Interim Results
Fiske PLC
13 February 2008
Fiske Plc
('Fiske' or 'the Company')
Interim Results
Fiske Plc (the 'Company') announces its interim results for the six months ended
30 November 2007. In accordance with rule 26 of the AIM Rules for Companies this
information is also available, under the Investors section, at the Company's
website, http://www.fiskeplc.com.
For further information please contact:
• Gerry Beaney/Fiona Kindness Grant Thornton UK LLP (Nominated Adviser)
(tel: 020 7383 5100)
• Gerard Luchini, Fiske Plc - Compliance Officer
(tel: 020 7448 4700)
Chairman's Statement
I am pleased to report a satisfactory first half of the financial year. For the
six months to 30 November 2007 we made a pre-tax profit of £400,000 against
£338,000 in the same period of the previous year. Due to returning to a more
normal tax charge of 28.6% against 40.3% in the same period last year earnings
per share are 3.4p against 2.6p.
As a result, and bearing in mind the strength of our balance sheet, we have
decided to increase the interim dividend from 2p to 2.5p per share. Corporate
finance, whilst never a large part of our income, was subdued in the period but
this was more than compensated by increased income from commission, investment
management fees and interest. We believe that a key strength of our business
lies in the steady increase in recurring income and it is our policy to continue
to grow in this area. The Company has adopted International Financial Reporting
Standards (IFRS) for the first time this period. The impact of this change on
the reported financial statements has been minor in respect of accounting policy
changes.
You will be pleased to know that we have no exposure to Collateralised Debt
Obligations (CDO), Structured Investment Vehicles (SIV) and other complex
products. Our only collective investments are unit trusts and investment trusts
for suitable clients. However we are of the opinion that the repercussions from
the current turmoil has further to go in the damage to the banking system, to
investor confidence and to the US economy in particular. Until everyone has
owned up to the extent of their losses (and this has by no means happened yet in
the UK) it is difficult to see the effects subsiding. We therefore maintain a
cautious stance on our clients' behalf for the short term future, but believe
they will be well positioned to take advantage of opportunities in the medium
term. Nevertheless the second half will inevitably be affected by the turbulence
in global markets.
The proposed simplification of the capital gains tax regime from 5 April 2008
should be good news for private clients generally, and for our private client
business in particular.
The Board continues to look at opportunities to improve shareholder value and
indeed is personally motivated in that direction. However most of the '
opportunities' presented are predicated at the expense of our clients and of
ephemeral benefit for shareholders. You may be sure that if an appropriate
proposition is brought to the Board they will give it proper consideration
bearing in mind the interests of shareholders, clients and staff.
M J Allen
Chairman
13 February 2008
Independent Review Report to Fiske plc
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
November 2007 which comprises the consolidated income statement, the
consolidated statement of recognised income and expense, the consolidated
balance sheet, the consolidated cash flow statement and related notes 1 to 5. We
have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing
Practices Board. Our 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.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the AIM Rules of the London Stock Exchange
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report have been prepared in accordance with the accounting policies the group
intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, 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 Ireland) 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.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 November 2007 is not prepared, in all
material respects, in accordance with the AIM Rules of the London Stock
Exchange.
