Panmure Gordon & Co. Plc

Half-yearly Report

Half-yearly Report

Panmure Gordon & Co.Plc

Panmure Gordon & Co. plc

Panmure Gordon reports 2015 first half results

London, 29 September 2015 – Panmure Gordon & Co. plc (“Panmure Gordon” or “the Group”), a leading independent stockbroker and investment bank, today announces its results for the first half ended 30 June 2015.

Financial highlights

Operational highlights

Phillip Wale, Chief Executive, commented:

“The first half of the year has been challenging on account of external political and economic factors such as the UK election, disruptive market volatility in China and the political and economic fallout from Greece. Despite these challenges, I am pleased with the number of corporate transactions completed, which in total is similar to the number in 2014 though many of these executed were smaller in total value.

We are delighted to welcome our new colleagues that have joined as a result of the acquisition of Charles Stanley Securities and look forward to working successfully together in the future.

It is encouraging to see our pipeline of corporate transactions continuing to build in number and quality on account of the management changes made in the year, the sector based approach adopted across the Group and the focus on origination of transactions. Although the timing of their completion is difficult to forecast due to prevailing market conditions, we remain confident in our ability to deliver an excellent level of service for our clients.”

Enquiries:

Panmure Gordon

         
Phillip Wale, Chief Executive
Philip Tansey, Chief Financial Officer 020 7886 2500
 

Buchanan (Financial PR)

Mark Edwards 020 7466 5000
Helen Chan

Stephanie Watson

 
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett/Salmaan Khawaja/Jen Clarke 020 7383 5100

Chief Executive’s review

The first half of the year has been challenging on account of external political and economic factors such as the UK election, disruptive market volatility in China and the political and economic fallout from Greece; net commission and fee income has as a result declined by 20% to £13.1m (2014: £16.2m) leading to a small pre-tax loss for the period of £0.23m (2014: profit of £2.0m).

Net commission and trading income has shown a healthy 6% rise to £5.7m (2014: £5.4m) reflecting the excellent work and development in a number of areas across the institutional equity department despite the continuing decline in market volumes and the increasing uncertainty around commission rates against the backdrop of a rapidly changing regulatory environment.

Corporate finance and related income has however reduced by 35% to £7.5m (2014: £11.5m). Whilst the number of corporate transactions executed is similar to that of the same period in 2014 their size and resulting revenue have been lower and the market for such transactions was particularly disrupted by the uncertainty in the run-up to the UK general election and then the market dislocation that followed.

Charles Stanley Securities

In July we were delighted to complete on the acquisition of the corporate finance, research, sales and fixed income departments of the securities division of Charles Stanley for a maximum initial consideration of £1.5m and potential deferred consideration of up to a maximum further £5m based on the performance of the business over the following twelve months. The acquisition brings to the firm new corporate clients and a team of excellent professionals that will help increase the size and quality of the firm and provide our clients with a more diversified range of products and services. These services include fixed income broking and further expertise in mergers and acquisitions advisory. The integration within the Group has proceeded well and it is expected that by leveraging the existing infrastructure, operational efficiencies will shortly be achieved. We welcome our new colleagues and look forward to working successfully together in the future.

Outlook

Despite somewhat becalmed markets in the first half of the year we have executed a number of excellent transactions on behalf of our clients although smaller in deal-size than in 2014. The markets at the start of the second half have remained challenging and subject to significant volatility, though some stability has now started to take hold. It is pleasing to see that our pipeline of corporate transactions is continuing to build in number and quality on account of the management changes made in the year, the sector based approach adopted across the Group and the focus on origination of transactions. Although the timing of their completion is difficult to forecast due to prevailing market conditions, we remain confident in our ability to deliver an excellent level of service for our clients.

