RNS Number:3302S
Seymour Pierce Group PLC
21 November 2003
Date 21 November 2003
Contact Keith Harris, Chairman 020 7107 8000
Patrick Ingram, Finance Director 020 7107 8000
Seymour Pierce Group Plc
David Bick/Chris Steele 020 7929 5599
Holborn david.bick@holbornpr.co.uk
chris.steele@holbornpr.co.uk
SEYMOUR PIERCE GROUP Plc
PRELIMINARY RESULTS
for the year ended 30 September 2003
During the year ended 30 September 2003 we witnessed an improvement in stock
market conditions. After a thorough assessment of our activities we have
restricted the scope of our business to operations generating recurrent fee
income. I am pleased to report on our results for the year.
Results
Turnover in the year to 30 September 2003 fell from #20m to #17m as a result of
poor market conditions in the first half and the subsequent sale of businesses,
in particular of the investment banking unit which completed at the beginning of
the fourth quarter. Operating costs were lowered substantially across the Group.
The Group's remaining operating businesses, Pavilion Asset Management and Rowan,
returned a combined profit before tax and exceptional items of #1,249,000
against a loss of #643,000 in 2002; and businesses now disposed of or closed
reduced their losses before tax and exceptional items to #204,000, compared to
#3.2m in the previous year. The Group's retained loss for the year was reduced
to #7.5m (2002: loss #29.7m). No dividend will be proposed for the year (2002:
nil).
Trading
Pavilion Asset Management, the Group's institutional asset management business,
saw its revenues in the year rise by 20% and reduced its operating costs by a
similar proportion, producing a profit before tax and exceptional items of
#818,000 on turnover of almost #4m (2002: loss #963,000, turnover #3.3m). This
was a pleasing outcome under the circumstances, particularly since most of the
cost savings were in effect for only a part of the period.
Rowan, which provides discretionary portfolio management and financial advice,
has succeeded in remaining profitable throughout the last three years and has
achieved some promising organic growth. The business recorded a profit before
tax, goodwill and exceptional items of #431,000, an increase of 35%, on turnover
up 18% to #3.6m.
Strategic Review
Today the UK stock market stands approximately 10% above its level at the time
of the last Annual Report, although it had fallen to a seven year low during
this period. Market sentiment and investor confidence were particularly badly
affected by the uncertainty surrounding the war in Iraq.
A year ago the Board, faced with these highly volatile market conditions, and a
sharp fall in the Company's share price, embarked on a strategic review which
contemplated the sale or closure of a number of our operations. The intention
was to preserve value and to return surplus cash to shareholders.
Disposals & Closures
The Group has made several disposals in the year and closed a number of
businesses.
The investment banking business was sold to Alchemy Partners and a management
team for #7.35m. This business lost #490,000 in the previous year and made a
profit of #299,000 in the period to 11 July 2003, the effective date of
disposal.
A number of subsidiary businesses, which were making unacceptable losses, namely
Seymour Pierce Bell, the regional stockbroker, Seymour Pierce Green, the private
banking operation, and Asymmetric Capital Management, an associated company,
were disposed of for small amounts which brought these losses to an end.
Pavilion Capital, the multi manager hedge fund operator also ceased activity,
unable to make progress in a fiercely competitive, high cost environment and
after posting significant losses. Two other small businesses were also closed.
Outlook
It remains our intention to return surplus cash to our shareholders and we will
shortly be issuing a circular to shareholders explaining this process in more
detail.
The value embedded in the Group after a return of surplus cash will comprise
chiefly its asset management operations as well as certain legacy stakes in a
number of unquoted and early stage investments: the latter are collectively
shown in our balance sheet at #227,000.
A continuation of positive stock market conditions and cost cutting measures now
sees the Group trading profitably for the first time since 2000. Our asset
management operations have the opportunity to win new clients to add to revenues
and profits, and we now look to the future with some optimism.
Change of Name
Following the disposal of the investment banking business it is the intention of
the Board to seek shareholders' approval at the Annual General Meeting for a
change in the name of the Company to Investment Management Holdings plc.
Board of Directors
Given the relative size of the ongoing Group and the rationalisation of
operations a corresponding restructuring and reduction of the Board will be set
out in the forthcoming circular regarding the return of capital.
