REG - Premier Miton Group - Full Year Results
07/12/2021 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:20211207:nRSG7479Ua&default-theme=true
RNS Number : 7479U Premier Miton Group PLC 07 December 2021
7 December 2021
PREMIER MITON GROUP PLC
FULL YEAR RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021
Premier Miton Group plc ('Premier Miton', 'Company' or 'Group'), the AIM
quoted fund management group, today announces its final results for the year
ended 30 September 2021.
Highlights
· £13.9 billion closing Assets under Management (4) ('AuM') (2020:
£10.6 billion) - up 31%
· £14.0 billion closing AuM as at 31 October 2021 (unaudited)
· Net inflows of £830 million for the year (2020: £619 million
outflow)
· Strong investment performance with 83% of funds in the first or
second quartile of their respective sectors since launch or fund manager
tenure (2020: 65%)
· Adjusted profit before tax (1,4) of £28.6 million (2020: £22.4
million) - up 28%
· Adjusted earnings per share (2,4) of 16.46 pence (2020: 12.46
pence) - up 32%
· Profit before tax (3 )of £17.5 million (2020: £9.6 million) -
up 82%
· Cash balances were £47.7 million at 30 September 2021 (2020:
£36.0 million) - up 32%
· Final proposed dividend of 6.3 pence per share (2020: 4.5 pence
per share) - up 40%
· Total proposed dividend for the year of 10.0 pence per share
(2020: 7.0 pence per share) - up 43%
· Three investment teams hired and three new funds launched in the
year
Notes
(1) Adjusted profit before tax is calculated before the deduction of taxation,
amortisation, share-based payments, merger related costs and exceptional
costs. Reconciliation included within the Financial Review section.
(2) Adjusted earnings per share is calculated before the deduction of
amortisation, share-based payments, merger related costs and exceptional
costs.
(3) Merger related costs totalled £1.4 million during the year (2020: £4.5
million).
(4) These are Alternative Performance Measures ('APMs').
Mike O'Shea, Chief Executive Officer of Premier Miton Group, commented:
"I am pleased to deliver a strong set of results for the Group. We have
achieved net inflows of £830 million in 2021, with all four quarters seeing
positive flows. In terms of investment performance, 83% of our funds are
outperforming since manager tenure. From a financial point of view, we have a
healthy level of cash on our balance sheet and our AuM is at an all-time high.
"We have a diversified business and a strong, broad product range which we
have continued to develop over the year, including the launch of the Premier
Miton European Sustainable Leaders Fund, managed by our highly successful
European equities team, as well as the Premier Miton Global Smaller Companies
Fund and Premier Miton European Equity Income Fund managed by our new
investment teams. Our ability to deliver such good results is entirely down
to the hard work and diligence of the talented people within our Group. We
would like to thank them for their efforts which have allowed us to maintain
the highest levels of business continuity and investment excellence over the
period.
"As a business we have a clear medium-term goal of growing our assets under
management to £20bn and beyond. With our talented investment teams, excellent
long-term performance, and strong distribution capabilities we can see how
this is achievable. As part of this growth ambition, we will continue to
develop our successful profile in the UK wealth management and independent
financial advisory space as well as exploring opportunities to grow our
presence in the UK institutional market.
"We have continued to make significant progress with the integration of ESG
into our investment processes across the firm alongside the launch of two more
dedicated responsible investing funds with more planned in the future. This is
a very important focus for the Group, and we are determined to make this a key
area of success for Premier Miton.
"Our key strengths of investment excellence, relevant products, powerful
distribution, financial position, operating platform, strong culture, and
acting responsibly as we move towards a more sustainable future, support our
belief that Premier Miton is well positioned for future growth."
ENDS
For further information, please contact:
Premier Miton Group plc
Mike O'Shea, Chief Executive Officer 01483 306 090
Investec Bank plc (Nominated Adviser and Broker)
Bruce Garrow / Ben Griffiths / Virginia Bull / Harry Hargreaves 020 7260 1000
Edelman Smithfield Consultants (Financial PR)
John Kiely / Latika Shah 07785 275665/
07950 671948
Notes to editors:
Premier Miton Investors is focused on delivering good investment outcomes for
investors through relevant products and active management across its range of
investment strategies, which include equity, fixed income, multi-asset and
absolute return.
LEI Number: 213800LK2M4CLJ4H2V85
Chairman's Statement
In February, I was delighted to be appointed Chairman of the Group and I am
pleased to introduce my first Annual Results statement.
I am happy to report that under Mike O'Shea's leadership our business achieved
strong asset growth and demonstrated its clear purpose in 2021. Global markets
have recovered much of the falls experienced at the start of the wretched
pandemic, contributing well to our results. Many of our funds are exhibiting
excellent performance metrics.
We are a leading UK based active investment management business and seek to
deliver durable returns for our clients over the medium to longer term. Our
purpose is to manage our clients' investments actively and responsibly for a
better financial future. We know that good investing can make a huge positive
difference to individual lives and understanding this connection and the
responsibilities that go with it is the bedrock of our culture.
Assets under Management ('AuM')
At 30 September 2021 the Group had AuM of £13.9 billion, an increase of 31%
on the prior year end. This figure reflects a return to positive inflows for
the Group and continued outperformance across our fund range. AuM at the
year-end is split between equity funds 59%, multi-asset funds 28%, fixed
income funds 7% and investment trusts 6%. Average AuM rose by 26%, to £12.7
billion, up from £10.1 billion.
Investment performance
Investment performance remains strong with 83% of funds in the first or second
quartile of their respective sectors since launch or fund manager tenure
(2020: 65%). Our culture places our customers at the centre of our business
model. We believe that continued good investment performance over the medium
to longer term is core to our success and aligns clearly with shareholders'
interests.
Results & Dividend
In 2021 the business performed strongly, driven largely by the rise in AuM.
Our profit before tax was £17.5 million, representing an increase of 82% on
the comparative year. The Group aims to increase profitability over time by
growing AuM through the provision of value-for-money funds and investments
that deliver attractive returns. We seek to charge a fair fee for our services
and are rigorous in managing our cost base.
We work hard in the interests of our shareholders, alongside our other
stakeholders, and thank them for their continuing support. The Board does what
it can reasonably and prudently do to grow shareholder value and to secure
attractive returns in all ways, including through our share price performance.
Dividends matter to our shareholders and the Board is recommending a final
dividend for 2021 of 6.3p per share. This brings the total proposed dividend
for 2021 to 10.0p per share, representing an increase of 43% on 2020. If
approved by the shareholders at the Annual General Meeting on 2 February 2022,
the final dividend of 6.3p per share will be paid on 11 February 2022 to
shareholders on the register at the close of business on 14 January 2022. The
Group seeks to grow the dividend over time reflecting increasing
profitability.
We also recognise that retaining a healthy level of profit on the balance
sheet is important for business confidence, stability, and to support
initiatives which will contribute to shareholder value growth. The Directors'
intention is therefore to maintain a strong capital position with enough
resources to support the business to grow whilst taking a sensible long-term
view. At 30 September 2021 the Group was robustly financed with no debt and
cash balances of £47.7 million.
