Preliminary Results

RNS Number:4497C
Conister Trust PLC
04 May 2006


                      Conister Trust PLC Year-end results

               Preliminary results announcement for y/e 31/12/05



Chairman's Statement


The profit on ordinary activities before tax for the year was #124,000 (2004:
#760,000). Following an interim dividend of 0.3p per share (2004:0.3p) the board
has resolved that no final dividend should be declared (2004:0.75p per share).


Throughout the period the group faced strong competition, with both volumes and
margins under pressure. Despite opening a new office in February 2005 for
lending to military personnel, the overall interest receivable grew only 4.1% to
#7.5 million (2004:#7.2 million). After deducting interest payable and
commissions, the net operating income grew 5% to #4.2 million (2004:#4.0
million).


We continued to monitor costs closely, including a freeze on staff pay in April
2005. However, expenses have grown ahead of revenues. This is largely explained
by the costs of the new office in Peterborough; closing the office in
Huddersfield; additional resources to grow the UK HP book; and further
investment in upgrading the IT system. At the time of writing we are reviewing
our position with the supplier of the new IT software.


After deducting provisions for bad and doubtful debts, which we continue to make
on a prudent basis, tax and the payment of an interim dividend of 0.3p per
share, the retained earnings for the year were #23,000 (2004:#414,000).



Business Units


During 2005, HP advances fell by 16% and there was a 23% reduction in the number
of agreements entered into. This was mainly in the core Manx lending book, where
margins were also under pressure.


Volumes from UK brokers remained static and lending margins were further eroded.
Our in-house UK broker, Conister Finance and Leasing Limited, delivered lower
volumes and margins.


The new office in Peterborough performed well against its budget and this has
continued since the year-end. As this is unsecured lending, we will not take an
aggressive stance in this market.


We significantly reined back lending for litigation funding, consequent upon the
withdrawal of a number of companies from the after-the-event insurance market.
Litigation funding continues to be our highest margin business, but the amount
set aside for provisioning has grown as repayments are taking longer than
anticipated. However, we are confident that we are taking appropriate action
and, if successful, we will be able to write back some of this in future
periods.


At the end of 2005, we announced the launch of a new revenue stream from the
provision of premium finance on insurance policies. An agreement was reached
with Group Direct Limited, which is anticipated to deliver lending of at least
#5 million annually over 4 years.


Directorate


I have noted previously our need to move into new markets. As can be seen in the
performance for 2005, our traditional markets, primarily HP and motor finance,
are mature and competitive and offer limited opportunity for sustained
profitable growth. The board has now identified new strategic opportunities.
This led to the creation of a new role of Chief Executive Officer and, after a
thorough search, I was delighted to announce the appointment by the board of Mr
Jerry Linehan as CEO. He has now completed a strategic review of the group and
identified a number of significant opportunities, which are being progressed
rapidly.


During the year, Mr John Webster, who was appointed a non executive director in
2004, left the board to pursue his growing personal business interests and, more
recently, Mr Gareth Jones, Executive Director, who was appointed in 2003, left
the board to return to the UK. I thank them for their services to the company
and wish them well in their future endeavours.


Outlook


Since the end of the financial period, trading conditions have remained
competitive. However, the board is actively pursuing new significant strategic
opportunities and details will be announced in the very near future.


The board is confident in the future potential of the bank for customers, staff
and shareholders and, in what has been a challenging year, I wholeheartedly
thank all our staff for their hard work and dedication.


Consolidated Profit & Loss Account
for the year ended 31 December 2005

                                                           2005           2004
                                                                      Restated
                                                           #000           #000
Interest receivable and similar income                    7,461          7,162
Interest payable                                         (2,492)        (2,308)
                                                        ---------     ----------
Net interest income (gross income)                        4,969          4,854
Commissions                                                (848)          (915)
Other operating income                                       56             64
                                                        ---------     ----------
Net operating income                                      4,177          4,003
Operating expenses                                       (3,180)        (2,708)
Bad and doubtful debts - specific                          (586)          (200)
                       - general                           (287)          (335)
                                                        ---------     ----------
Profit on ordinary activities before taxation               124            760
                                                        ---------     ----------
Taxation                                                    (16)           (49)
                                                        ---------     ----------
Profit on ordinary activities after taxation                108            711

Dividends                                                   (85)          (297)
                                                        ---------     ----------
Retained profit for the year                                 23            414
                                                        =========     ==========
Basic earnings per share                                   0.38p          2.53p
                                                        =========     ==========
Fully diluted earnings per share                           0.38p          2.53p
                                                        =========     ==========





Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 December 2005

                                                              2005        2004
                                                                      Restated
                                                              #000        #000

Profit for the financial year                                  108         711

Loss on pension scheme                                         (33)        (31)

Current tax associated with loss on pension scheme               3           1

Deferred tax associated with loss on pension scheme              -           2
                                                           ---------  ----------

Total recognised gains and losses relating to the year          78         683

Prior period adjustment                                       (482)
                                                           ---------

Total gains and losses recognised since last annual           (404)
report                                                     =========


            The adoption of Financial Reporting Standard 17 "Retirement
Benefits" (FRS 17") has required a change to the accounting treatment of
pensions and the prior year Balance Sheet and results have been restated as
shown above.


Balance Sheets

as at 31 December 2005

                                              Group                Company
                                        2005       2004       2005        2004
                                               Restated               Restated
                                        #000       #000       #000        #000
Assets
Cash at bank                           6,827      5,087      6,811       4,972
Customers accounts receivable         55,739     57,395     54,471      54,702

Tangible fixed assets                    866      1,070        807         890
Investment in subsidiary                   -          -         10          10
undertakings
Other debtors and prepayments            169        123        416       2,171
                                     ---------  ---------  ---------  ----------
Total assets                          63,601     63,675     62,515      62,745
                                     =========  =========  =========  ==========
Liabilities
Deposit accounts                      52,884     52,701     52,884      52,701
Creditors and accrued charges            554        664        499         563
Proposed dividends                         -        212          -         212
Provision for liabilities and              -          5          -           -
charges                              ---------  ---------  ---------  ----------
                                      53,438     53,582     53,383      53,476
Capital resources
                                     ---------  ---------  ---------  ----------
Called up share capital                7,111      7,056      7,111       7,056
Share premium account                    769        749        769         749
Profit and loss account                1,799      1,806        768         982
                                     ---------  ---------  ---------  ----------
Equity shareholders' funds             9,679      9,611      8,648       8,787
                                     ---------  ---------  ---------  ----------
Total liabilities and equity
shareholders'                         63,117     63,193     62,031      62,263
funds excluding pension liability
Pension liability                        484        482        484         482
                                     ---------  ---------  ---------  ----------
Total liabilities and equity
shareholders'                         63,601     63,675     62,515      62,745
funds including pension liability    =========  =========  =========  ==========



Consolidated Cash Flow Statement
for the year ended 31 December 2005

Reconciliation of profit before taxation                    2005          2004
to net operating cash flow                                            Restated
                                                            #000          #000
Profit before taxation                                       124           760
Profit on sale of fixed assets                               (60)           (1)
Provision on fixed assets                                    120             -
Depreciation charge                                          103           103
Pension scheme                                               (31)          (10)
Increase in trade debtors                                    (32)          (53)
(Decrease)/Increase in trade creditors                      (206)          110
                                                         ---------    ----------
Net cash inflow from trading activities                       18           909
Decrease/(Increase) in customers accounts receivable       1,656        (6,323)
Increase in deposit accounts                                 183         4,828
                                                         ---------    ----------
Net cash inflow/(outflow) from operating activities        1,857          (586)
                                                         =========    ==========

Cash flow statement                                         2005          2004
                                                            #000          #000
Net cash inflow/(outflow) from operating activities        1,857          (586)
Taxation                                                     (49)          (37)
Capital expenditure
Purchase of tangible fixed assets                           (109)         (240)
Sale of tangible fixed assets                                150            42
                                                         ---------    ----------
                                                           1,849          (821)
Equity dividends paid                                       (222)         (207)
                                                         ---------    ----------

Increase /(Decrease) in cash                               1,627        (1,028)
                                                         =========    ==========


Preparation of the results

The financial information set out in this statement is extracted from the
statutory financial statements which have not yet been audited but are not 
expected to differ materially from the information given in this statement.


Final dividend

An interim dividend of 0.3p per share has been paid. The directors do not
propose to pay a final dividend.


Report and Accounts

A copy of these results contained in the annual report and accounts for the year
ended 2005 will be posted to shareholders by 22 May, 2006 and will be available
from that date from the Company's Registered Office, Conister House, 16-18 Finch
Road, Douglas, Isle of Man, IM1 2PT and will be posted on the Company's web site
www.conistertrust.com.


                      This information is provided by RNS
            The company news service from the London Stock Exchange

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