1st Sep 2009 15:18
1 September 2009
DANIEL STEWART SECURITIES PLC
(AIM)
("Daniel Stewart" or "the Company")
FINAL RESULTS
FOR THE YEAR ENDED 31 MARCH 2009
The Board of Daniel Stewart Securities plc, the investment bank offering corporate advisory and institutional stockbroking services, announces its final results for the year ended 31 March 2009.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Group Turnover of £4.4m (2008: £8.4m)
Reported loss after tax of £2.9m (2008: Loss £2.0m); fully diluted Loss per Share of (1.15p) (2008: 0.80p)
Liquidity remains strong. Cash at year end of £ 1.2m; now £2.0m
Client numbers: 49 up from 46 at year end 2008
Grew overseas revenues via US joint venture and Middle East licence
Launched on-line CFD platform
Post period end showing early signs of improvement in revenues
Commenting on today's announcement, Peter Shea, Group Chief Executive, said:
"We have successfully completed a number of transactions and selectively strengthened our management team during the first period of the new-year despite markets remaining weak with tremendous volatility. We have extended our pipeline of transactions and have continued to add to our client base.
"We are confident that, after completing a substantial cost reduction programme, which has left our annualised administrative costs lower in the current financial year versus the previous, we are structured to quickly reap the benefits of recovery as it develops."
--ENDS--
Enquiries:
DANIEL STEWART SECURITIES PLC Tel: 020 7776 6550
Peter Shea
BISHOPSGATE COMMUNICATIONS LIMITED Tel: 020 7562 3350
Maxine Barnes
Nick Rome
Siobhra Murphy
ARBUTHNOT SECURITIES Tel: 020 7012 2000Nick Tulloch
Niamh Corbett
Notes to Editors:
About Daniel Stewart
Daniel Stewart Securities is an AIM-listed company providing a range of investment banking services to Small Cap publicly traded and non-publicly traded companies. The Group has two subsidiaries, Daniel Stewart and Company, the Group's principal operating subsidiary, which is authorised and regulated by the Financial Services Authority and is a member of the London Stock Exchange, and Daniel Stewart Capital, the Group's leasing and debt financing division.
CHAIRMAN'S LETTER TO THE SHAREHOLDERS
Dear Shareholder
I am pleased to be able to present our results for the year to March 31st 2009.
We have, as all are aware, been trading through a period of tumultuous financial upheaval with recession on a global basis. Conditions have been such that the IPO and Secondary markets effectively came to a stand still.
We have seen Small and Mid Cap companies unable to continue to access equity capital. The banking system close to systemic failure effectively stopped providing credit with few exceptions.
During 2008/9 we completed a total of 17 transactions across the business.
We took the opportunity in these difficult times to make some exceptional hires in our Research, Corporate Broking and Corporate Finance departments. In our sales team we strengthened our distribution capability by establishing a retail client arm supported by the creation of an on-line CFD product. We continue to strengthen our team and look to hire more quality individuals who are keen to work in a dynamic environment. We have completed negotiations with our Middle East partners and have seen the first of what we hope will be a number of transactions generated from the region.
Additionally we have consolidated our arrangements in the US with SMH Capital and successfully completed our first OTCQX transaction just after our year end and expect to begin the distribution of our research to their institutional client base very soon.
We were supported throughout the year by our shareholders who contributed £1.1 million in new capital up to March 31st 2009 and a further £1 million since the year end. As such our balance sheet, while reduced, still remains strong with cash balances today of £2 Million.
While we see no immediate sign of economic improvement we are confident that we are well positioned and financially strong enough to survive these unprecedented difficulties.
Peter Dicks
Chairman
Chief Executive's review
This review contains several subjective and forward looking statements which have been made by the Directors in good faith based upon the information available to them at the time. Any subjective or forward-looking statement should be considered by the user within the context of economic and business risk.
Business Environment
Economic conditions throughout the period have been very poor. The capital markets for small and mid cap companies effectively closed with barely a handful of transactions being completed on AIM.
