AIM:  BHL

28 December 2011                                                                                                                    

Baydonhill plc

("Baydonhill" or "the Company")

Interim results for the six month period ended 30 September 2011

Baydonhill makes good progress following strategic changes within the business.

Baydonhill, the corporate and retail foreign exchange provider, announces its interim results for the six month period ended 30 September 2011.

HIGHLIGHTS

·      Results represent the impact of the strategic changes made in the fourth quarter of 2010 and announced previously.  Underlying Private Client and Corporate business continues to perform well in challenging economic conditions

·      Gross profit (foreign exchange commission after affiliate commission and bank charges) before exceptionals down to £2.5 million from £3.0 million while administrative expenses fell to £2.49 million from £2.9 million

·      Operating profit before exceptional items (to reflect mark-to-market adjustment of forward contracts in compliance with IAS 39) of £20,081 (2010: £180,659). Pre-tax loss of £147,598 (2010: profit of £91,244)

Eric Peacock, Chairman of Baydonhill, commented:

"Following the strategic changes of late 2010 the company has made good progress in developing a higher quality of earnings from core revenues.  The Company is seeing continued growth from new business and is looking to expand its sales operation in the New Year".

Contacts:

Chairman's Statement

Performance Review

Following the changes made at the end of the last fiscal year when the Company exited the Money Service Business sector, volumes have fallen as anticipated. The Company is pleased that the impact to profits has been minimised. During the period under review, the Company made a small loss before taxation and exceptional items of £65,002 (2010: Profit £91,244).

The Company continues to focus on the development of the Corporate Division in addition to working on several other strategic opportunities. New business growth from the Corporate Division remains strong although the current economic climate has had some impact on the growth of the core business.

The results from the Retail Division have been in line with expectations despite the current economic conditions.

Outlook

The Company expects to continue month-on-month new business revenue growth replacing revenue reductions arising from the strategic changes referred to above. The Company plans continued investment in IT infrastructure and is looking to expand sales activity in the New Year.

The economic environment continues to impact some areas of the business although new business growth remains strong. The Company plans to focus on continued improvement to its infrastructure for the remainder of the financial year. 

Eric Peacock

Chairman

28 December 2011

INCOME STATEMENT

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOW

NOTES TO THE INTERIM RESULTS

1.         General Information

The financial information set out in these interim results does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.  The Company's financial statements for the year ended 31 March 2011 which were prepared under International Financial Reporting Standards ("IFRS"), as adopted for use in the European Union, were filed with the Registrar of Companies.  The auditors reported on these financial statements, their report was unqualified and did not include reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and, did not contain any statements under Section 498 (2) or Section 498 (3) of the Companies Act 2006.

2.         Basis of Preparation

            These interim financial statements are for the six month period ended 30 September 2011.  They have been prepared on a basis consistent with IFRS as adopted for use in the European Union with the exception of IAS 34: Interim Financial Reporting.  IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee ("IFRC") and there is an ongoing process of review and endorsement by the European Commission.  The financial information has been prepared on the basis of IFRS that the Board of Directors expects to be applicable as at 31 March 2012.

These financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments.

3.         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.

4.         Cost of Sales - Exceptional

The exceptional cost of sales item relates to the unrealised loss / (gain) arising from the fair value adjustment relating to outstanding contracts with both customers and the bank.  As these contracts mature, the unrealised loss / (gain) will reverse.  This adjustment is required in order to comply with IAS 39.

5.         Taxation

Tax has been calculated using an estimated annual effective tax rate of 25 per cent.

(31 March 2011: 15 per cent.) on the (loss) / profit before tax.

The difference between the total tax expense shown above and the amount calculated by applying the standard rate of UK corporation tax to the loss before tax is as follows:

6.         Dividends

            The Directors do not recommend the payment of an interim dividend.

7.         (Loss)/Earnings per Share

The loss per share for the period ended 30 September 2011 is calculated on the loss for the period of £110,469 (2010: profit £62,884) based on the weighted number of shares in issue in the six month period to 30 September 2011 of 57,833,750 (2010: 49,255,490).  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 reduces the net loss per share and is therefore anti-dilutive.

Basic earnings per share and diluted earnings per share for the year to 31 March 2011 are based on a profit of £396,962 and £414,836 respectively the difference related to the interest on the convertible loan and the tax effect of this.  The basic earnings per share has been calculated on a weighted average of 49,915,356 Ordinary Shares in issue.  Diluted profit per share is calculated on a weighted average of 57,950,934.  For the share options and warrants, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's share) based on the monetary value of the subscription rights attached to outstanding share options.  The number of shares calculated is compared with the number of shares that would have been issued assuming the exercise of the share options. 

8.         Deferred Tax

Recognition of deferred tax

Despite the loss in the period under review, the Directors consider it appropriate to recognise the deferred asset arising principally from trading losses incurred in previous years.  In order to recognise the deferred tax asset arising from prior period trading losses, the Directors must be satisfied that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.  The Company prepared a five year profit forecast with underlying assumptions in line with those experienced in the period to 30 September 2011.  The forecast indicated that the losses would be utilised in full by March 2015, and the Directors therefore decided it would be appropriate to continue to recognise the deferred tax asset in full.

Other factors affecting future tax

As at 30 September 2011, trading losses of approximately £4.3 million (31 March 2010: £4.2million) are available to carry forward against future profits of the same trade.  These tax losses will reduce the corporation tax charge in future years until they have been utilised.

9.         NET CASH (USED IN) / GENERATED FROM OPERATING ACTIVITIES

10.        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 Company's registered office, 160 Brompton Road, London, SW3 1HW.