REG - AssetCo PLC - Preliminary Results Announcement for 2024
06/03/2025 07:15
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RNS Number : 5498Z AssetCo PLC 06 March 2025
6 March 2025
LEI: 213800LFMHKVNTZ7GV45
For Immediate Release
AssetCo plc ("AssetCo" or the "Company")
Preliminary Results Announcement for 2024
AssetCo plc ("AssetCo" or the "Company"), the agile asset and wealth
management company, today announces its results for the year ended 30
September 2024.
Highlights
· Active equity assets under management as at 30 September 2024
amounted to £2.8 billion (2023: £2.4bn) with the rise in assets bucking
industry trends.
· Operating loss for continuing business for the year £3.3m (after
adjusting for exceptional items of £1.9m) improving on the operating loss of
£7.7m for the previous year. The total loss for the year ended 30 September
2024 (benefitting this year from tax adjustments) was £2.5m.
· An initial fund raising brings nearly €400m in assets to two
Group funds managed by leading fund manager Jonathan Knowles (previously of
Capital International Group) in a joint venture with his firm Compound Equity
Group.
· A further major milestone in business consolidation and
simplification achieved with consolidation to State Street as
Custodian/Depositary for the Group's open-ended funds: corporate and client
savings realised.
· Change of name to River Global PLC and share re-organisation
allowing trading in the separate business interests of River Global and
Parmenion to be voted on by Shareholders today.
Martin Gilbert, Chairman of AssetCo, said:
"The financial year ended 30 September 2024 was a challenging one for both the
industry and AssetCo. Nonetheless our results for the year show us continuing
to close the gap towards profitability with a significantly reduced operating
loss for continuing business of £3.3m.
UK investor funds under management in active equities experienced persistent
net outflows across the industry amounting to some £20bn 1 for FY23/24. The
Group is not immune to this and further action on cost saving is in hand as a
result. This is facilitated in particular by the successful consolidation of
certain back office services which, after some delay, was successfully
achieved for the Group's open-end funds towards the end of February.
We were pleased to see an encouraging start to our joint initiative with
leading global fund manager, Jonathan Knowles, previously of Capital
International Group - this being one of the two initiatives that we signalled
with our interim results. The second such initiative, working with an
established overseas wealth manager, is well advanced and we hope to commence
operations later in our financial year.
Subject to shareholder approval we hope to see active trading in two share
classes representing the Group's separate business interests in River Global
and Parmenion from 7 March 2025. We believe this reorganisation will provide
greater flexibility for our shareholders and in our ability to deal with these
two distinct lines of business. The name of the Company will also change to
River Global PLC.
While retaining our valuable interest in Parmenion we have focussed our
attention during the year on rationalising and positioning our River Global
equities business to weather the on-going and extremely challenging conditions
for active equity asset managers."
For further information, please contact:
AssetCo plc Deutsche Numis
Gary Marshall, CFOO Nominated adviser and joint broker
Martin Gilbert, Chairman Giles Rolls / Charles Farquhar
Tel: +44 (0) 7788 338157 Tel: +44 (0) 20 7260 1000
Panmure Liberum Limited H/Advisors
Joint broker Neil Bennett
Atholl Tweedie Rachel Cohen
Tel: +44 (0) 20 7886 2500 Tel: +44 (0) 20 7379 55151
For further details, visit the website, www.assetco.com
(http://www.assetco.com)
Ticker: AIM: ASTO.L
Pro-Forma Impact of Proposed Share Reorganisation
The following information is being provided in respect of proposed share
classes, the New A Ordinary Shares and the New B Shares, as a pro-forma
version of the Segmental Reporting section of the Financial Statements of
AssetCo PLC (to be renamed River Global PLC) to aid shareholders in their
consideration of those shares, should the Share Reorganisation be approved at
the Shareholder Meeting later today.
New Ordinary A Shares New B Combined Share Classes
Shares
Operating Business Parmenion Investment Total
£'000 £'000 £'000
Total revenue to external customers 14,368 - 14,368
Operating (loss)/profit (7,960) 2,423 (5,537)
Finance income 296 - 296
Finance costs (109) - (109)
(Loss)/profit before tax (7,773) 2,423 (5,350)
Income tax 2,898 - 2,898
(Loss)/profit for the period (4,875) 2,423 (2,452)
Operating (loss)/profit (7,960) 2,423 (5,537)
Exceptional items within operating (loss)/profit 1,881 - 1,881
Discontinued operations 326 - 326
Operating (loss)/profit for continuing business excluding exceptionals (5,753) 2,423 (3,330)
Total assets 33,474 27,049 60,523
Total liabilities (7,404) - (7,404)
Total net assets 26,070 27,049 53,119
CHAIRMAN'S STATEMENT
Introduction
The financial year ended 30 September 2024 was a challenging one for both the
industry and AssetCo. Nonetheless we were able during the year to make good
progress in our move towards profitability.
Substantial progress was also made in rationalising and transforming the
business despite considerable market headwinds. Our initiative to re-organise
our shares into two new share classes, A Ordinary Shares and B Shares,
reflecting our active equity asset management business (A Ordinary Shares) and
our interest in Parmenion (B Shares) required extensive consultation with
relevant regulatory authorities as we charted new waters for an AIM-quoted
business. The delay was disappointing, but we are pleased to have been able to
issue a Circular to Shareholders seeking approval for the reorganisation at a
General Meeting convened for 6 March 2025. Subject to shareholder approval we
hope to see active trading in the two separate share classes from 7 March
2025. We believe this reorganisation will provide greater flexibility for our
shareholders and in our ability to deal with these two quite separate business
interests. Again, subject to shareholders approving the reorganisation, we
propose changing the name of the Company on 6 March 2025 to River Global PLC
in line with the Group's underlying equities business.
While retaining our valuable interest in Parmenion we have focussed our
attention on rationalising and positioning our River Global equities business
to weather the on-going and extremely challenging conditions for active equity
asset managers. I have provided more detail on the year's activities below.
Continued market shrinkage
Geopolitics continued to unsettle markets during the financial year, with the
Ukraine/Russia conflict continuing to destabilise the region, further
exacerbated by discord in the Middle East. In addition to the impact of
these conflicts, the ongoing effects from Brexit, inflation and sluggish
economic recovery following the pandemic resulted in a volatile environment
for investment markets. Despite this, the FTSE 100 rallied by almost 10% 2
during the financial year, with a sustained rise running through to around the
middle of May 2024 before election worries set in. Labour's warnings of an
austerity budget with substantial tax rises set a more cautionary tone
thereafter and the UK market lost impetus and direction. Global markets
generally moved ahead strongly with the MSCI World Index posting a gain of
almost 34% during the financial year. Despite some promising market returns
the active equities industry as a whole saw significant shrinkage. UK investor
funds under management in active equities experienced persistent net outflows
across the industry amounting to some £20bn 3 for FY23/24, ending the period
at £465bn, equating to outflows of some 4% during the year. Persistently high
interest rates, inflation and concerns surrounding the impact of the UK Budget
all contributed to large net outflows from UK equities funds in particular,
estimated at £18.5bn and accounting for 93% of total net outflows across the
active equities industry over the period.
Corporate Activity
Notwithstanding the challenging landscape there are some reasons to be
optimistic as the economic uncertainty, coupled with significant discounts on
UK companies also generates opportunity. AssetCo began the financial year with
the completion of the acquisition of Ocean Dial Asset Management on 2nd
October 2023 which added nearly £1m per annum in net new profits to the Group
from outset.
We announced in October 2023 that agreement had been reached in principle to
dispose of the River and Mercantile Infrastructure business. The original
agreement envisaged at that time did not reach completion and instead a rather
simpler arrangement was eventually made which was completed at the end of May
2024 stemming losses (-£0.3m in year to end September 2024) in this area.
Operational highlights
In June 2024, I outlined two potential joint venture arrangements and am
pleased to be able to report the successful launch of one of these and good
progress on the other.
Nearly €400m was added to the Group's assets under management in a fund
raising to mark the commencement of the first "joint venture" with Jonathan
Knowles and his newly established firm, Compound Equity Group. In practice,
the arrangement constitutes a fee share agreement under the terms of which
Compound provides services to the Group. Jonathan was previously one of the
top equity fund managers for Capital International Group - one of the largest
asset managers in the world - and he and supporting employees of his firm now
operate under the existing River Global regulatory and operational framework
as part of the joint agreement between us. This has provided Jonathan with
rapid access to market while leveraging River Global's established
infrastructure to mutual benefit.
I am also pleased to confirm that we are in advanced discussions with a second
organisation - an offshore wealth manager - for River Global to be appointed
as Investment Manager for a new range of funds that the wealth manager is
looking to develop to provide an improved service for both their established
client base and new clients. Again, this will utilise our established
infrastructure to facilitate additional growth. Assets under management are
expected to be significant at an early stage and, while initial revenues to
the Group are at a reduced rate reflecting the oversight role we expect to
play, the additional scale and future opportunities are attractive as is the
opportunity to work with a high calibre business partner.
The Company's project to consolidate back-office service providers has been
delayed somewhat from the target the Company had set to deliver around its
financial year end but otherwise made good progress and is now delivering
significant savings which began to take effect from the point of major
consolidation, successfully achieved in the final week of February 2025. The
synergies associated with that project remain on track albeit with a later
starting point.
Operating Margin Improving
Results for the year reflect exceptional costs of £1.9m relating to
restructuring of the operating business. Setting these to one side in order to
focus on the underlying continuing operations at year end, we see operating
losses of £3.3m for the year (note 8) on revenues (plus other income) of
£16.5m. The comparable figures for last year were operating losses of £7.7m
on revenues plus other income of £17.3m demonstrating a further improvement
in operating margin over that seen last year. While still negative, the hurdle
to profitability is now much smaller and the total loss, which benefits this
year from tax adjustments, is £2.5m - a very significant improvement on the
previous year.
The infrastructure business (RMI) which we have exited, contributed an
operating loss before exceptionals of c.£0.3m whereas Ocean Dial, acquired on
2 October 2023, introduced additional run rate (annualised) revenues at point
of acquisition of £1.9m compared to a cost base of c.£1m. The run rate for
costs (i.e. monthly costs, adjusted for anomalies and annualised) in the River
Global business is estimated to be some £3m lower by year end than it had
been at the start of the year as certain contractual and other obligations
fell away.
The consolidation of asset management activities and disposal of RMI has
facilitated further initiatives on cost saving as less evident overlaps and
inefficiencies are flushed out in the smaller more cohesive business. We also
plan further fund mergers to merge (or close) smaller funds delivering
operational savings while realising economies of scale for clients and more
attractive propositions for distributors. In addition, we have rationalised
legacy corporate structures within the Group and have plans for further
simplification in the current year. These further initiatives, taken together,
have enabled us to identify some £2.5m per annum of additional cost savings
actionable over the coming months, evidencing a path to financial
profitability, subject of course to reasonably stable markets and assets under
management.
Parmenion: a valuable asset
Since acquiring our structured 30% equity interest (before dilution for
management interests) in Parmenion, that company has continued to trade
strongly in terms of AUM, revenue and profitability. In September 2023, we
responded to speculation around the value of that interest by obtaining an
independent valuation suggesting a value of between £75 and £90m. Based on
recent discussions with the Company's advisers, the Board believes that this
continues to represent a fair assessment of the value of the Company's
interest assuming an arm's length sale of the company as a whole.
2024 was a strong year for Parmenion with group assets under management or
advice exceeding £13bn on 31 December 2024, up from £11.7bn as at 31 March
2024.
Well Placed to Weather the Storm
Despite the positivism evident in the US since the election, uncertainty in
global economic conditions and an uncertain political backdrop continues to
concern consumers and financial markets, although there are signs that overall
market activity might finally pick up. Whilst the UK has been relatively flat,
globally inflation has surprised on the upside in a number of influential
regions and with rates not expected to rise in the near future, the risk of
recession has eased. The Company's underlying businesses going forward - River
Global and Parmenion - have the financial strength, support and agility to
weather current conditions but it is only fair to acknowledge the toll that
persistent outflows have had on River Global's business and the reduced
resilience that results. We are confident that the various options available
to us to deal with further adverse conditions are adequate for the foreseeable
future but acknowledge the pressure that this puts on the business over the
longer term. Our management teams have a wealth of expertise and a range of
products and capabilities which enables them to capitalise on opportunities as
well as meeting the needs of our existing investors and we continue to see the
future potential.
Martin Gilbert
Chairman
5 March 2025
BUSINESS REVIEW
At the end of the financial year to 30 September 2024, the AssetCo Group
encompasses two distinct business lines: River Global, a wholly owned and
operated active equities asset management business, together with a structured
30% equity interest in Parmenion, a digital platform business.
Assets under management increased from the £2,409 million reported at the end
of September 2023 to £2,779 million as at the end of September 2024.
Results for the year ended 30 September 2024 show an operating loss of £3.3m
(after adjusting for discontinued operations and exceptional items) and an
overall loss of £2.5m. This result maintained the trajectory we had
previously outlined towards run rate profitability.
Nearly €400m was added to the Group's assets under management in a fund
raising to mark the commencement of the joint venture referenced in our
interim results in June 2024. Founder clients invested in two former River
Global badged funds now managed by Jonathan Knowles, previously one of the top
equity fund managers for Capital International Group - one of the largest
asset managers in the world. The revenue share for River Global in respect of
the initial founder assets is relatively small but arrangements for future
third party funds are expected to be more remunerative. Given that Jonathan
Knowles and supporting employees of his firm, Compound Equity Group, operate
under the existing River Global regulatory and operational framework to manage
what were previously small, unprofitable funds, the arrangement capitalises on
existing infrastructure and is revenue enhancing from outset.
Overall, assets under management for the River Global Group at the end of
September 2024 demonstrated a notable increase for the financial year as a
whole. This included a new business win of over £100m into the Company's UK
Opportunities Fund in June 2024.
The Group was notified in October 2024 that it had been appointed to manage a
substantial mandate for a UK institution with funding for that mandate due to
take place in April 2025. This win was not included in our budget planning and
would therefore have made a positive contribution in the year ahead.
Unfortunately, however, the Group was terminated as manager in December 2024
by a US institution for whom the Group has managed two portfolios for some six
years. The assets under management (c.£200m) and revenues (c.£1m) relating
to the UK and US institutions essentially offset each other leaving the Group
no worse but no better off on an on-going basis as a result.
Elsewhere, headwinds continue to batter the active equity asset management
industry with some £20bn in outflows from active equity funds over the
financial year 2023 to 2024. The Group is not immune to this and has seen some
£230m of outflows in the period from 1 October 2024 to end January 2025.
Performance
Investment performance of the Group's equities open end funds measured at the
end of the financial year to September 2024 remains strong with over 50% of
funds (by assets under management) outperforming peers over both the five year
and ten year time horizon. Over three years, investment performance has been
weaker with 45% of funds (by assets under management) outperforming peers; the
second half of this financial year has clearly been challenging.
Over the last few years, the performance of global equity markets has been
increasingly dominated by a small number of mega-cap stocks that have
benefitted from escalating price momentum as they become ever larger
percentages of global indices, drawing in passive and index-following capital
and even some active managers who fear missing out on the growth themes that
they represent. Investors have been overtly focused on price momentum to the
exclusion of other factors and as a result of this many investor portfolios
have become increasingly concentrated in a narrow range of stocks and the
themes that these stocks represent. Consequently, the breadth of market
returns is now nearly as narrow as it was in 1999-2000. In addition, the
dominance of mega-caps has led to increasing underperformance of mid and
smaller sized companies, a trend that is a global, not just a regional
phenomenon.
These factors represent a headwind for the performance of our range of funds,
but we remain committed to our beliefs as active managers and we are confident
that, as markets broaden out and interest rates are reduced, our portfolios
will deliver for our clients. Our confidence is grounded in our strong
investment teams, led by experienced managers, that offer differentiated
portfolios invested with conviction and that are based on clearly defined
investment processes. It is therefore pleasing to note that in the first
quarter of the current financial year, the percentage of our funds
outperforming the competition over a three year period has improved to 64%.
The information above is disclosed in order to allow shareholders to assess
the current performance of our investment strategies. While historical
investment performance is not an indicator of future investment performance,
the long term track records of our strategies give shareholders an indication
of the sustainability of our investment performance across different
investment cycles. Performance data is sourced from: FE Analytics for IA
Sector Peer Group performance. B share class (net of management fees)
performance is used since share class launch for all funds. For any fund
performance prior to the launch of these share classes, performance is chain
linked with the next highest paying fee share class back to the earliest date.
Re-structuring and Integration
Substantial progress was made in business integration during the year with all
equity asset management activities (other than Ocean Dial) consolidated under
River Global Investors LLP. Following a recent approval from the FCA for a
change of permissions we hope to be able to progress integration of Ocean
Dial's business in the near future. Centralised trading supported by a
centralised middle office function was also implemented in January 2024
substantially streamlining and simplifying operational processes.
Progress with asset management integration also enabled us to appoint SVM
Asset Management as Authorised Corporate Director covering all the UK open-end
funds for the Group. This once again centralised and rationalised activities,
enabling us to bring in-house most of the activities and revenues previously
falling to third parties.
Agreement was reached for the consolidation of back-office services (those of
Depositary, Custodian and Transfer Agency) under a single provider for our UK
funds. This brings operational efficiencies and the major part of this, being
consolidation to State Street of Custodial/Depositary services for the Group's
open-end funds, completed successfully on 24 February. This delivers savings
both to the Group and to our clients. It will also allow us to complete the
exercise of re-branding all of our operational entities and funds.
Completion of the current rationalisation program in full will result in
considerable simplification across our business. This will in turn give us
more scope to align our cost base to reflect on-going trading conditions and
therefore prospective revenues in the current financial year.
Consolidation of the Group's legacy fund range has progressed well. We managed
and marketed 17 open-ended funds at the beginning of the financial year and by
year end that had been focused into 14 funds by winding up or merging smaller,
uneconomic funds. The clearer focus that a narrower range of larger funds
brings us increases the effectiveness of our marketing effort, delivers better
value for clients and reduces or eliminates our need to subsidise less
economic funds.
One legacy of integration is the various corporate structures that remain from
previous activities. During the year, we reduced the number of corporate
entities within the Group by some 40%. Further simplification is planned
before the end of the current financial year.
Highlights of our continued move to a lower cost operating model for the
active equities business include:
· Headcount (measured as full time equivalent) for the active equities
business has moved from 74.7 at the start of the financial year (including
Ocean Dial on a pro forma basis) to 54.6 at end September 2024 - a 27%
reduction.
· Funds consolidated from 17 to 14.
· Corporate entities reduced by 40%.
· Premises costs reduced by £268,000 pa after year end (rising to a
saving of £335,000 pa next year).
Our simplified operating model enables greater and more effective interaction
across our various teams and significantly simplifies the support requirements
for our business - as well as delivering explicit cost savings in its own
right.
Ocean Dial Acquisition
We announced the acquisition of Ocean Dial Asset Management in March 2023 and,
having worked to secure regulatory approvals in both UK and India, completed
the acquisition process on 2 October 2023.
Ocean Dial's current business is the management of the assets of the India
Capital Growth Fund Limited which, as announced on acquisition on 2 October
2023, had a net asset value of c.£166m (at 22 September 2023) generating an
annualised run rate revenue (based on market cap) for the Group of c.£1.9m.
Ocean Dial's contribution illustrates the vibrancy of the Indian stock market
and the continued attractions of investing in this dynamic economy.
The Board of the India Capital Growth Fund, working closely with Ocean Dial
and River Global, managed a biennial redemption option with higher redemption
levels than expected but with a resulting shareholder base which is almost
entirely retail based and free of discount players. The Fund traded at a
premium for a period shortly thereafter and was able to issue c.£10m in new
shares. As at 30 September 2024, the Fund had an updated net asset value of
c.£176m generating an annualised run rate revenue (based on market cap) for
the Group of c.£1.99m which is, of course, subject to the volatility of the
Indian stock market.
