REG - Argentex Group PLC - Interim Results
08/11/2022 07:00
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RNS Number : 6002F Argentex Group PLC 08 November 2022
8 November 2022
THIS ANNOUNCEMENT HAS BEEN DETERMINED TO CONTAIN INSIDE INFORMATION. THE
PUBLICATION OF THIS ANNOUNCEMENT MEANS THAT THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Argentex Group PLC
("Argentex" or the "Group")
Interim results for the period ended 30 September 2022
Strong growth strategy drives record financial performance
Argentex Group plc, the international provider of foreign exchange services to
institutions, corporates and high net worth private individuals, today issues
its interim results for the six-month period ended 30 September 2022.
Financial highlights
· Group revenue growth of 75% to £27.4m compared to same period last
year (HY22: £15.7m)*
· Adjusted operating profit** up 55% to £7.3m (HY22: £4.7m)
· Adjusted operating profit margin down by 3.3% to 26.6% (HY22: 29.9%)
but ahead of expectations
· Short-term cash generation remains strong at 75% (HY22: 82%)
Operational highlights
· Corporate clients trading up 12% to 1,393 (HY22: 1,241)
· Structured solutions contributing 9.5% of revenue for HY23 (HY22: 3%)
exceeding expectations
· Spot/forward/structured solutions revenue mix (excluding swaps) was
39.2%/51.3%/9.5% in the period (HY22: 49.3%/48.8%/1.9%)
· Clients trading on new online platform grew by 82%
· 80% of volumes comprised trades in sterling, euro and US dollar,
significantly limiting the impact of risks in emerging market currencies
· Argentex BV (our Netherlands entity) has exceeded expectations and is
generating meaningful revenue following the award of our Electronic Money
Institution (EMI) licence
*The Group has changed to a 31 December year end and for this year reports
unaudited 6 months to 30 September 2022 and audited 9 months to 31 December
2022. HY22 refers to the period from 1 April 2021 to 30 September 2021, the
first half of the last financial year ended 31 March 2022. HY23 refers to
the period from 1 April 2022 to 30 September 2022.
** Adjusted operating profit excludes non-adjusted expenditure and share-based
payments as shown in the Consolidated Statement of Profit or Loss and
Comprehensive Income.
Strong progress against three-pillared growth strategy
Technology
· New best in class online platform launched in February 2022 leading to
an 82% growth in clients trading online
· Online platform revenues increased 225% to £0.9m
· Further investment in technology will create efficiencies and enhance
profitability
International expansion
· Argentex BV now meaningfully contributing to Group revenue
· Electronic Money Institution ("EMI") licence awarded by the Dutch
National Bank in September, resulting in successful passporting application to
all EU countries
People
· Average headcount increased by 38 FTE (excluding directors and LLP
partners) totalling 107 in HY23 (HY22: 69)
· Average headcount per region (with growth):
UK NL AUS
Non-sales 38 (+12) 2 (+1) 3 (+3)
Sales/dealing 50 (+12) 12 (+8) 2 (+2)
88 (+24) 14 (+9) 5 (+5) 107 (+38)
Outlook
Momentum has continued across all facets of the strategy into the last quarter
of our new reporting period. Although market dynamics continue to be
supportive, we maintain a balanced approach to risk, particularly in light of
the uncertainty through this period of high inflation.
As highlighted in the 3 October trading update, the Board expects that the
financial performance for the full year will exceed current market
expectations and in the medium term expects initiatives to generate a strong
return on investment through growth in revenues and optimisation of revenue
mix, thereby boosting profitability and improved earnings quality.
Harry Adams, CEO of Argentex commented:
"I am delighted Argentex has delivered another record financial performance,
underpinned by our new growth strategy. Our core business goes from strength
to strength, resulting in high double-digit revenue and profit growth. All
pillars of our growth strategy have exceeded expectations, driving strong
momentum into H2."
