Final Results

Numis Corporation PLC 06 December 2006 Embargoed for release 7am Wednesday 6 December 2006 Numis Corporation Plc Final Results for the year ended 30 September 2006 Numis Corporation Plc ('Numis') today announces final results for the year ended 30 September 2006. Numis is the holding company of Numis Securities Limited, the independent investment banking and broking business. Financial Highlights • Operating income up 11% to £73.1m (2005: £65.7m). • Profit before tax up 22% to £37.2m (2005 Profit before tax and exceptional profits: £30.6m). • Basic earnings per share up 19% to 25.8p (2005 EPS before exceptional profits: 21.7p). • Final dividend of 3.75p per share, making a total of 5.0p per share (2005: 3.15p per share) for the year, up 59%. • Net assets increased by 23% to £90.5m (2005: £73.3m) and cash balances increased to £74.9m (2005: £57.1m), representing 83% of net assets (2005: 78%). Operational Highlights • £1,465m raised for corporate clients in the period (2005: £1,062m). Over 65% of deals were for existing clients. • Corporate client list increased to 101 from 94. • Further improvement in our service to clients recognised by first places in The Thomson Extel survey for research, execution and corporate access for companies with market capitalisation up to £1bn. • Investment in high calibre staff continues, headcount now 165 (2005: 127). • Control over costbase maintained with pre-bonus expenses 34% of revenue (2005: 39%). Commenting on the results, Oliver Hemsley, Chief Executive of Numis, said: 'Despite more challenging market conditions in the second half of the year, the quality of our clients and staff has enabled us to report another record year. We are making good progress towards our goal of making Numis a leading independent investment banking and broking group serving respected London-quoted companies. We will work to set Numis apart as an innovative investment banking business'. CHIEF EXECUTIVE'S STATEMENT For the year ended 30 September 2006 operating income was up 11% to £73.1m (2005: £65.7m). Profit before tax and exceptional items for the year rose to £37.2m (2005: £30.6m). Basic earnings per share were 25.8p (2005: 21.7p) while net assets increased to £90.5m (2005: £73.3m) and cash balances to £74.9m (2005: £57.1m). Numis has achieved these results despite more challenging market conditions during the second half of the year. Although the FTSE 250 has more than recovered from its setback in early May, the AIM market has not done so. However, the quality of our clients and staff has enabled us to continue to increase profits. Further evidence of the strength of our business comes from the result we achieved in the Thomson Extel survey this year. In the market dealing with companies of less than £1bn market capitalisation we were ranked 1st for research, execution services and corporate access. We were also identified as the 'most improved firm'. Numis continues to invest in talented and committed people across the business. As our corporate and institutional client base has expanded we have continued to attract such people while still maintaining control over costs. This has enabled us to build our business at the same time as improving our operating margins. Corporate Broking and Advisory After an exceptionally busy first half for our corporate clients, the last quarter slowed as a result of the weakening in general market conditions. However, the number of corporate clients for whom we act has now risen to 101 (2005: 94). During the year, our clients raised a total of £1,465m (2005: £1,062m) through 46 varied transactions across a broad range of sectors. It is also pleasing to note that over 65% of these transactions were on behalf of existing clients, reflecting the success of our corporate clientele, the quality of our service and the strength of our relationships with them. We are making good progress towards our goal of building a leading independent investment banking and broking group serving respected London-quoted companies. We continue to add to our staff with individuals and teams who wish to work within a growing independent business where they can participate in its direction and success. Research, Sales and Trading Our research and execution services are recognised as being exceptional. In this year's Thomson Extel survey, Numis was placed first in 7 out of 14 research sectors and first overall in research and execution. We now have strong and recognised capability in 14 sectors, including aerospace & defence, building & construction, food producers, insurance, IT, leisure, life sciences, media, mining, new energy & emissions, property funds, retail, specialised financials and support services. Our execution services have made a major contribution to the development of our reputation and the growth in institutional commissions. Our execution business continues to be focused on client facilitation, rather than generating proprietary trading profits and was rewarded with a first place in the Thomson Extel survey. Sales & Trading is an increasingly competitive area with pressure on commission levels for trades in liquid stocks from electronic trading. However, we will exploit the market for independent and well researched ideas, combined with high quality execution, which help to improve performance for institutional investors. Our New York office is now a significant contributor to our institutional commissions and the relationships we are developing in Europe will add to institutional activity. Innovation During the year Numis worked with the former deputy CEO of the Prudential PLC to form Paternoster Limited, a new FSA regulated Life Assurance company. We jointly conceived and developed this business, focused on taking over the liabilities of mature closed final salary pension schemes. We also secured commitments of £500m to fund the business, drawing down £250m during the period, enabling Paternoster to start signing up pension schemes. Operations and Financial Review We continue to invest in capable staff in all areas of the business and in improving our service to clients. During the year our average headcount has increased from 112 to 145 and our productivity has been broadly maintained with revenue per employee of £504,000 (2005: £587,000). With this tight cost