REG - MJ Hudson Group PLC - Full Year Results for 12 months ended 30 June 21
25/11/2021 07:00
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RNS Number : 5729T MJ Hudson Group PLC 25 November 2021
25 November 2021
MJ Hudson Group plc
(the "Company", "Group" or "MJ Hudson")
Full year results for the twelve months ended 30 June 2021
MJ Hudson Group plc (AIM:MJH), the specialist service provider to the asset
management industry, today announces its full year results for the year ended
30 June 2021 ( "FY21").
Financial Highlights
Statutory results^
· Revenue of £39.8m compared with £22.3m in the year to 30 June
2020 ("FY20")
· Loss before tax of £(5.3)m (FY20 restated :£(7.3)m)
· Net debt position of £(6.9)m as at 30 June 2021 (excluding
IFRS16 leases)
^ The statutory results include certain passthrough revenues in respect of the
Group´s Outsourcing segment. As a result, the Group considers that Underlying
Revenue - which excludes these passthrough revenues - is a better guide to the
development of the business.
Underlying results
· Underlying Revenue growth of 26% to £25.5m from £20.3m in the
year to 30 June 2020*
· Underlying EBITDA up 47% to £ 5.6m, (FY20 restated: £ 3.8m)
· Pre-tax profit more than doubled to £2.4m (FY20 restated:
£0.9m)
· Diluted EPS of 1.3p (FY20: 0.5p)
· Proposed maiden dividend of 0.125p per share in respect of FY21
Operational Highlights
· Strong finish to FY21 with gains across all three divisions in
the second half and 14% organic revenue growth for the full year as a whole
· Amongst significant new client activity, five notable client
wins, each with potential to be top 10 clients by revenue in 2022
· Three acquisitions completed in the period: PERACS; Bridge
Consulting; and Clarus Risk, each adding additional clients, services, and
scale to the Group.
· Completed the acquisition of the Saffery Champness Funds Limited,
post-period-end, following receipt of regulatory approval, adding to the team
in Guernsey
· Total of eight acquisitions made, since 2018; M&A pipeline
remains active.
· Strong trading in current financial year, continuing the momentum
established in the last six months of FY21, with good contributions from
recent acquisitions in both Outsourcing and Data & Analytics.
Financial Summary
Statutory results
2021 2020* Change
£m £m
Revenue 39.8 22.3 78.5%
Operating loss (5.1) (5.1) 0%
Loss before taxation (5.3) (7.3) 27.4%
Loss for the year (5.4) (7.5) 28.0%
Underlying results 2021 2020* Change
£m £m
Underlying Revenue 25.5 20.3 25.6%
Underlying EBITDA 5.6 3.8 47.3%
Underlying Operating profit 3.4 1.9 78.9%
Underlying Profit before taxation 2.4 0.9 166.7%
Underlying Profit for the year 2.3 0.7 228.6%
Underlying EBITDA margin 22% 19%
Underlying diluted earnings per share 1.3p 0.5p
Net (debt)/ cash excluding IFRS16 leases £(6.9)m £10.0m
Proposed dividend per share 0.125p n/a
Notes
1. Underlying Revenue is statutory revenue less direct cost of sales.
2. Underlying EBITDA is segment profit/(loss) before: share based payments
expense (including LTIP); fundraising and acquisition
costs; non-recurring costs; and discontinued businesses losses. This
also included unallocated group expenses in 2020.
**Certain items have been restated in the results for the financial year to
June 2020 as part of the audit for FY21. These restatements have had, in
aggregate, a £0.3m impact on statutory losses in FY20 and relate to changes
in the reporting of deferred consideration and a credit loss calculation
within administrative and other expenses. A more detailed explanation can be
found in note 1 to the financial statements.
Commenting on the results, CEO Matthew Hudson CEO said:
"This has been our first full financial year since our IPO, which we completed
two weeks before a hard Brexit and two months before a global pandemic took
hold. The three major client trends that have supported our growth over the
past 11 years are now continuing again on their 30-year upwards trajectory:
more money than ever is flowing into funds (and particularly into alternative
assets, our speciality); regulation continues to escalate; and there is an
increasing need for our clients to outsource. It is thrilling to now see a
clearer future for MJ Hudson, with these three major positive secular
tailwinds blowing at our backs and at the start of what I see as a significant
uptick in activity.
Looking beyond FY21, the Board is optimistic as to progress in the current
year, encouraged by both the strong trading in the first few months and the
potential within our M&A pipeline. As ever, growth is our focus: we
continue to look for interesting acquisitions and will invest further into
research and development. Our plan is to extend our range of services and our
geographical reach, as well as developing and acquiring technology that
improves the offering we provide to our clients and helps us operate more
efficiently. We have a qualified list of M&A opportunities in Europe,
North America and Asia, which we plan to finance through an intelligent mix
of debt and equity over time. "
The Company will be holding a virtual analyst meeting at 9.00am on 25(th)
November. A copy of the presentation slides will be made available on the
company website during the course of today.
For further information, please contact:
MJ Hudson Group plc +44 20 3463 3200
Matthew Hudson, CEO
Peter Connell, CFO
Andrew Walsh, IRO
Cenkos Securities (Nomad and Broker) +44 20 7397 8900
Giles Balleny
Stephen Keys
Callum Davidson
Buchanan (PR Adviser) +44 20 7466 5000
Stephanie Whitmore
Kim Looringh-van Beeck
Hannah Ratcliff
This announcement contains inside information as defined in Article 7 of the
Market Abuse Regulation
About MJ Hudson
MJ Hudson is a specialist service provider to the US$100 trillion+ asset
management industry, with a focus on its fastest growing segment, alternative*
investments (which include private equity, venture capital, real estate,
infrastructure and hedge funds).
As outlined at IPO in December 2019, our growth strategy is to develop and
acquire new products and services that are needed by our core customer base of
asset managers and institutional investors and to extend this customer base in
the key markets of North America, Europe and Asia. Our strategy benefits
from the underlying expansion of the alternative assets subsector and the
continuing and growing need for outsourcing and specialist advice as
regulation and competition makes operating more challenging for our clients.
Founded in 2010 by CEO Matthew Hudson (a lawyer and former alternative
assets fund manager), we have grown quickly to now support more than 1,000
clients, including 18 of the FTSE 100. Our business is transatlantic and pan
European, with clients clustered around the major asset management centres
of Europe and North America. Our team of 288 staff works out of 10 offices
in those same centres.
For more information, please visit our website: investors.mjhudson.com/
(https://investors.mjhudson.com/)
*Alternative or alternatives - A subsector of the global asset management
industry which comprises: private equity funds; real estate funds; hedge
funds; infrastructure funds; and alternative credit funds
Chief Executive Statement
MJ Hudson is pleased to report its final results for the12 months to 30 June
2021.
MJ Hudson is at the start of a major uptick in activity. 2020 and the
lockdowns saw a freezing of certain activity, such as new fund launches, but
these tended to be postponements, not cancellations. Having been in our client
sector for over thirty years, I have seen this before. Out of a crisis comes
positive change for us, with our three major business trends on the up:
firstly, there is growth in private equity and other alternative funds AUM, as
investors seek higher returns and yield; secondly, a re-focus on regulation
and governance, especially benefitting our market-leading ESG business, that
helps clients deal with increased regulation and improve transparency; and,
thirdly, the need for outsourcing, driven less by cost and more by the desire
to seek the highest qualified technicians and learn from them.
A lot has happened in a year. Before the 2016 UK referendum, we had no
employees in continental Europe, and now a third of our staff works from the
EU. We are Brexit-proof and, indeed, our fund regulatory platforms in the UK,
the Channel Islands, Luxembourg and (newly) Ireland now give clients the same
security, with flexibility to structure in any one or combination of the major
European fund locations.
In addition to the agility and flexibility our clients enjoy from our
services, they benefit from our deep and broad market intelligence and our
analytical abilities. We have built, and continue to enhance, an extremely
rich set of data on private funds and their investors, from fees and terms
through to ESG and performance. The analytical tools we have built and
acquired help our clients measure, benchmark, and enhance performance, costs,
risk and sustainability. As well as providing a huge amount of value to our
clients, this gives us a significant advantage over our competition. Private
markets are private for a reason, but as transparency increases, MJ Hudson and
its clients are in the vanguard.
MJ Hudson is a growth company, focussed on a global growth sector. Including
the benefit of acquisitions, the Group has grown by more than 50% in two
years, on an Underlying Revenue basis.
In addition to our results for the financial year, the Company is pleased to
announce the completion of the acquisition of Saffery Champness Funds Limited
(´SCFL´), following the receipt of regulatory approval. First announced in
July 2021, SCFL is a Guernsey-based fund administration business. The
acquisition adds strength and depth to the Group´s Guernsey operations, as
well as additional expertise and technology. We have already been working with
the team, and we are encouraged as to the prospects for our combined group in
Guernsey.
1 Group growth
In FY21, revenue was £39.8m (FY20: £22.3m), an increase of 78%. Revenue has
recovered after being suppressed in FY20, due to the Covid-19 lockdowns. As
highlighted in previous reporting, the Outsourcing segment contains
significant pass-through revenue, reflected in direct cost of sales.
The following table analyses the Underlying Revenue for the Group.
