REG - W.H. Ireland Group - Final Results
12/08/2024 07:00
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RNS Number : 9940Z W.H. Ireland Group PLC 12 August 2024
12 August 2024
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service (RIS), this inside information
is now considered to be in the public domain.
WH Ireland Group Plc
("WH Ireland" or the "Company" and with its subsidiaries the "Group")
Financial Results for the Twelve Months ended 31 March 2024
WH Ireland announces its final results for the year ended 31 March 2024.
Financial & Operating Summary
· Revenue of £21.5m (FY 2023: £26.7m)
· Underlying* loss before tax £2.5m (FY 2023: underlying loss
before tax of £2.0m)
· Statutory loss before tax £5.9m (FY 2023: loss before tax
£1.8m) reflecting impact of:
o Restructuring costs of £2.9m (FY2023: nil)
o Reduced loss on investments of £0.6m (FY 2023: loss of £2.7m)
o Nil benefit from other income (FY 2023: other income of £2.2m)
· Loss per share of 3.38p (FY 2023: loss of 3.08p)
· Cash and cash equivalents as at 31 March 2024 of £4.9m (FY 2023:
£4.2m)
o Cash and cash equivalents of £6.5m as at 31 July 2024
· Successful £5m placing completed in August 2023
*A reconciliation from underlying profits to statutory profits is shown within
the financial review on page 6.
The above results include the Capital Market Division which was sold post
period end on 15 July 2024
Pro-forma results of the continuing group comprising wealth management and
head office
These pro-forma results consider what the continuing operations results would
look like following the post year end decision to no longer actively pursue a
sale of the WM business. Refer to note 5 of the annual report for further
information.
· Revenue of £11.9m (FY 2023: £14.4m) reflecting market falls
during the year
· Total AUM at £1.2bn (FY2023: £1.4bn)
· Underlying loss before tax of £0.6m (FY 2023: loss before tax of
£0.2m)
· Statutory loss before tax of £2.8m (FY 2023: loss before tax of
£1.7m)
· Loss per share of 1.57p (175,718,098 shares)(FY 2023: loss of
2.82p, 59,172,423 shares)
Post period end events
· Disposal of Capital Markets division completed in July 2024 for
up to £5m deferred consideration
· The disposal has resulted in reduced liabilities and a lower
working capital requirement
· Settlement of final deferred consideration relating to the
purchase of Harpsden in 2020
· Decision by the Board to no longer actively pursue a sale of the
Wealth Management business, whilst assessing strategic opportunities if and
when they arise
Current Trading and Outlook
· Focus on operational development of the WM division whilst
assessing strategic opportunities
· Further reduction in Group central costs planned following the
sale of the CM division
· These initiatives are designed to ensure that the Group can
return to sustainable profitability
Commenting, Phillip Wale, Chief Executive Officer said:
"The market backdrop has been extremely challenging. While the FTSE 100 has
been relatively resilient, the AIM All Share Index fell 9% over the period.
These market conditions severely impacted transactional business (and
particularly fundraisings) in the Capital Markets Division, which, together
with significant restructuring costs, were the principal reason for the Group
reporting losses for the year.
"However, having completed the sale of the Capital Markets division in July
2024, we have achieved a more stable financial position for the Group against
the current market backdrop. We are now implementing plans for the growth of
the remaining WM business to return it to break even whilst finding further
efficiencies in the Group as a whole."
For further information please contact:
WH Ireland Group plc www.whirelandplc.com
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Phillip Wale, Chief Executive Officer +44(0) 20 7220 1666
Canaccord Genuity Limited www.canaccordgenuity.com
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Emma Gabriel / Harry Rees +44(0) 20 3523 8000
MHP Communications whireland@mhpgroup.com
Reg Hoare / Charles Hirst +44 (0) 20 7831 406117
Notes to Editors:
About WH Ireland Group plc
Wealth Management Division
WH Ireland provides independent financial planning advice and discretionary
investment management. Our goal is to build long term, mutually beneficial,
working relationships with our clients so that they can make informed &
effective choices about their money and how it can support their lifestyle
ambitions. We help clients to build a long term financial plan and investment
strategy for them and their families.
Capital Markets Division
The sale of the division to Zeus Capital Limited was completed on 15 July
2024.
WH Ireland Group plc is the holding company for WH Ireland Limited (WHI). WHI
provides a high quality service across both of its business areas - a Wealth
Management (WM) division providing investment solutions for individuals,
families and charities and a Capital Markets (CM) division which is a leading
firm for public and private companies seeking corporate advice and investment
capital.
Classification and Disclosure within Financial Statements
During the year, the Group pursued a sale of both the WM and CM divisions.
Both sales were judged to be highly probable at year end and so have been
classified as 'held for sale' assets within the Statement of Financial with
the associated loss for the year being shown within Discontinued Operations
within the Statement of Comprehensive Income. A breakdown of these disclosures
is shown within note 6.
Post year end, the sale of the WM business did not proceed and the strategy
for this division shifted to driving growth in the assets under management and
providing a wider level of service to develop further revenue streams. The
sale of the CM division completed post year end in July 2024. This will assist
the group in the implementation of its plans for the growth of the remaining
WM business.
Wealth Management
WHI provides financial planning advice and discretionary investment
management. Our goal is to build long-term, mutually beneficial, working
relationships with our clients so that they can make informed and effective
choices about their money and how it can support their lifestyle ambitions. We
help clients to build a long-term financial plan and investment strategy for
them and their families.
Capital Markets
The CM division had been specifically focused on the public and private growth
company marketplace. The team's significant experience in this dynamic segment
means that they have been able to provide a specialist service to each of its
respective participants. For companies, we have raised public and private
growth capital, as well as provided both day-to-day and strategic corporate
advice including M&A advisory. The division's tailored approach means that
the team engages with all of the key investor groups active in its market -
High Net Worth individuals, Family Offices, Wealth Managers and Funds. The
broking, trading and research teams provide the link between growth companies
and this broad investor base.
Chair and Chief Executive's statement
Market backdrop
The market backdrop has been extremely challenging. While the FTSE 100 has been relatively resilient, the AIM All Share Index fell 9% over the period. These market conditions severely impacted transactional business (and particularly fundraisings) in our CM Divisions and there have been a number of strategic issues for the board to consider.
Outlook
As shareholders will be aware the Group announced in July 2023 that it had
raised £5m through a placing of shares in the Company. The board would like
to thank shareholders for their support for this placing which enabled
stabilisation to occur in our financial position whilst a cost reduction
exercise and other strategic initiatives were carried out.
Following a further decline in market conditions and a persistent inflationary
backdrop, the board has continued with the strategy to actively explore
opportunities and options for the group principally a sale of all or part of
its assets.
During the year a number of potential buyers approached us in respect of a
purchase of the WM division and where it was appropriate these were actively
pursued. However none of these discussions resulted in a transaction and
therefore whilst the WM division was held as an asset for sale at the year end
(and this is reflected in the approach to the completion of the year end
accounts) it is now part of our ongoing operations and will therefore be
subject to the normal accounting treatments on an ongoing basis in the absence
of an event occurring which impacts this assessment.
Post balance sheet date, the Group reached completion on a deal to sell the CM
division. This completed in July 2024 and is on a deferred consideration
basis. This division was actively being marketed for sale and it was highly
probable that this sale would occur within a few months of reporting date.
This division is therefore also shown as an asset held for sale and a
discontinued operation in the subsequent Financial Statements. The sale of
this division completed in July 2024.
Looking forward
Following the sale of the CM division after the year-end it is the intention
of the Group to focus on the operation and development of the WM division
whilst assessing strategic opportunities for the Group as they arise.
Moving forward we will further reduce costs, as certain group and central
functions can be streamlined following the sale of the CM division.
Considering this, together with the implementation of our cost reduction
programme earlier in the year, we believe the Group Moving forward we will
further reduce costs, as certain group and central functions can be
streamlined following the sale of the CM division. Considering this, together
with the implementation of our cost reduction programme earlier in the year,
we believe the Group has an improved chance of returning the continuing WM
division to a break-even position.
The Financial Year 2024
Overall revenue fell 19.6% from the previous year from £26.7m to £21.5m, we
reduced administrative expenses by 2% from £27.6m to £26.7m. Although our
loss on investments reduced from a £2.7m loss in the previous year to £0.6m
loss, we incurred large restructuring costs of £2.9m. These were principally
redundancies and project costs in relation to the Board exploring strategic
opportunities for parts of the business. This led to a loss overall for the
business of £5.9m before tax.
WM income was affected by market falls which led to a reduction of total
assets under management from £1.4bn to £1.2bn. This was the principal reason
for a fall in revenue of 18% (from £14.4m to £11.9m). With the reduction of
costs, including the redundancies of staff, WM recorded a small underlying
loss for the year.
CM revenue is derived from retainer income, earned from our role as NOMAD or
broker to clients, and transactional income. While retainer income held up
well, we finished the year with 79 clients, a fall from 90 at the beginning of
the period, transactional income was severely hit, with a particularly sharp
fall in corporate fundraisings. This led to an overall drop in CM revenue of
22% from £12.2m to £9.6m.
Board
The Company welcomed two new non-executive directors in November 2023, Simon
Moore and Garry Stran to the Board, with Simon serving as Chair. The Directors
thank the previous non-executive directors of the Company for their service to
the business.
On behalf of the Board, we would like to express our appreciation for the
continuing hard work and loyalty of employees throughout a difficult period.
Whilst this has been an unsettling period for all stakeholders we would like
to thank our employees, clients and partners for their efforts to complete the
sale of the CM division and for working with us to stabilise the business.
We would also like to thank the team members who were unfortunately made
redundant during the year for their professionalism during this period and
wish them well for the future.
As outlined in this report your board will now focus on creating a business
that has sustainable profitability, a vibrant culture and is well placed to
exploit strategic opportunities should they arise in order to maximise the
opportunity to create shareholder value.
Financial review
Overview
The WH Ireland Group consists of a principal operating subsidiary, WH Ireland
Limited.
WH Ireland Limited consists of two business divisions: WM (WM), which provides
investment management solutions and financial advisory services to retail
clients and CM (CM) which provides a range of services to both public and
private companies, including day to day regulatory and strategic corporate
advice, institutional sales and broking services; and the production of equity
research. It also provides trading services to Funds, High Net worth
individuals and Family Offices. Post balance sheet date, the CM division has
been sold.
Total assets managed by the Group are £1.8bn (FY23: £2.1bn). Of this total,
£1.2bn (FY23: £1.4bn) is held in WM with a further £0.6bn (FY23: £0.7bn)
within CM's Ultra High Net Worth business.
The Group's income is derived from activities conducted in the UK with a
number of retail, high net worth, ultra-high net worth, institutional and
corporate clients.
The average Group headcount for the year was 133 (FY23: 163) in the UK.
Strategy summary
Following the fundraise that took place during the year, the Group's aim was
to increase the value of discretionary assets under management in WM. The
Group also aimed to continue to service our new and existing corporate client
list in CM, whilst sourcing new transactional activity utilising our strong
distribution capability in public and private markets. During the year, the
Group pursued a sale of both the WM and CM divisions. Both sales were judged
to be highly probable at year end and so have been classified as 'held for
sale'. Post year end, the strategy for WM shifted from a sale of the division
to driving growth in the assets under management and providing a wider level
of service to develop further revenue streams. The sale of the CM division
completed post year end in July 2024. This will assist the group in the
implementation of its plans for the growth of the remaining WM business whilst
finding efficiencies in the remaining business.
Group financial results summary
Year to Year to
31 Mar 2024 31 Mar 2023
£'000 £'000
Revenue 21,465 26,688
Administrative expenses (26,665) (27,591)
Expected credit loss (328) (239)
Operating loss (5,528) (1,142)
Net loss on investments (583) (2,683)
Release of deferred consideration 160 -
Changes in fair value and finance cost of deferred consideration - (173)
Other income - 2,175
Loss before tax (5,951) (1,823)
Taxation 12 -
Loss and total comprehensive income for the year (5,939) (1,823)
The format of these tables do not follow that in the Statement of
Comprehensive Income which is required to show effect of discontinued
operations on the business. These table show the results of both divisions in
the statutory format.
Reconciliation between underlying and statutory profits
Underlying profit before tax is considered by the Board to be an accurate
reflection of the Group's performance when compared to the statutory results,
as this excludes income and expense categories which are deemed of a
non-recurring nature or non-cash operating item. Reporting at an underlying
level is also considered appropriate for external analyst coverage and peer
group benchmarking. A reconciliation between underlying and statutory profit
before tax for the year ended 31 March 2024 with comparative is shown below:
Year to Year to
31 Mar 2024 31 Mar 2023
£'000 £'000
Underlying loss before tax (2,468) (1,987)
Amortisation of acquired brand and client relationships (273) (496)
Changes in fair value and finance cost or release of deferred consideration 160 (173)
Restructuring costs (2,909) -
Client Settlement (152) -
Other income - 1,957
Net changes in the value of non-current investments (309) (1,124)
Total underlying adjustments (3,483) 164
Statutory loss before tax (5,951) (1,823)
Tax 12 -
Loss and total comprehensive income for the year (5,939) (1,823)
Underlying earnings per share
Weighted average number of shares ('000) in issue during the period (note 12) 175,718 59,172
Basic underlying earnings per share (1.40p) (3.36p)
Amortisation of acquired brand and client relationships
These intangible assets are created in the course of acquiring funds under
management and are amortised over their useful life which have been assessed
between two to 12 years. This charge has been excluded from underlying profit
as it is a significant non-cash item. Amortisation ceased from the date the WM
division was reclassifies to assets held for sale, refer to note 6.
Changes in fair value and finance cost of deferred consideration
This comprises the fair value measurement arising on the deferred
consideration payments from acquisitions together with the associated finance
costs from the unwinding of the present value discount relating to the
Harpsden acquisition (subsidiary previously acquired).
Restructuring costs
These costs relate to the restructuring costs within both WM and CM and the
resultant costs of redundancies of staff in the London office arising from the
cost savings measures taken during the year. These costs also include
transaction fees paid in relation to the exploration of the potential sale of
the WM division and the resultant sale of the CM division.
Client Settlement
This item relates to an issue with our outsourced platform provider, cited in
our interim results, which resulted in incorrect amounts of interest being
paid to clients. The provider and the Group have settled these amounts with
clients.
