RNS Number:7785B
Worldsec Ld
27 September 2002
Worldsec Limited
Interim Report for the six months ended 30 June 2002
The Directors submit the interim report on Worldsec Limited (the "Company") and
its subsidiaries (collectively known as the "Group") for the six months ended 30
June 2002 (the "Period").
HIGHLIGHTS
* Turnover for the Period increased by 8% as compared with the same period
in 2001 to US$4,067,000.
* Loss for the Period was US$3,894,000, as compared to US$3,083,000 for the
same period in 2001.
DIVIDEND
The Directors do not recommend the payment of an interim dividend.
REVIEW OF OPERATIONS AND PROSPECTS
The business environment continued to be difficult and we again operated at a
loss, despite reduction in staff and fixed costs and the closure in 2001 of our
offices in Malaysia and the Philippines.
During the period we reached agreement on the proposed disposal of certain
assets to UOB Kay Hian Holdings Limited. A Circular to Shareholders dated 1st
August 2002 gave details of the proposed disposal, which has since been approved
at a Special General Meeting of the shareholders held on 19th August 2002.
Completion of this disposal marks our Group's withdrawal from our broking,
research and corporate finance activities which have provided the bulk of our
revenues in the past.
Since the end of the first half, trading conditions have become even more
difficult, vindicating the proposed disposal. An amount of US$1.9m has been
provided in the interim results to reflect the estimated losses since June and
the necessary cost leading up to the completion of the proposed disposal.
We are planning to realise our assets as cash and the Directors intend to invest
cash balances in money market investments and deposits whilst considering how to
redeploy such cash balances either into a new business or by way of a return of
funds to shareholders or a combination of both.
By order of the Board
Henry Ying Chew Cheong
Deputy Chairman and
Chief Executive Officer
27 September 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Audited
Six months ended Year ended
Notes 30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Turnover 3 4,067 3,754 8,035
Fees and commission payable (802) (609) (1,155)
3,265 3,145 6,880
Gain on disposal of intangible assets 164 180 181
Gain/(loss) on investments 53 (295) 541
Recovery of doubtful receivables - - 232
Other operating income 384 572 794
3,866 3,602 8,628
Staff costs (3,319) (3,940) (8,305)
Provision for doubtful receivables (369) (500) (1,193)
Loss on revaluation of investments (375) - (1,824)
Other operating costs (1,714) (2,225) (4,397)
Operating loss 3 (1,911) (3,063) (7,091)
Interest receivable and similar income 103 287 473
Interest payable and similar charges (158) (268) (480)
Provision for closure of operations 4 (1,900) - (123)
Goodwill written off - - (591)
Loss on ordinary activities before taxation (3,866) (3,044) (7,812)
Tax on loss on ordinary activities 5 (28) (39) (149)
Loss for the financial period/year (3,894) (3,083) (7,961)
Loss per share 6 (29) cents (23) cents (60) cents
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Six months ended Year ended
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Loss for the period/year (3,894) (3,083) (7,961)
Surplus arising on revaluation of investments and tangible fixed 1 3 7
assets
Currency translation differences 70 (145) (73)
Total recognised losses (3,823) (3,225) (8,027)
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Unaudited Audited
Six months ended Year ended
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Loss for the period/year (3,894) (3,083) (7,961)
Other recognised gains/(losses) relating to the period/year 71 (142) (66)
Net reduction in shareholders' funds during the period/year (3,823) (3,225) (8,027)
Shareholders' funds brought forward 24,208 32,235 32,235
Shareholders' funds carried forward 20,385 29,010 24,208
CONSOLIDATED BALANCE SHEET
Unaudited Audited
Notes 30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Fixed assets
Intangible assets 7 772 929 875
Tangible fixed assets 667 1,013 832
Investments 8 1,271 1,270 1,271
Purchased goodwill - 690 -
2,710 3,902 2,978
Current assets
Investments 9 1,208 3,264 1,548
Debtors 27,523 24,803 25,086
Bank deposits and cash 10 38,517 41,052 36,167
67,248 69,119 62,801
Creditors: Amounts falling due within one year 11 (49,543) (43,979) (41,541)
Net current assets 17,705 25,140 21,260
Total assets less current liabilities 20,415 29,042 24,238
Provisions for liabilities and charges 12 (30) (32) (30)
Net assets 20,385 29,010 24,208
Capital and reserves
Called up share capital 13 13,367 13,367 13,367
Reserves 7,018 15,643 10,841
Equity shareholders' funds 20,385 29,010 24,208
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Audited
Six months ended Year ended
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Net cash outflow from operating activities (Note 14) (2,125) (4,291) (2,207)
Returns on investments and servicing of finance
Interest received from banks 103 287 473
Interest paid on bank loans and overdrafts (158) (268) (480)
Net cash (outflow)/inflow from returns on investments and servicing (55) 19 (7)
of finance
Tax paid (38) (67) (230)
Capital expenditure and financial investment
Purchase of tangible fixed assets (16) (86) (166)
Sale of tangible fixed assets 69 - -
Sale of intangible assets 215 457 458
Net cash inflow from capital expenditure and financial investment 268 371 292
Net cash outflow before use of liquid resources and financing (1,950) (3,968) (2,152)
Management of liquid resources
Increase in time deposits of maturity exceeding 1 day (70) (25) (71)
Decrease in cash (Note 15) (2,020) (3,993) (2,223)
NOTES TO THE INTERIM REPORT
1. BASIS OF CONSOLIDATION
The Group's financial statements consolidate the financial statements
of the Company and the subsidiary undertakings included in the Group.
