RNS Number:5488S
Trio Holdings PLC
27 November 2003
27 November 2003
TRIO HOLDINGS PLC
Preliminary Results - stronger second half performance
TRIO Holdings PLC (TRN.L), a leading London-based money and securities broking
house, today announce a stronger second half performance, to give satisfactory
results in the difficult year to 30 September 2003, blighted in the first half
by uncertainties in the run up to the resolution of events in the Middle East.
Highlights:
* Profit before tax on continuing businesses #2.1 million; net of
discontinued businesses #1.9 million (2002: #5.4 million including
exceptional operating items of #1.3 million)
* Recommended final dividend maintained at 0.5p per share
* Total normal dividends for the year maintained at 0.75p per share
* Net Assets at 30 September 2003 up to #11.6 million (2002: #11.3
million)
* Cash balances stand at #10.4 million
* Significant indirect balance sheet improvement through elimination of
long-standing contingent liability of #600,000
David Hagan, Executive Chairman, said:
"I am pleased to confirm that trading conditions indeed improved in our second
half, enabling us to report profits before tax on continuing businesses of #2.1
million and to recommend maintenance of the normal dividend level at a
historical high.
Furthermore, my colleagues and I are delighted to advise the total elimination
of a significant contingent liability of #0.6 million that has detracted from
our very strong balance sheet since 2000, vindicating the robust position
consistently taken by the board in respect of this matter.
As I reported in my interim statement on 1 May 2003, our first half was
substantially tempered by the restraint of speculative trading by our customers,
the banks, reflecting their prudence in the long run-up to the events in the
Middle East. The second half saw a return to more normal, although moderate,
market conditions. Subsequent refocus on the economic fundamentals of global
markets now perhaps suggests a prognosis of modestly rising interest rates in
most major currencies. In turn, this should imply a continuance of moderately
active markets in our specialist niche areas of expertise."
Enquiries to:
DAVID HAGAN Tel: 020 7469 9100
Executive Chairman, TRIO Holdings PLC
PATRICK TOYNE SEWELL Tel: 020 7638 9571
Citigate Dewe Rogerson
CHAIRMAN'S STATEMENT
Review of the business
After a difficult first half, it is pleasing to announce a satisfactory out turn
for the full year as a whole with a profit on continuing businesses before
taxation of #2.1 million, becoming #1.3 million after taxation. This,
therefore, enables the board to recommend for approval at the Annual General
Meeting a final dividend at 0.5p per share, which will be payable on 20 February
2004, to shareholders on the register on 23 January 2004. Our historically high
total normal dividend for the year will consequently be maintained at 0.75p.
Net assets have increased to #11.6 million and our very strong balance sheet, in
relationship to the size of the company, continues to include cash balances in
excess of #10 million.
In June 2003 we completed the disposal of The Network Group Limited, an
electronics design and assembly business, the ownership of which had long been
an anachronism within the group and which had become increasingly loss-making.
Its sale at net asset value to Fireco Limited was a happy resolution to our
predicament.
Niche excellence
There has been material consolidation in our very specialist industry sector,
with the continued dynamic acquisitive growth of ICAP plc, as the industry giant
and leader, and the strategically interesting acquisition of Tullett plc by the
listed stockbroking company Collins Stewart plc. Nonetheless TRIO, due to the
long and untarnished history of our principal operating subsidiary Martin
Brokers (UK) plc as the oldest money broking firm in the City, continues to be
acknowledged as the leader in several important niche sectors.
In the authoritative Risk Magazine annual survey published in September 2003, we
achieved the resounding accolade of being voted 'Top Broker' in a total of
eleven market sectors. In Forward Foreign Exchange broking, our superb teams
were 1st in Dollar/Euro, 1st in Dollar/Sterling, 1st in Dollar/Swedish Krona,
and 1st in Dollar/EM Asia. We were voted 'Top Broker' in Overnight Index Swaps
for Swedish Krona, reflecting market acknowledgement of our first class 'Scandi'
team. Also in the complex and cerebral arena of Equity Derivatives, our teams
were voted 1st in all six sectors (telecoms, technology, media, financials,
autos, and others) for European OTC Single Stock Equity Options. My board
colleagues and I congratulate the continuing excellence of our many brokers in
all these teams.
Electronic transactional systems
In recent years, several product sectors of our markets have seen the emergence
of electronic transactional systems, many with global reach, which have achieved
varying levels of acceptance and adoption by our customer base. Inherently such
systems can improve market efficiencies, reduce risk, and lend themselves to the
ultimate goal of straight-through processing.