Other income
Last year the Group received a refund of £2.2m from HMRC. This was following
confirmation from HMRC that the supply of certain Group services were exempt
from VAT during the period from 2017 to 2022. This is presented net of
commission payable to a third party of £218k.
Net changes in value of investments
As part of the fee arrangement with corporate clients in CM, there is often a
grant of warrants over shares or the issue of actual shares in addition to the
cash element of the fee. The value of such warrants and shares are credited to
revenue on the date of the fee note and then any changes in the valuation are
recorded as net gains or losses. In view of the nature of these gains or
losses, including non-cash, these gains or losses have been excluded from
underlying profit. The total change in value of investments are £583k, a
corresponding commission payable of £274k on the gain or loss of these
warrants are included in the net changes above. The net change in investment
value is £309k.
The Financial Year 2024
Overall revenue fell from £26.7m to £21.5m from the previous (19.6%), we
reduced administrative expenses by 2% from £27.6m to £26.7m. Although our
loss on investments reduced from a £2.7m loss in the previous year to £0.6m
loss, we incurred restructuring costs of £2.9m. These were principally
redundancies and transaction costs in relation to the Board exploring
strategic opportunities for parts of the business. This led to a loss overall
for the business of £6.0m before tax.
WM income was affected by market falls which led to a reduction of assets
under management from £1.4bn to £1.2bn. This was the principal reason for a
fall in revenue of 18% (from £14.4m to £11.9m). With the reduction of costs,
including the redundancies of staff, WM recorded a small underlying loss for
the year.
CM revenue is derived from retainer income, earned from our role as NOMAD or
broker to clients, and transactional income. While retainer income held up
well, we finished the year with 79 clients, a fall from 90 at the beginning of
the period, transactional income was severely hit, with a particularly sharp
fall in corporate fundraisings. This led to an overall drop in CM revenue of
22% from £12.2m to £9.6m.
Expenses
Total operational costs decreased by 3.2%. As part of cost of sales, third
party commission increased by 63.14%, due to agreements that are revenue
contingent. Variable people costs, mainly related to bonus payments have
reduced by 49%.
2024 2023
£'000 £'000
Cost of sales - non-salaried staff costs (note 7) 1,592 605
Fixed non-people costs 11,235 10,867
Fixed people costs 12,881 14,243
Variable people costs 956 1,876
Total 26,664 27,591
Financial position and regulatory capital
Net assets remained consistent at £14.3m at 31 March 2024 (FY23: £14.3m) and
tangible net assets (net assets excluding disposal group, prior year net
assets excluding intangible assets and goodwill) decreased by 10% to £6.3m
(FY23: £7.0m).
The Investment Firms Prudential Regime (IFPR) applies to all solo-regulated
MiFID investment firms and WH Ireland is a non-SNI (small and
non-interconnected) MIFIDPRU investment firm.
Accordingly, the Group's regulatory capital requirement is its fixed overhead
requirement as defined by the Financial Conduct Authority (FCA). During the
year the Group carried out a placing to raise £5m by way of the issue of
ordinary shares, to ensure that the Group's own funds are in excess of its
regulatory capital requirement. Post year end, the sale of the CM division
took place. This has had the effect of fixed overhead requirements and
wind-down costs for the business falling.
Cost reduction exercises have been implemented during the year, including
certain members of senior management agreeing to sacrifice a proportion of
their salary in return for share options, alongside a collective consultation
regarding headcount reduction.
As a result, the Directors have reviewed the forward-looking position as part
of the going concern modelling and stress testing and in light of post
year-end events believe that the regulatory requirements will be met.
Future developments
The Group has continued to be subjected to challenging market conditions
resulting from a number of well documented public events. The funds from the
placing that took place during the year have been used to provide working
capital, secure the current regulatory capital position and achieve a more
stable financial position for the Group against the current market backdrop.
The Group has also actively explored asset sales during the year, with the CM
division being sold post year end. This sale has resulted in a positive
regulatory capital position and changed requirements. The Directors will now
focus on implementing improvements to the remaining WM division as well as
making changes that will increase efficiencies across the business.
Key Performance Indicators
The following financial and strategic measures have been identified as the key
performance indicators (KPIs) of the Group's overall performance for the
financial year.
1. GROUP ASSETS UNDER MANAGEMENT £bn
The total value of funds under management has a direct impact on the Group's
revenue.
-14%
2. NUMBER OF RETAINED CM CORPORATE CLIENTS
The number of retained clients has a direct relationship to the value of fees
earned from success fees and retainer income in CM.
-11
3. TOTAL REVENUE £m
The amount of revenue generated by WM and CM together is one of the key growth
indicators.
-20%
4. DISCRETIONARY AND ADVISORY ASSETS UNDER MANAGEMENT (WM) £bn
Discretionary and advisory funds are the main income driver for our WM
business.
-16%
Dividends
The Board does not propose to pay a dividend in respect of the financial year
(FY23: £nil).
Statement of Financial Position and Capital Structure
Maintaining a strong and liquid statement of financial position remains a key
objective for the Board, alongside its regulatory capital requirement. Due to
the successful placing of shares during the year, the Group have been able to
secure the current regulatory capital position and achieve a more stable
financial position for the Group against the current market backdrop. The
group regulatory capital position is surplus to the regulatory capital
requirement. As a result of the post year end sale of the CM division, the
required regulatory capital position has fallen to £3.8m (based on harm
assessment). The group therefore will be more likely to achieve these
requirements. As at 31 March 2024, total net assets were £14.3m (FY23:
£14.3m) and net current assets £14.3m (FY23: £5.3m). This increase is due
to assets and liabilities being allocated to the disposal groups. Cash
balances at year-end were £4.9m (FY23: £4.2m).
Risks and Uncertainties
Risk appetite is established, reviewed and monitored by the Board. The Group,
through the operation of its Committee structure, considers all relevant risks
and advises the Board as necessary. The Group maintains a comprehensive risk
register as part of its risk management framework encouraging a risk-based
approach to the internal controls and management of the Group. The risk
register covers all categories including human capital risk, regulatory risk,
conduct (client) risk, competition, financial risk, IT and operational
resilience risk and legal risk. Each risk is ranked on impact and likelihood
and mitigating strategies are identified. In addition, the Executive Committee
which is formed of the Executive Directors, the Heads of the business
divisions, a representative from HR and Chief Risk and Compliance Officer meet
to assess and monitor these. An Executive Risk Committee has recently been
established to manage and monitor risks and report into the Board.
The Group had outsourced its internal audit function to Deloitte since April
2021. Post year end this function is now outsourced to BDO. The internal
auditors formally report to Garry Stran, Chair of the Audit Committee with Jay
Iyer, Chief Risk and Compliance Officer, being the principal day to day
contact.
Liquidity and capital risk
The Group continues to focus on managing the costs of its business and
returning to growth and sustainable profitability whilst increasing the
proportion of recurring revenue with CM and the building of its discretionary
fee paying client base in WM to better fit the regulatory environment in which
it operates.
To mitigate risk, the Board continues to focus on ensuring that the financial
position remains robust and suitably liquid with sufficient regulatory capital
being maintained over the minimum common equity tier 1 capital requirements.
Regulatory capital and liquid assets are monitored on a daily basis.
Operational risk
Operational risk is the risk of loss to the Group resulting from inadequate or
failed internal processes, people and systems, or from external events.
Business continuity risk is the risk that serious damage or disruption may be
caused as a result of a breakdown or interruption, from either internal or
external sources, of the business of the Group. This risk is mitigated in part
by the number of branches across the UK and the Group having business
continuity and disaster recovery arrangements including business interruption
insurance.
The Group seeks to ensure that its risk management framework and control
environment is continuously evolving which Compliance and Risk monitor on an
ongoing basis.
Credit risk
The Board takes active steps to minimise credit losses including formal new
business approval, and the close supervision of credit limits and exposures,
and the proactive management of any overdue accounts. Additionally, risk
assessments are performed on an ongoing basis on all deposit taking banks and
custodians and our outsourced relationships.
Regulatory risk
The Company operates in a highly regulated environment in the UK. The
Directors monitor changes and developments in the regulatory environment and
ensure that sufficient resources are available for the Group to implement any
required changes. The impact of the regulatory environment on the Group's
management of its capital is discussed in note 26 of the financial statements.
Section 172 Statement
Broader Stakeholder Interests
Directors of the Group must consider Section 172 of the Companies Act 2006
which requires them to act in the way that would most likely promote the
success of the Group for the benefit of all its stakeholders. The Board and
its committees consider who its key stakeholders are, the potential impact of
decisions made on them taking into account a wider range of factors, including
the impact on the Company's operations and the likely consequences of
decisions made in the long-term. The Group's key stakeholders and how the
Board and the Group have engaged with them during the year is set out below.
Employees
The CEO and his management team on behalf of the Board engage with employees
through a variety of methods including periodic 'all staff' updates,
information and points of interest, staff forums, group meetings and Town Hall
meetings.
Shareholders
Our shareholders have been pivotal in supporting the Group and its management
team and Board. The Board recognise and frequently discuss the importance of
good, open and constructive relationships with both potential new shareholders
as well as existing shareholders and is committed to this communication. The
way in which this has been achieved during the year has been by our Chief
Executive Officer, supported by the management team, maintaining regular
contact and meetings with individual and institutional shareholders, both
existing and potential, and communicating and discussing shareholders' views
with the Board. A number of Board members and employees also hold the Group's
shares and regular communications are provided. Having one class of share
capital ensures all shareholders are treated equally.
The Group's strategy and results are presented to shareholders through
meetings following announcements of the final and interim results.
Shareholders are also invited to meet the Board and management team, who
attend the Annual General Meeting. The annual report and accounts for the year
ended 31 March 2024 along with all past accounts, regulatory communications
and other material is set out on the Group's website at
https://www.whirelandplc.com/investor-relations
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.
Regulators
The Board maintains continuous and open communication with our regulators at
the FCA as well as with the London Stock Exchange. Regular ongoing dialogue
has continued through the CEO and CFO with the FCA who receive regular
Management information. The FCA have approved the appointments of each member
of the Management team and the Board members as required.
Clients
Our clients are fundamental to the business of the Group and the Board
recognise that their interests are of paramount importance. Management of WM
and CM closely engage with clients to understand their objectives so that the
service provided by the business is appropriate. In WM the client's profile
and the suitability of the investment strategy provided is frequently assessed
by our professional investment managers and this is supplemented by a second
line of review from management and our compliance team. It is recognised that
the status of our clients can and does change in line with the environment and
vulnerable clients in particular are identified and discussed at management
and at Committee level to ensure that they are provided with the best possible
advice.
In CM the Group's objective is also to achieve the best outcome and this
applies equally to institutional corporate clients. Regular contact is
maintained with them across all departments including corporate broking,
corporate finance, trading and research. Our investor relations team arranges
meetings with investors, undertakes site visits and organises events for a
wide range of our clients' teams.
Suppliers, Community and Environment
The Board through its Executive Directors is keenly focused on its key
supplier relationships and regularly challenges and reviews its arrangements.
The Group openly encourages its offices and employees to engage in local
charitable, community groups and other causes.
The Board recognises the firm's duty to act in the best long-term interests of
our clients which includes having investment practices that contribute to the
preservation of our planet. The Board has had an active effort to continue on
our path towards carbon neutrality by consuming less as an organisation,
providing recycling points in our offices and planting a new tree for every
new investment account opened.
Each of the Board members consider that they have acted together, in good
faith in a way most likely to promote the success of the Group for the benefit
of its broader range of stakeholders as a whole taking into account section
172 (1) (a-f) of the Companies Act 2006.
Maintaining a reputation for high standards of business conduct
The board supports a culture that encourages the group's high standards which
helps the Group deliver on its strategic objectives. The board ensures
adherence to policies that encourage high performance of employees and
regularly receives updates on the group's culture through engagement surveys
and in the business updates.
Considering the Long Term
The board outlines the Group's strategy and oversees the framework of
governance, risk management and internal controls to with the long-term
success of the business in mind. The strategy is focused on developing the
Group's ability to service the long-term needs of its clients. The group
operates in a highly regulated environment. The identification, management and
mitigation of risks to the group's business is key to ensuring the delivery
of its strategy over the longer term, and the consideration of risk plays an
important part in decision-making.
The Strategic Report has been approved by the Board and signed on its behalf
by:
S Jackson
Chief Finance Officer
9 August 2024
Consolidated statement of comprehensive income
Year ended Year ended
31 March 2024 31 March 2023
Note £'000 £'000
*Restated
Net loss on investments 17 (583) (2,683)
Release of deferred consideration 8 160 (173)
Pre-tax loss from continuing operations (423) (2,856)
Taxation 10 12 -
Post-tax loss from continuing operations (411) (2,856)
(Loss)/profit from discontinued operations inc. tax 6 (5,528) 1,033
Loss and total comprehensive income for the year (5,939) (1,823)
Earnings per share 12
From continuing operations
Basic and diluted (0.23p) (4.83p)
From discontinuing operations
Basic and diluted (3.15p) 1.75p
Total
Basic and diluted (3.38p) (3.08p)
*The 2023 consolidated statement of comprehensive income has been restated to
reflect the recognition of a deferred tax asset to offset the deferred tax
liability. Refer to Note 19 for further details.
There were no items of other comprehensive income for the current year or
prior years.
