Worldsec Ld 26 April 2005 Worldsec Limited Preliminary Statement of Annual Results Worldsec Limited is pleased to release today its preliminary statement of annual results for the year ended 31 December 2004. The Chairman's Statement and extracts from the audited financial statements are reproduced below. Investor Relations For further information please contact: In Hong Kong Mr Paul K K Cheng Chief Operating Officer and Finance Director +852 2867 7213 ________________________________________________________________________________ CHAIRMAN'S STATEMENT RESULTS The audited consolidated profit after taxation for the year was US$0.52 million against US$1.54 million recorded in the previous year. Earnings per share based on the weighted number of shares in issue during the year was US 4 cents (2003: US 11 cents). THE YEAR IN REVIEW Having effectively ceased all business operations, the Group recorded a turnover of only US$11,000 for 2004. With further recovery of doubtful debts together with gain on disposal of investment and other income during the year, the Group was able to record an operating profit of US$470,000. The net profit after tax amounted to US$522,000. During the year, the Group completed the sale of Worldsec Brokerage Limited and disposed of all its listed investment in Taiwan as well as certain other investments and assets. The voluntary liquidation of two subsidiaries, which had been the main operating subsidiaries of the Group, was also completed. In April, 2004, we made a second distribution to shareholders totalling US$9,357,103 equivalent to US 70 cents per share. This, together with the initial distribution of US 45 cents in 2003, amounted to a total distribution of US$1.15 per share. PROSPECTS Following the decision to cease operations, our aim has been to realize the Group's assets at maximum value possible. A large number of our assets are illiquid. Their value is difficult to assess and the liquidation process is sometimes lengthy necessitating regulatory consents from various authorities. Subsequent to the year end, we have realised cash of some US$1.4 million from debtors and we hope to recover more in the coming months. Every effort is being made to liquidate the remaining main assets which comprise of a small office space in Manila and the trading rights on the Philippine Stock Exchange. The sale of these remaining assets and the collection of the outstanding debts would represent the practical completion of the liquidation of the Group which would enable the Group to make a final distribution which we hope to make during the course of this year, currently estimated at not less than US 15 cents per share. This would result in a total distribution of approximately US$1.30 per share as compared to US$1.15 per share estimated at the time the liquidation process commenced. David Archibald Evelyn Lyle Non-Executive Chairman 26 April 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2004 ______________________________________________________________________________________________________ Year ended 31 December 2004 2003 Notes US$'000 US$'000 Turnover 1 11 197 Fees and commissions payable - (216) ___________ ___________ 11 (19) Gain on disposal of investments 602 288 Unrealised gain on investments - 1,237 Recovery of doubtful receivables 670 1,391 Other operating income 94 159 ___________ ___________ 1,377 3,056 Staff costs (381) (641) Impairment losses - (89) Other operating costs (526) (815) ___________ ___________ Operating profit 1 470 1,511 Interest receivable and similar income 21 55 Interest payable and similar charges (5) (13) Profit (Loss) on disposal of subsidiaries and research materials 36 (14) ___________ ___________ Profit on ordinary activities before taxation 522 1,539 Tax charge on ordinary activities 2 - (2) ___________ ___________ Profit for the financial year 522 1,537 ___________ ___________ Earning per share - basic and diluted 3 4 cents 11 cents ___________ ___________ The results above relate entirely to discontinued operations. CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2004 ______________________________________________________________________________________________________ Year ended 31 December 2004 2003 Notes US$'000 US$'000 Current assets Investments 448 3,672 Debtors 1,805 3,266 Bank deposits and cash 777 7,001 ___________ ___________ 3,030 13,939 Creditors: Amounts falling due within one year (406) (2,433) ___________ ___________ Net current assets 2,624 11,506 Provisions for liabilities and charges - - ___________ ___________ Net assets 2,624 11,506 ___________ ___________ Capital and reserves Called up share capital 4 13 13 Contributed surplus 4 9,646 19,003 Special reserve 4 625 625 Profit and loss account 4 (6,908) (7,430) Revaluation reserve 4 278 281 Currency translation reserve 4 (1,030) (986) ___________ ___________ Equity shareholders' funds 2,624 11,506 ___________ ___________ CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 ______________________________________________________________________________________________________ Year ended 31 December 2004 2003 Note US$'000 US$'000 Cash (outflow) inflow from operating activities 6 (976) 3,416 ___________ ___________ Returns on investments and servicing of finance Interest received from banks and deposit taking companies 21 55 Interest paid on bank loans and overdrafts (5) (13) ___________ ___________ Net cash inflow from returns on investments and servicing of finance 16 42 ___________ ___________ Taxation Tax refund - 99 ___________ ___________ Capital expenditure and financial investment Sale of Shanghai Stock Exchange membership - 75 Sale of investments 3,683 - ___________ ___________ Net cash inflow from capital expenditure and financial investment 3,683 75 ___________ ___________ Acquisition and disposal Net cash inflow (outflow) from disposal of subsidiaries 410 (14) ___________ ___________ Net cash inflow (outflow) from acquisition and disposal 410 (14) ___________ ___________ Equity dividend paid Dividend paid (9,357) (6,015) ___________ ___________ Net cash outflow before use of liquid resources and financing (6,224) (2,397) Management of liquid resources Decrease (Increase) in time deposits of maturity exceeding 1 day 4,917 (4,975) ___________ ___________ Decrease in cash (1,307) (7,372) ___________ ___________ NOTES TO THE PRELIMINARY STATEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 ______________________________________________________________________________________________________ 1. ANALYSIS OF TURNOVER, OPERATING PROFIT AND NET ASSETS The turnover attributable to the different classes of the Group's business is as follows: Year ended 31 December 2004 2003 US$'000 US$'000 Analysis by class of business: Broking and related services 11 197 Corporate finance - - ___________ ___________ 11 197 ___________ ___________ Geographical analysis of turnover: Hong Kong 11* 197* ___________ ___________ 11 197 ___________ ___________ * The broking and related services are substantially related to Hong Kong market. The operating profit attributable to the different classes of the Group's business is as follows: Broking and related services 470 1,511 Corporate finance - - ___________ ___________ 470 1,511 ___________ ___________ During the year, the operating profit of the Group was derived from the Group's operations based in Hong Kong and the assets of the Group were related to broking activities and were substantially situated in Hong Kong. 2. TAX CHARGE ON ORDINARY ACTIVITIES Year ended 31 December 2004 2003 US$'000 US$'000 The charge comprises: UK Corporation Tax current year at 30% (2003: 30%) - - Hong Kong Profits Tax current year at 17.5% (2003:17.5%) - (2) Other overseas taxation - - ___________ ___________ - (2) Deferred taxation - - ___________ ___________ - (2) ___________ ___________ The taxation for the year can be reconciled to the profit before taxation per the consolidated profit and loss account as follows: 2004 2003 US$'000 US$'000 Profit before taxation 522 1,539 ___________ ___________ Tax charge at income tax rate of 17.5% (2003:17.5%) (91) (269) Tax effect of estimated tax losses not recognized (29) (2) Tax effect of expenses not deductible for tax purpose (1) (18) Tax effect of income not taxable for tax purpose 121 253 Utilisation of estimated tax losses previously not recognized - 36 Underprovision in previous years - (2) ___________ ___________ Total current tax charge for the year - (2) ___________ ___________ 3. EARNINGS PER SHARE Calculation of earnings per share was based on the following: Year ended 31 December 2004 2003 Profit for the financial year US$522,000 US$1,537,000 ___________ ___________ Weighted average number of shares in issue 13,367,290 13,367,290 ___________ ___________ Earnings per share 4 cents 11 cents ___________ ___________ 4. CAPITAL AND RESERVES CALLED UP SHARE CAPITAL US$ Authorised: ordinary shares of US$0.001 each as at 1 January and 31 December 2004 50,000 ___________ Called up, issued and fully paid: ordinary shares of US$0.001 each as at 1 January and 31 December 2004 13,367 ___________ RESERVES Movements on reserves were as follows: Profit Currency Contributed Special and Loss Revaluation translation surplus reserve account reserve reserve US$'000 US$'000 US$'000 US$'000 US$'000 The Group At 1 January 2004 19,003 625 (7,430) 281 (986) Profit for the year - - 522 - - Translation adjustment - - - (3) (44) Distribution paid (note 5) (9,357) - - - - ________ ________ ________ ________ ________ At 31 December 2004 9,646 625 (6,908) 278 (1,030) ________ ________ ________ ________ ________ 5. DISTRIBUTIONS On 29 March 2004, the Board resolved to pay a distribution out of the contributed surplus account of US$0.7 per share totalling US$9,357,103 to the shareholders whose names appeared in the register of members on 13 April 2004. 6. RECONCILIATION OF OPERATING PROFIT TO NET CASH (OUTFLOW) INFLOW FORM OPERATING ACTIVITIES Year ended 31 December 2004 2003 US$'000 US$'000 Operating profit 470 1,511 Gain on disposal of investments (602) - Unrealised gain on investments - (1,237) Impairment losses - 89 Amortisation of intangible assets - 19 Exchange difference (32) (72) Decrease in investments held as current assets - 464 Decrease in trade debtors 1,080 1,027 Decrease in other debtors and prepayments 99 1,304 Decrease in cash at bank - trust accounts - 8,613 Decrease in trade creditors (1,293) (7,544) Decrease in other creditors and accruals (698) (758) ___________ ___________ NET CASH (OUTFLOW) INFLOW FROM OPERATING ACTIVITIES (976) 3,416 ___________ ___________ 7. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Year ended 31 December 2004 2003 US$'000 US$'000 Decrease in cash (1,307) (7,372) Cash (outflow) inflow from (decrease) increase in liquid resource (4,917) 4,975 ___________ ___________ Movement in net funds (6,224) (2,397) Net funds brought forward 7,001 9,398 ___________ ___________ Net funds carried forward 777 7,001 ___________ ___________ This information is provided by RNS The company news service from the London Stock Exchange