Strategic process
The savings and investment markets in the UK are large and growing,
economically valuable and competitively dynamic. We are unashamedly an active
manager of our funds and believe in the ability of our investment teams to add
value over time. We have plenty of scope for growth in these markets and good
investment performance and client diversity are critical to our future
success.
We run highly active funds with concentrated portfolios that we believe will
deliver for our clients over the long term. Inevitably, there will be periods
when particular funds may be performing less well relative to peers. That is
in the nature of the way we manage money. However, diversity in the range of
the group's funds is a source of strategic strength and our portfolio of funds
is valuable for our business and our shareholders. At the same time, we
regularly review the portfolio to see if there are areas for change and
improvement.
Following the completion in the year of the operational aspects of the merger
of Premier and Miton we have a platform that is well balanced, resilient and
capable of supporting significant growth in AuM, and generating improving
profit margins. Our primary focus is to build greater market share for our
funds and investment strategies, yet we also keep a close watch on industry
developments for strategic and tactical opportunities. A number of ideas are
under consideration at any one time and these are vigorously pursued by our
experienced and capable leadership group where we see favourable cost/benefit
outcomes.
Environmental, Social & Governance ('ESG')
Developing our positioning on ESG matters is an ongoing opportunity and one on
which we need to keep stepping up our efforts, in common with the broad fund
management sector. Of course, along with our industry peers we want to play
our part, both as stewards of investment capital managed actively, and as a
corporate entity, recognising that our primary task is to deliver attractive
investment returns from our diverse range of funds.
We have several initiatives in progress, including the launch of a new
sustainable equity fund and increasing the coverage of our ESG data to support
the integration of ESG factors alongside financial factors across our fund
range. We are increasing our oversight of decisions on key company votes, such
as shareholder and climate-related resolutions.
We were delighted to be awarded a B rating for our 2020 submission to the CDP
disclosure system, designed to help manage environmental impacts. We joined
the CDP as an investor and partnered with them on their 2021 non-disclosure
initiative, encouraging other companies to complete the CDP climate
assessment.
Culture & People
A healthy, positive and client-focused culture is crucial for the long-term
success of our firm. Monitoring culture and shaping it as needed will be made
easier by the return of our people to office working and thus being together.
We are encouraging this across the business and believe it will be beneficial
for everyone involved. Clearly, this may take some time and we should have
flexibility to cater for an adjustment in people's expectations and needs. Our
people deserve praise for the way they have worked through this difficult
time. They have demonstrated resilience and positivity; I thank them and am
sure they will continue to show their professionalism and enthusiasm as we
approach the year ahead.
We are proud and pleased to have a talented and capable team across the
business and we seek to incentivise and reward our people fairly and
appropriately, to align rewards with the outcomes we expect and need to
succeed as a business. As with our clients and their investments, we know that
our people have choices as to where they pursue their careers, so retention
strategies and succession planning are important responsibilities for the
Board to consider.
Board
I would like to reiterate my deep thanks to Mike Vogel, who stood down as Chairman earlier this year, for his extensive contribution to getting the Group to where it is now. We were pleased that Sarah Mussenden and Sarah Walton joined our Board in June. They each have impressive capabilities and experience and we look forward to their guidance as we develop the business. Sarah Walton has taken on the role as Chair of the Audit & Risk Committee and her first report in the role will be set out in the Annual Report. We expect and need our Board to be high performing and I would like to thank all our Directors for their full and thoughtful contributions during the year, especially in being so supportive of the transitions and changes which have taken place on the Board and in the committees.
Outlook
We are an ambitious and growing business. We achieved significant strategic milestones in the year including the completion of our merger, the redesign our multi-asset offering and the launch of three new funds. With the pandemic still here, markets everywhere continue to adjust and show signs of strain with at times material volatility. There is also an uncertain political and regulatory environment affecting our industry which adds to our challenges. However, the prospects for the UK savings and investment markets are attractive and I believe we have resilient, agile and energetic people working at Premier Miton. We are well placed to navigate the future with confidence and determination for the benefit of all our stakeholders. The Board and I look forward to working with our team to steer us to ongoing success.
Robert Colthorpe
Chairman
06 December 2021
Chief Executive Officer's Statement
I am pleased to deliver a strong set of results for the Group. We have
achieved net inflows of £830 million in 2021, with all four quarters seeing
positive flows. In terms of investment performance, 83% of our funds are in
the first or second quartile since manager tenure. We have a diversified
business and a broad range of products delivering excellent outcomes for our
clients over the medium to longer term. We have a financially robust balance
sheet, and we continue to increase the efficiency of our platform, as
evidenced by the higher profit margin for 2021.
Business performance
At the end of September 2021 Assets under Management ('AuM') stood at £13.9
billion representing an increase of 31% on last year. Average AuM (a key
metric of success and a determinant of the Group's profitability) finished the
year at £12.7 billion, an increase of 26% on the previous year.
The net management fee margin (the retained revenue of the firm after
deducting the costs of fund administration, external Authorised Corporate
Directors ('ACD') and any enhanced fee arrangements), was 65.0bps compared
with 65.9bps last year. On 27 November 2020 the Group, successfully completed
the on boarding of all open-ended funds onto the in-house ACD platform and
consequently rebranded the names of all funds under the Premier Miton marque.
The adjusted operating margin increased from 33.5% to 33.8%. Our strategy
continues to focus on delivering good outcomes for our investors and to
diversify and increase the levels of AuM being managed by the Group. We aim to
meet investor demand through the creation of transparent, value-for-money
products that have well-defined objectives. Many are highly differentiated
from other funds and have uncorrelated returns when compared with mainstream
indices.
We classify our products according to four categories: equity funds,
multi-asset funds, fixed income funds, and investment trusts. At the year end,
equity funds accounted for 59% of the total AuM, multi-asset funds 28%, fixed
income 7%, with investment trusts making up the remainder.
Investment flows
Premier Miton's range of high active share, alpha focused funds are well
placed to deliver for investors in the current environment. I am pleased to
report that, during the period, we experienced net flows into our products
totalling £830 million (2020: £619 million outflow). This represents a
strong improvement on last year and a net addition of some 7% of the Group's
average AuM.
Looking at specific funds, we saw continued success from several of our single
strategy funds. The Premier Miton European Opportunities Fund, launched in
2015, ended the period with AuM of just under £3 billion. Also growing
strongly was the Premier Miton US Opportunities Fund demonstrating a
consistent, active investment approach without investing in the big-name tech
stocks. During the year it surpassed the important AuM milestone of £1
billion, ending the year with £1.3 billion of AuM. I am also pleased to note
that our Premier Miton UK Value Opportunities Fund, has delivered excellent
returns for investors despite traditional 'value stocks' being out of favour
with the market. The fund is in the top quartile of funds in its sector over
one, three five and seven years and ended the period with AuM of over £700
million.
We have been successful at launching new products and bringing on talented
fund managers with scope to grow. In the last eighteen months, we have
launched six new funds and have taken on two segregated mandates. At 30
September 2021 we had a total of £693 million of AuM (in aggregate) in these
new strategies. This is a good result during challenging market conditions and
broadens our product range for future flows over the years ahead.
We have also made good progress on the development of our multi-asset fund
range. In January 2021 we made changes to our multi-asset multi-manager fund
range, driven by the aim to reduce the costs borne by investors. This team now
offers nine funds covering income, risk-targeted, growth and wealth
preservation - many of which now have significantly reduced ongoing charges.