Deloitte & Touche LLP
Chartered Accountants
London, United Kingdom 13 February 2008
Condensed Consolidated Income Statement
for the six months ended 30 November 2007
Six months ended Six months ended Year ended
30 November 2007 30 November 2006 31 May 2007
Unaudited Unaudited Unaudited
Notes £'000 £'000 £'000
Fee and commission income 2,070 1,971 4,516
Fee and commission expenses (505) (502) (1,148)
Net fee and commission income 1,565 1,469 3,368
Other income 141 137 177
TOTAL REVENUE 1,706 1,606 3,545
Profit/(loss) on disposal of available-for-sale
investments 7 (3) 14
Operating expenses (1,423) (1,313) (2,699)
Write-down of goodwill - - (75)
Amortisation of intangibles (42) (71) (106)
OPERATING PROFIT 248 219 679
Investment revenue 29 22 26
Finance income 125 98 202
Finance costs (2) (2) (4)
Profit on disposal of property, plant and equipment - 1 1
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 400 338 904
Taxation (114) (122) (312)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 286 216 592
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS 286 216 592
Earnings per ordinary share (pence)
Basic 3 3.4 p 2.6 p 7.1 p
Diluted 3 3.4 p 2.6 p 7.1 p
Condensed Consolidated Statement of Recognised Income
and Expense
for the six months ended 30 November 2007
Six months ended Six months ended Year ended
30 November 2007 30 November 2006 31 May 2007
Unaudited Unaudited Unaudited
£'000 £'000 £'000
Gain on revaluation of available-for-sale investments
taken to equity 6 55 95
INCOME RECOGNISED DIRECTLY IN EQUITY TRANSFERS 6 55 95
Transfers to profit or loss on sale of available-for-sale
investments (4) 4 3
PROFIT FOR THE PERIOD 286 216 592
TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD 288 275 690
Attributable to equity shareholders 288 275 690
Condensed Consolidated Balance Sheet
30 November 2007
As at As at As at
30 November 2007 30 November 2006 31 May 2007
Unaudited Unaudited Unaudited
£'000 £'000 £'000
ASSETS
NON-CURRENT ASSETS
Goodwill 375 450 375
Other intangible assets 99 176 141
Property, plant and equipment 131 171 152
Available-for-sale investments 645 516 542
TOTAL NON-CURRENT ASSETS 1,250 1,313 1,210
CURRENT ASSETS
Trade and other receivables 10,132 9,122 22,552
Investments held for trading 517 451 213
Cash and cash equivalents 3,867 3,625 4,411
TOTAL CURRENT ASSETS 14,516 13,198 27,176
TOTAL ASSETS 15,766 14,511 28,386
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 10,378 9,578 23,161
Current tax liabilities 403 262 288
TOTAL CURRENT LIABILITIES 10,781 9,840 23,449
NON-CURRENT LIABILITIES
Deferred tax liabilities 117 101 118
TOTAL NON-CURRENT LIABILITIES 117 101 118
TOTAL LIABILITIES 10,898 9,941 23,567
EQUITY
Share capital 2,087 2,078 2,078
Share premium 1,187 1,185 1,185
Revaluation reserve 288 247 286
Retained earnings 1,306 1,060 1,270
SHAREHOLDERS' EQUITY 4,868 4,570 4,819
TOTAL EQUITY AND LIABILITIES 15,766 14,511 28,386
Condensed Consolidated Cash Flow Statement
for the six months ended 30 November 2007
Six months ended Six months ended Year ended
30 November 2007 30 November 2006 31 May 2007
Unaudited Unaudited Unaudited
£'000 £'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash (used in)/generated by operations (356) (604) 382
Interest paid (2) (2) (4)
Tax paid - - (171)
NET CASH (USED IN)/GENERATED FROM OPERATING ACTIVITIES (358) (606) 207
INVESTING ACTIVITIES
Interest received 125 98 202
Dividends received 29 22 26
Proceeds on disposal of available-for-sale investments 65 17 153
Proceeds on disposal of property, plant and equipment - 5 5
Purchases of available-for-sale investments (160) - (90)
Purchases of property, plant and equipment (6) (10) (25)
NET CASH GENERATED FROM INVESTING ACTIVITIES 53 132 271
FINANCING ACTIVITIES
Share capital issued 11 - -
Dividends paid (250) (166) (332)
NET CASH USED IN FINANCING ACTIVITIES (239) (166) (332)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (544) (640) 146
Cash and cash equivalents at beginning of period 4,411 4,265 4,265
Cash and cash equivalents at end of period 3,867 3,625 4,411
Notes to the Interim Financial Statements
and IFRS reconciliations
1. ACCOUNTING POLICIES
The following accounting policies have been applied in dealing with items which
are considered material in relation to the Group's financial statements:
a) Basis of preparation
The financial information for the six months ended 30 November 2007 has been
prepared under International Financial Reporting Standards ('IFRS') subject to
exemptions referred to in this note. The financial information for the year
ended 31 May 2007 has been derived from audited UK GAAP information adjusted for
the impact of IFRS and is therefore unaudited. The financial information for the
period ended 30 November 2006 has been derived from unaudited UK GAAP
information adjusted for the impact of IFRS. The interim information, together
with comparative information contained in this report for the year ended 31 May
2007 and the period ended 30 November 2007, does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985. However,
the information has been reviewed by the Company's auditors, Deloitte & Touche
LLP, and their report appears on page 2. The UK GAAP statutory accounts for the
year ended 31 May 2007 have been reported on by the Company's auditors, Deloitte
& Touche LLP, and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985.
b) Transition to International Financial Reporting Standards
The transitional arrangements to IFRS are set out in IFRS1. The next annual
financial statements of the Group will be prepared in accordance with IFRS as
adopted for use in the EU. The Group's transition date to IFRS is 1 June 2006,
being the first day of the comparative period. Accordingly the interim financial
report, together with comparative information, has been prepared using
accounting policies consistent with IFRS.
c) Basis of consolidation
The interim financial statements incorporate the financial statements of the
Company and entities controlled by the Company (its subsidiaries) made up to 30
November each year. Control is achieved where the company has the power to
govern the financial and operating policies of an investee entity so as to
obtain benefit from its activities. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
d) Revenue recognition
The Group follows the principles of IAS 18, 'Revenue Recognition', in
determining appropriate revenue recognition policies. Therefore, revenue is
recognised to the extent that it is probable that the economic benefits
associated with the transaction will flow into the Group.