Consolidated statement of financial position
Group
31 March 31 March 31 March
2024 2023 2022
Note £'000 £'000 £'000
*Restated *Restated
ASSETS
Non-current assets
Intangible assets 15 - 3,763 4,259
Goodwill 14 - 3,539 3,539
Property, plant and equipment 13 - 569 325
Investments 17 - 820 3,013
Right of use asset 18 - 635 1,168
Deferred tax asset 19 - -
- 9,326 12,304
Current assets
Trade and other receivables 20 5,098 5,444 5,758
Other investments 21 1,544 2,049 1,912
Cash and cash equivalents 22 4,902 4,234 6,446
Assets held for sale 6 7,994 - -
Total current assets 19,538 11,727 14,116
Total assets 19,538 21,053 26,420
LIABILITIES
Current liabilities
Trade and other payables 23 (3,232) (4,013) (6,681)
Lease liability 18 - (319) (376)
Provisions 24 (1,676) (2,121) (2,412)
Liabilities classified as held for sale 6 (293) - -
Total current liabilities (5,201) (6,453) (9,469)
Non-current liabilities
Deferred tax liability* 19 - - -
Lease liability 18 - (293) (999)
- (293) (999)
Total liabilities (5,201) (6,746) (10,468)
Total net assets 14,337 14,307 15,952
Capital and reserves
Share capital 27 4,965 3,116 3,104
Share premium 27 22,817 19,014 19,014
Other reserves 981 981 981
Retained earnings (13,312) (7,711) (6,247)
Treasury shares 28 (1,114) (1,093) (900)
Shareholders' funds 14,337 14,307 15,952
* The 2023 and 2022 consolidated statement of financial position has been
restated to reflect the recognition of a deferred tax asset to offset the
deferred tax liability. Refer to Note 19 for further details.
These financial statements were approved by the Board of Directors on 9 August
2024 and were signed on its behalf by:
S Jackson
Director
Company statement of financial position
Company
31 March 31 March
2024 2023
Note £'000 £'000
ASSETS
Non-current assets
Investment in subsidiaries 16 19,848 26,448
Loan receivable 28 1,114 1,093
Amounts owed from Group companies 20 4,676 -
25,638 27,541
Current assets
Trade and other receivables 20 44 29
44 29
Total assets 25,682 27,570
LIABILITIES
Current liabilities
Trade and other payables 23 (750) (1,136)
Provisions 24 (1,229) (2,121)
Total liabilities (1,979) (3,257)
Total net assets 23,703 24,313
Capital and reserves
Share capital 27 4,965 3,116
Share premium 27 22,817 19,014
Other reserves 228 228
Retained earnings (4,307) 1,955
Shareholders' funds 23,703 24,313
The Company has elected to take the exemption under Section 408 of the
Companies Act 2006 not to present the Company statement of comprehensive
income. The loss after tax of the Company for the year was £6.6m (FY23:
£nil).
These financial statements were approved by the Board of Directors on 9 August
2024 and were signed on its behalf by:
S Jackson
Director
Consolidated and Company statement of cash flows
Group Company
Year ended Year ended Year ended Year ended
31 Mar 2024 31 Mar 2023 31 Mar 2024 31 Mar 2023
Notes £'000 £'000 £'000 £'000
*restated
Operating activities:
Loss for the year (5,939) (1,823) (6,600) -
(5,939) (1,823) (6,600) -
Adjustments for non-cash items:
Depreciation and amortisation 13, 15, 18 624 1,093 - -
Finance income 8 - (10) - -
Movement in deferred consideration 8 (160) 173 (160) 173
Finance expense 8 21 51 - -
Tax 10 (12) - - -
Non-cash adjustment for share option charge 7 338 359 338 359
Non-cash adjustment for investment gains 17, 21 583 2,683 - -
Non-cash consideration for revenue (761) (1,096) - -
Non-cash adjustment for right of use assets 18 - (125) - -
Impairment 16 - - 6,600 -
Working capital changes:
Decrease / (increase) in trade and other receivables 346 314 (4,851) 88
(Decrease) / increase in trade and other payables and provisions** (336) (2,668) (228) (1,221)
Net cash (used in) / generated from operations (5,296) (1,049) (4,901) (601)
Income taxes received/(paid) 10 - - -
Net cash outflows from operating activities (5,296) (1,049) (4,901) (601)
Investing activities:
Acquisition of property, plant and equipment 13 (16) (475) - -
Decrease / (increase) in loan receivables - - (21) (193)
Interest received 8 12 10 - -
Cash received on disposal of investments and warrants 17, 21 1,408 430 - -
Deferred consideration paid* 24 (78) (464) (78) (464)
Net cash generated from / (used in) investing activities 1,326 (499) (99) (657)
Finance activities:
Proceeds from issue of share capital 27 5,000 12 5,000 12
Purchase of own shares by Employee Benefit Trust (21) (193) - -
Interest paid 8 - - - -
Lease liability payments (340) (483) - -
Net cash generated from/ (used in) financing activities 4,639 (664) 5,000 12
Net increase / (decrease) in cash and cash equivalents 668 (2,212) - (1,246)
Cash and cash equivalents at beginning of year 4,234 6,446 - 1,246
Cash and cash equivalents at end of year 4,902 4,234 - -
*The 2023 consolidated statement of financial position has been restated to
reflect the recognition of a deferred tax asset to offset the deferred tax
liability. Refer to Note 19 for further details.
In the prior year, Deferred consideration paid of £464k had been presented as
a Financing activity. The cash flow relates to the payment of deferred
consideration relating to the acquisition of Harpsden WM Limited, which is an
Investing activity. The comparative has been restated accordingly.
Non-cash transaction:
** During the period, outstanding deferred consideration of £654k was settled
via issue of shares (refer to note 24)
Reconciliation of Group and Company liabilities arising from financing activities in the year:
As at Cash flows Non-cash As at
1 April 2023 changes 31 March 2024
Group £'000 £'000 £'000 £'000
Lease liability 612 (340) 21 293
612 (340) 21 293
Reconciliation of Group and Company liabilities arising from financing
activities in the prior year:
As at Cash flows Non-cash As at
1 April 2022 changes 31 March 2023
Group £'000 £'000 £'000 £'000
Lease liability 1,375 (483) (280) 612
1,375 (483) (280) 612
There are no Company liabilities arising from financing activities.
Consolidated and Company statement of changes in equity
Share Share Other Retained Treasury Total
capital premium reserves earnings shares equity
Group £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2022 (As originally stated) 3,104 19,014 981 (6,789) (900) 15,410
Prior year adjustment* - - - 542 - 542
Balance at 1 April 2022 (As restated) 3,104 19,014 981 (6,247) (900) 15,952
Loss and total comprehensive income for the year (Previously stated as - - - (1,823) - (1,823)
£1,944k)
Transactions with owners in their capacity as owners:
Employee share option scheme - - - 359 - 359
New share capital issued 12 - - - - 12
Purchase of own shares by Employee Benefit Trust - - - - (193) (193)
Balance at 31 March 2023 (As restated) 3,116 19,014 981 (7,711) (1,093) 14,307
Loss and total comprehensive income for the year - - - (5,939) - (5,939)
Transactions with owners in their capacity as owners:
Employee share option scheme - - - 338 - 338
New share capital issued** 1,849 3,928 - - - 5,777
Share issue costs - (125) - - - (125)
Purchase of own shares by Employee Benefit Trust - - - - (21) (21)
Balance at 31 March 2024 4,965 22,817 981 (13,312) (1,114) 14,337
*The 2023 Consolidated and Company statement of changes in equity has been
restated to reflect the recognition of a deferred tax asset to offset the
deferred tax liability. Refer to Note 19 for further details.
**See further details in note 27.
Retained earnings include £10k (2023: £10k) ESOT reserve.
Share Share Other Retained Treasury Total
capital premium reserves earnings shares equity
Company £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2022 3,104 19,014 228 1,596 - 23,942
Profit / (loss) and total comprehensive income for the year - - - - -
Transactions with owners in their capacity as owners:
Employee share option scheme - - - 359 - 359
New share capital issued 12 - - - - 12
Balance at 31 March 2023 3,116 19,014 228 1,955 - 24,313
Profit / (loss) and total comprehensive income for the year - - - (6,600) - (6,600)
Transactions with owners in their capacity as owners:
Employee share option scheme - - - 338 - 338
New share capital issued (note 27) 1,849 3,928 - - - 5,777
Share issue costs - (125) - - - (125)
Balance at 31 March 2024 4,965 22,817 228 (4,307) - 23,703
The nature and purpose of each reserve, whether consolidated or Company only,
is summarised below:
Share premium
The share premium is the amount raised on the issue of shares that is in
excess of the nominal value of those shares and is recorded less any direct
costs of issue.
Other reserves
Other reserves comprise a (consolidated) merger reserve of £753k (FY23:
£753k) and a (consolidated and company) capital redemption reserve of £228k
(FY23: £228k).
Retained earnings
Retained earnings reflect accumulated income, expenses, gains and losses,
recognised in the statement of comprehensive income and the statement of
recognised income and expense and is net of dividends paid to shareholders. It
includes £10k (FY23: £10k) of ESOT reserve.
Treasury shares
Purchases of the Company's own shares in the market are presented as a
deduction from equity, at the amount paid, including transaction costs. That
is, shares are shown as a separate class of shareholders' equity with a debit
balance. This includes shares in the Company held by the EBT or ESOT, both of
which are consolidated within the consolidated figures.
Notes to the financial statements
1. General information
WH Ireland Group plc is a public company incorporated in the United Kingdom.
The shares of the Company are traded on the AIM, a market of the London Stock
Exchange Group plc. The address of its registered office is 24 Martin Lane,
London, EC4R 0DR.
Basis of preparation
The consolidated and Parent Company financial statements have been prepared in
accordance with International Accounting Standards as adopted by the UK and in
accordance with the Companies Act 2006. The principal accounting policies
adopted in the preparation of the consolidated financial statements are set
out in note 3. The policies have been consistently applied to all the years
presented, unless otherwise stated.
The consolidated financial statements are presented in British Pounds (GBP),
which is also the Group's functional currency. Amounts are rounded to the
nearest thousand, unless otherwise stated.
Going concern
The financial statements of the Group have been prepared on a going concern
basis. In making this assessment, the Directors have prepared detailed
financial forecasts for the period to September 2025 which consider the
funding and capital position of the Group and Company. Those forecasts make
assumptions in respect of future trading conditions, notably the economic
environment and its impact on the Group's revenues and costs. In addition to
this, the nature of the Group's business is such that there can be
considerable variation in the timing of cash inflows. The forecasts take into
account foreseeable downside risks, based on the information that is available
to the Directors at the time of the approval of these financial statements.
Certain activities of the Group are regulated by the FCA, the statutory
regulator for financial services business in the UK which has responsibility
for policy, monitoring and discipline for the financial services industry. The
FCA requires the Group's capital resources to be adequate; that is sufficient
in terms of quantity, quality and availability, in relation to its regulated
activities. The Directors monitor the Group's regulatory capital resources on
a regular basis.
The Directors have conducted full and thorough assessments of the Group's
business and the past financial year has provided a thorough test of those
assessments. The ongoing market conditions presented a range of challenges to
the business and during the year the Group raised additional capital by way of
placing of ordinary shares to existing shareholders and new investors raising
£5m. After the year end, the Group sold the CM division which resulted in an
up-front reduction in the required regulatory capital. Additionally, this will
also result in cost reductions as expenses related to that division will
reduce, with benefits taking effect from quarter 2 of the financial year. The
cost savings have been factored into the forecasts.
Whilst there always remains uncertainty over the economic environment, after
the year-end the business has improved its capital position and likelihood of
a return to a break-even position. Further actions open to the Directors
include incremental cost reductions, regulatory capital optimisation
programmes or further capital raising.
An analysis of the potential downside impacts was conducted as part of the
going concern assessment to assess the potential impact on revenue and asset
values with a particular focus on the variable component parts of our overall
revenue. Furthermore, reverse stress tests were modelled to assess what level
the Group's business would need to reduce to before resulting in a liquidity
crisis or a breach of regulatory capital. That modelling concluded that all
revenue would need to decline by more than 45% from management's forecasts to
create such a crisis situation within 18 months' time.
Based on all the aforementioned, the Directors believe that regulatory capital
requirements will continue to be met and that the Group and Company has
sufficient liquidity to meet its liabilities for the next 12 months and that
the preparation of the financial statements on a going concern basis remains
appropriate.
2. Adoption of new and revised standards
New and amended standards that are effective for the current year
A number of new or amended standards became applicable for the current
reporting period and as a result the Group and Company has applied the
following standards:
- IAS 1: Presentation of Financial Statements: Classification of Liabilities
as Current or Non-Current and Classification of Liabilities as Current or
Non-Current - Deferral of Effect Date. Non-current Liabilities with covenants
The above requirements did not have a material impact on the financial
statements of the group or company.
New standards, interpretations and amendments not yet effective
Name Description Effective date
IAS 1 Non-current Liabilities with covenants 1 January 2024
The Directors do not expect the adoption of these standards and amendments to
have a material impact on the Financial Statements.
3. Significant accounting policies
Basis of consolidation
Where the company has control over an investee, it is classified as a
subsidiary. The company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the Company and
its subsidiaries ("the Group") as if they formed a single entity. Intercompany
transactions and balances between group companies are therefore eliminated in
full. The consolidated financial statements incorporate the results of
business combinations using the acquisition method. In the statement of
financial position, the acquiree's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at the
acquisition date. The results of acquired operations are included in the
consolidated statement of comprehensive income from the date on which control
is obtained until the date on which control ceased.
In the Company's accounts, investments in subsidiary undertakings are stated
at cost less any provision for impairment.
Business combinations
All business combinations are accounted for by applying the purchase method.
The purchase method involves recognition, at fair value, of all identifiable
assets and liabilities, including contingent liabilities, of the subsidiary at
the acquisition date, regardless of whether or not they were recorded in the
financial statements of the subsidiary prior to acquisition. The cost of
business combinations is measured based on the fair value of the equity or
debt instruments issued and cash or other consideration paid, plus any
directly attributable costs. Any directly attributable costs relating to
business combinations before or after the acquisition date are charged to the
statement of comprehensive income in the period in which they are incurred.
Goodwill arising on a business combination represents the excess of cost over
the fair value of the Group's share of the identifiable net assets acquired
and is stated at cost less any accumulated impairment losses. The cash
generating units to which goodwill is allocated are tested annually for
impairment. Any impairment is recognised immediately in administrative
expenses in the statement of comprehensive income and is not subsequently
reversed. On disposal of a subsidiary the attributable amount of goodwill that
has not been subject to impairment is included in the determination of the
profit or loss on disposal.
Revenue
WM (WM)
Management and custody fees
Investment management fees are recognised in the period in which the related
service is provided. It is a variable fee based on the average daily market
value of assets under management and is invoiced on a calendar quarter basis
in arrears. The performance obligation is satisfied over time as the
contractual obligations are on ongoing throughout the period under contract.
The revenue accrued but not yet invoiced is recognised as a contract asset.