Our multi-manager range sits alongside our two other multi-asset investment
strategies, Diversified and Macro Thematic, each with their own specialist
investment teams. 17 out of our 19 multi-asset funds now have OCFs below 1%.
We offer five directly invested multi asset Premier Miton Diversified funds,
the first one launched in March 2013, and all of which are top quartile over
one year and since launch, and over three and five years where applicable.
These funds are gaining increasing sales traction through advisers and will be
a core focus for our advisory business development team in the year ahead.
During the year the Diversified funds collectively gathered £130 million of
net inflows versus outflows of £3 million in 2020 and we intend to focus on
building on this success during the coming year.
Despite the overall outflow from multi-asset funds during the year, we are
encouraged that the changes we have instigated are having an effect with
outflows in the second half of the year being lower (£183 million) than in
the first half of the year (£627 million). The pace of outflows has clearly
slowed and we believe that the combination of reduced costs on our multi-asset
funds coupled with an improving relative performance profile has been behind
this. We can see from industry data that there is clearly ongoing demand for
multi-asset solutions from advisers and with our strong distribution presence
we believe that we can return to growth for this part of our business in the
future.
Our strong investment flows into existing and new strategies are not just due
to excellent investment performance, but also testament to hardworking
distribution teams. We have developed a cohesive team that puts clients and
their advisers at the centre of what they do, with an aim of building lasting
relationships over investment cycles. The sales team consists of 23 people in
discretionary and advisory intermediary markets throughout the United Kingdom.
The distribution team continues to use detailed sales data to enhance the
overall client experience. Supporting this is an astute marketing team whose
aim is to build awareness of our products with meaningful campaigns and
events.
Fund range
2021 was a busy year for the Group as we continued to develop our product
range. During the year we launched three new funds and completed two fund
mergers designed to reduce costs for investors. The purpose of continued
product development is to create a better result for our clients and to offer
funds that are differentiated, high-performing and, importantly, value for
money. We know that our clients have a choice of where they invest their
money, so it is vital that our investment teams offer the outcomes required.
The investment performance across our equity, fixed income, multi-asset and
absolute return funds has been excellent. At 30 September 2021 65% of AuM was
in the first quartile and 83% performing above median within their respective
IA sectors since the tenure of the fund manager. Shorter-term numbers were
also good with 82% above median over one year and 79% above median over three
years.
In November, Emma Mogford joined the Group from Newton Investment Managers and
assumed management of three UK equity income funds. Emma has a disciplined
style that we believe will do well for investors over the long term.
In January we made changes to our multi-asset multi-manager fund range, as
noted above, to deliver even more value to underlying investors. This range of
funds covers all outcome objectives and is led by David Hambidge and head of
research, Ian Rees. Wayne Nutland, manager of the Premier Miton Managed Index
Balanced Fund, also joined this team in February and adds his expertise in ETF
investing. David Jane and Anthony Rayner assumed responsibility for the
Premier Miton Multi-Asset Growth & Income Fund and the Premier Miton
Multi-Asset Conservative Growth Fund from 1 February 2021.
Our European equities team of Carlos Moreno and Thomas Brown were joined by
Russell Champion in August following the successful launch of their second
fund, Premier Miton European Sustainable Leaders, on 10 May 2021. This fund
has started well and has been amongst the top performers in its sector since
launch. At 30 September 2021 their first fund, Premier Miton European
Opportunities Fund, was £2.9 billion in size and top decile since launch
returning 228.7% versus 86.3% from the sector.
In March we launched the Premier Miton Global Smaller Companies Fund. The
experienced investment team of Alan Rowsell and Imogen Harris joined us in
late 2020 having managed over £1 billion in global smaller companies at their
previous employer. The fund has returned 12.1% since launch versus 9.7% from
the sector. This is yet another example of where our actively managed funds in
a dynamic asset class can make a meaningful impact in many portfolios.
Our Fixed Income team have been with the firm for a little over a year and
have created a sound foundation on which to build future fund flows. They are
a talented group of individuals and performance across their product range is
attractive. Having reached just over £1 billion of assets under management in
their first year, they have the potential to raise many times this over the
years ahead.
I would also like to congratulate Gervais Williams and Martin Turner who
celebrated their ten-year anniversary as managers of the £1.2 billion Premier
Miton UK Multi Cap Income Fund in October 2021. The fund has delivered
excellent returns to investors having grown by 249.3% (with dividends
reinvested) since launch to the 30 September 2021. This compares with 111.2%
for the IA UK Equity Income sector average and 106.1% for the FTSE All-Share
Index.
Towards the end of the period, we added to our range of income funds with the
launch of the Premier Miton European Equity Income Fund managed by Will James.
The fund offers increased choice to investors looking for alternative sources
of equity income during a period of low interest rates and low bond yields. We
look forward to bringing this new fund to a wider audience as it builds its
track record. Finally, we also completed the merger of the Premier Global
Infrastructure Income Fund into the Premier Miton Global Infrastructure Fund,
creating a single, larger fund that we believe will be more attractive to
potential investors as well as offering economies of scale to reduce ongoing
investor costs.
Over the last year we have been pleased that the quality of our investment
performance and fund managers has continued to be recognised through winning
various industry awards including Specialist Group of the Year Award and two
fund awards at the Investment Week Fund Manager of the Year Awards 2021. Our
investment trust business is also being recognised, where we were a finalist
for Group of the Year Award and nominated for four individual trust awards at
the Investment Week Investment Company of the Year Awards 2021 in November.
Responsible investing
During the year we expanded our range of sustainable and responsible products
covering a number of global equity, European equity and UK equity funds. We
have continued to make significant progress with the integration of ESG into
our investment processes across the firm alongside the launch of two more
dedicated ESG/sustainable funds. This is important for the Group, and we are
determined to make this a key area of success for Premier Miton.
On 14 December 2021 the Premier Miton Ethical Fund will be renamed the Premier
Miton Responsible UK Equity Fund. Changing the name of the fund to reference
the focus on companies that act responsibly and have a positive influence on
society and the environment, will help to make the investment approach of the
fund clearer for investors. This fund was also nominated for 'Best Sustainable
and ESG Equity Fund' in the Investment Week Sustainable & ESG Investment
Awards 2021.
We have also continued to work hard to build diversity across all levels of
our business. With the appointment of Sarah Walton and Sarah Mussenden to our
board I am pleased that we are making a clear statement that we would like our
business to have a much better gender balance over the years ahead. At the end
of September our workforce was 64% male and 36% female which is a small
improvement on the 72%/28% split we had at the end of the previous financial
year. We clearly have more work to do. Our non-executive team is now 50% male
and 50% female and I am keen to see further progress in this direction across
our wider workforce as we move through 2022 and beyond.
Elsewhere, we continue to make progress on environmental matters and it was
pleasing to be awarded a B rating for our first CDP submission in recognition
of how we are managing our environmental impact as a firm. We have more to do
here in order to maintain our momentum and I am grateful to the members of our
Environmental Committee for their hard work and guidance through the last 12
months.