Advisory Outsourcing Data & Analytics Established Organic Investments(1) Consolidated
£ millions Total Total
FY21
Underlying Revenue 9.5 7.1 6.6 23.2 2.3 25.5
Growth (5%) 54% 43% 20% 130% 26%
Underlying EBITDA(2) 1.8 2.1 2.0 5.9 (0.3) 5.6
Margin 19% 30% 30% 25% (13)% 22%
FY20 (Restated)
Underlying Revenue 10.0 4.7 4.6 19.3 1.0 20.3
Underlying EBITDA 1.4 2.0 1.4 4.8 (1.0) 3.8
Margin 14% 43% 30% 25% (100)% 19%
1. Organic investments represent investment into start-up AIFM operations in
Luxembourg, fund administration and regulatory consulting (see glossary for
more detail).
2. Underlying EBITDA is segment profit/(loss) before: share based payments
expense (including LTIP), unallocated group expenses and discontinued business
losses.
Underlying Revenue represents gross revenue, less direct cost of sales, and
is analysed below. The Group considers that Underlying Revenue is a better
guide to the development of the business, as it excludes these passthrough
revenues. In FY21, underlying revenue was £25.5m (FY20: £20.3m), an increase
of 26%. Organic growth for continuing operations was 14% (FY20: 4%), for the
full year (up from 3.6% in first half). Organic growth relates to businesses
that have been fully owned by the Group for the whole of FY20 and FY21.
At the Group level, Underlying EBITDA grew to £5.6m, in FY21, compared
with £3.8m (restated) in FY20, with associated margins for the period
increasing from 19% in FY20 to 22.4% in FY21. Excluding the impact of Organic
Investments, the EBITDA margin remained at 25%.
2 Segmental performance
The performance by individual segments or divisions was as follows:
Advisory - accounted for 37% of Group Underlying Revenue in FY21 (FY20:
49%)
· This segment comprises the Group's Law and Investment Advisory
business units. Underlying revenue was £9.5m (FY20: £10.0m). Advisory
revenue saw a 5% contraction in the year (FY20: 7% reduction) which was due to
reduced law revenues. Part of this reduction was due to delays in fund
launches and closings in the year but also from internal reorganisations,
including the cessation of a small loss-making hedge fund practice and the
closure of the Switzerland branch office. Investment Advisory revenue
continued its recovery from FY20 and saw revenue growth of 31% in the
second half of the financial year. The underlying EBITDA margin increased
to 19% from 14% in FY20 due to a focus on margin improvement in the Law
business.
Outsourcing - accounted for 28% of Group Underlying Revenue (FY20: 23%)
· Through this segment, the Group provides ongoing operational and
regulatory support for fund managers and funds. This segment achieved 51%
(FY20: 49%) underlying revenue growth in the year. This was largely due
to Bridge Consulting Limited (Ireland), which was acquired on 12 February.
In 2021 organic growth reduced slightly, albeit with an improving second half
trend, owing to reduced revenues in the UK AIFM business. Total underlying
revenue for this segment was £7.1m (FY20: £4.7m) and Underlying EBITDA
margin reduced from 43% to 30%. FY20 margins were inflated due to the Covid
salary deductions applied across the Group from April to June 2020. We also
saw a margin squeeze due to delays in integrating the Jersey administration
business, acquired in FY20, with our established Guernsey administration
business. This is improving now, and the Jersey administration business is
currently rebuilding its new business pipeline as revised travel arrangements
make it easier to visit prospective clients outside the Channel
Islands.
Data & Analytics - accounted for 26% of the Group's underlying revenues
(FY20 :23%).
· This segment comprises the Group's analytical platform, with a suite of
services and products such as ESG, benchmarking, IR & Marketing,
Performance Analytics (acquired December 2020) and Quantitative Solutions
(acquired June 2021). Organic revenue growth in the segment of 30%
(FY20 - was all acquisition led) was driven by the growth of the ESG
business, where revenue grew by 84%, in the year. Including
acquisitions, Underlying Revenue in the segment grew to £6.6m in FY21,
from £4.6m in FY20. Underlying EBITDA increased to £2.1m, in FY21, from
£1.4m in FY20 and relevant margin was 30% (FY20: 30%). FY20 margins were
inflated by Covid groupwide salary deductions.
Organic investments - accounted for 9% of the Group's underlying revenue
(FY20:5%)
· The Group´s three investments within Organic investments (AIFM,
fund administration and regulatory solutions) are to be moved to the
Outsourcing segment in FY22, which is their natural home. Their collective
revenue improved in the year to £2.3m from £1.0m, driven primarily through
expanded offerings within the Luxembourg AIFM business, which was offset by a
strengthening of teams in each of the three businesses. Losses at the
Underlying EBITDA level fell from £1.0m to £0.3m, in the period.
The result of this is that the balance of the Group is changing. In
particular, the EBITDA contributions from the three divisions
are now comparable in scale, for the first time. One important driver of
this is the organic growth within ESG. This
rebalancing effect has other consequences: the recurring
revenue profile of the Group has increased, with 86% of revenues in
the year to 30 June 2021 (FY20: 84%) coming from repeat or
recurring clients.
3. Clients and markets
MJ Hudson is well-positioned for long term growth. By the end of
the 2020/2021 financial year, the Company saw a rebound in fund launches, and
private equity (the largest asset class we serve), continues its constant
march upwards in AUM. Similarly, private debt grows, as more traditional
banks withdraw from risk and clients seek yield, in a super low-yield market.
This thirst for yield has also led to more investment in real estate and
infrastructure, only enhanced by western governments' desire to dig their way
out of a crisis. In a similar vein, renewables are also seeing a boost, driven
by concerns around climate change and ESG.
As these markets grow and the need for services and tools in these markets
increases, MJ Hudson is well-positioned to satisfy these needs.
Operating growth highlights FY21 FY20
Total operating locations 10 11
Total staff 288 206
Total clients 1,094 943
Total Multi-Service clients (services from > 1 division) 68 91
% Group revenues from Multi-Service clients 29% 14%
Total Underlying Revenue growth 26% 22%
% organic growth in Underlying Revenue 14% 4%
% Underlying Revenue from top 10 clients 16% 17%
In terms of operating highlights, we added a new office in Dublin, via the
acquisition of Bridge Consulting. Total staff members across the Group grew
by 40%, (including those brought in through acquisitions). The total number of
multi-Service clients - those taking services from more than one division
or segment - was 68 compared with 91 last time. However, the bigger change
here is that these multi-service clients accounted for 29% of Group revenue
in FY21, compared with 14% in FY20. Within the top 10 clients in FY 2021,
six came from outside the Advisory segment, compared with three in FY20.
4 M&A and investing
We completed three acquisitions during FY21, with a further deal announced
after the period end.
As an update on the integration of each of these acquisitions:
· PERACS (now MJ Hudson Fund Performance Analytics) - The Company
completed the deal at the end of last calendar year, and, by Easter, it had
secured its biggest ever client contract
· Bridge Consulting (now MJ Hudson Bridge) - The regulated Irish
acquisition, Bridge Fund Management Limited (BFML), has won a significant
number of new clients off the back of regulatory changes in Ireland and has
seen significant growth. Consolidated from February, there has been good
collaboration and the revenue run rate has already exceeded expectations set
during deal due diligence.
· Clarus Risk (now MJ Hudson Quantitative Solutions) - The incoming
team has already landed new clients on a cross-sell basis from within the MJ
Hudson Group, despite being consolidated for only a few months.
· SCFL - As discussed above, this completed after the end of FY21.
MJ Hudson has been working with the team and is encouraged by the prospects
for a combined group in Guernsey.
When the Company came to the AIM market at the end of 2019, MJ Hudson Group
had historic EBITDA of £ 2.7m and one dominant division (Advisory). Through a
number of judicious acquisitions and organic growth, both the Outsourcing and
Data & Analytics divisions are expected to exceed this, on a pro forma
basis, in the current financial year. That transformation has been made
possible by the funds raised at the IPO and the industry of the Group's staff
in the UK, continental Europe, and North America.
MJ Hudson is now in its second year as a quoted company and the eight
acquisitions made since 2018 contributed, in aggregate, £10.4m to Group
revenues, in the full year to June 2021. Most of the M&A in FY21 was
completed in the final six months. Looking at this same group in the periods
immediately prior to their acquisition, we have increased revenues on
consolidation by a healthy 31%, on average. A key contributor to that is the
ESG business in Data & Analytics, which has grown revenues by over 130%,
since consolidation in July 2019, with staff numbers up from 12 to more
than 40, in Amsterdam and London, combined.
The incubated businesses form the Organic Investments business segment. The
Company has incubated three businesses: Luxembourg services; the regulatory
solutions team, in London; and fund administration. Collectively, these
businesses had operating losses of £0.3m, in the year to June
2021, following £1.0m loss, in the prior year. Pleasingly, a series of new
client wins, and organic growth have combined to push them further
along the path to profitability. Going forward, these incubated businesses
will be reported in our Outsourcing division, which is their natural home.
Since listing the Group in December 2019, the Company has been investing
heavily in technology. This includes: investment in the IT
infrastructure; our application development capabilities (including machine
learning); and acquisitions of businesses that centre on technology. We
expect to continue this investment strategy.
