David Hudd – Chairman John Foster - Managing Director Falkland Islands Holdings plc – Interim Results – Half Year ended 30 September 2011
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Introduction to FIH • AIM quoted support services group comprising three market leading, cash generative businesses – Falkland Islands Company: retail, support services and property business operating in the Falkland Islands – Portsmouth Harbour Ferry Company : Gosport to Portsmouth passenger ferry service – Momart International: specialist transport and logistics company serving fine art market Core trading businesses provide strong, diversified earnings base and support dividend yield Core trading businesses provide strong, diversified earnings base and support dividend yield • • Holds 12 million shares in AIM quoted oil exploration company Falkland Oil & Gas Limited (FOGL) – Market value of stake as at 30 September 2011 was £5.6 million (47p per FOGL share) – Deep water rig contracted for 2 wells in Q2 2012 FOGL stake provides significant upside potential FOGL stake provides significant upside potential • • Strategy Maintain organic growth and dividends through continued investment in existing businesses – – Leverage assets in Falklands to maximise returns from oil exploration activity – Retain shareholding in FOGL to maximise upside potential 3
FIH Interim Results 2011: Overview Overall Group trading performance in line with board expectations • – Underlying PBTa £1.19 million (2010: £1.15 million) +3.8% – Diluted EPS on Underlying PBTa 9.0p per share (2010: 8.9p) • Maintained Interim Dividend 4.0p per share (2010: 4.0p) • Strong Balance Sheet Bank debt and HP reduced to £3.7 million (March 2011: £4.2 million) – – Cash on hand £2.4 million (March 2011: £2.1 million) – £5 million, 50 year lease secured on new Gosport pontoon • Upgraded 400mbbl Rockhopper oil discovery will be transformational for Falklands economy when developed • Falkland Oil & Gas (FOGL) FIH’s holding of 12 million shares (5.8% ) post April 2011 fundraising – Leiv Eiriksson deep water rig expected in Falklands waters in late January 2012 - Upside potential from giant Loligo prospect (4.7 bn boe) - PBTa – profit before taxation and amortisation 4
FIH: Summary P&L - 6 months ended 30 September 2011 6 months ended 30 September 2011 2010 £000 £000 Change +/- Turnover 16,510 14,348 +15.1% Trading Profit +5.7% 1,346 1,273 Pension scheme financing costs etc (65) (72) Pontoon lease interest (75) - Net Bank / HP interest (18) (56) (158) (128) Net financing costs +7.3% Underlying Pre Tax Profit (PBTa) 1,188 1,145 +3.8% Amortisation of Intangibles (198) (198) - Profit Before Tax 990 947 +4.5% Diluted EPS (PBTa basis) 9.0p 8.9p +1.1% PBTa – profit before taxation and amortisation 5
FIH: Segmental Analysis - 6 months ended 30 September 2011 6 Months ended 30 September 2011 2010 £000 £000 Change +/- Turnover FIC 6,989 6,492 +7.6% PHFC 2,148 2,030 +5.8% Momart International 7,373 5,826 +26.5% Total Turnover 16,510 14,348 +15.1% Pre Tax Profit FIC 515 551 -6.5% PHFC 385 383 +0.5% Momart International 288 211 +36.5% Underlying Pre Tax Profit (PBTa) 1,188 1,145 +3.8% 6
Falkland Islands Company (FIC): Overview • Established in 1852 by Royal Charter • Retail • 60% market share from five outlets • Motor Land Rover and Ford sales and rentals • • Support Services • Shipping services ex UK & stevedoring on MoD vessels • Agency Services: for international squid & fishing fleets • Insurance Broking: sole local provider • Penguin Travel: tours for cruise ship passengers • Property Portfolio of residential and commercial • properties – valued at £1.5m over nbv • Land bank of 70 acres in Stanley, 600 acres outside urban area • Marmont Row – Sea front heritage properties 7
FIC: 6 months ended 30 September 2011 • Satisfactory performance consolidating growth seen in prior year – Sales ahead by 7.7% to £6.99m boosted by demand for support services – PBTa down slightly at £0.51m vs £0.55m in H1 2010 Retail sales down 1.6% at £4.3m - Demand subdued vs H12010 • – Squeeze on household budgets – cost inflation 7-9% and increased competition – West Store boosted by Peacocks +4.2% (-1.8% ex Peacocks) – Homecare DIY & Building Supplies - sales down 16% • Automotive – Ahead by 6% - New vehicles sales up (19 vs 18) • Fishing Agency – Better illex squid catch, £0.1million contribution • Marmont Row – 1 house sale in H1 (£28k profit) , 8 out of 9 remaining units let out • Property rental income - up 74k to £178k – yield on nbv = 15.5% • Darwin Shipping – 3rd party freight revenues + £0.2million to £0.5million • Insurance and Port services – continued growth • Rockhopper SeaLion discovery underpins excellent medium term growth prospects 8
