Fih Group Regulatory News (FIH)

1 Dec 2005 07:01

Falkland Islands Holdings PLC01 December 2005 1 December 2005 Falkland Islands Holdings plc Interim Results for the six months ended 30 September 2005 Falkland Islands Holdings ("FIH"), an AIM listed company operating a range ofbusinesses in the Falkland Islands, and the Portsmouth Harbour Ferry Company inthe UK, announces its unaudited interim results for the six months ended 30September 2005. Financial Highlights • Turnover up 50% to £8.1 million (2004: £5.4m) • Profit before taxation rose to £729,000 (2004: £299,000) • Underlying profits before exceptional profits on sale of subsidiary and goodwill amortisation rose to £747,000 (2004: £299,000 ) • EPS on underlying profits increased 91% to 6.1p (2004: 3.2p) • No interim dividend is proposed (2004: Nil) Operating Highlights • Satisfactory trading in Falklands Winter half despite poor illex squid catches • First full contribution from Portsmouth Harbour Ferry Company ("PHFC") also benefiting from International Festival of the Sea and new ferry • Cargo shipping agreement set up with UK Ministry of Defence • Ongoing exploration activity: - Falkland Oil & Gas extending seismic activity and looking to identify 20 drillable prospects - Falkland Gold & Minerals working through 23 identified onshore targets • Disposal of Cobham Travel Outlook • Second half outlook remains positive • Future of ferry boosted by demise of SHRT plan for tunnel under Portsmouth Harbour • Growth prospects in Falklands linked to recovery in illex fishing catches • Solid contribution expected from PHFC in quieter winter half • Exposure to oil and minerals exploration through shareholdings in FOGL and FGML • Continue to seek earnings enhancing complementary acquisitions David Hudd, Chairman of Falkland Islands Holdings plc, said: "We have continued to make good progress in the first six months and theperformance from PHFC has been especially pleasing. Whilst the poor illexfishing season continues to impact, the outlook for the second half remainspositive and we are optimistic of further solid contributions from our principaltrading operations." Enquiries: Falkland Islands Holdings Tel: 01279 461 630John Foster, Managing Director Tel: 07710 764 556David Hudd, Chairman Tel: 07771 893 267 College Hill Tel: 020 7457 2020Ben Brewerton / Nick Elwes Chairman's Statement Overview We are pleased to report that Falkland Islands Holdings has continued to makegood progress in the 6 months to 30 September 2005. Profits rose sharply as thefull benefits of the acquisition of Portsmouth Harbour Ferry Company were seenin the first half and Earnings per Share, excluding exceptional profits on thesale of a subsidiary and the amortisation of Goodwill, increased by 91% from3.2p in the prior period to 6.1p in the current year. As in previous years nointerim dividend is proposed. Financials Turnover has increased from £5.4million in the first half of last year to£8.1million and Profits Before Tax rose from £299,000 to £729,000 in the 6months to 30 September 2005.Underlying profits after stripping out profits fromthe sale of the Cobham Travel subsidiary and before the amortisation of Goodwillincreased from £299,000 to £747,000. The profit after tax attributable toshareholders was £461,000 compared to £201,000 last year. Operations Trading activity in the Falkland Islands during the winter half wassatisfactory. Turnover rose from £5.4million to £5.8million reflecting thereopening of the Upland Goose Hotel following its refurbishment in the summer of2004 and insurance commission which continued to grow. Profits from the Group'sFalklands business saw a small decline in the first half compared to the sameperiod last year with contribution lower by £30,000 at £448,000.This flatperformance reflected the generally less buoyant economic conditions in theIslands resulting from the poor illex fishing season in 2004/5 and the sharpincrease in global vessel charter and fuel costs which saw a rise in the cost oftransporting goods to the Falklands. In September 2005 the Group moved away fromchartering its own vessels and started shipping cargo to the islands on UKMinistry of Defence vessels. These arrangements are expected to provide animportant buffer against continuing rises in global freight and transportationcosts as well as improving the efficiency of the Group's supply chain. The 6 months to 30 September 2005 saw the first full contribution of £580,000from the Group's main UK trading subsidiary, Portsmouth Harbour Ferry Company ("PHFC"). PHFC performed well in the summer period. Underlying passenger numberswere slightly lower than in the previous year following the introduction of carparking charges in Gosport in November 2004; however profitability benefitedfrom an increase in ferry fares in June 2005 and in particular from theadditional ferry and cruising