5 Reconciliation of statutory to Underlying operating profit
FY21 FY20
Statutory operating loss (5.1) (5.1)
Underlying adjustments
Share based payments and LTIP expense 1.8 0.6
Fundraising and acquisition costs 3.2 4.0
Non- recurring costs 1.8 0.9
Discontinued business losses 0.9 0.5
Group expenses 0.0 0.6
Amortisation of acquired intangible assets 0.8 0.4
Underlying operating Profit 3.4 1.9
Significant drivers of this improvement in Underlying operating profits
were:
· adjustment to administration expenses is the addback of
share-based payments and LTIP expenses;
· fundraising/acquisition costs of £3.2m (FY20 -
£4.0m), including £0.7m in respect of payments to former shareholders of
Tower Gate Capital;
· non-recurring costs of £1.8m (FY20 - £0.9m), which
are one-off in nature and include consultancy costs, in respect of the UK
regulated entities, totalling £0.3m; reorganisation costs in UK law,
investment advisory, and fund management solutions business units of £0.5m;
new product development and launch costs;
· discontinued business losses, representing the loss from
individual entities, which have either been wound up in the year, or which
management has concluded will be discontinued in the near future, due to
lack of profitability;
· Group expenses relating to FY20, including central
costs not passed on to segments, in respect of improving business integration
processes and dedicated IT infrastructure; and,
· depreciation and amortisation, including £0.8m, in
respect of amortisation of acquired intangibles.
6 Cashflow and conversion
Statutory net cash generated from operating activities for FY21 was an
outflow of £3.0m before tax (FY20 - 4.8m). After adjusting for the cash
impact of the factors listed in section 5 above, the Underlying Operating
Cashflow of the Group is a positive inflow of £5.2m (FY20: £1.9m).
Cash balances at the end of FY21 were £9.8m (FY20 - £13.4m).
7 Debt and debt financing
As at 30 June 2021 the Group had net debt (excluding lease liabilities) of
£6.9m (FY20: £10.0m of net cash).
During FY21, the Group refinanced its debt facilities and entered into a
five-year financing agreement with Santander UK PLC. The financing comprises a
facility of up to £17.5m, with repayment due in 2026. There is an option to
extend this amount over time, on an uncommitted basis. The facility is to be
used to finance the Group´s M&A pipeline, regulatory capital
requirements, and general corporate needs. Existing loans totalling
approximately £4 million were repaid in May and June 2021.
The regulated Irish acquisition, Bridge Fund Management Limited (BFML), has
won a number of new clients on the back of regulatory changes in Ireland and
has seen significant growth. With that growth has come an accelerated
regulatory capital need. €5.5 million was placed in the BFML regulatory
capital deposit account in June and a further €2.8 million has been paid in
September, taking this entity's regulatory capital up to the cap of €10
million.
8 Dividend
The Board has recommended a maiden dividend of 0.125p per share in respect of
the year ended 30 June 2021, payable on 25(th) January 2022 for shareholders
on the register as at 17(th) December 2021. As previously communicated, for
the purpose of comparison with any future dividends, investors should consider
this a payment for the six-month period to end June 2021. The Group's
intention in the short to medium term is to introduce a progressive dividend
policy. The Group's primary focus is on delivery of capital growth for
shareholders.
9 Board and Staff
Our people remain at the heart of the business. With the benefit of both
organic growth and acquisitions, the Group now has 288 staff, an
increase of 40% over the prior year. This has been a challenging period for
all and, as the Company welcomes its teams back into the office environment,
it is very aware that Covid-19 remains a threat. The Company would like to
thank its staff once again for the hard work and efforts over the year, which
have generated excellent financial results.
10 Current trading and outlook
Trading has been strong in the current financial year, continuing the momentum
established in the last six months of FY 21 and with good contributions from
recent acquisitions.
MJ Hudson is in a strong financial position and there are good prospects for
the industry it serves. While coronavirus continues to pose a risk, management
has witnessed the resilience of the sector in which the Company operates. As
MJ Hudson builds on the strength of these results and on the early advances
that it has made in valuable secular growth trends such as ESG and
outsourcing in private markets, the Board is optimistic as to growth in the
current year, encouraged by both the trading in the first few months and the
potential within its M&A pipeline.
25(th) November 2021
Consolidated statement of comprehensive income
For the year ended 30 June 2021
Note 2021 2020
£'000 £'000
(restated)
Revenue 39,823 22,284
Direct cost of sales (14,285) (1,973)
Other cost of sales (1,026) (1,209)
Gross profit 24,512 19,102
Administrative and other expenses (29,201) (23,717)
Expected credit loss on trade receivables and contract assets (788) (585)
Other operating income 331 65
Operating loss (5,146) (5,135)
Finance expense 4 (973) (1,134)
Fair value movements 5 835 (1,053)
Share of profit of a joint venture 6 -
Loss before taxation (5,278) (7,322)
Tax expense (122) (214)
Loss for the year (5,400) (7,536)
Attributable to:
Equity holders of the parent (5,380) (7,536)
Non-controlling interest (20) -
Loss for the year (5,400) (7,536)
Earnings per share attributable to the ordinary equity holders of the parent
Basic and diluted EPS 6 (0.032) (0.056)
Other comprehensive income
May be reclassified to profit or loss in subsequent periods and attributable
to equity holders of the parent:
Exchange differences arising on translation of foreign operations (116) 77
Total comprehensive loss for the year (5,516) (7,459)
Consolidated statement of financial position
As at 30 June 2021
2021 2020
Note £'000 £'000
(restated)
ASSETS
Non-current assets
Intangible assets 7 46,935 32,689
Tangible assets 2,067 2,196
Right-of-use asset 9 7,056 7,578
Investments 10 2,568 1,308
Other receivables 11 416 398
Total non-current assets 59,042 44,169
Current assets
Trade and other receivables 11 14,857 10,988
Income tax receivables 150 -
Cash and cash equivalents 9,785 13,388
Total current assets 24,792 24,376
Total assets 83,834 68,545
LIABILITIES AND EQUITY
Non-current liabilities
Borrowings 12 16,658 873
Deferred consideration 12 5,120 5,719
Lease liabilities 9 6,377 6,497
Other payables 405 497
Total non-current liabilities 28,560 13,586
Current liabilities
Trade and other payables 8,027 5,831
Income tax liabilities 396 114
Deferred tax liabilities 182 203
Borrowings 12 12 2,538
Deferred consideration 12 8,556 4,758
Lease liabilities 9 897 798
Total current liabilities 18,070 14,242
EQUITY
Issued share capital 13 - -
Share premium account 13 56,023 55,527
Owned shares 13 (928) -
Other reserves 14 2,828 509
Retained loss (20,699) (15,319)
Total equity 37,224 40,717
Non-controlling interest (20) -
Total equity 37,204 40,717
Total liabilities and equity 83,834 68,545
Consolidated statement of changes in equity
For the year ended 30 June 2021
Share Share Owned Other Retained Total
Capital Premium Shares Reserves Loss Total NCI Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 30 June 2019 20 15,344 - 1,443 (9,027) 7,780 - 7,780
Share based payments - - - 437 - 437 - 437
Exercise of options 1 1,506 - (565) 565 1,507 - 1,507
Convertible loan note options exercised - 11,826 - (883) 883 11,826 - 11,826
Loss for the year (restated) - - - - (7,536) (7,536) - (7,536)
Other comprehensive income - - - 77 - 77 - 77
Net shares issue (note 22) - 28,861 - - - 28,861 - 28,861
Cost of shares issued through IPO - (2,232) - - - (2,232) - (2,232)
Group restructure (21) 21 - - (204) (204) - (204)
B shares issued - 201 - - - 201 - 201
Balance as at 30 June 2020 - 55,527 - 509 (15,319) 40,717 - 40,717
Share based payments - - - 2,446 - 2,446 - 2,446
Exercise of options - (82) 236 (11) - 143 - 143
Loss for the year - - - - (5,380) (5,380) (20) (5,400)
Other comprehensive income - - - (116) - (116) - (116)
Shares issued (note 22) - 578 - - - 578 - 578
Shares repurchased - - (1,164) - - (1,164) - (1,164)
Balance as at 30 June 2021 - 56,023 (928) 2,828 (20,699) 37,224 (20) 37,204
Consolidated statement of cash flows
For the year ended 30 June 2021 2020
Note £'000 £'000
(restated)
Cash flows from operating activities:
Loss for the financial year before taxes (5,278) (7,322)
Adjustments for:
Depreciation and impairment of fixed assets and right-of-use assets 9 1,499 1,134
Amortisation and impairment of intangible assets 7 1,504 1,271
Loss on disposal of tangible and intangible assets 126 198
Revaluation (gain)/ loss on investments 5 (1,644) (139)
Fair value (gain)/loss on deferred consideration 5, 12 809 (856)
Fair value loss on convertible loan notes 5 - 543
Share based payments expense 1,998 437
Interest payable 973 2,639
(Increase)/decrease in trade and other receivables (2,329) (861)
Decrease in trade and other payables (79) (1,729)
Foreign exchange gains and losses (582) (45)
Cash from operations (3,003) (4,730)
Taxation paid (54) (85)
Net cash used in operating activities (3,057) (4,815)
Cash flows from investing activities:
Purchases of tangible assets (241) (2,084)
Purchase of intangible assets 9 (1,887) (127)
Purchase of subsidiary undertaking (1,524) (4,995)
Payment of deferred consideration related to acquisitions (9,236) (3,350)
Purchase of financial instruments (173) -
Proceeds from sale of financial instruments 575 -
Net cash used in investing activities (12,486) (10,556)
Cash flows from financing activities:
Interest paid (837) (1,124)
Equity subscription 496 28,133
Owned shares purchased (928) -
Proceeds from issue of bank loan 12 18,191 1,023
Finance costs on bank loans 12 (760) -
Repayment of bank loan 12 (3,590) (964)
Repayment of loan notes 12 - (600)
Repayment of loans to directors (18) (386)
Payment of lease liabilities (614) (422)
Net cash generated from financing activities 11,940 25,660
Net (decrease)/increase in cash and cash equivalents (3,603) 10,289
Cash and cash equivalents at beginning of year 13,388 3,099
Cash and cash equivalents at end of year 9,785 13,388
Cash and cash equivalents comprise:
Cash at bank and in hand 9,785 13,388
Cash and cash equivalents at end of year 9,785 13,388
Notes to the financial statements
1. General information
This document does not constitute the Group's statutory accounts for the years
ended 30 June 2020 or 30 June 2021 but is derived from those accounts.
