REG - W.H. Ireland Group - Interim Results
13/12/2024 07:15
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RNS Number : 0213Q W.H. Ireland Group PLC 13 December 2024
13 December 2024
WH Ireland Group plc
("WH Ireland" or the "Company")
Interim Results for the Six Months ended 30 September 2024
Financial Highlights*
· Revenue of £8.5m (H1 2023: £10.7m)
o Wealth Management (WM) division revenue £5.3m (H1 2023: £6.3m)
o Discontinued revenue (Capital Markets (CM) division) £3.2m (H1 2023:
£4.4m)
· Underlying loss before tax of (£1.32m) (H1 2023: (£1.81)m)(+)
· Statutory loss before tax of (£1.25m) (H1 2023: £(3.92)m)
· Basic and diluted loss per share (0.53p) (H1 2023: loss of (4.4)p)(+)
· Cash balances at £4.6m (31 March 2024: £4.9m; 30 September 2023:
£6.9m)
· Cash balances £4.2m as at 30 November 2024
Successful disposal of Capital Markets Division
· CM division sold to Zeus Capital in July 2024
o Contingent consideration of £2m has been recognised in connection with
the disposal as at 30 September 2024
o This amount will be reassessed at each reporting date until the eventual
settlement which is due in August 2025
Divisional Highlights*
· Streamlining of Group and central functions with further reduction in
headcount and costs
· Wealth Management:
o Total AUM of £1.1bn (H1 2023: £1.2bn)
o Discretionary assets under management of £0.7bn (H1 2023: £0.9bn)
Current trading and outlook
· Focus on operation and development of Wealth Management, whilst
assessing strategic opportunities as they arise
· Further cost reductions underway as central functions are streamlined
following the sale of CM
· Improved chance of returning the WM division to a break-even position
following the cost reductions over the last year
(+)A reconciliation from underlying profits to statutory profits is shown
within the Chief Executive's statement below
*all numbers unaudited
Commenting, Phillip Wale, Chief Executive Officer said:
"WH Ireland's interim results reflect the challenging market backdrop which
has had another significant impact on our performance in the period.
"We have an improved chance of returning Wealth Management to a break-even
position following the cost reductions over the last year, supported by a more
stable financial position, and without anticipating any potential improvement
in our markets.
"Following the successful sale of Capital Markets in July this year, our focus
is on the operation and development of Wealth Management, further streamlining
our central functions and costs, whilst also assessing strategic opportunities
for the Group as they arise."
For further information please contact:
WH Ireland Group plc www.whirelandplc.com
(https://protect.checkpoint.com/v2/___http:/www.whirelandplc.com/___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpiZDRlMDE1YzRlYjRmMmY0MTAzMTU2MjQ3NWZkOTk3Njo2OmRhODQ6ODJkZGQ2ODI3MWU2MDBlNDJiN2IxYWFhNTlhNTY3Y2YzOGE0Yzk3NTg0NTg0Njc4YzBjODM4NzY0YWNkOGM4MDpwOlQ6Tg)
Phillip Wale, Chief Executive Officer +44(0) 20 7220 1666
Zeus https://zeuscapital.co.uk
Katy Mitchell/Harry Ansell +44(0) 20 3829 5000
MHP Communications whireland@mhpgroup.com
Reg Hoare +44 (0) 7831 406117
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.
Chair and Chief Executive's statement
Market backdrop
The market backdrop has had another significant impact on our performance in
the period. While the FTSE 100 has been showing signs of recovery, the AIM All
Share Index was still in decline. Given our challenges in recent years around
the strategy of our business and public perception of it, our Assets Under
Management (AUM) were also impacted.
Looking forward
Following the sale of the Capital Markets (CM) division during the period, the
Group has focused on the operation and development of the remaining Wealth
Management (WM) division, whilst assessing strategic opportunities for the
Group as they arise.
Moving forward we are further reducing costs, as certain Group and central
functions can be streamlined following the sale of the CM division. This has
led to an overall reduction in headcount across both the direct WM division
and the central functions.
Considering this, together with the benefits of our cost reduction programme
last year, we believe the Group has an improved chance of returning to a
break-even position.