Phillip Wale

Chief Executive

Condensed consolidated interim statement of profit or loss and other comprehensive income (unaudited)

For the half year to 30 June 2015

£‘000

     

 

Notes

     

6 months

     

6 months

     

12 months

   

30 June

30 June

31 December

2015

2014

2014

Continuing operations  
Commission and trading income 6,321 6,115 10,916
Commission and trading expense (641) (758) (1,474)
Net commission and trading income 5,680 5,357 9,442
 
Corporate finance and related income 7,534 11,516 20,704
Loss on corporate investments 10 (127) (642) (755)
 
Net commission and fee income 13,087 16,231 29,391
 
Net loss on available for sale investments - - (7)
Administrative expenses1 (12,667) (13,799) (25,507)

Redundancy, restructuring and other non-recurring
   charges1

6 (376) (198) (1,216)
Operating profit before share-based payments 44 2,234 2,661
 
Share-based payments1 (264) (274) (500)
 
Operating (loss)/profit (220) 1,960 2,161
 
Financial income - - 1
Financial expense (5) (5) (17)
 
Net financial expense (5) (5) (16)
 

(Loss)/profit before tax

(225)

1,955

2,145
 
Income tax 3 55 (401) (646)
 

(Loss)/profit for the period

(170)

1,554

1,499
 
Other comprehensive income - - -
     
Total comprehensive (loss)/income (170) 1,554 1,499
 
Basic (loss)/profit per share 4 (1.09)p 10.00p 9.64p
Diluted (loss)/profit per share 4 (1.09)p 9.80p 9.39p

1 Administrative expenses which total £13.3m (6 months 30 June 2014: £14.3m, 12 months 31 December 2014: £27.2m) have been presented separately here owing to their individual nature and size

The notes on pages 8 to 14 form part of these financial statements.

. Condensed consolidated interim statement of financial position (unaudited)

At 30 June 2015

£‘000

     

 

Notes

     

As at

     

As at

     

As at

   

30 June

30 June

31 December

2015

2014

2014

Assets  
Intangibles 13,201 13,201 13,201
Plant and equipment 1,922 2,004 2,060
Available for sale investments 100 8 -
Deferred tax asset 523 562 396
Other receivables 7 471 725 645
Total non-current assets 16,217 16,500 16,302
 
Securities held for trading 9 8,600 9,828 4,507
Trade and other receivables 7 41,402 64,959 20,808
Cash and cash equivalents 4,254 6,544 12,386
Total current assets 54,256 81,331 37,701
 
Current liabilities  
Trade payables 8 (31,532) (57,026) (14,804)
Tax and social security (562) (690) (857)
Corporation tax liabilities (195) (153) (194)
Other payables 8 (2,465) (3,965) (2,688)
Held for trading liabilities 9 (1,922) (1,866) (1,275)
Total current liabilities (36,676) (63,700) (19,818)
     
Net current assets 17,580 17,631 17,883
 
Deferred tax liability (1,109) (1,011) (1,058)
Total non-current liabilities (1,109) (1,011) (1,058)
     
Net assets 32,688 33,120 33,127
 
Equity  
Issued share capital 5 622 6,187 622
Share premium account 5 - 36,740 -
Merger reserve 21,810 21,810 21,810
Other reserve (7,960) (7,626) (7,790)
Retained earnings 18,216 (23,991) 18,485
Total equity 32,688 33,120 33,127

The notes on pages 8 to 14 form part of these financial statements.

Condensed consolidated interim statement of cash flows (unaudited)

£‘000      

6 months

 

     

6 months

 

     

12 months

 

30 June

30 June

31 December

2015

2014

2014

Cash flows from operating activities  
(Loss)/profit after tax (170) 1,554 1,499
Net financial expense 5 5 16
Depreciation and amortisation 217 170 353
Net loss on available for sale investments - - 7
Profit on disposal of subsidiary - (29) -
Movement in securities held for trading (3,446) (1,631) 3,099

(Decrease)/increase in amounts owed by market
 counterparties

(780) 1,105 3,496
Increase in trade and other receivables (3,123) (168) (346)
Decrease in trade payables and provisions (311) (826) (2,176)
IFRS 2 share-based payments and related charges 264 274 500
Income tax expense (55) 401 646
Net cash flow from operating activities (7,399) 855 (7,094)
 
