3rd May 2006 07:02
Numis Corporation PLC03 May 2006 EMBARGOED FOR RELEASE 7:00 am Wednesday 3 May 2006 Numis Corporation Plc Interim Results for the six months ended 31 March 2006 Numis Corporation Plc ("Numis") today announces interim results for the sixmonths ended 31 March 2006. Numis is the holding company of Numis SecuritiesLimited, the independent U.K. investment banking and institutional brokingbusiness. Financial Highlights and comparison with the same period last year • Operating income £36.8m (2005: £25.5m) + 44% • Profit before tax £18.6m (2005: £12.3m) + 51% • Earnings per share 13.2p (2005: 9.1p) + 45% • Interim dividend of 1.25p (2005: 0.625p) +100% • Net assets £82.3m (September 2005: £70.8m) + 16% Operational Highlights • Corporate client list increased to 101 (2005: 83) across a wide range of sectors • £443m raised for corporate clients in the period (2005: £427m) • Institutional client revenue + 71% with the New York office now a significant contributor • Research coverage expanded - now providing analysis on more than 430 London quoted companies • Continued investment in hiring high quality staff across the business • Control over costbase maintained Commenting on the results, Oliver Hemsley, Chief Executive of Numis, said: "We are building Numis for the future. We have been able to take advantage offavourable market conditions over the past six months but our success hasdepended on our strong commitment to anticipating and delivering the needs ofour clients and the institutions we service. The second half of the year has started well. London continues to be anattractive market for UK and international companies looking to raise money andthe size and quality of our corporate client base is growing as a result." Contacts: Numis CorporationOliver Hemsley, Chief Executive 020 7776 1500Bill Trent, CFO BrunswickGill Ackers 020 7404 5959 CHIEF EXECUTIVE'S STATEMENT Results I am pleased to report an increase in profits for the six months ended 31 March2006. Group operating income has risen to £36.8m (2005: £25.5m) while profitbefore tax rose to £18.6m (2005: £12.3m). Operating profit was £16.4m (2005:£11.0m). Earnings per share were 13.2p (2005: 9.1p) while net assets haveincreased to £82.3m (September 2005: £70.8m). During the period cash balancesincreased to £63.8m (September 2005: £57.1m). Dividend and Scrip Alternative The Board has decided to rebalance the dividend towards a greater interimdistribution and has declared an interim dividend of 1.25p per share (2005:0.625p). The Board believes that rebalancing will underline its commitment to aprogressive and sustainable dividend policy. The dividend will be payable on 31July 2006 to all shareholders on the register at 12 May 2006. Shareholders willbe offered the option to receive shares instead of a cash dividend, the detailsof which will be explained in a circular to accompany our interim report. REVIEW OF ACTIVITIES Corporate Broking and Advisory It has been a busy six months for existing and new corporate clients of thegroup and the number of corporate clients for whom we act has risen to 101(2005: 83). During the period, our clients raised a total of £443m (2005: £427m)through 25 (2005: 19) transactions; many of these had an international element,reflecting the UK's growing importance as the international financial centre ofchoice. It is pleasing to note that over 42% of these funds were raised onbehalf of existing clients, reflecting the strength of our corporate clientele. We have been strengthening both our corporate broking and corporate financedepartments with exceptional individuals including the appointment of NigelTurner as deputy Chairman. Numis is an attractive choice for ambitiousindividuals who wish to work within a growing independent investment bank wherethey can participate in the direction and success of the business. Research, Sales and Trading We have continued to expand our analysis of UK quoted companies and now provideresearch on over 430 stocks across the whole market to a wide range of UK andinternational institutional clients. Over the past 6 months we have invested inimproving the quality of our research product and service and we are pleased tosee the return in increased institutional commission. The firm now has a strongand recognised capability in a broad range of sectors, including aerospace,defence & engineering, building & construction, food producers, financials,insurance, IT, leisure, life sciences, media, mining, new energy & renewables,oil & gas, retail and support services. The market for objective research hasshown that our investment in this area has been well founded and we continue toadd teams and individuals in attractive sectors. Our sales and trading activities have flourished with commissions rising by 71%over the corresponding period last year. Although this is an increasinglycompetitive area, with greater focus on commission levels