Interim Management Statement

RNS Number : 3240S

Evolution Group PLC

18 November 2011

 



Embargoed until 7.00am                                                                                                                                                                  18 Nov 2011

The Evolution Group Plc

(the "Evolution Group", the "Group", the "Company")

Interim Management Statement

Evolution Group, the listed investment bank and private client investment management group, today announces its second Interim Management Statement for the financial year ending 31 December 2011, as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3. This relates to the period from 1 July 2011 to today's date.

Investec Offer

As announced on 27^th October 2011, the Group's shareholders voted by the requisite majority to approve Investec plc's acquisition of the Group. The hearing of the petition to the Court to sanction the Court sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme") and to confirm the related Capital Reduction is expected to take place on 13 December 2011, although this is dependent on certain conditions to the Scheme having been satisfied by that date, including the receipt of requisite regulatory and anti-trust clearances.

Subject to the Court sanctioning the Scheme and the satisfaction of certain other outstanding conditions, it is expected that the last day for dealings in Evolution Shares will be 13 December 2011 and the Scheme will become effective on 14 December 2011. If the Scheme becomes effective on 14 December 2011, it is expected that the new Investec plc shares to be allotted to existing Evolution Group shareholders pursuant to the Scheme will be admitted to the official list of the UK Listing Authority and to trading on the London Stock Exchange's Main Market for listed securities on the 14 December 2011 and the listing of Evolution will be cancelled on 14 December 2011.

Group performance

Despite ongoing tough market conditions, we are pleased to announce that the Group is line to meet the Board's expectations regarding trading performance.

Private Clients¹                                

As announced on the 20 October 2011, Williams de Broë completed the acquisition of BNP Paribas Private Investment Management Limited from BNP Paribas Wealth Management S.A.

Although still in its infancy the acquisition is proceeding smoothly, bringing £1.5bn of new Assets under Management to the business.

Our Private client business also continued to see momentum in organic new fund sales, with Q3 gross inflows of £96m (Q3 2010: £95m), whilst also continuing to attract high calibre professionals to its investment management and business development teams.  

As a result of these organic and inorganic inflows offsetting recent market falls Assets under Management have grown to be £7.1bn at the end of October 2011, up 18% from £6.0bn at 30 June 2011. We believe this increase in Assets under Management, combined with a scalable business model, leaves Williams de Broë well placed to further increase its profits and margins.

Investment Banking²

Our Investment Banking division has been significantly impacted by the recent turbulent market conditions and the inherent uncertainty over the Group's future following Investec's initial offer on the 3 August.

As a result of these two factors, income is considerably down in Q3, resulting in the business accruing a year to date loss at the adjusted operating level.

Due to the current depressed levels of income within the business, Management has taken action to reduce the cost base from Q4 onwards. This has been achieved by reducing headcount by 60 employees and continuing to have a disciplined approach to all areas of discretionary expenditure.

Despite these recent losses, the corporate finance and debt capital markets ("DCM") pipelines remain strong, including seven IPOs, six further retail bond mandates and a number of secondary equity raisings expected to complete before the year end.

To date in 2011, the investment banking division has acted on 10 equity capital market transactions, with a total of £1.4bn raised by its clients. Our DCM business has completed three mandates during the period, notably including Tesco Bank (raising £125m), Places for People (the first social housing retail bond issue, raising £145m) and National Grid (the first RPI-linked retail bond, raising £282.5m).

Notes

¹The results of Private Clients are defined as those arising from Williams de Broë Limited, WDB Asset Management Limited, WDB AssetMaster Management Company Limited and from Williams de Broë Private Investment Management Limited (Formally BNP Paribas Private Investment Management Limited).

²The results of Investment Banking are defined as those arising from Evolution Securities Limited, its subsidiary Evolution Securities (US) Inc. ("ESUS") and Darwin Strategic Limited ("Darwin").

Forward looking statements

This interim management statement may contain forward-looking statements with respect to the financial condition, results, operations and businesses of The Evolution Group Plc.  Such statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by forward-looking statements and forecasts.  Forward-looking statements and forecasts are based on the Directors' current view and information known to them at the date of this statement.  The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Nothing in this interim management statement should be construed as a profit forecast.

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For further information, please contact:

The Evolution Group Plc Alex Snow, Chief Executive Officer	020 7071 4300
Pelham Bell Pottinger (Financial PR to Investec)	020 7861 3925
Victoria Geoghegan

Notes to Editors:

 

The Evolution Group Plc

The Evolution Group is the holding company of Evolution Securities Limited, Williams de Broë Limited and Evolution Securities China Limited. Founded in April 2001 and originally listed on AIM, the Evolution Group joined the LSE Official List in 2003; the Group currently has a market capitalisation of approximately £180 million.

Evolution Securities Limited is a leading investment bank focused on UK mid cap public companies. It provides a full range of investment banking services including equity research, institutional sales and trading, market making and corporate finance advice. Evolution Securities Limited has over 70 retained corporate clients. It is authorised and regulated by the Financial Services Authority.

Williams de Broë Limited is one of the UK's leading and fastest growing private client investment managers, with offices in Bath, Birmingham, Bournemouth, Edinburgh, Exeter, Guildford and London. Williams de Broë Limited is authorised and regulated by the Financial Services Authority.

 

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