biz.yahoo.com
Monday August 14, 7:10 am Eastern Time
Press Release
SOURCE: London Pacific Group Limited
London Pacific Group Limited Financial Results For the Quarter Ended June 30, 2000
LONDON, Aug. 14 /PRNewswire/ -- London Pacific Group Limited (NYSE: LDP, London: LPG) today reported consolidated net income for the quarter ended June 30, 2000 of $339.8 million, or $5.62 per diluted share and ADR, compared with $20.4 million of net income, or $0.36 per diluted share and ADR, for the second quarter of 1999.
For the six months ended June 30, 2000, consolidated net income was $284.3 million, or $4.72 per diluted share and ADR, compared with $40.8 million of net income, or $0.75 per diluted share and ADR, for the same period in 1999.
Arthur I. Trueger, London Pacific Group executive chairman, said that ``these robust returns reflect a continuing high level of corporate finance activity across our different operating company portfolios.''
London Pacific Group Limited, based in Jersey, Channel Islands, is a financial services company with four business areas: annuities, asset management, financial advisory services and venture capital management. London Pacific's operating companies gather assets through their distribution networks in the US and UK, and seek to generate superior returns on their venture capital holdings in late stage technology infrastructure companies.
Highlights:
* The primary reasons for the dramatic growth in net income were two
events in the venture capital portfolios of London Pacific's operating
companies. New Focus, Inc. completed a highly successful IPO and
SiTera, Inc. was acquired by Vitesse Semiconductor Corporation. These
gains were offset partially by a net decline in the value of the
existing holdings due to market conditions.
* Sales of annuities doubled to $157 million in the second quarter,
compared with $79 million in sales in the second quarter of 1999. The
Group is now selling annuities in the Channel Islands and the UK.
* Four holdings in the Company's two life insurance subsidiaries
completed IPOs or were acquired during the second quarter. Saba
Software, Inc. and New Focus, Inc. completed IPOs on April 7, 2000 and
May 18, 2000, respectively. SiTera, Inc. was acquired on May 31, 2000,
and iCompression, Inc. was acquired by GlobeSpan on June 30, 2000.
Subsequent to the end of the quarter, VINA Technologies, Inc. completed
its IPO on August 10, 2000. In addition two portfolio companies,
Silicon Spice, Inc. and OnLink Technologies, Inc., are being acquired
and another company is in acquisition discussions.
* Four new private equity transactions were completed in the first half:
iCompression (which has already been acquired), Mahi, Westwave and
KnowledgeNet.
* Assets under management, consulting or administration as of
June 30, 2000 were $5.3 billion.
* A semi-annual dividend of 11.0 cents per share gross, or 8.8 cents per
ADR, will be paid to shareholders and ADR holders on the register as of
August 25, 2000. The dividend will be paid on September 25, 2000 to
shareholders, with an ex-dividend date of August 21, 2000. The
dividend will be paid to ADR holders on October 5, 2000, with an
ex-dividend date of August 23, 2000.
Mr. Trueger commented, ``it is hard to guess where technology equity market conditions will lead us over the balance of the year. If the markets turn upward the numbers could improve further as our listed stocks recover losses sustained during the half. In any event, acquisitions and IPO activity are continuing and this should contribute to a strong year even with markets remaining at their current levels. A sharp downward move in markets affecting the level of IPO activity could affect us adversely although on the other hand, a reduction in the cost of private equity investments could be beneficial to the Company.
``Other events in the first half include our joining the CREST automated settlement system and announced eligibility for the FTSE 250. Our move to the UK medium-sized companies index should generate additional interest in our stock. We continue to increase the profile of the Company and will do so during the year. While operating success is most important, we recognize the need to tell our story more widely in the US and UK and intend to do just that. Watch for increased press commentary as well as new and timely information available from the Company.''
Statements contained herein which are not historical facts are forward-looking statements that involve a number of risks and uncertainties that could cause the actual results of the future events described in such forward-looking statements to differ materially from those anticipated in such forward-looking statements. The types of risks and uncertainties that may cause such differences between the anticipated and actual results of future events described in the forward-looking statements include, but are not limited to: significant fluctuations in the performance of debt and equity markets worldwide; the effect of economic conditions and interest rates in the US, UK or internationally; variations in demand for the Group's products and services; the ability of the Group to compete in its business areas; and changes in government regulations affecting the Group's operations. The Group does not intend to review or revise any particular forward-looking statement referenced herein in light of future events, and investors are cautioned not to put undue reliance on any forward-looking statements.
