possible Ian Salter Chairman Managing Director's statement It is with great pleasure that I am able to report to our shareholders a record period for your Company. During the period, CCH focused primarily on its two main complementary finance activities. These are the short-term receivable financing facilities offered mainly by CCH Europe GmbH based in Dusseldorf, and the short to long term trade and project finance facilities provided to a very great extent in a Sharia compliant Islamic structure. Our short term receivable financing activities are funded to a very significant level by Islamic banks based in the Middle East although we are increasingly being offered conventional funding lines from banks operating in Europe. In line with our own conservative approach to credit risk we fully insure the receivables we finance against non-payment with some of the World's largest insurance companies. We do not restrict our receivable financing activities to any one area or industry on account of the non-payment insurance that we purchase. As such we have a wide industry and geographical spread of receivables. A further advantage in purchasing insurance is that we are effectively using the credit analysis skills of our insurers, thereby managing to control your Company's head count and related staffing costs. During the period we financed in excess of £142 Million (US$250 Million) of short term receivables. When I report to you during the next year, I am confident that this figure will be significantly higher. Historically our short to long term trade and project finance activities have been provided to companies known to directors or shareholders of the Group. Increasingly however, through an expanded use of third party finance intermediaries we are being approached to finance 'new relationships'. This is a very positive and encouraging trend that I believe results from an increased awareness of the Company's activities and our ability, through the use of our Islamic funding base, to structure transactions more in keeping with customers' beliefs and wishes than traditional conventional finance sources. Looking towards the future we will continue to seek opportunities to expand the Company's core activities and thereby increase shareholder value through organic growth and acquisitions. It is the intention of the Board of Directors to increase liquidity in the Company's shares during the course of this year. 2006 has started positively and the Board of Directors looks forward with confidence to the future. Finally I would like to congratulate and thank all those who have contributed to the Company's advancement and I would like to acknowledge the strong support shown to the Company by our funding partners. Eren Nil Managing Director GROUP PROFIT AND LOSS ACCOUNT PERIOD FROM 1 NOVEMBER 2004 TO 31 DECEMBER 2005 Year to 31 Dec 05 31 Oct 04 Note £ £ GROUP TURNOVER 4,837,011 992,193 Cost of sales (2,454,441) (540,698) ----------- ----------- GROSS PROFIT 2,382,570 451,495 Distribution costs (140,537) - Administrative expenses (1,551,935) (412,698) ----------- ----------- OPERATING PROFIT 690,098 38,797 Interest receivable 11,559 145 Interest payable and similar charges (12,103) (1,826) ----------- ----------- PROFIT ON ORDINARY ACTIVITIES BEFORE 689,554 37,116 TAXATION Tax credit on profit on ordinary 93,132 - activities ----------- ----------- PROFIT FOR THE FINANCIAL PERIOD 2 782,686 37,116 =========== =========== Earnings per ordinary share (pence) 3 1.21 0.08 =========== =========== All of the activities of the group are classed as continuing. The company has taken advantage of section 230 of the Companies Act 1985 not to publish its own Profit and Loss Account. GROUP BALANCE SHEET 31 DECEMBER 2005 31 Dec 05 31 Oct 04 Note £ £ £ £ FIXED ASSETS Intangible assets 549,658 - Tangible assets 120,714 228,913 Investments 6 49,949 - ----------- ----------- 720,321 228,913 CURRENT ASSETS Debtors 94,713,444 310,346 Cash at bank and in hand 8,391,898 119,320 ----------- ----------- 103,105,342 429,666 CREDITORS: Amounts falling 101,484,794 85,134 due within one year ----------- ----------- NET CURRENT ASSETS 1,620,548 344,532 ----------- ----------- TOTAL ASSETS LESS