The acquisition was earnings enhancing for the Group and it is anticipated
that further synergies will be achievable as we integrate the business and
capitalise on the operating model we have established with the Fund Board.
Corporate Rationalisation
In October 2023, we announced an agreement in principle to dispose of our
interest in River and Mercantile Infrastructure LLP ("RMI"). In the event, the
agreement envisaged at the time did not reach completion, but a more
straightforward disposal of our interest was concluded in May 2024. The
business generated a loss for the year to September 2024 of £0.3m.
Digital Platform - PARMENION
Parmenion had assets under management or advice of £12.6bn as at 30 September
2024 (including the business of EBI which it acquired in 2022) which compares
favourably to £10.6bn at the same time the previous year. Operating profit
for the combined businesses was £15.5m at their December 2023 year end which
again compares favourably to the previous year's result of £11.9m. Revenue
generated by the combined businesses over the year to end December 2023
amounted to £48.6m. Overall, EBITDA more than tripled in the three years to
end December 2023.
Parmenion continues to garner awards from across the spectrum of investment
platform providers, including "Best model portfolio service 2024" (for its EBI
business) at the Professional Adviser Awards 2024 and first place in 6 out of
11 categories in the Defaqto platform service review 2024. It is Defaqto 5
Star rated and Defaqto Gold Service rated amongst 20 Defaqto ratings covering
all aspects of its business.
Parmenion serviced 1,570 financial advisory firms as at end December 2023 and
continues to add functionality to its proprietary technology, importantly
adding a new Platform Switch Service in 2023 which facilitates the process of
transitioning to Parmenion for financial advisory firms.
More generally, Panmure noted in a research note published in October 2023
that "the attractions of the long-term structural growth opportunities in the
investment platform market remain. The addressable market remains vast, at
c.£3trn and growing, with penetration of said market around 31%, leaving
plenty to go for. Structural trends, including an ageing population and
regulatory change, are encouraging saving as the burden of responsibility for
saving for retirement shifts from employer to employee. Given the number of
structural growth drivers, savings products, such as ISAs, remain popular, and
SIPPs are growing in number due to the flexibility they provide. As the
popularity of these products grows, so does that of the investment platforms,
key providers of these products to the wider UK market."
Annualised Revenue Breakdown by Business Type (as at 30 September 2024)
The following table shows the fee rates by business type as at financial year
end September 2024 compared to that for the previous year:
Year to end September 2024 Year to end Sept 2023
Business Type AUM (£m) Gross annualised revenue net of rebates (£'000) Weighted average fee rate, net of rebates (bp) Weighted average fee rate, net of rebates (bp)
Wholesale 1,887 9,992 53 60
Institutional 639 2,397 38 37
Investment Trust 253 2,501 99 103*
Total 2,779 14,890 54 59
*includes Ocean Dial Asset Management (acquired 2 October 2023) on a pro-forma
basis
The reduction in fee rate for the wholesale funds business reflects the near
€400m in additional fund assets that were raised as part of the "joint
venture" with Compound Equity Group referenced earlier. As noted, initial
founder assets for this joint venture (which include Jonathan Knowles own
capital) have been onboarded at a low fee rate. Fee rates elsewhere for the
Group's open-ended funds have not moved significantly.
This table excludes the Group's interest in Parmenion which had assets under
management or advice of £11.1bn, generating revenues of £43.2m as at 31
December 2023 (financial year end of Parmenion) and assets under management or
advice of £13bn as at 31 December 2024.
· Wholesale refers to the active equity assets which are
held and managed in mutual funds distributed by the Group.
· Institutional refers to the active equity assets which
are held and managed in separate accounts on behalf of institutional clients
of the Group.
· Investment Trust refers to the active equity assets which
are held and managed in investment trusts which are clients of the Group.
Gary Marshall
Chief Financial and Operating Officer
5 March 2025
STRATEGIC REPORT
Introduction
The Directors present their Strategic Report on the Group for the year ended
30 September 2024.
Review of the business
A review of the business is contained in the Chairman's statement and in the
Business Review and is incorporated into this report by cross-reference.
Strategy
The Group's strategy is to identify high-quality asset and wealth management
businesses which can be added to the AssetCo stable and improved by working
alongside our experienced management team to improve their capabilities,
distribution and reach.
Our key areas of focus include being a responsible company and manager,
meeting the needs of clients and investors and to expand through a combination
of selective acquisitions and organic growth.
Key performance indicators ("KPIs")
The financial key performance indicators for the year ended 30 September 2024
were as follows:
As at end 30 September 2024 2023 Movement
Assets under Management ("AUM") £2,779m £2,409m +£370m
Total assets (balance sheet) £60.5m £72.3m -£11.8m
Annualised revenue 4 £14.9m £13.9m +£1.0m
Profit/Loss for the year -£2.5m -£26.7m +£24.2m
(i.e. including exceptionals and discontinued business)
Operating profit/loss for continuing business excluding exceptionals 5 for -£3.3m -£7.7m +£4.4m
the year
Investment performance 6 (1 year) 33% 49% -16% points
Investment performance5 (3 year) 45% 81% -36% points
Investment performance5 (5 year) 54% 53% +1% points
Context for the movement in above KPIs is given in the Chairman's Statement
(in relation to profit and loss) and in the Business Review (in relation to
the movement in AUM, annualised revenue and the investment performance). The
reduction in total assets (balance sheet) follows mainly from the losses
incurred during the year together with cash outflow relating to acquisitions
(see note 22).
Alternative Performance Measures ("APMs")
The Group uses non-GAAP APMs as detailed below to provide users of the annual
report and accounts with supplemental financial information that helps explain
its results, recognising the fact that certain acquired businesses may have
contributed to the results for only part of the financial year.
The calculation of these APMs has been defined above; the reasons for their
use are as follows:
APM Reason for use
Assets under Management This is a standard industry measure of the scale of our active equity
business. Revenues in that business are typically derived as a percentage of
assets under management making it key to the profitability of the business.
Annualised revenue Given that AssetCo is in the business of acquiring and/or integrating
businesses, this may occur at different points during the financial year.
Consequently, the full year's revenues as disclosed in the statutory accounts
may not give a clear picture of what "business as usual" might look like.
Annualised revenues, as defined, allow us to aggregate revenues across all
business units and present a consolidated picture on a consistent basis. In
practice, the actual outturn is dependent upon actual business experience
during the year so this is not a forecast.
Operating profit/loss for continuing business excluding exceptionals for the Much as above, exceptional costs (such as those incurred in re-structuring or
year integrating business after acquisition) obscure the "business as usual"
picture. Excluding them from operating profit/loss allows a better assessment
of the underlying business profitability. A reconciliation of this number to
statutory continuing operations operating loss is provided in note 8 of the
financials.
Investment performance Investment performance relative to competitor funds is a standard industry
measure of the competitiveness of the investment funds marketed by the Group.
One, three and five year measurement periods are considered representative.
Risk Management and Internal Controls
The Board is responsible for the Company's system of internal controls and for
reviewing the effectiveness of the Company's risk management framework.
During the reporting period, the Board has continued to review the Company's
risk management framework and maintains a risk register which assesses risks
facing the Group. The Board regularly reviews the risk register and obtains
assurance from the Executive Team as to the effectiveness of the risk
management framework.
The sale of loss-making businesses has allowed the Group to focus on its
active equities business and has helped to strengthen the risk management
framework following the integration of the Group's operating businesses in
line with its target operating model. The Group's risk management framework is
designed to manage rather than eliminate the risk of failure to achieve
business objectives and can provide only reasonable and not absolute assurance
against material misstatement or loss.
The Company has established procedures for planning and monitoring the
operational and financial performance of the Group, as well as compliance with
applicable laws and regulations. These procedures include:
• clear responsibilities for financial controls and
the production of timely financial management information;
• the control of key financial risks through clearly
laid down authorisation levels and proper segregation of accounting duties;
• the regular review of business updates, cash flows
and cash balances by management and the Board.
Principal risks and uncertainties
The Directors continuously monitor the business and markets to identify and
deal with risks and uncertainties as they arise. Set out below are the
principal risks which we believe could materially affect the Group's ability
to achieve its strategy. The risks are not listed in order of significance.
Risk Responsibility and Principal Control
Profitability and Dividends: Board/Executive Team:
Profitability remains a key focus for the Group. Delays in profitability in The exit from Rize and RMI, both loss making businesses, has helped the Group
the longer term could threaten the Group's ability to trade on a going concern to focus its resources on its active equities business. The Group continues to
basis, impact the Board's ability to fund growth and acquisitions as well as cut costs. The Group is focused on achieving run-rate profitability and the
the ability to pay dividends. Board monitors costs and cash management carefully to this end. In particular,
cash forecasts are regularly provided to the Board for the purposes of
monitoring the position against regulatory capital requirements.
Distribution: Board/Distribution:
Corporate actions such as acquisitions and business re-structuring can disturb Distributors and markets are carefully targeted and client relationships
existing clients while discouraging new ones. The reduction in the overall monitored to identify and mitigate the risk of loss.
size of the market for active equity asset management has also made increasing
assets under management more difficult.
Performance and Product: Board/Product/Investment Team:
Sustained under-performance or investment style drift could lead to client The Group continually monitors and develops its product suite to ensure that
redemptions as could situations where a fund is considered out-of-date in its it remains competitive and attractive. The Investment Team, in conjunction
positioning or no longer fit for purpose. with Investment Risk, continually monitor fund performance against targets,
including style, taking corrective action where necessary.
Loss of Key People: Board/Remuneration Committee:
The Group has managed most departures on a planned basis but going forwards The Board reviews succession planning for all senior executives. Senior
will need to ensure continued retention of key staff if it is to manage executives are subject to extended notice periods (between six and twelve
client, consultant and regulatory expectations. months). The Group seeks to offer attractive terms as well as a flexible
working environment. The Group operates a Restricted Share Plan and continues
to examine ways to incentivise and retain senior partners and key staff.
Economic Conditions: Board/Executive Team:
As an equity specialist the business remains vulnerable to any material fall The Group seeks to manage an appropriate balance of fixed and variable costs.
in equity markets. In the event of a sustained economic downturn, the Group would seek to take
early action to cut fixed costs.
Systems and Controls: Board/Operations:
Operating multiple systems across multiple subsidiary and associate companies The Group has developed a detailed controls framework to create a consistent,
increases the risk of control failure. Managing multiple service providers harmonised approach. The Group has consolidated to a single operating model as
also generates challenges. well as seeking to rationalise service providers.
ENVIRONMENTAL SOCIAL AND GOVERNANCE
In pursuing its strategy, the Company is committed to a responsible business
approach that delivers positive outcomes and sustainable long-term value to
its stakeholders. In this regard the Company has developed an Environmental
Social and Governance policy (the "ESG Policy").
We are committed to a responsible business approach that delivers positive
outcomes and sustainable long-term value to all our stakeholders and
particularly to our clients. At the heart of this is our ESG Policy which is
incorporated into all our decision-making processes.
In framing our ESG Policy we are focused on our clients concerns and needs.
We will endeavour to engage with our clients to understand and accommodate
their ESG requirements in terms of the services we provide.
Our ESG Policy is not static, it will continue to evolve as our business
changes and we will continually look to improve our ESG Policy in the light of
best market practice and the expectations of our stakeholders.
Environmental
We strive to reduce the impact of our business activities on the environment.
This includes reducing our energy, carbon, water and waste footprint as a
business. The Company does not currently fall under the scope of Streamlined
Energy and Carbon Reporting requirements.
Social
We expect to be a responsible member of the community and a force for positive
change. We endeavour to contribute to the community through philanthropic
partnerships, paid internships and encouraging employee volunteering.
Governance
Commensurate with the size of the AssetCo business, we embrace high standards
of integrity, transparency and corporate governance. We foster a culture of
inclusion, diversity of thought and background (including improving our gender
balance) and equal opportunity across our business. We treat our staff with
integrity and respect. We are a values-led business and look to attract,
develop and retain the best talent.
Memberships and Reporting
Our ESG agenda is supported by the activities of our operating businesses.
This includes the adoption of the United Nations-backed Principles for
Responsible Investment ("UNPRI") by key subsidiaries and by becoming
signatories to the UK Stewardship Code, to which both River Global Investors
and SVM Asset Management have been accepted by the Financial Reporting Council
("FRC") as signatories. A number of the investment products managed by River
Global Investors have a clear ESG focussed investment process.
We are continuing to evolve our ESG policies across the Group with the
operation of a Sustainability and Stewardship Committee to oversee progress in
this area.
Acquisitions and Service Providers
Our strategy as a business is largely predicated on acquisitions. In terms
of businesses acquired we will look to ensure that they have or adopt policies
and initiatives which are consistent with our ESG Policy. Likewise, we expect
all significant service providers to AssetCo and its businesses to have in
place policies which are consistent with our ESG Policy.
OUR STAKEHOLDERS: S.172 STATEMENT
Duty to promote the success of the Company
Section 172(1) of the Companies Act 2006 requires Directors to act in the way
they consider, in good faith, would be most likely to promote the success of
the Company for the benefit of its members as a whole, and in doing so have
regard (amongst other matters) to:
• the likely consequences of any decision in the
long-term;
• the interests of the Company's employees;
• the need to foster the Company's business
relationships with suppliers, customers and others;
• the impact of the Company's operations on the
community and the environment;
• the desirability of the Company maintaining a
reputation for high standards of business conduct; and
• the need to act fairly between members of the
Company.
This Section 172 Statement sets out how the Directors have discharged this
duty.
In order for the Company to succeed in the long-term, the Board must build and
maintain successful relationships with a wide range of stakeholders. The Board
recognises that the long-term success of the Company is dependent on how it
works with a number of important stakeholders.
The Board's decision-making process considers both risk and reward in the
pursuit of delivering the long-term success of the Company. As part of the
Board's decision-making process, the Board considers the interests of a broad
range of the Company's stakeholders. The Board considers that its primary
stakeholders are clients, employees, shareholders, suppliers and service
providers, and regulators.
The Board fulfils its duties in collaboration with the senior management team,
to which day-to-day management has been delegated. The Board seeks to
understand stakeholder groups' priorities and interests. The Board listens to
stakeholders through a combination of information provided by management and
also by direct engagement where appropriate. The following overview provides
further insight into how the Board has had regard to the interests of our
primary stakeholders, while complying with its duty to promote the success of
the Company in accordance with Section 172 of the Companies Act 2006.
Our primary stakeholders How we engage with them
Clients: Our distribution teams have a busy client engagement schedule and maintain
contact with our clients through regular meetings, reporting and written
The Company through its subsidiaries aims to provide investment products that communication. This helps us to understand our clients' needs.
meet the needs of clients and put those needs first.
Members of the senior management team meet directly with key clients to
understand the views of our clients and to ensure that we continue to meet our
clients' expectations.
Client engagement feeds into our regulated subsidiaries assessment that
products and services are fit for purpose and offer fair value in line with
the UK regulator's consumer duty obligations.
Employees: The Group's senior management team is engaged directly with its operating
subsidiaries and regularly participates in face-to-face meetings at management
The Company's employees are senior experienced professionals. It is of the level where open discussion is encouraged. Our subsidiaries have strong
utmost importance to the Board that we have a culture that attracts and leadership and management teams who engage with colleagues in a number of
retains talented employees. ways, including all employee calls and colleague network groups.
We value our diverse workforce and seek inclusion at all levels, with
colleague surveys providing actionable insights to how we can improve
this.
The senior management team has focussed on withdrawing from loss making
businesses, the integration of newly acquired businesses into the Group and
the restructuring of certain group functions to better align with business
needs. During this process, due consideration has been given to all
stakeholders, including colleagues, shareholders and our clients.
The Group is proud to support the development of colleagues through training,
study leave and support as well as contributing to our community through the
support of a number of charities.
Shareholders: The Board engages with the Company's shareholders in a number of ways which
include the AGM and one-to-one meetings and telephone conversations. Our AGM
The ongoing support of our shareholders is vital in helping us deliver our allows shareholders the opportunity to engage directly with the Board.
long-term strategic objectives.
The Chairman, and CFOO regularly meet (in person and virtually) the Company's
major shareholders to discuss the financial performance of the Company.
Matters discussed with shareholders include strategy, its execution and the
generation of returns.
Suppliers and service providers: The Company is committed to the highest standards of business conduct.
The Company places reliance on external third-party suppliers and service The selection process and engagement with these parties is undertaken by
providers for certain activities and services. senior management. We ensure that there is an appropriate framework of
oversight of our key third-party suppliers. Regular meetings are held with key
third-party service providers and issues escalated to senior management where
required. Material supplier selection is reported to the Board and
significant issues or risks related to suppliers will be escalated to the
Board.
As described above, a key focus has been on the integration of the newly
acquired businesses into the Group. Suppliers and service providers have been
reviewed by senior management during this period as part of this project.
Regulators
The Group operates in the UK and is subject to the oversight of the Financial
Conduct Authority. River Global Investors is also registered with the US
Securities and Exchange Commission. We have a conduct-led culture that
encourages our people to act with integrity at all times.
The Company is AIM listed and complies with the AIM Rules. We engage with our
regulators through the Group's legal and compliance function by way of regular
mandatory reporting as well as any ad hoc interactions required by our
regulators.
Community and the environment
Due regard is given to the impact of the Company's operations on the community
and environment through the activities of its subsidiaries overseen by the
senior management team.
Sustainable investing is a key focus for the Group's businesses. River Global
and SVM are signatories to UNPRI and the FRC's Stewardship Code.
The Group aims to make an impact within the communities it operates in through
supporting charitable activities undertaken by employees through a GAYE
payroll scheme, volunteering leave, and colleague-selected charity partners.
The Group have also supported The Switch, an organisation providing Work
Experience placements for students in Tower Hamlets for over 30 years to
provide real life experiences of the world of work and to broaden career
aspirations.
The strategic report was approved by the Board on 5 March 2025 and signed on
its behalf by;
Gary Marshall
Chief Financial and Operating Officer
5 March 2025
Company Registration Number: 04966347
BOARD OF DIRECTORS
Martin Gilbert
Chairman
Martin was appointed to the Board on 25 January 2021 as the Company's
Chairman.
Martin Gilbert has a long history in asset and wealth management. He
co-founded Aberdeen Asset Management PLC in 1983 and was chief executive
officer from 1991 to 2017. During that period Aberdeen Asset Management PLC
grew, through a combination of organic growth and strategic acquisition, to
become one of the world's leading independent asset managers with £308
billion of AUM. In 2017 Aberdeen Asset Management PLC merged with Standard
Life plc, to become Standard Life Aberdeen plc. On merging, Standard Life
Aberdeen plc was the biggest UK-based asset management company and the second
biggest in Europe. Martin was co-chief executive officer and subsequently vice
chairman until he retired from Standard Life Aberdeen plc in September 2020.
Martin is chairman of Revolut Ltd, Toscafund and an independent director of
Glencore plc, alongside a number of other directorships.
Skills and competencies:
Martin brings substantial experience and knowledge of the financial services
and asset management sector. He is an experienced leader, having been the CEO
of Aberdeen Asset Management PLC. Martin's breadth of experience in the
financial services sector, understanding of the diverse issues faced when
building an asset management group through acquisitions and his strong
leadership style allow him to lead an effective Board and are vital to the
Company's long-term sustainable success.
Gary Marshall
Chief Financial and Operating Officer
Gary was appointed to the Board on 11 October 2022 as the Company's Chief
Financial and Operating Officer.
