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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
City Of London Group Plc | LSE:CIN | London | Ordinary Share | GB00BD9GS058 | ORD 2P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:0604M City Of London Group PLC 9 June 2003 RELEASED ON BEHALF OF: City of London Group PLC (LSE: CIN) JUNE 9, 2003 CITY OF LONDON GROUP IN BETTER SHAPE THAN EXPECTED AFTER A DIFFICULT YEAR * Pre-Tax Profit Of #369,208 Offset By Previously Announced #2.6 Million Write Off Against Technology Investments * Value Of Twelve Largest Portfolio Investments Still In Line With Book Cost * Final Dividend Passed To Conserve Funds City of London Group Plc, the specialist mining PR, portfolio and technology investor, has come through a difficult year in far better shape than once feared, with net assets at year end of 58p/share (98p/share), says chairman Mr John Greenhalgh. Pre-tax profits for the 12 months ended March 31, 2003 totalled #369,208 (#704,622), before the previously announced #2.6m write off against the Group's technology investments. A further sum of approximately #1.25m has been provided against the fall in value of listed holdings. After all the exceptional provisions, Group losses for the year totalled 40.63p/share (profit 6.66p/ share). The final dividend is being passed to conserve funds. The company's investment portfolio of quoted holdings at market value, combined with unlisted at #244,000 cost, totalled #5.57m at year-end, before deducting bank borrowings of #2.96m. This is equivalent to 32.8p/share, with an additional 27.5p/share invested in Archive-it (formerly Rchive-it) through a mix of equity and loans. The e-mail archiving specialist is now 91p.c. owned by COL Group (before an 18p.c. options pool). The Group continues to nurture its investment in Archive-it which is now income producing but made a pre-interest loss of #242,456 on sales of #65,435 in the final quarter of the year. COL Group's portion of the loss has not been consolidated, reflecting the Board's decision to sell or refinance Archive-it during the coming year, provided favourable terms can be agreed, whilst retaining an interest in its progress. Comments Mr Greenhalgh: "My view is it will probably go to the foresighted Americans as do so many good British inventions." At the operating level, the PR division made a pre-tax loss of #43,534 (profit of #37,339) in difficult business conditions as the anticipated recovery of the mining/exploration sector failed to materialise. Taking advantage of this weak market, which has wreaked havoc in the PR industry, COL Group will seek a suitable PR partner in the coming year, with particular emphasis on UK business, states Mr Greenhalgh. Dividends and interest income held up well, bringing in #245,386 (#284,493) before bank charges which rose to #112,656 (#44,364) as borrowings increased. Realised capital gains from portfolio investment sales amounted to #285,173 (#387,890). Commenting on the Group's technology investments, Mr Greenhalgh says Eceurope.com, the bulletin board trade site, successfully built up an initial membership of 136,000 but failed to convert sufficient numbers into paying members. This conversion failure led to the prompt closure of the site. Direct BroadcastingCorporation, is a designer of media management software which provides scheduling, production, distribution and automated billing for digital networks. This has been mothballed for the time being. Both investments have been written off but COL Group retains intellectual property rights over both software systems. /2 COL GROUP 2 The third investment is Archive-it which has developed a system for email archiving that meets compliance, legal admissibility and storage criteria. Its enterprise product, the Mailstore software system, is now winning clients and generating revenue although take up is on the slow side. This reflects a lack of business awareness of the real impact of email regulation, both in America and the UK (where less than 5p.c. of businesses have adopted an email archiving product to date). "Our view is that the Archive-it product - it took longer to be better - is now a 'Rolls Royce' engine designed to power many different planes in the email world and provide safe and secure flights to and from all storage destinations", comments Mr Greenhalgh. Mailstore has been taken up by various police forces, local authorities and government bodies and more recently by a leading firm of City solicitors. Discussions for the integration of the system into a major manufacturer's software have reached an advanced stage. Mailstore has also been re-badged in the United States and marketing is about to start. In the UK, a #100m turnover enterprise solutions provider is undertaking a similar exercise. In addition, Computacenter, the leading software channel, has also adopted Mailstore as a priority product to promote through its government sales divisions. However, Archive-it was always viewed as a five-year investment to yield major returns, says Mr Greenhalgh. Three years of this programme have been completed and although the company is starting to secure sales and revenues, it remains undercapitalised in terms of the market spend required for its destined role as "best of breed" in the compliance archiving market. Although cash flow is beginning to click in on a modest scale, a monthly break-even position is not expected until the end of 2003 as the larger channel-driven sales start coming through, he adds. OPTIONS FOR ARCHIVE-IT BEING CONSIDERED Against this background, an unsolicited approach was received from an American company which likes the Archive-it product and has a strong corporate customer base. Other approaches followed. Separately, talks are being held with a second US company specialising in the email sector with a view to establishing closer ties with Archive-it. In addition, meetings have been held with UK venture capitalists who have expressed an interest in Archive-it. Discussions with a view to selling part or all of the Archive-it shareholding are continuing and various options are being appraised. These discussions with interested parties are likely to continue throughout the summer, says Mr Greenhalgh. Turning to the outlook for the year ahead, Mr Greenhalgh comments that the heavy provisions made in 2002-03 were a prudent measure that will help the Group meet its objective of increasing shareholder value after the downturn. With the 2004 US Presidential election now appearing on the horizon, the chairman believes that the business tempo in the coming year will be set in America where, traditionally, both the economy and stock markets improve ahead of such elections. This could be sufficient to kick-start a much-needed recovery of other major economies, a development that could provide welcome opportunities for COL Group, he says. COPIES OF FULL PRELIMINARY STATEMENT AVAILABLE ON REQUEST Further Information: John Greenhalgh, Chairman City of London Group. Tel: 020-7628-5518; 070500-39678 (mobile) Peter Doye, Deputy Chairman, City of London Group. Tel: 020-7628-5518 This information is provided by RNS The company news service from the London Stock Exchange END MSCBRGDLRDGGGXL
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