Initial and ongoing advisory fees
Initial advisory fees are charged to clients on a fixed one-off fee agreement.
The performance obligation is satisfied as the initial advice is provided.
Ongoing advisory fees are variable fees based on the average daily market
value of assets under management and invoiced on a calendar quarter basis in
arrears. Both initial and ongoing advisory fees are recognised in the period
in which the related service is provided. The performance obligation of
ongoing advice is satisfied over time as the contractual obligations are
ongoing throughout the period under contract. The revenue accrued but not yet
invoiced is recognised as a contract asset.
Commission and transaction charges
Commission is recognised when receivable in accordance with the date of
settlement. It is a variable fee based on a percentage of the transaction and
therefore the performance obligation is satisfied at the date of the
underlying transaction. The transaction price is calculated based on the
agreed percentage of the underlying consideration of the trade. The underlying
consideration being the number of shares multiplied by the share price at the
time of the underlying transaction.
CM (cM)
Commission
Brokerage commission is recognised when receivable in accordance with the date
of settlement. It is a variable fee based on a percentage of the transaction
and therefore performance obligation is satisfied at the date of the
underlying transaction. The transaction price is calculated based on the
agreed percentage of the underlying consideration of the trade. The underlying
consideration being the number of shares multiplied by the share price at the
time of the underlying transaction.
Corporate finance advisory fees
Corporate finance advisory fees are fixed fees agreed on a deal by deal basis
and might include non-cash consideration received in the form of shares, loan
notes, warrants or other financial instruments recognised at the fair value on
the date of receipt and therefore the performance obligation is satisfied over
time when the Group has met the performance obligations per the contract.
Retainer fees
Retainer fees are recognised over the length of time of the agreement. Fees
are fixed and invoiced quarterly in advance based on the agreed engagement
letter. The performance obligation is satisfied over time as the contractual
obligations are on ongoing throughout the period under contract. The deferred
revenue is recognised as a contract liability.
Corporate placing commissions
Corporate placing commissions are variable fees agreed on a deal-by-deal basis
based on a percentage of the funds raised as part of a transaction. This
includes non-cash consideration received in the form of shares, loan notes,
warrants or other financial instruments recognised at the fair value on the
date of receipt. Given that fees related to this work are success based, there
is a significant risk of reversal of the variable revenue and therefore the
performance obligation is satisfied at a point in time when the transaction is
completed. The combination of corporate placing commissions and corporate
finance advisory fees are referred to as corporate success fees.
Employee benefits
The Group contributes to employees' individual money purchase personal pension
schemes. The assets of the schemes are held separately from those of the Group
in independently administered funds. The amount charged to the statement of
comprehensive income represents the contributions payable to the schemes in
respect of the period to which they relate.
Short-term employee benefits are those that fall due for payment within 12
months of the end of the period in which employees render the related service.
The cost of short-term benefits is not discounted and is recognised in the
period in which the related service is rendered. Short-term employee benefits
include cash-based incentive schemes and annual bonuses.
Share-based payments
The share option programmes allow Group employees to receive remuneration in
the form of equity-settled share-based payments granted by the Company.
The cost of equity-settled transactions with employees is measured by
reference to the fair value at the date at which they are granted. The fair
value of the options granted is measured using an option valuation model. The
cost of equity-settled transactions is recognised, together with a
corresponding increase in equity, over the period in which the performance or
service conditions are fulfilled (the vesting period), ending on the date on
which the relevant employees become fully entitled to the award (the vesting
date). The cumulative expense recognised for equity settled transactions, at
each reporting date until the vesting date, reflects the extent to which the
vesting period has expired and the Group's best estimate of the number of
equity instruments that will ultimately vest. The statement of comprehensive
income charge or credit for a period represents the movement in cumulative
expense recognised at the beginning and end of that period.
Where the terms of an equity-settled award are modified, an incremental value
is calculated as the difference between the fair value of the repriced option
and the fair value of the original option at the date of re-pricing. This
incremental value is then recognised as an expense over the remaining vesting
period in addition to the amount recognised in respect of the original option
grant.
Where an equity-settled award is cancelled or settled (that is, cancelled with
some form of compensation) it is treated as if it had vested on the date of
cancellation and any expense not yet recognised for the award is recognised
immediately.
However, if a new award is substituted for the cancelled award and is
designated as a replacement award on the date that it is granted, the
cancelled and new awards are treated as if they were a modification of the
original award, as described in the previous paragraph. Any compensation paid
up to the fair value of the award is accounted for as a deduction from equity.
Where an award is cancelled by forfeiture, when the vesting conditions are not
satisfied, any costs already recognised are reversed (subject to exceptions
for market conditions).
In all instances, the charge/credit is taken to the statement of comprehensive
income of the Group or Company by which the individual concerned is employed.
Employee Share Ownership Trust (ESOT)
The Company has established an ESOT. The assets and liabilities of this trust
comprise shares in the Company and loan balances due to the Company. The Group
includes the ESOT within these consolidated Financial Statements and therefore
recognises a Treasury shares reserve in respect of the amounts loaned to the
ESOT and used to purchase shares in the Company. Any cash received by the ESOT
on disposal of the shares it holds, will be used to repay the loan to the
Company.
The costs of purchasing Treasury shares are shown as a deduction against
equity. The proceeds from the sale of own shares held increase equity. Neither
the purchase nor sale of treasury shares leads to a gain or loss being
recognised in the consolidated statement of comprehensive income.
Income taxes
Income tax on the profit or loss for the years presented, comprising current
tax and deferred tax, is recognised in the statement of comprehensive income
except to the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using rates enacted or substantively enacted at the reporting year-end date
and any adjustment to tax payable in respect of previous years.
Deferred tax is provided for temporary differences, at the reporting year-end
date, between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes. The following temporary differences
are not provided for;
· goodwill which is not deductible for tax purposes;
· the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit; and
· temporary differences relating to investments in subsidiaries to
the extent that they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the reporting period end
date (note 19).
A deferred tax asset is recognised for all deductible temporary differences
and unused tax losses only to the extent that it is probable that future
taxable profits will be available against which the assets can be utilised.
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and
impairment. Depreciation is calculated, using the straight-line method, to
write down the cost or revalued amount of plant and equipment over the assets'
expected useful lives, to their residual values, as follows:
Computers, fixtures and
fittings
- 4 to 7 years
Intangible assets
Measurement
Intangible assets with finite useful lives that are acquired separately are
measured, on initial recognition at cost. Following initial recognition, they
are carried at cost less accumulated amortisation and any accumulated
impairment. The cost of intangible assets acquired in a business combination
is their fair value at the date of acquisition.
Intangible assets other than goodwill are amortised over the expected pattern
of their consumption of future economic benefits, to write down the cost of
the intangible assets to their residual values as follows:
Client relationships
- 10 to 12 years
Brand
- 2 years
The amortisation period and method for an intangible asset are reviewed at
least at each financial year end. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the
asset or its residual value are accounted for by changing the amortisation
period or method.
Impairment
The carrying amounts of the Group's intangible assets, excluding goodwill, are
reviewed when there is an indicator of impairment and the asset's recoverable
amount is estimated.
The recoverable amount is the higher of the asset's fair value less costs to
sell (or net selling price) and its value-in-use. Value-in-use is the
discounted present value of estimated future cash inflows expected to arise
from the continuing use of the asset and from its disposal at the end of its
useful life. Where the recoverable amount of an individual asset cannot be
identified, it is calculated for the smallest cash-generating unit (CGU) to
which the asset belongs. A CGU is the smallest identifiable group of assets
that generates cash inflows independently.
When the carrying amount of an asset (or CGU) exceeds its recoverable amount,
the asset (or CGU) is considered to be impaired and is written down to its
recoverable amount. An impairment loss is immediately recognised as an
expense. Any subsequent reversal of impairment credited to the statement of
comprehensive income shall not cause the carrying amount of the intangible
asset to exceed the carrying amount that would have been determined had no
impairment been recognised.
Impairment of assets
Goodwill and other intangible assets that have an indefinite life are not
subject to amortisation, they are tested annually for impairment. Other assets
are tested for impairment when any changes in circumstance indicate the
carrying amount is possibly not recoverable. An impairment loss is recognised
when the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell
and the value in use. Goodwill is allocated to cash generating units for the
purpose of assessing impairment, assets (excluding goodwill) are grouped
together based on the assets that independently generates cash flow whose cash
flow is largely independent of the cash flows generated by other assets (cash
generating units).
Leased assets
Measurement and recognition of leases as a lessee
For any new lease contracts entered into on or after 1 April 2019, as
permitted under IFRS 16, the Group recognises a right of use asset and a lease
liability except for:
· Leases with a term of 12 months or less from the lease
commencement date
· Leases of low value assets
Lease liabilities are measured at the present value of the unpaid lease
payments discounted using an incremental borrowing rate.
Right of use assets are initially measured at the amount of the lease
liabilities plus initial direct costs, costs associated with removal and
restoration and payments previously made. Right of use assets are amortised on
a straight-line basis over the term of the lease.
Lease liabilities are subsequently increased by the interest charge using the
incremental borrowing rate and reduced by the principal lease.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's
balance sheet when the Group becomes a party to the contractual provisions of
the instrument.
Financial assets and liabilities
Investments are recognised and derecognised on the trade date where the
purchase or sale of an investment is under a contract whose terms require
delivery of the investment within the timeframe established by the market
concerned, and are initially measured at fair value, plus transaction costs,
except for those financial assets classified as at fair value through profit
or loss, which are initially measured at fair value.
Assets and liabilities are presented net where there is a legal right to
offset and an intention to settle in that way.
The three principal classification categories for financial assets are:
measured at amortised cost, fair value through other comprehensive income
(FVOCI) and fair value through profit or loss (FVTPL). The classification of
financial assets under IFRS 9 is generally based on the business model in
which a financial asset is managed and its contractual cash flow
characteristics.
Financial assets are not reclassified after their initial recognition unless
the Group changes its business model for managing financial assets, in which
case all affected financial assets are reclassified on the first day of the
first reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the
following conditions and is not designated as at FVTPL:
· it is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
· its contractual terms give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount
outstanding.
On initial recognition of an equity investment that is not held for trading,
the Group may irrevocably elect to present subsequent changes in the
investment's fair value in OCI. This election is made on an
investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as
described above are measured at FVTPL. On initial recognition, the Group may
irrevocably designate a financial asset that otherwise meets the requirements
to be measured at amortised cost or at FVOCI as at FVTPL if doing so
eliminates or significantly reduces an accounting mismatch that would
otherwise arise.
Assets held at FVTPL are subsequently measured at fair value. Net gains and
losses, including any interest or dividend income, are recognised in profit or
loss.
Financial assets at amortised cost are subsequently measured at amortised cost
using the effective interest method. The amortised cost is reduced by
impairment losses. Trade receivables and other receivables are measured and
carried at amortised cost using the effective interest method, less any
impairment. If impaired, the carrying amount of other receivables is reduced
by the impairment loss directly and a charge is recorded in the Income
Statement. For trade receivables, the carrying amount is reduced by the
expected credit lifetime losses under the simplified approach permitted under
IFRS9. Subsequent recoveries of amounts previously written off are credited
against the allowance account and changes in the carrying amount of the
allowance account are recognised in the Income Statement.
Equity investments at FVOCI are subsequently measured at fair value. Dividends
are recognised as income in profit or loss unless the dividend clearly
represents a recovery of part of the cost of the investment. Other net gains
and losses are recognised in OCI and are never reclassified to profit or loss.
The following financial assets & liabilities are held at FVTPL;
investments and deferred consideration. The following financial assets and
liabilities are held at amortised cost; Cash and cash equivalents, trade and
other receivables, contract assets, trade and other payables and lease
liabilities.
Trade payables
Trade payables principally comprise amounts outstanding for trade purchases
and ongoing costs. The Directors consider that the carrying amount of trade
payables approximates to their fair value.
Deferred consideration
Deferred consideration is recognised at the discounted present value of
amounts payable. After initial recognition, it is rebased over the period in
which the consideration is payable, with the unwinding of the discount being
taken to the statement of comprehensive income.
4. Critical accounting judgements and key sources of estimation and uncertainty
The preparation of financial statements in accordance with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including reasonable expectations of future
events. The estimates and judgements that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below:
Identification and classification of discontinued operations and disposal group assets and liabilities
Management was required to assess both divisions against criteria set out in IFRS 5 on whether they would be classed as discontinued operations. During the year, the Group pursued a sale of both the WM and CM divisions. Both sales were judged to be highly probable at year end and so have been classified as 'held for sale'. The sale of the divisions were deemed to be highly probable on the date bids were received from the preferred bidders. This was 31(st) October 2023 for WM and 15(th) February 2024 for CM. At year end both divisions have been classed as such and assets and liabilities held for sale have been allocated to the associated disposal groups.
Post year end, the WM sale fell through and there was an initial attempt to find an alternative buyer. However, following the successful sale of the CM business and positive impact that has on the group's cash flows and regulatory capital, management felt that this transaction essentially gave more time to make a decision on the future of the WM division. The intention to continue operating the WM division became the preferred option. As this decision was made post year end, it is not indicative of circumstances that existed at the year end, an adjustment is therefore not necessary to be made at 31 March 2024 and the WM division remains classified as held for sale at that date.
The Statement of Comprehensive Income shows the results from the discontinued operations. The Statement of Financial Position has the assets and liabilities held for sale. These have been allocated to the disposal groups as detailed in note 6.
Amortisation and impairment of non-financial assets
As noted above, the Group estimates the useful economic lives of intangible
assets, in order to calculate the appropriate amortisation charge. This is
done by the Directors using their knowledge of the markets and business
conditions that generated the asset, together with their judgement of how
these will change in the foreseeable future. Note 14 outlines the details of
the value in use calculation and the assumptions made in this.
Where an indicator of impairment exists, value in use calculations are
performed to determine the appropriate carrying value of the asset. The value
in use calculation requires the Directors to estimate the future cash flows
expected to arise for the CGU and a suitable discount rate in order to
calculate present value. Where the actual future cash flows are less than
expected, a material impairment loss may arise.
Goodwill is subject to an annual impairment review which is performed by
comparing the recoverable amount of the CGU to its carrying value. The
recoverable amount is the higher of the value in use and fair value to sell
less costs.
