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W.H. Ireland Group (WHI)

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Friday 23 July, 2010

W.H. Ireland Group

Half Year Results

RNS Number : 8011P
W.H. Ireland Group PLC
23 July 2010
 



AIM: WHI

 

WH IRELAND GROUP PLC

("WH Ireland" or "the Group")

 

Half Year Results

for the six months ended 31 May 2010

 

Key Points

 

·    Group revenue from continuing operations decreased by 41.6% to £8.8m (six months ended 31 May 2009: £15.1m)

decrease reflects one-off Wealth Management division revenues achieved in 2009

·    Operating loss from continuing operations of £0.587m (six months ended 31 May 2009: profit of £0.287m)

·    Loss before tax of £0.518m (six months ended 31 May 2009: consolidated loss of £0.523m*)

·    Basic loss per share of 0.25p (six months ended 31 May 2009: consolidated loss per share of 3.23p*)

·    Equity shareholders' funds before minority interests decreased to £14.0m (31 May 2009: £15.7m), representing approximately 65p per share (31 May 2009: 74p)

·    Total funds under management and control of £1.35bn, up 14.7% from year end

·    New Chief Executive Officer, Paul Compton, appointed with effect from 6 September 2010

 

* in respect of the period ended 31 May 2009, consolidated loss before tax and consolidated loss per share are stated inclusive of the results from the discontinued operation. The discontinued operation relates to the reduction in the Group's shareholding in WHI Australia Pty Limited which resulted in the investment being reclassified from a subsidiary to an associate.

 

 

Rupert Lowe, Chairman of WH Ireland, said,

 

"Whilst it is disappointing to see that the business has continued to make a loss during the period, I am pleased to report that our balance sheet has remained largely intact.  This has been due in part to the significant cost reduction measures taken during the past 12 months. 

 

I am also delighted that we have appointed Paul Compton as our new Chief Executive, who will be taking up his new position in September 2010. Paul brings a wealth of relevant experience to the business and will be focusing on driving our revenues.  He is excited about building on our regional presence, further enhancing our wealth management proposition and adding to our placing power for corporate clients.  

 

Managing a business during an economic downturn is always difficult but I firmly believe that we have now cut our cloth appropriately and, with further emphasis on increasing our revenues, we will be better positioned for a difficult or even benign market, and well positioned for any upturn." 

 

Enquiries:

WH Ireland                                                                    Tel: 020 7220 1666

Rupert Lowe

 

Oriel Securities Ltd                                                        Tel: 020 7710 7600

Tom Durie

 

Biddicks (Financial PR to WH Ireland)                             Tel: 020 7448 1000

Zoë Biddick

Sophie Lane

 

Chairman's Statement

 

Our loss before tax is £0.518m (£0.054m after tax), which is a slight improvement on the consolidated loss for the same period last year.  This result was achieved despite a reduction in revenue from continuing operations to £8.8m (2009: £15.1m), primarily due to a large client who provided significant revenues in the first half of 2009 no longer participating in the market.  Whilst it is disappointing to see that the business has continued to make a loss during the period, I am pleased to report that our balance sheet has remained largely intact.  This has been due in part to the significant cost reduction measures taken during the past 12 months.  Shareholders will understand that the board have decided in the circumstances not to pay an interim dividend.

 

Underlying revenues in the Wealth Management division have held up well comparing the six months to 30th November 2009 to the first half of the current year reported on in these interim results.  Having identified the exceptional revenue referred to above, we undertook a rigorous cost management exercise and these measures have been proven to be appropriate. 

 

In the Wealth Management division, assets under management have increased by 14.7% to £1.35 billion since the year end.  The rebranding has been implemented successfully and the combined offering is being rolled out on an ongoing basis, whilst maintaining our focus on private client stockbroking.

 

Our Securities division has suffered from the delay or postponement of a number of transactions in our pipeline but our budgeted revenue targets for the full year remain achievable.  Current trading across both the Wealth Management and Securities business does reflect the general market malaise and the quietness of the summer months.

 

It seems that investor confidence may take some time to return and that the prospects of a double dip recession are increasing.  Managing a business during an economic downturn is always difficult but I firmly believe that we have now cut our cloth appropriately and, with further emphasis on increasing our revenues, we will be better positioned for a difficult or even benign market, and well positioned for any upturn. 