control our expense ratio and operating margins have improved - with costs before bonuses falling to 34% of revenue (2005: 39%). We are also pleased with progress on balance sheet management. Our Employee Benefit Trust ('EBT') has made significant share purchases and reduced potential dilution from options not covered by unencumbered shares held in the EBT. Uncovered options are down from 2,913,000 (2.8% of outstanding share capital) to 1,015,374 (1.0%). At the same time balance sheet discipline has been maintained with cash balances now representing 81% of net assets (2005: 78%). New Offices at Paternoster Square On 2 October 2006 we signed a lease for 31,000 square feet of space in the London Stock Exchange building at 5 Paternoster Square, London EC4. This will enable controlled expansion of the business into more efficient office space. Dividend and Scrip Alternative The Board has declared a final dividend of 3.75p per share (2005: 2.525p). The dividend will be payable on 9 February 2007 to all shareholders on the register at 15 December 2006. Shareholders will be offered the option to receive shares instead of a cash dividend, the details of which will be explained in a circular to accompany our Annual Report. Outlook We have seen a satisfactory start to the new financial year with institutional commission & market making revenues more than double our performance at this point last year and £169m being raised to date for 11 corporate clients. Our corporate business pipeline is strong and the quality of our research is such that we look forward to growth in our secondary market revenues. We work hard to attract high quality companies and people to the organisation and I am confident that we will continue to reap the benefits from these efforts. We also continue to develop services and investment opportunities that will set Numis apart as a flexible and innovative investment banking business. Oliver Hemsley Chief Executive 6th December 2006 Contacts: Numis Corporation: Oliver Hemsley, Chief Executive 020 7776 1500 Bill Trent, CFO Brunswick: Gill Ackers 020 7936 5382 Lucie Anne Brailsford 020 7396 3515 Consolidated profit and loss account For the year ended 30 September 2006 Restated 2006 2005 £000 £000 OPERATING INCOME 73,060 65,693 _________ _________ GROSS PROFIT 73,060 65,693 Administrative expenses (41,127) (38,076) ________ ________ OPERATING PROFIT 31,933 27,617 Share of associated undertakings' profit 2,165 1,388 Exceptional item - profits on disposal of fixed asset investments - 9,299 ________ ________ PROFIT ON ORDINARY ACTIVITIES 34,098 38,304 BEFORE INTEREST Interest receivable and similar income 3,149 1,652 Interest payable and similar charges (41) (48) PROFIT ON ORDINARY ACTIVITIES ________ ________ BEFORE TAXATION 37,206 39,908 Tax on profit on ordinary activities (11,183) (9,466) PROFIT ON ORDINARY ACTIVITIES ________ ________ AFTER TAXATION 26,023 30,442 ________ ________ PROFIT FOR THE YEAR 26,023 30,442 ___________ ___________ Earnings per share Basic 25.8p 31.3p Diluted 24.9p 30.0p Earnings per share, excluding exceptional item Basic 25.8p 21.7p Diluted 24.9p 20.9p Consolidated balance sheet At 30 September 2006 Restated 2006 2005 £000 £000 Fixed assets Tangible fixed assets 1,802 1,598 Fixed asset investments - 1,546 Investment in associated undertakings 2,209 859 -------- --------- 4,011 4,003 ======== ========= Current assets Debtors 104,066 92,103 Investments 25,742 17,812 Cash at bank and in hand 74,898 57,133 -------- --------- 204,706 167,048 Creditors Amounts falling due within one year (118,189) (97,725) -------- --------- Net current assets 86,517 69,323 -------- --------- Net assets 90,528 73,326 ======== ========= Capital and reserves Share capital 5,295 5,258 Share premium account 20,636 19,341 Profit and loss account 64,597 48,727 -------- --------- Equity shareholders' funds 90,528 73,326 ======== ========= Consolidated cash flow statement For the year ended 30 September 2006 Restated 2006 2005 £000 £000 Net cash inflow from operating activities 44,342 25,069 Returns on investments and servicing of finance Dividends received from associate 150 - Interest received 3,149 1,631 Interest paid (41) (48) Other dividends received - 21 --------- -------- Net cash inflow from returns on 3,258 1,604 investments and servicing of finance Taxation Corporation tax paid (14,009) (5,683) Capital expenditure and financial investment Purchase of tangible fixed assets (1,111) (1,375) Purchase of fixed asset investments (5,695) (1,251) Disposal of interests in associated undertakings - 13,540 Net cash outflow from investing activities (6,806) 10,914 from capital expenditure and financial investment Equity dividends paid (2,642) (1,361) Financing Issue of ordinary shares 130 4,044 Purchase of own shares for the ESOP (6,508) (922) --------- -------- Increase in cash in the year 17,765 33,665 ========= ======== Reconciliation of net cash flow to movement in net funds Increase in cash balances in the year 17,765 33,665 Net funds at the beginning of the year 57,133 23,468 --------- -------- Net funds at the end of the year 74,898 57,133 ========= ======== Notes to the financial statements 1 Operating income 2006 2005 £000 £000 Institutional trading profits and 17,512 17,386 commissions Corporate retainers 3,464 2,197 Deal fees 8,980 11,044 Placing commission 43,104 35,066 ------- -------- 73,060 65,693 ======= ======== 2 Exceptional items 2006 2005 £000 £000 Profit from sale of interest in associate: - 9,299 Squaregain Ltd (formerly Comdirect Ltd) ------- -------- - 9,299 ======= ======== 3 Staff costs 2006 2005 £000 £000 Employee costs during the year amounted to: Wages and salaries 11,482 8,753 Incentive payments 13,050 10,697 Exceptional incentive payments (in - 600 connection with Squaregain disposal) Social security costs 2,639 4,226 Compensation for loss of office 214 526 Other pension costs 507 755 LTIP award costs 1,009 1,063 ------- -------- 28,901 26,620 ======= ======== 4 Number of staff employed 2006 2005 Number Number Average for the year Professional 112 85 Administration 33 27 ------- -------- 145 112 ======= ======== At the year end 165 127 ======= ======== This information is provided by RNS The company news service from the London Stock Exchange

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