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Peregrine - Unaudited Interim Results For The Six Months Ended 30 September 2005
Peregrine Holdings Limited
(Registration number 1994/006026/06)
JSE code: PGR & ISIN code: ZAE000015152
("Peregrine" or "the company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005
INCOME STATEMENT
% change IFRS
Six months to
30 September
2004 to 2005
2005
R"000
Revenue 63 261,717
Operating expenses 55 (169,146)
Profit from operations 81 92,571
Net interest received 25,440
Interest received 45,392
Interest paid (19,952)
Realised and unrealised net changes in fair
value of long term assurance fund
investments 102,870
Transfer to long term assurance fund
liability (102,870)
Realised and unrealised net changes in fair
value of fund assets 26,586
Interest received 5,917
Dividends received 5,345
Fair value adjustments 15,324
Allocation to debenture holders (26,586)
(Loss) / Income from associate companies (1,029)
Profit from ordinary activities 111 116,982
Capital surplus on sale of subsidiaries 26,939
Capital impairment -
Profit before taxation 153 143,921
Taxation (34,228)
Profit for the period 164 109,693
Attributable to :
Equity holders of the company 185 100,434
Minority interest 9,259
109,693
DETERMINATION OF HEADLINE EARNINGS
Profit attributable to equity holders of the
company 100,434
Adjustments:
Impairment of loan receivable -
Capital surplus on sale of subsidiaries (26,939)
Headline earnings 119 73,495
Headline earnings per share (cents) 123 37.9
Earnings per share (cents) 192 51.9
Diluted headline earnings per share (cents) 114 35.7
Diluted earnings per share (cents) 179 48.8
Dividend paid per ordinary share (cents) 140 12.0
Dividend per ordinary share declared
subsequent to 31 March 2005 (cents) -
Number of ordinary shares in issue ("000) 229,970
Treasury shares held ("000) 37,609
Weighted average number of ordinary shares
in issue ("000) 193,684
Diluted weighted average number of ordinary
shares in issue ("000) 205,648
IFRS restated IFRS restated
Six months to 30 Year ended 31
September March
2004 2005
R"000 R"000
Revenue 160,151 369,797
Operating expenses (109,126) (215,310)
Profit from operations 51,025 154,487
Net interest received 2,092 13,938
Interest received 8,089 28,020
Interest paid (5,997) (14,082)
Realised and unrealised net changes in
fair value of long term assurance fund
investments 42,279 113,045
Transfer to long term assurance fund
liability (42,279) (113,045)
Realised and unrealised net changes in
fair value of fund assets 2,570 4,056
Interest received 244 1,894
Dividends received 450 900
Fair value adjustments 1,876 1,262
Allocation to debenture holders (2,570) (4,056)
(Loss) / Income from associate companies 2,212 2,263
Profit from ordinary activities 55,329 170,688
Capital surplus on sale of subsidiaries 5,080 5,030
Capital impairment (3,500) (3,300)
Profit before taxation 56,909 172,418
Taxation (15,330) (51,904)
Profit for the period 41,579 120,514
Attributable to :
Equity holders of the company 35,208 107,223
Minority interest 6,371 13,291
41,579 120,514
DETERMINATION OF HEADLINE EARNINGS
Profit attributable to equity holders of
the company 35,208 107,223
Adjustments:
Impairment of loan receivable 3,500 3,300
Capital surplus on sale of subsidiaries (5,080) (5,030)
Headline earnings 33,628 105,493
Headline earnings per share (cents) 17.0 54.1
Earnings per share (cents) 17.8 55.0
Diluted headline earnings per share
(cents) 16.7 52.1
Diluted earnings per share (cents) 17.5 52.9
Dividend paid per ordinary share (cents) 5.0 -
Dividend per ordinary share declared
subsequent to 31 March 2005 (cents) - 12.0
Number of ordinary shares in issue ("000) 232,808 229,985
Treasury shares held ("000) 39,490 39,259
Weighted average number of ordinary
shares in issue ("000) 198,181 194,903
Diluted weighted average number of
ordinary shares in issue ("000) 201,606 202,532
BALANCE SHEET
IFRS IFRS restated
As at 30 As at 30 IFRS restated
September September As at 31 March