Statutory accounts for 30 June 2020 have been delivered to the Registrar of
Companies, and those for 2021 will be delivered to the Registrar of Companies
following the Group's annual general meeting.
MJ Hudson Group plc (the "Company") is a company incorporated in Jersey,
Channel Islands under the Companies (Jersey) Law 1991. The address of the
registered office is P.O. Box 264, Forum 4, Grenville Street, St Helier,
Jersey JE4 8TQ. The financial statements consolidate the financial statements
of the company and its subsidiary undertakings (together the "Group").
The principal activity of the Group is acting as an independent advisory and
infrastructure business, serving fund managers, investors, and advisers active
in private equity, venture capital, hedge, credit, real estate and
infrastructure. The group owns two full scope AIFM management platform to fund
managers, one in the UK and another in Luxembourg.
Correction of errors
Three errors have identified in relation to the FY 2020 financial statements
which have been corrected as prior year misstatements in these financial
statements. They are described below:
An error was identified in the expected credit loss calculation for the prior
year. This has resulted in an additional £334,000 charge to administrative
and other expenses (notes 5 & 7) with an associated decrease in trade
debtors (note 11). This resulted in the basic and diluted loss per share
increasing from (0.053) to (0.056) (note 6)
As described in note 16, Deferred consideration includes payments which is
dependent upon the results of the acquired businesses and are accounted for at
fair value through profit or loss. The fair value movement of £649,000 was
previous disclosed within Finance expenses in error and therefore have been
reclassified as fair value movements in note 5.
In considering the completeness of related party disclosures (note 17) the
directors have identified certain related parties and associated disclosures
that were omitted from the 2020 financial statements. These include
information pertaining to directors' interests in other companies in which
transactions had occurred, associated outstanding balances and deferred
consideration loans from directors of subsidiaries of the Group.
2. Basis of preparation and consolidation
2.1 Basis of Preparation
The financial statements of the Group have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union
("IFRS").
The financial statements are prepared on a going concern basis, under the
historical cost convention, except for certain financial assets and
liabilities, which are revalued and measured at fair value through profit or
loss. The financial statements are presented in pounds sterling and all values
are rounded to the nearest thousand (£000), except when otherwise indicated.
The preparation of the financial statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial
statements are disclosed in note 4 of the Annual Report.
2.2 Going concern
The financial statements have been prepared on a going concern basis. In
adopting the going concern basis, the Directors have considered the group's
operations and principal risks and uncertainties, along with the impact of the
COVID-19 pandemic.
As described in note 13 the Group's objectives when managing capital are to
safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to maintain
an optimum capital structure to reduce the cost of capital. In determining if
the Group is a going concern, the Directors have considered the group's
operations and principal risks and uncertainties, along with the impact of the
COVID-19 pandemic.
During FY21 the Group refinanced its debt facilities and entered into a
five-year financing agreement with Santander UK PLC. The financing comprises a
facility of up to £17.5m, with repayment due in 2026 (see note 12). There is
an option to extend this amount over time, on an uncommitted basis. The
facility is to be used to finance the Group´s M&A pipeline including
deferred consideration, regulatory capital requirements and general corporate
needs. The previous loans totalling approximately £4 million, were repaid in
May and June 2021.
The regulated Irish acquisition, Bridge Fund Management Limited (BFML), has
won a significant number of new clients off the back of regulatory changes in
Ireland and has seen significant growth. With that growth, has come an
accelerated regulatory capital need. £4.7 million (€5.5 million) was placed
in the BFML regulatory capital deposit account in June and a further £2.4
million (€2.8 million) has been paid in September which has taken this
entity's regulatory capital up to the cap of £8.6 million (€10 million). As
reported previously, we have also seen an increase in trade debtors and
accrued income due to remote working and lockdown impacts in extending the
timing required for clients to complete transactions. This has begun to ease
in June with record law firm billing in the month and cashflow patterns are
expected to return to previous levels over the next few months.
In order to compensate for this accelerated regulatory capital need and also
the increased lockup of working capital a further drawdown of £7 million was
finalised in August 2021. This facilitated the expansion of the regulated
Irish business and restored the working capital buffer. £24.5 million of the
facility has been drawn down to date.
To assess going concern the Directors have prepared 'Base case' financial
forecasts for the period to 31 December 2022. The base case budget data is
derived from granular bottom-up data which was produced in conjunction with
Business Unit Heads.
In addition, the Directors have considered the impact COVID-19 could have on
the Group and assessed that impact on the business has diminished considerably
since the beginning of 2021 with strong levels of growth returning. In
considering a 'Worst case' scenario the Group have reviewed the ability of the
business to withstand reductions in revenue as set out in the table below:
Jul 2021 to Jan 2022 to
Dec 2021 Dec 2022
Business units with primarily project based revenue 15% 10%
(Advisory and part of Data & Analytics)
Business units with 12 months contracted revenue 10% 10%
(Outsourcing and part of Data & Analytics)
In addition to the above 'Worst case' revenue assumptions this scenario
assumes that debtor days do not recover from current levels until 2022 across
all business units. This is to reflect slowdown in cash collection as a result
of a prolonged COVID-19 and slow wider economic recovery. This is assumed to
be mitigated by suspension of recruitment and reductions (assumed halved) in
FY22 salary reviews and bonuses.
The Directors 'Worst case' financial modelling showed that the Group could
withstand these revenue reductions, if combined with a 50% reduction in budget
salary review and bonus levels and meet ongoing covenants as well as still
operate within existing borrowing facilities to enable the Group to meet its
liabilities as they fell due. In the event that the 'Worst case' scenario
arose the Directors could also take further cost mitigating actions not
currently included within the 'Worst case' forecast. It is estimated that cost
mitigating factors could generate further savings in excess of £2 million in
FY22. In addition, non-essential spending could be deferred e.g. continued
delay in launch of US Law operations. If cost mitigation factors are
necessary, they may include reductions in recruitment, further reduction in
holiday pay accrual as highlighted in 2.3 below and restructuring. Group funds
are not specifically earmarked for transactions. Further information on
borrowing and deferred consideration payments in respect of acquisitions are
included in note 12 and 13 to the financial statements.
Based on the Group's trading through to 31 October 2021 and the financial
forecasts together with the possible cost mitigating actions available the
Board has a reasonable expectation that the Group has adequate financial
resources to continue in operational existence for the foreseeable future, and
for a period to 31 December 2022 from the date of signing of these financial
statements. Accordingly, the Group continues to adopt the going concern basis
in preparing its financial statements.
2.3 COVID-19 impact
As reported in our June 2020 Annual Report & Accounts, the COVID-19
pandemic has impacted the Group in a number of ways. Operationally all of our
offices have been subject to lockdowns of varying lengths and severity. In
lockdown, all of the offices have been made COVID compliant and are currently
in a transitional phased return period, which will see a gradual return to
normal working patterns. Some increase in flexible working is part of a move
to the 'new normal' and the Group is well placed to support this.
As at October 2021 the current status is that all our offices are open and we
are currently phasing staff back to the office over the remainder of the year
and assessing flexible working opportunities on a case by case basis. We
remain ready to adapt should another lockdown occur in any of our
jurisdictions.
In response to the COVID-19 pandemic the Group took swift and decisive action
as a result of the anticipated reduction in revenue and put in place a series
of cost saving measures in April 2020 in order to preserve cash and liquidity
to create a cash buffer cushion in the event of a possible protracted
downturn. We have adopted some of these measures again in FY21 with senior
executive management taking salary cuts for the first 3 months of 2021,
scrapping of general bonuses re FY21 and reduction in holiday pay accrual by
requiring staff to take accrued leave by 30 June 2021. Other factors including
reduced travel and entertainment costs, office costs and marketing events
costs also assisted and these remain suppressed compared to pre-pandemic
levels. The Group took advantage of the UK HMRC VAT deferral scheme in June
2020 but has not taken any additional government funding to support the
operation. No staff have been furloughed at any time.
The revenue shortfall experienced by the Advisory division from March 2020 to
June 2020 was due to the temporary suspension of client new fund launches and
M&A activity. Since then we have seen a strong recovery in organic growth,
particularly in the second half of our financial year and new business
pipelines are strong in most of our business units.
3. Segment information
For management purposes, the Group is organised into business units based on
its products and services and has three established reportable segments plus
organic investments as follows:
· Advisory: the provision of legal and investment consultancy
services for alternative asset management and investors across all areas of
the alternative investment industry. This includes legal services to
alternative asset managers, corporate entities and institutional investors to
advise on M&A and establishing investment funds along with support for
primary fund investments, co-investments and secondaries. This segment also
includes consulting services and the provision of individual independent
investment advisers and professional trustees to corporate pension schemes,
local government pension schemes and charitable organisations.
