Interim Results

Gresham House PLC 23 September 2003 GRESHAM HOUSE plc 36 Elder Street, London E1 6BT Telephone: 020 7588 7352, Facsimile: 020 7377 2946 CHAIRMAN'S INTERIM STATEMENT The results for the half year ended 30th June, 2003 show a return on ordinary activities after tax for the Revenue account of £279,000, compared with £430,000 for the comparable period last year and a much improved position for the Capital account even though this is still showing a loss of £176,000 for the period. Overall this has resulted in a basic return per ordinary share of 2.3p against a loss of 30.6p for the comparable period last year. Underlying revenue streams have remained fairly constant compared with the similar period last year, the increase being attributable to construction activities undertaken in the period under review. These activities also largely account for the increase in Other expenses although the Group has also incurred additional costs in maintaining its property portfolio. The investment portfolio reflects improvements in the markets generally and, whilst the climate for start up situations remains very difficult, we are seeing many more promising investment opportunities. As stated above, improvements to the property portfolio have continued during the period and have been met from Group resources rather than from an increase in borrowings. Whilst the basic net asset value per ordinary share has fallen by 2.7% to 475.2p over the period this is solely as a result of the issue of 171,299 ordinary shares through the exercise of rights under the Company's Share Option schemes and under the terms of the 8% Secured Redeemable Loan Stock 2006 issued by Gresham House Finance plc. Your Board continues its strategy of seeking out innovative early stage investments but remains cautious as to short term prospects. A P Stirling Chairman 23rd September, 2003. GRESHAM HOUSE plc INTERIM RESULTS 2003 UNAUDITED CONSOLIDATED STATEMENT OF TOTAL RETURN for the Half Year ended 30th June, 2003 Six months to Six months to Year ended 30th June, 2003 30th June, 2002 31st December, 2002 (Unaudited) (Unaudited) (Audited) Revenue Capital Total Revenue Capital Total Revenue Capital Total £' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000 Loss on Investments - (176) (176) - (1,767) (1,767) - (3,497) (3,497) Income: Dividend and Interest Income 114 - 114 135 - 135 276 - 276 Rental Income 1,505 - 1,505 1,473 - 1,473 2,908 - 2,908 Other operating income 331 - 331 157 - 157 1,056 - 1,056 ______________________________________________________________________________________________ 1,950 (176) 1,774 1,765 (1,767) (2) 4,240 (3,497) 743 Other expenses (940) - (940) (606) - (606) (1,767) - (1,767) ______________________________________________________________________________________________ Net return before finance costs and taxation 1,010 (176) 834 1,159 1,767) (608) 2,473 (3,497) (1,024) Interest payable and similar charges (731) - (731) (729) - (729) (1,450) - (1,450) ______________________________________________________________________________________________ Return on ordinary activities before taxation 279 (176) 103 430 (1,767) (1,337) 1,023 (3,497) (2,474) Taxation - - - - - - - ______________________________________________________________________________________________ Return on ordinary activities after taxation attributable to equity shareholders 279 (176) 103 430 (1,767) (1,337) 1,023 (3,497) (2,474) Dividend - Equity shares - - - - - - (141) - (141) ______________________________________________________________________________________________ Transfer to reserves 279 (176) 103 430 (1,767) (1,337) 882 (3,497) (2,615) ============================================================================================== Basic return per Ordinary Share 6.2p (3.9)p 2.3p 9.8p (40.4)p (30.6)p 23.2p (79.5)p (56.3)p ============================================================================================== Diluted return per Ordinary Share 6.0p (3.8)p 2.2p 9.3p (40.4)p (31.1)p 21.6p (73.9)p (52.3)p ============================================================================================== Statement of Total Recognised Gains and Losses 30th June 30th June 31st December 2003 2002 2002 £'000 £'000 £'000 Profit for the financial period 279 430 1,023 Net movement on capital reserves (176) (1,767) (3,497) ________ ________ ________ 103 (1,337) (2,474) ======== ======== ======== Notes (i) The revenue column of this statement is the consolidated profit and loss account of the group. (ii) All revenue and capital items in the above statement derive from continuing operations. GRESHAM HOUSE plc INTERIM RESULTS 2003 UNAUDITED CONSOLIDATED BALANCE SHEET as at 30th June, 2003 30th June, 2003 30th June, 2002 31st December, 2002 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Investments Securities 6,234 7,958 6,649 Properties 31,666 29,455 30,976 Tangible assets 391 393 382 ________ ________ ________ 38,291 37,806 38,007 ________ ________ ________ Current assets 7,779 7,815 7,087 Creditors - amounts falling due within one year 5,496 4,408 5,346 ________ ________ ________ Net current assets 2,283 3,407 1,741 ________ ________ ________ Total assets less current liabilities 40,574 41,213 39,748 Creditors - amounts falling due after more than one year 18,452 18,132 17,860 Deferred income 245 245 245 ________ ________ ________ 21,877 22,836 21,643 ======== ======== ======== Capital and reserves Called up share capital (Note 5) 1,151 1,100 1,108 Share premium account 453 287 364 Other reserves Revaluation reserve 8,064 8,064 8,064 Capital reserve - realised 22,425 22,879 22,403 Capital reserve - unrealised (256) 1,197 (57) Revenue reserves (9,960) (10,691) (10,239) ________ ________ ________ Equity shareholders' funds 21,877 22,836 21,643 ======== ======== ======== Basic Net Asset Value per ordinary share 475.2p 518.9p 488.3p ======== ======== ======== Diluted Net Asset Value per ordinary share 461.4p 489.4p 454.2p ======== ======== ======== GRESHAM HOUSE plc INTERIM RESULTS 2003 UNAUDITED CONSOLIDATED CASH FLOW STATEMENT for the Half Year ended 30th June, 2003 Six months to Six months to 12 months to 30th June, 2003 30th June, 2002 31st December, 2002 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Cashflow from operating activities Investment income 81 71 106 received Interest received 33 64 166 Rental income received 1,477 1,937 3,479 Other cash payments (121) (916) (743) ________ ________ ________ Net cash inflow from operating activities (Note 2) 1,470 1,156 3,008 ======== ======== ======== Returns on investment and servicing of finance Interest paid on 2.5% Secured Redeemable Loan Stock 2001 - (9) (6) Interest paid on 8% Secured Redeemable Loan Stock 2006 (146) (92) (243) Interest paid on property loans (577) (711) (1,183) Net cash outflow from investments ________ ________ ________ and servicing of finance (723) (812) (1,432) ======== ======== ======== Capital expenditure and financial investment Sale of tangible fixed assets 6 10 10 Purchase of tangible fixed assets (19) - - Purchase of investments (557) (855) (1,633) Sale of investments 795 1,333 1,690 Net loans (advanced)/repaid (51) 472 483 Purchase of investment properties (690) (572) (2,093) Purchase of developments in hand (146) (134) (822) Net cash (outflow)/inflow from ________ ________ ________ capital expenditure and financial investment (662) 254 (2,365) ======== ======== ======== Corporation tax paid - - - ======== ======== ======== Equity dividends paid (141) (136) (136) ======== ======== ======== Cash (outflow)/inflow before use of liquid resources and financing (56) 462 (925) ======== ======== ======== Management of liquid resources Acquisition of listed securities held for dealing (261) (50) (36) ======== ======== ======== Financing Repayment of loans (391) (542) (1,238) Receipt of loans 199 1,209 1,929 Share capital issued 132 53 138 Net cash (outflow)/inflow from financing (60) 720 829 ======== ======== ======== (Decrease)/increase in Cash (377) 1,132 (132) ======== ======== ======== GRESHAM HOUSE plc INTERIM RESULTS 2003 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Six months to Six months to 12 months to 30th June, 2003 30th June, 2002 31st December, 2002 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Retained profit for the period 279 430 882 Revaluation surplus Net movement on capital reserves (177) (1,767) (3,497) Issue of ordinary shares 132 53 138 ________ ________ ________ 234 (1,284) (2,477) Shareholders' funds at beginning of period 21,643 24,120 24,120 ________ ________ ________ Shareholders' funds at end of period 21,877 22,836 21,643 ======== ======== ======== GRESHAM HOUSE plc INTERIM RESULTS 2003 NOTES TO THE INTERIM STATEMENT for the Half Year ended 30th June, 2003 1. Basis of preparation (a) The interim statement has been prepared in accordance with the accounting policies as set out in the Group's Report and Accounts for the year ended 31st December, 2002. (b) The interim statement is neither audited nor reviewed. The figures for the year ended 31st December, 2002 do not comprise statutory accounts for the purpose of section 240 of the Companies Act 1985, and have been extracted from the Group's full accounts for that year which received an unqualified Auditors' Report and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The accounts have been filed with the Registrar of Companies. (c) In accordance with the Company's accounting policies the above figures take into account the results of significant investments only to the extent of dividends received amounting to £1,717 (2002: £1,717). Six months to Six months to 12 months to 30th June, 2003 30th June, 2002 31st December, 2002 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 2. Reconciliation of operating profit to operating cash flows. Return on ordinary activities before taxation 279 430 1,023 Interest payable 731 729 1,450 ________ ________ ________ 1,010 1,159 2,473 Depreciation 4 3 14 Loan provision written back - - 4 (Increase)/decrease in debtors (611) 344 467 Increase/(decrease) in creditors 1,067 (350) 50 ________ ________ ________ Net cash flow from operating activities 1,470 1,156 3,008 ======== ======== ======== 3. Reconciliation of net cash flow to movement in net debt. (Decrease)/increase in cash for the period (377) 1,132 (132) Cash outflow from repayment of debt 391 542 1,238 Cash inflow from loans received (199) (1,209) (1,929) Cash outflow from increase in liquid resources 261 50 36 ________ ________ ________ Movement in net debt in the period 76 515 (787) Net debt at beginning of period (17,840) (17,053) (17,053) ________ ________ ________ Balance at end of period (17,764) (16,538) (17,840) ======== ======== ======== 4. Analysis of net debt At 1st January Cash flow Other non-cash At 30th June 2003 changes 2003 £'000 £'000 £'000 £'000 Cash in hand and at bank / brokers 2,592 (377) 2,215 Debt due within one year (2,918) 192 592 (2,134) Debt due after one year (17,860) - (592) (18,452) ________ ________ ________ ________ (20,778) 192 - (20,586) Current asset investments 346 261 607 ________ ________ ________ ________ (17,840) 76 - (17,764) ======== ======== ======== ======== 5. Called up share capital During the period under review 97,000 share options were exercised at par under the Unapproved Share Option Schemes and, in addition, 74,299 ordinary shares were issued under the terms of the 8% Secured Redeemable Loan Stock 2006; 26,572 ordinary shares at a price of 180p per share; and 47,727 ordinary shares at a price of 126p per share. The allotted share capital has therefore increased by 171,299 ordinary shares. This information is provided by RNS The company news service from the London Stock Exchange

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