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W.H. Ireland Group (WHI)

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Monday 21 February, 2005

W.H. Ireland Group

Final Results

W.H. Ireland Group PLC
21 February 2005

                             W.H. IRELAND GROUP plc
                        ('W.H. Ireland' or 'the Group')
                               PRELIMINARY RESULTS
                        FOR THE YEAR TO 30 NOVEMBER 2004

The principal activity of W.H. Ireland is the provision of stockbroking,
corporate finance, investment management and financial services to both private
and institutional clients. It has a national network of offices including
Manchester, London, Birmingham and Cardiff.

                                   Key Points

  * Turnover up by 82% to £16.9m (2003: £9.3m)

  * Pre-tax profit increased to a record £2.6m (2003: £0.2m)

  * Net assets increased by 40% to £10.1m (2003: £7.2m)

  * Strong asset base including shares in LSE, Euroclear and property.

  * Proposed final dividend of 1.50p per share, giving a total of 2.25p for
    the year (2003: 1.25p)

  * Special dividend of 2.00p per share - a distribution of the net proceeds
    of the LSE's special dividend.

  * Strong progress across our core business areas:

    - Investment management - funds under management up 39% to £291m
    - Corporate finance - record year with 25 AiM introductions (2003: 13)
    - IFA business - making excellent progress
    - Stockbroking commission up by 72.32%

  * Continued expansion of London office

  * Outlook remains encouraging

Laurie Beevers, chief executive, commenting, said,

'We are continuing to grow the business and expand the quality, range and depth
of the services we offer. This has the effect of broadening our revenue streams
and establishing firm foundations from which to grow the business, both
geographically and by business area.'

Press enquiries:

W.H. Ireland Group plc               Tel: 020 7448 1000 (today)
Laurie Beevers, chief executive      Tel: 0161 832 6644 Mobile: 07903 164004
David Youngman, managing director    Tel: 0161 832 6644 Mobile: 07900 887142
Richard Lee, director                Tel: 0161 832 6644 Mobile: 07831 170298

Biddicks                             Tel: 020 7448 1000
Zoe Biddick or Katie Tzouliadis

Chairman's Statement

I am very pleased to report on a record year for the Company. Turnover increased
by 82% to a record £16,889,225 whilst pre-tax profit was another record at

We have taken advantage of improved trading conditions to deliver a substantial
and sustained recovery. All core areas of our business have made strong progress
and we are well positioned to continue growing both organically and by selective

In view of this progress, we are proposing to pay a final dividend of 1.5p per
share, an increase of 0.75p. During the year, we received an exceptional
dividend on our shareholding in the London Stock Exchange plc which has been
credited to our profit and loss account, as opposed to any increase in the value
of the holding itself which is credited to reserves. We have, therefore, decided
to pay a special dividend to shareholders to distribute the net proceeds of this
exceptional dividend and this will amount to 2.00p per share, making a total
dividend for the year of 4.25p per share. The final and special dividends will
be paid on 29 April 2005 to shareholders on the register as at 11 March 2005
and, again, a scrip dividend alternative will be available.

Over the last three years we have significantly expanded our corporate finance
activities building on an already established niche market position
concentrating upon companies trading on AiM. Our drive for expansion has led to
a significant increase in the number of clients advised on a retained basis,
with some 49 corporate clients retained at the year end. According to AiM
statistics recorded by the London Stock Exchange, we were the leading Nominated
Adviser and Broker by number of new introductions in the first 9 months of 2004,
a splendid achievement. During the year, we advised on 29 transactions, raising
a total of £67 million. The team is now functioning as a truly national
operation with offices in London, Manchester and Birmingham. Corporate fees
accounted for 24% of our turnover during the year and, at the year end, the
annual retainer base was over £780,000.