· Outsourcing: a multi-service platform providing regulatory cover
and support via a variety outsourced services to asset managers and advisers.
This includes the provision of all key front, middle and back office
functions, including portfolio management, risk management, fund and corporate
administration, accounting and fiduciary services.
· Data & Analytics: research, consulting, benchmarking services
underpinned by data and software tools to support sustainable investment,
tax-advantaged investing, risk monitoring and investor relations. These
services are designed to help investor and asset manager clients make better
strategic choices, improve investment performance and investor communications,
and obtain better value from their service providers.
· Organic investments: incubated businesses form the organic
investments business segment. This includes three separate businesses
including Luxembourg services, regulatory consulting team in London and
international fund administration business. This has been presented separately
from the other segments to increase the transparency of the profitability of
the group before these activities. Going forward, these incubated businesses
will be reported in our Outsourcing division.
No operating segments have been aggregated to form the above reportable
operating segments. Key management are the Chief Operating Decision Makers
(CODM) and they monitor the operating results of the business units separately
for the purpose of making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on adjusted operating
profit or loss. The adjustments include unallocated central costs, organic
investments, fundraising and acquisition costs, non-recurring items, and
depreciation and amortisation. Unallocated central costs (Group expenses) are
items incurred centrally which are neither directly attributable nor can be
reasonably allocated to individual segments but are considered recurring in
nature. The organic investments are newly formed businesses which are still
considered to be in their start-up phase. Fundraising and acquisition costs
are professional fees incurred relating to new debt or equity issuances and
acquisition of new entities. Non-recurring costs are one-off in nature such as
office relocation costs, and other one-off costs.
Business unit performance is not driven from assets given the nature of
business being primarily the provision of services. For this reason, the CODM
does not regularly obtain the split of asset and liabilities by reporting
segment, which are monitored on a Group basis. The Group's depreciation and
amortisation, financing costs (including finance costs, finance income and
other income), fair value movements and income taxes are also managed on a
Group basis and are not allocated to operating segments.
Year ended 30 June 2021
Advisory Outsourcing Data & Analytics Established Segments Organic investments Consolidated
£'000 £'000 £'000 total £'000 £'000
£'000
Revenue 9,541 9,360 6,599 25,500 14,323 39,823
Direct cost of sales - (2,229) - (2,229) (12,056) (14,285)
Revenue less direct cost of sales 9,541 7,131 6,599 23,271 2,267 25,538
Other cost of sales (520) (171) (313) (1,004) (22) (1,026)
Gross profit 9,021 6,960 6,286 22,267 2,245 24,512
Administrative and other expenses (8,354) (5,550) (4,786) (18,690) (3,263) (22,953)
Other operating income 179 49 71 299 3 302
Segment profit/(loss) 846 1,459 1,571 3,876 (1,015) 2,861
Group income/(expenses) 36
Fundraising and Acquisition costs (3,166)
Non-recurring costs (1,874)
Depreciation and amortisation (3,003)
Operating loss (5,146)
Finance expenses (973)
Fair value movements 835
Share of profit in a joint venture 6
Tax (122)
Loss for the year (5,400)
Year ended 30 June 2020 (restated)
Advisory Outsourcing Data & Analytics Established Segments Organic investments Consolidated
£'000 £'000 £'000 total £'000 £'000
£'000 (restated)
Revenue 10,022 6,708 4,566 21,296 988 22,284
Direct cost of sales - (1,973) - (1,973) - (1,973)
Revenue less direct cost of sales 10,022 4,735 4,566 19,323 988 20,311
Other cost of sales (967) - (242) (1,209) - (1,209)
Gross profit 9,055 4,735 4,324 18,114 988 19,102
Administrative and other expenses (8,182) (2,962) (3,313) (14,457) (1,910) (16,367)
Other operating income 18 15 - 33 3 36
Segment profit/(loss) 891 1,788 1,011 3,690 (919) 2,771
Group expenses (660)
Fundraising and Acquisition costs (3,990)
Non-recurring costs (853)
Depreciation and amortisation (2,403)
Operating loss (5,135)
Finance expenses (1,783)
Fair value movements (404)
Share of profit in a joint venture -
Tax (214)
Loss for the year (7,536)
4. Finance income and costs (restated)
2021 2020
£'000 £'000
(restated)
Bank loan interest 628 704
Interest on lease liabilities 345 223
Deferred consideration fair value loss - 207
Total finance costs 973 1,134
June 2020 Finance costs have been restated to move the unwind of discount on
deferred consideration totalling £649,000 to Fair value movements shown in
note 5.
5. Fair value movements (restated)
During the year the Group recorded the following fair value adjustments:
2021 2020
£'000 £'000
(restated)
Investments fair value gain (Note 10) 1,644 139
Deferred consideration fair value loss (note 16) (809) (649)
Convertible bonds fair value loss - (543)
Total fair value movements 835 (1,053)
June 2020 Fair value movements have been restated to move the unwind of
discount on deferred consideration totalling £649,000 from Finance income and
costs shown in note 4.
6. Earnings per share (EPS) (restated)
Basic EPS is calculated by dividing the profit for the year attributable to
ordinary equity holders of the parent by the weighted average number of
ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of ordinary
shares that would be issued on conversion of all the dilutive potential
ordinary shares into ordinary shares.
The following table reflects the income and share data used in the basic and
diluted EPS calculations:
2021 2020
£'000 £'000
(restated)
Loss for the year attributable to equity holders of the Group (5,380) (7,536)
Weighted average number of ordinary shares for basic EPS (Thousands) 170,281 134,308
Basic loss per share attributable to the ordinary equity holders of the parent (0.032) (0.056)
The following instruments are not included in the diluted EPS calculation
because they would have an antidilutive effect on EPS. The number of
instruments outstanding is as follows:
2021 2020
Thousands Thousands
Share options 14,569 11,845
Total of antidilutive instruments not included 14,569 11,845
7. Intangible assets
Customer relationships
Software Goodwill Total
£'000 £'000 £'000 £'000
Cost or valuation
At 1 July 2019 2,752 2,305 18,587 23,644
Additions 127 - 113 240
FX translation adjustments - 24 32 56
Acquisition of subsidiaries - 4,318 6,634 10,952
At 30 June 2020 2,879 6,647 25,366 34,892
Additions 1,887 - 92 1,979
Disposals (918) - - (918)
FX translation adjustments (17) (81) (111) (209)
Acquisition of subsidiaries (note 16) 570 7,243 6,275 14,088
At 30 June 2021 4,401 13,809 31,622 49,832
Amortisation
At 1 July 2019 795 133 - 928
Charge for the year 707 409 - 1,116
Impairment - - 155 155
FX translation adjustments - 4 - 4
At 30 June 2020 1,502 546 155 2,203
Charge for the year 747 757 - 1,504
Disposals (799) - - (799)
FX translation adjustments (1) (10) - (11)
At 30 June 2021 1,449 1,293 155 2,897
Net book value
At 30 June 2020 1,377 6,101 25,211 32,689
At 30 June 2021 2,952 12,516 31,467 46,935
8. Goodwill and intangibles with indefinite useful lives
At each statement of financial position date non-financial assets not carried
at fair value are assessed to determine whether the asset may be impaired. The
assessment is performed annually or more frequently if there is an indication
of impairment. For the assessment the recoverable amount of the asset is
compared to the carrying amount of the asset.
The goodwill as summarised by the operating segments to which its CGU belongs
is as follows:
Business Data &
Advisory Outsourcing Analytics Total
£'000 £'000 £'000 £'000
At 30 June 2020 5,714 9,203 10,294 25,211
At 30 June 2021 5,714 10,288 15,465 31,467
The goodwill allocated to each CGU is tested annually for impairment. The VIU
calculations use pre-tax cash flow projections covering a three year period.
Cash flows beyond the three year period are extrapolated using long term
average growth rates.
The key assumptions in the discounted cash flow projections for the CGU's are
as follows:
· the future level of revenue - which is based on past performance
and expected changes based on management knowledge of the business;
· long term growth rate - which has been assumed to be 2.0% (2020 -
2.0%) per annum based on the average historical growth in gross domestic
product in the United Kingdom over the past fifty years; and
· the discount rate - which is the Group's pre-tax weighted average
cost of capital and has been assessed at 12.1% (2020 - 12.1%) and has been
assessed for any country specific risk factors. The range for the Group
allocated to individual CGU's is between 12.1% - 14%.
Based on the discounted cash flow projections, the value in use exceeds
recoverable amount. The Group performed sensitivity analysis by adjusting the
discount rate and reducing revenues. The decrease in future forecast revenues
was performed without a corresponding reduction in costs for each of the CGUs.
The recoverable amount and sensitivity analysis are provided below:
Outsourcing Data & Analytics
Advisory
Compound annual growth rate (CAGR) of revenue over three years 17.9% 24.5% 24.1%
Estimated excess over carrying values 150.7% 53.4% 58.2%
Decrease in forecasted revenues to trigger an impairment 10.4% 8.9% 8.8%
Increase in discount rate required for impairment 13.3% 5.3% 7.3%
The percentage decrease in future forecast revenues and the increase in the
discount rate noted above are the amounts that would be required for the
carrying amounts to exceed the recoverable amount under the VIU calculation.
Management believes that the carrying value of goodwill remains recoverable
given the conservative nature of the underlying forecasts prepared.
