Final Results, Dividend and Notice of AGM
finnCap Group plc
Results for the 11 month period ended 31 March 2019,
Dividend Declaration, Notice of AGM and Posting of Annual Report
finnCap Group plc (the "Company" or "finnCap") and together with its subsidiaries (the "Group"), today announces its results for the 11 month period ended 31 March 2019 (the "Period").
During the Period, Cavendish Corporate Finance ("Cavendish") was acquired for £14.6m, supporting the Group's development plan to become the leading full-service provider of growth capital and advisory services to public and private small and mid-cap companies. Additionally, the year-ends of the group were aligned, and as such, the reported figures for the Period include the performance of finnCap Ltd for 11 months and that of Cavendish for just under 4 months.
finnCap's shares are admitted to trading on the AIM Market of the London Stock Exchange ("LSE"). The Company is authorised and regulated by the Financial Conduct Authority ("FCA") and is a member of the LSE.
Financial highlights:
• Profit before tax and non-recurring items up 41% to £4.29m (year ended 30 April 2018: £3.05m)
• Record retainer revenue: £5.9m (year ended 30 April 2018: £5.7m), with a current annualised run rate of £6.4m. The monthly run rate has increased by 13% over the 11 month period
• 7th consecutive year of growth in both total revenue and corporate finance fees
• Adjusted* earnings per share: 2.86p (year ended 30th April 2018: 2.22p)
• Operating cash inflow: £2.81m (2018: £0.09m)
• Dividend declared of 0.355p per share (£0.6m in total)
Operational highlights:
• finnCap's Equity Capital Markets division won 18 new quoted clients in the period with an average market cap of £80m (as at the date of take on)
• Cavendish had its most successful year in the company's history, closing 28 deals, generating £14.8m of unaudited fees (2018: £10.2m). Of these, £3.2m were generated after the acquisition and so are included in the Group's performance for the Period
• finnCap Group plc won its first debt advisory mandate, as well as completing its first buy-side M&A deal, which illustrates the potential of combining finnCap and Cavendish's suite of financial services
Current trading - since the end of the financial period, finnCap Group has:
• continued to trade profitably
• won 5 new high-quality corporate clients
• executed 19 transactions
• built a healthy pipeline of transactions for the coming months, which are spread over a broad number of sectors and group services, making us less reliant on the public market equity issuance environment and giving us confidence in our portfolio approach
• continued to recruit high calibre individuals across the firm, particularly within the debt advisory team.
We therefore look forward to updating the market further following completion of the first half of the financial year.
(*) Adjusted EPS is calculated excluding share-based payments, amortisation of intangible assets from the acquisition of Cavendish, non-recurring items and includes a nominal tax charge. The weighted average number of shares in issue during the period includes shares held by the Group's Employee Benefit Trust.
Commenting on the results, CEO Sam Smith said:
"This has been a very significant year for finnCap and marks our transformation into a full-service financial group dedicated to helping drive the success of ambitious growth companies. To effect this change has involved a huge commitment from all our staff, which is greatly appreciated.
Performance in the period was strong and the financial results were slightly ahead of management expectations. During the period we continued to win good quality corporate clients and we are clearly seeing the benefits of the acquisition of Cavendish and the combination of the two firms.
Our suite of financial services now includes being able to advise on all significant forms of financing, across both debt and equity, including private equity, IPOs and secondary public offerings. In addition, we can advise on buy-side and sell-side M&A, exit planning, bid defence and offer PLC regulatory counsel.
finnCap is well positioned, with a strong multi product offering, a very capable management team and a strengthened board to actively pursue our strategy to become the advisor of choice to ambitious growth companies, supporting them as they seek to accelerate their own business expansion and achieve their strategic goals. "
Commenting on the results, Non-Executive Chairman Jon Moulton said:
"I'm very pleased to chair a financial services group that now occupies a very distinctive market position and boasts an unrivalled suite of services focused on enhancing the prospects of ambitious growth companies. Such businesses have probably never had more funding options but the sheer variety of choices means that having an experienced adviser is essential to ensure they choose the right route. finnCap is now very well placed to offer such advice across the debt and equity spectrum and we look forward to playing a strong role in supporting scale-up businesses and realising our own potential as a dynamic, forward thinking financial services group."
