Can anyone explain were this company is heading. Is it time to bail out with a merger or will the share price keep diving?

The final results are out, any comments anyone?

Company Inter-Alliance Group PLC
TIDM IAL
Headline Final Results
Released 18:20 30-Jun-04
Number 3505A



30 June 2004

Inter-Alliance Group PLC (Inter-Alliance or the Group)
Full year results ended 31 December 2003

INTER-ALLIANCE MAKES SIGNIFICANT PROGRESS IN 2003
AND REPORTS ENCOURAGING TRADING IN 2004

Inter-Alliance Group made significant progress in 2003. Gross revenue increased 22.5% during the year and, since the start of the restructuring programme in January 2002, we have seen encouraging growth in the number of Advisers as well as improvements in productivity. This is an exceptional achievement especially given the scale of restructuring when retention, never mind recruitment, is more challenging. As I was delighted to announce earlier this month, Inter-Alliance is in merger talks with Millfield Group Plc. I believe that a successful conclusion to these discussions can only augment our position in a consolidating marketplace and I look forward to updating shareholders on progress shortly.

Keith Carby, Chairman and Chief Executive Inter-Alliance Group PLC

Financial Highlights

Year ended 31 December 2003:

Gross revenue up 22.5% at 63.6 million (2002: 51.9 million)

Gross profit 16.0 million (2002: 10.2 million)

Operating loss before exceptional items 20.0 million (2002: loss 11.0 million).

Loss per share of 7.8 pence (2002: loss 21.3 pence)



Growth in the number and productivity of Advisers

At the start of the restructuring programme in January 2002, the Groups UK operations had 1,088 Advisers. At the end of 2003, the Group had 1,208 Advisers, an 11% increase over January 2002.

The annualised increase in new business productivity since completing most of the restructuring (in Q4 2003 and Q1 2004) was 25.9% higher than the equivalent figure for 2002 (55,000 over 43,700).

Significant cost saving actions taken

Since January 2003, staff numbers have halved, down 297 to 298 at the present time. The number of operating premises have reduced from 59 to 39 at the year end and 26 at the present time.

These actions have led to a substantially reduced annualised cash overhead run rate of approximately 24 million at the year end. Further cost reductions amounting to approximately 2 million scheduled for implementation around the year-end have been deferred, given merger discussions.

Current trading

The directors were pleased with trading performance in the first quarter and to date.

By the end of March, the number of UK Advisers had increased to 1,214, the volumes of both submitted and issued business were significantly up by 23% on the comparable period last year and the gross margin rates are marginally ahead of last year, in line with managements expectations. The directors believe these results are to some extent a consequence of an improving market but are also derived from the actions taken in the second half of 2003 to restructure the Group.

Merger discussions and going concern


Merger discussions between Inter-Alliance and Millfield Group Plc are proceeding. Written commitments to make available the necessary funds for the merger have been obtained and the directors are now awaiting the FSAs decision, which needs to be taken through a series of processes to enable the merger to be concluded and the funds released. Obviously, Inter-Alliance has not been able to provide its auditors with sufficient evidence surrounding the likely outcome of these processes. Accordingly, in the circumstances, the auditors have no option but to qualify this aspect of Inter-Alliances accounts in advance of the FSAs decision.



Hard copies of the annual report and financial statements year ended 31 December 2003 may be obtained from Inter-Alliances office at Tuition House, 27 37 St. Georges Road, Wimbledon, London SW19 4DS. The annual report and financial statements can also be viewed on the Groups web site www.inter-alliance.co.uk. The financial statements are in the process of being sent to shareholders.





Enquiries


Inter-Alliance Group PLC Financial Dynamics
Keith Carby, Chairman & Chief Executive
Geoffrey Pelham-Lane

01285 886 700
020 7269 7194


Louise Dolan


020 7269 7192












Chairman and Chief Executives Review
Results

I am pleased to report that the Inter-Alliance Group made significant progress in 2003. Despite having the major task, and suffering the substantial costs of the reconstruction of the Company which started in 2002, gross revenue for 2003 was up by 22.5% over the previous year at 63.6m (2002: 51.9m).

This has been supported by the growth in the number and productivity of our Advisers. At the start of the restructuring programme in January 2002, the Groups UK operations had 1,088 Advisers. At the end of 2003, the Group had 1,208 an 11% increase over January 2002. In addition, Inter-Alliance International had 130 Advisers transacting business with the Company so the total number of Advisers operating with the whole Group as at 31 December 2003, was 1,338. This is an exceptional achievement especially given the scale of restructuring when retention, never mind recruitment, is more challenging.

Looking at the new business production since completing most of the restructuring (in Q4 2003 and Q1 2004), the annualised increase in productivity over that period was a very pleasing 25.9% over the equivalent figure for 2002 (55,000 over 43,700).

The profit and loss account confirms that following the assumption of business of the former associated companies the rate of gross profit has improved but consequently operating overheads have increased as the Company now pays certain administrative costs which were previously settled by the associated companies. Therefore we have reported a gross profit of 16.0m (2002: 10.2m) and an operating loss before exceptional items of 20.0m (2002: 11.0m). After exceptional items, interest and minority interests of 13.5m (2002: 6.7m) the loss for the year was 33.5m (2002: 17.7m) producing a loss per share of 7.8 pence (2002: loss 21.3 pence).

A loss of such magnitude is disappointing to all involved however the operating loss in the second half at 5.3m is a significant reduction from the 14.7 reported in the first half evidencing the positive trends in both revenues and expenses. As part of the restructuring exercise, we have assessed the carrying value of all assets and liabilities, including goodwill, within the Company and Group balance sheets. This has resulted in a material charge of 13m for exceptional costs which are detailed in Note 7. 6m of this charge relates to the fundamental restructuring, including a share of the net losses of former associate companies and 7m to write downs and provisions for onerous leases, contracts and balances relating to the restructuring of which 1.8m relates to the impairment review of goodwill. The majority of these latter provisions were not cash costs in the year. Normal operating costs for the year before the above but including those normal operating costs assumed from former associate companies amounted to 36m of which 21m occurred in the first half and 15m in the second half.

Significant cost saving actions were undertaken in June, September and at the end of November. These have resulted in a halving of the staff numbers since January 2003, down 297 to 298 at the present time, and in the number of operating premises from 59 to 39 at the year end and 26 at the present time. These have led to a substantially reduced annualised cash overhead run rate of approximately 24m at the year end. Further cost reductions amounting to approximately 2m scheduled for implementation around the year end were deferred pending merger discussions.



Restructuring

The conversion of 87 Limited Companies into a single integrated entity during 2002 was a difficult and painful process. Without doubt, it distracted many in the Group. Nevertheless, this change was essential if we were to move from an organisational structure that meant there was no prospect of good profitability towards becoming a successful and strongly profitable business capable of offering an attractive future for all its stakeholders.

