REG - MJ Hudson Group PLC - Interim Results
12/04/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220412:nRSL0374Ia&default-theme=true
RNS Number : 0374I MJ Hudson Group PLC 12 April 2022
RNS Release: 12 April 2022
MJ Hudson Group plc
Interim results for the six months ended 31 December 2021
48% revenue growth in the period; three transformative growth opportunities
including key 2021 acquisition making contribution 12 months ahead of schedule
MJ Hudson Group plc ("MJ Hudson", the "Company" or the "Group"), the
end-to-end solutions provider to the asset management industry, today
announces its interim results for the six months ended 31 December 2021 ("H1
FY22").
Financial highlights
· Revenue growth of 48% to £23.4m from £15.8m in H1 FY21 driven
by strong organic growth (especially in ESG & Sustainability) and full
contributions from successful acquisitions.
· Fully diluted EPS (0.18)p (H1 FY21 (0.16)p.
· Adjusted EBITDA increased 89% to £3.4m and adjusted EBITDA
margin improved from 16% to 20%, owing to a more favourable business mix (both
from H1 FY21).
· Adjusted pre-tax profit before tax increased to £1.6m from
£0.4m in H1 FY21 .
· Adjusted fully diluted EPS increased to 0.9p (H1 FY21 0.2p).
· Net debt rose to £13.0m excluding leases (H1 FY21 £1.6m net
cash), in order to fund infrastructure investments, M&A, and to support
accelerated growth in the Irish Super ManCo and ESG & Sustainability.
* Adjusted metrics remove pass-through revenues and certain costs (such as
share based payments, M&A and financing costs, losses from discontinued
businesses, and other exceptional costs); see notes below for further
description and reconciliation of statutory loss before tax to adjusted profit
before tax.
Operational highlights
· Three transformative growth opportunities (ESG &
Sustainability, the Irish Super ManCo, Luxembourg fund services), plus
accelerating growth in the software and data business lines, more generally.
· Strong new business activity, with several global market leaders
engaging the Group's services, attracted by the Group's strong brand and mix
of cutting-edge Data & Analytics tools and Outsourcing services.
· An extremely productive pipeline, across the Group, with much
converted, post-period, and more expected by year end; new engagements have
emphasis on recurring revenues, supporting strong revenue generation into
FY23, and beyond.
· Acquisition of Saffery Champness Fund Services, a Guernsey-based
fund administrator, providing scale to Channel Island operations.
· A number of prestigious industry awards won, including for the
ESG technology platform and for ESG & Sustainability advisory services.
Operational review
Performance in the period has been transformed through extremely strong (34%)
organic revenue growth in the software-driven data and analytics businesses
and in long-term recurring contract outsourcing services (21%). This has been
further supported by the ability to now recognise full contributions from
recent acquisitions in those same business areas.
Following successful incubation, integration, and investment, the Group now
has three transformative growth opportunities in ESG & Sustainability
(acquired July 2019), the Irish Super ManCo (acquired in Feb 2021) and the
incubated Luxembourg fund services business. Indeed, the investment into ESG
& Sustainability, and fund services (including the Irish Super ManCo and
the Luxembourg fund services team) has helped these two teams grow to be the
Group´s largest business units, by staff numbers.
The power of the MJ Hudson brand and the unique combination of specialist
digital tools and services continued to draw the largest firms in the industry
into the Group's orbit, with 18 members of the FTSE 100 and several of the
world's largest private equity firms already becoming clients by the end of
the period and conversations ongoing with prospective clients of similar size
and stature.
MJ Hudson's operating infrastructure has also been significantly upgraded,
with the Group bringing key systems fully online and succeeding in attracting
a large number of additional hires into its fastest growing business units,
including ESG & Sustainability. There was industry recognition for MJ
Hudson at industry awards, with the Group named a finalist for five Drawdown
awards, winning three: Best ESG Advisory Services; Best ESG Technology (for
its newly launched ESG Advantage digital platform); and Best Marketing and
Communications Advisory. The Outsourcing division also picked up an award from
Private Equity Wire, in March 2022, winning for Best ManCo Solution, in an
award category voted on solely by the market.
The sole acquisition made in the period was that of Saffery Champness Fund
Services Limited, a Guernsey based fund administration business, adding more
scale to the Group's services in this field. In addition, FidesIQ, a joint
venture with SmartCats, in the Data & Analytics division, was launched. .
This joint venture is a FinTech and advisory business that helps pension funds
improve the way they monitor and evaluate the success of the investment
decisions they make and the advice they receive. The integration of
acquisitions made earlier in the financial year remains on track, with
contributions from the Irish Super ManCo trading twelve months ahead of
expectations.
