Interim Results

Falkland Islands Holdings PLC
10 December 2003

                       FALKLAND ISLANDS HOLDINGS PLC


          Interim Results for the six months ended 30 September 2003



                              HIGHLIGHTS

Falkland Islands Holdings PLC, a UK quoted company operating in the Falkland
Islands in general trading activities, announces interim results for the six
months ended 30 September  2003.



  • First half financial performance impacted by reduced shipping profits:

-         Turnover of £4.9m (2002: £5.3m)

-         Pre-tax profits of £300,000(2002: £421,000)

-         Basic earnings per share of 3.2p(2002:4.6p)



  • Stronger start and outlook for second half:

-         Shipping revenues restored to normal levels

-         Retailing benefiting from redevelopment and food hall extension

-         Agreement to act as sole agents for Caribbean Alliance Insurance
          Company

-         Plans under consideration for use of Group land for housing
          development (subject to relevant planning and other permissions)



  • Continued exploration activity:

-     Oil: Several large leads identified; talks underway with potential joint
      partners

-     Minerals - Future work programme being drawn up





David Hudd, Chairman of Falkland Islands Holdings plc commented:



'Whilst the first half of the year was disappointing due to the poor shipping
result, the fishing season activities in 2002/3 have restored confidence and
trading conditions overall have improved and we believe the Group will generate
a positive result for the year.



The Group is also investing in a number of new developments, which have the
potential to generate significant growth in the longer term.'





                                                                10 December 2003



Enquiries:


Falkland Islands Holdings PLC                        Tel: [phone]
David Hudd, Chairman

College Hill                                         Tel: [phone]
James Henderson








                          Chairman's Interim Statement

                   For the six months ended 30 September 2003





Review of results



As we anticipated, the first half of the year produced lower profits than last
year. Profit before tax fell to  £300,000 (2002: £421,000) on turnover 7% lower
at £4.9m (2002: £5.3m).Earnings per share were 3.2p (2002: 4.6p) .



The fall in profit was attributable to reduced shipping revenues, in the
aftermath of the poor fishing season in 2001/2 which we referred to at the time
of the announcement of our year end results. However, activity levels have now
been restored and a satisfactory result is anticipated for the year.



The directors are not recommending payment of an interim dividend but, in the
absence of unforeseen events, they would anticipate paying a final dividend of
not less than 5.5p in respect of the year ended 31 March 2004.



Cash generation remains strong and the Group maintained net cash balances of
£452,000, the same level as at 31 March 2003. Capital expenditure of
approximately £389,000, primarily relating to the West Store redevelopment, was
financed from cash flow.



Operations



Operating profits declined to £304,000 from £435,000. Retailing profits were
maintained despite the disruption resulting from the extensive building work at
the West Store.  Management services, the fishing agency and the automotive
operations,  produced results comparable to last year.



The shortfall in profits was largely attributable to the decline in shipping
activities and a disappointing result from the Upland Goose Hotel.  Three
voyages were completed in the period (2002:3).  However, bulk freight cargoes
were at low levels reflecting the reduction in  infrastructure and capital
spending by the Islanders which followed the 2001/2 fishing results.   Shipping
costs were significantly higher as a result of increased bunkering costs and the
decline of sterling against the euro.



Occupancy levels at the Upland Goose were lower this year ;  the hotel benefited
last year from increased visitor numbers linked to the 20th anniversary of the
1982 conflict.



Developments



The West Store extension and fit out was completed in July at an overall cost of
  £550,000.  The extension provides a 65% increase in the food hall floor area.
The introduction of the Waitrose own label range, which was one of the key
drivers in the decision to carry out the development, has proved popular with
customers.  For the first time the Falklands has a store offering a
comprehensive range of products in surroundings comparable to retail food
outlets in the UK.



