ARL.L Regulatory News (ARL)

20 Dec 2006 07:00

Arlington Group Ltd20 December 2006 ARLINGTON GROUP LIMITED UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2006 Incorporated in Bermuda with registered number 36035 Dear Shareholder: UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2006 The results of the Group for the period under review show a loss before taxationof £0.7 million (2005: Profit £2.4 million), equivalent to a basic Loss PerShare (EPS) of 1.1 pence. (2005: Profit per Share 2.9 pence). The Group's cash position at 30 September 2006 was £6.6 million(31 March 2006:£6.1 million), equivalent to 10.3 pence per share (31 March 2006: 9.4 pence pershare), while Net Asset Value per share (undiluted) at the period end was£35.8m, equivalent to 55.5 pence per share (31 March 2006: 58.5 pence pershare). HALF YEAR TRADING During the period under review the Company saw mixed returns on its principalinvestments, a summary of which is detailed below: Arlington Special Situations Fund (ASSF)As at 30 September 2006, Arlington had £9.8m invested in ASSF which generated apositive return of 9.9% over the period under review. ASSF has recently startedmarketing the Fund to sophisticated third party investors with the intention togrow AUM to approximately US$100m. Copenhagen International Opportunities Fund (Copenhagen)As at 30 September 2006, Arlington had £10.7m invested in Copenhagen whichgenerated a positive return of 4.1% over the period under review. The Fundadopts a European long short equity strategy and typically runs a 20-40% netlong position depending upon market circumstances. Copenhagen has recentlyinitiated a marketing campaign with the intention of substantially increasingthe asset base. Arlington Alphex Japan FundThe long only Japanese equity fund experienced a difficult initial tradingperiod. Its exposure to small and mid cap companies was impacted as the marketsold off heavily with the Topix Second Section and the TSE Mothers Sectionfalling 18% and 37% respectively. Since the end of the period under review, theBoard has taken a decision to exit this investment. Arlington FX SelectDuring the period, Arlington made an investment into an index of foreignexchange funds in collaboration with a major multinational investment bank. As aresult of poor performance, Arlington has closed the position. DIVIDENDS The directors do not recommend the payment of an interim dividend. FUTURE PROSPECTS AND OUTLOOK The Board continues to pursue a number of substantial investment opportunities. NICHOLAS BARHAM 19 December 2006 PROFIT AND LOSS ACCOUNT Unaudited Consolidated Interim Results for the six months to 30th September 2006 Six months Six months Year to to 30/09/06 to 30/09/05 31/03/06 Unaudited Unaudited Audited £'000 £'000 £'000 TURNOVER Continuing operations 5,804 6,312 16,050 Discontinued operations - 4,994 4,994 __________ ___________ ___________ 5,804 11,306 21,044 COST OF SALES (5,489) (8,243) (15,421) __________ ___________ __________ GROSS PROFIT 315 3,063 5,623 Changes in market value of funds (13) 323 2,343Administrative expenses (1,080) (2,172) (3,529) __________ _________ __________ OPERATING PROFIT Continuing operations (778) 1,131 4,354 Discontinued operations - 83 83 __________ __________ __________ (778) 1,214 4,437Profit on disposal ofdiscontinued operations - 714 714 Interest receivable 87 495 903 Interest payable - (5) (20) __________ __________ __________ (LOSS)/PROFIT ON ORDINARYACTIVITIES BEFORE TAXATION (691) 2,418 6,034 Tax on profit on ordinary activities (11) (516) (638) __________ __________ __________ RETAINED (LOSS)/PROFITFOR THE PERIOD (702) 1,902 5,396 ========== ========== ========== Earnings per share- basic (pence) (1.09)p 2.93p 8.32p- fully diluted (pence) (1.09)p 2.92p 8.29p Earnings per share from continuing operations- basic (pence) (1.09)p 1.60p 7.10p- fully diluted (pence) (1.09)p 1.60p 7.07p All recognised gains and losses are included in the profit and loss account. CONSOLIDATED BALANCE SHEET Unaudited Consolidated Interim Results for the six months to 