Whilst the restructuring work that went on throughout most of 2003 was just as challenging as the integration process in 2002, it was done against a background of steadily building morale within the Company as the Boards strategy began to bear fruit.

This was clear in the Sales Divisions where the restructuring of Sales Management has already produced results, shown most notably in the positive trends in Gross Revenue and the retention and development of Advisers throughout 2003.

For a new Sales Management team to achieve this performance whilst implementing a major premises rationalisation programme was truly exceptional.

The amount of change in Group Services (the functions which support our Sales Divisions) was, if anything, even more radical. The level of service to our Advisers was improved in all areas. The degree of control over finance, business processing, operational compliance and all other areas was increased despite the substantial disruption caused by reducing staff numbers so significantly.

The changes included the introduction of the Business Quality Division across all regulated companies, combining regulatory compliance with training and enabling remedial and development work to operate hand in glove in a consistent fashion for both Inter-Alliance and Sage advisers. Also, a centralised Group Purchasing function has been built assuming control of all expenditure through a strict authorisation framework. This team reduced the Groups supplier numbers from over 1,000 to less than 200.



In addition to the enhanced capability arising from the Group Services concept, 2003 also brought the introduction of a totally new technology platform (ATLAS) by which our Advisers submit their business. ATLAS was developed from scratch within Inter-Alliance Group by our subsidiary, IntelliFlo. Although faced with all the usual challenges and teething problems that tend to accompany significant IT development, ATLAS was introduced very effectively thanks to the hard work and talent of a whole range of Inter-Alliance personnel. Our Advisers now benefit from an IT platform which many judge to be the best in the Sector. The Advisers will benefit even more over the next few years as extra functionality is added to ATLAS and their knowledge and skill is enhanced, supported by our dedicated ATLAS trainers.

As always, the introduction of proper processes, controls and higher quality management meant that efficiency increased. Far fewer people are now able to provide a much more cost effective and improved service for our Advisers.



Acquisitions

Taking advantage of the opportunity to lead consolidation in the Financial Services Distribution Sector is a major element of Inter-Alliances corporate strategy. Following the successful acquisition of HST Financial Limited in 2002, the Company acquired the business and assets of Heartland Independent Advisers Limited in March 2003. The principal attraction of Heartland was the apparent quality of its Advisers. Having now worked with these Advisers for some time and witnessed their integration into Inter-Alliance, I am very pleased with the outcome.



Fund Raising

During the year the Group completed two share Placings in March and August which, together with the conversion of loan facilities into equity raised 29m net of expenses. The funds were used to finance the acquisitions, various aspects of the restructuring programme and to provide day-to-day working capital support. These transactions enabled us to widen our list of institutional shareholders.



Other Strategic Developments

As well as the economic and market forces driving the need for consolidation, the other major factor affecting strategy for Inter-Alliance is regulatory change. Depolarisation and the regulation of the mortgage and general insurance arenas will all have significant impact over the next year.

Historically, Inter-Alliance did not seek to play any part in the non-regulated business carried out by its Advisers. During 2003, the Company began a programme aimed at capturing this business through offering our Advisers a Sector leading proposition. This began with the launch of PMH Alliance which allowed our Advisers to place their term assurance and medical insurance business through the Company. This move has proven to be very successful with the monthly revenue via PMH Alliance running at approximately 1m at the year end. The directors believe that this business will continue to build as more Advisers appreciate the advantages of placing all their business through the Company.

By the end of 2004, Advisers across the Sector will be reaching decisions about how they will carry out their newly regulated mortgage business. We have developed a series of options including a mortgage proposition to meet the specific needs of our Advisers. These propositions are now being presented to our Advisers and the early reaction has been very favourable.

In addition to producing automatic increases in productivity, both PMH Alliance and the mortgage strategy will enable the Company to recruit more aggressively. PMH Alliance has already delivered in this respect.

The Company will adopt a similar approach to General Insurance business with the eventual aim of giving our Advisers the opportunity to place all their business via the Company.

Our IT platform will play a key role in this endeavour. Advisers will be much more likely to put all their business through the Company if the technology takes away both expense and bureaucracy leaving them with very efficient straight through processing. I have already mentioned how our back office platform, ATLAS, has continued to be successfully developed and how we have made a considerable investment in training our Advisers to make good use of the system. This is now paying off. ATLAS was developed by our wholly owned subsidiary, IntelliFlo and the version of ATLAS available to other IFA organisations, Intelligent Office, is attracting a great deal of interest.

Away from the UK our subsidiary, Inter-Alliance International, has made good progress. With a restructuring programme comparable to that in the UK (relocation of the Head Office to Cyprus, development of the Middle East, restructuring of the African business, expansion in the Far East and the launch of a new global network Inter-Alliance WorldNet), Inter-Alliance International has done superbly to implement these changes and, at the same time, raise gross revenue by 2m to 5m in 2003.



Current Trading

The directors were pleased with trading performance in the first quarter and to date. By the end of March the number of UK based Advisers had increased to 1,214, the volumes of both submitted and issued business were significantly up by 23% on the comparable period last year and the gross margin rates are marginally ahead of last year, in line with managements expectations. The directors believe these results are to some extent a consequence of an improving market but are also derived from the actions taken in the second half of 2003 to restructure the Group.

Whilst certain identified cost saving plans, amounting to approximately 2m annualised, were deferred pending the outcome of the aborted merger talks with BBB (where deal abort costs of approximately 1m were incurred) others continue to be implemented, including the relocation of the Swindon support centre to Cirencester, exit from the third floor lease in Wimbledon and the closure of 10 additional operating locations. The directors therefore expect the groups annualised cost base to be approximately 20m by the end of the current year. The deferral of these cost savings and the further investment in the development of the mortgage proposition will delay the Groups achievement of positive cash flow and monthly profitability, with the full benefit coming through in 2005.

As a consequence of the year end audit and following recent discussions with the FSA it has been determined that the corporate structure of the group, which consists of both regulated and unregulated companies, should be revisited to make more efficient use of capital and particularly by addressing the regulated status of the plc holding company. This will enhance the Groups ability to meet the regulatory threshold conditions.


Going Concern

The case for consolidation in our Sector (in terms of benefits to Inter-Alliance shareholders, to our staff and to our clients) is more compelling than ever. The lengthy discussions with Berkeley Berry Birch Plc confirmed this and the breakdown of these discussions did not discourage the directors nor affect their judgement of the benefits of finding a good merger partner. Fortunately, we were able to renew discussions with Millfield Group Plc who we have always judged to offer the best fit for us.



The Boards of the two companies appreciate the importance of both securing funding for the merger and of meeting FSA requirements. On the former, we have obtained written commitments to make available the necessary funds and to have the proposals put to the FSA. We are now awaiting the FSAs decision which, quite rightly, needs to be taken through a series of processes.