Within the reportable segment totals above there are four CGU's which have a
reasonably possible risk of impairment The CGU's at risk of potential
impairment are: MJH Investment Advisors and MJH Services Jersey CGU's within
the Advisory segment; MJH Fiduciaries Jersey CGU within the Outsourcing
segment, and Amaces CGU within the Data & Analytics segment the headroom
and sensitivities are outlined in the following table:
MJH MJH Services Jersey MJH Amaces
Investment Advisors £000 Fiduciaries Jersey £'000
£'000 £'000
Goodwill 1,458 770 3,264 6,800
Total carrying value 2,841 974 7,137 10,119
Headroom based on forecast, as a percentage of carrying value 29.4% 3.2% 18.3% 1.5%
CAGR forecasted 21.1% 20.5% 17.6% 14.2%
CAGR required to trigger an impairment 19.8% 20.0% 16.0% 13.8%
Discount rate required to trigger an impairment 14.9% 12.7% 13.9% 12.5%
The changes to CAGR and discount rate to trigger an impairment have been
evaluated independently of each other. The percentages stated above would
result in the CGU's headroom being completely eliminated and therefore are
considered to be sensitive input assumptions. Management concludes there are
sufficient cashflow projections to support the carrying value and associated
goodwill but continues to monitor as the threshold for impairment is
reasonably close to being breached.
9. Leases
Nature of leasing activities
The Group leases a number of assets including buildings and office equipment
in the jurisdictions from which it operates in. Leases generally have lease
terms between 3 and 10 years. The Group's obligations under its leases are
secured by the lessor's title to the leased assets. Generally, the Group is
restricted from assigning and subleasing the lease. The majority of lease
payments fixed are over the lease term or are linked with an inflation index.
2021 2020
Number of active leases 17 15
There are several lease contracts that include extension and termination
options, which have been taken into consideration upon recognition of the
right-of-use asset and reassessed annually. On a case-by-case basis, the Group
will consider whether the absence of a break clause would expose the Group to
excessive risk. Typically, factors considered in deciding to negotiate a break
clause include:
· the length of the lease term;
· the economic life of assets purchased for the fit out of the
lease if applicable;
· the economic stability of the environment in which the property
is located; and
· whether the location represents a new area of operations for the
Group.
Each individual lease is assessed as to whether or not management expects to
exercise the break clause. Where we have concluded it is reasonably certain to
be exercised the carrying amounts of lease liabilities are reduced by the
amount of payments that would be avoided from exercising break clauses. During
the year, one of the Group's leases was terminated in respect of its London
property. This termination did not result in the recognition of any
accelerated depreciation of the right of use asset or amendment to the
accounting for the lease liability since the Group originally made the
assessment that the Group would take advantage of the early termination option
on this lease.
The Group also has certain leases with lease terms of 12 months or less and
leases of office equipment with low value. The Group applies the 'short-term
lease' and 'lease of low-value assets' recognition exemptions for these
leases. The short-term and low-value leases portfolio at 30 June 2021 and 2021
is materially consistent with the ongoing costs of the leases as seen below
during the year of £61k (2020: £54k).
Right-of-use assets
Leasehold Office
property
equipment
Total
£'000 £'000 £'000
At 1 July 2019 507 48 555
Additions 7,730 171 7,901
Depreciation charge for the year (850) (28) (878)
At 30 June 2020 7,387 191 7,578
Additions 485 106 591
Depreciation charge for the year (1,035) (78) (1,113)
At 30 June 2021 6,837 219 7,056
Lease liability and movements during the period
2021 2020
£'000 £'000
At 1 July 7,295 554
Additions 591 7,104
Interest expense 345 223
Lease payments (957) (586)
At 30 June 7,274 7,295
Current 897 798
Non-current 6,377 6,497
Amounts recognised in profit or loss
2021 2020
£'000 £'000
Depreciation of right-of-use assets 1,113 878
Interest on lease liabilities 345 223
Expenses relating to low value and short term-leases (included in 61 54
administrative expenses)
1,519 1,155
10. Investments
2021 2020
£'000 £'000
Listed investments 1,970 586
Unlisted investments 572 722
Investment in joint venture 26 -
Total investments 2,568 1,308
In February 2020, the Group's investment in Making Science Group ("Making
science") listed on the Spanish stock exchange. During the year ended 30 June
2021, the Group disposed of 23,525 shares in Making science at a value of
£589,000. The fair value as at 30 June 2021 is based on the listed priced of
EUR5.7 per share.
Valuation of unlisted investments is based on the management's estimate of the
value of investments that will be realised, which is dependent on the
investments performing as expected. The primary significant unobservable input
into valuation of the fair value of unlisted investments is the share value
from the most recent funding rounds for the related company that the Group
holds and investment in. Management performed a sensitivity analysis over the
unlisted investment at the end of the year and the fair value would need to be
increased or decreased by 58-88% (2020 - 56-85%) in order to have a
significant impact on the financial statements.
The Group has a 50% interest in Bridge Independent Risk Solutions Ltd, a joint
venture brought on as part of the Bridge Group acquisition. The Group's
interest is accounted for using the equity method.
2021 2020
£'000 £'000
Fair value
At 1 July 1,308 707
Additions during the year 180 462
Acquisition of joint venture 26 -
Disposal (589) -
Fair value gain/(loss) during the year 1,643 139
At 30 June 2,568 1,308
11. Trade and other receivables (restated)
The following table summarises the current trade and other receivables:
2021 2020
£'000 £'000
(restated)
Current trade and other receivables
Trade receivables 7,013 4,109
Prepayments 1,578 1,239
Contract assets 4,979 3,902
Other receivables 1,287 1,738
Total current 14,857 10,988
Non-current trade and other receivables
Other receivables 416 398
Total trade and other receivables 15,273 11,386
The June 2020 trade receivables balance has been decreased by £334,000 to
reflect additional expected credit loss as discussed in note 1.
The primary decrease to current other receivables for the year ended 30 June
2021 is from repayments of amounts receivable from directors of £426,000
(2020 - £888,000), refer to note 17. The balance within non-current other
receivables relates to the lease rental deposit for the lease of 1 Frederick's
place with a fair value of £416,000 (2020 - £398,000) which is expected to
be returned after a minimum of three years subject to meeting specific
financial performance criteria. The deposit and amounts receivable from
directors do not have expected credit loss allowances booked against them as
they are expected to be repaid in full to the business.
Analysis of trade receivables and contract assets based on age of
invoices
Trade Receivables
Contract < 30 31-60 61-90 91-120 > 120 Total
30 June 2021 assets £'000 £'000 £'000 £'000 £'000 £'000
Expected credit loss rate 8.63% 0.77% 1.83% 10.88% 12.50% 63.83%
Gross carrying amount 5,425 4,242 867 298 739 2,877 9,023
Expected credit loss (468) (33) (16) (32) (92) (1,837) (2,010)
Net receivable 4,957 4,209 851 266 647 1,040 7,013
Trade Receivables
Contract < 30 31-60 61-90 91-120 > 120 Total
30 June 2020 (restated) assets £'000 £'000 £'000 £'000 £'000 £'000
Expected credit loss rate 15.45% 1.14% 4.01% 8.70% 22.22% 51.37%
Gross carrying amount 4,615 2,488 222 476 267 1,633 5,086
Expected credit loss (713) (28) (9) (41) (59) (840) (977)
Net receivable 3,902 2,460 213 435 208 793 4,109
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses (ECL) which uses a provision matrix to calculate a lifetime expected
loss allowance for all trade receivables. The provision rates are based on
days past due for groupings of various customer segments that have similar
loss patterns. The balances are segmented by age for the entire Group as there
is no sector or client type within the Group that has a disparate loss rate
compared to the other sectors in the Group.
The provision matrix and ECL rates have been determined based on historical
loss data available to management in addition to forward looking information
utilising management knowledge. For instance, if forecast economic conditions
(i.e., gross domestic product) are expected to deteriorate over the next year
which can lead to an increased number of defaults, the historical default
rates are adjusted. At every reporting date, the historical observed default
rates are updated and changes in the forward-looking estimates are analysed.
An asset is written off when there is no reasonable expectation of recovering
the contractual cash flows.
The assessment of the correlation between historical observed default rates,
forecast economic conditions and ECLs is an estimate. The amount of ECLs is
sensitive to changes in circumstances and of forecast economic conditions. The
Group's historical credit loss experience and forecast of economic conditions
may also not be representative of customer's actual default in the future.
For the forward looking element this is evaluated on a client by client basis
and an additional provision is recorded for any specific debtors that are
considered to be individually doubtful. As at 30 June 2021 included within the
ECL for trade receivables is a provision of £1,009,000 (2020 - £532,000 one
debtor) related to two specific debtors that were added after considering
their current financial status and other forward looking factors.
Management performed a sensitivity analysis over contract assets and trade
receivables at the end of the year. If the full ECL provision noted above was
increased or decreased by 10% this would have a £247,000 impact on the
provision and related expense (2020 - £169,000).
