Interim Results
12 Septembre 2006 - 5:19PM
UK Regulatory
RNS Number:8443I
Conister Trust PLC
12 September 2006
Conister Trust plc
Interim Results for the six months ended 30 June 2006
Chairman's Statement
Outlook
________________________________________________________________________________
Conister is experiencing difficult trading environments in all the markets it
has historically chosen to operate in which limits our ability to create
shareholder value and results in losses. As a company with over seventy years of
Manx heritage, we remain committed to servicing our Isle of Man customers and
supporting the local community with our head office in the Isle of Man. However,
to deliver long-term shareholder value Conister needs to take advantage of
global opportunities. Conister is now progressively repositioning itself to
focus on a number of e-commerce banking opportunities as well as the growing
high net worth market. We hope to make a number of announcements as this
strategy unfolds.
The new Board has a clear vision and every confidence in the future success of
Conister Trust.
Financial Review
________________________________________________________________________________
The Bank incurred a loss on ordinary activities before tax of #383,000 (2005 :
profit #304,000) in the six months to 30 June 2006. While disappointing, the
results are in line with the Board's expectations in the difficult trading
environment and we expect no material improvement by the year end.
Net operating income in the six months declined slightly to #1.9 million
compared to #2 million in the same period last year due to the subdued
traditional HP market and restrained litigation funding lending,
The Bank's core business is focused on traditional HP markets in the Isle of Man
and UK which suffer from strong competition, declining volumes and low
profitability. Nevertheless, there has been a noticeable improvement in the
volumes in the Manx business during July reflecting a focus on improving
performance and loss of a Manx competitor. We have also seen promising growth in
our unsecured lending to military personnel. Looking forward, trading conditions
are expected to remain competitive in our traditional markets. We remain
cautious in our credit policy to maintain the high quality of our lending.
We have continued to restrain new lending for litigation funding as we
reposition ourselves in this market. Bad debt expenses have increased primarily
reflecting slower than anticipated repayments of litigation funding advances.
A notable achievement in 2006 has been the inception of a new revenue stream
financing vehicle insurance premiums. The Bank has funded #2 million to date and
we contemplate a significant increase in this area.
Operating expenses have increased to #2 million in the first six months compared
to #1.5 million for the same period last year as we invest in transforming the
business including the appointment of a new Chief Executive Officer and
strengthening our management team.
The capitalisation of the Bank has been significantly strengthened with the
subscription for 12,000,000 Ordinary Shares by Burnbrae Limited, a company
beneficially owned by me, for a consideration of #5.4 million at the end of May.
It is Burnbrae's stated intention to support Conister's growth in new areas.
Board
________________________________________________________________________________
Conister is undergoing significant change which requires strong leadership and
an experienced Board. We announced in June that Don McCrickard, Dr Christopher
Fay and Philip Stamp would join the Board as Non-Executive Directors. They bring
to Conister considerable financial and banking experience. With their respective
backgrounds, I have no doubt that all will add to the quality of the Board
debate. Following my appointment as Chairman, I would also like to record the
Board's gratitude to the out going Chairman Peter Hammonds for his service to
the Bank in that capacity.
Dividend
The Board has resolved that an interim dividend will not be paid for the half
year to 30 June 2006 (2005: 0.3p per share).
Jim Mellon 12 September 2006
Consolidated Profit and Loss Account
Unaudited
Audited
12 months to
31.12.2005
6 months to Restated
30.6.2006 30.6.2005
Restated
#000 #000 #000
Interest receivable and similar income 3,465 3,674 7,461
Interest payable (1,183) (1,235) (2,492)
--------- --------- ----------
Net interest income (gross income) 2,282 2,439 4,969
Commissions ( 397) ( 433) ( 848)
Other operating income receivable 55 26 56
--------- --------- ----------
Net operating income 1,940 2,032 4,177
Operating expenses (2,006) (1,528) (3,210)
Bad and doubtful debts - specific ( 412) ( 32) ( 586)
- general 95 ( 148) ( 287)
--------- --------- ----------
(Loss)/Profit on ordinary activities
before ( 383) 324 94
taxation
Taxation - ( 19) ( 16)
--------- --------- ----------
(Loss)/Profit on ordinary activities
after ( 383) 305 78
taxation
Dividends - ( 85) ( 85)
--------- --------- ----------
Retained (loss)/profit for the period ( 383) 220 ( 7)
========= ========= ==========
Basic earnings per share (1.26)p 1.08 p 0.28p
========= ========= ==========
Fully diluted earnings per share (1.22)p 1.08p 0.28p
========= ========= ==========
The provision for taxation is based upon the estimated rate at which provision
will need to be made in the financial statements for the full year.