Gary has worked in the financial services industry since 1983, initially in
life assurance but for over 30 years in asset management. He joined Aberdeen
Asset Management PLC in 1997 following Aberdeen's acquisition of Prolific
Financial Management and held a variety of roles leading up to being Head of
EMEA and UK Regions for Standard Life Aberdeen before retiring from that
company in 2021. In his capacity as regional head, Gary served as Chief
Executive for regulated operating subsidiaries based in UK and in Europe; he
also served as Chief Executive and Head of Americas for Aberdeen from 2010 to
2014, based in Philadelphia. Gary brought a strong finance perspective to his
previous roles and developed a deep understanding of the operational
complexities of running a multinational asset management business from years
spent managing and integrating acquired businesses. Gary is a qualified
actuary.
Skills and competencies:
Gary has extensive asset management experience having held a number of senior
roles in a large, well regarded asset management group. He has in-depth
expertise in finance, operations and regulatory compliance. Gary's operational
expertise and his experience of integrating businesses is vital to the Group's
strategy and the long-term sustainable success of the Company.
Jonathan Dawson
Senior Independent Director & Chairman of the Remuneration Committee
Jonathan joined the Board as senior independent director on 15 June 2022 on
completion of the acquisition of River and Mercantile Group PLC, where he had
been chairman for a number of years.
He is a graduate of the universities of St Andrews and Cambridge and started
his career in the Ministry of Defence before joining Lazard, the investment
bank, where he spent over 20 years. He left Lazard in 2005 and co-founded
Penfida Limited, the leading independent corporate finance adviser to pension
fund trustees which is now part of the XPS Group. Jonathan previously served
as a non-executive director and chair of the remuneration committee of
National Grid plc until July 2022. Other previous appointments include
non-executive directorships of Galliford Try plc, National Australia Group
Europe Limited and Standard Life Investments (Holdings) Limited. He also
served as senior independent director of Next plc and Jardine Lloyd Thompson
Group plc.
Skills and competencies:
Jonathan has significant financial services, pensions and non-executive
experience. He brings innovative perspective and independent oversight to the
Board. Jonathan's breadth of experience, knowledge of the business of River
and Mercantile and strong corporate governance expertise contribute to the
effective operation of the Board and long-term sustainable success of the
Company.
Tudor Davies
Non-executive director & Chairman of the Audit Committee
Tudor was appointed to the Board on 23 March 2011 and was Chair of AssetCo
until the re-admission and change in April 2022 when Martin Gilbert took over
the role.
Tudor has over 20 years of experience in the repositioning of several Plc's,
as Chair, Chief Executive and Non-Executive Director, and was formerly a
partner with Arthur Young (a predecessor firm of Ernst & Young LLP)
specialising in corporate finance and recovery.
Skills and competencies:
Tudor brings substantial experience to the Board and his knowledge of the
turnaround of businesses allow him to bring a financial and strategic
perspective to a broad range of subjects in support of the Board and its
Committees.
Christopher Mills
Non-executive director
Christopher was appointed to the Board on 23 March 2011.
Christopher is chief executive officer of Harwood Capital Management Limited
and chief executive and investment manager of North Atlantic Smaller Companies
Investment Trust plc. He relinquished his role as Chairman of the Audit
Committee to Tudor Davies when the latter became non-executive.
Skills and competencies:
Christopher has significant asset management experience, having established a
successful asset management business, Harwood Capital. He is a highly regarded
investor and draws on this experience in support of the Board.
DIRECTOR'S REPORT
Introduction
The Directors present their annual report and the audited consolidated
financial statements of the Company and the Group for the year ended 30
September 2024.
Principal activities and business review
The Company's principal activity is to act as a holding company for a group of
wealth and asset management companies. AssetCo plc is a public limited company
registered and domiciled in England and Wales with registered number 04966347.
The Company is listed on AIM and is subject to the AIM Rules. The Group
operates principally in the United Kingdom. A review of the business is set
out in the Strategic Report which is incorporated by reference into this
report.
Directors
The Directors who were in office during the year, and up to the date of
signing the financial statements, were as follows:
Martin Gilbert (Executive Chairman)
Peter McKellar (Deputy Chairman)
resigned 30 April 2024
Gary Marshall (CFOO)
Jonathan Dawson (Senior Independent Director)
Tudor Davies (Non-Executive)
Christopher Mills (Non-Executive)
The company secretary is Gordon Brough.
In accordance with best practice, all Directors will offer themselves for
re-election at the AGM.
Results
The financial statements are set out after the committee reports.
Dividend
Your Board decided against the payment of a dividend this year in light of
adverse trading conditions.
Capital structure
The primary objective of the Company's capital management is to ensure that
capital is available to allocate to the business that maximises shareholder
value. The proposed share reorganisation is intended to assist with this by
better aligning shareholders interests with the Group's two main business
interests.
Full details of the authorised and issued capital, together with details of
the movements in the Company's issued share capital during the year, are shown
in note 30.
Financial risk management
See note 3 to the financial statements.
Research and development
No expenditure has been incurred during the year in respect of the Group's own
research and development activities.
Future developments
The outlook for the Group is set out in the Chairman's Statement.
Directors' shareholdings and interests
The beneficial interests of the Directors in the shares of the Company were as
follows:
At At
30 September 2024 30 September 2023
No. No.
Martin Gilbert 8,892,500 7,283,300
Peter McKellar 7 3,938,410 3,938,410
Gary Marshall 414,592 414,592
Jonathan Dawson 347,810 347,810
Tudor Davies 8 2,073,920 2,073,920
Christopher Mills 9 26,964,500 20,638,420
No Director had a material interest in any significant contract (other than a
service contract) with the Company or any subsidiary company at any time
during the year.
Conflicts of interest
A director has a statutory duty to avoid a situation in which they have or
could have a conflict of interest or possible conflict with the interests of
the Company.
The Company has adopted a policy relating to the handling by the Company of
matters that represent conflicts of interest or possible conflicts of interest
involving the directors. Where a conflict of interest or potential conflict of
interest is identified, only directors that are not involved in the conflict
or potential conflict may participate in any discussions or authorisation
process.
Substantial shareholdings
At 28 February 2025 the company secretary has been notified, in accordance
with Chapter 5 of the Disclosure Guidance and Transparency Rules sourcebook as
issued by the Financial Conduct Authority, of the following interests in 3% or
more in the ordinary share capital of the Company:
No. of shares % of issued share capital
Harwood Capital LLP 26,964,500 18.7%
Punter Southall Group Ltd 12,745,800 8.8%
Martin Gilbert 8,892,500 6.2%
Hargreaves Lansdown Asset Management Limited 8,497,458 5.9%
Somers 7,170,960 4.9%
A J Bell Securities 5,272,306 3.7%
Dowgate Capital 5,144,654 3.5%
Interactive Investor 4,456,828 3.1%
Share buy-back
At the annual general meeting in 2024, the Company was granted the authority
by its shareholders to buy back its own shares up to a maximum of 14,247,407.
The Company did not exercise this authority during the financial period under
review. However the Company holds 5,354,770 shares in treasury from previous
purchases.
Political donations
The Group made no political donations or contributions during the year.
Energy and Carbon Reporting
The Company does not currently fall under the scope of Streamlined Energy and Carbon Reporting requirements.
Business combinations and disposals
Business combinations and disposals during the year are discussed in note 22.
Post balance sheet events
Three notable events took place following the year end which are described in
Note 35 ("Post Balance Sheet Events") being a revision to the lease for London
premises, consolidation of service provision and the issue of a circular to
shareholders in AssetCo plc recommending a share re-organisation and the
re-naming of the Company to River Global PLC.
Going concern
The Group is currently loss making, albeit with a trajectory that evidences
improving operational losses over time and which affords a pathway to
profitability. Against this background, the Directors have given careful
consideration to the going concern assumption on which the Group's accounts
have been prepared. Having carefully considered the Group's operational and
regulatory cash requirements, the Directors have concluded that the Group has
adequate financial resources to continue operating for the 12 months from the
date of signing these financial statements. On that basis the Directors have
continued to adopt the Going Concern basis of accounting in preparing the
consolidated Group and Company accounts. Further detail is set out in note 2
to the accounts.
Statement of directors' responsibilities in respect of the financial statements
• The Directors are responsible for preparing the
Annual report and the financial statements in accordance with applicable law
and regulation.
• Company law requires the Directors to prepare
financial statements for each financial year. Under that law the Directors
have prepared the Group and the Company financial statements in accordance
with UK-adopted international accounting standards.
• Under company law, directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the profit or
loss of the group for that period. In preparing the financial statements, the
Directors are required to:
o select suitable accounting policies and then apply them consistently;
o state whether applicable UK-adopted international accounting standards
have been followed, subject to any material departures disclosed and explained
in the financial statements;
o make judgements and accounting estimates that are reasonable and prudent;
and
o prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and Company will continue in business.
• The Directors are responsible for safeguarding the
assets of the Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
• The Directors are also responsible for keeping
adequate accounting records that are sufficient to show and explain the
Group's and Company's transactions and disclose with reasonable accuracy at
any time the financial position of the Group and Company and enable them to
ensure that the financial statements comply with the Companies Act 2006.
• The Directors are responsible for ensuring the
annual report and the financial statements are made available on a website.
Financial statements are published on the company's website in accordance with
legislation in the United Kingdom governing the preparation and dissemination
of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the company's website is the
responsibility of the Directors. The Directors responsibility also extends
to the ongoing integrity of the financial statements contained therein.
Directors' confirmations
In the case of each Director in office at the date the Directors' report is
approved:
• so far as the Director is aware, there is no
relevant audit information of which the Group's and Company's auditors are
unaware; and
• they have taken all the steps that they ought to
have taken as a Director in order to make themselves aware of any relevant
audit information and to establish that the Group's and Company's auditors are
aware of that information.
Directors' liability insurance
The Company has entered into deeds of indemnity for the benefit of each
Director of the Company in respect of liabilities to which they may become
liable in their capacity as director of the Company and any company in the
Group. Those indemnities are qualifying third party indemnity provisions for
the purposes of S. 234 of Companies Act 2006 and have been in force from 15
April 2022 (or, if later, the date of the Director's appointment) up to the
date of approval of the financial statements and will continue to be in force.
Independent auditors
During the year the incumbent auditors BDO LLP were replaced by approval of
the Board with Moore Kingston Smith LLP. In accordance with section 489(4) of
the Companies Act 2006, a resolution to reappoint Moore Kingston Smith LLP
will be proposed at the annual general meeting.
Corporate governance
The Company's statement of corporate governance can be found in these
financial statements. The Corporate Governance Statement forms part of this
Report of the Directors and is incorporated by cross-reference. The Board
confirms that it has complied with the requirements of the Quoted Companies
Alliance Corporate Governance Code for small and mid-sized publicly traded
companies, save as disclosed below.
Annual General Meeting
The resolutions to be proposed at the forthcoming Annual General Meeting are
set out in the formal notice of the meeting.
Recommendation
The Board considers that the resolutions to be proposed at the Annual General
Meeting are in the best interests of the Company and it is unanimously
recommended that shareholders support these proposals as the Board intends to
do in respect of their own holdings.
Approval of annual report
The Corporate Governance Report, the Strategic Report and the Directors'
Report were approved by the Board on 5 March 2025.
By order of the Board
Gary Marshall
Chief Financial and Operating Officer
5 March 2025
CORPORATE GOVERNANCE REPORT
Dear Shareholder,
The Board recognises the value of good corporate governance in ensuring the
long-term sustainable success of the Company. In accordance with AIM Rule 26,
the Company chooses to report against the Quoted Companies Alliance Corporate
Governance Code for small and mid-sized publicly traded companies (the "QCA
Code 2018"). The QCA has implemented a number of enhancements to its Code
which will apply from next year and we expect to report on these in next
year's Accounts.
The following Report sets out the Company's governance arrangements and
describes how the ten principles of the QCA Code have been addressed and
provides the disclosures indicated by the Code. The Board has reviewed the
Corporate Governance disclosures and believes that the Group complies with the
principles and disclosures required by the QCA Code, except as otherwise
disclosed below.
Martin Gilbert
Chairman
5 March 2025
QCA Code Compliance
The Company has adopted the QCA Code. The disclosures below describe in detail
how we have applied the QCA Code and where our practices differ from the
expectations of the QCA Code. A formal statement on our compliance with the
QCA Code is set out in the Directors' Report.
1. Establish a strategy and business model which promote the long term value for Shareholders
The Business Review and Strategic Report describe the business model and
business objectives which when read with the Chairman's Statement describe the
past year's activity and the desired future prospects of the Group. Further
detail of the strategy is included in the Directors' Report. The principal
risks and uncertainties which may impact the Group's ability to achieve its
strategy are set out in the Strategic Report.
2. Seek to understand and meet Shareholders' needs and expectations
The Company, through its Chairman, has regular contact with its institutional
Shareholders to understand their needs and expectations. Christopher Mills is
the CEO of the company's largest shareholder and where appropriate provides
feedback to the Board on that shareholder's view of the Company's
performance. The Board supports the principle that the Annual General
Meeting should be used to communicate with private Shareholders and encourages
them to participate.
Shareholders can access corporate, regulatory, news and share capital
information on the Company's website at www.assetco.com. Enquiries can be
directed to the Board using the corporate e-mail: info@assetco.com
3. Take into account wider stakeholder and social responsibilities and their implications for long term success
Details of the Board's consideration of its stakeholders is set out in the
Section 172 Statement.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board considers regularly the risks relating to the Company's
activities.
Details of the current risks and uncertainties facing the Company are set out
in the Strategic Report.
Details of the approach to internal controls and risk management are also set
out in the Strategic Report. The Company does not currently have an internal
assurance function and has appointed a third party to undertake this work on a
case-by-case basis. The Board will continue to review the risk management
framework and assess its effectiveness.
5. Maintain the Board as a well-functioning balanced team led by the Chair
The composition of the Board is considered to be appropriate in terms of the
current development of the Company's business strategy. There is an
appropriate balance between executive and non-executive directors, one of
which was considered by the board to be independent during the accounting
period. There are four Board Committees. The terms of reference for each is
available on the Company's website at www.assetco.com.
Details of meeting frequency and attendance are set out below. All Board
members are expected to attend the Company's regular board meetings and
relevant Board Committee meetings and to ensure that they have sufficient time
to allocate to their role. Each Board member has confirmed that he has
sufficient time to perform the role effectively.
6. Ensure that between them the Directors have the necessary up-to-date skills and capabilities
The Directors (biographical details can be found in this document) have a wide
range of qualifications and expertise which is considered appropriate in terms
of the implementation of the Company's strategy. The Board fosters an attitude
of independence of character and judgement. The Company Secretary advises the
Board on all governance matters. All Directors have access to the Company
Secretary and the General Counsel's services and advice. While the Board is
satisfied that its Directors have the appropriate skills and expertise, no
disclosure is provided detailing the steps Directors take to keep their skills
up to date. The Board values diversity and expects to improve its gender
balance once financial conditions improve.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Board has been focussed on the implementation of the Company's strategy
and the completion of several corporate transactions. In the circumstances,
the Board has not undertaken a formal evaluation process of its effectiveness
during the period but expects to do so later in 2025.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board, in developing the Company through the implementation of its
strategy, will promote a positive corporate culture, and desired ethical
behaviours within the Company, and communicate these across the Group.
Integrity is key to the Group's success and is fundamental to the development
of a conduct led culture across the Group. The Group has a suite of policies
which underpin the Board's expectations of ethical values and behaviours which
it seeks to promote across the business. In order to do so, the Group employs
a series of measures including the embedding of conduct and ethical standards
within training modules which are required to be undertaken by all employees
and regular "all hands" briefings where cultural values are reinforced,
examples of the Board's expectations showcased, and achievements celebrated.
The Collective Network has been established as an informal network for staff
promoting ethical values and celebrating diversity and inclusion: it reports
on events and business updates monthly.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
The Board is responsible for the Company's system of internal controls and
reviewing its effectiveness. The procedures for planning and monitoring the
operation and performance of the Company, as well as its compliance with
applicable law and regulations, are set out below under "Corporate
Governance". The Board has formally approved a schedule of matters reserved
for the Board and requires various matters to be escalated from its operating
subsidiaries. The role of Executive Chairman and Senior Independent Director
is clearly understood and is operating satisfactorily, further disclosure will
be included on the Company's website in due course.
10. Communicate how the Company is governed and is performing by maintaining a dialogue with Shareholders and other relevant stakeholders
The principal method of communicating the Company's corporate governance
process and principles is the Annual Report which is being sent directly to
Shareholders and is available on the Company's website at www.assetco.com.
The Annual General Meeting also provides an opportunity for Shareholders to
address corporate governance matters. Details of the role of the Board's
committees and work undertaken is described below.
Corporate Governance
Leadership and strategy
The Board is responsible for matters of strategy, performance, budgeting and
resources as well as setting standards of conduct and accountability. The
Board has delegated authority for the day to day running of the business to
the Senior Executive Team.
The Board has provided the Group with entrepreneurial leadership and is
responsible for the long-term sustainable success of the Company for the
benefit of its shareholders. The Board has regard for its other stakeholders,
including employees, clients, shareholders, suppliers and service providers
and regulatory authorities. Further detail of this is set out in the Section
172 Statement.
During the period, the Board has focussed on the development and execution of
the Company's strategy. A significant focus has been on the development of,
and execution of, acquisition opportunities, the integration of those
businesses and the reduction of costs in those businesses.
The Board has reviewed and challenged the annual budget during the period. The
Board receives regular reports on the progress of the implementation of cost
reduction strategies and the integration of the active equity businesses onto
a single operating model. The Board regularly reviews the resources required
for the Group's size and complexity.
Board Composition
The Board comprises two Executive Directors and three Non-Executive
Directors.
No individual or group of individuals dominate the Board or its decision
making.
The Board considers Jonathan Dawson to be an independent director for the
purposes of the QCA Code during the reporting period. Jonathan Dawson is the
Senior Independent Director.
Details of the skills and competencies brought by each Director are set out
below their respective biographies.
All Directors are required to stand for re-election on an annual basis at the
Company's annual general meeting in accordance with the Company's Articles of
Association.
The Board, through the Nomination Committee, will continue to review the
Board's composition to ensure that the skills and experience of Directors
support the growth of the Company and the achievement of its strategic
objectives. In doing so, Board diversity will be actively considered.
The Board has determined that it has the appropriate balance of skills and
experience to enable it to effectively lead the Company.
Board and Committee Attendance
During the year, the Board held six scheduled meetings, which included
meetings to approve specific transactions as well as meetings to approve the
Company's full and half year results. Board and Committee Member attendance
at meetings is set out below:
Director Board Audit Remuneration Nomination
Martin Gilbert 6/6 n/a 1/2 0/0
Christopher Mills 4/6 3/5 1/2 0/0
Jonathan Dawson 6/6 5/5 2/2 0/0
Gary Marshall 6/6 n/a n/a n/a
Tudor Davies 5/6 5/5 2/2 0/0
Commitment
The Board requires all Directors to devote sufficient time to their duties and
use their best endeavours to attend all meetings. The Directors' appointment
letters or service contracts (as applicable) set out a minimum time
commitment, which for a non-executive director includes attendance at six
board meetings per annum, attendance at the AGM and additional meetings as
required. The Board is satisfied that each Director has sufficient time to
undertake their duties effectively.
Governance Framework
The Company, consistent with the early stages of the implementation of its
business strategy, has a flat management structure.
The terms of reference of each Board Committee has been reviewed, updated and
approved.
The Board continues to review the governance arrangements across the Group
which are evolving as part of the consolidation and integration work following
the completion of acquisitions.
Operation of the Board
The Board meets regularly: typically six times a year and on an ad-hoc basis
to consider specific items of business as the need arises.
The Chairman, in conjunction with the Executive Directors and Company
Secretary, sets the agenda for each Board meeting. Management information is
delivered ahead of each Board meeting and a comprehensive set of papers is
circulated before Board meetings. The decisions of the Board are formally
minuted.
All Directors have access to the Company Secretary's services and advice.
On certain matters in the year, the Board has sought external advice.
