TIDMWCW
RNS Number : 3336T
Walker Crips Group plc
04 June 2009
4 June 2009
Walker Crips Group plc
Preliminary results for the year ended 31 March 2009
Walker Crips Group plc ("WCG", the "Company" or the "Group"), the integrated
financial services group, today announces its unaudited preliminary results for
the year ended 31 March 2009.
Financial highlights
* Total revenue of GBP15.9 million down 13.1% (2008: GBP18.3 million)
* Pre-tax profit down 52.2% to GBP1.1m (2008: GBP2.3 million)
* Shareholders' funds increased by 9.0% to GBP14.6 million (2008: GBP13.4 million)
* Proposed final dividend maintained at 1.60 pence per share (2008: 1.60 pence per
share)
* Basic earnings per share down 48.9% to 2.3 pence (2008: 4.5 pence)
* Net cash resources at year end remain healthy
* Successful growth in proportion of non-broking fee income, which represented
51.3% of total revenues (2008: 48.9%)
* No impairments or losses on goodwill and intangible balance sheet assets
Business highlights
* Healthy regulatory capital surplus maintained
* WCAM funds under management (FUM) decreased 5.4% to GBP383 million at the year
end (2008: GBP405 million), compared to a 31.2% decline in the FTSE 100.
* Cost saving measures implemented with the full benefit coming through in the
year to 31 March 2010.
* Encouraging start to the current year. WCAM FUM increased to GBP441 million at
31 May 2009.
Commenting on the results, David Gelber, Chairman, said:
"The results represent a relatively strong performance in the context of falling
global stock markets and the significant losses, impairments and write-downs
being reported by other market participants. However, we are continuing to
monitor overheads and make savings where possible."
"There are early signs of a possible market recovery reflected in an improvement
in our trading levels in recent weeks. Your Board maintains its conviction and
confidence in a return to higher levels of profitability if the increased market
activity is sustained."
For further information, please contact:
+----------------------------------------+----------------------------------------+
| Walker Crips Group plc | Tel: +44 (0)20 3100 8000 |
| Rodney FitzGerald, Chief Executive | |
| Stephen Bailey, Investment Director | |
| | |
+----------------------------------------+----------------------------------------+
| Altium | Tel: +44 (0)20 7484 4010 |
| Ben Thorne | |
| Tim Richardson | |
| | |
+----------------------------------------+----------------------------------------+
Further information on Walker Crips Group plc is available on the Group's
website: www.wcgplc.co.uk
CHAIRMAN'S STATEMENT
Market uncertainty, particularly in the second half of the year, continued to
have an impact on the Group's performance. Profit before tax for the year ended
31 March 2009 decreased 52% to GBP1.1m (2008: GBP2.3m) on revenue which fell by
13% to GBP15.9m (2008: GBP18.3m). Although disappointing, this result is a
creditable performance in the context of falling global stock markets and the
significant losses, impairments and write-downs being reported elsewhere. The
Group continued to implement cost reduction measures in the second half with
administrative expenses falling by 5% over the year to GBP11.9m (2008:
GBP12.5m). The full benefit of these cost saving initiatives will be felt in the
year to 31 March 2010.Our balance sheet, underpinned by healthy cash resources,
remains strong with net assets up 9% to GBP14.6m at the year end (2008:
GBP13.4m).
Business Performance Overview
WCAM, our asset management division, posted a robust performance for the year.
Funds under management (FUM) reduced only slightly to GBP383m (2008: GBP405m)
compared to a 31.2% decline in the FTSE 100 Index during the same period.
Since their respective launch dates, all of the WCAM funds have ranked in the
top quartiles of their respective peer groups, a testament to the established
investment strategy of our highly-rated fund management team. Since the year-end
WCAM has continued to attract new investors' funds, with FUM increasing to
GBP441m as at 31 May 2009.
