Fih Group Regulatory News (FIH)

6 Dec 2006 07:12

Falkland Islands Holdings PLC06 December 2006 6 December 2006 Falkland Islands Holdings plc Interim Results for the six months ended 30 September 2006 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 interim results for the six months ended 30 September 2006. Financial Highlights • Turnover from continuing activities was £7.3 million (2005: £7.6million) • Underlying profits before tax were £696,000* (2005: £747,000) • EPS on underlying profits were 5.6p (2005: 6.1p) • Gross cash resources increased to £4.1 million (31 March 2006 £3.6m) • No interim dividend is proposed Operating Highlights • Falkland Islands' businesses produced satisfactory results: o Encouraging illex squid catches. o West Store continued to make progress o Homecare impacted by reduction in housing starts and increased competition o Insurance broking & financial services income increased • Good results from Portsmouth Harbour Ferry Company ("PHFC") despite the absence of maritime festivals. PHFC was also awarded a 3 year contract to operate a water taxi service for Berkeley Homes • Exploration investments : o Falkland Oil & Gas now funded for 2007 and work continues to define, and prioritise the top prospects with a view to drilling in 2008 o Falkland Gold & Minerals is now concentrating on three areas of interest Outlook • Economic conditions in the Falklands expected to remain unchanged. • Trading is expected to continue to benefit from exploration activity and the 25th Commemoration. • Solid performance from PHFC anticipated, despite entering slow Winter period • Substantial exposure to oil and minerals exploration through shareholdings in FOGL and FGML. • Continue to seek earnings enhancing complementary acquisitions. * Before the amortisation of goodwill, charges for share based payments and exceptional items. David Hudd, Chairman of Falkland Islands Holdings plc, said: "The Group has made satisfactory progress in the first six months. Activity onthe islands was as anticipated, whilst the improvement in illex catches in Apriland May was encouraging. PHFC made a solid contribution after last year'sexceptional first half. For the full year we anticipate a similar level of underlying profit for theGroup to that achieved in 2005/6." Enquiries: Falkland Islands Holdings Tel: 01279 461 630 David Hudd, Chairman Tel: 07771 893 267 John Foster, Managing Director Tel 07710 764 556 College Hillo Nick Elwes Tel: 020 7457 2020 Chairman's Statement and Review of Operations Overview We are pleased to report satisfactory interim results for the half year to 30September 2006. Underlying profits before tax, and before the amortisation ofgoodwill and charges for share based payments were in line with our expectationsat £696,000 (2005: £747,000). Profits on ordinary activities before taxation (after goodwill amortisation,share based payment charges and in the prior year, profits on the sale ofdiscontinued operations) were £549,000 (2005: £699,000). Earnings per share, onreported profits were 4.0p per share (2005:5.2p) and earnings per share onunderlying profits before tax excluding exceptional items the amortisation ofgoodwill, and share based payment charges were 5.6 p per share (2005: 6.1 p). Asin previous years no interim dividend is proposed. Group turnover from continuing activities was down 4.4% at £7.3 million (2005:£7.6 million).The reduction was largely accounted for by timing differences onfleet vehicle sales in the Falklands and the absence of maritime festivals inPortsmouth Operations In the Falklands the year started encouragingly with much improved illex squidcatches in April and May which had a positive impact on the fishing agency. Inretail operations sales in the Group's flagship West Store continued to makeprogress but the Homecare business was impacted by a reduction in new housingstarts and increased competition. The Group's financial services operations,insurance broking and property rental activities all performed well. Motorvehicle sales were low in the first half with over 80% of sales expected in thesecond half of the year. Underlying profits before tax from Falkland operationsfell back from £340,000 to £316,000 in the 6 months to 30 September 2006 onturnover of £5.5 million(2005: £5.8million) The Portsmouth Harbour Ferry Company achieved a good result and despite theabsence of the maritime festivals of 2005 generated underlying profits beforetax of £380,000 compared with £407,000 in 2005. Turnover declined by 3.7% in theabsence of the boost provided by the IFOS and Trafalgar events. Howeverselective fare rises in June 2006 mitigated the impact on profits. In August wewere successful in winning a 3 year contract to operate a water taxi serviceacross the harbour on behalf of Berkeley Homes and this made a smallcontribution in the current period. 