"We have leveraged our evolving suite of products and leading customer service
levels to capture a growing book of high quality, diversified corporate
clients who seek a trusted and well-capitalised counterparty to provide
solutions to their global foreign exchange needs in today's uncertain market
environment."
Analyst presentation
Argentex will host an online presentation for equity analysts at 09:30 today.
Analysts wishing to register should RSVP to FTI Consulting:
argentex@fticonsulting.com
Retail investor presentation
Management will host a live presentation and Q&A for retail investors via
the Investor Meet Company platform at 16:00 today. The presentation is open to
all existing and potential shareholders.
Investors can sign up to Investor Meet Company for free and add to meet
Argentex Group PLC via:
https://www.investormeetcompany.com/argentex-group-plc/register-investor
(https://www.investormeetcompany.com/argentex-group-plc/register-investor)
For further information please contact:
Argentex Group PLC
Harry Adams - Chief Executive Officer
Jo Stent - Chief Financial Officer
investorrelations@argentex.com
FTI Consulting (Financial PR)
Ed Berry / Ambrose Fullalove / Jenny Boyd
Telephone: 07703 330 199
argentex@fticonsulting.com
Singer Capital Markets (Nominated Adviser and Broker)
Tom Salvesen / James Maxwell / Justin McKeegan
020 7496 3000
Forward looking statements
This announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and businesses and plans for
Argentex Group PLC. These statements and forecasts involve risk and
uncertainty because they relate to events and depend upon circumstances that
have not yet occurred. There are a number of different factors that could
cause actual results or developments to differ materially from those expressed
or implied by these forward-looking statements. Nothing in this statement
should be construed as a profit forecast.
The release, publication, transmission or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by law and
therefore persons in such jurisdictions into which this announcement is
released, published, transmitted or distributed should inform themselves about
and observe such restrictions. Any failure to comply with the restrictions may
constitute a violation of the securities laws of any such jurisdiction.
Overview
Argentex has maintained strong momentum through the first half of the
financial period making progress both strategically and operationally to
deliver a record financial performance. The core business continues to
strengthen, driving high double-digit revenue and adjusted operating profit
growth of 75% and 55% respectively.
Our evolving suite of technology-enabled products alongside our high customer
service levels have attracted a growing number of corporate clients who seek a
trusted and well capitalised counterparty to provide tailored solutions to fit
their global foreign exchange needs in today's uncertain market environment.
Whilst the period included two weeks of heightened volatility in the pound,
our scalable, highly cash generative and increasingly diversified business
model continues to demonstrate its long-term resilience and highlight the
Group's ability to deliver for all stakeholders against any economic backdrop.
Financial performance
During the period, the Group has focused on delivering against its growth
strategy and capitalising on growing corporate demand for a focused, "right
tech, right touch" service which has resulted in a 75% increase in HY23
revenues to a record £27.4m (HY22: £15.7m).
In addition to a continued drive to improve efficiency, the Group maintained a
disciplined approach to costs during the period, resulting in a 55% increase
in adjusted operating profit to £7.3m (HY22: £4.7m).
Strong client relationships have delivered an increase in revenue from
existing clients combined with an increase in the number of new corporate
clients by 12% to 1,393 (HY22: 1,241).
Our new Structured Solutions division performed well, contributing 9.5% of
total Group revenue in the period compared to just 2% of total revenue for
HY22. The business remains committed to offering suitable products to
professional counterparties only. These products are for commercial purposes
and therefore the Group does not offer speculative products such as TARFs
(Target Redemption Forward) and TARNs (Targeted Accrual Redemption Note).
The core business historically was made up of spot forward product mix only
and has been split broadly 50:50 in the past. In HY23 the product mix has
changed to include structured solutions or options products with spot
contracts representing 39.2% of revenue. Forwards attract higher spreads due
to factors such as increased client credit risk, but the payoff to higher
revenue is having to wait until the contract is settled to realise the cash. A
blend of spot and forward contracts is therefore important for an optimum mix
of revenue generation and cash flow. Although spot contracts represent a lower
percentage of total revenue in HY23, the cash generation impact is mitigated
by the fact that options represent 9.5% of revenues and carry a premium which
is paid up front. 75% of revenues in HY23 convert to cash within a three-month
period, compared to 82% HY22. Furthermore over 80% of volumes comprised
trades in sterling, euro and US dollar, significantly limiting the impact of
risks in emerging market currencies.
