TIDMCNKS
RNS Number : 5032P
Cenkos Securities PLC
26 March 2009
Cenkos Securities plc ("the Company") together with its subsidiaries ("the
Group")
ANNUAL FINANCIAL RESULTS OF THE GROUP FOR THE YEAR ENDED 31 DECEMBER 2008
Cenkos Securities plc today announced its audited final results for the year to
31 December 2008. The highlights of the results comparing them with the prior
year are:
Financial Highlights
* Revenue is GBP28.3 million (2007: GBP53.8 million)
* Profit before tax for the year is GBP5.1 million (2007: GBP23.8 million)
* Basic earnings per share is 4.9p (2007: 22.8p)
* Diluted earning per share is 4.9p (2007: 22.6p)
* GBP6.0 million net cash generated from operating activities (2007: GBP16.2
million)
* The Board proposes a final dividend of 5p per share compared to last year's
final dividend of 12p per share. This makes a total dividend of 10p for the year
and reflects the Company's dividend policy of only retaining profits when the
Board considers that it is required to fund the existing business or where
attractive investment opportunities have been identified.
Business Highlights
* Continued success in attracting new institutional and corporate clients helping
to grow the Cenkos franchise.
* Taking advantage of market conditions to organically grow our existing teams,
particularly in our 50% owned wealth management operations based in the Channel
Islands and in the later part of the year our institutional equities team.
* We continue in very difficult markets to raise funds for our clients. This has
continued into the new year with a GBP130 million of funds raised for Omega
Insurance.
* Voted AIM broker of the year at the 2008 Growth Company Awards.
Andrew Stewart - Chief Executive Officer commented:
"We are experiencing market and economic conditions the like of which I have not
seen before. The weak have been found wanting and the strong have been severely
tested. Cenkos, due to its robust business model and the quality, dedication and
experience of our employees has survived, weather beaten but intact.
I do not anticipate that these global conditions will change in the near future.
I believe, however, that Cenkos is well positioned to take advantage of the
fall-out that has resulted."
Chairman's Statement
When I announced the Group's interim results last September I said that market
conditions had been very difficult. Subsequent to this the market place in which
we and most other companies operate has suffered a further sharp deterioration
resulting in the demise of a number of well-known financial institutions and
wide spread panic within the financial markets. As has been well documented
elsewhere, during this period the banks stopped lending, asset prices fell
sharply, liquidity in quoted shares virtually vanished and capital fund raisings
all but dried up.
Given this background I am pleased to say that the Group has again had a
profitable year, whilst continuing to expand and diversify its business. The
Group has weathered the current financial tsunami well, this is in part due to
the Cenkos business model which enables us to control the cost base quicker than
some of our competitors, given our low fixed costs and performance driven
remuneration policy. It is also due to the dedication, experience and skill of
our employees and our loyal institutional and corporate client base.
Through these unprecedented times we kept calm and focused on our strengths. As
a result we have managed to service our existing clients and attract new ones.
Even when capital markets have in effect closed we have continued to raise funds
for our clients. Cenkos has always prided itself in putting the interests of its
clients first and providing them with an excellent service. As I believe our
performance this year shows by adopting this approach we can survive and indeed
continue to grow.
The devastation that has been caused over recent months inevitability gives rise
to opportunities. I believe that Cenkos with its ability to react quickly, its
simple understandable client focused philosophy and its partnership culture is
well positioned to take advantage of these opportunities. During the latter part
of the year and indeed since the year end we have managed to attract some high
quality teams and we will continue to grow organically when the appropriate
opportunities arise.
The Group continues to maintain healthy regulatory capital ratios and cash
levels and as a result the Board are declaring a final dividend of 5p per share
(2007: 12p per share). This is consistent with our dividend policy. The dividend
will be payable on 26 May 2009 to all shareholders on the register at 24 April
2009.
John Hodson
Chairman
26 March 2009
Business and Financial Review
We are experiencing market and economic conditions the like of which I have not
seen before. The weak have been found wanting and the strong have been severely
tested. Cenkos due to its robust business model and the quality, dedication and
experience of our employees has survived, weather beaten but intact. We are now
officially in a recession and the effects of the credit crunch continue to
unwind. Cenkos, however now has a well balanced business and during the year,
whilst inevitably affected by these events, has shown itself to be comparatively
resilient in the present financial turmoil. Revenue for the year is GBP28.3
million (2007: GBP53.8 million) which I believe shows the relative strength of
Cenkos' revenue streams given the current exceptionally challenging business
environment. The table below shows an analysis of how these revenues are made
up.
+-------------------------------------------------------------------------+--------------------+--------------------+
| | 31 December 2008 | 31 December 2007 |
| | GBP000's | GBP000's |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Placing fees | 15,322 | 32,146 |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Corporate finance fees | 9,365 | 10,109 |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Commission income | 4,643 | 7,680 |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Market making | (3,919) | 1,969 |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Wealth management | 2,864 | 1,887 |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Total Revenue | 28,275 | 53,791 |
+-------------------------------------------------------------------------+--------------------+--------------------+
This table shows there has been a diversification of income streams and whilst
placing fees are still a major component of our revenue, M&A corporate finance
fees and commission income from secondary trading make a significant
contribution to total revenue.
Corporate broking and advisory
The results this year have inevitability been affected by the general lack of
equity capital raising activity. We are therefore pleased to announce that our
clients raised a total of GBP360 million (2007: GBP1,100 million). According to
the latest statistics released in the Hemscott Corporate Advisers guide, the
Company was ranked 8th by the number of AIM clients advised and 2nd in respect
of the number of AIM clients by market capitalization.During the year we
continued to grow the number of retained corporate clients. The Group was
nominated advisor or corporate broker to 55 (2007: 45) companies as at 31
December 2008 with a market capitalisation of GBP3 billion (2007: 6 billion).