Dividend
The Company is declaring a dividend of 0.355p per share. The dividend will be paid to shareholders on 9 August 2019 with an associated record date of 19 July 2019 and ex-dividend date of 18 July 2019.
Notice of AGM and Posting of Annual Report
The Company announces that it will hold its Annual General Meeting ("AGM") at 12:30pm on 26 September 2019 at the offices of finnCap Group plc, 60 New Broad Street, London EC2M 1JJ.
Copies of the Notice of AGM and the Company's Annual Report will be posted to shareholders on or before 31 July 2019 and are available on the Company's website www.finncap.com.
Contacts
finnCap Group plc Tel: +44 (0) 20 7220 0500
Sam Smith, Chief Executive Officer investor.relations@finncap.com
Tom Hayward, Chief Financial Officer
Grant Thornton (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Philip Secrett/Samantha Harrison/Seamus Fricker
finnCap Limited (Broker) Tel: +44 (0) 20 7220 0500
Rhys Williams / Tim Redfern
Sapience Communications (PR adviser to the Group) Tel: +44 (0) 20 3195 3240
Richard Morgan Evans
Chairman's Statement
This report covers the eleven month period from 1 May 2018 to 31 March 2019, an exciting period for finnCap Group plc ("finnCap", the "Group" or the "Firm"). We started the period principally as a public market focused organisation servicing the needs of quoted companies. Following the acquisition of Cavendish Corporate Finance ("Cavendish") in December 2018 and the development of new revenue lines, we are now a full-service financial services group for ambitious growth companies. The combination has started well.
With our IPO on AIM in December 2018, we joined many of our retained corporate clients on the public markets and continue to provide them and private companies with advice on public and private fundraisings, IPOs, debt, mergers and acquisitions, and technical public market bids; effectively servicing the lifetime financial needs of a high growth business.
Our financial results, which are slightly ahead of management's expectations, reflect the performance of finnCap Ltd for 11 months (due to the alignment of year ends), and for Cavendish for just under four months (since the date of its acquisition). Set out below is a summary of the Group's performance for the period, and that of its constituent parts, to allow readers to more clearly understand the financial performance of the enlarged business.
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Group |
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|
finnCap Ltd |
Cavendish |
Cavendish |
Cavendish |
IFRS accounts |
|
|
11 months to |
8 months |
4 months |
12 months to |
11 months to |
|
|
31 March 2019 |
pre-IPO* |
post-IPO |
31 March 2019* |
31 March 2019 |
|
Revenue |
21,287 |
11,568 |
3,229 |
14,797 |
24,516 |
|
Profit before taxation and non-recurring items |
|
|
|
|
|
|
|
|
|
|
4,294 |
|
|
|
|
|
|
|
|
*Unaudited
The current scale of the combined business can be seen if the performance of finnCap Ltd is annualised and combined with the unaudited outturn for the full 12 months for Cavendish. This shows the Group generating just over £38m of revenue (although we do not expect Cavendish to perform as strongly in the current financial year).
We are delighted to report that we are clearly seeing the benefits of combining the two businesses. Every year finnCap's corporate clients have undertaken acquisitions and disposals, or debt raisings, that we have previously been unable to service. Similarly, Cavendish has been asked to consider flotations and fundraisings alongside disposals for their clients that it was unable to execute. As a result of combining these two businesses, and in January 2019, adding a buy-side advisory service, the enlarged Group can now offer the full suite of financial services to all clients, and we have already seen the first examples of these revenue synergies. We have completed our first buy-side mandate and we have assisted an existing finnCap corporate client with debt advice. We also have a good number of IPO leads from Cavendish and its associated overseas offices through its membership of Oaklins.
We are looking to expand our services further: to cement our position as one of a small number of firms able to provide a full suite of advisory and execution services to our target clients, whilst building strong long-term relationships.
