10th Nov 2006 07:00
Walker,Crips,Weddle,Beck PLC10 November 2006 Press Release For immediate release: 10 November, 2006. Interim Results for the six months to 30 September 2006 Walker, Crips, Weddle, Beck Plc (Code: WCW), the financial services firm whoseactivities cover stockbroking, fund management, corporate finance and personalfinancial services, today announces interim results for the six months ended 30September 2006, the highlights of which are: • Revenue of £8,439,000 (2005: £7,801,000), an increase of 8.2% • Operating Profit of £1,126,000 (2005: £965,000 before exceptional item), an increase of 16.7% • Pre-tax profit of £1,225,000 (2005: Loss £894,000) • Interim dividend increased by 8.2% to 2.65p per share (2005: 2.45p per share) • Continued excellent performance from Walker Crips Asset Managers (WCAM) with funds under management rising to £233.4m from £203m at 31 March 2006, an increase of 15%. Commenting on the results, Graham Kennedy, Chairman of Walker, Crips, Weddle,Beck, said: "It is encouraging to see the company performing well in alldivisions and the group benefiting from a growing proportion of fee basedrevenue. " For further information, please contact: Walker, Crips, Weddle, Beck PLC Tel: +44 (0)20 72537502Michael Sunderland, Chief Executive.Rodney FitzGerald, Finance Director.Stephen Bailey, Investment Director. Further information on Walker, Crips, Weddle, Beck plc: Further information on Walker, Crips, Weddle, Beck is available on the Company'swebsite: www.wcwb.co.uk. Chairman's statement I have great pleasure in announcing another improvement in the performance ofthe business reflected by a record interim pre-tax profit of £1,225,000,compared to a loss of £894,000 for the same period last year. In the six monthsto 30 September 2006 revenue improved 8% to £8,439,000, due to an increase inactivity across our core divisions. Operations Against the challenging market conditions of the last six months, all of ourbusiness units have made significant contributions towards the group'sprofitability. Despite lower transaction volumes within the market place, ourstockbroking subsidiary has performed creditably and has benefited from agrowing proportion of its revenues being fee-based. Once again our unit trust management subsidiary, Walker Crips Asset Managers Ltd(WCAM), enjoyed a healthy period with funds under management rising from £203million to £233 million since 31 March 2006. WCAM now manages six unit trustswhich include two multi manager products and has recently introduced a new highAlpha fund to complement our existing product range and I am pleased to announcethat the fund has attracted subscriptions in excess of £42 million sinceinception on 30 October 2006. It is the stated intention of our fund managers to'soft close' the fund at £100 million. The division continues to receive thebenefit of significant interest from both institutions and the private clientcommunity and I look forward to reporting further growth in funds undermanagement at the year end. Our corporate finance division enjoyed a marked improvement of 160% in feeincome as more of the assignments in progress are reaching completion than inthe previous period. Due in part to the advent of A Day in April of this year, profitability at ourYork-based financial services arm, the London York group, increased dramaticallyby 266% over the previous half year. The Ebor SIPP has completed a successfulhalf-year period with the number of plans rising to 113 from 76 at the last yearend. Total amounts held within Ebor SIPPs now amount to £20 million. The LondonYork group is well-positioned to capitalise further on the liberalisation ofpension legislation that has benefited the industry since A Day. The prior half year's results contained an exceptional cost of £2,460,000relating to a specific bad debt provision. Legal proceedings against two clientsfor the recovery of this sum have been ongoing and will continue until themiddle of next year when we expect to be able to report a more conclusiveoutcome. In the meantime your board considers the provision made last year to besufficient to cover the cost of pursuing this action. During the next financialyear we anticipate our head office relocation to new premises in Bunhill Row,London to have been completed. I am pleased to announce an increase in the interim dividend to 2.65p per share(2005: 2.45p per share) reflecting our confidence in the future prospects of thegroup. This dividend will be paid on 18 