PAM.L Regulatory News (PAM)

24 May 2005 07:30

Premier Asset Management PLC24 May 2005 Premier Asset Management plc Interim results for the six months to 31st March 2005 Highlights • Funds under management reached new high, up 14% to £605 million (£530 million - 2004) • Turnover up 43% to £4.55 million (£3.17 million - 2004) • Profit before tax, amortisation of goodwill and exceptional items increased to £172,529 (£168,829 - 2004) • Five third-party OEICs successfully launched, with more under discussion • Two new projects completed since balance sheet date now successfully concluded: • Acquisition of 30% stake in Castlefield Investments LLP, providing access to the charities and small pension fund sectors • Successful launch of £25 million Renewable Energy Generation Ltd, to invest in a number of renewable energy projects including wind farms in EU and EU Accession countries Chairman's Statement Your Company has continued to make progress and to move forward during the firstsix months of the current financial year in the manner anticipated in my lastreport in December 2004. Funds under management have reached a new high, newproducts and relationships have been created, sales of open ended funds havebeen encouraging, new projects are being negotiated and fund performance hasbeen good across the majority of the funds that we manage. In order to achievethis considerable growth in turnover, we have invested in new people andprojects. All of this bodes well for the future in terms of growth in revenuesand in growth in profits. As far as the last six months was concerned, your company made a profit beforetaxation, amortisation of goodwill and exceptional items of £172,529 on aturnover of £4.549m. While turnover rose 43%, the profit is almost identical tothat for the same period last year of £168,829. Funds under management at the end of March stood at £605m as compared to £530mat the same time last year, representing an increase of 14%. The increase overthe period reflects the impact of positive sales for both the core fund of fundspropositions as well as the successful launch of a number of new third partyOEIC initiatives. During the six months ended 31st March 2005, net sales offunds across the range totalled some £38m which is extremely pleasing. Whilesales of structured plans have been slower than in the previous period, theincreased investor confidence has lead to renewed interest in equity linkedproducts rather than capital protected ones. During the course of the period under review, the team at Premier was involvedin negotiating two new projects for your Company. Both of these were announcedafter the end of the period under review, but are worthy of mention here as theywill add revenues and profits for your Company, particularly as we move into thenext financial year. On the 27th April your Company was very pleased to announce the acquisition of a30% stake in Castlefield Investments LLP. Castlefield is a boutique investmentmanager based in Manchester. They look after some £110m of assets, mostlysegregated portfolios, on behalf of charities and small pension funds, an areayour Company has not been directly involved in until now. During various discussions with the partners of Castlefield it became clear thatyour Company has the sales, marketing and operational expertise to help themdevelop their business, whilst they have the institutional investment processthat would allow Premier to gain a foothold in the charities market, increasereach in the pensions market for intermediary distribution, as well asestablishing a presence in the North of England. Your Company is acquiring a 30% interest in the partnership for £700,000,subject to certain performance criteria, most of which will be settled inPremier shares. Your Company will generate revenue through a share of thepartnership profits as well as through moving Castlefield's clients on to thePremier back office platform. Your Board is pleased to have been able toestablish the relationship and is looking forward to working with the team atCastlefield to build up both their assets under management and Premier'sprofitability. Further, on the 16th May, your Company launched Renewable Energy Generation Ltd.This £25m Guernsey based company will be jointly managed by Premier and Probyn &Co, one of North America's leading renewable energy specialists. It will utilisethe expertise of Premier's in house Utilities team alongside the team at Probyn& Co, to seek out, evaluate and invest in a number of renewable energy projects.The focus will be on opportunities within the EU and EU accession countries andin particular on wind farms, where the managers believe there are goodopportunities for attractive investment returns. Your Board anticipates thatover time it may be possible