London Pacific Group Limited
Condensed Consolidated Statements of Income
For the three and six months ended June 30, 2000 and 1999
Under US GAAP (1) (unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
$'000 $'000 $'000 $'000
Revenues:
Investment income 27,547 23,883 53,332 47,129
Insurance policy charges 2,011 1,718 3,838 3,240
Financial advisory services,
asset management and
other fee income 7,231 6,638 16,996 13,016
Realized investment
gains (losses) (8,596) (5,586) 188 (5,829)
Unrealized investment gains
on trading securities 426,338 39,842 354,193 73,757
454,531 66,495 428,547 131,313
Expenses:
Interest credited on
insurance policyholder
accounts 22,330 17,751 42,775 35,049
Amortization of deferred
policy acquisition costs 5,947 3,690 11,242 7,756
Operating expenses 16,039 17,653 29,260 29,241
Goodwill amortization 57 59 115 118
Interest expense 2 17 14 22
44,375 39,170 83,406 72,186
Income before income
tax expense 410,156 27,325 345,141 59,127
Income tax expense 70,325 6,880 60,848 18,329
Net income 339,831 20,445 284,293 40,798
Interim dividend
declared (2)(3)
(2000 and 1999: 11.0 cents
per share gross;
8.8 cents per ADR) 4,608 4,408
Earnings per share
and ADR, basic $6.57 $0.41 $5.59 $0.82
Earnings per share
and ADR, diluted $5.62 $0.36 $4.72 $0.75
(1) Due to US Securities and Exchange Commission requirements, the
Company is now reporting its financial results under US GAAP, whereas
in prior years it reported under UK GAAP. The effect of this change
on net income, as previously reported for the first half of 1999, is
an increase from $40.1 million to $40.8 million, and on diluted
earnings per share and per ADR, an increase from $0.74 to $0.75.
(2) Dividend payable on September 25, 2000 to shareholders on the
register as of August 25, 2000, with an ex-dividend date of
August 21, 2000.
(3) Dividend payable on October 5, 2000 to ADR holders on the register as
of August 25, 2000, with an ex-dividend date of August 23, 2000.
London Pacific Group Limited
Condensed Consolidated Balance Sheets
As of June 30, 2000 and December 31, 1999
Under US GAAP
June 30, December 31,
2000 1999
(Unaudited)
ASSETS $'000 $'000
Cash and cash equivalents 27,841 49,703
Cash held in escrow 2,933 3,110
Investments, principally of
life insurance subsidiaries:
Fixed maturities:
Available-for-sale, at fair value
(amortized cost: June 30, 2000,
$1,192,977; December 31, 1999,
$1,037,085) 1,111,593 989,065
Held-to-maturity, at amortized cost
(fair value: June 30, 2000,
$164,986; December 31, 1999, $221,167) 166,126 222,110
Equity securities:
Trading account, at fair value
(cost: June 30, 2000, $84,176;
December 31, 1999, $34,680) 803,533 399,844
Available-for-sale, at fair value
(cost: June 30, 2000, $179,589;
December 31, 1999, $186,403) 171,397 182,926
Loans to life insurance policyholders 10,374 10,385
Total investments 2,263,023 1,804,330
Assets held in separate accounts 171,417 125,528
Deferred policy acquisition costs 173,641 144,518
Receivables 36,147 56,335
Other assets 13,412 19,264
Total assets 2,688,414 2,202,788
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities 1,538,871 1,416,423
Liabilities related to separate accounts 172,881 126,703
Accounts payable and accrued liabilities 28,832 34,912
Income taxes payable and other liabilities 5,802 5,748
Deferred income taxes 118,814 66,527
Total liabilities 1,865,200 1,650,313
Shareholders' equity:
Ordinary shares, $.05 par value per share:
authorized 86,400,000 shares;
issued and outstanding 64,433,313 shares 3,222 3,222
Additional paid-in capital 63,510 62,307
Retained earnings 836,544 559,344
Employee benefit trusts, at cost
(shares: June 30, 2000, 12,724,006;
December 31, 1999, 15,331,656) (49,401) (54,033)
Accumulated other comprehensive income
(loss) from net unrealized gains
(losses) on available-for-sale securities (30,661) (18,365)
Total shareholders' equity 823,214 552,475
Total liabilities and shareholders' equity 2,688,414 2,202,788
Net asset value per share and ADR $12.78 $8.57
London Pacific Group Limited
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2000 and 1999
Under US GAAP (unaudited)
Six Months Ended
June 30,
2000 1999
$'000 $'000
Net cash provided by operating activities 135,210 33,983
Cash flows from investing activities:
Purchases of held-to-maturity and
available-for-sale securities (228,381) (200,209)
Proceeds from sale of held-to-maturity
and available-for-sale securities 75,880 125,018
Capital expenditures (1,099) (551)
Other cash flows from investing activities 4,214 244
Net cash used in investing activities (149,386) (75,498)
Cash flows from financing activities:
Issue of ordinary shares -- 5
Dividends paid (7,093) (7,096)
Payment of bank overdraft (593) (748)
Net cash used in financing activities (7,686) (7,839)
Net decrease in cash and cash equivalents (21,862) (49,354)
Cash and cash equivalents at beginning of year 49,703 111,414
Cash and cash equivalents at end of period 27,841 62,060
SOURCE: London Pacific Group Limited |