Dividend
Immediately prior to flotation, the Board of finnCap Ltd declared an interim dividend of 0.207p per share. Post flotation, the Board of finnCap Group plc declared an interim dividend of 0.148p per share. On the back of the performance in the Period, the Board is now declaring an interim dividend for the financial period ended 31 March 2020 of 0.355p per share. The dividend will be paid to shareholders on 9 August 2019 with an associated record date of 19 July 2019 and ex-dividend date of 18 July 2019. The Board does not intend to declare a final dividend for the Period, or in future financial periods, as the Company has determined that the timely payment of dividends for its shareholders (and in particular employee shareholders) is important.
As set out in the Group's AIM Admission Document, the Board has adopted a dividend policy to reflect the Group's performance during the financial year, the expectation of future cash flow generation and its long-term earnings potential. The Board intends that the Group pay two dividends each year initially aiming for a 5 per cent yield based on the IPO price of 28p per share for the year ended 31 March 2020 (excluding the above interim dividend of 0.355p per share), with the total split in the proportion 30/70 between them.
Investors should note that there can be no guarantee of any dividend payment and the Board may revise the Group's dividend policy at any time.
Commercial and Regulatory Environment
During the period under review, the public markets have been volatile with a marked decline over the course of November and December 2018, whilst the longer-term shift of raising growth capital from the public markets to alternative private sources of fundraising has slowly continued.
The FTSE Small Cap index, in the first eight months of the period, depreciated by 15%, before then rallying by 10% in the last three months. As such, much of the period was spent in a declining market that impacted on the market's enthusiasm for primary fundraisings. Alternative sources of funds (private equity, venture capital, angels, P2P or public sector) have continued to become more popular (approximately £10bn was funded from such sources in 2018, compared to £5.5bn raised on AIM). To best service their clients, financial intermediaries need to be able to advise on all sources of funding and investment.
On the public equity markets, daily trading volumes and values remained relatively consistent in 2018 compared to the previous year but execution commission rates were much lower as a result of MiFID II, which we further comment on below. M&A volumes benefited from concerns about the impact of Brexit and the political risk of a future increase in the taxation of capital gains.
The Firm is regulated and overseen by a variety of different regulators, exchanges and non-statutory bodies, and the cost of risk management and compliance continues to increase. The Group continues to increase staffing levels and training group-wide to ensure that that it complies with all regulatory requirements and best practice and maintains a culture that is appropriate for the regulatory environment in which it operates. The Board has also established a very active Risk and Compliance Committee.
The current period was the first complete period in which the Group was required to comply with MiFID II which, among other things, required the separation of charges for research and execution. Our response was to make the research that we produce in respect of our corporate clients free to all, but to continue to charge institutional clients for access to our research analysts, their models and non-client research.
We do not believe that the market properly recognises the differences between the large cap market (which is generally highly liquid and where execution is typically automated) and the smaller companies' market (where matching buyers and sellers is more dependent on local market knowledge and relationships, and therefore is more manual and costly) thereby leading to a significant underpayment for the trading services offered. The Firm has made a material investment in technology to automate the exchange of information with institutional investors that MiFID II requires, but this has added further cost to the execution of trades in the smaller companies' market.
The period saw the implementation of systems and processes to prepare the Firm for the impact of the EU General Data Protection Regulation. The Group is also currently preparing for the arrival of the FCA's Senior Managers and Certification Regime in December 2019.
Ambition Nation
Ambition Nation is finnCap's nationwide campaign that explores the key issues facing the UK's ambitious growth businesses, spotlights fast-growth companies from around the country, convenes the entrepreneurs who are building these businesses and thereby encourages future growth. It centres particularly around how leaders can navigate the current investment landscape and access the capital they need to thrive.
The Ambition Nation series of events drives content and insights to inform, inspire and fuel business growth. It provides the opportunity to reach out to a wider business community and convene influential individuals from across our target market. Ultimately it drives differentiated lead generation by building a thriving community of CEOs, business leaders and investors.
