Our Annual Report and Accounts 2016
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2016 has been a transformational year for WH Ireland: we reached a settlement with the FCA, we bolstered our capital base, and we welcomed a substantial new shareholder, KEH, to our register after it acquired a 23% stake in the Company.
Our revenues were lower overall, with the first six months affected by a slowdown in corporate activity ahead of the European referendum at the end of June. However, the second half has shown an encouraging trend, with rising stock markets, and a strong rebound in corporate confidence which was reflected in the improved levels of activity in our Corporate Broking division. The Corporate division finished the year positively with participation as a Co-Lead Manager in the Sirius Minerals equity placing.
The Private Wealth Management division increased overall funds under management to £2.9bn, with the discretionary element increasing to over £1.0bn, thus continuing to improve our levels of fee income. The move to outsource our operational platform to SEI Investments (Europe) Ltd has progressed, with the transfer on target to be effective during the second quarter of 2017: this will provide both a quantum leap in our access to, and maintenance of, state of the art information technology, will help improve our regulatory robustness and enhance the service levels to our clients immensely. All of the committed and quantifiable costs associated with this project as of 30 November 2016 have been taken in the 2016 profit and loss account as an exceptional item. I would expect to witness ongoing cost savings and lower planned spending activity as a result of this transfer to amount to an annualised saving of at least £400k in a full year, beginning in the 2018 financial year.
I reported last year on the appointment as a Non-Executive Director of Jonathan Carey, after a distinguished career at Jupiter Asset Management. In addition, we have strengthened the Board with two further appointments, which were announced after the year end.
First, following the 23% shareholding acquired by KEH Group in WH Ireland, their CEO, Humphrey Percy, agreed to join the Board of WH Ireland as a Non-Executive Director. Humphrey was previously CEO of Bank of London and the Middle East plc and Head of Global Financial Markets at WestLB.
Secondly, we announced the appointment of Victoria Raffé, Non-Executive Director, who has had an extensive career in the City, most recently as Director of the Authorisations Division for the Financial Conduct Authority (‘FCA’).
Sale of Manchester Office
In my statement last year, I stated that the Board was considering the potential sale of our freehold office in Manchester: we have recently announced the sale of 11 St James’s Square for £5.27m, a premium to the book value of £4.75m. Manchester staff will be moving to a new leased office during the summer of 2017.
The net cash from the property sale, coupled with existing cash balances, means that Group cash balances are now in excess of £11.0m, and provides comfort to all as to the resilience of our balance sheet.
Last year the Board felt it prudent to omit paying a dividend. The Board continues regularly to assess this position but it is not the intention of the Board to recommend a dividend payment to Shareholders for the year under review.
Despite the uncertainties regarding the UK’s progress towards Brexit and the unpredictability of newly elected President Trump, markets are close to all-time highs, which is a positive environment both for the pipeline in our Corporate Broking division and for the ad valorem fee paying discretionary mandates in our Private Wealth Management division. Against this background of renewed investor confidence, the Board remains cautiously optimistic about the year ahead.
Finally, I would like to thank all our staff across all of our office locations for their individual hard work and efforts during the many challenges of 2016.