7
March 2024
BROOKS MACDONALD GROUP
PLC
HALF-YEAR RESULTS FOR THE SIX
MONTHS ENDED 31 DECEMBER 2023
"Six months of strategic
progress resulting in an 18% increase in underlying profit before
tax"
Brooks Macdonald Group plc ("Brooks
Macdonald" or the "Group") today announces its half-year results
for the six months ended 31 December 2023.
Andrew Shepherd, CEO, commented:
"I am pleased to report that demand
for our products and services remains strong across our Group with
£1.2 billion of gross inflows during the period. This rounds out a
solid half year in which revenue growth and a focus on cost control
delivered an improved underlying profit margin of
26.9%.
"During the last six months our
priority has been to help our clients and advisers navigate the
challenging markets that the wealth management industry has
continued to face. The need for trusted advice and robust long-term
investment management remains as strong as ever. As a management
team, we have been proactive in adapting our business to the
current environment, resulting in a Group that is in a stronger
operational position, well-placed to take advantage of the
opportunity ahead.
"These results are a testament to
the expertise and hard work of our people and our collective drive
to deliver long-term sustainable results. Although the short-term
macroeconomic outlook remains uncertain, we have confidence in our
growth strategy and our ability to keep delivering for all our
stakeholders."
Solid financial performance with continued organic
growth
·
Total Funds under Management ("FUM") grew to a
record £17.6 billion, up 4.3% over the half year (30 June 2023:
£16.8 billion);
·
Funds under Management or Advice ("FUM/A") with
Private Clients reached £5.2 billion, with £4.4 billion relating to
portfolios within the Group's investment management and £0.8
billion to portfolios with third party investment
managers;
·
Investment performance was 5.3% for the half year,
in line with the MSCI PIMFA balanced index, which was up 5.6%,
offsetting net outflows in the period of £0.2 billion or 1% of
opening FUM;
·
Revenue increased by 8.0% to £63.6 million (H1
FY23: £58.9 million) driven by higher financial planning revenue,
following the acquisitions in the prior period, and transactional
and net interest income;
·
Underlying costs increased by 4.7% in line with
guidance and primarily due to the full period impact of the
acquisitions made in the prior period and cost inflation. The
benefits from the organisational changes implemented in December
will be realised in the second half;
·
Underlying profit before tax was £17.1 million, up
from £14.5 million in the same period last year, with the
underlying profit margin increasing to 26.9% (H1 FY23: 24.6%),
consistent with the Group's commitment to achieving a top quartile
underlying profit margin;
·
The performance of our International operations is
behind plan and in the interests of achieving the best return for
shareholders, we have commenced a strategic review of the
business. In addition, the Group has
recognised an £11.6 million one-off, non-cash impairment charge on
the goodwill associated with the International business acquired in
2012. This has led to a statutory loss before tax of £0.8 million
at the Group level, compared with a profit of £9.8 million in H1
FY23. The impairment charge does not impact cash
nor regulatory capital, and has not limited the Group's ability to
distribute capital to shareholders in accordance with our
progressive dividend policy;
·
The Group has declared an interim dividend of
29.0p (H1 FY23: 28.0p), in line with its progressive dividend
policy. This reflects our strong capital position and the Board's
continuing confidence in the Group's prospects.
Strategic progress
Organisational development
·
The Group implemented organisational changes,
reducing headcount by c. 10%, which will result in an annual cost
saving of c. £4 million, designed to strengthen the business
operationally and best deliver on the strategy to drive
growth;
·
The Group is increasingly focusing its
client-facing activities around its distribution channels, with
distinct propositions and sales strategies that meet the different
needs of advisers and private clients, to build stronger
relationships and provide exceptional service.
Ongoing digital transformation
·
In the period, the Group completed the first phase
of the implementation of its new client relationship management
system, focussed on advisers, with the second phase focused on
intermediated and private clients to commence shortly;
·
The Group has embedded outsourced adviser- and
client-facing processes and systems, aiming to deliver
best-in-class experience;
·
In financial planning, the Group implemented
advice software across the UK business to provide consistently
strong client service.