During the financial period, the Firm hosted the annual Ambition Nation summit, focusing on "Building An Ambitious Future"; the bi-annual Female Leaders series in September 2018, focusing on the funding gap; and On Track in April 2019, discussing key indicators of growth. Across these events, we welcomed contributions from over 30 speakers and 800 attendees. In 2019/20, we are looking to expand the Female Leaders series regionally; to launch our Driving Ambition film series in August 2019; as well as to host our inaugural Ambition Nation Listed 50 Awards in October 2019.
Board
The Board has evolved over the period. On the completion of the acquisition of Cavendish in December 2018, Lord Leigh of Hurley (Cavendish's co-founding partner) and Joe Stelzer (its Managing Partner) both joined the Board as executive directors, along with Andy Hogarth and Barbara Firth as independent non-executive directors. The Board is notably stronger. As announced in January 2019, Joe Stelzer has stepped away from the Board and out of the day-to-day management of the business for medical reasons, and his responsibilities have been assumed by Tom Hayward (Group CFO).
The current Board of Directors holds in total 47% of the issued share capital of the Group.
People
As a financial services firm, finnCap's main assets are its reputation and its people. We recognise the huge commitment that our staff have made to the firm, both in terms of their time and their financial investment, and we thank them for this. Between them, the Board and employees own 78% of the Group. External shareholders can take comfort in the level of investment that the team has in the business and, accordingly, their interest in its commercial success.
We consider our culture to be one of our strongest differentiators. We are focused on a highly collegiate approach which brings many benefits, including higher productivity, lower staff turnover, and helping to reduce many of the business's risks. Our remuneration policy is formulated to encourage this approach, and hence seeks to deliver the best long-term result for the Group.
finnCap's Employee Benefit Trust has built a material holding of shares in finnCap over the years, and as the share price has risen over this time, there is now an accumulated value in the EBT of £2.1m measured using the period-end share price. These shares are available to satisfy existing options and to further incentivise and reward staff, at no cash cost to the Group.
Outlook
Since the start of the current financial year, we have continued to trade profitably, winning new high-quality corporate clients and have executed 19 transactions. In addition, we have continued to recruit high calibre individuals across the firm, particularly within the debt advisory team.
The market backdrop remains difficult, particularly with Brexit still to be resolved, but we have a healthy pipeline of transactions for the coming months, which are spread over a broad number of sectors and group services, making us less reliant on the public market equity issuance environment and giving us confidence in our portfolio approach. We therefore look forward to updating the market further following completion of the first half of the financial year.
Jon Moulton
Non-Executive Chairman
8 July 2019
Financial Performance and Position
Equity Capital Markets
The equity capital markets division of the Group delivered £21.3m of turnover in the 11 month period to 31 March 2019 (12 months to 30 April 2018: £22.1m). This was a very good performance given the market conditions in November and December, the impact of MiFID II on trading incomes across the market and the resulting impact on the performance of our peer group. The individual contributors to this performance are considered below.
Retainer revenues - Total fees from retainers in the 11 months ended 31 March 2019 were £5.9m, or a monthly average rate of £538k. This compares to £5.7m in the 12 months ended 30th April 2018, or a monthly average rate of £477k, and therefore represents growth on a like-for-like basis of 13%. During the year we won 18 new clients (with an average market capitalisation at the date of take on of £80m), including Revolution Bars Group Plc, Gateley (Holdings) plc, Mothercare Plc, Filtronic Plc, Grit Real Estate Income Group Limited, M.P. Evans Group Plc and Shoe Zone Plc, whilst 16 clients were lost mainly as a result of delisting and takeovers. The total market capitalisation of our retained clients at the period end was £10,858m, and the average was £86m. Of note is the growth in our investment companies' mandate from 6 to 10 retained clients.
