RNS Number:3377T
Teather & Greenwood Holdings PLC
17 December 2003
For Immediate Release 17 December 2003
TEATHER & GREENWOOD HOLDINGS PLC
("Teather & Greenwood" or "the Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2003
Teather & Greenwood, one of the UK's leading independent stockbrokers, announces
its interim results for the six months ended 31 October 2003.
Highlights
* Turnover on continuing operations up 10.1% to #9.8m (2002: #8.9m);
* Profit before tax #0.6m (2002: loss #2.6m);
* Earnings per share were 0.8p (2002: loss per share 9.5p);
* Higher levels of secondary agency commissions earned from improving
market conditions;
* Corporate Finance team have closed five transactions in the first
half and two transactions since 31 October 2003 with an increased pipeline
going forward;
* Research capability broadened in key sectors by the recruitment of
several highly rated and experienced analysts;
* Number of market making stocks increased in the first half; the
Group has become second specialist market maker on OFEX;
* Investment Funds team have increased the number of new brokerships
and expanded their market making coverage;
* Lord Baker of Dorking is to be appointed Chairman at the end of
this financial year;
* Commenting on outlook, Ken Ford, Chief Executive said:
"With the markets now in a more positive mode and with some confidence
returning, the Group is well placed to maximise the benefits from these
opportunities in all areas in which it operates. We have excellent people
working in the Group and with a return to profitability, we are confident about
the future."
Enquiries:
Ken Ford, Chief Executive
Nick Stagg, Chief Operating Officer
Teather & Greenwood 020 7426 9000
Richard Darby, Mark Edwards, James Strong
Buchanan Communications 020 7466 5000
Notes to Editors
Teather & Greenwood Limited is the principal operating company of Teather &
Greenwood Holdings plc, which is quoted on the Official List and which is a
Member of the London Stock Exchange. Teather & Greenwood Limited provides a
range of complementary services focused on institutional stockbroking and
corporate finance advisory services and is regulated by the Financial Services
Authority.
For more information on Teather & Greenwood Limited and its services, please
visit the company's website: www.teathers.com.
Chairman's Statement
Trading conditions have improved significantly since the start of the financial
year in May 2003. In this first half the improving market conditions have
resulted in higher levels of secondary agency commissions. The reduction in the
Group's cost base and continued focus on cost control into the second half, will
result in a positive effect on earnings. The return of corporate finance
activity has lagged the general improvement in market conditions by some months
as the pipeline of transactions has built up. Nevertheless, during the first
half our corporate team closed five transactions and has made a promising start
in the second half.
The sale of the majority of our Investment Management business was successfully
completed towards the end of the last financial year. In this first half
#750,000 was released from escrow as part of that transaction, of which #500,000
was recognised last year, and #250,000 which has been recognised in this half.
We are due up to a further #650,000 towards the end of this financial year
subject to performance criteria of the business sold, none of which has been
recognised to date.
The strategy of the Group focused on institutional stockbroking and corporate
finance advisory services in the mid and small cap sectors. Management
continues to control costs, whilst carefully developing the core activities to
capitalise on the operational gearing of the Group.
I have chaired the Group through the last two years of very tough trading
conditions and overseen a significant restructuring of the cost base and a
return to profitability. Having seen this through, I have decided to stand down
at the end of this financial year as both Chairman and Director of the Group
after 23 years with Teather & Greenwood. My successor will be Lord Baker of
Dorking and the Board will be looking to recruit a third independent
non-executive director in due course.
Financial Highlights
Turnover for the Group for the six months ended 31 October 2003 was #9.8 million
(2002: #8.9 million on continuing operations) producing an operating profit of
#0.4 million (2002: an operating loss of #1.1 million on continuing operations
before re-organisation costs). Earnings per share were 0.8p (2002: loss per
share 9.5p).
The balance sheet at 31 October 2003 showed net assets of #9.4 million (30 April
2003: #9.0 million). The Group has generated cash of #1.2 million (six months
to 31 October 2002, used: #4.1 million), alongside an increase in the size of
our trading positions of #0.7 million (six months to 31 October 2002 decrease:
#1.4 million).
The Board is not recommending the payment of an interim dividend (31 October
2002: # nil). The future policy will be kept under review.
Business Review
The Group has a sizeable secondary UK agency sales team and a first class
distribution capability for mid and small cap companies. We act for a large
number of companies as broker and financial advisor and have since 31 October
2003 added two further brokerships to our list, and are actively pursuing
further appointments.
We have broadened our research capability in key sectors by recruiting several
highly rated and experienced analysts. This follows our previously stated aim of
extending our coverage of the mid-cap arena and has resulted in an improvement
in FTSE250 commission flow. In addition, the research department continues to
provide comprehensive coverage of our extensive list of corporate clients as
well as peer comparisons.
