Last checked at 17 Nov 2009 07:00
Walker Crips Group PLC (WCW)
17 November, 2009
7:00A - Interim Results
Press Release Embargoed until 7.00am, 17 November 2009.
Walker Crips Group PLC
Results for the six months ended 30 September 2009
Walker Crips Group PLC ("Walker Crips", the "Company" or the "Group"), the financial services firm with activities covering stockbroking, fund management, corporate finance and personal wealth management, today announces results for the six months ended 30 September 2009.
Highlights
Operating profit increased by 15.8% to £0.77m (2008: £0.67m)
Pre-tax profit up 1.2% to £0.82m (2008: £0.81m)
Interim dividend maintained at 0.94p per share (2008: 0.94p)
Revenue virtually unchanged at £8.51m (2008: £8.56m)
WCAM funds under management increased by 35% over the six month period to 30 September 2009 to £519m (31 March 2009: £383m)
Net cash resources remain healthy at £3.7m at 30 September 2009 (31 March 2009: £3.3m)
Non-broking income as a proportion of total income increased to 51.0% (2008:50.4%)
Commenting on the results, David Gelber, Chairman of Walker Crips said: 'During the six months to 30 September 2009, the Group saw encouraging signs of an improvement in trading conditions which have continued since the period end. If current levels of business can be maintained, the Group is confident of reporting full year results which are ahead of those achieved last year and in line with the Board's expectations.'
For further information, please contact:
| Walker Crips Group Plc Rodney FitzGerald, Chief Executive Stephen Bailey, Investment Director | Tel: +44 (0)20 3100 8000 |
| Altium Ben Thorne Tim Richardson | Tel: +44 (0) 20 7484 4040 |
Further information on Walker Crips Group is available on the Company's
website: www.wcgplc.co.uk
Chairman's statement
I am pleased to report a considerable improvement in the Group's half year results to 30 September 2009 when compared to the second half of the previous financial year with business volumes benefiting from signs of improved trading conditions.
Whilst revenue remained in line with the same period last year, virtually unchanged at £8.51m (2008: £8.56m), operating profit increased by 15.8% to £771,000 (2008: £666,000). However, the impact of falling interest rates on revenues from cash balances meant that profit before tax only increased by a modest 1.2% to £0.82m (2008: £0.81m), with cost control continuing to play an important role. Basic earnings per share remained flat at 1.6p (2008: 1.6p).
Non-broking income as a proportion of total income increased to 51.0% (2008: 50.4%).
Operations
WCAM, our fund management division, made good progress over the six months to 30 September 2009, increasing funds under management (FUM) to £519m (31 March 2009: £383m), an increase of 35%. This is the first time in WCAM's history that the £500m FUM milestone has been achieved and is a clear recognition of the success of the fund managers and their investment process.
The investment management / stockbroking division performed significantly better in the period, driven by the equity market rally and renewed investor interest. Walker Crips Structured Investments successfully launched a number of new products during the period, whilst the private clients desk benefited from an increase in funds under management. The Group has recruited a number of new investment advisors in recent months who have contributed significantly to the improved results of the stockbroking division.
Despite continuing subdued activity on the AIM and PLUS quoted markets, our corporate finance division successfully concluded a number of transactions and experienced only a modest fall in revenue compared with the same period last year. Costs have been reduced and continue to be tightly controlled, with the savings resulting in an improved performance compared with the prior year. New hires have contributed to an encouraging pipeline of advisory transactions.
Our York-based wealth management and pensions division also capitalised on the improved market conditions and the growing range of products on offer during the period. The prudent cost reduction measures put in place last year also contributed to the division's higher profitability, which was well ahead of the Board's expectations.
Expenses / Liquidity
A significant proportion of employment costs, the largest component of Group overheads, are closely aligned with business levels and, coupled with cost reduction measures previously implemented, helped to reduce administrative expenses by 12.5% to £5.6m (2008: £6.4m).
Cash balances of £3.7m (31 March 2009: £3.3m) remain healthy and underpin the Group's working capital and net asset base of £15m, allowing your Board to conclude without hesitation, in accordance with guidance from the Financial Reporting Council, that the use of the going concern basis for the preparation of the financial statements continues to be appropriate.
Dividend
I am pleased to announce that the interim dividend is to be maintained at 0.94p per share (2008: 0.94p per share). This dividend reflects our desire to maintain shareholder income whilst retaining sufficient resources within the business to fund future growth. The dividend will be paid on 10 December 2009 to those shareholders on the register at the close of business on 4 December 2009.