COVID-19
During the year we operated a predominantly home working environment in line
with government guidance. Despite the challenging circumstances we delivered
continuity to our clients and continued to provide the exceptional outcomes
they expect from us. In September we transitioned to a flexible hybrid working
arrangement and made changes to the office layouts in both London and
Guildford, as well as introducing technology to facilitate video conferencing
and the booking of desk space.
We believe there are clear benefits both individually and for the business in
having a combination of office and home working. It is also clear from our
staff surveys that many want to retain more flexibility going forward but also
maintain the ability to meet and work together, share ideas and foster
creativity.
Strategy
Since the merger in 2019, we have invested significantly in our investment
teams, developed key systems and processes, and built scalable operational and
risk management frameworks. Our medium-term ambition is to reach £20 billion
of AuM. We think that this is a credible challenge for the business but
believe that we have the people, the products and the performance to achieve
it. As part of this growth ambition, we will continue to develop our
successful profile in the UK wealth management and independent financial
advisory space as well as exploring opportunities to grow our presence in the
UK institutional market. . If we are to be successful in achieving our goals,
it is important that we maintain our clear focus on delivering excellent
outcomes for our investors, that we work together as a team and that we manage
our business effectively for the benefit of all stakeholders.
Closing
The 2021 financial year was an active and productive period for the Group.
Despite the pandemic, we completed many key initiatives to strengthen our core
business and that will enhance our enterprise value into the future. These
initiatives range from hiring high performing individuals and teams, seeding
new investment capabilities, and increasing our diversity. Some initiatives
will take time to come to fruition but we are committed to maintaining a
business environment that is supportive for success - individually and
collectively.
Our staff deserve to be congratulated for their hard work and diligence during
the past two years. The whole board of Premier Miton Group plc are immensely
proud of the way they have continued to work and persevere in such difficult
and challenging circumstances. The Group's ability to launch, position and
maintain its investment strategies entirely depends on our talented people. I
am proud to say that we have maintained the highest levels of business
continuity and investment excellence over the past 12 months and believe that
we can continue to do so into the future.
Our funds offer many of the characteristics that we believe investors will be
seeking over the coming decade and beyond. They are run by experienced teams
free to employ their own individual skills for the benefit of investors, they
have high active shares, high tracking errors against underlying indices,
long-term time horizons and are unconstrained from house views.
From a financial point of view, we have a healthy level of cash on our balance
sheet, our AuM are at an all-time high and our net sales flows are positive
and getting stronger. Our key strengths of investment excellence, relevant
products, powerful distribution, financial position, operating platform, and
acting responsibly as we move towards a more sustainable future, means we
believe that Premier Miton is well positioned for the future.
Mike O'Shea
Chief Executive Officer
6 December 2021
Financial Review
Financial performance
Profit before tax increased to £17.5 million (2020: £9.6 million). During
the year the operational aspects of the merger were completed, the reported
profit before tax included a further £1.4 million (2020: £4.5 million) of
costs associated with the merger.
Adjusted profit before tax *, which is after adjusting for amortisation,
share-based payments, merger related costs and exceptional costs increased to
£28.6 million (2020: £22.4 million).
2021 2020 %
£m £m Change
Net revenue 84.5 66.8 26.5
Administrative expenses (55.8) (44.4) 25.7
Adjusted profit before tax * 28.6 22.4 27.7
Amortisation (5.1) (4.5) 13.3
Share-based payments (4.5) (3.6) 25.0
Merger related costs (1.4) (4.5) (68.9)
Exceptional costs (0.1) (0.2) (50.0)
Profit before tax 17.5 9.6 82.3
* These are Alternative Performance Measures ('APMs').
Assets under Management * ('AuM')
AuM ended the year at £13,931 million (2020: £10,608 million), an increase
of 31%.
Average AuM for the year increased by 26% to £12,751 million (2020: £10,110
million). The increase reflects good fund performance, a return to net inflows
of £830 million (2020: outflows of £619 million) and strong market
performance from the lows of March 2020.
Net revenue
2021 2020 %
£m £m Change
Management fees 93.2 77.5 20.3
Fees and commission expenses (10.3) (10.9) (5.5)
Net management fees (1 *) 82.9 66.6 24.5
Other income 1.6 0.2 700.0
Net revenue 84.5 66.8 26.5
Average AuM (2) 12,751 10,110 26.1
Net management fee margin (3) (bps) 65.0 65.9 (1.4)
1 Being management fee income less trail/rebate expenses and the
cost of fund accounting and external Authorised Corporate Director ('ACD')
fees for the former Miton fund range
2 Average AuM for the year is calculated using the daily AuM
3 Net management fee margin represents net management fees divided by
the average AuM
The Group's revenue represents management fees generated on the assets being
managed by the Group.
Net management fees increased to £82.9 million from £66.6 million last year,
a 25% increase reflecting the 26% increase in the Group's average AuM.
The Group's net management fee margin for the year was 65.0 basis points, a
reduction of 1.4% from the previous year, the reduction is driven by the
change in our business mix and the impact of flows and markets on our existing
business.
Administration expenses
Administration expenses (excluding share-based payments) totalled £55.8
million (2020: £44.4 million), an increase of 26%.
Staff costs continue to be the largest component of administration expenses,
these consist of both fixed and variable elements.
The fixed staff costs, which includes salaries and associated National
Insurance, employers' pension contributions and other indirect costs of
employment increased to £19.1 million (2020: £16.7 million). The rise
reflects the increase in costs associated with an additional 1.5 months of
former Miton staff as well as the annualised impact of new joiners at the end
of 2020. The average headcount for the year has stayed broadly in line, from
150 to 153 (this increase being due primarily to further hires in the
investment teams).
Variable staff costs totalled £18.6 million (2020: £10.9 million). Included
within this are general discretionary bonuses, sales bonuses and bonuses in
respect of the fund management teams, plus associated employers' national
insurance. These costs move in line with the net revenues of the Group and the
adjusted profit before tax, the strong growth in the Group's average AuM has
driven this increase.
Overheads and other costs totalled £16.7 million (2020: £15.5 million) being
20% of net revenue (2020: 23%).
2021 2020 %
£m £m Change
Fixed staff costs 19.1 16.7 14.4
Variable staff costs 18.6 10.9 70.6
Overheads and other costs 16.7 15.5 7.7
Depreciation - fixed assets 0.7 0.6 16.7
Depreciation - leases 0.7 0.7 -
Administration expenses 55.8 44.4 25.7
Share-based payments
The share-based payment charge for the year was £4.5 million (2020: £3.6
million).
As at 30 September 2021 the Group's Employee Benefit Trusts ('EBTs') held
10,947,088 ordinary shares representing 6.9% of the issued ordinary share
capital (2020: 9,921,565 shares).
At the year end the outstanding awards totalled 10,741,362 (2020: 9,329,115).
The increase reflects 3,980,000 awards issued during the year (2020:
4,130,000). See note 15 for further detail.
Balance sheet and cash
Total shareholders' equity as at 30 September 2021 was £132.2 million (2020:
£129.7 million).
At the year end the cash balances of the Group totalled £47.7 million (2020:
£36.0 million). The increase reflects the increased profitability of the
Group.
The Group has no external bank debt.
Capital management
Dividends totalling £12.1 million were paid in the year (2020: £11.7
million), see note 16 for further details.