Transactions - Total fees received from transactions in the 11 month period to 31 March 2019 were £12.0m (12 months to 30 April 2018: £11.3m). Notable deals completed during the period included:
Public Market Fundraisings
· acting as financial adviser and sole broker to Ideagen raising £30m to support an acquisition
· acting as sponsor to PPHE on its move to the Official List and then acting as joint broker on a £149m block trade
· acting as financial adviser and sole broker to Altitude raising £9m to support its working capital needs and to make an acquisition
· acting as financial adviser and sole broker to DX Group in a balance sheet restructuring, whitewash and fundraising of £4.8m
· acting as financial adviser and sole broker to Angle on its £12.7m working capital fundraising
PLC M&A Advisory
· acting as financial adviser to Taptica on its £135m offer for RhythmOne
· acting as joint Rule 3 adviser to Tax Systems on its £110m acquisition by Bowmark
· acting as financial adviser to Ligland Pharmaceuticals on its £33m offer for Vernalis
· acting as Nomad and joint broker to Cityfibre on its £538m acquisition by consortium of infrastructure investors
Investment Companies
· acting as financial adviser and joint UK placing agent on the IPO of GRIT Real Estate raising $132m
· acting as sponsor for the restructuring, tender offer and move to Official List for Vietnam Holding
Private Company
· advising DivideBuy on a £62m financing in the form of debt and equity to finance the working capital requirements for growth
Trading - The period under review was the first to reflect the material full impact of MiFID II on the trading side of our business. Whereas trading revenues (from both agency and principal trading) had been relatively consistent for the last three years at approximately £5m, in the current period these declined to £3.4m (12 months to 30 April 2018: £5.1m). The decrease is the product of slightly lower volumes and a lower average rate of commission as a result of MiFID II, offset partially by the introduction of research payments.
M&A Advisory
Cavendish had its best ever year for the 12 months to 31 March 2019, closing 28 deals and generating £14.8m (unaudited) of fees (2018: £10.2m). £3.2m of fees is included in the financial statements for the four months after the acquisition. Notable transactions included:
· the sale of Tpay to Helios Partners.
· the dual track sale/IPO process for Zenith Hygiene Group that resulted in its sale to Diversey
· the sale of Rapidata Services Limited to Access Group
· the sale of Indigo Group Holdings to Growth Capital Partners
· a dual-track debt/equity process for Manolete Partners
· advising on the successful bid by Inflexion for Creative Parking. This was the Group's first buyside transaction of this kind
As stated in our Admission Document, we believe the Cavendish performance for the period is significantly better than the business would normally generate, and in part was due to the unusually high level of inbound deal flow resulting from concerns about the political environment and potential changes to the future taxation of entrepreneurs. We do not consider this level of performance to be sustainable in more normal trading conditions. Our strategy for future growth is to focus on a sectoral approach to both lead generation and transaction execution, recruitment of further sectoral and geographic specialists, cross referrals between the two sides of the Group and brand development.
finnCap Group
Although the historic performance of the two sides of the business was separated out above for clarity, significant investment is being made to integrate them, in order to realise the revenue synergies that are the rationale for the original business combination.
To date, this has already resulted in:
· advising on a £5.0m debt facility for Universe from HSBC, to part-fund its acquisition of Camden Technology Investments Limited. This was the first debt advisory mandate for the Group from an existing finnCap Ltd client, and demonstrates the potential of rolling out this service to its existing corporate clients
· advising on the successful bid by Inflexion for Creative Parking. In addition, the Firm are currently working on two more buyside mandates
· the first signed disposal mandate for Cavendish that was introduced by finnCap
· a number of private fundraisings for finnPrivate which were introduced by Cavendish
· a twin track sale/IPO
· three potential IPOs that were introduced to the Group by Oaklins, the international network of M&A houses of which Cavendish is a member
None of the above would have been possible for the two businesses acting independently, and as such are incremental revenues to the Group.
As part of the integration and expansion of services to the clients of both sides of the business, the Group is making a material investment in further resources. The debt advisory team has been expanded in order to better service the Group's retained corporate client base, and discussions are being held with a number of sector and geographic specialists to strengthen the Group's origination and execution capability.
Going forward, finnCap Group is positioning itself to be a fully integrated group offering a full suite of services to ambitious growth companies.
Financial Position
The Group's cash and cash equivalents, net of borrowings, improved during the period from £3.8m to £4.7m. The overdraft balance at 30 April 2018 related to the funding of unsettled trades by Pershing through our Model A Settlement Agreement and as at 31 March 2019, there was no such balance.