Market tailwinds supporting the further growth of the Group remain. The Group
provides the "picks and shovels" to the fast-growing alternative assets
segment within asset management. Oversight and regulation is increasing, as
this segment grows, creating greater need for the Group's specialist advice,
services and tools. This is all supported by the global trend towards
outsourcing.
Financial summary and key performance indicators
Where Group performance has been presented on an adjusted basis, this is to
give a clearer picture of the underlying performance of the business, by
removing pass-through revenues and exceptional costs. A reconciliation to
statutory results is presented within this statement. The Group includes
non-GAAP measures where it is deemed useful and necessary.
Six months ended 31st Dec 2021 Six months ended 31st Dec 2020
£m £m
Notes Growth
Statutory results
Revenue 23.4 15.8 48.1%
EBITDA 0.4 (1.3) 130.8%
Loss before tax (3.1) (2.5) (24.0)%
Basic and diluted EPS (p) (1.8)p (1.6)p
Net (debt)/cash excluding IFRS16 leases (13.0) 1.6
Adjusted results 1
Underlying Revenue 2 17.0 11.3 50.4%
EBITDA 3 3.4 1.8 88.9%
EBITDA margin 20.0% 15.9%
Profit before tax 4 1.6 0.4
Basic and diluted adjusted EPS (p) 5 0.9p 0.2p
1. Adjusted results exclude discontinued businesses (revenue
£0.1m - H1 FY21 £0.1m)
2. Revenue under IFRS includes all revenues received by the
Group. Within the Group's FMS subdivision (Outsourcing) a material proportion
of revenue is typically passed through to clients as a specific payment linked
to the performance of the clients' funds. This is reflected in direct costs of
sales. In managing the business and looking at underlying trends for the Group
as a whole, management considers that these payments can have a distorting
effect. Underlying revenue is a measure defined to specifically excludes these
items. It provides a more representative metric, especially in relation to the
value created by the Group, its underlying growth and the operating efficiency
of its activities. These pass-through revenues have increased in the period
due to a significant new Luxembourg AIFM client's first billing.
3. Adjusted EBITDA is segment profit / (loss) before share based
payments including LTIP expense, discontinued business losses, and M&A and
financing costs. Underlying adjustments are explained in more detail below.
4. Adjusted profit before tax is calculated by taking adjusted
operating profit less finance expenses.
5. Adjusted EPS takes the adjusted profit after tax divided by
the weighted average shares outstanding at the period end.
Commenting on the results, CEO of MJ Hudson, Matthew Hudson, said:
"Our continued growth is built on a determined effort to translate our growing
market reputation and expertise into better quality revenues. While some lower
margin advisory services suffered from the lingering, albeit diminished,
overhang of Covid-19, we have, in line with our longer-term strategy, focussed
on accelerating our high-margin Data & Analytics solutions and scaling up
our annuity-style outsourcing services. Our award-winning ESG &
Sustainability business unit is leading our growth, successfully working
together with other teams within the Group to deliver unique combinations of
services to our growing list of clients.
Supported by a strong brand, we have built a robust pipeline of new business,
particularly in Outsourcing and Data & Analytics, and with an emphasis on
subscription and other recurring revenues, as well as multi-service
engagements. This includes large mandates, closed post-period, and more we
expect to close both during the current financial year, and beyond. The board
remains confident in management's ability to continue growing the business in
the second half and (per our January trading update), expects the Company to
deliver strong growth at the upper end of market guidance."
A briefing for analysts will be held at 9.30am, this morning via a Zoom video
call. Registration is through mjhudson@buchanan.uk.com.
For further information contact:
MJ Hudson Group plc +44 20 3463 3200
Matthew Hudson, CEO
Matthew Craig-Greene , CMO
Katherine Hazelden, PR Director
Cenkos Securities (Nomad and Joint Broker) +44 20 7397 8900
Giles Balleny
Stephen Keys
Callum Davidson
Buchanan (PR Adviser) +44 20 7466 5000
Stephanie Whitmore
Kim van Beeck
Hannah Ratcliff
This announcement contains inside information as defined in Article 7 of the
Market Abuse Regulation
About MJ Hudson
MJ Hudson (AIM:MJH) is the end-to-end solutions provider to the US$100
trillion+ asset management industry, specialising in its fastest growing
segment, private markets (including private equity and venture capital).
The Company offers investors access to the growth in private markets as a
tech-enabled 'picks and shovels' play.
Founded in 2010, by CEO Matthew Hudson (a private markets lawyer and former
fund manager), MJ Hudson was admitted to the AIM market of the London Stock
Exchange in 2019. The Group has grown to more than 300 professionals, serving
more than 1,000 clients, across the globe, including some of the industry's
largest players and 18 of the FTSE 100.
