Scott Lines, Managing Director of LOM (Holdings) Limited today released the Groups Unaudited accounts for the half year to 30 June 2001, which will shortly be mailed to shareholders.
We are pleased to announce a modest level of profitability for the six months ended 30 June 2001 despite operating in extremely difficult market conditions. Further details are as follows:
Revenues - The weakness in global equity markets over the first six months of 2001 was reflected in a substantial decline in the Company's primary revenue source, broking fees, which were down 66% over same period last year. Net interest revenue fell by 36% due to continued interest rate cuts and lower margin borrowing by customers.
Costs - LOM has proactively responded to the bear market by implementing a detailed group-wide review of our cost base. However the group has continued to invest in areas identified as having long term strategic importance and these costs have been expensed against current earnings.
Outlook -LOM continues to invest heavily in technology despite the slowdown. These technology improvements will allow the group to maximize the efficiency and scalability of our securities execution and administration functions and result in an increase in our net return on sales. Thus when global equity markets recover we expect the group to substantially increase net earnings.
As of 30 June 2001 the group's capital was $22m of which 41% is in cash. The Company has no debt. The group is in a strong position to weather the current downturn in business and continue to expand business operations. The Company's new subsidiary in Freeport, Bahamas is on-line, and we expect that office to begin to contribute to group revenue in the near future.
Overall the outlook for our earnings this year remains very uncertain and this uncertainty has been compounded by the tragic events of the last week. We continue to expect a modest recovery in brokerage activity in the last quarter of the year. We believe that the world equity
markets will experience a strong rebound in 2002 and this will have a very positive impact on the company's revenue and net profits.
Net revenue for the six-month period ending 30 June 2001 amounted to $6,110,625 compared to $16, 649,250 in the same six month period last year. Net earnings for the 2001 period were $337,192 compared to $6,090,635 for the 2000 period.
Total operating expenses were $5,773,432 for the six months ending 30 June 2001 versus $10,558,614 for the same period last year.
Basic earning per share was $0.05 for the 2001 six-month period compared to $0.98 for the 2000 six-month period. Earning per share on a fully diluted basis was $0.05 for the 2001 period and $0.91 for the 2000 period. Dividends per share were $0.06 and $0.05 respectively.
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