During the year falling global stock markets and recessionary fears accelerated
migration away from equity based investments. As a result the stockbroking
division experienced sustained pressure on transaction volumes throughout the
year to 31 March 2009 and net commission revenue decreased by 14% to GBP5.6m
(2008: GBP6.5m).
A new product division, Walker Crips Structured Investments (WCSI) made a sound
contribution to Group profitability. Our experienced team successfully marketed
four structured investment plans during the second half of the year,
contributing net revenue in excess of GBP200,000.
Board Changes
On 31 December 2008, the Board accepted the resignation of Mr Howard Saunders as
a non-executive director. The Board would like to express its sincere thanks to
Howard for his support and advice for the last seven years, a period during
which the Group expanded rapidly, and wishes him well in his retirement.
Share Issue
In July 2008, 1.4 million new ordinary shares of 6 2/3 pence each were issued as
deferred consideration for the acquisition of the London York financial services
group (G&E Investment Services). This represented the maximum number of shares
due after a highly profitable earn-out period. Having achieved demanding earn
out targets, London York continues to deliver longer-term benefits by providing
a strong platform for further growth in the wealth management sector and
bringing important diversity to our revenues.
Dividend
I am pleased to announce that, in light of the Group's profitable performance
this year, together with a positive start to the new financial year, the Board
is proposing that the final dividend be maintained at 1.60 pence per share
(2008:1.60 pence per share) making a total dividend for the year of 2.54 pence
per share (2008: 2.54 pence per share). This decision has been taken with due
consideration of our established dividend policy which takes account of
longer-term performance and has historically rewarded shareholders with gradual
increases in dividend based on growth of shareholders' funds rather than on a
single year's results. The Group maintains a healthy level of regulatory capital
and distributable reserves and your Board believes that after nearly two years
of challenging trading there is a reasonable prospect of a favourable change in
conditions before the end of the current financial year.
It is proposed that the final dividend will be paid on 22 July 2009 to those
shareholders on the register at the close of business on 19 June 2009.
Outlook
We are continuing to monitor overheads and make savings where possible. There
are early signs of a possible market recovery reflected in an improvement in our
trading levels in recent weeks. Your Board maintains its conviction and
confidence in a return to higher levels of profitability if the increased market
activity is sustained.
D M Gelber
Chairman
4 June 2009
CHIEF EXECUTIVE'S REPORT
Results Overview
I am pleased to report that against declining market activity driven by further
unprecedented deterioration in global financial markets, the Group has achieved
a profit before tax for the year of GBP1.1 m (2008: GBP2.3m) helped by the cost
saving measures which have been implemented throughout the year. The growing
range of products across the Group also provided it with a solid base and helped
to contain the impact of the economic turmoil on annual Group revenue to a
modest decrease of 13.1% to GBP15.9m (2008: GBP18.3m).
Asset Management (WCAM)
The asset management division made another significant contribution to Group
profitability. With its relatively low cost base and sustained levels of
recurring annual income, WCAM provides a sound platform for the other Group
business units to add value in the current challenging climate.
Funds under management (FUM) fell 5.4 % over the year from GBP405m to GBP383m by
the year end, compared to the FTSE 100 Index which fell 31.2 % over the same
period. Since the year end, FUM have recovered to stand at GBP441m at 31 May
2009.
The expansion of the sales team during the year has resulted in an increase in
investor interest in WCAM's seven actively-managed funds, which have all ranked
in the top quartiles of their respective peer groups since launch.
The Board believes that these consistently high quality performance statistics
provide WCAM with opportunities to gain further significant market share.
Investment Management/Stockbroking (Walker Crips Stockbrokers Limited)
Income from investment management and stock broking continued to be the largest
component of Group revenue during the year at GBP11.9m (2008: GBP12.8m), a
modest reduction of just over 7% in extremely challenging conditions.
Total assets under management and administration stood at GBP1.4bn at year end,
a decrease of just 14.8% from the prior year and out performance relative to the
31.2% fall in the FTSE 100 index over the period.
