Interim Results

RNS Number:2418R
Conister Trust PLC
14 September 2005


                       Conister Trust plc


          Interim results for the six months ended 30 June 2005


Chairman's Statement


The performance for the six month ended 30 June 2005 reflects intensified
competition in our Manx market, which have impacted both volumes and margins. As
a result, our overall new business levels have slowed, despite growth in our UK
markets including promising growth in our new product line of providing finance
for military personnel. Litigation funding will not grow significantly until we
find appropriate insurers to support the lending book and we have only taken on
a small amount of new business in recent months. Expenses have increased,
reflecting our investment in the new office to serve military personnel and in a
new IT system to serve our hire purchase customers.


The dividend for the half year to 30 June 2005 will be 0.3p per share (2004:
0.3p) and will be paid on 28 October 2005 to those shareholders on the register
on 23 September 2005.


We intend once again to make available a scrip dividend as an alternative to the
cash dividend (where shareholders can choose to take new shares instead of a
payment in cash). Shareholders will receive a separate letter about this.


Performance


The profit on ordinary activities before tax on the half year was #319,000
(2004: #347,000). Lending volumes on the Isle of Man have reduced significantly,
reflecting the continuing impact of competition and especially a down-turn in
activity in motor car sales and financing. There is also some erosion of
margins.


In June we closed our Huddersfield office and, wherever possible, transferred
customer relationships to our in-house brokers in Wigan. There was a modest gain
in the sale of the Huddersfield premises, broadly off-set by the cost of three
redundancies. The benefit of the on-going cost savings from the closure will
show through in the second half of the year and thereafter. The Wigan office
continues to perform satisfactorily in the face of strong competition.


The four staff we recruited in February as specialists in motor vehicle finance
for personnel in the armed services have performed well. Based in Peterborough,
they are making a significant contribution to growth in our UK lending book, as
is the department based in the Isle of Man, serving the UK broker introduced
business.


The litigation funding market still retains significant potential, but as with
many new markets, it is changing as it develops. These changes mean that we are
taking a prudent stance and there will be no significant growth in our lending
until we are satisfied that this will be supported by appropriate insurance. We
have developed strong relationships with many solicitors in this field and
believe that as we make progress with insurers we remain well placed in the
market. At the time of writing we are hopeful of entering into a new arrangement
with a major insurer.


We continue to be protective of the quality of our lending book. Some banks and
finance houses have recently reported a deterioration in the quality of their
lending. So far we have not experienced this, and we are continuing with our
more conservative lending policy, as demonstrated by the continuing drop in
specific provisions on our lending book.


I would draw your attention to the note below the cash flow statement concerning
accounting for pension costs.



Outlook


We have been exploring new strategic opportunities for some time because we
recognise that current trading conditions continue to be difficult and the
outlook remains challenging. As you may be aware from our Stock Exchange
announcements, these opportunities have changed over the last few months, but we
remain hopeful that these discussions will soon be successfully concluded and
the benefits derived from them will be achieved in 2006 and beyond.



Peter JS Hammonds 13 September 2005


Consolidated Profit and Loss Account

                                                   Unaudited             Audited
                                                  6 months to       12 months to
                                              30.6.2005  30.6.2004    31.12.2004
                                                   #000       #000          #000

Interest receivable and similar income            3,674      3,481         7,162
Interest payable                                (1,235)   ( 1,055)       (2,292)

Net interest income (gross income)                2,439      2,426         4,870
Commissions                                       (433)      (482)         (915)
Other operating income receivable                    26         42            64

Net operating income                              2,032      1,986         4,019

Operating expenses                              (1,533)   ( 1,357)       (2,747)
Bad and doubtful debts
- specific                                         (32)      (148)         (200)
- general                                         (148)      (134)         (335)

Profit on ordinary activities before                319        347           737
taxation

Taxation                                           (19)       (27)          (48)

Profit on ordinary activities after taxation        300        320           689

Dividends                                          (85)       (85)         (297)

Retained profit for the period                      215        235           392

Basic earnings per share                          1.06p      1.14p         2.45p

Fully diluted earnings per share                  1.06p      1.14p         2.45p


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 (2004 : 0.3p)
which will be payable on 28 October 2005 to shareholders on the register on 23
September 2005


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
                                           30.6.2005  30.6.2004      31.12.2004
                                                #000       #000            #000

ASSETS
Cash and balances at banks                     7,685      5,218           5,087
Customer accounts receivable                  58,364     56,323          57,395
Tangible fixed assets                          1,050        985           1,070
Other debtors and prepayments                    201        179             193

                                              67,300     62,705          63,745

LIABILITIES
Deposit accounts                              55,596     51,757          52,701
Creditors and accrued charges                  1,198        875             669
Proposed dividends                                85         85             212

                                              56,879     52,717          53,582

CAPITAL RESOURCES
Called up Share Capital                        7,088      7,043           7,056
Share Premium account                            759        744             749
Profit and Loss account                        2,574      2,201           2,358

Equity shareholders' funds                    10,421      9,988          10,163

                                              67,300     62,705          63,745


The interim financial statements were approved by the board of directors on 13
September 2005 and have been prepared on the basis of the accounting policies
set out in the 2004 statutory financial statements.


The interim financial statements are unaudited but have been reviewed by the
Auditors.



The "Accounting for Pension Costs" note after the consolidated cash flow
statement forms part of these financial statements.

Consolidated Cash Flow Statement

                                                   Unaudited             Audited
                                                  6 months to       12 months to
                                              30.6.2005  30.6.2004    31.12.2004
                                                   #000       #000          #000

Reconciliation of profit before taxation to
net operating cash flow
Profit before taxation                              319        347           737
Profit on sale of fixed assets                     (61)          -           (1)
Depreciation charge                                  53         52           103
Increase in trade debtors                          (24)       (42)          (40)
Increase in trade creditors                         519        309           110

Net cash inflow from trading activities             806        666           909

Increase in customers accounts receivable         (968)    (5,251)       (6,323)
Increase in deposit accounts                      2,895      3,884         4,828

Net cash inflow /(outflow) from operating         2,733      (701)         (586)
activities

CASH FLOW STATEMENT

Net cash inflow /(outflow) from operating         2,733      (701)         (586)
activities

Taxation                                              7          7          (37)

Issue of ordinary share capital                       -          -             -

Capital expenditure
Purchase of tangible fixed assets                  (93)       (91)         (240)
Sale of tangible fixed assets                       121         28            42

                                                  2,768      (757)         (821)

Equity dividends paid                             (170)      (140)         (207)

Increase /(Decrease) in cash                      2,598      (897)       (1,028)



Accounting for Pension Costs


The Company currently accounts for the cost of pension schemes under Statement
of Standard Accounting Practice 24, "Accounting for Pension Costs". The Company
will adopt Financial Reporting Standard 17, "Retirement Benefits" at the
financial year-end. The change to accounting under FRS 17 will be a change of
accounting policy and treated as a prior period adjustment. The main change will
be in relation to the accounting for the defined benefit scheme, whereby the
actuarially determined pension fund surplus or deficit will be presented on the
face of the balance sheet, as an asset or liability respectively. As at 31
December 2004 the scheme had an actuarial deficit of #536,000. Should a deficit
of a similar level remain at the financial year-end, this would result in a
significant reduction in both net assets and shareholder's funds. However, as a
change to accounting under FRS 17 will be a prior period adjustment, there may
be an impact on the profit and loss account for the year, with the majority of
the movement in shareholders' funds being attributable to opening reserves.




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