2. Accounting policies
The financial statements set out in this report have been prepared
under the historical cost convention, as modified by the revaluation of
certain fixed assets and investments, in accordance with accounting
principles generally accepted in the United Kingdom. Where applicable,
assets have been stated at their recoverable amount.
During the period, the Group reached an agreement on the proposed
disposal of certain assets to UOB Kay Hian Holdings Limited.
Completion of this disposal will result in the Group's withdrawal from
the broking, research and corporate finance activities which have provided
the bulk of the revenues in the past. On completion, the Group will have no
significant revenue generating activities. However, the directors are
planning to realise the remaining assets and invest cash balances in money
market investment and deposits whilst considering how to redeploy such cash
balances either into a new business or by a return of funds to shareholders
or a combination of both.
The directors have held negotiations with several parties interested in
acquiring the remaining assets of the Group or setting up a new business
within the Group. The directors consider that the Group has adequate
resources to continue in operational existence and they are continuing to
look for investment opportunities. On this basis, the directors consider it
appropriate to prepare the financial statements on a going concern basis.
Save as disclosed above, the accounting policies adopted in preparing
this report are consistent with those adopted in preparing the consolidated
financial statements of the Group for the year ended 31 December 2001.
NOTES TO THE INTERIM REPORT (CONTINUED)
3. ANALYSIS OF TURNOVER, OPERATING (LOSS)/PROFIT AND NET ASSETS
Unaudited Audited
Six months ended Year ended
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Turnover analysed by class of business
Broking and related services 3,724 3,239 6,389
Corporate finance 343 515 1,646
4,067 3,754 8,035
Geographical analysis of turnover
Hong Kong 3,125 2,781 6,369
Thailand 791 595 1,012
Others 151 378 654
4,067 3,754 8,035
Operating (loss)/profit analysed by class of business
Broking and related services (1,724) (3,200) (7,637)
Corporate finance (187) 137 546
(1,911) (3,063) (7,091)
The net assets utilised in the Group relate substantially to broking
activities.
NOTES TO THE INTERIM REPORT (CONTINUED)
4. PROVISION FOR CLOSURE OF OPERATIONS
During the period, the Group has reached agreement on the proposed
disposal of certain assets, the effect of which is the Group's withdrawal
from the broking, research and corporate finance activities. The provision
reflects the estimated losses since 30 June 2002 and the necessary cost
leading up to the completion of the proposed disposal.
5. TAX
Unaudited Audited
Six months ended Year ended
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
The charge comprises:
UK Corporation Tax at 30% - current year 25 22 46
Hong Kong Profits Tax at 16% - current year - 16 86
Other overseas taxation 3 1 19
28 39 151
Deferred taxation - - (2)
6. LOSS PER SHARE
Unaudited Audited
Six months ended Year ended
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Loss for the financial period/year (3,894) (3,083) (7,961)
Loss per share (29) cents (23) cents (60) cents
Number Number Number
Weighted average number of shares in issue 13,367,290 13,367,290 13,367,290
NOTES TO THE INTERIM REPORT (CONTINUED)
7. INTANGIBLE ASSETS
Intangible assets represent eligibility rights to trade on or through
the Stock Exchange of Hong Kong Limited and Hong Kong Futures Exchange
Limited respectively ("Trading Rights").