Conflicts of interest
The Board takes action to identify and manage conflicts of interest. Where
conflicts of interest arise, the relevant Director would declare their
interest in the matter and recuse themselves from the discussion and any
related decision.
Delegation of Authority
The Board is responsible for setting strategy, purpose and the direction of
the Company. The Board has delegated to the Senior Executive Team authority
for the day to day running of the business and specific authority (as set out
in the terms of reference of each committee) to the Audit, Remuneration,
Nomination and Disclosure Committees (the "Committees"). The remit of each
Committee is described below.
Audit Committee
Committee Composition
The Audit Committee comprises all the Non-Executive Directors and is chaired
by Tudor Davies. The Committee members have a mix of financial and sector
experience. The Committee received information and support from the Executive
Directors as well as the Company Secretary in performing its duties.
The Committee's responsibilities
The Audit Committee is focused on the key areas of financial integrity,
internal controls and risk management. This includes:
• review of the financial statements and Annual
Report;
• consideration of the external audit report and
management representation letter;
• going concern review;
• review of the audit plan and audit engagement
letter;
• review of the auditor's fees and non-audit
services;
• review of the risk management and internal
controls;
• review of the interim results; and
• meetings with the auditors with and without
management present.
The Audit Committee monitors the relationship with the auditors, Moore
Kingston Smith LLP, to ensure that the auditors' independence and objectivity
are maintained. As part of its review the Committee monitors the provision of
non-audit services by the external auditors.
The auditors prepare an audit plan for the full-year financial statements. The
audit plan sets out the scope of the audit, areas of special focus and audit
timetable. This plan is reviewed and agreed in advance by the Audit Committee.
Following the audit of the annual financial statements, the auditors present
their findings to the Audit Committee for discussion. Matters of material
estimates and judgement are regularly discussed and are detailed in note 4;
'Critical accounting estimates and judgements'.
Review of activities during the year
During the year ended 30 September 2024 the Audit Committee met five times.
The Committee considered:
• Proposals regarding a change in Auditor including
potential candidates and candidate submissions
• The Auditor's year-end audit plan;
• The annual report and financial statements for the
year-ended 30 September 2023 and the interim results for the current period to
ensure they were fair, balanced and understandable;
• Significant accounting judgments and estimates;
• Risk management reporting
• Internal control systems
• Cost reduction proposals
• Going concern;
• Impairments of investments, goodwill and other
assets; and
• Acquisition accounting for Ocean Dial Asset
Management Limited.
Remuneration Committee
Committee Composition
The Remuneration Committee comprises all the Non-Executive Directors and is
chaired by Jonathan Dawson. As the Company is not listed on the Main Market,
it is not subject to the requirements of the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment) Regulations 2013.
The Committee's responsibilities
The Remuneration Committee is tasked with ensuring that Directors and senior
employees are provided with an appropriate package of incentives and rewards
that align personal reward with increased shareholder value over both the
short and longer term. This includes:
• Determining the framework or policy for
remuneration for the Company's Executive Directors and senior management;
• Setting targets for any performance related pay
schemes;
• Overseeing any long term incentive share schemes;
and
• Overseeing major changes in employee benefit
structures.
Review of activities during the year
During the year ended 30 September 2024 the Remuneration Committee met twice.
The Committee considered matters related to compensation terms for existing
and new employees, variable compensation awards and severance terms.
Nomination Committee
Committee Composition
The Nomination Committee comprises all the Non-Executive Directors and is
chaired by Martin Gilbert.
The Committee's responsibilities
The Nomination Committee is responsible for reviewing the structure, size and
composition of the Board and identifying and nominating, for the approval of
the Board, candidates to fill vacancies on the Board as and when they arise.
This includes:
• Responsibility for identifying and nominating for
approval of the Board candidates to fill Board vacancies;
• Evaluating the balance of skills, knowledge and
experience on the Board;
• Considering succession planning for directors and
senior executives; and
• Reviewing the time requirements for Board
positions.
Review of activities during the year
The Nomination Committee did not meet during the year.
Disclosure Committee
The Disclosure Committee is responsible for determining whether information
concerning the Company or its shares constitutes inside information which
should be disclosed to the market and includes the timing of such disclosures
and the approval of the content of such disclosures. The Disclosure
Committee is comprised of Martin Gilbert, Peter McKeller (resigned 30 April
2024), Gary Marshall and Gordon Brough, the Company's general counsel. The
Disclosure Committee meets on an ad-hoc basis as required.
The terms of reference for each Committee is available on the Company's
website at www.assetco.com. The entity has taken the exemption from SECR
disclosures given the size, and has not reported on scope 1, 2 or 3 emissions.
The Committees are provided with sufficient resources to discharge their
duties, including access to external advisers where required.
REMUNERATION COMMITTEE REPORT
The following represents the Directors' Remuneration Report for the year to 30
September 2024. As the Company is listed on the Alternative Investment Market
('AIM') we have a number of obligations regarding disclosure which are covered
in full in this report and elsewhere. Our aim is to demonstrate that our
remuneration policy is aligned to the needs of the business and attuned to
shareholders' interests by promoting the long-term success of the firm and
delivery of its strategic plan.
Committee Composition
The Remuneration Committee comprises all the Non-Executive Directors and is
chaired by Jonathan Dawson.
The Committee's responsibilities
The Remuneration Committee is tasked with ensuring that Executive Directors
and senior employees are provided with an appropriate package of incentives
and rewards that align personal reward with increased shareholder value over
both the short and longer term. This includes:
• Determining the framework or policy for
remuneration for the Company's Executive Directors and senior management;
• Setting targets for any performance related pay
schemes;
• Overseeing any long-term incentive share schemes;
and
• Overseeing major changes in employee benefit
structures.
Compensation and Benefit Structure
The Group's main compensation and benefit arrangements are broadly common
across all employees. The components are:
Fixed pay
Basic Salary which is paid monthly in arrears.
Benefits
The Group provides access to a range of core and flexible benefits. Whilst the
intention is to harmonise these across the Group we currently operate a small
number of pension arrangements: a contributory pension scheme of 5% of basic
salary with Company matching, a non-contributory scheme of 10% of basic
salary, or an equivalent allowance. Insured benefits consisting of Life
Assurance (typically 4x basic salary) and Income Protection (typically 66.67%
of basic salary) are also part of the core benefits offering. Employees
benefit from 30 days annual leave, in addition to public holidays, and can
elect to opt in to private medical insurance for themselves with the
opportunity to add dependants at their own cost.
Discretionary Bonus
A discretionary cash bonus is considered at the financial year end.
Consideration includes the Group's overall performance along with delivery of
individual performance against objectives including contribution to team and
approach to risk management. Partners and employees of River Global Investors
LLP, who comprise the portfolio management team of one of the main equity
asset management subsidiaries of the Group, instead participate in a profit
share arrangement which allocates a fixed percentage of revenues from the
portfolios that they manage to a profit sharing pool from which all salaries
and any discretionary bonus is paid once certain allocated costs have been
deducted. A somewhat similar revenue sharing arrangement applies for certain
other portfolio managers.
Annual salary review
The Group has remained loss making throughout the year and, accordingly, it
was determined that targeted increases would only be awarded to individuals
who had taken on additional responsibilities or to better align them with
market/peer group comparators.
Discretionary Bonus
Recognising the challenging operating conditions, discretionary bonuses were
awarded only to a targeted number of employees either in recognition of an
exceptional contribution or to motivate and retain key individuals. For more
junior staff an award of (typically) £1,000 was made to reflect the efforts
and contribution to change made across the organisation during the year.
Restricted Share Plan
The Company announced the adoption of a Restricted Share Plan at the beginning
of November 2023. The Plan is designed primarily with longer term retention of
critical staff in mind and recognises the fact that the challenging operating
conditions provide limited scope for other more immediate rewards. It is
intended to be both simple and transparent, without pre-conditions that are
either complex to measure or monitor, or capable of becoming misaligned with a
developing business. The simple incentive of alignment with a rising share
price was considered to be the most compelling performance incentive. There
have been no new awards under the Restricted Share Plan during the year. The
Committee has considered terms for those retiring or exiting employees who
were previously awarded restricted shares as the need has arisen.
Audited Directors' remuneration for the year ended 30 September 2024
Salary Pension Bonus Total LTIP/Share Plan
£ £ £ £ £
Martin Gilbert 23,333 - 23,333 -
Peter McKellar 23,333 - 23,333 -
Gary Marshall* 125,000 12,500 - 137,500 61,000
Jonathan Dawson 40,000 - - 40,000 -
Tudor Davies 40,000 - - 40,000 -
Christopher Mills 40,000 - - 40,000 -
* Full time employee.
An IFRS 2 accounting charge of £61,000 (2023: £9,000) was accrued in the
year ended 30 September 2024 relating to the portion of the Restricted Share
Plan awarded in November 2023 to Gary Marshall.
CONSOLIDATED INCOME STATEMENT
For the year ended 30 September 2024
Note 2023
2024 £'000
£'000
CONTINUING OPERATIONS
Revenue 5 13,845 14,979
Cost of sales (491) -
Gross profit 13,354 14,979
Other income 7 2,648 2,321
Impairment of financial assets - (1,467)
Other administrative expenses (21,380) (28,069)
Total administrative expenses 8 (21,380) (29,536)
Other gains 9 166 122
Operating loss 10 (5,212) (12,114)
Finance income 13 293 74
Finance costs 14 (105) (510)
Finance income / (loss) 188 (436)
Share of results of associate 23 - (352)
Loss before tax (5,024) (12,902)
Income tax credit 16 2,898 195
Loss for the year (2,126) (12,707)
Loss attributable to:
Owners of the parent (2,126) (12,707)
Loss for the period attributable to continuing operations (2,126) (12,707)
DISCONTINUED OPERATIONS
Loss from discontinued operation (attributable to equity holders of the 6 (326) (13,992)
company)
Total loss attributable to the owners of the parent during the year (2,452) (26,699)
Continuing operations loss per ordinary share attributable to the owners of
the parent during the year
Basic - pence 17 (1.48) (9.06)
Diluted - pence 17 (1.48) (9.06)
Discontinued operations loss per ordinary share attributable to the owners of
the parent during the year
Basic - pence 17 (0.23) (9.98)
Diluted - pence 17 (0.23) (9.98)
Total loss per ordinary share attributable to the owners of the parent during
the year
Basic - pence 17 (1.71) (19.04)
Diluted - pence 17 (1.71) (19.04)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 September 2024
Note
2024 2023
£'000 £'000
Loss for the year 5 (2,452) (26,699)
Total comprehensive loss for the year (2,452) (26,699)
Attributable to:
Owners of the parent (2,452) (26,699)
Total comprehensive loss for the year (2,452) (26,699)
CONSOLIDATED AND COMPANY'S STATEMENT OF FINANCIAL POSITION
As at 30 September 2024
Note
Group 2024 Group 2023 Company Company
£'000 £'000 2024 2023
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 18 75 98 - -
Right-of-use assets 19 766 1,534 - -
Goodwill and intangible assets 20 16,446 13,495 - -
Deferred tax asset 31 1,546 - - -
Investments in subsidiaries 21 - - 37,560 38,122
Investment in associates 23 27,049 24,626 27,221 24,797
Total non-current assets 45,882 39,753 64,781 62,919
Current assets
Trade and other receivables 24 5,821 5,807 3,003 2,502
Financial assets at fair value through profit and loss 25 93 13 79 -
Current income tax receivable 28 - 1,159 - -
Cash and cash equivalents 26 8,727 25,573 3 3,698
Total current assets 14,641 32,551 3,085 6,200
Total assets 60,523 72,304 67,866 69,119
Liabilities
Non-current liabilities
Lease liabilities 19 290 950 - -
Deferred tax liabilities 31 1,546 905 - -
Total non-current liabilities 1,836 1,855 - -
Current liabilities
Trade and other payables 27 4,631 14,347 10,419 13,233
Lease liabilities 19 569 697 - -
Current income tax liabilities 28 368 1,465 343 1,437
Total current liabilities 5,568 16,507 10,762 14,670
Total liabilities 7,404 18,362 10,762 14,670
Shareholders' equity
Issued share capital 30 1,493 1,493 1,493 1,493
Share premium 30 209 209 209 209
Capital redemption reserve 30 653 653 653 653
Merger reserve 30 43,063 43,063 43,063 43,063
Other reserve 30 612 95 612 95
Retained earnings 7,089 8,429 11,074 8,936
Total equity 53,119 53,942 57,104 54,449
Total equity and liabilities 60,523 72,304 67,866 69,119
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the Company income statement. The profit of
the Company for the year was £1,026,000 (2023 loss: £31,655,000). The notes
are an integral part of these consolidated financial statements. The financial
statements were authorised for issue by the board of directors and were signed
on its behalf by Gary Marshall.
Gary Marshall
Chief Financial and Operating Officer
5 March 2025
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2024
Share capital Share premium Capital redemption reserve Merger reserve Other reserve Retained earnings Total Non-controlling interest Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 September 2022 1,493 - 653 43,063 - 43,139 88,348 (1,094) 87,254
Loss for the year - - - - - (26,699) (26,699) - (26,699)
Total comprehensive income for the year - - - - - (26,699) (26,699) - (26,699)
NCI transfer on sale of Rize ETF Limited - - - - - (1,094) (1,094) 1,094 -
IFRS2 share scheme charge - - - - 95 (95) - - -
Shares bought for treasury - - - - - (6,815) (6,815) - (6,815)
Treasury shares used to settle conversion of loan notes - 209 - - - 1,791 2,000 - 2,000
Dividends paid - - - - - (1,798) (1,798) - (1,798)
Balance at 30 September 2023 1,493 209 653 43,063 95 8,429 53,942 - 53,942
Loss for the year - - - - - (2,452) (2,452) - (2,452)
Total comprehensive income for the year - - - - - (2,452) (2,452) - (2,452)
IFRS2 share scheme charge - - - - 517 - 517 - 517
Treasury shares used to settle Ocean Dial Asset Management Limited acquisition - - - - - 1,112 1,112 - 1,112
(note 22)
Balance at 30 September 2024 1,493 209 653 43,063 612 7,089 53,119 - 53,119
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2024
Share capital Share premium Capital redemption reserve Merger reserve Other reserve Profit and loss account Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 September 2022 1,493 - 653 43,063 - 47,434 92,643
Loss for the year - - - - - (31,655) (31,655)
Total comprehensive income for the year (31,655) (31,655)
- - - - -
Shares bought for treasury - - - - - (6,836) (6,836)
IFRS 2 share scheme charge - - - - 95 - 95
Treasury shares used to settle conversion of loan notes - 209 - - - 1,791 2,000
Dividends paid - - - - - (1,798) (1,798)
Balance at 30 September 2023 1,493 209 653 43,063 95 8,936 54,449
Profit for the year 1,026 1,026
Total comprehensive income for the year - - - - - 1,026 1,026
IFRS 2 share scheme charge - - - - 517 - 517
Treasury shares used to settle Ocean Dial Asset Management Limited acquisition - - - - - 1,112 1,112
(note 22)
Balance at 30 September 2024 1,493 209 653 43,063 612 11,074 57,104
CONSOLIDATED AND COMPANY'S STATEMENT OF CASH FLOWS
For the year ended 30 September 2024
Notes Group 2024 Group Company Company
£'000 2023 2024 2023
£'000 £'000 £'000
Cash flows from operating activities
Cash (outflow) from continuing operations 32 (8,230) (11,201) (3,616) (270)
Corporation tax received / (paid) 1,159 (137) - -
Net cash (outflow) from Continuing Operations (7,071) (11,338) (3,616) (270)
Net cash inflow / (outflow) from Discontinued Operations (326) 266 - -
Net cash (outflow) from total operations (7,397) (11,072) (3,616) (270)
Cash flows from investing activities
Net cash (paid) / received from acquisitions 22 (1,822) 2,801 - -
Payments for deferred consideration (SVM) 22 (7,000) - - -
Dividends received - - - 5,000
Finance income 13 293 74 - -
Finance costs 14 (105) (14) - -
Proceeds from sale of investment at fair value through profit and loss (79) 24 (79) -
Purchase of property, plant and equipment 18 - (114) - -
Purchase of intangibles 20 (39) - - -
Net cash (outflow)/inflow from investing activities (8,752) 2,771 (79) 5,000
Cash flows from financing activities
Shares issued for cash 30 - 209 - 209
Dividends paid - (1,798) - (1,798)
Lease payments (697) (630) - -
Payments for treasury shares - (6,837) - (6,837)
Net cash (outflow) from financing activities (697) (9,056) - (8,426)
Net change in cash and cash equivalents (16,846) (17,357) (3,695) (3,696)
Cash and cash equivalents at beginning of year 25,573 43,066 3,698 7,394
Exchange differences on translation - (136) - -
Cash and cash equivalents at end of year 26 8,727 25,573 3 3,698
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 September 2024
General information and basis of presentation
AssetCo Plc ("AssetCo" or the "Company") is the Parent Company of a group of
companies ("the Group") which offers a range of investment services to private
and institutional investors. The Company is a public limited company,
incorporated and domiciled in the United Kingdom under the Companies Act 2006
and is listed on the Alternative Investment Market ("AIM") of the London Stock
Exchange. The address of its registered office is 30 Coleman Street, London,
EC2R 5AL.
The audited preliminary announcement has been prepared in accordance with the
Group's accounting policies as disclosed in the financial statements for the
year ended 30 September 2024 and international accounting standards ('IFRS'),
and the applicable legal requirements of the Companies Act 2006. This
preliminary announcement was approved by the Board of Directors on 5 March
2025. The preliminary announcement does not constitute statutory financial
statements within the meaning of section 434 of the Companies Act 2006.
Statutory accounts for the year to 30 September 2023 have been delivered to
the Registrar of Companies. The audit report for those accounts was
unqualified and did not contain statements under 498 (2) or (3) of the
Companies Act 2006 and did not contain any emphasis of matter.
Certain statements in this announcement constitute forward-looking statements.
Any statement in this announcement that is not a statement of historical fact
including, without limitation, those regarding the Company's future
expectations, operations, financial performance, financial condition and
business is a forward-looking statement. Such forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties include, amongst other factors,
changing economic, financial, business or other market conditions. These and
other factors could adversely affect the outcome and financial effects of the
plans and events described in this announcement and the Company undertakes no
obligation to update its view of such risks and uncertainties or to update the
forward-looking statements contained herein. Nothing in this announcement
should be construed as a profit forecast.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
IFRS, this announcement does not itself contain sufficient information to
comply with IFRSs.
A notice convening the annual general meeting for 31 March 2025 at 10:00 a.m.
will be posted to shareholders in due course.
This Preliminary Announcement is available on the Company's website
www.assetco.com. (https://www.assetco.com) News updates, regulatory news and
financial statements can be viewed and downloaded from the company's website,
www.assetco.com. (https://www.assetco.com) Copies can also be requested, in
writing, from The Company Secretary, AssetCo plc, 30 Coleman Street, London
EC2R 5AL. The Company is not proposing to bulk print and distribute hard
copies of the Annual Report and Financial Statements for the year ended 30
September 2024 unless specifically requested by individual shareholders; it
will be available for download from the Company's website.
1. Legal Status and Activities
AssetCo Plc ("AssetCo" or the "Company") is the Parent Company of a group of
companies ("the Group") which offers a range of investment services to private
and institutional investors. The Company is a public limited company,
incorporated and domiciled in the United Kingdom under the Companies Act 2006
and is listed on the Alternative Investment Market ("AIM") of the London Stock
Exchange. The address of its registered office is 30 Coleman Street, London,
EC2R 5AL.
The financial statements have been presented in sterling to the nearest
thousand pounds (£000) except where otherwise indicated.
These financial statements were authorised for issue by the Board of Directors
on 5 March 2025.