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") The key exploration objectives for FOGL in 2006/7 are to define and prioritisethe top prospects for drilling. The analysis of the results of the seismic workcarried out over the last Austral Summer has been completed and exploration workis shortly to commence in the Falklands. That analysis continues to support thepresence of hydrocarbons in FOGL's licence area and work is now focussed on thebest prospects which will generate the targets for drilling in 2008. TRACS International have also recently published an independent technical reportindicating that in their opinion FOGL's top 10 prospects have an unriskedresource potential of 10 billion barrels and the risked reserves attributable toFOGL were 863 million barrels. This report which is available on FOGL's web sitegives an indication of the huge potential upside which exists for us asshareholders. The Summer field work, which will start later this month, comprises a programmeof Electromagnetic logging ("CSEM") and further 2D which will be guided by theCSEM results. CSEM is fairly new technology which has proved effective inconfirming the presence of hydrocarbons in prospects identified by positiveseismic results. The analysis of this further work will become available during2007 and will provide the data necessary for further farm out discussions andrig acquisition negotiations. FOGL secured additional financing in December when RAB, their largestshareholder, agreed to subscribe a total of £8 million for 5 year 6% convertibleloan notes. Their commitment means that FOGL will have sufficient cash tofinance the current exploration programme and additional work through 2007. Thenotes are convertible into FOGL shares at 80p per share and RAB was also issuedwith 6 million warrants to subscribe for new FOGL shares at 100p per share Fullexercise of these securities would increase the issued capital of FOGL by 16million shares (17%). The market value at 30 September 2006 of the Group's 15 million shares in FOGL(16.3%) at 30 September 2006 was £12.1 million compared to a book value of £2.4million. Falkland Gold and Minerals ("FGML") Exploration drilling and sampling have continued through the Austral winter andefforts are now being concentrated on three distinct areas of interest known asTarget 11 (Glorious Hill) Black Shale and Target 25. They are all on the EastFalklands and within easy reach of FGML's Goose Green base. FGML had cash balances of £5.8 million at 30 September 2006 and explorationexpenditure is continuing at a cash cost of some £150,000 per month. The market value at 30 September 2006 of the Group's shareholding of 11,250,000shares in FGML (14.4%) at 30 September 2006 was £ 928,000 compared to cost of£200,000. Balance Sheet and Cash Flow With the new shipping arrangements with the Ministry of Defence and DHL in placesince October 2005 we were able to take advantage of the more frequent supplyschedule to reduce stock levels from £3.5 million to just over £2.7 million at30 September 2006. As a result the Group's cash resources increased to over £4.1million at 30 September 2006 (2005: £1.2 million) and bank loans were reduced by£116,000 to £3.2 million. Outlook The Group has a strong cash position and we continue to search for suitableopportunities to make acquisitions to increase shareholder value. Little changeis expected in economic conditions in the Falklands and for the Groupunderlying profits for the full year are expected to be at a similar level tothose achieved in 2005/6. David Hudd John Foster Chairman Managing Director UNAUDITED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Unaudited Audited 6 Months to 6 Months to Year ended 30 September 30 September 31 March 2006 2005 2006 As restated As restated £'000 £'000 £'000 TurnoverContinuing operations 7,285 7,619 15,209Discontinued operations - 527 527 7,285 8,146 15,736 Cost of sales (4,521) (5,271) (9,855) Gross Profit 2,764 2,875 5,881 Administrative expenses (2,167) (2,101) (4,471)Amortisation of goodwill (102) (102) (204)Administrative expenses - exceptional costs - - (487)Total Administrative