Unaudited Audited
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Cost or valuation
At 1 January 1,071 1,385 1,385
Disposal (64) (314) (314)
At 30 June/31 December 1,007 1,071 1,071
Amortisation
At 1 January 196 115 115
Provided for the year 52 64 118
Eliminated on disposal (13) (37) (37)
At 30 June/31 December 235 142 196
Net book value
At 30 June/31 December 772 929 875
8. INVESTMENTS HELD AS FIXED ASSETS
Unaudited Audited
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Exchange memberships - at directors' valuation 81 81 81
Unlisted investments - at cost 1,190 1,189 1,190
1,271 1,270 1,271
NOTES TO THE INTERIM REPORT (CONTINUED)
9. INVESTMENTS HELD AS CURRENT ASSETS
Unaudited Audited
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Listed investments - overseas, at market value 711 2,786 1,064
Unlisted investments - overseas, at directors' valuation 31 - 30
Right to trade on or through the Philippine Stock Exchange, at directors' 466 478 454
valuation
1,208 3,264 1,548
10. ANALYSIS OF CASH
Unaudited Audited
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Bank deposits and cash 38,517 41,052 36,167
Bank loans and overdrafts (8,984) (8,390) (7,234)
29,533 32,662 28,933
Less:
Cash at bank - trust accounts (21,377) (24,372) (18,827)
Time deposits of maturity exceeding 1 day (2,648) (2,532) (2,578)
Cash (Note 16) 5,508 5,758 7,528
NOTES TO THE INTERIM REPORT (CONTINUED)
11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Unaudited Audited
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Bank overdrafts 8,984 8,390 7,234
Trade creditors 37,269 34,449 32,846
Taxation 32 93 42
Other creditors, accruals, provisions and deferred income 3,258 1,047 1,419
49,543 43,979 41,541
12. PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation represents the tax effect of the excess of depreciation
allowances claimed for tax purposes over the depreciation charged in the
financial statements. The tax effect of other timing differences, which
includes valuation surplus on the valuation of land and building and
exchange memberships are not significant and have not been provided.
Unaudited Audited
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Deferred taxation
At 1 January 30 32 32
Profit and loss account charge - - (2)
At 30 June/31 December 30 32 30
A deferred tax asset of approximately US$2,383,000 (2001:US$2,048,000) has not
been recognised in respect of tax losses available to offset future profits as
it is not certain when these tax losses will be utilised in the foreseeable
future. There was no material unprovided deferred tax liability at the balance
sheet date.
NOTES TO THE INTERIM REPORT (CONTINUED)
13. CALLED UP SHARE CAPITAL
Unaudited Audited
30.6.2002 30.6.2001 31.12.2001
US$ US$ US$
Authorised:
ordinary shares of US$1 each 50,000,000 50,000,000 50,000,000
Called up, issued and fully paid:
ordinary shares of US$1 each 13,367,290 13,367,290 13,367,290
14. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
Unaudited Audited
Six months ended Year ended
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Operating loss (1,911) (3,063) (7,091)
Gain on disposal of intangible assets (164) (180) (181)
Loss on disposal of tangible fixed assets - - 81
Depreciation 109 147 301
Provision for doubtful receivables 369 500 1,193
Loss on revaluation of investments 375 - 1,824
Amortisation of intangible assets 52 64 118
Amortisation of purchased goodwill - 98 197
Exchange difference 74 (133) (38)
Decrease in investments held as current assets (35) 301 199
Increase in debtors (2,806) (7,252) (8,228)
(Increase)/decrease in cash at bank - trust accounts (2,550) (497) 5,048
Increase in trade creditors 4,423 6,449 4,846
Decrease in other creditors and accruals (61) (725) (476)
Net cash outflow from operating activities (2,125) (4,291) (2,207)
NOTES TO THE INTERIM REPORT (CONTINUED)
15. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Unaudited Audited
Six months ended Year ended
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Decrease in cash (2,020) (3,993) (2,223)
Cash outflow from increase in liquid resources 70 25 71
Movement in net funds (1,950) (3,968) (2,152)
Net funds brought forward 10,106 12,258 12,258
Net funds carried forward 8,156 8,290 10,106
16. ANALYSIS OF NET FUNDS
Unaudited Audited
30.6.2002 30.6.2001 31.12.2001
US$'000 US$'000 US$'000
Cash in hand and deposits repayable on demand 14,492 14,148 14,762
Bank loans and overdrafts (8,984) (8,390) (7,234)
Cash (Note 10) 5,508 5,758 7,528
Time deposits of maturity exceeding 1 day 2,648 2,532 2,578
Net funds 8,156 8,290 10,106
17. COMPARATIVES FIGURES
Certain comparative figures have been reclassified to conform with the
presentation of the financial statements of the Group for the six months
ended 30 June 2002.
