POB.L Regulatory News (POB)

1 Feb 2005 07:00

Portman Building Society01 February 2005 PORTMAN BUILDING SOCIETY PRESS RELEASE For Immediate Release1 February 2005 PORTMAN ANNOUNCES 2004 ANNUAL RESULTS - EXCEPTIONAL PERFORMANCE IN CHALLENGING YEAR - Portman Building Society delivered an exceptional set of annual results today,underlining its position as one of the UK's leading building societies. Key Achievements: • Growth in total assets of 10% to £15.5 billion• Profit before tax up 16% to £78.1 million• Management expenses ratio of 0.77%• Record new mortgage lending of £3.6 billion, up 24%• Successful integration of The Staffordshire• Mortgage and general insurance regulation implemented• Launch of Portman Direct Commenting on this success, Portman Chief Executive Robert Sharpe said, "2004was a year of challenges and triumphs for the Group and I am pleased to reportanother record set of annual results. We have continued to demonstrate ourobjective to thrive as a mutual by delivering consistent and fair value to ourgrowing membership base through our products and services. Whilst deliveringthese benefits and growing the business, we have also maintained cost efficiencyand are prudent in our risk management. "We successfully achieved the implementation of compliant systems in readinessfor mortgage and general insurance regulation without compromising on growth orcustomer service, and we will continue to develop our core systems to improveour products and services even further. "Following our ground-breaking merger with The Staffordshire at the end of 2003,we had a clear objective to integrate the two operations in order to deliver thebenefits of the merger - I am pleased to report that this process is on trackand the initial stages of this integration have now been successfully achieved. "2005 will present its own challenges to the industry, the most immediate beingthe slowdown in the housing market. Despite this, I am confident that PortmanBuilding Society will continue to develop as a highly successful, independentand dominant force in the building society sector and in the financial servicesindustry as a whole", Sharpe concluded. Business Highlights: Mortgages Record new mortgage volumes at £3.6 billion were 24% up on the previous recordhigh in 2003. The Group took an aggressive approach to lending during the firsthalf of the year enabling it to manage the necessary systems changes in thesecond half in preparation for mortgage regulation. The Group also continued to be active in lifetime mortgages, with its market-leading product taking a 6%market share of business written. Savings and investments During 2004, the Society continued to grow its retail share balances, whichincreased by £738 million. This was achieved through the continued good value ofexisting products and the launch of a number of competitive new accountsincluding: • Classic Gold (a 60 day notice account) and Signature Gold (a new cheque book account)• Third and fourth issues of the Bonus Extra 75 day notice account• Rollover Bond with a market-leading rate• Guaranteed Equity Bond providing a low risk opportunity to benefit from gains in the stock market The Mortgage Works During 2004, the Society completed the final phase of the integration of TheMortgage Works, moving all its operations to Bournemouth. The Mortgage Works isthe Group's specialist mortgage lender, providing a presence in thenon-conforming lending market, generating additional profits for the core memberbusiness. The operation continues to go from strength to strength, with lendingvolumes significantly exceeding the target for the year, increasing some 47%over 2003, and profits increasing to £17.3 million. -ENDS- Editor's notes: The Group Income and Expenditure Account, Balance Sheet and Cash Flow Statementfollow this release. • Portman Group consists of: i. Portman Building Society has been established for over 150 years tracing its roots back to 1846, making it the third oldest building society in the UK. It is a top four UK building society with assets of £15.5 billion and employs over 2,000 staff. With some 150 branches based predominantly in the South of England, the Society serves over 1.5 million members. ii. The Staffordshire is a trading name of Portman Building Society. The brand was created as a result of the merger between Portman Building Society and Staffordshire Building Society, which completed