2005 2004 2005
R"000 R"000 R"000
ASSETS
Non - current assets 2,124,644 1,392,338 1,817,876
Property, plant and equipment 85,029 6,788 84,332
Intangible assets 238,253 187,037 186,915
Investment in associate
companies 3,249 17,747 16,948
Financial investments 41,764 36,494 28,662
Long term assurance fund
investments 1,372,447 1,041,635 1,259,121
Fund assets for investment
contracts 355,342 49,385 202,056
Loans and receivables 19,520 35,893 29,971
Deferred taxation 9,040 17,359 9,871
Current assets 2,726,287 564,964 1,359,686
Trading securities 252,987 140,337 190,062
Trade and other receivables 76,259 53,690 53,292
Amounts receivable in
respect of stockbroking
activities 1,955,022 262,622 933,392
Cash and cash equivalents 442,019 108,315 182,940
Total assets 4,850,931 1,957,302 3,177,562
EQUITY AND LIABILITIES
Equity 590,515 448,867 510,979
Share capital, retained
earnings and reserves 670,273 526,176 588,099
Treasury shares (87,071) (84,329) (83,693)
Minority interest 7,313 7,020 6,573
Non - current liabilities 1,843,018 1,119,357 1,547,575
Interest bearing borrowings 98,198 - 73,061
Liability for share based
payments 2,267 - -
Obligations under operating
leases 675 22,176 752
Long term assurance fund 1,372,447 1,041,635 1,259,121
Investment contracts 355,342 49,385 202,056
Deferred taxation 14,089 6,161 12,585
Current liabilities 2,417,398 389,078 1,119,008
Trade and other payables 107,810 88,770 91,806
Amounts payable in respect
of stockbroking activities 2,259,388 278,999 997,293
Current portion of interest
bearing borrowings 1,779 - 982
Obligations under operating
leases 99 - -
Taxation 48,322 21,309 28,927
Total equity and liabilities 4,850,931 1,957,302 3,177,562
Net asset value per share
(cents) 303.2 228.6 264.5
STATEMENT OF CHANGES IN EQUITY
Six months ended 30 September
Share
capital and
share Accumulated
2005 premium profits
R"000 R"000
Balance at 31 March 2005 as previously reported 52,667 467,471
IFRS adjustments - (6,093)
Balance at 31 March 2005 IFRS restated 52,667 461,378
Share repurchased and cancelled/Treasury shares
repurchased (59) -
Write-down in value of treasury shares on
vesting - (5,389)
Currency translation differences - -
Revaluation of available for sale assets - -
Profit for the period - 100,434
Dividends paid - (23,431)
Balance at 30 September 2005 52,608 532,992
2004
Balance at 31 March 2004 as previously reported 87,433 385,221
IFRS adjustments - (17,691)
Balance at 31 March 2004 restated 87,433 367,530
Shares repurchased and cancelled (27,297) 292
Write-down in value of treasury shares on
vesting - (3,774)
Currency translation differences - -
Revaluation of available for sale assets - -
Liability for shares to be issued - -
Profit for the period - 35,208
Dividends paid - (9,804)
Balance at 30 September 2004 restated 60,136 389,452
Non -
Treasury distributable
2005 shares reserves
R"000 R"000
Balance at 31 March 2005 as previously reported (83,693) 32,914
IFRS adjustments 5,993
Balance at 31 March 2005 IFRS restated (83,693) 38,907
Share repurchased and cancelled/Treasury shares
repurchased (16,905) -
Write-down in value of treasury shares on vesting 13,527 -
Currency translation differences - 1,249
Revaluation of available for sale assets - 9,370
Profit for the period - -
Dividends paid - -
Balance at 30 September 2005 (87,071) 49,526
2004
Balance at 31 March 2004 as previously reported (90,476) 34,408
IFRS adjustments 3,965
Balance at 31 March 2004 restated (90,476) 38,373
Shares repurchased and cancelled 1,933
Write-down in value of treasury shares on vesting 4,214 -
Currency translation differences - 1,078
Revaluation of available for sale assets - (144)
Liability for shares to be issued - -
Profit for the period - -
Dividends paid - -
Balance at 30 September 2004 restated (84,329) 39,307
Obligation to Minority
2005 issue shares interest Total equity
R"000 R"000 R"000
Balance at 31 March 2005 as
previously reported 35,147 6,573 511,079
IFRS adjustments - (100)
