LBS.L Regulatory News (LBS)

17 Feb 2005 07:00

Leeds & Holbeck Building Society17 February 2005 Embargoed until 7am Thursday 17th February A strong return to savings contributes to record results Audited annual results for 2004 Leeds & Holbeck, the UK's 8th largest building society, today (Thursday 17February 2005) announces record full year results for 2004 across all areas ofthe business. 2004 Highlights •Assets increase by 15% to a record of £6.1bn •Pre-tax profits up by 14% to a record £41.7m •Best ever savings balances increase of £468m to £4.1bn •Record gross mortgage lending of £1.6bn - up by 13% •Record net mortgage lending of £581m •Another big improvement in efficiency with cost asset ratio falling by 5p to just 67p per £100 of assets (72p in 2003) •Cost to income ratio of just 47p per £1 of income •Net interest margin reduces even further to 1.07% from 1.11% Chief Executive, Ian Ward, said: "We delivered an excellent financialperformance in 2004. With profits, lending and savings balances all at recordlevels, these are the Society's best ever results."The housing market slowed in the second half of last year but our mortgagebusiness remained strong. Gross mortgage lending increased 13% to £1.6bn, easilyexceeding any previous total. Net lending of £581m was also a record."Our assets grew by 15% to £6.1bn, only a year after achieving the £5bnmilestone."During 2004 there was a strong return to traditional savings accounts. Buildingsocieties' performance as a whole improved substantially compared to 2003, withnet receipts increasing by more than 80% during the year to over £9bn. Evenagainst this significant rise for societies, our increase in total savingsbalances of £468m was more than a third greater than our natural market share. "Our disciplined approach to cost control improved our cost asset ratio by 5p to67p per £100 of assets. We are very careful to invest in business activitiesthat generate a significant contribution for the Society whilst ensuring we donot incur unnecessary extra overheads. A key measure of this is thecost-to-income ratio and the Society's is one of the lowest in the industrywhich means that for every £1 in income we spend only 47p."All of these factors mean that pre-tax profits rose 14% to a record level of£41.7m. This is a great achievement for our business. As an independent mutualbuilding society we consistently deliver superior performance across a range ofmeasures whilst continuing to offer great value products to benefit ourmembers". Note to EditorsA copy of the Society's results for 2004 is attached.The Society's press office would be happy to arrange interviews with theSociety's Chief Executive, Ian Ward or Deputy Chief Executive & FinanceDirector, David Pickersgill. For further information please contact:Karen Wint (Head of Marketing & PR)0113 225 7731 or 07989 386772 (out of office hours)kwint@leedsandholbeck.co.ukGary Brook (PR Manager)0113 225 7606 or 07866 455111 (out of office hours)gbrook@leedsandholbeck.co.ukFor further comment on the results please contact:Ian Ward (Chief Executive) - 0113 225 7501 (direct line)David Pickersgill (Deputy Chief Executive & Finance Director) - 0113 225 7502(direct line) LEEDS & HOLBECK BUILDING SOCIETY GROUP RESULTS FOR THE YEAR TO 31 DECEMBER 2004 Income and Expenditure (Audited) (Audited) Year Year to to 31 December 31 December 2004 2003 ----------- ----------- £M £M Interestreceivable andsimilar income 300.2 235.1Interestpayable andsimilarcharges (238.8) (178.6) ----------- -----------Net interestreceivable 61.4 56.5Fees andcommissionsreceivable 25.3 26.2Fees andcommissionspayable (5.3) (5.5)Otheroperatingincome 0.5 0.4 ----------- -----------Total income 81.9 77.6Administrativeexpenses (36.8) (34.5)Depreciationandamortisation (1.8) (2.2)Provisions forbad anddoubtful debts (1.6) (4.3) ----------- -----------Profit onordinaryactivitiesbefore tax 41.7 36.6Tax on profiton ordinaryactivities (12.6) (11.0) ----------- -----------Profit for thefinancial year 29.1 25.6 =========== =========== Balance Sheet (Audited) (Audited) 31 31 December 2004 December 2003 ----------- ----------- £M £MAssetsLiquid assets 1,194.5 1,008.1Loans andadvances tocustomers 4,885.4 4,293.4Tangible fixedassets 25.0 24.4Other assets 11.6 10.5Prepaymentsand accruedincome 12.1 6.6 ----------- -----------Total assets 6,128.6 5,343.0 =========== =========== LiabilitiesShares 4,089.0 3,621.4Borrowings 1,671.4 1,383.5Otherliabilities 21.0 19.3Accruals anddeferredincome 5.6 6.3Subscribedcapital 25.0 25.0 ----------- ----------- 5,812.0 5,055.5Revaluationreserve 13.5 13.4Generalreserve 303.1 274.1 ----------- -----------Totalliabilities 6,128.6 5,343.0 =========== =========== Cash Flow Statement (Audited) (Audited) Year Year to to 31 December 31 December 2004 2003 ----------- ----------- £M £M Net cashinflow fromoperatingactivities(see below) 144.9 83.6Returns oninvestmentsand servicingof finance (3.3) (3.3)Taxation (13.2) (13.5)Net capitalexpenditure (2.4) (2.6)Net financialinvestment (120.2) (64.0) ----------- -----------Increase incash 5.8 0.2 =========== =========== Reconciliation of Operating Profit to Net CashInflowFrom Operating Activities OperatingProfit 41.7 36.6Netincrease/(decrease) inaccruals anddeferredincome 30.0 (2.0)Depreciationandamortisation 1.8 2.2Net (increase)in loans andadvances tocustomers (593.8) (420.5)Net increasein shares 448.7 238.1Net increasein amountsowed to creditinstitutions,debtsecurities inissue andothercustomers 276.1 233.0Net (increase)in loans andadvances tocreditinstitutions (59.5) (17.7)Othermovements (0.1) 13.9 ----------- ----------- 144.9 83.6 ----------- --- ----------- KEY RATIOS (Audited) (Audited) Year Year to to 31 December 31 December 2004 2003Cost to assetratio 0.67% 0.72%Gross capital 5.9% 6.2%Free capital 5.8% 6.1%Solvency ratio 12.3% 13.0%Liquidity 20.7% 20.1%Notes: 1. •The financial information set out above, which was approved by the Board on 16 February 2005, does not constitute accounts within the meaning of the Building Societies Act 1986. 2. •The financial information has been prepared on the basis of the accounting policies adopted by the Society and set out in the Annual Accounts to 31 December 2004 and 31 December 2003. 3. •The financial information for the years ended 31 December 2004 and 31 December 2003 has been extracted from the Annual Accounts for those years. Annual Accounts for the year ended 31 December 2003 have been filed with the Financial Services Authority and those for the year ended 31 December 2004 will be filed with the Financial Services Authority following publication. The Auditors' report on the Annual Accounts for both years were unqualified. This information is provided by RNS The company news service from the London Stock Exchange