Interim Results
Trio Holdings PLC
01 May 2003
1 May 2003
TRIO HOLDINGS PLC
Interim Report for the six months ended 31 March 2003
CHAIRMAN'S STATEMENT
Highlights for the six months ended 31 March 2003:
• Profit before tax £0.51 million (2002 - £2.21 million)
• Interim dividend 0.25p per share (2002 - 0.25p per share)
• Net Assets at 31 March 2003 of £11.17 million (2002 - £10.00 million)
• Cash balances £10.24 million (2002 - £10.58 million)
• Turnover £15.64 million (2002 - £17.60 million)
I indicated in my statement to shareholders on 21 January 2003 that volumes of
trading had lessened in the autumn, and these reduced trading levels prevailed
throughout most of this reporting period, causing a decline in turnover to
£15.64 million. Happily there were indications of more robust trading at the
tail end of the period, as the prognosis for the situation in the Middle East
became clearer after some months of uncertainty. Under the circumstances I am
therefore modestly pleased to announce a profit before taxation for the six
months of £0.51 million.
During the period the prevailing lack of short-term interest rate volatility and
uncertainty of direction tempered normal trading activity by our principal
customer base, the banks. Compounding these phenomena, this customer base
understandably restrained speculative trading activity during the prolonged and
uncertain run-up period to the resolution of events in Iraq. More recently,
however, our core foreign exchange, money and derivative markets, so dependant
on volatility in short term interest rates, have been less restrained: attention
is refocusing on the economic fundamentals of the global markets which is
establishing a better climate for increased activity going forward.
We have retained our strong balance sheet with net assets at £11.17 million,
including substantial cash balances of £10.24 million and, combined with
modestly better current trading, this has enabled the Board to maintain the
interim dividend at 0.25p per share. The dividend will be paid on 16 June 2003
to shareholders on the register on 16 May 2003.
During the period we have started to enjoy the benefits last autumn's
re-equipment and re-location to our new office at Cannon Bridge, which gave us
an open-plan, flexible, re-equipped dealing room. Over the last four months, we
have taken advantage of this flexibility to add, by careful recruitment, a new '
Credit' division. This division currently employs nine brokers, specialising
particularly in the comparatively new international market in Credit Default
Swaps. The costs of organically growing such a new specialisation weigh
adversely on the profit and loss account during the initial establishment
period, but early indications for longer-term success in this fast-growing
product area are encouraging, and the positive reaction to the daily research
output of this new team has already underpinned their professional broking
profile.
Our secure electronic transactional dealing system www.UK-Locals.com for Local
Authority treasurers, building societies and banks, celebrated the second
anniversary of its launch in March, showing a 60% increase in trades from its
first year, a 35% increase in web-site hits, and a 30% increase in registrants.
I am pleased to announce that, since the end of the period, April 2003 showed
yet another record month for the transactional system. Developed entirely
in-house by our talented team at Trio Internet Systems Limited ('TIS'),
enthusiasm for the system has enlarged our Local Authority customer base in
general, and raised the broking team's profile and relationships in particular
in this niche area. This has resulted in the additional benefit of an increased
level of completed longer-term re-structuring deals, further contributing to
profitability for that section.
A beta-test version of the all-new 'Arbitrage' system from TIS has been in use
by some of our brokers since early in the calendar year. The development team
remain confident that the fully-developed package will totally replace the
current arbitrage and other third-party software used in our dealing rooms by
the autumn. Strategies for possible external commercialisation of Trio Insight '
Vantage' and 'Vision' will follow the full in-house installation.
Despite the several early months of subdued trading conditions, as presaged in
earlier statements, Trio continues in a healthy state with good technology and
infrastructure, excellent broking staff, and a very sound financial base.
Interestingly in January 2003 the listed stock broking company Collins Stewart
plc acquired Tullett plc, a large competitor money broking group: also in the
same month, ICAP plc announced the acquisition of BrokerTec, an electronic
interdealer broker in the global fixed income markets. Indeed a climate of
consolidation persists in this highly competitive industry. In conclusion,
assuming that markets now continue to return to being moderately active, I view
the future with cautious confidence.