Interim results
Overall revenue fell 21% from the comparative period from £10.7m to £8.5m
(unaudited) (reflecting the sale of the CM business mid-period), and we
reduced administrative expenses by 22% from £12.5m to £9.8m (unaudited).
We also incurred redundancy and project costs, totalling £0.7m the latter in
relation to the Board exploring strategic opportunities for parts of the
business. This led to a loss overall for the business of £1.25m before tax
(unaudited).
WM income was affected by a reduction of total assets under management from
£1.2bn to £1.1bn. This was the principal reason for a 16% fall in its
revenue (from £6.3m to £5.3m).
CM revenue was recognised until the disposal completion date of 12th July
2024. Contingent consideration of £2m has been recognised in connection with
the successful disposal of the CM division at 30 September 2024. This is based
on estimated revenue to be generated in the 12 months post acquisition by the
buyer. For further details, see note 1. This amount is recognised within
accrued income and will be reassessed at each reporting date until the
eventual settlement which is due in August 2025.
The recognition of the contingent consideration has led to a gain on disposal
of £1,031k being recognised as part of the profit on discontinued operations
(see note 10).
Summary
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 have left us as we
restructured during the period for their professionalism and wish them well
for the future.
The 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.
Independent Review Report to WH Ireland Group plc
Conclusion
We have been engaged by WH Ireland Group plc ('the Company') to review the
condensed set of financial statements of the Company and its subsidiaries (the
'Group') in the interim financial report for the six months ended 30 September
2024 which comprises the consolidated statement of comprehensive income,
consolidated statement of financial position, consolidated statement of cash
flows, consolidated statement of changes in equity and the related explanatory
notes that have been reviewed. We have read the other information contained
in the interim financial report and considered whether it contains any
apparent material misstatements of fact or material inconsistencies with the
information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the interim
financial report for the six months ended 30 September 2024 is not prepared,
in all material respects, in accordance with International Accounting Standard
34, "Interim Financial Reporting" as contained in UK-adopted International
Accounting Standards, and the AIM Rules for Companies.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" ('ISRE (UK) 2410') issued for use in
the United Kingdom. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted International Accounting Standards.
The condensed set of financial statements included in this interim financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting" as contained in UK-adopted International
Accounting Standards.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the Group and
the Company to cease to continue as a going concern.
Responsibilities of Directors
The interim financial report is the responsibility of, and has been approved
by the directors. The directors are responsible for preparing the interim
financial report in accordance with International Accounting Standard 34
"Interim Financial Reporting" as contained in UK-adopted International
Accounting Standards and the AIM Rules for Companies.
In preparing the interim financial report, the directors are responsible for
assessing the Group's and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the Group or the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's Responsibilities for the Review of the Financial Information
In reviewing the interim financial report, we are responsible for expressing
to the Company a conclusion on the condensed set of financial statements in
the interim financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK) 2410 "'Review of Interim Financial
Information performed by the Independent Auditor of the Entity". Our review
work has been undertaken so that we might state to the Company those matters
we are required to state to them in an independent review report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company, for our review work,
for this report, or for the conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
12 December 2024
Consolidated statement of comprehensive income
6 months ended 6 months ended 12 months ended
30 Sep 2024 30 Sep 2023 31 Mar 2024
Note (unaudited) (unaudited) *restated (audited)
£'000 £'000 £'000
Revenue 5,344 6,338 11,891
Administrative expenses (7,565) (7,925) (14,214)
Operating loss (2,221) (1,587) (2,323)
Net gain/(losses) on investments 74 (177) (583)
Finance income 8 5 -
Finance expense (6) (14) (21)
Contingent consideration movement - - 160
Loss from continuing operations (2,145) (1,773) (2,767)
Profit/(loss) from discontinuing operations 10 900 (2,142) (3,184)
Loss before tax (1,245) (3,915) (5,951)
Taxation - - 12
Loss and total comprehensive income for the year (1,245) (3,915) (5,939)
Earnings per share 8
Basic and diluted from continuing operation (0.92p) (1.99p) (1.57p)
Basic and diluted from discontinuing operation 0.39p (2.41p) (1.81p)
Total (0.53p) (4.40p) (3.38p)
*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 11 for further details.