December 2006 to those shareholders onthe register at the close of business on 24 November 2006. Strategically, your board remains committed to increasing our fee-based revenuesand I am pleased to state that non-broking revenue as a proportion of totalrevenue increased again in this six month period to 47.9%, being over £4,000,000(2005: £2,900,000), compared to 40.6% for the full year 2006. This reflects theshift in emphasis during the period from the more volatile commission-basedrevenues to the less volume-sensitive management fees which is illustratedthrough the commission shared amount decreasing when compared to the priorperiod whilst gross revenue has increased. Board Changes Some while ago, Michael Sunderland, our Chief Executive Officer, informed theBoard that he wished to relinquish this post on 1 January 2007. Michael hasbeen with the company since 1972 and our CEO since 1996. During that time hehas been the motivating force behind a number of important acquisitions andcontributed strongly to development of the Group's diverse range of operations.I am pleased to advise that Michael will remain an Executive Director withspecial responsibility for expansion of Private Client Services. After consideration by a duly constituted Nomination Committee, consisting ofthe Company's Non-Executive Directors, I am pleased to advise their unanimouschoice of Rodney FitzGerald, currently Finance Director, as successor. He willreplace Michael as Chief Executive Officer with effect from 1 January 2007. Topave the way for greater management in depth I am also pleased to advise thatSean Lam will be appointed Group Managing Director with effect from the samedate. The Board wish both Rodney and Sean well in their new roles. Directors, Account Executives and staff On behalf of the board, I would like to thank all our account executives andmembers of staff for their continued loyalty and commitment which has been thefoundation for our growth since becoming a fully-listed company in 1996. Outlook Since our half year end market activity has improved, benefiting our main coredivisions. WCAM has recently been awarded a substantial institutional mandate tomanage UK equities which will provide a significant boost to funds currentlyunder management. A further update on this mandate will be provided in duecourse. Furthermore, trading in the second half of the current year has so far exceededour expectations and we look to continue our historical trend of achievingstrong trading results in the second half. With our increasingly diversebusiness model now firmly in place we remain, despite challenging marketconditions, confident about the strength of our long-term prospects. G.N. Kennedy CVO Chairman 10 November 2006 Walker Crips Weddle Beck plcConsolidated interim income statementFor the six months ended 30 September 2006 Unaudited Unaudited Audited Notes Six months to Six months to Year to 30 September 30 September 31 March 2006 2006 2005 £'000 £'000 £'000Revenue 8,439 7,801 16,861Commission payable (1,944) (2,310) (5,022)Gross profit 6,495 5,491 11,839 Share of after tax profits of joint venture 21 14 50 Administrative expenses - other (5,390) (4,540) (9,736)Administrative expenses - exceptional item - (2,460) (2,692)Total administrative expenses (5,390) (7,000) (12,428) Operating profit / (loss) 1,126 (1,495) (539) Investment revenues 111 111 262Finance costs (12) (10) (21)Profit on disposal of available-for-sale - 500 668investment Profit / (loss) before tax 1,225 (894) 370 Analysed as:Profit before tax and exceptional item 1,225 1,066 2,394Profit on disposal of available-for-sale - 500 668investmentAdministrative expenses - exceptional item - (2,460) (2,692)Profit / (loss) before tax 1,225 (894) 370 Taxation (393) 272 (136) Profit / (Loss) for the period attributableto equity holders of the company 832 (622) 234 Earnings / (Loss) per share 2Basic 7.2p (5.8p) 2.0pDiluted 7.0p (5.7p) 1.9p Dividends proposed for the period per 3 2.65p 2.45p 6.65pordinary share Dividends (£'000) 310 284 772 Walker Crips Weddle Beck plcConsolidated interim balance sheetAs at 30 September 2006 Notes Unaudited Unaudited Audited 30 September 2006 30 September 2005 31 March 2006 £'000 £'000 £'000Non current AssetsGoodwill 4,677 5,278 4,677Other intangible assets 978 1,036 1,036Property, plant and equipment 499 539 547Investment in joint venture 25 19 55Available-for-sale investments 886 908 845 7,065 7,780 7,160Current AssetsTrade and other receivables 40,915 46,594 