RNS Number:9086S
Premier Asset Management PLC
05 December 2003
Premier Asset Management PLC
Preliminary Announcement of Results for
year to 30 September 2003
During the last twelve months, the fortunes of your Company have, I believe,
changed for the better. This was particularly the case during the second half of
the period under review, consequently I feel that shareholders can look forward
more confidently to the coming year and to a continuation of the improvement of
recent months, created by the higher funds under management and by the recovery
in equity markets.
Before turning to the future, it is appropriate that I review the events of the
last twelve months in more detail. The first half year was characterised by
further falls in equity markets, a reduction in funds under management and
therefore in fees generated. These more than offset the cost saving initiatives
I described in my report of a year ago. The low point was reached at the end of
March, which is our half year end, when funds under management stood at #326
million. In early June your Board announced a loss on ordinary activities,
before taxation and amortisation of goodwill, of #349,000.
Since the end of March, equity markets have recovered, in some cases
significantly, for example the FTSE All share Index has risen 22.4% from the end
of March to 3rd December 2003. This has had a beneficial effect on revenues for
the second half of the year and will, in the absence of a further market
correction, continue to do so going forward. In addition, sales of structured
plans have remained strong. The benefits of still further cost control
initiatives have been achieved and have begun to feed through.
During the year as a whole, turnover was #5,063,000 which compares to #6,468,000
for the same period last year, a reduction of 21.7%. Inevitably, this reduction
in turnover has impacted on the numbers for the year as a whole and your Board
is reporting a loss on ordinary activities after taxation, but before
amortisation of goodwill and exceptional items, of #528,000. This compares with
a comparable loss of #685,000 last year.
I mentioned in my report at the interim stage that your Board had been in
advanced negotiations regarding a substantial acquisition where the seller, much
to your Board's disappointment, decided to proceed with another party who had
entered proceedings late in the process. As a result, I informed shareholders
that the non-recurring costs relating to this transaction, which consist of the
whole of the exceptional cost of #474,000, would be included in the full year's
results.
No dividends to ordinary shareholders are recommended while we incur losses and
we have accumulated negative reserves
Looking forward, it is pleasing to report that funds under management have
increased to #500 million, as at the end of November 2003, partly as a result of
improved markets, but also due to the addition of two new investment trust
mandates in early November. Premier Utilities Trust was established as the
successor vehicle for investors wanting to rollover their investment in the Legg
Mason International Utilities Trust, and attracted some #38 million of assets at
launch. The board of Legg Mason European Utilities Trust also decided to appoint
Premier to manage their #30 million portfolio, and I am grateful for their
confidence in our abilities.
Elsewhere within the business, and as mentioned above, sales of structured plans
remain ahead of expectations, which is pleasing. This initiative has been a
tremendous source of new Independent Financial Adviser contacts, and your
Company fully intends to develop these contacts for its core "fund of funds"
offering wherever possible.
As might be expected, given the difficult market conditions that have existed
for much of the last three years, your Board believes that it will be some time
before confidence fully returns to the retail investor. However, Premier's
position as one of the most experienced fund of funds providers, gives your
Company an excellent base on which to build as this confidence does return.
Sales of Premier's core Managed Investment Solutions products have been positive
during the year as a whole, notwithstanding the difficult market conditions, and
the Sales and Marketing team will continue to build on their distribution
successes to date.
I am also very pleased to announce that your Company has been selected to manage
three new "fund of funds" products for Laing and Cruickshank Investment
Management. These are scheduled to commence in February next year and will be
promoted initially to Laing and Cruickshank's extensive private client base.
Your Board believes that this initiative will develop into an important source
of revenue for Premier and very much look forward to working closely with the
team at Laing and Cruickshank.
During the course of the year, Laurie Munro and Richard Morris both left the
board and I would like to personally thank them both for their contributions
during their time as non-executive directors. Your Board is in the process of
appointing at least one additional non-executive director and a further
announcement in this regard will be made in due course.
Shareholders will recall that I wrote to shareholders on 6th March 2003 giving
notice of an Extraordinary General Meeting to be held on 3rd April 2003, at
which it was intended that the Company would seek shareholder approval for a
capital reconstruction. The purpose of which was to allow for the preference
shares to be converted into ordinary shares. However, the proposed meeting was
subsequently adjourned due to the advanced discussions that were then taking
place concerning the substantial acquisition mentioned above. Your board
anticipates that a proposal to deal with the outstanding preference shares will
be brought to shareholders in due course.
The last three years have, without doubt, been very difficult ones for your
Company; but it is the firm belief of your Board that the future looks brighter
than it has done for some time. Clearly, the outlook is not without risks, and
any further significant weakness in equity markets would be a setback. However,
that aside, your Board is hopeful that the recent improvement in trading will
continue to feed through into the new financial year.
