Interim Results
Walker Crips Group plc
13 November 2007
Walker Crips Group PLC (WCW)
Tuesday 13 November, 2007
7:00A - Interim Results
Walker Crips Group PLC
13 November 2007
Press Release For immediate release: 13 November 2007.
Interim Results
for the six months to 30 September 2007
Walker Crips Group PLC ('Walker Crips' or the 'Company'), the financial services
firm with activities covering stockbroking, fund management, corporate finance
and personal wealth management, today announces results for the six months ended
30 September 2007, the highlights of which are:
• Revenue of £9,076,000 (2006: £8,439,000), an increase of 7.5%
• Operating Profit of £1,226,000 (2006: £1,126,000), an increase of 8.9%
• Pre-tax profit of £1,402,000 (2006: £1,225,000), an increase of 14.4%
• Earnings per share up 16.7% to 2.8p (2006:2.4p)
• Interim dividend increased by 6.8% to 0.94p per share (2006: 0.88p per share)
Commenting on the results, David Gelber, Chairman of Walker Crips said: 'I am
delighted to see the business performing strongly and progress being made across
the broad range of its operations despite the current challenging investment
climate.
For further information, please contact:
Walker Crips Group Plc Tel: +44 (0)20 3100 8000
Rodney FitzGerald, Chief Executive.
Stephen Bailey, Investment Director.
Further information on Walker Crips Group plc:
Further information on Walker Crips Group is available on the Company's
website: www.wcwb.co.uk.
Chairman's statement
It gives me great pleasure to report another strong set of results for the group
reflecting a solid performance from all operating divisions. The pre-tax profit
in the six months to 30 September 2007 of £1,402,000 is an increase of 14.4%
over the £1,225,000 reported in the comparable period last year. Despite
volatile market conditions in this half-year period, revenues improved by 7.5%
to £9,076,000 (2006: £8,439,000)
Operations
The stockbroking division has shown resilience in the recent difficult
investment climate. The increase in revenue and profitability has been driven by
both an increase in non-sharing recurring fees and a tight control of costs.
All three of our UK equity funds have achieved first quartile performance since
1 April 2007, with the longer established UK Growth and Equity Income Funds also
first quartile over 1, 3 and 5 years. Equity Income is ranked in the first
decile since launch and UK Growth, first decile since our investment fund
management subsidiary (WCAM) assumed the mandate. Our Multi Manager funds, run
from our York office, also continue to perform well and attract new monies.
Following on from this, WCAM profitability rose by more than 43% over the
comparable period last year, underpinned by higher revenues from substantially
larger underlying funds. This commendable result has been achieved despite a
fall in funds under management to £321m as at 30 September 2007 from £383m at
the last year end. Since the half-year end date, we have been granted a mandate
to manage additional funds valued at £80m, which significantly contributes to
the recent increase in funds under management to the current total of £410m.
Our corporate finance division performed well during an uncertain period. The
recent recruitment of a number of experienced individuals will provide the
foundation for expansion in both advisory and corporate broking services.
The London York group, our York-based wealth management arm, has made excellent
progress during the period. The Ebor SIPP continues to attract new investors and
has completed another successful half-year period. Total funds held within Ebor
SIPPs have now increased to £39 million from £25 million at the last year end.
In line with our strategy of increasing our recurring fee-based revenues, I am
pleased to report further progress, with non broking revenues increasing
marginally to 48.1% of total revenue compared to 47.9% in the previous half
year.
Office Move
In August, we relocated our head office to Bunhill Row in the City of London.
The effective planning and dedication of the project team, staff and account
executives ensured a smooth transition. Our new offices now provide a more
functional environment for our team and sufficient space to fulfil our expansion
plans.
Name change and Share Subdivision
On 14 August 2007 shareholders approved a proposal to change the Company's name
to Walker Crips Group plc, having earlier approved the subdivision of each old
20p ordinary share into three new ordinary shares of 6 2/3p each on 20 July 2007
at the Company's Annual General Meeting.
Dividend
I am pleased to announce an increase in the interim dividend to 0.94p per
ordinary share (2006: 0.88p per share), a rise of over 6.8%. This is a
reflection of our confidence in the future of the group. The dividend will be
paid on 14 December 2007 to those shareholders on the register at the close of
business on 23 November 2007.