In an effort to maintain profitability within the division whilst also trying to
keep a nucleus of talented staff together, personnel-related cost savings have
been gradually implemented during the past eighteen months, mainly from the back
office and principally through natural wastage. Back office headcount has been
reduced by 20% over the year.
During one of its most difficult years, the Private Client Fund Management
division had a satisfactory performance with fee-based revenues being sustained
at strong levels in spite of weaker stock markets. The York based stockbroking
operation is now fully integrated with London and overall Funds under Management
have grown to GBP138m of which GBP62m is managed on a Discretionary
basis.Volatile markets have provided the Company with the opportunity to use
appropriately collateralised derivative products to enhance portfolio offerings
to clients. This is likely to be a key growth area for the future for both the
London and York offices.
The Group's front office structure, with many advisers operating on a
self-employed commission sharing basis, has proved resilient in the difficult
economic environment. Unlike some of our competitors we have not been forced
into making painful and large-scale redundancies in order to reduce fixed salary
costs.
Following a benchmarking exercise, a comprehensive overhaul of the Group's fee
tariff was completed in mid-year. Fee increases for some of our fringe services
has had the impact of restoring our profit margins to realistic levels for those
services.
In keeping with our proud tradition of providing a tailored service to our
increasingly sophisticated client base, Walker Crips Structured Investments was
successfully launched during the year aimed at external intermediaries and
suitable discretionary or advisory customers. To date WCSI has successfully
issued four medium-term investment products, each attracting considerable
interest.
It is encouraging to report that the Company's less volatile non-broking fee
income, one of our key performance indicators, exceeded 50% of total revenue for
the first time this year.
Wealth Management (London York group)
Our Financial Services and Pension Management Division, based in York, has
performed robustly given the difficult market conditions although its
contribution to the Group's bottom line was significantly lower than in 2008.
The Ebor SIPP product had another successful year of growth. Plans now number
250 and funds under administration exceed GBP50m at the year end (2008: 223
plans and GBP44m). SSAS (Small Self Administered Scheme) plans numbered 184 at
the year end with funds under administration exceeding GBP200m (2008: 203 plans
and GBP175m). We envisage further growth this year for both these products,
despite recent Budget announcements. In particular, our SSAS offering has
already experienced a marked upturn in qualified enquiries.
One of our two joint venture companies, set up with large provincial accountancy
firms based in the North of England, has been wholly acquired by our joint
venture partner who exercised its right to buy us out after a mutually
profitable four year incubation period. However, our business relationship will
continue through the supply of compliance and other related services on a fixed
fee basis. Additionally, it has undertaken to continue to support our Unit Trust
Pension and Structured product range and to utilise our stockbroking services.
Corporate Finance (Keith Bayley Rogers & Co Limited)
The Corporate Finance division registered a small loss for the year as the
appetite for small cap transactions remained limited, particularly on the AIM
market where Keith Bayley Rogers is focused. There are few signs that the
appetite for small-cap transactions will increase in the immediate future and
the division has reduced its cost base accordingly in order to minimise future
losses.
Corporate Activity
While the Group's strategy of combining acquisitive and organic growth to drive
expansion remains unchanged, the Board has developed a more cautious attitude to
acquisitions in recent months.
We have instead concentrated on recruiting teams and individuals and are
delighted that a number of recent front office hires have already brought in
quality business.
Liquidity
Despite material swings in working capital arising from timing differences in
settlements with counterparties the current level of cash resources remains
sufficient and provides adequate headroom even when faced with the volatile
business flows of recent months. Much greater emphasis is being placed on the
credit risk of the banking institutions with whom we place funds, with financial
stability taking greater priority over rates of return.
Going Concern
The Group continues to have a strong balance sheet. The decrease in net cash at
31 March 2009 to GBP 3.3m (2008: GBP5.1m) arose primarily by reason of timing
differences in settlements.
