RNS Number:4403Q
Intermediate Capital Group PLC
02 October 2003
2 October 2003
Interim results announcement for the six months to 31 July 2003 and
Proposed Placing and Open Offer of 9,176,804 New Ordinary Shares at 915p per
share
Intermediate Capital Group PLC ("ICG" or the "Company") announces today its
interim results for the six month period to 31 July 2003 and a Placing and Open
Offer to raise approximately #82 million, net of expenses.
Placing and Open Offer
* Qualifying Shareholders will be offered under the Open Offer 9,176,804 New
Ordinary Shares at the Placing Price, payable in full on acceptance, on the
basis of:
2 New Ordinary Shares for every 13 Existing Ordinary Shares
* Net proceeds of the Placing and Open Offer will amount to approximately
#82 million.
* In the 12 month period to 31 July 2003, ICG experienced a strong level of
new lending and this is expected to continue into the second half of the
current financial year.
* To enable ICG to continue this growth, while retaining a prudent financial
structure, ICG believes it is now appropriate to raise further equity in
order to reduce its gearing and further increase its borrowing capacity.
Under the terms of the Placing Agreement, which has been entered into in
connection with the Placing and Open Offer, Cazenove & Co. Ltd has conditionally
agreed to procure placees or, failing which, to subscribe itself for the New
Ordinary Shares, to the extent that they are not taken up under the Open Offer.
HSBC is acting as Co-Lead Manager and Joint Broker to the Placing and Open
Offer. Further details of the Placing and Open Offer are set out in Part 1 of
this announcement.
Interim Results
Highlights
* Core income up 31% to #28.4m (2002 - #21.6m)
* Pre-tax profits up 23% to #32.1m (2002 - #26.2m)
* EPS up 17% to 36.3p (2002 - 31.0p)
* Interim dividend up 10.5% to 10.5p per share
* Loan book up 18% to #1.03bn in the first half
* First closing of new mezzanine fund
The interim results of ICG for the six month period ended 31 July 2003 are set
out in Part 2 of this announcement.
The Chairman of ICG, John Manser, commented "I am pleased to report another
strong performance by ICG in the six months to 31 July 2003. Prospects for
growth in net interest income and core income are good.
"The Placing and Open Offer will strengthen ICG's balance sheet and will enable
the Company to take advantage of good growth opportunities whilst maintaining a
sound financial structure."
Enquiries:
ICG
Tom Bartlam (Managing Director) 020 7628 9898
Tom Attwood (Managing Director) 020 7628 9898
Cazenove & Co. Ltd
Christopher Smith 020 7588 2828
Brunswick
Gill Ackers 020 7404 5959
Part 1
Proposed Placing and Open Offer
Introduction
ICG proposes to raise approximately #82 million (net of expenses) by means of a
Placing and Open Offer of 9,176,804 New Ordinary Shares at 915p per share.
Under the terms of the Placing Agreement, which has been entered into in
connection with the Placing and Open Offer, Cazenove & Co. Ltd has conditionally
agreed to procure placees or failing which to subscribe itself for the New
Ordinary Shares to the extent that they are not taken up under the Open Offer.
HSBC is acting as Co-Lead Manager and Joint Broker to the Placing and Open
Offer.
Information on ICG
ICG is the leading independent provider of mezzanine finance in Europe. Since
its formation in 1989, ICG has arranged or provided over #3 billion of mezzanine
finance in nearly 200 transactions across Western Europe. When ICG listed on the
London Stock Exchange in 1994, its portfolio of mezzanine loans and investments
was #144 million. The portfolio has consistently grown every year since then to
over #1 billion at 31 July 2003.
The growth in ICG's portfolio has been driven by a number of factors:
* the strong growth in the buyout market throughout Western Europe, which is
ICG's principal source of business;
* ICG's continuing emphasis on developing a mezzanine business in
continental Europe, where the growth in buyout activity has been
particularly strong. ICG established a Paris office in 1995 and expects to
open further offices in continental Europe in the near future. It has built
up a team of 15 continental European mezzanine professionals, including
French, German, Dutch, Spanish and Swedish; and
* the increased size of buyouts and the increased use of mezzanine in such
transactions.