 

Through the period there have been a number of changes at board level.  Both Richard Ford (Chief Executive Officer) and Nigel Gurney (Finance Director) have chosen to leave the business having completed extensive but necessary restructuring.  Despite media speculation to the contrary, their departures were entirely of their own choosing and I am sorry to see them go.  I have very much enjoyed working with both of them and have been pleased with the progress in the business under their tenure over two difficult years.

 

John Padovan retired as a non-executive director at the Company's AGM in April having served in senior roles in many public companies during a long and distinguished career.  I am very grateful for his contribution to WH Ireland over the years and wish him a long and happy retirement.

 

In addition, following his appointment as Parliamentary Under Secretary of State at the Department of Energy and Climate Change and in accordance with the Ministerial Code, Lord Jonathan Marland has today resigned from the Board as a non-executive director of the Company with immediate effect.  I would like to thank Jonathan for his significant contribution to the Company and wish him well in his new government responsibilities. 

 

As announced separately today, I am also delighted that we have appointed (subject to FSA approval) Paul Compton as our new Chief Executive, who will be taking up his new position in September 2010.  He and Richard Ford have already commenced an orderly and structured handover to ensure as much continuity as possible and will be supported by Nigel Gurney who remains with us as Finance Director until mid November.

 

Paul has over 25 years' experience in the Small/Mid Cap sector and joins WH Ireland from Toscafund Asset Management LLP ("Toscafund"), the London based hedge fund and asset managers.  At Toscafund, Paul co-managed the Toscafund Mid Cap Fund which was ranked the second best performing equity hedge fund in Europe in 2009 by Eurohedge, a leading hedge fund news and information provider. 

 

From 2002 to 2007, Paul was Head of Capital Markets at Collins Stewart, where he was responsible for building the division into the leading broker in the Small/Mid Cap field, with a strong track record in raising funds.  During his time at Collins Stewart, his team raised £7.6 billion in 234 separate transactions.  Prior to this, Paul worked for Merrill Lynch as Head of Capital Goods Research, having started his career with Morgan, Grenfell & Co.

 

Paul brings a wealth of relevant experience to the business and will be focusing on driving our revenues.  He is excited about building on our regional presence, further enhancing our wealth management proposition and adding to our placing power for corporate clients.   Paul will be joining a growing team of highly qualified, committed and experienced individuals.

 

I am also pleased to announce that we have appointed John Scott, Head of Private Client Stockbroking, to the Board as an executive director with immediate effect.  John joined the Company in May 2008 from Barclays Wealth and has worked in stockbroking for over 40 years.

 

Finally, I would like to thank our shareholders for their support over a difficult two years of market turmoil and restructuring. 

 

Rupert Lowe

Chairman

22 July 2010

 

 

 

 

  

Condensed consolidated statement of comprehensive income - unaudited

for the half year ended 31 May 2010

 


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2010

2009

2009


£'000

£'000

£'000

Revenue

8,799

15,073

24,618

Administrative expenses

(9,386)

(14,786)

(26,449)

Operating (loss)/profit

(587)

287

(1,831)





Other income

29

1

29

Investment losses

(66)

(151)

(263)

Finance income

26

82

84

Finance expense

(54)

(122)

(192)

Share of profit of associates

130

40

93

Profit on disposal of associate

4

-

-





(Loss)/profit before tax

(518)

137

(2,080)





Tax expense

464

365

183

(Loss)/profit from continuing operations

(54)

502

(1,897)





Loss on discontinued operations, net of tax

-

(1,223)

(216)

Loss for the year

(54)

(721)

(2,113)





Other comprehensive income

 


 

Loss on property revaluation

(102)

-

-

Valuation gains/(losses) on available-for-sale investments

20

(16)

55

Transferred to profit or loss on sale

(22)

-

-

Exchange gains arising on translation of foreign operations

-

357

479

Tax relating to components of other comprehensive income

-

15

114

Total other comprehensive income

(104)

356

648


 


 

Total comprehensive income

(158)

(365)

(1,465)


 


 

Profit for the period attributable to:

 


 

Owners of the parent

(54)

(683)

(2,075)

Minority interest

-

(38)

(38)


(54)

(721)

(2,113)


 


 

Total comprehensive income attributable to:

 


 

Owners of the parent

(158)

(369)

(1,507)

Minority interest

-

4

42


(158)

(365)

(1,465)





Earnings per share for profit attributable to the ordinary equity holders of the parent during the period




Basic

(0.25)p

(3.23)p

(9.79)p

Diluted

(0.25)p

(3.23)p

(9.79)p




 

Continuing operations




Basic

(0.25)p

2.38p

(8.95)p

Diluted

(0.25)p

2.38p

(8.95)p




 