Outlook
·
The outlook for underlying profit for the year
remains in line with market expectations;
·
We expect continued momentum in gross inflows,
primarily driven by Platform MPS and BMIS. However, the Group
continues to see an elevated level of outflows given prevailing
macroeconomic conditions, and we now expect net outflows for the
full year at the Group level;
·
Cost benefits of the organisational changes
announced in October 2023 will be realised from the second
half;
Financial highlights:
|
H1 FY24
|
H1 FY23
|
FY23
|
|
|
|
|
Underlying1 profit before
tax (£m)
|
17.1
|
14.5
|
30.3
|
Underlying1 profit margin
before tax (%)
|
26.9
|
24.6
|
24.5
|
Statutory (loss) 2/profit
before tax (£m)
|
(0.8)
|
9.8
|
22.2
|
Statutory (loss) 2/profit
margin before tax (%)
|
(1.3)
|
16.6
|
17.9
|
Underlying1 diluted
earnings per share (p)
|
80.4
|
72.5
|
151.0
|
Statutory diluted (loss)/earnings
per share (p)
|
(21.1)
|
50.6
|
112.6
|
Interim (FY23 - final) dividend per
share (p)
|
29.0
|
28.0
|
75.0
|
Business highlights:
|
H1 FY24
|
H1 FY23
|
FY23
|
|
|
|
|
FUM (£bn)
|
17.6
|
16.2
|
16.8
|
Revenue (£m)
|
63.6
|
58.9
|
123.8
|
Total net assets (£m)
|
147.6
|
151.1
|
157.3
|
Cash balances (£m)
|
59.0
|
37.6
|
53.4
|
Revenue by segment:
|
H1 FY24
|
H1 FY23
|
FY23
|
|
|
|
|
UK Investment Management
(£m)
|
54.2
|
48.8
|
103.5
|
International (£m)
|
9.4
|
10.1
|
20.3
|
Financial calendar:
|
|
|
|
Ex-dividend date for interim
dividend
|
14 March
2024
|
Record date for interim
dividend
|
15 March
2024
|
Interim dividend payment
date
|
16 April
2024
|
1The underlying figures represent the results for the Group's
activities excluding underlying adjustments as listed in the
Interim management report. The Board considers the underlying
profit to be an appropriate reflection of the Group's performance
compared to statutory profit. A reconciliation between the Group's
statutory and underlying profit before tax is also included in the
Interim management report.
2The statutory loss is after accounting for statutory profit
adjustments, including a one-off goodwill impairment of £11.6
million in association with the International business.
Conference call and investor presentation
details
There will be a video presentation
followed by a Q&A session for analysts and investors at 9:30
a.m. today via webcast and conference call.
For conference call details please
contact FTI Consulting on +44 (0) 07976 870961 or
brooksmacdonald@fticonsulting.com.
The video presentation can be accessed on the
Investor Relations section of Brooks Macdonald's website using the
following link:
https://www.brooksmacdonald.com/investor-relations
Presentation slides will be available
from 7.30 a.m. today on the Investor Relations site.
Enquiries to:
Brooks Macdonald Group plc
Andrew Shepherd,
CEO
Andrea Montague, Chief
Financial Officer
|
www.brooksmacdonald.com
020 7927
4816
|
Singer Capital Markets Advisory LLP
(Nominated Adviser and Joint Broker)
Charles Leigh-Pemberton/James
Moat
Investec Bank plc (Joint Broker)
Bruce Garrow/David
Anderson
|
020 7496
3000
020 7597
4000
|
FTI Consulting
Ed Berry/Katherine
Bell
|
brooksmacdonald@fticonsulting.com
07703
330199 / 07976 870961
|
|
Notes to editors
Brooks Macdonald Group plc, through
its various subsidiaries, provides leading wealth management
services in the UK and internationally. The Group, which
was founded in 1991 and began trading on AIM in 2005, had
discretionary Funds under Management of £17.6 billion as
at 31 December 2023.
Brooks Macdonald offers outsourced
discretionary investment management for intermediaries and
advice-led integrated wealth management for private clients. The
Group also acts as fund manager to a range of onshore and
international funds.
