REG - W.H. Ireland Group - Interim Results
07/12/2021 07:00
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RNS Number : 7518U W.H. Ireland Group PLC 07 December 2021
WH Ireland Group plc
("WH Ireland" or the "Company")
Interim Results for the Six Months ended 30 September 2021
"Good strategic progress, maintaining our return to profit and investing
significantly in both divisions"
Financial Highlights
§ Revenue increased 38% to £17.5m (H12020: £12.7m(*))
o Wealth Management division revenue £7.8m (H12020: £6.1m)
o Capital Markets division revenue £9.7m (H12020: £6.5m)
§ Significant increase in underlying profit before tax to £1.1m (H12020:
£0.6m)(+)
§ Statutory profit before tax unchanged at £0.3m (H12020: £0.5m)
§ Underlying basic earnings per share 1.87p (H12020: 1.32p)(+)
§ Group regulatory capital solvency ratio (CET1): 18.4% (H12020: 15.1%)
§ Cash balances at £8.4m (H12020: £5.8m; FY2021 £8.2m)
Divisional Highlights
§ Wealth Management (including Harpsden):
o Total group AUM up 41% to £2.4bn (H12020 (excluding IOM sold Oct 2020):
£1.7bn)
o WM AUM held on SEI (UK) platform of £1.6bn (H12020: £1.2bn)
o Discretionary assets under management rose 67% to £1.2bn (H12020:
£0.7bn)
o Encouraging discretionary net inflows (excluding market performance) of
£43m representing 4.1% of opening assets
o Largely completed the transfer of the Harpsden assets to our SEI (UK)
platform with minimal attrition, and developed a more focussed approach to our
WM acquisition pipeline
§ Capital Markets:
o Increase in number of corporate clients to 86 (H12020: 80)
o 20 transactions completed in H1 raising £193m (H12020: £104m) including
four IPOs
o Reinforced our ability to distribute to not only institutional clients but
also to high net worth (HNW) clients, a key point of differentiation
o Re-launched our Investor Forum in September 2021:
§ Enables our HNW clients to participate in our public and private offerings
§ Over 300 HNWs have already signed up to date
Board strengthened
§ New CFO, Simon Jackson appointed in October 2021 bringing significant
experience in growing a wealth management business
§ Helen Sinclair and Tom Wood appointed as non-executive directors, both of
whom bring recent current experience and valuable expertise in key areas
Current trading and outlook
§ Trading in line with our expectations of a sustainable return to
profitability
§ Good second half pipeline in Capital Markets but market dependent
§ Momentum in Wealth Management supported by investment and the recent
acquisition of Harpsden
Commenting, Phillip Wale, Chief Executive Officer said:
"WH Ireland has continued to make progress in the first half, maintaining our
return to profit and further improving our financial position, despite the
overhang of the Covid pandemic. We have made a cautious return to our offices,
whilst further enhancing our control framework and investing in growth
opportunities to increase the customer base of both sides of our business.
"Following the good start reported today, we expect to see continued momentum
in the business albeit in somewhat more challenging markets."
WH Ireland is hosting a webcast for analysts and investors at 9.30am today.
Please contact whireland@mhpc.com (mailto:whireland@mhpc.com) for further
details.
For further information please contact:
WH Ireland Group plc www.whirelandplc.com (http://www.whirelandplc.com)
Phillip Wale, Chief Executive Officer +44(0) 20 7220 1666
Canaccord Genuity Limited www.canaccordgenuity.com (http://www.canaccordgenuity.com)
Andrew Potts / Tom Diehl +44(0) 20 7523 8000
MHP Communications whireland@mhpc.com
Reg Hoare / James Bavister +44 (0) 20 3128 8793
*The comparative information for the period end 30 September 2020 has been
reclassified to reflect the correct loss on discontinued operations, together
with a reclassification of investment gains to revenue as laid out in the
report and accounts year ending 31 March 2021. See note 1 for further
information.
(+)A reconciliation from underlying profits to statutory profits is shown
within the Chief Executive's statement below
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 and
effective choices about their money and how it can support their lifestyle
ambitions. We can trace our history of helping individuals and their
families as well as entrepreneurs, charities and trustees back to 1872. By
building a financial plan and investment strategy with us, our clients are
free to focus on the important things, like life.
