Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • Investegate.co.uk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com
  • FETransmission.com
  • Trustnet.hk
  • FEAnalytics.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

W.H. Ireland Group (WHI)

  Print      Mail a friend

Tuesday 02 March, 2010

W.H. Ireland Group

Preliminary Results

RNS Number : 8995H
W.H. Ireland Group PLC
02 March 2010
 



 

WH Ireland Group Plc

("WH Ireland" or "the Group")

 

Preliminary Results for the year ended 30 November 2009

 

WH Ireland (AIM: WHI) is an established financial services group with two distinct segments, private wealth management and securities.

 

Key Points

·      Group turnover on continuing operations decreased by 8.2% to £24.6m (2008: £26.8m), reflecting difficult trading conditions in the financial markets

·      Operating loss of £1.8m on continuing operations includes £0.7m of non-recurring charges

·      Restructuring programme implemented in 2009 is expected to yield an annualised cost reduction of £2.1m

·      Loss before tax on continuing operations of £2.1m (2008: £2.5m)

·      Total basic loss per share of 9.79p (2008: loss per share of 13.45p)

·      Equity shareholders' funds before minority interests decreased by 15.0% to £14.1m (2008: £16.6m) representing approximately 66p per share on the increased share capital (2008: 85.8p)

·      Part disposal of shareholding in loss-making Australian business realising £0.4m profit on disposal

·      Total funds under management and control in the UK increased to £1.18bn (2008: £1.13bn)

 

Richard Ford, Chief Executive, said today:

 

"The year under review was a particularly difficult one for the stockbroking community but I am pleased to say that WH Ireland has come through it in good shape.  Our restructuring programme has reduced our cost base in line with our business objectives, leaving us well placed to take advantage of any improvement in economic conditions."

 

Enquiries:

WH Ireland                                                                            Tel: 020 7220 1666

Richard Ford

 

Oriel Securities Ltd                                                             Tel: 020 7710 7600

Tom Durie

 

Biddicks (Financial PR to WH Ireland)                            Tel: 020 7448 1000

Zoe Biddick


Chairman's statement

 

Results and Dividend

The result for the full year is an operating loss from continuing operations of £1.8m stated after charges for non-recurring items of £0.7m.  The overall loss from continuing operations before tax is £2.1m.  This compares with a loss from continuing operations before tax of £2.5m for the last financial year and is a consequence of the ongoing very inclement conditions which prevail in both the real economy and in the financial markets.  During the year, the Group disposed of a significant proportion of its holding in its Australian associate.  Accounting rules state that we are no longer required to consolidate the performance of this associated holding.  However, since the disposal did not take place until the end of the year under review, the associated holding did contribute to the Group's performance for 11 months of the period in question.  The Consolidated Income Statement discloses the performance of the Group with the results of the discontinued operation shown separately.  A more detailed analysis of these results is to be found in the Chief Executive's Report which follows my statement.

 

Due to the operating loss incurred in the year and the continuing challenging conditions, your Directors consider that the payment of a dividend is not justified this year.

 

Strategy

The overriding aim is to establish a leading financial services group with a strong shareholder base, which attracts both new customers and revenue generators through its market reputation and quality of service. It is the Board's strategy to focus on its two primary business areas: Private Wealth Management, incorporating stockbroking, portfolio management financial planning and asset management, and Securities, incorporating corporate finance, corporate broking, research and institutional sales. We will endeavour to grow these two primary business areas in parallel, to achieve a similar contribution to the Group's profitability from both areas.

 

This strategy will be implemented by continuing to grow the business organically, through acquisitions and via strategic partnerships.

 

Trading

Trading conditions remain varied and difficult but there are significant signs of improvement.  There may still be further turbulence ahead and consequently, we continue to position your Company in a conservative manner from a cost perspective.  Our management team has taken action both to realign our cost base to one that is more appropriate for a business of our size and to build an accountable and responsible management structure which will help to ensure that costs will remain under tight control.  Trading continued to suffer through the period due to the unprecedented collapse of the world's banking system. 

 

Australia

We maintain a keen interest in our Australian associate and I am very pleased that its management team has secured the business's future by acquiring the majority of the 39.3% sold by the Company during the year.  We now own 37.3% of the business, keeping us closely involved but not running it from the other side of the world.  The local management team is now fully aligned with us in seeking to achieve considerable success for the business and returning it to profitability as soon as possible.  The part-disposal of our shareholding has resulted in the investment being reclassified as an associate and the Group results for the year reflect this change through the reporting of losses arising from discontinued operations.

