(ASTR.L) Astaire Group PLC Buy/Sell

Edward Vandyk, Group Chief Executive, commented:

"Following our restructuring programme, we are now focused on growing the Group, both organically and through the acquisition of complementary businesses to strengthen our competitive position for the long term. However, while there are signs of increased market activity, small cap corporate activity remains slow and so we remain cautious on that front for the remainder of this year. Our retail stockbroking business Rowan Dartington & Co. is benefiting from increasing private client activity."

Enquiries
Astaire Group plc 020 7448 4400

Edward Vandyk

Fairfax I.S. PLC, Nominated Adviser 020 7598 5368

Jeremy Porter
Maitland 020 7379 5151

Neil Bennett George Hudson Tom Roberts

Chairman's Statement

The first half of 2009 has seen the new management team focused on the objectives set out by the Chief Executive in the 2008 Annual Report and Accounts, in particular achieving cash flow neutrality and returning the group to profitability.

Results

The underlying loss before tax (as explained more fully in the Financial Review) for the period was £2.3 million, compared to a loss of £1.1 million for the first six months of 2008. Statutory loss before tax from continuing operations was £2.6 million, compared with a loss of £1.6 million for the first half of 2008. Whilst total income has fallen relative to last year the main contributor to the increased losses in 2009 has been the costs of restructuring.

For the first time in fifteen months the Group achieved its objective of being profitable in the month of June 2009. This has been achieved despite a relatively low level of revenue as a consequence of the cost reductions implemented across the businesses.

Strategy

There has been significant restructuring activity within the London based institutional stockbroking and corporate finance business, along with the cessation of activities in Blue Oar Asset Management and the sale of the Australian business, Inteq Limited. The costs of restructuring and terminating activities are included in these results.

Having largely completed the restructuring phase the Group has pursued its strategy of seeking to acquire businesses that can deliver additional revenue onto the established operating platforms within the Group. The successful conclusion to our offer for Dowgate Capital Plc will deliver additions to our corporate finance activities as well as an expansion of our private client wealth management business. The acquisition of Ruegg & Co Limited also provides further expansion to our corporate finance function. The task for the remainder of the year is to fully integrate these acquisitions and ensure any operational efficiencies are successfully delivered.

Astaire Securities Plc

The securities business has been reshaped in the first half of 2009 with substantial changes in personnel, management and operating focus. The business remains committed to its institutional and corporate clients and is improving the services provided to both. Work is ongoing to fully absorb and integrate the staff and clients acquired through the acquisitions, and this is expected to be completed before the year end.

Rowan Dartington & Co. Limited

The private client stockbroking and wealth management business was, and remains, a key part of the Group's activities. The business continues to recruit talented staff and has recently agreed terms with suppliers for a significant upgrading to its IT systems.

Change of Name

The Group has changed its name from Blue Oar Plc to Astaire Group Plc in accordance with approval obtained from shareholders at the Annual General Meeting.

Outlook

Whilst markets feel more positive at present, and there is increased activity in the marketplace generally, small cap corporate activity remains slow. Our expectations therefore remain cautious on that front for the remainder of this year. However, private client activity is increasing, and the Group's institutional research gaining wider recognition, so we look forward to 2010 with increasing confidence.

Oliver Vaughan

Chairman

25th September 2009

Financial Review

Result before tax

The result for the first six months of 2009 was a headline loss before tax of £2.6 million which, on an underlying basis (the metric by which the Board monitors ongoing performance and which is considered to provide the optimal comparative measure) produced a loss before tax of £2.3 million as detailed below:

Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 09 30 June 08 31 December 08
£'000 £'000 £'000
Headline loss on ordinary (2,561) (1,615) (16,131)

activities before taxation Add back:
(Gain) / loss on fair value (23) (427) 1,092

through
profit and loss investments
Adjustments for associated 12 214 (546)

operating costs
Loss on sale of subsidiary 619 - -
Impairment of goodwill and 98 - 10,261

other intangibles
Amortisation of other 222 265 589

intangibles
Bid defence costs - - 365
Share-based payments credit (924) - -
Share-based payments charge 292 470 1,115
Underlying loss on ordinary (2,265) (1,093) (3,255)

activities before taxation

Income statement

The Income Statement for the period is split between "Continuing" and "Discontinued" operations. Discontinued refers to the sale in the period of the Group's Australian subsidiary, Inteq Limited, which completed on 3 June 2009 and which reported a loss for the period of £196,000 (6 months to 30 June 2008: loss of £416,000).

