Half Yearly Report – Replacement – WH Ireland Financial Services Company, Wealth Management & Corporate Broking | WHIreland

Half Yearly Report – Replacement

RNS Number : 5456T
W.H. Ireland Group PLC
20 July 2015
 



The following amendments have been made to the Half Year Results announcement released on 20 July 2015 at 7.00am under RNS No 4414T.

 

In Note 2 Segmental reporting, in the table representing revenue and profit information for the Group’s business segments for the half year ended 31 May 2015, all figures marked with an asterisk have been amended.

 

All other details remain unchanged.

 

The full amended text is shown below.

 

 

 

 

 

Monday, 20 July 2015

 

 

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 its half year ended 31 May 2015.

 

Highlights

 

·      Group revenue increased 9% to £15.94m (2014: £14.69m)

34% increase in recurring revenues to £5.13m (2014: £3.83m)

·      Operating profit of £0.31m (2014: £0.12m)

·      Profit before tax of £0.59m (2014: £0.20m)

·      Basic earnings per share of 1.86p (2014: 0.58p)

 

Private Wealth Management

 

·      Total funds under management and control of £2.8bn up 3.7% from year end (30 November 2014: £2.7bn)

Strong increase in discretionary assets under management of 16% to £0.83bn (30 November 2014: £0.72bn)

·      Management fee income increased by 55% to £3.4m (2014: £2.2m)

 

Corporate Broking

 

·      Further growth in number of retained corporate clients to 98 (2014: 92)

·      Retainer fee income rose by 7% to £1.68m (2014: £1.57m)

·      Increased flow of secondary placings with 15 transactions completed 

 

 

Richard Killingbeck, Chief Executive, said:

 

We have reported an improved and profitable first half performance with increased discretionary funds under management in Private Wealth Management and increased numbers of clients in Corporate Broking.

 

“The actions we have taken in order to achieve the margins that the Company is capable of producing will begin to benefit the second half and beyond. We remain cautiously optimistic and look forward to the next six months with confidence.”

 

 

 

 

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

 



SPARK Advisory Partners Limited


Mark Brady/Miriam Greenwood

+44(0) 20 3368 3551/3550



MHP Communications


Reg Hoare / Jade Neal / Jamie Ricketts

+44(0) 20 3128 8100


whireland@mhpc.com

 

 

 

 




 

Chairman’s Statement

 

Introduction

It is pleasing to report a profitable first half to the year with further progress being made in most areas of our business. There remains a considerable amount of work to be done if we are to achieve the returns that the Board believes the Company is capable of producing but, under difficult market conditions, it is reassuring to see our recurring revenues growing strongly.

Dividend

In line with previous years, the Board is continuing with its policy of only recommending the payment of a final dividend in respect of its financial year end; this will be declared at the time of the 2014/5 results announcement in February 2016.

Conclusion

The second half of the year will face the headwind of various macro-economic uncertainties.  Currently the most topical are the volatile market conditions in China and the demise of the Greek economy with the attendant uncertainty about her continued participation in the Euro experiment.  Nevertheless the cautious optimism that I expressed at the year-end remains appropriate and we look forward to the next six months with confidence.

 

 

Rupert Lowe

Chairman

 

Chief Executive’s Statement

 

Overview

The first six months of the year has witnessed considerable progress in both of our divisions in delivering our stated ambition of achieving a greater share of our revenue from recurring revenue streams.  

The Private Wealth Management division has continued to grow its management fee income with an increase of over 50% being achieved when compared with the same period last year.  This growth reflects the continued focus on discretionary and advisory fee paying assets from both new and existing clients.  

Within the Corporate Broking division continuing growth in the number of corporate clients has resulted in further increases to retainer income and a consequential increase in the number of client-related corporate transactions undertaken during the first half.