Given the effect markets have had on some of our competitors we feel that there
is a good opportunity to increase our client base, further adding to our
recurring revenues.
In the year we have also increased the amount of pure M&A corporate finance fees
as opposed to those related to placings, being involved in 13 transactions.
Institutional equities
The institutional equities team currently provides research driven investment
recommendations to institutional clients. At present the team produces research
on 79 companies and has a particular expertise in the business services, retail
and consumer sectors having recruited professionals who were previously top
ranked analysts in these sectors. In recent months we have added to our team of
analysts and enhanced our execution services by the recruitment of a number of
experienced sales traders. Our execution business is strictly focussed on client
facilitation rather than generating proprietary trading profits. Given that this
activity is affected by the move to unbundled services, it is pleasing to note
that the research produced is perceived by clients to be important to them and
an increasing number have now elected to pay for research separately in addition
to paying commission. I believe that the continued organic growth of this area
will enhance our overall offering and like the growth in retainer income
mentioned above will increase the amount of recurring revenue coming into the
Group.
Market making
The Group continues to run market making activities in order to support other
services that it provides to its clients. The Group makes markets in the
securities of all companies where it has a broking relationship. The Group does
not engage in proprietary trading and applies a range of position limits and
monitoring procedures to any position taking. Despite having these strong
procedures in place we were affected by the disappearance of liquidity in equity
markets and incredible downward pressure on asset prices in October and November
of last year and this is reflected in this revenue stream.
Investment funds
The team provides a broad range of services including corporate broking,
corporate finance, research, market making and sales with a sole focus on
investment fund investors and has a detailed knowledge of their asset allocation
strategies enabling successful secondary distributions and primary sales. The
Group makes markets in approximately 200 (2007: 200) investment fund securities
and by 31 December 2008 the Group has been appointed as corporate broker to 48
(2007: 27) investment funds and has raised GBP149 million (2007: GBP600 million)
in the year. This area of our business was affected by the events in the fourth
quarter of 2008 when activity in investment funds almost dried up and the
discount to net assets at which the funds traded deepened significantly. However
the turmoil in the sector also allows us to pick up a significant number of new
brokerships as other institutions retreated from the market or teams changed
employer. We have also recently seen an increasing number of mandates to provide
advisory work, reflecting the many restructurings that are taking place in the
sector.
Off shore wealth management and stockbroking services
Offshore wealth management and stockbroking services are primarily provided
through Cenkos Channel Islands Limited, a 50% owned subsidiary, based in
Guernsey and its own subsidiary based in Jersey. Varying levels of stockbroking
services from discretionary to execution only are provided primarily to high net
worth individuals and also financial intermediaries and institutions. During the
second half we took the opportunity to add significant capacity to our
operations in the Channel Islands by recruiting a team of 10. Prior to the year
end we also successfully launched two funds raising GBP26 million as we pursue a
strategy of building an offshore asset management business. The business during
the year has grown both in terms of the number of clients and funds managed.
These now stand at 1150 (2007: 530) and GBP476 million (2007: GBP186 million)
respectively.
Fund management business
Our fund management business is primarily provided by Cenkos Fund Management
Limited. This operation already has an investment management agreement with AIM
quoted fund which has a market capitalisation of circa. GBP54 million (2007:
GBP60 million). The fund specialises in making investments principally in
unquoted companies who may come to market within a few years. The team has a
well established track record in this particular area. A significant amount of
the fund is invested and the company is now making a positive contribution to
the Group.
Income statements
The Group's revenue is GBP28.3 million compared to last year's GBP53.8 million.
The reasons for this movement have been dealt with in the Chairman's Statement
and Business Review. Administrative expenses have been reduced from GBP33.7
million to GBP24.3 million.
This decrease reflects Cenkos' ability to control its costs in periods when
there are significant reductions in revenue. Cenkos has a low fixed cost base
and a remuneration policy which results in the payment of low basic salaries and
rewards income generation. We do not operate a system where bonuses are
guaranteed. Our head count has increased during the year principally reflecting
the recruitment of income generating individuals. We have only modestly
increased the head count in infrastructure areas that support the front office
functions. This has resulted in an adjusted profit before tax of GBP5.3 million
compared to GBP21.9 million in 2007.
The adjusted profit before tax figures have been calculated by adjusting out
various non-recurring items that impacted the results.
+-------------------------------------------------------------------------+--------------------+--------------------+
| | 31 December 2008 | 31 December 2007 |
| | GBP000's | GBP000's |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Profit before tax per the consolidated income statement | 5,124 | 23,819 |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Other gains and losses related to part disposal of Cenkos Channel | - | (1,709) |
| Islands Ltd. | | |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Gain from disposal of employees B shares | - | (804) |
+-------------------------------------------------------------------------+--------------------+--------------------+
| Costs associated with aborted take-over bids for Close Brothers Group | 100 | 841 |
| plc and Arden Partners plc | | |
+-------------------------------------------------------------------------+--------------------+--------------------+
| | 5,224 | 22,147 |
+-------------------------------------------------------------------------+--------------------+--------------------+
Adjusted diluted EPS has fallen from 20.4p per share to 5p per share. This
figure has been subject to the same adjustments as above and set out in note 11
so as to give a better view of the Group's performance on an ongoing basis.
Diluted EPS has fallen from 22.6p per share to 4.9p per share.