Portsmouth Harbour Ferry Company (PHFC): Overview • Ferry service for foot, cycle & motor cycle passengers • Acquired in December 2004 • 5 minute journey across mouth of harbour from Gosport to Portsmouth (1/3 mile) • Operates 364 days a year, 5.30am - Midnight • 4 purpose built vessels (2 fully depreciated) • 3.4 million passenger journeys p.a. • Strong competitive position 9
PHFC: 6 months ended 30 September 2011 • Satisfactory performance – Revenues ahead by 5.8% at £2.15 million – PBTa after overhead allocation unchanged at £0.39 million • New £5m pontoon installed 27 June 2011 - 50 year lease agreed with Council • Passenger numbers down 4.1% on prior year in line with expectations – Weekend discretionary travel most affected (-9% ) • Fare rises of 17.5% in June 2011 to offset increased costs from new pontoon – Adult daily return now £2.70 (£2.40), Child /Senior £1.80 (£1.60) • Costs tightly controlled – despite rising fuel prices • Ferry reliability 99.9% • Steady underlying performance from stable business 10
Momart International: Overview Specialist transport & logistics company • serving fine art market in the UK & overseas • Market leading position with excellent reputation; high barriers to entry • 3 business streams • Museum Exhibitions – consulting, planning, packing, transport and installation • Commercial Galleries – logistics services for Clients galleries and artists • Storage – 70,000 sq ft of secure warehousing for client storage • Notable exhibitions Antony Gormley • Cult of Beauty (V&A) • Richter (Tate Modern) • Post Modernism (V&A) • Magritte (Tate Liverpool) • Maddox Brown (Manchester Art Gallery) 11
Momart International: 6 months ended 30 September 2011 PBTa £0.29 million up 36.5% vs H12010 • • Recovery in Exhibition volumes – revenue + 30% to £3.4 million – Gross Margins squeezed by 3.8% – 13% increase in divisional contribution Gallery Services • – revenue +28% to £3.2 million – Large international contract £0.9 million – 18% increase in divisional contribution • Storage revenues ahead by 7% to £0.78 million Total revenue increased to £7.4 million (+26% ) vs H1 2010 • • Commercial art market remains buoyant – successful Basel & Frieze London art fairs • Reorganised management team – 2 vendor directors + new FD • New ERP system being built to streamline administration and improve MIS • Encouraging performance after contraction in H1 2010 12
FIH: Balance Sheet All figs £’000’s 30 Sept 2011 31 March 2011 30 Sept 2010 Tangible Fixed Assets 12,839 7,489 7,281 Investment properties at cost * 1,464 1,721 1,759 Goodwill & Intangibles 12,913 13,111 13,311 Quoted investments at m.v 5,641 10,710 14,940 Deferred Tax & other assets 692 634 701 Total non current assets 33,549 33,665 37,992 Working Capital - Net 3,217 3,148 3,466 Cash 2,376 2,062 2,288 Corporation tax payable (666) (569) (622) Bank Loans etc due within 1 year (1,116) (1,058) (1,076) Dividend payable - (507) (459) Net Current Assets 3,304 3,583 3,597 Bank Loans etc due after 1 year (2,555) (3,104) (3,521) Finance Lease re Pontoon (5,000) Pension Provisions & Def. Tax (3,543) (3,547) (3,848) Equity Shareholders funds 25,751 30,601 34,220 Net Assets per share £2.79 £3.32 £3.71 * Market value of investment & rental properties £4m+ 13
FIH: Net borrowings and liquidity 30 Sept 2011 31 March 2011 30 Sept 2010 £000 £000 £000 Bank Loans & HP due within 1 year (1,118) (1,058) 1,076 Bank loans due after 1 year (2,555) (3,104) 3,521 Total Bank Borrowings & HP (3,673) (4,162) (4,597) Cash 2,378 2,062 2,288 Net Bank Borrowings) (1,295) (2,100) (2,309) Decrease in net bank borrowings & HP 805 209 Long term finance lease re Pontoon (5,000) - - Total Net Borrowings (6,295) (2,100) (2,309) Net Tangible Assets 12,838 17,490 20,909 Capital Gearing – Net 49.0% 12.0% 11.0% 14
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