Gross fees and commission income fell 7% relative to the same period last year, and this was primarily due to the very limited revenues from corporate finance and new issue activity. Realised gains on our equity investments and option positions again provided a contribution, with a net gain of £220,000 (6 months to 30 June 2008: £702,000). The unrealised movement in the valuation of options and warrants held at 30 June 2009 was a modest gain of £23,000 (6 months to 30 June 2008: £427,000), reflecting a further positive movement in the share price of the underlying equities. The loss on the sale of Inteq Limited totalled £619,000. Operating expenses, on a headline basis, have fallen by 17% relative to the first half of 2008. Investment revenue of £148,000 (6 months to 30 June 2008: £573,000) is primarily interest on the cash balances held by the Group.

Taxation

The taxation credit for the period is principally in respect of deferred tax movements.

Earnings per share

The basic loss per share from continuing operations for the six months was 1.48 pence per share compared to 0.85 pence per share for the first six months of 2008.

Balance sheet

The main change in the Balance Sheet between 31 December 2008 and 30 June 2009 relates to the movement in cash. Net assets per share were 9.99 pence per share at 30 June 2009, a 17.3% decline from 12.08 pence per share at 31 December 2008. Net current assets remain strong at £12.5 million at 30 June 2009 compared with £15.2 million at 31 December 2008.

Cash flow

During the period cash and cash equivalents have fallen from £13.6 million to £9.1 million, a reduction of £4.5 million. The cash reduction is as a consequence of the costs of restructuring and the cessation of non-core operations, the operating outflows in the period, costs relating to the successful bid by Evolve Capital Plc in December 2008 and investment activity.

Dividends

The Board is not recommending the payment of an interim dividend.

Going concern

As part of its regular assessment of the future prospects for the Group, the Board reviews a one year plan and further projections. Group cash balances including those acquired have decreased during 2009, but the Group has significant cash resources and no borrowings. As detailed above, the Group has undertaken a strategic review and cut costs across its operating businesses.

As a result of such considerations, the Directors have a reasonable expectation at the time of approving the interim financial statements that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the interim financial statements.

Peter Joy

Group Finance Director

25th September 2009

Condensed Consolidated Income Statement

for the six months ended 30 June 2009

Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 09 30 June 08 31 December 08
£'000 £'000 £'000
Fee and commission income 6,187 6,661 15,018
Fee and commission expenses (1,028) (644) (1,825)
Net fee and commission income 5,159 6,017 13,193
Other income 338 96 178
Total income 5,497 6,113 13,371
Profit on disposal of 220 702 651

available-for-sale investments Gain / (loss) on fair value
through profit and loss 23 427 (1,092)

investments
Loss on sale of subsidiary (619) - -
Operating expenses (98)
Impairment of goodwill and - (10,261)

other intangibles
Amortisation of other (222) (265) (589)

intangibles
Bid defence costs - - (365)
Share-based payments credit 924 - -
Share-based payments charge (292) (470) (1,115)
Other operating expenses (8,142) (8,690) (17,832)
Total operating expenses (7,830) (9,425) (30,162)
Operating loss (2,709) (2,183) (17,232)
Investment revenue 154 573 1,150
Finance costs (6) (5) (49)
Loss on ordinary activities (2,561) (1,615) (16,131)

before taxation

Taxation 79 205 1,186
Loss from continuing (2,482) (1,410) (14,945)

operations

Discontinued operations

Loss from discontinued (196) - -

operations

Loss for the period (2,678) (1,410) (14,945)

Loss attributable to equity
shareholders (2,678) (1,410) (14,945)

of Astaire Group Plc

Loss per ordinary share (pence)
From continuing operations (1.48) (0.85) (9.01)

From continuing and (1.60) (0.85) (9.01)

discontinued operations

Condensed Consolidated Statement of Comprehensive Income

for the six months ended 30 June 2009

Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 09 30 June 08 31 December 08
£'000 £'000 £'000
Loss for the period (2,678) (1,410) (14,945)

Other comprehensive income:
Gains on revaluation of 53 50 191

available-for-sale investments taken to equity, net of tax
Exchange differences on 3 424 419

translation of foreign operations
Transferred to profit or loss (98) 1 (3)

on sale of available-for sale investments

Other comprehensive income for (42) 475 607

the year, net of tax

Total comprehensive income for (2,720) (935) (14,338)

the year

Total comprehensive income (2,720) (935) (14,338)

attributable to equity shareholders of Astaire Group Plc

Condensed Consolidated Balance Sheet

as at 30 June 2009

Unaudited Unaudited Audited
30 June 09 30 June 08 31 December 08
£'000 £'000 £'000

Non-current assets
Goodwill 1,093 9,645 1,093
Other intangible assets 3,363 5,944 3,841
Property, plant and equipment 595 988 906
Total non-current assets 5,051 16,577 5,840

Current assets
Trade and other receivables 11,480 27,818 7,065
Available-for-sale investments 1,583 1,549 1,224