Having conducted detailed forecasts and appropriate stress-testing, taking
account of possible adverse changes in trading performance, the Board has
sufficient grounds to believe the Group is well placed to manage its business
risks successfully and that it will be able to operate within the level of its
current financing arrangements, which includes a GBP3m overdraft facility.
Accordingly, the Board continues to adopt the going concern basis for the
preparation of the financial statements.
Regulation
The Retail Distribution Review is shortly to complete its consultation period
and a fundamental strand in the proposed regulation is the achievement of a
step-change in professionalism across the entire financial services sector by
way of minimum qualifications for all Approved Persons. The Group embraces the
proposed changes and implementation for which is planned for 2012. A plan to
assist our personnel in meeting the new requirements will be implemented to
ensure that they can acquire suitable qualifications well before this deadline.
Despite the inclusion of additional capital requirements to cover operational
risks as well as balance sheet risk under the Capital Requirements Directive,
the Group continues to hold significant surplus regulatory capital.
Directors, Account Executives and Staff
During a period when the Group has been looking to reduce costs and rationalise
personnel, the Board is aware of the inevitable increased workload borne by
those remaining. The degree of versatility of many members of staff has been
prominent and invaluable, particularly from the longer-serving members of our
very adaptable and efficient back office.In these exceptionally difficult times
I would like to thank all our Approved Persons, staff and my fellow directors
for their loyalty and commitment to the Group.
Outlook
The opening weeks of the new financial year have seen a marked improvement in
business activity compared to the final quarter of last year. The full impact of
cost saving initiatives and the revised fee tariff will be felt in the year to
March 2010. There have been signs of a return in investor confidence helped by
the rise in key UK equity indices. Despite general uncertainty about the
recovery of global economies, your Board believes that the Group is
well-positioned to benefit should this trend translate to a sustained recovery.
R. A. FitzGerald FCA
Chief Executive Officer
4 June 2009
Walker Crips Group plc
Consolidated income statement
Year ended 31 March 2009
+--------------------------------+----------+----------+----------+----------+----------+
| | Notes | | | 2009 | 2008 |
| | | | | GBP'000 | GBP'000 |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Revenue | 5 | | | 15,865 | 18,312 |
+--------------------------------+----------+----------+----------+----------+----------+
| Commission payable | | | | (3,225) | (3,749) |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Gross profit | | | | 12,640 | 14,563 |
+--------------------------------+----------+----------+----------+----------+----------+
| Share of after tax | | | | 175 | 69 |
| profits of joint | | | | | |
| ventures | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Administrative expenses | | | | (11,906) | (12,530) |
| - other | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Administrative expenses | 3 | | | - | (106) |
| - exceptional items | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Total administrative | | | | (11,906) | (12,636) |
| expenses | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Operating profit | | | | 909 | 1,996 |
+--------------------------------+----------+----------+----------+----------+----------+
| Investment revenues | | | | 193 | 324 |
| Finance costs | | | | (5) | (3) |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Profit before tax | | | | 1,097 | 2,317 |
+--------------------------------+----------+----------+----------+----------+----------+
| Analysed as: | 3 | | | 1,097 | 2,423 |
| Profit before tax and | | | | - | (106) |
| exceptional items | | | | ________ | ________ |
| Administrative expenses | | | | 1,097 | 2,317 |
| - exceptional items | | | | | |
| Profit before tax | | | | | |
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Taxation | | | | (283) | (745) |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Profit for the year | | | | 814 | 1,572 |
| attributable to equity | | | | | |
| holders of the company | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Earnings per share | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Basic | 4 | | | 2.3p | 4.5p |
+--------------------------------+----------+----------+----------+----------+----------+
| Diluted | 4 | | | 2.2p | 4.2p |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
Walker Crips Group plc
Consolidated statement of recognised income and expense
Year ended 31 March 2009
+-------------------------------------------------+------------+----------+----------+
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+-------------------------------------------------+------------+----------+----------+
| | | | |
+-------------------------------------------------+------------+----------+----------+
| Gain on revaluation of | | 248 | 282 |
| available-for-sale investments taken to | | | |