 

Retirement of Director

The Board has been notified by John Padovan that, as he is approaching his 72nd birthday, he will not be seeking re-election at the forthcoming AGM. The Board reluctantly accepts John's decision to retire and would like to express its thanks and gratitude for his service to the Group.

 

Outlook

We remain cautious in our outlook, particularly with an impending election and the possible change of Government.  With this further uncertainty in mind, it is likely that markets will continue to be volatile and whilst wealth preservation remains key, it is increasingly difficult to achieve in a low interest environment.  However, we have a well managed business on a solid footing with an appropriate cost base and are working hard to protect and enhance the interests of our clients, both private and corporate. 

 

I would like to thank all my colleagues for supporting our Company and "staying the course" through what has been a difficult year.  They have all shown immense dedication, commitment and loyalty and I thank them all.

 

Rupert Lowe

Chairman


Chief Executive's Report

 

Overview

Our loss from continuing operations before taxation of £2.1m (compared to a like-for-like loss in the prior year of £2.5m) reflects a reduction in turnover, the costs of restructuring (which are approximately £0.7m) and an impairment of our available for sale investments of £0.3m.

 

As has been noted in the Chairman's report, the disposal of a significant proportion of the Group's investment in our Australian associate has necessitated the reporting of the losses arising in Australia as a discontinued operation.  On a combined basis, taking the results of the continuing operation with the 11 months of trading from the discontinued operation, the loss before tax is £2.4m compared to £4.0m in the corresponding period last year.

 

The year under review was a particularly difficult one for the stockbroking community.  I am pleased to say however, that WH Ireland has come through it in good shape.  This is due to a number of factors.  We took an early decision to implement a prudent but wide ranging and effective cost management programme across the business.  Secondly, we defined, communicated and focused on a clear and simple strategy.  At the same time we have worked to ensure our balance sheet is clean and appropriate for the business.  This has resulted in the realisation of some non-core assets to focus on cash.  I am pleased to say that as a result of these measures, your Company is very well placed to take advantage of any improvement in economic conditions.

 

Our overall turnover on continuing operations is down 8.2% on last year.  This compares with a reduction of 17.9% on continuing operations for the previous period.  Our cost management programme was appropriate and implemented in a timely fashion and whilst much of the reduction in turnover is due to the ongoing drought of IPO opportunities on the AIM market, it also reflects a general lack of confidence in the market as a whole. 

 

During the year, we reduced our holding in WH Ireland Australia Pty Ltd, our Australian associate, from 76.6% to 37.3%.  The share disposal was almost entirely taken up by the local management team, satisfying our objective of ensuring we have an appropriately motivated local team to take this business forward successfully.  We remain committed to maintaining a minority holding and still have ongoing and close relationships with our Australian colleagues.  However, the need for UK based management input into a business on the other side of the world has reduced correspondingly.

 

We are focusing our efforts on rebuilding our turnover and profitability.  To this end, we have set challenging but achievable objectives for the year ahead and have created a cost base commensurate with those objectives.  We believe that we have established a structure and a culture to achieve success.

 

Restructuring

This has been a "turnaround" year for your Company.  The restructuring programme had at its heart the need to create a cost base that was suitable for a business of our size.  Having defined the strategy for the business, it was important to ensure the whole of our team understood the direction of travel, so that (sometimes painful) decisions could be viewed in perspective.  As mentioned above, the restructuring programme has resulted in charges in the year under review of approximately £0.7m but it is anticipated that these actions will result in a total reduction of our cost base of approximately £2.1m per annum in the new financial year and beyond. 

 

Our headcount through the year has reduced by 43 in total.  We have parted company with some friends and colleagues who have been associated with the Company for many years.  I wish them all well for the future and for those that remain, I would like to thank them all for their patience and tolerance through what has been a very challenging year.  I hope and believe that the need for further headcount reduction is now behind us.

 

As part of our strategic review, one particular area that we examined in some detail was our back office and administration team.  It is all too easy in the financial services world to assume that outsourcing is a panacea.  Whereas on the surface it may appear attractive, a close understanding shows that this activity is an asset which both differentiates us from many of our competitors and which our clients especially appreciate.  We are able to provide a close and efficient level of service.  Whilst reducing the balance sheet cost of such a service might appear attractive superficially, a jewel in our crown would be lost.  Our decision to keep our back office has led to a programme of development and investment, including the recruitment of a highly experienced leader in Alan Kershaw (the new Operations Director in our main subsidiary) to take this business unit forward.  Our clear objective for this team is to build on its successes by acquiring further external administrative clients and to develop into a stand alone profit centre.  I am delighted that Alan has joined our team and his appointment is already yielding benefits.