30th September 2006 At 30/09/06 At 30/09/05* At 31/03/06* Unaudited Unaudited Audited £'000 £'000 £'000 FIXED ASSETSTangible assets 25 616 29 __________ __________ __________ 25 616 29 __________ __________ __________ CURRENT ASSETSDebtors 268 842 1,100Investments 29,361 11,292 31,345Property held for resale - - 579Cash at bank and in hand 6,647 23,622 6,086 __________ __________ __________ 36,276 35,756 39,110 CREDITORS: Amounts fallingdue within one year (462) (1,916) (1,311) __________ __________ __________ NET CURRENT ASSETS 35,814 33,840 37,799 __________ __________ __________ TOTAL ASSETS LESSCURRENT LIABILITIES 35,839 34,456 37,828 Provisions for liabilities and charges (4) - (4) __________ __________ __________ NET ASSETS 35,835 34,456 37,824 ========== ========== ========== CAPITAL AND RESERVES Called up share capital 323 325 323Capital redemption reserve 3 1 3Shares to be issued 44 39 39Profit and loss account 35,465 34,091 37,459 __________ __________ __________ EQUITY SHAREHOLDERS' FUNDS 35,835 34,456 37,824 ========== ========== ========== Net assets per share - basic 55.5p 53.1p 58.5p ========== ========== ========== *Restated following adoption of FRS20 CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS TO 30TH SEPTEMBER 2006 Unaudited Consolidated Interim Results for the six months to 30th September 2006 Six months Six months Year to to 30/09/06 to 30/09/05 31/03/06 Unaudited Unaudited Audited £'000 £'000 £'000 Net cash inflow/(outflow)from operating activities 2,158 (526) (18,943) __________ __________ __________ Returns on investments andservicing of financeInterest paid - (5) (18)Interest element of hirepurchase and finance leases - - (2)Interest received 87 495 902Dividend received - - 1 __________ __________ __________ Net cash inflow from returns oninvestments and servicing of finance 87 490 883 __________ __________ __________ Taxation paid (392) (1,244) (1,613) __________ __________ __________ Capital expenditure andfinancial investmentReceipts from sale of fixed asset - - 578Payments to acquire fixed assets - (12) (12) __________ __________ __________ Net cash (outflow)/inflow from capitalexpenditure and financial investment - (12) 566 __________ __________ __________ Acquisitions and disposalsSale of subsidiary - 1,350 1,840Bank balance of disposed subsidiaries - (89) (89) __________ __________ __________ Net cash inflow fromacquisitions and disposals - 1,261 1,751 __________ __________ __________ Equity dividends paid to shareholders (1,292) - - __________ __________ __________ Cash inflow/(outflow)before financing 561 (31) (17,356) FinancingPurchase of own shares - - (126)Repayment of loans - (76) (161)Capital element of finance lease repayments - (11) (11) __________ __________ __________ Net cash (outflow) from financing - (87) (298) __________ __________ __________ INCREASE/(DECREASE) INCASH IN THE PERIOD 561 (118) (17,654) ========== ========== ========== NOTES TO THE UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED30TH SEPTEMBER 2006 1. The consolidated interim results for the six months ended 30th September 2006 are unaudited and were approved by the directors on 19 December 2006. The financial information set out above does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The information given as comparative figures for the year ended 31st March 2006 was extracted from the Group's audited accounts for that financial year. 2. ACCOUNTING POLICIES The principal accounting policies of the Group have remained unchanged from those set out in the Group's accounts for the year ended 31st March 2006 with the exception of the adoption of FRS 20. The Group has adopted FRS 20 'Share based payments' in respect of share options granted to current and former directors and employees. Share options granted to employees since 26 June 2003 are valued at the date of grant using an appropriate option pricing model and are charged to operating profit over the vesting period of the option. The cumulative charge of £39,000 for options granted in previous years has been recognised in the accounts as a prior year adjustment and the comparative figures restated. The effect in the current period is a charge to profits of £5,000. 