to attract further assets to this excitinginvestment area and looks forward to working with the directors of REG Ltd toensure that this project is a success for investors and for your Company. Looking forward, your Board has a number of additional projects under activeconsideration which are designed to increase both funds under management andprofitability across the various operating divisions of the Company. These willcontinue to be investigated with a view to bringing them to a satisfactoryconclusion wherever possible. Elsewhere, the Premier Advantage Funds, which is the brand used for marketingyour Company's specialist equity funds, have been performing well. Inrecognition of this and in order to promote the brand to a wider audience, yourCompany has appointed a full time institutional sales person to actively marketthe funds. Your Board is hopeful that this initiative, coupled with continuedgood performance, will deliver increased assets under management for yourCompany. On the Fund of Funds side, the team at Premier is continuing to promote both thein house fund range as well as working with existing and new potential thirdparty distributors. Since March 2004, your Company has launched five third partyOEIC structures and is in negotiation with a small number of other firms toincrease this number over the coming months. Your Board is hopeful that assetsunder management in this area will continue to grow still further, havingreached some £90m at the end of March 2005. In late December 2004, your Company announced the Group's participation in thesettlement of the split capital investigation and the £239,000 of costsassociated with this are shown as an exceptional item in the profit and lossaccount. Finally, your Board announced on the 3rd May that after much thought andconsideration, Jonathan Fry, Joint Chief Executive, decided to resign as adirector of the company in order to seek new challenges in his career. The Boardrecognises that Jonathan has made a valuable contribution to the development ofthe company over many years and would like to wish him well for the future. MikeO'Shea has accepted the role of Chief Executive Officer and the Board has everyconfidence in the strength of experience and skills of the Executive Committeeto implement the Company's strategy. Looking forward, your Board believes that your Company will trade satisfactorilyduring the second half of the current year. Also, it is optimistic for theoutlook for the following financial year provided that there is no seriousdownturn in global equity markets. It remains for me to thank the team at Premier for their hard work and effortsduring the first half of the current year and I look forward to their continuedsupport as we grow the various businesses. Roger Wood Chairman 23 May 2005 Consolidated Profit and Loss Account For the six month period ended 31st March 2005 Notes 6 Months to 6 Months to 31st March 2005 31st March 2004 £ £Turnover 2 4,549,061 3,174,425 Operating expensesAmortisation of goodwill (116,655) (114,259)Other operating expenses (4,431,560) (3,057,013)Exceptional item 3 (239,004) - Operating (loss)/profit (238,158) 3,153 Net interest payable and similar charges 55,028 51,417 (Loss)/profit on ordinary activities before taxation (183,130) 54,570 Tax on (loss)/profit on ordinary activities - - (Loss)/profit on ordinary activities after taxation (183,130) 54,570Dividends (non equity) - (12,450) Retained (loss)/profit for the period (183,130) 42,120 Earnings per share before amortisationof goodwill and exceptionals- basic 4 1.32 1.31- diluted 4 1.30 1.30 Earnings per share after amortisationof goodwill and exceptionals- basic 4 (1.39) 0.35- diluted 4 (1.38) 0.35 All the amounts relate to continuing operations. The group has no recognisedgains or losses other than those reported above. The accompanying accounting policies and notes form an integral part of thesefinancial statements. Consolidated Balance Sheet At 31st March 2005 31st March 30th September Notes 2005 2005 2004 2004 £ £ £ £Fixed Assets- Intangible fixed assets 2,978,864 3,083,168- Tangible fixed assets 314,619 335,115 3,293,483 3,418,283Current Assets- Investments 70,885 90,108- Debtors 9,482,745 2,859,154- Cash 3,153,360 2,749,287 12,706,990 5,698,549 Creditors: Amounts falling due within one year (10,730,573) (3,273,497) Net current assets 1,976,417 2,425,052 Total assetsLess current liabilities 5,269,900 5,843,335 Called up share capital 1,313,597 1,309,917Share premium account 620,204 606,772Capital redemption reserve 830,000 830,000Profit and loss account 5 2,506,099 3,096,646Shareholders' funds 5,269,900 5,843,335 Consolidated Cash Flow Statement For the six month period ended 31st March 2005 31st March 30th September Notes 2005 2005 2004 2004 £ £ £ £Net cash