Arden Partners plc 02 July 2007 For Immediate Release 2 July 2007 Arden Partners plc ("Arden" or the "Company") Interim results for the six months ended 30 April 2007 Arden Partners plc (AIM: ARDN.L), the institutional stockbroking company, today announces its unaudited interim results for the six month period ended 30 April 2007. Highlights • Turnover increased by 12% to £8.4 million (2006: £7.5 million) • Underlying profit before tax* increased by 11% to £3.0 million (2006: £2.7 million) • Profit before tax increased from £2.65m to £2.66m • Underlying** basic earnings per share increased by 7% to 8.7p (2006: 8.1p) • Basic earnings per share 7.3p (2006: 8.1p) • Interim dividend declared in respect of the six month period ended 30 April 2007 of 2.2p • Advised on 11 transactions with a total value of over £216 million * Profit before tax as adjusted to remove the effect of share based payments (FRS 20) and exceptional costs. ** Earnings as adjusted for the after-tax effect of share based payments (FRS 20) and exceptional costs. Commenting on this, Sir David Rowe-Ham, Chairman of Arden, said: "We are very pleased with the progress Arden has continued to make since our last results. The business has continued to develop in line with our growth strategy and, with a good start to the second half in both primary and secondary income together with an encouraging pipeline, the Board is confident of delivering another successful year." Arden Partners plc 0207 398 1630 Tony Bartlett - Chief Executive Officer Jonathan Keeling - Executive Director Trevor Norris - Group Finance Director Altium - NOMAD to Arden Partners plc 0207 484 4040 Garry Levin Marc Milmo Buchanan Communications 0207 466 5000 Mark Edwards Nick Melson Chief Executive's Statement I am delighted to report another good set of results for Arden Partners. Our performance remains strong with an increase in turnover of 12% and an increase in underlying profit before tax and exceptionals of 11% over the corresponding period last year. In the first half the Company has managed to continue the progress made since its IPO on AIM last year and I am pleased with the contributions made by each of our business streams. Results and dividend During the six months ended 30 April 2007, turnover has increased by 12% to £8.4m (2006: £7.5m) and underlying profit before tax (before exceptional costs) rose by 11% to £3.0m (2006: £2.7m). Underlying basic earnings per share (before exceptional costs) were 8.7p (2006: 8.1p). During the period, the company incurred exceptional costs of £318,000 in relation to professional fees incurred in relation to a potential acquisition which was terminated as terms could not be agreed. Net assets have increased to £9.2m (2006: £4.6m) including cash balances of £5.3m. The Board has declared an interim dividend of 2.2p (2006: 1.75p). The dividend will be payable on 4 October 2007 to all shareholders on the register at 14 September 2007. Equities division Income from research, sales and trading has continued to grow with turnover improving by 9% from £3.2m to £3.5m. We are also continuing to see incremental growth resulting from "unbundling". This is testament to the quality of our sales and execution capability and the excellence of our research product. We will continue to invest in electronic trading systems which should allow the business to gain additional market share. Corporate finance division The corporate finance team has had another busy six months focussed mainly on secondary placings. In total, the team has worked on eleven transactions with a total value of some £216m, generating fees totalling £4.4m (2006: £3.6m). Of these, two were primary fundraisings, six were secondary and the remainder related to M&A activities. The Board believes that the split of activities underlines the quality of the corporate base and the objective remains to win new corporate clients. An encouraging pipeline shows a good spread of transactions due to be completed in the second six months. One significant fundraising, a secondary placing of £21m for Hardy Oil & Gas, has already been completed. Staff Our staff contribute greatly to the success of the business and we are grateful for their hard work ethic. In an environment where remuneration packages have continued to rise, the recruitment of staff has remained challenging. Despite this, the business has attracted a number of quality individuals and will continue to do so. The Company is proposing to implement a new Long Term Incentive Plan to assist in the recruitment process and documentation setting out the full details of the plan will be sent to shareholders. We will continue to reward our staff on a performance basis focussed strongly on delivering shareholder value. Outlook The business has continued to develop in line with its growth strategy and, with a good start to the second half in both primary and secondary income together with an encouraging pipeline, the Board is confident of