(BHL.L) Baydonhill PLC Buy/Sell

Eric Peacock, Chairman, commented:

"I am delighted that the investment by the Company to develop its corporate business has provided continued growth, particularly in the current economic climate, and that the company has reached and sustained breakeven at EBITDA level on a monthly basis."

Contacts

Baydonhill plc
Eric Peacock, Chairman Tel: 020 7594 0584

Wayne Mitchell, Chief Executive

Merchant John East Securities Limited
Bidhi Bhoma Tel: 020 7628 2200
Chairman's Statement

Introduction

I am pleased to report that through continued revenue growth in the Corporate Division and the restructuring of costs across the business, the Company reached its goal of achieving EBITDA breakeven in September 2009 and continued this trend in October and November. For the six months ended 30 September 2009, the Company made a loss before tax of £741,586 (2008: loss £658,451) on gross turnover of £300,645,456 (2008: £220,720,675).

During the period under review, new incentive arrangements were introduced whereby the parent company, Ekwienox Limited ("Ekwienox"), agreed to make available loans to certain directors and employees of the Company, to allow these persons to subscribe for new ordinary shares in the Company ("Subscription Shares"). The loans taken up amounted, in aggregate, to approximately £350,000 and were used to subscribe for 5,599,968 new ordinary shares at 6.25p per share ("Subscription Price"), being a 56 per cent. premium to the closing mid-market price of the Company's shares on 21 October 2009. The loans are repayable on or before 30 November 2012.

With the introduction of a new website in October 2009, the Company rebranded its operating business as 'Baydonhillfx' to improve product recognition. While this change is very recent, initial indications are that both the new website and change in trading name have been well received.

The loan facility from Wallich & Matthes Holding BV and the convertible loan notes issued by Ekwienox FX Ltd., both wholly owned subsidiaries of Ekwienox, have been extended from 30 September 2009 and 30 April 2010 respectively, to 30 September 2010.

Review

The Corporate Division continues to show strong growth with turnover (representing the value of foreign exchange transactions executed by the Company) increasing to £255 million during the period under review (six months to September 2008: £136 million) an increase of 87 per cent. Gross profit (representing foreign exchange commission earned) for the Corporate Division increased by 86 per cent. to £979,000. (six months to September 2008: £525,000).

The Private Client Division continues to be challenged by the difficult market conditions for foreign exchange providers, with turnover 39 per cent. lower than the same period last year. However modest increases in turnover have been experienced in recent months, indicating stabilisation in the sector.

The Company's overall gross profit includes a deduction for bank charges of £260,169, compared to £10,507 in six months to September 2008 due to a change in the structure of bank charges from 13 October 2008 (see note 3). Therefore, the underlying improvement in gross profit across both divisions of the Company was approximately £449,000, representing an increase of approximately 34 per cent.

Outlook

The Company expects that the Corporate Division will continue to show strong revenue growth and, as a result, the Company will invest in talented individuals and its IT structure. As commented in the 2009 Annual Report, the increase in corporate revenue is a combination of new business and existing recurring business. The nature of the corporate sales model lends itself to a high level of first year costs associated with winning new business. The Corporate Division is now in its second year and as anticipated, the Company is beginning to benefit from a reduced costs to revenue ratio. The Directors believe that remainder of the year will continue to be challenging for the Private Client Division, although there are some signs of the market stabilising with an increase in activity.

Given the revenue increases and cost cutting measures taken in this period, significant progress towards profitability has been made and the Directors feel that the Company is in a strong position to continue to build on this in 2010.

Eric Peacock

Chairman

22 December 2009

Six months Six months ended Year
ended 30 September 2008 ended
30 September (unaudited) 31 March

(unaudited) (audited)
TURNOVER 300,645,456 220,720,675 460,436,851
Cost of sales (299,154,248) (219,428,798) (457,743,038)
GROSS PROFIT 1,491,208 1,291,877 2,693,813
Administrative expenses (2,120,286) (1,925,730) (3,954,516)
OPERATING LOSS (629,078) (633,853) (1,260,703)
Interest receivable and 8,000 59,187 99,310

similar income

Interest payable and similar (120,508) (83,784) (214,009)

charges

LOSS BEFORE TAX (741,586) (658,450) (1,375,402)

LOSS FOR THE PERIOD (741,586) (658,450) (1,375,402)
Loss per share - basic (2.46p) (2.70p) (5.64p)

At 30 September At 30 September At 31 March 2009
2009 2008 (audited)
(unaudited) (unaudited)

Tangible 737,430 676,648 728,572
Investments 10 10 10

Debtors 63,395,914 30,628,477 39,917,677
Cash at Bank 2,454,658 2,111,983 2,710,550
65,850,572 32,740,460 42,628,227