Single enlarged CGU
The assets directly relating to the Harpsden acquisition, together with the
in-place workforce and directly attributable revenue and costs were previously
separated in an independent CGU within WH Ireland. The goodwill and
intangibles were previously allocated to the Harpsden CGU, these have now been
reallocated to the WM CGU. There no longer exists cash inflows for Harpsden
that are largely independent. Instead the cash inflows for Harpsden are
dependent on, and can be substituted with, cash inflows in respect of the WM
division as a whole. It is therefore now the view of management that a change
in CGUs is justified due to the further integration of the Harpsden clients
and operations into the wider WM division.
Although the integration of Harpsden into the wider WM division has occurred
over time, there are a few factors that have triggered a change in
identification. The main factor is the interdependence on cash inflows for
Harpsden on the cash inflows of the WM division. Other items judged to trigger
this change in identification include redistribution of Harpsden AUM across
the division, deregulation of the Harpsden entity with the FCA, internal
reporting of the branches within the WM division and the use of group
resources being shared across the division.
Investments in subsidiaries
Where an indicator of impairment exists, management uses its judgement to
assess the carrying value of the asset by determining the fair value by
independent assessment of the carrying value of the business units. The
carrying value of investments in subsidiaries, prior to impairment, on 31
March 2024 was £26.4m (FY23: £26.4m) (see note 16).The market capitalisation
of WH Ireland Group Plc is £9.5m which is less than the £26.4m holding of
WHI Ltd and Harpsden Ltd together, which could indicate an impairment.
At the year-ended 31 March 2024, the carrying values of the investments in
subsidiaries were consequently assessed for indicators of impairment. The
recoverable value of the two CGUs were calculated using the Value in Use of WM
and the sale price of CM.
The value of investment in subsidiaries were considered in the sum of two
parts, for the two CGUs. The WM CGU was valued by calculating its value in use
(note 14). CM was assessed with reference to the consideration for the
disposal of the division which occurred post year end (see note 33).
The sum of the two parts was £19.85m, resulting in an impairment of £6.6m
(note 16).
5. Segment information
The Group has two principal operating segments, WM (WM) and CM (CM) and a
number of central office costs that do not fall into either of these operating
segments. At 31 March 2024 both of these operating segments met the criteria
in IFRS 5 to be classified as discontinued operations (see note 6 & 33).
This information has been disclosed to enable users of the financial
statements to see the breakdown of the groups result from discontinued
operations by segment.
WM offers investment management advice and services to individuals and
contains our Wealth Planning business, giving advice on and acting as
intermediary for a range of financial products. CM provides corporate finance
and corporate broking advice and services to companies and acts as Nominated
Adviser (Nomad) to clients traded on the AIM and contains our Institutional
Sales and Research business, which carries out stockbroking activities on
behalf of companies as well as conducting research into markets of interest to
its clients.
Both divisions are located in the UK. Each reportable segment has a segment
manager who is directly accountable to, and maintains regular contact with,
the Chief Executive Officer.
No customer represents more than ten percent of the Group's revenue (FY23:
nil).
The following tables represent revenue and cost information for the Group's
business segments. The key line items below are not consistent with the
statement of comprehensive income.
Year ended 31 March 2024 WM CM Central Office Group
£'000 £'000 £'000 £'000
Revenue 11,891 9,574 - 21,465
Direct costs (9,628) (9,448) - (19,076)
Contribution 2,263 126 - 2,389
Indirect costs* (2,894) (1,963) - (4,857)
Underlying loss before tax (631) (1,837) - (2,468)
Amortisation of acquired brand and client relationships (273) - - (273)
Release of deferred consideration - - 160 160
Redundancy costs (380) (564) - (944)
Holiday Leave paid on termination (43) (83) - (126)
Project Costs (865) (527) - (1,392)
Onerous contracts - (447) - (447)
Client settlement (152) - - (152)
Investment losses - - (583) (583)
Payaway on investment losses - 274 - 274
Loss before tax (2,344) (3,184) (423) (5,951)
Tax - - 12 12
Loss for the year (2,344) (3,184) (411) (5,939)
*Includes £329k auditor's remuneration as follows:
Audit of these financial statements £80k (FY23: £60k)
Amounts payable to the principal auditors and their associates in respect of:
o audit of financial statements of subsidiaries pursuant to legislation
£130k (FY23: £115k)
o audit related assurance services £59k (FY23: £50k)
o audit of financial statements relating to prior year £60k (FY23: £50k)
Year ended 31 March 2024 WM CM Group
£'000 £'000 £'000
Statutory operating costs included the following:
Amortisation 273 - 273
Depreciation 56 60 116
Depreciation from Right of Use assets 142 93 235
Year ended 31 March 2023 WM CM Central Office Group
£'000 £'000 £'000 £'000
Revenue 14,443 12,245 - 26,688
Direct costs (11,400) (11,604) - (23,004)
Contribution 3,043 641 - 3,684
Indirect costs (3,314) (2,357) - (5,671)
Underlying profit / (loss) before tax (271) (1,716) - (1,987)
Amortisation of acquired brand and client relationships (496) - - (496)
Changes in fair value and finance cost of deferred consideration - - (173) (173)
Other income 1,957 - - 1,957
Investment losses - - (2,683) (2,683)
Payaway on investment losses - 1,559 - 1,559
Profit / (loss) before tax 1,190 (157) (2,856) (1,823)
Tax - - - -
Profit / (loss) for the year 1,190 (157) (2,856) (1,823)
The segment note has been restated to be consistent with the current year
presentation.
Year ended 31 March 2023 WM CM Group
£'000 £'000 £'000
Statutory operating costs included the following:
Amortisation 496 - 496
Depreciation 141 90 231
Depreciation from Right of Use assets 218 148 366
Segment assets and segment liabilities are reviewed by the Chief Executive
Officer based on the consolidated statement of financial position.
Accordingly, this information is replicated in the Group Consolidated
statement of financial position. As no measure of assets or liabilities for
individual segments is reviewed regularly by the Chief Executive Officer, no
disclosure of total assets or liabilities has been made.
The accounting policies of the operating segments are the same as those
described in the summary of significant accounting policies.
Revenue disaggregated by division and timing of recognition below:
Year ended 31 March 2024 WM CM Group
£'000 £'000 £'000
Point in time 1,107 5,541 6,648
Over time 10,784 4,033 14,817
11,891 9,574 21,465
Year ended 31 March 2023 WM CM Group
£'000 £'000 £'000
Point in time 1,528 8,011 9,539
Over time 12,915 4,234 17,149
14,443 12,245 26,688
The following movement of contract liabilities was recognised in the year:
As at 31 Mar 2023 Recognised in revenue Amounts deferred As at 31 Mar 2024
Group £'000 £'000 £'000 £'000
Contract liabilities 7 (7) 14 14
Contract liabilities relate to deferred recognition of retainer fees invoices
quarterly. Contract assets relate to accrued management fee income and the
decrease from £3m to £2.48m at 31 March 2024 is linked to the decrease in WM
fee income for the period. Refer to note 20.
6. Discontinued operations and assets & liabilities held for sale
During the year, management entered into separate discussions to sell both
divisions of the group; WM and CM. This decision was taken in line with the
Group's strategy on returning the business to sustainable profitability.
Consequently, all non-current and associated current assets and liabilities
were classified as a disposal group. WM has been judged to be held for sale
from 31 October 2023 and CM from 15 February 2024. Assets and Liabilities held
for sale have been allocated to the associated disposal groups on these dates.
Measurement of the disposal group's assets is based on the lower of their
carrying amount and fair value less costs to sell.
Financial performance information
Year ended Year ended
31 Mar 2024 31 Mar 2023
Note £'000 £'000
Revenue 21,465 26,688
Administrative expenses (26,665) (25,416)
Expected credit loss 20 (328) (239)
Operating loss (5,528) 1,033
Taxation 10 - -
Post-tax (loss)/ profit from discontinuing operations (5,528) 1,033
The carrying amounts of assets and liabilities in the disposal group may be
analysed as follows:
Assets and liabilities of disposal group classified as held for sale
Year ended 31 Mar 2024 WM CM Total
Assets classified as held for sale Note £'000 £'000 £'000
Intangible assets 15 3,490 - 3,490
Goodwill 14 3,539 - 3,539
Property, plant and equipment 13 255 214 469
Investments - warrants 17 - 95 95
Right of use asset 18 378 23 401
Total assets held for sale 7,662 332 7,994
Year ended 31 Mar 2024 WM CM Total
Liabilities directly associated with assets classified as held for sale Note £'000 £'000 £'000
Lease liability 18 (272) (21) (293)
Total liabilities held for sale (272) (21) (293)
Year ended 31-Mar-24 Year ended 31-Mar-23
£'000 £'000
Cash flows from operating activities (5,306) 1,305
Cash flows from investing activities (16) (475)
Cash flows from financing activities (340) (483)
Total cash movement from discontinued activities (5,662) 347
7. Employee benefit expense
Non-salaried staff are commission-only brokers and therefore do not receive a
salary.
Year ended Year ended
31 Mar 2024 31 Mar 2023
Group £'000 £'000
Wages and salaries 10,970 11,970
Bonuses 618 1,537
Social security costs 1,442 1,734
Other pension costs 469 539
13,499 15,780
Non salaried staff 1,592 605
Charge for share options granted to employees (note 30) 338 359
15,429 16,744
Year ended Year ended
31 Mar 2024 31 Mar 2023
Company £'000 £'000
Wages and salaries 249 207
The average number of persons (including Directors) employed during the year
was:
Year ended Year ended
Group 31 Mar 2024 31 Mar 2023
Executive and senior management 6 6
CM 36 50
WM 68 74
Support staff 20 30
Salaried staff 130 160
Non salaried staff 3 3
Total 133 163
Year ended Year ended
Company 31 Mar 2024 31 Mar 2023
Executive and senior management 3 4
The total amount paid to Directors in the period, including social security
costs was £0.8m (FY23: £0.9m). Full details of Directors' remuneration,
including that of the highest paid Director, are disclosed in the Remuneration
Report of the financial statements.
8. Finance income and expense
Year ended Year ended
31 Mar 2024 31 Mar 2023
Group £'000 £'000
Bank interest receivable 12 10
Other interest - -
Finance income 12 10
-
Interest payable on lease liabilities classified within result from 21 51
discontinued operations
Release of deferred consideration (see note 24) (160) 173
Finance expense (139) 224
9. Other income
Year ended Year ended
31 Mar 2024 31 Mar 2023
Group £'000 £'000
VAT refund - 2,175
Total other income - 2,175
During the previous year the Group received a refund of £2.2m from HMRC. This
was following confirmation from HMRC that the supply of certain Group services
were exempt from VAT during the period from 2017 to 2022.
10. Taxation
Year ended Year ended
31 Mar 2024 31 Mar 2023
Group £'000 £'000
*Restated
Current tax expense:
United Kingdom corporation tax at 25% (FY23: 19%) - -
Adjustment in respect of prior year (12) -
Total current tax (12) -
Deferred tax credit (note 19):
Current year - -
Effect of change in tax rate - -
Total deferred tax - -
Total tax (12) -
*The 2023 taxation note has been restated to reflect the recognition of a
deferred tax asset to offset the deferred tax liability. Refer to Note 19 for
further details.
The tax credit for the year and the amount calculated by applying the standard
United Kingdom corporation tax rate of 25% (FY23: 19%) to profit before tax
can be reconciled as follows:
Year ended Year ended
31 Mar 2024 31 Mar 2023
Group £'000 £'000
Loss before tax (5,951) (1,823)
Tax expense using the United Kingdom corporation tax rate of 25% (FY23: 19%) (1,488) (346)
Other expenses not tax deductible 313 334
Income not chargeable to tax - (11)
Movement in unrecognised deferred tax 1,163 9
Other amounts - 14
Total tax (credit) / charge (12) -
11. Dividend
No dividend is proposed in respect of 2024 (FY23: none).
12. Earnings per share (EPS)
Basic EPS is calculated by dividing the profit or loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the year, excluding ordinary shares purchased by the Company
(note 28).
Diluted EPS is the basic EPS, adjusted for the effect of the conversion into
fully paid shares of the weighted average number of all employee share options
outstanding. In a year when the Company presents positive earnings
attributable to ordinary shareholders, anti-dilutive options represent options
issued where the exercise price is greater than the average market price for
the period.
Year ended Year ended
31 Mar 2024 31 Mar 2023
Group
Weighted average number of shares in issue during the period 175,718 59,172
Effect of dilutive share options - -
(thousands)
175,718 59,172
Total
Post-tax loss from continuing operations (£'000) (411) (2,856)
(Loss)/profit from discontinuing operations incl. tax (£'000) (5,528) 1,033
Earning per share - basic and diluted
From continuing operations (0.23p) (4.83p)
From discontinuing operations (3.15p) 1.75p
Total (3.38p) (3.08p)
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below:
*The 2023 Earnings per share note has been restated to reflect the recognition
of a deferred tax asset to offset the deferred tax liability. Refer to Note 19
for further details.
13. Property, plant and equipment
Group Company
Computers, Computers,
fixtures and fittings fixtures and fittings
£'000 £'000
Cost
At 31 March 2022 5,748 37
Additions 475 -
Disposal - (4)
At 31 March 2023 6,223 33
Additions 16 -
Transfer to asset held for sale (6,239) -
At 31 March 2024 - 33
Depreciation and impairment
At 31 March 2022 5,423 33
Depreciation charge 231 -
At 31 March 2023 5,654 33
Depreciation charge 116 -
Transfer to asset held for sale (5,770) -
At 31 March 2024 - 33
Net book values
At 31 March 2024 - -
At 31 March 2023 569 -
Property, plant and equipment were transferred to the WM and CM disposal
groups on 31 October 2023 and 15 February 2024 respectively.
Included in the above, are software costs capitalised in the year with a net
book value at 31 March 2024 of £9k (FY23: £116k).
14. Goodwill
Goodwill acquired in a business combination is allocated to a cash generating
unit (CGU) that will benefit from that business combination. As explained in
note 4, the goodwill is now attributed to the WM CGU.