The Group has fourteen offices across
the UK and Crown Dependencies
including London, Birmingham, East
Anglia, Exeter, Leeds, Manchester, Nuneaton, Southampton, Tunbridge
Wells, Scotland, Wales,
Jersey, Guernsey and Isle of Man.
LEI:
213800WRDF8LB8MIEX37
www.brooksmacdonald.com
/ @BrooksMacdonald
Interim management report
Solid financial performance in H1
The six months ended 31 December
2023 saw solid performance amid challenging markets, with positive
investment returns contributing to growth in Funds under Management
("FUM") of 4.3%, which reached a record £17.6 billion (30 June
2023: £16.8 billion). Despite weak industry flows, we delivered
good growth in BM Investment Solutions ("BMIS"), our Platform
Managed Portfolio Service ("PMPS") and the specialist offerings in
our Bespoke Portfolio Service ("BPS"), especially in our
Decumulation Service.
Total Group revenue increased by
8.0% to £63.6 million (H1 FY23: £58.9 million), driven by an
increase in transactional and interest income, and a greater
contribution from financial planning revenue following the
acquisitions in the prior period. Total underlying costs were up
4.7% to £46.5 million (H1 FY23: £44.4 million), reflecting strong
cost discipline in an inflationary environment. Together, this
resulted in a significant increase to underlying profit before tax,
of 17.9% to £17.1 million (H1 FY23: £14.5 million), and to
underlying profit margin of 2.3 percentage points to 26.9% (H1
FY23: 24.6%), reflecting our commitment and progress to achieving a
top quartile underlying profit margin. Similarly, underlying basic
EPS was up 9.7% to 81.6p (H1 FY23: 74.4p).
The performance of our International
operations is behind plan and in the interests of achieving the
best return for shareholders, we have commenced a strategic review
of the business. In addition, the Group has recognised an £11.6
million one-off, non-cash impairment charge on the goodwill
associated with this business. This has contributed to a Group
statutory loss before tax of £0.8 million - excluding this
impairment, the Group would have recognised a statutory profit
before tax of £10.8 million (H1 FY23: £9.8 million). The impairment
charge does not impact cash, nor regulatory capital, and has not
limited the Group's ability to distribute capital to shareholders
in accordance with our progressive dividend policy.
The Group is declaring an interim
dividend of 29.0p per share, up from the 28.0p interim dividend
paid last year, in line with the solid underlying results for the
period and the Board's continuing confidence in the Group's
prospects.
Strategy to enable growth
Recent markets have been more
difficult to navigate but our key strengths, which include a
client-centric culture, strong adviser relationships, robust
Centralised Investment Process and a commitment to service and
operational excellence, mean that the value we provide our key
stakeholders remains strong.
We have a clear strategy which will
increase the value we create for all stakeholders. We are focused
on three key value drivers to achieve this strategy:
• Market-leading
organic growth;
• Service and
operational excellence; and
• Selective
high-quality acquisitions.
Our medium-term ambition is to
achieve the following targets: to deliver 8-10% net flows, to
achieve top quartile underlying profit margin and to become a Top 5
wealth manager in the UK.
Market-leading organic growth
In the first half of our financial
year, we continued to see elevated industry outflows. However,
client demand was strong and we continued to attract funds, with
Group gross inflows of £1.2 billion, up 1% on the same period last
year. Approximately half of these inflows were in our MPS Platform
service. Increased outflows of £1.3 billion, reflecting trends seen
in the broader market, led to overall modest net outflows of less
than £0.2 billion in the period. This was more than offset by
positive investment performance of £0.9 billion, leading to a 4.3%
increase in FUM to a record level of £17.6 billion.
Our UK Investment Management
("UKIM") discretionary business achieved slightly positive net
inflows, as growth in Managed Portfolio Service ("MPS") more than
offset outflows in BPS. Positive investment returns led to an
increase in UKIM discretionary FUM of 5.6% to £13.7
billion.