Capital Markets Division
Our Capital Markets Division is specifically focused on the public and private
growth company marketplace. The team's significant experience in this exciting
segment means that we are able to provide a specialist service to each of its
respective participants. For companies, we raise public and private growth
capital, as well as providing both day-to-day and strategic corporate advice.
Our tailored approach means that our teams engage with all of the key investor
groups active in our market - High Net Worth Individuals, Family Offices,
Wealth Managers and Funds. Our broking, trading and research teams provide the
link between growth companies and this broad investor base. In our latest
financial period, we successfully completed the IPOs of ITIM, Northcoders,
Mailbox REIT and Orcadian Energy, we raised capital for companies such as
Jubilee Metals and i3 Energy; while welcoming nine new quoted companies to our
corporate client roster.
Chairman's Statement
Review and Outlook
The first half of the financial year has seen WH Ireland continue to grow,
improve the quality of its business and invest to ensure that momentum
continues. A year on year increase in underlying profitability has been
achieved despite the costs of the continuing integration of Harpsden and
further investment in people. The 23% organic growth in Discretionary Funds
Under Management is also pleasing. Net inflows (excluding market performance)
were £43.4m, which is encouraging, especially as we believe the continued
integration of Harpsden will allow Wealth Management to further develop and
improve its proposition to its customers into the future.
We have now largely completed the transfer of the Harpsden assets to our
wealth management platform (SEI) with minimal attrition. The expertise we have
gained from this complex process prepares us well for further acquisitions. We
have also established a systematic approach to our wealth management
acquisition pipeline, with support from our Capital Markets division, to
ensure we are well placed for our target market. Whilst larger acquisitions
have continued to attract significant interest from a range of market
participants, the smaller opportunities remain attractive, particularly for us
given the potential for synergies as we transfer assets onto our platform.
However, we remain patient to ensure we generate significant value from each
acquisition.
Our Capital Markets division has shown real progress across a number of
fronts, all of which point to the improvement in quality we are seeking. The
number of companies who rely on us for advice and distribution has continued
to grow and has now reached 86 from just 80 a year ago. We successfully
completed four IPOs making us one of the leading AIM IPO advisers and we
completed one of our largest ever placings in September 2021. We re-launched
our Investor Forum in September 2021 which allows our high net worth clients
("HNW") to participate in our Public and Private offerings, and over 300 HNWs
have already signed up. This further reinforces, what we believe is a key
point of differentiation, namely our ability to distribute to HNW and Ultra
HNW individuals.
I am also delighted that we have attracted significant talent in the first
half. This has included two new Board members, Helen Sinclair and Tom Wood,
both of whom bring experience and valuable expertise in areas very important
to WH Ireland. Our new CFO, Simon Jackson, is already making good progress in
a number of areas as we continue to drive efficiencies as we grow. His
experience, gained as Brooks Macdonald grew to its current size, is already
very evident. The arrival of a new Head of Wealth Planning, Steve Pennington,
will allow us to pursue our stated aim of greater penetration of financial
planning through the whole business as we strive to lead our proposition with
the very best wealth planning capability whilst providing independent
financial advice and product selection.
There remains much work to do in order for us to achieve our collective
ambitions for both businesses, but we have made progress towards the £3bn
Discretionary Funds under Management target. We are now very focused on seeing
the benefits of this increased scale fall through to the margin. We have also
made good progress towards the £20m revenue target from our Capital Markets
division while improving the overall quality of that revenue.
Phil Shelley
6 December 2021
Chief Executive Officer's Report
Overview
WH Ireland has continued to make progress in the first half of this financial
year despite the ongoing issues of the Covid pandemic. We have made a cautious
return to our offices and again I thank all our employees, clients, customers,
and business partners for their support. During this period we have invested
in the business and enhanced our control framework, while maintaining a return
to profitability. Investment in our Capital Markets division has been made in
Healthcare, Climate Aligned Capital, HNW & Family Office distribution and
Private Growth Capital segments as well as in Wealth Planning. We remain
focused to ensure that we retain the benefits of last year's first profitable
year in five years, especially the retention of our people; and pursuing
opportunities to grow both sides of our business and grow our customer base.
Six Months to 30 September 2021
The start of the financial year was very different from that faced in 2020.
