Walker Crips Regulatory News (WCW)

Walker Crips Group plc

Results for the six months ended 30 September 2011

Walker Crips Group plc ("Walker Crips", the "Company" or the "Group"), the financial services firm with activities covering stockbroking, portfolio and fund management, corporate finance and personal financial services, today announces results for the six months ended 30 September 2011 (the "Period").

Highlights

·; Revenue up 7% to £10.65m (2010: £9.97m)

·; Gross Profit up 2.5% to £7.40m (2010: £7.22m)

·; Pre-tax profit down 8.1% to £0.83m (2010: £0.90m)

·; Basic EPS down 5.2% to 1.65p (2010: 1.74p)

·; Interim dividend maintained at 0.94p per share (2010: 0.94p), reflecting confidence in the Company's longer term prospects

·; Non-broking income as a proportion of total income increased to 61% (2010: 55%)

Outlook

Commenting, David Gelber, Chairman of Walker Crips, said: 'Whilst current depressed market conditions remain similar to those experienced towards the end of the Period, with investor and market uncertainty undermining overall confidence, the Board is confident that the Group is well positioned to benefit from any longer term improvement in market activity'.

Subsequent Events

The Board notes that Walker Crips had some exposure to MF Global UK Limited when that company entered the Special Administration Regime on 31 October 2011 and that such exposures remain unsettled. However, based on information received to date, the Board expects that this situation will be resolved without a material impact on the financial or trading position of the Company.

For further information, please contact:

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 resilient and satisfactory performance by the Group in the first half, with revenue improving 7% over the Period to £10.65m (2010: £9.97m). This achievement should be judged against a background of lower transaction volumes in weaker equity markets, especially towards the end of the Period.

Commissions payable in the Period increased by 18% to £3.25m (2010: £2.75m), due to an increase in the proportion of Group revenues with commission sharing arrangements. Overall, gross profit improved over the Period to £7.40m (2010: £7.22m).

Cost increases (including significantly increased property expenses), the increased commissions payable referred to above and the continuing negative impact of the low interest rate environment on investment income, have all combined to reduce profit before tax in the Period by 8% to £0.83m (2010: £0.90m).

Non-broking income as a proportion of total income continued to improve to 61% (2010: 55%) in line with the Board's continued desire to diversify revenue streams and be less reliant on volatile commission revenues (see note 5).

Operations

WCAM, our in-house fund management division, continued to make good progress over the Period, reporting increased revenues (up 11.7% to £2.06m) and profits (up 17% to £1.13m). Since the last year end, the unit trust and other UK based mandated funds, managed so successfully by Stephen Bailey and Jan Luthman, declined by just 1.7% to £566m at the Period end (31 March 2011: £576m; 30 September 2010: £516m). These funds have increased since the Period end and at 14 November 2011 stood at £592m. However, the Group's total funds under management declined by 11.3% to £698m at the Period end (31 March 2011: £787m; 30 September 2010: £750m) after the wind down of two non-core open-ended offshore funds managed by a separate division of WCAM.

The investment management / stockbroking division saw a 7% improvement in gross revenues during the Period to £7.4m (2010: £7.0m). This was a robust top line performance although the increase in shared revenue and higher administration expenses resulted in decreased profitability for the division.

The award-winning Walker Crips Structured Investments team continued to build upon its growing reputation in the intermediary market place with the launch during the Period of several new products which more easily enable experienced investors to take medium-term positions to meet their investment strategies.

The corporate finance division suffered once again in extremely difficult markets, with an increased loss in the Period of £62,000 (2010: £20,000 loss) as investor confidence in the microcap arena remained fragile. Further overhead reductions have been implemented to better align costs and revenues in this division during the second half of the year.

At our York-based financial services division, revenues increased 7% to £1.05m (2010: £0.98m) which, with sound cost control, fed directly through to the bottom line which increased 75% to £152,000 (2010: £87,000).

Expenses / Liquidity

Administrative expenses during the Period increased by 4% to £6.6m (2010: £6.4m). This is in line with inflation and incorporates significantly increased property costs for the Group's head office following the expiry of the original lease incentive arrangements. Steps have been taken to reduce operating costs in the second half year to offset the market uncertainty and the general decline in stockbroking revenues.

Cash balances had reduced to £3.4m by the Period end (31 March 2011: £4.3m) due to working capital movements and day to day variations in client settlement requirements. Liquid assets, in the form of net current assets, at the Period end of £7.2m remained slightly above the year end position (31 March 2011: £7.1m).

Dividend

I am pleased to announce that the interim dividend is to be maintained at 0.94p per share (2010: 0.94p per share). The Board continues to believe in rewarding shareholders with a steady income stream whilst funding internal growth through retained earnings. The dividend will be paid on 9 December 2011 to those shareholders on the register at the close of business on 25 November 2011.

Directors, Account Executives and Staff

On behalf of the Board, I would like to once again thank my fellow directors, all account executives and members of staff for their continued loyalty and flexibility in the face of the uncertain market conditions experienced during the Period.

Outlook

Whilst current depressed market conditions remain similar to those experienced towards the end of the Period, with investor and market uncertainty undermining overall confidence, the Board is confident that the Group is well positioned to benefit from any longer term improvement in market activity.

Subsequent Events

The Board notes that Walker Crips had some exposure to MF Global UK Limited when that company entered the Special Administration Regime on 31 October 2011 and that such exposures remain unsettled. However, based on information received to date, the Board expects that this situation will be resolved without a material impact on the financial or trading position of the Company.

D. M. Gelber

Chairman

16 November 2011

Walker Crips Group plc

Notes to the condensed consolidated financial statements

For the six months ended 30 September 2011

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 2011.

The condensed consolidated financial statements should be read in conjunction with the Group's audited financial statements for the year ended 31 March 2011.The interim financial information is unaudited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.The Group's financial statements for the year ended 31 March 2011 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 498 (2) or (3) of the Companies Act 2006.

As the net asset base remains healthy, the directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they also conclude 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.

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 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.

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 are discussed in detail in the Annual Report for the year ended 31 March 2011.Since the year end, as described in the Chairman's letter, the events at MF Global have heightened the uncertainties faced by the Group.

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

* Prior period revenue has been re-classified between operating divisions as determined by clients' principal activity whereas previously these income streams were split across several segments.

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 £598,000 (2010 - £633,000) and on 36,301,187 (2010 - 36,301,187) 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 37,114,062 (2010 - 37,151,959) 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 (2010: 0.94p) is payable on 9 December 2011 to shareholders on the register at the close of business on 25 November 2011. The interim dividend has not been included as a liability in this interim report.

5. Total Income (£'000)

The Group's income can also be categorised as follows for the purpose of measuring a Key Performance Indicator, non-broking income to total income.

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

16 November 2011