We continue to offer our traditional style stockbroking services to private
clients, providing both discretionary and advisory services. This business has
grown substantially with very strong performances from our spread of offices.
Client investment funds under discretionary or advisory management grew to £291
million as at 30 November 2004, compared with £209 million at the previous year
end. In London, the team has performed particularly strongly and we are looking
to acquire new premises to cater for continued expansion. Our Cardiff team has
also developed very successfully during the year. In Birmingham, we were able to
attract a team of 15 executives and their business performed in line with

Our IFA operations in Manchester and Cardiff have performed well and now employ
a total of 13 people. Our objective is to expand this area of activity as and
when we can recruit or purchase small teams of highly qualified advisers with
profitable client bases.

In addition to the increase in value of our shareholding in the London Stock
Exchange, our other investments continue to show good progress, in particular
our 22.5 per cent. stake in Ultimate Finance Group plc. Our head office building
in Manchester is due for a refurbishment which will enable us to increase the
rental value of the building. A number of tenants' leases come up for review or
renewal in the next 18 months, and we are confident of being able to improve the
value of the building which is in a prime location in the centre of Manchester.

As anticipated in my statement in last year's report and accounts, Mohammed
Marafie, a non-executive Director of the firm for seven years, retired from the
board during the year. Since the year end his shareholding has been placed with
a number of institutions whom we are pleased to welcome as new shareholders.

I would like to extend my very genuine thanks to all our staff and colleagues
who due to their hard work, loyalty, teamwork and expertise have all contributed
to a very successful year for their and your Company.

During the year, the market has regained its confidence and composure
substantially and, with property values softening, the medium and long term
advantage of equity investment is once more being recognised.

The current year has started well. The benefits of our broadly based expansion
in services and people are showing through with good levels of activity in all
areas of the business.

We look forward to the future with confidence.

Sir David Trippier RD JP DL

Chief Executive's Statement

The firm has continued to grow, both organically and through the recruitment of
specialist teams. This continued development, coupled with better trading
conditions, has produced a record result for the year. Our turnover has grown
from £9,260,811 to £16,889,225, and our pre-tax profit from £188,338 to
£2,624,143. During the year we changed our accounting policy on the valuation of
certain fixed asset investments in association with the adoption of the carried
interest scheme which has resulted in a significant increase in the book value
of these investments at the year end which, together with our record profits,
has seen our net asset value rise to £10,114,056 from £7,254,322. This equates
to 64.32p per share compared to 47.70p per share last year. Our discretionary
and advisory funds under management have increased during the year from £209
million, at the last year end, to £291 million.

All areas of the firm have contributed to this growth and I am pleased to be
able to detail below the developments during the year.


Our businesses around the country have continued to grow. In particular, the
London office has had an outstanding year. During the year we made the final
payment on our acquisition of Stockholm Investments, the discretionary fund
management business we bought in October 2001. We continue to act for a wide
range of private clients and as a result of its strong performance, our London
activities have outgrown our Cannon Street offices. Therefore, we are
considering a move to larger offices in the City during the current year.

In Birmingham, we have expanded considerably and now occupy two floors of our
leased premises in the city centre. We are pleased to welcome formally the team
of 15 brokers and support staff who joined us half way through the year. They
have already proved a successful and profitable addition to the firm.

In our Manchester head office, which also houses our administration function,
further appointments have been made, in particular strengthening our back office
and compliance capabilities to cater for our expansion. Meanwhile we are
continually developing our IT facilities through the installation of the latest
technology available in the market to ensure that our clients receive the
highest quality of service.

We have built a significant presence in Wales. Our two Cardiff based broking
offices, one of which has re-located to the Cardiff Bay area, are both
performing well. Combined with our four-strong office in Colwyn Bay, North
Wales, we now have a total of 14 people in our stockbroking offices, making us
one of the larger stockbrokers in the Principality.

Our other regional offices continue to perform satisfactorily, although we have
decided to close our small office in Tunbridge Wells.


Our Corporate Broking and Institutional Sales departments, located in Manchester
and London, have had a successful year and have taken part in a number of
primary and secondary placings. In our day to day activities, we also act for a
number of institutional fund management groups and hedge funds. Through
selective sector specialisation, we now have a particular expertise in mining
and exploration, healthcare, and technology companies in the small and mid cap


Our research capability has expanded during the year, both in numbers of
personnel and scope of research. We do not set out to be a major research house,
as the costs of doing so would be prohibitive for a broker of our size.
Furthermore, there is a vast amount of research available from major research
houses. However, we do aim to have the in house expertise necessary at a high
level to support the other areas of the business, particularly corporate broking
and corporate finance. As is required by the compliance rules, our researchers
are structurally independent in their reporting and analysis.