3. RECONCILIATION OF OPERATING (LOSS)/PROFIT TO NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES Six months Six months Year to to 30/09/06 to 30/09/05 31/03/06 Unaudited Unaudited Audited £'000 £'000 £'000 Operating (loss)/profit (778) 1,214 4,437 Amortisation of goodwill - (71) (71) Depreciation 4 183 192 Share based payment charge 5 - - Decrease in stocks - 100 100 Decrease in debtors 832 2,472 1,724 Decrease/(increase) in current asset investments 2,563 (1,746) (22,378) (Decrease) in creditors (468) (2,678) (2,947) __________ __________ __________ Net cash inflow/(outflow) from operating activities 2,158 (526) (18,943) ========== ========== ========== 4. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Six months Six months Year to to 30/09/06 to 30/09/05 31/03/06 Unaudited Unaudited Audited £'000 £'000 £'000 Increase/(decrease) in cash in the period 561 (118) (17,654) Net cash outflow from loans - 76 161 Cash outflow in respect of hire purchase and finance leases - 11 11 __________ __________ __________ Change in net funds arising from cash flows 561 (31) (17,482) New finance leases - (2) (24) Finance leases disposed of with subsidiary undertakings - - 22 Net funds at beginning of period 6,086 23,570 23,570 __________ __________ __________ Net funds at end of period 6,647 23,537 6,086 ========== ========== ========== 5. ANALYSIS OF NET FUNDS Cash at bank and in hand 6,647 23,622 6,086 __________ __________ __________ 6,647 23,622 6,086 __________ __________ __________ Debt due within one year - (85) - __________ __________ __________ - (85) - __________ __________ __________ Net funds 6,647 23,537 6,086 ========== ========== ========== 6. EARNINGS PER SHARE (EPS) Six months Six months Year to to 30/09/06 to 30/09/05 31/03/06 Unaudited Unaudited Audited Weighted average number of ordinary shares in issue ('000) 64,611 64,925 64,826 __________ __________ __________ Dilutive effect of the weighted average number of share options in the period ('000) - 247 246 __________ __________ __________ Profit after tax (£'000) (702) 1,902 5,396 __________ __________ __________ Basic earning per share - pence (1.09)p 2.93p 8.32p ========== ========== ========== Fully diluted earnings per share - pence (1.09)p 2.92p 8.29p ========== ========== ========== Diluted EPS is calculated by adjusting the weighted average number of shares in issue on the assumption of conversion of all dilutive potential ordinary shares. As there was a loss for the period the fully diluted earnings per share is the same as the basic earnings per share. 7. MOVEMENT IN SHAREHOLDERS' FUNDS Six months Six months Year to to 30/09/06 to 30/09/05 31/03/06 Unaudited Unaudited Audited £'000 £'000 £'000 Opening shareholders' funds as previously stated 37,824 32,554 32,554 (Loss)/profit for the period (702) 1,902 5,396 Dividend paid (1,292) - - Net movement of shares - - (126) Prior year adjustment(1) - - - Share based payments 5 - - __________ __________ __________ Closing shareholders' funds 35,835 34,456 37,824 ========== ========== ========== Note (1) Following the adoption of FRS20, £39,000 has been transferred from the profit and loss account to Shares to issued prior to 31 March 2005. This has no impact on total shareholders' funds. 8. NET ASSET VALUE PER SHARE The "basic" net asset value per share figures are calculated on the basis of the net assets attributable to equity shareholders divided by the number of ordinary shares in issue at the relevant dates. 9. Copies of the interim report are available to the public free of charge for 14 days as from today. They may be obtained in any one of the following ways: (a) From the Company Secretary at: Thistle House, 4 Burnaby Street, Hamilton, HM11, Bermuda. (b) From the Company's share registrars: web.queries@computershare.co.uk This information is provided by RNS The company news service from the London Stock Exchange