Set out below is the movement in allowance for expected credit losses of trade
receivables and contract assets:
2021 2020
£'000 £'000
(restated)
As at 1 July 1,690 1,105
Provision for expected credit losses 2,430 1,662
Write-offs (1,642) (1,077)
As at 30 June 2,478 1,690
12. Borrowings and deferred consideration
Borrowings
2021 2020
£'000 £'000
Current borrowings
Bank loans 12 2,538
Non-current borrowings and other liabilities
Bank loans 16,658 144
Other loans - 729
Total non-current 16,658 873
Total borrowings and other liabilities 16,670 3,411
Bank loans
In April 2021 the Group secured a five-year loan facility with Santander for a
mix of Sterling and Euros of which £8,573,000 and £8,932,000 (€10,301,000)
were drawn down at an interest rate of 3.5% above Bank of England and EURIBOR,
respectively, payable quarterly in arrears. The loan facility is subject to
specific debt covenants, the covenants are monitored to ensure that the Group
remains in compliance. There have been no breaches to these covenants for the
year ended 30 June 2021. Management has performed a sensitivity analysis over
the debt balances and if there was a 1.0% increase to the interest rate the
total interest expense and related payable would increase by £110,000. Since
there is a minimum interest rate, as noted above, the amount of interest
expense will not decrease from current rates.
This loan facilitated the repayment of £2,000,000 from Bermuda Commercial
Bank (interest of 7% was previously payable 6-monthly in arrears), Metro bank
secured loan (interest at fixed rate of 4.25% plus an additional floating
charge on the assets of that company, which was 0.5% at the commencement of
the loan balance at 2020 - £214,000) and a majority of the capital loans to
facilitate cashflow management. The remaining loan balances of £12,000 (2020
- £1,200,000) have now been repaid (2020 - length of the loans varied from 3
months to 5 years and the interest rates are between 0.6% - 1.9%).
Deferred consideration
2021 2020
£'000 £'000
Current deferred consideration 8,556 4,758
Non-current deferred consideration 5,120 5,719
Total deferred consideration 13,676 10,477
Deferred consideration relates to outstanding payments due on acquisitions.
This includes payments that are due after the passage of time with no other
conditions attached to payments and contingent consideration which is
dependent upon the results of the acquired business.
Deferred consideration is initially recognised at an estimated fair value
amount where the contingent consideration is probable and can be measured
reliably. 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 rates used are selected on the basis of the
assessed risks and expected returns. A market rate, on cash flows of high
certainty, is assumed to be at a risk-free rate, while cash flows contingent
on business performance are discounted based on the acquiree's weighted
average cost of capital.
The contingent consideration based on business performance is estimated based
on forecasts for the respective business acquired and linked to achieving
certain performance thresholds. If these performance thresholds are not met
the total consideration will decrease, or if the thresholds initially
considered to not be probable are met or exceeded the total consideration may
increase.
During the year ended 30 June 2021 a net fair value loss of £809,000 (2020
restated- £649,000) was recorded in profit and loss (note 9) resulting in a
corresponding decrease to the deferred consideration. This fair value
adjustment was due to revisions in the consideration agreements and changes in
the expected performance of the businesses acquired.
Key assumptions in calculating the fair value of deferred consideration can be
summarised as follows:
· future business performance - which is based on past performance
and expected changes based on management knowledge of the business;
· risk-free rate - range used between 1.0% - 2.5%
· discount rate adjusted for the risk associated with the acquired
business - range used between 10.6% - 25.0%
Included in the above total deferred consideration is £2,243,000 (2020 -
£1,979,000) that is due after the passage of time. The remaining £11,433,000
deferred consideration is linked to the achievement of future performance
criterion by the businesses acquired. If these performance thresholds are not
met the total consideration will decrease, or if the thresholds initially
considered to not be probable are met or exceeded the total consideration may
increase.
For those acquisitions that have a cap on the maximum amount of consideration
this could result in an additional £2,414,000 of undiscounted consideration
in addition to the amounts currently recognised. For other acquisitions there
are no caps on the amount of consideration as the subsequent amounts paid out
are set at a percentage of financial performance metrics. Management performed
a sensitivity analysis over the various expected pay outs for a range of
possible outcomes. Changing the future business performance by increasing
revenue by 10% all acquisitions, with no corresponding increase in costs,
would result in an additional £1,221,000 of undiscounted consideration. A
decrease in revenue of 10% would result in a decrease to undiscounted
consideration of £1,634,000.
13. Share capital and Share Premium
MJ Hudson Group plc was incorporated on 29 July 2019 and was admitted to the
Alternative Investment Market (AIM) on 12 December 2019. Prior to admission
the Group undertook a reorganisation such that MJ Hudson Group plc was
established as the parent and holding company of MJH Group Holdings Limited.
2021 2020
£'000 £'000
Issued Ordinary Share capital - -
Allotted, called up and fully paid
172,627,765 Ordinary shares in MJ Hudson Group plc at £nil each (2020 -
171,320,220)
Share premium* 56,023 55,527
Owned shares (928) -
1,881,658 Ordinary shares in MJ Hudson Group plc at £nil each (2020 - £nil)
*Share premium includes premium paid on B shares of Subsidiary as stated below
Share Capital Share premium
Date Shares £'000 £'000
Ordinary Share capital
Opening balance 1 Jul 2020 171,320,220 - 55,326
Shares issued in MJ Hudson Group plc 1,307,545 - 578
Cost of owned shares in excess of cash on exercise of share options - - (82)
Outstanding at the end of the year 30 Jun 2021 172,627,765 - 55,822
Date Shares Owned shares
£'000
Owned shares
Opening balance 1 Jul 2020 - -
Shares repurchased (2,429,824) (1,164)
Issued for cash on exercise of share options 495,000 236
Outstanding at the end of the year 30 Jun 2021 (1,934,824) (928)
At the time of the admission to AIM the ordinary share capital of MJH Group
Holdings Limited contained 2 classes of shares - A and B shares. The A
ordinary shares were all acquired by MJ Hudson Group plc in exchange for 45
shares in MJ Hudson Group plc and each share issued carries one voting right.
The B share capital of MJH Group Holdings Limited, a subsidiary of MJ Hudson
plc, was not acquired under the takeover. The B shares were issued during 2020
at market value of £201,000 to senior management under a subsidiary growth
share plan.
The 20,000 B shares issued have no voting rights and a par value of £0.01
each. There are no restrictions on the distribution of dividends and the
repayment of capital.
Date Shares Share Capital Share Premium
B Shares 1 Jul 2020 20,000 - 201
Opening balance
Outstanding at the end of the year 30 Jun 2021 20,000 - 201
The total share premium includes share premium from ordinary shares of
£55,822,000 and the share premium of B shares of £201,000 total of
£56,023,000.
Capital risk management
The Group's objectives when managing capital are to safeguard its ability to
continue as a going concern, so that it can provide returns for shareholders
and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital. In addition, the Group capital
management policy takes into consideration debt covenants with lenders and the
capital adequacy requirements of relevant regulatory bodies to ensure that
capital structure is in compliance with those requirements. The capital risk
management policy remains unchanged throughout the periods presented.
Capital is regarded as total equity, as recognised in the consolidated
statement of financial position and stated in the table above, plus debt as
disclosed in note 12. Debt is calculated as total borrowings (excluding lease
liabilities) less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the
number of dividends paid to shareholders, return capital to shareholders,
issue new shares, issue new debt or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a
business or company was seen as value adding relative to the current share
price at the time of the investment. The Group will explore new acquisitions
as part of its growth strategy and continues to integrate and grow its
existing businesses in order to maximise synergies.
14. Other Reserves
Share-based Convertible debt option reserve Foreign currency translation reserve Total other Reserves
payment reserve £'000 £'000 £'000
£'000
Balance as at 1 July 2019 584 883 (24) 1,443
Share-based payments 437 - - 437
Exercise of options (565) - - (565)
Exercise of convertible debt - (883) (883)
Currency translation difference - - 77 77
Balance as at 30 June 2020 456 - 53 509
Share-based payments 2,446 - - 2,446
Exercise of options (11) - - (11)
Currency translation difference - - (116) (116)
Balance as at 30 June 2021 2,891 - (63) 2,828
Share-based payments
Employees of the Group are granted options to acquire shares in the Group. The
charge for the period was £166,000 ended 30 June 2021 (2020 - £437,000).
There were also charges related to the long-term incentive plan (LTIP) for the
period of £1,385,000. The LTIP may be settled in cash or shares. Management
has modified the settlement policy as of 30 June 2021 and concluded that this
plan will be settled with shares rather than in cash. As such the Group has
transferred the liability of £447,000 previously recorded into the
share-based payment reserve from other long term liabilities. The valuation
has been updated effective 30 June 2021.
15. Changes in liabilities from financing activities
The following is a reconciliation of cash flow and non-cash flow movements
relating to financing of the Group, in accordance with the requirements of IAS
7.44(A).
2020 Repayments New loans New leases Interest paid Non cash Total
Year ended 30 June 2021 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Long term borrowings 873 (873) 16,746 - - (88) 16,658
Short term borrowings 2,556 (2,735) 685 - (494) - 12
Lease liabilities 7,295 (614) - 591 (343) 345 7,274
Total debt liabilities 10,724 (4,222) 17,431 591 (837) 257 23,944
The non-cash decrease in long term borrowings of £88,000 for the year ended
30 June 2021 is due to the foreign currency translation of Euro denominated
loans introduced during the year.
2019 Repayments New loans New leases Interest paid Non cash Total
Year 30 June 2020 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Long term borrowings 14,563 (805) 499 - (627) (12,757) 873
Short term borrowings 978 (759) 524 - (238) 2,051 2,556
Lease liabilities 554 (422) - 7,104 (164) 223 7,295
Total debt liabilities 16,095 (1,986) 1,023 7,104 (1,029) (10,483) 10,724
The non-cash decrease in long term borrowings of £12,757,000 for the year
ended 30 June 2020 is due to the conversion of convertible loan notes into
equity of £10,706,000 and the transfer from long term to short term
borrowings of £2,051,000.