delivering another successful year. Tony Bartlett Chief Executive 2 July 2007 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended 30 April 2007 Six months Six months Year ended ended ended 31 October 2006 30 April 2007 30 April 2006 Audited Unaudited Audited (restated) Note £'000 £'000 £'000 Turnover 2 8,434 7,530 14,274 Administrative expenses 3 (5,951) (4,937) (10,392) --------------------- -------- ---------- ---------- ---------- Operating profit 2,483 2,593 3,882 Interest receivable and similar income 184 95 206 Interest payable and similar charges (6) (37) (38) --------------------- -------- ---------- ---------- ---------- Profit on ordinary activities before taxation 2,661 2,651 4,050 Taxation on profit on ordinary activities (850) (800) (1,489) --------------------- -------- ---------- ---------- ---------- Profit on ordinary activities 1,811 1,851 2,561 after taxation ======== ========== ========== ========== ===================== Earnings per share Basic 4 7.3p 8.1p 11.0p Diluted 4 7.0p 8.1p 10.5p ===================== ======== ========== ========== ========== Note - All results are in respect of continuing activities CONSOLIDATED BALANCE SHEET At 30 April 2007 At At At 30 April 2007 30 April 2006 31 October 2006 Unaudited Audited Audited (restated) Note £'000 £'000 £'000 Fixed assets Tangible assets 443 300 388 Current assets Long market making positions and similar investments 3,655 2,365 1,800 ----------------------- ------ ---------- ---------- ---------- Market debtors 11,075 4,550 6,094 Pledged assets 882 - - Other debtors 2,080 1,293 1,075 ----------------------- ------ ---------- ---------- ---------- Debtors 14,037 5,843 7,169 Cash at bank and in hand 5,289 4,793 8,260 ----------------------- ------ ---------- ---------- ---------- 22,981 13,001 17,229 Creditors: amounts falling due within one year (14,252) (8,670) (9,828) ----------------------- ------ ---------- ---------- ---------- Net current assets 8,729 4,331 7,401 ----------------------- ------ ---------- ---------- ---------- Total assets less current liabilities 9,172 4,631 7,789 ----------------------- ------ ---------- ---------- ---------- Capital and reserves Called up share capital 2,470 1,365 2,470 Share premium account 2,646 20 2,646 Employee Benefit Trust Reserve (200) (200) (200) Capital Redemption Reserve - 900 - Profit and loss account 4,256 2,546 2,873 ----------------------- ------ ---------- ---------- ---------- Shareholders' funds 6 9,172 4,631 7,789 ======================= ====== ========== ========== ========== CONSOLIDATED CASH FLOW STATEMENT For the six months ended 30 April 2007 Note Six months Six months Year ended ended ended 31 October 2006 30 April 2007 30 April 2006 Audited Unaudited Audited (restated) £'000 £'000 £'000 Cash flows from operating activities 7 (1,532) 699 4,218 Exceptional cash flow (318) - (613) ----------------------- ------ ---------- ---------- ---------- Net cash flow from operating activities (1,850) 699 3,605 Returns on investments and servicing of finance 157 (280) (176) Taxation (676) - (1,800) Capital expenditure and financial investment (157) (141) (315) Dividends paid (equity) (445) - (400) ----------------------- ------ ---------- ---------- ---------- Cash flow before use of liquid resources and financing (2,971) 278 914 Management of liquid resources 160 (16) 1,026 Financing - (1,100) 1,731 ----------------------- ------ ---------- ---------- ---------- (Decrease)/Increase in cash (2,811) (838) 3,671 ======================= ====== ========== ========== ========== Notes to the Interim Statements 1) Accounting Policies The consolidated interim financial statements have been prepared in accordance with the accounting policies within the annual report for the year ended 31 October 2006, except that the Group has adopted the following policy in respect of stock loans: • The Group enters stock borrowing arrangements with certain institutions which are entered into on a collateralised basis with cash advanced as collateral. Under such arrangements a security is purchased with a commitment to return it at a future date at an agreed price. The securities purchased are not recognised on the balance sheet and the transaction is treated as a secured loan made for the purchase price. Where cash has been used to effect the purchase, the purchase is recorded as a pledged asset on the balance sheet. Financial Comparatives The financial information set out in this interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The comparatives for the full year ended 31 October 2006 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 237 (2)-(3) of the Companies Act 1985. 