Interim Results

Leo Insurance Services PLC 31 October 2007 Leo Insurance Services plc (the 'Company') 31 October 2007 Interim Results for the 6 months ending 31 July 2007 Leo Insurance Services plc today announces the Interim Results for the six months to 31 July 2007. CHAIRMAN'S STATEMENT Dear Shareholders, I have the pleasure of advising you that the profit before tax for the six months ended July 31 2007 amounted to £17,324. This compares to a loss in the corresponding period for 2006 of £176,725. This loss was, however, post an exceptional item regarding share options in the sum of £169,912 which is not repeated in the current figures. Accordingly, on a like for like basis, the six months to July 2006 showed a loss of £6,813, compared to the profit of £17,324 as stated above. This increase in operating profitability was possible despite a slight decrease in revenues to £140,747 from £150,789 in the six months to July 2006. The major driver in the increase in operating profitability was a reduction of the cost of sales in the period to July 2007 to £74,998 from £112,775 in the corresponding period for 2006. In September 2007 Safeland Plc with whom Leo has a long term contract announced that it had raised an additional £55m of equity to expand its Property Fund. This equity when matched with bank funding will enable further property purchases in excess of £200m to be made by the Fund. Under the long term contract referred to above all of these buildings will be insured by Leo's subsidiary Grafton Insurance Services Ltd which therefore gives me confidence that profits will continue to rise. LG Lipman Chairman Contacts: Leo Insurance Services plc Paul Davis Tel: 020 8815 1600 Landsbanki Securities (UK) Limited Thilo Hoffmann Tel: 020 7426 9000 Leo Insurance Services Plc CONSOLIDATED INCOME STATEMENT for the six months ended 31 July 2007 Notes Restated Restated 6 months 6 months 12 months ended ended ended 31 July 31 July 31 January 2007 2006 2007 (unaudited) (unaudited) (audited) £ £ £ TURNOVER Group and share of joint venture's 140,747 150,789 308,517 Cost of sales (74,998) (112,775) (226,287) GROSS PROFIT 65,749 38,014 82,230 Administrative expenses: - Exceptional - (169,912) (169,912) - Other (47,963) (46,829) (73,137) PROFIT/(LOSS) BEFORE INTEREST AND TAX 17,786 (178,727) (160,819) Finance Income 1,471 2,002 5,648 Finance Cost (1,933) - (4,167) PROFIT/(LOSS) BEFORE TAX 17,324 (176,725) (159,338) Taxation 856 - (15,651) PROFIT/(LOSS) FOR THE PERIOD 18,180 (176,725) (174,989) EARNINGS/(LOSS) PER ORDINARY SHARE Basic 4 0.25p (2.50p) (2.44p) Diluted 4 0.18p (2.50p) (2.44p) Leo Insurance Services Plc CONSOLIDATED BALANCE SHEET 31 July 2007 Notes Restated Restated 31 July 31 July 31 January 2007 2006 2007 (unaudited) (unaudited) (audited) £ £ £ CURRENT ASSETS Trade and other receivables 142,529 103,605 339,346 Cash and cash equivalents 181,680 298,261 88,329 TOTAL CURRENT ASSETS 324,209 401,866 427,675 CURRENT LIABILITIES Trade and other payable (287,312) (321,422) (408,958) TOTAL CURRENT LIABILITIES (287,312) (321,422) (408,958) NET CURRENT ASSETS 36,897 80,444 18,717 NON-CURRENT LIABILITIES Trade and other payables - (65,000) - NET ASSETS/(LIABILITIES) 36,897 15,444 18,717 EQUITY Called up share capital 72,160 70,624 72,160 Share premium account 5,761 5,761 5,761 Accumulated losses (550,757) (570,674) (568,937) Share based payment reserves 509,733 509,733 509,733 TOTAL EQUITY 36,897 15,444 18,717 Leo Insurance Services Plc CONSOLIDATED CASH FLOW STATEMENT for the six months ended 31 July 2007 Notes Restated Restated 6 months 6 months 12 months ended ended ended 31 July 31 July 31 January 2007 2006 2007 (unaudited) (unaudited) (audited) £ £ £ OPERATING ACTIVITIES Net cash inflow/(outflow) from operating activities 93,813 188,538 (22,409) NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 93,813 188,538 (22,409) INVESTMENT ACTIVITIES Interest received 1,471 2,002 5,648 NET CASH INFLOW FROM INVESTING ACTIVITIES 1,471 2,002 5,648 FINANCING ACTIVITIES Proceeds from issue of share capital - - 1,536 Interest paid (1,933) - (4,167) NET CASH (OUTFLOW) FROM FINANCING ACTIVITIES (1,933) - (2,631) NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS 93,351 190,540 (19,392) Cash and equivalents at beginning of period 88,329 107,721 107,721 CASH AND CASH EQUIVALENTS AT END OF PERIOD 181,680 298,261 88,329 Leo Insurance Services Plc CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 31 July 2007 Notes Restated