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Falkland Islands Holdings

Results Year ended 31 March 2014 Continued growth. Falkland Islands Holdings. FKL : Overview. Record Pre-Tax profits £3.65m ( 2013: £3.29m ) Benefits of diversified interests demonstrated FIC: Quieter trading year , continued investment Momart: Record trading performance

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Falkland Islands Holdings

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  1. Results Year ended 31 March 2014 Continued growth Falkland Islands Holdings

  2. FKL : Overview Record Pre-Tax profits £3.65m ( 2013: £3.29m ) Benefits of diversified interests demonstrated FIC: Quieter trading year , continued investment Momart: Record trading performance PHFC: Stable trading – new ferry under construction FOGL :Awaiting 2015 drilling campaign with 5 wells funded 2

  3. FKL : Year ended 31 March 2014Trading Overview • Group revenue up by 7.5% to £38.3m (2013: £35.6m) • Momart : Record result – profits + 53% to £1.8m • FIC : Quieter trading year – no rig activity – profits down £0.3m to £1.0m – further investment • PHFC – Reduced decline in passenger numbers ( -1.6% vs -8.8% ) – profits up 8% to £0.8m • Operating profit £3.9m (2013: £3.5m) +10% • Underlying pre tax profits +11% to new record £3.65m (2013: £3.3m) • Earnings per share on underlying profits 22.0p (2013: 21.3p) • Proposed maintained full year dividend 11.5p per share (2013: 11.5p ) • Cash £5.7m ( 2013 : £11.4m ) • Bank borrowings reduced to £1.0m ( 2013: £2.0m) • Holding of 12.8m shares in FOGL maintained : 1 for every FKL share in issue 3

  4. FKL : Year ended 31 March 2014Trading Overview 4

  5. FKL : Cash & Liquidity 5

  6. FIC : Further progress to First Oil

  7. FIC : Background to Oil – June 2014 • Premier Oil ( PMO ) progressing technical development of Sea Lion • Engineering concept selected Jan 2014 - Tension Leg Platform • Detailed engineering design being progressed • FEED contracts to be awarded by mid 2014 • PMO seeking farm–in partner before final project sanction – in 2015 • PMO undertaking further exploration drilling in North Falklands basin – “ A proven but under explored oil province” • Potentially find Sea Lion extensions and / or identify new prospects in basin • Exploration drilling scheduled Q1/Q2 2015 – minimum 6 wells ( +up to 8 slots ) • Utilising 3D seismic surveys completed in 2013 • 2 wells in Southern basin ( Noble Energy / FOGL acreage ) • 4 in Northern ( Sea Lion extension ) • Temporary dock installed by Noble Energy in Stanley harbour to support offshore drilling.

  8. Falklands : Timeline for Oil Timeline for Oil

  9. FIC : Further progress to First Oil The Noble Energy temporary port facility

  10. FIC : Trading - Year ended 31 March 2014 • Revenue ahead at £15.88million ( 2013: 15.22million ) + 4.3% • Good growth in auto sales ( Falklands 4x4) + 42% • Falkland Building Services – growth in house building ( + £0.64m ) • Stronger cruise ship visitors numbers up by 34% to 39,500 helped H2 sales . • First contribution from SAtCO - Installing Noble Energy temporary dock from March 14 • BUT : retail , property rental and freight income hit by absence of oil rig • Retail sales down £0.5m – 4.8% - margins squeezed with increased costs • Property rental income -25% -£0.1m • Stevedoring and freight income -£0.4m - 23.5% • FIC profits down by £0.3m to £1.0m ( 2013 £1.3m )

  11. FIC : Further progress to First Oil • Hebe Street Houses • Airport Road foundations

  12. FIC : Further progress to First Oil

  13. – FIC : Year ended 31 March 2014

  14. FIC : Year ended 31 March 2014 • Significant £2.7m capital investment during year. • Continued investment in Falklands Building Services – 61 staff now employed • Further work done to modernise Falklands 4x4’s Servicing facilities • Growing WIP & Order book for commission building of kit homes • 4 new houses built in central Stanley to add to rental portfolio • Modernisation of FIC offices at Crozier Place on track, offering attractive office space for external rental and improved Head Office facilities for FIC • Creation of new “Home Builder” Retail Warehouse in progress • New chiller and warehouse / container facilities started at Airport Road • New Property and Retail Directors recruited to strengthen local team • Fitzroy Road apartments redesigned on more cost effective, flexible basis . • FIG plans for Deep Water Port on hold pending green light on Sea Lion