 

Alan is the latest in a series of senior management appointments that have seen the entire team renewed since my appointment in September 2008.  I believe we now have a unified, professional and focused team capable of taking advantage of the enhanced platform that has been developed.  Our culture of transparency, trust and openness is being further encouraged.


Securities

Our securities business incorporates Corporate Finance, Corporate Broking, Research and Institutional Sales. 

 

At the year end, we acted for 64 companies; 58 of which are on AIM, 3 PLUS market companies, 2 ASX companies and 1 fully listed.

 

We acted on a total of 15 transactions through the period and have in the past six months developed a significant pipeline of new business.  The principal difference in total fees earned during the year is more or less entirely attributable to the dearth of capital raising transactions.  During 2007/8 we acted on 20 transactions.

 

Like all stockbrokers, we have been exposed to the vagaries of the stock market cycle and have, in the past, enjoyed a strong performance when we successfully raised large amounts of capital for our client companies.  This year we have therefore been developing other income streams that are not so dependent on those stock market cycles.  In particular, we have developed our mergers and acquisitions (M&A) capability, our access to debt financing for client companies and are pursuing a sectoral approach, led by our strong research team, to develop a reputation for excellence in key areas.  This is a slow and careful process, but we are already starting to see the benefits from this diversification, as prospective clients appreciate that we can offer a broad ranging service.  These additional strings to our bow will be of value in any event but will aid our continuing and increasingly successful attempts to increase revenue into the business.  As the economy starts to recover, we are looking to add to our institutional sales and distribution capabilities to further enhance our competitive position.

 

Private Wealth Management

Our Private Wealth Management business incorporates Private Client Stockbroking, discretionary and advisory Portfolio Management, Fund Management and Financial Planning.  Lindsey Hamilton was appointed as Head of Wealth Management in September 2009 to implement the strategy outlined in last year's annual report and accounts.  She brought with her a team of Financial Planners who have already made a positive impact to the business, as well as a structured approach to enhancing the connection between our private clients and our broad range of services and expertise.  Having successfully restructured the Group, we are about to embark on a marketing campaign to raise the profile of this part of the business and to take advantage of the current and anticipated demographic and regulatory changes.  In this respect, where others may struggle, I believe we are well positioned to benefit from the Retail Distribution Review.  Stockbroking remains at the heart of everything we do and we are setting ourselves challenging objectives to broaden our Wealth Management business to appeal to the mass affluent marketplace as well as our existing client base.

 

Our assets under management within the UK have risen since last year and now stand at £1,178m, an increase of 4.5% on last year end and testament to the loyalty of our client base through a difficult year.  We are also experiencing positive inflows from our third party administration clients and our nascent fund management business.

 

Going concern

The Directors believe that the Group has adequate resources to continue to trade for the foreseeable future and thus they continue to adopt the going concern basis in preparing the financial information.

 

Investment book

Our investment in Ultimate Finance plc, an invoice discounting business, continues to perform comparatively well in an economic environment that is beneficial for its business plan. 

 

Available-for-sale Investments

It is disappointing to note that, whilst making a significant contribution to Group profitability in previous years, the value of our investments book continues to be under pressure and has again not made a significant contribution this year (contributing a loss of £0.3m). 

 

The future

I stated at this point last year that "the general economic outlook is not rosy and stockbroking businesses will continue to be affected in the near to medium term."  I believe this statement is as relevant now as it was twelve months ago but with some important differences.  Your Company is now managed on a sound cost basis to ensure its continuing stability; our balance sheet remains clean and appropriate for our business; there are genuine signs of improvement in the corporate pipeline within our Securities business; the Wealth Management proposition is defined, clear and is about to be rolled out to our existing and new clients; we have a committed, loyal and stable Board, management team and workforce; and there are signs of some general improvement in the wider economic environment. 

 

A business like ours relies on its people.  This may appear to be a trite phrase but it has never been more true than now, when our corporate and private clients rightly deserve and expect an ever closer relationship with your Company and its team.  We thrive when our clients thrive and we suffer when they do.  I would like to take this opportunity to thank all of my colleagues for their immense contribution over the past twelve months.  I am proud to be associated with each and every one of the WH Ireland team.  I thank them all and I look forward to working with them to continue to secure a successful future for the Company.