Directors, Account Executives and Staff
On behalf of the board, I would like to thank my fellow directors, all account
executives and members of staff for their continued loyalty and commitment. The
results during the period reflect the hard work of all our staff and the
continued support of our clients.
Outlook
I remain cautiously optimistic about the second half despite a quiet start with
markets dominated by credit and liquidity issues. The breadth of the Company's
products provides the platform for confidence in our long-term prospects and
should ensure we are well placed to withstand any adverse investment conditions
which may lie ahead.
D. M. Gelber
Chairman
13 November 2007
Walker Crips Group plc
Consolidated interim income
statement
For the six months ended 30 Unaudited Unaudited Audited
September 2007
Notes Six months to Six months to Year to
30 September 30 September 31 March 2007
2007 2006
£'000 £'000 £'000
Revenue 2 9,076 8,439 17,959
Commission payable (1,893) (1,944) (4,253)
----------- ----------- -----------
Gross profit 7,183 6,495 13,706
Share of after tax
profits of joint
ventures 30 21 50
Administrative
expenses - other (5,987) (5,390) (11,347)
Administrative
expenses -
exceptional item - - (520)
----------- ----------- -----------
Total (5,987) (5,390) (11,867)
administrative
expenses ----------- ----------- -----------
Operating profit 1,226 1,126 1,889
Investment revenues 179 111 243
Finance costs (3) (12) (14)
----------- ----------- -----------
Profit before tax 1,402 1,225 2,118
----------- ----------- -----------
------------------------ ----- ----------- ----------- -----------
Analysed as:
Profit before tax
and exceptional
item 1,402 1,225 2,638
Administrative
expenses -
exceptional item - - (520)
----------- ----------- -----------
Profit before tax 1,402 1,225 2,118
------------------------ ----- ----------- ----------- -----------
Taxation (413) (393) (595)
----------- ----------- -----------
Profit for the
period attributable
to equity holders
of the company 989 832 1,523
----------- ----------- -----------
Earnings per share 5
Basic 2.8p 2.4p 4.4p
Diluted 2.7p 2.33p 4.27p
Walker Crips Group plc
Consolidated interim balance
sheet
As at 30 September 2007
Notes Unaudited Unaudited Audited
30 September 30 September 31 March 2007
2007 2006
£'000 £'000 £'000
Non current Assets
Goodwill 5,152 4,677 5,152
Other intangible
assets 863 978 921
Property, plant and
equipment 1,465 499 1,143
Investment in joint
ventures 54 25 74
Available for sale
investments 980 886 888
Deferred tax asset 177 - 178
----------- ----------- -----------
8,691 7,065 8,356
Current Assets
Trade and other
receivables 57,985 40,915 64,290
Trading Investments 321 298 138
Cash and cash
equivalents 3,164 4,149 6,298
----------- ----------- -----------
61,470 45,362 70,726
----------- ----------- -----------
Total assets 70,161 52,427 79,082
----------- ----------- -----------
Current liabilities
Trade and other
payables (54,518) (38,491) (63,656)
Current tax
liabilities (654) (485) (448)
Bank overdrafts (86) (78) (148)
Provisions (155) (323) (649)
Shares to be issued (1,588) - -
----------- ----------- -----------
(57,001) (39,377) (64,901)
----------- ----------- -----------
Net current assets 4,469 5.985 5,825
----------- ----------- -----------
Non current liabilities
Deferred tax
liabilities - (164) -
Shares to be issued - (1,113) (1,588)
----------- ----------- -----------
- (1,277) (1,588)
----------- ----------- -----------
Net assets 13,160 11,773 12,593
=========== =========== ===========
Equity
Share capital 7 2,358 2,336 2,356
Share premium
account 7 1,555 1,450 1,547
Own shares 7 (173) (173) (173)
Revaluation reserve 7 633 567 569
Other reserves 7 3,940 3,592 3,907
Retained earnings 7 4,847 4,001 4,387
----------- ----------- -----------
Equity attributable
to equity holders
of the company 13,160 11,773 12,593
=========== =========== ===========
Walker Crips Group plc
Consolidated interim cash flow
statement
For the six months ended 30 Unaudited Unaudited Audited
September 2007
Six months to Six months to Year to
30 September 30 September 31 March 2007
2007 2006
£'000 £'000 £'000
Operating activities
Cash (used in) /
generated from
operations (1,880) 2,321 5,384
Interest received 179 85 216
Interest paid (3) (12) (14)
Tax paid (232) (134) (435)
----------- ----------- -----------
Net cash (used in) /
generated from
operating activities (1,936) 2,260 5,151
----------- ----------- -----------
Investing activities
Joint venture
investment - - (20)
Purchase of property,
plant and equipment (513) (68) (830)
Purchase of
investments held for
trading (183) (163) (3)
Dividends received 79 77 77
