ARGO Group Limited Interim Results for the six -6-

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION

 
                                                  Six months        Six months 
                                                       ended             ended 
                                                30 June 2011      30 June 2010 
                                                     US$'000           US$'000 
 
 Profit on ordinary activities before 
  taxation                                             1,170             1,209 
 
 Interest income                                        (29)              (30) 
 Amortisation of intangible assets                       341               323 
 Depreciation                                             21                52 
 Unrealised gains on investments                       (159)              (53) 
 Net foreign exchange (loss)/gain                          6              (77) 
 Increase/(decrease) in payables                         469           (1,540) 
 (Increase)/decrease in receivables                  (1,379)               537 
 Income taxes paid                                       (7)              (12) 
==========================================  ================  ================ 
 Net cash inflow from operating activities               433               409 
==========================================  ================  ================

12. RELATED PARTY TRANSACTIONS

74% of revenue derives from funds in which two of the Company's directors, Andreas Rialas and Kyriakos Rialas, have an influence through the provision of investment advisory services.

Michael Kloter, the non-executive chairman, is also partner in a legal firm which supplies services to the Group. This firm charged US$11,426 (six months ended 30 June 2010: US$5,192) for services rendered to the Group in the period.

During the period the group has advanced USD 575,000 (EUR 400,000) to Argo Real Estate Opportunities Fund Limited ("AREOF") (to whom it provides investment management services) in order to assist with its operational cash requirements.

The group has also provided AREOF with a notice of deferral, in relation to the above amount and amounts due from the provision of investment management services, under which it will not demand payment of such amounts until the group judges that AREOF is in a position to pay the outstanding liability. These amounts at 30 June 2011 are the above USD 575,000 advance and investment management services fees accrued or receivable of USD 1,198,000 (EUR 833,333), totalling USD 1,773,000 (EUR 1,233,000).

13. CLAIM RELATING TO LAWSUIT AGAINST FORMER GROUP COMPANY

Argo Group Limited ("Argo") had been named as an additional defendant in a lawsuit filed against Absolute Capital Management Holdings Limited (now named ACMH Limited ("ACMH")) and others. The suit had been filed in the United States District Court for the District of Colorado, by an investor in several of ACMH's investment funds. This litigation arose after the demerger of Argo from ACMH. The plaintiff, The Cascade Fund LLP ("Cascade"), had made a number of claims against ACMH and had been seeking to include Argo assets as part of the ACMH asset pool available to it by way of compensation.

In April 2010 the Colorado court dismissed Cascade's action against ACMH for failure to state a claim, following which Cascade filed a second amended complaint. On 31 March 2011 the court dismissed Cascade's second amended complaint and dismissed Cascade's claim against Argo and ACMH in its entirety.

Argo is pleased to report that Cascade did not appeal the order of the Colorado court issued on 31 March 2011 thus concluding the matter.

This information is provided by RNS

The company news service from the London Stock Exchange

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Argo (LSE:ARGO)
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