| equity | | | |
+-------------------------------------------------+------------+----------+----------+
| Deferred tax on gains on | | (70) | (62) |
| available-for-sale investments | | | |
+-------------------------------------------------+------------+----------+----------+
| Deferred tax on share options | | (120) | (148) |
+-------------------------------------------------+------------+----------+----------+
| | | | |
+-------------------------------------------------+------------+----------+----------+
| Net income recognised directly in equity | | 58 | 72 |
+-------------------------------------------------+------------+----------+----------+
| | | | |
+-------------------------------------------------+------------+----------+----------+
| | | | |
+-------------------------------------------------+------------+----------+----------+
| Profit for year | | 814 | 1,572 |
+-------------------------------------------------+------------+----------+----------+
| | | | |
+-------------------------------------------------+------------+----------+----------+
| Total recognised income and expense for | | 872 | 1,644 |
| the year attributable to equity holders | | | |
| of the company | | | |
+-------------------------------------------------+------------+----------+----------+
| | | | |
+-------------------------------------------------+------------+----------+----------+
Walker Crips Group plc
Consolidated balance sheet
31 March 2009
+----------------------------------------+----------+----------+----------+----------+
| | Note | | Group | Group |
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Non-current assets | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Goodwill | | | 5,121 | 5,121 |
+----------------------------------------+----------+----------+----------+----------+
| Other intangible assets | | | 691 | 806 |
+----------------------------------------+----------+----------+----------+----------+
| Property, plant and equipment | | | 1,203 | 1,451 |
+----------------------------------------+----------+----------+----------+----------+
| Investment in joint ventures | | | 28 | 93 |
+----------------------------------------+----------+----------+----------+----------+
| Available for sale investments | | | 1,418 | 1,170 |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| | | | 8,461 | 8,641 |
+----------------------------------------+----------+----------+----------+----------+
| Current assets | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Trade and other receivables | | | 31,907 | 40,864 |
+----------------------------------------+----------+----------+----------+----------+
| Trading investments | | | 316 | 216 |
+----------------------------------------+----------+----------+----------+----------+
| Cash and cash equivalents | | | 3,671 | 5,353 |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| | | | 35,894 | 46,433 |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Total assets | | | 44,355 | 55,074 |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Current liabilities | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Trade and other payables | | | (28,891) | (39,489) |
| Current tax liabilities | | | (292) | (524) |
| Bank overdrafts | | | (337) | (301) |
| Deferred tax liability | | | (134) | (84) |
| Shares to be issued | | | - | (1,105) |
| Cash consideration due under | | | (150) | - |
| acquisition agreements | | | | |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| | | | (29,804) | (41,503) |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Net current assets | | | 6,090 | 4,930 |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Non-current liabilities | | | - | (150) |
| Cash consideration due under | | | | |
| acquisition agreements | | | | |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Net assets | | | 14,551 | 13,421 |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Equity | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Share capital | | | 2,464 | 2,360 |
+----------------------------------------+----------+----------+----------+----------+
| Share premium account | | | 1,605 | 1,568 |
+----------------------------------------+----------+----------+----------+----------+
| Own shares | | | (173) | (173) |
+----------------------------------------+----------+----------+----------+----------+
| Retained earnings | | | 5,013 | 5,101 |
+----------------------------------------+----------+----------+----------+----------+
| Revaluation reserve | | | 967 | 789 |
+----------------------------------------+----------+----------+----------+----------+
| Other reserves | | | 4,675 | 3,776 |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Equity attributable to equity holders | 6 | | 14,551 | 13,421 |
| of the company | | | | |
+----------------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------------+----------+----------+----------+----------+
Walker Crips Group plc
Consolidated cash flow statement
Year ended 31 March 2009
+---------------------------------------------+------+----------+---------+----------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Operating activities | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Cash (used in) /generated by | | | (414) | 1,101 |
