Interim Results
10 December 2003 - 6:00PM
UK Regulatory
RNS Number:0625T
Falkland Islands Holdings PLC
10 December 2003
FALKLAND ISLANDS HOLDINGS PLC
Interim Results for the six months ended 30 September 2003
HIGHLIGHTS
Falkland Islands Holdings PLC, a UK quoted company operating in the Falkland
Islands in general trading activities, announces interim results for the six
months ended 30 September 2003.
* First half financial performance impacted by reduced shipping profits:
- Turnover of #4.9m (2002: #5.3m)
- Pre-tax profits of #300,000(2002: #421,000)
- Basic earnings per share of 3.2p(2002:4.6p)
* Stronger start and outlook for second half:
- Shipping revenues restored to normal levels
- Retailing benefiting from redevelopment and food hall extension
- Agreement to act as sole agents for Caribbean Alliance Insurance
Company
- Plans under consideration for use of Group land for housing
development (subject to relevant planning and other permissions)
* Continued exploration activity:
- Oil: Several large leads identified; talks underway with potential joint
partners
- Minerals - Future work programme being drawn up
David Hudd, Chairman of Falkland Islands Holdings plc commented:
"Whilst the first half of the year was disappointing due to the poor shipping
result, the fishing season activities in 2002/3 have restored confidence and
trading conditions overall have improved and we believe the Group will generate
a positive result for the year.
The Group is also investing in a number of new developments, which have the
potential to generate significant growth in the longer term."
10 December 2003
Enquiries:
Falkland Islands Holdings PLC Tel: 07771 893 267
David Hudd, Chairman
College Hill Tel: 020 7457 2020
James Henderson
Chairman's Interim Statement
For the six months ended 30 September 2003
Review of results
As we anticipated, the first half of the year produced lower profits than last
year. Profit before tax fell to #300,000 (2002: #421,000) on turnover 7% lower
at #4.9m (2002: #5.3m).Earnings per share were 3.2p (2002: 4.6p) .
The fall in profit was attributable to reduced shipping revenues, in the
aftermath of the poor fishing season in 2001/2 which we referred to at the time
of the announcement of our year end results. However, activity levels have now
been restored and a satisfactory result is anticipated for the year.
The directors are not recommending payment of an interim dividend but, in the
absence of unforeseen events, they would anticipate paying a final dividend of
not less than 5.5p in respect of the year ended 31 March 2004.
Cash generation remains strong and the Group maintained net cash balances of
#452,000, the same level as at 31 March 2003. Capital expenditure of
approximately #389,000, primarily relating to the West Store redevelopment, was
financed from cash flow.
Operations
Operating profits declined to #304,000 from #435,000. Retailing profits were
maintained despite the disruption resulting from the extensive building work at
the West Store. Management services, the fishing agency and the automotive
operations, produced results comparable to last year.
The shortfall in profits was largely attributable to the decline in shipping
activities and a disappointing result from the Upland Goose Hotel. Three
voyages were completed in the period (2002:3). However, bulk freight cargoes
were at low levels reflecting the reduction in infrastructure and capital
spending by the Islanders which followed the 2001/2 fishing results. Shipping
costs were significantly higher as a result of increased bunkering costs and the
decline of sterling against the euro.
Occupancy levels at the Upland Goose were lower this year ; the hotel benefited
last year from increased visitor numbers linked to the 20th anniversary of the
1982 conflict.
Developments
The West Store extension and fit out was completed in July at an overall cost of
#550,000. The extension provides a 65% increase in the food hall floor area.
The introduction of the Waitrose own label range, which was one of the key
drivers in the decision to carry out the development, has proved popular with
customers. For the first time the Falklands has a store offering a
comprehensive range of products in surroundings comparable to retail food
outlets in the UK.
The Group has successfully concluded an agreement to act as agents for Caribbean
Alliance Insurance Company (CAIC) which is replacing Royal & Sun Alliance (RSA)
as the main provider of insurance cover for the Islands.CAIC is a former
subsidiary of RSA and the approval of the Falklands Government has been secured
for the change. CAIC specialises in providing insurance cover for island
communities. We believe that their appointment will lead to a significant
increase in the range of insurance products for our clients.
Given the forecast shortage of available housing in Stanley, the Group is in
the process of drawing up plans to utilise some of its landbank for housing
development. Any such developments will be subject to planning and other
necessary approvals.
Exploration Activities
Both the oil and gas and the mineral exploration licences have been the subject
of much activity over the last 6 months and your directors remain committed to
ensuring that the Company participates in future exploration activity.
The Hydrocarbon oil and gas consortium, in which the Group has a 20% interest,
has completed the reprocessing and analysis of some 1,000km of the 4,460 km of
seismic data which was purchased last year. Several large leads have been
identified which the consortium believes warrant further investigation and it is
likely that additional seismic will be shot in 2004/5. The Group intends to
limit its capital expenditure on this oil and gas exploration activity through
the introduction of a farm-in partner and is in discussion with a number of
potential partners.
The Onshore mineral Joint venture, in which the Group holds a 33% interest, has
a prospecting licence covering the whole of the Falkland Islands. Discussions
are continuing on the future work programme with potential joint venture
partners.