This merger is our preferred option. Because of this, we have not been able to provide our auditors with sufficient evidence surrounding the certainty of these outstanding processes or the certainty of adequate funding in the event the merger does not proceed. Accordingly, in the circumstances, they have no option but to qualify this aspect of our accounts.



Prospects

The factors mentioned in our 2003 Interim Report as being causes for optimism within the IFA distribution business are now even closer. The preparations for the post polarisation world are now advanced and the pros and cons of the various Wrap propositions are now even clearer.

In our 2003 half year statements, we wrote that Inter-Alliance was particularly well placed to take advantage of such developments because of our scale and our brand. The merger with Millfield Financial Group Plc will increase our edge in both regards.

We can now focus all our resources on the significant opportunities before us. Turning around Inter-Alliance has been a very expensive and demanding undertaking. I would like to state the Boards gratitude to our shareholders, staff, and Advisers. I have no doubt that the investment made by all concerned in the last two years will produce an attractive return in the foreseeable future.



KA Carby

Chairman and Chief Executive



Directors
Keith Carby, aged 57
Chairman and Chief Executive

Keith was appointed to the Board as Non-Executive Director in January 2001 and became Chairman and Chief Executive in January 2002. Keith has over 20 years experience in the financial services industry and previous positions include Managing Director of Allied Dunbar plc and co-founder and Managing Director of J. Rothschild Assurance Plc (JRA). JRA subsequently reversed into St. Jamess Place Capital. He is Chairman of the board of Alumni at Said Business School, Oxford University, a Fellow of the Life Insurance Association and Chairman of the Life Assurance Associations Charitable Trust.



Michael Burne LLB, aged 33
Legal Director

Michael was appointed as Legal Director of the Company in December 2002. He qualified as a Solicitor with Denton Hall before joining Allen & Overy in their Intellectual Property department. He joined St Jamess Place Capital Plc, formerly JRA, in 1998 as a solicitor, becoming Head of Legal in 2000. More recently he has led that Companys Business Development team responsible for the strategic development of new market opportunities.



Steven Hartley ACA, aged 44
Finance Director

Steven Hartley was appointed as Finance Director of Inter-Alliance Group PLC on 19 June 2003. Steven qualified as a Chartered Accountant at BDO Stoy Hayward and was admitted to Partnership in 1990, where he built a successful Corporate Finance team. In 1995 he left to found Euro Sales Finance plc, where he was Chief Financial Officer.



Gerard Moore, aged 47
Operations Director

Gerard was appointed Operations Director in December 2002, having joined Inter-Alliance as Group Development Director in August 2002. He has 25 years financial services experience, initially with Alliance and Leicester. He joined Allied Dunbar in 1987, where his career spanned Investment Marketing and Management Development before becoming manager of the Practice Development Division. Gerard left to join J. Rothschild Assurance in 1991 as Head of Training and Development, progressing to Executive Director Human Resources.



Carey Shakespeare, aged 49
Marketing Director

Carey was appointed to the Board as Marketing Director in January 2003. He has over 29 years financial services experience, including Hambro Life (later Allied Dunbar). In 1991 Carey was a founder member of J. Rothschild Assurance, now St. Jamess Place Capital Plc and joined Inter-Alliance at the start of August 2002 having been Executive Director for Marketing at St. Jamess Place Capital Plc.



Alan Curtis FIA, aged 56
Non-Executive Director

Alan was appointed to the Board as Non-Executive Director in June 2000. He is a qualified actuary and is employed by Credit Lyonnais Securities in the mergers and acquisitions department to advise on developments in the insurance industry and has held previous positions as a leading insurance sector analyst.



Tom Morton FCA, aged 52
Non-Executive Director

Tom Morton was appointed a non-executive director of Inter-Alliance Group PLC on 24 October 2003. Tom is a Chartered Accountant and was formerly a partner with PricewaterhouseCoopers. Tom Morton is now a Trustee of a Company Pension Fund and also a number of trusts for specific clients. He consults on mergers and acquisitions. As a former Non-Executive Director of HST Financial plc (now part of the Inter-Alliance Group), Tom has extensive experience of the IFA sector.



Directors Report
Financial Statements

The directors present their annual report and the audited consolidated financial statements for the year ended 31 December 2003.



Principal Activity

The principal activity of the Group and the Company, is that of an Independent Financial Services Group operating in the UK and internationally. The subsidiary and associated undertakings principally affecting the results and net assets of the Group in the year are listed in Notes 16 and 17 to the Financial Statements.



Review of Business and Future Development

The results for the year are set out in the consolidated Profit and Loss account on page 14. The review of the business for the year ended 31 December 2003, and subsequent developments are included in the Chairman and Chief Executives Statement. Details of the prior year adjustments and post balance sheet events are included in Notes 28 and 35 respectively.



Dividends and Transfer to Reserves

The directors do not recommend payment of a dividend for the current year (2002: Nil) and therefore the Group deficit for the year after taxation, exceptional items and minority interest which amounted to 33.5 million (restated 2002: loss of 17.7 million) will be transferred from reserves.



Directors

The directors during the reporting period under review and up to the date of this report were as follows:



KA Carby


M Achilles
(resigned 13 May 2004)

MJ Burne


SM Hartley
(appointed 19 June 2003)

PM Lockyer
(resigned 13 May 2004)

GT Moore


AG Curtis


TM Morton
(appointed 24 October 2003)

V Isaacs
(resigned 24 October 2003)

C Shakespeare
(appointed 1 January 2003)



The directors interests in the Companys shares and share options are set out in the Directors Remuneration Report on page 11. The directors do not have any interests in the issued share capital of the subsidiary undertakings. Michael Burne and Carey Shakespeare retire by rotation in accordance with Article 93 of the Companys Articles of Association. Michael Burne and Carey Shakespeare, being eligible will be proposed for re-election at the Annual General Meeting. Tom Morton having been appointed by the directors since the last Annual General Meeting will be proposed for election at the forthcoming Annual General Meeting. The Company has purchased directors and officers insurance on behalf of its directors and officers.



Workplace and Employees

Inter-Alliance employs people throughout the UK and is committed to equality in all aspects of working life. Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

We recognise the importance of all our staff and advisers having a voice in our organisation, where feedback is valued. We encourage an open-door management policy, where all members of our community feel able to converse with senior management. Inter-Alliance believes in conducting its business in a socially responsible manner in respect of our environment, our employees, our customers, our shareholders and our local communities.



Supplier Payment Policy

The Companys policy, which is also applied to the Group, is to agree terms of payment with suppliers when agreeing the terms of each transaction, to ensure that suppliers are made aware of the terms of payment and abide by the terms of payment. Trade creditors of the Company at 31 December 2003 were equivalent to 22 (2002 23) days purchases, based on the average daily amount invoiced by suppliers during the year.