Restated 6 months 6 months 12 months ended ended ended 31 July 31 July 31 January 2007 2006 2007 (unaudited) (unaudited) (audited) £ £ £ OPENING EQUITY (as previously stated) 18,717 22,258 22,258 Effect of adopting IFRS - - - OPENING EQUITY (as restated) 18,717 22,258 22,258 Shares issued during the period - - 1,536 Share Option Charge - 169,911 169,912 Loss for the period 18,180 (176,725) (174,989) CLOSING EQUITY 36,897 15,444 18,717 Leo Insurance Services Plc NOTES TO THE INTERIM FINANCIAL INFORMATION for the six months ended 31 July 2007 1 BASIS OF PREPARATION The financial information contained in this interim report does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The figures for the period ended 31 January 2007 have been extracted from the audited statutory accounts. The interim results, which have not been audited or reviewed by the company's auditors, have been prepared in accordance with applicable International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). These standards are also collectively referred to as 'IFRS'. Statutory accounts for year ending 31 January 2007 (prepared in accordance with UK GAAP) were prepared and filed with the Registrar of Companies and received an unqualified audit report. The interim report was approved by the Board of Directors on 30 October 2007. Copies of this statement are being sent to all shareholders and are available to the public for collection at the company's Registered Office at 94-96 Great North Road, London N2 0NL. 2 TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) All listed companies in the EU are required to present their consolidated financial statements for accounting periods beginning on or after 1 January 2007 in accordance with IFRS as adopted by the EU. Therefore, the group's consolidated financial statements for the year ending 31 January 2008 will be presented on this basis with IFRS comparatives. These interim financial statements have been prepared on the basis of the IFRS accounting policies expected to be adopted in the year end consolidated financial statements. Reconciliations have been provided to UK GAAP and these, together with an explanation of the resulting changes in accounting policies, are set out in notes 6 and 7. Although there is a now a fairly stable platform, standards continue to evolve and those currently in issue and endorsed by the EU are subject to interpretation by the International Financial Reporting Interpretations Committee (IFRIC) and further standards may be issued and endorsed by the EU before 31 January 2008. These uncertainties could result in the need to change the basis of accounting or presentation of financial information from that applied in the preparation of this document. The group is required to apply its IFRS accounting policies retrospectively to determine the opening IFRS balance sheet at the transition date of 1 February 2006 and the comparative information for the year ended 31 January 2007. The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates. 3 ACCOUNTING POLICY CHANGES An explanation of the changes in accounting policies as a result of adopting IFRS, together with a full list of the revised accounting policies are shown in notes 6 and 7. 4 LOSS PER SHARE The loss per share for the period is calculated based upon the following information: 12 months 6 months ended 6 months ended ended 31 July 31 July 31 January 2007 2006 2007 (unaudited) (unaudited) (audited) Weighted average number of shares in issue 7,215,956 7,062,381 7,177,247 during the period Weighted average number of dilutive share options in issue during the period 9,950,330 9,796,755 9,911,621 5 RECONCILIATION OF OPERATING TO NET CASH FLOW FROM OPERATING ACTIVITIES 6 months ended 6 months ended 12 months ended 31 July 31 July 31 January 2007 2006 2007 (unaudited) (unaudited) (audited) £ £ £ Company operating profit 17,786 (178,727) (160,819) (Increase)/decrease in debtors 196,817 (102,341) (338,082) (Decrease)/increase in creditors (120,790) 299,695 306,580 Share option charge - 169,911 169,912 Net cash flow from operating activities 93,813 188,538 (22,409) 6 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UNDER IFRS Basis of accounting Prior to the introduction of IFRS, the group had prepared its financial statements under United Kingdom accounting standards. As a result of adopting IFRS it has been necessary to change some of the group's accounting policies and these are detailed below. Basis