2. Significant Accounting Policies
The principal accounting policies applied in the preparation of these
consolidated financial statements, which have been applied consistently with
those applied in the previous year, are set out below.
a. Basis of preparation
The financial statements comply with AIM Rules and have been prepared in
accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards. The financial statements are prepared using the
historical cost convention modified by revaluation of financial assets and
financial liabilities held at fair value through profit and loss. The
accounting policies which follow set out those policies which apply in
preparing the financial statements for the year ended 30 September 2024.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires management to make estimates
and assumptions that affect the amounts reported for assets and liabilities as
at the balance sheet date and the amounts reported for revenue and expenses
during the year. The nature of estimation means the actual outcomes may differ
from the estimates. Further details on the critical accounting estimates used
and judgements made in preparing these financial statements can be found in
note 4.
NEW AND AMENDED STANDARDS ADOPTED BY THE COMPANY AND GROUP
The following new and revised Standards and Interpretations have been issued
and are effective for the current financial period of the Company:
· Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice
Statement 2
· Definition of Accounting Estimates - Amendments to IAS 8
· Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12
The application of the other revised Interpretations, Amendments and Annual
Improvements did not have any material impact on the amounts reported for the
period and prior years but may affect the accounting for future transactions
or arrangements.
NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The following IFRS and IFRIC Interpretations have been issued but have not
been applied by the Company in preparing these financial statements as
they are not as yet effective and in some cases had not yet been adopted by
the UK. The Company intends to adopt these Standards and Interpretations when
they become effective, rather than adopt them early.
· Non-current Liabilities with Covenants - Amendments to IAS 1 and
Classification of Liabilities as Current or Non-current - Amendments to IAS 1
· Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
· Supplier Finance Agreements - Amendments to IAS 7 and IFRS 7
· IFRS S1 General Requirements for Disclosure of Sustainability-related
Financial Information and IFRS S2 Climate-related Disclosures
· Lack of Exchangeability - Amendments to IAS 21
· Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture - Amendments to IFRS 10 and IAS 28
The directors do not expect that the adoption of the Standards listed above
will have a material impact on the Company in future periods.
A number of IFRS and IFRIC interpretations are also currently in issue which
are not relevant for the Company's activities and which have not therefore
been adopted in preparing these financial statements.
GOING CONCERN
The Group is currently loss making, albeit with a trajectory that evidences
improving operational losses over time and which affords a pathway to
profitability. Against this background, the Directors have given careful
consideration to the going concern assumption on which the Group's accounts
have been prepared. Having carefully considered the Group's operational and
regulatory requirements, the Directors have concluded that the Group has
adequate financial resources to continue operating for the 12 months from the
date of signing these financial statements. On that basis the Directors have
continued to adopt the Going Concern basis of accounting in preparing the
consolidated Group and Company accounts.
As part of this review, the Directors have prepared projections rolling
forward more than two years from the date of signing for the Company and Group
under several scenarios from growth to stressed environments. The latter
includes a fall of 30% in assets under management over the 2025 financial
year. Although such a stress would necessitate management actions these
actions were identified by management and subjected to challenge, with the
Group demonstrating its ability to continue as a going concern well beyond the
required 12 months from the date of signing if such a stress and subsequent
actions were taken by the Group. Modelling projections were subject to
challenge and review to ensure that appropriate stresses were applied to the
projections with key drivers to the stress scenarios taking account of the
principal risks and uncertainties identified in the Risk Management section of
the Strategic Report. For the purpose of this assessment, management made
conservative assumptions regarding future growth. The ability to achieve cost
saving measures and the reasonableness of the stress testing applied was
considered in the light of those assumptions. Sensitivity analysis and
modelling to take account of specific one-off risks to the Group and Company
was undertaken in line with the principal risks and uncertainties.
In the event that profitability is not achieved, there will be an increased
risk to the going concern assessment in subsequent reporting periods. The
Group is required to hold a minimum level of regulatory capital together with
a buffer of at least a 10% at all times. As at 31 January 2025, the regulatory
capital requirement for the Group was just over £4.5m.
The Directors also acknowledge less resilience within the Group to one-off
shocks and macroeconomic events while losses continue. Principal risks and
uncertainties are set out in the Strategic Report. Current initiatives,
outlined in the Chairman's Statement and Business Review, will deliver further
cost savings and the Directors are committed to additional cost saving
initiatives as necessary to respond to future business developments. Should
there be a need for additional capital, the directors have the option of
seeking to raise additional capital, of considering potential partnerships or
of re-structuring the business.
b. Principles of Consolidation and Equity Accounting
SUBSIDIARIES
Subsidiaries are all entities (including structured entities) over which the
Group has control. The Group controls an entity where the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the
date that control ceases.
The acquisition method of accounting is used to account for business
combinations by the Group (note 22).
Inter-company transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated,
unless the transaction provides evidence of an impairment of the transferred
asset. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the Group.
INVESTMENT IN ASSOCIATED COMPANIES
Associates are all entities over which the Group has significant influence but
not control or joint control. This is generally the case where the Group holds
between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting where the investments are
initially recognised at cost and adjusted thereafter to recognise the Group's
share of post-acquisition profits or losses of the investee in profit or loss,
and the Group's share of movements in other comprehensive income of the
investee in other comprehensive income. Dividends received from associates are
recognised as a reduction in the carrying value of the investment. The Company
recognises the holding in associates at cost.
The Company and Group recognises interest received on loan instruments held in
the investee company as other income. The Group holds loan notes in the
corporate owner of its associate, Parmenion. These loan notes carry a coupon
of 10%. The accounting for this interest is set out in note 7. There are no
repayment dates for the loan notes until 2050 and the Group carries the loans
at amortised cost.
ACCOUNTING POLICY CHOICE FOR NON-CONTROLLING INTERESTS
The Group recognises non-controlling interests in an acquired entity either at
fair value or at the non-controlling interest's proportionate share of the
acquired entity's net identifiable assets. This decision is made on an
acquisition-by-acquisition basis. For the non-controlling interests in Rize
ETF Limited, the Group elected to recognise the non-controlling interests at
the proportionate basis of the acquired net identifiable assets. See note 2
for the Group's accounting policies for business combinations.
c. Revenue Recognition
IFRS 15 specifies the requirements that an entity must apply in order to
measure and recognise revenue and its related cash flows. The core principle
of the standard is that an entity should recognise revenue at an amount that
reflects the consideration to which the entity expects to be entitled in
exchange for transferring promised goods or services to a customer.
The standard includes a five-step model for recognising revenue as follows:
Identifying the contract with the customer; identifying the relevant
performance obligations of the contract; determining the amount of
consideration to be received under the contract; allocating the consideration
to the relevant performance obligation; and accounting for the revenue as the
performance obligations are satisfied.
The Group's primary source of income is made up as follows:
MANAGEMENT FEES
Gross management fees from investment management activities. These fees are
generally based on an agreed percentage, as per the management contract, of
the AUM and are recognised in the same period in which it is provided. Under
the requirements of IFRS 15 revenue is presented net of rebates.
MARKETING FEES
Marketing fees are from marketing thematic ETFs. These marketing fees are
generally based on an agreed percentage, as per the contract, of the AUM and
are recognised in the same period in which it is provided. Services are
provided to the Manager of the ETF funds as a Marketing Agent for the funds
and as such recognised at the time that services are provided.
For all revenue streams, the Group acts as principal and therefore recognises
revenue gross with any related expenses presented in Administrative expenses.
Segments
The Group had three operating segments for the year ended 30 September 2024;
Active Equities, Infrastructure Asset Management, and Digital Platform. In the
Active Equities and Infrastructure Asset Management segments, assets are
managed by the Group. The Digital Platform is operated via an associated
company.
The Group had four segments for the year ended 30 September 2023; Active
Equities, Infrastructure Asset Management, Exchange Traded Funds and Digital
Platform. in the Active Equities and Infrastructure Asset Management segments,
assets are managed by the Group. In Exchange Traded Funds, the Group did not
take part in the management as our focus is on providing clients with access
to the funds in particular themed sectors. The Digital Platform is operated
via an associated company.
d. Other Items in the Income Statement
Other income
Other income consists primarily of interest on loan notes held by way of
investment in associate companies.
Other gains or losses
The Group includes in this heading those items such as movement on fair value
investments.
Exceptional Items
Exceptional items are those items which are outside the normal course of
business, whether income or cost, which are material by nature or amount and
which are not expected to recur. Specific costs included are; one-off
redundancy costs relating to the Group's restructuring plans, specific one-off
retention bonuses issued by River and Mercantile Group PLC prior to its
acquisition and a one-off provision with regards to the infrastructure
business.
e. Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the Company's businesses
are measured using the currency of the primary economic environment in which
the entity operates ("the functional currency"). The financial statements are
presented in sterling (£), which is the Company's and the Group's functional
and presentation currency. There has been no change in the Company's
functional or presentation currency during the year under review.
Foreign operations translation
The financial statements are prepared in sterling. Income statements of
foreign operations are translated into sterling at the average exchange rates
for the year and balance sheets are translated into sterling at the exchange
rate ruling on the balance sheet date. Foreign exchange gains or losses
resulting from such translation are recognised through other comprehensive
income.
Other transactions and balances
Other foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies, other than those
held in foreign operations, are recognised in the income statement.
f. Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the board of
directors.
g. Intangible Assets
Goodwill
Goodwill is measured as described in note 22 Business Combinations. Goodwill
arising on acquisition of subsidiaries is not amortised but it is tested for
impairment annually, or more frequently if events or changes in circumstances
indicate that it might be impaired and is carried at cost less accumulated
impairment losses. Gains on the bargain purchase of an entity, where the
purchase consideration is less than the fair value of net assets acquired, is
taken to the income statement at the time of acquisition. Gains and losses on
the disposal of an entity include the carrying amount of goodwill relating to
the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment
testing. The allocation is made to those cash-generating units or groups of
cash-generating units that are expected to benefit from the business
combination in which the goodwill arose. The units or groups of units are
identified at the lowest level at which goodwill is monitored for internal
management purposes, being the legal entity (note 20).
Brands
Separately acquired brands are shown at historical cost. Brands acquired in a
business combination are recognised at fair value at the acquisition date.
They have a finite useful life and are subsequently carried at cost less
accumulated amortisation and impairment losses.
Amortisation on assets is calculated using the straight-line method to write
down their cost to their residual values over their estimated useful lives
over 5 - 10 years.
Software
Costs incurred on internally developed computer software are initially
recognised at cost, and when the software is available for use, the costs are
amortised on a straight-line basis over an estimated useful life of between
two and five years. Initial research costs and planning prior to a decision to
proceed with development of software are recognised in the Consolidated
statement of comprehensive income when incurred on acquisition.
Customer relationships
Intangible assets are recognised where client relationship contracts are
either separately acquired or acquired with investment managers who are
employed by the Group. These are initially recognised at cost and are
subsequently amortised on a straight-line basis over their estimated useful
economic life. Separately acquired client relationship contracts are amortised
over 11 years.
Website development
Development costs payable to third parties that are directly attributable to
the design and testing of new features of websites used by Group companies are
capitalised when those costs are expected to generate future economic
benefits. No internal costs in relation to website development are
capitalised. Capitalised development costs are recorded as intangible assets
and amortised from the point at which the asset is ready for use.
Amortisation on website development costs is calculated using the
straight-line method to write down their cost to their residual values over
their estimated useful lives over a maximum of 10 years.
Costs associated with maintaining software programmes are recognised as an
expense as incurred.
h. Financial Instruments
Financial assets
Investments and other financial assets
Classification
The Group classifies its financial assets in the following measurement
categories:
• those to be measured subsequently at fair value
(either through other comprehensive income or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the Company's business model for managing the
financial assets and the contractual terms of the cash flows. For assets
measured at fair value, gains and losses will be recorded either in profit or
loss or in other comprehensive income.
For investments in equity instruments that are not held for trading, this will
depend on whether the Group has made an irrevocable election at the time of
initial recognition to account for the equity investment at fair value through
other comprehensive income (FVOCI).
Recognition and de-recognition
Regular way purchases and sales of financial assets are recognised on trade
date being the date on which the Group commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets
carried at FVPL are expensed in profit or loss.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where
the group's management has elected to present fair value gains and losses on
equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the de-recognition of the
investment. Dividends from such investments continue to be recognised in
profit or loss as investment income when the group's right to receive payments
is established.
Changes in the fair value of financial assets at FVPL are recognised in
investment income in the statement of profit or loss as applicable. Impairment
losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
The Group has applied the IFRS 9 simplified approach to measuring expected
credit losses for trade receivables. Under this approach a provision is made
for lifetime expected credit losses for the trade receivable. For calculation
of expected credit losses, the trade receivables are grouped based on the
number of days past due. Expected credit losses on trade receivables that are
not past due are primarily based on actual credit losses from recent years.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with
banks and holdings in short-term money market funds managed by third party
managers.
Financial liabilities
A financial liability is any liability that is a contractual obligation to
deliver cash or another financial asset to another entity or to exchange
financial assets or financial liabilities with another entity under conditions
that are potentially unfavourable to the Company.
An equity instrument is a contract that evidences a residual interest in the
assets of an entity after deducting all of its liabilities. Financial
liabilities and equity instruments are classified according to the substance
of the contractual arrangements entered into. Financial liabilities are
classified as such in the balance sheet.
Finance costs and gains or losses relating to financial liabilities are
included in the income statement. Finance costs are calculated so as to
produce a constant rate of return on the outstanding liability. Where the
contractual terms of share capital do not have any terms meeting the
definition of a financial liability then this is classed as an equity
instrument. Dividends and distributions relating to equity instruments are
debited direct to equity.
Trade payables
Trade payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method. Trade payables
represent amounts owed to suppliers for professional services, utilities,
office supplies and any other goods provided to the Group.
i. Equity
Issued share capital
Ordinary shares are classified as equity. Costs directly attributable to the
issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Share premium
The share premium account represents the excess over nominal value of the fair
value of consideration received for equity shares, net of expenses of the
share issue.
Purchase of own shares
Where the Company purchases the Company's equity instruments (for example, as
the result of a share buy- back), and the shares are cancelled, the
consideration paid, including any directly attributable incremental costs (net
of income taxes), is deducted from equity attributable to the owners of
AssetCo plc and the relevant amount transferred to a capital redemption
reserve.
Where the Company purchases the Company's equity instruments for the purpose
of holding them as treasury shares then the amount is transferred to retained
earnings. Any incidental costs arising on purchase of Treasury shares are
recognised in the profit and loss account immediately.
On 28 September 2022 the Company was granted authority by shareholders to
purchase up to 10% of the outstanding ordinary shares in the Company. By 30
September 2024 the Company has held 5,354,770 (2023: 8,283,027) shares with a
nominal value of £53,548 (2023: £82,830) for an aggregate consideration of
£3,775,257 (2023: £4,887,995).
Merger Reserve
A merger reserve arises when the Company issues equity in respect of acquiring
90% or more of the equity in another entity. As required by the Companies Act
2006 the excess over the par value of the shares is credited to Merger Reserve
rather than Share Premium.
Other Reserves
Other reserves represent the amount of share capital which may become issuable
when shares vest under the Company's LTIP (see note 30).
j. Dividends
Dividends payable are recognised as a liability in the year in which they are
authorised. An interim dividend is recognised when it is approved and paid and
a final dividend is recognised when it has been approved by shareholders at
the annual general meeting. Dividends receivable are recognised on the date
given by the investee company as the ex- dividend date.
k. Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the Company,
excluding any costs of servicing equity other than ordinary shares;
• by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account:
• the after-income tax effect of interest and other
financing costs associated with dilutive potential ordinary shares; and
• the weighted average number of additional ordinary
shares that would have been outstanding, assuming the conversion of all
dilutive potential ordinary shares.
l. Leases
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
• Fixed payments (including in-substance fixed
payments), less any lease incentives receivable;
• Variable lease payments that are based on an index
or a rate, initially measured using the index or rate as at the commencement
date;
• Amounts expected to be payable by the Company
under residual value guarantees;
• The exercise price of a purchase option if the
Company is reasonably certain to exercise that option; and
• Payments of penalties for terminating the lease,
if the lease term reflects the Company exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, the lessee's incremental
borrowing rate is used, being the rate that the individual lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value to
the right-of-use asset in a similar economic environment with similar terms,
security and conditions.
Right-of-use assets are measured at cost comprising the following:
• The amount of the initial measurement of lease
liability;
• Any lease payments made at or before the
commencement date less any lease incentives received;
• Any initial direct costs; and
• Restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. If the Company is
reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset's useful life.
Payments associated with short-term leases of equipment and vehicles and all
leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of
12 months or less.
The main leasing activities undertaken by the Company are rental of office
buildings in the UK.
m. Business Combinations
The acquisition method of accounting is used to account for all business
combinations, regardless of whether equity instruments or other assets are
acquired. The consideration transferred for the acquisition of a subsidiary
comprises the:
• fair values of the assets transferred;
• liabilities incurred to the former owners of the
acquired business;
• equity interests issued by the Group;
• fair value of any asset or liability resulting
from a contingent consideration arrangement; and
• fair value of any pre-existing equity interest in
the subsidiary.
Identifiable assets acquired, liabilities and contingent liabilities assumed
in a business combination are, with limited exceptions, measured initially at
their fair values at the acquisition date. The Group recognises any
non-controlling interest in the acquired entity, on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the acquired entity's net
identifiable assets.
Acquisition-related costs are expensed as incurred. The excess of the:
• consideration transferred;
• amount of any non-controlling interest in the
acquired entity; and
• acquisition date fair value of any previous equity
interest in the acquired entity over the fair value of the net identifiable
assets acquired is recorded as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the business acquired, the
difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts
payable in the future are discounted to their present value as at the date of
exchange. The discount rate used is the entity's incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or as a financial
liability. Amounts classified as a financial liability are subsequently
re-measured to fair value, with changes in fair value recognised in profit or
loss.
If the business combination is achieved in stages, the acquisition date
carrying value of the acquirer's previously held equity interest in the
acquiree is re-measured to fair value at the acquisition date. Any gains or
losses arising from such re-measurement are recognised in profit or loss.
n. Property, Plant and Equipment
All property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the company and the
cost of the item can be measured reliably. The carrying amount of any replaced
parts is derecognised. All other repairs and maintenance are charged to the
income statement during the financial year in which they are incurred.
Depreciation on assets is calculated using the straight-line method to write
down their cost to their residual values over their estimated useful lives as
follows:
Leasehold improvements Remaining life of the lease
Fixtures and fittings 3 - 5
years
Computer equipment 5 years
The residual values and useful lives of assets are reviewed, and adjusted if
appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised within operating profit in the income
statement.
o. Income Taxes
The income tax expense or credit for the period is the tax payable on the
current period's taxable income, based on the applicable income tax rate for
each jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
countries where the Company and its subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable tax regulation is
subject to interpretation and considers whether it is probable that a taxation
authority will accept an uncertain tax treatment. The Group measures its tax
balances either based on the most likely amount or the expected value,
depending on which method provides a better prediction of the resolution of
the uncertainty.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not accounted for if it
arises from initial recognition of an asset or liability in a transaction
other than a business combination that, at the time of the transaction,
affects neither accounting nor taxable profit nor loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to offset current tax assets and liabilities and where the
deferred tax balances relate to the same taxation authority.
Current and deferred tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity respectively, that future taxable profit will be
available against which the temporary differences can be utilised.
p. Employee Benefits
Long Term Incentive Plan ("LTIP")
The Group operated an LTIP until 5 July 2022 at which date it was cancelled,
full details of which are set out in Note 36.
RESTRICTED SHARE PLAN ("RSP")
On 7 November 2023 certain employees were granted an award that vests over 3
years. Due to conditions that existed in the year, the charge for the RSP has
commenced in the prior financial year ended 30 September 2023 and will be
spread over the life of the award. Details of this award can be found in note
34.