ICG's portfolio is well diversified by sector and geography. At 31 July 2003,
its portfolio consisted of loans to 83 companies spread over 28 sectors and 11
countries.
In 2001, ICG opened a small office in Hong Kong with a view to extending its
mezzanine business to certain companies in the Asia Pacific region. Over the
last two years ICG has established good working relations with the major private
equity houses in the region, and is well placed to build the business when
financing activity increases following the impact of SARS.
In addition to investing its own capital in mezzanine assets, ICG has developed
a successful fund management business. At 31 July 2003, ICG had invested third
party mezzanine funds amounting to #331 million. In September 2003, ICG achieved
the first closing of its new mezzanine fund with equity raised of Euro295 million.
ICG intends to gear up this equity with debt facilities. Taking into account
further amounts of equity expected to be raised at subsequent closings of the
fund, together with leverage, ICG is confident that this new fund will have cash
resources in excess of Euro1billion. In addition, at the end of September 2003, ICG
raised a new Euro250 million loan fund as a result of which ICG currently manages
five non-mezzanine sub-investment grade debt funds amounting in total to over
Euro1.7 billion.
The substantial rate of growth seen in the mezzanine portfolio and the fund
management business has generated strong and consistent growth in revenues and
profitability since ICG listed in 1994. For the year ended 31 January 1994,
ICG's core income (net interest income plus fees less administrative expenses)
and profit before tax were #6.8 million and #17.8 million respectively. Since
then core income and profit before tax have grown to #45.9 million and #53.5
million respectively for the year ended 31 January 2003. Throughout this period
of growth, the credit quality of the loan book has remained high and the level
of provisions has, in the opinion of the Directors, been acceptable.
ICG has maintained a progressive dividend policy, growing distributions on an
annualised basis by an average of 13.5 per cent. per annum since the year ended
31 January 1994.
Background to and reasons for the Placing and Open Offer
Since listing in 1994, ICG has experienced significant growth in its loan book
as a result of the high levels of demand seen throughout the UK and continental
Europe for mezzanine finance.
Although over the last two years M&A activity has materially declined, the
European buyout market has remained relatively strong, which, along with
increased uncertainty in the financial markets, has helped to produce an
attractive environment for mezzanine in general and for ICG in particular. This
has led to high levels of new lending and a significant increase in ICG's
mezzanine loan portfolio, which in turn has produced strong growth in core
income.
Over the 12 months to 31 July 2003, ICG experienced a strong level of new
lending, and this is expected to continue into the second half of the current
financial year. Relatively low levels of repayments over this period combined
with the strengthening of the Euro against the pound have contributed to the
loan book growing to over #1 billion.
ICG has financed its growth with a combination of equity and debt and its policy
has been to limit balance sheet gearing (being the ratio of net debt to equity
shareholders' funds) to levels the Directors consider appropriate for the nature
of ICG's business. Since its listing in 1994, ICG has in most years been able to
grow the business while remaining comfortably within a gearing ratio of 4:1. As
at 31 July 1999, gearing levels exceeded 3:1 and, with a strong pipeline of
potential deals in prospect, ICG could see gearing levels moving closer to 4:1
in the foreseeable future. Consequently ICG raised #54.5 million of equity by
means of a rights issue thereby reducing its gearing to more comfortable levels.
ICG's loan book has grown from approximately #400 million as at 31 July 1999 to
over #1 billion as at 31 July 2003, and its borrowings have increased from #320
million to #838 million. As a result of increases in retained earnings and the
net proceeds of the 1999 rights issue, Shareholders funds have grown from #105
million at 31 July 1999 to #235 million at 31 July 2003. As at 31 July 2003,
gearing was 3.6:1.