Results of Operations
Revenue for the twelve months was £4.4 million down from £8.3 million for the previous year - a fall of 47%. Our gross profit performance deteriorated by 47% on the previous year, to £4.2 million versus £7.9 million for 2008. At the operating level, before bonus, share based payments and exceptional items, we reported a loss of £2.2 million compared to a loss of £0.5 million for 2008. Staffing levels were 39 at year end down from 46 in 2008. Administrative costs were reduced by 13% from £6.9 million in 2008 to £6.0 million. After taking into account interest, depreciation and amortisation the pre tax loss was £2.6 million compared with a loss of £2.0 million in 2008. This loss is after £0.7 million in exceptional charges and share based payments. No bonuses of cash or shares were paid during the year. The charge for share based payments being related to awards from previous years.
Equity Capital Markets
At year-end 31st March 2009 our retained AIM and other public market client base consisted of 49 companies. We completed two transactions and acted on the admission of £13 million in new capital on both primary and secondary issues.
Liquidity and Capital Resources
Net Assets fell from £5.7 million in 2008 to £3.8 million, primarily due to reduced working capital as a result of cash utilisation. Working capital remained positive although reduced on last year at £1.2 million down from £2.5 million. Cash flow was negative, reducing cash balances at the year end by £1.5 million, of this £0.4 million was exceptional. Our cash position at year end had decreased although we have subsequently raised new capital and cash balances now stand at £2 million.
Corporate Finance
Our corporate finance team acted on 15 transactions during the year including 3 AIM introductions.
Equity Research
Our Equity research team now covers over 80 stocks across a number of sectors that we have elected to specialise in. These include General Financial, Healthcare, Leisure & Media, Software, IT & Telco's and Support Services. Our analysts have won recognition throughout the year for the quality of their work from an array of market participants.
Trading and Investment
Trading during the year was profitable, however our investment book consisting of positions held primarily in client stocks deteriorated by £0.5 million. Secondary commissions amounted to £0.8m.
.
Specialist Debt Services
Both our debt finance and leasing divisions performed satisfactorily during the year each providing a positive contribution. They were both hampered in their activities due to limited capital commitments from the parent company.
Employees
As at 31 March 2009 we employed 39 members of staff, compared to 46 at the end of 2008.
Premises
While we have not yet concluded our negotiations on the lease for our current premises we are confident of a satisfactory outcome. We anticipate a slight increase in property costs but do not believe that it will be significant.
Outlook
We have successfully completed a number of transactions during the first period of the new-year despite markets remaining weak with tremendous volatility. We are confident that, after completing a substantial cost reduction programme which has left our annualised administrative costs lower in the current financial year versus the previous, we are structured to quickly reap the benefits of recovery as it develops. Ours is a people business, and I would like to extend my gratitude to all employees, shareholders and clients who have shown continued commitment to your firm. Our pipeline of promising transactions continues to build and we remain cautiously optimistic.
Peter Shea
Group Chief Executive
The preliminary results for the year ended 31 March 2009 were approved by the Board on 30 July 2009 and accounts for the year ended 31 March 2009 will be sent to shareholders in due course.