Several factors have contributed to the Group's success, to date, and support
strong growth expectations, for the future:
1. Private markets are growing fast, and MJ Hudson provides the picks and
shovels
2. As private markets grow, so do scrutiny and regulation, increasing the
need for the Group's specialist advice and services, particularly in areas
like ESG, where it has award-winning solutions
3. As it evolves, the sector is increasingly embracing technology, data,
and analytics, where MJ Hudson has market-leading and award-winning tools and
in which it continues to invest
4. The Group's multi-service approach creates multiple client touchpoints,
building stronger, longer-term relationships, and making it easier to sell in
additional MJ Hudson services
5. Performing these services generates vast amounts of data, which MJ
Hudson aggregates and analyses, in order to further support its clients, by
developing next-generation tools and fine-tuning existing services
For more information, please visit our website: www.mjhudson.com/investors
(http://www.mjhudson.com/investors)
LinkedIn: www.linkedin.com/company/mj-hudson/
(http://www.linkedin.com/company/mj-hudson/)
Twitter: www.twitter.com/MJHudsonCorp (http://www.twitter.com/MJHudsonCorp)
Chief Executive's statement
MJ Hudson, the end-to-end solutions provider to the asset management industry,
is pleased to report its interim results for the six months ended 31 December
2021.
Underlying revenues grew by 50%, compared with the same period last year and
adjusted EBITDA increased to £3.4m (H1 FY21: £1.8m). Adjusted pre-tax
profits increased to £1.6m (H1 FY21 £0.4m) with EPS of 0.9p (H1 FY21: 0.2p).
Organic revenue grew by 7% in the period (H1 FY21 - 4%), with organic revenue
for Outsourcing and Data & Analytics growing21% and 34%, respectively.
However, Advisory organic revenue contracted by 16% during the period, as
explained, below.
During the period, the Group continued its strategy of focussing on higher
margin business units in the Outsourcing and Data & Analytics divisions.
For H1 FY22, Advisory revenue represented 25% of the total compared with 45%
in the prior period; Outsourcing is now the single largest division by
revenue, accounting for 45% of the Group in H1 FY22, with Data & Analytics
increasing to 30%.
Adjusted EBITDA margins increased to 20.0% (H1 FY21 - 15.9%), even as the
Group continued to invest into growth, in order to take advantage of
opportunities to scale ESG & Sustainability and the Irish Super ManCo, as
well as other areas of the business. Once these major investments into
personnel, systems and infrastructure complete (expected to be in FY23),
margins are anticipated to improve yet further.
During the reporting period, the Group acquired Saffery Champness Fund
Services, a Guernsey based fund administration provider. Following regulatory
approval, the entity was renamed MJ Hudson Fund Services Guernsey Limited and
was consolidated from the beginning of November 2021. As a result, the first
meaningful contribution from this business line will be generated in the
second half of FY 2022.
Net debt was £13.0m at the end of the period (excluding lease liabilities)
compared with £1.6m net cash in December 2020, The extra funding was used to
support planned infrastructure investments and to support accelerated growth
in the Irish Super ManCo and ESG & Sustainability. As at the end of
December 2021, LTM net debt/adjusted EBITDA was 1.8x.
Segment adjusted performance
£m Advisory Outsourcing* Data & Analytics Total
6m to 31(st) December 2021
Underlying Revenue 4.3 7.7 5.1 17.0
Growth (15.7) % 126.5% 88.9% 50.4%
Adjusted EBITDA** 0.6 1.4 1.4 3.4
Adjusted EBITDA margin 14.0% 18.2% 27.5% 20.0%
6m to 31(st) December 2020
Underlying Revenue 5.1 3.4 2.7 11.3
Adjusted EBITDA** 0.8 0.4 0.6 1.8
Adjusted EBITDA margin 15.7% 11.8% 22.2% 15.9%
*Outsourcing division results include Luxembourg, Fund Administration and
Regulatory Consulting business which were previously included
under Organic Investments. To aid comparison the FY21 comparatives have been
added to Outsourcing also.
**Adjusted EBITDA takes the segment profit from the segment note and adds back
share based payments and LTIP expense and losses from discontinued operations.
Performance for the individual segments is as follows:
Data & Analytics (30% of Group revenue)
This division achieved 89% revenue growth and 34% organic revenue growth.
Adjusted EBITDA margin increased to 27.5% from 22.2%. The MJ Hudson ESG &
Sustainability business saw 49% organic sales growth compared to H1 FY2021, in
response to sustained customer demand and the launch of the ESG Advantage
software product. The fund performance analytics business, acquired in
December 2020, is now fully integrated and delivering encouraging revenue at
high margin, due to the automated nature of its business model. It is also
proving to be a valuable point of entry to the Group for US based and other
blue chip alternative funds. The quantitative solutions business was
successfully integrated in the review period (acquired late June 2021).