Given our hybrid working model, a market still in turmoil created by the
Covid-19 pandemic and UK markets that have underperformed those of the US and
Asia in recovery terms, I still believe we are performing well. Our employees
once again showed great flexibility and maintained a seamless service to all
our clients. The investment in new people and teams within Capital Markets,
has continued, despite tougher market conditions than the second half of last
year. Wealth Management continued its successful drive to improve quality of
earnings with an increase in the proportion of its assets under discretionary
management, and by fully integrating its first acquisition, Harpsden Wealth
Management Limited. Overall revenue for the Group rose 38% to £17.5m (2020 H1
restated: £12.7m) and our underlying profit before tax increased to £1.1m
(2020: £0.6m) whilst our statutory profit for the period was £0.3m (2020 H1
restated: £0.5m).
Underlying profit before tax is considered by the Board to be a more 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 a non-cash operating item. Reporting at an underlying
basis is also considered more appropriate for external analyst coverage and
peer group benchmarking, allowing a more accurate like-for-like comparison. A
reconciliation between underlying and statutory profit before tax for the six
months ended 30 September 2021, with comparatives is shown in the following
table:
6m to 30 6m to 30 12m to 31 Mar 2021
£m Sept 2021 Sep 2020
Underlying profit before tax 1.10 0.65 1.68
Acquisition related items
Deal restructuring and integration costs 0.40 - 0.46
Amortisation of acquired brand and client relationships 0.22 0.06 0.22
Changes in fair value and finance cost of deferred consideration 0.31 - -
Other items
Dual running platform costs - 0.01 0.04
Restructuring costs 0.30 0.11 0.13
Net changes in the value of non-current investment assets (0.46) - (0.22)
Statutory profit before tax 0.33 0.47 1.05
Clients
Our clients are at the heart of everything that we do. Our central mission is
to provide excellent service to our corporate, institutional, and private
clients, and this remains our priority. I would like to take the opportunity
to thank all our clients for their loyalty and patience as we have worked
through the inevitable disruption from the scale and pace of change we have
instigated this year.
It was pleasing to see from our annual client satisfaction survey that our
discretionary managed clients have awarded us higher ratings this year, with
marked progress amongst our wealthiest clients, brand perception and the
transparency of our services and costs.
Further efficiencies within our infrastructure has given WH Ireland a platform
that we believe is able to provide the quality of service that will
differentiate us in the future, and which has shown it is sufficiently robust
to successfully navigate challenges and embrace growth within the business.
Staff
We continue to encourage excellence within the Group, and we continue to
attract new individuals and teams across both divisions. I thank all our
members of staff for their commitment and hard work in the past year as they
managed the uncertainty and challenges of the ever-changing working model
while maintaining client service as a priority. Group headcount, excluding
non-executive directors is now 142, increased from 124 in September 2020,
which includes the 17 additional staff that joined with the Harpsden
acquisition.
We have also strengthened our Wealth Management division with the appointment
of Steve Pennington. Steve joined WH Ireland in November 2021 as Director,
Head of Wealth Planning. His previous role was at Arbuthnot Latham & Co.
Limited where he led the transformation and integration of their Wealth
Planning proposition. He is a Chartered Financial Planner, Fellow of the
Personal Finance Society and Chartered FCSI.
Shareholders
I am delighted with the support, both in terms of capital investment and
guidance, received from our major shareholders and thank them and the new
investors who have joined and supported WH Ireland in this period.
Capital
The first half of this year has seen total equity increase to £15.7m (H1
2020: £8.6m). Cash at the period end was £8.4m which has increased 45% over
the year (H1 2020: £5.8m). The Group has no debt.
Wealth Management (WM)
This has been a pivotal year for the Wealth Management division. Following a
year of cost reduction, legacy system elimination and control framework
improvement, coupled with the rationalisation of non-optimal teams and offices
and the repricing of the WM offerings, the division was able to grow AUM with
the acquisition of Harpsden Wealth Management Limited ("Harpsden"). The team
at Harpsden has developed, what we believe is an excellent business with
professionalism and care. It brought both £250m of discretionary assets and a
profitable business that, once the integration is complete, we believe will
provide clients with even better value products and pricing.
Total Group assets under management have increased to £2.4bn (H1 2020:
£1.7bn) including £1.6bn in WM. Discretionary managed assets increased by
£460m including £250m from the Harpsden acquisition, a rise over the year of
67% to £1.2bn (H1 2020: £0.7bn).