Our Corporate Finance department has had another excellent year. Our decision to
focus on AiM has been amply justified by our moving up from third to second
position in the UK, measured by the number of AiM flotations for which we have
acted as Nominated Adviser. I would like to congratulate our three teams in
London, Manchester and Birmingham on their success in achieving such a memorable
outcome for the year. We have a good pipeline of future deals in hand.


WH Ireland Financial Services Ltd, our IFA arm, continued to perform well and
expand with further appointments of advisers at Ingram Phillips in Cardiff and
Manchester. In this subsidiary we remain focused on recruiting only high calibre
advisers, capable of transacting substantial business but avoiding the pitfalls
of acquiring high employee-low return business.


We retain a substantial holding in the London Stock Exchange, which has
increased in value significantly during the year and post the balance sheet
date. We also have a holding in Euroclear which is shown in the accounts at a
cost of £75,052 and we estimate that its current value is significantly higher.

Our investment in Ultimate Finance, the asset finance business quoted on AiM,
has shown solid improvement in its level of business and we are very happy with
its progress. The team there are to be congratulated on their success in a
competitive market place.

Our head office in Manchester, whose freehold we own, is located in the prime
central area of the city. We have applied for planning permission for
alterations to the building which we believe will enable us to enhance its
appearance and facilities, and so increase the rents payable significantly as
rent reviews occur in the next two years.


I would like to add my heartfelt thanks to those of the Chairman to all my
colleagues who have played their part in achieving a successful outcome for the


We are continuing to grow the business and expand the quality, range and depth
of the services we offer. This has the effect of broadening our revenue streams
and establishing firm foundations from which to grow the business, both
geographically and by business area. The new year has started well with a good
pipeline of corporate activity and, subject to favourable market conditions, we
expect a successful outcome for the year. We continue to examine further areas
of growth whereby, organically or by acquisition, we can add value and build on
the success achieved to date.

Laurie Beevers
Chief Executive

W.H. Ireland Group plc
Consolidated profit and loss account
for the year ended 30 November 2004

                                                      Year ended    Year ended
                                                     30 November   30 November
                                                            2004          2003
                                              Note             £             £
Group turnover                                        16,889,225     9,260,811

Administrative expenses                              (14,951,179)   (8,759,317)

Group operating profit                                 1,938,046       501,494
Share of operating profit/(loss) before tax
in associates                                              2,919      (130,787)
                                                       1,940,965       370,707

Profit on disposal of fixed asset            
investments                                  1 & 2       359,057             -
Income from fixed asset investments
(including exceptional item of £330,000)         3       368,704             -
                                                       2,668,726       370,707
Other interest receivable and similar income             354,367       151,436
Amounts written off investments                            6,730       (33,815)
Interest payable and similar charges                    (405,680)     (299,990)
Profit on ordinary activities before                   
taxation                                               2,624,143       188,338
Tax on profit on ordinary activities                    (763,273)     (131,895)
Profit on ordinary activities after taxation           1,860,870        56,443
Dividends on equity shares                       4      (668,095)     (192,829)
Retained profit/(loss) for the year for                
Group                                                  1,192,775      (136,386)
Earnings per share
(in accordance with FRS 14)
Basic                                            5         11.88p         0.38p
Diluted                                          5         11.18p         0.38p
Headline earnings per share (in accordance
with guidelines issued by
UK Society of Investment Professionals)
Basic                                            5         10.72p         1.12p
Diluted                                          5         10.09p         1.10p

All turnover and results in the current and previous year relate to continuing

W.H. Ireland Group plc
Statement of total recognised gains and losses
for the year ended 30 November 2004