Consolidated statement of financial position
30 Sep 2024 30 Sep 2023 31 Mar 2024
Note (unaudited) (unaudited) *restated (audited)
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 3,061 3,529 -
Goodwill 6 3,539 3,539 -
Property, plant and equipment 262 484 -
Investments 3 102 276 -
Right of use asset 253 462 -
7,217 8,290 -
Current assets
Trade and other receivables 5,686 4,732 5,098
Other investments 3 83 1,414 1,544
Cash and cash equivalents 4 4,593 6,923 4,902
Assets held for sale 10 - - 7,994
10,362 13,069 19,538
Total assets 17,579 21,359 19,538
LIABILITIES
Current liabilities
Trade and other payables (3,528) (3,442) (3,232)
Lease liability (83) (153) -
Provision 5 (506) (1,424) (1,676)
Deferred tax liability* - - -
Liabilities classified as held for sale - - (293)
(4,117) (5,019) (5,201)
Non-current liabilities
Lease liability (144) (243) -
(144) (243) -
Total liabilities (4,261) (5,262) (5,201)
Total net assets 13,318 16,097 14,337
Capital and reserves
Share capital 7 4,965 4,965 4,965
Share premium 22,817 22,817 22,817
Other reserves 981 981 981
Retained earnings (14,331) (11,552) (13,312)
Treasury shares (1,114) (1,114) (1,114)
Shareholders' funds 13,318 16,097 14,337
* 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 11 for further details.
Signed on behalf of the board
S J Jackson
12 December 2024
Consolidated statement of cash flows
6 months ended 6 months ended 12 months ended
30 Sep 2024 30 Sep 2023 31 Mar 2024
Note (unaudited) (unaudited) *restated (audited)
£'000 £'000 £'000
Operating activities:
Loss for the period: (1,245) (3,915) (5,939)
(1,245) (3,915) (5,939)
Adjustments for:
Depreciation, amortisation and impairment 652 490 624
Finance income (8) (5) -
Movement in contingent consideration - - (160)
Loss on disposal of fixed assets 111 - -
Finance expense 6 14 21
Tax - - (12)
Non-cash adjustment for share option charge 226 74 338
Non-cash adjustment for investment (gains)/losses (74) 381 583
Non-cash adjustment for revenue (21) (401) (761)
(Increase)/decrease in trade and other receivables (588) 712 346
Increase/(decrease) in trade and other payables 4 (571) (337)
Net cash used in operations (937) (3,221) (5,297)
Net cash outflows from operating activities (937) (3,221) (5,297)
Investing activities:
Acquisition of property, plant and equipment - - (16)
Interest received 8 5 12
Cash received on disposal of investments and warrants 1,549 1,199 1,408
Contingent consideration paid (875) (43) (78)
Net cash gained from investing activities 682 1,161 1,326
Finance activities:
Proceeds from issue of share capital - 5,000 5,000
Purchase of own shares by Employee Benefit Trust - (21) (21)
Lease liability payments (54) (230) (340)
Net cash (used in) / generated from financing activities (54) 4,749 4,639
Net (decrease) / increase in cash and cash equivalents (309) 2,689 668
Cash and cash equivalents at beginning of period 4,902 4,234 4,234
Cash and cash equivalents at end of period 4,593 6,923 4,902
*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 11 for further details.
Consolidated statement of changes in equity
Share Share Other Retained Treasury Total
capital premium reserves earnings shares equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2023 (As originally stated) 3,116 19,014 981 (8,374) (1,093) 13,644
Prior year adjustment * - - - 663 - 663
Balance at 1 April 2023 (As restated) 3,116 19,014 981 (7,711) (1,093) 14,307
Profit and total comprehensive income for the period - - - (3,915) - (3,915)
Employee share option scheme - - - 74 - 74
New share capital issued 1,849 3,803 - - - 5,652
Purchase of own shares by Employee Benefit Trust - - - - (21) (21)
Balance at 30 September 2023 4,965 22,817 981 (11,552) (1,114) 16,097
Profit and total comprehensive income for the period - - - (2,024) - (2,024)
Employee share option scheme - - - 264 - 264
Balance at 31 March 2024 4,965 22,817 981 (13,312) (1,114) 14,337
Balance at 1 April 2024 4,965 22,817 981 (13,312) (1,114) 14,337
Profit and total comprehensive income for the period - - - (1,245) - (1,245)
Employee share option scheme - - - 226 - 226
Balance at 30 September 2024 4,965 22,817 981 (14,331) (1,114) 13,318
* The 30 September 2023 consolidated 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 11 for further details.