Cash flows from investing activities  
Financial income received - - 1
Acquisition of plant and equipment (95) (177) (402)
Acquisition of available for sale investments (100) - -
Proceeds from disposal of investments and dividends - - 1
Dividend paid (363) - -
Net cash from investing activities (558) (177) (400)
 
Cash flows from financing activities  
Purchase of own shares for EBT (173) (197) (372)
Financial expense (5) (5) (17)
Repayment of EBT loan 3 10 23
Net cash from financing activities (175) (192) (366)
 
Net (decrease)/increase in cash and cash equivalents (8,132) 486 6,328
Cash and cash equivalents at 1 January 12,386 6,058 6,058
Cash and cash equivalents at 30 June / 31 December 4,254 6,544 12,386

Condensed consolidated interim statement of changes in equity for the half year to 30 June 2015

£‘000      

Issued
share
capital

     

Share
premium

     

Merger
reserve

     

Other
reserve

     

Retained
earnings

     

Total
equity

   
At 1 January 2015 622 - 21,810 (7,790) 18,485 33,127

Total comprehensive
income for the period

(Loss) for the period - - - - (170) (170)
Other items recorded directly in equity
Dividend payment - - - - (363) (363)
Share-based payments - - - - 264 264

Purchase of own shares for
EBT

- - - (173) - (173)

Decrease in shares held by
EBT

- - - 3 - 3
At 30 June 2015 622 - 21,810 (7,960) 18,216 32,688

Condensed consolidated interim statement of changes in equity for the half year to 30 June 2014

£‘000      

Issued
share
capital

     

Share
premium

     

Merger
reserve

     

Other
reserve

     

Retained
earnings

     

Total
equity

   
At 1 January 2014 6,187 36,740 21,810 (7,441) (25,819) 31,477

Total comprehensive
income for the period

Profit for the period - - - - 1,554 1,554

Other items recorded
directly in equity

Share-based payments - - - - 274 274

Purchase of own shares
for EBT

- - - (195) - (195)

Decrease in shares held
by EBT

- - - 10 - 10
At 30 June 2014 6,187 36,740 21,810 (7,626) (23,991) 33,120

Consolidated statement of changes in equity for the year ended 31 December 2014

£‘000      

Issued
share
capital

     

Share
premium

     

Merger
reserve

     

Other
reserve

     

Retained
earnings

     

Total
equity

 

   
At 1 January 2014 6,187 36,740 21,810 (7,441) (25, 819) 31,477

Total comprehensive income
for the period

 

Profit for the year - - - - 1,499 1,499

Other items recorded
directly in equity

 

Share capital reduction (5,565) (36,740) - - 42,305 -
Share-based payments - - - - 500 500

Purchase of own shares for
EBT

 

- - - (372) - (372)

Decrease in shares held by
EBT

 

- - - 23 - 23
At 31 December 2014 622 - 21,810 (7,790) 18,485 33,127
 

1 Legal status and basis of preparation

1.1 Legal status

Panmure Gordon & Co. plc (the “Company”) is a company domiciled in the United Kingdom. The address of the Company’s registered office is One New Change, London, EC4M 9AF. The consolidated interim financial statements of the Company for the 6 months ended 30 June 2015 relate to the Company and its subsidiaries (together referred to as the “Group”).

1.2 Basis of preparation and statement of compliance with International Financial Reporting Standards

The interim consolidated financial statements of the Group have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (‘IASB’) and as endorsed by the EU. They do not include all of the information required for full annual financial statements and should be read in conjunction with the Group’s consolidated financial statements for the year ended 31 December 2014, which were prepared in accordance with International Financial Reporting Standards (‘IFRSs’) as issued by the IASB and as endorsed by the EU. EU-endorsed IFRSs may differ from IFRSs as issued by the IASB if, at any point in time, new or amended IFRSs have not been endorsed by the EU.

The accounting policies are consistent with those applied by the Group in its 2014 annual financial statements. During the period ended 30 June 2015, the Group adopted a number of amendments to standards and interpretations which did not have a significant effect on the consolidated financial statements of the Group.