Keith Harris
Chairman
21 November 2003
Seymour Pierce Group Plc
Consolidated Profit and Loss Account
for the year ended 30 September 2003
2003 2002
#'000 #'000
(Unaudited) (Audited)
Turnover
Continuing operations 7,607 6,359
Discontinued operations 9,835 14,076
17,442 20,435
Operating costs (18,825) (29,449)
Goodwill amortisation (675) (1,208)
Goodwill write down (exceptional) (1,489) (17,957)
Write down of fixed asset investments (exceptional) (185) (6,605)
Write down of current asset investments (exceptional) (1,251) -
Restructuring and other charges (exceptional) (4,312) (5,673)
Operating loss (9,295) (40,457)
Continuing operations (8,994) (38,144)
Discontinued operations (301) (2,313)
Profit on disposal of fixed asset investments 1,467 8,618
Other income 173 -
Share of associate's results - (382)
Interest receivable 631 720
Interest payable (149) (241)
Loss on ordinary activities before taxation (7,173) (31,742)
Tax (charge)/credit on loss on ordinary activities (357) 699
Loss on ordinary activities after taxation (7,530) (31,043)
Minority interest - 1,362
Loss for the financial year (7,530) (29,681)
Dividends - -
Retained loss for the financial year (7,530) (29,681)
Loss per share (1.03p) (5.35p)
Diluted loss per share (0.97p) (5.05p)
Seymour Pierce Group Plc
Consolidated Balance Sheet
30 September 2003
2003 2002
#'000 #'000
(Unaudited) (Audited)
Fixed assets
Intangible assets 5,678 4,193
Tangible assets 128 789
Investments 592 1,645
6,398 6,627
Current assets
Investments 25 2,816
Debtors 2,260 6,358
Cash at bank and in hand 18,171 22,544
20,456 31,718
Creditors: amount falling due within one year (3,065) (8,601)
Net current assets 17,391 23,117
Total assets less current liabilities 23,789 29,744
Creditors: amounts falling due after more than one year
Other long term creditors (1,588) (457)
Minority interest - (308)
(1,588) (765)
Provisions for liabilities and charges
Restructuring charges (1,816) (1,639)
Deferred taxation - (191)
Share of deficit in associate - (382)
Net assets 20,385 26,767
Capital and reserves
Called up share capital 7,505 7,308
Share premium 46,438 45,692
Revaluation reserve - 446
Profit and loss account (33,558) (26,679)
Equity shareholders' funds 20,385 26,767
Seymour Pierce Group Plc
Notes to the Preliminary Results
1. Reconciliation of movements in shareholders' funds
2003 2002
#'000 #'000
Retained loss for the financial year (7,530) (29,681)
Ordinary share capital subscribed and issued 943 33,873
Transfer from deferred tax provision 191 -
Foreign currency translation 14 (8)
Net (reduction in)/addition to equity shareholders' fund (6,382) 4,184
Equity shareholders' funds at 1 October 26,767 22,583
Equity shareholders' funds at 30 September 20,385 26,767
2. Segmental analysis of turnover, profit or loss before tax and net assets
Analyses by class of business of turnover, profit/(loss) before tax and net
assets are as follows:
Turnover Profit/(loss) Net assets
before tax
2003 2002 2003 2002 2003 2002
Class of business #'000 #'000 #'000 #'000 #'000 #'000
Pavilion Asset Management Limited 3,989 3,307 818 (963) 2,377 1,534
Rowan & Co. Capital Management PLC 3,618 3,052 431 320 942 1,726
Group administration - - (1,773) (5,261) 15,906 16,860
Subsidiaries not trading at year end 590 1,243 (282) (1,081) 1,160 1,145
Subsidiaries disposed of in the year 9,245 12,833 78 (2,090) - 5,502
Share of deficit in associate - - - (382) - -
Exceptional items, goodwill and disposal - - (6,445) (22,285) - -
of fixed asset investments
17,442 20,435 (7,173) (31,742) 20,385 26,767
The Group operates almost exclusively in the United Kingdom.
3. Disposal of subsidiaries
In the year ended 30 September 2003, the Group disposed of subsidiaries with net
assets of #5,378,000. Consideration amounted to #7,657,000 resulting in a
profit on disposal of #1,554,000.
Seymour *Seymour Seymour Total
Pierce Pierce Green Pierce Bell
Limited and Limited #'000
Seymour #'000
Pierce Ellis #'000
Limited
#'000
Net assets disposed
Fixed assets 429 129 43 601
Investments 1,197 - - 1,197
Debtors 2,529 437 371 3,337
Cash 2,566 34 70 2,670
Creditors (1,984) (357) (97) (2,438)
Inter company balances - 11 - 11
Net assets disposed 4,737 254 387 5,378
Unamortised goodwill 181 544 - 725
Profit/(loss) on disposal 2,437 (496) (387) 1,554
Cash consideration receivable 7,355 302 - 7,657
Goodwill previously written off 8,661 4,202 - 12,863
Date of disposal 11 July 30 Sept 4 June
2003 2003 2003
*Seymour Pierce Investment Management Limited, Seymour Pierce Advisory Services
Limited and other businesses within the Group's private banking business.
On 30 April 2003 agreement was completed for the sale of antfactory Investments
BV, a subsidiary company, to antfactory Investments Holdings BV, an unconnected
company, which assumed an intercompany liability owed by the Group of #5.8m in
consideration. No cash consideration was received. antfactory Investments BV was
the vehicle through which the Group held residual early stage investments
acquired as part of the acquisition of antfactory Holdings Ltd on 12 February
2002 and which were fully provided against at 30 September 2002. The company had
no other assets.
4. Announcement based on draft accounts
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 30 September 2003 or 2002. The
financial information for the year ended 30 September 2002 is derived from the
statutory accounts for that period 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 Section 237(2) or (3) of the
Companies Act 1985. The statutory accounts for the year ended 30 September 2003
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.
Copies of the statutory accounts are to be sent to shareholders and will be
available to the public at the registered office of Seymour Pierce Group Plc,
1st Floor, 31 Southampton Row, London WC1B 5HT, as well as on the Group's
website, www.seymourpiercegroup.com.
- ENDS -
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