Net assets grew from £7.3m to £20.9m, although the movement was mainly as a result of the goodwill created through the acquisition of Cavendish during the period. The Board's intention is to grow the Firm's net assets to fund future growth in the coming years through the retention of profits after funding dividends.
Financial Statements
Consolidated Statement of Comprehensive Income
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Period ended |
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Year ended |
|
|
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31 March 2019 |
30 April 2018 |
||
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£'000 |
|
£'000 |
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|
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Revenue |
|
|
|
|
|
24,516 |
|
22,137 |
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Other operating income |
|
|
|
14 |
|
18 |
||
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Total income |
|
|
|
|
24,530 |
|
22,155 |
|
|
Administrative expenses |
|
|
|
(20,264) |
|
(19,137) |
||
|
Operating profit before non-recurring items |
|
4,266 |
|
3,018 |
||||
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Non-recurring items |
|
|
|
(1,095) |
|
- |
||
|
Operating profit |
|
|
|
|
3,171 |
|
3,018 |
|
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Finance income |
|
|
|
|
28 |
|
32 |
|
|
Profit before taxation |
|
|
|
3,199 |
|
3,050 |
||
|
Taxation |
|
|
|
|
|
(875) |
|
(615) |
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Profit attributable to equity shareholders |
|
2,324 |
|
2,435 |
||||
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Total comprehensive income for the year |
|
2,324 |
|
2,435 |
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Earnings per share (pence) |
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Basic |
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|
|
|
1.85 |
|
2.11 |
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Diluted |
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|
|
|
|
1.65 |
|
2.04 |
There are no items of other comprehensive income.
All results derive from continuing operations.
Consolidated Statement of Financial Position
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31 March |
|
30 April |
|
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
£'000 |
|
£'000 |
|
Non-current assets |
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
487 |
|
445 |
|||
|
Intangible assets |
|
|
|
13,644 |
|
121 |
|
|
Financial assets held at fair value |
|
691 |
|
388 |
|||
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Deferred tax asset |
|
|
|
428 |
|
- |
|
|
Total non-current assets |
|
|
15,250 |
|
954 |
||
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Current assets |
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
8,541 |
|
9,242 |
||
|
Current assets held at fair value |
|
1,111 |
|
646 |
|||
|
Cash and cash equivalents |
|
|
4,659 |
|
4,521 |
||
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Total current assets |
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|
14,311 |
|
14,409 |
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Total assets |
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29,561 |
|
15,363 |
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Non-Current liabilities |
|
|
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|
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||
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Provisions |
|
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|
63 |
|
73 |
|
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Current liabilities |
|
|
|
|
|
|
|
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Trade and other payables |
|
|
8,065 |
|
6,918 |
||
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Corporation taxation |
|
|
498 |
|
298 |
||
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Borrowings |
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- |
|
739 |
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Total current liabilities |
|
|
8,563 |
|
7,955 |
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Equity |
|
|
|
|
|
|
|
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Share capital |
|
|
|
1,688 |
|
1,180 |
|
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Share premium |
|
|
|
575 |
|
768 |
|
|
Capital redemption reserve |
|
|
- |
|
452 |
||
|
Own shares held |
|
|
|
(1,636) |
|
(676) |
|
|
EBT reserve |
|
|
|
- |
|
(54) |
|
|