The directors note that the business was loss-making during the period and profitable during the previous financial year and the Group had cash resources of £4.3m at 30 June 2015 (2014: £6.5m) and no short term borrowings (2014: nil). The directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these interim results.

1.3 Comparative information

These interim consolidated financial statements include comparative information as required by IAS 34 and the AIM rules for Companies.

The comparative figures for the financial year ended 31 December 2014 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

1.4 Use of estimates and assumptions

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. Judgements made by management in the application of adopted IFRSs that have a significant effect on the financial statements and estimates with a significant risk of material adjustment are discussed in note 1.1 within the Report and Financial Statements 2014. The areas highlighted in the year-end financial statements include:

i) Goodwill and investment in subsidiaries

ii) Deferred tax

iii) Provisions

iv) Share-based payments

2 Segmental analysis

The Group reports its operating segments according to how the Group's Chief Operating Decision Maker (CODM) allocates resources to each segment and assesses performance. In this respect the Group's CODM has been defined as the Group's CEO.

Following the disposal of the Group’s US business during 2012, the geographical division is made between the UK and Swiss operations only. In the segmental table below, the results of the Swiss office appear in the ‘Other’ column.

There are no regular major customers that account for more than 10% of revenue.

Segmental analysis for the 6 months to 30 June 2015, the 6 months to 30 June 2014 and the 12 months to 31 December 2014, reconciled to the income statement

     

UK

     

Other

     

Total

   
                                   

6 months

 

6 months

 

12 months

 

6 months

 

6 months

 

12 months

 

6 months

 

6 months

 

12 months

 

30 Jun

30 Jun

31 Dec

30 Jun

30 Jun

31 Dec

30 Jun

30 Jun

31 Dec

2015

2014

2014

2015

2014

2014

2015

2014

2014

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
     

Net commission and trading
income

4,840

4,877

8,061

840

480

1,381

5,680

5,357

9,442

Corporate finance fee income 6,852 11,150 20,147 19 19 38 6,871 11,169 20,185

Loss on corporate
   investments

(127)

(642)

(755)

-

-

 

(127)

(642)

(755)

Wealth management and
   other income

663

347

519

-

-

-

663

347

519

Net loss on AFS
   investments

-

-

(7)

-

-

-

-

-

(7)

Foreign exchange loss (15) (22) (106) (2) (6) (6) (17) (28) (112)
On-going administration costs (11,884) (13,191) (24,036) (766) (580) (1,359) (12,650) (13,771) (25, 395)
     

Segmental operating
profit/(loss)

329

2,519

3,823

91

(87)

54

420

2,432

3,877

     

Redundancy and restructuring
   charges

(376)

(198)

(1,216)

-

-

-

(376)

(198)

(1,216)

Share-based payment
   charges

(264)

(274)

(500)

-

-

-

(264)

(274)

(500)

     
Operating (loss)/ profit (311) 2,047 2,107 91 (87) 54 (220) 1,960 2,161
     

Net financial expense

(5)

(5)

(16)

-

-

-

(5)

(5)

(16)

     
(Loss)/profit before tax (316) 2,042 2,091 91 (87) 54) (225) 1,955 2,145
     
Income tax

72

(384)

(631)

(17)

(17)

(15)

55

(401)

(646)

     
Profit/(loss) for the period

 

(244)

 

1,658

 

1,460

 

74

 

(104)

 

39

 

(170)

 

1,554

 

1,499

Net assets      

UK

     

Other1

     

Total

   
                                   

As at

As at

As at

As at

As at

As at

As at

As at

As at

30 Jun

30 Jun

31 Dec

30 Jun

30 Jun

31 Dec

30 Jun

30 Jun

31 Dec

2015

2014

2014

2015

2014

2014

2015

2014

2014

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
     

Non-current assets (inc
   goodwill)

16,217 16,500 16,302 - - - 16,217 16,500 16,302
Current assets 54,256 81,331 37,701 - - - 54,256 81,331 37,701
Current liabilities (36,676) (63,700) (19,818) - - - (36,676) (63,700) (19,818)
Non-current liabilities (1,109 ) (1,011) (1,058) - - - (1,109) (1,011) (1,058)
Capital expenditure (95) (177) (402) - - - (95) (177) (402)

1 The Swiss business operates as a representative office of the UK business and therefore shares assets with the UK business

3 Taxation

The current tax charge for the period is different from the standard rate of corporation tax in the UK of 20.25% (2014: 21.50%).