The directors have resolved that no interim dividend shall be paid (2005: 0.3p
per share).
The earnings per share calculation is based upon profit/(loss) for the period
after taxation and the weighted average of the number of shares in issue
throughout the period.
Consolidated Balance Sheet
Unaudited
as at
30.6.2006 30.6.2005 Audited
#000 Restated as at
#000 31.12.2005
Restated
#000
ASSETS
Cash and balances at banks 10,912 7,685 6,827
Customer accounts receivable 53,888 58,364 55,739
Tangible fixed assets 826 1,050 866
Other debtors and prepayments 600 138 169
---------- ----------- ----------
62,226 67,237 63,601
========== =========== ==========
LIABILITIES
Deposit accounts 50,724 55,596 52,884
Creditors and accrued charges 259 1,198 554
Proposed dividends - 85 -
---------- ----------- ----------
50,983 56,879 53,438
CAPITAL RESOURCES
---------- ----------- ----------
Called up Share Capital 10,111 7,088 7,111
Shares to be issued 159 60 75
Share Premium account 3,169 759 769
---------- ----------- ----------
Profit and Loss account 1,397 1,954 1,724
Equity shareholders' funds 14,836 9,861 9,679
---------- ----------- ----------
Pension liability 407 497 484
---------- ----------- ----------
66,226 67,237 63,601
========== =========== ==========
The interim financial statements were approved by the board of directors on 12
September 2006 and have been prepared on a consistent basis with the accounting
policies in the 2005 Annual Report with the exception of the adoption of
Financial Reporting Standard 20 'Share-based payment'.
The interim financial statements are unaudited but have been reviewed by the
Auditors and their report is set out on page 9.
Figures for previous periods restated for Financial Reporting Standard 20
"Share-based payment" and 17 "Retirement benefits".
Consolidated Cash Flow Statement
6 months to
30.6.2006 30.6.2005 Unaudited
#000 Restated Audited
#000 12 months to
31.12.2005
Restated
#000
Reconciliation of profit before taxation
to net operating cash flow
(Loss) / Profit before taxation (383) 324 94
Profit on sale of fixed assets - (61) (60)
Provision on fixed assets - - 120
Depreciation charge 45 53 103
Pension scheme (21) (27) (31)
Shares to be issued 84 15 30
Increase in trade debtors (431) (17) (32)
(Decrease)/ Increase in trade creditors (295) 519 (206)
--------- --------- ---------
Net cash (outflow) / inflow from trading
activities (1,001) 806 18
Decrease /(Increase) in customers
accounts receivable 1,851 (968) 1,656
(Decrease)/ Increase in deposit accounts (2,160) 2,895 183
--------- --------- ---------
Net cash (outflow) / inflow from
operating activities (1,310) 2,733 1,857
========= ========= =========
CASH FLOW STATEMENT
Net cash (outflow)/ inflow from
operating activities (1,310) 2,733 1,857
Taxation - 7 (49)
Issue of ordinary share capital 5,400 - -
Capital expenditure
Purchase of tangible fixed assets (5) (93) (109)
Sale of tangible fixed assets - 121 150
--------- --------- ---------
4,085 2,768 1,849
Equity dividends paid - (170) (222)
--------- --------- ---------
Increase in cash 4,085 2,598 1,627
========= ========= =========
Consolidated Statement of Total Recognised Gains and Losses
Audited Unaudited
6 months to 12 months to
30.6.2006 30.6.2005 31.12.2005
#000 Restated Restated
#000 #000
(Loss)/Profit for the financial
period/year (383) 324 94
Gain/(Loss) on pension scheme 58 (29) (33)
Current tax associated with loss on
pension scheme - 3 3
----------- --------- -----------
Total recognised gains and losses
relating to the year (325) 298 64
Prior period adjustment (Adoption of
Financial Reporting - (482) (482)
Standard 17 "Retirement Benefits")
Prior period adjustment (Adoption of
Financial Reporting Standard 20 "Share
Based Payments") (75) - -
----------- --------- -----------
Total gains and losses recognised since
last annual report (400) (184) (418)
=========== ========= ===========
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