Pension contributions - defined contribution scheme
For defined contribution schemes, the Group pays contributions to publicly or
privately administered pension insurance plans on a mandatory, contractual or
voluntary basis. The Group has no further payment obligations once the
contributions have been paid. Contributions to defined contribution schemes
are recognised in the income statement during the year in which they become
payable.
q. Termination benefits
Termination benefits are payable when an employment is terminated by the Group
before the normal retirement date, or whenever an employee accepts voluntary
redundancy in exchange for these benefits. The Group recognises termination
benefits when it is demonstrably committed to either terminating the
employment of current employees according to a detailed formal plan without
possibility of withdrawal or providing termination benefits as a result of
acceptance of an offer of voluntary redundancy. Benefits falling due more than
twelve months after the balance sheet date are discounted to their present
value.
r. Accrued Income
Material income earned from, but not yet invoiced to, customers in the
financial year is included within prepayments and accrued income where receipt
of such income is virtually certain.
3. Financial Risk Management
a. Financial Risk Factors
The risks of the business are measured and monitored continuously by the Board
which has in place procedures and policies covering specific areas namely
credit, market and liquidity risk. We set out below how we approach each area.
Credit risk
Credit risk is the risk that a counterparty defaults on their contractual
obligations which may result in financial loss to the Group. The Group holds
no collateral as security against any financial asset. Credit risk arises
principally from the Group's fee receivables, other receivables, loan notes
and cash balances.
The banks and short-term money market funds with whom the Group deposits cash
and cash equivalent balances are monitored, including their credit ratings.
The credit risk is limited as balances are held with reputable banks with
credit ratings of triple B and above, as disclosed in note 26; short-term
money market funds are rated AAAm or equivalent.
The Group manages its credit risk through monitoring the aging of receivables
and the credit quality of the counterparties with which it does business. The
ageing of these is provided in note 29.
The Group has two main types of receivables: revenue related and loan notes in
respect of its investment in associate. For revenue receivables, the Group
proactively manages the invoicing process to ensure that invoices are sent out
on a timely basis and has procedures in place to chase for payment at
pre-determined times after the dispatch of the invoice to ensure timely
settlement. For receivables due from loan notes in respect of its investment
in associate, the Group has rigorous procedures for monitoring its investment
which include regular review of monthly management accounts from the
associated entity and regular dialogue with that entity's management.
There is no schedule of repayment in place. In all cases, detailed escalation
procedures are in place to ensure that senior management are aware of any
problems at an early stage.
Market risk Pricing risk
Pricing risk arises where the fair value or future cash flows of financial
instruments will fluctuate because of changes in market prices other than
those from interest rate risk or currency risk. The Group is at an early stage
in its development of an Asset and Wealth Management business and the current
exposure to pricing risk is immaterial.
Currency risk
The Company and Group transacts principally in sterling. The Company's and
Group's exposure to currency risk is detailed in note 29.
In relation to translation risk, the Group's current policy is not to hedge
the net asset values of the overseas investments although, where appropriate
and cost-effective facilities are available, local borrowings are utilised to
reduce the translation risk.
Cash flow interest rate risk
The Group's policy on managing interest rate risk is subject to regular
monitoring of the effect of potential changes in interest rates on its
interest cost and income with a view to taking suitable actions should
exposure reach certain levels.
The Group's only external borrowing is the lease on its properties where the
interest rate is fixed for the life of the agreement so there is no
sensitivity to interest rate rises. As regards interest income the Group is
able to invest surplus funds and any interest rate increase will be
beneficial.
Financial assets
The Company holds its surplus funds in short-term bank deposits.
Financial liabilities
The Group has no material cash flow interest rate risk as it has no material
financial liabilities that attract interest. Should this situation change then
the Group may manage the risk by using floating or fixed interest rate swaps.
Liquidity risk
Prudent liquidity management implies maintaining sufficient cash and the
availability of funding through an adequate amount of committed credit
facilities. The Group maintains adequate bank balances to fund its operations.
See note 31 for analysis of the Group's financial liabilities into relevant
maturity groupings based on the remaining period at the year-end date to the
contractual maturity date.
b. Capital Risk Management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. The Group is not subject to
externally impaired capital requirements.
The Group owns subsidiary companies which are regulated by the Financial
Conduct Authority ("FCA") and these businesses are subject to regulatory
capital thresholds. The Group's internal compliance and finance departments in
these businesses regularly monitor and report to FCA to ensure the business
complies with the capital thresholds which apply to them.
In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
4. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. This note provides an
overview of the areas that involved a higher degree of judgement or
complexity, and of items which are more likely to be materially adjusted due
to estimates and assumptions turning out to be wrong.
a. Critical Accounting estimates
Valuation of goodwill and other intangible assets
Determining the valuation of goodwill and intangible assets arising from a
business combination under IFRS 3 contains elements of judgement. The Group
has acquired customer relationships, acquired brands and computer software
included within intangible assets as part of the business combinations. The
valuation methodology and key assumptions in respect of the valuation of these
intangible assets can be found in Note 20.
Impairment of goodwill and other intangible assets and recoverability of Company's investment in subsidiaries
The recognition of goodwill and other intangible assets arising on
acquisitions and the impairment assessments contain significant accounting
estimates. Goodwill is carried at cost less provision for impairment, the
carrying value is tested annually for impairment, or more frequently if any
indicators arise. Other intangible assets are amortised over their useful
economic life and are assessed for impairment when there is an indication that
the asset might be impaired. The impairment test of goodwill and other
intangible assets includes key assumptions underlying the recoverable amounts,
the growth rates applied to the future cash flows and the Group's discount
rate. Note 21 sets out the estimates used and the sensitivity changes in the
key assumptions.
Estimation of current tax payable and current tax expense in relation to an uncertain tax position
The Group's corporation tax provision for 2024 now stands at £343,000 (2023:
£1,442,000) and relates to management's assessment of the amount of tax
payable on open positions where the liabilities remain to be agreed with
relevant tax authorities - principally due to the Grant Thornton litigation
which concluded in 2021. Uncertain tax items for which the provision is made
relates principally to the interpretation applicable to arrangements entered
into by the Group including the application of carried forward losses before 1
April 2017 derived from HMRC guidance on this matter. Due to uncertainty
associated with such tax items, it is possible that, on conclusion of open tax
matters at a future date, the final outcome may differ. Whilst a range of
outcomes is possible, management does not expect the maximum possible tax
payable to exceed £343,000. At a minimum tax payable could be £nil resulting
in a reduction in liabilities of up to £343,000.
b. Critical Accounting judgements
Going concern assumptions
Inputs, including stresses, management actions and forecasting all require
significant judgement in concluding on going concern. These have been set out
in more detail in the basis of preparation.
Accounting for subsidiaries & Discontinued Operations
During the year ended 2023 AssetCo sold its shareholding in Rize ETF Limited.
· AssetCo held 68% of the equity of Rize ETF Limited. Whilst the
founders of the business had a material stake (which could be increased by 5%
percentage points in the event of a sales "trigger" being met) there was in
place a comprehensive shareholder agreement which conferred considerable
control to the Group via the appointment of Board representation and the way
in which key matters had to be agreed, including the ability to block
resolutions as well as voting patterns and economic dependency. Accordingly,
we believe it was appropriate to account for Rize as a subsidiary entity.
· At the 2023 year-end Rize ETF Limited was considered sold and no
longer owned by the Group.
During the 2023 year the Group sold two separate operations classified as
Discontinued Operations under IFRS 5. These were for the sale of River and
Mercantile Asset Management LLC and Rize ETF Limited. River and Mercantile
Asset Management LLC represented a specific geographic area of business for
the Group (being the USA) and Rize ETF Limited represented a major line of
business for the Group. Both sales completed within the year ended 30
September 2023 and so qualify as discontinued operations under the standard.
In 2024 AssetCo disposed of its investment in its infrastructure business. The
infrastructure business was run through two Group companies, River and
Mercantile Infrastructure LLP ("LLP") and River and Mercantile Infrastructure
GP S.a.r.l. ("GP"). All operations within the LLP have now ceased and the GP
has been transferred to a 3(rd) party as part of a share transfer agreement.
Consequently, the operations of the Infrastructure business are considered
discontinued.
Additionally in the year the regulated entity Saracen Fund Managers Limited
was sold in a share purchase agreement transferring the legal rights and
regulatory permissions but with all operating activities retained by the
Group. Consequently, Saracen is not considered a discontinued operation.
HELD FOR SALE ASSETS
No assets were classified as held for sale by the Group as at 30 September
2024.
5. Segmental Reporting
The core principle of IFRS 8 'Operating segments' is to require an entity to
disclose information that enables users of the financial statements to
evaluate the nature and financial effects of the business activities in which
the entity engages and the economic environments in which it operates.
Segment information has historically been presented in respect of the Group's
commercial competencies, Active equities, Infrastructure asset management,
Exchange Traded Funds and its investment in Digital Platforms.
Active equities comprise all equities businesses historically acquired by the
Group including RMG, ODAM, Saracen, SVM and Revera; Infrastructure Asset
Management was the non-equities investment arm of RMG; Exchange Traded Funds
is Rize ETF and Digital Platforms represents the Group's investment in the
associated company, Parmenion.
The Directors consider that the chief operating decision maker is the Board.
Head Office segment comprises the Group Board's management and associated
costs and consolidation adjustments.
Intra-segment transactions are disclosed on the face of the segmental report.
The amounts provided to the Board with respect to net assets are measured in a
manner consistent with that of the financial statements. The Company is
domiciled in the UK.
Changes to segmental reporting
By 30 September 2023 the US business has been sold alongside Rize ETF Limited.
During the 2023 financial year the UAE did not generate any revenue and only
incurred administrative costs. Consequently for 2023 the US business was
presented as a Discontinued Operation for the purposes of Segmental reporting.
Additionally, the Exchange Traded Funds segment (fully encompassed by the now
sold Rize ETF Limited) was also moved to Discontinued Operations.
Further detail of these Discontinued Operations can be found in note 6.
For the year ended 30 September 2024 Segments have been identified as the
Equities Business, Head Office and Digital Platforms.
Geographical analysis of Revenue for Consolidated Group
For the year ended 30 September 2024
2024 2023
£'000 £'000
UK 14,368 16,536
US - 186
14,368 16,722
ANALYSIS OF REVENUE AND RESULTS BY COMMERCIAL ACTIVITY
For the year ended 30 September 2024
Active equities Digital platform Head office Discontinued Operations (Infrastructure Business) Total
£'000 £'000 £'000 £'000 £'000
Revenue
Management fees 13,845 - - 523 14,368
Total revenue to external customers 13,845 - - 523 14,368
Segment result
Operating (loss)/profit (7,232) 2,423 (403) (325) (5,537)
Finance income 293 - - 3 296
Finance costs (87) - (18) (4) (109)
(Loss)/profit before tax (7,026) 2,423 (421) (326) (5,350)
Income tax - - 2,898 - 2,898
(Loss)/profit for the year (7,026) 2,423 2,477 (326) (2,452)
Segment assets and liabilities
Total assets 30,752 27,049 2,722 - 60,523
Total liabilities (6,873) - (531) - (7,404)
Total net assets 23,879 27,049 2,191 - 53,119
ANALYSIS OF REVENUE AND RESULTS BY COMMERCIAL ACTIVITY
For the year ended 30 September 2023
Active equities Infrastructure asset management Digital platform* Head office* Discontinued Operations Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
Management fees 14,419 560 - - 186 15,165
Marketing fees - - - - 1,557 1,557
Total revenue to external customers 14,419 560 - - 1,743 16,722
Segment result
Operating (loss) (9,415) (2,413) - (2,500) (2,832) (17,160)
Finance income 75 - - 2,213 (6) 2,282
Finance costs (450) - - (60) 6 (504)
(Loss) on sale of subsidiary - (11,160) (11,160)
Share of result of associate - - (352) - - (352)
(Loss) before tax (9,790) (2,413) (352) (347) (13,992) (26,894)
Income tax 19 (11) - 187 - 195
(Loss) for the year (9,771) (2,424) (352) (160) (13,992) (26,699)
Segment assets and liabilities
Total assets 40,456 173 - 31,675 - 72,304
Total liabilities (8,039) (1,013) - (9,310) - (18,362)
Total net assets 32,417 (840) - 22,365 - 53,942
6. Discontinued Operations
Within the year ended 30 September 2023 two businesses were sold and were
classified as Discontinued Operations under IFRS 5. These were River and
Mercantile Asset Management LLC and Rize ETF Limited.
Within the year ended 30 September 2024 one business was sold and has been
classified as Discontinued Operations under IFRS 5. This is the Infrastructure
business who's operating results are shown in note 5.
Under these standards the Discontinued Operations have been separately
identified on the face of the Financial Statements and have been disclosed
below to help the users of the accounts better understand the continuing
operations of the Group.
2024 2023
£'000 £'000
River and Mercantile Asset Management LLC - (470)
Rize ETF Limited - (2,362)
River and Mercantile Infrastructure LLP & (326) -
River and Mercantile Infrastructure GP S.a.r.l.
Loss on disposal - (11,160)
(Loss) from discontinued operation (attributable to equity holders of the (326) (13,992)
company)
Operating cashflows
2024 2023
£'000 £'000
River and Mercantile Infrastructure LLP & (326)
River and Mercantile Infrastructure GP S.a.r.l.
River and Mercantile Asset Management LLC - (1,149)
Rize ETF Limited - (2,286)
Operating cash (outflow) from Discontinued Operations (326) (3,435)
River and Mercantile Asset Management LLC
2023
£'000
Revenue
Management fees 186
Total revenue to external customers 186
Operating expenses (656)
Operating (loss) (470)
Finance income -
(Loss) before tax (470)
Income tax -
(Loss) for the year (470)
Rize ETF Limited
2023
£'000
Revenue
Marketing fees 1,635
Total revenue to external customers 1,635
Operating expenses (3,997)
Operating (loss) (2,362)
(Loss) before tax (2,362)
Income tax -
(Loss) for the year (2,362)
Disposal costs
The disposal of River and Mercantile Asset Management LLC ("LLC") and Rize ETF
Limited ("Rize") resulted in a net loss totalling £11,160,000 in the year
ended 30 September 2023. This is broken down as follows:
For the year ended 30 September 2023:
LLC Rize Total
£'000 £'000 £'000
Fair value of consideration received 440 4,779 5,219
Impairment of existing intangible assets - (16,924) (16,924)
Disposal of net assets/(liabilities) on sale (99) 644 545
Total gain / (loss) on disposal 341 (11,501) (11,160)
NCI transfer on sale of Rize ETF Limited - (1,094) (1,094)
341 (12,595) (12,254)
The deferred consideration for the LLC constitutes an agreed percentage of
future revenues up to 30 June 2025 estimated at $139,000 before discount.
The deferred consideration for Rize includes both a cash and earn-out element.
Given the uncertainty and lack of Group control over the ability to earn a
consideration on the earn-out element, no value has been ascribed to this. In
addition, there was a deferred cash element of £2,650,000 payable 18 months
from completion. This has been discounted present value using a rate of
14.65%. NCI of £1,094,000 was recognised within retained earnings upon the
sale of Rize.
7. Other Income
2024 2023
£'000 £'000
Interest on loan notes held in associate 2,423 2,214
Other income 225 107
Total other income 2,648 2,321
Interest on loan notes held in associate
As set out in note 23 the Group has acquired a 30% equity interest in
Parmenion Capital Partners LLP via a corporate entity, Shillay TopCo Limited.
A large part of the Group's total investment is held by way of loan notes.
During the financial year the Group recognised £2,423,000 (2023: £2,214,000)
of interest on those loan notes and this is reflected in other income.
8. Administrative expenses and exceptional items
Exceptional items recognised in the income statement in the current and prior
period were:
2024 2023
£'000 £'000
Restructuring costs 1,881 2,967
Provision against doubtful debt - 1,467
One-off recognition of deferred tax asset (note 31) (1,805) -
Provision releases for corporation tax (1,094) -
Exceptional items (1,018) 4,434
Administrative expenses can be broken down as follows:
Exceptional items within administrative expenses 1,881 4,434
Acquisition costs - 152
Disposal Costs Rize and LLC - 201
Share-based payment expense and social security 568 104
Other administrative expenses 18,931 24,645
Total administrative expenses 21,380 29,536
Restructuring costs include salaries of employees being made redundant from
the point of notice of redundancy, severance costs and costs associated with
the implementation of the new target operating model. The provision against
doubtful debt is against the receivables due from the Partners of the
Infrastructure business, repayable through future profits. As noted, this was
fully written off in the current year with no impact on the income statement.
A further breakdown of administrative costs has been provided below to show
staff costs, amortisation and depreciation. The remaining administrative costs
consist of office facilities, technology and communication, market data,
research and other related operational costs:
2024 2023
£'000 £'000
Staff costs (note 12) 10,825 15,429
Amortisation and depreciation 920 684
Administrative costs 9,635 13,423
Total administrative expenses 21,380 29,536
Reconciliation of 'Operating loss for continuing business excluding exceptionals'.
The table below reconciles statutory losses to the Strategic Report's KPI for
Operating loss for continuing business excluding exceptionals:
2024 2023
£'000 £'000
Continuing operations: Operating loss (5,212) (12,114)
Adjusted for:
Exceptional items 1,881 4,434
Operating loss for continuing business excluding exceptionals for the year (3,331) (7,680)
Finance income 293 2,288
Finance cost (105) (510)
Income tax 2,898 195
Adjusted for tax related exceptional items (2,899) -
(Loss)/profit for the year after excluding Exceptional items and Discontinued (3,144) (5,707)
Operations
9. Other Gains and Losses
2024 2023
£'000 £'000
Gain on disposal of fair value investments 166 122
166 122
10. Operating Loss and Profit
Operating (loss)/profit is stated after charging the following:
2024 2023
£'000 £'000
Depreciation of property plant and equipment (note 18) 23 28
Depreciation of right-of-use assets (note 19) 675 865
Amortisation of intangible assets (note 20) 1,716 661
Loss on foreign exchange differences (note 14) 21 212
Fees payable to the Company's auditors:
- For the audit of the parent Company and the consolidated financial 190 295
statements
- audit fees re: subsidiaries 223 260
- audit-related assurance services 73 10
Staff costs (note 12) 10,825 15,429
11. Directors' Emoluments
Salary and fees Restricted Share Plan Total
2024 2023 2024 2023 2024 2023
Director £'000 £'000 £'000 £'000 £'000 £'000
Martin Gilbert 23 83 - - 23 83
Peter McKellar 23 72 - - 23 72
Campbell Fleming - 98 - - - 98
Gary Marshall 138 138 61 9 199 147
Jonathan Dawson 40 60 - - 40 60
Tudor Davies 40 55 - - 40 55
Christopher Mills 40 45 - - 40 45
Mark Butcher - 25 - - - 25
Aggregate fees and emoluments 304 576 61 9 365 585
An IFRS 2 accounting charge of £61,000 (2023: £9,000) was accrued in the
year ended 30 September 2024 relating to the portion of the Restricted Share
Plan awarded in November 2023 to Gary Marshall (note 34).
Pension allowances paid to current directors were £12,500 (2023: £24,000).
The highest paid director received aggregate emoluments, including awards
under the share- based payments charge, of £199,000 (2023: £147,000).
12. Staff Costs
The monthly average number of staff employed by the Group and Company
(including executive directors) was:
Group 2024 Group 2023 Company Company
No. No. 2024 2023
No. No.
Active equities 70 92 - -
Infrastructure asset management 4 6 - -
Exchange Traded Funds (discontinued operation) - 14 - -
Head office 9 13 9 13
83 125 9 13
The costs incurred in respect of these employees were:
Continuing operations: Group 2024 Group 2023 Company 2024 Company 2023
£'000 £'000 £'000 £'000
Wages and salaries 8,820 13,473 538 1,306
Social security costs 1,040 1,408 82 159
Share-based payments 568 113 - 26
Other pension costs 397 435 - 13
10,825 15,429 620 1,504
Wages and salaries include termination payments of £458,000 (2023:
£1,095,000). These amounts are reflected in the total exceptional
restructuring costs set out in Note 8.