Substantial Shareholdings

As at 7 June 2004, the Company had been notified, in accordance with sections 198 and 208 of the Companies Act 1985, of the following interests in the ordinary share capital of the Company:

Shareholder
Ordinary shares
% holding

Henderson Global Investors Limited
134,166,500
14.78%

SG Asset Management Limited
83,804,199
9.23%

Artemis Fund Managers Limited
75,602,752
8.32%

Insight Investment Management Limited
72,361,451
7.97%

Gartmore Fund Managers Limited
39,122,705
4.30%

Friends Provident Life and Pensions Limited
40,549,980
4.47%

Ruffer Investment Management Limited
36,500,000
4.02%


At 7 June 2004 there were a total of 907,895,248 ordinary shares in issue.





Share Capital Movements

The movements in share capital are set out in Note 27.



Auditors

During the year Deloitte & Touche transferred their business to a limited liability partnership, incorporated under the Limited Liability Partnership Act 2000, known as Deloitte & Touche LLP. The directors have used the Companys statutory power to give consent to the appointment of Deloitte & Touche being treated as extending to Deloitte & Touche LLP.



Money Laundering

Inter-Alliance is committed to comply fully with the money laundering requirements and anti-terrorist legislation as stated in the Financial Services and Markets Act 2000. We take steps to ensure compliance with obligations in respect of money laundering prevention and detection by applying a training process for all customer-facing staff that addresses internal controls, record keeping requirements and the procedure for reporting suspicious events. The Group Compliance Officer is the appointed Money Laundering Officer.



Charitable and Political Donations

There were no charitable or political donations made directly by the Group (2002: Nil).



Directors Responsibilities

United Kingdom company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and Group at the end of the financial year and of the profit or loss of the Group for that period. In preparing those financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

state whether applicable accounting standards have been followed; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in operational existence for the foreseeable future.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and Group and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for the system of internal control and safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.



Share Capital

Section 142 of the Companies Act provides that, where the net assets of a public company are half or less than its called up share capital, the directors of the company shall convene an EGM to consider whether action should be taken to deal with the situation. The directors called such an EGM that took place on 11 August 2003. Having complied with their statutory obligations to notify shareholders, the directors are continuing to consider what, if any, steps should be taken.



Going Concern

The directors have undertaken a process to satisfy themselves that the Group will be a going concern for not less than twelve months after the date of approval of these financial statements as more fully explained in Note 1.



This report was approved by the Board on 30 June 2004.



MJ Burne LLB

Company Secretary




Corporate Governance Report
Inter-Alliance is committed to developing and adhering to high standards of corporate governance. As an AIM listed Group, Inter-Alliance is not obliged to comply with the Combined Code as issued by the UKs Listing authority. However, the Company follows the principles for good governance laid out in the Combined Code, where appropriate for an organisation of its size and nature. The Board has adopted the Institute of Chartered Secretaries and Administrators guidance in respect of the Terms of Reference for the Audit, Remuneration and Nomination Committees.



The Board

The Board is currently made up of five executive and two non-executive directors. The non-executive directors are each independent and both bring varied experience to the Board. There is a formal written schedule of matters reserved for the Boards decisions. The Board is responsible for setting overall Group strategy and policy, monitoring Group performance and authorising significant transactions. The Articles of Association provide that directors are subject to re-election at the first Annual General Meeting following their appointment and thereafter one third of the Board retires by rotation every year.

The Board meets a minimum of six times a year, although it met more frequently than this during 2003. In addition, an executive management group established in January 2003 meets at least fortnightly to review operational and strategic issues and reports to the Board to ensure performance against plans is monitored effectively.

All directors have access to the advice and services of the Company Secretary and any appropriate external professional advisers.



Nomination Committee

The Nomination Committee consists of Tom Morton (Chairman), Keith Carby and Alan Curtis. Vincent Isaacs was also a Committee Member until his resignation from the board on 24 October 2003. The committee meets to review the size and composition of the Board and to be responsible for identifying and nominating for the approval of the Board, candidates to fill board vacancies as and when they arise. The Committee met during the year to consider the appointments of Steven Hartley and Tom Morton to the Board.



Audit Committee

The audit committee consists of Alan Curtis (Chairman) and Tom Morton (Non-Executive Director). Vincent Isaacs was Chairman of the Committee until his resignation from the board on 24 October 2003. The Committee is responsible for monitoring the integrity of the Groups annual report and financial statements, ensuring full involvement of the auditors and compliance with accounting standards and legal requirements.



Remuneration Committee

The Remuneration Committee consists of Tom Morton (Chairman) and Alan Curtis. Vincent Isaacs was also a Committee Member, until his resignation from the board on 24 October 2003. The Committee is responsible for determining and agreeing with the Board the framework or broad policy for the remuneration of the Companys Chairman and Chief Executive and all other board members. In addition, the Committee reviews the design of all share and other incentive plans for approval by the Board and, where appropriate, shareholders and determines the overall amount of such awards and individual awards to executive directors. The Directors Remuneration Report is detailed on pages 11 to 13.



Risk Management

The Board places a high priority on the management of risk and the development of suitable corporate policies to manage and control risk. The Policy and Risk Review Group, comprising Gerard Moore, Philip Lockyer (resigned 13 May 2004), Michael Burne and the Group Compliance Officer, was reconstituted in January 2004 as the Regulatory Risk Review Committee. The primary objective of the Regulatory Risk Review Committee (RRRC) is to ensure that the Board, senior management team and all Approved Persons are positioned to take appropriate decisions and to ensure that relevant policies are put in place to meet the Companys regulatory responsibilities. In addition, in February 2004 the Board resolved to create a Risk Committee as a formal committee of the Board to ensure that full consideration is given to all risks within the Group. The RRRC will report to the Board Risk Committee. Keith Carby, Michael Burne, Gerard Moore and Steven Hartley comprise the membership of the Board Risk Committee.



Financial Assets

The Group does not enter into derivative or hedging transactions and had no material foreign currency assets or liabilities at 31 December 2003. The Group policy is to maximise investment income by investing surplus funds in short-term deposits or liquidity funds where exposure to fluctuating returns and liquidity risks can be minimised. There are no material differences between the book value and fair value of the Groups financial assets and liabilities at 31 December 2003, details of which are included in Note 38 to the financial statements.



Internal Controls

The primary responsibility of the Board is to maintain internal control systems and a framework to ensure the Companys assets and shareholders investments are protected.

The main components of the Companys internal controls are:

the Board has implemented an organisational structure, accompanied by job descriptions at management level, that clearly allocates responsibility for internal controls and processes;

the Company reviews its financial controls and procedures as required to ensure they continue to be appropriate for the business environment;

the financial control and reporting systems include the preparation of detailed operating and financial budgets and forecasts for each group company. Monthly management accounts are prepared and compared against these budgets and forecasts to provide appropriate management and performance information to the Board and executive management; and

the Regulatory Risk Review Committee meets monthly to oversee the maintenance of risk management control policies and the management of group-wide regulatory risk.