| operations | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Interest received | | | 150 | 295 |
+---------------------------------------------+------+----------+---------+----------+
| Interest paid | | | (5) | (3) |
+---------------------------------------------+------+----------+---------+----------+
| Tax paid | | | (581) | (657) |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Net cash (used in) /generated by | | | (850) | 736 |
| operating activities | | | | |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Investing activities | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Joint venture termination fee | | | 205 | - |
| Deferred consideration payment under | | | - | (302) |
| acquisition agreements | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Net Purchase of property, plant and | | | (195) | (700) |
| equipment | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Purchase of investments held for | | | (100) | (78) |
| trading | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Dividends received | | | 78 | 79 |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Net cash used in investing | | | (12) | (1,001) |
| activities | | | | |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Financing activities | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Proceeds on issue of shares | | | 46 | 25 |
+---------------------------------------------+------+----------+---------+----------+
| Dividends paid | | | (902) | (858) |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Net cash used in financing | | | (856) | (833) |
| activities | | | | |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Net (decrease) in cash and cash | | | (1,718) | (1,098) |
| equivalents | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Net cash and cash equivalents at | | | 5,052 | 6,150 |
| beginning of year | | | | |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Net cash and cash equivalents at end | | | 3,334 | 5,052 |
| of year | | | | |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| Cash and cash equivalents | | | 3,671 | 5,353 |
+---------------------------------------------+------+----------+---------+----------+
| Bank overdrafts | | | (337) | (301) |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
| | | | 3,334 | 5,052 |
+---------------------------------------------+------+----------+---------+----------+
| | | | | |
+---------------------------------------------+------+----------+---------+----------+
Notes
For the year ended 31 March 2009
1. The financial information set out in the announcement does not constitute
the company's statutory accounts for the years ended 31 March 2009 or 2008. The
financial information for the year ended 31 March 2008 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was unqualified
and did not contain a statement under s. 237(2) or (3) Companies Act 1985. The
statutory accounts for the year ended 31 March 2009 are yet to be signed but
will be finalised on the basis of the financial information presented by the
directors in this preliminary announcement and will be delivered to the
Registrar of Companies following the company's annual general meeting.
Going concern
The Group's business activities, together with the factors likely to affect its
future development, performance and position are set out in the Chairman's
Statement and Chief Executive's report.
The Group has healthy financial resources together with a long established, well
proven and tested business model. As a consequence, the directors believe that
the Group is well placed to manage its business risks successfully despite the
current difficult climate.
After conducting enquiries, the directors believe that the Company and the Group
have adequate resources to continue in existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the
financial statements.
2. Whilst the information as set out in this preliminary announcement is
prepared in accordance with International Financial Reporting Standards ('IFRS')
the announcement itself does not contain sufficient information to comply with
IFRS
The accounting policies are consistent with those applied in the full financial
statements and are consistent with those of the prior year.
3. Exceptional items
Last year, final judgement was awarded in the High Court in the Company's favour
against two clients' unauthorised transactions (as per the Group's announcement
of the 3 July 2007). Additional legal expenses of GBP106,000 were incurred
beyond the original exceptional provision made in the year to 31 March 2006 and
were charged to the income statement last year.
4. Earnings per share
The calculation of basic earnings per share for continuing operations is based
on the post-tax profit for the financial year of GBP814,000 (2008: GBP1,572,000)
and on 35,988,221 (2008: 34,920,683) ordinary shares of 6 2/3p, being the
weighted average number of ordinary shares in issue during the year.
The effect of options granted would be to reduce the reported earnings per
share. The calculation of diluted earnings per share is based on 37,067,260
(2008: 37,049,416) ordinary shares, being the weighted average number of
ordinary shares in issue during the period adjusted for dilutive potential
ordinary shares.