Outsourcing (45% of Group revenue)
This division achieved 126% revenue growth and 21% organic revenue growth.
Luxembourg AIFM, fund administration, and regulatory consulting, which were
previously classified as Organic Investments in FY21 have all now moved to
Outsourcing from FY22, reflecting the maturity of these businesses. Overall
growth has been driven by the Irish Super ManCo, acquired in February 2021. In
this business, AUM increased from €6bn at time of acquisition to €50bn at
half year stage and this has increased further since December, as a result of
significant client wins. Organic growth has been strongest in the Luxembourg
AIFM business and UK fund administration team, in the period. Adjusted EBITDA
margin improved from 11.8% to 18.2% with gains coming from the former Organic
Investments and the impact of the Irish Super ManCo.
Advisory (25% of group revenue)
This division, which comprises the law firm and the Investment Advisory
business, experienced a 16% reduction in revenue. This was primarily owing to
a restructuring of the law firm, last year, which saw three partners leave,
resulting in H1 FY21 revenues falling 15.7% (£0.8m) compared to the same
period in the previous year. This revenue dip is expected to be temporary: two
law partners have since joined, and they are beginning to make good progress.
In the Investment Advisory business, one client in the public sector
renegotiated its engagement with the Group, resulting in some revenue loss
from that client, and reduced EBITDA margins of 14.0%, compared to 15.7% in H1
FY21. However, the business has since seen a number of new client successes,
with a large multi-year contract awarded by the ACCESS pool announced after
the period end. This will shape results for the full year FY22 and beyond.
Incubation activities have previously been reported within a fourth category,
Organic Investments. As set out above, these businesses have achieved
profitability and they are now reported within Outsourcing. Historically, the
Group has set up Organic Investments in circumstances where - by way of
services or geography - there is a compelling investment case, but where
M&A opportunities are unattractive or otherwise do not pass due diligence
processes. This has been a successful route to growth for the Group.
New business activity
The Group continues to attract ever larger clients, with a number of notable
wins in the period, as reported in the Group's trading update of January 31:
1. The ESG & Sustainability and IR & Marketing Solutions teams
jointly won several mandates to provide technical and marketing services to a
range of private markets fund managers. This combined service has since been
shortlisted as Specialist Adviser of the Year at the Private Equity Awards
2022
2. The Luxembourg fund services team won a mandate from a $600bn
global fund manager, including ESG & Sustainability services
3. The law firm was instructed on a series of investments made by a
FTSE 100 asset manager
4. The investment consulting team won a multi-year,
multi-million-pound private markets mandate from a £35bn local government
pension scheme pool
5. The Irish Super ManCo has secured major clients, including a
£20bn+ multi-strategy asset management house, pushing assets under management
("AUM") above €50bn. The team in Ireland is generating record revenue levels
and is an exciting area of growth, moving into the second half of the year
Post period, the Group has executed on several of the major contracts from its
H1 FY22 pipeline, including a global investment bank and a top-5 global
private equity house. The Group continues to prioritise engagements including
the provision of multiple services and recurring revenues.
The Group continued to invest in marketing and business development and a
strong pipeline built during the period has seen record revenues achieved in
several business units since period-end.
Acquisitions
During the period, the Group acquired Saffery Champness Fund Services Limited,
a Guernsey based fund administration business, from the accountancy group
Saffery Champness. This has provided greater scale to the Group's
multi-jurisdictional fund administration business, within the Outsourcing
division. 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.
One of MJ Hudson's strengths has proven to be its ability to scale
acquisitions, once they have been integrated into the Group. For example, the
ESG & Sustainability team and the North American IR & Marketing
Solutions team, have both grown rapidly since acquisition in 2019 and 2020,
respectively, and are expecting to continue on this trajectory. The Irish
Super ManCo business acquired in February 2021 continues to progress well,
trading twelve months ahead of plans set at the time of acquisition. The
cross-selling opportunities and strong brand of MJ Hudson both provide a good
catalyst for specialist, owner managed businesses to flourish. The portfolio
of businesses acquired in calendar 2021 grew revenue at an average of 36% in
the six months to Dec 2021, compared with their periods prior to
consolidation.
Net debt
Net debt was £13.0m as at the end of December 2021. In August 2021, the Group
borrowed an additional £7m from Santander under the terms of its five-year
loan facility. This was to fund infrastructure investments and M&A, and to
support accelerated growth in ESG & Sustainability and the Irish Super
ManCo business, which is significantly ahead of the business targets set at
acquisition. No further funding extension is expected as this business is now
capitalised at the maximum required level of €10m. In January 2022, the
Group borrowed a further £3m to accelerate investment into growth and
technology.