Total revenue has increased to £7.8m (H1 2020: £6.2m) with management fees
of £6.7m (H1 2020: £4.6m) representing 86% of revenue (H1 2020: 75%)
Capital Markets (CM)
The Capital Markets division strengthened its position as a top five broker
and top three Nominated Adviser to AIM companies, by client numbers. Good
progress in client numbers reflects the focus placed on our target of advising
100 corporate clients by March 2024. This will be an important step in
delivering a business that can consistently deliver revenue of over £20m a
year. During the first half of the year this division welcomed 9 new clients,
increasing its number of retained corporate clients to 86 (H1 2020: 80)
increasing retained revenue to £1.8m (H12020: £1.6m). Gross transaction fees
grew to £6.7m (H1 2020: £3.5m) as the team completed 20 transactions raising
£193m for clients (H1 2020: 32 and £104m respectively). This included four
successful IPO transactions in the period. Commission income fell slightly
over the period to £1.2m (H1 2020: £1.4m)
Looking forward
The year has started well with the final stages of the Harpsden integration
proceeding better than we had expected and with the Capital Markets division
continuing the progress it made last year despite a more challenging trading
environment.
Following the good start reported today, we expect to see continued momentum
in the business albeit in somewhat more challenging markets.
Phillip Wale
6 December 2021
Consolidated Statement of Comprehensive Income
UNAUDITED FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2021
6 months ended 6 months ended 12 months ended
30 Sep 2021 30 Sep 2020* 31 Mar 2021
Note (unaudited) (unaudited) (audited)
£'000 £'000 £'000
Continuing operations
Revenue 2 17,502 12,717 29,559
Administrative expenses (16,823) (12,188) (28,418)
Operating profit 679 529 1,141
Operating profit before exceptional items: 1,021 757 1,757
Exceptional items (342) (228) (616)
Operating profit after exceptional items 679 529 1,141
Finance income - 2 2
Finance expense 5 (354) (63) (96)
Profit before tax 325 468 1,047
Tax income - - 192
Profit from continuing operations 325 468 1,239
Loss from discontinued operations - (86) (86)
Profit and total comprehensive income for the year 325 382 1,153
Earnings per share 7
From continuing operations
Basic 0.55p 0.96p 2.47p
Diluted 0.49p 0.96p 2.07p
From discontinued operations
Basic - (0.18p) (0.17p)
Total
Basic 0.55p 0.78p 2.30p
Diluted 0.49p 0.78p 1.93p
Consolidated Statement of Financial Position
UNAUDITED AS AT 30 SEPTEMBER 2021
30 Sep 2021 30 Sep 2020 31 Mar 2021
Note (unaudited) (unaudited) (audited)
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 4,512 696 4,764
Goodwill 3,539 - 3,539
Property, plant and equipment 376 618 511
Investments 3 1,783 1,986 1,099
Right of use asset 1,377 2,203 1,603
Deferred tax asset 190 - 190
11,777 5,503 11,706
Current assets
Trade and other receivables 5,652 4,355 5,156
Other investments 3 1,675 1,726 2,490
Cash and cash equivalents 4 8,377 5,849 8,211
15,704 11,930 15,857
Total assets 27,481 17,433 27,563
LIABILITIES
Current liabilities
Trade and other payables (7,001) (6,054) (7,623)
Lease liability (516) (765) (552)
Deferred consideration 5 (1,291) - (1,087)
(8,808) (6.819) (9,262)
Non-current liabilities
Lease liability (1,224) (1,981) (1,506)
Deferred tax liability (772) - (799)
Deferred consideration 5 (1,011) - (909)
(3,007) (1,981) (3,214)
Total liabilities (11,815) (8,800) (12,476)
Total net assets 15,666 8,633 15,087
Capital and reserves
Share capital 6 3,001 2,335 3,001
Share premium 19,083 14,414 19,083
Other reserves 981 981 981
Retained earnings (6,755) (8,453) (7,334)
Treasury shares (644) (644) (644)
Shareholders' funds 15,666 8,633 15,087
Signed on behalf of the board
P A Wale
6 December 2021
Consolidated Statement of Cash Flows
UNAUDITED FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2021
6 months ended 6 months ended 12 months ended
30 Sep 2021 30 Sep 2020* 31 Mar 2021
Note (unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities:
Profit/(loss) for the period:
Continuing operations 325 468 1,239
Discontinuing operations - (86) (86)
325 382 1,153
Adjustments for:
Depreciation, amortisation and impairment 611 647 1,242
Finance income - (2) (2)
Finance expense 354 63 96
Tax - - (196)
Non-cash adjustment for share option charge 254 - 90
(Increase)/ decrease in trade and other receivables (951) 2,056 1,815