Notes to the consolidated 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 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 2024 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 2024 in accordance with UK-adopted
International Accounting Standards and 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 2024 interim report are those which the
Group currently expects to adopt in its annual financial statements for the
year ending 31 March 2025 which will be prepared in accordance with UK-adopted
International Accounting Standards and are consistent with those adopted in
the audited annual Report and Accounts for the period ended 31 March 2024.
The financial information in this report does not constitute the Company's
statutory accounts. The statutory accounts for the period ended 31 March 2024
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 2024 are unaudited
(six months to 30 September 2023: unaudited).
Going concern
The condensed 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 31 December 2025 which consider the
funding and capital position of the Group. 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.
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 and the resilience of the business. During the period, the Group
sold the CM division which resulted 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 having already
taken effect from quarter 2 of the financial year. The cost savings have been
factored into the forecasts.
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 be driven down to before resulting in a
liquidity crisis or a breach of regulatory capital. That modelling concluded
that revenue would need to decline by more than 22% from management's
forecasts to create such a crisis situation within twelve months' time.
Based on all the aforementioned, the Directors believe that the Group has
sufficient liquidity to meet its liabilities for the next twelve months and
that the preparation of the interim financial statements on a going concern
basis remains appropriate. The Directors, conscious of the continuing,
challenging external market environment, will continue to prudently manage the
capital and liquidity position of the firm.
Net (losses)/ gains on investments
Warrants and investments may be received during the course of business and are
designated as fair value through profit or loss. At each reporting date the
warrants and investments are revalued and any gain or loss is recognised in
net (losses)/ gains on investments. On exercise of warrants and sale of
investments the gain or loss is also recognised in net (losses)/ gains on
investments.
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 were
reallocated to the WM CGU as at 31 March 2024. 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.
Identification and classification of discontinued operations and disposal
group assets and liabilities
During the prior year ended 31 March 2024, management was required to assess
both divisions against criteria set out in IFRS 5 on whether they would be
classed as discontinued operations. The Group had pursued a sale of both the
WM and CM divisions. Both sales were judged to be highly probable at year end
and so were 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 31st October 2023 for WM and 15th February 2024 for CM. At
year end both divisions had 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 did not proceed 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.
However this adjustment has been made in the current period. The WM division
has been reclassified as continuing operations in the Consolidated statement
of comprehensive income including associated comparatives for the 31 March
2024 and 30 September 2023 amounts and assets and liabilities allocated to the
WM division that were previously classified as held for sale at 31 March 2024
have been reclassified to their appropriate categories and depreciation and
amortisation has been recognised in the current period in accordance with IFRS
5.
Estimate of contingent consideration
The sale of the CM business in July 2024 is on a contingent consideration
basis 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). Terms that are capitalised are defined in
the relevant sale and purchase agreement dated 12 July 2024.
Based on the level of retainer and transaction revenue over the previous 12
month period, management has currently estimated this amount to be £2m. This
has been recognised fully in the Consolidated statement of comprehensive
income during the period and is subject to re-measurement following further
assessment at 31 March 2025.
2. Segment information
The Group has two principal operating segments, Wealth Management (WM) and
Capital Markets (CM) and a number of minor operating segments that have been
aggregated into one operating 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. The CM business was sold in July
2024 and are therefore shown as discontinued operations on the face of the
financial statements. No customer represents more than ten percent of the
Group's revenue (FY23: nil).