Corporate Finance: Revenue comprises the value of services supplied by the
Group, exclusive of value added tax and are recognised when the relevant
transaction is completed. Retainer fees are recognised over the period of the
agreement.
Stockbroking: Turnover comprises commission and other fees and is recognised
when receivable in accordance with the date of the underlying transaction.
Other income includes dividend income on available-for-sale investments,
recognised when an unconditional right to receive the income has been
established.
e) Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The
cost of acquisition is measured as the aggregate of the fair values, at the date
of exchange, of the assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquiree, plus
any costs directly attributable to the business combination.
The acquiree's identifiable assets, liabilities and contingent liabilities that
meet the conditions for recognition under IFRS 3 are recognised at their fair
value at the acquisition date. As permitted by IFRS 1, the Group has chosen not
to restate, under IFRS, business combinations that took place prior to 1 June
2006 the date of transition to IFRS.
f) Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate or jointly controlled entity
at the date of acquisition. Goodwill is initially recognised as an asset at cost
and is subsequently measured at cost less any impairment. Goodwill which is
recognised as an asset is reviewed for impairment at least annually. Any
impairment is recognised immediately and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently where there is an indication
that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than the carrying value of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro-rata on the basis of the
carrying value of each asset in the unit. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, associate or jointly controlled entity, the
attributable amount of goodwill is included in the determination of the profit
or loss on disposal. Goodwill arising on acquisitions before the date of
transition to IFRSs has been retained at the previous UK GAAP amounts subject to
being tested for impairment at that date.
g) Property, plant and equipment
All property, plant and equipment is shown at cost less subsequent depreciation
and impairment. Cost includes expenditure that is directly attributable to the
acquisition of items. Depreciation is charged so as to write off the cost or
valuation of assets over their useful economic lives, using the straight-line
method, which are considered to be as follows:
Office furniture and fittings - 4 years
Computer equipment - 3 years
Office refurbishment - 5 years
The assets' residual values and useful lives are reviewed, and if appropriate
asset values are written down to their estimated recoverable amounts, at each
balance sheet date. Gains and losses on disposals are determined by comparing
proceeds with the carrying amounts, and are included in the income statement.
h) Impairment of intangible assets
Our policy is to amortise intangible assets over the life of the contract, in
this instance the period to 31 October 2008.
At each balance sheet date, the Group reviews the carrying amounts of its
intangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value, using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss being recognised
for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognised as income immediately.
i) Available-for-sale investments
Investments previously classified as fixed asset investments have been
re-classified as available-for-sale investments, and initially recognised at
fair value. Subsequent available-for-sale investments are recognised and
derecognised on a trade date where a purchase or sale of an investment is
effected under a contract whose terms require delivery of the investment within
the timeframe established by the market concerned, and are initially measured at
cost, including transaction costs.
At subsequent reporting dates, available-for-sale investments are measured at
fair value. Gains or losses arising from changes in fair value are recognised
directly in equity, until the security is disposed of or is determined to be
impaired, at which time the cumulative gain or loss previously recognised in
equity is included in the net profit or loss for the period. Impairment losses
recognised in profit or loss are not subsequently reversed through profit or
loss.
The fair values of available-for-sale investments quoted in active markets are
determined by reference to the current quoted bid price.
j) Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value,
and are subsequently measured at amortised cost using the effective interest
rate method. Appropriate allowances for estimated irrecoverable amounts are
recognised in profit or loss when there is objective evidence that the asset is
impaired. The allowance recognised is measured as the difference between the
asset's carrying amount and the present value of estimated future cash flows
discounted at the effective interest rate computed at initial recognition.
k) Investments held for trading
Investments held for trading, which from time to time may include derivatives,
including traded options and warrants traded on an exchange, are measured at
market value.
l) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other
short-term highly liquid investments that are readily convertible to known
amounts of cash and are subject to insignificant risk of changes in value. Such
investments are normally those with original maturities of three months or less.