Once again, I must pass my wholehearted thanks to the team at Premier who have
responded well to the challenges of the last three years, and who have carried
out their work with enthusiasm, diligence and care. I look forward to their
continued support. I must also extend my thanks to those advisers who continue
to entrust their clients' assets to our care, and assure them that we will
continue to strive to meet their investment objectives to the best of our
abilities.
Roger Wood
Chairman
Enquiries:
Jonathan Fry/Mike O'Shea 01483306 090
Premier Asset Management Limited
Henry Gewarter
Positive Profile 020 7353 1619
Consolidated Profit and Loss Account
For the year ended 30th September 2003
2003 2002
# #
Turnover 5,062,542 6,468,040
Operating expenses
Amortisation of goodwill (188,012) (333,837)
Other operating expenses (5,720,349) (7,311,866)
Exceptional item (474,248) -
Operating loss (1,320,067) (1,177,663)
Net interest receivable and similar charges 129,815 159,258
Loss on ordinary activities before taxation (1,190,252) (1,018,405)
Tax on loss on ordinary activities - -
Loss on ordinary activities after taxation (1,190,252) (1,018,405)
Dividends (non equity) (49,800) (49,800)
Retained loss for the year (1,240,052) (1,068,205)
Basic earnings per ordinary share (pence)
Pre goodwill EPS (4.85) (6.17)
Post goodwill EPS (10.41) (8.97)
All the amounts relate to continuing operations. The group has no recognised
gains or losses other than those reported above.
Consolidated Balance Sheet
At 30th September 2003
The financial statements were approved on behalf of the Board of Directors on
4th December 2003.
2003 2003 2002 2002
# # # #
Fixed assets Intangible fixed 3,188,375 3,256,340
assets
Tangible fixed 394,833 392,818
assets
3,583,208 3,649,158
Current assets Investments 292,006 280,299
Debtors 1,402,038 1,566,782
Cash 3,547,833 4,304,430
5,241,877 6,151,511
Creditors: amounts falling due (2,966,395) (2,701,927)
within one year
Net current assets 2,275,482 3,449,584
Total assets less current 5,858,690 7,098,742
liabilities
Called up share capital 2,020,942 2,020,942
Share premium account 6,003,402 6,003,402
Profit and loss account (2,165,654) (925,602)
Shareholders' funds (including 5,858,690 7,098,742
non-equity)
Consolidated Cash Flow Statement
For the year ending 30th September 2003
2003 2003 2002 2002
# # # #
Net cash (outflow)/inflow from (667,734) (3,109,575)
operating activities
Returns on investments and
servicing of finance
Interest received 130,791 161,003
Interest paid (976) -
Net cash inflow from returns on 129,815 161,003
investments and servicing of
finance
Taxation
UK corporation tax paid - -
Capital expenditure and
financial investment
Purchase of tangible fixed (93,484) (83,659)
assets
Purchase of current asset (11,707) (508,660)
investments
Purchase of goodwill (120,047) (73,212)
Sale of tangible fixed assets 10,000 546
Sale of current asset - 277,567
investments
Net cash outflow from capital (215,238) (387,418)
expenditure and financial
investment
(Decrease)/Increase in cash (753,157) (3,335,990)
Basis of preparation
This preliminary statement, which has been agreed with the auditors, was
approved by the Board on 4th December 2003. It is not the Company's accounts.
The statutory accounts for the year ended 30th September 2002 have been
delivered to the Registrar of Companies, received an unqualified audit report,
did not contain statements under s237 (2) or (3) of the Companies Act 1985. The
statutory accounts for the year ended 30th September 2003 have received an
unqualified audit report and did not contain statements under s237 (2) or (3) of
the Companies Act 1985 and which will be delivered to the Registrar of
Companies.
Earnings Per Share
The calculation of earnings per share has been made in accordance with FRS14 '
Earnings Per Share'. The diluted earnings per share figures have not been
disclosed as the effect of the assumed conversion of options and preference
shares is anti-dilutive.
2003 2002
# #
Attributable loss (1,240,052) (1,068,205)
Weighted average number of shares 11,909,418 11,909,418
Earnings per share (pence) (10.41) (8.97)
Goodwill per share 1.58 2.80
Exceptional item 3.98 -
Earnings per share (pre goodwill and exceptional) (4.85) (6.17)
Supplementary earnings per share figures exclude amortisation of goodwill and
have been presented in these accounts as the directors consider that these
supplementary figures provide a useful additional indication of performance.
This information is provided by RNS
The company news service from the London Stock Exchange
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