Final Results

Trio Holdings PLC 27 November 2003 27 November 2003 TRIO HOLDINGS PLC Preliminary Results - stronger second half performance TRIO Holdings PLC (TRN.L), a leading London-based money and securities broking house, today announce a stronger second half performance, to give satisfactory results in the difficult year to 30 September 2003, blighted in the first half by uncertainties in the run up to the resolution of events in the Middle East. Highlights: • Profit before tax on continuing businesses £2.1 million; net of discontinued businesses £1.9 million (2002: £5.4 million including exceptional operating items of £1.3 million) • Recommended final dividend maintained at 0.5p per share • Total normal dividends for the year maintained at 0.75p per share • Net Assets at 30 September 2003 up to £11.6 million (2002: £11.3 million) • Cash balances stand at £10.4 million • Significant indirect balance sheet improvement through elimination of long-standing contingent liability of £600,000 David Hagan, Executive Chairman, said: 'I am pleased to confirm that trading conditions indeed improved in our second half, enabling us to report profits before tax on continuing businesses of £2.1 million and to recommend maintenance of the normal dividend level at a historical high. Furthermore, my colleagues and I are delighted to advise the total elimination of a significant contingent liability of £0.6 million that has detracted from our very strong balance sheet since 2000, vindicating the robust position consistently taken by the board in respect of this matter. As I reported in my interim statement on 1 May 2003, our first half was substantially tempered by the restraint of speculative trading by our customers, the banks, reflecting their prudence in the long run-up to the events in the Middle East. The second half saw a return to more normal, although moderate, market conditions. Subsequent refocus on the economic fundamentals of global markets now perhaps suggests a prognosis of modestly rising interest rates in most major currencies. In turn, this should imply a continuance of moderately active markets in our specialist niche areas of expertise.' Enquiries to: DAVID HAGAN Tel: 020 7469 9100 Executive Chairman, TRIO Holdings PLC PATRICK TOYNE SEWELL Tel: 020 7638 9571 Citigate Dewe Rogerson CHAIRMAN'S STATEMENT Review of the business After a difficult first half, it is pleasing to announce a satisfactory out turn for the full year as a whole with a profit on continuing businesses before taxation of £2.1 million, becoming £1.3 million after taxation. This, therefore, enables the board to recommend for approval at the Annual General Meeting a final dividend at 0.5p per share, which will be payable on 20 February 2004, to shareholders on the register on 23 January 2004. Our historically high total normal dividend for the year will consequently be maintained at 0.75p. Net assets have increased to £11.6 million and our very strong balance sheet, in relationship to the size of the company, continues to include cash balances in excess of £10 million. In June 2003 we completed the disposal of The Network Group Limited, an electronics design and assembly business, the ownership of which had long been an anachronism within the group and which had become increasingly loss-making. Its sale at net asset value to Fireco Limited was a happy resolution to our predicament. Niche excellence There has been material consolidation in our very specialist industry sector, with the continued dynamic acquisitive growth of ICAP plc, as the industry giant and leader, and the strategically interesting acquisition of Tullett plc by the listed stockbroking company Collins Stewart plc. Nonetheless TRIO, due to the long and untarnished history of our principal operating subsidiary Martin Brokers (UK) plc as the oldest money broking firm in the City, continues to be acknowledged as the leader in several important niche sectors. In the authoritative Risk Magazine annual survey published in September 2003, we achieved the resounding accolade of being voted 'Top Broker' in a total of eleven market sectors. In Forward Foreign Exchange broking, our superb teams were 1st in Dollar/Euro, 1st in Dollar/Sterling, 1st in Dollar/Swedish Krona, and 1st in Dollar/EM Asia. We were voted 'Top Broker' in Overnight Index Swaps for Swedish Krona, reflecting market acknowledgement of our first class 'Scandi' team. Also in the complex and cerebral arena of Equity Derivatives, our teams were voted 1st in all six sectors (telecoms, technology, media, financials, autos, and others) for European OTC Single Stock Equity Options. My board colleagues and I congratulate the continuing excellence of our many brokers in all these teams. Electronic transactional systems In recent years, several product sectors of our markets have seen the emergence of electronic transactional systems, many with global reach, which have achieved varying levels of acceptance and adoption by our customer base. Inherently such systems can improve market efficiencies, reduce