on 31 December 2003. The Staffordshire has 39 branches in the West Midlands and its administrative centre is in Wolverhampton. iii. The Mortgage Works (UK) plc is a specialist mortgage lender which has been operating in the mortgage market for the last 15 years. Its product range, available through brokers, includes; buy-to-let, self-certification and complex prime, a product designed to provide an individual solution to borrowers' needs. iv. Portman Channel Islands Ltd is based in the Bailiwick of Guernsey and, as the offshore deposit taking subsidiary of Portman Building Society, offers a safe home for its investors' money together with friendly and efficient service. Further comment from the Society's Executive Team on the Annual Results can bearranged by contacting the Press Office. A selection of photographs is alsoavailable. Readers requiring further information about any of the products or servicesoffered by the Portman Group should visit their local branch of Portman or TheStaffordshire or call 0845 60 90 600 for details. Information can also be foundby logging onto www.portman.co.uk and www.thestaffs.co.uk For further information please contact:Helen ShawGroup Communications Manager01202 56225607887 830123 GROUP INCOME AND EXPENDITURE ACCOUNTfor the year ended 31 December 2004 2003 £m £m % Change Net interest receivable 150.7 120.3 25% Other income and charges 41.5 33.5 24% Total income 192.2 153.8 25% Administrative expenses (101.1) (75.2) 34% Depreciation and amortisation (12.6) (10.1) 25% Operating profit before provisions 78.5 68.5 15% Provisions (0.4) (1.1) -64% Profit before tax 78.1 67.4 16% Taxation (23.1) (20.6) 12% Profit after tax 55.0 46.8 18% Financial ratios: Profit after tax as % of mean total assets 0.37% 0.42% Management expenses as % of mean total assets 0.77% 0.76% GROUP BALANCE SHEETas at 31 December 2004 2003 £m £m % Change ASSETS Liquid assets 3,524 3,030 16% Loans to customers - residential mortgages 11,621 10,621 9% - other 162 270 -40% Fixed and other assets 197 191 3% Total assets 15,504 14,112 10% LIABILITIES AND RESERVES Shares 10,759 10,021 7% Borrowings 3,743 3,060 22% Other liabilities 75 134 -44% Subordinated debt 105 130 -19% Subscribed capital 185 185 - Reserves 637 582 9% Total liabilities and reserves 15,504 14,112 10% Movements: Gross residential lending 3,602 2,915 Net increase in residential mortgages 1,000 2,687 Net increase in share balances 738 2,361 Financial ratios: Liquid assets 24.3% 23.2% Gross capital 6.4% 6.9% Solvency 13.5% 14.2% Tier 1 capital 11.7% 11.7% CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 December 2004 2003 £m £m Net cash inflow from operating activities 390.2 519.0 Returns on investments and servicing of finance (19.8) (13.0) Taxation (20.0) (27.5) Net financial investment (341.7) (598.9) Net capital investment (12.4) (9.2) Cash acquired on transfer of engagements - 40.4 Financing (25.0) 125.0 (Decrease)/increase in cash (28.7) 35.8 NOTES TO THE FINANCIAL INFORMATIONfor the year ended 31 December 2004 1. The financial information set out above, which was approved by the Board of Directors on 31 January 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 Group accounting policies set out in the Annual Accounts to 31 December 2004. 3. Reconciliation of profit before tax to net cash inflow from operating activities: 2004 2003 £m £m Profit on ordinary activities before tax 78.1 67.4 Depreciation and amortisation 12.6 10.1 Net increase in: Loans and advances to customers (888.0) (1,062.7) Loans and advances to credit institutions (173.2) (116.4) Net increase/(decrease) in: Shares 688.1 882.4 Owed to credit institutions/other customers (165.8) 279.5 Debt securities in issue 839.1 432.5 Other (0.7) 26.2 Net cash inflow from operating activities 390.2 519.0 Analysis of cash balances included in the balance sheet: Cash in hand and balances with Bank of England 8.1 9.8 Loans and advances to credit institutions repayable on demand 17.6 44.6 25.7 54.4 Decrease in cash (28.7) 4. 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, and those for the year ended 31 December 2004 will be filed following publication, with the Financial Services Authority. The Independent Auditors' Reports on the Annual Accounts for the years ended 31 December 2004 and 31 December 2003 were unqualified. This information is provided by RNS The company news service from the London Stock Exchange