m) Client money
The group holds money on behalf of clients in accordance with the Clients' Money
Rules of the Financial Services Authority. Such monies and the corresponding
liabilities to the clients are excluded from the balance sheet.
n) Trade and other payables
Trade and other payables are recognised initially at fair value, which is the
agreed market price at the time goods or services are provided. The Group
accrues for all goods and services consumed but as yet unbilled at amounts
representing management's best estimate of fair value.
o) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
p) Dividends
Equity dividends are recognised when they become legally payable. Interim equity
dividends are recognised when paid. Final equity dividends are recognised when
approved by the shareholders at an annual general meeting.
q) Share-based payments
Where equity settled share options are awarded to employees, the fair value of
the options at the date of grant is charged to the income statement over the
vesting period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each balance
sheet date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of options that eventually vest. Market
vesting conditions are factored into the fair value of the options granted. As
long as all other vesting conditions are satisfied, a charge is made
irrespective of whether the market vesting conditions are satisfied. The
cumulative expense is not adjusted for failure to achieve a market vesting
condition.
When the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and after
the modification, is also charged to the income statement over the remaining
vesting period.
Where equity instruments are granted to persons other than employees, the income
statement is charged with the fair value of the goods and services received.
r) Taxation
The tax expense represents the sum of the tax currently payable and the deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, except where the Group is
able to control the reversal of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis.
Interim measurement note
Current income tax expense is recognised in these interim consolidated financial
statements based on management's best estimates of the annual income tax
liability expected for the full financial year.
s) Foreign currencies
The individual financial statements of each group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each group company are expressed in pounds
sterling, which is the functional currency of the Company, and the presentation
currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the rates prevailing
on the balance sheet date. Non-monetary items carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that are measured in
terms of historical costs in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly
in equity.
t) Leases
Operating lease rentals are charged to the profit and loss account on a straight
line basis over the term of the lease. Reverse premiums and similar incentives
received to enter into operating lease agreements are released to the profit and
loss account over the period to the date on which the rent is first expected to
be adjusted to the prevailing market rate. Benefits received and receivable as
an incentive to enter into an operating lease are also spread on a straight-line
basis over the lease term.
2. TAXATION
The tax charge for the six months to 30 November 2007 reflects all the necessary
provisions for current tax, taking into account the availability of losses
brought forward, and movements in deferred tax with reference to the adjustments
necessary under IFRS. In arriving at the effective tax rate account has been
taken of the forthcoming change in the rate of tax charged, the disallowance of
the cost of share based payments charged to the income statement.
3. EARNINGS PER SHARE
The calculation of the basic earnings per ordinary share is based on profit on
ordinary activities after tax and on the weighted average number of ordinary
shares in issue during the period. The calculation of diluted earnings per
ordinary share is based on the basic earnings per ordinary share adjusted to
allow for the issue of shares on the assumed conversion of all dilutive options.
Six months ended 30 November 2007 Six months ended 30 November 2006
Weighted Weighted
average average
Earnings number Earnings per Earnings number Earnings per
£'000 of shares share (pence) £'000 of shares share (pence)
Basic earnings per ordinary
share 286 8,322,003 3.4 216 8,300,245 2.6
Dilutive effect of potential
ordinary shares: options 2 69,247 - 2 84,830 -
Dilutive earnings per
ordinary share 288 8,391,250 3.4 218 8,385,075 2.6
4. DIVIDENDS PAID
Dividends paid of £250,000 (2006 - £166,000) refer to the Second interim
dividend paid for the preceding year.
The Interim dividend of 2.5p will be paid on 14 March 2008 to shareholders on
the register on 22 February 2008. The shares will be marked ex-dividend on 20
February 2008.
5. IFRS RECONCILIATION
Reconciliations of equity, net assets and profit under UK GAAP to IFRS.