Outlook

Despite this solid progress, there remains a lot of work to be undertaken in order to achieve the gross margin levels and returns that the Chairman refers to above.  The rationalisation of office locations and reductions in the cost base will begin to have a positive impact in the second half of our financial year.  Further, we are continuing to focus a significant amount of time and effort in bringing efficiencies to bear within our operational platform whilst at the same time ensuring that we have the ability to service our growing discretionary client base.  Various internal projects have begun this year which will take some time to be completed but which should begin to benefit the business in 2016 and beyond.

 

Richard Killingbeck

Chief Executive Officer

 




 

Consolidated statement of comprehensive income – unaudited

for the half year ended 31 May 2015

 

 


Half year

Half year

Year

 



ended

ended

ended

 



31 May

31 May

30 November

 



2015

2014

2014

 





(audited)

 


Note

£’000

£’000

£’000

 

Revenue

2

15,942

14,691

30,043

 

Administrative expenses


(15,626)

(14,564)

(29,353)

 

Operating profit


316

127

690

 

Other income


12

 

Investment (losses)/gains


(98)

(2)

(2)

 

Fair value gains/(losses) on investments


385

87

(221)

 

Finance income


16

14

25

 

Finance expense


(26)

(23)

(48)

 

Profit before tax


593

203

456

 

Tax expense


(141)

(64)

(119)

 

Profit and total comprehensive income for the period


452

139

337

 






 






 

Earnings per share for profit attributable to the ordinary equity holders of the parent during the period





 

Basic

6

1.86p

0.58p

1.42p

Diluted

6

1.82p

0.55p

1.34p






 






 

 




 

Consolidated statement of financial position – unaudited

as at 31 May 2015

 

 

 


31 May

31 May

30 November



2015

2014

2014





(audited)


Note

£’000

£’000

£’000

Assets





Non-current assets





Property, plant and equipment


5,500

5,700

5,595

Goodwill


258

319

258

Intangible assets


3,502

476

463

Investments

3

456

532

579

Deferred tax asset


350

375

360



10,066

7,402

7,255

Current assets




 

Trade and other receivables


20,919

33,098

38,345

Trading investments


261

1,180

890

Cash and cash equivalents

4

5,903

8,643

7,490



27,083

42,921

46,725

Total assets


37,149

50,323

53,980

Liabilities




 

Current liabilities




 

Trade and other payables


(17,685)

(34,191)

(37,919)

Corporation tax payable


(443)

(192)

(308)

Obligations under finance leases


(119)

(119)

(119)

Borrowings


(174)

(175)

(179)

Provisions for liabilities and charges


(45)

(412)

(189)



(18,466)

(35,089)

(38,714)

Non-current liabilities




 

Deferred tax liability


(205)

(393)

(205)

Obligations under finance leases


(50)

(159)

(109)

Accruals and deferred income


(3,461)

(363)

(347)

Borrowings


(1,081)

(1,255)

(1,169)

Provisions for liabilities and charges


(35)

(21)

(21)



(4,832)

(2,191)

(1,851)

Total liabilities


(23,298)

(37,280)

(40,565)

Total net assets


13,851

13,043

13,415

Equity




 

Share capital

5

1,222

1,192

1,193

Share premium


343

95

101

Available-for-sale reserve


7

7

7

Other reserves


982

982

982

Retained earnings


12,033

11,549

11,895

Treasury shares


(736)

(782)

(763)

Total equity


13,851

13,043

13,415





 





 

 




 

Consolidated statement of cash flows – unaudited

for the half year ended 31 May 2015

 

Half year

Half year

Year

ended

ended

ended

31 May

31 May

30 November

2015

2014

2014



(audited)

£’000

£’000

£’000

Operating activities:




Profit for the period

452

139

337

Adjustments for:



 

Depreciation, amortisation and impairment

169

235

474

Finance income

(16)

(14)

(25)

Finance expense

26

23

48

Taxation

141

64

119

Gain in investments

(363)

(155)

(202)