6 months ended 30 Sep 2024 Wealth Management Capital Markets Group and consolidation adjustments Group
(unaudited) £'000 £'000 £'000 £'000
Revenue 5,344 3,175 - 8,519
Direct costs (4,658) (2,706) - (7,364)
Contribution 686 469 - 1,155
Indirect costs (1,919) (555) - (2,474)
Underlying (loss) before tax (1,233) (86) - (1,319)
Amortisation (428) - - (428)
Redundancy costs (301) (12) - (313)
Holiday Leave paid on termination (7) - - (7)
Project Costs (252) (146) - (398)
Finance income 4 - 4 8
Finance expense (4) - (2) (6)
Gain on fixed assets and business sale - 1,031 150 1,181
Gain on investments - - 74 74
Net changes in the value of non-current investment assets - (37) - (37)
(Loss)/profit before tax (2,221) 750 226 (1,245)
Taxation - - - -
(Loss)/profit for the period (2,221) 750 226 (1,245)
6 months ended 30 Sep 2023 Wealth Management Capital Markets Group and consolidation adjustments Group
(unaudited) £'000 £'000 £'000 £'000
Revenue 6,338 4,385 - 10,723
Direct costs (5,142) (4,850) - (9,992)
Contribution 1,196 (465) - 731
Indirect costs (1,365) (876) (308) (2,549)
Underlying (loss) before tax (169) (1,341) (308) (1,818)
Amortisation (234) - - (234)
Redundancy costs (227) (520) - (747)
Holiday Leave paid on termination (29) (77) - (106)
Project Costs - - (806) (806)
Net changes in the value of non-current investment assets - (204) - (204)
Loss before tax (659) (2,142) (1,114) (3,915)
Taxation - - - -
Loss for the period (659) (2,142) (1,114) (3,915)
12 months ended 31 Mar 2024 Wealth Management Capital Markets Group and consolidation adjustments Group
(audited) £'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 profit/(loss) before tax (631) (1,837) - (2,468)
Amortisation of acquired client relationships (273) - - (273)
Changes in fair value & finance cost of contingent consideration - - 160 160
Redundancy costs (380) (564) - (944)
Holiday Leave paid on termination (43) (83) - (126)
Project Cost (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)
Taxation - - 12 12
Loss for the year (2,344) (3,184) (411) (5,939)
3. Investments
As at As at As at
30 Sep 2024 30 Sep 2023 31 Mar 2024
Investments £'000 £'000 £'000
Fair value: warrants 102 276 95
Total investments 102 276 95
Warrants may be received during the ordinary course of business; there is no
cash consideration associated with the acquisition.
As at As at As at
30 Sep 2024 30 Sep 2023 31 Mar 2024
£'000 £'000 £'000
Other investments 83 1,414 1,544
The fair value of warrants is estimated using established valuation models.
These investments are included in non-current assets.
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 cash and cash equivalents.
Client money at 30 September 2024 was £0.1m (30 September 2023: £0.3m; 31
March 2024: £0.1m).
5. Provisions
Contingent consideration Provision for onerous contracts Other provision £'000
At 30 Sep 2023 1,424 - - 1,424
Charged to Statement of Comprehensive Income (160) 447 - 287
Reclassification (354) - 354 -
Paid during the year (35) - - (35)
Balance at 31 March 2024 875 447 354 1,676
Paid during the period (875) - - (875)
Realised during the period - (295) - (295)
Balance at 30 September 2024 - 152 354 506
Contingent consideration related to the acquisition of Harpsden. During the
period £875k was paid to the former shareholders of Harpsden WM Limited. The
remaining excess provision of £354k has been retained by the Group and was
reclassified to other provisions on account of potential future claims that
may arise.
As part of the sale of the CM division there were existing contracts that run
until December 2024. These services will not be used by the business going
forward so were included in the discontinued operations for CM. These are
onerous contracts as the Group is locked into them and they are not
transferred to the buyer. During the year £295k has been released from the
provision for onerous contracts in line with invoices received during the
service termination period.
The other provision is for a potential liability in relation to the contingent
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.
6. Goodwill
Goodwill acquired in a business combination is allocated to a cash generating
unit (CGU) that will benefit from that business combination. In the prior
year, the goodwill was attributed to a single enlarged CGU that encompasses
the WM business as a whole.
The carrying amount of goodwill acquired in the acquisition of Harpsden WM is
set out below:
As at As at As at
30 Sep 2024 30 Sep 2023 31 Mar 2024
Group £'000 £'000 £'000
Beginning of period 3,539 3,539 3,539
End of period 3,539 3,539 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. At 31 March 2024,
the WM CGU recoverable amount was calculated as £18.0m and the carrying value
of the assets allocated to the CGU was £8.0m, showing a total headroom of
£10.0m.