As set out above, LTM net debt/adjusted EBITDA, as at the end of December
2021, was 1.8x. For the full year FY22, this metric will be impacted by the
additional borrowing, in January 2022, set out above, but is expected to be
tempered by a full EBITDA contribution from recent acquisition and the
continued growth of the Group. Management expects to continue to manage this
metric within growth company norms.
Reconciliation of adjusted financial measures and statutory results
Six months ended Six months ended
31st Dec 2021 31st Dec 2020
£m £m
Statutory loss before taxation (3.1) (2.5)
Fundraising and acquisition costs 1.1 1.3
Non-recurring costs 0.6 0.7
Unallocated group costs - 0.1
Share based payment and LTIP charge 0.8 0.5
Amortisation of acquired intangibles 0.6 0.3
Discontinued businesses losses 0.4 0.4
Fair value movements*** 1.2 (0.5)
Adjusted profit before taxation 1.6 0.4
*** Fair value movements includes gains and losses on deferred consideration
and investments. In H1 FY2022, the 1.2m adjustment primarily related to
deferred consideration fair value loss (H1 FY2021 benefitted from £0.9m fair
value gain on investments).
Adjusted financial measures are presented to provide additional information to
best represent the performance of the business. In particular:
· fundraising and acquisition costs of £1.1m (H1 FY21 £1.3m)
include the fees relating to the fundraising from Santander in the period (see
Net Debt section above) and the Saffrey Champness Fund Services Limited
acquisition;
· non-recurring costs of £0.6m (H1 FY21 £0.7m) are one-off in
nature and comprise reorganisation and office wind-down costs of £0.5m and
professional fees of £0.1m;
· share based payment and LTIP charges primarily relate to share
based schemes that were established at the time of the IPO; and
· discontinued business losses represent the loss from individual
entities that have either been wound up in the year or management has
concluded will be discontinued in the near future due to lack of productivity.
This is a non-IFRS alternative financial measure.
Cashflow
6 months ended 31st Dec. 2021 6 months ended 31st Dec. 2020
£m £m
Statutory cash expended from operations (0.3) (1.2)
Adjusting items
Fundraising & acquisition costs 1.1 1.3
Non-recurring costs 0.6 0.7
Unallocated Group expenses - 0.1
Net cash generated from underlying operating activities 1.4 0.9
Net cash expended from operating activities improved to £(0.3)m from £(1.2)m
in H1 FY21. On an underlying basis, net cash generated from operating
activities increased from £0.9m (H1 FY21) to £1.4m.
The investment into the growth of the group has continued and net cash used in
investing activities was £5.3m (H1 FY21 £5.7m).
Cash and cash equivalents at end of period were £11.3m (H1 FY21 £4.9m).
Dividend
The Group made a dividend payment for the financial year FY21 in January of
2022. The Group intends to repeat this approach in the current year and will
pay a single dividend in respect of FY22 in January 2023. Per previous
guidance, whereas the prior year dividend was in respect of the six-month
period to June 2021, the payment for FY22 will be in respect of the full
twelve-month period to June 2022. Going forward, and as communicated upon IPO,
management is committed to a progressive dividend policy, which reflects the
sustainable growth in the business.
Board
The Board of MJ Hudson was appointed prior to the Company´s admission to AIM,
in December of 2019, and has been unchanged, since that date. Its composition
satisfies the requirements for a company registered in Jersey, as well as its
obligations under the AIM rules, and the guidance set out under the QCA code.
The structure of the Board is reviewed on a continuing basis, both in this
context and given its wider responsibilities. In a separate release today, we
have announced, the appointment of former Senior Independent Director, Mr
Geoffrey Miller, to the position of Non-Executive Chair of the Board,
effective 1 May 2022, and the promotion of the COO, Mr Odi Lahav, to the
position of Executive Director of the Board, subject to standard NOMAD due
diligence. At the same time, Mr Charles Spicer, the current Chair, replaces Mr
Miller as the Senior Independent Director and will chair the Remuneration
Committee. These changes are consistent with the Company´s transformation
since its admission to AIM, as demonstrated by these interim results, and with
its high growth potential.
Current trading and outlook
The strong trading reported in the Group´s January update has continued in
recent months. As a consequence, the Board expects to deliver growth for the
full year to June 2022 at the upper end of market forecasts. Whilst
significant investment will continue into areas of growth in FY23, it is
expected that the following years will see margins increase, as the revenue
mix shifts further towards Outsourcing and Data & Analytics and
infrastructure projects complete.