Consolidated income statement
Year ended 31 March 2009
|
Adjusted for share based payments, bonus and exceptional items |
||||
|
Continuing operations |
31 March 2009 |
31 March 2008 |
31 March 2009 |
31 March 2008 |
|
£ |
£ |
£ |
£ |
|
|
Revenue |
4,377,098 |
8,369,690 |
4,377,098 |
8,369,690 |
|
Cost of sales |
(130,866) |
(501,604) |
(130,866) |
(501,604) |
|
Gross profit |
4,246,232 |
7,868,086 |
4,246,232 |
7,868,086 |
|
Share trading account |
(512,898) |
(1,432,351) |
(512,898) |
(1,432,351) |
|
Contribution to fixed costs |
3,733,334 |
6,435,735 |
3,733,334 |
6,435,735 |
|
Administrative costs |
(5,974,087) |
(6,919,329) |
(5,974,087) |
(6,919,329) |
|
Share based payments |
(259,127) |
(461,775) |
|
- |
|
Bonus payments |
(1,018,407) |
- |
||
|
Operating Loss |
(2,499,880) |
(1,963,776) |
(2,240,753) |
(483,594) |
|
Bank interest receivable and similar income |
385,488 |
803,688 |
385,488 |
633,722 |
|
Interest payable |
(136,621) |
(317,207) |
(136,621) |
(147,240) |
|
(2,251,013) |
(1,477,295) |
(1,991,886) |
2,888 |
|
|
Exceptional items |
(396,036) |
(527,777) |
- |
|
|
(Loss) / Profit before tax |
(2,647,049) |
(2,005,072) |
(1,991,886) |
2,888 |
|
Taxation |
(228,000) |
- |
(228,000) |
- |
|
(Loss) / Profit for the year |
(2,875,049) |
(2,005,071) |
(2,219,886) |
2,888 |
Earnings per share
|
31 March 2009 |
31 March 2008 |
|||||
|
Basic |
(1.23)p |
(0.93)p |
||||
|
Diluted |
(1.15)p |
(0.80)p |
||||
Consolidated balance sheet
As at 31 March 2009
|
31 March 2009 |
31 March 2008 |
|||||||||||||
|
£ |
£ |
|||||||||||||
|
Non current assets |
||||||||||||||
|
Goodwill |
1,731,532 |
1,731,532 |
||||||||||||
|
Available for sale investments |
210,064 |
389,364 |
||||||||||||
|
Property, plant and equipment |
181,015 |
334,014 |
||||||||||||
|
Loans receivable |
1,106,200 |
1,201,013 |
||||||||||||
|
Deferred taxation |
81,000 |
|||||||||||||
|
3,228,811 |
3,736,923 |
|||||||||||||
|
Current assets |
||||||||||||||
|
Financial assets |
96,927 |
786,373 |
||||||||||||
|
Trade and other receivables |
2,508,372 |
3,054,852 |
||||||||||||
|
Corporation tax |
0 |
|||||||||||||
|
Cash and cash equivalents |
1,161,181 |
2,687,565 |
||||||||||||
|
3,766,480 |
6,528,790 |
|||||||||||||
|
Total assets |
6,995,291 |
10,265,713 |
||||||||||||
|
Liabilities |
||||||||||||||
|
Trade and other payables |
2,550,730 |
4,003,882 |
||||||||||||
|
Corporation Tax |
79,000 |
- |
||||||||||||
|
2,629,730 |
4,003,882 |
|||||||||||||
|
Non current liabilities |
536,266 |
538,520 |
||||||||||||
|
Total liabilities |
3,165,996 |
4,542,402 |
||||||||||||
|
Net assets |
3,829,295 |
5,723,311 |
||||||||||||
|
Equity |
||||||||||||||
|
Capital and reserves attributable to equity shareholders |
||||||||||||||
|
Share capital |
650,781 |
538,459 |
||||||||||||
|
Share premium |
5,308,756 |
4,298,270 |
||||||||||||
|
Retained earnings |
(10,243,983) |
(7,321,997) |
||||||||||||
|
Revaluation reserve |
(1,150,577) |
(1,150,577) |
||||||||||||
|
Capital redemption reserve fund |
49,998 |
49,998 |
||||||||||||
|
Capital reserve |
8,524,435 |
8,524,435 |
||||||||||||
|
Share compensation reserve |
689,885 |
784,723 |
||||||||||||
|
3,829,295 |
5,723,311 |
|||||||||||||
Consolidated statement of changes in equity
For the year ended 31 March 2009
|
Balance at 1 April 2008 |
Movement |
Shares issued |
Loss for the year |
Cost to employee of share options |
Total |
|
|
Share capital |
538,459 |
112,322 |
650,781 |
|||
|
Share premium |
4,298,270 |
1,010,486 |
5,308,756 |
|||
|
Retained earnings |
(7,321,997) |
(147,775) |
(2,875,049) |
94,838 |
(10,243,983) |
|
|
Revaluation reserve |
(1,150,577) |
(1,150,577) |