The Board has kept under review the need for an Internal Audit function and it is anticipated that this will be created in the current year.




Directors Remuneration Report


As an AIM listed company, the Directors Remuneration Report Regulations do not formally apply. However, we voluntarily disclose the following information.



Unaudited Information

The Group applies the Principles of Good Governance relating to directors remuneration to:

ensure that the executive directors of the Group are fairly rewarded for their individual contribution to the overall performance of the Group; and

demonstrate to shareholders that the remuneration of the executive directors and other senior executives of the Group was determined by members of the Board who had no personal interest in the outcome of their decisions and had due regard to the shareholders interests.



Procedures for Developing Policy and Fixing Remuneration

The Board has shown a commitment to formal procedures for developing a remuneration policy, fixing executive remuneration and ensuring that no director is involved in deciding his or her own remuneration. The Remuneration Committee is authorised to obtain such outside professional advice and expertise as it considers necessary, and consults with the chief executive of the Company. The Remuneration Committee is authorised by the Board to investigate any matter within its terms of reference. It is authorised to seek any information that it requires from any employee.



Details of the Remuneration Policy

The basic salaries to be paid to the executive directors are decided by the Remuneration Committee. The Remuneration Committee also considers pension arrangements and other benefits, any bonuses and any other element of remuneration that is performance-related.



Share Options

Options are awarded in order to motivate executives, staff and IFAs. The Remuneration Committee supervises the share option schemes, approves the exercise price of options, the performance criteria to be satisfied before exercise is permitted, and monitors the effectiveness of the share option schemes as an incentive.



Directors Contracts

The executive directors have service contracts with twelve-month notice periods. Alan Curtis and Tom Morton have contracts terminable on three months notice. All the contracts can be terminated by mutual consent should circumstances dictate. There is no provision for compensation on termination of the appointment.



Remuneration of Non-Executive Directors

The remuneration for non-executive directors is determined by the Board. Non-executive directors do not receive any pension or other benefits, nor do they participate in share option schemes. Their level of remuneration is based on outside advice and a review of current practices in other companies.



Audited Information

Remuneration of Directors

Directors remuneration for the year excluding compensation for loss of office and pension contributions was as follows:


2003
2002


Total
Total


000
000

KA Carby
183
169

M Achilles
106
97

MJ Burne
109
8

SM Hartley
93


PM Lockyer
191
57

GT Moore
129
54

C Shakespeare
124


AG Curtis*
25
25

TM Morton*
5


V Isaacs*
21
26

SD McGreevy

10

MF Williamson

62

DV Garofalo

11


986
519


*Non-executive



Directors Interests

The interests of the directors holding office on 31 December 2003 in the issued share capital of the Company were as follows:



Later of



31 December



2002


31 December
or date of

Ordinary shares of 1p each
2003
appointment

KA Carby*
6,250,000


M Achilles



MJ Burne



SM Hartley
2,500,000


PM Lockyer
5,064,165
1,314,165

GT Moore



C Shakespeare



AG Curtis



TM Morton




* Various family trusts in which KA Carby has no beneficial interest held 1,093,747 shares at 31 December 2003 (31 Dec 2002; 1,093,747).



There have been no changes to directors interests in the issued share capital of the Company since 31 December 2003.



Share Options

The Remuneration Committee took an active role in reviewing the Companys share option plans. The Committee considered that the value of the Companys share options granted to IFAs and employees had become negligible and as such did not provide the incentive to IFAs and employees that is intended for such schemes. The Committee recognised that in a service business, the retention and motivation of the Companys IFAs and key employees is vital in securing business growth and delivering shareholder value. Consequently, the Remuneration Committee made new proposals to the Board to replace the schemes that were currently in place with arrangements that would reward outstanding performance.

Accordingly, the Company offered option holders the chance to voluntarily surrender their existing share options. As a result, options over 19,990,554 ordinary shares of 1p each were surrendered. This includes the options surrendered by the directors and the Long Term Incentive Plan (LTIP) of 4,193,654 options surrendered by KA Carby. On 14 and 21 November 2003 and on the recommendation of the Remuneration Committee, the Company re-granted or granted options over 79,158,569 Ordinary Shares at the mid-market closing share price of 2.875 pence to all eligible option holders (including the directors) who surrendered their options and to new option holders respectively.



Directors Share Options

The Remuneration Committee believed, for the reasons stated above, that the options held by directors also needed to be replaced. Accordingly, the directors surrendered all of their existing options, including the LTIP, set out in the table below.

Name
Date of grant
Option price
Date of surrender
No. of shares under option

M Achilles
28 September 2001
86p
14 November 2003
232,558

MJ Burne
3 December 2002
109p
14 November 2003
125,000

KA Carby LTIP
7 March 2002
55p
14 November 2003
4,193,654

PM Lockyer
1 September 2002
105.5p
14 November 2003
218,009

GT Moore
1 August 2002
107.5p
14 November 2003
230,000

C Shakespeare
1 August 2002
107.5p
14 November 2003
100,000


31 December 2002
109p
14 November 2003
50,000




The directors were granted 30 million new options, for nil consideration, but with exercise being subject to stringent performance conditions which were set and will be monitored by the Remuneration Committee. These options are detailed in the table below.


Share option
Date of
Option
No. of shares

Earliest date
Latest date

Name
scheme
grant
price
under option
Total
exercisable
exercisable

M Achilles
Approved
14 November 2003
2.875p
1,043,478

1 January 2007
13 November 2013


Unapproved
14 November 2003
2.875p
1,956,522
3,000,000
1 January 2007
13 November 2013

MJ Burne
Approved
14 November 2003
2.875p
1,043,478

1 January 2007
13 November 2013


Unapproved
14 November 2003
2.875p
1,956,522
3,000,000
1 January 2007
13 November 2013

KA Carby
Approved
14 November 2003
2.875p
1,043,478

1 January 2007
13 November 2013


Unapproved
14 November 2003
2.875p
8,956,522
10,000,000
1 January 2007
13 November 2013

SM Hartley
Approved
14 November 2003
2.875p
1,043,478

1 January 2007
13 November 2013


Unapproved
14 November 2003
2.875p
2,956,522
4,000,000
1 January 2007
13 November 2013

PM Lockyer
Approved
14 November 2003
2.875p
1,043,478

1 January 2007
13 November 2013


Unapproved
14 November 2003
2.875p
2,956,522
4,000,000
1 January 2007
13 November 2013

GT Moore
Approved
14 November 2003
2.875p
1,043,478

1 January 2007
13 November 2013


Unapproved
14 November 2003
2.875p
1,956,522
3,000,000
1 January 2007
13 November 2013