 

Richard Ford

Chief Executive


Financial information

 

Consolidated income statement

For the year ended 30 November 2009

 










Discontinued Operations

Continuing Operations


Discontinued Operations

Continuing Operations



2009

2009


2008

2008


Note

£'000

£'000


£'000

£'000

Revenue

2

5,077

24,618

 

5,776

26,816

Administrative expenses

 

(5,825)

(26,449)

 

(6,427)

(27,423)

Operating loss

 

(748)

(1,831)

 

(651)

(607)

(Loss)/Profit on disposal of available-for-sale investments

 

-

-

 

(13)

706

Profit on disposal of other investments

 

68

3

 

-

-

Fair value gains/(losses) on investments

 

-

37

 

(890)

(2,278)

Impairment losses on available-for-sale investments

6

-

(303)

 

-

(406)

Income from investments

 

-

29

 

-

46

Profit on sale of discontinued operations

 

382

-

 

-

-

Finance income

 

25

84

 

76

360

Finance expense

 

(7)

(192)

 

(59)

(319)

Share of profit of associates

 

-

93

 

-

16

Loss before taxation

 

(280)

(2,080)

 

(1,537)

(2,482)

Taxation

3

64

183

 

505

796

Loss after taxation

 

(216)

(1,897)

 

(1,032)

(1,686)

Loss relating to discontinued operations

 

 

(216)

 

 

(1,032)

Total loss for the period

 

 

(2,113)

 

 

(2,718)

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

Minority interest:

 

 

 

 

 

 

Discontinued operations

 

 

(38)

 

 

(117)

Equity shareholders of the parent:

 

 

 

 

 

 

Discontinued operations

 

 

(178)

 

 

(915)

Continuing operations

 

 

(1,897)

 

 

(1,686)

 

 

 

(2,113)

 

 

(2,718)

 

 

 

 

 

 

 

Basic earnings per share

5

 

 

 

 

 

Continuing operations

 

 

(8.95)p

 

 

(8.72)p

Discontinued operations

 

 

(0.84)p

 

 

(4.73)p

 

 

 

(9.79)p

 

 

(13.45)p

Diluted earnings per share

5

 

 

 

 

 

Continuing operations

 

 

(8.95)p

 

 

(8.72)p

Discontinued operations

 

 

(0.84)p

 

 

(4.73)p

 

 

 

(9.79)p

 

 

(13.45)p

 



Consolidated statement of recognised income and expense

For year ended 30 November 2009

 




Group



Year ended

Year ended



30 November

30 November



2009

2008


Note

£'000

£'000

Foreign exchange translation differences relating to the translation of foreign operations

8

608

(133)

Net change in fair value of available-for-sale financial assets transferred to profit or loss

 

40

(443)

Net income/(expenses) recognised directly in equity

 

648

(576)

Loss for the year

 

(2,113)

(2,718)

Total recognised income and expense for the year

 

(1,465)

(3,294)

 

 

 

 

Attributable to:

 

 

 

Minority interest

 

42

(110)

Equity shareholders of the parent

 

(1,507)

(3,184)

 

 

(1,465)

(3,294)

 



Consolidated balance sheet

As at 30 November 2009

 




Group



30 November

30 November



2009

2008


Note

£'000

£'000

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

 

6,813

7,323

Goodwill

 

2,909

3,430

Intangible assets

 

321

587

Associates

 

1,963

880

Investments

6

1,514

1,847

Loan notes receivable

 

310

310

Deferred tax asset

 

643

762

 

 

14,473

15,139

Current assets

 

 

 

Trade and other receivables

 

42,673

261,284

Other investments

 

855

98

Corporation tax recoverable

 

42

-

Cash and cash equivalents

7

4,258

5,759

 

 

47,828

267,141

Total assets

 

62,301

282,280

LIABILITIES

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

(44,628)

(246,881)

Bank overdraft

7

-

(11,600)

Borrowings

 

(419)

(872)

Provisions

 

-

(199)

Corporation tax provision

 

-

(366)

 

 

(45,047)

(259,918)

Non-current liabilities

 

 

 

Borrowings

 

(2,426)

(2,747)

Deferred tax liability

 

(273)

(250)

Accruals and deferred income

 

(297)

(2,215)

Liability for put and call options

 

-

(183)

Provisions

 

(147)

(160)

 

 

(3,143)

(5,555)

Total liabilities

 

(48,190)

(265,473)

Total net assets

 

14,111

16,807

 

 

 

 

EQUITY

 

 

 

Share capital

8

1,064

1,054

Share premium

8

5,724

5,633

Available-for-sale reserve

8

210

170

Revaluation reserve

8

667

667

Foreign exchange reserve

8

-

31

Other reserves

8

1,472

1,472

Retained earnings

8

5,261

7,847

Treasury shares

8

(287)

(287)

Total equity attributable to equity holders of the parent

 