Directors, Account Executives and Staff
On behalf of the board, I would like to thank my fellow directors, all account executives and members of staff for their loyalty and energy throughout the period.
Outlook
During the six months to 30 September 2009, the Group saw encouraging signs of an improvement in trading conditions which have continued since the period end. If current levels of business can be maintained, the Group is confident of reporting full year results which are ahead of those achieved last year and in line with the Board's expectations.
D. M. Gelber
Chairman
17 November 2009
| Walker Crips Group plc | ||||||
| Condensed Consolidated Income Statement | ||||||
| For the six months ended 30 September 2009 | ||||||
| Unaudited | Unaudited | Audited | ||||
| Notes | Six months to | Six months to | Year to | |||
| 30 September 2009 | 30 September 2008 | 31 March 2009 | ||||
| £'000 | £'000 | £'000 | ||||
| Revenue | 2 | 8,513 | 8,556 | 15,865 | ||
| Commission payable | (2,116) | (1,544) | (3,225) | |||
| Gross profit | 6,397 | 7,012 | 12,640 | |||
| Share of after tax (loss) /profits of joint ventures | (1) | 31 | 175 | |||
| Administrative expenses | (5,625) | (6,377) | (11,906) | |||
| Operating profit | 771 | 666 | 909 | |||
| Investment revenues | 48 | 144 | 193 | |||
| Finance costs | (2) | (3) | (5) | |||
| Profit before tax | 817 | 807 | 1,097 | |||
| Taxation | (241) | (229) | (283) | |||
| Profit for the period attributable to equity holders of the company | 576 | 578 | 814 | |||
| Earnings per share | 3 | |||||
| Basic | 1.6p | 1.6p | 2.3p | |||
| Diluted | 1.5p | 1.6p | 2.2p |
| Walker Crips Group plc | ||||||
| Condensed Consolidated Statement of Comprehensive Income | ||||||
| For the six months ended 30 September 2009 | Unaudited | Unaudited | Audited | |||
| Six months to | Six months to | Year to | ||||
| 30 September 2009 | 30 September 2008 | 31 March 2009 | ||||
| £'000 | £'000 | £'000 | ||||
| Profit for the period | 576 | 578 | 814 | |||
| Other comprehensive income: | ||||||
| (Loss) /Gains on revaluation of available-for-sale investments | (18) | 6 | 248 | |||
| Deferred tax on available-for-sale investments | 6 | (2) | (70) | |||
| Deferred tax on share options | 2 | (89) | (120) | |||
| Total comprehensive income for the period | 566 | 493 | 872 | |||
| Walker Crips Group plc | ||||||
| Condensed Consolidated Statement of Financial Position | ||||||
| As at 30 September 2009 |
| |||||
| Notes | Unaudited | Unaudited | Audited | |||
| 30 September 2009 | 30 September 2008 | 31 March 2009 | ||||
| £'000 | £'000 | £'000 | ||||
| Non current Assets | ||||||
| Goodwill | 5,121 | 5,121 | 5,121 | |||
| Other intangible assets | 633 | 748 | 691 | |||
| Property, plant and equipment | 1,043 | 1,379 | 1,203 | |||
| Investment in joint ventures | 27 | 89 | 28 | |||
| Available for sale investments | 1,400 | 1,176 | 1,418 | |||
| 8,224 | 8,513 | 8,461 | ||||
| Current Assets | ||||||
| Trade and other receivables | 34,329 | 49,107 | 31,907 | |||
| Trading Investments | 175 | 235 | 316 | |||
| Cash and cash equivalents | 3,755 | 4,058 | 3,671 | |||
| 38,259 | 53,400 | 35,894 | ||||
| Total assets | 46,483 | 61,913 | 44,355 | |||
| Current liabilities | ||||||
| Trade and other payables | (31,499) | (46,603) | (28,891) | |||
| Current tax liabilities | (284) | (506) | (292) | |||
| Bank overdrafts | (26) | (56) | (337) | |||
| Deferred tax liability | (119) | (113) | (134) | |||
| Cash consideration due under acquisition agreements | - | (150) | (150) | |||
| (31,928) | (47,428) | (29,804) | ||||
| Net current assets | 6,331 | 5,972 | 6,090 | |||
| Net assets | 14,555 | 14,485 | 14,551 | |||
| Equity | ||||||
| Share capital | 2,469 | 2,459 | 2,464 | |||
| Share premium account | 1,623 | 1,584 | 1,605 | |||
| Own shares | (173) | (173) | (173) | |||
| Revaluation reserve | 955 | 793 | 967 | |||
| Other reserves | 4,677 | 4,703 | 4,675 | |||
| Retained earnings | 5,004 | 5,119 | 5,013 | |||
| Equity attributable to equity holders of the company | 14,555 | 14,485 | 14,551 | |||
| Walker Crips Group plc | |||||
| Condensed Consolidated Statement of Cash Flows | |||||