Fair value through profit &
loss investments 316 1,970 522
Cash and cash equivalents 9,093 16,392 13,601
Total current assets 22,472 47,729 22,412
Total assets 27,523 64,306 28,252

Current liabilities
Trade and other payables 9,935 29,219 7,152
Current tax liabilities 61 89 55
Obligations under finance - 35 34

leases

Total current liabilities 9,996 29,343 7,241

Non-current liabilities
Deferred tax liabilities 755 1,618 836
Obligations under finance - 64 52

leases

Total non-current liabilities 755 1,682 888
Total liabilities 10,751 31,025 8,129

Share capital 168 167 167
Share premium 15,716 15,658 15,716
Capital redemption reserve - 2,708 -
Merger reserve 2,559 9,501 2,559
Fair value and other reserves 81 1,001 456
Retained earnings (1,752) 4,246 1,225

Parent company's
shareholders' equity 16,772 33,281 20,123
Total equity and liabilities 27,523 64,306 28,252

Condensed Consolidated Statement of Changes in Equity

for the six months ended 30 June 2009

Capital redemption Fair value and other
Share capital Share premium reserve Merger reserves Retained Total
Reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2008 165 15,658 2,708 9,276 526 5,779 34,112
Issue of share capital 2 - - 225 - - 227
Dividends paid - - - - - (593) (593)
Share-based payments - - - - - 470 470
Total comprehensive income - - - - 475 (1,410) (935)

for the period

Balance at 30 June 2008 167 15,658 2,708 9,501 1,001 4,246 33,281
Dividends paid - - - - - (400) (400)
Transfer to share premium - 58 - (58) - - -
Share-based payments - - - - - 645 645
Total comprehensive income - - - - 132 (13,535) (13,403)

for the period
Transfer to retained earnings - - (2,708) (6,884) (677) 10,269 -
Balance at 31 December 2008 167 15,716 - 2,559 456 1,225 20,123
Issue of ordinary share 1 - - - - - 1

capital
Share-based payments - - - - - (632) (632)
Total comprehensive income - - - - (42) (2,678) (2,720)

for the period
Transfer on disposal of - - - - (333) 333 -

subsidiary

Balance at 30 June 2009 168 15,716 - 2,559 81 (1,752) 16,772

Condensed Consolidated Statement of Cash Flows

for the six months ended 30 June 09

Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 30 June 31 December

£'000 £'000 £'000
(4,116)
Net cash used in operating (4,386) (7,151)

activities

Investing activities
Interest received 267 570 1,066
Dividends received 21 23 27
Proceeds on disposal of 1,043 825 1,106

available-for-sale investments
Purchases of (1,595) (450) (578)

available-for-sale investments
Purchases of property, plant (35) (299) (402)

and equipment
Purchase of subsidiary - (3,190) (3,352)

undertakings
Cash acquired with subsidiary - 730 729

undertaking
Cash divested with subsidiary (95) - -

undertaking

Net cash used in investing (394) (1,791) (1,404)

activities

Financing activities
Dividends paid - (593) (993)
Capital element of finance (25) (12) (25)

leases repaid
Proceeds from issue of 1 - -

ordinary share capital

Net cash used in financing (24) (605) (1,018)

activities

Net decrease in cash and cash (4,534) (6,782) (9,573)

equivalents

Cash and cash equivalents at 13,601 23,091 23,091

beginning of period

Effect of foreign exchange 26 83 83

rates

Cash and cash equivalents at 9,093 16,392 13,601

end of period

Notes to the Interim Condensed Financial Statements

1. ACCOUNTING POLICIES

The Interim Report is unaudited and does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.

IAS 1 (revised) requires the presentation of a statement of changes in equity as a primary statement, separate from the income statement and statement of comprehensive income. As a result, a condensed consolidated statement of changes in equity has been included in the primary statements, showing changes in each component of equity for each period presented.

The Group has adopted International Financial Reporting Standard 8 "Operating Segments" for its financial statements for the year ending 31 December 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance.

Excepting the above, the accounting policies used in the preparation of the Interim Report are consistent with those set out in the Annual Report and Accounts for the year ended 31 December 2008.

The information for the year ended 31 December 2008 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified, did not include reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain statements under section 237(2) or (3) of the Companies Act 1985.

The interim condensed financial statements will be circulated to all shareholders by 2 October 2009 and will be available from the Company's registered office at 30 Old Broad Street, London, EC2N 1HT and also in accordance with Rule 20 of the AIM rules, on the Company's website at www.astairegroup.co.uk.