The significant and continued growth in ICG's portfolio since the rights issue
in 1999 has resulted in growth in core income, pre-tax profits and earnings per
share. To enable it to continue this growth, while retaining a prudent financial
structure, ICG believes it is now appropriate to raise further equity in order
to reduce its gearing and further increase its borrowing capacity. The net
proceeds of the Placing and Open Offer of approximately #82 million will be
applied in the reduction of short-term borrowings under existing facilities, and
consequently, immediately following the Placing and Open Offer, gearing will be
approximately 2.4:1.
With a favourable background for the use of mezzanine finance, and the strength
of the Company's lending activities and its expanding fund management business,
the Directors believe there are good prospects for continued growth in core
income.
Current trading and prospects
Part 2 of this announcement contains ICG's interim results for the six month
period ended 31 July 2003, which were announced today. These show a strong
performance by ICG with core income increasing by 31 per cent. to #28.4 million
compared with the corresponding period in the previous year. While net capital
gains were slightly down on the previous year, pre-tax profits for the first
half increased by 23 per cent. to #32.1 million.
ICG has had a good period for new lending with the loan book increasing over the
six months by 18 per cent. to #1.03 billion as at 31 July 2003.
ICG also achieved the first closing of its latest mezzanine fund and is
confident that, once leveraged, this new fund will have cash resources in excess
of Euro1 billion. In addition, ICG raised another fund to invest in non-mezzanine
sub-investment grade debt of Euro250 million.
In the second half, ICG continues to see a good flow of mezzanine opportunities
which should lead to strong new lending. Prospects for growth in net interest
income and core income are good.
Details of the Placing and Open Offer
ICG proposes to raise approximately #82 million (net of expenses) by way of the
Placing and Open Offer. The New Ordinary Shares are being conditionally placed
at the Placing Price with placees subject to and to the extent that valid
applications under the Open Offer are not made by Qualifying Shareholders.
Cazenove has agreed, as agent on behalf of the Company, to invite Qualifying
Shareholders under the Open Offer to take up the New Ordinary Shares at the
Placing Price, payable in full on acceptance, on the basis of:
2 New Ordinary Shares for every 13 Existing Ordinary Shares
registered in the names of Qualifying Shareholders on the Record Date, and so in
proportion for any greater or lesser number of Existing Ordinary Shares then
held. Entitlements will be rounded down to the nearest whole number and any
fractional entitlements to New Ordinary Shares will be disregarded in
calculating Qualifying Shareholders' pro rata entitlements. Such fractional
entitlements will be aggregated and included in the Placing, with the proceeds
retained for the benefit of the Company. Qualifying Shareholders may accept the
Open Offer in respect of any number of New Ordinary Shares up to their maximum
entitlement as set out on their Acceptance Forms. Qualifying Shareholders with
holdings of Existing Ordinary Shares in both certificated and uncertificated
form will be treated as having separate entitlements under the Open Offer.
The New Ordinary Shares will be offered at the Placing Price to Qualifying
Shareholders on a pre-emptive basis under the terms of the Open Offer only, and
not, in whole or in part, to the public. Pursuant to the Placing Agreement,
Cazenove has conditionally agreed to place with institutional and other
investors or, to the extent that it fails to do so, itself subscribe for those
New Ordinary Shares not taken up by Qualifying Shareholders under the Open
Offer. The Placing and Open Offer is being fully underwritten by Cazenove on the
terms and subject to the conditions set out in the Placing Agreement.
No acceptance in excess of a Qualifying Shareholder's pro rata entitlement will
be met and any Qualifying Shareholder so accepting will be deemed to have
accepted his maximum entitlement.
The New Ordinary Shares will rank pari passu in all respects with the Existing
Ordinary Shares and will rank in full for dividends and other distributions
declared, made or paid on or after Admission in respect of the ordinary share
capital of the Company. The New Ordinary Shares will not rank for the interim
dividend declared on 2 October 2003 for the six month period ended 31 July 2003.
The Open Offer is conditional, inter alia, upon:
(i) the Placing Agreement becoming unconditional (save for any
condition relating to Admission in any of those agreements), and
not having lapsed or been terminated in accordance with its
terms prior to Admission; and
(ii) Admission having become effective by no later than 8.00 a.m. on 27
October 2003 or such later time and/or date as ICG and Cazenove may
agree (but, in any event, not later than 8.00 a.m. on
7 November 2003).
If Admission does not take place, New Ordinary Shares will not be issued under
the Placing or the Open Offer and all monies received by Computershare will be
returned to the Qualifying Shareholder (at the Qualifying Shareholder's risk)
without interest within 14 days thereafter.
