Interim Results

BWD Securities PLC 5 July 2000 BWD Securities PLC (BWD) the investment management and administration services group announces its interim results for the half year to 31 May 2000 Key Points: * Basic earnings per share before goodwill amortisation 18.8p (1999 12.9p) - up 46% * Interim dividend of 6.0p (1999 4.5p) - up 33% * Turnover at £19.9m (1999 £12.6m) - up 58% * Group fee income at £9.4m (1999 £6.5m) - up 45% * BWD Rensburg managed client funds at £3.3bn (1999 £2.2bn) - up 50% * BWD Rensburg Unit Trusts at £233m (1999 £147m) - up 59% Overall, the first half year has been very satisfactory for all Group businesses and we look forward with confidence to the outcome for the full year. For further information please contact: Michael Burns, Chief Executive Tel: 0151 227 2030 Michael Dickinson, Group Finance Director Tel: 01484 607722 BWD Securities PLC Keith Hann / Nick Lyon Tel: 020 7796 4133 Hudson Sandler Interim Statement The Group's profit before tax and goodwill amortisation for the six months ended 31 May 2000 was £5,392,000 (1999: £3,416,000) an increase of 58%. Basic earnings per share, before goodwill amortisation, increased by 46% to 18.8p (1999: 12.9p). The increase in the effective rate of tax to 32.4% (1999: 29.1%) reflects the charge for goodwill amortisation which is not allowable for corporation tax purposes, together with the lowering of the prior year tax charge by an exceptional tax credit arising from the operation of an employee share scheme. The Directors have declared an interim dividend of 6.0p per share (1999: 4.5p) payable on 2 October 2000 to shareholders on the register at 25 August 2000. Total income increased by 58% to £19.9 million (1999: £12.6 million) with Group fee income increasing by 45% to £9.4 million (1999: £6.5 million). Whilst recognising that these increases include the benefit of particularly active markets during the period, Group companies, which all operate in the areas of investment management or administration services, have continued to secure significant new fee based business. BWD Rensburg increased managed clients' funds, including PEP / ISA schemes, by 50% to £3.3 billion (1999: £2.2 billion). Fee paying funds included in these figures increased by 40% to £1.4 billion (1999: £1.0 billion). The integration into BWD Rensburg of Nicholson Barber, which was acquired late last year, continues to progress well. BWD Rensburg Unit Trust Managers increased the value of funds under management by 59% to £233 million at 31 May 2000 (1999: £147 million). Additional resources, particularly personnel, have been allocated to the business to strengthen its position and stimulate further growth. Capital for Companies raised an additional £10 million during the period for BWD Aim VCT plc. This brings the total value of funds managed by Capital for Companies to £41 million, including £38 million in respect of two venture capital trusts (VCT's). Changes announced in the Budget earlier this year have increased the attractions of VCT's as an investment vehicle. Northern Registrars has benefited from the high levels of share transfer and corporate activity during the period. Despite these unprecedented levels of activity, Northern Registrars has maintained the high quality of the services it provides, whilst continuing to attract a steady flow of new clients. Northern Administration's services are receiving interest from potential clients, now that its fully integrated collective investment scheme administration system is in operation. The Stock Exchange has announced that trading in its shares through a matched bargain facility will commence on 11 July 2000. BWD Rensburg Limited owns 100,000 shares to which no value has been attributed in the Group's financial statements and the Directors have not currently established any policy as regards retention or disposal. Overall, the first half year has been very satisfactory for all Group businesses and we look forward with confidence to the outcome for the full year. Alan Bottomley Michael Burns Chairman Chief Executive 5 July 2000 Group Profit and Loss Account 2000 1999 1999 6 months 6 months 12 months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 Note _______________________________________________________________________________ Turnover 19,895 12,662 26,960 Administrative expenses (14,975) (9,769) (21,293) _______ _______ _______ Operating profit before goodwill amortisation 4,920 2,893 5,667 Net interest receivable 472 523 991 _______ _______ _______ Profit on ordinary activities before taxation and goodwill amortisation 5,392 3,416 6,658 Goodwill amortisation (240) - (48) _______ _______ _______ Profit on ordinary activities before taxation 5,152 3,416 6,610 Tax on profit on ordinary activities (1,669) (993) (1,527) _______ _______ _______ Profit on ordinary activities after taxation 3,483 2,423 5,083 Dividends (1,193) (848) (2,853) _______ _______ _______ Retained profit for the period 2,290 1,575 2,230 ======= ======= ======= Basic earnings per share 1 -before goodwill amortisation 18.8p 12.9p 26.9p -after goodwill amortisation 17.6p 12.9p 26.7p Diluted earnings per share 1 -before goodwill amortisation 18.3p 12.5p 26.1p -after goodwill amortisation 17.1p 12.5p 25.8p Dividend per share 6.0p 4.5p 14.5p Statement of Total Recognised Gains and Losses The Group has no material recognised gains and losses other than those included in the profits above and therefore no separate statement of total recognised gains and losses is presented. Group Balance Sheet 2000 1999 1999 31 May 31 May 30 Nov £'000 £'000 £'000 _____________________________________________________________________________ Fixed Assets Intangible assets 8,911 - 9,151 Tangible assets 6,044 6,336 5,606 Investments 384 809 514 ______ ______ ______ 15,339 7,145 15,271 ______ ______ ______ Current Assets Debtors 36,004 21,605 41,939 Investments 1,162 - 1,162 Cash at bank and in hand 13,162 7,247 12,514 ______ ______ ______ 50,328 28,852 55,615 Creditors Amounts falling due within one year (43,733) (23,006) (51,253) ______ ______ ______ Net Current Assets 6,595 5,846 4,362 ______ ______ ______ Total Assets less Current Liabilities 21,934 12,991 19,633 Creditors Amounts falling due after more than one year (3,529) - (3,529) Provisions for Liabilities and Charges (209) (282) (244) ______ ______ ______ Net Assets 18,196 12,709 15,860 ====== ====== ====== Capital and Reserves Share capital 2,032 1,928 2,027 Reserves 16,164 10,781 13,833 ______ ______ ______ Equity Shareholders' Funds 18,196 12,709 15,860 ====== ====== ====== Consolidated Cash Flow Statement 2000 1999 1999 6 months 6 months 12 months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 Note _______________________________________________________________________________ Net cash inflow/(outflow) from operating activities (a) 3,879 (477) 7,340 Returns on investment and servicing of finance Net interest received 522 655 1,052 Taxation paid (318) (168) (1,780) Capital expenditure and financial investment Purchase of tangible fixed assets (1,053) (1,125) (1,824) Purchase of fixed asset investments - (215) (204) Proceeds from sale of tangible fixed assets 50 54 96 Proceed from sale of fixed asset investments - - 38 Acquisitions and disposals Purchase of subsidiary undertakings - - (2,500) Net cash acquired with subsidiary undertakings - - 454 Equity dividends paid (1,984) (1,601) (2,470) ______ ______ ______ Cash inflow/(outflow) before financing 1,096 (2,877) 202 Financing Issue of ordinary share capital 46 18 432 Decrease in debt (362) - - ______ ______ ______ Increase/(Decrease) in cash in the period (b) 780 (2,859) 634 ====== ====== ====== Notes to the Cash Flow Statement a. Reconciliation of operating profit to operating cash flows 2000 1999 1999 6 months 6 months 12 months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 ______________________________________________________________________________ Operating profit* 4,680 2,893 5,619 Amortisation of goodwill 240 - 48 Depreciation charges 610 417 825 Profit on disposal of tangible fixed assets (45) (20) (51) Profit on disposal of fixed asset investments - - (11) Shares subject to grant of a nil cost option 130 - 257 Decrease in provisions (35) (38) (76) Decrease/(Increase) in debtors 5,914 (225) (20,992) (Decrease)/Increase in creditors (7,615) (3,504) 21,721 ______ ______ ________ Net cash inflow/(outflow)from operating activities 3,879 (477) 7,340 ====== ====== ====== * After charging goodwill amortisation b. Analysis and reconciliation of net funds At 1 Dec Cash At 31 May 1999 flow 2000 £'000 £'000 £'000 ______________________________________________________________________________ Cash in hand, at bank 12,514 648 13,162 Overdrafts (1,774) 132 (1,642) Debt due after one year (3,529) - (3,529) Debt due within one year (1,362) 362 (1,000) ______ ______ ______ Net Funds 5,849 1,142 6,991 ====== ====== ====== 2000 1999 1999 6 months 6 months 12 months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 ______________________________________________________________________________ Increase/(Decrease) in cash in the period 780 (2,859) 634 Cash outflow from decrease in debt 362 - - Loans acquired with subsidiary - - (362) Loan notes issued upon acquisition - - (4,529) ______ ______ ______ Movement in net funds in the period 1,142 (2,859) (4,257) Net funds at beginning of period 5,849 10,106 10,106 ______ ______ ______ Net funds at end of period 6,991 7,247 5,849 ====== ====== ====== Notes 1. Basic earnings per share is calculated with reference to Group profit of £3,483,000 and 19,842,799 Ordinary Shares in issue during the six months ended 31 May 2000 (18,845,172 Ordinary Shares for the six months ended 31 May 1999 and 19,046,421 Ordinary Shares for the year ended 30 November 1999). Fully diluted earnings per share is the basic earnings per share, adjusted for the effect of the conversion into fully paid shares of the weighted average number of all employee share options outstanding during the period. 2. The information contained in the 1999 Group balance sheet, profit and loss account and consolidated cash flow statement does not constitute full accounts and has been extracted from the latest published accounts for the year ended 30 November 1999 which have been delivered to the Registrar of Companies. The report of the auditors on these accounts was unqualified. The Group profit and loss accounts and consolidated cash flow statements for the six-month periods and the Group balance sheets at 31 May 1999 and 31 May 2000 are unaudited. 3. To date, the Group's results and operations have not been adversely affected either by internal Year 2000 compliance failures or the inability of any third parties to manage the issue. The Directors recognise the need to continue to monitor the Year 2000 issue and are confident that the steps being undertaken will continue to avoid disruption. NOTES TO EDITORS BWD Securities PLC is a growing UK financial services group with two principal business streams: Investment Management: BWD Rensburg manages over £3 billion of investments for private clients, charities and pension funds. It also undertakes stockbroking and financial planning for both personal and corporate clients, and has offices across northern England and in Scotland and Northern Ireland. BWD Rensburg Unit Trust Managers manages six unit trusts, each with specific and distinctive investment objectives. Capital for Companies manages two venture capital trusts, both of which are listed on the London Stock Exchange. Administration Services: Northern Registrars handles share registration services for over 200 UK quoted companies. Northern Administration provides administration services for collective investment schemes such as unit trusts. BWD Securities aims to build shareholder value through the provision of high quality professional advice and services to existing and new clients, through selective acquisitions of complementary businesses and by progressively increasing its fee income as a proportion of total revenues.

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