risk, and lend themselves to the ultimate goal of straight-through processing. Indeed, many of our competitor companies have embraced such systems, mainly combining electronic broking with the traditional voice methodology, into a ' hybrid' model. We strategically endorse the hybrid model for the foreseeable future. In order to be at the vanguard of these remorseless advances in technology, our talented team at Trio Internet Systems ('TIS') developed, entirely in-house, a highly sophisticated secure electronic transactional dealing system. Its first product area, www.UK-Locals.com, was for Local Authority treasurers, building societies and banks, and has now completed over 6,500 trades since its inception over two years ago. The system's take-up and usage by its customer base continues to grow, and indeed in October we once again achieved another record month in transaction volumes. An additional benefit has been the enhancement of our relationships and perception within the Local Authority sector, directly contributing to improved profitability for that activity. We have recently formed a new subsidiary, Martin Brokers Transactional Products Limited, to interface between TIS and the Martin Brokers dealing teams, to expand in due course our range of hybrid brokered products. Next January, work will commence on the introduction of the next product area for this technology, which is planned to go live by April, with additional and potentially more significant product areas being introduced thereafter. Software development Over the last two years, the TIS team developed an all new pricing and analytics tool branded Trio Vantage. Trio Vantage is a fast and simple to use multi-instrument pricing tool for the dealing environment, with sophisticated facilities for monitoring arbitrage opportunities between currencies and instruments - www.triointernetsystems.com. This product has now been very successfully rolled out across all our in-house dealing desks and has substantially replaced the third party software previously used. Our strategy for possible external commercialisation of this product has crystallised with the recent establishment of an in-house sales team, whose early success has been the agreement of two major trading banks and one European broking firm to trial the product. We are optimistic of the first external sales of Trio Vantage emerging early in the New Year. Relocation Just over one year ago, the group completed a highly successful relocation to our new office at Cannon Bridge, with the associated re-equipment, providing a modern, open-plan, totally modular and flexible dealing room environment. The many advantages of this flexibility continue to be helpful in enabling easy, nil-cost expansion, contraction, and re-configuration of dealing desks and brokers, to reflect the ebb and flow of activity levels in different products. As an example of this expansion, during the year we established a new Credit division, to create an initial presence in this broad arena focused on the comparatively new international market in Credit Default Swaps, together with corporate bonds and bond options. Inherently the establishment period of such a new activity, bears adversely on the profit and loss account, but we view the Credit market as a strategically important area for the future and continue to endorse the professional endeavours of this team. Summary Moderately active business has continued to prevail since the year end, although globally the financial markets are tentative, reflecting political and social uncertainties, and I remain extremely cautious. There is still a continuing climate of consolidation amongst our competitors. Our very sound financial base enables us to look widely at seeking possible corporate developments for TRIO Holdings PLC in due course, from a position of strength. This is a fiercely competitive industry, which faces the challenge of embracing sophisticated advances in software and technology and successfully combining them with traditional communication methods, to provide hybrid broking of extra added value to the banks. We will remain an active participant in this evolution. In particular there is always competition for good staff. Indeed their recruitment and retention occasionally borders the absurd, and certainly challenges the morality and the legal envelope of modern day employment practice. But we are essentially a 'niche' broker, and the quality, expertise, loyalty and dedication of our excellent broking, IT and back-office teams continue to underpin my cautiously confident view of our future. For more information on TRIO and its operating businesses please visit: www.trio.co.uk www.uk-Locals.com www.martin-brokers.com www.triointernetsystems.com TRIO HOLDINGS PLC UNAUDITED PRELIMINARY STATEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2003 2003 2003 2003 2002 Continuing Discontinued Total Total £000's £000's £000's £000's Turnover 32,674 186 32,860 34,426 Operating expenses (30,678) (481) (31,159) (30,596) ______ ______ _______ _______ Operating profit/(loss) before exceptional items 1,996 (295) 1,701 3,830 Exceptional operating items - - - 1,270 ______ ______ _______ _______ Operating profit/(loss) 1,996 (295) 1,701 5,100 Profit on sale of investments - - - 77 Share of loss of associate (94) - (94) (81) Net interest receivable less payable 246 - 246 267 ______ ______ _______ _______ Profit/(loss) on ordinary activities before taxation 2,148 (295) 1,853 5,363 Taxation -UK (834) - (834) (2,211) -Overseas - - - (77) ______ ______ _______ _______ Profit/(loss) on ordinary activities after taxation 1,314 (295) 1,019 3,075 Dividends paid and proposed (626) - (626) (835) ______ ______ _______ _______ Retained profit/(loss) for the year transferred to reserves 688 (295) 393 2,240 ====== ====== ====== ====== Earnings per share 1.22p 3.68p ===== ===== Dividends per share - normal 0.75p 0.75p - special - 0.25p ===== ===== TRIO HOLDINGS PLC UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2003 2002 £000's £000's Profit for the year 1,019 3,075 Foreign exchange translation differences on foreign currency investment in subsidiaries 2 - _______ _______ Total recognised gains and losses 1,021 3,075 ====== ====== UNAUDITED RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS 2003 2002 £000's £000's Profit for the year 1,019 3,075 Dividends paid and proposed (626) (835) _______ _______ 393 2,240 Other recognised gains and losses 2 - _______ _______ Net addition to equity shareholders' funds 395 2,240 Opening equity shareholders' funds 11,253 9,013 _______ _______ Closing equity shareholders' funds 11,648 11,253 ====== ====== TRIO HOLDINGS PLC UNAUDITED CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2003 2003 2002 £000's £000's FIXED ASSETS Tangible assets 1,993 2,422 Investments 71 165 _______ _______ 2,064 2,587 CURRENT ASSETS Stocks - 92 Investments 277 - Debtors 5,062 5,176 Cash 10,376 11,463 _______ _______ 15,715 16,731 Creditors: due within one year (5,449) (6,885) _______ _______ NET CURRENT ASSETS 10,266 9,846 Creditors: due after more than one year (681) (1,179) Equity minority interests (1) (1) _______ _______ NET ASSETS 11,648 11,253 ====== ====== CAPITAL AND RESERVES Share capital 4,174 4,174 Capital reserve 2,474 2,474 Profit and loss account 5,000 4,605 _______ _______ EQUITY SHAREHOLDERS' FUNDS 11,648 11,253 ====== ====== TRIO HOLDINGS PLC UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2003 2003 2002 £000's £000's Net cash inflow from operating activities 1,917 7,620 Returns on investments and servicing of finance 246 267 Taxation paid (1,770) (1,873) Capital expenditure and financial investment (69) (830) Acquisitions and disposals (141) (93) Dividends paid (835) (376) _______ _______ Net cash (outflow)/inflow before financing (652) 4,715 Financing (435) (1,362) _______ _______ (Decrease)/increase in cash in the year (1,087) 3,353 ====== ====== Reconciliation of net cash flow to movement in net funds 2003 2002 £000's £000's (Decrease)/increase in cash in the year (1,087) 3,353 Cash inflow from the decrease in debt and lease financing 435 1,362 _______ _______ Change in net funds resulting from cash flows (652) 4,715 New finance leases - (1,501) _______ _______ Movement in net funds in the year (652) 3,214 Net funds at 1 October 2002 10,179 6,965 _______ _______ Net funds at 30 September 2003 9,527 10,179 ====== ====== Reconciliation of operating profit to net cash inflow from operating activities 2003 2002 £000's £000's Operating profit 1,701 5,100 Depreciation charges 483 304 Loss on disposal of fixed assets - 122 Decrease in debtors 167 1,057 (Decrease)/increase in creditors (449) 1,055 Decrease/(increase) in stock 13 (18) Exchange rate movements 2 - _______ _______ Net cash inflow from operating activities 1,917 7,620 ====== ====== TRIO HOLDINGS PLC NOTES 1. Profit and Loss Account The results in foreign currencies are translated into Sterling at the average exchange rates ruling in the year in which the results accrued. 2. Earnings per Share Earnings per share is based on the net profit after taxation attributable to ordinary shareholders and on a weighted average of the number of ordinary shares in issue in the year: 83,484,325 (2002: 83,484,325). The earnings per share excluding exceptional operating items after taxation in 2002 was 2.66p per share. 3. Announcement based on draft accounts (unqualified audit report) The financial information set out in the announcement does not constitute the group's statutory accounts for the years ended 30 September 2003 or 2002. The financial information for the year ended 30 September 2002 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 30 September 2003 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the group's annual general meeting. Copies of this announcement are available to members of the public at the Company's registered office, Cannon Bridge, 25 Dowgate Hill, London EC4R 2BB. This information is provided by RNS The company news service from the London Stock Exchange

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