of consolidation The consolidated financial statements incorporate the financial statements of Leo plc, its subsidiaries and the group's interest in jointly controlled interest accounted for on a basis of proportionate consolidation, up to 31 July 2007. Joint ventures A joint venture is a contractual arrangement whereby the group and other parties undertake an economic activity that is subject to joint control. Where a group company undertakes its activities under joint venture arrangements directly, the group's share of jointly controlled assets and any liabilities incurred jointly with other ventures are recognised in the financial statements of the group and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Joint venture arrangements which involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly controlled entities. The group reports its interests in jointly controlled entities using the proportionate consolidation method of accounting. The group combines its share of the joint venture's individual income and expenses, assets and liabilities and cash flows on a line by line basis with similar items in the group's financial statements. 7 EXPLANATION OF TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS This is the group's first interim report prepared in accordance with IFRS. The only effect of the transition to IFRS is the method of consolidation of the Joint Venture, which has proportionally consolidated the assets and liabilities and income and expenses of the Joint Venture rather than showing the gross assets and liabilities within non-current assets and the share of the Joint Venture's operating profits. The reconciliations of balance sheets and equity at 31 January 2007 (date of last UK GAAP financial statements) and 31 July 2006 (date of last UK GAAP interim report) are set out overleaf. As there is no effect on equity as a result of the transition, no reconciliation of the opening position at 1 February 2006 (date of transition to IFRS) has been presented. In addition, there is a reconciliation of profit for the six month period to 31 July 2006 and the year ended 31 July 2007. These reconciliations will enable comparison of the 2007 interim figures under IFRS with those published under UK GAAP in the 2006 interim report and the annual report for the year ended 31 January 2007. Reconciling UK GAAP items IFRS BALANCE SHEET AS AT 31 JULY 2006 Non-current assets 35,394 (35,394) - Current assets - Debtors 12,428 91,177 103,605 - Cash and cash equivalents 42,939 255,322 298,261 _______ _______ _______ 55,367 346,499 401,866 Current liabilities (10,317) (311,105) (321,422) _______ _______ _______ NET CURRENT ASSETS 45,050 35,394 80,444 Non-current liabilities (65,000) - (65,000) _______ _______ _______ NET ASSETS 15,444 - 15,444 _______ _______ _______ INCOME STATEMENT AS AT 31 JULY 2006 TURNOVER - 150,789 150,789 Cost of sales - (112,775) (112,775) _______ _______ _______ GROSS PROFIT - 38,014 38,014 Administrative expenses (212,939) (3,802) (216,741) Share of JV operating profit 34,212 (34,212) - _______ _______ _______ OPERATING LOSS (178,727) - (178,727) Interest receivable 2,002 - 2,002 _______ _______ _______ LOSS ON ORDINARY ACTIVITES BEFORE AND AFTER TAXATION (176,725) - (176,725) _______ _______ _______ Reconciling UK GAAP items IFRS BALANCE SHEET AS AT 31 JANUARY 2007 Non-current assets 65,520 (65,520) - Current assets - Debtors 16,111 323,235 339,346 - Cash and cash equivalents 18,476 69,853 88,329 _______ _______ _______ 34,587 393,088 427,675 Current liabilities (81,390) (327,568) (408,958) _______ _______ _______ NET CURRENT (LIABILITIES)/ASSETS (46,803) 65,520 18,717 Non-current liabilities - - - _______ _______ _______ NET ASSETS 18,717 - 18,717 _______ _______ _______ INCOME STATEMENT AS AT 31 JANUARY 2007 TURNOVER - 308,517 308,517 Cost of sales - (226,287) (226,287) _______ _______ _______ GROSS PROFIT - 82,230 82,230 Administrative expenses (237,685) (5,354) (243,039) Share of JV operating profit 76,866 (76,866) - _______ _______ _______ OPERATING LOSS (160,819) - (160,819) Interest receivable 1,481 - 1,481 _______ _______ _______ LOSS ON ORDINARY ACTIVITES BEFORE TAXATION (159,338) - (159,338) Taxation (15,651) (15,651) _______ _______ _______ LOSS ON ORDINARY ACTIVITES AFTER TAXATION (174,989) (174,989) _______ _______ _______ This information is provided by RNS The company news service from the London Stock Exchange

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