                                                    Year ended      Year ended
                                                   30 November     30 November
                                                          2004            2003
                                                             £               £
Profit/(Loss) for the financial year                 1,192,775        (136,386)
Unrealised surplus on revaluation of fixed asset
investments (Note 1)                                 1,722,124         459,686
Unrealised gain on revaluation of properties                 -         505,000
Taxation on realised surplus on revaluation of
fixed assets                                                 -         (90,873)
Non trading increase in net assets of associate
arising from external subscriptions                     43,081               -
Total recognised gain for the year                   2,957,980         737,427

Note of historical cost profits and losses
for the year ended 30 November 2004

                                                     Year ended    Year ended
                                                    30 November   30 November
                                                           2004          2003
                                                              £             £
Reported profit on ordinary activities before tax     2,624,143       188,338
Realisation of fixed asset investment revaluation
gains                                                     1,915       366,288
Historical cost profit on ordinary activities
before taxation                                       2,626,058       554,626
Historical cost profit retained for the year after
the provisions for taxation and dividends             1,194,690       139,029

W.H. Ireland Group plc
Consolidated Balance Sheet
for the year ended 30 November 2004

                                           2004         2004           2003         2003
                            Note              £            £              £            £
Fixed assets
Intangible assets                                  3,052,104                   3,229,325
Tangible assets                                    5,173,591                   5,205,695
Investments                    6                   6,060,443                   2,547,086
Investments in associates                            484,512                     268,879
                                                  14,770,650                  11,250,985
Current assets
Debtors                             122,661,229                 113,831,227
Investments                              15,191                      11,209
Cash at bank and in hand             10,883,582                   5,083,127
                                    133,560,002                 118,925,563
Creditors: amounts falling
due within one year            7   (131,789,786)               (117,646,103)
Net current assets                                 1,770,216                   1,279,460
Total assets less current
liabilities                                       16,540,866                  12,530,445
Creditors: amounts falling
due after more than one year   8                  (6,162,692)                 (5,266,628)
Provisions for liabilities
and charges                                         (264,118)                     (9,495)
Net assets                                        10,114,056                   7,254,322
Capital and reserves
Called up share capital                              786,161                   765,187
Shares to be issued                                        -                   283,333
Share premium account                              1,239,687                 1,566,085
Capital redemption reserve                           226,333                   226,333
Merger reserve                                       490,511                         -
Revaluation reserve                                4,641,072                 2,920,863
Other reserves                                       753,704                   753,704
Profit and loss account                            1,976,588                   738,817
Equity shareholders' funds                        10,114,056                 7,254,322

W.H. Ireland Group plc
Consolidated cash flow statement
for the year ended 30 November 2004

                                                    Year ended      Year ended
                                                   30 November     30 November
                                                          2004            2003
                                                             £               £
Net cash inflow from operating activities            5,995,730       2,568,333
Returns on investments and servicing of finance        370,222        (148,554)
Taxation                                              (116,161)        114,581
Capital expenditure and financial investment           426,385         294,989
Acquisitions and disposals                            (222,471)       (515,128)
Equity dividends paid                                 (211,104)        (78,666)
Cash inflow before financing                         6,202,601       2,235,555
Financing                                             (402,849)       (157,442)
Increase in cash in the period                       5,799,752       2,078,113

W.H. Ireland Group plc
Reconciliation of Movement in equity shareholders' funds
for the year ended 30 November 2004

                                                            Group        Group
                                                             2004         2003
                                                                £            £
Profit for the financial year before dividends          1,860,870       56,443
Dividends                                                (668,095)    (192,829)
Profit/(Loss) for the financial year                    1,192,775     (136,386)
Surplus on investment revaluation reserve               1,722,124      459,686
Surplus on property revaluation reserve                         -      505,000
Tax in respect of realised surplus on revaluation               -      (90,873)
Non trading increase in net assets of associates           43,081            -
Shares issued in payment of scrip dividends in the
year                                                       24,244       70,376
Shares issued on acquisition of trades or businesses            -      100,000
New shares issued                                          19,176            -
Shares issued in payment of deferred consideration        141,667      141,667
Transfer from shares to be issued                        (141,667)    (141,667)
Payment in settlement of shares to be issued             (141,666)           -
Redemption of deferred ordinary shares                          -     (226,333)
Transfer to capital redemption reserve                          -      226,333
Transfer from profit and loss account                           -     (226,333)
Consolidation adjustment on redemption of deferred
ordinary shares                                                 -      209,070
Increase in shareholders funds during the year          2,859,734      890,540
Opening equity shareholders' funds                      7,254,322    6,363,782
Closing equity shareholders' funds                     10,114,056    7,254,322