The Group has successfully concluded an agreement to act as agents for Caribbean
Alliance Insurance Company (CAIC) which is replacing Royal & Sun Alliance (RSA)
as the main provider of insurance cover for the Islands.CAIC is a former
subsidiary of RSA and the approval of the Falklands Government has been secured
for the change.  CAIC specialises in providing insurance cover for island
communities.  We believe that their appointment will lead to a significant
increase in the range of insurance products for our clients.



Given the forecast shortage of available  housing  in Stanley, the Group is in
the process of drawing up plans to utilise some of its landbank for housing
development. Any such developments will be subject to planning and other
necessary approvals.



Exploration Activities



Both the oil and gas and the mineral exploration licences have been the subject
of much activity over the last 6 months and your directors remain committed to
ensuring that the Company participates in future exploration activity.



The Hydrocarbon oil and gas consortium, in which the Group has a 20% interest,
has completed the reprocessing and analysis of some 1,000km of the 4,460 km of
seismic data which was purchased last year. Several large leads have been
identified which the consortium believes warrant further investigation and it is
likely that additional seismic will be shot in 2004/5. The Group intends to
limit its capital expenditure on this oil and gas exploration activity through
the introduction of a farm-in partner and is in discussion with a number of
potential partners.



The Onshore mineral Joint venture, in which the Group holds a 33% interest, has
a prospecting licence covering the whole of the Falkland Islands.  Discussions
are continuing on the future work programme with potential joint venture
partners.



Outlook



The Falklands economy has recovered from the uncertainty earlier in the year and
the trading performance of the Group has improved since the end of the first
half. The Group is pursuing a number of new developments which your Board
believes will generate long term growth.  The board is confident that the Group
will achieve a satisfactory result for the year.







UNAUDITED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT

                                                 Notes      Unaudited        Unaudited         Audited
                                                          6 Months to      6 Months to      Year ended
                                                         30 September     30 September        31 March
                                                                 2003             2002            2003
                                                               £'000            £'000           £'000

Turnover                                                        4905             5284           11447
Cost of sales                                                  (3338)           (3608)          (7871)

Gross Profit                                                    1567             1676            3576
Administrative expenses                                        (1363)           (1338)          (2789)
Other Operating Income                                           100               97             265

Operating profit                                                 304             435             1052
                                                   1
Net Interest                                                      (4)             (14)            (27)

Profit on ordinary activities before taxation                    300              421            1025

Taxation on profit on ordinary                                  (102)            (139)           (308)
activities                                           2

Profit on ordinary activities after taxation         2           198              282             717

Dividends                                                       -                -               (336)

Retained profit for the financial period                         198              282             381

Earnings per share                                   3
                - basic                                         3.2p             4.6p           11.8p
                - fully diluted                                 3.2p             4.6p           11.2p





UNAUDITED CONSOLIDATED BALANCE SHEET

                                                             Unaudited       Unaudited        Audited
                                                          30 September    30 September       31 March
                                                                  2003            2002           2003
                                                                £'000           £'000          £'000

Fixed assets
Intangible assets                                                  81              22             63
Tangible assets                                                  3555            3127           3275
Investments                                                       112             112            112

                                                                 3748            3261           3450

Current assets
Stocks                                                           2793            3355           2858
Debtors                                                          1222            1249           1715
Cash at bank and in hand                                          952             615            957
                                                                 4967            5219           5530
Creditors: amounts falling due within
                    one year                                    (3643)          (3568)         (4214)

Net current assets                                               1324            1651           1316

Total assets less current liabilities                            5072            4912           4766

Creditors: amount falling due after
                     more than one year                          (352)           (639)          (250)
Provision for liabilities and charges                           (1136)          (1011)         (1130)

Net Assets                                                       3584            3262           3386

Capital and reserves
Called up share capital                                           617             615            617
Share Premium account                                              54              31             54
Other Reserves                                                    703             703            703
Profit and loss account                                          2210            1913           2012

