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LOM (Holdings) Limited 2004 Half Year Financial Results

22 22 2004

Hamilton, Bermuda: 22nd July 2004 - "After witnessing a sharp rise in equity valuations in the last part of 2003, world financial markets spent the first half of 2004 balancing the effect of sharply increasing bond yields, rapidly deteriorating conditions in the Middle East and growing questions over the sustainability of US economic growth into the 2nd half of 2004. In the first half year the S&P 500 index gained 2.4%, the Nikkei 10%, the FTSE Eurotop 100 gained 3.8% and the UK FTSE 100 gained 0.9%. On the bond front the Citigroup Broad Investment Grade 7-10 year Index fell 0.16%. Despite the essentially sideways movements of most markets over this period customer activity remained relatively buoyant and with group customer assets up sharply from last year our brokerage revenues rose substantially.

On a year on year comparison, first half 2004 group net broking revenues after execution costs rose 126% (to represent 65% of net revenues). Greater demand for margin loans resulted in a 41% rise in net interest earnings. Other divisions of the group also performed well. Asset management fees rose 3% year on year, while leasing activity continued to grow with lease income revenues rising 75%. Overall net revenues for the group rose 68%.

Operating costs for the group, ex commission payments which are directly related to brokerage revenue, rose 11% year on year. This increase was mainly due to a 10.9% increase in employee compensation. A more stable outlook for financial markets has led the group to add staff to concentrate on new business development. We expect that operating costs for the group will again increase slightly in the second half as the costs of our new London office and additional marketing costs create drag on earnings.

LOM's first half net earnings were $2,085,554 versus $204,425 for the same period in 2003. Post these results we have experienced a normal summer slowdown in business activity in July and expect this to continue in August. We expect that activities will pick up in the last four months of the year, however this outlook is very much dependant on the financial markets.

LOM's assets under administration continue to grow with group customer assets in custody totalling $861 million as of June 30th. LOM's balance sheet remains very healthy with net equity of $26.2 million. The group carries no debt and holds cash and equivalents of $14.8 million or 56% of total assets. As of 30th June 2004 LOM's book value was $4.04 per share.

In June LOM paid its first regular dividend of 5 cents per share to shareholders of record on the 25th May 2004. Our stock price on the Bermuda Stock Exchange is trading at $3.50. Given the disparity between LOM's current share price and our current and conservative book value the Board has authorized the company to buy back shares for cancellation in an amount not exceeding $1,000,000.

We would like to thank our customers for their support and our staff for all of the hard work and dedication they continue to exhibit."

Signed by:

Scott Lines

Managing Director