CIN.L Regulatory News (CIN)

14 Jun 2007 07:00

City Of London Group PLC14 June 2007 PRESS RELEASE - FINAL RESULTSCITY OF LONDON GROUP PLC JUNE 14, 2007 CITY OF LONDON GROUP INCREASES CASH POSITION AS IT EXPLORES ACQUISITIONS IN FINANCIAL SECTOR • Final Dividend Re-Instated Following Pre-Tax Profits Of £456,751 • US$ Currency Losses And Aborted Acquisition Costs Mar Satisfactory Year • Cash Balances Increase By £1.05 Million To £2.50 Million • Marginal Improvement In Net Assets Per Share To 78.8p After Interim Payout Underlining "their confidence of better things to come", the directors of Cityof London Group Plc are re-instating the final dividend with a recommendedpayment of 1p per share for the year ended March 31, 2007, making a total of 2pper share for the full year (2005-06: nil), says Mr John Greenhalgh, chairman ofthe specialist mining PR and investment group, in his annual statement. Reporting pre-tax profits of £456,751 (£579,192), he comments that "a reasonablysatisfactory year" was marred by £117,500 of expenses associated with theaborted acquisition of a hedge fund management team, and £141,207 in foreigncurrency losses. In addition, £120,711 was charged to the P&L for the "diminution of investment value now considered to be permanent." Assets per shareincreased slightly to 78.8p (78.4p), rising to 82p at end-May, whilst earningsper share fell to 4.52p (6.06p), after exceptional items. The third minimum royalty payment of US$500,000 was received from Iron Mountainin respect of its purchase of COLG's Rchive-it.com business, and the finalpayment of the same amount is due in September. During the year, the Group's investment portfolio was sold down, increasing thecash pool to £2.50m from £1.45m to allow the company to move ahead with otherinvestment opportunities now in the initial stages of scrutiny. This partialswitch to cash was accompanied by a £62,000 increase in bank interest receiptsand a £15,000 reduction in dividend and bond income. The Group's PR subsidiary consolidated the progress made in 2005-6, reporting apre-tax profit of £106,132 (£121,395) on sales of £326,193 (£315,375). Furthermodest improvement is anticipated in the year ahead following some pick up inclients late in the year and into the new trading period. Difficulty in findingskilled personnel to augment the existing team is hampering expansion, butstrategic decisions regarding the Division are regularly reviewed. Profits realised on disposal of portfolio investments totalled £673,000(£358,000). The disposals, whilst adding to the cash balance, are the mainreason behind the fall in financial assets available for sale to £5.14m from£5.49m. Gross investment income, which includes dividends, bank interest andrental income, totalled £282,086 (£242,834). Commenting today, Mr Greenhalgh said that the Group had devoted time and effortin its attempt to bring a hedge fund management team into its City of LondonFinancial Services Ltd (COLFS) subsidiary before discussions were finallyaborted, with each side meeting its own costs. In order to offset the anticipated costs and to provide the venture withstart-up and working capital, a placement of shares at 78p each to raise£490,000 was agreed by the Board. Shareholder approval will be sought at theforthcoming Annual Meeting. Meanwhile, COLFS has continued with its interruptedapplication for FSA authorisation. Looking ahead, Mr Greenhalgh anticipates the current year will be "even busier"as the Group undertakes more detailed examination of various proposals beforeit with the present focus being on the financial sector. He expects theinvestment portfolio will continue to serve the group well, with any furthersoftness in core-income stocks being more than offset by price rises in equityholdings. "I remain optimistic that, with the directors' minds fully applied towards theenlargement of the Group, an exciting future lies ahead for our shareholders." The final dividend of 1p per share will be paid on August 31, 2007 toshareholders of record on August 3. The shares will go ex-dividend on August 1. FULL RESULTS AND CHAIRMAN'S STATEMENT AVAILABLE ON RNS AND ON REQUEST Annual Meeting: 12.00 Noon, August 2, 2007. The Honourable ArtilleryCompany, City Road, London EC1 Further Information: John Greenhalgh Chairman City of London Group Plc. Tel: 020-7628-5518Peter Doye Deputy Chairman City of London Group Plc. www.cityoflondongroup.com City of London Group Share Price This information is provided by RNS The company news service from the London Stock Exchange