Expenses (2,269) (2,203) (5,162) Other Operating Income 124 78 344 Continuing operations 619 749 1062Discontinued operations - 1 1Group Operating profit (Note 1) 619 750 1,063 Profit on sale of discontinued operations - 84 84 Profit on sale of fixed asset investment - - 2,135 Net Interest (Note 2) (70) (135) (264) Profit on ordinary activities before taxation 549 699 3,018 Taxation on profit on ordinary activities (208) (268) (374)(Note 3) Profit on ordinary activities after taxation 341 431 2,644 Earnings per share (Note 4) - Basic 4.0p 5.2p 31.8p - Fully diluted 4.0p 5.1p 31.3p UNAUDITED CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 30 Sept 2006 30 Sept 2005 31 March 2006 £'000 £'000 £'000Fixed assetsIntangible assets 3,877 4,034 3,979Tangible assets 7,929 8,520 8,042Investments (Note 5) 2,610 2,900 2,610 14,416 15,454 14,631Current assetsStocks 2,751 3,519 3,107Debtors 1,466 1,553 1,837Cash at bank and in hand 4,160 1,222 3,601 8,377 6,294 8,545Creditors: amounts falling due (3,442) (4,989) (4,797)within one year Net current assets 4,935 1,305 3,748 Total assets less current 19,351 16,759 18,379liabilities Creditors: amounts falling due (3,193) (2,964) (2,765)after more than one yearProvision for liabilities and (855) (882) (853)charges Net assets excluding pension 15,303 12,913 14,761liabilities Net pension scheme liabilities (1,918) (1,714) (1,909) Net Assets 13,385 11,199 12,852 Capital and reservesCalled up share capital 847 838 838Share Premium account 7,207 7,061 7,064Other Reserves 703 703 703Revenue Reserves 4,628 2,597 4,247Equity shareholders' funds 13,385 11,199 12,852 UNAUDITED CONSOLIDATED CASH FLOW for the six months ended 30 September 2006 Unaudited Unaudited Audited 6 months to 6 months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 £'000 £'000 £'000 Cash flow from operating 722 465 1,665activities (Note 9)Returns on investmentand servicing of financeInterest received 21 14 38Interest paid (51) (94) (203) TaxationUK Corporation tax (53) (82) (250)Overseas taxation paid - - (141) Capital ExpenditurePurchase of tangible (116) (242) (505)fixed assetsPurchase of investments - (2,000) (2,000)Receipts from sale of - 5 15tangible fixed assetsReceipts from sale of - - 2,427investment AcquisitionsSale of subsidiary - 158 178undertaking Dividends paid - - (502) Cash (Outflow) / Inflow 523 (1,776) 722before financing FinancingShares issued 152 - 3Repayment of secured (116) (102) (524)loanRepayment of loan notes - - (43)New secured loan - 2,409 2,609 Increase in cash (Note 9) 559 531 2,767 Consolidated Statement ofTotal Recognised Gains andLosses Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000 Profit for the period 341 431 2,644after taxationActuarial (loss) / gain (7) - (31)Tax on actuarial (loss) / - (53) -gain Movement on deferred tax 2 - (123)asset relating to pensionscheme Total gains and losses 336 378 2,490recognised in the period Prior year adjustment FRS 20 (70) Total gains and losses 266recognised since lastannual report Falkland Islands Holdings plc Segmental information Six months to 30 September 2006 General trading in Ferry services in Total Total the the Falkland Islands United Kingdom Falklands Ferry Total 6 months to 6 months to 6 months to Year Ended 30 September 30 September 30 September 31 March 2006 2005 2006 2005 2006 2005 2006 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000Turnover- continuing 5,487 5,753 1,797 1,866 7,284 7,619 11,902 3,307 15,209operationsDiscontinuedoperations-Cobham Travel - - - 527 - 527 - 527 527 5,487 5,753 1,797 2,393 7,284 8,146 11,902 3,834 15,736 Segmentoperatingprofit beforeexceptional 351 395 268 355 619 750 1,043 507 1,550items Exceptional - - - - - - (435) (52) (487)costs Segment 351 395 268 355 619 750 608 455 1,063operatingprofit Profit on sale - - - - - - 2,135 - 2,135of fixed assetinvestments Profit on saleof discontinuedoperations - - - 84 - 84 - 84 84Net Interest (75) (82) 5 (53) (70) (135) (212) (52) (264)Payable Group profit 276 313 273 386 549 699 2,531 487 3,018before taxation Net assets 11,754 7,394 1,631 3,805 13,385 11,199 8,941 3,911 12,852 General trading in Ferry services in Total Total the the Falkland Islands United Kingdom Falklands Ferry Total 6 months to 30 6 months to 6 months to Year Ended September 30 September 30 September 31 MarchUnderlying 2006 2005 2006 2005 2006 2005 2006Profit BeforeTax £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Segment profit 276 313 273 386 549 699 2,531 487 3,018before tax asabove