REG - Fiske PLC - Interim results
16/02/2024 07:00
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RNS Number : 3542D Fiske PLC 16 February 2024
16 February 2024
FISKE PLC
("Fiske" or the "Company" or the "Group")
Interim results
Fiske (AIM:FKE) is pleased to announce its interim results for the six months
ended 31 December 2023.
In accordance with rule 26 of the AIM Rules for Companies this information is
also available, under the Investors section, at the Company's website,
https://www.fiskeplc.com .
For further information, please contact:
Fiske PLC
James Harrison (CEO) Tel: +44 (0) 20 7448 4700
100 Wood Street
London
EC2V 7AN
Grant Thornton UK LLP (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Samantha Harrison / Harrison Clarke / Enzo Aliaj
Trading
We are pleased to report a marked increase in our revenues and operating
profit for the six-month period to 31 December 2023 when compared to the
previous half-year period to 31 December 2022. Revenues increased by 32% to
£3.46m (2022: £2.60m) whilst operating profit was £193k compared to a loss
of £158k for the six-month period to 31 December 2022.
Despite a weak October, our Assets under Management & Administration
(AUMA) were broadly level with the start of our financial year (1 July 2023)
up to late November, at which point a global rally in markets alongside good
portfolio performances pushed our AUMA up by c.5% over the six-month period to
31 December 2023.
Following a realignment of our charges in April 2023 and the continued
migration of clients to fee paying services, investment management fees have
risen by some 20% to £1.79m in the first half of the year from £1.49m in the
six months to 30 June 2023.
For over twelve years we have received little or no interest income on cash
held on client's accounts pending investment. In the case of Euro balances
we have absorbed negative interest rates at times. Finally, we have returned
to a more 'normal' world where some interest is paid on cash. This can be
shared with clients and used to cover some of the costs of managing the cash
held for clients and the regulatory costs associated with administering client
assets.
Our company cash balance has risen to £4.1m as at 31 December 2023. This is
an increase of 24% from the level of £3.3m as at 30 June 2023. We are now
receiving some interest on our own cash having not done so for many years.
This amounted to £69k in the six months to 31 December 2023 (2022: £nil).
Profit after tax was £367k to 31 December 2023 which is significantly up on
£28k reported for the six months to 31 December 2022. This gives rise to
earnings per share for the six-month period of 3.1p (2022: 0.2p).
Euroclear
During the period under review, we took the opportunity to make a small
additional purchase of Euroclear shares, for a total consideration of £110k,
at an attractive price. The purchase represented an increase of 2.9% on our
existing investment holding and was made on 14 December 2023. Our holding
continues to represent a significant store of value on our balance sheet and
the company paid us dividend income amounting to £259k in the six months to
31 December 2023 (2022: £200k). Of this, £181k has been received and £78k
is withholding tax that is subject to reclaim from the Belgian tax
authorities.
Recent results from Euroclear to 31 December 2023 showed further improvement
in the company's operating businesses. Purchases of shares by new
shareholders have taken place at higher levels than when last notified.
Accordingly, we have adjusted our holding value up towards this higher
level. The company also guided shareholders that it expects to increase its
dividend, payable in Q3 2024, by some 82% which would equate to an expected
investment income receivable of more than £470k.
Markets
The relatively benign world economic backdrop has been counter-balanced by
heightened tensions in the Middle East following Hamas' surprise attack on
Israel in October and the latter's emphatic retaliation. An escalation in
the conflict is of concern as militant Houthis target shipping in the Red Sea,
disrupting trade and supply chains. In Ukraine, the war with Russia drags on
as they endure the more difficult winter months. Geo-political risks remain
high but financial markets have remained relatively sanguine so far this year.
Market sentiment improved towards the end of the year as thoughts turned more
to the interest rate environment. Inflation, whilst proving far from
transitory, has continued to fall; to 3.1% in the USA, 3.9% in the UK and 2.4%
in the Eurozone. And this, combined with comments from Federal Reserve Bank
chairman Jay Powell at the final US rate setting meeting in December, pretty
much confirmed that interest rate increases have finished, and cuts could be
coming as soon as the first half of 2024.
The change in interest rate expectations benefitted both equities and bonds in
2023. The prospect of "cheaper" money especially helped "growth" stocks and
the largest American technology companies, which now represent more than a
quarter of the market by value, drove the main indices higher. The theme for
the year revolved around AI (artificial intelligence) and its main
beneficiaries. The so called magnificent 7 (Apple, Microsoft, Amazon,
Alphabet, Meta, Nvidia and Tesla) have largely accounted for the performance
of the leading indices with the balance being more pedestrian.