12 April 2022
MJ HUDSON GROUP PLC
Consolidated statements of comprehensive income
Unaudited six months to Unaudited six months to
31 December 2021 31 December 2020
(restated)
Note £'000 £'000
Revenue 3 23,445 15,818
Direct cost of sales (6,308) (4,647)
Other cost of sales (1,052) (345)
Gross profit 16,085 10,826
Administrative and other expenses (17,585) (13,680)
Other operating income 178 192
Operating loss (1,322) (2,662)
Finance expense (508) (339)
Fair value movements (1,239) 460
Loss before taxation (3,069) (2,541)
Tax benefit / (expense) 34 (43)
Loss for the year (3,035) (2,584)
Attributable to:
Equity holders of the parent (3,046) (2,584)
Non-controlling interest 11 -
Loss for the period (3,035) (2,584)
Other comprehensive income
Exchange differences arising on translation of foreign operations (115) (32)
Total comprehensive loss for the period (3,150) (2,616)
Earnings per share attributable to the ordinary equity holders of the parent
Basic and diluted EPS 4 (0.02) (0.02)
MJ HUDSON GROUP PLC
Consolidated statements of financial position
Unaudited at 31 December Audited at 30 June
Note 2021 2021
£'000 £'000
ASSETS
Non-current assets
Intangible assets 49,731 46,935
Tangible assets 2,193 2,067
Right-of-use asset 9,141 7,056
Investments 1,817 2,568
Other receivables 74 416
Total non-current assets 62,956 59,042
Current assets
Trade and other receivables 17,106 14,857
Income tax receivable 150 150
Cash and cash equivalents 11,325 9,785
Total current assets 28,581 24,792
Total assets 91,537 83,834
LIABILITIES AND EQUITY
Non-current liabilities
Borrowings 23,469 16,658
Deferred consideration 5,899 5,120
Lease liabilities 8,770 6,377
Other payables 405 405
Total non-current liabilities 38,543 28,560
Current liabilities
Trade and other payables 9,034 8,027
Income tax liabilities 125 396
Deferred tax liabilities 182 182
Borrowings 870 12
Deferred consideration 6,933 8,556
Lease liabilities 1,046 897
Total current liabilities 18,190 18,070
Equity
Issued share capital - -
Share premium account 5 56,023 56,023
Owned shares (982) (928)
Other reserves 6 3,517 2,828
Retained loss (23,745) (20,699)
Total equity 34,813 37,224
Non-Controlling interest (9) (20)
Total equity 34,804 37,204
Total liabilities and equity 91,537 83,834
MJ HUDSON GROUP PLC
Consolidated statements of changes in equity
Share Share Owned Other Retained Total equity
Capital Premium Shares Reserves loss Total NCI
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 July 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 period - - - - (5,380) (5,380) (20) (5,400)
Other comprehensive income - - - (116) - (116) - (116)
Shares issued - 578 - - - 578 - 578
Shares repurchased - - (1,164) - - (1,164) - (1,164)
Balance as at - 56,023 (928) 2,828 (20,699) 37,224 (20) 37,204
30 June 2021
Share based payments
- - - 804 - 804 - 804
Loss for the period - - - - (3,046) (3,046) 11 (3,035)
Other comprehensive income - - - (115) - (115) - (115)
Shares repurchased - - (54) - - (54) - (54)
Balance as at - 56,023 (982) 3,517 (23,745) 34,813 (9) 34,804
31 December 2021
MJ HUDSON GROUP PLC
Consolidated statements of cash flows
Un audited six months to Unaudited six months to
ember 2021 31 December 2020
31 Dec
£'000 £'000
(Restated)
Cash flows from operating activities:
Loss for the financial period before taxes (3,069) (2,541)
Adjustments for:
Depreciation and impairment of fixed assets and right-of-use assets 855 721
Amortisation and impairment of intangible assets 882 618
Revaluation of investments 166 (842)
Fair value movements 1,067 211
Share based payment 804 69
Net interest payable/(receivable) 508 510
Decrease/(increase) in trade and other receivables (1,976) (527)
Increase/(decrease) in trade and other payables 974 560
Foreign exchange (344) 12
Cash from operations (133) (1,209)
Taxation paid (150) -
Net cash used from operating activities (283) (1,209)
Cash flows from investing activities:
Purchases of tangible assets (371) (164)
Purchase of intangible assets (1,516) (205)
Purchase of subsidiary undertaking (1,340) (1,195)
Purchase of financial instruments (5) (22)
Proceeds from sale of financial instruments 591 -
Payment of deferred consideration related to acquisitions (2,643) (4,159)
Net cash used in investing activities (5,284) (5,745)
Cash flows from financing activities
Interest paid (192) (694)
Equity subscription less associated costs - 562
Owned shares purchased (55) (991)
Proceeds from issue of bank loan 8,118 184
Repayment of bank loan (150) (299)
Directors loan repayments in the period - (18)
Payment of lease liabilities (614) (259)
Net cash (used in) / generated from financing activities 7,107 (1,515)
Net increase in cash and cash equivalents 1,540 (8,469)
Cash and cash equivalents at beginning of period 9,785 13,388
Cash and cash equivalents at end of period 11,325 4,919
Cash and cash equivalents comprise:
Cash at bank and in hand 11,325 4,919
Bank overdrafts - -
11,325 4,919
Notes to the interim report
1 . GENERAL INFORMATION
MJ Hudson Group plc (the "Company") is a public limited company incorporated
in Jersey, Channel Islands and its shares are quoted on the AIM Market of the
London Stock Exchange under the Companies (Jersey) Law 1991. The address of
the registered office is PO Box 264, Forum 4, Grenville Street, St Helier, JE4
8TQ. The financial information consolidates 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 three full scope AIFM management platforms
to fund managers, in the UK, Luxembourg, and Ireland.
