Half Yearly Report

WH Ireland Group plc

(“WH Ireland”, “the Group” or “the Company”)

 

Half Year Results

 

WH Ireland, the financial services group that provides corporate broking and private wealth management services, today announces its results for six months ended 31 May 2014.

 

Highlights:

 

·      Revenue increased by 12.6% to £14.69m (2013: £13.05m)

·      Recurring revenue increased by 9.3% to £4.7m (2013: £4.3m)

·      Adjusted* profit before tax £470,000 (2013: £59,000)

·      Profits before tax £203,000 (2013: £59,000)

·      Basic earnings per share of 0.58p (2013: 0.16p)

·      Dan Cowland appointed Finance Director and Tim Steel as non-executive director

 

*Before one off re-organisation costs of £267,000

 

 

Corporate Broking:

 

·      Continued growth in the number of corporate broking clients to 92 (2013: 84)

·      Fund raisings increased to £34.8m (2013: £26.5m) in 9 transactions (2013: 13)

·      Market making revenue and secondary commission increased total divisional revenue by 12%

·      Recruitment has taken place in investor relations, research, sales and corporate teams enhancing the division’s capability and capacity

 

 

Private Wealth Management:

 

·      Funds under management and administration rose by 9.6% to £2.7bn (30 November 2013: £2.5bn)

·      Active recruitment of individuals and teams, specifically in Milton Keynes, Birmingham and London

·      Isle of Man office fully operational and winning new private client mandates

·      Focusing the offering:

o  Streamlining of smaller offices with assets transferred to London

o  Ceased to offer traded options facilities

o  Planning to exit third party administration business

 

 

Richard Killingbeck, Chief Executive Officer, said:

 

“WH Ireland performed strongly during the first half of the year, with good growth in adjusted pre-tax profits and revenues, continuing the progress made in the last financial year. 

 

“Much progress has been made in the development of WH Ireland into a focussed business around two key disciplines, Corporate Broking and Private Client Wealth Management. Both businesses are in a considerably stronger position than twelve months ago in terms of their financial performance, proposition and teams.

 

We anticipate making further progress in the second half and into 2015.”

 

A copy of these results are available on the Company’s website: www.wh-ireland.co.uk 

 

 

 

 

 

For further information please contact:

 

WH Ireland Group plc	www.wh-ireland.co.uk
Richard Killingbeck, Chief Executive Officer Miles Nolan, Head of Communications	+44(0) 20 7220 1666
Panmure Gordon (UK) Limited
Hugh Morgan / Adam James, Corporate Finance	+44(0)20 7886 2500
MHP Communications
Reg Hoare / Jade Neal / Jamie Ricketts	+44(0) 20 3128 8100
	whireland@mhpc.com

 

Notes to editors

 

WH Ireland Group plc:

WH Ireland is a financial services group offering private wealth management and corporate broking services.  Since 2000, the company has been listed on the London Stock Exchange on AIM (WHI).  The Group has two divisions:

 

Corporate Broking:  The Group provides corporate finance, research, market making and fund raising capabilities to quoted small/mid-cap companies, including a full NOMAD service to the majority of our corporate clients. WH Ireland is ranked 3rd largest Nominated Advisor and corporate broker by number of AIM clients.

 

Private Wealth Management: The Group provides wealth management and wealth planning services tailored to the individual, corporates, trusts and funds. It has over 140 years’ pedigree in private client wealth management. It manages £2.7 billion of assets under management and administration and operates from 10 offices around the United Kingdom.

 

 

 

 

Chairman’s Statement

 

Introduction

The Board is pleased to report that WH Ireland performed strongly during the first half of the year, with good growth in adjusted pre-tax profits and revenues, continuing the progress made in the last financial year. 

 

This continues to be against the backdrop of decreasing volatility and increasing activity in financial markets. Both of our businesses, Corporate Broking and Private Wealth Management, took advantage of these improved market conditions and continued to develop their businesses and improve their financial performance.

 

Divisional review

In Corporate Broking, we have continued to raise money for small growth companies across a variety of sectors as well as increasing the number of clients for whom we act as NOMAD and/or Broker to 92 as of the half year end. 

 

In Private Wealth Management, our funds under management and administration continue to grow with total funds increasing by 9.6% during the period. Following the half year end we were pleased to announce the opening of our new Milton Keynes office staffed by a new team formerly of Charles Stanley.  They are amongst several individuals who have joined the division recently as we seek to grow assets under management further.

 

Across the Company one of the most pleasing developments is the increase in recurring income which, in the half year, rose to £4.7m (2013: £4.3m).  At the same time we have begun to address the cost/income ratio with the intent of delivering more profit to the bottom line, the full benefits of which should begin to be in evidence during 2015.