Enquiries to:
DAVID HAGAN Tel: 020 7469 9100
Executive Chairman, TRIO Holdings PLC
PATRICK TOYNE SEWELL Tel: 020 7638 9571
Citigate Dewe Rogerson
TRIO HOLDINGS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 31 March 2003 (unaudited)
6 months to 6 months to Year
to
31 March 31 March 30 Sept
2003 2002 2002
£000s £000s £000s
Turnover 15,643 17,605 34,426
Net recurring operating expenses (15,224) (15,662) (30,596)
Operating profit before exceptional item 419 1,943 3,830
Exceptional item - - 1,270
Operating profit 419 1,943 5,100
Share of loss of associated company (69) (14) (81)
Net interest receivable less payable 156 200 267
Profit on sale of investment - 77 77
Profit on ordinary activities before taxation 506 2,206 5,363
Taxation UK (384) (1,003) (2,211)
Overseas - - (77)
Profit for the period 122 1,203 3,075
Dividends paid and proposed (209) (209) (835)
Retained (loss)/profit for the period transferred to reserves (87) 994 2,240
Earnings per share 0.15p 1.44p 3.68p
Diluted earnings per share 0.15p 1.44p 3.68p
Dividends per share 0.25p 0.25p 1.00p
There were no acquisitions or discontinued operations in the
current or prior period
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
6 months 6 months Year
to to to
31 March 31 March 30 Sept
2003 2002 2002
£000s £000s £000s
Profit for the period 122 1,203 3,075
Foreign exchange translation differences on foreign
currency investment in subsidiaries 3 (4) -
Total recognised gains and losses 125 1,199 3,075
RECONCILIATION OF CONSOLIDATED MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
6 months 6 months Year
to to to
31 March 31 March 30 Sept
2003 2002 2002
£000s £000s £000s
Profit for the period 122 1,203 3,075
Dividends paid and proposed (209) (209) (835)
(87) 994 2,240
Other recognised gains and losses 3 (4) -
Net (reduction from)/addition to equity shareholders' funds (84) 990 2,240
Opening equity shareholders' funds 11,253 9,013 9,013
Closing equity shareholders' funds 11,169 10,003 11,253
TRIO HOLDINGS PLC
CONSOLIDATED BALANCE SHEET
as at 31 March 2003 (unaudited)
31 March 31 March 30 Sept
2003 2002 2002
£000s £000s £000s
Fixed Assets
Tangible assets 2,201 658 2,422
Investments 95 57 165
2,296 715 2,587
Current Assets
Stock 91 75 92
Debtors 4,950 5,486 5,176
Cash at bank and in hand 10,244 10,578 11,463
15,285 16,139 16,731
Creditors: due within one year (5,640) (6,722) (6,885)
Net Current Assets 9,645 9,417 9,846
Creditors: due after more than one year (771) (128) (1,179)
Equity minority interests (1) (1) (1)
Net Assets 11,169 10,003 11,253
Capital and Reserves
Share capital 4,174 4,174 4,174
Distributable reserves 2,474 2,474 2,474
Profit and loss account 4,521 3,355 4,605
Equity Shareholders' Funds 11,169 10,003 11,253
Notes
1. Profit and Loss Account
There were no acquired or discontinued activities during the current or prior
period. The result arises from continuing operations. The results in foreign
currencies are translated into Sterling at the average exchange rates ruling in
the period.
2. Taxation
Taxation has been estimated on the basis that the six month period forms an
integral part of an annual reporting period.
3. Earnings per share
The profit per share is based on the net profit after taxation attributable to
ordinary shareholders and on a weighted average of the number of shares in issue
in the period: 83,484,325 (2002: 83,484,325).
4. Unaudited accounts
The interim results have been prepared in accordance with accounting policies
set out in the accounts for the year ended 30 September 2002. The financial
information in this report does not constitute full accounts as defined by
section 240 of the Companies Act 1985. The figures and the financial information
for the year ended 30 September 2002 have been compiled from an extract of the
latest published accounts and do not constitute statutory accounts for the year.
Those accounts have been delivered to the Registrar of Companies and included
the report of the independent auditors which was unqualified and did not contain
a statement under either section 237(2) or section 237(3) of the Companies Act
1985.
TRIO HOLDINGS PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 March 2003 (unaudited)
6 months to 6 months to Year
to
31 March 31 March 30 Sept
2003 2002 2002
£000s £000s £000s
Net cash inflow from operating activities 755 3,468 7,620
Returns on investments and servicing of finance 156 140 267
Taxation (1,256) (725) (1,873)
Capital expenditure and financial investment (27) (251) (830)
Acquisitions and disposals - 83 (93)
Dividends paid (626) (167) (376)
Net cash flow before financing (998) 2,548 4,715
Financing (221) (80) (1,362)
(Decrease)/increase in cash in the period (1,219) 2,468 3,353
Reconciliation of operating profit to net cash inflow from operating results
6 months to 6 months to Year
to
31 March 31 March 30 Sept
2003 2002 2002
£000s £000s £000s
Operating profit, including exceptional operating items 419 2,020 5,100
Depreciation charges 250 161 304
Loss on disposal of fixed assets - - 122
Decrease in debtors 226 740 1,057
(Decrease)/increase in creditors (144) 552 1,055
Decrease/(increase) in stock 1 (1) (18)
Exchange rate movements 3 (4) -
Net cash inflow from operating activities 755 3,468 7,620
Reconciliation of net cash flow to movement in net funds
6 months to 6 months to Year
to
31 March 31 March 30 Sept
2003 2002 2002
£000s £000s £000s
(Decrease)/increase in cash in the period (1,219) 2,468 3,353
Cash inflow from decrease in debt and lease financing 221 80 1,362
Change in net funds resulting from cash flows (998) 2,548 4,715
New finance leases - (51) (1,501)
Movement in net funds in the period (998) 2,497 3,214
Opening net funds 10,179 6,965 6,965
Closing net funds 9,181 9,462 10,179
Analysis of net funds
At Cash At
1.10.02 flow 31.3.03
£000s £000s £000s
Cash in hand and at bank 11,463 (1,219) 10,244
Finance leases (1,284) 221 (1,063)
Total 10,179 (999) 9,181
TRIO HOLDINGS PLC
REVIEW REPORT OF THE INDEPENDENT AUDITORS
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2003 which comprises the consolidated profit and
loss account, the consolidated statement of total recognised gains and losses,
the reconciliation of consolidated movements in equity shareholders funds, the
consolidated balance sheet, the consolidated cash flow statement and related
notes 1 to 4. We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2003.
Deloitte & Touche
Chartered Accountants
London
1 May 2003
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