(Decrease)/ increase in trade and other payables (55) 1,536 2,602
Decrease/(increase) in current asset investments 3 815 (869) (1,706)
(Increase) in non-current asset investments 3 (839) (1,303) -
Net cash generated from operations 514 2,510 5,094
Income taxes received/(paid) - - -
Net cash inflows from operating activities 514 2,510 5,094
Investing activities:
Cost on disposal of subsidiary undertaking - (90) (90)
Interest received - 2 3
Investment in subsidiary - - (4,765)
Acquisition of property, plant and equipment (4) (75) (201)
Net cash used in investing activities (4) (163) (5,053)
Finance activities:
Proceeds from issue of share capital - - 5,335
Lease liability payments (344) (232) (898)
Interest paid - - (1)
Net cash (used)/gained in financing activities (344) (232) 4,436
Net increase in cash and cash equivalents 166 2,115 4,477
Cash and cash equivalents at beginning of period 8,211 3,734 3,734
Cash and cash equivalents at end of period 8,377 5,849 8,211
*Comparative figures have been reclassified to reflect the correct loss on
discontinued operations and to reflect the reclassification of realised gains
to revenue for the six months to 30 September 2020.
Consolidated Statement of Changes in Equity
UNAUDITED FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2021
Share Share Other Retained Treasury Total
capital premium reserves earnings shares equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2020 2,335 14,414 981 (8,580) (644) 8,506
Profit and total comprehensive income for the period - - - 382 - 382
Employee share option scheme - - - - - -
Other movements - - - (255) - (255)
Balance at 30 September 2020 2,335 14,414 981 (8,453) (644) 8,633
Profit and total comprehensive income for the period - - - 771 - 771
Employee share option scheme - - - 90 - 90
New share capital issued 666 4,669 - - - 5,335
Other movements - - - 258 - 258
Balance at 31 March 2021 3,001 19,083 981 (7,334) (644) 15,087
Balance at 1 April 2021 3,001 19,083 981 (7,334) (644) 15,087
Profit and total comprehensive income for the year - - - 325 - 325
Employee share option scheme - - - 254 - 254
Other movements - - - - - -
Balance at 30 September 2021 3,001 19,083 981 (6,755) (644) 15,666
Notes to the Consolidated Statements
(UNAUDITED)
1. General information
WH Ireland Group plc is a public company incorporated in the United Kingdom.
The shares of the Company are traded on AIM, a market operated by the London
Stock Exchange Group plc. The address of its registered office is 24 Martin
Lane, London, EC4R 0DR.
Basis of preparation
The condensed financial statements in this interim report for the six months
to 30 September 2021 has been prepared in accordance with IAS 34 Interim
Financial Reporting. This report has been prepared on a going concern basis
and should be read together with the Group's annual consolidated financial
statements as at and prepared to 31 March 2021 in accordance with
International Accounting Standards in accordance with the requirements of the
Companies Act 2006.
The accounting policies, presentation and methods of computation adopted by
the Group in the preparation of its 2021 interim report are those which the
Group currently expects to adopt in its annual financial statements for the
year ending 31 March 2022 which will be prepared in accordance with United
Kingdom Adopted International Financial Reporting Standards and are consistent
with those adopted in the audited annual Report and Accounts for the period
ended 31 March 2021.
The financial information in this report does not constitute the Company's
statutory accounts. The statutory accounts for the period ended 31 March 2021
have been delivered to the Registrar of Companies in England and Wales. The
auditor has reported on those accounts. Its report was unqualified, did not
draw attention to any matters by way of emphasis, and did not contain a
statement under Section 498(2) or 498(3) of the Companies Act 2006. The
financial information for the six months to 30 September 2021 are unaudited
(six months to 30 September 2020: unaudited).
At the time of approving this interim report, the directors have a reasonable
expectation that the company has adequate resources to continue in operational
existence for the foreseeable future. Therefore the directors continue to
adopt the going concern basis of accounting in preparing this report.