CURRENT LIABILITIES 2,340,869 573,445 =========== =========== CAPITAL AND RESERVES Called-up share capital 1,441,269 1,044,444 Share premium account 4 1,211,266 417,615 Other reserves 4 94,262 - Profit and loss account 4 (405,928) (888,614) ----------- ----------- 2,340,869 573,445 =========== =========== SHAREHOLDERS' FUNDS: 5 Equity 1,740,869 (26,555) Non-equity 600,000 600,000 ----------- ----------- 2,340,869 573,445 =========== =========== COMPANY BALANCE SHEET 31 DECEMBER 2005 31 Dec 05 31 Oct 04 Note £ £ £ £ FIXED ASSETS Tangible assets 95,639 228,913 Investments 6 1,333,210 - ----------- ----------- 1,428,849 228,913 CURRENT ASSETS Debtors 525,558 310,346 Cash at bank 110,847 119,320 ----------- ----------- 636,405 429,666 CREDITORS: Amounts falling 130,857 85,134 due within one year ----------- ----------- NET CURRENT ASSETS 505,548 344,532 ----------- ----------- TOTAL ASSETS LESS CURRENT LIABILITIES 1,934,397 573,445 =========== =========== CAPITAL AND RESERVES Called-up share capital 1,441,269 1,044,444 Share premium account 4 1,211,266 417,615 Profit and loss account 4 (718,138) (888,614) ----------- ----------- 1,934,397 573,445 =========== =========== SHAREHOLDERS' FUNDS: Equity 1,334,397 (26,555) Non-equity 600,000 600,000 ----------- ----------- 1,934,397 573,445 =========== =========== GROUP CASH FLOW STATEMENT PERIOD FROM 1 NOVEMBER 2004 TO 31 DECEMBER 2005 Year to 31 Dec 05 31 Oct 04 Note £ £ £ £ NET CASH (OUTFLOW)/INFLOW FROM (39,432,856) 90,259 OPERATING ACTIVITIES RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 11,559 145 Interest paid (12,103) (1,826) ----------- ----------- NET CASH OUTFLOW FROM RETURNS (544) (1,681) ON INVESTMENTS AND SERVICING OF FINANCE CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Net inflow from tangible fixed 210 - assets Acquisition of investments (49,949) - ----------- ----------- NET CASH OUTFLOW FOR CAPITAL (49,739) - EXPENDITURE AND FINANCIAL INVESTMENT ACQUISITIONS AND DISPOSALS Legal fees on acquisition of (68,960) - subsidiary Net cash acquired with 2,096,759 - subsidiary ----------- ----------- NET CASH INFLOW FROM 2,027,799 - ACQUISITIONS AND DISPOSALS ----------- ----------- CASH (OUTFLOW)/INFLOW BEFORE (37,455,340) 88,578 FINANCING FINANCING Increase in bank loans 45,447,805 - ----------- ----------- NET CASH INFLOW FROM FINANCING 45,447,805 - INCREASE IN CASH 7,992,465 88,578 =========== =========== GROUP CASH FLOW STATEMENT (continued) RECONCILIATION OF OPERATING PROFIT TO NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES Year to 31 Dec 05 31 Oct 04 £ £ Operating profit 690,098 38,797 Amortisation 18,952 - Depreciation 140,055 115,171 Foreign exchange gains (70,737) - Profit on disposal of fixed assets (210) - (Increase)/decrease in debtors (53,040,762) 10,827 Increase/(decrease) in creditors 12,829,748 (74,536) ----------- ----------- Net cash (outflow)/inflow from operating (39,432,856) 90,259 activities =========== =========== NOTES TO THE FINANCIAL STATEMENT PERIOD FROM 1 NOVEMBER 2004 TO 31 DECEMBER 2005 1. STATUS OF INFORMATION The financial information presented in this preliminary announcement does not constitute statutory accounts within the meaning of the Companies Act 1985. The information has however been extracted from the Company's statutory accounts which were approved by the Board on 20 June 2006 and on which the Company's auditors have given an unqualified audit opinion. The comparative figures for 2004 have been extracted from the statutory accounts for the year ended 31 October 2004. The statutory accounts for the year ended 31 October 2004 have been filed with the Registrar of Companies and the auditors' opinion on these accounts was unqualified. 2. PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY The profit dealt with in the accounts of the parent company was £170,476 (2004 - £37,116). 3. EARNINGS PER SHARE 14 Months Year to to 31 Dec 05 31 Oct 04 pence Pence Earnings per ordinary share 1.21 0.08 =========== =========== Basic earnings per share is based on the profit after tax of £782,686 (2004:£37,116) and the weighted average number of shares in issue and held outside the group of 64,480,498 (2004 - 44,444,444). 