Employee benefit obligations
The Group's subsidiaries have defined contribution pension schemes in place.
The pension contribution charge in 2024 amounted to £397,000 (2023:
£435,000).
13. Finance income
Finance income from continuing operations was: 2024 2023
£'000 £'000
Interest income 293 74
293 74
14. Finance Costs
Finance costs from continuing operations were: 2024 2023
£'000 £'000
Lease liability finance charge 65 90
Finance costs on bonds and letters of credit 19 208
Loss on foreign exchange 21 212
105 510
15. Group and Company Dividends
The Group has not declared any interim or final dividends with respect to the
financial year to September 2023 or 2024.
In respect of the financial year to 30 September 2022 an interim dividend of
1.3p per share was paid in December 2022 and amounted to £1,798,000 (2021:
£nil). The dividend was not recognised as a liability at 30 September 2022 as
it was not approved and paid until after the period end.
16. Income Tax
2024 2023
£'000 £'000
Current tax
Provision release for corporation tax enquiry (1,094) -
Current tax on (loss)/profits for the year - 11
Total current tax expense/(credit) (1,094) 11
Deferred tax
Continuing operations (1,805) (199)
Discontinued operations - (7)
Total deferred tax (credit)/expense (1,805) (206)
Income tax (credit)/expense (2,898) (195)
The tax on the Group's loss before tax differs from the theoretical amount
that would arise using the standard tax rate applicable to the profits of the
consolidated entities as follows:
2024 2023
£'000 £'000
(Loss) before tax continuing operations (5,024) (12,902)
(Loss) before tax discontinued operations (326) (13,992)
Total (loss) before tax (5,350) (26,894)
Tax credit at a standard rate of 25% (2023: 22%) (1,338) (5,917)
Factors affecting tax charge for the year:
Provision release (1,094) -
Expenses not deductible for tax purposes 3,222 4,416
Income not taxable for tax purposes (2,648) (3,491)
Other short-term timing differences (264) (184)
Tax losses used (326) -
Movement in unrecognised deferred tax (450) 4,981
(2,898) (195)
The rate applicable from 1 April 2023 increased to 25%, resulting in a
pro-rata rate for the prior period of 22%. Deferred taxes at the reporting
date have been measured using these enacted tax rates and reflected in these
financial statements.
17. Loss & earnings per share
Basic
Basic earnings per share is calculated by dividing the loss attributable to
owners of the parent by the weighted average number of Ordinary Shares in
issue during the year. The weighted average number of shares is calculated by
reference to the length of time shares are in issue taking into account the
issue date of new shares and any buybacks (see note 30).
2024 2023
(Loss) from continuing operations - £000 (2,126) (12,707)
(Loss) from discontinued operations - £000 (326) (13,992)
Total (loss) attributable to owners of the parent (2,452) (26,699)
Weighted average number of ordinary shares in issue - no. 143,446,157 140,364,398
Basic loss per share from continuing operations - pence (1.48) (9.06)
Basic loss per share from discontinued operations - pence (0.23) (9.98)
Total basic loss per share (1.71) (19.04)
Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of Ordinary Shares in issue assuming conversion of all dilutive
potential Ordinary Shares.
2024 2023
(Loss) from continuing operations - £000 (2,126) (12,707)
(Loss) from discontinued operations - £000 (326) (13,992)
Total (loss) attributable to owners of the parent (2,452) (26,699)
Weighted average number of ordinary shares in issue - no. 143,446,157 140,364,398
Diluted loss per share from continuing operations - pence (1.48) (9.06)
Diluted loss per share from discontinued operations - pence (0.23) (9.98)
Total diluted loss per share (1.71) (19.04)
18. Property, Plant & Equipment
Consolidated Group
Leasehold improvements Fixtures and fittings Computer equipment Total
£'000 £'000 £'000 £'000
Cost
At 1 October 2022 2 8 68 78
Acquisition of subsidiary 68 38 137 243
Additions 17 - - 17
Disposals (1) - - (1)
At 30 September 2023 86 46 205 337
Acquisition of subsidiary - - - -
Additions - - - -
Disposals (13) - (24) (37)
At 30 September 2024 73 46 181 300
Accumulated depreciation
At 1 October 2022 1 8 37 46
Acquisition of subsidiary 17 36 127 180
Charge for the year 4 - 24 28
Disposals - - (15) (15)
At 30 September 2023 22 44 173 239
Acquisition of subsidiary - - - -
Charge for the year 8 1 14 23
Disposals (13) - (24) (37)
At 30 September 2024 17 45 163 225
Net book value at 30 September 2024 56 1 18 75
Net book value at 30 September 2023 64 2 32 98
19. Right of use assets and lease liability
Consolidated Group
Right of use asset
£'000
Cost:
At 1 October 2022 411
Additions 2,175
Write offs (411)
At 30 September 2023 2,175
Additions -
Adjustments (156)
At 30 September 2024 2,019
Accumulated depreciation:
At 1 October 2022 187
Charge for the year 865
Write offs (411)
At 30 September 2023 641
Charge for the year 675
Write offs (63)
At 30 September 2024 1,253
Net book value at 30 September 2024 766
Net book value at 30 September 2023 1,534
Lease liability
£'000
Lease liability:
At 1 October 2022 294
Additions 2,160
Write offs (254)
Payments made (630)
Interest charge 76
At 30 September 2023 1,646
Additions -
Adjustments (156)
Payments made (618)
Dilapidation payments (78)
Interest charge 65
At 30 September 2024 859
Of which:
Current lease liabilities 569
Non-current liabilities 290
At 30 September 2024 859
The Group's leases relating to office accommodation with terms of more than
one year are recognised as a right of use asset and a corresponding liability
at the date at which the leased asset is available for use by the Group. The
weighted average incremental borrowing rate applied to the leases was between
5% and 6%. On 20(th) October 2022 the Coleman Street lease agreements were
renegotiated and extended, leading to a full write down of the existing lease
balances held and recognition of the new lease agreements effective from
14(th) January 2023. An adjustment totalling £156,000 was made during the
year in relation to the dilapidations calculation for Coleman Street.
Dilapidation payments totalling £78,000 were made in relation to the 2(nd)
floor of Coleman Street whose lease was not renewed and ended in January 2024.
20. Goodwill & Intangible Assets
Customer relationships Website development
Group Goodwill £'000 Software Brand £'000 Total
£'000 £'000 £'000 £'000
Cost
At 1 October 2022 20,435 2,400 1,250 650 112 24,847
Acquisition of business 6,340 200 - 50 - 6,590
Additions - - - - 12 12
Disposal of business (16,860) - - (150) (124) (17,134)
Cost at 30 September 2023 9,915 2,600 1,250 550 - 14,315
Acquisition of business 208 3,600 - - - 3,808
Additions - - 39 - - 39
Cost at 30 September 2024 10,123 6,200 1,289 550 - 18,162
Accumulated amortisation
At 1 October 2022 - 64 98 60 25 247
Acquisition of business - - - - - -
Impairment 11,860 - - - - 11,860
Charge for the year - 232 340 89 12 673
Disposal of business (11,860) - - (64) (37) (11,961)
Amortisation at 30 September 2023 - 296 438 85 - 819
Charge for the year - 534 297 66 897
Amortisation at 30 September 2024 - 830 735 151 1,716
-
Net book value at 30 September 2024 10,123 5,370 554 399 16,446
-
Net book value at 30 September 2023
9,915 2,304 812 465 - 13,496
Software and website development are internally generated and have finite
lives as set out in Note 2. Amortisation of all intangible assets is included
in administrative expenses in the income statement.
Goodwill is allocated to the Group's cash-generating units and due to the
operational merging of various equities businesses in the Group, now only
distinguishes between the recently acquired Ocean Dial Asset Management
Limited goodwill and remaining equities business goodwill:
2024 2023
£'000 £'000
Saracen Fund Managers Limited and Revera Asset Management Limited - 3,575
SVM - 6,340
Previously acquired equities businesses now under a single CGU 9,915 -
Ocean Dial Asset Management Limited 208 -
Total 10,123 9,915
Impairment review
Goodwill is reviewed annually for impairment and its recoverability has been
assessed at 30 September 2024 by comparing the carrying amount of the CGUs to
their expected recoverable amount, estimated on a value-in-use basis. The
value-in-use of each CGU has been calculated using discounted cash flow
projections based on the most recent budgets and forecasts maintained by the
Group. The most recent budgets prepared are part of the annual planning
process for the year ending 30 September 2025 and are then extrapolated over
the next four years so that the budgets and forecasts cover a period of five
years. Cash flows are then extrapolated beyond the five-year budget and
forecasted into perpetuity using an expected long-term growth rate, with the
long-term growth rate considered reasonable compared with budget and any
forecasted growth.
Consolidated assessment: As at 30 September 2024 headroom exists in the
calculations in respective recoverable amounts of these CGUs over the carrying
amounts of the goodwill allocated to them. On this basis the Directors have
concluded that there is no impairment required to the goodwill balances as at
30 September 2024.
Company assessment: As at 30 September 2024 the Company was deemed to require
an impairment in some of its investments in subsidiaries as set out in note
21.
Merger of CGU's
During both the 2023 and 2024 financial years, work has been undertaken to
reorganise the operating structure of the Group. As such several previously
separably identifiable CGU's are now considered to be merged for the financial
year 2024 and impairment testing has aggregated the operating components of
these previously identifiable CGU's.
Key inputs
Modelling was performed to support both discounted cash flow (DCF) and net
present value (NPV) methodologies. The overall approach to impairment reviews
for 2024 represents a more conservative approach with a reduction in expected
revenue growth in all cases vs. prior year modelling.
Key DCF inputs included: Forecasting revenue driven by AuM. Modelling for the
years ended 30 September 2023 and 2024 took the approved budgets as a starting
point. Revenue growth was modelled to be broadly flat for the financial years
ending 2024 and 2025 with a subsequent annual growth rate of 2%. Costs were
grown at 2% p.a. where applicable, notably below current inflation rates,
primarily due to expected future cost saving measures and a strategy
throughout the business to manage costs. The discount rate applied for the
analysis was 13.75% (2023: 14.65%) based on the risk-free rate of interest and
specific risks relating to the Group.
Key NPV inputs included; A broad spectrum of third party transaction and
trading data was analysed (both current and historical). It is noted that
industry trading multiples have fallen in the period based on peer group share
price analysis and this was incorporated into the relevant modelling. This
data was compared with the relevant cash generating units and businesses in
the Group to select appropriate and conservative valuation multiples after
taking into account any identified free cash and estimated costs to realise
these prices.
21. Investments in Subsidiaries
Company shares in group undertakings:
2024 2023
£'000 £'000
At 1 October 38,122 69,921
Additions in the year 1,508 9,073
Impairment (2,070) (40,872)
At 30 September 37,560 38,122
Investments in Group undertakings are recorded at cost, which is the fair
value of the consideration paid, less any impairment. In the year the
additions relate to shares to the value of £1,112,000 issued by the Company
in relation to the acquisition of Ocean Dial Asset Management Limited and
£396,000 with respect to the share award detailed in note 34. The impairment
in the year of £2,070,000 relates to River and Mercantile Group Limited
following a review of its carrying value to the Company making use of
modelling assumptions outlined within note 20.
In the year ended 30 September 2023 an impairment was recognised in relation
to the Company's investment in River and Mercantile Group Limited for
£18,880,000, and in relation to Revera Asset Management for £241,000. As
noted in note 20 a review of goodwill and intangible assets was conducted for
the year ended 30 September 2023 and as a result of this testing it was
considered appropriate to impair the values of these investments to the higher
of their net realisable value or value in use. The methodology for this
modelling has been set out in note 20.
The subsidiaries of AssetCo plc as at 30 September 2024 are as follows:
Proportion Class of shareholding
Name of Company Note held Nature of business
River and Mercantile Group Limited 1 100% Ordinary Investment management
River Global Holdings Limited 1 100% Ordinary Holding company
River Global Services Limited 1 100% Ordinary Service company
River and Mercantile Group Trustees Limited 1 100% Ordinary Dormant service company
River and Mercantile US Holdings Limited 1 100% Ordinary Holding company for the US business
River Global Investors LLP 1 100% Ordinary Investment management company
Revera Asset Management Limited 2 100% Ordinary Investment management
SVM Asset Management Holdings Limited 2 100% Ordinary Investment management
SVM Asset Management Limited 2 100% Ordinary Investment management
SVM Investment Management Limited 2 100% Ordinary Dormant
SVM Investment Managers Limited 2 100% Ordinary Dormant
River Global LLP 1 100% Ordinary Dormant
AAMCO Limited 1 100% Ordinary Dormant
AssetCo Asset Management Limited 1 100% Ordinary Dormant
AssetCo Investment Management Limited 1 100% Ordinary Dormant
Notes:
1. Incorporated, registered and having their principal
places of business in the United Kingdom with their registered offices being
30 Coleman Street, London, EC2R 5AL.
2. Incorporated, registered and having their principal
place of business in the United Kingdom with their registered office being 7
Castle Street, Edinburgh EH2 3AH.
All subsidiary undertakings are included in the consolidation of the Group.
22. Business Combination
Summary of acquisitions
SVM Asset Management Holdings Limited
On 31 October 2022 AssetCo plc announced the completion of the acquisition of
the entire share capital and 100% voting rights of SVM Asset Management
Holdings Limited ("SVM"). SVM is an active equities fund management Group
based in Edinburgh.
Final settlement of the deferred consideration for SVM was made in December
2023 totalling £7,000,000.
Details of the purchase consideration are as follows:
SVM
£'000
Cash paid 2,216
Convertible loan notes issued 9,000
Fair value adjustment to loan notes (173)
Total consideration 11,043
The fair value of assets and liabilities recognised as a result of the
acquisition were as follows:
SVM
£'000
Cash 5,017
Trade and other receivables 444
Plant and equipment 2
Right-of-use assets -
Trade payables (238)
Other payables (565)
Lease liability -
Corporation tax liability (145)
Total net assets recognised on acquisition 4,515
Fair value adjustments
Intangible assets: brand 50
Intangible assets: customer relationships 200
Deferred tax liability (62)
Net identifiable assets/(liabilities) acquired 4,703
Goodwill 6,340
Net assets acquired 11,043
Other than fair value adjustments in respect of intangible assets acquired
there were no fair value adjustments to the book values of assts and
liabilities acquired.
Acquired receivables
The fair value of acquired trade receivables was £444,000 and no loss
allowance has been recognised on acquisition.
Revenue and profit contribution
The business was accounted for from the date of acquisition (31 October 2023).
Had the business been consolidated from the start of the period, this would
have increased the Group's consolidated revenue by £249,000 and operating
losses by £101,000 for the year. The revenues of the business for the 12
months to 30 September 2023 were £3,058,000 and the operating losses for the
12 months to 30 September 2023 was £1,108,000.
Convertible loan
The terms of the £9,000,000 loan were for loan notes with a nominal value of
£9 million, unsecured and carrying a coupon of 1%. The reduction in nominal
value of the loan notes represents a fair value adjustment to reflect the
difference in the 1% coupon and a market interest rate. The first £2 million
of loan notes were convertible into AssetCo ordinary shares in certain
circumstances, at market value, up to 31 December 2022 with the remainder
convertible into AssetCo ordinary shares, at £1.45 per share, up to 31
December 2023. If not converted the loan notes were repayable at nominal value
on 31 December 2023. As announced on 20 March 2023 the SVM vendors, following
an extension of their conversion option date to 28 February 2023, duly
exercised their option to convert the first £2 million of loan notes into
AssetCo ordinary shares. The market price agreed was 68.7p per share and led
to the issue to the SVM vendors of 2,911,208 AssetCo ordinary shares which
were satisfied by the transfer of shares from those held in treasury. As set
out in Companies Act 2006 the difference between the average purchase price of
these shares and the agreed issue price is taken to share premium.
Ocean Dial Asset Management Limited
On 2nd October 2023 AssetCo plc completed its acquisition of the entire share
capital and 100% voting rights of Ocean Dial Asset Management ("ODAM"). ODAM
is an active equities fund manager of the fund India Capital Growth Fund
("IGC").
Details of the purchase consideration are as follows:
ODAM
£'000
Cash paid 2,464
Shares paid 556
Deferred shares (paid 30 January 2024) 556
Total consideration 3,576
The fair value of assets and liabilities recognised as a result of the
acquisition are as follows:
ODAM
£'000
Cash 642
Trade and other receivables 211
Plant and equipment 2
Trade payables (76)
Other payables (111)
Total net assets recognised on acquisition 668
Fair value adjustments
Intangible assets: customer relationships 3,600
Deferred tax liability (900)
Net identifiable assets/(liabilities) acquired 2,700
Goodwill 208
Net assets acquired 3,576
Acquired receivables
The fair value of acquired receivables was £211,000, primarily made up of
accrued income and no loss allowance has been recognised on acquisition.
Customer relationships & management contracts
The initial recognition of the management contract held by Ocean Dial was
calculated based on a Multi-period Excess Earnings Method ("MEEM"), estimating
a useful life of 12 years for the contract. Management developed a cash flow
forecast based on expectations from the year of acquisition making use of
historical analysis and management experience in the industry. Revenue growth
was estimated on a conservative basis of 2% per Annum offset by a biennial AuM
redemption of incrementally larger severity over the years (increasing from
2.5% to 30% redemptions by 2035) representing the shareholders biennial
continuation vote; based on management experience, historical analysis of
previous voting results and increased probability of redemptions over time. An
assumed weighted average cost of capital of 19% was applied, a premium
relative to the wider Group's business reflecting the size and equity risk
premium associated with the Ocean Dial Business. A deferred tax liability has
been recognised in respect of this asset.
Revenue and profit contribution
The business was accounted for from the date of acquisition (2nd October
2023). This is the first working day of the financial year of the Group and
consequently the revenue and operating results of the Group would have been
unaffected by accounting for the acquisition from 1st October 2023.
Revenue for the 12 months ended 30 September 2024 was £1,926,000 and
contributing £1,049,000 to the profit before tax of the Group.
Purchase consideration - cash outflow
Outflow of cash to acquire subsidiaries, net of cash acquired
2024 2023
£'000 £'000
Cash consideration 2,464 2,216
Less: balances acquired (642) (5,017)
Net outflow / (inflow) of cash - investing activities 1,822 (2,801)
Deferred consideration paid for acquisitions - SVM 7,000 -
Total paid / (received) in year relating to acquisitions 8,822 (2,801)
Acquisition-related costs
Directly attributable acquisition related costs for ODAM were £25,000
including those not directly attributable to the issue of shares. Incidental
costs are included in administrative expenses in the income statement.
Acquisition-related costs for the year ended 30 September 2023 were £205,000
which were not directly attributable to the issue of shares and are included
in administrative expenses in the income statement.
23. Group Interest in Associates
Restated
Total Equity Loan notes
£'000 £'000 £'000
Balance at 30 September 2022 22,765 352 22,413
Share of operating results for 2023 (352) (352) -
Interest earned in the year 2,213 - 2,213
Closing balance at 30 September 2023 24,626 - 24,626
Share of operating results for 2024 - - -
Interest earned in the year 2,423 - 2,423
Closing balance at 30 September 2024 27,049 - 27,049
On 1 October 2021 AssetCo acquired an effective 30% interest in the equity of
Parmenion Capital Partners LLP, via a Guernsey-registered corporate structure.
AssetCo is a shareholder in the holding company for this group, Shillay TopCo
Limited.
The tables below provide summarised information of the associate. The
information disclosed reflects the amounts presented in the unaudited
financial statements of the relevant associate and not the AssetCo plc share
of those amounts. They have been amended to reflect adjustments made by the
Company when using the equity method, including fair value adjustments and
modifications for differences in accounting policy.