 

 

 

 

 

Condensed consolidated statement of financial position - unaudited

as at 31 May 2010






31 May

31 May

30 November


2010

2009

2009


£'000

£'000

£'000

Assets




Non-current assets




Property, plant and equipment

6,394

7,152

6,813

Goodwill

2,866

3,074

2,909

Intangible assets

240

529

321

Associates

2,003

920

1,963

Investments

1,417

1,598

1,514

Loan note receivable

335

310

310

Deferred tax asset

912

815

643


14,167

14,398

14,473

Current assets




Trade and other receivables

32,752

78,312

42,673

Other investments

70

149

855

Corporation tax recoverable

263

-

42

Cash and cash equivalents

1,600

7,848

4,258


34,685

86,309

47,828

Total assets

48,852

100,707

62,301

Liabilities




Current liabilities




Trade and other payables

(31,828)

(76,584)

(44,628)

Bank overdraft

-

(2,003)

-

Borrowings

(474)

(500)

(419)

Corporation tax provision

-

(33)

-

Provisions

-

(102)

-


(32,302)

(79,222)

(45,047)

Non-current liabilities




Borrowings

(1,936)

(2,552)

(2,426)

Deferred tax liability

(313)

(250)

(273)

Accruals and deferred income

(167)

(2,507)

(297)

Liability for Put and Call Options

-

(212)

-

Provisions

(135)

-

(147)


(2,551)

(5,521)

(3,143)

Total liabilities

(34,853)

(84,743)

(48,190)

Total net assets

13,999

15,964

14,111

Equity




Share capital

1,064

1,064

1,064

Share premium

5,724

5,724

5,724

Available-for-sale reserve

208

169

210

Revaluation reserve

565

667

667

Foreign exchange reserve

-

345

-

Other reserves

1,472

1,472

1,472

Retained earnings

5,253

6,585

5,261

Treasury shares

(287)

(287)

(287)

Total shareholders' equity

13,999

15,739

14,111

Minority interest

-

225

-

Total equity

13,999

15,964

14,111

 

 

 

 

 

Condensed consolidated statement of changes in equity - unaudited

for the half year ended 31 May 2010


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2010

2009

2009


£'000

£'000

£'000

Operating activities




Loss for the period/year

(54)

(721)

(2,113)

Adjustments for:

 


 

Depreciation, amortisation and impairment

293

707

1,151

Financial income

(26)

(97)

(109)

Financial expense

54

127

199

Taxation

(464)

198

(247)

Share of profit of associates

(130)

(40)

(93)

Changes in investments

217

80

507

Gain on sale of discontinued operations

-

-

(382)

Gain on sale of associate

(4)

-

-

Gain on sale of property, plant and equipment

(136)

(160)

(171)

Non-cash adjustment for share option charge

46

29

97

Decrease in trade and other receivables

9,921

182,925

211,533

Decrease in trade and other payables

(12,943)

(170,566)

(198,237)

Decrease/(increase) in current asset investments

785

(51)

(757)

Exchange adjustments

-

-

548

Tax paid

15

(590)

(728)

Net cash (used in)/generated from operating activities

(2,426)

11,841

11,198

Investing activities




Proceeds from sale of property, plant and equipment

300

168

250

Proceeds from sale of investments

-

221

-

Interest received

26

97

109

Disposal of subsidiary, net of cash acquired

-

-

(218)

Disposal of associate, net of cash acquired

100

-

-

Acquisition of associates

-

-

(32)

Acquisition of property, plant and equipment

(22)

(59)

(203)

Acquisition of investments

(122)

(59)

(133)

Income from investments

-

1

-

Net cash generated from/(used in) investing activities

282

369

(227)

Financing activities




Proceeds from issue of share capital

-

101

101

Issue of loan note

(25)

-

-

Decrease in borrowings

(435)

(567)

(774)

Interest paid

(54)

(127)

(199)

Net cash used in financing activities

(514)

(593)

(872)

Net (decrease)/increase in cash and cash equivalents

(2,658)

11,617

10,099

Cash and cash equivalents at beginning of period/year

4,258

(5,841)

(5,841)

Effect of foreign exchange movements

-

69

-

Cash and cash equivalents at end of period

1,600

5,845

4,258

Clients' settlement cash

549

3,396

1,969

Group cash

1,051

2,449

2,289

Cash and cash equivalents at end of period

1,600

5,845

4,258

 

 

 

 

 