As anticipated at the time of the AGM the positive outlook for corporate
activity, fuelled by a steadily rising UK market, has materialised during recent
months. Market appetite from both institutions and private clients for
secondary fundraisings and IPOs has shown a healthy improvement. We are pleased
to report that we have raised capital for Bizspace, Mulberry, Ottakars, Emerald
Energy and Coffee Republic, and successfully placed a #14 million stake in
Majestic Wine in June. The flotations of Monstermob plc and Immedia plc have
completed since 31 October, and our pipeline of corporate work is strong. This
gives us encouragement for future profits in this area.
In addition, the interest shown by a number of overseas companies in obtaining a
listing in London is expected to result in sponsorship activity for the
International team in the second half of the year. They completed their first
fast-track admission to AIM in November 2003.
We have increased the number of stocks in which we make markets as well as
becoming the second specialist market maker on OFEX. We intend to grow the
overall number of market making stocks to increase profits from this area.
The Investment Funds team has had a successful first half. Although new issues
have been quiet, the corporate side has been advisor on a number of deals and
has won new brokerships, which now stand at 30. The secondary side has expanded
its market making coverage and been particularly successful in the country fund
sector.
Outlook
With the markets now in a more positive mode and with some confidence returning,
the Group is well placed to maximise the benefits from these opportunities in
all the areas in which it operates. The Group's low cost base will ensure these
revenues continue to translate into profits. With a return to profitability and
the excellent people within the Group, the Board is confident about the future.
Jeremy Delmar-Morgan
Chairman
16 December 2003
Consolidated Profit and Loss Account
for the 6 months ended 31 October 2003
6 months 6 months 12 months
ended ended ended
31/10/03 31/10/02 30/04/03
Note #'000s #'000s #'000s
(unaudited) (unaudited) (audited)
Turnover
Continuing operations (1) 9,760 8,863 15,182
Discontinued operations - 2,410 3,563
Group turnover 9,760 11,273 18,745
Operating costs (9,355) (13,637) (25,932)
Operating profit/(loss)
Continuing operations 405 (1,100) (3,217)
Discontinued operations - (1,264) (3,970)
Group operating profit/(loss) 405 (2,364) (7,187)
Profit on disposal of fixed asset investments 1 607 764
Profit on disposal of discontinued operation 250 - 1,815
Reorganisation costs - (753) (1,870)
Amounts written off investments - (74) (74)
Profit/(loss) on ordinary activities before 656 (2,584) (6,552)
interest
Net interest payable (71) (50) (209)
Profit/(loss) on ordinary activities before 585 (2,634) (6,761)
taxation
Taxation on profit/(loss) on ordinary (6) (150) - -
activities
Profit/(loss) for the period 435 (2,634) (6,761)
Equity dividend - - -
Profit/(loss) transferred to reserves 435 (2,634) (6,761)
Earnings/(loss) per share (2) 0.8p (9.5p) (21.8p)
Diluted earnings/(loss) per share (2) 0.8p (9.5p) (21.8p)
Consolidated Balance Sheet
as at 31 October 2003
31/10/03 31/10/02 30/04/03
#'000s #'000s #'000s
(unaudited) (unaudited) (audited)
Fixed assets
Tangible assets 1,132 2,145 1,696
Investments 1,415 1,445 1,398
Intangible assets 300 400 350
2,847 3,990 3,444
Current assets
Trading positions 4,586 7,161 4,800
Debtors 90,044 65,513 55,327
Cash at bank and in hand 877 2,504 1,044
95,507 75,178 61,171
Creditors: amounts falling due within one year 88,405 68,455 55,118
Net current assets 7,102 6,723 6,053
Total assets less current liabilities 9,949 10,713 9,497
Creditors: amounts falling due after one year 500 500 500
Net assets 9,449 10,213 8,997
Capital & reserves
Called up share capital 5,710 2,848 5,703
Share premium account 2,418 2,352 2,408
Other reserves 14 14 14
Profit and loss account 1,307 4,999 872
Equity shareholders' funds 9,449 10,213 8,997
Consolidated cash flow statement
for the 6 months ended 31 October 2003
6 months ended 6 months ended Year ended
31/10/2003 31/10/2002 30/4/2003
Note #'000s #'000s #'000s #'000s #'000s #'000s
(unaudited) (unaudited) (unaudited) (unaudited) (audited) (audited)
Net cash inflow/(outflow) (3) 1,051 (4,890) (9,292)
from operating activities
Returns on investment and