5. Segmental analysis
For management purposes the Group is currently organised into four operating
divisions - Investment Management/Stockbroking, Corporate Finance, Financial
Services and Fund Management. These divisions, all of which conduct business in
the United Kingdom only, are the basis on which the Group reports its primary
segment information.
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| 2009 | Investment | Corporate | Financial | Fund | Consolidated |
| | Management | Finance | services | Management | Year ended |
| | / | GBP'000 | GBP'000 | GBP'000 | 31 March |
| | Stockbroking | | | | 2009 |
| | GBP'000 | | | | GBP'000 |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Revenue | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| External | 11,922 | 311 | 1,056 | 2,576 | 15,865 |
| sales | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Total | 11,922 | 311 | 1,056 | 2,576 | 15,865 |
| revenue | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Result | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Segment | 109 | (174) | 180 | 1,464 | 1,579 |
| result | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Unallocated | | | | | (670) |
| corporate | | | | | |
| expenses | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Operating | | | | | 909 |
| profit | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Investment | | | | | 193 |
| revenues | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Finance | | | | | (5) |
| costs | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Profit | | | | | 1,097 |
| before | | | | | |
| tax | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Tax | | | | | (283) |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Profit | | | | | 814 |
| after | | | | | |
| tax | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Other | | | | | |
| information | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Capital | 183 | - | 12 | - | 195 |
| additions | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Depreciation | 354 | 18 | 48 | 23 | 443 |
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Balance | | | | | |
| sheet | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Assets | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Segment | 34,149 | 132 | 620 | 1,021 | 35,922 |
| assets | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Unallocated | | | | | 8,433 |
| corporate | | | | | |
| assets | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Consolidated | | | | | 44,355 |
| total assets | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Liabilities | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Segment | 28,779 | 51 | 259 | 565 | 29,654 |
| liabilities | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Unallocated | | | | | 150 |
| corporate | | | | | |
| liabilities | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Consolidated | | | | | 29,804 |
| total | | | | | |
| liabilities | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
5. Segmental analysis (continued)
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| 2008 | Investment | Corporate | Financial | Fund | Consolidated |
| (As | Management | Finance | services | Management | Year ended |
| restated) | / | GBP'000 | GBP'000 | GBP'000 | 31 March |
| | Stockbroking | | | | 2008 |
| | GBP'000 | | | | GBP'000 |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Revenue | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| External | 12,827 | 820 | 2,013 | 2,652 | 18,312 |
| sales | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Total | 12,827 | 820 | 2,013 | 2,652 | 18,312 |
| revenue | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Result | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Segment | 772 | 122 | 490 | 1,734 | 3,118 |
| result | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Unallocated | | | | | (1,122) |
| corporate | | | | | |
| expenses | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Operating | | | | | 1,996 |
| profit | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Investment | | | | | 324 |
| revenues | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Finance | | | | | (3) |
| costs | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Profit | | | | | 2,317 |
| before | | | | | |
| tax | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Tax | | | | | (745) |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Profit | | | | | 1,572 |
| after | | | | | |
| tax | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Other | | | | | |
| information | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Capital | 686 | 10 | 5 | - | 701 |
| additions | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Depreciation | 309 | 5 | 73 | 4 | 391 |
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Balance | | | | | |
| sheet | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Assets | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Segment | 42,800 | 841 | 1,213 | 1,579 | 46,433 |
| assets | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Unallocated | | | | | 8,641 |
| corporate | | | | | |
| assets | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Consolidated | | | | | 55,074 |
| total assets | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Liabilities | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Segment | 38,776 | 210 | 551 | 861 | 40,398 |
| liabilities | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Unallocated | | | | | 1,255 |
| corporate | | | | | |
| liabilities | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| Consolidated | | | | | 41,653 |
| total | | | | | |
| liabilities | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
| | | | | | |
+-------------------------------+--------------+-----------+-----------+------------+--------------+
As the Group's joint ventures are primarily engaged in financial services
activities, it has been decided that the results of these joint ventures will
now be reported under financial services. Consequently the result for financial
services in the year to 31 March 2008 has been restated to include the GBP69,000
share of after tax profits of the joint ventures.