                                                                 3584            3262           3386






UNAUDITED CONSOLIDATED CASH FLOW for the six months ended 30 September 2003


                                                                              Unaudited                  Audited
                                            Unaudited                       6 months to                  Year to
                                          6 months to                 30 September 2002           '31 March 2003
                                    30 September 2003                                                      
Notes                                £'000     £'000                 £'000       £'000          £'000     £'000

  Cash flow from operating                       403                               137                     1600
  activities
  Returns on investment and
  sevicing of finance
  Interest received                      9                               7                         14
  Interest paid                        (13)                            (21)                       (40)
                                                  (4)                              (14)                     (26)

  Taxation
  UK Corporation tax                   -                                 -                        (30)
  Overseas taxation paid               -                               (91)                      (343)
                                                   0                               (91)                    (373)

  Capital Expenditure
  Purchase of tangible fixed          (389)                           (139)                      (396)
  assets
  Purchase of intangible fixed         (18)                            (22)                       (63)
  assets
  disposal of fixed assets               3                            -
                                                (404)                             (161)                    (459)

  Equity dividends paid                            -                                 -                     (304)

  Cash inflow/(outflow) before                    (5)                             (129)                     438
  financing

  Financing
  Shares issued                                    -                               -                         25
  Repayment of secured loan                        -                               -                       (250)

  (Decrease)/ increase in cash                    (5)                             (129)                     213






NOTES TO THE UNAUDITED CONSOLIDATED CASH FLOW 
for the six months ended 30 September 2003

                                                    Unaudited               Unaudited                  Audited
                                                  6 Months to             6 Months to               Year ended
                                                 30 September            30 September                 31 March
                                                         2003                    2002                     2003
Notes                                                  £'000                   £'000                    £'000
       Reconciliation of net cash flow to
       movment in net funds/(debt)
       (Decrease)/increase in cash in the                 (5)                   (129)                     213
       period
       Cash outflow from decrease in debt                -                       -                        250


       Movement in net debt in period                     (5)                   (129)                     463
       Net cash/(debt) at start of period                457                      (6)                      (6)
       Net cash/(debt) at 30 September                   452                    (135)                     457

       Reconciliation of operating profit
       to operating cash flows
       Operating profit                                  304                     435                     1052
       Depreciation charges                              106                      98                      207
       Decrease/(increase) in stocks                      65                    (199)                     298
       Decrease/(increase) in debtors                    493                     311                     (156)
       (Decrease)/increase in creditors                 (565)                   (508)                     199
       and provisions

       Net cash inflow from operating                    403                     137                     1600
       activities



       Analysis of change in net debt
                                                        As at                                            As at
                                                     31 March                    Cash             30 September
                                                         2003                   Flows                     2003
                                                        £'000                   £'000                    £'000
       Cash at bank and in hand                          957                      (5)                     952
       Debt due within one year                         (250)                                            (250)
       Debt due after one year                          (250)                                            (250)
       Total                                             457                      (5)                     452





Notes:



 1. All significant turnover, profits and net assets are generated from general
    trading in the Falkland Islands.



 2. The taxation charge has been estimated at 32.5%.



 3. Earnings per share has been calculated on profit after tax of £198,000 (2002:
    £282,000) based on the weighted average number of shares in issue, excluding
    shares held in the Employee Share Ownership Plan of 6,095,037 (2002:
    6,070,037).  The fully diluted earnings have been further adjusted by the
    dilutive outstanding share options resulting in a weighted average number of
    shares of 6,154,943 (2002:6,170,722)



 4. The interim report has been prepared on the basis of the accounting policies
    set out in the group's 2003 Annual Report.



 5. The results for the year ended 31 March 2003 as shown in the statement do not
    constitute statutory accounts but are an abridged version of the Company's
    2003 accounts which have filed with the Registrar of Companies and upon
    which the audit report was unqualified and did not contain a statement under
    Section 237 (2) or (3) of the Companies Act 1985.  The Interim report was
    approved by the Board on 10 December 2003.



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