Condensed consolidated statement of changes in equity - unaudited

for the half year ended 31 May 2010










Total






Available-






share-




Share

Share

for-sale

Revaluation

Exchange

Other

Retained

Treasury

holders'

Minority

Total


capital

premium

reserve

reserve

reserve

reserves

earnings

shares

equity

interest

equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 December 2008

1,054

5,633

170

667

31

1,472

7,847

(287)

16,587

220

16,807

Total comprehensive (loss)/income for the period

-

-

(1)

-

314

-

(683)

-

(370)

5

(365)

Shares issued

10

91

-

-

-

-

-

-

101

-

101

Recognition of share-based payments

-

-

-

-

-

-

29

-

29

-

29

Amounts owed to shareholders

-

-

-

-

-

-

(608)

-

(608)

-

(608)

Balance at 31 May 2009

1,064

5,724

169

667

345

1,472

6,585

(287)

15,739

225

15,964













Total comprehensive income/(loss) for the period

-

-

41

-

(345)

-

(1,392)

-

(1,696)

(225)

(1,921)

Recognition of share based payments

-

-

-

-

-

-

68

-

68

-

68













Balance at 30 November 2009

1,064

5,724

210

667

-

1,472

5,261

(287)

14,111

-

14,111













Total comprehensive loss for the period

-

-

(2)

(102)

-

-

(54)

-

(158)

-

(158)

Recognition of share based payments

-

-

-

-

-

-

46

-

46

-

46













Balance at 31 May 2010

1,064

5,724

208

565

-

1,472

5,253

(287)

13,999

-

13,999

 

 

 

 

 

 

Notes to the condensed consolidated interim financial statements

for the half year ended 31 May 2010

 

1. Basis of preparation

Statement of compliance

These consolidated interim financial statements have been prepared in accordance with the disclosure requirements of AIM Rules and the recognition and measurements of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU) excluding IAS 34 'Interim Financial Reporting'.

 

The IASB has issued the following revised and updated standards that are applicable to the Group and that resulted in changes in presentation for this accounting period: IAS 1 (revised) 'Presentation of Financial Statements' and IFRS 8 'Operating Segments'.

 

IAS 1 (revised) updates the presentation of the key statements of performance and position for the Group.

 

IFRS 8 introduces new requirements for segmental reporting to be based on the information provided to the Chief Operating Decision Maker (CODM). It also introduces additional disclosure and reconciliation requirements. The segmental reporting bases used in previous years are those which are currently reported to the CODM, hence the only changes to the segmental reporting for 2009/10 are in respect of the additional disclosure.

 

In addition, the following IFRIC amendments and IASs have been adopted, although they have no impact on the Group's reporting; IFRIC 9 'Reassessment of embedded derivatives', IFRIC 13 'Customer loyalty programmes', IFRIC 14 'IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction', IFRIC 16 'Hedges of a net investment in a foreign operation' and the amendments to IAS 23 'Borrowing Costs', IAS 32 'Presentation', IAS 39 'Financial instruments: recognition and measurement' and IFRS 2 'Share-based payment'. IFRIC 15 'Agreements for the construction of real estate' and various amendments to IAS 39 are still to be endorsed but these are not expected to have any impact on the Group.

 

The consolidated interim financial statements are condensed and do not include all of the information required for full annual financial statements.

 

The accounting policies adopted by the Group in the preparation of its 2010 interim financial statements and those which the Group currently expects to adopt in its annual financial statements for the year ending 30 November 2010 are consistent with those disclosed in the annual financial statements for the year ended 30 November 2009.

 

The information in this interim report is unaudited and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The interim report was approved by the Board of Directors on 22July 2010. The statutory accounts for the year ended 30 November 2009 have been delivered to the Registrar of Companies in England and Wales. The auditor has reported on those accounts. Its report was unqualified and did not contain a statement under Section 298(2) or (3) of the Companies Act 2006.

 

Going concern

The accounts have been prepared on a Going Concern basis as in the opinion of the Directors, at the time of approving the interim report there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

 

In making this assessment, the Directors have prepared detailed financial forecasts for the period to November 2011 which consider the funding and capital position of the Group. Those forecasts make assumptions in respect of future trading conditions, notably the economic environment and its impact on the Group's revenues and costs. In addition to this the nature of the Group's business is such that there can be considerable variation in the timing of cash inflows. The forecasts take into account foreseeable downside risks, based on the information that is available to them at the time of approval of these financial statements.