||||
|
Capital redemption reserve |
49,998 |
49,998 |
||||
|
Capital reserve |
8,524,435 |
8,524,435 |
||||
|
Share compensation reserve |
784,723 |
(94,838) |
689,885 |
|||
|
5,723,311 |
(147,775) |
1,122,808 |
(2,875,049) |
- |
3,829,295 |
|
Consolidated cash flow statement
For the period ended 31 March 2009
|
31 March 2009 |
31 March 2008 |
||||||||
|
£ |
£ |
||||||||
|
Operating activities |
|||||||||
|
Operating (loss) / profit |
(2,499,880) |
1,963,776) |
|||||||
|
Provision for impairment of fixed assets |
178,617 |
191,843 |
|||||||
|
Tax (paid) / recovered |
(68,000) |
280,498 |
|||||||
|
Movements on reserves |
(141,775) |
||||||||
|
Exceptional items |
(396,036) |
(527,777) |
|||||||
|
(2,927,074) |
(2019,212) |
||||||||
|
Movement in working capital |
|||||||||
|
Decrease/ (Increase) in receivables |
(161,634) |
(539,582) |
|||||||
|
Increase in payables |
(1,756,272) |
581,910 |
|||||||
|
Decrease in financial assets |
689,446 |
583,371 |
|||||||
|
(1,228,460) |
625,690 |
||||||||
|
Operating cash flow |
(4,155,534) |
(1,393,522) |
|||||||
|
Investing activities |
|||||||||
|
Expenditure on tangible fixed assets |
(25,618) |
(202,431) |
|||||||
|
Expenditure on available for sale investments |
179,300 |
40,166 |
|||||||
|
Cash flow from investing activities |
153,682 |
(162,265) |
|||||||
|
Financing |
|||||||||
|
Loans made to third parties |
802,927 |
1523,500 |
|||||||
|
Loans received |
300,866 |
(390,178) |
|||||||
|
Loans written off |
|||||||||
|
Issue of share capital |
1,122,808 |
||||||||
|
Interest receivable |
385,488 |
803,688 |
|||||||
|
Interest payable |
(136,621) |
(317,207) |
|||||||
|
Cash flow from financing activities |
2,475,468 |
1,619,803 |
|||||||
|
Cash and cash equivalents at 1 April 2008 |
2,687,565 |
2,623,549 |
|||||||
|
Cash and cash equivalents at 31 March 2009 |
1,161,181 |
2,687,565 |
|||||||
|
(Decrease) / increase in cash and cash equivalents |
(1,526,384) |
64,016 |
|||||||
Notes to the financial statements - (extract)
Year ended 31 March 2007
1. Accounting policies
General information
Daniel Stewart Securities plc is a company incorporated in the United Kingdom under the Companies Act 1985. Daniel Stewart Securities plc the ultimate parent company of the group. The group's principal activities are the provision of financial advice to companies and trading in financial instruments. These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the group operates.
The financial information set out herein, which was approved by the board on 10 August 2009 does not comprise the companies' statutory accounts. The audit of these financial statements is still to be completed. Statutory accounts for the previous financial year ended 31 March 2008 have been delivered to the register of companies.
Basis of accounting
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted for use in the European Union, for the first time. Up until 31 March 2006, the group prepared its financial statements under UK Generally Accepted Accounting Principles ("UK GAAP"). From 1 April 2006, the group consolidated financial statements are prepared in accordance with IFRS and International Financial Reporting Interpretations Committee ("IFRIC") interpretations adopted by the European Union, and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS, with the prior period being presented on the same basis.
The financial statements have been prepared on the historical cost basis as modified by the valuation of certain financial instruments, as described below. The principal accounting policies adopted are set out below.
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