W.H. Ireland Group plc
Notes to the preliminary statement
for the year ended 30 November 2004

1. Accounting policies
The following accounting policies have been applied consistently in dealing with
items that are considered material in relation to the Group's financial

Basis of preparation
The financial statements have been prepared in accordance with applicable
accounting standards subject to the true and fair view overrides detailed below
and under the historical cost accounting rules, except as modified by the
revaluation of certain assets. The Group has adopted UITF38 regarding shares
held in the Employee Benefit Trust although there is no impact on the financial
statements as no shares were held in the Trust at the beginning and the end of
the year.

Basis of accounting for the carried interest scheme
During the year the company adopted a carried interest bonus scheme under which
bonuses may be payable to certain corporate finance personnel when certain
warrants or shares acquired as part of a corporate finance transaction are
ultimately sold at a profit. The relevant warrants and shares are included
within fixed asset investments and are revalued at the year end reporting date
and a bonus is provided on 50% of the expected profit should the warrants or
shares be sold at that revalued amount, being the maximum amount of bonus that
may be paid out. The amount of the bonus provision relating to warrants where
the expiry date is less than one year are shown in creditors under one year, and
the balance is shown in creditors over one year.

At the 30 November 2004 the relevant warrants had a revaluation gain of
£2,763,582 and the shares a revaluation gain of £803,441 and accordingly bonuses
of £1,381,791 and £401,720 respectively would need to be provided on those
gains. Under the specific requirements of the Companies Acts and relevant
Financial Reporting Statements the full amount of the revaluation gain would be
taken through the statement of total recognised gains and losses to the
revaluation reserve in the balance sheet whilst the provision for the bonuses
would be taken to the profit and loss account. The Directors do not consider
that adopting this accounting treatment truly matches the bonus expense against
the relevant gain and thus does not show a true and fair view of the reasoning
and substance behind the relevant accounting entries. In order to show a true
and fair view of the carried interest scheme the Directors have departed from
the prescribed accounting treatment and have credited a sufficient amount of the
gain to the profit and loss account to match the relevant bonus provision, as a
credit within administrative expenses where the related bonus is charged. The
effect of this is to avoid a reduction in profits of £1,744,041 should the bonus
alone be reported in the profit and loss account.

During the current year certain warrants within the carried interest scheme were
exercised and the shares acquired therefrom were sold for a realised profit of
£718,123 and a bonus of £359,066 was paid out from that profit. Under the
specific requirements of the Companies Acts and relevant Financial Reporting
Statements the profit on sale of the shares should be disclosed below the
operating profit line under the heading profit on disposal of fixed assets and
the bonus should be included in staff costs above the operating profit line. The
Directors do not believe that this accounting treatment properly reflects the
matching of the bonus and the specific gain it is paid out from, nor with the
equivalent revaluations within operating profit (see above). Accordingly the
Directors have departed from these accounting requirements and have taken a
sufficient amount of the gain as matches the bonus paid and have reported this
above the operating profit line as a credit to administration expenses. This
treatment has no effect on the reported profits before tax for the year, but it
moves a realised gain of £359,066 from below to above the operating profit line.