Balance sheet
During the year our net trading investments reduced by GBP6million from GBP14.8
million to GBP8.8 million thereby reducing our exposure to future volatility in
the market price of our investments. Most of this reduction took place in the
second half of the year. This reduction resulted in higher cash levels than
reported in our interim accounts despite paying our interim dividend during the
period. The reduction in trading investments has been carried out without
affecting our ability to facilitate our clients' business. Some of the reduction
was also caused by the fall in asset prices during the period. During the year
the fair value of the Group's available for sale investment in Plus Markets
Group plc fell by GBP2.8 million. This fall is recognized as a movement through
reserves and results in a negative available for sale reserve of GBP243,000 as
we believe the fair value decline to be temporary.
Cash levels although lower than last year are more than sufficient to cover the
working capital requirements of the business on an ongoing basis. Since the year
end we have continued to generate cash particularly due to the successful
completion of the Omega Insurance fundraising which impacted in January 2009 and
as at 28 February 2009 cash resources were GBP11.1 million.
At the year end the levels of secondary trading were lower than those at 31
December 2007. This has had the effect of reducing both our trade receivables
and payables, as these captions include outstanding trades at the reporting
date.
Our regulatory capital ratios continue to be strong, reflecting a sizable buffer
over the FSA requirements. These requirements reflect the implementation of the
new Internal Capital Adequacy Assessment Process (ICAAP) regime which has been
reviewed by and agreed with the FSA.
Internal control and risk management
The Board confirms that there is an ongoing process for identifying, evaluating
and managing the significant risks faced by the Group, which has been in place
for the period and up to the date of approval of the financial statements. This
process has been reviewed by the Board.
The system of internal control is designed to manage rather than eliminate the
risk. As such it can provide only reasonable not absolute assurance against
material misstatement or loss.
The Group is exposed to a number of business risks. The Board is responsible for
determining the Group's risk appetite and for ensuring that the Group's risk
management processes are appropriate and operating effectively. Day to day
management of risk is delegated to the executive members of the Board and the
risk committee and, where appropriate to preserve Chinese Walls within the
business, to the new business committee. Whilst encouraging an entrepreneurial
and commercial culture, the Board seeks to minimise avoidable, value destroying
risk exposures.
Principle risks and controls
Market risk exposure
The Group is exposed to market risk arising from its short-term positions in
predominantly market making stocks. The Group manages market risk by
establishing individual stock limits and overall trading book limits. There are
daily procedures in place to monitor the utilisation of these limits.
Foreign currency and interest rate risk
The Group does not have any material dealing in foreign currency, the majority
of transactions are in UK based equities and hence denominated in sterling.
Neither does the Group have any significant exposure to movements in interest
rate.
Reputational risk
The Group believes that one of the greatest risks to the Group comes from the
potential loss of its reputation. Whilst entrepreneurial employees are
encouraged to develop new clients and streams of revenue, all new business is
subject to a rigorous appraisal process from the New Business Committee to
ensure that it meets the Group's strict criteria.
Operational risk
Operational risk is the risk that the Group suffers a loss directly or
indirectly from inadequate or failed internal processes, people, and systems or
from external events. Compliance and senior management closely ensure that any
significant operational risks and their controls are continually reviewed and
assessed and where applicable corrective action plans are put in place.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. These parties
may default on their obligations due to the bankruptcy, lack of liquidity,
operational failure and other reasons. The vast majority of the Groups credit
risk arises from the settlement of security transactions. However, the
settlement model primarily used by the Group, does not expose the Group to a
risk as a principle to a trade; rather the Group's exposure lies only with
Pershing - a wholly owned subsidiary of the Bank of New York, a AA (2007: AAA)
rated bank. Given the present economic climate these ratings continue to be
monitored. In addition, in circumstances in which the Group does act as
principal, when acting as a market maker, the counterparty will normally be a
FSA regulated market counterparty, rather than a corporate or individual
trader.
Our cash resources also give rise to credit risk and these are
presently deposited with HSBC Bank plc. The banks with which we deposit money
are reviewed on an annual basis by the Board.
Trade receivables not related to the settlement of market transactions consist
of outstanding corporate finance retainers and fees and are spread across a
range of industries. As they relate to clients of ours they are subject to a
review by our new business committee. This Committee considers, amongst other
issues, the financial soundness of any client taken on.
In 2006 we issued various tranches of partly paid B shares to a number of our
employees. The carrying value of the unpaid portion is included in financial
assets and is currently due to be repaid on 1 July 2011. As at the reporting
date these had a carrying value of between 77p and 125p per share, whilst the
Company's share price was 101p. The recoverability of these amounts is reviewed
on a monthly basis. These shares are capable of converting into the Company's
ordinary shares and as a result they have a positive intrinsic value if the
market price of the company's shares is greater than the value at which they
were issued. At the reporting date, there were 505,000 shares with a negative
intrinsic value, which amounted to GBP118,915.
The Group does not have any significant credit risk exposure to any single
counterparty with the exception of Pershing, HSBC and the B shareholders to the
extent of their unpaid share premium.
The carrying amount of financial assets recorded in the financial statements,
which is net of impairment losses, represents the Group's maximum exposure to
credit risk without taking account of the value of any collateral obtained.
The credit risk on liquid funds is limited because the counterparties are banks
with high credit ratings assigned by international credit rating agencies.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board. It
has however delegated this to the Group Finance Director. The Group has in place
an appropriate liquidity risk management framework for the management of the
Group's short, medium and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves
and banking facilities, by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets and liabilities.
The Group has additional undrawn borrowing facilities at its disposal to further
reduce liquidity risk. Given the nature of the Group's business, the Group does
not run any liquidity mismatches, financial liabilities are on the whole short
term and the Group has sufficient cash retained to cover all of these
liabilities.
Employee risk
The Group's employees are its greatest asset and the future success of the Group
depends on the Group's ability to attract and retain high quality executives and
employees. The Group seeks to minimize this risk by rewarding employees through
an overall remuneration package which is heavily skewed towards performance and
share based payments which align the interests of the employees and
shareholders.