The carrying amount of goodwill acquired in the acquisition of Harpsden WM is
set out below:
Year ended Year ended
31 Mar 2024 31 Mar 2023
Group £'000 £'000
Beginning of year 3,539 3,539
Transfer to asset held for sale (3,539) -
End of year - 3,539
Goodwill is assessed annually for impairment and the recoverability has been
assessed at 31 March 2024 by comparing the carrying value of the CGU to which
the goodwill is allocated against its recoverable amount. The recoverable
amount is the higher of the CGU's fair value less cost to sell and the value
in use. The value in use has been calculated using pre-tax discounted cash
flow projections based on the most recent budgets and forecasts approved by
the Board of Directors.
The projections cover a five-year period and a terminal multiple has been
applied to the cash-flows extrapolating the projections consistent with the
assumed indefinite useful life of the goodwill. The projections are based on a
four-year forecast that has been approved by the board, with the fifth year
being extrapolated using the trend in the forecast.
The newly enlarged WM CGU recoverable amount was calculated as £18.0m, with a
headroom of £10m which indicates that there is no impairment. The main
underlying assumptions used in the calculations are the pre-tax discount rate,
the short-term growth in revenue and expenditure and the long-term growth rate
to perpetuity. The revenue growth used in the cash flow forecast is based on
the AUM forecasts multiplied by the relevant yields. AUM forecasted growth
ranges from 0.0% to 8.2%. Cash outflows are forecasted individually, in an
absence of specific detail these costs are set to increase by 5% in line with
inflation. A pre-tax discount rate of 17.0% has been used. This is based on
the Group's assessment of the risk-free rate of interest and specific risks
relating to the division. A 2% long-term growth rate has been applied, which
is prudent when compared against the growth rates used in the forecast
calculations for the first five years.
Sensitivity analysis has been performed and no impairment would arise if the
following scenarios occurred:
· A fall in AUM in FY25 to FY29 of 12% each year would result in a
break-even position
· Costs for the entire business applying to the WM CGU - if all
forecasted costs were applied to the WM CGU, the headroom would reduce to
£4m. Still, this would not result in an impairment of the CGU
This amount was transferred to the WM disposal group on 31 October 2023.
15. Intangible assets
Client relationships arise when the group acquires a broker business with an
existing client base. The assets below represent the fair value of future
benefits arising from these client relationships. Amortisation of client
relationships is charged to administrative expenses in note 6 on a
straight-line basis over the estimated useful lives (2 to 12 years). No
impairment indicators were present for the acquired client relationship
contracts.
Client
relationships Brand Total
Group £'000 £'000 £'000
Cost
At 31 March 2022 8,731 75 8,806
Additions - - -
At 31 March 2023 8,731 75 8,806
Additions - - -
Transfer to asset held for sale (8,731) (75) (8,806)
At 31 March 2024 - - -
Amortisation
At 31 March 2022 4,500 47 4,547
Charge for the year 468 28 496
At 31 March 2023 4,968 75 5,043
Charge for the year 273 - 273
Transfer to asset held for sale (5,241) (75) (5,316)
At 31 March 2024 - - -
Net book values
At 31 March 2024 - - -
At 31 March 2023 3,763 - 3,763
During the year ended 31 March 2021, the group acquired client relationships
totalling £4.2m as part of the Harpsden acquisition and at the year ending 31
March 2024 the net book value was £3.25m (FY23: £3.37m) and remaining useful
economic life of 7 years (FY23: 8 years). An intangible asset was also
recognised representing the Harpsden brand totalling £75k and at the year
ending 31 March 2024 the net book value was fully amortised.
An intangible asset was recognised relating to the client relationships
brought in by Robert Race when he joined the group. At the year ended 31 March
2024 the net book value was £244k (FY23: £367k) and remaining useful
economic life of 2 years (FY23: 3 years). The Harpsden and Robert Race client
relationships total net book value comes to £3.49m.
These were transferred to the WM disposal group on 31 October 2023.
The company did not have any intangible assets either at 31 March 2024 or 31
March 2023.
16. Subsidiaries
Year ended Year ended
Note 31 Mar 2024 31 Mar 2032
Company £'000 £'000
Beginning of year 26,448 26,448
Impairment 4 (6,600) -
End of year 19,848 26,448
Investments in subsidiaries are stated at cost less impairment.
The Company's subsidiaries, all of which are included in the consolidated
financial statements, are presented below:
Subsidiary Country of incorporation Principal activity Class of shares Proportion held by Group Proportion held by Company
WH Ireland Limited England & Wales WM and CM Ordinary 100% 100%
Harpsden WM Limited England & Wales WM Ordinary 100% 100%
WH Ireland (Financial Services) Limited England & Wales Dormant Ordinary 100% -
Readycount Limited England & Wales Dormant Ordinary 100% 100%
Stockholm Investments Limited England & Wales Dormant Ordinary 100% 100%
ARE Business and Professional Limited England & Wales Dormant Ordinary 100% -
SRS Business and Professional Limited England & Wales Dormant Ordinary 100% -
WH Ireland Nominees Limited England & Wales Nominee Ordinary 100% -
WH Ireland Trustee Limited England & Wales Trustee Ordinary 100% -
Fitel Nominees Limited England & Wales Nominee Ordinary 100% -
The registered office of all companies listed above is 24 Martin Lane, London,
EC4R 0DR.
The following dormant subsidiaries are guaranteed by the Company and therefore
take advantage of the Companies Act (2006) in obtaining exemption from an
individual audit:
Subsidiary Country of incorporation Company registration number
WH Ireland (Financial Services) Limited England & Wales 4279349
Readycount Limited England & Wales 3164863
Stockholm Investments Limited England & Wales 4215675
ARE Business and Professional Limited England & Wales 3681185
SRS Business and Professional Limited England & Wales 4238969
WH Ireland Nominees Limited England & Wales 2908691
WH Ireland Trustee Limited England & Wales 3559373
Fitel Nominees Limited England & Wales 1401140
17. Investments
Group
Quoted Warrants Total
Other financial assets at fair value through profit or loss £'000 £'000 £'000
At 31 March 2022 1 2,964 2,965
Additions - 286 286
Fair value loss - (2,060) (2,060)
Disposals (1) (370) (371)
At 31 March 2023 - 820 820
Additions - 184 184
Fair value loss - (597) (597)
Disposals - (312) (312)
Transfer to asset held for sale - (95) (95)
At 31 March 2024 - - -
Total investments at 31 March 2024 - - -
Total investments at 31 March 2023 - 820 820
Financial assets at fair value through profit or loss include equity
investments other than those in subsidiary undertakings. These are measured at
fair value with fair value gains and losses recognised through profit and
loss.
Other investments, in the main, comprise financial assets designated as fair
value through profit or loss and include warrants and equity investments.
These were transferred to the CM disposal group on 15 February 2024.
Warrants may be received during the ordinary course of business and are
designated as fair value through profit or loss. There is no cash
consideration associated with the acquisition.
Fair value, in the case of quoted investments, represents the bid price at the
reporting year-end date. In the case of unquoted investments, the fair value
is estimated by reference to recent arm's length transactions. The fair value
of warrants is estimated using established valuation models.
The fair value of the warrants was determined using the Black Scholes model
and grouped within level 3 with fair value measurements derived from formal
valuation techniques (see note 25). The key inputs into this calculation are
the share price as at 31 March 2024, exercise price, risk free interest rate
and volatility which is based on the share price movements during the same
length as the remaining time of exercise.
Year ended Year ended
31 Mar 2024 31 Mar 2023
Net loss on investments Note £'000 £'000
Fair value loss on warrants (597) (2,060)
Fair value gain / (loss) on investments 21 14 (623)
Total net loss on investments (583) (2,683)
18. Right of use asset and lease liability
Leasehold Properties
£'000
Cost
At 31 March 2022 2,667
Additions 445
Disposals (1,185)
Deferred rent release 125
At 31 March 2023 2,052
Transferred to asset held for sale (2,052)
At 31 March 2024 -
Depreciation and impairment
At 31 March 2022 1,499
Charge for the year 366
Disposal (448)
At 31 March 2023 1,417
Charge for the year 235
Transfer to asset held for sale (1,652)
At 31 March 2024 -
Net book values
At 31 March 2024 -
At 31 March 2023 635
Maturity of discounted lease payments in relation to non-cancellable leases
The table below represents the minimum lease payments in relation to
non-cancellable leases where the group is a lessee:
Group
Payable within 1 year Payable in 2 to 5 years Payable after more than 5 years Total contractual payments
Group £'000 £'000 £'000 £'000
2024 97 196 - 293
2023 319 281 12 612
The leases were transferred to the WM and CM disposal groups on 31 October
2023 and 15 February 2024 respectively.
The following represents the lease expense in relation to leases which is
recognised in the statement of comprehensive income:
Year ended Year ended
31 Mar 2024 31 Mar 2023
Group £'000 £'000
Depreciation of right of use asset 235 366
Deferred rent release - (125)
Interest charge 21 51
Total charge 256 292
Nature of leases
The Group leases a number of properties in the jurisdictions it operates.
These leases are usually for a fixed term although the Group sometimes
negotiates break clauses in its leases. On a case-by-case basis, the Group
will consider whether the absence of a break clause would expose the group to
excessive risk. Typically factors considered in deciding to negotiate a break
clause include:
· the length of the lease term;
· the economic stability of the environment in which the property
is located; and
· whether the location represents a new area of operations for the
Group
As at 31 March 2024, the carrying amounts of the lease liabilities are not
reduced by the amounts that would not be paid as a result of exercising the
break clauses because the Group does not anticipate exercising its rights to
the break clauses.
The total cash outflow for leases, including short-term leases, in the year
ending 31 March 2024 was £340k (FY23: £483k)
Payments associated with short-term leases and all leases of low-value assets
are recognised on a straight-line basis in administrative expenses in note 6.
Short-term leases are leases with a lease term of 12 months or less without a
purchase option, short term leases recorded as an expense during the year was
£115k.
The Company did not have any right of use assets or lease liabilities either
at 31 March 2024 or 31 March 2023.
19. Deferred tax assets and liabilities
Deferred tax is provided for temporary differences, at the reporting year-end
date, between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes using a tax rate of 25% (FY23: 19%).
A deferred tax asset is recognised for all deductible temporary differences
and unutilised tax losses only to the extent that it is probable that future
taxable profits will be available against which the assets can be utilised.
Deferred tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
The deferred tax liability balance has been restated during the year . There
is a net nil deferred tax position as at 31 March 2024 and 31 March 2023.
Year ended 31 March 2024 Asset Liability Net
£'000
£'000
£'000
Business Combinations - (596) (596)
Trading losses carried forward 596 - 596
Deferred tax asset/ (liability) 596 (596) -
Set off (596) 596 -
Net deferred tax asset/ (liability) - - -
Year ended 31 March 2023 Asset Liability Net
£'000
£'000
£'000
(restated)
Business Combinations - (663) (663)
Trading losses carried forward 663 - 663
Deferred tax asset/ (liability) 663 (663) -
Set off (663) 663 -
Net deferred tax asset/ (liability) - - -
The carrying amount of the deferred tax asset is reviewed at each reporting
date and is only recognised to the extent that it is probable that future
taxable profits of the Group will allow the asset to be recovered.
The unrecognised tax losses and fixed asset timing differences amount to
£18.3m (FY23: £17.1m). No deferred tax has been recognised in respect of
these losses due to the uncertainty over the timing of future profits.
The change in deferred tax assets and liabilities during the year was as
follows:
Asset Liability Net
£'000
£'000
£'000
Balance as at 1 April 2022 542 (542) -
Released to Consolidated statement of comprehensive income 121 (121) -
Balance as at a 31 March 2023 663 (663) -
Released to Consolidated statement of comprehensive income (67) 67 -
Balance as at 31 March 2024 596 (596) -
The Company had no deferred tax balances either at 31 March 2024 or 31 March
2023.
Restatement of deferred tax asset
The Group has a deferred tax liability in relation to temporary differences on
intangible assets recognised as part of acquisition accounting for business
combinations in the Group's consolidated financial statements. Such intangible
assets are not permitted to be recognised in the acquiree's separate financial
statements.
Upon acquisition accounting, the Group did not reassess whether an additional
deferred tax asset could have been recognised to the extent of the additional
deferred tax liability that was recognised in the consolidated financial
statements.
There has previously been a diversity of practice in relation to the
accounting treatment for the recognition of deferred tax assets on business
combinations in accordance with IAS 12. There has been solidification
following publication of recent reviews, which have clarified the position,
resulting in the recognition of a deferred tax asset on consolidation to the
extent the Group has unused tax losses available, to offset the deferred tax
liability.
This is because the taxable temporary differences associated with the
intangible assets relates to the same tax authority (UK) as the Group as such
the asset meets the criteria for recognition. In addition, the offset criteria
of IAS 12 are also met and therefore the deferred tax amounts are presented
net in the consolidated statement of financial position. The additional
deferred tax asset recognised for tax attributes within the existing Group is
credited to the consolidated statement of comprehensive income.
This change in accounting treatment has been applied retrospectively by
restating each of the affected financial statement line items as follows. A
third consolidated statement of financial position has been presented as of 31
March 2022 and the impact of the adjustment is below.
Consolidated statement of financial position:
2022 Adjustment 2022
Prior to adjustment
£'000
Restated
£'000
£'000
Deferred tax asset/(liability)
Deferred tax (542) 542 -
Equity
Retained earnings (6,789) 542 (6,247)
2023 Adjustment 2023
£'000
Restated
Prior to adjustment
£'000
£'000
Deferred tax asset/ (liability)
Deferred tax (663) 663 -
Equity
Retained earnings (8,374) 663 (7,711)
The Deferred tax as at 31 March 2022 of £542k above represents the net of the
non-current deferred tax asset and current deferred tax liability that were
previously presented gross in the consolidated statement of financial position
at 31 March 2022.