50,659Trading Investments 298 103 135Cash and cash equivalents 4,149 2,867 2,549 45,362 49,564 53,343 Current liabilitiesTrade and other payables (38,146) (43,610) (46,797)Current tax liabilities (731) (783) (483)Bank loans & overdrafts (78) (155) (165)Provisions (323) (272) (411) (39,278) (44,820) (47,856) Net current assets 6,084 4,744 5,487 Non current liabilitiesDeferred tax liabilities (263) (272) (268)Shares to be issued (1,113) (1,600) (1,113) (1,376) (1,872) (1,381) Total assets less liabilities 11,773 10,652 11,266 Equity Share capital 4 2,336 2,320 2,326Share premium account 4 1,450 1,367 1,396Own shares 4 (173) (173) (173)Revaluation reserve 4 567 561 515Other reserves 4 3,592 3,498 3,548Retained earnings 4 4,001 3,079 3,654Equity attributable to equityholders of the company 11,773 10,652 11,266 Walker Crips Weddle Beck plcConsolidated interim cash flow statementFor the six months ended 30 September 2006 Unaudited Unaudited Audited Six months to Six months to Year to 30 September 30 September 31 March 2006 2006 2005 £'000 £'000 £'000Cash generated / (used) from operating activitiesCash generated / (used) from operations 2,321 (1,433) (1,521)Interest received 85 85 239Interest paid (12) (10) (21)Tax paid (134) (137) (454) Net cash generated / (used) from operating 2,260 (1,495) (1,757)activities Cash generated / (used) from investing activitiesAcquisition of subsidiary / business - (750) (740)Purchase of property, plant and equipment (68) (345) (306)Proceeds from disposal of available-for-saleinvestments - 500 668Purchase of investments held for trading (163) 174 141Dividends received 77 26 23 Net cash (used) / generated in investing (154) (395) (214)activities Cash generated / (used) from financing activitiesProceeds on issue of shares 64 38 72Dividends paid (483) (457) (738) Net cash used in financing activities (419) (419) (666) Net increase / (decrease) in cash and cashequivalents 1,687 (2,309) (2,637)Cash and cash equivalents at the start of theperiod 2,384 5,021 5,021 Cash and cash equivalents at the end of the 4,071 2,712 2,384period Walker Crips Weddle Beck plcConsolidated interim statement of recognisedincome and expenseFor the six months ended 30 September Unaudited Unaudited Audited2006 Six months to Six months to Year to 30 September 30 September 31 March 2006 2006 2005 £'000 £'000 £'000Gain on revaluation of available-for-saleinvestments taken to equity 42 23 50Deferred tax on gains onavailable-for-sale investments 10 (7) (15) Net income recognised directly in equity 52 16 35 Transfers Transferred to profit or loss on sale ofavailable-for-sale investments - (453) (544)Tax on sale of available-for-sale - 136 162investmentsProfit / (loss) for the period 832 (622) 234 Total recognised income and expense forthe period attributable to equity holders 884 (923) (113) Walker Crips Weddle Beck plc Notes to the accounts For the six months ended 30 September 2006 1. Basis of preparation and accounting policies The Group's consolidated accounts are prepared using accounting policiesconsistent with International Financial Reporting Standards. The interim accounts have been prepared on the basis of the accounting policiesand methods of computation set out in the Group's consolidated accounts for theyear ended 31 March 2006. The interim accounts should be read in conjunctionwith the Group's audited accounts for the year ended 31 March 2006. The interim financial information is unaudited and does not constitute statutoryfinancial statements within the meaning of section 240 of the Companies Act1985. The presentation of certain comparative figures has been amended to conform tothe format of recently published financial statements. The Group's accounts for the year ended 31 March 2006 have been reported on bythe auditors and delivered to the Registrar of Companies. The report of theauditors was unqualified and did not draw attention to any matters by way ofemphasis. They also did not contain a statement under section 237(2) or (3) ofthe Companies Act 1985. Interests in joint ventures The Group's share of the assets, liabilities, income and expenses of jointlycontrolled entities are accounted for in the consolidated financial statementsunder the equity method. Income from the sale or use of the Group's share of the output of jointlycontrolled assets, and its share of the joint venture expenses, are recognisedwhen it is probable that the economic benefits associated with the transactionswill flow to / from the Group and their amount