The Board is recommending a final dividend payment of 6.3p per share bringing
the total dividend payment for 2021 to 10.0p per share (2020: 7.0p).
If approved by the shareholders at the Annual General Meeting on 2 February
2022, the dividend will be paid on 11 February 2022 to shareholders on the
register at the close of business on 14 January 2022.
The Group's dividend policy is to target an annual ordinary dividend pay-out
of approximately 50 to 65% of profit after tax, adjusted for exceptional
costs, share-based payments and amortisation.
Going concern
The Directors have assessed the prospects of the Group over a period of three
years after the balance sheet date, rather than the 12 months required by the
Going Concern provision.
The Directors confirm that they have a reasonable expectation that the Group
will continue to operate and meet its liabilities, as they fall due, up to 30
September 2024. The Directors' assessment has been made with reference to the
Group's current position and strategy, the Board's appetite for risk, the
Group's financial forecasts, and the Group's principal risks and how these are
managed.
The Directors have also reviewed and examined the financial stress testing
inherent in the Internal Capital Adequacy Assessment Process ('ICAAP').
The three-year period is consistent with the Group's current strategic
forecast and ICAAP. The forecast considers the Group's profitability, cash
flows, dividend payments and other key variables. Sensitivity analysis is also
performed on certain key assumptions used in preparing the forecast, both
individually and combined, in addition to scenario analysis that is performed
as part of the ICAAP process, which is formally approved by the Board.
Alternative Performance Measures ('APMs')
The Directors use the following APMs in evaluating the performance of the
Group and for planning, reporting and incentive-setting purposes.
Unit Used in management appraisals Aligned with shareholder Strategic KPI
returns
Adjusted profit before tax £ • • •
Definition: Profit before interest, taxation, amortisation, share-based
payments, merger related costs and exceptional items.
Purpose: This measure encompasses all operating expenses in the business,
including fixed and variable staff cash costs, except those incurred on a
non-cash, non-business as usual basis. It provides
a proxy for cash generated and is the key measure of profitability for
management decision making.
Adjusted operating margin % • • •
Definition: Adjusted profit before tax divided by net revenue.
Purpose: Used to determine the efficiency of operations and the ratio of
operating expenses to revenues generated in the year.
Cash generated from operations £ •
Definition: Profit before taxation adjusted for the effects of transactions of
a non-cash nature, any deferrals or accruals and items of income
or expense associated with investing or financing cash flows.
Purpose: Provides a measure in demonstrating the amount of cash generated from
the Group's ongoing regular business operations.
AuM £ • • •
Definition: The value of assets that are managed by the Group.
Purpose: Management fee income is calculated based on the level of AuM
managed. The AuM managed by the Group is used to measure the Group's relative
size against the industry peer group.
Net management fee £ •
Definition: The net revenue of the Group. Calculated as gross management fee
income, less the cost of fund accounting, external Authorised Corporate
Directors ('ACD') and any enhanced fee arrangements.
Purpose: Provides a consistent measure of the profitability of the Group and
its ability to grow and retain clients, after removing amounts paid to third
parties.
Net management fee margin bps • •
Definition: Net management fees divided by average AuM.
Purpose: A measure used to demonstrate the blended fee rate earned from the
AuM managed by the Group. A basis point ('bps') represents one hundredth of a
percent, this measure is used within the asset management sector and provides
comparability of the Group's net revenue generation.
Adjusted earnings per share (basic) p • • •
Definition: Adjusted profit after tax divided by the weighted average number
of shares in issue in the year.
Purpose: Provides a clear measure to shareholders of the profitability of the
Group from its underlying operations. The exclusion of amortisation,
share-based payments, merger related costs and exceptional items provides a
consistent basis for comparability of results year on year.
Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2021
Notes
2021 2020
£000 £000
Revenue 3 94,726 77,721
Fees and commission expenses (10,248) (10,948)
Net revenue 84,478 66,773
Administration costs (55,832) (44,408)
Share-based payment expense 15 (4,528) (3,581)
Amortisation of intangible assets 9 (5,117) (4,517)
Merger related costs 4 (1,350) (4,467)
Exceptional items 4 (126) (216)
Operating profit 5 17,525 9,584
Finance revenue - 20
Profit for the year before taxation 17,525 9,604
Taxation 7 (3,496) (3,714)
Profit for the year after taxation attributable to equity holders of the 14,029 5,890
parent
pence pence
Basic earnings per share 8 9.53 4.14
Diluted earnings per share 8 8.96 4.00
No other comprehensive income was recognised during 2021 or 2020. Therefore,
the profit for the year is also the total
comprehensive income.
All of the amounts relate to continuing operations.
Consolidated Statement of Changes in Equity
For the year ended 30 September 2021
Notes Share Merger reserve Own shares held by an EBT Capital redemption reserve Retained Total
capital £000 £000 £000 earnings Equity
£000 £000 £000
At 1 October 2019 50 - (6,944) 4,532 47,688 45,326
Profit for the year - - - - 5,890 5,890
Issue of share capital on merger 9,14 10 94,312 - - - 94,322
Purchase of own shares held by an EBT - - (2,669) - - (2,669)
Shares issued to EBT as part of the merger - - (5,178) - - (5,178)
Exercise of options - - 142 - (15) 127
Share-based payment expense 15 - - - - 3,581 3,581
Deferred tax direct to equity - - - - (6) (6)
Equity dividends paid 16 - - - - (11,699) (11,699)
At 30 September 2020 60 94,312 (14,649) 4,532 45,439 129,694
Profit for the year - - - - 14,029 14,029
Purchase of own shares held by an EBT - - (4,101) - - (4,101)
Exercise of options - - 2,960 - (2,960) -
Share-based payment expense 15 - - - - 4,528 4,528
Other amounts direct to equity - - - - (134) (134)
Deferred tax direct to equity - - - - 305 305
Equity dividends paid 16 - - - - (12,097) (12,097)
At 30 September 2021 60 94,312 (15,790) 4,532 49,110 132,224
Consolidated Statement of Financial Position
As at 30 September 2021
Notes
2021 2020
£000 £000
Non-current assets
Goodwill 9 70,688 70,948
Intangible assets 9 27,377 32,234
Other investments 100 100
Property and equipment 1,737 2,385
Right-of-use assets 1,751 2,414
Deferred tax asset 7 2,166 1,599
Trade and other receivables 10 971 367
104,790 110,047
Current assets
Financial assets at fair value through profit and loss 3,529 2,697
Trade and other receivables 10 146,084 44,409
Cash and cash equivalents 11 47,675 35,992
197,288 83,098
Total assets 302,078 193,145
Current liabilities
Trade and other payables 12 (163,208) (53,046)
Current tax liabilities - (2,948)
Provisions 13 (15) -