----------- ----------- -----------
Net cash used in
investing activities (617) (154) (776)
----------- ----------- -----------
Financing activities
Proceeds on issue of
shares 10 64 181
Dividends paid (529) (483) (790)
----------- ----------- -----------
Net cash used in
financing activities (519) (419) (609)
----------- ----------- -----------
Net (decrease) /
increase in cash and
cash equivalents (3,072) 1,687 3,766
Net Cash and cash
equivalents at the
start of the period 6,150 2,384 2,384
----------- ----------- -----------
Net Cash and cash
equivalents at the end
of the period 3,078 4,071 6,150
----------- ----------- -----------
Cash and cash
equivalents 3,164 4,149 6,298
Bank overdrafts (86) (78) (148)
----------- ----------- -----------
3,078 4,071 6,150
----------- ----------- -----------
Walker Crips Group plc
Consolidated interim statement
of recognised income and expense
For the six months Unaudited Unaudited Audited
ended 30 September 2007
Six months to Six months to Year to
30 September 30 September 31 March 2007
2007 2006
£'000 £'000 £'000
Gain on
revaluation of
available-for-
saleinvestments
taken to equity 92 42 43
Deferred tax
on gains on
available-for-
sale
investments (28) 10 11
Deferred tax
on share
options - - 275
----------- ---------- ----------
Net income
recognised
directly in
equity 64 52 329
Transfers:
Profit for the
period 989 832 1,523
----------- ---------- ----------
Total
recognised
income and
expense for
the period
attributable
to equity
holders of the
Company 1,053 884 1,852
----------- ---------- ----------
Walker Crips Group plc
Notes to the accounts
For the six months ended 30 September 2007
1. Basis of preparation and accounting policies
The Group's consolidated financial statements are prepared in accordance with
International Financial Reporting Standards as adopted by the EU (IFRS). These
interim financial statements are presented in accordance with IAS 34 Interim
Financial Reporting.
The interim financial statements have been prepared on the basis of the
accounting policies and methods of computation set out in the Group's
consolidated financial statements for the year ended 31 March 2007. The interim
financial statements should be read in conjunction with the Group's audited
financial statements for the year ended 31 March 2007.
The interim financial information is unaudited and does not constitute statutory
financial statements within the meaning of section 240 of the Companies Act
1985.
The presentation of certain comparative figures has been amended to conform to
the format of recently published financial statements.
The Group's financial statements for the year ended 31 March 2007 have been
reported on by the auditors and delivered to the Registrar of Companies. The
report of the auditors was unqualified and did not draw attention to any matters
by way of emphasis. They also did not contain a statement under section 237(2)
or (3) of the Companies Act 1985.
Interests in joint ventures
The Group's share of the assets, liabilities, income and expenses of jointly
controlled entities are accounted for in the consolidated financial statements
under the equity method.
Income from the sale or use of the Group's share of the output of jointly
controlled assets, and its share of the joint venture expenses, are recognised
when it is probable that the economic benefits associated with the transactions
will flow to / from the Group and their amount can be measured accurately.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary or jointly controlled entity at the date
of acquisition. Goodwill is initially recognised as an asset at cost and
reviewed for impairment at least annually. Any impairment is recognised
immediately in profit or loss and is not subsequently reversed in future
periods.
Intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its
intangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable amount of the
cash-generating unit to which the assets belong.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profits, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that is probable that
taxable profits will be available against which deductible temporary differences
can be utilised.
Share based compensation
The Group operates a number of share option schemes for employees and account
executives. The charge to the income statement is determined by the fair value
of the options granted at the date of grant and recognised over the vesting
period.
Principal risks and uncertainties
The principal risks and uncertainties faced by the Group continue to be credit
risk and operational risk. These are described in detail in the Annual Report
for the year ended 31 March 2007.