Outlook
The Falklands economy has recovered from the uncertainty earlier in the year and
the trading performance of the Group has improved since the end of the first
half. The Group is pursuing a number of new developments which your Board
believes will generate long term growth. The board is confident that the Group
will achieve a satisfactory result for the year.
UNAUDITED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT
Notes Unaudited Unaudited Audited
6 Months to 6 Months to Year ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Turnover 4905 5284 11447
Cost of sales (3338) (3608) (7871)
Gross Profit 1567 1676 3576
Administrative expenses (1363) (1338) (2789)
Other Operating Income 100 97 265
Operating profit 304 435 1052
1
Net Interest (4) (14) (27)
Profit on ordinary activities before taxation 300 421 1025
Taxation on profit on ordinary (102) (139) (308)
activities 2
Profit on ordinary activities after taxation 2 198 282 717
Dividends - - (336)
Retained profit for the financial period 198 282 381
Earnings per share 3
- basic 3.2p 4.6p 11.8p
- fully diluted 3.2p 4.6p 11.2p
UNAUDITED CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Fixed assets
Intangible assets 81 22 63
Tangible assets 3555 3127 3275
Investments 112 112 112
3748 3261 3450
Current assets
Stocks 2793 3355 2858
Debtors 1222 1249 1715
Cash at bank and in hand 952 615 957
4967 5219 5530
Creditors: amounts falling due within
one year (3643) (3568) (4214)
Net current assets 1324 1651 1316
Total assets less current liabilities 5072 4912 4766
Creditors: amount falling due after
more than one year (352) (639) (250)
Provision for liabilities and charges (1136) (1011) (1130)
Net Assets 3584 3262 3386
Capital and reserves
Called up share capital 617 615 617
Share Premium account 54 31 54
Other Reserves 703 703 703
Profit and loss account 2210 1913 2012
3584 3262 3386
UNAUDITED CONSOLIDATED CASH FLOW for the six months ended 30 September 2003
Unaudited Audited
Unaudited 6 months to Year to
6 months to 30 September 2002 '31 March 2003
30 September 2003
Notes #'000 #'000 #'000 #'000 #'000 #'000
Cash flow from operating 403 137 1600
activities
Returns on investment and
sevicing of finance
Interest received 9 7 14
Interest paid (13) (21) (40)
(4) (14) (26)
Taxation
UK Corporation tax - - (30)
Overseas taxation paid - (91) (343)
0 (91) (373)
Capital Expenditure
Purchase of tangible fixed (389) (139) (396)
assets
Purchase of intangible fixed (18) (22) (63)
assets
disposal of fixed assets 3 -
(404) (161) (459)
Equity dividends paid - - (304)
Cash inflow/(outflow) before (5) (129) 438
financing
Financing
Shares issued - - 25
Repayment of secured loan - - (250)
(Decrease)/ increase in cash (5) (129) 213
NOTES TO THE UNAUDITED CONSOLIDATED CASH FLOW
for the six months ended 30 September 2003
Unaudited Unaudited Audited
6 Months to 6 Months to Year ended
30 September 30 September 31 March
2003 2002 2003
Notes #'000 #'000 #'000
Reconciliation of net cash flow to
movment in net funds/(debt)
(Decrease)/increase in cash in the (5) (129) 213
period
Cash outflow from decrease in debt - - 250
Movement in net debt in period (5) (129) 463
Net cash/(debt) at start of period 457 (6) (6)
Net cash/(debt) at 30 September 452 (135) 457
Reconciliation of operating profit
to operating cash flows
Operating profit 304 435 1052
Depreciation charges 106 98 207
Decrease/(increase) in stocks 65 (199) 298
Decrease/(increase) in debtors 493 311 (156)
(Decrease)/increase in creditors (565) (508) 199
and provisions
Net cash inflow from operating 403 137 1600
activities
Analysis of change in net debt
As at As at
31 March Cash 30 September
2003 Flows 2003
#'000 #'000 #'000
Cash at bank and in hand 957 (5) 952
Debt due within one year (250) (250)
Debt due after one year (250) (250)
Total 457 (5) 452
Notes:
1. All significant turnover, profits and net assets are generated from general
trading in the Falkland Islands.
2. The taxation charge has been estimated at 32.5%.
3. Earnings per share has been calculated on profit after tax of #198,000 (2002:
#282,000) based on the weighted average number of shares in issue, excluding
shares held in the Employee Share Ownership Plan of 6,095,037 (2002:
6,070,037). The fully diluted earnings have been further adjusted by the
dilutive outstanding share options resulting in a weighted average number of
shares of 6,154,943 (2002:6,170,722)
4. The interim report has been prepared on the basis of the accounting policies
set out in the group's 2003 Annual Report.
5. The results for the year ended 31 March 2003 as shown in the statement do not
constitute statutory accounts but are an abridged version of the Company's
2003 accounts which have filed with the Registrar of Companies and upon
which the audit report was unqualified and did not contain a statement under
Section 237 (2) or (3) of the Companies Act 1985. The Interim report was
approved by the Board on 10 December 2003.
This information is provided by RNS
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END
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