can be measured accurately. Goodwill Goodwill arising on consolidation represents the excess of the cost ofacquisition over the Group's interest in the fair value of the identifiableassets and liabilities of a subsidiary or jointly controlled entity at the dateof acquisition. Goodwill is initially recognised as an asset at cost andreviewed for impairment at least annually. Any impairment is recognisedimmediately in profit or loss and is not subsequently reversed in futureperiods. Intangible assets At each balance sheet date, the Group reviews the carrying amounts of itsintangible assets to determine whether there is any indication that those assetshave suffered an impairment loss. If any such indication exists, the recoverableamount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where the asset does not generate cash flows that areindependent from other assets, the Group estimates the recoverable amount of thecash-generating unit to which the assets belongs. Deferred tax Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofits, and is accounted for using the balance sheet liability method. Deferredtax liabilities are generally recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that is probable thattaxable profits will be available against which deductible temporary differencescan be utilised. Share based compensation The Group operates a number of share option schemes for employees and accountexecutives. The charge to the income statement is determined by the fair valueof the options granted at the date of grant and recognised over the vestingperiod. 2. Earnings per share The calculation of basic earnings per share for continuing operations is basedon the post-tax profit for the period of £832,000 (2005 - (£622,000)) and on11,499,993 (2005 - 10,634,614) ordinary shares of 20p, being the weightedaverage number of ordinary shares in issue during the period. The effect of options granted and commitments to issue shares in respect ofacquisitions would be to reduce the reported earnings per share. The calculationof diluted earnings per share is based on 11,888,530 (2005 - 10,930,198)ordinary shares, being the weighted average number of ordinary shares in issueduring the period adjusted for the dilutive potential ordinary shares (beingshare option schemes only) . 3. Dividends The interim dividend of 2.65p per share is payable on the 18 December toshareholders on the register at the close of business on the 24 November (30September 2005 : 2.45p). The interim dividend has not been included as aliability in this interim report. Walker, Crips Weddle Beck plc Notes to the accounts (continued) For the six months ended 30September 2006 4. Reserves and retained earnings Called up Share Own shares Capital Other Revaluation Retained Total share premium held Redemption earnings Equity capital £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000At 1 April 2005 2,153 1,337 (173) 111 1,578 862 4,158 10,026 Revaluation of investment at fair 23 23valueDeferred tax credit (7) (7)Transfer of realised gain on sale (453) (453)of available-for-sale investmentsTaxation on prior period realised 136 136gainLoss for the 6 months ended 30 (622) (622)September 2004Total recognised income and expense (301) (622) (923)for the periodMarch 2005 final dividend (457) (457)Fair value adjustment for 37 37equity-settled share-based paymentsIssue of shares 7 30 37Purchase consideration - issue of 160 1,772 1,932800,000 shares At 30 September 2005 2,320 1,367 (173) 111 3,387 561 3,079 10,652 Revaluation of investment at fair 27 27valueDeferred tax charge (8) (8)Transfer of realised gain on sale of available (91) (91)for sale investmentsTaxation on prior period realised 26 26gainProfit for the 6 months ended 31 856 856March 2006Total recognised income and expense (46) 856 810for the periodSeptember 2005 interim dividend (281) (281)Fair value adjustment for 50 50equity-settled share-based paymentsIssue of shares 6 29 35 0At 31 March 2006 2,326 1,396 (173) 111 3,437 515 3,654 1,266 Revaluation of investment at fair 42 42valueDeferred tax charge 10 10Profit for the 6 months ended 30 832 832September 2006Total recognised income and expense 52 832 884for the periodMarch 2006 final dividend (485) (485)Fair value adjustment for 44 44equity-settled share-based paymentsIssue of shares 10 54 64 At 30 September 2006 2,336 1,450 (173) 111 3,481 567 4,001 11,773 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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