Growth Strategy
We are encouraged that our core business, underpinned by the strong momentum
from our growth strategy, is delivering well against our ambitious
expectations and generating a significant increase in revenues.
TECHNOLOGY
Our technology investment is directly focused on supporting all of our growth
pillars - enhancing our product offerings including the breadth of our online
services proposition, supporting the solid growth in structured solutions,
supporting the increased regulatory requirements of our global expansion, as
well as supporting our people by making them more efficient and effective.
Our proprietary platform and the new online service have already delivered
tangible results and opened up new market opportunities. We will continue to
enhance both the products available and open up additional market segments to
serve in the coming period.
Our new online platform was launched in February with a fully mobile
responsive interface allowing our clients to transact anytime, anywhere at
their convenience. The client response has been extremely encouraging with 290
clients using the service during the period, increasing online clients in the
period by 82%, building a solid foundation for scaling our business through
increased dealing efficiencies, deeper wallet share, and wider client segment
appeal as we add additional capabilities. We expect that trend to continue and
are confident this investment in technology will strengthen our client
relationships and facilitate further geographical cross-sell opportunities and
provide a solid base to improve margins over time.
INTERNATIONAL EXPANSION
Our international growth strategy is focused on capturing market share in
target regions. As such, I'm delighted that during the period Argentex's
Dutch subsidiary Argentex BV was awarded an Electronic Money Institution
("EMI") licence by the Dutch National Bank. The licence enables Argentex to
operate its full business model to access the growing Dutch FX market.
This gold standard licence endorses Argentex's differentiated and
uncompromising appoach to regulation and will enable the Group to build on its
strong position seamlessly across Europe by scaling more efficiently in a
region that is full of opportunity.
We continue to engage in meaningful conversations with other overseas
regulators, and the Dutch National Bank, to ensure the right licences are
awarded to our businesses in key target international markets. We expect to
update investors on progress of our launch in Australia in 2023.
PEOPLE
We are adhering to our plan and have made 20 new hires for the reporting
period, 9 of which have been in our international offices (7 in Netherlands
and 2 in Australia). Importantly, we have made senior hires into Credit Risk
and Change Management, this has meant that our average headcount in the period
increased by 38 FTE and totalled an average of 107 for the period (excluding
directors and LLP Partners) compared to 69 in the prior period.
Outlook
It has been over three years since Argentex made its debut as a publically
traded business. The business continues to mature, professionalise and adapt
to changing market dynamics and the needs of its clients. We will remain
focused on delivering on our three pillar growth strategy to build an agile,
efficient, scalable and diverisified platform that will drive results for all
stakeholders in all market conditions.
The strategic measures we are taking now and our continued investment
programme are designed to position the Group to capitalise on the significant
opportunities both geographically and through productisation to become a
leading technology-led financial services provider.
Given the strong HY performance and continued positive momentum in the last
quarter of this reporting period, the Board is confident the Group will exceed
current market expectations for the full year and expects our initiatives to
generate a strong return on investment through growth in revenues,
optimisation of revenue mix, boost in profitability and improvement in
earnings quality.
Due to the shortened reporting period for the 9 months to the end of December
2022, the Board has determined not to pay an interim dividend but intend to
pay a final dividend representing the 9-month period post year-end.
On behalf of the Board, I would like to thank our people, shareholders and our
clients for their continued support and contribution to our ongoing success.
Harry Adams,
Chief Executive Officer
FINANCIAL REVIEW
Revenue
In the six-month period to 30 September 2022, Argentex generated revenues of
£27.4m, representing an increase of 75% on the prior year six-month period.