 

Certain activities of the Group are regulated by the FSA which is the single statutory regulator for financial services business in the UK and has responsibility for policy, monitoring and discipline for the financial services industry as a whole. The FSA requires the Group's capital resources to be adequate; that is sufficient in terms of quantity, quality and availability, in relation to its regulated activities. The Directors monitor the Group's regulatory capital resources on a daily basis and they are prepared to implement appropriate management actions to address any potential deficit as required.  These actions may include cost reductions, regulatory capital optimisation programmes or further capital raising. The Directors consider that, taking account of foreseeable downside risks, regulatory capital requirements will continue to be met.

 

The Company has a facility with the Bank of Scotland in respect of a £3m property loan repayable over twenty years at 1.25% above base rate and a £2m working capital facility loan repayable over ten years, with a one year capital repayment holiday, at 2.25% above base rate. The property loan was drawn down on 4 February 2002 and the working capital facility loan was drawn down on 29 May 2002.  The property loan outstanding at 31 May 2010 is £2.1m (31 May 2009: £2.3m).  The working capital loan outstanding at 31 May 2010 is £0.3m (31 May 2009: £0.8m).

 

The Group also has an overdraft facility with the Bank of Scotland for £1m at 3.25% above base rate. Bank overdrafts are repayable on demand. The overdraft facility is due for renewal on 31 August 2010. These facilities are secured against the property at 11 St James's Square, Manchester and fixed and floating charges on the assets of the Group. The Group is in ongoing discussions with the Bank relating the renewal of the facilities.

 

2. Segmental reporting

 

In identifying its operating segments, management generally follows the Group's reporting lines, which represent the main geographic markets in which the Group operates. The segment reporting below is shown in a manner consistent with the internal reporting provided to the CODM, who is the Chief Executive, and to the Board. These operating segments are monitored and strategic decisions are made on the basis of segment operating results. The Group operates two main business segments which are Wealth Management and Securities.

 

Business segments

 

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Wealth Management comprises the activities of Private Client Stockbroking, Investment Management and Independent Financial Advice. Securities consists of Corporate Finance Services, Research and Institutional Stockbroking.

 

The following tables present revenue and profit and certain assets and liabilities information regarding the Group's business segments:

 

Half year ended 31 May 2009

 

 




Unallocated



Wealth


corporate



Management

Securities

items

Group

Other segment items

£'000

£'000

£'000

£'000

Capital expenditure

-

-

22

22

Depreciation and amortisation

-

-

261

261

 

   

Half year ended 31 May 2009


Wealth




Management

Securities

Group

Group

£'000

£'000

£'000

Revenue




External

13,488

1,585

15,073

Inter-segment

-

-

-

Total revenue

13,488

1,585

15,073

Segment result

4,836

(675)

4,161

Other income

-

-

1

Investment income

-

-

(151)

Finance income

-

-

82

Finance expense

-

-

(122)

Share of profit of associates

-

-

40

Profit on disposal of associate

-

-

-

Loss on discontinued operations, net of tax

-

-

(1,223)

Unallocated net corporate expenses

-

-

(3,874)

Loss before taxation

-

-

(1,086)

Taxation

-

-

365

Loss for the period

-

-

(721)

Segment assets

84,252

1,990

86,242

Unallocated corporate assets

-

-

14,465

Total Group assets

-

-

100,707

Segment liabilities

53,654

353

54,007

Unallocated corporate liabilities

-

-

30,736

Total Group liabilities

-

-

84,743

 




Unallocated



Wealth


corporate



Management

Securities

items

Group

Other segment items

£'000

£'000

£'000

£'000

Capital expenditure

-

-

59

59

Depreciation and amortisation

-

-

321

321

 

 

Year ended 30 November 2009

 


Wealth




Management

Securities

Group

Group

£'000

£'000

£'000

Revenue




External

21,982

2,636

24,618

Inter-segment

-

-

-

Total revenue

21,982

2,636

24,618

Segment result

5,804

(1,125)

4,679

Other income

-

-

29

Investment income

-

-

(263)

Finance income

-

-

84

Finance expense

-

-

(192)

Share of profit of associates

-

-

93

Profit on disposal of associate

-

-

-

Loss on discontinued operations, net of tax

-

-

(216)

Unallocated net corporate expenses

-

-

(6,510)

Loss before taxation

-

-

(2,296)

Taxation

-

-

183

Loss for the year

-

-

(2,113)

Segment assets

44,773

1,846

46,619

Unallocated assets

-

-

15,682

Total Group assets

-

-

62,301

Segment liabilities

38,346

308

38,654

Unallocated liabilities

-

-

9,536

Total Group liabilities

-

-

48,190

 