  15. Momart : Building on its Reputation

  16. FIC – Year ended 31 Momart : Overview • Specialist Art Logistics company serving fine art market in the UK & overseas • Market leading position with reputation for quality - high barriers to entry • 3 business streams : • Museum Exhibitions –planning, case making , packing, transport and installation • Commercial Galleries –Logistics services for galleries , artists and auction houses • Storage – 70,000 sq ft of secure warehousing for client storage in East London. • 125 staff – 65 South Quay Canary Wharf , 60 in Leyton . • Fleet of 17 specialist art transport vehicles • Experienced and committed workforce - Royal Warrant holder

  17. Momart : Building on its reputation

  18. Momart: Trading year ended 31 March 2014

  19. Momart: Trading year ended 31 March 2014 • Record result in an exceptional year • Revenue up 12% to £18.3m ( 2013: £16.3m ) • Profits up 53% to £1.83m ( 2013: £1.16m ) • Record Exhibitions revenues + 20% to £10.9m • Wide range of UK and higher margin international shows • Gallery Services – Revenue + 1.3% growth £5.57m • Commercial art market still buoyant • Improved asset utilisation and more selective contract selection lead to improved margins • Storage revenues up 2.6% to £1.83m : facilities effectively full at +93% capacity. • New Finance & Commercial Director recruited September 2013 to strengthen team. • New ERP system leading to faster turnaround of estimates and more commercial pricing – more to come in 2014 with full roll out. • Notable exhibitions : Manet : Royal Academy , Ellen Gallagher : Tate Modern ,Reunion ( Walpole collection from Hermitage ) , David Bowie , Chinese Painting : V&A , Vikings : British Museum and Vienna : National Gallery.

  20. mart: Building on its reputation Momart: Building on its reputation • Closer relationships with major auction houses • Technically demanding, complex ,international exhibitions an increasing source of business • Working closely with high quality international partners • New offices and introduction of ERP system set to increase productivity • Substantial increase in storage capacity planned for 2015

  21. Portsmouth Harbour Ferry Company Overview Portsmouth Harbour Ferry Company (PHFC) Overview • Ferry service for foot, cycle & motor cycle passengers • Operating since 1874 • Acquired by FIH in Dec. 2004 - £7.5m • 5 minute journey across mouth of harbour from Gosport to Portsmouth (1/3 mile) • Return fares are £3.10 (adult) and £2.10 (Child/Senior) • Operates 364 days a year, 5.30am – Midnight: Reliability 99.7% • 4 purpose built vessels (2 fully depreciated) 1 under construction • 3.0 million passenger journeys p.a. • Unregulated, with dominant local position • Strong predictable cash flow • New Vessel being commissioned – delivery early 2015 will complete fleet modernisation

  22. PHFC - Year ended 31 March 2013 PHFC : Trading year ended 31 March 2014

  23. P PHFC : Trading year ended 31 March 2014 • Passenger journey decline slowed to -1.6% to c.2.99 million ( 2013: 8.9% ) • Fares increased 3-4 % June 2013 ( and June 2014 ) • Adult Return fares £2.80 > £2.90, Child / OAP unchanged £1.80> £1.90 • 10 Trip Ticket £13.00 > £13.50 • Ferry reliability maintained at >99% • PBT £0.77m ( 2013 £ 0.72m ) + 6.1% • New vessel due from Croatia Q1 2015 –cost £3.3million – 30 year life • No further vessel investment for 15-20 years • MoD agreement May 2014 to reimburse staff ferry expenses should mitigate impact BAE job losses • Medium term outlook for Portsmouth positive – QE2 carriers - 2016-17