Business continuity risk
Continuity planning is in place across the business in order to sustain
operations with a minimum of disruption with a combination of business
continuity planning, duplicated infrastructure and remote facilities. Regular
testing of the business continuity plan is undertaken.
As an organisation the management of risk is embedded in our culture, in the way
we operate and the way we manage all aspects of our business.
People
The present market conditions and its uncertainties are difficult ones for
employees but I am proud to lead a group of such committed and competent
individuals. Their skill and calmness have enabled us to come through these
troubled times and provide us with a solid platform on which to build.
Outlook
I do not anticipate that the present global conditions will change in the near
future and trading will continue to be difficult. However, we have made a
satisfactory start to the year. I believe that Cenkos is well positioned to take
advantage of the fall out that has resulted. We have the capacity and will to be
able to expand our franchise so as to take advantage of more benign markets when
they eventually return.
Forward-looking statements
This final results announcement contains forward-looking statements with respect
to the financial condition, results, operations and businesses of Cenkos
Securities plc. Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable, we can give no assurance that
these expectations will prove to have been correct. Such statements and
forecasts involve risk and uncertainty because they relate to events and depend
upon circumstances that will occur in the future. There are a number of factors
that could cause actual results or developments to differ materially from those
expressed or implied by forward-looking statements and forecasts.
Forward-looking statements and forecasts are based on the Directors' current
view and information known to them at the date of this statement. The Directors
do not make any undertaking to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Responsibility Statement
We confirm that to the best of our knowledge:
a) the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit of Cenkos Securities plc, and
b) the management report includes a fair review of the development and
performance of the business and the position of Cenkos Securities plc and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
Andrew StewartSimon Melling
Chief Executive Officer Group Finance Director
26 March 2009 26 March 2009
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Consolidated income statement for the year ended 31 December 2008 | |
+--------------------------------------------------------------------------------------------------------------------+--------------+
| | | | | | 1 January | 1 |
| | | | | | | January |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | Notes | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Revenue | 3 | | | | 28,275 | |
| | | | | | | 53,791 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Administrative expenses | | | | | (24,317) | |
| | | | | | | (33,664) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Operating profit | | | | | 3,958 | 20,127 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Investment income - interest | 4 | | | | 1,277 | |
| receivable | | | | | | 1,997 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Finance costs - interest | 5 | | | | (111) | |
| payable | | | | | | (14) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Other gains and losses | 8 | | | | - | |
| | | | | | | 1,709 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit before tax | 7 | | | | 5,124 | 23,819 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Tax | 9 | | | | (1,404) | |
| | | | | | | (7,057) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit for the year | | | | | 3,720 | 16,762 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Attributable to: | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Equity holders of the parent | | | | | 3,545 | 16,552 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Minority interests | | | | | 175 | 210 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 3,720 | 16,762 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Earnings per share | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Basic | 11 | | | | 4.9p | 22.8p |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Diluted | 11 | | | | 4.9p | 22.6p |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| All amount shown in the consolidated income statement derive from continuing operations of the Group. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| The profit attributable to the Company in the year ended 31 December 2008 was GBP3,337,910 (31 |
| December 2007: GBP16,571,015). |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Consolidated balance sheet as at 31 December 2008 | | | |
+-----------------------------------------------------------------------------------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Non-current assets | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Property, plant and | | | | | 1,111 | |
| equipment | | | | | | 944 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Available for sale | | | | | 763 | 3,543 |
| investments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Deferred taxation | | | | | 67 | |
| | | | | | | 321 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 1,941 | 4,808 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Current assets | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Trading investments - long | | | | | 11,392 | 26,597 |
| positions | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Trade and other receivables | | | | | 41,493 | 56,763 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Cash and cash equivalents | | | | | 6,337 | 16,244 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
| | | | | | 59,222 | 99,604 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Total assets | | | | | 61,163 | 104,412 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Current liabilities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Trading investments - short | | | | | (2,506) | (11,803) |
| positions | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Trade and other payables | | | | | (23,430) | (46,761) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | (25,936) | (58,564) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net current assets | | | | | 33,286 | 41,040 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Non-current liabilities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Deferred tax liabilities | | | | | - | |
| | | | | | | (761) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Total liabilities | | | | | (25,936) | (59,325) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net assets | | | | | 35,227 | 45,087 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Equity | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Share capital | | | | | 727 | |
| | | | | | | 726 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Share premium account | | | | | 22,700 | |
| | | | | | | 22,700 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Revaluation (deficit) / | | | | | (243) | |
| reserves | | | | | | 1,776 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Retained earnings | | | | | 11,614 | |
| | | | | | | 19,633 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Equity attributable to | | | | | | |
| equity holders of the parent | | | | | | |
+ + +------------------------------+ +------------+-------------+--------------+
| | | | | | 34,798 | 44,835 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Minority interests | | | | | 429 | 252 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Total equity | | | | | 35,227 | 45,087 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Consolidated cash flow statement for the year ended 31 December 2008 | |
+--------------------------------------------------------------------------------------------------------------------+--------------+
| | | | | | 1 January | 1 |
| | | | | | | January |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit for the year | 3,720 | 16,762 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Adjustments for: | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Finance income | | | | | (1,165) | (1,984) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Tax expense | | | | | 1,404 | 7,057 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Depreciation of property, plant and equipment | 341 | 227 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Other gains and losses | | | | | - | (1,709) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Share based payment expense | | | | | | 1,349 |
| | | | | | 928 | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Operating cash flows before movements in working capital | 5,228 | 21,702 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Decrease / (increase) in net trading | | | | 5,909 | (6,798) |
| investments | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| Decrease / (increase) in trade and other | | | | 15,198 | (17,056) |