Indeed, many of our competitor companies have embraced such systems, mainly
combining electronic broking with the traditional voice methodology, into a '
hybrid' model. We strategically endorse the hybrid model for the foreseeable
future.
In order to be at the vanguard of these remorseless advances in technology, our
talented team at Trio Internet Systems ('TIS') developed, entirely in-house, a
highly sophisticated secure electronic transactional dealing system. Its first
product area, www.UK-Locals.com, was for Local Authority treasurers, building
societies and banks, and has now completed over 6,500 trades since its inception
over two years ago. The system's take-up and usage by its customer base
continues to grow, and indeed in October we once again achieved another record
month in transaction volumes. An additional benefit has been the enhancement of
our relationships and perception within the Local Authority sector, directly
contributing to improved profitability for that activity.
We have recently formed a new subsidiary, Martin Brokers Transactional Products
Limited, to interface between TIS and the Martin Brokers dealing teams, to
expand in due course our range of hybrid brokered products. Next January, work
will commence on the introduction of the next product area for this technology,
which is planned to go live by April, with additional and potentially more
significant product areas being introduced thereafter.
Software development
Over the last two years, the TIS team developed an all new pricing and analytics
tool branded Trio Vantage. Trio Vantage is a fast and simple to use
multi-instrument pricing tool for the dealing environment, with sophisticated
facilities for monitoring arbitrage opportunities between currencies and
instruments - www.triointernetsystems.com. This product has now been very
successfully rolled out across all our in-house dealing desks and has
substantially replaced the third party software previously used.
Our strategy for possible external commercialisation of this product has
crystallised with the recent establishment of an in-house sales team, whose
early success has been the agreement of two major trading banks and one European
broking firm to trial the product. We are optimistic of the first external sales
of Trio Vantage emerging early in the New Year.
Relocation
Just over one year ago, the group completed a highly successful relocation to
our new office at Cannon Bridge, with the associated re-equipment, providing a
modern, open-plan, totally modular and flexible dealing room environment. The
many advantages of this flexibility continue to be helpful in enabling easy,
nil-cost expansion, contraction, and re-configuration of dealing desks and
brokers, to reflect the ebb and flow of activity levels in different products.
As an example of this expansion, during the year we established a new Credit
division, to create an initial presence in this broad arena focused on the
comparatively new international market in Credit Default Swaps, together with
corporate bonds and bond options. Inherently the establishment period of such a
new activity, bears adversely on the profit and loss account, but we view the
Credit market as a strategically important area for the future and continue to
endorse the professional endeavours of this team.
Summary
Moderately active business has continued to prevail since the year end, although
globally the financial markets are tentative, reflecting political and social
uncertainties, and I remain extremely cautious. There is still a continuing
climate of consolidation amongst our competitors. Our very sound financial base
enables us to look widely at seeking possible corporate developments for TRIO
Holdings PLC in due course, from a position of strength.
This is a fiercely competitive industry, which faces the challenge of embracing
sophisticated advances in software and technology and successfully combining
them with traditional communication methods, to provide hybrid broking of extra
added value to the banks. We will remain an active participant in this
evolution.
In particular there is always competition for good staff. Indeed their
recruitment and retention occasionally borders the absurd, and certainly
challenges the morality and the legal envelope of modern day employment
practice. But we are essentially a 'niche' broker, and the quality, expertise,
loyalty and dedication of our excellent broking, IT and back-office teams
continue to underpin my cautiously confident view of our future.