2) Turnover Six months Six months Year ended ended ended 31 October 2006 30 April 2007 30 April 2006 Audited Unaudited Audited (restated) £'000 £'000 £'000 Commission and market making 3,523 3,235 6,082 Corporate finance and retainers 4,911 4,295 8,192 ------------------------ ---------- ---------- ---------- Total turnover 8,434 7,530 14,274 ======================== ========== ========== ========== 3) Administrative expenses Six months Six months Year ended ended ended 31 October 2006 30 April 2007 30 April 2006 Audited Unaudited Audited (restated) £'000 £'000 £'000 Staff costs 3,662 3,184 6,485 Overheads 1,971 1,753 3,294 ------------------------ ---------- ---------- ---------- Staff and overhead costs 5,633 4,937 9,779 Exceptional items 318 - 613 ------------------------ ---------- ---------- ---------- Total administrative costs 5,951 4,937 10,392 ======================== ========== ========== ========== Note: staff costs include a charge of £17,000 (Interim 2006: £Nil, Final 2006: £17,000) for share based payments (FRS 20). 4) Earnings per share Basic earnings per share is calculated on profit after tax of £1,811,000 (2006: £1,851,000) and 24,701,872 (2006 restated: 22,850,020) being the weighted average number of ordinary shares in issue during the period. Diluted earnings per share takes account of the weighted average number of outstanding share options being 1,077,998 (2006: Nil) where the exercise price was less than the average price of the shares during the period. Underlying basic earnings per share of 8.7p (2006: 8.1p) and the underlying diluted earnings per share of 8.3p (2006: 8.1p) for the six months ended 30 April 2007 is calculated on profit after tax of £2,146,000 (2006: £1,851,000) being the profit after tax, adjusted for the post tax impact of exceptional costs of £318,000 (2006; £Nil) and FRS 20 costs of £17,000 (2006: £Nil). 5) Dividends Six months Six months Year ended ended ended 31 October 2006 30 April 2007 30 April 2006 Audited Unaudited Audited (restated) £'000 £'000 £'000 Final dividend year ended 31 October 2006 445 - - Interim dividend year ended 31 October 2006 - - 400 ------------------------- ---------- ----------- ---------- Distribution to equity shareholders 445 - 400 ========================= ========== =========== ========== The Board has declared an interim dividend of 2.2p (2006: 1.75p). The dividend will be payable on 4 October 2007 to all shareholders on the register at 14 September 2007. 6) Reconciliation of movement in shareholders' funds Employee Benefit Profit Share Share Trust and loss Capital Premium Reserve account Total £'000 £'000 £'000 £'000 £'000 Attributable to equity holders at 31 October 2006 2,470 2,646 (200) 2,873 7,789 Profit after tax - - - 1,811 1,811 Share based payments - - - 17 17 Dividends paid - - - (445) (445) ==================== ======== ======== ======== ======== ======== Attributable to equity holders at 30 April 2007 2,470 2,646 (200) 4,256 9,172 ==================== ======== ======== ======== ======== ======== 7) Reconciliation of operating profit to net cash flow from operating activities Six months Six months Year ended ended ended 31 October 2006 30 April 2007 30 April 2006 Audited Unaudited Audited (restated) £'000 £'000 £'000 Operating profit 2,483 2,593 3,882 Exceptional costs 318 - 613 ----------------------- ---------- ---------- ---------- 2,801 2,593 4,495 Depreciation of tangible fixed assets 101 60 145 Movement in long market making positions and similar investments (1,855) (1,617) (1,052) Movement in debtors (6,847) 510 (801) Movement in creditors 4,251 (847) 1,414 Share based payments 17 - 17 ----------------------- ---------- ---------- ---------- Cash flows from operating activities (1,532) 699 4,218 ======================= ========== ========== ========== Independent Review Report Introduction We have been instructed by the company to review the financial information for the six months ended 30 April 2007 which comprises the Consolidated Profit and Loss Account, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market or and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Standards on Auditing (UK and Ireland) and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 April 2007. BDO STOY HAYWARD LLP Chartered Accountants Birmingham 29 June 2007 Corporate Information Directors Sir David Rowe-Ham - Chairman Tony Bartlett - Chief Executive Officer Jonathan Keeling - Executive Director Trevor Norris - Group Finance Director Philip Dayer - Non Executive Director Grahame Whateley - Non Executive Director Company Secretary and Registered Office Trevor Norris Arden House Highfield Road Edgbaston Birmingham B15 3JU Direct line : 0121 423 8990 Fax : 0121 423 8991 Company Number 4427253 Company Web Address www.arden-partners.co.uk Financial Advisor and Broker Altium Securities Limited 30 St James's Square London SW1Y 4AL Financial PR Buchanan Communications 45 Moorfields London EC2Y 9AE Registrar Capita IRG Plc The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Lawyers Eversheds LLP 115 Colmore Row Birmingham B3 3AL Auditors BDO Stoy Hayward LLP 125 Colmore Row Birmingham B3 3SD Bankers RBS 8th Floor 280 Bishopsgate London EC2M 4RB This information is provided by RNS The company news service from the London Stock Exchange