14,111

16,587

Minority interest

 

-

220

Total equity

 

14,111

16,807

 



Consolidated cash flow statement

For year ended 30 November 2009




Group



Year ended

Year ended



30 November

30 November



2009

2008


Note

£'000

£'000

Operating activities

 

 

 

Loss for the year

 

(2,113)

(2,718)

Adjustments for:

 

 

 

Depreciation, amortisation and impairment

 

1,151

1,099

Finance income

 

(109)

(436)

Finance expense

 

199

378

Taxation

3

(247)

(1,301)

Share of profit of associates

 

(93)

(16)

Changes in investments

 

507

2,881

Gain on sale of discontinued operations

 

(382)

-

Gain on sale of property, plant and equipment

 

(171)

(21)

Non-cash adjustment for share option charge

 

97

65

Decrease/(Increase) in trade and other receivables

 

211,533

(161,765)

(Decrease)/Increase in trade and other payables

 

(198,237)

145,858

Increase in current asset investments

 

(757)

(98)

Exchange adjustments

 

548

-

Tax paid

 

(728)

(319)

Net cash generated from/(used in) operating activities

 

11,198

(16,393)

Investing activities

 

 

 

Proceeds from sale of property, plant and equipment

 

250

210

Proceeds from sale of investments

 

-

1,993

Interest received

 

109

436

Disposal of subsidiary, net of cash acquired

 

(218)

-

Purchase of associates

 

(32)

(40)

Acquisition of property, plant and equipment

 

(203)

(227)

Acquisition of investments

6

(133)

(480)

Income from investments

 

-

46

Purchase of loan notes

 

-

(310)

Net cash (used in)/generated from investing activities

 

(227)

1,628

Financing activities

 

 

 

Proceeds from issue of share capital

8

101

3,059

Dividends paid

 

-

(573)

Decrease in borrowings

 

(774)

(230)

Interest paid

 

(199)

(347)

Net cash (used in)/generated from financing activities

 

(872)

1,909

Net increase/(decrease) in cash and cash equivalents

 

10,099

(12,856)

Cash and cash equivalents at beginning of year

 

(5,841)

7,018

Effect of foreign exchange movements

 

-

(3)

Cash and cash equivalents at end of year

7

4,258

(5,841)

 

 

 

 

Clients' settlement cash

 

1,969

(8,055)

Group cash

 

2,289

2,214

Cash and cash equivalents at end of year

7

4,258

(5,841)

 



 

1.   Principal accounting policies

The financial information set out in this announcement has been prepared in accordance with the recognition and measurement principles of IFRS as endorsed for use in the European Union.

 

The financial information set out in this announcement does not constitute the group's statutory accounts for the year ended 30 November 2009 or the year ended 30 November 2008 under the meaning of s434 Companies Act 2006, but is derived from the 2009 annual report and accounts.

 

Statutory accounts for the years ended 30 November 2008 and 30 November 2009 have been reported on by the Independent Auditors.

 

The Independent Auditors' Report on the Annual Report and Financial Statements for year ended 30 November 2009 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under s498(2) or s498(3) of the Companies Act 2006.

 

The Independent Auditors' Report on the accounts for the year ended 30 November 2008 referred to a matter concerning the company's ability to continue as a going concern to which the auditors' drew attention by way of emphasis without qualifying their opinion.

 

Statutory accounts for the year ended 30 November 2008 have been filed with the Registrar of Companies. The statutory accounts for the year ended 30 November 2009 will be delivered to the Registrar in due course.

 

2.   Segment information

The primary segment reporting format is determined to be business segments. For management purposes, the Group is organised into two business streams which reflect the nature of the Group's services, client base and risk profile. Secondary information is reported geographically.

 

a. Business segments

For management purposes, the Group is currently organised into the two business streams, presented below, which are the primary basis of segment reporting. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.   Private Wealth Management comprises the activities of private client stockbroking, investment management and independent financial advice.  Securities consists of corporate finance services, research and institutional stockbroking.

The following tables present revenue and profit and certain assets and liabilities information regarding the Group's business segments.