Correction of errors
Two errors have identified in relation to the interim results for the six
months ended December 2020 (prior period) which have been corrected as prior
year misstatements in these financial statements. They are described below:
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 loss of £382,000 was previous
disclosed within Finance expenses in error and therefore have been
reclassified as fair value movements in this financial information.
In considering the requirements for discontinued operations, individual
entities were not significant enough to be considered discontinued operations
in the prior period. The loss associated with these individual entities have
been included within the respective lines of the prior period, revenue
decreased by £86,000 and Administrative and other expenses increased by
£344,000.
2. BASIS OF PREPARATION
The financial information presented in this Interim Report has been prepared
in accordance with International Financial Reporting Standards as adopted by
the United Kingdom ("IFRS") that are expected to be applicable to the
financial statements for the year ending 30 June 2022 and on the basis of the
accounting policies expected to be used in those financial statements.
The financial information is 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 information is presented in pounds sterling and all
values are rounded to the nearest thousand (£'000), except when otherwise
indicated.
The Interim Report covers the six months ended 31 December 2021 and was
approved by the Board of Directors on 11 April 2021. The Interim Report is
unaudited. The interim condensed set of consolidated financial statements in
the Interim Report are not statutory accounts as defined by Companies (Jersey)
Law 1991. Comparative figures for the 6 months ended 31 December 2020 have
been extracted from the prior year financial statements for that period.
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 and regulatory consulting.
· Data & Analytics: ESG advisory and retainer services, fund
performance analytics, benchmarking services underpinned by data and software
tools to support sustainable investment, 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 historically included three separate
businesses including Luxembourg services, regulatory consulting team in London
and international fund administration business. Previously, they have been
presented separately from the other segments to increase the transparency of
the profitability of the group before these activities. For the period ended
31 December 2021, these incubated businesses are reported in our Outsourcing
division. There are no new Organic Investments in the period.
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 organic investments, fundraising and
acquisition costs, non-recurring items, unallocated central income / costs,
and depreciation and amortisation. Unallocated central income / costs (Group
income /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. Nonrecurring
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.
Period ended Advisory Outsourcing Data & Analytics Segment total Organic investments Consolidated
31 December 2021 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 4,283 14,064 5,098 23,445 - 23,445
Direct cost of sales - (6,308) - (6,308) - (6,308)
Revenue less direct cost of sales 4,283 7,756 5,098 17,137 - 17,137
Other cost of sales (270) (294) (488) (1,052) - (1,052)
Gross profit 4,013 7,462 4,610 16,085 - 16,085
Administrative and other expenses (4,005) (6,626) (3,445) (14,076) - (14,076)
Other operating income 122 30 26 178 - 178
Segment profit/(loss) 130 866 1,191 2,187 - 2,187
Group expenses -
Fundraising and Acquisition costs (1,128)
Non-recurring costs (644)
Depreciation and amortisation (1,737)
(1,322)
Operating loss
Finance expenses (508)
Fair value movements (1,239)
Tax 34
Loss for the period (3,035)
Period ended Advisory Outsourcing Data & Analytics Segment total Organic investments Consolidated
31 December 2020 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 4,995 3,263 2,749 11,007 4,811 15,818
Direct cost of sales - (741) - (741) (3,906) (4,647)
Revenue less direct cost of sales 4,995 2,522 2,749 10,266 905 11,171
Other cost of sales (285) - (60) (345) - (345)
Gross profit 4,710 2,522 2,689 9,921 905 10,826
Administrative and other expenses (4,672) (1,859) (2,191) (8,722) (1,458) (10,180)
Other operating income 155 20 5 180 3 183
Segment profit/(loss) 193 683 503 1,379 (550) 829
Group expenses (95)
Fundraising and Acquisition costs (1,337)
Non-recurring costs (721)
Depreciation and amortisation (1,338)
(2,662)
Operating loss
Finance expenses (510)
Fair value movements 631
Tax (43)
Loss for the period (2,584)
The segment note for the period ended 31 December 2020 has been restated for
results of entities that were previously considered to be part of discontinued
operations. This is included above within Advisory segment (revenue of
negative £82,000 and administrative expenses of £344,000).