Consolidated statement of changes in equity:
2022 Adjustment 2022
Prior to adjustment
£'000
Restated
£'000
£'000
Equity
Retained earnings (6,789) 542 (6,247)
2023 Adjustment 2023
£'000
Restated
Prior to adjustment
£'000
£'000
Equity
Retained earnings (8,374) 663 (7,711)
Consolidated statement of profit or loss and other comprehensive income:
2023 Adjustment 2023
£'000
Restated
Prior to adjustment
£'000
£'000
Income tax charge/ (credit) (121) (121) -
Total Profit/ (Loss) for the year (1,944) (121) (1,823)
20. Trade and other receivables
Group Company
31 Mar 2024 31 Mar 2023 31 Mar 2024 31 Mar 2023
£'000 £'000 £'000 £'000
Non-current assets
Amounts owed from Group companies - - 4,676
Current assets
Trade receivables 508 643 - -
Other receivables 874 528 26 14
Contract assets 2,481 3,008 - -
Prepayments 1,235 1,265 18 15
5,098 5,444 44 29
The carrying value of trade and other receivable balances are denominated
fully in British pounds (FY23: 100%).
Contract assets relates to management fee accruals. Management fees are
accrued on a monthly basis and reconciled to fees collected quarterly.
Consideration to IFRS 9 has been made and it has been determined that there is
a low probability of default and therefore the expected credit loss is not
material.
The impact of applying IFRS 9 to intercompany balances for the Company has
been considered and probability of default was assessed and consequently, it
was determined that the expected credit loss is not material.
Fees and charges owed by clients are generally considered to be past due where
they remain unpaid five working days after the relevant billing date. At 31
March 2024, trade receivables (net of provisions for impairment and doubtful
debts) comprised of the following:
Group Company
31 Mar 2024 31 Mar 2023 31 Mar 2024 31 Mar 2023
£'000 £'000 £'000 £'000
Not past due 61 17 - -
Up to 5 days due - - - -
from 6 to 15 days past due 12 - - -
From 16 to 30 days past due 6 - - -
From 31 to 45 days past due 43 467 - -
More than 45 days past due 386 159 - -
508 643 - -
Trade receivables are largely amounts due from retainer clients, who are
invoiced on a quarterly basis in advance. The Group's payment terms are set
out in each client's engagement letter (with a maximum of 30 days).
Consequently, these receivables have no significant financing component and
the Group have applied the simplified approach in line with IFRS 9.
Calculation of loss allowances are measured at an amount equal to lifetime
expected credit losses (ECLs). The approach taken by the Group in arriving at
the expected credit loss is as follows:
Step 1: The Group have determined the appropriate brackets by grouping each
trade receivables based on the ageing structure.
Step 2: Having determined the appropriate groupings, a historical loss rate
(adjusted for forward looking information) was calculated for each age bracket
by reviewing the pattern of payment of trade receivables over the past 12
months.
Step 3: This historical loss rate (adjusted for forward looking information)
has been applied to each ageing bracket of trade receivables as at the balance
sheet date to arrive at an expected credit loss for each grouping. All trade
receivables over 365 days have a 100% historical loss rate loss applied to
them.
Based on the above, the group recognised an expected credit loss of £328k
(FY23: £239k expected credit loss).
The maximum exposure to credit risk, before any collateral held as security,
is the carrying value of each class of receivable set out above.
The Directors consider that the carrying amounts of trade and other
receivables approximate their fair value.
Movements in impairment provisions were as follows:
Group Company
31 Mar 2024 31 Mar 2023 31 Mar 2024 31 Mar 2023
£'000 £'000 £'000 £'000
Opening balance 248 502 - -
Amount released from provision due to recovery (66) (25) - -
Amounts written off, previously fully provided (121) (493) - -
Amount charged to the statement of comprehensive income 394 264 - -
Closing balance 455 248 - -
21. Other investments
Group Company
31 Mar 2024 31 Mar 2023 31 Mar 2024 31 Mar 2023
£'000 £'000 £'000 £'000
Current asset investment 671 922 - -
Restricted cash 873 1,127 - -
Total 1,544 2,049 - -
Current asset investments represent short-term principal positions in the form
of listed and unquoted investments which are held at market value.
Included in current asset investments are unquoted investments totalling a
value of £nil (FY23: £nil).
Restricted cash represents monies held by the Group which have some
restrictions on their conversion to cash. The cash is held by an external
broker which has restrictions on cash in order to comply with margin
requirements.
Included in net loss on investments, in the Consolidated statement of
comprehensive income is the fair value gain and the sale of investments.
Further details can be found in note 17.
22. Cash and cash equivalents
Group Company
31 Mar 2024 31 Mar 2023 31 Mar 2024 31 Mar 2023
£'000 £'000 £'000 £'000
Cash and cash equivalents 4,902 4,234 - -
For the purposes of the cash flow statement, cash and cash equivalents
comprise cash in hand and deposits with banks and financial institutions with
a maturity of up to three months.
Cash and cash equivalents represent the Group's and the Company's money and
money held for settlement of outstanding transactions.
Money held on behalf of clients is not included in cash and cash equivalents
on the statement of financial position. Client money at 31 March 2024 for the
Group was £137k (FY23: £301k). There is no client money held in the Company
(FY23: £nil).
23. Trade and other payables
Group Company
31 Mar 2024 31 Mar 2023 31 Mar 2024 31 Mar 2023
£'000 £'000 £'000 £'000
Trade payables 1,210 1,148 226 12
Amounts due to Group companies - - 312 790
Other payables 192 89 - -
Tax and social security 289 588 - -
Contract liabilities 14 7 - -
Accruals 1,527 2,181 212 334
3,232 4,013 750 1,136
The Directors consider that the carrying amounts of trade and other payables approximate their fair value.
Deferred income relates to retainer fees invoiced in advance and spread over the length of the period, typically quarterly. The balance at year-end was fully recognised in the following financial year.
Amounts due to Group companies are unsecured, interest free and repayable on demand.
24. Provisions
Group Company
Deferred consi- Provision for onerous contracts Other provision £'000 Deferred consi- Other provision £'000
deration deration
At 31 March 2022 2,412 - - 2,412 2,412 - 2,412
Charged to Statement of Comprehensive Income 173 - - 173 173 - 173
Paid during the year (464) - - (464) (464) - (464)
At 31 March 2023 2,121 - - 2,121 2,121 - 2,121
(Credited)/charged to Statement of Comprehensive Income (160) 447 - 287 (160) - 287
Reclassification (354) - 354 - (354) 354 -
Paid during the year (78) - - (78) (78) - (78)
Settled during the year via share issue (654) - - (654) (654) - (654)
At 31 March 2024 875 447 354 1,676 875 354 1,229
Provisions of £1,676k (2023: £2,121k) are included in current liabilities.
Deferred consideration relates to the acquisition of Harpsden and the maximum
amounts payable over a two-year period. The following assumptions were made:
revenue growth of 2%, attrition rate of 3% for larger clients and 10% for
smaller clients, discount rate of 13.5%.
During the year £78k was paid to former shareholders of Harpsden WM Limited
(Harpsden) in relation to the deferred consideration due. A further settlement
to the former shareholders of Harpsden of £654k was made by way of share
issue. The group reached an agreement with the former shareholders on a final
payment of £875k that has been paid after the year end. Following the
settlement agreement, the deferred consideration provision was reduced so that
the carrying value at 31 March 2024 reflects the final agreed settlement
amount of £875k. This resulted in £160k being released and credited to
profit or loss. The remaining excess provision of £354k has been retained by
the Group and reclassified to other provisions on account of potential future
claims that may arise.
As part of the sale of the CM division there are existing contracts that run
until December 2024. These services will not be used by the business going
forward so are included in the discontinued operations for CM. These are
onerous contracts as the Group is locked into them and are not transferred to
the buyer.
The other provision is for a potential liability in relation to the deferred
consideration. There is uncertainty around the timing of this liability as
well as the amount. This may fall due within one year, as such this liability
is shown as current.
25. Financial risk management
The fair value of all the Group's and the Company's financial assets and
liabilities approximated to their carrying value at the reporting year-end
date. The carrying amount of non-current financial instruments, including
floating interest rate borrowing, are not significantly different from the
fair value of these instruments based on discounted cash flows. The
significant methods and assumptions used in estimating fair values of
financial instruments are summarised below:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include equity
investments, other than those in subsidiary undertakings. In the case of
listed investments, the fair value represents the quoted bid price at the
reporting period end date. The fair value of unlisted investments is estimated
by reference to recent arm's length transactions.
Other investments
Other investments include warrants and equity investments, categorised as fair
value through profit or loss. In the case of listed investments, the fair
value represents the quoted bid price at the reporting year-end date. The fair
value of unlisted investments is estimated by reference to recent arm's length
transactions. In the case of warrants, the fair value is estimated using
established valuation models.
Trade receivables and payables
The carrying value less impairment provision of trade receivables and payables
is assumed to approximate to their fair values due to their short-term nature.
Borrowings
Borrowings are measured at amortised cost using the effective interest rate
method. The tables below summarise the Group's main financial instruments by
financial asset type:
31 March 2024
Amortised cost Fair value through profit or loss Total
Group Note £'000 £'000 £'000
Financial assets
Other investments 6, 21 - 1,639 1,639
Trade and other receivables 20 3,863 - 3,863
Cash and cash equivalents 22 4,902 - 4,902
Financial liabilities
Trade and other payables 23 2,929 - 2,929
Deferred consideration 24 875 - 875
Lease liability 18 293 - 293
31 March 2023
Amortised cost Fair value through profit or loss Total
Group Note £'000 £'000 £'000
Financial assets
Other investments 17, 21 - 2,869 2,869
Trade and other receivables 20 4,179 - 4,179
Cash and cash equivalents 22 4,234 - 4,234
Financial liabilities
Trade and other payables 23 3,418 - 3,418
Deferred consideration 24 2,121 - 2,121
Lease Liability 18 612 - 612
The tables below summarise the Company's main financial instruments by
financial asset type:
31 March 2024
Amortised cost Fair value through profit or loss Total
Company Note £'000 £'000 £'000
Financial assets
Trade and other receivables 20 26 - 26
Amounts owed from Group companies 4,676 - 4,676
Cash and cash equivalents 22 - - -
Financial liabilities
Trade and other payables 23 438 - 438
Amounts due to Group companies 32 312 - 312
31 March 2023
Amortised cost Fair value through profit or loss Total
Company Note £'000 £'000 £'000
Financial assets
Trade and other receivables 20 14 - 14
Financial liabilities
Trade and other payables 23 346 - 346
Amounts due to Group companies 32 790 - 790
Risks
The main risks arising from the Group's financial instruments are credit risk,
liquidity risk and market risk. Market risk comprises, interest rate risk and
other price risk. The Directors review and agree policies for managing each of
these risks which are summarised below:
Credit risk
Credit risk is the risk that clients or other counterparties to a financial
instrument will cause a financial loss by failing to meet their obligations.
Credit risk relates, in the main, to the Group's trading and investment
activities and is the risk that third parties fail to pay amounts as they fall
due. Formal credit procedures include approval of client limits, approval of
material trades, collateral in place for trading clients and chasing of
overdue accounts. Additionally, risk assessments are performed on banks and
custodians.
The maximum exposure to credit risk at the end of the reporting period is
equal to the statement of financial position figure. The impairment policy can
be found in note 20. There were no other past due, impaired or unsecured
debtors.
Financial assets that are neither past due nor impaired in respect of trade
receivables relate mainly to accrued management fees.
The credit risk on liquid funds, cash and cash equivalents is limited due to
deposits being held at the Group's main bank with a credit rating of "A",
assigned by Standard and Poor's.
There has been no change to the Group's exposure to credit risk or the manner
in which it manages and measures the risk during the period.
The credit risk in the Company principally comes from intercompany balances
and subordinated loan. Since these are all within the Group, the Directors can
closely monitor the risk of default on a regular basis to minimise any
potential losses.
Liquidity risk
Liquidity risk is the risk that obligations associated with financial
liabilities will not be met. The Group monitors its risk to a shortage of
funds by considering the maturity of both its financial investments and
financial assets (for example, trade receivables) and projected cash flows
from operations.
The Group's objective is to maintain the continuity of funding using bank
facilities where necessary, which are reviewed annually with the Group's
Banker, the Bank of Scotland. Items considered are limits in place with
counterparties which the bank are required to guarantee, payment facility
limits, as well as the need for any additional borrowings.
The table below summarises the maturity profile of the Group's financial
liabilities based on contractual undiscounted payments:
31 March 2024
Payable within 1 year Payable in 2 to 5 years Payable after more than 5 years Total contractual payments
Group Note £'000 £'000 £'000 £'000
Trade and other payables 23 2,929 - - 2,929
Lease liability 6,18 110 210 - 320
Deferred consideration 24 875 - - 875
3,914 210 - 4,124
31 March 2023
Payable within 1 year Payable in 2 to 5 years Payable after more than 5 years Total contractual payments
Group Note £'000 £'000 £'000 £'000
Trade and other payables 23 3,418 - - 3,418
Lease liability 18 340 306 14 660
Deferred consideration 24 2,121 - - 2,121
5,879 306 14 6,199
The table below summarises the maturity profile of the Company's financial
liabilities based on contractual undiscounted payments:
31 March 2024
Payable within 1 year Payable in 2 to 5 years Payable after more than 5 years Total contractual payments
Company £'000 £'000 £'000 £'000
Trade and other payables 438 - - 438
31 March 2023
Payable within 1 year Payable in 2 to 5 years Payable after more than 5 years Total contractual payments
Company £'000 £'000 £'000 £'000
Trade and other payables 346 - - 346
Market Risk
Interest rate risk
The Group's exposure to the risk of changes in market interest rates relates
to the Group's amount of interest receivable on cash deposits. The maximum
exposure for interest is not significant.
Other price risk
Other price risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices (other
than those arising from interest rate risk) whether those changes are caused
by factors specific to the individual financial instrument or its issuer or
factors affecting all similar financial instruments traded in the market.
Other investments are recognised at fair value and subject to changes in
market prices.
The Group manages other price risk by monitoring the value of its financial
instruments monthly and reporting these to the Directors and Senior
Management. The Group has disposed of several of its investments during the
year, which has helped mitigate risk. However, the risk of deterioration in
prices remains high whilst the market continues to be volatile.
The risk of future losses is limited to the fair value of investments as at
the year-end of £1,639k (FY23: £2,869k). See note 17 and 21.
