29th Jul 2005 07:00
W.H. Ireland Group PLC29 July 2005 W.H. IRELAND GROUP plc ("W.H. Ireland" or "the Group") Interim Results For the Six Months to 31 May 2005 The principal activity of W.H. Ireland is the provision of stockbroking,corporate finance, investment management and financial services to both privateand institutional clients. It has a national network of offices includingManchester, London, Birmingham and Cardiff. Key Points * Turnover up by 35% to £11.0m (2004: £8.1m) * Operating profit increased by 41% to £1.5m (2004: £1.1m) * Pre-tax profit grew by 85% to £1.9m (2004: £1.0m) * Earnings per share up by 86% to 8.20p (2004: 4.41p) * Interim dividend of 1.25p per share (2004: 0.75p) * Excellent progress across core business areas - record first half for Corporate Finance, with 17 AIM flotations * Continued expansion of branch network - entry into Scotland and offices in Leicester and Stockport opened. Now operating from total of 13 locations. * Expansion of capacity in London * Controlling interest in Australian stockbroker, D. J. Carmichael Pty Ltd acquired in June. * Outlook positive Laurie Beevers, chief executive, commenting, said, "I am delighted to report record results for the first half. All areas of thebusiness made good progress. Corporate finance, in particular, enjoyed a strongfirst half, floating 17 companies on AIM and advising on a further sevensecondary placing, to raise a total of £52m. We are particularly excited by our acquisition, in June, of a controllinginterest in Australian stocking broking firm, D.J.Carmichael. The second half has started well and assuming stable market conditions, we lookforward to making good progress over the remainder of the year." Press enquiries: W.H. Ireland Group plc Tel: 020 7448 1000 (today)Laurie Beevers, chief executive Tel: 0161 832 6644 Mobile: 07903 164004David Youngman, managing director Tel: 0161 832 6644 Mobile: 07900 887142 Biddicks Tel: 020 7448 1000Zoe Biddick or Katie Tzouliadis Chairman's Statement I am pleased to report record results for the half year ended 31 May 2005. Groupoperating profit rose by 41% to £1.5m from £1.1m last year, an excellentperformance. Pre-tax profits rose by 85% to £1.9m against £1.0m for the sameperiod last year. The current year's figure includes a profit of £0.3m on thedisposal of quoted investments. All areas of the business are developing welland, in particular, corporate finance, corporate broking and financial serviceshave enjoyed a strong first half year. Reflecting the Group's strong performance over the period, the Board isincreasing the interim dividend to 1.25p (2004: 0.75p) per share, to be paid on28 October 2005 to shareholders on the register on 9 September 2005. Again, ascrip dividend alternative will be available. In this reporting period, our corporate finance offices in Manchester,Birmingham and London have floated 17 companies on AIM, including the firstUkrainian based trading company and have been responsible for a further sevensecondary placings. These activities raised a total in excess of £52m for ourcorporate client companies which now total 60 compared with 39 last year. We are continuing to expand our stockbroking activities and, in the first half,opened our first office in Scotland, in Kilmarnock, as well as an office inLeicester. Since the period end, we have also acquired an office in Stockport.These openings have increased our representation in the UK to 13 locations. I am also pleased to report that we have now received planning permission for amajor refurbishment of our head office in Manchester. In London, we have signeda lease on new premises in Martin Lane in the City, not far from our currentoffice. The new London office provides us with significantly increased capacityand we expect to complete our relocation during August. On the international front, as well as being associated with a number offlotations of overseas companies, in June 2005 we reached agreement to acquire acontrolling interest in the Australian stockbroking firm, D.J. Carmichael PtyLimited ("DJC"). DJC is one of the oldest established stockbrokers in Perth andwe have worked together very successfully over a number of years. The mergerbrings together the considerable expertise of both companies in covering,amongst other things, resource-based investments, both in research and corporatefinance and we believe that it will create considerable opportunities for bothfirms in the UK and Australia. We are continuing to look for opportunities to grow the business further, bothorganically and by acquisition. In order to facilitate this, the management teamof our principal subsidiary, WH Ireland Limited, has been strengthened by theappointment of several key individuals. Most recently, we have appointed ChrisMuir as managing director, who joined us from Brewin Dolphin Securities Ltd.where he was group operations director. I would like to welcome into the Group all new staff, both in the UK andAustralia. The second half has begun well with the level of corporate finance activityremaining strong. By comparison, stockbroking has been quieter due in part to ageneral weakening of equity activity and in part reflecting seasonal norms.Assuming