| receivables | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| (Decrease) / increase in trade and other | | | | (20,358) | 18,574 |
| payables | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| Distributions to ex members of a | | | | - | (209) |
| subsidiary | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net cash flow from operating | | | | | 5,977 | 16,213 |
| activities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Interest paid | | | | | (111) | (14) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Taxation paid | | | | | (4,272) | (5,942) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net cash flow from operating | | | | | 1,594 | 10,257 |
| activities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Investing activities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Interest received | | | | | 1,348 | 1,912 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net proceeds from the part disposal of subsidiary | | | - | 2,021 |
+--------------------------------------------------------------------------+--------------+------------+-------------+--------------+
| Purchase of property, plant | | | | | (508) | (434) |
| and equipment | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net cash flows from | | | | | 840 | 3,499 |
| investing activities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Financing activities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Dividends paid | | | | | (12,344) | (7,259) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Proceeds from issue of equity shares | 1 | - |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Fees related to issue of | | | | | - | (33) |
| equity shares | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Increase in investment in | | | | | (20) | - |
| subsidiary | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Issue of capital by subsidiary to minority interests | 22 | - |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net cash used in financing activities | (12,341) | (7,292) |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net (decrease)/increase in cash and cash equivalents | (9,907) | 6,464 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Cash and cash equivalents at beginning of year | 16,244 | 9,780 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Cash and cash equivalents at end of year | | | | 6,337 | 16,244 |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Consolidated statement of changes in equity for the year ended 31 December 2008 |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | Equity attributable to equity holders of the | | |
| | parent | | |
+------------------------------+-----------------------------------------------------------------------+-------------+--------------+
| | Share | Share | Available | Retained | Minority | Total |
| | capital | premium | for sale | earnings | interests | |
| | | | reserve | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | GBP 000's | GBP 000's | GBP 000's | GBP 000's | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| At 1 January 2007 | 726 | 22,733 | 1,556 | 8,843 | 26 | 33,884 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Interest acquired by | - | - | - | - | 313 | 313 |
| minority interest | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit for the year | - | - | - | 16,552 | - | 16,552 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit allocated to minority | - | - | - | - | 210 | 210 |
| interests | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Distribution of profit to | - | - | - | - | (208) | (208) |
| minority interest | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Transfer of amounts to | - | - | - | - | (89) | (89) |
| payables on retirement of | | | | | | |
| minority interest members | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Revaluation of | - | - | 314 | - | - | 314 |
| available-for-sale | | | | | | |
| investments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Deferred tax liability on | - | - | (94) | - | - | (94) |
| revaluation of | | | | | | |
| available-for-sale | | | | | | |
| investments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Credit to equity for equity | - | - | - | 1,349 | - | 1,349 |
| settled share based payments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Deferred tax on share based | - | - | - | 148 | - | 148 |
| payments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Share issue costs taken | - | (33) | - | | - | (33) |
| through premium | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Dividends paid | - | - | - | (7,259) | - | (7,259) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| At 31 December 2007 | 726 | 22,700 | 1,776 | 19,633 | 252 | 45,087 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Shares issued | 1 | - | - | - | - | 1 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Interest acquired by | - | - | - | - | 22 | 22 |
| minority interest | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Increase in investment in | - | - | - | - | (20) | (20) |
| subsidiary | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Retained profit for the | - | - | - | 3,545 | - | 3,545 |
| period | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit allocated to minority | - | - | - | - | 175 | 175 |
| interests | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Revaluation of | - | - | (2,780) | - | - | (2,780) |
| available-for-sale | | | | | | |
| investments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Reversal of deferred tax | - | - | 761 | - | - | 761 |
| liability on revaluation of | | | | | | |
| available-for-sale | | | | | | |
| investments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Credit to equity for equity | - | - | - | 928 | - | 928 |
| settled share based payments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Deferred tax on share based | - | - | - | (148) | | (148) |
| payments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Dividends paid | - | - | - | (12,344) | - | (12,344) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| At 31 December 2008 | 727 | 22,700 | (243) | 11,614 | 429 | 35,227 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Notes to the financial statements for the year ended 31 December 2008 | |
+--------------------------------------------------------------------------------------------------------------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 1. Accounting policies | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| General information | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Cenkos Securities plc is a company incorporated in the United Kingdom under the Companies Act 1985. |
| The Group's principal activity is the provision of investment banking services. These financial |
| statements are presented in pounds sterling because that is the currency of the primary economic |
| environment in which the Group operates. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Basis of accounting | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The accounting policies used in arriving at the figures in this announcement are consistent with those |
| which were set out in the audited financial statements for the year ended 31 December 2007. Whilst the |
| financial information included in this announcement has been computed in accordance with International |
| Financial Reporting Standards (IFRSs) as adopted by the European Union, this announcement does not |
| itself contain sufficient information to comply with IFRSs. The Group's 2008 Statutory Accounts comply |
| with IFRSs. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Adoption of new and revised | | | | | | |
| standards | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| In the current year, the Group has adopted IFRS 8: Operating Segments, which is effective for annual |
| reporting periods on or after 1 January 2009. The impact of the adoption of IFRS 8 has been to expand |
| the disclosures in these financial statements regarding the Group's business and geographical segments |
| (see note 3). |
| At the date of authorisation of these financial statements, the following Standards and |
| Interpretations which have not been applied in these financial statements were in issue but not yet |
| effective: |
| IFRS 2 (amended) Share-based Payment - Vesting Conditions and Cancellations |
| IAS 1 (revised 2007) Presentation of Financial Statements |
| The Directors anticipate that the adoption of these Standards and Interpretations in future periods |
| will have no material impact on the financial statements of the Group. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Basis of consolidation | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The consolidated financial statements incorporate the financial statements of the Company and entities |
| controlled by the Company made up to 31 December each year. Control is achieved where the Company has |
| the power to govern the financial and operating policies of an investee entity so as to obtain |