Lease liabilities (870) (857)
(164,093) (56,851)
Non-current liabilities
Provisions 13 (374) (389)
Deferred tax liability 7 (4,237) (4,152)
Lease liabilities (1,150) (2,059)
Total liabilities (169,854) (63,451)
Net assets 132,224 129,694
Equity
Share capital 14 60 60
Merger reserve 94,312 94,312
Own shares held by an Employee Benefit Trust (15,790) (14,649)
Capital redemption reserve 4,532 4,532
Retained earnings 49,110 45,439
Total equity shareholders' funds 132,224 129,694
Consolidated Statement of Cash Flows
For the year ended 30 September 2021
Notes
2021 2020
£000 £000
Cash flows from operating activities:
Profit for the year 14,029 5,890
Adjustments to reconcile profit to net cash flow from operating activities:
Tax on continuing operations 7 3,496 3,714
Finance revenue - (20)
Interest payable on leases 94 93
Depreciation - fixed assets 688 617
Depreciation - leases 625 689
Gain on sale of financial asset at fair value through profit and loss - (13)
Loss/(gain) on revaluation of financial assets at fair value through profit (407) 6
and loss
Loss on disposal of property and equipment 28 -
Increase in employee benefit liability 970 1,182
Purchase of plan assets (held for employee benefit liability) (970) (1,182)
Amortisation of intangible assets 9 5,117 4,517
Share-based payment expense 15 4,528 3,581
(Increase)/decrease in trade and other receivables (101,769) 8,479
Increase/(decrease) in trade and other payables 110,162 (19,533)
Cash generated from operations 36,591 8,020
Income tax paid (7,267) (3,226)
Net cash flow from operating activities 29,324 4,794
Cash flows from investing activities:
Interest received - 20
Acquisition of assets at fair value through profit and loss (1,261) (12,166)
Proceeds from disposal of assets at fair value through profit and loss 836 10,304
Purchase of property and equipment (68) (138)
Cash acquired on merger - 27,296
Net cash flow from investing activities (493) 25,316
Cash flows from financing activities:
Lease payments (950) (566)
Exercise of options - 127
Purchase of own shares held by an EBT (4,101) (2,669)
Equity dividends paid (12,097) (11,699)
Net cash flow from financing activities (17,148) (14,807)
Increase in cash and cash equivalents 11,683 15,303
Cash and cash equivalents at the beginning of the year 35,992 20,689
Cash and cash equivalents at the end of the year 11 47,675 35,992
Selected notes to the Consolidated Financial Statements
For the year ended 30 September 2021
1. Authorisation of financial statements and statement of compliance with IFRS
The Consolidated Financial Statements of Premier Miton Group plc (the
'Company') and its subsidiaries (the 'Group') for the year ended 30 September
2021 were authorised for issue by the Board of Directors on 6 December 2021
and the Consolidated Statement of Financial Position was signed on the Board's
behalf by Mike O'Shea and Piers Harrison.
The Company is a public limited company incorporated and domiciled in England
and Wales. The Company's ordinary shares are traded on the Alternative
Investment Market ('AIM').
These Consolidated Financial Statements were prepared in accordance with
international accounting standards in conformity with the requirements of the
Companies Act 2006. The Consolidated Financial Statements are presented in
Sterling and all values are rounded to the nearest thousand pounds (£000)
except when otherwise indicated.
The principal accounting policies adopted by the Group are set out in note 2.
2. Accounting policies
Basis of preparation
The Consolidated Group Financial Statements for the year ended 30 September
2021 have been prepared in accordance with IFRS. The Consolidated Financial
Statements have been prepared on a going concern basis, under the historical
cost convention, as modified by the revaluation of financial assets and
financial liabilities measured at fair value through profit or loss. Costs are
expensed as incurred.
The Directors have assessed the prospects of the Group over a period of three
years after the balance sheet date, rather than the 12 months required by the
Going Concern provision. This assessment has been made after considering the
impact of COVID-19 on the business. The Directors note that the Group has no
external borrowings and maintains significant levels of cash reserves.
The Directors confirm that they have a reasonable expectation that the Group
will continue to operate and meet its liabilities, as they fall due, up to 30
September 2024. The Directors' assessment has been made with reference to the
Group's current position and strategy, the Board's appetite for risk, the
Group's financial forecasts, and the Group's principal risks and how these
risks are managed, as detailed in the Strategic Report. The Directors have
also reviewed and examined the financial stress testing inherent in the
Internal Capital Adequacy Assessment Process ('ICAAP').
The three-year period is consistent with the Group's current strategic
forecast and ICAAP. The forecast considers the Group's profitability, cash
flows, dividend payments and other key variables. Sensitivity analysis is also
performed on certain key assumptions used in preparing the forecast, both
individually and combined, in addition to scenario analysis that is performed
as part of the ICAAP process, which is formally approved by the Board. This
analysis demonstrates that even after modelling materially lower levels of
assets under management ('AuM') associated with a reasonably plausible
downside scenario, the business remains cash generative.
3. Revenue
Revenue recognised in the Consolidated Statement of Comprehensive Income is
analysed as follows:
2021 2020
£000 £000
Management fees 93,171 77,506
Commissions 1,075 7
Other income 480 208
Total Revenue 94,726 77,721
All revenue is derived from the UK and Channel Islands.
4. Exceptional items and merger related costs
Recognised in arriving at operating profit from continuing operations:
2021 2020
£000 £000
Fund development costs - 52
Connect development costs 126 164
Total exceptional costs 126 216
Merger related costs 822 2,560
Merger employment restructuring costs 528 1,907
Total merger related costs 1,350 4,467
Exceptional items are those items of income and expense, which are considered
not to be incurred in the normal course of business of the Group's operations,
and because of the nature of the events giving rise to them, merit separate
presentation to allow shareholders to understand better the elements of
financial performance in the year.
Connect development costs relate to external consultants who have been
deployed on the testing of the Connect platform during the development stage
prior to launch.
In accordance with the accounting policy for exceptional items these costs
have been treated as exceptional.
Merger related costs in the year totalling £821,886 (2020: £2,560,242)
represented legal and professional fees associated with the merger with Miton
Group plc of £51,132 (2020: £1,687,116) and merger integration costs of
£770,754 (2020: £873,126).
Employment restructuring costs arising as a result of the merger totalled
£528,031 (2020: £1,906,618) of which £528,031
(2020: £1,900,618) related to redundancy costs and £nil (2020: £6,000) of
associated legal costs.