market conditions remain stable, we look forward to making goodprogress over the second half of the year. Sir David Trippier RD JP DL MSIChairman W.H. IRELAND GROUP PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTfor the six months ended 31 May 2005 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 31 May 31 May 30 November 2005 2004 2004 £'000 £'000 £'000------------------------------ -------- -------- ---------Group turnover 10,982 8,117 16,889Administration expenses (9,446) (7,030) (14,951)------------------------------ -------- -------- ---------Group operating profit 1,536 1,087 1,938Share of operating profit/(loss) inassociates 5 (36) 3------------------------------ -------- -------- --------- 1,541 1,051 1,941Profit on disposal of fixed assets 330 - 359Income from fixed asset investments 11 - 369------------------------------ -------- -------- --------- 1,882 1,051 2,669Other interest receivable and similarincome 274 139 354Amounts written off investments - - 7Interest payable and similar charges (248) (158) (406)------------------------------ -------- -------- ---------Profit on ordinary activities beforetaxation 1,908 1,032 2,624Tax on profit on ordinary activities (619) (344) (763)------------------------------ -------- -------- ---------Profit on ordinary activities aftertaxation 1,289 688 1,861Dividends on equity shares (200) (118) (668)------------------------------ -------- -------- ---------Retained profit for the period for theGroup 1,089 570 1,193------------------------------ -------- -------- --------- Earnings per share (in accordance with FRS 14)Basic 8.20p 4.41p 11.88pDiluted 7.37p 4.17p 11.18p------------------------------ -------- -------- --------- Earnings per share (in accordance withguidelines issued by UK Society ofInvestment Professionals)Basic 7.29p 4.97p 10.72pDiluted 6.55p 4.71p 10.09p W.H. IRELAND GROUP PLCSTATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESfor the six months ended 31 May 2005 Restated (note 11) Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 31 May 31 May 30 November 2005 2004 2004------------------------------ -------- -------- --------- £'000 £'000 £'000------------------------------ -------- -------- ---------Profit for the period 1,089 570 1,193Unrealised surplus on revaluation offixed asset investments (note 4) (The figure for 31 May 2004 includes a prior year adjustment of £179,380) 321 264 1,722Non trading increase in net assets ofassociates - 43 43Taxation on realised surplus onrevaluation of fixed asset investments (244) - ------------------------------- -------- -------- ---------Total recognised gain for the period 1,166 877 2,958------------------------------ -------- -------- --------- The restatement above for the six month period 31 May 2004 has no effect on thetotal recognised gains and losses for the year ended 30 November 2004. NOTE OF HISTORICAL COST PROFITS AND LOSSESfor the six months ended 31 May 2005 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 31 May 31 May 30 November 2005 2004 2004 £'000 £'000 £'000------------------------------ -------- -------- ---------Reported profit on ordinary activitiesbefore taxation 1,908 1,032 2,624Realisation of fixed asset investmentrevaluation gains 678 2 2------------------------------ -------- -------- ---------Historical cost profit on ordinaryactivities before taxation 2,586 1,034 2,626------------------------------ -------- -------- ---------Historical cost profit retained for theperiod after the provision for taxationand dividends 1,523 572 1,195------------------------------ -------- -------- --------- W.H. IRELAND GROUP PLCCONSOLIDATED BALANCE SHEETfor the six months ended 31 May 2005 Restated (note 11) Unaudited Unaudited Audited 31 May 2005 31 May 2004 30 November 2004 ---------- ---------- ------------ £'000 £'000 £'000 £'000 £'000 £'000------------------- ------ ------- ------- ------ ------- -------Fixed assetsIntangible assets 2,963 3,141 3,052Tangible assets 5,127 5,237 5,174Investments 5,869 2,835 6,060Investment in associates 443 415 485------------------- ------ ------- ------- ------ ------- ------- 14,402 11,628 14,771Current assetsDebtors 89,702 177,862 122,661Investments 7 22 15Cash at bank and in hand 10,479 6,931 10,884------------------- ------ ------- ------- ------ ------- ------- 100,188 184,815 133,560Creditors due withinone year (97,226) (182,904) (131,790)------------------- ------ ------- ------- ------ ------- -------Net current assets 2,962 1,911 1,770------------------- ------ ------- ------- ------ ------- -------Total assets lesscurrent liabilities 17,364 13,539 16,541Creditors due afterone year (5,829) (4,996) (6,163)Provisions forliabilities and charges (228) (381) (264)------------------- ------ ------- ------- ------ ------- -------Net assets 11,307 8,162 10,114------------------- ------ ------- ------- ------ ------- ------- Capital and reservesCalled up share capital 787 785 786Shares to be issued - 142 -Share premium account 1,266 1,718 1,240Capital redemption reserve 226 226 226Merger reserve 491 - 491Revaluation reserve 4,284 3,183 4,641Other reserves 754 754 754Retained profits 3,499 1,354 1,976------------------- ------ ------- ------- ------ ------- -------Equity shareholders' funds 11,307 8,162 10,114------------------- ------ ------- ------- ------ ------- ------- Net assets per ordinary share 70.70p 51.97p 64.32p------------------- ------ ------- ------- ------ ------- ------- W.H. IRELAND GROUP PLCCONSOLIDATED CASH FLOW STATEMENTfor the six months ended 31 May 2005 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 31 May 31 May 30 November 2005 2004 2004 £'000 £'000 £'000------------------------------ -------- -------- ---------Net cash (outflow)/inflow from operatingactivities (927) 2,660 5,956Returns on investments and servicing offinance 84 (18) 370Taxation (71) 42 (116)Capital proceeds/(expenditure) andfinancial investment 1,135 (199) 426Acquisitions and disposals - (139) (222)------------------------------ -------- -------- ---------Cash inflow before management of liquidresources and financing 221 2,346 6,414Equity dividends paid (523) (106) (211)Financing (110) (392) (403)------------------------------ -------- -------- ---------Increase/(decrease) in cash in the period (412) 1,848 5,800------------------------------ -------- -------- --------- RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWfor six months ended 31 May 2005 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 31 May 31 May 30 November 2005 2004 2004 £'000 £'000 £'000------------------------------ -------- -------- ---------Operating profit 1,536 1,087 1,938Less non cash transfer from revaluationreserve (note 4) (321) - (1,744)Less carried interest bonus set againstprofit on disposal (77) - -Depreciation 151 162 314Amortisation 89 89 177Profit on sale of fixed assets - (19) (389)(Increase)/decrease in debtors 32,965 (64,073) (8,859)Increase/(decrease) in creditors (35,278) 65,425 14,523Decrease in current asset investments 8 (11) (4)------------------------------ -------- -------- --------- (927) 2,660 5,956------------------------------ -------- -------- --------- W.H. IRELAND GROUP PLCANALYSIS OF NET DEBT At beginning Other non At the end of the period Cash flow cash changes of the period £'000 £'000 £'000 £'000------------------------ -------- -------- -------- --------Cash at bank and in hand 10,884 (405) - 10,479Overdrafts (1) (7) - (8)------------------------ -------- -------- -------- -------- 10,883 (412) - 10,471Debt due within one year (281) 102 (113) (292)Debt due after one year (4,239) - 113 (4,126)Finance leases (32) 8 - (24)------------------------ -------- -------- -------- -------- 6,331 (302) - 6,029------------------------ -------- -------- -------- -------- W.H. IRELAND GROUP PLCNOTES TO THE INTERIM STATEMENT 1. The interim report, which is the responsibility of the Directors and has not been audited, was approved by the Directors on 28 July 2005. 2. The figures for the six months ended 31 May 2005 have been prepared using the same accounting policies as for the year ended 30 November 2004. 3. These unaudited interim financial statements do not constitute statutory accounts. They have, however, been reviewed by the auditors whose report is included. The figures for the year ended 30 November 2004 have been extracted from the audited accounts for that year. The comparative figures for the financial year ended 30 November 2004 are not the Company's statutory accounts for that year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 4. Share premium and reserves Capital Share Share redemption Merger Revaluation Other Retained capital premium reserve reserve reserve reserve profits £'000 £'000 £'000 £'000 £'000 £'000 £'000------------ ------ ------- -------- ------ -------- ------ -------At beginningof the period 786 1,240 226 491 4,641 754 1,976Shares issued 1 26 - - - - -Adjustmenton.investmentrevaluation (see below) - - - - 321 - -Transfer ofrealised gain - - - - (678) - 678Tax on realisedinvestment gain - - - - - - (244)Retained profit for the period - - - - - - 1,089--------- ------- -------- -------- ------- -------- ------- -------- At end ofthe period 787 1,266 226 491 4,284 754 3,499--------- ------- -------- -------- ------- -------- ------- -------- The adjustment on investment revaluation is after £320,466 has been credited directly to the profit and loss account and offset against the applicable bonus provision made under the carried interest scheme, as detailed in the 30 November 2004 audited accounts. 5. On 28 April 2005, 17,334 new ordinary shares of 5p each were issued at 156p per share in satisfaction of the scrip dividend alternative for the final dividend for the year ended 30 November 2004. 6. A final dividend for the year ended 30 November 2004 of 1.5p per share costing £235,848 and a special dividend for the year ended 30 November 2004 of 2.0p per share were paid on 28 April 2005. It is proposed that an interim dividend for the six months ending 31 May 2005 of 1.25p per share costing £199,892 be paid on 28 October 2005 to shareholders on the register on 9 September 2005. 