As we entered the New Year, and following a good rally in December, markets
looked to be a little overbought. However, notwithstanding the ongoing
geo-political risks, the forthcoming elections in the USA, UK and elsewhere
and sluggish economic growth, the outlook for financial markets is reasonably
good. Both interest and inflation rates look as though they have peaked,
bond yields are steady, equity valuations are reasonable and could enjoy
modest upward re-ratings as interest rates start to fall later in the year.
With top line growth harder to come by, we would expect to see more merger and
acquisition activity particularly in the small and mid-cap space. The UK
market continues to look relatively inexpensive.
Dividend
Notwithstanding likely market volatility, the Directors believe that following
the measures taken in recent years to increase investment management fee
income and control costs, the company is now in a much stronger financial
position. Its valuable holding in Euroclear continues to produce a substantial
investment income stream and with sustainable investment management fee income
and an encouraging pipeline of new business, the Directors have resolved to
resume dividend payments with the declaration of an interim dividend of 0.25p
per share. The dividend will be payable on 29 March 2024 to shareholders on
the register on 15 March 2024. The shares will be marked ex-dividend on 14
March 2024.
Outlook
Consolidation within the wealth management industry has been a feature over
the recent past with many leading companies within the sector now either under
foreign ownership or merged to create ever larger entities. Far from being
squeezed out, well financed smaller investment managers and their clients can
prosper. With our close engagement with clients, Fiske is well placed to
deliver positive outcomes for all its stakeholders in the future.
Tony R Pattison
James P Q Harrison
Chairman
Chief Executive
Officer
15 February 2024
Condensed Consolidated Statement of Total Comprehensive Income
For the six months ended 31 December 2023
6 months ended 6 months ended Year to
31 December 2023 31 December 2022 30 June 2023
note Unaudited Unaudited Audited
£'000 £'000 £'000
Revenues 2 3,458 2,604 5,879
Operating expenses (3,265) (2,762) (5,751)
Operating profit / (loss) 193 (158) 128
Investment revenue 181 200 200
Finance income 69 - 14
Finance costs (14) (14) (27)
Profit on ordinary activities before taxation 429 28 315
Taxation charge (62) - (62)
Profit on ordinary activities after taxation 367 28 253
Other comprehensive income/(expense)
Items that may subsequently be reclassified to profit or loss
Movement in unrealised appreciation of investments 723 (192) (321)
Deferred tax on movement in unrealised appreciation of investments 3 (181) 48
80
Net other comprehensive income/(expense) 542 (144) (241)
Total comprehensive income/(loss) for the period/year attributable to equity 909 (116) 12
shareholders
Earnings per ordinary share (pence) 4
Basic 3.1p 0.2p 2.1p
Diluted 3.1p 0.2p 2.1p
All results are from continuing operations and are attributable to equity
shareholders of the parent Company.
Condensed Consolidated Statement of Financial Position
31 December 2023
As at As at As at
31 December 2023 31 December 2022 30 June 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Non-current assets
Intangible assets arising on consolidation 783 830 999
Right-of-use assets 110 203 156
Property, plant and equipment 10 18 15
Investments held at Fair Value Through Other Comprehensive Income 5,136 4,429 4,300
Total non-current assets 6,039 5,480 5,470
Current assets
Trade and other receivables 3,027 2,417 2,591
Cash and cash equivalents 4,089 3,051 3,333
Total current assets 7,116 5,468 5,924
Current liabilities
Trade and other payables 2,789 1,801 2,136
Short-term lease liabilities 106 106 106
Total current liabilities 2,895 1,907 2,242
Net current assets 4,221 3,561 3,682
Non-current liabilities
Long-term lease liabilities 17 111 65
Deferred tax liabilities 1,058 785 815
Total non-current liabilities 1,075 896 880
Net assets 9,185 8,145 8,272
Equity
Share capital 2,957 2,957 2,957
Share premium 2,085 2,085 2,085
Revaluation reserve 3,429 2,984 2,887
Retained earnings 714 119 343
Shareholders' equity 9,185 8,145 8,272
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 December 2023
Share Capital Share Premium Revaluation Reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 July 2023 2,957 2,085 2,887 343 8,272
Profit on ordinary activities after taxation - - - 370 370
Movement in unrealised appreciation of investments - - 723 - 723
Deferred tax on movement in unrealised appreciation of investments - - (181) - (181)
Total comprehensive income / (expense) for the period - - 542 370 912
- - - 1 1
Share based payment transactions
Total transactions with owners, recognised directly in equity - - - 1 1
Balance at 31 December 2023 2,957 2,085 3,429 714 9,185
Balance at 1 July 2022 2,957 2,085 3,128 90 8,260
Profit on ordinary activities after taxation - - - 28 28
Movement in unrealised appreciation of investments - - (192) - (192)
Deferred tax on movement in unrealised appreciation of investments - - 48 - 48