2. TAXATION

The tax credit for the six months to 30 June 2009 reflects all the necessary provisions for current tax, taking into account the availability of losses brought forward, and movements in deferred tax with reference to the adjustments necessary under IFRS. In arriving at the effective tax rate account has been taken of the change in the rate of tax charged, and the disallowance of the cost of share-based payments charged to the income statement. Current income tax expense is recognised in these interim consolidated financial statements based on management's best estimates of the annual income tax liability expected for the full financial year.

3. LOSS PER SHARE

The calculation of the basic loss per ordinary share is based on the loss on ordinary activities after tax and on the weighted average number of ordinary shares in issue during the period. The calculation of diluted loss per ordinary share is based on the basic loss per ordinary share adjusted to allow for the issue of shares on the assumed conversion of all dilutive options and warrants.

Reconciliations of the loss and weighted average number of shares used in the calculations are set out in the tables below.

Continuing operations

6 months ended 30 June 2009 6 months ended 30 June 2008
Weighted Weighted
Average Loss Average Loss
Number of per share Number of per share
Loss shares (pence) Loss shares (pence)
£'000 £'000

Basic loss per
ordinary share (2,482) 167,788,554 (1.48) (1,410) 165,031,899 (0.85)

Dilutive effect of securities

Continuing and discontinued operations

6 months ended 30 June 2009 6 months ended 30 June 2008
Weighted Weighted
Average Loss Average Loss
Number of per share Number of per share
Loss shares (pence) Loss shares (pence)
£'000 £'000

Basic loss per
ordinary share (2,678) 167,788,554 (1.60) (1,410) 165,031,899 (0.85)

Dilutive effect of securities

4. DIVIDENDS PAID

Six months to Six months to Year Ended
30 June 30 June 31 December

£'000 £'000 £'000

No dividends were paid in the period to 30 June 2009. (30 June 2008: 0.36p per share, 31
December 2008: 0.24p per - 593 993

share)

5. ACQUISITION OF DOWGATE CAPITAL PLC

On 20 July 2009 the Group announced that having received acceptances for 75.80 percent. of total voting rights, the offer for Dowgate Capital Plc was declared wholly unconditional. By 28 August 2009 the Group had received acceptances for 93.74 percent. of total voting rights, and announced that the offer was closed and that it intended to compulsorily acquire any remaining shares that had not accepted the offer.

The details below are based on the estimated cost of acquiring 100 percent. of Dowgate Capital Plc.

Book value Fair value adjustments Fair value
£'000 £'000 £'000

Net assets acquired:
Property, plant and equipment 197 197
Available-for-sale investments 88 88
Trade and other receivables 1,052 1,052
Cash and cash equivalents 863 863
Trade and other payables (706) (161) (867)
1,494 (161) 1,333
Other intangibles 1,305
Goodwill 682
Total consideration 3,320

Satisfied by:
Shares 1,192
Cash 1,968
Directly attributable costs 160
3,320

Net cash outflow arising on acquisition
Cash and directly attributable (2,128)

costs
Cash and cash equivalents 863

acquired

(1,265)

6. ACQUISITION OF RUEGG & CO LIMITED

On 22 July 2009 a wholly owned United Kingdom registered subsidiary, Ruegg & Co Limited, was acquired by the issue of 6.0 million Astaire Group Plc ordinary shares of 0.1 pence each whose fair market value was deemed to be 5.25 pence per share, and the payment of £334,000 in cash.

Book value Fair value adjustments Fair value
£'000 £'000 £'000

Net assets acquired:
Property, plant and equipment 3 3
Available-for-sale investments 27 114 141
Trade and other receivables 154 154
Cash and cash equivalents 180 180
Trade and other payables (54) (54)
Current tax liabilities (66) (66)

Other intangibles 174
Goodwill 134
Total consideration 666

Satisfied by:
Shares 315
Cash 334
Directly attributable costs 17

Net cash outflow arising on acquisition
Cash and directly attributable (351)

costs
Cash and cash equivalents 180

acquired

7. DISPOSAL OF INTEQ LIMITED

On 3 June 2009 the Group completed the disposal of Inteq Limited, its Australian corporate finance subsidiary. The disposal was effected as part of the Group's strategy to cut costs and exit loss making businesses.

The results of the discontinued operations, which have been included in the consolidated income statement, were as follows:

£'000
Total income 210
Profit on disposal of available-for-sale investments 44
Operating expenses (450)
Loss on ordinary activities before taxation (196)
Attributable tax expense -
Loss on disposal of discontinued operations (196)

A loss of £619,000 arose on the disposal of Inteq Limited as shown below:

£'000
Property, plant and equipment 215
Available-for-sale investments 375
Fair value through profit and loss investments 232
Trade and other receivables 159
Cash and cash equivalents 95
Trade and other payables (457)

Loss on sale of subsidiary (619)
Total consideration -

Net cash outflow arising on disposal:
Cash consideration -
Cash and cash equivalents disposed of (95)

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

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