Fih Group Regulatory News (FIH)

25 Jul 2005 11:35

Falkland Islands Holdings PLC25 July 2005 Falkland Islands Holdings plc("FIH", "the Company" or "the Group") AGM Statement and Trading update The following comments were made by Falkland Islands Holdings Chairman, DavidHudd, at the Company's Annual General Meeting, held at 11.30 am today: "Trading in our Falklands' businesses has started satisfactorily during theAustral winter. Income from Fishing Agency activity has continued to be affectedby the early closure of the Illex squid fishery by the Falkland IslandsGovernment in late March. However, economic activity in the Islands has to dateremained largely unaffected with consumer confidence being buoyed by explorationactivity and as a consequence retail operations within the Falkland IslandsCompany ("FIC") have continued to make modest progress. In late June FIC announced having reached agreement with Exel, freight managersfor the UK Ministry of Defence, to take cargo space on the MOD vessels whichsupply the Islands operating 10 vessel sailings each year. Despite the recentsharp increases seen in global fuel and vessel charter costs this newarrangement will enable the group to maintain its freight rates to customerswhilst at the same time improving service levels by doubling the frequency ofsailings. Trading at Portsmouth Harbour Ferry Company ("PHFC"), the Group's other mainbusiness, has also continued to progress well. In November 2004 car parkingcharges were introduced in Gosport for the first time and passenger volumes wereadversely affected but since then activity has been boosted by the celebrationsof the 200th anniversary of the Battle of Trafalgar and the InternationalFestival of the Sea in June, both of which were centred around Portsmouthharbour. In addition ferry fares were increased with effect from 1 June and thiscombined with the increased passenger activity over the early summer period hasseen the company make encouraging progress during the first quarter of the newfinancial year. I am also pleased to be able to announce that in July, Cobham Travel Services ("CTS"), the travel agency subsidiary of PHFC, was sold for a cash considerationwhich represents a modest premium to net assets. In the first quarter of theyear CTS made a small loss. The Group continues to be strongly cash generative and has recently negotiatedan increase in its working capital facilities (overdraft facilities have beenincreased from £0.8 million to £2.0 million) to give additional flexibility. Shareholders will also be aware that the group owns strategic stakes in the AIMlisted exploration companies, Falkland Oil and Gas ("FOGL") and Falkland Goldand Minerals ("FGML"). FOGL has made remarkable progress since its IPO in October 2004 which isreflected in the substantial increase in the share price. The seismic resultsto date have been encouraging and have far exceeded initial expectations. Inorder to fund the expanded exploration programme FOGL raised £10 million on 3June through a share placing at 85p per share. Your company subscribed for afurther 2.35 million shares in that placing, taking FIH's shareholding in FOGLup to 18.3% (16.8 million shares). FOGL currently has £19.3 million in cashwhich its Board believes is sufficient to fund exploration activities through2006. Those activities will include a further 2D seismic survey of a minimum of8,000km, which was commenced in June, with an option to extend to 15,000km anda 2,000 sq km 3D survey. This work is expected to take place in the next 12 to18 months. FOGL has been granted a 2 year extension of the southern arealicences and following some licence relinquishments FOGL now has an average 90%interest in 79,000 sq km of which 29,000 sq km is in the southern licences. In the second half of 2005 the interpretation and analysis of seismic data willproceed with the objective of defining about 20 drillable prospects to befollowed by a multi-well programme targeted to begin in 2007. FOGL has alreadyreceived expressions of interest from a number of potential partners and aformal programme will commence shortly to attract companies to participate inexploration activities. FGML, in which the Group owns 14.4% of the share capital, has established itsoperating base at Goose Green and to date has drilled 3 of the 23 target sitesidentified by the aero magnetic survey. The first results which relate to one ofthe targets show sub economic indications of gold and other precious metals andanalysis of the other 2 is ongoing. FGML is still at a very early stage of itsexploration programme and work is proceeding on a number of fronts to fullyunderstand the geological settings and then to focus on higher grade zones. The outlook remains positive for your Company, trading in the first quarter isin line with our expectations and we are well positioned to take advantage ofincreased economic activity related to exploration both by our associatedcompanies and others which are active in the Falklands. Your Board looks forwardto building on these solid foundations by making further acquisitions tostrengthen the Group's core operations." 25 July 2005 Enquiries: Falkland Islands Holdings Tel: 01279 461 630David Hudd, Chairman Tel: 07771 893 267John Foster Managing Director Tel 07710 764556 College Hill Tel: 020 7457 2020Ben Brewerton/Nick Elwes This information is provided by RNS The company news service from the London Stock Exchange