through electronictrading, there will always be a market for independent, well researched and wellexecuted ideas that help to improve performance for our institutional clients. Our trading business is focused on client facilitation, rather than generatingproprietary trading profits, and it continues to build market presence andgoodwill for Numis. We now actively trade over 400 stocks. New York Office Numis Securities Inc. has now been fully operational for over a year. We havereceived a very positive response from US institutions in particular to ouranalyst and company roadshows in the US. We expect to be able to continue therapid growth of our business in New York. Current trading and outlook Market conditions during the period under review remain favourable with a numberof our clients using the opportunity to raise funds for business expansion.Numis has also taken advantage of these conditions to increase the size andquality of its corporate client base; our goal to become the broker of choicefor high quality, UK quoted, mid and small cap companies is steadily beingrealised. Our client service and research strengths are such that we are nowalso being increasingly invited to act as co-lead managers on substantialflotations; we expect more such opportunities to occur in future. We have had an excellent start to the second half of our year, with a number ofinnovative transactions. Notably, we have raised £250m for Trinity Capital, anIndian property company, which will give us an excellent opportunity to developour business and contacts in India. In addition, Numis has founded and expectsto raise more than £500m over the next 18 months for Paternoster Limited toacquire defined benefit pension schemes from UK companies. Although trading will be dependent on market conditions, we continue to buildNumis as an independent investment banking business with confidence. Oliver HemsleyChief Executive3 May 2006 Consolidated profit and loss accountUnaudited results for the 6 months ended 31 March 06 6 months ended 6 months ended Year ended 31 Mar 06 31 Mar 05 30 Sept 05 Unaudited Unaudited Audited £000's £000's £000's Operating income 36,755 25,489 65,693 ---------- --------- ---------Gross income 36,755 25,489 65,693 Administrative expenses (20,322) (14,479) (38,076) ---------- --------- ---------Operating profit 16,433 11,010 27,617 Share of associatedundertaking's profit 1,029 795 1,388 Exceptional item - profiton disposal of associated - - 9,299undertakings and fixed assetinvestments ---------- --------- ---------Profit on ordinaryactivities beforeinterest 17,462 11,805 38,304 Interest receivable andsimilar income 1,250 548 1,652Interest payable andsimilar charges (69) (28) (48) ---------- --------- --------- Profit on ordinaryactivities beforetaxation 18,643 12,325 39,908 Taxation on profit onordinary activities (5,336) (3,664) (9,466) ---------- --------- --------- Profit on ordinaryactivities after taxation 13,307 8,661 30,442Dividends paid andproposed (1,324) (630) (3,157) ---------- --------- ---------Retained profit for theperiod 11,983 8,031 27,285 ========== ========= =========Earnings per share 13.2p 9.1p 31.3pBasicDiluted 12.7p 8.6p 30.0p Earnings per share, excludingexceptional itemBasic 13.2p 9.1p 21.7pDiluted 12.7p 8.6p 20.9p Consolidated balance sheetUnaudited as at 31 March 06 31 Mar 06 31 Mar 05 30 Sept 05 Unaudited Unaudited Audited £000's £000's £000's ----------- ----------- ----------Fixed Assets Tangible fixed assets 1,709 1,405 1,598Fixed asset investments 1,892 320 1,546Investment in associated undertakings 1,738 4,957 859 ----------- ----------- ---------- 5,339 6,682 4,003 ----------- ----------- ----------Current assets Debtors 101,629 92,665 92,103 Investments 18,802 17,538 17,812Cash at bank and in hand 63,771 26,665 57,133 ----------- ----------- ---------- 184,202 136,868 167,048 ----------- ----------- ---------- ----------- ----------- ----------Creditors Amounts falling due within one year (107,269) (94,980) (100,259) ----------- ----------- ----------Net current assets 76,933 41,888 66,789 ----------- ----------- ---------- ----------- ----------- ----------Net assets 82,272 48,570 70,792 =========== =========== ========== ----------- ----------- ----------Capital and reserves Share capital 5,295 5,180 5,258Share premium account 20,636 18,706 19,341Profit and loss account 56,341 24,684 46,193 ----------- ----------- ----------Equity shareholders' funds 82,272 48,570 70,792 =========== =========== ========== Consolidated cashflow statementUnaudited for the six months ended 31 March 06 31 Mar 06 31 Mar 05 30 Sept 05 Unaudited Unaudited Audited £000's £000's £000'sNet cash inflow from operating activitiesbefore exceptional items 15,828 5,162 24,147 Cash inflow from exceptional items - - 13,540 ----------- ----------- ----------Net cash inflow from operating activities 15,828 5,162 37,687 ----------- ----------- ----------Returns