Interim Results

BWD Securities PLC 27 June 2002 27 June 2002 BWD SECURITIES PLC ('BWD') INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2002 BWD, the Investment Management and Administration Services Group - Key Points: • Profit before tax and goodwill amortisation of £4.5m (2001: £4.4m) • Basic earnings per share before goodwill amortisation of 14.1p (2001: 15.1p) • Interim dividend of 6.0p per share (2001: 6.0p) • Turnover of £19.7m (2001: £18.6m) • Group fee and other recurring income of £12.0m (2001: £10.7m) • FTSE All-Share Index down 12% over 12 months to 31 May 2002 • BWD Rensburg managed client funds increased to £3.8bn (2001: £3.6bn) • BWD Rensburg Unit Trusts increased to £325m (2001: £312m) The above figures include a contribution from the London business acquired in July 2001 Mike Burns, Chief Executive of BWD Securities, commented: 'Under difficult circumstances it is pleasing to be able to report such a resilient level of both profits and earnings and more importantly for the longer term, a further increase in the proportion of fee and other recurring income to 61% of total income.' For further information, please contact: Michael Burns, Chief Executive Tel: 0151 227 2030 BWD Securities PLC Nick Lyon / Jessica Rouleau Tel: 020 7796 4133 Hudson Sandler INTERIM STATEMENT Financial Results The difficult market and trading conditions which we experienced in 2001 have been extended to the first half of this financial year, with a consequent impact across our businesses. This challenging operating environment is evidenced by the 12% fall in the FTSE All-Share Index over the twelve month period to 31 May 2002. The Group's profit before tax and goodwill amortisation for the six months ended 31 May 2002 was £4.5 million (2001: £4.4 million) on total income of £19.7 million (2001: £18.6 million). Fee and other recurring income increased to £12.0m (2001: £10.7m). Basic earnings per share before goodwill amortisation was 14.1p (2001: 15.1p). These results include a contribution from the London based business which was acquired in the second half of 2001. Under the difficult circumstances, it is pleasing to be able to report such a resilient level of both profits and earnings and more importantly for the longer term, a further increase in the proportion of fee and other recurring income to 61% (2001: 58%) of total income. Dividend The Directors have declared an interim dividend of 6.0p (2001: 6.0p) payable on 1 October 2002 to shareholders on the register at 23 August 2002. Board On 23 May 2002 the Board announced the appointment of Nick Lane Fox and Robert Allen as executive directors. We are confident that both Nick and Robert, who will continue to work primarily within BWD Rensburg, will make a significant contribution to the Group's future development. Operations BWD Rensburg increased managed clients' funds to £3.8 billion (2001: £3.6 billion). Fee paying funds included in these figures increased to £1.8 billion (2001: £1.6 billion). The integration of the London based business Dennis Murphy Campbell, which was acquired last summer, has now been successfully completed. Despite the deterioration in trading conditions experienced since this acquisition we are pleased to be able to report that this business is performing most satisfactorily. Capital for Companies currently manages a total of £34 million (2001: £43 million). This includes £32 million (2001: £41 million) on behalf of two Venture Capital Trusts. BWD Rensburg Unit Trust Managers increased the value of funds under management to £325 million (2001: £312 million). The Aggressive Growth Trust, which was launched in September 2001, has already reached £22 million and continues to attract considerable attention resulting from its strong investment performance. Northern Registrars has continued to gain new clients and now manages in excess of one million shareholder records. Additionally, the development of a wider range of service offerings to both existing and prospective clients is progressing. The business has, however, inevitably been affected by the general reduction in both corporate activity and share transfer volumes experienced over the period. Northern Administration currently administers £900 million of collective funds on behalf of third parties and is actively seeking to widen its client base further. Outlook Whilst acknowledging that there appears no immediate end to the current conditions, we believe that the continuation of such an environment combined with the increasing pressure arising from regulation and capital requirements may result in additional opportunities for the Group to make acquisitions. Given the increasingly solid foundations upon which the Group's businesses are based we believe we are well placed for the future and in particular, to benefit from any improvement in market indices. Alan Bottomley Michael Burns Chairman Chief Executive 26 June 2002 Consolidated Profit and Loss Account 2002 2001 2001 6 months 6 months 12 months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 Note Turnover 19,653 18,579 37,856 Operating expenses (15,525) (14,656) (30,640) Goodwill amortisation (450) (240) (622) Total administrative expenses (15,975) (14,896) (31,262) _______ _______ _______ Operating profit 3,678 3,683 6,594 Profit on disposal of properties - - 261 Net interest receivable 330 448 885 _______ _______ _______ Profit on ordinary activities before taxation 4,008 4,131 7,740 Tax on profit on ordinary activities (1,399) (1,359) (2,615) _______ _______ _______ Profit on ordinary activities after taxation 2,609 2,772 5,125 Dividends (1,304) (1,194) (3,789) _______ _______ _______ Retained profit for the period 1,305 1,578 1,336 _______ _______ _______ Earnings per share before goodwill 1 amortisation and profit on disposal of properties -Basic 14.1p 15.1p 26.8p -Diluted 13.9p 14.8p 26.2p Earnings per share 1 -Basic 12.1p 13.9p 24.9p -Diluted 11.8p 13.6p 24.4p Dividend per share 6.0p 6.0p 18.0p Turnover and operating profit relate entirely to continuing operations. The Group has no 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. Consolidated Balance Sheet 2002 2001 2001 31 May 31 May 30 Nov £'000 £'000 £'000 Fixed assets Intangible assets 15,925 8,429 16,375 Tangible assets 6,066 6,237 6,279 Investments 511 769 511 _______ _______ _______ 22,502 15,435 23,165 _______ _______ _______ Current assets Debtors 26,893 31,050 31,318 Investments - 1,162 - Cash at bank and in hand 22,047 15,309 22,468 _______ _______ _______ 48,940 47,521 53,786 Creditors Amounts falling due within one year (31,173) (35,339) (37,722) _______ _______ _______ Net current assets 17,767 12,182 16,064 _______ _______ _______ Total assets less current liabilities 40,269 27,617 39,229 Creditors Amounts falling due after more than one year (8,761) (6,779) (9,064) Provisions for liabilities and charges (224) (232) (238) _______ _______ _______ Net assets 31,284 20,606 29,927 _______ _______ _______ Capital and reserves Called up share capital 2,208 2,033 2,204 Reserves 29,076 18,573 27,723 _______ _______ _______ Equity shareholders' funds 31,284 20,606 29,927 _______ _______ _______ Consolidated Cash Flow Statement 2002 2001 2001 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) 2,740 (411) 6,946 Returns on investment and servicing of finance Net interest received 673 504 620 Taxation paid (1,008) (1,448) (3,559) Capital expenditure and financial investment Purchase of tangible fixed assets (377) (733) (1,362) Net proceeds from sale of properties - - 1,423 Proceeds from sale of tangible fixed assets 93 110 117 Proceeds from sale of fixed asset investments - - 10 Acquisitions and disposals Purchase of subsidiary undertakings - - (2,000) Costs associated with acquisition - - (301) Equity dividends paid (2,594) (2,387) (3,582) _______ _______ _______ Cash outflow before financing (473) (4,365) (1,688) Financing Issue of ordinary share capital 52 9 5,603 Increase in debt - 4,000 4,000 Redemption of loan notes - (711) (813) _______ _______ _______ (Decrease)/increase in cash in the period (b) (421) (1,067) 7,102 _______ _______ _______ Notes to the Cash Flow Statement a. Reconciliation of operating profit to operating cash flows 2002 2001 2001 6 months 6 months 12 months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 Operating profit 3,678 3,683 6,594 Amortisation of goodwill 450 240 622 Depreciation 548 536 1,113 Profit on disposal of tangible fixed assets (51) (15) (12) Profit on disposal of fixed asset investments - - (8) Shares subject to grant of a nil cost option - - 256 Decrease in debtors 4,144 5,890 5,912 Decrease in creditors and provisions (6,029) (10,745) (7,531) _______ _______ _______ Net cash inflow/(outflow) from operating activities 2,740 (411) 6,946 _______ _______ _______ b. Analysis and reconciliation of net funds At 1 Dec Cash Other At 31 May 2001 flows changes 2002 £'000 £'000 £'000 £'000 Cash and deposits 22,468 (421) - 22,047 Debt due after one year (4,416) - 416 (4,000) Debt due within one year (750) - (416) (1,166) _______ _______ _______ _______ Net funds 17,302 (421) - 16,881 _______ _______ _______ _______ 2002 2001 2001 6 months 6 months 12 months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 (Decrease)/increase in cash in the period (421) (1,067) 7,102 Repayment of debt - 711 813 Loans drawn down - (4,000) (4,000) Reclassification of deferred consideration - - 2,550 _______ _______ _______ Movement in net funds in the period (421) (4,356) 6,465 Net funds at beginning of period 17,302 10,837 10,837 _______ _______ _______ Net funds at end of period 16,881 6,481 17,302 _______ _______ _______ Notes 1. Basic earnings per share before goodwill amortisation and profit on disposal of properties is calculated with reference to earnings for shareholders of £3,059,000 (May 2001: £3,012,000; Nov 2001: £5,516,000) and the weighted average number of shares in issue during the period of 21,652,532 (May 2001: 19,892,456; Nov 2001: 20,585,873). Basic earnings per share is calculated with reference to earnings for shareholders of £2,609,000 (May 2001: £2,772,000; Nov 2001: £5,125,000). 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. The number of additional shares used for the diluted calculation is 400,656 (May 2001: 472,298; Nov 2001: 443,699). 2. The information contained in the 30 November 2001 consolidated balance sheet, profit and loss account and cash flow statement does not constitute full financial statements and has been extracted from the latest published financial statements for year ended 30 November 2001, which have been delivered to the Registrar of Companies. The report of the auditors on these financial statements was unqualified. The consolidated profit and loss accounts and cash flow statements for the six month periods and the consolidated balance sheets at 31 May 2001 and 31 May 2002 are unaudited. This information is provided by RNS The company news service from the London Stock Exchange

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