| benefits from its activities. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| No income statement is presented for the Company as provided by section 230(2) of the Companies Act |
| 1985. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| Minority interests in the net assets of consolidated subsidiaries are identified separately from the |
| Group's equity therein. Minority interests consist of the amounts of these interests at the date of |
| the original business combination plus the minority's share of undistributed reserves. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| The results of subsidiaries acquired or disposed of during the year are included in the consolidated |
| income statement from the effective date of acquisition or up to the effective date of disposal, as |
| appropriate. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| All intra-group transactions, balances, income and expenses are eliminated on consolidation. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Going concern | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The Group's business activities, together with the factors likely to affect its future development and |
| performance, the financial position of the Group, its cash flows and liquidity position are set out in |
| the Business and Financial Review. In addition, it also includes the Group's objectives, policies and |
| processes for managing its capital, its financial risk management objectives, details of its financial |
| instruments and its exposures to credit risk and liquidity risk. |
| The Directors have considered forecasts taking account of the current uncertain market conditions |
| which demonstrate that the Group shall continue to operate within its own resources without recourse |
| to the banking facilities available to it. The forecasts used for this exercise are based on various |
| assumptions regarding expected levels of income and cost. They have stress tested these basic |
| assumptions and this testing reveals that the Group can maintain acceptable cash levels even if it |
| relies only on recurring revenue streams and maintains its existing cost base. A major factor allowing |
| this to be the case is the flexible nature of the Group's performance related remuneration policy. |
| As a result, the Directors believe that the Group is well placed to manage its business risks |
| successfully despite the current uncertain economic outlook and that the Group has adequate resources |
| to continue in operational existence for the foreseeable future. Accordingly, they consider it |
| appropriate to adopt the going concern basis in preparing the annual report and accounts. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 2. Critical accounting judgement and key sources of estimation uncertainty |
+-----------------------------------------------------------------------------------------------------------------------------------+
| The preparation of financial statements in conformity with generally accepted accounting principles |
| requires the use of estimates and assumptions that affect the reported amounts of assets and |
| liabilities at the date of the financial statements and the reported amounts of revenues and expenses |
| during the reporting period. Although these estimates are based on managements best knowledge of the |
| amount, event or actions, actual results ultimately may differ from those estimates. The estimates and |
| assumptions that have a significant effect on the carrying amounts of assets and liabilities are set |
| out below: |
+-----------------------------------------------------------------------------------------------------------------------------------+
| a) Equity-settled | | | | | | |
| share-based payments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The fair value of share-based payments is calculated by reference to a Monte Carlo simulation model. |
| Inputs into the model are based on management's best estimates of appropriate volatility, discount |
| rate and share price growth. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| b) Valuation of investments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Trading investments include options over securities which have been received as consideration for |
| corporate finance services rendered. The fair value of these investments have been calculated by |
| reference to a Monte Carlo simulation model. Inputs into the model are based on management's best |
| estimates of appropriate volatility, discount rate and share price growth. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| c) Bad debt policy | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The Group regularly reviews all outstanding balances including the unpaid amounts relating to the |
| partly paid "B" shares and provides for amounts it considers irrecoverable. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 3. Business and geographical | | | | | | |
| segments | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The Directors consider that there is only one activity undertaken by the Group, that being investment |
| banking. A geographical analysis of the Group's revenue is as follows: |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | 1 January | 1 |
| | | | | | | January |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Geographical segment | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| UK | | | | | 25,411 | 51,904 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Channel Islands | | | | | 2,864 | 1,887 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 28,275 | 53,791 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Investment income | | | | | 1,277 | 1,997 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Other gains and losses | | | | | - | 1,709 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 29,552 | 57,497 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Segment information about these businesses is | | | | |
| presented below: | | | | |
+--------------------------------------------------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | 1 January 2008 to 31 December 2008 | 1 January 2007 to 31 December |
| | | 2007 |
+------------------------------+----------------------------------------------------------+-----------------------------------------+
| | UK | Channel | Consolidated | UK | Channel | Consolidated |
| | | Islands | | | Islands | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | GBP 000's | GBP 000's | GBP 000's | GBP 000's | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Revenue | 25,411 | 2,864 | 28,275 | 51,904 | 1,887 | 53,791 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Segment operating profit | 3,589 | 369 | 3,958 | 19,740 | 387 | 20,127 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Investment income - interest | | | 1,277 | | | 1,997 |
| receivable | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Finance costs - interest | | | (111) | | | (14) |
| payable | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Other gains and losses | | | - | | | 1,709 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit before tax | | | 5,124 | | | 23,819 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Tax | | | (1,404) | | | (7,057) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit for the year | | | 3,720 | | | 16,762 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 3. Business and geographical segments | | | | | |
| (continued) | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| | | | 1 January 2008 to 31 December 2008 |
+------------------------------+------------+------------------------------+--------------------------------------------------------+
| | | | UK | Channel | Elimination | Consolidated |
| | | | | Islands | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | GBP 000's | GBP 000's | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Other information | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Capital additions | | | 376 | 132 | - | 508 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Depreciation and | | | 300 | 41 | - | 341 |
| amortisation | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Assets | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Segment assets | | | 47,684 | 13,656 | (177) | 61,163 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Liabilities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Segment liabilities | | | 13,416 | 12,520 | | 25,936 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | 1 January 2007 to 31 December 2007 |
+------------------------------+------------+------------------------------+--------------------------------------------------------+
| | | | UK | Channel | Elimination | Consolidated |
| | | | | Islands | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | GBP 000's | GBP 000's | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Other information | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Capital additions | | | 401 | 3 | | 404 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Depreciation and | | | 185 | 20 | | 205 |