The breakdown of revenue by product and by geography can be seen in the table
below. Product mix and increased wallet share are driving this growth in
revenues, with structured solutions and online platform revenues both
exceeding management expectations. Forward contracts represented an increased
portion of core revenue in the half at 57% (HY22: 50%) - options excluded. Our
first overseas office (the Netherlands) has performed well in the half,
exceeding expectations and now making a meaningful contribution to Group
revenue - HY23: £0.8m (HY22: £0.2m).
Revenue by product
UK ROW Total
£m £m £m
6 months to 30 Sept 2022
Spot 10.5 0.2 10.7
Forwards and other products 16.1 0.6 16.7
26.6 0.8 27.4
6 months to 30 Sept 2021
Spot 7.3 - 7.3
Forwards and other products 8.2 0.2 8.4
15.5 0.2 15.7
The total number of corporates traded in HY23 was 1,393 versus 1,241 in HY22,
an increase of 12%.
Costs
Overall, costs are in line with expectations and include a credit valuation
adjustment provision of £0.9m reflecting the current economic climate. Our
investment in people, technology and international expansion continue at pace
and in line with expectation.
Administrative expenses include variable costs of £8.2m which are driven by
revenue volumes.
Investment in people is in line with plan with 20 new hires in the six-month
period. Average headcount in the period totalled 107 (excluding directors and
LLP Partners) compared to 69 in the prior period. The front office/back office
proportional split was 60% front office, 40% back office (prior period
61%/39%). Momentum continues regarding our investment in overseas expansion
with key hires made in addition to building out appropriate infrastructure and
frameworks. Consultancy and set up fees for the overseas operations is
included in non-adjusted expenditure and is targeted towards items such as our
recently awarded e-money licence in the Netherlands.
The technology investment continues to deliver with the online platform ahead
of schedule and exceeding anticipated return on investment. Seven new
technology hires have been made in the period in support of bringing
technology in house. Technology development costs are amortised in line with
our capitalisation policy over a three-year period.
Technology Investment
HY23 HY22
£m £m
In-house 0.2 -
External 0.7 0.7
Total 0.9 0.7
Profitability
As previously indicated, there has been a planned decrease in operating
margins in the half to 26.6% (HY22: 29.9%), reflecting the investment in our
three strategic pillars. Adjusted operating profit for the half of £7.3m
excludes £0.8m of non-adjusted expenditure to adjust for one-time
non-recurring items relating to senior staff changes and set up of overseas
operations in line with our accounting policies. The share-based payments
charge of £0.1m is also excluded from adjusted operating profit.
Adjusted operating profit is presented in the income statement to provide a
comparable view of performance year-over-year.
Consolidated Statement of Financial Position
Total assets increased by £119.8m or 123% since March 2022. The driving force
has been an increase in derivative financial assets held of £71.3m. This is
driven by a significant increase in trading activity, including timing of
settlement of forward contracts. The impact on net assets of this increase has
been mitigated by an increase in derivative financial liabilities of £69.3m.
The Group holds corresponding liabilities as it operates as a riskless
principal.
Another key driver for the increase in total assets has been the increase in
other assets of £34.9m caused by an increase in collateral required by our
counterparties, arising from the volatility experienced since March 2022 in
GBP sterling. The increase in amounts required by counterparties was offset by
an increase of £43.0m in collateral and variation margin collected from
clients, represented by amounts payable to clients. As a result, net assets
increased by £3.7m from 31 March 2022.
Cash and other assets totalled £93.7m at 30 September 2022, of which £42.1m
of other assets represents collateral and margin held with financial
counterparties and £67.9m is corresponding collateral and margin collected
from and payable to clients, leaving a net cash position of £25.8m compared
to £20.2m at 31 March 2022.
Cash Flow
The Group's net cash position (total cash plus collateral held by
institutional
counterparties less amounts payable to clients) is £25.8m (March
22: £20.2m). The increase from 31 March 2022 is driven primarily
by operating activities.