Balance at 31 March 2005 IFRS
restated 35,147 6,573 510,979
Share repurchased and
cancelled/Treasury shares
repurchased - - (16,964)
Write-down in value of treasury
shares on vesting - - 8,138
Currency translation differences - - 1,249
Revaluation of available for
sale assets - - 9,370
Profit for the period - 9,259 109,693
Dividends paid - (8,519) (31,950)
Balance at 30 September 2005 35,147 7,313 590,515
2004
Balance at 31 March 2004 as
previously reported - 4,849 421,435
IFRS adjustments - (13,726)
Balance at 31 March 2004
restated - 4,849 407,709
Shares repurchased and cancelled - - (25,072)
Write-down in value of treasury
shares on vesting - - 440
Currency translation differences - - 1,078
Revaluation of available for
sale assets - - (144)
Liability for shares to be
issued 37,281 - 37,281
Profit for the period - 6,371 41,579
Dividends paid - (4,200) (14,004)
Balance at 30 September 2004
restated 37,281 7,020 448,867
CASH FLOW STATEMENT
IFRS IFRS restated
Six months to 30 Six months to 30 IFRS restated Year
September September ended 31 March
2005 2004 2005
R"000 R"000 R"000
Cash flow from
operating
activities 252,505 5,422 90,799
Cash generated
from operating
activities 101,342 53,318 128,711
Working
capital
changes 165,194 (33,610) (19,300)
Net interest
received 24,248 2,092 12,809
Dividends paid (23,431) (9,804) (9,804)
Taxation paid (14,848) (6,574) (21,617)
Cash flow from
investing
activities (8,248) 5,937 9,615
Cash flow from
financing
activities 14,822 (24,329) (38,759)
Share
repurchases (16,964) (25,072) (32,541)
Proceeds on
vesting of
shares held by
staff share
trust 8,138 440 987
Share
incentive
scheme
payments
received 16,905 4,503 4,246
Dividends paid
to minorities (8,519) (4,200) (11,567)
Decrease in
loan
receivable - - 200
Increase/(decrease)
in interest
bearing borrowings 15,262 - (84)
Net
increase/(decr
ease) in cash
and cash
equivalents 259,079 (12,970) 61,655
Cash and cash
equivalents at
beginning of
the period 182,940 121,285 121,285
Cash and cash
equivalents at
end of the
period 442,019 108,315 182,940
SEGMENTAL ANALYSIS
IFRS Six months ended 30 September 2005
Revenue Interest and Profit from ordinary
associate income activities
R"000 R"000 R"000
Wealth and asset
management 172,811 2,370 67,036
Wealth management 96,542 1,976 26,512
Asset management 76,269 394 40,524
Structuring, broking
and distribution 47,362 28,193 30,855
Group investments
(net of group costs) 41,544 (6,152) 19,091
261,717 24,411 116,982
IFRS restated Six months ended 30 September 2004
Interest and Profit from ordinary
associate income activities
Revenue
R"000 R"000 R"000
Wealth and asset
management 113,298 2,680 43,983
Wealth management 68,035 2,640 15,679
Asset management 45,263 40 28,304
Structuring, broking
and distribution 26,744 2,396 6,715
Group investments
(net of group costs) 20,109 (772) 4,631
160,151 4,304 55,329
IFRS restated Year ended 31 March 2005
Interest and Profit from ordinary
associate income activities
Revenue
R"000 R"000 R"000
Wealth and asset
management 257,760 4,181 110,393
Wealth management 143,025 3,478 42,082
Asset management 114,735 703 68,311
Structuring, broking
and distribution 67,779 11,994 24,790
Group investments
(net of group costs) 44,258 26 35,505
369,797 16,201 170,688
RECONCILIATION OF ASSETS, LIABILITIES AND EQUITY
Assets
31 Mar 2005 30 Sept 2004 31 Mar 2004
R"000 R"000 R"000
As previously reported
/restated 2,979,130 1,908,501(1) 1,897,465
Adjustments: 198,432 48,801 (3,761)
IAS17 - Leases 1,067 7,199 6,424
IAS27/SIC12 - Consolidation of
investment trusts 202,056 49,385 -
Adjustments affecting income
from associates as a result of
IFRS
adoption by associates (169) (87) (57)
IAS 12 - Reclassification of
deferred tax assets and
liabilities (4,522) (7,696) (10,128)
Restated 3,177,562 1,957,302 1,893,704
Liabilities
31 Mar 2005 30 Sept 2004 31 Mar 2004
R"000 R"000 R"000
As previously reported
/restated 2,468,051 1,444,407(1) 1,476,030
Adjustments: 198,532 64,028 9,965
IAS17 - Leases 998 22,339 20,093