| For the six months ended 30 September 2009 | |||||
| Unaudited | Unaudited | Audited | |||
| Six months to | Six months to | Year to | |||
| 30 September 2009 | 30 September 2008 | 31 March 2009 | |||
| £'000 | £'000 | £'000 | |||
| Operating activities | |||||
| Cash generated / (used in) operations | 1,222 | (280) | (414) | ||
| Interest received | 16 | 107 | 150 | ||
| Interest paid | (2) | (3) | (5) | ||
| Tax paid | (257) | (235) | (581) | ||
| Net cash generated from / (used in) operating activities | 979 | (411) | (850) | ||
| Investing activities | |||||
| Joint venture termination fee | - | - | 205 | ||
| Deferred consideration payment under acquisition agreements | (150) | - | - | ||
| Purchase of property, plant and equipment | (45) | (152) | (195) | ||
| Sale / (Purchase) of investments held for trading | 141 | (19) | (100) | ||
| Dividends received | 32 | 72 | 78 | ||
| Net cash used in investing activities | (22) | (99) | (12) | ||
| Financing activities | |||||
| Proceeds on issue of shares | 23 | 20 | 46 | ||
| Dividends paid | (585) | (560) | (902) | ||
| Net cash used in financing activities | (562) | (540) | (856) | ||
| Net increase / (decrease) in cash and cash equivalents | 395 | (1,050) | (1,718) | ||
| Net cash and cash equivalents at the start of the period | 3,334 | 5,052 | 5,052 | ||
| Net Cash and cash equivalents at the end of the period | 3,729 | 4,002 | 3,334 | ||
| Cash and cash equivalents | 3,755 | 4,058 | 3,671 | ||
| Bank overdrafts | (26) | (56) | (337) | ||
| 3,729 | 4,002 | 3,334 | |||
| Walker Crips Group plc | ||||||||
| Condensed Consolidated Statement Of Changes In Equity | ||||||||
| For the six months ended 30 September 2009 | ||||||||
| Called up share capital | Share premium | Own shares held | Capital Redemption | Other | Revaluation | Retained earnings | Total Equity | |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Equity as at 31 March 2008 | 2,360 | 1,568 | (173) | 111 | 3,665 | 789 | 5,101 | 13,421 |
| Revaluation of investment at fair value | 6 | 6 | ||||||
| Deferred tax charge to equity | (2) | (2) | ||||||
| Movement on deferred tax on share options | (89) | (89) | ||||||
| Profit for the 6 months ended 30 September 2008 | 578 | 578 | ||||||
| Total recognised income and expense for the period | (89) | 4 | 578 | 493 | ||||
| March 2008 final dividend | (560) | (560) | ||||||
| Share-based payments | 6 | 6 | ||||||
| Issue of shares as Deferred Consideration | 95 | 1,010 | 1,105 | |||||
| Issue of shares on exercise of options | 4 | 16 | 20 | |||||
| Equity as at 30 September 2008 | 2,459 | 1,584 | (173) | 111 | 4,592 | 793 | 5,119 | 14,485 |
| Revaluation of investment at fair value | 242 | 242 | ||||||
| Deferred tax charge to equity | (68) | (68) | ||||||
| Movement on deferred tax on share options | (31) | (31) | ||||||
| Profit for the 6 months ended 31 March 2009 | 236 | 236 | ||||||
| Total recognised income and expense for the period | (31) | 174 | 236 | 379 | ||||
| September 2008 interim dividend | (342) | (342) | ||||||
| Share-based payments | 3 | 3 | ||||||
| Issue of shares on exercise of options | 5 | 21 | 26 | |||||
| Equity as at 31 March 2009 | 2,464 | 1,605 | (173) | 111 | 4,564 | 967 | 5,013 | 14,551 |
| Revaluation of investment at fair value | (18) | (18) | ||||||
| Deferred tax credit to equity | 6 | 6 | ||||||
| Movement on deferred tax on share options | 2 | 2 | ||||||
| Profit for the 6 months ended 30 September 2009 | 576 | 576 | ||||||
| Total recognised income and expense for the period | 2 | (12) | 576 | 566 | ||||
| March 2009 final dividend | (585) | (585) | ||||||
| Issue of shares on exercise of options | 5 | 18 | 23 | |||||
| Equity as at 30 September 2009 | 2,469 | 1,623 | (173) | 111 | 4,566 | 955 | 5,004 | 14,555 |
Walker Crips Group plc
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2009
1. Basis of preparation and accounting policies
The Group's consolidated financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS). These condensed financial statements are presented in accordance with IAS 34 Interim Financial Reporting.
