RNS Number:3938T
London Forfaiting Company PLC
22 March 2002
Press Enquiries:
Jack A G Wilson
Chairman
0207 481 3410
London Forfaiting Company PLC
2001 Preliminary Results
Report of the Chairman and the Chief Executive,
Results
The loss before and after tax for the year ended 31 December 2001 was £10.82
million compared to £1.07 million before and after tax profit for the previous
year. The loss per share was 10.33p compared with earnings per share of 1.02p in
the previous year.
Developments in the second half of the year.
We last wrote to you in September 2001, reporting a pre-tax loss in the first
half of the year of £13.96 million, resulting from a downward valuation of
assets of £15.62 million. We are pleased to tell you that in the second half of
the year we have reduced this loss by more than £3 million to £10.82 million for
the year as a whole. The improvement in the second half of the year in large
measure resulted from the success of our recoveries section, both in selling
some assets at prices higher than valuations and in recovering and restructuring
payments from borrowers in respect of other defaulted assets. The effect of this
activity has been to reduce the figure for downward revaluations less recoveries
from £13.86 million at the half year to £10.25 million for the full year. Net
assets per share which were 27.7p at 30 June 2001 increased to 30.7p at 31
December 2001.
Note 2 to this Statement explains the relationship of the movements in the first
half and in the second half of the year, which resulted from recoveries and also
from our regular valuations and provisioning reviews. These valuations also
include new provisions relating to the crisis in Argentina.
Business Environment
The business environment in which the Company operates remained difficult in the
year under review. The continued unsettled situation in certain emerging markets
and the events of September 11th amongst other factors kept activity in the
forfaiting market at relatively low levels throughout the year, although this
volatility did provide some opportunities for bond trading by our Cyprus
subsidiary.
Balance Sheet
The portfolio of forfaiting assets, including emerging market bonds which had
been reduced from £ 126.45 million at the end of 2000 to £ 76.09 million as at
the end of June, has been further reduced to £ 32.12 million at the end of
December 2001. The Company has been successful in trading down the size of its
portfolio so as to provide it with the choice of not taking up bank borrowings
when the US$ 150 million syndicated bank facility matures in October this year
although the company may well, as opportunities occur, enter into new borrowing
facilities in the future.
The portfolio of forfaiting assets excluding emerging market bonds amounted to
£30.35 million as at 31 December 2001 compared to £ 61.08 million as at 30 June
2001 and £ 99.95 million as at 31 December 2000 and the table on the next page
analyses the breakdown by country.
£ Million £ Million £ Million
31 December 2001 30 June 2001 31 December 2000
Europe 7.28 25.12 46.91
Central & East Europe 4.38 8.04 22.32
Croatia 0.03 0.49 3.12
Czech Republic - - 5.31
Macedonia - 0.38 -
Romania - 4.76 1.36
Russia 3.52 2.41 8.50
Slovakia - - 0.19
Slovenia 0.39 - 0.35
Ukraine 0.44 - 3.49
Baltics 0.07 0.15 0.95
Estonia 0.07 0.15 0.83
Lithuania - - 0.12
Other Europe 2.83 16.93 23.64
Cyprus - 1.74 -
France 0.13 1.72 1.83
Germany - 1.07 1.00
Greece - - 3.38
Netherlands - 0.04 0.07
Portugal - - 0.15
Sweden 1.07 - -
Switzerland 0.51 - -
Turkey 0.74 10.84 14.50
UK 0.38 1.52 2.71
Americas 12.59 15.58 26.58
South America 12.38 8.94 25.88
Argentina - 0.07 8.45
Brazil 0.07 0.12 0.37
Chile 0.04 0.25 5.84
Colombia 1.21 1.34 3.43
Ecuador* 11.06 7.16 7.73
Peru - - 0.06
Central America & the Caribbean 0.06 1.33 0.24
Cayman Islands - 1.33 -
Costa Rica 0.06 - 0.24
North America 0.15 5.31 0.46
Mexico 0.12 0.17 0.32
USA 0.03 5.14 0.14
Asia 9.19 14.96 24.73
Bangladesh 0.17 - -
China 0.27 0.96 0.67
Hong Kong 1.78 2.44 3.71
India - - 0.21
Indonesia 0.32 0.33 4.42
Japan - - 4.35
Kazakhstan 0.66 3.46 -
Malaysia 0.46 1.23 4.14
Philippines 3.90 3.82 3.69
South Korea 1.55 2.12 2.98
Thailand 0.08 0.08 0.56
Vietnam - 0.52 -
North Africa/Middle East 1.29 5.42 1.73
Bahrain - 0.32 0.31
Egypt 1.14 3.94 1.19
Iran 0.09 - -
Lebanon - - -
Oman 0.06 - 0.23
Saudi Arabia - 0.47 -
UAE - 0.69 -
Total 30.35 61.08 99.95
* The Ecuador exposure as at the date of announcement was £ 4.02 million. This
compares with £ 11.06 million at the year end. The reduction is the result of
repayments by the borrower during 2002.
Overheads
The Company has successfully continued to reduce administrative expenses which
were £ 10.0 million for 2001 compared with £ 12.8 million in the previous year.
Administrative expenses for the second half of the year at £ 4.4 million were
less than the £ 5.6 million for the first half.
Outlook
During 2002 we expect to make further progress in recovering monies from our
remaining non-performing assets; such recoveries may make a positive
contribution to the balance sheet in the coming months.
Currently new forfaiting business is at a relatively low level but it is
expected that there will be a pickup in world growth in the second half of 2002
which should lead to increased trade with the emerging markets and should have a
positive impact on new business possibilities.