Tax on profit on ordinary activities:      

6 monthe

     

6 months

     

12 months

   

30 June

30 June

31 December

2015

2014

2014

£‘000 £‘000 £‘000
Analysis of tax charge in period:  

  UK corporation tax at 20.25% (2014: 21.50%)

 

    Prior year adjustments

- - (31)

    Current year tax charge

- (36) -

    Foreign tax adjustments

(20) (17) (20)
(20) (53) (51)
Deferred tax  

  Prior year adjustments to deferred tax credit

4 - 67

  Current year deferred tax credit/(charge)

71 (348) (662)
75 (348) (595)
 
Tax credit/(charge) on profits on ordinary activities 55 (401) (646)
 
Effective tax rate charge (24.71)% (20.82)% (30.1)%
 
Factors affecting tax charge:  
 
 
(Loss)/profit on ordinary activities before tax (225) 1,955 2,145

Loss/(profit) on ordinary activities multiplied by rate of UK
  corporation tax at 20.25% (2014: 21.50%)

45 (414) (462)
 
Effects of:  
Expenses not deductible for tax purposes (49) (37) (90)
Differences relating to share schemes 71 38 (160)
Foreign tax (17) (17) (15)
Change in corporation tax rate - 29 14
Deemed goodwill amortisation 53 53 106
Goodwill on consolidation (53) (53) (106)
Adjustment to tax charge in respect of previous periods 5 - 67
 
Total tax credit/(charge) on profits on ordinary activities 55 (401) (646)

At 30 June 2015, the Group has recognised a deferred tax asset relating to UK losses carried forward.

4 Earnings per share

Earnings per share (EPS) are calculated on a net basis using the profit on ordinary activities after taxation divided by the weighted average number of shares detailed below.

Total Group

      6 months       6 months       12 months    
30 June 30 June 31 December
  2015 2014 2014
 
Weighted average number of ordinary shares in issue 15,545,473 15,545,473 15,545,473
 

Fully diluted weighted average number of ordinary shares in
issue

16,434,444 15,856,679 15,969,945
 
Basic (loss)/profit per share (1.09)p 10.00p 9.64p
 
Diluted (loss)/profit per share (1.09)p 9.80 p 9.39p

5 Share capital and reserves

The Company issued no new shares during the six months to 30 June 2015.

As at 30 June 2015, the number of shares in issue was 15,545,473 ordinary shares at a par value of 4p and nil deferred shares at a par value of 36p (30 June 2014: 15,545,473 ordinary shares at a par value of 4p and 15,458,200 deferred shares at a par value of 36p). The fully diluted ordinary share capital was 16,434,444 (30 June 2014: 15,856,679).

At the Company’s annual general meeting on 21 May 2014, shareholders approved the cancellation of the deferred 36p shares and this was subsequently approved by the High Court and registered at Companies House on 3 September 2014. As a consequence the amount standing to the credit of the share capital reserve in respect of the deferred shares and the full amount of the share premium reserve have been transferred to retained earnings, which as a result have become positive.

The ‘other reserve’ includes the nominal value of share capital owned by the Panmure Gordon & Co. plc No. 2 Employee Benefit Trust in respect of the 2005 Employee Share Option Plan and the cost of shares purchased in the market. At 30 June 2015 the Trust held 1,299,772 ordinary shares (December 2014: 1,286,432 shares).