16. Business combinations
Acquisitions during the year
On 13 October 2020, the Group acquired 100% of Bridge Group Limited (Bridge),
a funds service provider based in Ireland, conditional on regulatory approval
for £9,793,000 paid in cash, shares and deferred consideration. Full
regulatory approval from the Central Bank of Ireland was obtained on 12
February 2021. The acquisition will build on the Group's specialist funds
operations in London, Luxembourg and Guernsey and adds a strategically
important geography to the Group's network. It also brings a number of new
international asset management clients.
On 29 December 2020, the Group acquired 100% of Prof. Gottschalg UG and its
subsidiary PERACS GmbH (PERACS), a fund and portfolio performance specialist
company for £3,902,000 paid in cash, shares and deferred consideration. The
acquisition of PERACS extends the services provided by MJ Hudson's Data
& Analytics division. PERACS Group offers investors and asset managers in
the alternative assets industry a set of proprietary tools to produce
authoritative metrics and insights into the performance of funds. The business
was subsequently renamed to MJ Hudson Performance Analytics (German) UG.
On 24 June 2021, the Group acquired 100% of FinTech risk specialist Clarus
Risk Limited (Clarus), for £1,984,000 paid in cash, shares and deferred
consideration, to widen the breadth of services in the Group's data and
analytics division. Clarus offers its clients risk and regulatory risk
reporting either as managed service, or via software as a service (SaaS). Such
services are deployed through an advanced, customisable dashboard environment.
The goodwill represents the experience and expertise of the staff of
businesses acquired and non-contractual relationships. In calculating the
goodwill arising on acquisition, the fair values of net assets of businesses
have been assessed and adjustments from book value have been made where
necessary. The goodwill values recorded upon acquisition are not deductible
for tax purposes.
PERACS Bridge Clarus Total
£'000 £'000 £'000 £'000
Intangible fixed assets 388 - 182 570
Tangible fixed assets - 30 1 31
Right-of-use asset - 99 - 99
Investments - 20 - 20
Trade receivables 447 612 65 1,124
Other receivables 15 98 32 145
Contract assets - 302 - 302
Cash at bank and in hand 73 1,730 9 1,812
Total assets 923 2,891 289 4,103
Trade and other payables (698) (1,003) (83) (1,784)
Contract liabilities (53) - - (53)
Lease liability - (106) - (106)
Net assets 172 1,782 206 2,160
Customer relationships 20 6,757 467 7,244
Goodwill at cost (note 9) 3,710 1,254 1,311 6,275
Total purchase consideration 3,902 9,793 1,984 15,679
Initial cash consideration of £3,336,000 was paid at the time of
acquisitions, which is shown net of cash acquired within the statement of
cashflows. In the current period £7,243,000 has been settled of the total
consideration of £15,679,000 noted above. Included within the remaining
£8,436,000 of consideration to be paid to the vendors of businesses acquired
£6,909,000 is contingent upon the achievement of future performance criterion
by those businesses. This consideration is based on the estimated fair value
where the achievement of targets is probable and can be measured reliably.
If these performance thresholds are not met the total consideration will
decrease, or if the thresholds initially considered not probable are met or
exceeded the total consideration may increase. Refer to note 12 above for
further details on contingent consideration.
The useful economic life of customer relationships has been estimated to be 5
years for PERACS; 15 years for Bridge and 11 years for Clarus based on
estimates of the timing of the expected future net present cashflows
attributable to the business.
The results of the businesses since their acquisition for the year ended 30
June 2021 are as follows:
PERACS Bridge Clarus Total
£'000 £'000 £'000 £'000
Results since acquisition
Revenue 181 1,931 13 2,125
Profit/(loss) for the year (88) 275 3 190
Estimated results if owned since the beginning of the reporting period
Revenue 1,273 4,007 595 5,875
Profit for the year (70) 831 76 837
17. Related party disclosures
Transactions with related entities
Matthew Hudson ("Mr. Hudson") is a director and shareholder of HCO Global
Limited. Mr. Hudson's wife, Katherine, is also a shareholder and director of
this company. During the year the Group was charged £61,449 (2020 -
£205,923) by HCO Global Limited. At 30 June 2021 the Group owed HCO Global
Limited £nil (2020 - £20,973).
Mr. Hudson is a director and shareholder of Sports Apps Limited. Mr. Hudson's
wife, Katherine, is also a shareholder of this company. During the year the
Group invoiced Sports Apps Limited £98,035 (2020 - £61,311) in respect of
legal and corporate administration services and this was settled by addition
to a convertible loan note. At 30 June 2021 Sports Apps Limited owed the Group
£33,700 (2020 - £4,752). As at the 30 June 2021 Sports Apps Limited owed the
Group £161,831 (2020 - £143,683) in respect of the convertible loan note
which has been written down to £nil. At 30 June 2021 the fair value of the
Group's equity investment in the entity is £nil (2020 - £83,029).
Mr. Hudson is a director of Alpha Hawk Limited. During the year the Group
invoiced Alpha Hawk Limited £18,187 (2020 - £nil) in respect of legal
services. As at 30 June 2021 Alpha Hawk Limited owed the
Group £117,291 (2020 - £55,873). Due to performance of this business the
Group has made a full provision in respect of this loan balance in the 2021
financial statements.
Bridge Consulting Limited was acquired by the Group on 13(th) October 2020
(refer to note 12). During the year, Bridge Consulting Limited provided
£2,534 in funds administration services to Bridge Independent Risk Solutions,
a joint venture to the Group.
Directors' loans
Included in the consolidated accounts are certain amounts due from directors
of group companies. No new director loans were created in the twelve month
period to 30 June 2021.
As disclosed as part of the Group's RNS announcement on 18 November 2020 under
AIM Rule 19, the following disclosures were omitted from the Group's 2020
financial statements. As part of the Company's IPO in December 2019 Mr. Hudson
and others entered into a share subscription agreement. Under this agreement,
Mr. Hudson subscribed but did not pay for 659,191 shares in the Company at the
IPO issue price of 57p per share resulting in a payable due to the Company of
£375,739. The details of this loan were previously included in other
receivables from directors in the 2020 financial statements. The balance of
the loan remained unpaid as at 30 June 2020. The loan should originally have
been repaid by 3 March 2020. In January of 2021 the repayment date of the loan
was extended, with the consent of the Board, to 31 December 2021. The loan was
repaid by Mr. Hudson on 30 April 2021.
The remaining loan payable by Mr. Hudson to the Company at 30 June 2021 is
£462,703 (2020 - £462,703). This loan balance and the terms remain unchanged
in the 12 months ending 30 June 2021. . As the loan remained outstanding this
triggered corporation tax payable of £150,378, which is fully recoverable at
the time of repayment of the loan by the director. The loan is non-interest
bearing and is repayable on demand. All amounts are expected to be received in
full and no provision has been recorded against these balances (2020 -
£nil).
A separate share subscription of £50,000 at the IPO by Charles Spicer, the
Company's chairman, was outstanding at 30 June 2020 and was settled on 18
August 2020.
Loans from directors of subsidiaries
Deferred consideration loans from directors of £nil (2020 - £159,236)
relate to deferred consideration on the acquisition of Amaces Limited by MJH
Group Holdings Limited in December 2018. These loans were repaid during the
year in line with the contractual requirement in respect of the acquisition.
The loan balances were due to the former directors of Amaces Limited, and
their immediate family, and the breakdown was as follows at the end of
2020 - Aidan Dennis £49,761; Sandra Dennis £49,761; and James Economides
£59,714. A further deferred consideration loan from Jonathan Bale of
£nil (2020 - £17,967) which related to the 2014 acquisition of MJ Hudson
Services Jersey Limited (formerly Verras Services Limited) was settled in
the year. This loan balance was incorrectly shown as relating to deferred
consideration on the acquisition of MJ Hudson Law LLP on 2 December 2013.
18. Post balance sheet events
On 23 July 2021, the Group entered into a share purchase agreement relating to
the purchase of the entire share capital of Saffery Champness Fund Services
Limited (´SCFS´), a Guernsey based fund administration business, from the
accountancy group Saffery Champness. The acquisition is expected to double MJ
Hudson´s fund administration revenues in Guernsey with a 50% increase in
local staff numbers. The deal was approved by the Guernsey Financial Services
Commission and completed on 31 October 2021. It is expected to be modestly
accretive to earnings per share. The maximum consideration for SCFS
is £2.8m in cash and is subject to performance criteria over a two-year
period. The acquired business generated revenues of £1.4m for the
twelve-month period to March 2021 with an EBITDA margin comparable with the
Group´s Outsourcing division on a pro forma basis.
On 20 August 2021 the Group borrowed £7 million from Santander under the
terms of the Uncommitted Facility described more fully in note 12. This was to
fund accelerated regulatory capital required in the Irish operations due to
new business gains and working capital.
The Board of Directors have approved a resolution to recommend to shareholders
at the AGM of the Company that a final dividend be declared in respect of FY21
of 0.125p per share.
There are no other transactions which occurred in the period after the
consolidated statement of financial position date up to the date of the
authorisation of these financial statements which would affect the figures
stated within these financial statements.
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