on investments and servicing offinance Interest received 1,228 548 1,631 Interest paid (66) (28) (48) Dividends received 18 - 21 ----------- ----------- ----------Net cash inflow from returns oninvestments and servicing of finance 1,180 520 1,604Taxation Corporation tax paid (8,229) (1,628) (5,683) ----------- ----------- ----------Capital expenditure and financialinvestment Purchase of tangible fixed assets (538) (895) (1,375)Purchase of fixed asset investments (573) (25) (1,251) Disposal of interests in fixed assetinvestments 61 - - ----------- ----------- ----------Net cash outflow from investingactivities from capital expenditure andfinancial investments (1,050) (920) (2,626)Equity dividends paid (1,221) (928) (1,361) ----------- ----------- ----------Financing Issue of ordinary shares 130 991 4,044 ----------- ----------- ----------Increase in cash in the period 6,638 3,197 33,665 =========== =========== ========== Reconciliation of net cash inflow tomovement in net funds Increase in cash balance in the period 6,638 3,197 33,665Net funds at the beginning of the period 57,133 23,468 23,468 ----------- ----------- ----------Net funds at the end of the period 63,771 26,665 57,133 =========== =========== ========== Accounting policies The accounting policies that have been applied to the unaudited results areconsistent with the latest published audited accounts. Operating Income 31 Mar 06 31 Mar 05 30 Sept 05 Unaudited Unaudited Audited Number Number Number £000s £000s £000sInstitutional commissions and tradingprofits 12,138 7,201 17,386Corporate retainers 1,695 758 2,197Deal fees 4,781 3,795 11,044Placing commissions 18,141 13,735 35,066 --------- ---------- ---------- 36,755 25,489 65,693 ========= ========== ========== Administrative expenses 31 Mar 06 31 Mar 05 30 Sept 05 Unaudited Unaudited Audited Number Number Number £000s £000s £000sStaff costs (excluding incentivepayments) 7,813 5,979 15,323Non-staff costs 5,505 3,938 10,919 --------- ---------- ---------- 13,318 9,917 26,242Incentive payments 7,004 4,562 11,297 --------- ---------- ---------- 20,322 14,479 37,539 ========= ========== ========== Earnings per share Basic earnings per share is calculated on profit on ordinary activities aftertaxation of £13,307,000 (2005: £8,661,000) and 100,734,605 (2005: 94,929,000)ordinary shares being the weighted average number of ordinary shares in issueduring the period. Diluted earnings per share assumes that options outstandingat the end of the financial period were exercised at the beginning of the periodfor options where the exercise price was less than the average price of theshares during the period. 31 Mar 06 31 Mar 05 30 Sept 05 Unaudited Unaudited Audited Number Number Number 000s 000s 000s Weighted average number of ordinaryshares in issue during the year - basic 100,735 94,929 97,310Effect of options over ordinary shares 3,890 5,453 4,001 --------- ---------- ----------Diluted number of ordinary shares 104,625 100,382 101,311 ========= ========== ========== Dividend The board declares the payment of an interim dividend of 1.25p per share (2005:0.625p per share). The dividend will be payable on 31 July 2006 to allshareholders on the register on 12 May 2006. Reconciliation of the movement in shareholders' funds 31 Mar 2006 31 Mar 2005 30 Sep 2005 Unaudited Unaudited Audited £ 000 £ 000 £ 000 Profit for the period 13,307 8,661 30,442Dividends paid and proposed (1,324) (630) (3,157)Adjustment in respect of ESOPreserve (1,835) (2,557) (302)New shares issued 1,332 3,198 4,828 --------- ---------- ---------Net addition to shareholders' funds 11,480 8,602 31,811 Opening shareholders' funds 70,792 38,981 38,981 --------- ---------- ---------Closing shareholders' funds 82,272 48,570 70,792 ========= ========== ========= Reconciliation of operating profit to net cashflow from operating activities 31 Mar 2006 31 Mar 2005 30 Sep 2005 Unaudited Unaudited Audited £ 000 £ 000 £ 000 Operating profit 16,433 11,010 27,617Depreciation charges 365 227 514Increase in debtors (excludingtaxation receivable) (6,809) (8,477) (8,191)Net increase (decrease) in tradinginvestments 1,613 (4,142) (3,748)Increase in creditors 4,226 6,544 7,955(excluding taxation and dividends payable) --------- ---------- ---------Net cash inflow from operating activities 15,828 5,162 24,147 ========= ========== ========= Audited results The audited results for the year ended 30 September 2005 are an extract from thelatest published audited accounts and do not constitute the statutory accountsas defined in Section 240 of the Companies Act 1985. The published auditedaccounts have been delivered to the Registrar of Companies and included thereport of the auditors that was unqualified. The Company SecretaryNumis Corporation PlcCheapside House138 CheapsideLondonEC2V 6LH This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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