4. RESERVES Group Share Currency Profit and premium reserve loss account account £ £ £ Balance brought forward 417,615 - (888,614) Retained profit for the period - - 782,686 Other movements New equity share capital 793,651 - - subscribed Shares held by subsidiary - - (300,000) Exchange differences on - 94,262 - retranslation of net assets of subsidiary undertakings ----------- ----------- ----------- Balance carried forward 1,211,266 94,262 (405,928) =========== =========== =========== Company Share Profit and premium loss account account £ £ Balance brought forward 417,615 (888,614) Profit for the period - 170,476 Other movements New equity share capital subscribed 793,651 - ----------- ----------- Balance carried forward 1,211,266 (718,138) =========== =========== 5. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS EQUITY SHAREHOLDERS' FUNDS 31 Dec 05 31 Oct 04 £ £ £ £ Profit for the financial 782,686 37,116 period New equity share capital 396,825 - issued Shares held by subsidiary (300,000) - undertaking Premium on new share capital 793,651 - subscribed Exchange differences on 94,262 - retranslation of net assets of subsidiary undertakings ----------- ----------- Net addition to shareholders' 1,767,424 37,116 equity deficit Opening shareholders' equity deficit (26,555) (63,671) ----------- ----------- Closing shareholders' equity funds/ 1,740,869 (26,555) (deficit) =========== =========== NON-EQUITY SHAREHOLDERS' FUNDS Opening and closing shareholders' 600,000 600,000 non-equity funds =========== =========== TOTAL SHAREHOLDERS' FUNDS 2,340,869 573,445 =========== =========== 6. INVESTMENTS Group Listed companies £ COST Additions 49,949 ----------- At 31 December 2005 49,949 =========== NET BOOK VALUE At 31 December 2005 49,949 =========== The market value of listed investments at 31 December 2005 was £52,890 Company Country of Holding Proportion Nature of business incorporation of voting rights and shares held Subsidiary undertakings All held by the company: CCH Europe GmbH Germany Ordinary 100% Trade finance shares CCH Holdings Bahrain Ordinary 100% Investment SPC shares Group companies £ COST Additions 1,333,210 ----------- At 31 December 2005 1,333,210 =========== NET BOOK VALUE At 31 December 2005 1,333,210 =========== On 10 May 2005 the Company acquired CCH Europe GmbH for a consideration of £1,190,476 satisfied by the issue of 39,682,539 new ordinary 1p shares at 3p per share. Goodwill arising on the acquisition of CCH Europe GmbH has been capitalised and will be amortised over 20 years. The investment in CCH Europe GmbH has been included in the company's balance sheet at its fair value at the date of acquisition. Analysis of the acquisition of CCH Europe GmbH: Fair value and Book value £ Cash at bank and in hand 2,096,759 Fixed assets and investments 245,495 Debtors 41,035,236 Creditors (42,686,664) ----------- 690,826 =========== Satisfied by: Shares issued 1,190,476 =========== CCH Europe GmbH earned a profit of £761,790 in the year ended 31 December 2005 (2004 - £224,431), of which £688,249 arose in the period from 10 May 2005 to 31 December 2005. The summarised profit and loss account for this period is as follows: Turnover 4,397,750 =========== Profit before tax 922,217 Taxation 233,968 ----------- Profit for the period from 10 May to 31 December 2005 688,249 =========== On 17 September 2005 the group formed CCH Holdings SPC, a company registered in the Kingdom of Bahrain, for a consideration of £73,744 satisfied by cash. There was no Goodwill arising on the formation of CCH Holdings SPC. The investment in CCH Holdings SPC has been included in the company's balance sheet at the cost of shares issued on inception. CCH Holdings SPC incurred a loss during the period of £53,818. 7. DIVIDENDS The Directors are not declaring a dividend in respect of the period ended 31 December 2005. 8. ANNUAL REPORT AND FINANCIAL STATEMENTS Copies of the Annual Report and Financial Statements will be circulated to shareholders shortly and may be viewed after the posting date on the Company's web-site 'www.cch- international.com' This information is provided by RNS The company news service from the London Stock Exchange

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