Exceptional costs
These are considered by the Board to be non-trading and exceptional in nature.
This includes costs relating to the transfer of assets from Harpsden and other
one-off costs
Finance expense
Included within finance expenses is the fair value measurement arising on
deferred consideration payments from the acquisition of Harpsden together with
the associated net finance costs.
Comparative period reclassification
As reported in the Annual Report and Accounts for the year ended 31 March 2021
the loss from discontinued operations relating to the sale of WH Ireland (IOM)
Limited was £86k. Therefore the profit of £51k from discontinued operations
included in the six months to 30 September 2020 has been reclassified. As a
result continued operations were understated by £137k for the six months
ended 30 September 2020. The consolidated statement of comprehensive income
has been reclassified to reflect the correct treatment. There was no impact to
total comprehensive income and retained earnings. The reclassification has
impacted the consolidated statement of comprehensive income, the consolidated
statement of cash flow, the segment table for the six months to 30 September
2020 in note 2 and the earnings per share on continuing and discontinued
operations for the six months to 30 September 2020 in note 7. As also reported
in the Annual Report and Accounts for the year ended 31 March 2021 realised
investment gains were included in revenue. The realised investment gains of
£366k have therefore been moved to revenue for the six months to 30 September
2020. There was no impact to total comprehensive income and retained earnings.
The reclassification has impacted the consolidated statement of comprehensive
income, the consolidated statement of cash flow, the segment table for the six
months to 30 September 2020 in note 2 and the earnings per share on continuing
and discontinued operations for the six months to 30 September 2020 in note 7.
2. Segment information
The Group has two principal operating segments, Wealth Management (WM) and
Capital Markets (CM). The WM division 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. The CM
division provides corporate finance and corporate broking advice and services
to companies and acts as Nominated Adviser (Nomad) to clients traded on 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.
All 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.
The majority of the Group's revenue originates within the UK.
The following tables represent revenue and cost information for the Group's
business segments:
6 months ended 30 Sep 2021 Wealth Management Capital Markets Group and consolidation adjustments Group
(unaudited) £'000 £'000 £'000 £'000
Revenue 7,800 9,702 - 17,502
Direct costs (6,352) (7,269) - (13,621)
Contribution 1,448 2,433 - 3,881
Indirect costs (1,614) (795) (374) (2,783)
Underlying profit/(loss) before tax (166) 1,638 (374) 1,098
Acquisition related costs (405) - - (405)
Amortisation of acquired brand and client relationships (218) - - (218)
Changes in fair value and finance cost of deferred consideration (306) - - (306)
Restructuring costs (194) (102) - (296)
Net changes in the value of non-current investment assets - 452 - 452
Profit/(loss) before tax (1,289) 1,988 (374) 325
Tax - - - -
Profit/(loss) for the year (1,289) 1,988 (374) 325
6 months ended 30 Sep 2020* Wealth Management Capital Markets Group and consolidation adjustments Less Discontinued Operations** Group (continuing operations)
(unaudited) £'000 £'000 £'000 £'000 £'000
Revenue 6,151 6,460 590 (484) 12,717
Direct costs (5,222) (4,857) (432) 570 (9,941)
Contribution 929 1,603 158 86 2,776
Indirect costs (1,385) (513) (233) - (2,131)
Underlying profit/(loss) before tax (456) 1,090 (75) 86 645
Amortisation of acquired client relationships (61) - - - (61)
Dual running operating platform costs (10) - - - (10)
Restructuring costs (75) (31) - - (106)
Profit/(loss) before tax (602) 1,059 (75) 86 468
Tax - - - - -
Profit/(loss) for the year (602) 1,059 (75) 86 468
* These figures have been reclassified to reflect the correct loss on
discontinued operations and to reflect the reclassification of realised gains
to revenue for the six months to 30 September 2020.