6. Reconciliations of movements in shareholders funds
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| | Called | Share | Own | Capital | Other | Revaluation | Retained | Total |
| | up | premium | shares | Redemption | | | earnings | Equity |
| | share | | held | | | | | |
| | capital | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Equity | 2,356 | 1,547 | (173) | 111 | 3,796 | 569 | 4,387 | 12,593 |
| as at | | | | | | | | |
| 31 | | | | | | | | |
| March | | | | | | | | |
| 2007 | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Revaluation | - | - | - | - | - | 282 | - | 282 |
| of | | | | | | | | |
| investment | | | | | | | | |
| at fair | | | | | | | | |
| value | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Deferred | - | - | - | - | - | (62) | - | (62) |
| tax | | | | | | | | |
| charge | | | | | | | | |
| to | | | | | | | | |
| equity | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Movement | - | - | - | - | (148) | - | - | (148) |
| on | | | | | | | | |
| deferred | | | | | | | | |
| tax on | | | | | | | | |
| share | | | | | | | | |
| options | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Profit | - | - | - | - | - | - | 1,572 | 1,572 |
| for | | | | | | | | |
| the | | | | | | | | |
| year | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Dividends | - | - | - | - | - | - | (858) | (858) |
| paid | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Share | - | - | - | - | 17 | - | - | 17 |
| based | | | | | | | | |
| payments | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Issue | 4 | 21 | - | - | - | - | - | 25 |
| of | | | | | | | | |
| shares | | | | | | | | |
| on | | | | | | | | |
| exercise | | | | | | | | |
| of | | | | | | | | |
| options | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Equity | 2,360 | 1,568 | (173) | 111 | 3,665 | 789 | 5,101 | 13,421 |
| as at | | | | | | | | |
| 31 | | | | | | | | |
| March | | | | | | | | |
| 2008 | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Revaluation | - | - | - | - | - | 248 | - | 248 |
| of | | | | | | | | |
| investment | | | | | | | | |
| at fair | | | | | | | | |
| value | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Deferred | - | - | - | - | - | (70) | - | (70) |
| tax | | | | | | | | |
| charge | | | | | | | | |
| to | | | | | | | | |
| equity | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Movement | - | - | - | - | (120) | - | - | (120) |
| on | | | | | | | | |
| deferred | | | | | | | | |
| tax on | | | | | | | | |
| share | | | | | | | | |
| options | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Profit | - | - | - | - | - | - | 814 | 814 |
| for | | | | | | | | |
| the | | | | | | | | |
| year | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Dividends | - | - | - | - | - | - | (902) | (902) |
| paid | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Share | - | - | - | - | 9 | - | - | 9 |
| based | | | | | | | | |
| payments | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Issue | 95 | - | - | - | 1,010 | - | - | 1,105 |
| of | | | | | | | | |
| shares | | | | | | | | |
| as | | | | | | | | |
| deferred | | | | | | | | |
| consideration | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Issue | 9 | 37 | - | - | - | - | - | 46 |
| of | | | | | | | | |
| shares | | | | | | | | |
| on | | | | | | | | |
| exercise | | | | | | | | |
| of | | | | | | | | |
| options | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| Equity | 2,464 | 1,605 | (173) | 111 | 4,564 | 967 | 5,013 | 14,551 |
| as at | | | | | | | | |
| 31 | | | | | | | | |
| March | | | | | | | | |
| 2009 | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
| | | | | | | | | |
+---------------------------------+---------+---------+---------+------------+---------+-------------+----------+---------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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