IAS27/SIC12 - Consolidation of
investment trusts 202,056 49,385 -
Adjustments affecting income
from associates as a result of
IFRS
adoption by associates - - -
IAS 12 - Reclassification of
deferred tax assets and
liabilities (4,522) (7,696) (10,128)
Restated 2,666,583 1,508,435 1,485,995
Equity(2)
31 Mar 2005 30 Sept 2004 31 Mar 2004
R"000 R"000 R"000
As previously reported
/restated 511,079 464,094(1) 421,435
Adjustments: (100) (15,227) (13,726)
IAS17 - Leases 69 (15,140) (13,669)
IAS27/SIC12 - Consolidation of
investment trusts - - -
Adjustments affecting income
from associates as a result of
IFRS
adoption by associates (169) (87) (57)
IAS 12 - Reclassification of
deferred tax assets and
liabilities - - -
Restated 510,979 448,867 407,709
The movement in equity
comprises:
Adjustments affecting
accumulated profits (6,093) (20,359) (17,691)
IAS17 - Leases 69 (15,140) (13,669)
IAS 28/IAS39 -
Reclassification of available
for sale assets 6,007 6,868 8,035
IAS 21- Foreign currency
translation reserve (12,000) (12,000) (12,000)
Adjustments affecting income
from associates as a result of
IFRS
adoption by associates (169) (87) (57)
Adjustments affecting
non-distributable reserves 5,993 5,132 3,965
IAS 28/IAS39 -
Reclassification of available
for sale assets (6,007) (6,868) (8,035)
IAS 21- Foreign currency
translation reserve 12,000 12,000 12,000
(100) (15,227) (13,726)
1- Previously reported numbers were adjusted for the amortisation of goodwill
which ceased with effect from 1 April 2004. The change in accounting policy
is detailed in full in the financial results for the year ended 31 March
2005.
2- Equity includes minority interest.
PROFIT RECONCILIATION
For the six months ended 30 September 2004
Adjustment for
As previously IAS17 and effect
reported(1) of IFRS Restated
R"000 R"000 R"000
Revenue 161,318 (1,167) 160,151
Operating expenses (107,024) (2,102) (109,126)
Profit from operations 54,294 (3,269) 51,025
Net interest received 2,092 2,092
Interest received 8,089 8,089
Interest paid (5,997) (5,997)
Realised and unrealised
net changes in fair value
of long-term assurance
fund
investments 42,279 42,279
Realised and unrealised
net changes in fair value
of fund assets - 2,570 2,570
(Loss)/gain on revaluation
of long term assurance
fund liability (42,279) (42,279)
Allocation to debenture
holders - (2,570) (2,570)
Income from associate
companies 2,242 (30) 2,212
Profit from ordinary
activities 58,628 (3,299) 55,329
Net capital
profits/impairments 1,580 1,580
Profit before taxation 60,208 (3,299) 56,909
Taxation (15,961) 631 (15,330)
Profit for the period 44,247 (2,668) 41,579
Minority interest (6,371) (6,371)
Attributable to equity holders 37,876 (2,668) 35,208
For the year ended 31 March 2005
Adjustment for
As previously IAS17 and
reported effect of IFRS Restated
R"000 R"000 R"000
Revenue 372,255 (2,458) 369,797
Operating expenses (234,935) 19,625 (215,310)
Profit from operations 137,320 17,167 154,487
Net interest received 13,938 13,938
Interest received 28,020 28,020
Interest paid (14,082) (14,082)
Realised and unrealised net
changes in fair value of
long term assurance fund
investments 113,045 113,045
Realised and unrealised net
changes in fair value of
fund assets - 4,056 4,056
(Loss)/gain on revaluation
of long-term assurance fund
liability (113,045) (113,045)
Allocation to debenture
Holders - (4,056) (4,056)
Income from associate
companies 2,375 (112) 2,263
Profit from ordinary
activities 153,633 17,055 170,688
Net capital
profits/impairments 1,730 - 1,730
Profit before taxation 155,363 17,055 172,418
Taxation (46,447) (5,457) (51,904)
Profit for the period 108,916 11,598 120,514
Minority interest (13,291) - (13,291)
Attributable to equity holders 95,625 11,598 107,223
1- Previously reported numbers were adjusted for the amortisation of goodwill
which ceased with effect from 1 April 2004. The change in accounting policy is
detailed in full in the financial results for the year ended 31 March 2005.
ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS AND IAS17
Basis of preparation
The group has adopted International Financial Reporting Standards (IFRS) for
the year ending 31 March 2006. IFRS 1- First time adoption of International
Financial Reporting Standards has been applied in preparing the group"s interim
results,which have been prepared in accordance with IAS34 - Interim financial
reporting.
IFRS 1 elections
In applying IFRS, the group has made the following notable elections:
1. Business combinations: not to retrospectively apply the requirements of IFRS
3 for business combinations that occurred prior to 1 April 2004;
2. Cumulative foreign currency translation adjustment: to deem the cumulative
translation differences in respect of foreign operations to be zero at 31
March 2004, thus reclassifying the foreign currency translation reserves at
that date as retained earnings;
3. Share-based payments: not to apply the provisions of IFRS 2 - Share based
payments to equity settled awards granted on or before 7 November 2002, but
to account retrospectively for all share based payment transactions where
the scheme allows the option holder a choice as to cash settlement.
Significant changes
IFRS 3 - Goodwill
The group changed its accounting policy with respect to goodwill for the year
ended 31 March 2005, as detailed in the 2005 annual report.
IFRS 2 -Share based payments
There is no change under IFRS to the accounting treatment of either the
Peregrine (deferred purchase scheme) or Citadel (options granted prior to 7
November 2002) share incentive schemes.
Deloitte Private Clients has made the election to apply IFRS 2 retrospectively
to all share based payment transactions occurring before its transition date,
as the scheme allows the option holder a choice of cash settlement. A liability
has been raised and the corresponding cost of the options is amortised as an
expense over the vesting period of the options.
IAS 27 - Consolidation of investment funds
IAS 27 requires the consolidation of certain investment trusts established and
managed by Citadel Life to facilitate investments on behalf of clients. Whilst
the consolidation of the funds has a material effect on gross assets and
liabilities, there is no effect on net income and net equity.
The group does not consolidate the investment trusts which house various of the
funds managed by Peregrine Capital and Peregrine Investment Managers as these
trusts are controlled by independent trustees and the benefits accrue directly
to investors as beneficiaries of the trusts.
IAS 17 - Leases
The issuance of circular 7/2005 by SAICA on 2 August 2005, clarified the
interpretation of IAS 17.
As detailed in the 2005 annual report, the lease of the group"s Sandton
premises was capitalised as a finance lease in terms of AC105. To the date of
capitalisation the lease was accounted for as an operating lease.
The application of IAS 17 results in the recognition of higher lease costs in
previous periods with a reduction in the 2004 opening equity and in
attributable earnings for the six months to September 2004. On capitalisation
of the lease, the full deferred lease liability raised to date of
capitalisation under IAS 17, is required to be reversed to earnings in the
period that the lease is capitalised. As this took place during the second half
of 2005, attributable earnings for that six month period will increase by R15.2
million after tax. The distortion in earnings is created as a result of the
timing of the accumulation and subsequent reversal of the deferred lease
liability.
IAS 28 - Reclassification of available for sale financial assets
The group has historically classified its private equity investments as
available for sale assets, with changes in fair value recognised in equity.
Certain of these investments qualify as associates under IAS28. IAS
28 and 31 exclude investments in associates held by venture capitalists and
similar entities, provided that the investments are classified as held for
trading and measured at fair value through the income statement. As it would
not be appropriate to equity account the results of the group"s private equity
investments, the group has extended this treatment to its full private equity
portfolio. Previous revaluations through equity (AC133 revaluation reserve)
have been transferred to income.
IAS 12 - Reclassification of deferred tax assets and liabilities
The group has set off deferred tax assets and liabilities previously disclosed
on a gross basis in accordance with the offset criteria of IAS12.
Directors" statement
Whilst the directors believe the adjustments are correct in terms of current
IFRS practice in South Africa, accounting statements and reporting requirements
are subject to ongoing revision and interpretation. Changes arising there from
could take place prior to the group"s financial year ending 31 March 2006.
Highlights
Group assets under management now exceed R 20 billion
Profit from ordinary activities up 111% to R117,0 million
Attributable earnings of R100,4 million, up 185%
Earnings per share of 51,9 cents, up 192%
Headline earnings of R73,5 million, up 119%
Headline earnings per share of 37,9 cents, up 123%
Introduction
The Peregrine group has produced excellent results for the six months under
review. Favourable market conditions, combined with strong organic growth,
resulted in significantly increased contributions from all of the groups"
businesses. Particularly significant was the progress made in further expanding
the group"s hedge-fund related activities. The results of this growth are
clearly visible in the results, not only in the asset management division, but
in the prime-broking and investment divisions as well.