Fair value measurement recognised in the statement of financial position
The following table provides an analysis of financial instruments that are
measured after initial recognition at fair value, grouped into Levels 1 to 3
based on the degree to which the fair value is observable:
· Level 1 at fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets and liabilities;
· Level 2 fair value measurements are those derived from inputs
other than the quoted price included within Level 1 that are observable for
the asset or a liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices); and
· Level 3 fair value measurements are those derived from formal
valuation techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs). The valuation
technique used in determining the fair value is the Black Scholes model. The
key inputs into this calculation are the share price as at 31 March 2024,
exercise price, risk free interest rate and share price volatility.
31 March 2024
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Unquoted equities - - - -
Financial instruments designated at fair value through profit or loss
Other investments (note 17 & 21) 1,544 - 95 1,639
Total 1,544 - 95 1,639
31 March 2023
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Unquoted equities - - - -
Financial instruments designated at fair value through profit or loss
Other investments (note 17 & 21) 2,049 - 820 2,869
Total 2,049 - 820 2,869
26. Capital management
The capital of the Group comprises share capital, share premium, retained
earnings and other reserves. The total capital at 31 March 2024 amounted to
£14.3m for the Group (FY23: £14.3m) and £23.7m for the Company (FY23:
£24.3m). The primary objective of the Group's capital management is to ensure
that it maintains a strong capital structure to support the development of its
business, to maximise shareholder value and to provide benefits for its other
stakeholders.
These objectives are met by managing the level of debt and setting dividends
paid to shareholders at a level appropriate to the performance of the
business.
Certain activities of the Group are regulated by the FCA which is the
statutory regulator for financial services business and has responsibility for
policy, monitoring and discipline for the financial services industry. The FCA
requires the Group's resources to be adequate, that is, sufficient in terms of
quantity, quality and availability, in relation to its regulated activities.
The Group monitors capital on a daily basis by measuring movements in the
Group regulatory capital requirement and through its Internal Capital Adequacy
and Risk Assessment Process (ICARA), which was formerly through its Internal
Capital Adequacy Assessment Process (ICAAP). Compliance with FCA minimum
common equity tier 1 regulatory capital requirements was maintained during the
year and the Group is satisfied that there is and will be, sufficient capital
to meet these regulatory requirements for the foreseeable future.
27. Share capital and share premium account
Number of shares Share
Ordinary shares Ordinary shares Deferred shares Share capital premium
000's 000's £'000 £'000
As at 1 April 2022 62,086 - 3,104 19,014
Shares issued:
On placing 225 - 12 -
Balance at 31 March 2023 62,311 - 3,116 19,014
Shares issued:
To settle deferred consideration 2,842 - 142 511
Share split - 65,153 - -
On placing 170,833 - 1,707 3,417
Share issue costs - - - (125)
Balance at 31 March 2024 235,986 65,153 4,965 22,817
The total number of ordinary shares in issue is 235.99 million of 1p each (31
March 2023: 62.31 million of 5p each). The total number of deferred shares is
65.15 million (31 March 2023: nil) of 4p each.
During the year the group undertook a share placing, which raised net proceeds
of £5m by way of 170,833,333 ordinary shares at a price of 3p. The placing
took place on 28 July 2023 and funds were received in August 2023. This
decision was taken after discussions with the FCA.
In order to permit the Placing Shares to be issued at the Placing Price, which
was lower than the nominal value of the Existing Ordinary Shares, the Company
divided each issued Existing Ordinary Share (nominal value 5p each) into one
New Ordinary Share (nominal value 1p each) and one Deferred Share (nominal
value 4p each). The New Ordinary Shares have the same rights and benefits as
the Existing Ordinary Shares. Following the Share Sub-division, the number of
New Ordinary Shares held by each Shareholder were the same as the number of
Existing Ordinary Shares held by them immediately before the Share
Sub-division. The Deferred Shares were not admitted to trading on AIM, have
only very limited rights on a return of capital and are effectively valueless
and non-transferable. As a result of the Share Sub-division, the Company
adopted the New Articles, which set out the rights and restrictions applicable
to the New Ordinary Shares and the New Deferred Shares.
28. Treasury shares
Year ended 31 March 2024 Year ended 31 March 2023
Group £'000 £'000
At 31 March 1,093 900
Additions 21 193
At 31 March 1,114 1,093
At 31 March 2024 no shares in the Company were held in the EBT (FY23: nil
shares) and the ESOT held 3,117,418 shares (FY23: 3,017,418), at a nominal
value of 1p per share and represents the full balance above. This represents
1.32% of the called up share capital (FY23: 4.84%). The company loaned the
amount required for the ESOT to purchase the shares as required.
During the year the Company's Employee Share Option trust (ESOT) purchased the
following ordinary shares in the Company:
Number of shares Nominal value Total consideration
Date of issue 000's £'000 £'000
20-Apr-23 50,000 5p 9,500
12-Jun-23 10,000 5p 2,310
20-Jun-23 40,000 5p 9,240
29. Employee Benefit Trusts (EBT)
The WH Ireland EBT was established in October 1998 and the WH Ireland Group
plc Employee Share Ownership Trust (ESOT) was established in October 2011,
both for the purpose of holding and distributing shares in the Company for the
benefit of the employees. All costs of the EBT and ESOT are borne by the
Company or its subsidiary WH Ireland Limited.
Joint Ownership Arrangements (the 'JOE Agreements') are in place in relation
to 400,000 shares between the trustees of the ESOT and a number of employees
(the 'Employees'). Under the JOE Agreements, the option for the Employees to
acquire the interest that the trustees of the ESOT has in the jointly owned
shares, lapses when an employee is deemed to be a Bad Leaver. If an Employee
ceases to be an employee of the Group, other than in the event of critical
illness or death, the Employee is deemed to be a Bad Leaver.
The shares carry dividend and voting rights though these have been waived by
all parties to the JOE Agreements. Due to the consolidation of the ESOT into
the Group accounts, these shares are shown in Treasury (note 28). Due to the
nature of these arrangements, the options contained in the JOE Agreements are
accounted for as share-based payments (note 30).
30. Share-based payments
The Group had two schemes for the granting of non-transferable options to
employees during the reporting period; the approved Company Share Ownership
Plan (CSOP) and a Save as You Earn Schemes (SAYE). In addition, options are
held in the ESOT (note 29). SAYE matures in July 2025.
Company Share Ownership Plan (CSOP)
Under the terms of the Unapproved Options, options over the Company's shares
may be granted on a discretionary basis to employees and consultants of the
Group (including Directors) at a price to be agreed between the Company and
the relevant option holder. Under the terms of the options granted, such
options vest on the third anniversary of the award dates; are exercisable at
the market price at the time the option was issued and are exercisable for ten
years after the vesting date.
Salary Sacrifice Scheme
During the year, directors agreed to sacrifice a proportion of their
respective salaries in consideration of being awarded with options to
subscribe, at nil cost, for a number of New Ordinary Shares, with such options
vesting on a monthly basis over such period and (subject to vesting) which may
be exercised in the period of ten years following the date of vesting.
Vesting is subject to their remaining an employee of the Company at the
relevant time.
Movements in the number of share options outstanding that were issued post 7
November 2002 and their related weighted average exercise prices (WAEP) are as
follows:
31 March 2024
ESOT ESOT 2019 LTIP 2020 EMI Option Plan 2022 EMI Option Plan Salary Sacrifice Plan
Options WAEP Options WAEP Options WAEP Options WAEP Options WAEP Options WAEP
Outstanding at beginning of year 250,000 74.50p 50,000 92.5p 1,650,000 45.00p 2,936,361 44.45p 2,678,568 46.00p - -
Granted - - - - - - - - - - 13,066,665 -
Expired / forfeited (250,000) 74.50p - - (150,000) 45.00p (208,333) 48.00p (1,428,570) 46.00p - -
Exercised - - - - - - - - - - - -
Outstanding at end of year - - 50,000 92.50p 1,500,000 45.00p 2,728,028 30.82p 1,249,998 46.00p 13,066,665 -
Exercisable at end of year - - 50,000 92.50p 1,500,000 45.00p 2,728,028 30.82p 1,249,998 46.00p 3,266,666 -
WA Life* - 2.01 yrs 6.10 yrs 9.68 yrs 8.32 yrs 10.27 yrs
* WA Life represents the weighted average contractual life in years to the
expiry date for options outstanding at the end of the year.
31 March 2023
CSOP ESOT ESOT 2019 LTIP 2020 EMI Option Plan 2022 EMI Option Plan
Options WAEP Options WAEP Options WAEP Options WAEP Options WAEP Options WAEP
Outstanding at beginning of year 35,502 84.50p 350,000 74.50p 50,000 92.5p 1,800,000 45.00p 3,644,170 37.34p - -
Granted - - - - - - - - - - 2,678,568 46.00p
Expired / forfeited (35,502) 84.50p (100,000) 74.50p - - (150,000) 45.00p (260,416) 48.00p -
Exercised - - - - - - - - (447,393) 48.00p - -
Outstanding at end of year - 0.00p 250,000 74.50p 50,000 92.50p 1,650,000 45.00p 2,936,361 44.45p 2,678,568 46.00p
Exercisable at end of year - 0.00p 250,000 74.50p 50,000 92.50p 1,650,000 45.00p 2,936,361 44.45p 2,678,568 46.00p
WA Life* - 0.50 yrs 3.01 yrs 7.10 yrs 10.68 yrs 9.32 yrs
* WA Life represents the weighted average contractual life in years to the
expiry date for options outstanding at the end of the year.
Pricing Models
ESOT ESOT 2019 LTIP 2020 EMI Option Plan 2022 EMI Option Plan Salary Sacrifice Plan
Pricing model Monte Carlo N/A Black Scholes Black Scholes Black Scholes N/A
Date of grant 28/10/13-13/4/16 30/05/17 28/06/19 & 28/12/19 01/11/20 - 01/09/21 01/04/22 - 01/11/22 28/09/23
Share price at grant (p) 74.5-114.5 125 45.0 & 49.0 42.0-56.5 30.0-45.00 5.5
Exercise price (p) 0.0-114.5 - 45.0 & 49.0 0.0-58.0 42.0-48.0 -
Expected volatility (%) 43.0000-37.0000 N/A 50 50 21-22 N/A
Expected life (years) 5 3 3 1-3 3 2
Risk-free rate (%) 0.8000-1.9300 N/A 2 5 1.38-3.22 N/A
Expected dividend yield (%) 0.67-2.19 N/A N/A N/A N/A N/A
The pricing models used to value these options and their inputs are as
follows:
31. Capital commitments
There were no capital commitments for the Group or the Company as at 31 March
2024 (FY23: £nil).
32. Related party transactions
Group
Services rendered to related parties were on the Group's normal trading terms
in an arms' length transaction. Amounts outstanding are unsecured and will be
settled in accordance with normal credit terms. No guarantees have been given
or received. No provision (FY23: £nil) has been made for impaired receivables
in respect of the amounts owed by related parties.
Key management personnel include Executive and Non-Executive Directors of WH
Ireland Group plc and all its subsidiaries. They can undertake transactions in
stocks and shares in the ordinary course of the Group's business, for their
own account and are charged for this service, as with any other client. The
transactions are not material to the Group in the context of its operations,
but may result in cash balances on the Directors' client accounts owing to or
from the Group at any one point in time. The charges made to these individuals
and the cash balances owing from/due to them are disclosed in the table below.
There are no other material contracts between the Group and the Directors.
No transactions occurred with key management personnel and other relates
parties during the year ended 31 March 2024 or 31 March 2023.
The total compensation of key management personnel is shown below:
Year ended 31 March 2024 Year ended 31 March 2023
£'000 £'000
Short-term employee benefits 2,565 2,528
2,565 2,528
The highest paid Director for 2024 was P Wale receiving emoluments of
£374,216 (FY23: £470,868).
Company
The Parent Company receives interest from subsidiaries in the normal course of
business. Total interest received during the year was £nil (FY23: £nil). In
addition, the Parent Company received a management charge of £999k (FY23:
£879k) from its subsidiary WH Ireland Limited. WH Ireland Limited also
charged the Parent Company £nil (FY23: £nil) for broker services.
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation. The captions in the primary
statements of the Parent Company include amounts attributable to subsidiaries.
These amounts have been disclosed in aggregate in the notes 16, 20 and 23 and
in detail in the following table:
Amounts owed by related parties Amounts owed to related parties
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Readycount Limited - - - -
Stockholm Investments Limited - - - -
WH Ireland Limited 4,676 - - 478
Harpsden WM Limited - - 295 295
WH Ireland Trustee Limited - - 17 17
4,676 - 312 790
The net amount owed by related parties is £4,364k (FY23: £790k owed to
related parties) (see note 20 and 23).
The placing that took place during the year resulted in an amount owed by WH
Ireland Limited to the Parent Company of £4.7m. This is due to the shares
included in the placing were in the Parent Company, and the cash received by
WH Ireland Limited to be used in the operation of the business.
33. Events after the reporting date
Successful sale of the CM business
Post year end, the Group completed on the sale of the CM division on the
12(th) July 2024. This sale has resulted in a positive regulatory capital
position and changed requirements. The sale will also increase potential cash
inflows if and when the deferred consideration (of up to £5 million) is paid,
shortly following the first anniversary of completion of the Transaction.
The deferred consideration is to be paid in cash within 30 days of the first
anniversary of Completion and is to be calculated by reference to the retainer
and transaction revenue generated by the CM Division within the 12 months
after Completion. This amount is to be the aggregate of 20% of the Retainer
Fees, 30% of the Transaction Fees, 75% of the Market Making Equity Value and,
subject to the Relevant Retainer Fees being equal to or greater than £2.75m,
an amount equal to the Market Making Cash (£250k).
Decision by the Board to no longer actively pursue a sale of the WM business
After the year-end the sale of the WM division did not proceed. However, at
the year end date and shortly after the Board remained committed to the
disposal and therefore the WM division is classified as a discontinued
operation and the assets and liabilities form part of the disposal group at 31
March 2024. This, along with the successful sale of the CM division as
announced on 3 June 2024, prompted management to reassess the strategy for the
WM division. From this date, the WM division was removed from the disposal
group. The Group will now focus on implementing improvements to the remaining
WM division as well as making changes that will increase efficiencies across
the business. Consequently, this division will no longer be held for sale or
be shown as a discontinued operation in the 2025 financial year. Results for
the WM division have been isolated and presented in note 5.
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