Fiske plc reported under UK GAAP in its previously published financial
statements for the year ended 31 May 2007. The analyses that follow show
reconciliations of equity, net assets and profit as at 31 May 2007 to the
revised equity, net assets and profit as reported in these interim financial
statements. In addition there is a reconciliation of net assets under UK GAAP to
IFRS at the transition date of the Group, being 1 June 2006.
a) Reconciliation of equity at 1 June 2006 (Date of transition to IFRS)
Effect of transition to IFRS
Re- Re-
UK GAAP measurement classification IFRS
Notes £'000 £'000 £'000 £'000
ASSETS
NON-CURRENT ASSETS
Goodwill a - - 450 450
Other intangible assets c 697 - (450) 247
Fixed asset investments 176 268 (444) -
Tangible fixed assets 192 - (192) -
Property, plant and equipment d - - 192 192
Available-for-sale investments e - - 444 444
TOTAL NON-CURRENT ASSETS 1,065 268 - 1,333
CURRENT ASSETS
Trade and other receivables - - 6,804 6,804
Market and client debtors 6,518 - (6,518) -
Other debtors 298 - (298) -
Current asset investments - - - -
Investments held for trading - - - -
Cash and cash equivalents 4,265 - - 4,265
TOTAL CURRENT ASSETS 11,081 - (12) 11,069
TOTAL ASSETS 12,146 268 (12) 12,402
LIABILITIES
CURRENT LIABILITIES
Trade and other payables - - 7,718 7,718
Creditors: amounts falling due within one year 7,873 - (7,873) -
Current tax liabilities f - - 155 155
TOTAL CURRENT LIABILITIES 7,873 - - 7,873
NON-CURRENT LIABILITIES
Deferred tax liabilities g - 80 (12) 68
TOTAL NON-CURRENT LIABILITIES - 80 (12) 68
TOTAL LIABILITIES 7,873 80 (12) 7,941
EQUITY
Share capital 2,078 - - 2,078
Share premium 1,185 - - 1,185
Revaluation reserve - 188 - 188
Retained earnings 1,010 - - 1,010
Shareholders' equity 4,273 188 - 4,461
TOTAL EQUITY AND LIABILITIES 12,146 268 (12) 12,402
b) Reconciliation of equity at 30 November 2006
Effect of transition to IFRS
Re- Re-
UK GAAP measurement classification IFRS
Notes £'000 £'000 £'000 £'000
ASSETS
NON-CURRENT ASSETS
Goodwill a - 38 412 450
Other intangible assets c 588 - (412) 176
Fixed asset investments 163 353 (516) -
Tangible fixed assets 171 - (171) -
Property, plant and equipment d - - 171 171
Available-for-sale investments e - - 516 516
TOTAL NON-CURRENT ASSETS 922 391 - 1,313
CURRENT ASSETS
Trade and other receivables - - 9,122 9,122
Market and client debtors 8,779 - (8,779) -
Other debtors 348 - (348) -
Current asset investments 451 - (451) -
Investments held for trading - - 451 451
Cash and cash equivalents 3,625 - - 3,625
TOTAL CURRENT ASSETS 13,203 - (5) 13,198
TOTAL ASSETS 14,125 391 (5) 14,511
LIABILITIES
CURRENT LIABILITIES
Trade and other payables - - 9,578 9,578
Creditors: amounts falling due within 9,840 - (9,840) -
one year
Current tax liabilities f - - 262 262
TOTAL CURRENT LIABILITIES 9,840 - - 9,840
NON-CURRENT LIABILITIES
Deferred tax liabilities g - 106 (5) 101
TOTAL NON-CURRENT LIABILITIES - 106 (5) 101
TOTAL LIABILITIES 9,840 106 (5) 9,941
EQUITY
Share capital 2,078 - - 2,078
Share premium 1,185 - - 1,185
Revaluation reserve - 247 - 247
Retained earnings 1,022 38 - 1,060
Shareholders' equity 4,285 285 - 4,570
TOTAL EQUITY AND LIABILITIES 14,125 391 (5) 14,511
c) Reconciliation of equity at 31 May 2007
Effect of transition to IFRS
Re- Re-
UK GAAP measurement classification IFRS
Notes £'000 £'000 £'000 £'000
ASSETS
NON-CURRENT ASSETS
Goodwill a - - 375 375
Other intangible assets c 516 - (375) 141
Fixed asset investments 133 409 (542) -
Tangible fixed assets 152 - (152) -
Property, plant and equipment d - - 152 152
Available-for-sale investments e - - 542 542
TOTAL NON-CURRENT ASSETS 801 409 - 1,210
CURRENT ASSETS
Trade and other receivables - - 22,552 22,552
Market and client debtors 22,123 - (22,123) -
Other debtors 434 - (434) -
Current asset investments 213 - (213) -
Investments held for trading - - 213 213
Cash and cash equivalents 4,411 - - 4,411
TOTAL CURRENT ASSETS 27,181 - (5) 27,176
TOTAL ASSETS 27,982 409 (5) 28,386
LIABILITIES
CURRENT LIABILITIES
Trade and other payables - - 23,161 23,161
Creditors: amounts falling due within one year 23,449 - (23,449) -
Current tax liabilities f - - 288 288
TOTAL CURRENT LIABILITIES 23,449 - - 23,449