| amortisation | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Assets | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Segment assets | | | 100,784 | 3,699 | (71) | 104,412 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Liabilities | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Segment liabilities | | | 56,170 | 3,067 | 88 | 59,325 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 4. Investment income - | | | | | 1 January | 1 |
| interest receivable | | | | | | January |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Interest income generated | | | | | GBP 000's | GBP |
| from: | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Bank deposits | | | | | 457 | 584 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Other loans and receivables | | | | | 820 | 1,413 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 1,277 | 1,997 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Interest income generated from other loans and receivables represents the recognition of the unwinding |
| of the discount factor applied to the partly paid B shares. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 5. Finance costs - interest | | | | | | |
| payable | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 1 January | 1 |
| | | | | | | January |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Interest on bank overdrafts | | | | | 111 | 14 |
| and loans | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 6. Staff costs | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 1 January | 1 |
| | | | | | | January |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Staff costs comprise: | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Wages and salaries | | | | | 13,811 | 25,371 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Social security costs | | | | | 1,802 | 2,462 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| IFRS 2 share based payments | | | | | 1,125 | 1,380 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 16,738 | 29,213 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The Group does not operate any pension schemes. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The average number of employees (including executive directors) was: |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | No. | No. |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Corporate finance | | | | | 10 | 9 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Broking | | | | | 59 | 42 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Administration | | | | | 28 | 19 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 97 | 70 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The total emoluments of the highest paid director were: | 608 | 2,161 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 7. Profit before tax | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit for the period has been arrived at after charging/(crediting): | 1 January | 1 |
| | | January |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Operating lease rentals | | | | | 625 | 624 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Auditors' remuneration (refer to analysis | | | | 114 | 139 |
| below) | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| Depreciation of property, plant and | | | | 341 | 227 |
| equipment | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| Staff costs (see note 6) | | | | | 16,738 | 29,213 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Change in fair value of financial assets designated as at fair value through | 503 | 699 |
| profit or loss | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Costs associated with aborted takeover bid | | | 100 | 841 |
+--------------------------------------------------------------------------+--------------+------------+-------------+--------------+
| Gain from disposal of B shares by | | | | - | (804) |
| employees | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The analysis of auditors' remuneration is | | | | GBP 000's | GBP |
| as follows: | | | | | 000's |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| Fees payable to the Group's auditor for the audit of the Group's financial | 86 | 75 |
| statements and consolidation | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Fees payable to the Group's auditor for other services: | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| - The audit of the Group's subsidiaries, pursuant to legislation | 13 | 10 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| - Other services, pursuant to legislation | 15 | 15 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| - Tax services | - | 39 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 114 | 139 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Disposal of B shares by | | | | | | |
| employees | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| During 2007, two employees, who were holders of partly paid B shares, left the Group. The B shares |
| they held were subsequently fully paid up and as a result converted into ordinary shares which were |
| placed with various institutions. This resulted in a profit in the hands of the employees. It was |
| agreed between the employees and the Group that the after tax profit resulting from these transactions |
| were remitted to the Group and this gain is shown in the table above. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 8. Other gains and losses | | | 1 January | 1 |
| | | | | January |
+------------------------------+------------+------------------------------+-----------------------------------------+--------------+
| | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+-----------------------------------------+--------------+
| | | | 31 December | 31 |
| | | | | December |
+------------------------------+------------+------------------------------+-----------------------------------------+--------------+
| | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+-----------------------------------------+--------------+
| | | | Revenue | Expenses | Net gain | Net gain |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | GBP 000's | GBP 000's | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Gain on part disposal of a | | | - | - | - | 1,709 |
| subsidiary | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Total other gains and losses | | | - | - | - | 1,709 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Part disposal of subsidiary | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| On 15 November 2007 the Group disposed of part of its holding in Cenkos Channel Islands Limited |
| amounting to 11% of its share capital. A further 14% was disposed of on 11 December 2007, when Cenkos |
| Channels Islands Limited was successfully floated on the Channel Islands Stock Exchange. These |
| disposals of shares have reduced the Group's holding from 75% to 50%. However, control is still |
| maintained by the Company and as such the results of Cenkos Channel Islands Limited have continued to |
| be consolidated. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 8. Other gains and losses | | | | | | |
| (continued) | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | 31 | 15 | 11 | 31 |
| | | | December | November | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | 2008 | 2007 | 2007 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | GBP 000's | GBP 000's | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Non-current assets | | | 54 | 18 | 17 | 16 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Current assets | | | 6,863 | 2,813 | 3,161 | 2,227 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Cash and cash equivalents | | | (45) | 1,370 | 1,057 | 1,125 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Current liabilities | | | (6,259) | (3,525) | (3,561) | (2,735) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Net assets at date of | | | 613 | 676 | 674 | 633 |
| disposal and year end | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | 15 | 11 | Total |
| | | | | November | December | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | 2007 | 2007 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | GBP 000's | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Share of net assets disposed | | | | 218 | 94 | 313 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Fees related to disposal | | | | - | 129 | 129 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Cost of sale | | | | 218 | 223 | 442 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Gain on disposal | | | | 532 | 1,177 | 1,709 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Total consideration | | | | 750 | 1,400 | 2,150 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Satisfied by cash | | | | 750 | 1,400 | 2,150 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Cash inflow arising on | | | | | | |
| disposal: | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Cash consideration | | | | 750 | 1,400 | 2,150 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 9. Tax | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The tax charge comprises: | | | | | 1 January | 1 |