For more information on TRIO and its operating businesses please visit:
www.trio.co.uk
www.uk-Locals.com
www.martin-brokers.com
www.triointernetsystems.com
TRIO HOLDINGS PLC
UNAUDITED PRELIMINARY STATEMENT OF ANNUAL RESULTS
FOR THE YEAR ENDED 30 SEPTEMBER 2003
2003 2003 2003 2002
Continuing Discontinued Total Total
#000's #000's #000's #000's
Turnover 32,674 186 32,860 34,426
Operating expenses (30,678) (481) (31,159) (30,596)
______ ______ _______ _______
Operating profit/(loss) before exceptional items 1,996 (295) 1,701 3,830
Exceptional operating items - - - 1,270
______ ______ _______ _______
Operating profit/(loss) 1,996 (295) 1,701 5,100
Profit on sale of investments - - - 77
Share of loss of associate (94) - (94) (81)
Net interest receivable less payable 246 - 246 267
______ ______ _______ _______
Profit/(loss) on ordinary activities before taxation 2,148 (295) 1,853 5,363
Taxation -UK (834) - (834) (2,211)
-Overseas - - - (77)
______ ______ _______ _______
Profit/(loss) on ordinary activities after taxation 1,314 (295) 1,019 3,075
Dividends paid and proposed (626) - (626) (835)
______ ______ _______ _______
Retained profit/(loss) for the year transferred to reserves 688 (295) 393 2,240
====== ====== ====== ======
Earnings per share 1.22p 3.68p
===== =====
Dividends per share - normal 0.75p 0.75p
- special - 0.25p
===== =====
TRIO HOLDINGS PLC
UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
2003 2002
#000's #000's
Profit for the year 1,019 3,075
Foreign exchange translation differences
on foreign currency investment in subsidiaries 2 -
_______ _______
Total recognised gains and losses 1,021 3,075
====== ======
UNAUDITED RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
2003 2002
#000's #000's
Profit for the year 1,019 3,075
Dividends paid and proposed (626) (835)
_______ _______
393 2,240
Other recognised gains and losses 2 -
_______ _______
Net addition to equity shareholders' funds 395 2,240
Opening equity shareholders' funds 11,253 9,013
_______ _______
Closing equity shareholders' funds 11,648 11,253
====== ======
TRIO HOLDINGS PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 2003
2003 2002
#000's #000's
FIXED ASSETS
Tangible assets 1,993 2,422
Investments 71 165
_______ _______
2,064 2,587
CURRENT ASSETS
Stocks - 92
Investments 277 -
Debtors 5,062 5,176
Cash 10,376 11,463
_______ _______
15,715 16,731
Creditors: due within one year (5,449) (6,885)
_______ _______
NET CURRENT ASSETS 10,266 9,846
Creditors: due after more than one year (681) (1,179)
Equity minority interests (1) (1)
_______ _______
NET ASSETS 11,648 11,253
====== ======
CAPITAL AND RESERVES
Share capital 4,174 4,174
Capital reserve 2,474 2,474
Profit and loss account 5,000 4,605
_______ _______
EQUITY SHAREHOLDERS' FUNDS 11,648 11,253
====== ======
TRIO HOLDINGS PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2003
2003 2002
#000's #000's
Net cash inflow from operating activities 1,917 7,620
Returns on investments and servicing of finance 246 267
Taxation paid (1,770) (1,873)
Capital expenditure and financial investment (69) (830)
Acquisitions and disposals (141) (93)
Dividends paid (835) (376)
_______ _______
Net cash (outflow)/inflow before financing (652) 4,715
Financing (435) (1,362)
_______ _______
(Decrease)/increase in cash in the year (1,087) 3,353
====== ======
Reconciliation of net cash flow to movement in net funds
2003 2002
#000's #000's
(Decrease)/increase in cash in the year (1,087) 3,353
Cash inflow from the decrease in debt and lease financing 435 1,362
_______ _______
Change in net funds resulting from cash flows (652) 4,715
New finance leases - (1,501)
_______ _______
Movement in net funds in the year (652) 3,214
Net funds at 1 October 2002 10,179 6,965
_______ _______
Net funds at 30 September 2003 9,527 10,179
====== ======
Reconciliation of operating profit to net cash inflow from operating activities
2003 2002
#000's #000's
Operating profit 1,701 5,100
Depreciation charges 483 304
Loss on disposal of fixed assets - 122
Decrease in debtors 167 1,057
(Decrease)/increase in creditors (449) 1,055
Decrease/(increase) in stock 13 (18)
Exchange rate movements 2 -
_______ _______
Net cash inflow from operating activities 1,917 7,620
====== ======
TRIO HOLDINGS PLC
NOTES
1. Profit and Loss Account
The results in foreign currencies are translated into Sterling at
the average exchange rates ruling in the year in which the results accrued.
2. Earnings per Share
Earnings per share is based on the net profit after taxation
attributable to ordinary shareholders and on a weighted average of the
number of ordinary shares in issue in the year: 83,484,325 (2002:
83,484,325).
The earnings per share excluding exceptional operating items after
taxation in 2002 was 2.66p per share.
3. Announcement based on draft accounts (unqualified audit report)
The financial information set out in the announcement does not
constitute the group'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 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 s237(2) or (3) 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 group's annual
general meeting.
Copies of this announcement are available to members of the public at the
Company's registered office, Cannon Bridge, 25 Dowgate Hill, London EC4R 2BB.
This information is provided by RNS
The company news service from the London Stock Exchange
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