NON-CURRENT LIABILITIES
Deferred tax liabilities g - 123 (5) 118
TOTAL NON-CURRENT LIABILITIES - 123 (5) 118
TOTAL LIABILITIES 23,449 123 (5) 23,567
EQUITY
Share capital 2,078 - - 2,078
Share premium 1,185 - - 1,185
Revaluation reserve - 286 - 286
Retained earnings 1,270 - - 1,270
Shareholders' equity 4,533 286 - 4,819
TOTAL EQUITY AND LIABILITIES 27,982 409 (5) 28,386
d) Reconciliation of profit for the six months ended 30 November 2006
Effect of transition to IFRS
UK GAAP Re- Re- IFRS
£'000 measurement classification £'000
£'000 £'000
Gross commission and similar income 1,971 - (1,971) -
Fee and commission income - - 1,971) 1,971
Fee and commission expenses - - (502) (502)
Net fee and commission income 1,971 - (502) 1,469
Other income 137 - - 137
Commission payable (502) - 502 -
GROSS PROFIT/TOTAL INCOME 1,606 - - 1,606
Profit/(loss) on disposal of
available-for-sale investments - - (3) (3)
Profit/(loss) on disposal of investments (3) - 3 -
Operating expenses (1,313) - - (1,313)
Amortisation of intangibles (109) 38 - (71)
OPERATING PROFIT 181 38 - 219
Investment revenue 22 - - 22
Finance income 98 - - 98
Finance costs (2) - - (2)
Profit on disposal of property plant and equipment 1 - - 1
Profit on ordinary activities before taxation 300 38 - 338
Taxation (122) - - (122)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 178 38 - 216
Profit attributable to equity shareholders 178 38 - 216
e) Reconciliation of profit for the year ended 31 May 2007
Effect of transition to IFRS
Re- Re-
UK GAAP measurement classification IFRS
£'000 £'000 £'000 £'000
Gross commission and similar income 4,516 - (4,516) -
Fee and commission income - - 4,516 4,516
Fee and commission expenses - - (1,148) (1,148)
Net fee and commission income 4,516 - (1,148) 3,368
Other income 177 - - 177
Commission payable (1,148) - 1,148 -
GROSS PROFIT/TOTAL INCOME 3,545 - - 3,545
Profit/(loss) on disposal of
available-for-sale investments - - 14 14
Profit/(loss) on disposal of investments 14 - (14) -
Operating expenses (2,699) - - (2,699)
Write-down of goodwill - - (75) (75)
Amortisation of intangibles (181) - 75 (106)
OPERATING PROFIT 679 - - 679
Investment revenue 26 - - 26
Finance income 202 - - 202
Finance costs (4) - - (4)
Profit on disposal of property plant and equipment 1 - - 1
Profit on ordinary activities before taxation 904 - - 904
Taxation (312) - - (312)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 592 - - 592
Profit attributable to equity shareholders 592 - - 592
Notes to the Interim Financial Statements
NOTES TO RECONCILIATIONS OF EQUITY AND PROFIT
a) Goodwill
As a result of the adoption of IAS 38, 'Intangible Assets', goodwill previously
recognised within other intangible assets has been re-classified to goodwill on
the face of the balance sheet.
b) Amortisation
As a result of the adoption of IFRS 3, 'Business Combinations', goodwill is no
longer subject to amortisation. Rather its value is appraised annually for any
further write-down.
c) Other intangible assets
'Other intangible assets' consist of investment in rights to certain software
used in the Company's back office systems, less amortisation expensed since
acquisition.
d) Property, plant and equipment
As a result of the adoption of IAS 16, 'Property, Plant and Equipment', items
previously classified as tangible fixed assets have been re-classified as
property, plant and equipment.
e) Available-for-sale investments
Assets previously classified as fixed asset investments have been re-classified
as available-for-sale investments, and recognised at fair value as detailed in
the accounting policies. Fair value adjustments to available-for-sale
investments are taken directly to the fair value reserve.
f) Current tax liabilities
As a result of the adoption of IAS 12, 'Income Taxes', current tax liabilities
are shown as a separate line item on the face of the balance sheet.
g) Deferred tax assets and liabilities
The revaluation of available-for-sale investments has given rise to a deferred
tax liability. The deferred tax asset arising from UK GAAP accounting has been
netted against this liability in arriving at a net deferred tax liability.
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