Application has been made to the UKLA and to the London Stock Exchange for all
of the New Ordinary Shares to be admitted, respectively, to the Official List
and to trading on the London Stock Exchange's market for listed securities.
Admission is expected to occur on 27 October 2003, when unconditional dealings
in the New Ordinary Shares are expected to begin.
Certain Directors and their connected persons have expressed their intention to
accept the Open Offer. Such acceptances amount to 72,556 New Ordinary Shares out
of a total of 297,434 New Ordinary Shares which the Directors are entitled to
take up under the Open Offer.
Expected Timetable of Principal Events
Record Date for the Open Offer Close of business on
Tuesday 30 September 2003
Latest time and date for splitting of Acceptance Forms 3 p.m. on Wednesday 22 October 2003
Latest time and date for receipt of completed Acceptance Forms
and payment in full 3 p.m. on Friday 24 October 2003
Commencement of dealings in New Ordinary Shares 8 a.m. on Monday 27 October 2003
Stock accounts in CREST credited with New Ordinary Shares Thursday 30 October 2003
Despatch of definitive certificates for New Ordinary Shares By Friday 31 October 2003
Part 2
Interim results for the six months ended 31 July 2003
Chairman's Statement
Introduction
I am pleased to report another strong performance by ICG in the six months to 31
July 2003.
Core income rose by 31 per cent. to #28.4 million compared with the
corresponding period last year, primarily as a result of the particularly strong
growth in net interest income.
Net capital gains were slightly down on the previous year and pre-tax profits
for the first half increased by 23 per cent. to #32.1 million.
In the current financial year we have taken further significant strides in
developing our fund management business. We have had a first closing on our
latest mezzanine fund, the total size of which we are confident will exceed
Euro1bn, including gearing. In addition, we have closed another fund to invest in
sub investment grade debt of Euro250m.
In the first half we have seen a strong flow of attractive mezzanine
opportunities throughout Europe, as a result of which, ICG has increased its
loan book by 18 per cent. to #1.03bn at 31 July 2003. We believe that, in order
to continue to grow our lending business, while maintaining prudent levels of
gearing, it is now appropriate to raise new equity. Accordingly, we are
proposing to raise approximately #82 million net of expenses by means of a
Placing and Open Offer to shareholders.
The European mezzanine market
The buyout market in the UK and Continental Europe was active in the first half
of 2003 despite the negative impact on the marketplace of the Iraq war. While
the value of buyouts at approximately #18bn was less than in the second half of
2002, it was nearly 50 per cent. higher than in the first half of last year.
The use of mezzanine in buyouts has been particularly strong, with the total
value of mezzanine invested in the first half of 2003 amounting to approximately
#1.6bn, which represents approximately 9 per cent. of total buyout financing,
which is the highest level it has been in recent years. This high usage of
mezzanine was driven by the need for private equity arrangers of buyouts to
enhance returns in their financial structures and their increased willingness to
use mezzanine rather than high yield bonds in some of the larger transactions
together with the increased availability of mezzanine finance.
We have continued to see banks competing strongly for senior and mezzanine debt
arrangement mandates, and we have seen funds raised by two US investment banks
being more active investors in the mezzanine market. However, ICG remains one of
the largest independent mezzanine investors with a strong pan European team and
has therefore been approached on the majority of the significant mezzanine
financings in the market.
Gearing levels have been quite high for some of the larger buyouts but, for the
most part, have fairly reflected the risk of the transaction. Pricing has also
been satisfactory with no erosion of cash margins. We have continued to see
mezzanine in larger buyouts being structured with increased amounts of rolled-up
interest at the expense of warrants but with similar total return expectations.