18. INTERIM REPORT
The interim report will be posted to shareholders on or about 7 October
2002.
CORPORATE INFORMATION
Board of directors
Non-Executive Chairman
David Archibald Evelyn LYLE
Executive directors
Henry Ying Chew CHEONG (Deputy Chairman and Chief Executive Officer)
Paul Kwok Kin CHENG (Chief Operating Officer and Finance Director)
Alastair GUNN-FORBES
Non-executive directors
Mark Chung FONG
HO Soo Ching
Yoshiaki WATANABE
Yasumine SATAKE
Makato ITO (Alternate to Yasumine SATAKE)
Company secretary
Paul Kwok Kin CHENG
Registered office address
Cedar House, 41 Cedar Avenue, Hamilton HM12, Bermuda
Registration number
EC21466 Bermuda
Principal bankers
The Hongkong and Shanghai Banking Corporation Limited
1 Queen's Road, Central, Hong Kong
The Bank of Tokyo-Mitsubishi, Ltd.
7-1 Marunouchi, 2-chome, Chiyoda-ku, Tokyo 100, Japan
CORPORATE INFORMATION (CONTINUED)
Auditors
Deloitte Touche Tohmatsu, Certified Public Accountants
26th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong
Solicitors
Linklaters
One, Silk Street, London EC2Y 8HQ, England
Principal share registrar and transfer office
The Bank of Bermuda Limited
Bank of Bermuda Building, 6 Front Street, Hamilton HMDX, Bermuda
International branch registrar
Capita IRG (Offshore) Limited
Victoria Chambers, Liberation Square,1/3 the Esplanade, St Helier, Jersey,
Channel Islands
United Kingdom transfer agent
Capita IRG plc
Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU, England
Investor relations
For further information about Worldsec Limited, please contact:
The Chief Executive Officer
Worldsec Group
11th Floor, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong
PRINCIPAL OPERATING SUBSIDIARIES
HONG KONG
Worldsec Brokerage Limited
Worldsec Futures Limited
Worldsec International Limited
Worldsec Nominees Limited
Address: 11th Floor, Bank of America Tower, 12 Harcourt
Road, Central, Hong Kong
Telephone: +(852) 2867 7288 Fax: +(852) 2810 0281
Worldsec Corporate Finance Limited
Address: Room 1601, Bank of America Tower, 12 Harcourt Road,
Central, Hong Kong
Telephone: +(852) 2971 4288 Fax: +(852) 2537 8830
BANGKOK
Worldsec International Limited Thailand representative office
Address: Rm 2922/217, 14th Floor, Charn Issara Tower II, New
Petch Buri Road, Huaykwang, Bangkok 10310, Thailand
Telephone: +(662) 718 1818 Fax: +(662) 718 1828
LONDON
Worldsec International (U.K.) Limited
Address: 2nd Floor, 6 Broadgate, London, EC2M 2BT, England
Telephone: +(44207) 972 0881 Fax: +(44207) 972 0882
PRINCIPAL OPERATING SUBSIDIARIES (CONTINUED)
NEW YORK
Worldsec International Securities Inc.
Address: 919 3rd Avenue, Suite 2700, New York, N.Y. 10022,
USA
Telephone: +(1212) 371 0888 Fax: +(1212) 754 0076
SHANGHAI
Worldsec Investment Consulting (Shanghai) & Co. Ltd.
Address: Rm G, 15th Floor, Heng Ji Tower, 99 Huaihai Road
(E.), Shanghai 200021, China
Telephone: +(8621) 6386 4668 Fax: +(8621) 6386 5727
TAIPEI
Worldsec Investment Consulting (Taiwan) & Co. Ltd.
Address: 6th Floor, 29 An Ho Road, Section 1, Taipei, Taiwan
Telephone: +(8862) 2751 3737 Fax: +(8862) 2731 2966
This information is provided by RNS
The company news service from the London Stock Exchange
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