Wealth


Unallocated



Management

Securities

 corporate items

Group

Other segment items

£'000

£'000

£'000

£'000

Capital expenditure

-

-

212

212

Depreciation and amortisation

-

-

637

637

 

Geographical segments

The Group's operations were located in the United Kingdom and Australia until 6 November 2009, at which time the Group's holding in its Australian investment was substantially reduced, resulting in it then being classified as an associate and no longer being consolidated into the results of the Group. The following tables present revenue and certain assets and liability information by geographical area in which the assets are located:

 


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2010

2009

2009

Group revenue

£'000

£'000

£'000

United Kingdom - continuing

8,799

15,073

24,618

Australia - discontinued (see note 6)

-

2,050

5,077


8,799

17,123

29,695

 


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2010

2009

2009

Group segment assets

£'000

£'000

£'000

United Kingdom

12,985

13,497

13,150

Australia

1,014

2,467

961


13,999

15,964

14,111

 


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2010

2009

2009

Group capital expenditure

£'000

£'000

£'000

United Kingdom

22

40

106

Australia

-

19

106


22

59

212

 

 

3. Discontinued operations

 


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2010

2009

2009


£'000

£'000

£'000

Revenue

-

2,050

5,077

Administrative expenses

-

(2,789)

(5,825)

Operating loss

-

(739)

(748)




 




 

Other income

-

-

-

Investment income

-

70

68

Finance income

-

15

25

Finance expense

-

(6)

(7)

Share of profit of associates

-

-

-

Loss before tax

-

(660)

(662)





Tax expense

-

(563)

64

Profit on disposal of associate

-

-

-

Gain on discontinued operations, net of tax

-

-

382

Loss for the period

-

(1,223)

(216)

 

 

4. Investments


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2010

2009

2009


£'000

£'000

£'000

Available-for-sale investments




Fair value:         quoted

231

243

192

                        unquoted

562

501

572


793

744

764

Investments at fair value through the income statement




Fair value:         quoted

358

449

391

                        warrants

266

405

359


624

854

750

Total investments

1,417

1,598

1,514

 

Fair value, in the case of quoted investments, represents the bid price at the balance sheet date. In the case of unquoted investments, the fair value is estimated by reference to recent arm's length transactions. The fair value of warrants is estimated using established valuation models.

 

5. Cash, cash equivalents and bank overdrafts

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash in hand, deposits with banks and financial institutions with a maturity of up to three months and bank overdrafts repayable on demand.

 

Cash and cash equivalents represent the Group's and the Company's money and money held for settlement of outstanding transactions. 

 

Free money held by our bankers on trust on behalf of clients is not included in the balance sheet. Free money at 31 May 2010 was £80.9m (31 May 2009: £98.1m; 30 November 2009: £93.5m).  There is no free money held in the Company (31 May 2009: £nil; 30 November 2009: £nil). 

 

6. Share capital

The total number of authorised ordinary shares is 34.5 million shares of 5p each (31 May 2009 and 30 November 2009: 34.5 million). The total number of issued ordinary shares is 21.3 million shares of 5p each (31 May 2009: 21.3 million; 30 November 2009: 21.3 million).

 

7. Earnings per share

Basic earnings per share (EPS) is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares.

 

Diluted EPS is the basic EPS, adjusted for the effect of conversion into fully paid shares of the weighted average number of all dilutive employee share options outstanding during the period.  Options over 758,558 (31 May 2009: 814,867) shares are excluded from the EPS calculation as they are anti-dilutive.  Anti-dilutive options represent options issued where the exercise price is greater than the average market price for the period.

 

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

 

 


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2010

2009

2009


£'000

£'000

£'000

Weighted average number of shares in issue during the period

21,281

21,123

21,186

Effect of dilutive share options

93

93

93


21,374

21,216

21,279





Earnings attributable to ordinary shareholders

(54)

(683)

(2,075)

Continuing operations

(54)

502

(1,897)

Discontinued operations

-

(1,185)

(178)





Basic EPS




Continuing operations

(0.25)p

2.38p

(8.95)p

Discontinued operations

-

(5.61)p

(0.84)p


(0.25)p

(3.23)p

(9.79)p





Diluted EPS




Continuing operations

(0.25)p

2.38p

(8.95)p

Discontinued operations

-

(5.61)p

(0.84)p


(0.25)p

(3.23)p

(9.79)p





 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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