Asia Pacific
Our Hong Kong based mezzanine operation had a quiet six months as a result of
the negative impact of SARS on business in the region. However, business has now
returned to normality and there is a pick-up in activity.
Loan portfolio
We had a good start to the financial year in terms of new lending and, following
a slowdown in activity because of the Iraq war, we saw a significant upturn in
the number of mezzanine lending opportunities, several of which were quite
large. As a result of this, we have had a strong six months of new lending in
which we arranged or provided a total of #285 million of financings of which
#178 million was invested on our balance sheet and #78 million was invested on
behalf of our fund management clients, with the balance being syndicated to
third party investors. These new loans were to ten different companies of which
three were in the UK, three were in Germany, two were in France and one was in
each of The Netherlands and Spain.
During the first half we had a relatively quiet period for repayments with a
total of #60 million being repaid. The appreciation of the Euro against Sterling
in the first half of our financial year had the effect of increasing the
sterling value of our loan portfolio by #46 million. As a result of the above
ICG's loan book grew by 18 per cent. to #1.03 billion.
Our first half saw continuing difficult business conditions throughout western
Europe. There have been two new underperformers in our portfolio in the period
but this was matched by some of the investments, which were performing poorly,
now starting to improve. Overall we believe that our portfolio has performed
satisfactorily, taking into account the economic background.
Funds under management
Funds invested on behalf of our mezzanine fund management clients increased
during the first half to #331 million. As our last mezzanine fund is nearly
fully invested, we have been working on raising a new fund. We are pleased to be
able to announce the first closing of Euro295 million of equity in this new fund at
the end of September. As a result of anticipated further closings, together with
our intention to gear up this fund, we are confident that the fund will have
total cash resources in excess of Euro1 billion. This fund will take a higher
proportion of new investments than the last fund and will significantly increase
the scale of our mezzanine fund management business in the future and will help
to consolidate ICG's position as one of the biggest investors in the European
mezzanine market.
High yield bond markets strengthened somewhat in the first half of the year and
this has helped the performance of our two CDOs, although their performance
continues to be below our original expectations. The performance of our two loan
funds continues to be satisfactory and we were pleased to be able to announce at
the end of September the raising of a further loan fund of Euro250 million. As a
result of this last fundraising the funds under management in high yield and
leveraged loans amount to over Euro1.7 billion.
Core income
Core income, which comprises net interest income and fee income less operating
expenses, rose very strongly by 31 per cent. to #28.4 million compared with the
first half of the previous year, driven primarily by the 43 per cent. growth in
net interest income to #28.1 million. This increase arose from the 39 per cent.
growth in our portfolio over the past 12 months and the continuing use of
roll-up interest together with the strengthening of the Euro against Sterling.
Fee income increased by 5 per cent. to #8.9 million compared with the first half
of the previous year. Fund management fees increased by 16 per cent. to #5.1
million, as a result of the increase in funds invested, which more than
compensated for the slight fall in arrangement and agency fee income from #4.1
million to #3.8 million, a result of lower fees on some of the new transactions.
Operating expenses, net of the cost of the medium term incentive scheme,
increased by 18 per cent. to #7.7 million, primarily as a result of an increase
in personnel costs.
Capital gains and provisions
Capital gains reached #15.9 million, a similar level to the first half of last
year. This can be regarded as satisfactory in light of the difficult market
conditions for exiting investments, particularly through the IPO market.
We have made, at the half year, net provisions of #9.0 million to cover the
deteriorating performance of a small number of our investments. After charging
these provisions and the cost of our medium term incentive scheme, net capital
gains amounted to #3.7 million.
Dividends
The Board has declared an interim dividend of 10.5p per share, an increase of
10.5 per cent. over the interim dividend of 9.5p per share which was paid last
year. This is payable on 31 October 2003 to shareholders on the register on 10
October 2003.
Funding
In June, we successfully raised over #200 million of new debt facilities by
means of a securitisation of part of our portfolio. We were pleased to be able
to take advantage, for the first time, of this new source of borrowings, which
is capable of providing us with further debt in the future. This has resulted in
our total borrowing facilities amounting to #992 million at 31 July 2003.