The condensed consolidated financial statements have been prepared on the basis of the accounting policies and methods of computation set out in the Group's consolidated financial statements for the year ended 31 March 2009 except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007), as outlined below. The condensed consolidated financial statements should be read in conjunction with the Group's audited financial statements for the year ended 31 March 2009.The interim financial information is unaudited and does not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985.
The Group's financial statements for the year ended 31 March 2009 have been reported on by the auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not draw attention to any matters by way of emphasis. They also did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
Changes in accounting policy
In the current financial year, the Group has adopted International Accounting Standard 1 "Presentation of Financial Statements" (revised 2007) ("IAS 1"). IAS 1 requires the presentation of a statement of changes in equity as a primary statement, separate from the income statement and statement of comprehensive income. As a result, a condensed consolidated statement of changes in equity has been included in the primary statements, showing changes in each component of equity for each period presented.
Interests in joint ventures
The Group's share of the assets, liabilities, income and expenses of jointly controlled entities are accounted for in the consolidated financial statements under the equity method.
Income from the sale or use of the Group's share of the output of jointly controlled assets, and its share of the joint venture expenses, are recognised when it is probable that the economic benefits associated with the transactions will flow to / from the Group and their amount can be measured accurately.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary or jointly controlled entity at the date of acquisition. Goodwill is initially recognised as an asset at cost and reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss and is not subsequently reversed in future periods.
Intangible assets
At each period end date, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the assets belong.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Share based compensation
The Group operates a number of share option schemes for employees and account executives. The charge to the income statement is determined by the fair value of the options granted at the date of grant and recognised over the vesting period.
Principal risks and uncertainties
Under the Financial Services Authority's Disclosure and Transparency Rules, the Directors are required to identify those material risks to which the company is exposed and take appropriate steps to mitigate those risks. The principal risks and uncertainties faced by the Group remain unchanged from the year end and are discussed in detail in the Annual Report for the year ended 31 March 2009.
Related party transactions
No transactions took place in the period that would materially or significantly affect the financial position or performance of the group.
| 2. Segmental analysis | Investment Management/ Stockbroking | Corporate Finance | Wealth Management | Fund Management | Total | |||||||
| Revenue | ||||||||||||
| 6m to 30 September 2009 | 6,103 | 188 | 808 | 1,414 | 8,513 | |||||||
| 6m to 30 September 2008 | 5,925 | 197 | 802 | 1,632 | 8,556 | |||||||
| Year to 31 March 2009 | 11,922 | 311 | 1,056 | 2,576 | 15,865 | |||||||
| Result | Unallocated Costs | Operating Profit | ||||||||||
| 6m to 30 September 2009 | 195 | (30) | 175 | 685 | (254) | 771 | ||||||
| 6m to 30 September 2008 | 55 | (43) | 29 | 956 | (331) | 666 | ||||||
| Year to 31 March 2009 | 109 | (174) | 180 | 1,464 | (670) | 909 |
3. Earnings per share
The calculation of basic earnings per share for continuing operations is based on the post-tax profit for the period of £576,000 (2008 - £578,000) and on 36,554,482 (2008 - 35,538,661) ordinary shares of 6 2/3p, being the weighted average number of ordinary shares in issue during the period.
The effect of options would be to reduce the reported earnings per share. The calculation of diluted earnings per share is based on 37,429,745 (2008 - 36,017,931) ordinary shares, being the weighted average number of ordinary shares in issue during the period adjusted for dilutive potential ordinary shares.
4. Dividends
The interim dividend of 0.94p per share (2008 : 0.94p) is payable on the 10 December 2009 to shareholders on the register at the close of business on the 4 December 2009. The interim dividend has not been included as a liability in this interim report.
Directors' Responsibility Statement
The Directors confirm that to the best of their knowledge:
(a) The condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU;
(b) The half yearly report from the Chairman (constituting the interim management report) includes a fair review of the information required by DTR 4.2.7R; and
(c) The half yearly report from the Chairman includes a fair review of the information required by DTR 4.2.8R as far as applicable.
On Behalf of the Board
Rodney FitzGerald
Chief Executive Officer
17 November 2009