7. The basic earnings per share for the period has been calculated by dividing the profit on ordinary activities after taxation by the weighted average number of shares in issue during the period being 15,726,260 (six months to 31 May 2004: 15,623,268 and year ended 30 November 2004: 15,665,720). Diluted earnings per share is the basic earnings per share adjusted for the effect of the conversion into fully paid shares of the weighted average number of all share options and warrants outstanding during the year. The additional weighted average number of shares used for the diluted calculation is 1,778,656 (six months to 31 May 2004: 887,484 and year ended 30 November 2004: 974,352). The calculation done in accordance with the guidelines issued by the UK Society of Investment Professionals uses the profit on ordinary activities after tax adjusted for goodwill amortisation and the profit on sale of fixed assets. 8. The tax charged to the profit and loss account of £619,000 represents a tax charge of 32.44% (six months to 31 May 2004: £344,000 and 33.33% and year ended 30 November 2004; £763,000 and 29.08%). In addition, there is a tax charge transferred to reserves relating to tax payable on realised gains previously credited to the Revaluation Reserve of £245,585 (six months ended 31 May 2004: nil and year ended 30 November 2004: nil) 9. Creditors due within one year includes £303,334 (six months ended 31 May 2004: nil and year ended 30 November 2004: £299,284) relating to bonuses provided under the carried interest scheme, and creditors due after one year includes £1,663,752 (six months ended 31 May 2004: nil and year ended 30 November 2004: £1,483,927) relating to bonuses provided under the carried interest scheme. 10. Reference was made in previous years' annual report and financial statements to the Group's position concerning split capital investment trusts ("splits") and to the review into those being undertaken by the UK's financial regulator, The Financial Services Authority, which is ongoing. The group has continued to review its exposure to clients deriving from their holdings of splits and based on this review the Board has made a provision where cases have been referred to the Financial Ombudsman although the Company continues to robustly defend its position in such cases. The provision takes account of any potential claims that may be made against the compensation fund established by certain managers of splits. No Group company has ever been a manager to a split capital investment trust and therefore was not required to contribute to the compensation fund. 11.The 31 May 2004 comparative figures have been restated for the change of accounting policy during the financial year ended 30 November 2004 which resulted in fixed asset investments being valued at each year end only. Thus fixed asset investments at 31 May 2004 have been revalued to reflect their value at 30 November 2003, being the previous accounting year end. This has resulted in a reduction of £179,380 in the value of such investments. 12.On 30 June 2005 the Group acquired a 51% holding in a newly formed Australian subsidiary, WHI Australia Pty Limited, which was formed to acquire 100% of the Perth based stockbroking firm D.J. Carmichael Pty Limited, for a total consideration of A$2,110,250 cash and 250,852 new ordinary shares of 5p each in W H Ireland Group plc. W.H. IRELAND GROUP PLCINDEPENDENT REVIEW REPORT BY KPMG AUDIT PLC IntroductionWe have been instructed by the Company to review the financial information forthe six months ended 31 May 2005, which comprises: the consolidated profit andloss account; statement of total recognised gains and losses; note of historicalcost profits and losses; consolidated balance sheet; consolidated cash flowstatement; reconciliation of operating profit to operating cash flow; analysisof net debt and notes 1 to 12. We have read the other information contained inthe interim report and considered whether it contains any apparent misstatementsor material inconsistencies with the financial information.This report is made solely to the Company in accordance with the terms of ourengagement. Our review has been undertaken so that we might state to the Companythose matters we are required to state to it in this report and for no otherpurpose. To the fullest extent permitted by company law we do not accept orassume responsibility to anyone other than the Company for our review work, forthis report, or for conclusions we have reached. Directors' responsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the Directors. Review work performedWe conducted our review in accordance with guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing PracticesBoard. A review consists principally of making enquiries of Group management andapplying analytical procedures to the financial information and underlyingfinancial data and, based thereon, assessing whether the accounting policies andpresentation have been consistently applied unless otherwise disclosed. A reviewis substantially less in scope than an audit performed in accordance withAuditing Standards and therefore provides a lower level of assurance than anaudit. Accordingly we do not express an audit opinion on the financialinformation. Review conclusionOn the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 May 2005. KPMG Audit plcChartered AccountantsLeeds28 July 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
WHIreland