 

Year ended 30 November 2009


Private Wealth




Management

Securities

Group


£'000

£'000

£'000

Revenue

26,801

2,894

29,695

Segment result

5,336

(1,164)

4,172

Profit on disposal of other investments

-

-

71

Fair value gains on investments

-

-

37

Impairment losses on available-for-sale investments

-

-

(303)

Income from investments

-

-

29

Profit on disposal of discontinued operations

-

-

382

Finance income

-

-

109

Finance expense

-

-

(199)

Share of profit of associates

-

-

93

Unallocated net corporate expenses

-

-

(6,751)

Loss before taxation

-

-

(2,360)

Taxation

-

-

247

Loss on continuing operations after taxation

-

-

(2,113)

Segment assets

44,773

1,846

46,619

Unallocated corporate assets

-

-

15,682

Total Group assets

-

-

62,301

Segment liabilities

38,346

308

38,654

Unallocated corporate liabilities

-

-

9,536

Total Group liabilities

-

-

48,190

 

Revenue includes the following for discontinued operations:

Private Wealth Management             - £4.64m (2008: £4.85m)

Securities                                              - £0.26m (2008: £.067m)

 

Other segment items:


Unallocated

Private Wealth




corporate items

Management

Securities

Group


£'000

£'000

£'000

£'000

Capital expenditure

212

-

-

212

Depreciation and amortisation

637

-

-

637

Other non-cash expenses

-

-

-

-

 

Year ended 30 November 2008


Private Wealth




Management

Securities

Group


£'000

£'000

£'000

Revenue

27,247

5,345

32,592

Segment result

3,375

992

4,367

Profit on disposal of available-for-sale investments

-

-

693

Fair value losses on investments

-

-

(3,168)

Impairment losses on financial assets

-

-

(470)

Impairment losses on available-for-sale investments

-

-

(406)

Income from investments

-

-

46

Finance income

-

-

436

Share of profit of associates

-

-

16

Finance expense

-

-

(378)

Unallocated net corporate expenses

-

-

(5,155)

Loss before taxation

-

-

(4,019)

Taxation

-

-

1,301

Loss for the year

-

-

(2,718)

Segment assets

265,097

1,698

266,795

Unallocated corporate assets

-

-

15,485

Total Group assets

-

-

282,280

Segment liabilities

252,051

310

252,361

Unallocated corporate liabilities

-

-

13,112

Total Group liabilities

-

-

265,473

 

Other segment items:


Unallocated

Private Wealth




corporate items

Management

Securities

Group


£'000

£'000

£'000

£'000

Capital expenditure

227

-

-

227

Depreciation and amortisation

629

-

-

629

Other non-cash expenses

-

-

-

-

 

b. Geographical segments

The Group's operations were located in the United Kingdom and Australia until 6 November 2009, at which time the Group's holding in its Australian investment was substantially reduced, resulting in it then being classified as an associate and no longer being consolidated into the results of the Group.  The following tables present revenue and certain assets and liability information by geographical area in which the assets are located.

 

Group revenue


Year ended

Year ended


30 November

30 November


2009

2008


£'000

£'000

United Kingdom (continuing operations)

24,618

26,816

Australia (discontinued operations)

5,077

5,776

 

29,695

32,592

 

Group segment net assets


Year ended

Year ended


30 November

30 November


2009

2008


£'000

£'000

United Kingdom

13,150

14,396

Australia

961

2,411

 

14,111

16,807

 

Group capital expenditure


Year ended

Year ended


30 November

30 November


2009

2008


£'000

£'000

United Kingdom

106

201

Australia

106

26

 

212

227

 

3.   Taxation expense


Year ended

Year ended


30 November

30 November


2009

2008


£'000

£'000

Current tax expense/(credit)

 

 

United Kingdom corporation tax at 28% (2008: 28%)

-

77

Adjustments in respect of prior years

269

(264)

 

269

(187)

Deferred tax credit

 

 

Origination and reversal of temporary differences

(515)

(549)

Effect of change in tax rate

-

(13)

Adjustments in respect of prior years

(1)

(44)

Adjustments in respect of prior periods taken to reserves

-

(508)

 

(516)

(1,114)

Total tax credit in the income statement

(247)

(1,301)

 

The tax credit for the year and the amount calculated by applying the standard United Kingdom corporation tax rate of 27.97% (2008: 28.67%) to profit before taxation can be reconciled as follows:


Year ended

Year ended


30 November

30 November


2009

2008


£'000

£'000

Loss before taxation

(2,360)

(4,019)

Tax expense using the United Kingdom corporation tax rate of 27.97% (2008: 28.67%)

(660)

(1,152)

Share-based payments

-

(161)

Other expenses not tax deductible

593

580

Income not chargeable to tax

(433)

(240)

Difference in overseas tax rates

(8)

-

Adjustments to current tax in respect of prior years

269

(264)

Tax effect of chargeable gains

(7)

5

Adjustments to deferred tax in respect of prior years

(1)

(58)

Effect of change in tax rate

-

(11)

Total tax credit in the income statement

(247)

(1,301)

The United Kingdom corporation tax rate reduced from 30% to 28% for the tax year commencing 1 April 2008.