 

Board

There have been a number of Board changes since the year end.  Dan Cowland has joined us from Shore Capital replacing Alan Kershaw as Finance Director.  Our thanks go to Alan for his contribution to our progress.  Roger Lane-Smith is stepping down, effective 31 July 2014, after eight years on the Board while Tim Steel joined us in March as a non-executive director.  Roger has given much sage advice over a challenging period for WH Ireland and deserves sincere thanks.  We look forward to working with Tim who brings with him the benefits of a 30 year career at Cazenove with experience of both broking and fund management.

 

Dividend

In line with previous years, the Board continues with its policy of only recommending the payment of a final dividend in respect of each financial year; this will be declared at the time of the final results in February 2015.    

 

Summary

The pipeline of new corporate transactions remains robust but as always market conditions and timing are a key determinant to translating this into revenue. Our Private Client business should continue to demonstrate good asset growth but the benefits of changes already announced will not be fully reflected in this year’s figures.

 

Thanks as always goes to all our staff.

 

 

Rupert Lowe

Chairman

 

 

 

 

 

 

 

 

 

 

 

Chief Executive Officer’s Report

 

Overview

The past six months have witnessed continued development of the more focussed WH Ireland proposition. This has required senior management changes, the costs of which are reflected by the adjustments to pre-tax profits. The new management structure is working well and has helped form the increased oversight of the business that in turn has created the framework from which to achieve more focussed growth.

 

The process of change at WH Ireland will continue for some time as we seek to create a more efficient and focussed offering across both business divisions. Alongside these corporate challenges remain the wider industry challenges of increased costs associated with regulation, which are impacting WH Ireland and our peers.

 

Corporate Broking division

The number of corporate clients, a key objective of this division, has continued to increase with 92 corporate clients as of the half year end (2013:84). This has enabled a good increase in retainer revenues to be reported. Corporate fund raisings have also risen to £34.8 million during this period compared with £26.5 million for the comparative period last year. Improved commission income and income from market making has helped to increase total revenue generated by this division by 12%. The division has been active across the IPO market, secondary fund raisings and mergers and acquisitions.

 

The business is now focussed in four locations in London, Leeds, Manchester and Bristol. Recruitment has taken place in investor relations, research, sales and corporate teams enhancing the division’s capability and capacity.

 

Private Wealth Management division

A significant amount of change has occurred within this division, to both develop the fund management proposition and team, whilst at the same time focusing its offering.  

 

As the Chairman has referred to in his statement above, we have recruited a team of fund managers from Charles Stanley into a new Milton Keynes office and we have also welcomed private client executives from Barclays Wealth and Canaccord to our offices in Birmingham and London respectively. Our new Isle of Man office, which we opened in February 2014, has begun to win new clients and offers us increased opportunities in the international market representing an important strategic expansion for the division. This increase in the size of our team has significantly increased our capacity to manage additional discretionary and advisory client portfolios, and will help to increase funds under management to over £3 billion in the future. 

 

In terms of focusing our offering, we have ceased to operate from a number of smaller offices and in the majority of cases the assets have been transferred to London to be managed. We have ceased to offer a traded option service to clients and we have also informed our third party administrative clients that we will be ceasing to offer this service as of the year end.

 

Outlook

Much progress has been made in the development of WH Ireland into a focussed business around two key disciplines, Corporate Broking and Private Client Wealth Management. Both businesses are in a considerably stronger position than twelve months ago in terms of their financial performance, proposition and teams.

 

There remains more work to be done in both as we seek to achieve recognition for each division in the market place. The majority of change will have been completed by year end at which time the focus will shift to embedding a lower cost structure and achieving economies of scale by organic, as well as acquisitive, growth.

 

We anticipate making further progress in the second half and into 2015.

 

 

Richard Killingbeck

Chief Executive Officer

 

 

Consolidated statement of comprehensive income – unaudited

for the half year ended 31 May 2014

 

		Half year	Half year		Year
		ended	ended		ended
		31 May	31 May		30 November
		2014	2013		2013
	Note	£’000	£’000		£’000
Revenue	2	14,691	13,051		29,653
Administrative expenses		(14,564)	(12,847)		(28,734)
Operating profit		127	204		919
Other income		–	–		25
Investment (losses)/gains		(2)	30		458
Fair value gains/(losses) on investments		87	(154)		238
Finance income		14	6		64
Finance expense		(23)	(27)		(52)
Profit before tax		203	59		1,652
Tax charge		(64)	(22)		(516)
Profit for the period		139	37		1,136
Other comprehensive income:
Items that will be reclassified to profit or loss
Valuation gains on available for sale investments		–	–		370
Transferred to profit or loss on sale of investments		–	–		(581)
Tax relating to items that may be reclassified		–	–		48
Total other comprehensive income		–	–		(163)
Total comprehensive income attributable to the owners of the parent		139	37		973
Earnings per share for profit attributable to the ordinary equity holders of the parent during the period
Basic	6	0.58p		0.16p		4.80p
Diluted	6	0.55p		0.15p		4.47p