30 Sept 2022 31 March 2022
£m £m
Cash at bank 51.6 37.9
Collateral held by institutional counterparties 42.1 7.2
Less: amounts payable to clients (67.9) (24.9)
Net cash 25.8 20.2
Cash conversion
HY23 HY22
£m £m
Revenue 27.4 15.7
Revenue (swap adjusted S/A) (A) 27.3 14.8
Less:
Revenue settling beyond 3 months S/A (6.9) (2.7)
Net short-term cash generation (B) 20.4 12.1
Short-term cash return (B/A) 75% 82%
The short-term cash return ratio has reduced due to clients taking out a
greater proportion of longer term forward contracts, offset in part by
structured solutions carrying the premium payable upfront. Cash conversion
excluding options is 72%.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
6 months to 6 months to
30 September 2022 (unaudited) 30 September 2021 (unaudited)
£m £m
Revenue 27.4 15.7
Cost of sales (0.9) (0.2)
Gross profit 26.5 15.5
Administrative expenses (19.2) (10.8)
Adjusted operating profit 7.3 4.7
Non-adjusted expenditure (0.8) (0.2)
Share-based payments charge (0.1) (0.1)
Operating profit 6.4 4.4
Finance Costs (0.2) (0.2)
Profit before taxation 6.2 4.2
Taxation (1.1) (0.9)
Profit and total comprehensive income for the period
5.1 3.3
( )
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 September 2022
Notes 30 September 2022 31 March 2022
(unaudited) (audited)
£m £m
Non-current assets
Intangible assets 2.4 2.2
Property, plant and equipment 8 7.7 8.3
Derivative financial assets 6 14.1 3.1
Total non-current assets 24.2 13.6
Current assets
Trade and other receivables 6 0.9 0.6
Cash and cash equivalents 7 51.6 37.9
Other assets 7 42.1 7.2
Derivative financial assets 6 98.3 38.0
Total current assets 192.9 83.7
Current liabilities
Trade and other payables 9 (81.0) (34.2)
Derivative financial liabilities 9 (82.9) (21.6)
Total current liabilities (163.9) (55.8)
Non-current liabilities
Trade and other payables 9 (6.0) (6.0)
Derivative financial liabilities 9 (10.3) (2.3)
Total non-current liabilities (16.3) (8.3)
Net assets 36.9 33.2
Notes 30 September 2022 31 March 2022
(unaudited) (audited)
Equity £m £m
Share capital 10 0.1 0.1
Share premium account 12.7 12.7
Share option reserve 0.5 0.4
Merger reserve 4.5 4.5
Retained earnings 19.1 15.5
Total equity 36.9 33.2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ended 30 September 2022
Share capital Share premium Share option reserve Merger reserve Retained earnings Total equity
£m £m £m £m £m £m
Balance as at 31 March 2021 (audited) 0.1 12.7 0.2 4.5 11.2 28.7
Profit and total comprehensive income for the period - - - - 3.3 3.3
Transactions with shareholders
Dividends paid - - - - (2.2) (2.2)
Share-based payments - - 0.1 - - 0.1
Balance as at 30 September 2021 (unaudited) 0.1 12.7 0.3 4.5 12.3 29.9
Balance as at 31 March 2022 (audited) 0.1 12.7 0.4 4.5 15.5 33.2
Profit and total comprehensive income for the period - - - - 5.1 5.1
Transactions with shareholders
Dividends paid - - - - (1.5) (1.5)
Share-based payments - - 0.1 - - 0.1
Balance as at 30 September 2022 (unaudited) 0.1 12.7 0.5 4.5 19.1 36.9
CONSOLIDATED STATEMENT OF CASH FLOWS
6 months to 6 months to
30 September 2022 30 September 2021
(unaudited) (unaudited)
£m £m
Profit before taxation 6.2 4.2
Taxation paid (0.9) -
Net finance expense 0.2 0.2
Depreciation of right of use assets 0.4 0.3
Amortisation of intangible assets 0.7 0.6
Depreciation of property, plant and equipment 0.2 0.3
Share-based payment charge 0.1 0.1
(Increase)/decrease in receivables (0.3) 1.5
Increase in payables 46.7 3.0
(Increase) in derivative financial assets (71.3) (1.5)
Increase/(decrease) in derivative financial liabilities 69.3 (0.3)