Unaudited summarised balance sheet
Shillay TopCo Limited Shillay TopCo Limited
30 September 2024 30 September 2023
£'000 £'000
Total current assets 23,189 31,657
Non-current assets 104,293 107,752
Total current liabilities (9,050) (18,772)
Total non-current liabilities (127,496) (128,216)
Net liabilities (9,064) (7,579)
Unaudited summarised statement of comprehensive income
Shillay TopCo Limited Shillay TopCo Limited
30 September 2024 30 September 2023
£'000 £'000
Revenue 49,448 40,761
Expected profit for the period (1,714) 921
Net Asset Adjustment - (9,095)
Total comprehensive income (1,714) (8,174)
Equity interest (%) 30% 30%
Equity interest (514) (2,452)
Share of operating results - (352)
Shillay TopCo Limited movement in net assets for the year ended 30 September
2023
The Shillay TopCo Limited (Shillay) accounts for the year ended 31 December
2022 were the first set of consolidated accounts for the entity. These
accounts were approved and signed on 28(th) June 2023. This accounting period
was also the first accounting period in which the purchase price allocation
and any resulting tax positions were calculated in respect of its acquisitions
of Parmenion Capital Partners LLP and EBI Portfolios Limited. As a result of
finalising these positions for the 2022 consolidated accounts for the Shillay
group net assets were reduced by £9.1m primarily as a result of adjustments
for uplifts in goodwill recognised on acquisition and the recognition of
additional deferred tax liabilities.
Share of operating results
The AssetCo Group has recognised this adjustment in its accounts for the year
ended September 2023, reducing the value of its equity investment by its share
of these losses down to a value of £nil.
It is important to note that this adjustment reflects a finalisation of
accounting positions for the December 2022 year end for Shillay TopCo Limited
and has no bearing on the underlying performance of its investment in
Parmenion. Further losses recognised by Shillay TopCo Limited will not be
recognised in the AssetCo PLC accounts and are presented at £nil value.
24. Trade and other receivables
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Trade receivables 329 377 - -
Other receivables 2,836 2,767 2,478 2,174
Amounts due from Group undertakings - - 363 258
Prepayments and accrued income 2,656 2,662 162 70
5,821 5,806 3,003 2,502
Due to their short-term nature, the carrying value of trade and other
receivables is considered to be substantially equal to its fair value.
Trade and other receivables, including accrued income, held in other
currencies amounted to £487,000 (2023: £503,000). They include £2,478,000
(2023: £2,158,000) in relation to deferred consideration for the sale of Rize
ETF Limited.
The carrying value of trade receivables and accrued income forms part of the
Group's overall exposure to credit risk. The Group does not hold any
collateral as security.
As of 30 September 2024, trade and other receivables of £nil (2023: £nil)
were impaired, and all trade receivables were aged less than 30 days. The
amount of the provision was immaterial (2023: immaterial). No trade
receivables were written off during the year (2023: £nil).
Amounts relating to accrued income total £1,816,000 (2023: £2,194,000). All
balances are accrued for in the period they are earned and performance
obligations are met and there were no adjustments to revenue recognised with
respect to prior year balances.
25. Financial Assets at Fair Value Through Profit and Loss
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Seeded funds 93 13 79 -
93 13 79 -
The Group uses capital to invest in its own products as seed investments and
they are recognised under the existing accounting policy as assets held at
fair value through profit and loss. The fair value of the Group's investment
in its funds is derived from the fair value of the underlying investments some
of which are not traded in an active market and therefore the investment is
classified as Level 2 under IFRS 13 Fair Value Measurement.
Amounts recognised in profit or loss
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Fair value (losses)/gains on equity investments - - - -
Dividends received recognised in finance income - - - -
26. Cash and cash equivalents
Group Group 2023 Company Company
2024 £'000 2024 2023
£'000 £'000 £'000
Cash at bank and in hand 8,727 25,573 3 3,698
Cash and cash equivalents 8,727 25,573 3 3,698
Cash and cash equivalents
UK sterling 8,385 24,971 3 3,698
US dollars 284 302 - -
Euros 57 297 - -
Australian dollars 1 3 - -
8,727 25,573 3 3,698
Balances are held with reputable banks with credit ratings of triple B and
above or in short-term money market funds rated AAAm or equivalent.
27. Trade and other payables
Group Group 2023 Company Company
2024 £'000 2024 2023
£'000 £'000 £'000
Trade payables 804 655 4 -
Other payables 748 1,046 - 712
Other taxation and social security 429 242 22 26
Amounts due to Group undertakings - - 10,231 5,495
Deferred consideration - 7,000 - 7,000
Accruals 2,650 5,403 162 -
4,631 14,346 10,419 13,233
Due to their short-term nature, the carrying value of trade and other payables
approximates to their fair value. Trade and other payables held in other
currencies amounted to £552,000 (2023: £152,000).
Deferred consideration outstanding at 30 September 2023 represents loan notes
payable with respect to the acquisition of SVM which were paid in December
2023.
The amount due to Group undertakings recognised in the Company's trade and
other payables is due to River Global Holdings Limited and is for the purpose
of providing working capital. It is interest-free, unsecured and repayable on
demand.
28. Current taxation
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Tax receivable - 1,159 - -
Tax (payable) (368) (1,465) (343) (1,437)
Corporation tax (payable) (368) (304) (343) (1,437)
In the prior year, corporation tax payable was made up of a payable balance of
£1,465,000 and a receivable balance of £1,159,000. The receivable related to
tax payments made by a Group subsidiary in prior years and was fully repaid in
the year.
There is no corporation tax charge arising in the current year. As referred to
in note 4 there is some uncertainty around the treatment of certain items in
the tax return and the matter remains open however the provision made for this
as at 30 September 2024 is £343,000 (2023: £1,442,000).
29. Financial assets and liabilities
The following tables illustrate the categorisation and carrying value of
financial assets and liabilities as at 30 September 2024. Credit risk is also
discussed in note 3. It should be noted that Loans to associates has been
included in the financial assets table to reflect the nature of the loan as a
financial asset.
Financial assets
Group Company Company
2024 Group 2023 2024 2023
£'000 £'000 £'000 £'000
Trade receivables 329 377 - -
Other receivables 5,072 5,429 2,478 2,174
Amounts due from Group undertakings - - 363 258
Cash and cash equivalents 8,727 25,573 3 3,698
Financial assets at amortised cost 14,128 31,379 2,844 6,130
Financial assets held as investments in associates 27,049 24,626 27,221 24,797
Financial assets at fair value through profit and loss 93 13 - -
41,270 56,018 30,065 30,927
Financial liabilities at amortised cost
Group Company Company
2024 Group 2023 2024 2023
£'000 £'000 £'000 £'000
Trade payables 804 655 4 -
Other payables 748 1,047 - 93
Accruals 2,650 5,403 159
Intercompany payables - - 10,231 5,492
Lease liability 859 1,646 - -
5,061 8,751 10,394 5,585
Maturity analysis of financial liabilities
The following disclosures show the maturity profile of contractual
undiscounted cash flows of financial liabilities as at 30 September 2024:
Trade payables Other payables Lease liability Deferred Considerations Total
£'000 and accruals and accruals £'000
£'000 £'000 £'000
2024
Due in one year or less 804 3,398 569 - 4,771
Due in more than one year - - 290 - 290
2023
Due in one year or less 655 6,450 697 7,000 14,802
Due in more than one year - - 1,091 - 1,091
Currency risk
The Company and Group has performed sensitivity testing on the fair value of
the Group and Company's financial instruments of a 10% movement in sterling
against all other currencies from the closing rates as at 30 September 2024,
with all other variables remaining constant. The below table sets out the
financial assets and liabilities of the Group held in foreign currencies. A
variation of 10% in sterling against these currencies would result in a
£28,000 (2023: £52,000) impact upon the Group income statement.
Financial assets Financial liabilities
£'000 £'000 Net
£'000
2024
US dollar 757 (499) 258
Euro 70 (53) 17
Australian dollar 2 - 2
829 (552) 277
2023
US dollar 407 (22) 385
Euro 135 (4) 131
Australian dollar 3 - 3
545 (26) 519
Exposures to foreign exchange rates vary during the year depending on the
volume of overseas transactions. Nonetheless the analysis above is considered
to be materially representative of the Group's exposure to currency risk
during the year.
30. Equity
Share capital and share premium
2024 2023 2024 2023
Shares Shares £000 £000
Ordinary shares of £0.01 each (2023: £0.01)
Fully paid 149,292,970 149,292,970 1,493 1,493
The ordinary shares entitle the holder to participate in dividends, and to
share in the proceeds of winding up the Company in proportion to the number of
and amounts paid on the shares held.
Movement in ordinary shares
Number of shares Share capital £000 Share premium £000 Total
No. £000
Balance at 30 September 2022 149,292,970 1,493 - 1,493
Share premium arising on treasury shares used in loan note conversion - - 209 209
Balance at 30 September 2023 149,292,970 1,493 209 1,702
Balance at 30 September 2024 149,292,970 1,493 209 1,702
Other reserves
Capital redemption reserve Merger reserve Other reserve Total
£'000 £'000 £'000 £'000
Opening balance at 1 October 2022 653 43,063 - 43,716
Share-based payments in relation to LTIP (see note 34) - - 95 95
Balance at 30 September 2024 and 2023 653 43,063 95 43,811
Share-based payments in relation to LTIP (see note 34) - - 517 517
Balance at 30 September 2024 and 2023 653 43,063 612 43,328
The Company bought back and cancelled 6,532,942 ordinary shares in December
2020. These shares have been credited to the Capital Redemption Reserve in the
amount of £653,000.
A Merger Reserve arose on the issue of shares to vendors of Saracen Fund
Managers Limited rather than share premium. This was subsequently added to
when the Company completed the acquisition of River and Mercantile Group Plc,
the consideration for which was wholly settled by the issue of new ordinary
shares in AssetCo plc. Under section 612 of the Companies Act 2006 the excess
over the par value of these shares is accounted for as a Merger Reserve rather
than as share premium.
As at 30 September 2024 the Group held 5,354,770 of treasury shares (2023:
8,283,027) further described in note 2.
31. Deferred taxation
Deferred tax liabilities
Group Group 2023 Company Company
2024 £'000 2024 2023
£'000 £'000 £'000
Deferred tax liabilities to be settled after more than one year 1,546 745 - -
Deferred tax liabilities to be settled within one year - 160 - -
Total deferred tax liabilities 1,546 905 - -
The balance comprised temporary differences attributable to:
Deferred tax liability
Group Group 2023 Company Company
2024 £'000 2024 2023
£'000 £'000 £'000
Financial assets at fair value through profit and loss - - - -
Right-of-use assets - 31 - -
Intangible assets 1,546 874 - -
Deferred tax liability 1,546 905 - -
Deferred tax assets
Group Group 2023 Company Company
2024 £'000 2024 2023
£'000 £'000 £'000
Deferred tax asset recognised in the year 1,546 - - -
Deferred tax asset 1,546 - - -
Deferred tax movements
Group Financial assets at fair value through profit and Loss Right-of-use Intangible Total
£'000 Assets Assets £'000
£'000 £'000 Unutilised tax losses
£'000
At 1 October 2022 28 45 997 - 1,070
Acquisition of subsidiary - - (21) - (21)
Disposal of subsidiaries - - 63 - 63
Charged/(credited) to profit and loss (28) (13) (165) - (206)
At 30 September 2023 - 32 874 - 905
Acquisition of subsidiaries - - 900 - 900
Disposal of subsidiaries - - - - -
Charged/(credited) to profit and loss - (32) (228) (1,546) (1,805)
At 30 September 2024 - - 1,546 (1,546) -
The recognition of deferred tax assets is based upon whether it is more likely
than not that sufficient and suitable taxable profits will be available in the
future against which the reversal of temporary differences can be deducted.
For these purposes, taxable profits include taxable temporary differences,
such as those that arise in relation to the Group's intangible fixed assets. A
deferred tax asset has therefore been recognised up to the value of the
deferred tax liability thereon. Where the temporary differences relate to
losses, the availability of the losses to offset against future profitability
is also considered. The directors consider that there is no basis on which to
recognise additional deferred tax assets at 30 September 2024 or 30 September
2023. The unrecognised asset in respect of tax losses is set out below.
Tax Losses
2024 2023
£'000 £'000
Utilisable tax losses 51,877 55,075
Tax losses recognised in respect to deferred tax liabilities (6,184) -
Unused tax losses for which no deferred tax benefit has been recognised 45,693 55,075
Potential tax benefit at 25% (2023: 25%) 11,423 13,769
The unused tax losses were incurred by AssetCo plc, Revera Asset Management
Limited, River and Mercantile US Holdings Limited and River and Mercantile
Group Limited.
32. Reconciliation of losses and profits before tax to net cash
outflow from operations
Group
2024 Group 2023 Company Company
£'000 £'000 2024 2023
£'000 £'000
(Loss)/profit for the year before taxation (5,024) (12,902) (68) (31,655)
Share-based payments
- in respect of LTIP 517 - 122 23
Cash effect of LTIP - - - -
Share of profits of associate - 352 - -
Interest received from associate (2,423) (2,213) (2,423) (2,213)
Increase in investments - - - (4,000)
Reduction in fair value of investments (2) - - -
Gain on disposal of fair value investments - - - -
Impairment of investments - - 2,070 35,871
Proceeds of asset held for resale - - - -
Bargain purchase - - - -
Depreciation 23 28 - -
Amortisation of intangible assets 897 665 - -
Amortisation of right-of-use assets 768 860 - -
Finance costs (note 14) - 510 - -
Movement in foreign exchange (note 14) 21 (76) - -
Finance income (note 13) (293) (74) - -
Provision against doubtful debt (note 8) - 1,467 - -
Provision release for corporation tax (1,094) - (1,094) -
Dividends from investments - - (492) (5,000)
Decrease / (increase) in receivables 190 3,841 (501) (2,468)
(Decrease)/ increase in payables (1,810) (3,659) (1,230) 9,171
Cash (outflow)/inflow from continuing operations (8,230) (11,201) (3,616) (271)
33. Related Party Transactions
Related parties comprise the Company's shareholders, subsidiaries, associated
companies, joint ventures and other entities over which the shareholders of
the Company have the ability to control or exercise significant influence over
financial and operating decisions and key management personnel.
During the year, the Company entered into the following significant
transactions with related parties at prices and on terms agreed between the
related parties:
Intercompany balances
2024 2023
£'000 £'000
Amounts payable to River Global Holdings Ltd. (9,868) (5,000)
Amounts payable to Revera Asset Management Limited - (492)
Amounts payable from River Global Investors LLP - 156
Amounts payable from River Global Services Limited. - 102
(9,868) (5,234)
The balance with River Global Holdings Limited is a current loan, payable on
demand within the next year. Subsequent to year end, the amount was repaid.
During the year loans payable to Revera Asset Management Limited were forgiven
and a gain has been recognised in the Company accounts as a non-cash Dividend
for £492,000.
As noted within note 23, loan notes totalling £27,049,000 (2023:
£24,626,000) are owed to the Company in respect of its investment in
Parmenion.
Key management compensation
2024 2023
£'000 £'000
Salaries, fees and other employee benefits 304 575
Share-based payments 61 95
365 670
Further details on directors' emoluments can be found in note 11.
Details of the Directors' shareholdings in the Company can be found in the
Directors' Report.
34. Share Awards
On 6 November 2023 the Group announced that it has put in place a Restricted
Share Plan ("RSP") for a limited number of executives, partners and staff. The
Plan has awarded rights over up to 5,013,000 ordinary shares in the Company,
which it is expected would be satisfied from shares currently held in
treasury. Vesting of Shares under the Scheme is due on 1 October 2026 and is
subject to usual provisions for malus, clawback and for apportionment or
forfeiture in respect of good and bad leavers prior to that date at the
discretion of the Board's Remuneration Committee. The fair value of the award
made use of a Black Scholes model incorporating market volatility and the
share price at the date of the award.
As noted in the prior year, a charge for this award was recognised in the year
ended 30 September 2023 due to conditions attached to those awards.
Share Award RSP
Award Year 2024
Grant date share price £ 0.4
Number of shares outstanding at 30 September 2024 5,013,000
2024 2023
£'000 £'000
Restricted Share Plan Costs 517 95
35. Post Balance Sheet Events
New lease arrangement in London: a new lease agreement was entered into just
before Christmas 2024 for the London-based premises of River Global and
AssetCo. This involved surrendering one of the existing floors in the premises
and consolidating our reduced employee footprint on to a single floor. The
revised lease arrangements, together with associated savings in rates and
service charges etc, deliver a saving of roughly £268,000 per annum at time
of writing. This saving increases to some £335,000 per annum next year when a
fee for the partial surrendering rolls off. Refitting costs of some £120K
have been incurred in exiting and re-configuring the remaining space.
Back office consolidation: we successfully consolidated service provision to
State Street on 24(th) February 2025, securing their services as Depositary
and Custodian across all of the open-end funds currently managed by the Group
(barring one ex-Saracen fund which will merge into the River Global umbrella
range shortly). State Street have also taken on the role of Middle Office
service provider for the Group, replacing previous incumbent Bank of New York
Mellon. State Street have also taken on the role of Transfer Agent for the
Group's River Global badged open-ended funds. Remaining funds will be merged
into the River Global umbrella in a few months time to complete this major
consolidation exercise. The move brings with it substantial benefits:
· Improved service charges for the consolidated fund range, delivering
better value to the Group's fund shareholders.
· Improved revenue to the Group by virtue of the Authorised Corporate
Director fee that follows from the consolidation exercise.
· Simplified and improved service offering to fund shareholders.
· Near completion of the end goal of a single operating model across
the Group, dealing with a single, centralised back-office service provider.
Proposed share reorganisation: a circular was issued to shareholders of
AssetCo plc recommending the approval of a proposal to:
· Re-organise and sub-divide the Company's share capital into New A
Ordinary Shares and New B shares. The New B shareholders would become
entitled to the benefits of the Company's economic interest in Parmenion, and
the New A Ordinary shareholders would retain the balance of the Company's
economic interest (being its active equities asset management business mainly
branded River Global).
· Admit the New A Ordinary shares and the New B shares to trading on
AIM.
· Amend the Articles of the Company accordingly.
· Change the name of the Company to River Global PLC.
Shareholders will vote on the proposal at a general meeting to be held at
10:00am on 6 March 2025.
GLOSSARY
AGM Annual General Meeting
Board The board of directors of the Company
CEO Chief Executive Officer
Company AssetCo plc
Covid Coronavirus
Director A director of the Company
ETF Exchange Traded Fund
Group AssetCo plc and its subsidiaries
Revera or Revera Asset Management Revera Asset Management Limited
River Global or River Global Holdings Limited and its subsidiaries
River Global Group or RMG
Rize Rize ETF Limited
Saracen Saracen Fund Managers Limited
SVM or SVM Asset Management SVM Asset Management Limited or its holding company SVM Asset Management
Holdings Limited
1 Source: Broadridge
2 Source: www.londonstockexchange.com/indices/FTSE100
3 Source: Broadridge
4 Monthly revenue at date shown annualised (i.e. x 12)
5 Operating profit/loss here is defined as revenue plus other income for
continuing business less other administrative expenses but excluding
exceptional and other one-off costs and exceptional gains/losses - see Note 8.
6 % active equity mutual fund AUM in 1st or 2nd quartile when compared to
competitor funds in relevant Investment Association sectors.
7 Resigned 30 April 2024
8 Tudor Davis has been treated as being interested in shares held by Cadoc
Limited, a company of which he is a director, but which is controlled by other
members of his family.
9 Christopher Mills, as chief executive and a member of Harwood Capital LLP,
is deemed to have an interest in the 26,964,500 shares owned by various funds
associated with Harwood Capital LLP.
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