Non-cash adjustment for share based payments

108

99

205

Decrease/(increase) in trade and other receivables

17,425

3,594

(1,653)

(Decrease)/increase in trade and other payables*

(20,172)

(554)

3,158

(Decrease)/increase in provisions

(130)

68

(155)

Decrease/(increase) in trading investments

629

(333)

(43)

Net cash (used in)/generated from operations

(1,731)

3,166

2,263

Income taxes received/(paid)

4

(112)

Net cash (used in)/generated from operating activities

(1,727)

3,166

2,151

Investing activities*:



 

Proceeds from sale of investments

646

70

70

Interest received

16

14

25

Acquisition of investments

(160)

Acquisition of property, plant and equipment

(60)

(201)

(261)

Net cash generated from investing activities

442

(117)

(166)

Financing activities:



 

Proceeds from issue of shares

313

96

132

Repayment of borrowings

(93)

(59)

(181)

Repayment of obligations under finance leases

(48)

(99)

(102)

Interest paid

(26)

(23)

(48)

Interest paid: Finance leases

(11)

(10)

(17)

Dividends paid

(437)

(357)

(325)

Net cash used in financing activities

(302)

(452)

(541)

Net (decrease)/increase in cash and cash equivalents

(1,587)

2,597

1,444

Cash and cash equivalents at beginning of period

7,490

6,046

6,046

Cash and cash equivalents at end of period

5,903

8,643

7,490

Cash and cash equivalents at the end of the period comprise of:



 

Clients’ settlement cash

107

4,895

172

Group cash

5,796

3,748

7,318

Cash and cash equivalents at end of period

5,903

8,643

7,490

 

*The investing activities and movement in trade and other payables for the half-year ended 31 May 2015, do not include the acquisition of intangibles for deferred payments of £3.05m, treated as a non cash item.

 

 

 

 

 

 

 









Consolidated statement of changes in equity – unaudited

 

 



Available






Share

Share

for-sale

Other

Retained

Treasury

Total


capital

premium

reserve

reserves

earnings

shares

equity


£’000

£’000

£’000

£’000

£’000

£’000

£’000

Balance at 1 December 2013

1,185

6

7

982

11,668

(782)

13,066

Profit and total comprehensive income for the period

139

139

 

 

 

 

 

 

 

 

Contributions by and distributions to owners

 

 

 

 

 

 

 

Recognition of share-based payments

99

99

Share options exercised

7

89

96

Dividends (note 7)

(357)

(357)

Total contributions by and distributions to owners

7

89

(258)

(162)

Balance at 31 May 2014

1,192

95

7

982

11,549

(782)

13,043

Profit and total comprehensive income for the period

198

198

 





 


 

Contributions by and distributions to owners





 

 

 

Recognition of share-based payments

106

106

Share options exercised

1

6

10

19

36

Dividends (note 7)

32

32

Total contributions by and distributions to owners

1

6

148

19

174

Balance at 30 November 2014

1,193

101

7

982

11,895

(763)

13,415

Profit and total comprehensive income for the period

452

452

 

 

 

 

 

 

 

 

Contributions by and distributions to owners

 

 

 

 

 

 

 

Recognition of share-based payments

108

108

Share options exercised

29

242

15

27

313

Dividends (note 7)

(437)

(437)

Total contributions by and distributions to owners

29

242

(314)

27

(16)

Balance at 31 May 2015

1,222

343

7

982

12,033

(736)

13,851

for the half year ended 31 May 2015

 

 

 

 

 

 

 


 

 

 

Notes to the interim report and financial information

for the half year ended 31 May 2015

 

1. Basis of preparation

Statement of compliance

The financial information in this interim report has been prepared in accordance with the disclosure requirements of the Alternative Investment Market (“AIM”) Rules and the recognition and measurements of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU).

The interim report does not include all of the information required for full annual financial statements.

The accounting policies adopted by the Group in the preparation of its 2015 interim report are those which the Group currently expects to adopt in its annual financial statements for the year ending 30 November 2015 and are consistent with those disclosed in the annual financial statements for the year ended 30 November 2014.