| | | | | | | January |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Current tax | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| United Kingdom corporation tax at 28.5% (2007 - 30%) based on the profit for | 1,391 | 7,072 |
| the period | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Overseas tax charge borne by subsidiaries operating in other jurisdictions | 6 | - |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Adjustment in respect of | | | | | (99) | - |
| prior period | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Total current tax | | | | | 1,298 | 7,072 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Deferred tax | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Credit on account of timing | | | | | - | (15) |
| differences | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Charge on account of timing | | | | | 106 | - |
| differences | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Total deferred tax | | | | | 106 | (15) |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Total tax on profit on ordinary activities | | | 1,404 | 7,057 |
+--------------------------------------------------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The tax charge for the period differs from that resulting from applying the standard rate of UK |
| corporation tax of 28.5% to the profit before tax for the reasons set out in the following |
| reconciliation. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| 9. Tax (continued) | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 1 January | 1 |
| | | | | | | January |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Profit on ordinary | | | | | 5,124 | 23,819 |
| activities before tax | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Tax on profit on ordinary activities at the UK corporation tax rate of 28.5% | 1,460 | 7,146 |
| (2007: 30%) | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Tax effect of: | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Depreciation in excess of capital allowances | 25 | 2 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Expenses that are not deductible in determining taxable profits | 411 | 596 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Different tax rates of subsidiaries operating in other jurisdictions | (150) | (13) |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Income not subject to corporation tax | (396) | (735) |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Adjustment for IFRS2 relating to staff options | 106 | 25 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Adjustment for loss relief | | | | | 47 | 36 |
| not claimed | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Adjustment in respect of prior period | (99) | - |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Tax expense for the period | | | | | 1,404 | 7,057 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| In addition to the amount charged to the income statement, deferred tax relating to the fair value of |
| the Group's available for sale investments amounting to GBP761,216 (2007: GBP94,184 charged directly |
| to equity) has been credited directly to equity. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| 10. Dividends | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Amounts recognised as distributions to equity holders in the year: | 1 January | 1 |
| | | January |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Final dividend for the year ended 31 December 2007 of 12p (31 December 2006: | 8,711 | - |
| nil) per share | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Interim dividend for the period to 30 June 2008 of 5p (June 2007: 10p) per | 3,633 | 7,259 |
| share | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | 12,344 | 7,259 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| A final dividend of 5p per share has been proposed for the year ended 31 December 2008 | |
| (2007: 12p). | |
+--------------------------------------------------------------------------------------------------------------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The proposed final dividend has not been included as a liability in these financial statements. |
| Subject to shareholders approval at the Annual General Meeting, the final dividend will be paid on 26 |
| May 2009 to all shareholders on the register of members as at 24 April 2009. The Annual General |
| Meeting of the Company will be held on 21 May 2009 at 12 noon at 6.7.8 Tokenhouse Yard, London, EC2R |
| 7AS. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------------------------------------------------+
| 11. Earnings per share | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The calculation of the basic and diluted earnings per share is based on the | 1 January | 1 |
| following data: | | January |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | 2008 to | 2007 to |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | 2008 | 2007 |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | GBP 000's | GBP |
| | | | | | | 000's |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Earnings | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Earnings for the purposes of basic earnings per share being net profit | 3,545 | 16,552 |
| attributable to equity holders of the parent | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Effect of dilutive potential ordinary shares: | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Share options | | | | | - | - |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Earnings for the purposes of diluted earnings per share | 3,545 | 16,552 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| | | | | | No. | No. |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Number of shares | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Weighted average number of ordinary shares for the purposes of basic earnings | 72,616,990 | 72,593,670 |
| per share | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Effect of dilutive potential ordinary shares: | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Share options | 95,060 | 520,806 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Weighted average number of ordinary shares for the purpose of diluted earnings | 72,712,050 | 73,114,476 |
| per share | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| The denominators for the purposes of calculating both basic and diluted earnings per share have been |
| adjusted to reflect the sub-division of shares on 31 October 2006. The weighted average number of |
| shares considered for the current period also includes the total number of B shares, even though they |
| are partly paid shares, as these shares are entitled to a full dividend payout. |
+-----------------------------------------------------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------------------------------------------------+
| Adjusted earnings | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Earnings for the purposes of basic and diluted earnings per share | 3,545 | 16,552 |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Other gains and losses | - | (1,709) |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Gain from disposal of | | | | | - | (804) |
| employee B shares | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Costs associated with aborted takeover | | | | 100 | 841 |
| bid | | | | | |
+-------------------------------------------+------------------------------+--------------+------------+-------------+--------------+
| Adjusted earnings for the purposes of adjusted basic and diluted earnings per | 3,645 | 14,880 |
| share | | |
+------------------------------------------------------------------------------------------------------+-------------+--------------+
| Adjusted EPS | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Basic | | | | | 5p | 20.5p |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Diluted | | | | | 5p | 20.4p |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| Additional Information | | | | | | |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
| The financial information in this announcement does not constitute statutory accounts within the |
| meaning of section 240 of the Companies Act 1985 but is derived from those accounts. The auditors have |
| reported on the statutory accounts for the year ended 31 December 2008. Their report was unqualified |
| and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. Those accounts |
| have not been delivered to the Registrar of Companies, but will be delivered following the Company's |
| Annual General Meeting. |
| Statutory accounts for the year ended 31 December 2007 have been delivered to the Registrar of |
| Companies. The auditors have reported on those accounts. Their report was unqualified and did not |
| contain statements under section 237 (2) or (3) of the Companies Act 1985. |
+------------------------------+------------+------------------------------+--------------+------------+-------------+--------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JAMMTMMITTJL
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