6 Redundancy, restructuring and other non-recurring charges

      6 months       6 months       12 months    
30 June 30 June 31 December
2015 2014 2014
  £‘000 £‘000 £‘000
Redundancy charges 376 198 353
Restructuring charges - - 396
Other charges - - 467
Total 376 198 1,216

7 Trade and other receivables

      As at       As at

 

     

As at

   
30 June 30 June

31 December

2015 2014 2014
£‘000 £‘000 £‘000
Non-current assets  
Other receivables 471 725 645
Total 471 725 645
Current assets  
Trade receivables 675 615 1,673
Stock borrow1 2,694 1,043 188
Market receivables 32,732 59,843 15,435
Other receivables 2,069 668 738
Prepayments and accrued income 3,232 2,790 2,774
Total 41,402 64,959 20,808

1 Stock borrow reflects collateral placed against the value of stock borrowed.

The level of market receivables at a period end is dependent on the level of agency and trading activity in the preceding days. The majority of market receivables reside within the UK business segment.

Within non-current assets, other receivables represent loans made to employees under the Group’s Matching Share Plan.

8 Trade and other payables

      As at       As at       As at    
30 June 30 June 31 December
2015 2014 2014
  £‘000 £‘000 £‘000
Market payables (30,877) (53,249) (14,360)
Stock lending1 - (3,128) -
Trade payables (655) (649) (444)
Total trade payables (31,532) (57,026) (14,804)
 
Other payables (659) (716) (524)
Provisions, accruals and deferred income (1,806) (3,249) (2,164)
Total other payables (2,465) (3,965) (2,688)

1 Stock lending reflects collateral placed against the value of stock concerned.

The level of market payables at a period end is dependent on the level of agency and trading activity in the preceding days.

Litigation

In the normal course of business there may be various litigation claims and contingencies pending against the Group which, in the opinion of management, will be resolved with no material impact on the Group’s financial position or results of operations.

9 Financial Instruments

The group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements. The different levels have been defined as follows:

The table below analyses financial instruments carried at fair value by valuation method.

Group       At 30 June 2015       At 30 June 2014    
Level 1       Level 2       Level 3       Total Level 1       Level 2       Level 3       Total
       
Available for sale assets - - 100 100 - - 8 8
Assets held for trading 6,190 2,323 87 8,600 6,622 3,206 - 9,828
Liabilities held for trading (1,628) (294) - (1,922) (1,538) (327) - (1,866)
      At 31 December 2014    
Level 1       Level 2       Level 3       Total
 
Available for sale assets - - - -
Assets held for trading 2,200 2,307 - 4,507
Liabilities held for trading (847) (428) - (1,275)

There have been no transfers of assets between the levels noted above in the period under review.

10 Corporate investments

During the period the Company’s positions in a small number of corporate client stocks were valued on a mark to market basis and have declined in value by £0.127m (H1 2014: £0.642m).

11 Acquisitions

On July 15th 2015 the securities business of Charles Stanley & Co Limited was acquired by Panmure Gordon (UK) Limited for an initial maximum cash consideration of £1.5m and potential deferred consideration of up to a maximum further £5m based on the performance of the business over the following twelve months. The acquisition has not been accounted for in these interim statements but will be in the final accounts for the year ended 31 December 2015.

12 General

The interim report was approved by the board of directors on 28 September 2015.

This report will be made available to the public, upon request, at the registered office of Panmure Gordon & Co. plc, One New Change, London EC4M 9AF or from the Company’s website www.panmure.com.

INDEPENDENT REVIEW REPORT TO PANMURE GORDON & CO. PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2015 which comprises the condensed consolidated interim statement of profit or loss and other comprehensive income, condensed consolidated interim statement of financial position, condensed consolidated interim statement of cash flows, condensed consolidated interim statement of changes in equity and the related explanatory notes. We have read the other information contained in the half-yearly 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 the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this 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 reached.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

As disclosed in note 1.2 the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly 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 UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and 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 report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the AIM Rules.

Zaffarali Khakoo

for and on behalf of KPMG LLP

Chartered Accountants

15 Canada Square

London E14 5GL

28 September 2015