The financial information for the period ended 31 May 2015 does not constitute the Company’s statutory accounts.  The statutory accounts for the year ended 30 November 2014 have been delivered to the Registrar of Companies in England and Wales.  The auditor has reported on those accounts.  Its report was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.  The financial information for the half year ended 31 May 2015 and 31 May 2014 is unaudited.

The AIM Rules for Companies do not require IAS 34 “Interim Financial Reporting” to be applied; therefore it has not been used in the preparation of this interim report.

Going concern

The financial statements of the Group have been prepared on a going concern basis.  In making this assessment, the Directors have prepared detailed financial forecasts for the period to November 2017 which consider the funding and capital position of the Group.  Those forecasts make assumptions in respect of future trading conditions, notably the economic environment and its impact on the Group’s revenues and costs.  In addition to this, the nature of the Group’s business is such that there can be considerable variation in the timing of cash inflows.  The forecasts take into account foreseeable downside risks, based on the information that is available to the Directors at the time of the approval of these financial statements.

Certain activities of the Group are regulated by the Financial Conduct Authority (FCA) which is the statutory regulator for financial services business in the UK and has responsibility for policy, monitoring and discipline for the financial services industry.  The FCA requires the Group’s capital resources to be adequate; that is sufficient in terms of quantity, quality and availability, in relation to its regulated activities.  The Directors monitor the Group’s regulatory capital resources on a daily basis and they have developed appropriate scenario tests and corrective management plans which they are prepared to implement to address any potential deficit as required.  These actions may include cost reductions, regulatory capital optimisation programmes or further capital raising.  The Directors consider that, taking account of foreseeable downside risks, regulatory capital requirements will continue to be met.

The Directors have renewed the Group’s banking facilities, confirming that these will be available until 28 February 2016.

2. Segmental reporting

The Group has two operating segments. 

The Private Wealth Management division offers investment management advice and services to individuals and contains the Group’s Wealth Planning business, giving advice on and acting as intermediary for a range of financial products.  The Corporate Broking division provides corporate finance and corporate broking advice and services to companies and acts as Nominated Adviser to clients listed on AIM.  It also contains the Group’s Institutional Sales and Research business, which carries out stockbroking activities on behalf of companies as well as conducting research into markets of interest to its clients.

All divisions are located in the UK or the Isle of Man.  Each reportable segment has a segment manager who is directly accountable to and maintains regular contact with the CEO. 

No customer represents more than ten percent of the Group’s revenue.


The following tables represent revenue and profit information for the Group’s business segments:

Half year ended 31 May 2015


Private Wealth

Corporate

Head

Other Group

 


Management

Broking

Office

Companies

Group


£’000

£’000

£’000

£’000

£’000

Revenue

10,915

4,869

158

15,942

Segment result

501

(283)

98

316

Executive Board cost

169

169

(454)

116

Other Income

Investment gains

(8)

(90)

(98)

Fair value gains/(losses) on investments

(11)

396

385

Finance income

15

1

16

Finance expense

(11)

(4)

(11)

(26)

Profit/(loss) before tax

655

189

(454)

203

593

Tax (expense)/income

(22)

(130)

11

(141)

Profit/(loss) for the year

633*

59*

(454)

214*

452*

 

Half year ended 31 May 2014


Private Wealth

Corporate

Head

Other Group

 


Management

Broking

Office

Companies

Group


£’000

£’000

£’000

£’000

£’000

Revenue

10,077

4,540

74

14,691

Segment result

326

(118)

(81)

127

Executive Board cost

188

188

(476)

100

Other Income

Investment losses

(2)

(2)

Fair value gains on investments

87

87

Finance income

12

1

1

14

Finance expense

(8)

(3)

(12)

(23)

Profit/(loss) before tax

518

153

(476)

8

203

Tax (expense)/income

(17)