Related party transactions
No transactions took place in the period that would materially affect the
financial position or performance of the group. Related party transactions are
described in detail in the Annual Report for the year ended 31 March 2007
2. Segmental analysis 6m to 6m to 12m to
Sept Sept March
Revenue 2007 2006 2007
Stockbroking 6,573 6,101 13,111
Corporate Finance 463 480 861
Financial Services 955 1,061 2,141
Investment Fund Management 1,085 797 1,846
-------- ---------- ----------
9,076 8,439 17,959
===== ====== ======
3. Share Capital
On 20 July 2007 a resolution was passed at the annual general meeting to
subdivide each 20p ordinary share of the issued and unissued share capital of
the Company into 3 ordinary shares of 6 2/3p each. Previously disclosed earnings
and dividend per share figures have been amended to reflect this change.
4. Change of Name
On 14 August 2007 a resolution was passed at an extraordinary general meeting to
change the Company's name to Walker Crips Group Plc
5. Earnings per share
The calculation of basic earnings per share for continuing operations is based
on the post-tax profit for the period of £989,000 (2006 - £832,000) and on
34,908,914 (2006 - 34,499,979) ordinary shares of 6 2/3p, being the weighted
average number of ordinary shares in issue during the period.
The effect of options granted and commitments to issue shares in respect of
acquisitions would be to reduce the reported earnings per share. The calculation
of diluted earnings per share is based on 36,175,753 (2006 - 35,665,590)
ordinary shares, being the weighted average number of ordinary shares in issue
during the period adjusted for dilutive potential ordinary shares.
6. Dividends
The interim dividend of 0.94p per share (2006 : 0.88p) is payable on the 14
December to shareholders on the register at the close of business on the 23
November. The interim dividend has not been included as a liability in this
interim report.
Walker Crips
Group plc
Notes to
the
accounts
(continued)
For the six
months
ended 30
September
2007
7. Reserves Called up Share Own shares Capital Other Revaluation Retained Total
and share capital premium held Redemption earnings Equity
retained
earnings
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Equity as
at 1 2,326 1,396 (173) 111 3,437 515 3,654 11,266
April 2006
Revaluation
of
investment 42 42
at
fair value
Deferred
tax 10 10
charge
Profit for
the
6 months
ended 832 832
30 --------- --------- --------- --------- --------- --------- --------- ---------
September
2006
Total
recognised
income and
expense for
the period 52 832 884
March 2006
final (485) (485)
dividend
Share-based
payments 44 44
Issue of
shares on
exercise of
options 10 54 64
--------- --------- --------- --------- --------- --------- --------- ---------
Equity as
at 30
September 2,336 1,450 (173) 111 3,481 567 4,001 11,773
2006
Revaluation
of
investment 2 2
at
fair value
Deferred - -
tax charge
Excess
deferred
tax
on share 275 275
options
Profit for
the
6 months 691 691
ended --------- --------- --------- --------- --------- --------- --------- ---------
31 March
2007
Total
recognised
income and
expense for
the period 275 2 691 968
September
2006
interim (305) (305)
dividend
Share-based
payments 40 40
Issue of
shares on
exercise of
options 20 97 117
--------- --------- --------- --------- --------- --------- --------- ---------
Equity as
at 2,356 1,547 (173) 111 3,796 569 4,387 12,593
31 March
2007
Revaluation
of
investment 92 92
at
fair value
Deferred
tax (28) (28)
credit
Profit for
the
6 months
ended 989 989
30 --------- --------- --------- --------- --------- --------- --------- ---------
September
2007
Total
recognised
income and
expense for
the period 64 989 1,053
March 2007
final (529) (529)
dividend
Share-based
payments 33 33
Issue of
shares on
exercise of
options 2 8 10
--------- --------- --------- --------- --------- --------- --------- ---------
Equity as
at
30 2,358 1,555 (173) 111 3,829 633 4,847 13,160
September
2007
Directors' Responsibility Statement
The Directors confirm that to the best of their knowledge:
(a) The condensed set of financial statements contained within the half yearly
financial report has been prepared in accordance with IAS 34 ' Interim Financial
Reporting' as adopted by the EU;
(b) The half yearly report from the Chairman (constituting the interim
management report) includes a fair review of the information required by DTR
4.2.7R; and
(c) The half yearly report from the Chairman includes a fair review of the
information required by DTR 4.2.8R as far as applicable.
On Behalf of the Board
Rodney FitzGerald
Chief Executive Officer
13 November 2007
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