Interim Results
17 September 2003 - 9:03AM
UK Regulatory
RNS Number:8322P
Conister Trust PLC
17 September 2003
CONISTER TRUST PLC
Half-year Results
Chairman's Statement
We have focused on two essential management objectives - consolidating the
restructuring undertaken in 2002 and embarking on a growth path to make Conister
a stronger and more profitable Bank.
Performance
The dividend for the half-year to 30 June 2003 will be 0.3p per share (2002 :
0.3p) and will be paid on 31 October 2003 to those shareholders on the register
on 3 October 2003. We intend, for the first time for an interim dividend, to
make available a scrip dividend as an alternative to the cash dividend (where
shareholders can choose to take new shares instead of payment in cash). The
profit on ordinary activities before tax for the half-year was #157,000 (2002 :
#91,000).
Interest receivable has continued to grow, up 10% on the same period last year.
Tight control of margins and commissions has amplified this sales growth,
resulting in an increase in net operating income of 14%.
Much of this growth has been achieved in our core motor finance business, both
in the Isle of Man and in the UK. This improvement has been driven by focusing
on our sales and service standards. However, our commercial finance units have
faced intense competition, with some competitors pricing finance at rates that
we regard as uneconomic. In this environment, we have chosen to decline to take
on a substantial volume of business rather than risk unprofitable lending.
Operating costs are up on the first half of last year (12%) but have fallen
compared to the second half. This reflects the investment made in improved
control processes and people last year. Our cost income ratio is still too high
- continued growth in income is our chosen strategy to ensure that this ratio is
driven down.
The improvement in debt recovery procedures and the enhanced credit quality
standards continue to improve the quality of our lending book. We have
strengthened the general provision reserve as a deliberate management policy to
take a more prudent approach in new and existing markets. Given Conister's
historic track record, we believe this is a more appropriate approach in an
industry where the timing of bad and doubtful debts are inherently
unpredictable. If we had not chosen to increase the general provision, the
profit on ordinary activities before tax would have been #51,000 higher.
Deposits exceeded #40m for the first time and we have continued our strategy of
broadening our deposit base.
Outlook
The board is positioning Conister Trust to develop into a larger and more
profitable banking institution. We have many advantages arising from our status
as a licensed bank in a premier financial jurisdiction, but significant and
sustainable change is still required to maximise the potential.
The changes to Conister will include diversification into other personal finance
markets. Diversification will reduce Conister's reliance on the Isle of Man
motor finance industry, as well as open up growth potential elsewhere. This
process has already begun and will be accelerated through the rest of 2003 and
into 2004.
Expansion into new markets, both lending and deposit based, will be largely
organic, but small acquisitions could feature as part of the growth plan if
appropriate opportunities were to arise. We will support this growth expansion
through a combination of retained earnings and the introduction of new capital.
In summary, we expect to continue our improvement in the second half of the
year, leaving us in a better position for greater progress in 2004.
Peter JS Hammonds 16 September 2003
Consolidated Profit and Loss Account
Unaudited Audited
6 months to 12 months to
30.06.03 30.06.02 31.12.02
#000 #000 #000
Interest receivable and similar income 3,145 2,868 5,921
Interest payable (976) (928) (1,908)
------- ------- --------
Net interest income (gross income) 2,169 1,940 4,013
Commissions (534) (512) (1,030)
Other operating income receivable 41 38 86
------- ------- --------
Net operating income 1,676 1,466 3,069
Operating expenses (1,270) (1,134) (2,407)
Bad and doubtful debts - specific (167) (230) (391)
- general (82) (11) (51)
------- ------- --------
Profit on ordinary activities before
taxation 157 91 220
Taxation (9) (3) 13
------- ------- --------
Profit on ordinary activities after
taxation 148 88 233
Dividends (74) (74) (222)
------- ------- --------
Retained profit for the period 74 14 11
======= ======= ========
Basic earnings per share 0.60p 0.36p 0.95p
======= ======= ========
Fully diluted earnings per share 0.60p 0.36p 0.95p
======= ======= ========
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 declared an interim dividend of 0.3p per share (2002 : 0.3p)
which will be payable on 31 October 2003 to shareholders on the register on 3
October 2003.
The earnings per share calculation is based upon profit for the period after
taxation and the weighted average of the number of shares in issue throughout
the period.
Consolidated Balance Sheet
Unaudited Audited
as at as at
30.06.03 30.06.02 31.12.02
#000 #000 #000
ASSETS
Cash and balances at banks 5,029 3,257 4,473
Customer accounts receivable 47,275 39,742 43,609
Tangible fixed assets 1,012 1,017 1,054
Intangible fixed assets - 1 -
Other debtors and prepayments 206 176 154
------- ------- --------
53,522 44,193 49,290
======= ======= ========
LIABILITIES
Deposit accounts 44,012 34,910 39,952
Creditors and accrued charges 720 606 590
Proposed dividends 74 74 148
------- ------- --------
44,806 35,590 40,690
CAPITAL RESOURCES
Called up Share Capital 6,190 6,159 6,159
Share Premium account 699 690 690
Profit and Loss account 1,826 1,754 1,751
------- ------- --------
Equity Shareholders' Funds 8,716 8,603 8,600
------- ------- --------
53,522 44,193 49,290
======= ======= ========
The interim financial statements were approved by the board of directors on 16
September 2003 and have been prepared on the basis of the accounting policies
set out in the 2002 statutory financial statements.
The interim financial statements are unaudited but have been reviewed by the
Auditors.
This information is provided by RNS
The company news service from the London Stock Exchange
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