activity linked to the Trafalgar celebrations andthe International Festival of the Sea in June and July 2005. The company'spleasure cruising activity also performed well, helped by the interestsurrounding these events and also by the commissioning in June of the company'snew vessel, the Spirit of Portsmouth which operates as a cruise boat in thesummer and a ferry in the winter. In July the Group was successful in sellingits non core Cobham Travel subsidiary at a premium to Net Assets. On 29 November 2005 the Department for Transport issued a statement confirmingthat it would not provide support for Hampshire County Council's longstandingplans for a Rapid Transit Scheme incorporating a tunnel under Portsmouthharbour. This announcement is seen very positively by your Board and effectivelyremoves the threat of the SHRT, opening the door for alternative publictransport schemes that will work in harmony with the existing ferry servicesprovided by PHFC. Investments The Group also owns strategic stakes in the AIM listed exploration companies,Falkland Oil and Gas and Falkland Gold and Minerals. Falkland Oil and Gas ("FOGL") Offshore exploration work is continuing in the Falklands basin with the 2Dseismic survey progressing whilst interpretation, analysis and mapping of thatdata is carried out in the UK. The current 2D survey which has been extended to cover 15,000km is concentratedon the large number of leads revealed by the previous survey of 9,450km whichwas completed in May 2005. This survey is now 60% complete and is anticipated tobe finished by the end of January and the data will be processed in the firsthalf of 2006. Interpretation and mapping is being progressed as the data becomesavailable and this will form the basis of a 3D seismic programme in the mostprospective areas. The objective remains to identify around 20 drillableprospects. Discussions have commenced to introduce potential farm-out partners in order toshare the costs and accelerate the exploration of this large area. The market value of the Group's shareholding of 16,803,000 shares in FOGL(18.3%) at 30 September 2005 was £18.9million compared to a book value of£2.7million. Falkland Gold and Minerals ("FGML") Onshore the two drilling rigs operated by FGML are working their way through the23 targets identified by the aeromagnetic survey carried out in 2004. To dateseven have been completed and the results have added considerably to FGML'sunderstanding of the geology of the Islands. The selection of the remaining drilling targets is being enhanced by groundgeophysics and soil sampling and the current expectation is that the initialdrilling programme will be completed by the end of 2006. The expectation is thatat that stage FGML will have available cash balances of some £5.5million tocarry out the further work required. The market value of the Group's shareholding of 11,250,000 shares in FGML(14.4%) at 30 September 2005 was £ 2.2million compared to a book value of£0.2million. Balance Sheet and Cash Flow In the half year to September the group drew down a £2 million bank loan to helpfinance the acquisition of its new ferry vessel Spirit of Portsmouth and spent£0.2 million to fit out the new boat. In the period the group also subscribed £2million for new shares in FOGL in that Company's share placing in May 2005 toincrease the scope of its oil exploration programme. Cash Flow from the Group'sOperating Activities was healthy at £465,000.As at 30 September 2005 the Grouphad net borrowings of £2.4million (£0.4m March 2005),Cash balances of£1.2million (£0.9m March 2005) and unutilised borrowing facilities of £2million. Outlook In the second half of the year economic conditions in the Falklands are expectedto remain flat. Growth will be limited in the absence of a significant recoveryin illex fishing catches although some progress is expected as a result ofincreased numbers of cruise ship visitors to the Falklands and other summeractivity. In the UK, for PHFC the winter months are quieter with less touristactivity in the Gosport and Portsmouth area and this provides a natural balanceto the normally stronger second half seen in the Falklands. Overall the outlookfor the second half remains positive and we remain cautiously optimistic thatfurther solid contributions will be delivered from both the group's principaltrading operations. David Hudd John FosterChairman Managing Director UNAUDITED INTERIM CONSOLIDATEDPROFIT AND LOSS ACCOUNT Unaudited 6 Months Unaudited 6 Months Audited Year ended To 30 September 2005 To 30 September 2004 31 March 2005 As restated As restated £'000 £'000 £'000 Turnover 8,146 5,415 12,754 Cost of sales (5,271) (3,779) (8,708) Gross Profit 2,875 1,636 4,046 Administrative expenses (2,173) (1,365) (3,345)Other Operating Income 78 100 291 Group Operating profit 780 371 992 Share of results of associated undertakings (22) - Total Operating profit 780 349 992 Profit on sale of subsidiary 84 Profit on ordinary activities before interest 864 349 992(Note 1) Net Interest (Note 2) (135) (50) (85) Profit on ordinary activities before taxation 729 299 907(Note 3) Taxation on profit on ordinary (268) (98) (306)activities (Note 4) Profit on ordinary activities after taxation 461 201 601(Note 8) Dividends paid - - 369 Earnings per share (Note 5) - Basic 5.5p 3.2p 8.2p - Fully diluted 5.4p 3.1p 8.1p Underlying Profit Before Tax 30 September 2005 30 September 2004 31 March 2005 £'000 £'000 £'000 Profit before taxation (as above) 729 299 907Add Amortisation of Goodwill 102 65Less profit on sale of Subsidiary (84)Profit Before Tax, Amortisation and Profit on 747 299 972Sale of Subsidiary Earnings per share before sale of subsidiary and 6.1p 3.2p 9.0pgoodwill amortisation UNAUDITED CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 30 September 2005 30 September 2004 31 March 2005 As restated As restated £'000 £'000 £'000 Fixed assetsIntangible assets 4,034 - 4,136Tangible assets 8,520 3,461 8,501Investments (Note 6) 2,900 1,828 900 15,454 5,289 13,537 Current assetsStocks 3,519 2,947 3,308Debtors 1,553 1,430 1,812Cash at bank and in hand 1,222 181 914 6,294 4,558 6,034Creditors: amounts falling due within one year (4,989) (3,101) (5,419) Net current assets 1,305 1,457 615 Total assets less current liabilities 16,759 6,746 14,152 Creditors: amount falling due after more than one year (2,964) (603) (831)Provision for liabilities and charges (882) (377) (882) Net pension scheme liabilities (Note 7) (1,714) (1,376) (1,648)Net Assets 11,199 4,390 10,791 Capital and reservesCalled up share capital 838 654 838Share Premium account 7,061 927 7,061Other Reserves 703 703 703Reserve for own shares (83) (112) (83)Profit and loss account (Note 8) 2,680 2,218 2,272 11,199 4,390 10,791 UNAUDITED CONSOLIDATED CASH FLOWfor the six months ended 30 September 2005 Unaudited 6 months to Unaudited 6 months to Audited Year to 30 September 2005 30 September 2004 31 March 2005 £'000 £'000 £'000 Cash flow from operating activities 465 (763) 777Returns on investment andServicing of financeInterest received 14 8 47Interest paid (94) (8) (31) TaxationUK Corporation tax (82) - (169)Overseas taxation paid 0 - (104) Capital ExpenditurePurchase of tangible fixed assets (242) (36) (1,243)Purchase of intangible fixed assets - - (622)Disposal of fixed assets 5 1 144 AcquisitionsInvestment in joint venture (679)Investment in subsidiary undertakings (5,556)Sale of subsidiary undertaking 158Purchase of investments (2,000) (935)Equity dividends paid - - (372) Cash (Outflow) / Inflow before financing (1,776) (2,412) (7,129) FinancingShares issued 910 5,472Repayment of secured loan (102) - (279)Sale of own shares 112Share options exercised 98New secured loan 2,409 500 1,000 Increase / (Decrease) in cash 531 (1,002) (726) Statement of Recognised Gains and Losses 6 months to 6 months to Year ended 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Profit for the period after taxation 461 201 601Actuarial (loss) / gain 0 38 (51)Tax on actuarial (loss) / gain (53) (12) 17Total gains and losses recognised in the 408 227 567periodPrior year adjustment FRS 17 (Note 1) (635)Prior year adjustment re FRS 21 502Total gains and losses recognised since last 275annual report The prior year adjustment in relation to FRS21 relates to the requirement torecognise dividends as paid, previously they were recognised on a proposed basis. Notes to the interim Statement to 30 September 2005: 1. Adoption of FRS17 The Board has adopted FRS17 'Retirement Benefits' for the first time. Theimpact on the profit and loss account is as follows: 6 Months ended 6 Months ended Year ended 30 September 2005 30 September 2004 31 March 2005 £'000 £'000 £'000Increase in pension provision 59 62 120Current service cost (9) (10) (20)Impact on operating profit 50 52 100Net financing costs (55) (47) (91)Total FRS 17 adjustments (5) 5 9 2. Interest The net interest cost includes the net financing cost of the group's definedbenefit pension schemes as shown in Note 1. 3. Segmental information 6 Months ended 6 Months ended Year ended 30 September 2005 30 September 2004 31 March 2005 £'000 £'000 £'000TurnoverGeneral trading in the Falkland Islands 5,753 5,415 11,468Ferry Services 2,393 1,286 8,146 5,415 12,754 Profit before taxation head office costsand goodwill amortisationGeneral trading in the Falkland Islands 448 478 1,303 Ferry Services 580 202 1,028 478 1,505 Head office costs (281) (179) (533) Profit before sale of subsidiary and goodwill 747 299 972amortisation Profit on sale of Subsidiary 84 Profit before goodwill amortisation 831 299 972 Goodwill amortisation (102) (65) Group profit before taxation 729 299 907 4. Taxation The taxation charge has been estimated at 32.0% (2004: 32.5%) 5. Earnings per share Earnings per share has been calculated on profit after tax of £461,000 (2004:£201,000) based on the weighted average number of shares in issue, excludingshares held in the Employee Share Ownership Plan of 8,324,063 (2004: 6,300,702).The fully diluted earnings have been further adjusted by the dilutiveoutstanding share options resulting in a weighted average number of shares of8,459,491 (2004: 6,397,703). 