servicing of finance
Interest and other
investment income
received 2 78 19
Interest paid (46) (126) (230)
Net cash outflow from (44) (48) (211)
returns on investments
and servicing of finance
Taxation
Corporation tax credit - 928 928
received
Capital expenditure and
financial investment
Receipts from sales of - - -
tangible fixed assets
Payments to acquire (22) (429) (677)
tangible fixed assets
Payments to acquire trade (17) - (20)
investments
Receipts from sales of 1 667 824
trade investments
Receipts from sale of 250 - 1,065
part of TGIM
Net cash inflow from 212 238 1,192
capital expenditure
Equity dividend paid - (423) (349)
Financing
Issue of ordinary 17 83 2,994
share capital
Increase/(decrease) (5) 1,236 (4,112) (4,738)
in cash
Notes
1. TURNOVER & SEGMENTAL ANALYSIS
6 Months to 31 October 2003 6 Months to 31 October 2002 12 Months to 30 April 2003
Continuing Discontinued Total Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations Operations Operations
#'000s #'000s #'000s #'000s #'000s #'000s #'000s #'000s #'000s
Corporate
Finance 1,491 - 1,491 2,699 - 2,699 4,016 - 4,016
Investment
Management 1,158 - 1,158 1,285 2,188 3,473 1,775 3,180 4,955
Institutional 4,740 - 4,740 3,671 - 3,671 7,368 - 7,368
Investment
Funds 2,371 - 2,371 1,208 222 1,430 2,023 383 2,406
Total 9,760 - 9,760 8,863 2,410 11,273 15,182 3,563 18,745
2. EARNINGS PER SHARE
31/10/03 31/10/02 30/04/03
Diluted Diluted Diluted
Earnings Earnings Earnings Earnings Earnings Earnings
#'000s #'000s #'000s #'000s #'000s #'000s
Earnings 435 435 (2,622) (2,622) (6,761) (6,761)
Number of shares 56,891,345 56,235,944 27,522,291 27,522,291 30,982,909 30,982,909
Earnings/(loss) per 0.8p 0.8p (9.5p) (9.5p) (21.8p) (21.8p)
share
Calculation of number of shares at 31 October 2003
At 1 May 57,034,498 57,034,498 28,213,245 28,213,245 28,213,245 28,213,245
Weighted average
number of shares
issued in the period 19,957 19,957 117,146 117,146 3,588,175 3,588,175
Dilutive effect
of share
option schemes 655,401 - - - - -
Own shares purchased
and held in EBT (818,511) (818,511) (808,100) (808,100) (818,511) (818,511)
At end of period 56,891,345 56,235,944 27,522,291 27,522,291 30,982,909 30,982,909
3. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES
6 months to 6 months to 12 months to
31/10/03 31/10/02 30/04/03
#'000s #'000s #'000s
Operating profit/(loss) 405 (2,364) (7,187)
Depreciation and amortisation 636 735 1,482
Restructuring payments - (1,171) (1,568)
(Increase)/decrease in trading positions (718) 1,425 1,574
(Increase)/decrease in debtors (34,842) 61,605 72,205
Increase/(decrease) in creditors 35,570 (65,120) (75,798)
Net cash inflow/(outflow) from operating 1,051 (4,890) (9,292)
activities
4. NET FUNDS AT END OF PERIOD
Bank balances 877 2,504 1,044
Bank overdrafts (1,392) (3,629) (2,795)
(515) (1,125) (1,751)
5.COMBINED RECONCILIATION ON NET CASHFLOW AND ANALYSIS OF MOVEMENTS
IN NET FUNDS
At 30/4/03 Cash flow At 31/10/03
#'000s #'000s #'000s
Bank balances 1,044 (167) 877
Bank overdrafts (2,795) 1,403 (1,392)
Total net funds (1,751) 1,236 (515)
6.TAXATION ON PROFIT /(LOSS) ON ORDINARY ACTIVITIES
The tax charge for the six months ended 31 October 2003 relates to the writing
off of a prior year deferred tax asset.
7. The interim figures are unaudited. The accounts for the year to 30 April
2003 are abridged. The periods ended 31 October 2002 and 2003, and the year
ended 30 April 2003 do not constitute statutory accounts as defined in Section
240 of the Companies Act 1985. Statutory accounts for the year ended 30 April
2003 have been delivered to the Registrar of Companies. These statutory
accounts were audited by Deloitte & Touche LLP and their report thereon was
unqualified. Copies of the interim results are available, free of charge to the
public on any weekday at the registered office of the Company (16 Old Bailey,
London, EC4M 7EG).
INDEPENDENT REVIEW REPORT TO TEATHER & GREENWOOD HOLDINGS PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 October 2003 which comprises the consolidated profit and
loss account, the consolidated balance sheet, the consolidated cash flow
statement and related notes 1 to 7. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2003.
Deloitte & Touche LLP
Chartered Accountants
London
16 December 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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