There was a material increase in our borrowings during the first half from #671
million at the beginning of the year to #912 million at 31 July 2003. This arose
primarily from the increase in our loan book, the appreciation of the Euro
against Sterling and the borrowings we had taken on to fund short term loans
which we warehoused for, and have now passed on to, our new mezzanine fund.
Excluding these short term borrowings of #74 million, which have now been
repaid, the borrowings to finance our portfolio amounted to #838 million at 31
July 2003, which represented a gearing ratio of 3.6:1. It is because of this
relatively high gearing, resulting from a strong flow of attractive investment
opportunities, and the need to raise additional funding for such deals in the
future that we have decided that it is appropriate to raise further equity from
our shareholders.
Board appointments
I am pleased to report that Christophe Evain, who previously ran our Paris
office and is now responsible for our Asia Pacific business, and Francois de
Mitry, who now runs our Paris office, are joining the Board. At the same time I
have to announce that Jean-Loup de Gersigny, one of the founders of ICG, who has
made an enormous contribution to the company, will be retiring from the Board at
the end of January 2004.
Prospects
The demand for mezzanine has been strong over the past twelve months and we
believe it should continue for the rest of the year, although not perhaps at
quite the same pace. ICG's market position is good and will be further
strengthened by our new mezzanine fund. We therefore expect to see a healthy
flow of mezzanine opportunities.
Since the end of July, we have completed 3 new transactions which has resulted
in #55 million being invested on our Balance Sheet and #50 million by our
managed funds. This should provide the platform for another strong period for
new lending in the second half. Levels of repayment are, as ever, hard to
predict but we think it likely that they will be higher than in the first half.
The prospects for growth in net interest income and core income in the second
half are good.
We expect to make further capital gains in the second half but as always it is
impossible to forecast accurately what levels will be achieved.
While our portfolio has to date performed well in a difficult business
environment, it does include a small number of underperforming investments which
we continue to monitor closely.
With a strengthened Balance Sheet, on the completion of the Placing and Open
Offer to raise approximately #82 million, we believe ICG, with its strong
pan-European team and leading position in the attractive and active European
mezzanine market, is well placed to continue the growth of its mezzanine lending
activities. This, along with its growing sub investment grade debt fund
management business, makes us confident of the prospects for the company.
John Manser
Chairman
2 October 2003
Consolidated Profit and Loss Account
for the six months ended 31 July 2003
Half year to Half year to Year to
31 July 31 July 31 January
2003 2002 2003
(unaudited) (unaudited) (audited)
#m #m #m
Interest and dividend income 41.9 31.6 66.9
Gain on disposals 15.9 16.3 33.9
Fee and other operating income 8.9 8.5 17.9
_______ _______ _______
66.7 56.4 118.7
Interest payable and similar charges (13.8) (12.0) (24.4)
Provisions against loans and investments (9.0) (8.0) (17.5)
Administrative expenses (11.8) (10.2) (23.3)
_______ _______ _______
Profit on ordinary activities before taxation 32.1 26.2 53.5
Tax on profit on ordinary activities (10.6) (8.0) (18.4)
_______ _______ _______
Profit on ordinary activities after taxation 21.5 18.2 35.1
Dividends paid and proposed - ordinary shares (6.3) (5.6) (18.3)
_______ _______ _______
Retained profit transferred to reserves 15.2 12.6 16.8
======= ======= =======
Earnings per share 36.3p 31.0p 59.8p
======= ======= =======
All activities represent continuing operations
Profit on ordinary activities before taxation is split as follows:
Core income Net capital gains
31 July 31 July 31 July 31 July
2003 2002 2003 2002
(unaudited) (unaudited) (unaudited) (unaudited)
#m #m #m #m
Income