 

4.   Dividends

No final dividend is proposed in respect of the year ended 30 November 2009. Dividends have been recognised as set out below:


Year ended

Year ended


30 November

30 November


2009

2008


£'000

£'000

Final dividend paid in respect of the year ended 30 November 2008 at nil p per share (2007: 3p)


-

516

Interim dividend paid in respect of the year ended 30 November 2009 at nil p per share (2008: 1p)


-

210

 

-

726

 

5.   Earnings per share

Basic earnings per share 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 (note 32).

Diluted earnings per share is the basic earnings per share, adjusted for the effect of the conversion into fully paid shares of the weighted average number of all employee share options outstanding during the year.  Options over 813,963 (2008: 1,037,791) shares are excluded from the EPS calculation as they are antidilutive. Antidilutive options represent options issued where the exercise price is greater than the average market price for the period.

 

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:


Year ended

Year ended


30 November

30 November


2009

2008

Weighted average number of shares in issue during the period

21,186

19,338

Effect of share options

93

1,417

 

21,279

20,755

Earnings attributable to ordinary shareholders

 

 

Continuing operations

(1,897)

(1,686)

Discontinued operations

(178)

(915)

 

(2,075)

(2,601)

Basic earnings per share

 

 

Continuing operations

(8.95)p

(8.72)p

Discontinued operations

(0.84)p

(4.73)p

 

(9.79)p

(13.45)p

Diluted earnings per share

 

 

Continuing operations

(8.95)p

(8.72)p

Discontinued operations

(0.84)p

(4.73)p

 

(9.79)p

(13.45)p

 

6.   Investments

 



Quoted

Unquoted

Total

Available-for-sale investments


£'000

£'000

£'000

At 1 December 2007

 

838

1,199

2,037

Fair value loss

 

(230)

(390)

(620)

Impairment

 

(406)

-

(406)

At 30 November 2008

 

202

809

1,011

Additions

 

1

-

1

Fair value gain/(loss)

 

63

(8)

55

Impairment

 

(74)

(229)

(303)

At 30 November 2009

 

192

572

764

 



Quoted

Warrants

Total

Other investments


£'000

£'000

£'000

At 1 December 2007

 

1,233

2,420

3,653

Exchange rate adjustments

 

(5)

-

(5)

Additions

 

480

190

670

Fair value loss

 

(845)

(1,246)

(2,091)

Disposals

 

(324)

(1,067)

(1,391)

At 30 November 2008

 

539

297

836

Exchange rate adjustments

 

29

-

29

Additions

 

79

53

132

Fair value loss

 

(25)

10

(15)

Disposal of subsidiary

 

(28)

-

(28)

Disposals

 

(203)

(1)

(204)

At 30 November 2009

 

391

359

750

Total investments 30 November 2009

 

 

 

1,514

Total investments 30 November 2008

 

 

 

1,847

 

Available-for-sale investments for the Group include equity investments, other than those equity investments which form part of the 'carried interest bonus scheme' and investments in subsidiaries. Available-for-sale investments are measured at fair value with fair value gains and losses recognised directly in equity in the 'available-for-sale' reserve.

Other investments, in the main, comprise financial assets designated as 'fair value through profit or loss' for the Group and include equity investments which form part of the 'carried interest bonus scheme'. Financial assets designated as 'fair value through profit or loss' are measured at fair value with fair value gains and losses recognised directly in the income statement.

Warrants are acquired as part of the 'carried interest bonus scheme' and designated as 'fair value through profit or loss'. There is no cash consideration associated with the acquisition.

Fair value, in the case of quoted investments, represents the bid price at the balance sheet 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 and the fair value of put and call options is formula driven.

7.   Cash, cash equivalents and bank overdraft


30 November

30 November


2009

2008


£'000

£'000

Cash and cash equivalents

4,258

5,759

Bank overdraft

-

(11,600)

 

4,258

(5,841)

For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits with banks and financial institutions with a maturity of up to three months and bank overdrafts repayable on demand.

Cash and cash equivalents represent the Group's money and money held for settlement of outstanding transactions.

Free money held in trust on behalf of clients is not included in the balance sheet. Free money at 30 November 2009 for the Group was £93,457,011 (2008: £81,089,000).