(96)

49

(64)

Profit/(loss) for the year

501

57

(476)

57

139

 

Year ended 30 November 2014 (audited)


Private Wealth

Corporate

Head

Other Group

 


Management

Broking

Office

Companies

Group


£’000

£’000

£’000

£’000

£’000

Revenue

20,328

9,538

177

30,043

Segment result

229

616

(155)

690

Executive Board cost

347

347

(897)

203

Other Income

12

12

Investment losses

(2)

(2)

Fair value losses on investments

(24)

(197)

(221)

Finance income

22

1

2

25

Finance expense

(17)

(6)

(25)

(48)

Profit/(loss) before tax

570

759

(897)

25

456

Tax (expense)/income

(31)

(181)

93

(119)

Profit/(loss) for the year

539

578

(897)

118

337

 




 

3. Investments


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2015

2014

2014




(audited)


£’000

£’000

£’000

Available-for-sale investments

 

 

 

Fair value:         unquoted

93

247

93


93

247

93

Investments at fair value through the income statement

 

 

 

Fair value:         quoted

196

41

284

                        warrants

167

244

202


363

285

486

Total investments

456

532

579

 

Fair value, in the case of quoted investments, represents the bid price at the reporting 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.

4. Cash, cash equivalents and bank overdrafts

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash in hand and deposits with banks and financial institutions with a maturity of up to three months.

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

Money held on behalf of clients is not included in the statement of financial position.  Client money at 31 May 2015 was £130.8m (31 May 2014: £101.6m; 30 November 2014: £107.2m).

5. Share capital

The total number of authorised ordinary shares is 34.5 million shares of 5p each (31 May 2014 and 30 November 2014: 34.5 million).  The total number of issued ordinary shares is 24.4 million shares of 5p each (31 May 2014: 23.8 million and 30 November 2014: 23.9 million).

6. Earnings per share

Basic earnings per share (EPS) 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.

Diluted EPS is the basic EPS, adjusted for the effect of conversion into fully paid shares of the weighted average number of all dilutive employee share options outstanding during the period.  34,838 options over shares are excluded from the EPS calculation.  At 31 May 2014: nil and 30 November 2014: nil options were excluded from the EPS calculation as they were anti-dilutive.  Anti-dilutive 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:


Half year

Half year

Year


ended

ended

ended


31 May

31 May

30 November


2015

2014

2014




(audited)


‘000

‘000

‘000

Weighted average number of shares in issue during the period

24,268

23,763

23,763

Effect of dilutive share options

611

1,243

1,308


24,879

25,006

25,071






£’000

£’000

£’000





Earnings attributable to ordinary shareholders

593

139

337





Basic EPS




Continuing operations

2.44p

0.58p

1.42p





Diluted EPS




Continuing operations

2.38p

0.55p

1.34p





 

7. Dividends

A final dividend of 2.0p per share, in respect of the year ended 30 November 2014, was approved by shareholders at the Annual General Meeting held on 26 March 2015.  This was subsequently paid on 10 April 2015.  No interim dividend has been paid or proposed in respect of the current financial year (2014: nil).

8. Contingent liabilities

In April 2014, the FCA instigated an investigation into WH Ireland Limited, the principal operating subsidiary of
WH Ireland Group plc, in respect of its control procedures required by Principle 3 of the FCA Rules of Business.  The investigation is in relation to the period between 1st January 2013 until 19th June 2013.

The Directors continue to cooperate fully with the FCA and are in ongoing dialogue in the hope of seeking clarity and timely resolution of the matter.  There is insufficient information at the date of these financial statements to allow the Board to make a reliable estimate of the effect on the Group’s financial position.  The Directors have therefore made no provision in these financial statements in respect of this matter.

9. Availability of Interim Report

Copies of this Report and the Company’s shareholder presentation can be downloaded from the Company’s website at www.wh-ireland.co.uk.

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

END

 
 

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