Results
Revenue of R261,7 million was 63% higher than the previous comparable period,
boosted by buoyant markets and increased performance fees. The face of the
income statement reflects an increase in operating expenses of 55%. On a
like-for-like comparison basis, core operating expenses increased by only 11%,
stripping out the effects of increased staff profit participation due to higher
business profitability and the first-time consolidation effects of Deloitte
Private Client (DPC) into Citadel from 1 June 2005.
Continued strong cash generation within the group and substantial growth in the
group"s hedge-fund related prime-broking operations resulted in net interest of
R25,4 million being earned for the period compared to R2,1 million the previous
period.
A capital profit of R26,9 million was earned principally from the receipt of
proceeds arising from the sale of a non-core group subsidiary during 2003.
Notwithstanding a full rate of taxation and an increase in minority interest,
earnings attributable to equity holders increased by 185% to R100,4 million and,
with a lower number of shares in issue, due to share re-purchases over the past
year,earnings per share increased by 192% to 51,9 cents per share. Headline
earnings increased by 119% to R73,5 million, with headline earnings per share up
123% to 37,9 cents.
Operating highlights
Private-client wealth manager, Citadel, which consolidated DPC for the latter
half of the period, produced a 69% increase in profit from ordinary activities
to R26,5 million. Positive investment performance saw Citadel"s asset base rise
to just short of R10 billion with the business starting to accrue a consistent
level of performance fees in the last three months of the period under review.
One area of concern has been the disappointing inflows into Cambium Capital,
Citadel"s joint-venture with Sanlam Life, which was launched in January of this
year. Management is currently looking at ways of pro-actively addressing this
issue.
The businesses within the asset management division collectively increased
their contribution to group profitability by 43% to R40,5 million.
PeregrineQuant (PQ), although a minor contributor to the division"s
profitability, continued to increase its annuity earnings base, with assets
under management increasing 21% to R8,6 billion.
Returns were consistently good across the group"s suite of hedge funds with
substantial performance fees being earned. Sound progress was made in further
diversifying the group"s single strategy hedge fund business. In addition to
long/short equity, the group"s hedge fund range now includes fixed income,
macro, trading and volatility arbitrage funds.
Peregrine is currently the country"s largest single strategy hedge fund
manager, managing in excess of R2 billion of single strategy hedge funds. The
group"s hedge- fund flagship, Peregrine Capital, currently manages R1,85
billion, with the group"s newer range of hedge funds managing an additional
R300 million.
Over the past year, the Peregrine group has explored the possibility of
entering the local fund-of-hedge-fund (FOHF) market. An announcement can be
expected in this regard within the next month.
The structuring, broking and distribution activities housed within Peregrine
Securities produced a 359% increase in profitability to R30,9 million. The
focus on building the group"s prime-broking capacity within Peregrine Equities
was the single most significant reason for this increase in profitability.
Buoyant market conditions substantially boosted the profitability of all the
other broking businesses in the division too. Similar levels of divisional
profitability going forward would require market conditions to remain as
favourable as in the previous period.
Return on group investments (net of group costs) increased more than four-fold
to R19,1 million. During the period no withdrawals of group capital were made
from any of the group"s hedge fund investments and substantial new investments
were made in seeding new hedge funds. Sound returns were achieved across this
increased asset base. Group costs were unchanged on a pre-bonus level compared
to the previous period.
Prospects
Under the favourable market circumstances experienced in the first half of this
financial year, the Peregrine group has been able to produce the most
profitable six month period in its history. In the short-term, a maintained
level of profitability for the balance of the financial year would require
equally favourable conditions to prevail.
Over the longer-term, we remain confident that the group"s positioning in the
niche areas of private wealth management, hedge fund management and trading
will continue to provide Peregrine with a platform for meaningful growth in
earnings over time.
BEE transaction
Shareholders are referred to the cautionary announcement dated 29 September
2005. The structure and pricing of the BEE transaction are in the process of
being finalised. Shareholders are accordingly advised to exercise caution when
dealing in their shares until an announcement is made giving details of the
transaction, which announcement is expected to be made during November.
By order of the board
Louis Fourie Sean Melnick
Chairman Chief Executive Officer
Sandton
2 November 2005
Sponsor
Java Capital (Proprietary) Limited
Date: 02/11/2005 10:36:52 AM Produced by the JSE SENS Department
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