 

8.   Reconciliation of changes in equity attributable to equity holders of the parent


Share

Share

Available-for-sale

Revaluation

Exchange

Other

Retained

Treasury



capital

premium

reserve

reserve

reserve

reserves

earnings

shares

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 December 2007

860

2,614

613

667

164

1,472

10,553

(287)

16,656

Loss arising on available-for-sale investments

-

-

(615)

-

-

-

-

-

(615)

Deferred taxation

-

-

172

-

-

-

-

-

172

Exchange rate adjustments

-

-

-

-

(133)

-

-

-

(133)

Net income recognised directly in equity

-

-

(443)

-

(133)

-

-

-

(576)

Loss after taxation

-

-

-

-

-

-

(2,718)

-

(2,718)

Total recognised income and expense for the year

-

-

(443)

-

(133)

-

(2,718)

 

(3,294)

Shares issued

186*

2,646*

-

-

-

-

65

-

2,897

Share premium on exercise of options

-

227*

-

-

-

-

-

-

227

Shares issued on scrip dividends

8

-

-

-

-

-

-

-

8

Share premium on scrip dividends

-

146

-

-

-

-

-

-

146

Prior year dividends paid

-

-

-

-

-

-

(516)

-

(516)

Current year dividends paid

-

-

-

-

-

-

(210)

-

(210)

Amounts owed from shareholders

-

-

-

-

-

-

608

-

608

Employee share option scheme

-

-

-

-

-

-

65

-

65

Balance at 30 November 2008

1,054

5,633

170

667

31

1,472

7,847

(287)

16,587

Gain arising on available-for-sale investments

-

-

55

-

-

-

-

-

55

Exchange rate adjustments

-

-

-

-

479

-

-

-

479

Deferred taxation

-

-

(15)

-

129

-

-

-

114

Net income recognised directly in equity

-

-

40

-

608

-

-

-

648

Loss after taxation

-

-

-

-

-

-

(2,075)

-

(2,075)

Total recognised income and expense for the year

-

-

40

-

608

-

(2,075)

-

(1,427)

Shares issued

10

-

-

-

-

-

-

-

10

Share premium on exercise of options

-

91

-

-

-

-

-

-

91

Amounts owed from shareholders

-

-

-

-

-

-

(608)

-

(608)

Employee share option scheme

-

-

-

-

-

-

97

-

97

Disposal of subsidiary

-

-

-

-

(639)

-

-

-

(639)

Balance at 30 November 2009

1,064

5,724

210

667

-

1,472

5,261

(287)

14,111

* The cash proceeds from the issue of share capital total  in 2008: £3,059,000.

The total number of authorised ordinary shares is 34.5 million shares of 5p each (2008: 34.5 million shares of 5p each). The total number of issued ordinary shares is 21.3 million shares of 5p each (2008: 21.1 million shares of 5p each). 

 

Shares issued in satisfaction of share options

On 21 May 2009, 103,478 new ordinary shares of 5p each were issued at a price of 50p per share to WL Beevers in satisfaction of share options.

On 21 May 2009, 99,130 new ordinary shares of 5p each were issued at a price of 50p per share to DW Youngman in satisfaction of share options.

 

The nature and purpose of each reserve is summarised below:

 

Share premium

The share premium is the amount raised on the issue of shares that is in excess of the nominal value of those shares and is recorded less any direct costs of issue.

 

Available-for-sale reserve

The available-for-sale reserve reflects gains or losses arising from the change in fair value of available-for-sale financial assets except for impairment losses which are recognised in the income statement. When an available-for-sale asset is impaired or derecognised, the cumulative gain or loss previously recognised in the available-for-sale reserve is transferred to the income statement.

 

Revaluation reserve

The revaluation reserve reflects changes in the fair value of property, plant and equipment until such time as the assets are disposed of. A revaluation surplus is recognised in the revaluation reserve unless it reverses a previous deficit when it is credited to the income statement up to the amount of the previous deficit. A revaluation deficit is charged to the income statement unless it reverses a previous surplus when it is charged to the revaluation reserve up to the amount of the previous surplus.

 

Exchange reserve

The exchange reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

 

Other reserves

Other reserves comprise a merger reserve of £491,511 (2008: £491,511), a capital redemption reserve of £228,083 (2008: £228,083) and other reserves of £753,704 (2008: £753,704).

 

Retained earnings

Retained earnings reflect accumulated income, expenses, gains and losses recognised in the income statement and the statement of recognised income and expense and is net of dividends paid to shareholders. The cumulative effect of changes in accounting policy is also reflected as an adjustment in retained earnings.

 

Treasury shares

Purchases of the company's own shares in the market are presented as a deduction from equity, at the amount paid, including transaction costs. That is, treasury shares are shown as a separate class of shareholders' equity with a debit balance.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR KMGGFRMGGGZM