C Shakespeare
Approved
14 November 2003
2.875p
1,043,478

1 January 2007
13 November 2013


Unapproved
14 November 2003
2.875p
1,956,522
3,000,000
1 January 2007
13 November 2013

Total




30,000,000








Consolidated Profit and Loss Account

for the year ended 31 December 2003








After



Before

After
Before
Exceptional
Exceptional



Exceptional
Exceptional
exceptional
exceptional
items
Items



items
items
items
items
restated
Restated



2003
2003
2003
2002
2002
2002


Note
000
000
000
000
000
000

Turnover
1,2







Existing operations

61,469

61,469
51,499

51,499

Acquisitions

2,150

2,150




Continuing operations

63,619

63,619
51,499

51,499

Discontinued operations




429

429



63,619

63,619
51,928

51,928

Cost of sales
3
(47,639)

(47,639)
(41,738)

(41,738)

Gross profit

15,980

15,980
10,190

10,190

Other operating expenses (net)
3,5,7
(36,009)
(7,004)
(43,013)
(21,170)
(1,505)
(22,675)

Operating loss
2
(20,029)
(7,004)
(27,033)
(10,980)
(1,505)
(12,485)

Existing operations

(19,860)
(7,004)
(26,864)
(10,893)
(1,505)
(12,398)

Acquisitions

(169)

(169)




Continuing operations

(20,029)
(7,004)
(27,033)
(10,893)
(1,505)
(12,398)

Discontinued operations




(87)

(87)



(20,029)
(7,004)
(27,033)
(10,980)
(1,505)
(12,485)

Share of net operating loss of associates
6,7
(728)
(4,706)
(5,434)
(1,519)
(139)
(1,658)

Profit on sale of subsidiary
discontinued operations




278

278

Costs of a fundamental restructuring
continuing operations
7

(1,149)
(1,149)

(4,154)
(4,154)

Loss before interest and taxation

(20,757)
(12,859)
(33,616)
(12,221)
(5,798)
(18,019)

Net interest receivable/(payable) and similar income/(charges)
8







Group

166

166
297

297

Associates

(12)
(49)
(61)
(52)

(52)

Loss on ordinary activities before taxation
5,6
(20,603)
(12,908)
(33,511)
(11,976)
(5,798)
(17,774)

Tax on loss on ordinary activities
9



18

18

Loss on ordinary activities after taxation

(20,603)
(12,908)
(33,511)
(11,958)
(5,798)
(17,756)

Minority interests
30
36

36
28

28

Loss for the financial year

(20,567)
(12,908)
(33,475)
(11,930)
(5,798)
(17,728)










Basic and diluted loss per share
11


(7.8p)


(21.3p)




There are no recognised gains or losses in either year other than the loss for each financial year.

There is no material difference between the result disclosed in the consolidated profit and loss account and the result on an unmodified historical cost basis for both periods.

The accompanying notes are an integral part of this consolidated profit and loss account.



Consolidated Balance Sheet

31 December 2003




Restated



2003
2002


Note
000
000

Fixed assets




Trademark
12
2
2

Goodwill
13
12,078
12,826

Intangible assets

12,080
12,828

Tangible assets
14
3,223
5,494



15,303
18,322

Current assets




Debtors




due within one year
19
5,575
8,024

due after one year
20
2,096
652

Investments
21
6,092


Cash at bank and in hand
22
4,314
8,080



18,077
16,756

Creditors: amounts falling due within one year
23
(12,445)
(9,679)

Net current assets

5,632
7,077

Total assets less current liabilities

20,935
25,399

Creditors: amounts falling due after more than one year
24
(601)
(564)

Provisions for liabilities and charges
25
(1,894)
(2,092)

Net assets

18,440
22,743






Capital and reserves




Called up share capital
27, 28
9,079
1,033

Share premium account
28
95,573
74,106

Own shares reserve
28
(1,429)
(1,429)

Share option reserve
28
858
796

Merger reserve
28
130
130

Shares to be issued reserve
28
70
470

Profit and loss account
28
(85,838)
(52,363)

Shareholders funds equity interests
29
18,443
22,743

Equity minority interests
30
(3)


Total capital employed

18,440
22,743




The accompanying notes are an integral part of this consolidated balance sheet.

The financial statements on pages 14 to 45 were approved by the Board on 30 June2004 and signed on its behalf by:

KA Carby SM Hartley

Chairman Director





Company Balance Sheet

31 December 2003




Restated



2003
2002


Note
000
000

Fixed assets




Intangible assets Trademark
12
2
2

Tangible assets
14
127
4,168

Investments in subsidiary undertakings
16
15,474
14,456



15,603
18,626

Current assets




Debtors




due within one year
19
7,815
7,541

due after one year
20
2,022
652

Investments
21
6,092


Cash at bank and in hand
22
1,757
6,988



17,686
15,181

Creditors: amounts falling due within one year
23
(12,188)
(9,539)

Net current assets

5,498
5,642

Total assets less current liabilities

21,101
24,268

Creditors: amounts falling due after more than one year
24
(448)
(448)

Provisions for liabilities and charges
25
(1,615)
(1,154)

Net assets

19,038
22,666






Capital and reserves




Called up share capital
27, 28
9,079
1,033

Share premium account
28
95,573
74,106

Own shares reserve
28
(1,429)
(1,429)

Share option reserve
28
858


Profit and loss account
28
(85,043)
(51,044)

Shareholders funds equity interests

19,038
22,666




The financial statements on pages 14 to 45 were approved by the Board on 30 June 2004 and signed on its behalf by:

KA Carby SM Hartley

Chairman Director





Consolidated Cash Flow Statement

for the year ended 31 December 2003



2003
2002


Note
000
000

Net cash outflow from operating activities
31
(25,239)
(21,944)

Returns on investments and servicing of finance
32
19
297

Taxation
32



Capital expenditure
32
(658)
(3,929)

Acquisitions and disposals
32
(1,337)
(3,274)

Cash outflow before financing

(27,215)
(28,850)

Management of liquid resources
32
(6,000)


Financing
32
32,565
28,007

Decrease in cash in the year

(650)
(843)




The accompanying notes are an integral part of this consolidated cash flow statement.







Notes to the Financial Statements

for the year ended 31 December 2003



1 Accounting Policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the year and the preceding year other than the accounting for the ESOP which is described below.



Basis of Accounting

The financial statements have been prepared under the historical cost convention and in accordance with applicable United Kingdom law and accounting standards.

The directors are committed to the consolidation strategy that they believe is vital to create a distribution organisation capable of generating long-term financial returns. In following that strategy, the directors have recently announced merger discussions with Millfield Group plc (Millfield) and are devoting their energies to pursuing these discussions in order to achieve a merger with Millfield.