(Increase) in other assets (34.9) -
Net cash generated from operating activities 16.4 8.4
Investing activities
Payments to acquire property, plant and equipment - (0.2)
Payments to acquire intangible fixed assets (0.9) (0.7)
Net cash used in investing activities (0.9) (0.9)
Financing activities
Payments made in relation to lease liabilities (0.3) -
Dividends paid (1.5) (2.2)
Net cash used in financing activities (1.8) (2.2)
Net increase in cash and cash equivalents 13.7 5.3
Cash and cash equivalents at the beginning of the period 37.9 38.4
Cash and cash equivalents at end of the period 51.6 43.7
1 General information
Argentex Group PLC ("the Company") is a public limited company, limited by
shares, incorporated and domiciled in England and Wales. The address of the
registered office of the Company is 25 Argyll Street, London, W1F 7TU. The
Company's shares are listed on AIM, the London Stock Exchange's market for
small and medium size growth companies. The Company is the ultimate parent
company of the Group into which the results of its subsidiaries are
consolidated.
2 Basis of preparation
The consolidated financial information contained within these financial
statements is unaudited and does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006.
While the financial figures included in this interim report have been prepared
in accordance with IFRS applicable to interim periods, this interim report
does not contain sufficient information to constitute an interim financial
report as defined in IAS 34. Financial information for the year ended 31 March
2022 has been extracted from the audited financial statements for that year.
The financial statements have been prepared using the measurement bases
specified by IFRS for each type of asset, liability, or expense. The
accounting policies applied in preparation of these interim financial
statements are consistent with the basis that was adopted for the preparation
of the full year accounts for the year ended 31 March 2022 and will be adopted
for the Group's next audited accounts for the 9 months ended 31 December 2022.
Statutory accounts for the year ended 31 March 2022 have been reported on by
the Company's Independent Auditor and have been delivered to the Registrar of
Companies. The Independent Auditor's Report on the Annual Report and Financial
Statements for 2022 was unqualified and did not contain a statement under
498(2) or 498(3) of the Companies Act 2006.
These interim financial statements are prepared on a going concern basis as
the Directors have satisfied themselves that, at the time of approving these
interim financial statements, the Group has adequate resources to continue in
operational existence for at least the next twelve months from the date of
this report.
3 Accounting policies
The accounting policies adopted in these interim financial statements are
identical to the those adopted in the Group's most recent annual financial
statements for the year ended 31 March 2022, which are available from the
Registrar of Companies and www.argentex.com/investor-relations
(http://www.argentex.com/investor-relations) .
4 Earnings per share
The Group calculates basic earnings to be net profit attributable to equity
shareholders for the period. The Group also calculates an adjusted earnings
figure, which excludes the effects of share-based payments, and non-adjusted
expenditure (net of a tax adjustment). The calculation of diluted earnings per
share assumes conversion of all potentially dilutive ordinary shares, all of
which arise from share options.