Interest and dividend income 41.9 31.6 - -
Gain on disposals - - 15.9 16.3
Fee and other operating income 8.9 8.5 - -
_______ _______ _______ _______
50.8 40.1 15.9 16.3
Less:
Interest payable and similar charges (13.8) (12.0) - -
Provisions against loans and
investments - - (9.0) (8.0)
Administrative expenses (8.6) (6.5) (3.2) (3.7)
_______ _______ _______ _______
28.4 21.6 3.7 4.6
======= ======= ======= =======
Consolidated Balance Sheet
31 July 2003
31 July 31 July 31 January
2003 2002 2003
(unaudited) (unaudited) (audited)
#m #m #m
Fixed assets
Tangible assets 1.5 1.8 1.6
Loans 938.9 654.5 801.4
Investments 91.8 85.2 74.7
Current assets
Debtors 41.2 19.2 26.5
Loans and investments 90.9 17.0 53.2
Cash at bank 48.7 0.8 1.9
_______ _______ _______
180.8 37.0 81.6
_______ _______ _______
Total assets 1,213.0 778.5 959.3
======= ======= =======
Capital and reserves
Called up share capital 11.9 11.7 11.8
Share premium account 89.1 85.3 86.0
Capital redemption reserve 1.4 1.4 1.4
Profit and loss account 132.2 112.8 117.0
_______ _______ _______
Equity shareholders' funds 234.6 211.2 216.2
Creditors: amounts falling due after more than one year 815.2 539.1 627.0
Creditors: amounts falling due within one year 163.2 28.2 116.1
_______ _______ _______
Total capital and liabilities 1,213.0 778.5 959.3
======= ======= =======
Consolidated Cash Flow Statement
for the six months ended 31 July 2003
Half year to Half year to Year to
31 July 31 July 31 January
2003 2002 2003
(unaudited) (unaudited) (audited)
#m #m #m
Operating activities
Interest and dividends received 36.8 29.2 58.0
Gain on disposals 15.9 16.3 33.9
Fee and other operating income 6.1 6.6 17.0
Administrative expenses (18.3) (13.0) (15.8)
_______ _______ _______
40.5 39.1 93.1
_______ _______ _______
Interest paid (23.0) (12.8) (27.6)
_______ _______ _______
Net cash inflow from operating activities 17.5 26.3 65.5
Taxation paid (11.8) (4.4) (10.2)
Capital expenditure and financial investment
Loans and investments made (181.7) (148.5) (292.9)
Realisations of loans and investments 59.7 66.4 132.9
Loans for syndication (29.8) 70.4 (20.3)
_______ _______ _______
(151.8) (11.7) (180.3)
Purchase of tangible fixed assets - (0.4) (0.4)
_______ _______ _______
(151.8) (12.1) (180.7)
_______ _______ _______
Equity dividends paid (12.8) (11.4) (17.0)
_______ _______ _______
Net cash outflow before financing (158.9) (1.6) (142.4)
Financing
Increase in share capital 3.2 0.1 0.9
Increase in debt 202.5 1.2 142.3
_______ _______ _______
Increase/(decrease) in cash and cash equivalents 46.8 (0.3) 0.8
======= ======= =======
Notes
1. Basis of accounting
The interim financial statements have been prepared under the historical cost
convention and on the basis of the accounting policies set out in the statutory
accounts of the group for the year ended 31 January 2003.
2. Earnings per share
The calculation of earnings per share is based on earnings of #21.5 million
(2002 - #18.2 million) and an average number of shares in issue throughout the
period of 59,307,144 (2002 - 58,658,402).
3. Dividends
The interim dividend of 10.5p per share will be paid out to members registered
at the close of business on 10 October 2003.
4. Investments
The group's portfolio of warrants and listed shares is included in investments
at the lower of cost or net realisable value.
5. General
The interim financial statements for the half year to 31 July 2003 were approved
by the Board on 1 October 2003.These financial statements are unaudited, but
they have been reviewed by the auditors, having regard to the bulletin "Review
of Interim Financial Information" issued by the Auditing Practices Board. The
comparative figures for the year ended 31 January 2003 have been extracted from
the group's statutory accounts which have been delivered to the Registrar of
Companies. The auditors' report on those statements was unqualified and did not
include a statement under Section 237 (2) or (3) of the Companies Act 1985.
Copies of this statement are being sent to all shareholders and are also
available at the registered office of the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
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