In anticipation of and in supporting the proposed merger, written commitments have been received to provide working capital funding for the enlarged group subject to Financial Services Authority (FSA) approval and the conclusion of the merger. As a gesture of these commitments one third of such funding has been advanced to be split equally between the Company and Millfield. The FSA has been kept informed of the funding proposals and an application for individual guidance is believed to be imminent. Assuming a successful conclusion of the merger discussions between Millfield and the Company, FSA approval of a change of control application will be required and this will be anticipated to be addressed by the FSA within three months of submission. If the FSA gives the individual guidance on the funding proposals and the merger proceeds, the directors believe the Company would be able to support its going concern status for at least twelve months from the date of approval of these financial statements.

Notwithstanding the background of the merger discussions, the directors are nonetheless obliged to assess the Companys status as a going concern on a stand-alone basis.

In the event the merger does not proceed the directors have initiated preliminary contact with the FSA about a group reorganisation to make more efficient use of capital. In addition, the directors have maintained a number of other strategic options to ensure that the company will continue as a going concern. This is likely to require an alternative source of funding to provide an adequate level of working and regulatory capital.

Whilst there can be no certainty in relation to the outcome of the FSAs deliberations or the merger process, and therefore the presence of funding in the absence of a merger, the directors, having considered all of the above, have confirmed their opinion that the accounts should be prepared on a going concern basis.

Basis of Consolidation

The Group financial statements consolidate the financial statements of Inter-Alliance Group PLC and its subsidiary undertakings drawn up to 31 December each year. The results of subsidiaries acquired or sold are consolidated for the periods from or to the date on which control passed. Acquisitions are accounted for under the acquisition method.

In the Group financial statements investments in associates are accounted for using the equity method. The consolidated profit and loss account includes the Groups share of associates profits less losses.

As permitted by section 230 (4) of the Companies Act 1985, no separate profit and loss account is presented in respect of the parent company.



Turnover

Turnover represents commissions and fees earned excluding value added tax. Commission is recognised on the inception of the policy.



Goodwill

Goodwill arising on the acquisition of subsidiary undertakings and businesses representing any excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight-line basis over its useful economic life, up to a maximum of twenty years. Provision is made for any impairment.



Investments

Fixed asset investments are shown at cost less provision for impairment. In the Company balance sheet, for investments in subsidiaries acquired for consideration including the issue of shares qualifying for merger relief, cost is measured by reference to the nominal value only of the shares issued and any premium is ignored. Current asset investments are stated at the lower of cost and net realisable value.

Intangible Fixed Assets

Trademarks and patents are capitalised and written off on a straight-line basis over their useful economic life, up to a maximum of twenty years. Provision is made for any impairment.



Tangible Fixed Assets

Tangible fixed assets are stated at cost net of depreciation and any provision for impairment. Depreciation is provided at the following annual rates in order to write off each asset to its residual value over its estimated useful life.

Fixtures and fittings 25% on reducing balance
Computer equipment 25-33% straight line
Motor vehicles 25% reducing balance



Finance Costs

Finance costs of debt are recognised in the profit and loss account over the term of such instruments at a constant rate on the carrying amount.



Debt

Debt is initially stated at the amount of the net proceeds after deduction of issue costs. The carrying amount is increased by the finance cost in respect of the accounting period and reduced by payments made in the period. Convertible debt is reported as a liability unless conversion actually occurs. No gain or loss is recognised on conversion.



Foreign Currencies

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rate of exchange ruling on the balance sheet date and gains and losses on translation are included in the profit and loss account. Transactions in foreign currencies are translated into sterling at the rate of exchange on the date of the transaction. Profits and losses of the overseas subsidiaries are translated into sterling using average rates of exchange. The assets and liabilities of the overseas subsidiaries are translated at the rate of exchange ruling at the balance sheet date and exchange differences arising on translation of net assets are taken directly to the profit and loss account.



Taxation

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Groups taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements. A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the potential reversal of the underlying timing differences can be deducted.



Operating Leases

Rentals paid under operating leases are charged on a straight-line basis over the lease terms.



Pensions

The Company operates a money purchase pension scheme where the amount charged to the profit and loss account in respect of pension costs and other post-retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.



Share Options

The Group accounts for the costs of share-based instruments on a fair value basis, computed by reference to the grant date. These costs are expensed over any performance period to which the award relates. The amounts are charged to the profit and loss account, or to goodwill where relevant, and credited to reserves where applicable.



Employee Share Option Plan (ESOP) Prior Year Adjustment

ESOP assets and liabilities over which the Company has defacto control are recognised by the Company in its own accounts. The Group has adopted UITF Abstract 38 Accounting for ESOP trusts and applied the accounting treatment required by UITF Abstract 17 Purchases and sales of own shares for own shares purchased and held as treasury shares to shares in the Company acquired by the ESOP. The Company has recorded a prior year adjustment to reflect the transfer of the cost of investments in own shares by the ESOP to an Own shares reserve as a deduction from shareholders funds in prior years (See Note 28). The prior year adjustment does not impact on the profit and loss account.



2 Segment Information

The directors consider that there is only one class of business and all results are attributable to the principal activity of the Group.

There is no material difference between the origin and destination of turnover.



United Kingdom

Rest of the World

Group



Restated



Restated


2003
2002
2003
2002
2003
2002

Geographical Segments 000
000
000
000
000
000

Turnover by destination:







Sales to third parties
58,679
48,920
4,940
3,008
63,619
51,928

Segment and operating loss







Segment and operating loss
(26,785)
(12,364)
(248)
(121)
(27,033)
(12,485)

Share of associates operating loss
(5,434)
(1,658)


(5,434)
(1,658)

Costs of a fundamental restructuring
(1,149)
(4,154)


(1,149)
(4,154)

Gain on disposal of subsidiary



278

278

Interest receivable and similar income (net)




105
245

Loss on ordinary activities before taxation




(33,511)
(17,774)









Net assets
18,413
22,192
27
551
18,440
22,743





Acquisitions and Disposals:

The analysis presented above includes the following amounts in respect of operations acquired during the year:



Inter-Alliance



Worldnet


Mortgage.com
Limited


United
Rest of the


Kingdom
World


000
000

Sales to third parties



by destination
185
1,965

Segment and operating loss
(132)
(37)

Segment net assets
(137)
(36)


In addition, HST Financial Limited and its subsidiaries acquired by the Company on 6 August 2002 contributed third party turnover of 15,682,000 (2002: 6,204,000)

and operating profit before goodwill amortisation of 228,000 (2002: 416,000 loss) towards continuing operations.