Indicators of impairment are also assessed throughout the year and the main
external sources that could indicate an impairment are the market
capitalisation of the business, the value of assets under management resulting
in lower revenue and an increase in market interest rates impacting the
applicable discount rate applied to the forward looking cash flows. Indicators
of impairment did not exist at reporting date, as such no impairment
assessment has been undertaken.
7. Share capital
Number of shares
'000
As at 1 April 2024 and 30 September 2024 235,986
The total number of ordinary shares in issue is 235.99 million (30 September
2023: 235.99 million; 31 March 2024: 235.99 million). The total number of
deferred shares is 65.15 million (31 March 2024: 65.15m, 30 September 2023:
65.15m).
8. 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 period, 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. 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.
As at As at As at
30 Sep 2024 30 Sep 2023 31 Mar 2024
Weighted average number of shares in issue during the period ('000) 232,647 88,931 175,718
Total
Post-tax loss from continuing operations (£'000) (2,145) (1,773) (2,755)
Profit / (loss) from discontinuing operations incl. tax (£'000) 900 (2,142) (3,184)
Earning per share - basic and diluted
From continuing operations (0.92p) (1.99p) (1.57p)
From discontinuing operations 0.39p (2.41p) (1.81p)
Total (0.53p) (4.40p) (3.38p)
Reconciliation of the earnings and weighted average number of shares used in
the calculations are set out below.
9. Dividends
No interim dividend has been paid or proposed in respect of the current
financial period (30 September 2023: nil; 31 March 2024: nil).
10. Discontinued operations
At 31 March 2024 management were advertising both the CM and WM division for
sale. During the interim period, the Group completed on the sale of the CM
division on the 12th July 2024. Following the agreement to sell the CM
division, the WM division was removed from the disposal group and shown in
continuing operations in the financial statements for all three period.
During the period £150k has been received in relation to the sale of the Isle
of Man WM business to Ravenscroft in 2020. This amount has been recognised in
the gain on disposal of discontinued operation line below.
Financial performance information Period ended Period ended Year ended
30 Sep 2024 30 Sep 2023 31-Mar 2024
£'000 £'000 £'000
Revenue 3,175 4,385 9,574
Administrative expenses (3,419) (6,323) (13,032)
Expected credit loss - - -
Operating loss (244) (1,938) (3,458)
Net gain / (loss) on investments (37) (204) 274
Gain on disposal of discontinued operations 1,181 - -
Profit/(loss) before tax 900 (2,142) (3,184)
Tax income/(charge) - - -
Profit/(loss) from discontinued operations 900 (2,142) (3,184)
Assets and liabilities of disposal group classified as held for sale as at
year ended 31 Mar 2024
WM CM Total
Assets classified as held for sale £'000 £'000 £'000
Intangible assets 3,490 - 3,490
Goodwill 3,539 - 3,539
Property, plant and equipment 255 214 469
Investments - warrants - 95 95
Right of use asset 378 23 401
Total assets held for sale 7,662 332 7,994
WM CM Total
Liabilities directly associated with assets classified as held for sale £'000 £'000 £'000
Lease liability (272) (21) (293)
Total liabilities held for sale (272) (21) (293)
11. Deferred tax assets and liabilities
Restatement of deferred tax asset
Deferred tax is provided for temporary differences, at the reporting 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 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.
The restatement described above was corrected as part of the 31 March 2024
statutory group audit and disclosed in the 31 March 2024 Annual Report. The
disclosure below is to present the comparative restatement for 30 September
2023 to reflect the same corrected position of the group's deferred tax
position with net £nil deferred tax recognised at that date.
Period ended 30 September 2023 Restated
£'000
Prior to adjustment Adjustment
£'000
£'000
Deferred tax asset/(liability)
Deferred tax (630) 630 -
Equity
Retained earnings (12,182) 630 (11,552)
This announcement contains certain inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"),
and is disclosed in accordance with the Company's obligations under Article 17
of MAR.
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