** Discontinued operations relate to WH Ireland (IOM) Limited
12 months ended 31 Mar 2021 Wealth Management Capital Markets Group and consolidation adjustments Less Discontinued Operations Group (continuing operations)
(audited) £'000 £'000 £'000 £'000 £'000
Revenue 13,291 16,285 467 (484) 29,559
Direct costs (10,272) (11,736) (569) 570 (22,007)
Contribution 3,019 4,549 (102) 86 7,552
Indirect costs (3,099) (1,312) (1,459) - (5,870)
Underlying profit/(loss) before tax (80) 3,237 (1,561) 86 1,682
Acquisition related costs (465) - - - (465)
Amortisation of acquired client relationships (218) - - - (218)
Dual running operating platform costs (35) - - - (35)
Restructuring costs (91) (38) - - (129)
Net changes in the value of non-current investment assets - 212 - - 212
Profit/(loss) before tax (889) 3,411 (1,561) 86 1,047
Tax 2 - 190 - 192
Profit/(loss) for the year (887) 3,411 (1,371) 86 1,239
3. Investments
As at As at As at
30 Sep 2021 30 Sep 2020 31 Mar 2021
Investments £'000 £'000 £'000
Fair value: unquoted 48 48 48
Fair value: quoted 1 1 1
Fair value: warrants 1,734 1,937 1,050
Total investments 1,783 1,986 1,099
Quoted and unquoted investments include equity investments other than those in
subsidiary undertakings. Warrants may be received during the ordinary course
of business; there is no cash consideration associated with the acquisition.
Fair value, in the case of quoted investments, represents the bid price at the
reporting 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. These investments
are included in non-current assets.
As at As at As at
30 Sep 2021 30 Sep 2020 31 Mar 2021
Trading investments £'000 £'000 £'000
Listed investments 1,675 1,726 2,490
Investments are measured at fair value, which is determined directly by
reference to published prices in an active market where available. Trading
investments are included in current assets.
4. Cash, cash equivalents and bank overdrafts
For the purposes of the statement of cash flows, 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 money and money held for
settlement of outstanding transactions.
Money held on behalf of clients is not included in the statement of financial
position. Client money at 30 September 2021 was £0.4m (30 September 2020:
£0.4m; 31 March 2021: £0.4m).
5. Deferred Consideration
As at As at As at
30 Sep 2021 30 Sep 2020 31 Mar 2021
At beginning of period 1,996 - -
Additions - - 1,996
Finance expense of deferred consideration 208 - -
Change in fair value 98 - -
Balance at end of period 2,302 1,996
Analysed as:
Included in current liabilities 1,291 - 1,087
Included in non-current liabilities 1,011 - 909
Balance at end of period 2,302 - 1,996
Deferred consideration relates to the acquisition of Harpsden Wealth
Management Limited 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%. The
total cash consideration of £2.5m was recognised at its fair value of £2m on
acquisition.
During the six months ended 30 September 2021, the fair value of the estimated
deferred consideration for Harpsden Wealth Management Limited was revalued by
£98k due to the estimated timing of when the consideration will fall due.
During the six months ended 30 September 2021 the Group also recognised a
finance expense of £208k on the deferred consideration. The fair value of the
Harpsden deferred consideration at 30 September 2021 was £2.3m. The two
deferred consideration payments of £1.25m each are payable in December 2021
and December 2022 respectively.
6. Share capital
The total number of ordinary shares in issue is 62.05 million (30 September
2020: 48.70 million; 31 March 2021: 62.02 million).
7. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit
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 and held as treasury shares.
Diluted EPS is the basic EPS, adjusted for the effect of conversion into fully
paid shares of the weighted average number of all dilutive employee share
options outstanding during the period. At 30 September 2021: 6.48m (30
September 2020: nil; 31 March 2021: 6.48m) options were excluded from the EPS
calculation as they were anti-dilutive. In a period 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.
Reconciliation of the earnings and weighted average number of shares used in
the calculations are set out below.
As at As at As at
30 Sep 2021 30 Sep 2020* 31 Mar 2021
Weighted average number of shares in issue during the period ('000) 58,690 48,704 50,249
Effect of dilutive share options (thousands) 7,162 - 9,614
65,852 48,704 59,862
Profit from continuing operations 325 468 1,239
Basic EPS 0.55p 0.96p 2,47p
Diluted EPS 0.49p 0.96p 2.07p
Loss from discontinuing operations - (86) (86)
Basic EPS - (0.18p) (0.17p)
Total profit 325 382 1,153
Basic EPS 0.55p 0.78p 2.30p
Diluted EPS 0.49p 0.78p 1.93p
*Comparative figures have been reworked as a result of the reclassification of
the loss on discontinued operations for the six months to 30 September 2020.
8. Dividends
No interim dividend has been paid or proposed in respect of the current
financial period (30 September 2020: nil; 31 March 2021: nil).
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