4. EARNINGS PER SHARE ( EPS)
Basic EPS is calculated by dividing the profit for the period attributable to
ordinary equity holders of the parent by the weighted average number of
ordinary shares outstanding during the period.
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 period 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:
Unaudited six months to Unaudited six months to
31 December 2021 31 December 2020
£'000 £'000
Loss for the period attributable to equity (3,046) (2,616)
holders of the Group
Thousands Thousands
Weighted average number of ordinary 170,964 169,766
shares for basic EPS
Basic and diluted loss per share (0.02) (0.02)
The following instruments are not included in the diluted EPS calculation due
as they would have an antidilutive effect on EPS.
Unaudited six months to 31 December 2021 Unaudited six months to 31 December 2020
Number '000 Number '000
Share options 16,342 14,197
Total of antidilutive instruments not included 16,342 14,197
5. SHARE CAPITAL AND SHARE PREMIUM
Unaudited at 31 December Audited at
2021 30 June
2020
£'000 £'000
Share capital
Allotted, called up and fully paid
172,537,765 Ordinary shares in MJ Hudson Group plc at £nil each - -
(June 2021 - 172,537,765)
20,000 B Shares in MJH Group Holdings Limited at £0.01 each - -
(June 2020 - 20,000)
Share premium 56,089 56,023
Owned shares
2,027,264 Ordinary shares in MJ Hudson Group plc at £nil each (991) (928)
(June 2021 - 1,881,658)
6. OTHER RESERVES
Foreign currency translation reserve
Share based payment
reserve Total other reserves
Balance as at 456 53 509
1 July 2020
Share based payments 2,446 - 2,446
Exercise of options (11) - (11)
Currency translation adjustment - (116) (116)
Balance as at 2,891 (63) 2,828
30 June 2021
Share based payments 804 - 804
Currency translation adjustment - (115) (115)
Balance as at 3,695 (178) 3,517
31 December 2021
7. BUSINESS COMBINATIONS
Acquisition of Saffery Champness Fund Services Limited
On 31 October 2021 the Group received full regulatory approval from
the Guernsey Financial Services Commission in connection with its
acquisition of 100% of Saffery Champness Fund Services Limited for
£2,495,000, paid in cash, shares, and deferred consideration. It is a
Guernsey based, fund administration business and its acquisition adds scale
and expertise to the Group´s existing operations. The receipt of this
approval was a key outstanding condition of the transaction, announced on 23
July of 2021. The business was subsequently renamed to MJ Hudson Fund Services
Guernsey Limited.
The goodwill represents the experience and expertise of the staff of MJ Hudson
Fund Services Guernsey Limited and non-contractual relationships. In
calculating the goodwill arising on acquisition, the fair values of net assets
of Saffery Champness Fund Services Limited 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. The acquisition
accounting and associated fair value adjustments are still being finalised at
the time these interim results have being released. The amounts noted below
are indicative only and may change upon finalisation of the purchase price
accounting.
Fair value
£'000
Trade and other receivables 14
Contract assets 159
Cash and cash equivalents 260
Total assets 433
(333)
Trade and other payables due within one year
Net assets 100
Customer relationships 976
Goodwill 1,419
Total purchase consideration 2,495
Of the total consideration £1,600,000 has been settled in the period and the
remaining £895,000 is located within current and non-current liabilities
depending on timing of payment. Included within the amount of total
consideration above are amounts that are contingent upon certain performance
thresholds being achieved by the acquired business discounted to their present
value as at the date of exchange. The contingent consideration recognised is
based on the estimated fair value where the consideration 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 to not
be probable are met the total consideration may increase.
8. POST BALANCE SHEET EVENT
In January 2022, the Group borrowed £3 million from Santander under the terms
of the Uncommitted Facility. This was to provide additional working capital to
fund accelerated investment into growth opportunities in ESG &
Sustainability and the Group's Irish Super ManCo plus software and product
development.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FFLLFLZLBBBVRecent news on MJ Hudson
See all newsRCS - MJ Hudson Group PLC - Matched Bargain Dealing Facility
AnnouncementREG - AIM MJ Hudson Group PLC - Cancellation - MJ Hudson Group plc
AnnouncementREG - MJ Hudson Group PLC - Completion of Disposal & Cancellation
AnnouncementREG - MJ Hudson Group PLC - Results of Extraordinary General Meeting
AnnouncementREG - MJ Hudson Group PLC - Company Update
Announcement