FRS 20 Charge 40 27 5 3 45 30 62 8 70re shareoptions Amortisation of - - 102 102 102 102 - 204 204goodwill Exceptional - - - - - - 435 52 487costs Profit on saleof fixed assetinvestments - - - - - - (2,135) - (2,135) Profit on saleof discontinuedoperations - - - (84) - (84) - (84) (84) Underlying 316 340 380 407 696 747 893 667 1,560Profit BeforeTax EPS onUnderlying PBT- basic 5.6p 6.1p 12.7p- fully diluted 5.6p 6.0p 12.5p Notes to the Interim Statement to 30 September 2006 1. Adoption of FRS 20 The Board has adopted FRS 20 'Share Based Payments' for the first time. Theimpact on the profit and loss account is as follows: 6 Months to 6 Months to Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000Increase in administrative 45 30 70expenses Decrease in operating 45 30 70profit and profittransferred to reserves Total FRS 20 adjustments 45 30 70 2. Interest In addition to bank interest payable, the net interest cost includes the netfinancing cost of the Company's defined benefit pension schemes. 3. Taxation The taxation charge has been estimated at 32.0% (2005: 32.0%) 4. Earnings per share Earnings per share has been calculated on profit after tax of £341,000 (2005:£431,000) based on the weighted average number of shares in issue, excludingshares held in the Employee Share Ownership Plan of 8,453,324 (2005: 8,324,063). The fully diluted earnings have been further adjusted by the dilutiveoutstanding share options resulting in a weighted average number of shares of8,470,867 (2005: 8,459,491).5. Investments The Group has investments in AIM quoted businesses, Falkland Oil & Gas Limited(FOGL) and Falkland Gold & Minerals Limited. The investments are statedat cost. 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000 FGML 200 200 200FOGL 2,410 2,700 2,410 2,610 2,900 2,610 30 September 30 September 31 MarchThe market value of the 2006 2005 2006investments was: £'000 £'000 £'000FGML 928 2,194 1,800FOGL 12,113 18,903 21,500 13,041 21,097 23,300 The market value per FIH 30 September 30 September 31 Marchshare of these investmentswas 2006 2005 2006 Pence / share Pence / share Pence / share FGML 11 26 21FOGL 143 226 257 154 252 278 6. Reconciliation of movement in shareholder funds 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000 Opening shareholder funds as 12,852 10,791 10,791previously reported Profit for the period 341 431 2,644Dividends paid - - (502)Issue of shares 152 - 3Provision for share based 45 30 70paymentsOther recognised gains and (5) (53) (154)losses Net addition to shareholder 533 408 2,061funds Closing shareholder funds 13,385 11,199 12,852 7. The interim report has been prepared on the basis of the accounting policiesset out in the Group's 2006 Annual Report as amended. 8. The results for the year ended 31 March 2006 as shown in the statement do notconstitute statutory accounts but are an abridged version of the Company's 2006accounts as amended which have been filed with the Registrar of Companies andupon which the audit report was unqualified and did not contain a statementunder Section 237 (2) or (3) of the Companies Act 1985. The Interim Report wasapproved by the Board on x December 2006. 9. Notes to the Unaudited Consolidated Cash Flow Reconciliation of net cash flow to movement in net debt Unaudited Unaudited Audited 6 Months to 6 Months to Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000 Increase in cash in the period 559 531 2,767Cash outflow from decrease in 116 102 -debtCash inflow from increase in - (2,409) (2,042)debtMovement in net debt in period 675 (1,776) 725 Change in net debt resulting - (143) -from acquisitionsNet cash/(debt) at start of 293 (432) (432)periodNet (debt) / cash at end of 968 (2,351) 293period Reconciliation of operatingprofit to operating cash flows Group operating profit 619 750 1,063Profit on sale of fixed assets - - (12)Amortisation of goodwill 102 102 204Depreciation & impairment 234 210 838charges(Increase) / decrease in stocks 356 (211) 201(Increase) / decrease in 371 94 (12)debtors(Decrease) in creditors & (1,005) (510) (687)provisionsProvision for share-based 45 30 70paymentsNet cash inflow from operating 722 465 1,665activities Analysis of change in net debt As at As at 1 April Cash 30 September 2006 Flows 2006 £'000 £'000 £'000 Cash at bank and in hand 3,601 559 4,160Debt due within one year (542) 116 (426)Debt due after one year (2,766) - (2,766) Total 293 675 968 This information is provided by RNS The company news service from the London Stock Exchange