  24. FOGL Licences: Location Map FO

  25. Falkland Oil and Gas (FOGL) • FKL retains 12.8m FOGL shares (2.4%) – 1 FOGL share for each FKL share in issue • Book cost 20p per share • Partners : Noble Energy ( Mkt cap c $26bn) Edison International (Mkt cap EDF c $67bn ) • Combination with Desire gives FOGL exposure to North , East and South Basins including Sea Lion • 3D seismic programme ( 12,000sq km ) has helped identify target prospects • FOGL fully funded for its share of planned exploration through 2015 • 5 well drilling programme starting late Q1 /early Q2 2015 • 2 wells in the South and 3 in the North Falklands Basin • High impact targets with > 1 bn bbls of gross prospects

  26. FKL: Strategy FKL: Strategy • FIC : Leverage property assets and support services to maximise long term returns • Momart : Expand storage capacity and develop sales & marketing to capitalise on brand reputation. • PHFC : Modernise fleet and maintain steady growth in profits • FOGL : Maintain shareholding through next drilling campaign • Group :Maintain/ grow dividend and maximise shareholder returns 26

  27. FKL : Outlook • FIC • Falklands economy still quiet but set to pick up as drilling approaches. • Key growth trigger will be Farm-In to unlock Sea Lion development . • House building and new vehicle sales will help offset quieter retail environment • Continuing investment in property assets in readiness for oil • PHFC • MoD reversal of ferry expenses embargo will mitigate effect of BAE closure in Portsmouth • Arrival of Harbour Spirit in Q1 2015 finishes modernisation of ferry fleet • Cyclical recovery & Dockyard expansion gives positive medium term view • Momart • No immediate repetition of exceptional 2013-14 result • Commercial art market expected to remain buoyant – importance of London growing • New ERP system will boost efficiency in 2014-15 • Plans to expand storage business in 2015 to remove block to further growth • Overall • Spread of trading interests underpins Group’s ability to maintain earnings • 2015 exploration drilling and Sea Lion gives significant upside potential

  28. Appendices Additional Information on Falkland Islands Holdings

  29. FKLFKL : Year ended 31 March 2014 Divisional Analysis by company

  30. FKL Group balance sheet FKL : Balance Sheet

  31. FKL Group cash flow FKL : Cash Flow

  32. Current Sea Lion Development Plans Plan • Phased Development proposed for Sea Lion • Phase 1 recovers 293 mm stb over 25 years from 32 wells • Initial development in the north • Phase 2 development plan will incorporate results from exploration • $5.2bn project costs for Phase 1 • Premier seeking farm in partner to share costs Source: Premier Oil website May 2014 • Tension Leg Platform (TLP) selected Jan 2014 • Minimal subsea infrastructure • Better economics than a new build FPSO scheme • Greater flexibility for infill drilling • Award of FEED contracts imminent • 4 year project timeline • First Oil targeted for 2019

  33. FIC : Further progress to First Oil • Work starts behind Marmont Row • SAtCO Crane in Operation

  34. FIC: Sites for development FIC: Sites for development

  35. Map of FIC Development Sites Map of FIC Development Sites

  36. Map of FIC Development Sites Map of FIC Development Sites

  37. David Hudd, Chairman David joined the Board in March 2002. He is a Chartered Accountant and was a partner in Price Waterhouse until 1982. Since then, he has been Chairman or Chief Executive of a number of listed companies. He is currently also anon-executive Director of Falklands Oil and Gas Limited. John Foster, Managing Director John joined the Board in January 2005. He is a Chartered Accountant and previously served as a Finance Director and Corporate Finance Director in a number of public companies and before that worked for nine years as a venture capitalist with a leading investment bank in the City. Mike Killingley, Non Executive – Chairman of the Audit Committee Mike was appointed to the board in July 2005. He is a chartered accountant and was a partner of KPMG (and predecessor firms) from 1984 to 1998. Jeremy Brade, Non Executive Jeremy was appointed to the board in September 2009.He is a Director of Harwood Capital ( formerly J.O. Hambro Capital Management ) and a non-executive director of a number of quoted and unquoted companies. Edmund Rowland, Non Executive Edmund joined the Board in April 2013. He currently serves as a Director of Blackfish Capital Management, having gained experience in London and Hong Kong, as an analyst and investment manager with BNP Paribas and Blackfish. Management Team Management Team

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