Merger relief reserve |
|
|
10,482 |
|
- |
||
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Share based payments reserve |
|
292 |
|
247 |
|||
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Retained earnings |
|
|
|
9,534 |
|
5,418 |
|
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Total equity |
|
|
|
20,935 |
|
7,335 |
|
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Total equity and liabilities |
|
|
29,561 |
|
15,363 |
||
Consolidated Statement of Cash Flows
|
|
|
Period ended |
|
Year ended |
|
|
|
31 March 2019 |
|
30 April 2018 |
|
|
|
£'000 |
|
£'000 |
|
Cash flows from operating activities |
|
|
|
|
|
Profit before taxation |
|
3,199 |
|
3,050 |
|
Adjustments for: |
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|
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Depreciation |
|
242 |
|
221 |
|
Amortisation of intangible assets |
|
56 |
|
30 |
|
Finance income |
|
(28) |
|
(32) |
|
Share based payments charge |
|
100 |
|
85 |
|
Net fair value gains recognised in profit or loss |
|
(155) |
|
(114) |
|
Payments received of non-cash assets |
|
(218) |
|
(161) |
|
|
|
3,196 |
|
3,079 |
|
Changes in working capital: |
|
|
|
|
|
Decrease/(increase) in trade and other receivables |
|
778 |
|
(2,366) |
|
Increase in trade and other payables |
|
109 |
|
432 |
|
(Decrease) in provisions |
|
(10) |
|
(68) |
|
Cash generated from operations |
|
4,073 |
|
1,077 |
|
Net cash payments for current asset investments |
|
|
|
|
|
held at fair value through profit or loss |
|
(465) |
|
(355) |
|
Tax paid |
|
(796) |
|
(637) |
|
Net cash inflow from operating activities |
|
2,812 |
|
85 |
|
Cash flows from investing activities |
|
|
|
|
|
Acquisition of subsidiaries, net of cash acquired |
|
(3,592) |
|
- |
|
Purchase of property, plant and equipment |
|
(249) |
|
(111) |
|
Purchase of intangible assets |
|
(30) |
|
(85) |
|
Proceeds on sale of investments |
|
70 |
|
188 |
|
Interest received |
|
28 |
|
32 |
|
Net cash (outflow)/inflow from investing activities |
|
(3,773) |
|
24 |
|
Cash flows from financing activities |
|
|
|
|
|
Purchase of own shares by EBT |
|
(1,260) |
|
(620) |
|
Sale of own share by EBT |
|
693 |
|
40 |
|
Equity dividends paid |
|
(1,635) |
|
(1,051) |
|
Proceeds from the issue of new shares net of costs |
|
3,665 |
|
- |
|
Proceeds from exercise of options |
|
375 |
|
25 |
|
Proceeds from borrowings |
|
(739) |
|
739 |
|
Net cash outflow from financing activities |
|
1,099 |
|
(867) |
|
Net increase/(decrease) in cash and cash equivalents |
138 |
|
(758) |
|
|
Cash and cash equivalents at beginning of year |
|
4,521 |
|
5,279 |
|
Cash and cash equivalents at end of year |
|
4,659 |
|
4,521 |
Consolidated Statement of Changes in Equity
|
|
|
|
Capital |
Own |
|
Merger |
Share Based |
|
|
|
|
Share |
Share |
Redemption |
Shares |
EBT |
Relief |
Payment |
Retained |
Total |
|
|
Capital |
Premium |
Reserve |
Held |
Reserve |
Reserve |
Reserve |
Earnings |
Equity |
|
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 1 May 2017 |
1,175 |
748 |
452 |
(96) |
(39) |
- |
167 |
4,014 |
6,421 |
|
Total comprehensive income for the period |
- |
- |
- |
- |
(15) |
- |
- |
2,450 |
2,435 |
|
Transactions with owners: |
|
|
|
|
|
|
|
|
|
|
Transfer of own shares |
- |
- |
- |
(580) |
- |
- |
- |
- |
(580) |
|
Share based payments charge |
- |
- |
- |
- |
- |
- |
85 |
- |
85 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
(1,051) |
(1,051) |
|
Share options exercised |
5 |
20 |
- |
- |
- |
- |
(5) |
5 |
25 |
|
|
5 |
20 |
- |
(580) |
- |
- |
80 |
(1,046) |
(1,521) |
|
Balance at 30 April 2018 |
1,180 |
768 |
452 |
(676) |
(54) |
- |
247 |
5,418 |
7,335 |
|
Total comprehensive income for the period |
- |
- |
- |
- |
54 |
- |
- |
2,270 |
2,324 |
|
Transactions with owners: |
|
|
|
|
|
|
|
|
|
|
Transfer of own shares |
- |
- |
- |
(960) |
- |
- |
- |
- |
(960) |
|
Issue of share capital |
134 |
3,616 |
- |
- |
- |
- |
- |
- |
3,750 |
|
Share issue costs |
- |
(85) |
- |
- |
- |
- |
- |
- |
(85) |
|
Shares issued as part of the |
|
|
|
|
|
|
|
|
|
|
consideration in a business combination |
334 |
- |
- |
- |
- |
9,019 |
- |
- |
9,353 |
|
Elimination in share for share acquisition |
- |
(1,011) |
(452) |
- |
- |
1,463 |
- |
- |
- |
|
Share premium cancellation |
|
(3,048) |
- |
- |
- |
- |
- |
3,048 |
- |
|
Share based payments charge |
- |
- |
- |
- |
- |
- |
100 |
- |
100 |
|
Deferred tax on share based payments |
- |
- |
- |
- |
- |
- |
- |
378 |
378 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
(1,635) |
(1,635) |
|