5. Operating profit
(a) Operating profit is stated after charging:
Notes 2021 2020
£000 £000
Auditor's remuneration 5(b) 468 511
Staff costs 6 40,868 29,978
Interest - leases 94 93
Amortisation of intangible assets 5,117 4,517
Exceptional items 4 126 216
Merger related costs 4 1,350 4,467
Loss on disposal of fixed assets 28 -
Depreciation - fixed assets 688 617
Depreciation - leases 625 689
(b) Auditor's remuneration:
The remuneration of the auditors is analysed as follows:
2021 2020
£000 £000
Audit of Company 90 75
Audit of subsidiaries 190 188
Total audit 280 263
Audit-related assurance services 48 95
- Tax compliance services - 38
- Other non-audit services not covered above 140 115
Total other non-audit services 140 153
Total non-audit services 188 248
Total fees 468 511
6. Staff costs and Directors' remuneration
Staff costs during the year were as follows:
2021 2020
£000 £000
Salaries, bonus and performance fee share 30,769 22,471
Social security costs 4,696 3,085
Share-based payments 4,528 3,581
Other pension costs 875 841
Total staff costs 40,868 29,978
The average monthly number of employees of the Group during the year was made
up as follows:
2021 2020
number number
Directors 7 7
Investment management 51 44
Sales and marketing 33 38
Finance and systems 11 13
Legal and compliance 12 11
Administration 39 37
Total employees 153 150
7. Taxation
(a) Tax recognised in the Consolidated Statement of Comprehensive Income
2021 2020
£000 £000
Current income tax:
UK corporation tax 4,583 4,326
Current income tax charge 4,583 4,326
Adjustments in respect of prior periods (909) (82)
Total current income tax 3,674 4,244
Deferred tax:
Origination and reversal of temporary differences (680) (536)
Adjustments in respect of prior periods 502 6
Total deferred tax income (178) (530)
Income tax charge reported in the Consolidated Statement of Comprehensive 3,496 3,714
Income
(b) Reconciliation of the total income tax charge
The tax expense in the Consolidated Statement of Comprehensive Income for the
year is higher than the standard rate of corporation tax in the UK of 19%
(2020: 19%). The differences are reconciled below:
2021 2020
£000 £000
Profit before taxation 17,525 9,604
Tax calculated at UK standard rate of corporation tax of 19% (2020: 19%): 3,330 1,824
- Other differences 73 69
- Share-based payments 264 906
- Expenses not deductible for tax purposes 4 324
- Amortisation not deductible 250 252
- Income not subject to UK tax (38) (23)
- Change in tax rate 531 395
- Tax relief on vested options (525) (3)
- Fixed asset differences 15 46
- Adjustments in respect of prior periods (408) (76)
Income tax charge in the Consolidated Statement of Comprehensive Income 3,496 3,714
(c) Change in corporation tax rate
In the Spring Budget 2021, the Government announced that from 1 April 2023 the
corporation tax rate will increase to 25% from 19%. This was substantively
enacted on 24 May 2021. The deferred tax balances included within the
Consolidated Financial Statements have been calculated with reference to the
rate of 25% to the relevant balances from 1 April 2023.
(d) Deferred tax
The deferred tax included in the Group's Consolidated Statement of Financial
Position is as follows:
2021 2020
£000 £000
Deferred tax asset:
- Fixed asset temporary differences (38) (236)
- Accrued bonuses 619 782
- Share-based payments 1,585 491
- Losses and other deductions - 562
Deferred tax disclosed on the Consolidated Statement of Financial Position 2,166 1,599
2021 2020
£000 £000
Deferred tax liability:
- Arising on acquired intangible assets 4,216 4,119
- Fixed asset temporary differences 21 33
Deferred tax disclosed on the Consolidated Statement of Financial Position 4,237 4,152
2021 2020
£000 £000
Deferred tax in the Consolidated Statement of Comprehensive Income:
- Origination and reversal of temporary differences (680) (536)
- Adjustments in respect of prior periods 502 6
Deferred tax (income) (178) (530)
2021 2020
£000 £000
Unprovided deferred tax asset:
- Non trade loan relationship losses 1,971 1,764
- Excess management expenses 51 46
- Non trade intangible fixed asset losses 399 357
Unprovided deferred tax asset 2,421 2,167
8. Earnings per share
Basic earnings per share is calculated by dividing the profit for the year
attributable to ordinary equity shareholders of the Parent Company by the
weighted average number of ordinary shares outstanding at the year end.
The weighted average of issued ordinary share capital of the Company is
reduced by the weighted average number of shares held by the Group's EBTs.
Dividend waivers are in place over shares held in the Group's EBTs.
In calculating diluted earnings per share, IAS 33 'Earnings Per Share'
requires that the profit is divided 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 during the period.
(a) Reported earnings per share
Reported basic and diluted earnings per share has been calculated as follows:
2021 2020
£000 £000
Profit attributable to ordinary equity shareholders of the Parent Company for 14,029 5,890
basic earnings
Number Number
000 000
Issued ordinary shares at 1 October 157,913 105,801
- Effect of own shares held by an EBT (10,641) (9,220)
- Effect of shares issued - 45,705
Weighted average shares in issue 147,272 142,286
- Effect of movement in share options 9,239 5,056
Weighted average shares in issue - diluted 156,511 147,342
Basic earnings per share (pence) 9.53 4.14
Diluted earnings per share (pence) 8.96 4.00
(b) Adjusted earnings per share
Adjusted earnings per share is based on adjusted profit after tax, where
adjusted profit is stated after charging interest but before amortisation,
share-based payments, merger related costs and exceptional items.
Adjusted Profit for calculating adjusted earnings per share:
2021 2020
£000 £000
Profit before taxation 17,525 9,604
Add back:
- Share-based payment expense 4,528 3,581
- Amortisation of intangible assets 5,117 4,517
- Merger related costs 1,350 4,467
- Exceptional items 126 216
Adjusted profit before tax 28,646 22,385
Taxation:
- Tax in the Consolidated Statement of Comprehensive Income (3,496) (3,714)
- Tax effects of adjustments (914) (936)
Adjusted profit after tax for the calculation of adjusted earnings per share 24,236 17,735
Adjusted earnings per share was as follows using the number of shares
calculated at note 8(a):
2021 2020
(pence) (pence)
Adjusted earnings per share 16.46 12.46
Diluted adjusted earnings per share 15.49 12.04
9. Goodwill and other intangible assets
Cost amortisation and net book value of intangible assets are as follows:
Goodwill Other Total
£000 £000 £000
Cost:
At 1 October 2020 77,927 81,025 158,952
Additions / (disposals) - - -
At 30 September 2021 77,927 81,025 158,952
Amortisation and impairment:
At 1 October 2020 6,979 48,791 55,770
Impairment during the year 260 - 260
Amortisation during the year - 4,857 4,857
At 30 September 2021 7,239 53,648 60,887
Carrying amount:
At 30 September 2021 70,688 27,377 98,065
At 30 September 2020 70,948 32,234 103,182
During the year there were no additions to goodwill (2020: £55,350,821
relating to the acquisition of Miton Group plc).
The Group recognised an impairment for the total amount of goodwill
specifically related to the Acorn Income Fund Limited. This
entity announced on 23 September 2021 its residual assets will rollover into
the Unicorn UK Income Fund, an open ended vehicle managed by Unicorn Asset
Management Limited from 13 October 2021. The Group no longer acts as
investment manager to the Trust.
In the comparative year, an all-share merger with Miton Group plc resulted in
the shareholders of Miton Group plc receiving 0.30186 of a share in Premier
Miton Group plc which was satisfied through newly issued shares. On the
acquisition date, 15 November 2019, the consideration and net assets acquired
from Miton Group plc were as follows:
£000
Fair value of equity consideration in the prior year 94,322
Net assets acquired:
- Intangible assets 24,794
- Deferred tax liability on intangible assets acquired (4,213)
- Investments 100
- Cash and cash equivalents 27,296
- Property, plant and equipment 491
- Trade and other receivables 5,740
- Miton Group plc shares held by EBT 5,178
- Trade and other payables (19,741)
- Provisions (389)
- Right-of-use assets (net) (285)
Net assets acquired 38,971
2020 Goodwill addition 55,351
The fair value of the equity consideration was calculated by reference to the
number of shares issued and the share price at the completion date. The
purchase consideration in the table above was grossed up for the value of the
EBT shares issued.