We continued to see a positive
growth trajectory in our BMIS and PMPS, which saw annualised net
flows of 13.5% and 16.3%, respectively. We also delivered good
progress in the specialised variants of our BPS, including the
Decumulation Service, where annualised net flows were 10.9%, and
our recently launched gilts offering ended the 2023 calendar year
with FUM of £0.2 billion.
FUM in the UKIM Funds business
remained broadly flat in the period at £1.7 billion, with
investment returns offsetting net outflows, which were in line with
experience across the industry.
Similarly, in International, the FUM
held at £2.2 billion in the six-month period, with moderate net
outflows being offset by investment performance.
Markets improved towards the end of
2023 and Brooks Macdonald investment performance gained 5.3%,
broadly in line with the PIMFA Balanced index. Our Centralised
Investment Process ("CIP") continues to achieve strong risk
adjusted returns for clients.
Service and operational excellence
During the period we have continued
to progress our technology enhancements to provide best-in-class
client and adviser service. In doing so, we are committed to
driving further growth across the business. We have implemented
phase one of our new client relationship management system, which
replaces multiple legacy systems and is focused on improving
service for clients and advisers. We will shortly be implementing
the second phase, which is aimed at our private clients. We have
also introduced new software in our financial planning business to
improve client service levels and ensure we provide a consistent
service.
We have embedded outsourced systems
and processes into the business and are positioned to deliver full
efficiency benefits as the business grows and utilises the
operational gearing, and ultimately deliver best-in-class client
and intermediary experience. Our clients are now benefitting from
automated onboarding, improved intermediary and client portal
functionality and bespoke reporting across our business.
We recognise that there is always
more to be done and the Group will continue to drive forward its
digital transformation.
As our business grows, we are
committed to giving more tailored focus to our distinct client
groups, recognising the differences between our intermediated and
private client bases. This includes different propositions and
sales strategies across our distribution channels. Our integrated
wealth management proposition for private clients continues to
increase in importance, whilst our adviser-led outsourced
investment management retains popularity for its scalability and
cost-effectiveness for advisers and their clients. Both are
positioned well for growth.
We see significant opportunity
across our Group and distribution; we see opportunities to build
relationships with more intermediaries and to extend our
relationships with our current intermediaries, as well as growing
our wealth business. As at 31 December, the Group had £5.2 billion
Funds under Management or Advice ("FUM/A") with Private Clients,
with £4.4 billion relating to portfolios within the Group's
investment management and £0.8 billion to portfolios with
third-party investment managers. The £0.8 billion Assets Under
Advice held with third-party investment managers is not included in
the £17.6 billion FUM as at 31 December 2023.
Selective high-quality acquisitions
Acquisitions continue to form an
important part of our strategy and are indeed necessary to achieve
our ambitious medium-term target of becoming a Top 5 wealth manager
in the UK. As previously disclosed, we have four strict criteria
for acquisitions: (i) the target must be a good business in its own
right; (ii) there must be clear strategic logic to the combination;
(iii) it must be a good cultural fit with Brooks Macdonald; and
(iv) the economics of the transaction must be
compelling.
During the last six months, while
reviewing potential targets, we did not find an opportunity that
met these criteria, however, we continue to see a steady pipeline
of potential acquisitions. It is now just over a year since the
acquisitions of Integrity Wealth Solutions and Adroit Financial
Planning, announced at the end of 2022, which have both integrated
well and helped to drive forward our Wealth business.
People
During the period, we were pleased
to announce the appointment of Maarten Slendebroek as Chairman,
subject to regulatory approval. Maarten has extensive experience in
financial services, including as CEO of Jupiter for five years from
February 2014 and as Chair of the Supervisory Board of Robeco since
August 2020. Maarten succeeds Richard Price, who intends to step
down from the Board once Maarten receives regulatory approval.
Richard has served the Board of Brooks Macdonald for just over nine
years in the roles of Chair of the Audit Committee, Senior
Independent Director and, most recently, Acting Chairman, and we
thank him for his significant contribution.