inflow from Operating 769,102 526,675activities Returns on investments andservicing of finance:Interest received 59,186 51,523Interest paid (4,158) (106) Net cash inflow from returns on 55,028 51,417investments and servicing offinance TaxationUK corporation tax paid - - Capital expenditure andfinancial investment:Purchase of tangible fixed assets (16,682) (13,850)Purchase of investments (49,000) (50,700)Purchase of goodwill (12,351) (105,145)Sale of tangible fixed assets 1,955 7,855Sale of investments 251,201 93,321 Net cash inflow/(outflow) from 175,123 (68,519)capital expenditure andfinancial investment FinancingRepurchase of shares in treasury (447,279) -Issues of shares (net of expenses) 17,114 - Net cash outflow from (430,165) -financing Increase in cash 569,088 509,573 Notes to the Interim Statement For the six month period ended 31st March 2005 1. Basis of Preparation These interim financial statements, which are unaudited, comply with relevantaccounting standards and should be read in conjunction with the Annual Reportand Accounts for the year ended 30th September 2004 which have been filed atCompanies House and which contain an unqualified audit report. The accountingpolicies have been applied on a consistent basis with those applied in 2004. 2. Turnover Analysis Turnover relates to commissions and fees receivable, and arose primarily in theUnited Kingdom. A split of turnover by geographical region and activity are asfollows: Geographical analysis Six Months to 31st Six Months to 31st March 2005 March 2004United Kingdom 94.6% 90.8%Ireland 5.0% 7.0%Luxembourg 0.0% 1.5%North America 0.4% 0.7% Activity Analysis Six Months to 31st Six Months to 31st March 2005 March 2004 £'000 £'000Fund management fees 3,464 2,054Initial Fund Commissions 570 578Private Client Fees 178 147Private Client Commissions 39 242Other 298 153 4,549 3,174 Profit on ordinary activities before taxation, amortisation of goodwill andExceptional items are calculated as follows: Six Months to 31st Six Months to 31st March 2005 March 2004 £ £(Loss)/Profit on ordinary activities before taxation (183,130) 54,570amortisation of goodwill 116,655 114,259Exceptional Item 239,004 - Profit on ordinary activities before taxationamortisation of goodwill and exceptional 172,529 168,829items 3. Exceptional Item As previously noted in the 2004 annual report and accounts, Premier FundManagers Ltd (PFM) was assisting the Financial Services Authority (FSA) with itsindustry wide investigation of the split capital investment sector. The FSA hadsuggested to PFM and the other firms under investigation, that the partiesshould consider making a contribution into a fund that was to be established bythe FSA for the purpose of making distributions to eligible investors who feltthat they would have a claim for losses as a result of investing in certainsplit capital investments. On 24th December 2004 PFM, along with a number ofother firms, reached an agreement with the FSA, bringing to an end the splitcapital investment sector investigation. In this respect PFM agreed to pay£150,000 without admission of liability. In addition to the contribution, PFMalso incurred legal fees during the six-month period to 31st March 2005 of£89,004. 4. Earnings Per Share The calculation of earnings per share has been made in accordance with the FRS14 'Earnings Per Share'. Six Months to 31st March 2005 Earnings Weighted Per Share Average No of Amount pence £ shares Attributable loss (183,130) 13,133,140 -1.39Amortisation of goodwill 116,655 - 0.89Exceptional item 239,004 - 1.82Adjusted earnings per share 172,529 13,133,140 1.32Share options - 104,007 0.00Diluted earnings per share (183,130) 13,237,147 -1.38Amortisation of goodwill 116,655 - 0.88Exceptional item 239,004 - 1.80Diluted adjusted earnings per share 172,529 13,237,147 1.30 Six Months to 31st March 2005 Earnings Weighted Per Share Average No of Amount pence £ shares Attributable loss 42,120 11,909,418 0.35Amortisation of goodwill 114,259 - 0.96Exceptional item - - 0.00Adjusted earnings per share 156,379 11,909,418 1.31Share options - 91,676 0.00Diluted earnings per share 42,120 12,001,094 0.35Amortisation of goodwill 114,259 - 0.95Exceptional item - - 0.00Diluted adjusted earnings per share 156,379 12,001,094 1.30 5. Shareholders' Funds On 23 February 2005 the company purchased 616,273 of its own ordinary shares of10p each at a price of 72p per share. These shares are currently being held intreasury with the intention that they will be used to fund future acquisitions.The accounting treatment for the holding of shares in treasury requires that thecompany reduces the profit and loss account reserve by the full amount of theconsideration. This information is provided by RNS The company news service from the London Stock Exchange