As we mentioned at the time of our Interim Statement, the Company is also
seeking co-operative ventures with others and exploring ways of expanding the
outlets for our resources and skills.
Jack A. G. Wilson Stathis A. Papoutes
Chairman Chief Executive
21st March 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(Unaudited) (Audited)
Year ended Year ended
31 December, 31 December,
2001 2000
£'000 £'000
Total Sales (Note 1) 419,056 313,277
Trading income 12,227 20,886
Bank and other interest receivable 982 1,541
Bank interest payable (3,748) (8,557)
9,461 13,870
Administrative expenses (10,037) (12,802)
Operating profit (loss) before
recoveries and revaluations (576) 1,068
Recoveries and net revaluation of
forfaiting assets (Note 2) (10,248) -
Profit (loss) on ordinary activities
before taxation (10,824) 1,068
Tax on profit (loss) on ordinary
activities (Note 3) - -
Profit (loss) on ordinary
activities after taxation (10,824) 1,068
Dividends - -
Retained profit (loss) for the year (10,824) 1,068
Retained profit (loss) brought forward (57,266) (58,334)
Retained loss carried forward (68,090) (57,266)
Earnings (loss) per share (Note 4) (10.33) p 1.02 p
There are no recognised gains or losses for the current or previous year other
than as stated in the profit and loss account.
CONSOLIDATED BALANCE SHEET
(Unaudited) (Audited)
31 December, 31 December,
2001 2000
£'000 £'000
Fixed assets
Tangible assets 1,292 1,561
Current assets
Forfaiting assets (Note 5) 32,120 126,453
Prepayments and accrued income 9,199 19,882
Cash at bank and in hand 16,007 17,059
57,326 163,394
Current liabilities
Bank loans (Note 6) 20,613 112,169
Other creditors 5,848 9,805
26,461 121,974
Net current assets 30,865 41,420
Net assets 32,157 42,981
Capital and reserves
Called up share capital 41,912 41,912
Share premium account 33,335 33,335
Other reserves 25,000 25,000
Profit and loss account (68,090) (57,266)
Equity shareholders' funds 32,157 42,981
NOTES TO THE PRELIMINARY STATEMENT
1. Total sales include sales of emerging market bonds amounting to £187,223,000
(year ended 31 December, 2000: £20,539,000).
2. Recoveries and net revaluation
As reported Exchange Second Total
at 30th June adjustment half 2001 2001
£000's £000's £000's £000's
Recoveries from sales and repayments 1,759 (57) 4,252 5,954
Net revaluation for the period (15,622) 301 (881) (16,202)
(13,863) 244 3,371 (10,248)
3. Group tax losses of approximately £102 million (£48 million in the United
Kingdom) are available for offset against future profits.
4. The calculation of the earnings (loss) per share is based on the profit
(loss) after taxation and on the weighted average number of 104,780,000
ordinary shares in issue.
5. Forfaiting assets include £1.77 million of emerging market bonds (31
December, 2000: £26.5 million).
6. The syndicated facility from banks maturing in October 2002 amounts to
£103,064,450 of which £20,612,890 was drawn at 31 December, 2001.
7. Financial information for the year ended 31 December, 2000 has been extracted
from the Group's statutory accounts which have been delivered to the
Registrar of Companies. The audit report on the accounts for the year ended
31 December, 2000 was unqualified. The financial information contained in
this Preliminary Report does not constitute the Group's statutory accounts
within the meaning of section 240 of the Companies Act 1985.
CONSOLIDATED CASH FLOW STATEMENT
(Unaudited) (Audited)
Year ended Year ended
31 December, 31 December,
2001 2000
£'000 £'000
Net cash inflow from
operating activities Note (a) 4,103 62,793
Servicing of finance
Interest paid on medium
term loans - (1,652)
Taxation
UK corporation tax recovered 6 1,452
UK corporation tax paid - -
Overseas tax recovered 5 -
Overseas tax paid (7) (17)
4 1,435
Capital expenditure
Purchase of tangible assets (53) (675)
Sale of tangible assets 52 230
(1) (445)
Net cash inflow before financing 4,106 62,131
Financing
Medium term bank loans repaid - (75,539)
Increase (Decrease) in cash Note (b) 4,106 (13,408)
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
a) Reconciliation of profit (loss) on ordinary activities before taxation to net
cash inflow from operating activities
31 December 31 December
2001 2000
£'000 £'000
Profit (loss) on ordinary activities
before taxation (10,824) 1,068
Interest on medium term loans - 1,214
Depreciation charges 261 642
Profit on sale of tangible assets (22) (137)
Decrease in forfaiting assets 94,333 25,663
Decrease in prepayments and accrued income 10,685 9,065
Decrease (increase) in bank deposits 5,039 (1,428)
Decrease in creditors (3,962) (4,151)
Exchange rate adjustments 53 (556)
Increase (decrease) in bank loans (91,460) 31,413
Net cash inflow from operating activities 4,103 62,793
b) Analysis of changes in cash during the year
31 December, 31 December,
2001 2000
£'000 £'000
At 1 January 4,436 17,302
Exchange rate movements (23) 542
Net cash inflow (outflow) 4,106 (13,408)
At 31 December 8,519 4,436
c) Analysis of the balances of cash as shown in the consolidated balance sheet
31 December, 31 December,
2001 2000
£'000 £'000
Cash at bank and in hand per consolidated
balance sheet 16,007 17,059
Less bank deposits (7,488) (12,527)
8,519 4,532
Bank overdrafts - (96)
8,519 4,436
This information is provided by RNS
The company news service from the London Stock Exchange
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