Share options exercised |
40 |
335 |
- |
- |
- |
- |
(55) |
55 |
375 |
|
|
508 |
(193) |
(452) |
(960) |
- |
10,482 |
45 |
1,846 |
11,276 |
|
Balance at 31 March 2019 |
1,688 |
575 |
- |
(1,636) |
- |
10,482 |
292 |
9,534 |
20,935 |
Notes to the consolidated financial statements
1. Accounting policies
a. Basis of preparation
These consolidated financial statements contain information about the Group and have been prepared on a historical cost basis except for certain financial instruments which are carried at fair value. Amounts are rounded to the nearest thousand, unless otherwise stated and are presented in pounds sterling, which is the currency of the primary economic environment in which the Group operates.
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards and International Accounting Standards as adopted by the European Union and the IFRS Interpretation Committee interpretations (collectively IFRSs), and in accordance with applicable law.
The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies.
The financial information set out in this announcement does not constitute the Company's statutory accounts for the period ended 31 March 2019 (or the year ended 30 April 2018) under the meaning of Section 434 the Companies Act 2006 but is derived from those accounts. Statutory accounts for the period ended 31 March 2019 ha been reported on by the Company's independent auditors, BDO LLP (the "Independent Auditors"). The Independent Auditors' Reports on the Annual Report and Financial Statements for the period ended 31 March 2019 were unmodified, did not draw attention to any matters by way of emphasis and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The statutory accounts will be available at www.finncap.com and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
b. Basis of consolidation
The Group's consolidated financial statements include the financial statements of the Company and all its subsidiaries. Subsidiaries are entities over which the Group has control if all three of the following elements are present: power over the investee, exposure to variable returns from the investee and the ability of the investor to use its power to affect those variable returns. Subsidiaries are fully consolidated from the date on which control is established and de-consolidated on the date that control ceases.
The acquisition method of accounting is used for the acquisition of subsidiaries. Transactions and balances between members of the Group are eliminated on consolidation and consistent accounting policies are used throughout the Group for the purposes of consolidation.
The share for share acquisition of finnCap Ltd by finnCap Group plc was a corporate reorganisation to facilitate the IPO on AIM and the subsequent purchase of Cavendish. As this was not a business combination, merger accounting principles have been applied. The Group's prior year comparatives consist of the results and financial position of finnCap Ltd for the twelve months ended 30 April 2018, amended to conform to the use of IFRS.
c. Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement. The Strategic Report and Directors' Report describe the financial position of the Group; the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; and its exposure to credit risk and liquidity risk.
The Directors believe that the company has adequate resources to continue trading for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts.
2. Dividends
|
|
|
Period ended |
Year ended |
||
|
|
|
31 March 2019 |
30 April 2018 |
||
|
|
|
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
Dividends proposed and paid during the year |
|
|
1,635 |
|
1,051 |
|
Dividends per share |
|
|
1.38p |
|
0.91p |
Dividends are declared at the discretion of the Board.
3. Post balance sheet events
An interim dividend of 0.355p per share was proposed by the Directors at their meeting on 8th July 2019. These financial statements do not reflect this dividend.
4. Market abuse regulation (MAR) disclosure
Certain information contained in this announcement would have been deemed to be inside information for the purposes of article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
5. Website publication
The full financial statements are included in our annual report, which is published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of Financial Statements, which may vary from legislation in other jurisdictions.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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