Six months to Six months to
30 Sept 2022 30 Sept 2021
Basic earnings per share 4.5p 3.0p
Diluted earnings per share 4.5p 3.0p
Adjusted - basic 5.1p 3.2p
Adjusted - diluted 5.1p 3.2p
The calculation of basic and diluted earnings per share is based on the
following number of shares:
Six months to Six months to
30 Sept 2022 30 Sept 2021
m m
Basic weighted average shares 113.2 113.2
Contingently issuable shares 0.1 0.1
Diluted weighted average shares 113.3 113.3
The earnings used in the calculation of basic, diluted and adjusted earnings
per share are set out below:
Six months to Six months to
30 Sept 2022 30 Sept 2021
£m £m
Earnings - basic and diluted 5.1 3.3
Non-adjusted expenditure 0.8 0.2
Share-based payments 0.1 0.1
Tax impact (0.2) -
Earnings-adjusted 5.8 3.6
5 Dividends
6 months to 6 months to 6 months to 6 months to
30 September 2022 30 September 2021 30 September 2022 30 September 2021
(unaudited) (unaudited)
(unaudited)
(unaudited)
Pence per share Pence per share £m £m
Final dividend recommended by Directors at previous year end 1.25 2.0 1.5 2.3
1.25 2.0 1.5 2.3
The final dividend was declared in July 2022 in respect of the results for the
year ended 31 March 2022 and paid in respect of the ordinary shares in issue
of £0.0001 each.
In the previous financial year, an interim dividend of 0.75p per share,
totalling £0.8m, was declared and paid. No interim dividend is proposed for
the current financial year.
6 Trade and other receivables
30 September 2022 31 March
(unaudited) 2022
(audited)
£m £m
Non-current
Derivative financial assets at fair value 14.1 3.1
Current
Derivative financial assets at fair value 98.3 38.0
Other debtors 0.1 0.1
Prepayments 0.8 0.5
Trade and other receivables 0.9 0.6
7 Cash and cash equivalents
30 September 2022 31 March 2022
(unaudited) (audited)
£m £m
Cash and cash equivalents
Cash held at banks 51.6 37.9
Included within cash and cash equivalents are client funds relating to margins
received and client balances payable (see note 9). Client balances held as
electronic money in accordance with the Electronic Money Regulations 2011 are
held in accounts segregated from the firm's own bank balance.
The Directors consider that the carrying amount of these assets is a
reasonable approximation of their fair value. Cash is held at authorised
credit institutions and non-bank financial institutions with robust credit
ratings (where published) and sound regulatory capital resources.
Other assets of £42.1m (March 22: £7.2m) is made up of collateral with
banking and brokerage counterparties. Client margins received and disclosed
within client balances payable are used to service margin calls with
counterparties.
8 Property, plant and equipment
Leasehold improvements Right of use asset Office equipment Computer equipment Total
Cost £m £m £m £m £m
At 1 April 2022 1.8 7.3 0.8 0.7 10.6
Additions - - - - -
Disposals - - - - -
At 30 September 2022 1.8 7.3 0.8 0.7 10.6
Depreciation
At 1 April 2022 0.3 1.5 0.1 0.4 2.3
Charge for the period 0.1 0.4 0.1 - 0.6
Disposals - - - - -
At 30 September 2022 0.4 1.9 0.2 0.4 2.9
Net Book Value
At 30 September 2022 1.4 5.4 0.6 0.3 7.7
At 31 March 2022 1.5 5.8 0.7 0.3 8.3
9 Trade and other payables
30 September 2022 31 March 2022
(unaudited) (audited)
£m £m
Non-current
Derivative financial liabilities at fair value 10.3 2.3
Lease liabilities 5.8 5.8
Provisions 0.2 0.2
Trade and other payables 6.0 6.0
Current
Derivative financial liabilities at fair value 82.9 21.6
Amounts due to members and former members of Argentex LLP 2.3 2.8
Amounts payable to clients 67.9 24.9
Other creditors - 0.1
Accruals 7.4 3.4
Other taxation and social security 0.5 0.3
Lease liability 0.8 0.8
Corporation tax 2.1 1.9
Trade and other payables 81.0 34.2
10 Share capital
Ordinary Management Nominal
shares shares value
Allotted and paid up No. (m) No. (m) £
Ordinary shares of £0.0001 each 113.2 - 11,321
Management shares issued of £0.0025 each - 23.6 58,974
At 30 September 2022 113.2 23.6 70,295
There were no changes to share capital during the period from 1 April 2022 to
30 September 2022.
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