CREDITORS: Amounts falling due
within one year (66,328,098) (33,062,508) (42,778,505)
NET CURRENT LIABILITIES (477,526) (322,048) (150,278)

LIABILITIES 256,914 354,610 578,304

CREDITORS: Amounts falling due
after more than one year (2,188,198) (1,306,137) (2,201,824)
NET (LIABILITIES) / ASSETS (1,928,284) (951,527) (1,623,520)

Called up share capital 318,723 243,841 243,841
Share premium account 3,367,491 3,005,551 3,005,551
Profit and loss account (5,672,386) (4,261,387) (4,930,800)
Shares to be issued 57,888 60,468 57,888
EQUITY SHAREHOLDERS FUNDS (1,928,284) (951,527) (1,623,520)

Six months Six months Year
ended ended ended
30 September 30 September 31 March

(unaudited) (unaudited) (audited)

Reconciliation of operating loss to net cash outflow from operating activities

Operating loss (629,078) (633,854) (1,260,703)
Depreciation of tangible fixed 104,196 87,586 188,629

assets
Increase in debtors (23,478,237) (11,427,117) (20,716,318)
Increase in creditors 23,451,365 10,129,229 20,163,333
Share-based payment (credit) - (47,538) -
Net cash outflow from (551,754) (1,891,694) (1,625,059)

operating activities

Returns of investment & (27,905) (24,597) 20,302

servicing of finance

Taxation - - -
Capital expenditure (113,054) (174,207) (327,174)
Cash outflow before use of (692,713) (2,090,498) (1,931,931)

liquid resources

Management of liquid resources 314,042 - 119,200

Financing:
Other Loans - 160,000 150,000
Convertible Loans - 150,000 -
Issue of shares 436,821 - 600,000
Increase /(decrease) in cash 58,150 (1,780,498) (1,062,731)

for the period

Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash in 58,150 (1,780,498) (1,062,731)

the year
Cash inflow from decrease in (314,042) - (119,200)

liquid resources
Convertible loan note (13,312) (141,970) (175,293)
Other loan - (160,000) (600,000)
Net funds at 1 April 2009 961,695 2,918,919 2,918,919
Net funds at 30 September 2009 692,491 836,451 961,695
1. Nature of Information

The interim accounts for the six months ended 30 September 2009 and the comparative figures for the six months ended 30 September 2008 are unaudited. The comparative figures for the year ended 31 March 2009 are not the Company's statutory accounts within the meaning of section 434 of the Companies Act 2006 but are abridged from such accounts which have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors on such accounts was unqualified and did not contain any statement under Sections 237(2) or 237(3) of the Companies Act 1985.

The interim accounts are prepared on the basis of the accounting policies which will be applied in the accounts of the Company for the twelve months ending 31 March 2010.

2. Principal Activities

The principal activities of the Company continue to be the provision of foreign currency exchange and related financial products and the arrangement of overseas mortgages.

3. Cost of Sales
Six months Six months Year ended
Ended 30/09/09 Ended 30/09/08 31/03/09
Purchase of Foreign Currency 298,746,331 219,354,419 457,361,736
Introducer Commissions 147,748 63,872 128,660
Bank Charges 260,169 10,507 252,642
299,154,248 219,428,798 457,743,038

Gross Profit Excluding Bank
Charges 1,751,377 1,302,384 2,946,455

The manner in which bank charges were levied by the Company's primary banker, changed in October 2008 from a flat quarterly charge to a per transaction charge. This change has resulted in significant increases in bank charges.

4. Taxation
Based on the results of the period, the Company believe that no provision for taxation is required.
5. Dividends
The Directors do not recommend the payment of an interim dividend.
6. Loss per Share
The loss per share is calculated on the loss for the period of £741,586 based on the weighted average
number of shares in issue at 30 September 2009 of 30,194,347. Diluted loss and loss per share is
calculated on the same basis as basic loss and loss per share because the effect of the potential ordinary
shares (share options) reduces the net loss per share and is therefore anti-dilutive.

7. Analysis of Changes in Net Funds
At 1 April 2009 Cash Flows Other non-cash At 30 September
(£) (£) Movements (£) 2009 (£)
Cash at bank and in hand 2,141,350 (569,934) 1,571,416

Liquid resources 569,200 883,242
314,042

2,710,550 (255,892) 2,454,658

Debt due after one year (1,748,855) - (13,312) (1,762,167)

Total 961,695 (255,892) (13,312) 692,491
8. Copies of the Interim Results
Copies of this interim announcement will be available to download from the Company's website at
www.baydonhillfx.com and at the registered office, 160 Brompton Road, London, SW3 1HW.

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

IR CKBKBDBDDBBB