The intangible assets acquired in the business combination related to the
investment management agreements between Miton and the funds to which Miton
was the investment manager and the value arising from the underlying client
relationships Acquisition accounting principles under IFRS were applied.
Impairment tests for goodwill and intangible assets
The Group has determined that it has a single CGU in relation to asset
management for the purposes of assessing the carrying value of goodwill.
In line with IAS 36, 'Impairment of Assets', a full impairment review was
undertaken as at 30 September 2021. The recoverable amount within the fund
management CGU was determined by assessing the value-in-use using long-term
cash flow projections for the CGU.
Data for the explicit forecast period of 2022-2026 is based on the 2022 budget
and forecasts for 2023-2026. Increases in operating costs have been taken into
account and include assumed new business volumes. Cash flows beyond the
explicit forecast period are extrapolated using a long-term terminal growth
rate of 1.9% (2020: 3.0%). To arrive at the net present value, cash flows have
been discounted using a discount rate of 12.0% (2020: 13.0%). The Group
engaged valuation specialists in determining the inputs to calculate the
appropriate discount rate, including comparative betas, long term economic
growth rates and a study of the equity risk premiums published and observed in
the wider industry.
The overall value-in-use was greater than the carrying value and hence no
impairment charge has been recognised above the amount specifically recognised
for the Acorn Income Fund Limited as noted above. The key assumptions used in
determining this conclusion were expected aggregated fund flows and the
discount rate.
Sensitivity analysis
Management have performed a sensitivity analysis as of 30 September 2021 and
established that an increase in the discount rate to 39% would be required
before an impairment of goodwill and other intangible assets would be
considered necessary. In response to the market volatility arising from
COVID-19, an impairment assessment was completed during the year using
materially lower levels of AuM. Due to the cash generative nature of the
business, no impairment was identified at these lower levels of AuM.
The compound annual growth rate for expected fund flows over the forecast
period is 5% and would need to reduce to -16% per annum for the estimated
recoverable amount to equal the carrying value. The sensitivity analysis
established that a +/-3% change in the discount rate and long-term terminal
growth rate assumptions would not have a material impact on the Group's
results. The Group is, however, mindful of the current uncertainty that exists
in markets including the threat posed by the COVID-19 pandemic and that
extreme movements may be cause for further examination into the possibilities
of impairment.
Other intangible assets
Investment management contracts purchased by the Group are capitalised as
other intangible assets and are amortised over periods ranging from seven to
20 years depending on the nature of the assets purchased. These finite life
intangible assets were assessed for indicators of impairment by comparing AuM
levels at the year end with those on the acquisition date. Additionally, both
internal and external factors affecting these assets were considered. No
indicators of impairment were noted.
The largest of the intangible assets was in relation to the merger with Miton
Group plc with a carrying value of £18,136,303 and a remaining amortisation
period of five years (2020: merger with Miton Group plc with a carrying value
of £21,676,510 and a remaining amortisation period of six years).
10. Trade and other receivables
Current 2021 2020
£000 £000
Due from trustees/investors for open end fund redemptions/sales 132,587 34,491
Other trade debtors 530 2,566
Fees receivable 8,185 3,549
Prepayments 2,195 2,487
Corporation tax 644 -
Other receivables 1,943 1,316
Total trade and other receivables 146,084 44,409
Non-current
Other receivables 971 367
Trade and other receivables are all current and any fair value difference is
not material. Trade and other receivables are considered past due once they
have passed their contracted due date.
Non-current other receivables represent deferred compensation awards with
maturities greater than 12 months after Consolidated Statement of Financial
Position date. Deferred compensation awards are released in accordance with
the employment period to which they relate.
11. Cash and cash equivalents
2021 2020
£000 £000
Cash at bank and in hand 47,552 35,911
Cash held in EBTs 123 81
Total cash and cash equivalents 47,675 35,992
12. Trade and other payables
2021 2020
£000 £000
Due to trustees/investors for open end fund creations/redemptions 132,403 34,488
Other trade payables 2,295 996
Other tax and social security payable 3,345 1,929
Accruals 22,789 14,398
Pension contributions 25 20
Other payables 2,351 1,215
Total trade and other payables 163,208 53,046
Trade creditors and accruals principally comprise amounts outstanding for
trade purchases and ongoing costs. The Group has financial risk management
policies in place to ensure that all payables are paid within the pre-agreed
credit terms.
The Directors consider that the carrying amount of trade payables approximates
to their fair value.
13. Provisions
2021 2020
£000 £000
At 1 October 389 -
Arising on merger - 389
At 30 September 389 389
Current 15 -
Non-current 374 389
389 389
Provisions primarily relate to dilapidations for the offices at 6th Floor,
Paternoster House, London, and the Group's disaster recovery office in
Reading. The lease on Paternoster House runs to 28 November 2023 and the
provision for dilapidations on this office has been disclosed as non-current.
This provision is based on prices quoted at the time of the lease being taken
on.
14. Share capital
2021 allotted, called up and fully paid: Ordinary shares 0.02 pence each Number Deferred shares
Number of shares Number
At 1 October 2020 157,913,035 1
Movement in the year - -
At 30 September 2021 157,913,035 1
2020 allotted, called up and fully paid: Ordinary shares 0.02 pence each Number Deferred shares
Number of shares Number
At 1 October 2019 105,801,310 1
Issued on merger 52,111,725 -
At 30 September 2020 157,913,035 1
2021 allotted, called up and fully paid: Ordinary shares Deferred Total
Value of shares 0.02 pence each shares £000
£000 £000
At 1 October 2020 31 29 60
Movement in the year - - -
At 30 September 2021 31 29 60
2020 allotted, called up and fully paid: Ordinary shares Deferred Total
Value of shares 0.02 pence each shares £000
£000 £000
At 1 October 2019 21 29 50
Issued on merger 10 - 10
At 30 September 2020 31 29 60
The deferred share carries no voting rights and no right to receive a
dividend.
On 14 November 2019 the Company completed an all-share merger with Miton Group
plc. The Company issued 52,111,725 new ordinary shares ranked pari passu in
all respects with the Company's existing shares in issue.
15. Share-based payments
The total charge to the Consolidated Statement of Comprehensive Income for
share-based payments in respect of employee services received during the year
to 30 September 2021 was £4,528,000 (2020: £3,581,000), of which £4,405,000
related to nil cost contingent share rights.
16. Dividends declared and paid
2021 2020
£000 £000
Equity dividends on ordinary shares:
- Interim dividend: 3.7 (2020: first interim 1.75) pence per share 5,437 2,591
- Second interim: nil (2020: second interim 0.75) pence per share - 1,110
- Final dividend for 2020: 4.5 (2019 final interim 5.4) pence per share 6,660 7,998
Dividends paid 12,097 11,699
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 FR UPGRCPUPGGRQRecent news on Premier Miton
See all newsREG - Premier Miton Group - Holding(s) in Company
AnnouncementREG - Premier Miton Group - Posting of Interim Report
AnnouncementREG - Tooru PLC - Holding(s) in Company
AnnouncementREG - Premier Miton Group - Half Year Results for Six Months Ended 31 Mar 2025
AnnouncementREG - Premier Miton Group - Investor Presentation via Investor Meet Company
Announcement