6. Investments The investments are stated at cost. The market value of these investments was asfollows: 30 September 2005 31 March 2005 £'000 £'000Falkland Gold and Minerals Limited 2,194 4,246Falkland Oil and Gas Limited 18,903 17,123 21,097 21,369 7. Pension Scheme Liabilities The fair value of the scheme assets and the present value of the schemeliabilities were as follows: 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000Deficit at the beginning of the period (2,431) (2,063) (2,063)Current service costs (9) (10) (20)Cash pension contributions 47 43 84Net financing cost (55) (47) (91)Actuarial (loss)/gain 38 (51)Acquisition of subsidiary (290)Deficit at end of period (2,448) (2,039) (2,431)Deferred tax 734 663 783Net pension scheme deficit (1,714) (1,376) (1,648) 8. Prior Year Adjustments 30 September 2004 31 March 2005 £'000 £'000Prior year adjustmentsOperating Profit 52 100Interest (47) (91)Tax on profit on ordinary activities 5 3Adjustment in respect of FRS 21 18 520 28 532Profit previously reported 173 69Restated profit transferred to reserves 201 601 Actuarial gain/(loss) net of tax 26 (34)Other recognised gains and losses 26 (34) Increase in net pension liability (577) (635)Reduction in shareholder funds (577) (635) There are no prior period movements in the current period as all adjustments inrespect of FRS 17 and FRS 21 have been reflected in the opening position. Restatement of Profit and Loss account reserves 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Opening balance as previously reported 2,405 2,253 2,253Prior year adjustment FRS17 (635) (613) (613)Prior year adjustment FRS21 502 351 351 2,272 1,991 1,991 Retained profit for the period 461 201 601 Other gains and losses (53) 26 (34) Sale of own shares as previously reported 83Dividends Paid (369)Closing balance 2,680 2,218 2,272 9. Reconciliation of movement in shareholder funds 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Opening shareholder funds as previously reported 10,924 3,515 3,515Prior year adjustment re FRS 17 (635) (613) (613)Prior year adjustment re FRS 21 502 351 351Opening shareholder funds as restated 10,791 3,253 3,253 Profit for the period 461 201 601Dividends paid 0 (369)Issue of shares 910 7,228Sale of own shares 112Other recognised gains and losses (53) 26 (34)Net addition to shareholder funds 408 1,137 7,538 Closing shareholder funds 11,199 4,390 10,791 10. The interim report has been prepared on the basis of the accounting policies set out in the group's 2005 Annual Report as amended. 11. The results for the year ended 31 March 2005 as shown in thestatement do not constitute statutory accounts but are an abridged version ofthe Company's 2005 accounts as amended which have filed with the Registrar ofCompanies and upon which the audit report was unqualified and did not contain astatement under Section 237 (2) or (3) of the Companies Act 1985. The InterimReport was approved by the Board on 1 December 2005. NOTES TO THE UNAUDITED CONSOLIDATED CASH FLOWFor the six months ended 30 September 2005 Unaudited 6 Unaudited 6 Audited Year Months Months ended to 30 September to 30 September 31 March 2005 2004 2005 As restated As restated £'000 £'000 £'000Reconciliation of net cash flow tomovement in net debtIncrease / (Decrease) in cash in the 531 (1,002) (726)periodCash outflow from decrease in debt 102 - -Cash inflow from increase in debt (2,409) (500) (848)Movement in net debt in period (1,776) (1,502) (1,574)Change in net debt resulting from (143) 209(disposals) / acquisitions (1,919) (1,502) (1,365) Net (debt) / cash at start of period (432) 933 933 Net (debt) cash at end of period (2,351) (569) (432) Reconciliation of operating profit tooperating cash flowsGroup operating profit 780 349 992Amortisation of goodwill 102 65Depreciation charges 210 126 292(Increase) / Decrease in stocks (211) 132 (229)Decrease / (Increase) in debtors 94 (52) (256)(Decrease) in creditors and provisions (510) (1,318) (87) Net cash inflow from operating activities 465 (763) 777 Analysis of change in net debt As at 31 March Cash Other non-cash As at 2005 Flows changes Disposals 30 September 2005 £'000 £'000 £'000 £'000 £'000Cash at bank and in hand 914 451 (143) 1,222Overdraft (80) 80 0Debt due within one year (435) 102 (276) (609)Debt due after one year (831) (2,409) 276 (2,964)Total (432) (1,776) 0 (143) (2,351) This information is provided by RNS The company news service from the London Stock Exchange