2. Profit on disposal of fixed asset investments
                                                    Year ended      Year ended
                                                   30 November     30 November
                                                          2004            2003
                                                             £               £
Gross Profit on disposal of fixed asset
investments                                            718,123               -
Amount taken to administration expenses to
offset against the bonus payment thereon, (see
note 1)                                               (359,066)              -
Net profit on disposal of fixed asset
investments                                            359,057               -

3. Income from fixed asset investments
                                                 Year ended         Year ended
                                                30 November        30 November
                                                       2004               2003
                                                          £                  £
Quoted investments                                  359,151                  -
Unquoted investments                                  9,553                  -
                                                    368,704                  -

Income from quoted investments in 2004 includes an exceptional item of a special
dividend of £330,000 received on our holding of shares in the London Stock

4. Dividends and other appropriations
                                                    Year ended      Year ended
                                                   30 November     30 November
                                                          2004            2003
                                                             £               £
Equity shares:
Interim dividend paid at 0.75p per share (2003:
0.5p)                                                  117,783          75,156
Final dividend proposed at 1.5p per share (2003:
0.75p)                                                 235,848         117,673
Special final dividend proposed at 2.0p per
share (2003:nil)                                       314,464               -
                                                       668,095         192,829

The final proposed dividend is provided on the number of shares currently in

5. Earnings per share
                                                    Year ended      Year ended
                                                   30 November     30 November
                                                          2004            2003
                                                             £               £
Profit for the year used for the basic
calculation                                          1,860,870          56,443
Profit on sale of fixed asset investments             (359,057)              -
Goodwill amortisation                                  177,221         108,730
Profit for the year used in the 'headline
earnings' calculation under the guidelines
issued by the UK Society of Investment
Professionals                                        1,679,034         165,173
Weighted average number of shares used in the
basic calculation                                   15,665,720      14,796,324
Weighted average number of options outstanding
for the period                                         974,352         154,930
Weighted average number of shares used in the
diluted calculations                                16,640,072      14,951,254

The earnings per share calculated on a headline earnings basis has been
calculated in addition to the earnings per share as required by FRS14 'Earnings
per Share' and has been produced to give shareholders a cleaner understanding of
the performance of the Group.

6. Fixed asset investments
                                Unquoted                    Quoted
                             investments    Warrants   investments       Total
Group (excluding investments           £           £             £           £
in associates)                 
Cost or valuation
At beginning of year             110,872           -     2,436,214   2,547,086
Additions                             32     513,526        63,877     577,435
Reclassification of
unquoted to quoted
investments                      (25,085)          -        25,085           -
Revaluation adjustment                 -   2,763,582       702,583   3,466,165
Gain on fixed asset
investments previously                             
written down                           -           -           132         132
Write back of prior year
diminution in value                    -           -         6,730       6,730
Disposals                              -    (513,526)      (23,579)   (537,105)
At end of year                    85,819   2,763,582     3,211,042   6,060,443

This historical cost value of the above quoted investments at the year end was
£287,743 (2003 : £158,740). If these shares were sold at their market value a
potential tax charge of £874,190 (2003 : £660,336) would arise.

7. Creditors: amounts falling due within one year
                                                         Group          Group
                                                          2004           2003
                                                             £              £
Bank overdraft                                             703              -
Bank loans                                             280,935        277,258
Floating rate loan notes 2004/05                             -        141,667
Trade creditors                                    127,198,502    115,340,604
UK corporation tax payable                             910,576        292,782
Taxation and social security                           461,954        156,848
Obligation under finance leases and hire purchase
contracts                                               21,543         18,917
Deferred purchase consideration                        161,560        493,667
Other creditors                                        340,028        202,338
Accruals and deferred income                         1,863,673        604,349
Dividend proposed                                      550,312        117,673
                                                   131,789,786    117,646,103

Accruals and deferred income includes £299,284 relating to bonuses provided
under the carried interest bonus scheme. Details of the accounting treatment
thereof is given in note 1.

The floating rate loan notes 2004/05 were redeemed on 1 April 2004

8. Creditors: amounts falling due after more than one year
                                                            Group        Group
                                                             2004         2003
                                                                £            £
Bank loans                                              4,238,794    4,519,315
Deferred purchase consideration                           400,000      699,666
Obligations under finance leases and hire purchase
contracts                                                  10,772       16,912
Accruals and deferred income                            1,483,927            -
Deferred rent creditor                                     29,199       30,735
                                                        6,162,692    5,266,628

Accruals and deferred income includes £1,483,927 relating to bonuses provided
under the carried interest scheme. Details of the accounting treatment thereof
is given in note 1.

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

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