3 Cost of Sales, Gross Profit and other Operating Expenses (Net)


2003

2002


Continuing
Continuing
Discontinued



Operations
Operations
Operations
Total


000
000
000
000

Cost of sales
(47,639)
(41,467)
(271)
(41,738)

Gross profit
15,980
10,032
158
10,190

Administrative expenses-normal
(36,251)
(20,925)
(245)
(21,170)

Administrative expenses-exceptional
(7,205)
(2,323)

(2,323)

Administrative expenses
(43,456)
(23,248)
(245)
(23,493)

Other operating income-normal
242




Other operating income-exceptional
201
818

818

Other operating income
443
818

818

Other operating expenses (net)
(43,013)
(22,430)
(245)
(22,675)



Exceptional items included in administrative expenses and other operating income within continuing operations are detailed in Note 7.





4 Staff Costs

The average monthly number of employees of the Group (including executive directors) was:


2003
2002


Number
Number

Administration
427
247





Their aggregate remuneration comprised:




000
000

Wages and salaries
11,590
8,009

Social security costs
1,216
821

Other pension costs
214
136


13,020

Company INTER-ALLIANCE GROUP PLC ORD 1P
TIDM IAL
Headline Inter-Alliance makes 'significant' progress in 2003
Released 18:43 30-Jun-04
Number 184345.30062004



LONDON (AFX) - Inter-Alliance Group PLC said it has made significant progress in 2003.

Gross revenue increased 22.5 pct during the year and, since the start of the restructuring programme in January 2002, the board said it has seen encouraging growth in the number of Advisers as well as improvements in productivity.

Inter-Alliance is in merger talks with Millfield Group PLC and it said a successful conclusion to these discussions can only augment its position in a consolidating marketplace.

Results for 2003 showed an operating loss before exceptionals of 20 mln stg compared with a loss of 11 mln. Revenue was 63.6 mln stg, up from 51.9 mln and the loss per share was 7.8 pence compared with a loss of 21.3 pence.

The pretax loss was 33.5 mln stg compared with a loss of 17.8 mln.

Significant cost saving actions were undertaken in June, September and at the end of November. These have resulted in a halving of the staff numbers since January 2003, down 297 to 298 at the present time, and in the number of operating premises from 59 to 39 at the year end and 26 at the present time.

The company said these have led to a substantially reduced annualised cash overhead run rate of approximately 24 mln stg at the year end. Further cost reductions amounting to approximately 2 mln scheduled for implementation around the year end were deferred pending merger discussions.


newsdesk@afxnews.com

slm

Well, they could have been worse. Cost saving measures seem to be making an impact.
There's a positive small article in today's Shares Mag that says that if the current merger goes ahead, then it will make sense and IAL can go forward positively.
So, sentiment is slightly better. May see a small tick up in the SP but when the merger goes ahead, then the recovery in the SP should really start to take place. (IMHO)

Over 2 million buys and not a tick up.

Give it a little time.. It'll pop !

hi all,

I believe the sp will recover if the merger goes ahead....which I think it will happen eventually.......

I have placed 500 pound bet in this one on the basis:

bulls signs:

1. lots of big buys from institutions after the first merger was announced
2. some encouraging signs of recovery after reading quick the last results
3. massively oversold
4. consolidation in the marketplace

also there is obviuos bear signs like the operating loss but that was due mainly due to restructuring whic is almost complete. but I think at the present share price, is very attractive for a small bet.

I would like to hear other people bulls views

OAKAPPLE posting no. 10
ican assure you that little reliance can be plaved on the number of shares that are shown as bought or sold, for each and every such transaction there are various rules applied which result in the share transaction then being shown in the market as a buy or a sell.

the fault is that the parties reveal the price of the deal but not whether it is a buy or a sell. that 'decision' is made by the computorat the time the transaction arrives at the computor. the computor compares at that time the market prices with the price of the actual transaction and the computor itself then allocates the deal as a buy or a sell. the price at that time can be different to the price at the time of the deal...so the 'error arises. there are other reasons why the deal can be allocated the wrong way round. so the aggregate of the buy/sell figures for various reasons can be wrong.

perhaps SHARES magazine can prepare an article on this topic...or reprint any previous article

the other false information in the market is that increasing often the mid price shown is not a figure half way between the buy abd sell price.. so often it is the figure of the last automated trade i.e. computor driven trade, thus it can be the case that a mid price shown can be even higher than the current offer price. one of the main speakers at the INVESTORS CHRONICLE seminar at the stock exchange last week was not aware of this misleading data.

perhaps shares magazine can prepare an article to explain that a mid price is not always a price half way between the buy and sell prices.

i see the prices in real time via MARKET EYE....and also the details of the transaction ......but as stated in my above posting a deal may well not be correctly allocated as a buy or a sell

reference the trading of interalliance i see it has 1338 advisers, from my experiance over many years i can say that it is so very difficult getting one sound reliable financial adviser. these chaps are in neary every case just out and out salesmen who thrive by their wits. there true knowledge is very very limited...it fact it is so often limited to those products that show commission. in further fact the greater the commission the greater their knowledge of that product and so the greater eagerness to sell it..

all of this is like a south sea bubble in that one day the punter wakes up and cancels the product and part of the commission gained can be refunded to the product provider.

you should ask interalliance :
what is the average of years of service of financial advisers...my guess is 3 years

if every one cancelled their policies tomorrow how much commission would have to be refunded to the product providers.. i am 100% sure that interalliance are taking into their accounts as income commission before it has been fully'earned'

if interalliance wish to explain the answers to these questions then i shall welcome this

it beats me why anyone should buy shares in this company which has 'will of the wisp' goodwill and intangible assets of this magnitude coupled with 34,000,000 of losses in its last year and 18 million of losses in the previous year.

then look at the 79,000,000 of options granted to IFAs [the advisers!]and employers and a further 30,000,000 of options granted to directors.. all of these options waters down you share values.

surely you can do better than to buy inter alliance shares

10% up today

What's going on here?

Any technical input, apart from mpw777, cause I don't want hear it.

mpw777 - May I ask what your motives are for input on this BB. Would not your interest be better served on a stock you are keen on ?. We all know that this one is a punt but punts can turn into yachts

oakapples posting 26

i know all there is to know about financial advisers and,in particular,about independent financial advisers.

with few exceptions it is all a 'scam' and that includes the product providers...again with some exception of some products of some product providers. everything outside these two areas can be a 'scam'.

as a leading actuary announced yesterday the whole field will be better if there was no commission at all paid.....only specified clear fees and expenses.

i am sure that the salesmen of interalliance do some good.. but so often i guess a big chunk of the initial investment can go in commission and expenses.the products offered can be narrow.
in addition life offices have poured millions into purchasing shares in interalliance...i suppose to gain a flow of business. i guess that that money may have come from the policyholders funds,,,and not from shareholders funds.

there is no aspect of interalliance that excites me ...in fact the opposite applies. i simply put my arguments into the pot!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Things are hotting up merger news imminent

What makes you say so - john50

how do u know?

MPW777.I agree.

look at trades today

check the latest RNS for the merger update