Scott Lines, Managing Director of LOM (Holdings) Limited today released the Group's unaudited accounts for the half year to 30 June 2002, which will shortly be mailed to shareholders.
"Despite extremely difficult market conditions the LOM group managed to achieve a small profit during the first half of the year. Earnings in the first six months totaled $216,767 or 3.4 cents per share. Book value per share as of 30th June 2002 was $3.54 with the group's net equity totaling $22,276,986. LOM's balance sheet remains very strong with no debt outstanding and 37% of our capital held in cash and equivalents.
The rapid and sustained declines in the world's equity markets have continued to adversely impact our overall revenues which fell 11% year on year. Brokerage fee income was down 16%, while low interest rates and customers' aversion to margin borrowing resulted in net interest revenues falling 61% over the period. Revenues from asset management have remained stable. A brighter note is that foreign exchange revenues have risen 109% as the weaker dollar caused investors to seek alternative currency exposure. Gains on securities and other revenues have risen 65% year on year.
The group is continuing to reduce its cost base with expenses falling 9% year on year. In addition to reducing staff numbers through attrition we have reduced our occupancy cost through sub leasing half of our office space in Grand Cayman and letting out the second floor of the LOM Building at our headquarters in Bermuda. Both of these events occurred in July therefore these cost savings will reflect in our financials in the second half of the year. With these changes, our employees have shouldered increased workloads while operating in tighter physical conditions. On behalf of the board I would like to thank all of our very good staff for the efforts they have made though this very difficult environment.
Our expected recovery in global economic activity during 2002 materialized, however instead of the increased economic activity supporting a gradual recover in share prices, world equity markets continued to decline sharply. Widespread evidence of corporate malfeasance in the United States and the bankruptcy of some of the biggest corporate stars of the 1990's have created an environment whereby market participants are viewing every corporate result with deep suspicion. This environment will result in further corporate scandals being brought to light, and will continue to act as a depressant to valuations for the remainder of 2002.
Given this environment we expect that revenues from our broking divisions will remain weak for the remainder of 2002. We will continue to focus on cutting our cost base wherever possible while enhancing our other revenue lines.
We once again would like to thank our customers, employees, directors and shareholders for their support and efforts over the first half of the year."