Total comprehensive (expense) / income for the period - - (144) 28 (116)
- - - 1 1
Share based payment transactions
Total transactions with owners, recognised directly in equity - - - 1 1
Balance at 31 December 2022 2,957 2,085 2,984 119 8,145
Balance at 1 July 2022 2,957 2,085 3,128 90 8,260
Profit on ordinary activities after taxation - - - 251 251
Movement in unrealised appreciation of investments - - (321) - (321)
Deferred tax on movement in unrealised appreciation of investments - - 80 - 80
Total comprehensive (expense) / income for the period - - (241) 251 10
- - - 2 2
Share based payment transactions
Total transactions with owners, recognised directly in equity - - - 2 2
Balance at 30 June 2023 2,957 2,085 2,887 343 8,272
Condensed Consolidated Statement of Cash Flows
For the six months ended 31 December 2023
6 months ended 6 months ended Year ended
31 December 2023 31 December 2022 30 June 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Operating profit / (loss) 193 (158) 128
Amortisation of intangible assets arising on consolidation 216 81 205
Depreciation of right-of-use assets 46 47 94
Depreciation of property, plant and equipment 6 6 14
Interest relating to ROU assets (8) - (22)
Expenses settled by the issue of shares 1 1 2
Decrease/(increase) in receivables 1,096 683 605
(Decrease)/increase in payables (875) (996) (895)
Cash generated from / (used in) operations 675 (336) 131
Investing activities
Investment income received 181 200 200
Interest income received 69 - 14
Purchase of available-for-sale investments (113) - -
Purchases of property, plant and equipment (1) (3) (8)
Purchase of other intangible assets - - (157)
Net cash generated from investing activities 136 197 49
Financing activities
Interest paid (7) (14) (5)
Repayment of lease liabilities (48) (44) (90)
Net cash used in financing activities (55) (58) (95)
Net increase / (decrease) in cash and cash equivalents 756 (197) 85
Cash and cash equivalents at beginning of period 3,333 3,248 3,248
Cash and cash equivalents at end of period/year 4,089 3,051 3,333
Notes to the Interim Financial Statements
1. Basis of preparation
The Condensed Consolidated Interim Financial Statements of Fiske plc and its
subsidiaries (the Group) for the six months ended 31 December 2023 have been
prepared in accordance with IAS 34 (Interim Financial Reporting), as adopted
in the United Kingdom. The accounting policies applied are consistent with
those set out in the June 2023 Fiske plc Annual Report and accounts. These
Condensed Consolidated Interim Financial Statements do not include all the
information required for full annual statements and should be read in
conjunction with the June 2023 Annual Report and Accounts.
The Financial Statements of the Group for the Year ended 30 June 2023 were
prepared in accordance with International Financial Reporting Standards
adopted by in the United Kingdom. The statutory Consolidated Financial
Statements for Fiske plc in respect of the Year ended 30 June 2023 have been
reported on by the Company's auditor and delivered to the registrar of
companies. The report of the auditor was (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006.
Under IAS 27 these financial statements are prepared on a consolidated basis
where the Group consists of Fiske plc, the parent, and those subsidiaries in
which it owns 100% of the voting rights, being Ionian Group Limited, Fiske
Nominees Limited, Fieldings Investment Management Limited and VOR Financial
Strategy Limited.
The directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Thus, they continue to adopt the going concern basis of accounting in
preparing this half-yearly financial report.
There were no new mandatory standards or amendments to existing standards
effective in the six-month reporting period to 31 December 2023.
2. Revenues
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by
management to allocate resources to the segments and to assess their
performance. Following the acquisition of Fieldings Investment Management
Limited in August 2017, their staff and operations have been integrated into
the management team of Fiske plc. Pursuant to this, the Group continues to
identify a single reportable segment, being UK-based financial intermediation.
Within this single reportable segment, total revenue comprises:
6 months ended 6 months ended Year ended
31 December 2023 31 December 2022 30 June 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
Commission receivable 1,669 1,087 2,863
Investment management fees 1,790 1,495 2,982
3,459 2,582 5,845
Other income (1) 22 34
3,458 2,604 5,879
3. Deferred tax
Deferred tax assets and liabilities are recognised at a rate which is
substantively enacted at the balance sheet date. The rate to be taken in this
case is 25%, (Year to 30 June 2023: 25%) being the anticipated rate of
taxation applicable to the Group and Company in the following year.
4. Earnings per share
Diluted
Basic Basic
£'000 £'000
Profit on ordinary activities after taxation 367 367
Adjustment to reflect impact of dilutive share options - -
Profit 367 367
Weighted average number of shares (000's) 11,830 11,830
Profit per share (pence) 3.1p 3.1p
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