Ed Park, Chief Investment Officer
("CIO"), decided to leave Brooks Macdonald at the end of last year
and we thank him for his commitment to the business and wish him
well for the future. In response to his departure, we announced
some changes to our Investment Committee and we are delighted to
say that Philip Glaze has agreed to take over as external Chair of
this Committee. Michael Toolan, Senior Portfolio Director, and
Richard Larner, Head of Research, have been promoted to newly
created roles as Co-CIOs. Together they will enhance the
coordination and oversight of the Group's already rigorous
investment process. These promotions underline our commitment to
continuity and underscore the talent that we have in Brooks
Macdonald.
We also completed the organisational
changes that we communicated in October 2023, reducing the number
of roles in the Group by around 10%. This will make the Group
stronger with the resulting efficiencies increasing our
competitiveness. As ever, we remain focused on delivering
high-quality service to our clients and intermediaries.
Regulation
At the end of July 2023, the FCA's
new Consumer Duty rules came into effect and we welcomed the
Consumer Principle that requires firms to act to deliver good
outcomes for retail customers. Our processes and client-centric
culture and guiding principles are proving well-aligned to the new
requirements and we recently became an Affiliate Member of the
Consumer Duty Alliance, demonstrating our commitment to achieving
good outcomes for our clients.
The FCA has also addressed the
treatment of interest earned on customers' cash balances. Clients
do not generally, and are not encouraged to, invest with us to earn
interest on cash. Rather, our investment managers hold cash
primarily so it is available for investment or withdrawals, and so
cash balances in portfolios are typically low, currently at
approximately 2%, in line with the Group's asset allocation
guidelines. As part of our commitment to provide value to our
clients, we have increased the amount of interest that we pay on
cash balances in client portfolios. Instead of cash, we can offer
our Gilts BPS, which meets client demand for their portfolios to
take advantage of higher interest rates while avoiding equity risk.
We believe this process offers a good client outcome in line with
Consumer Duty.
Outlook
The outlook for profit for the year
remains in line with market expectations. We expect continued
momentum in gross inflows, primarily driven by Platform MPS and
BMIS. However, the Group continues to see an elevated level of
outflows given prevailing macroeconomic conditions and we now
expect net outflows for the full year at the Group level. The
fundamental opportunity for the Group remains as strong as it has
ever been and we are confident in our long-term prospects building
on our ambitious organic and inorganic growth strategy.
Review of the results for the period
The Group delivered a solid set of
results for the first half of the financial year, with a strong
underlying profit margin of 26.9%, against the continuing
challenging macroeconomic environment. Net outflows in the period
were offset by positive investment performance, leading to a record
closing FUM of £17.6 billion. Revenue increased by 8.0% on the
prior period, and underlying profit was up 17.9% to £17.1 million.
On a statutory basis, the Group incurred a small loss before tax of
£0.8 million after recognising a goodwill impairment charge at 31
December 2023 of £11.6 million. This is treated as a statutory
adjustment and excluded from underlying earnings in view of its
non-recurring and non-cash nature.
The table below shows the Group's
financial performance for the six months ended 31 December 2023
with the comparative period and provides a reconciliation between
the underlying results, which the Board considers to be an
appropriate reflection of the Group's underlying performance, and
the statutory results. Underlying profit represents an Alternative
Performance Measure ("APM") for the Group. Refer to the Non-IFRS
financial information section for a glossary of the Group's APMs,
their definition, and the criteria for how underlying adjustments
are considered.
Table 1 - Group financial results summary
|
Six months
to
31 Dec 2023
£m
|
Six months
to
31 Dec
2022
£m
|
12 months
to
30 Jun
2023
£m
|
Revenue
|
63.6
|
58.9
|
123.8
|
|
|
|
|
Fixed staff costs
|
(23.2)
|
(21.5)
|
(45.2)
|
Variable staff costs
|
(5.7)
|
(4.3)
|
(10.9)
|
Total staff costs
|
(28.9)
|
(25.8)
|
(56.1)
|
|
|
|
|
Non-staff costs
|
(19.1)
|
(18.8)
|
(37.8)
|
FSCS levy
|
-
|
-
|
(0.5)
|
Total non-staff costs
|
(19.1)
|
(18.8)
|
(38.3)
|
|
|
|
|
Net finance income
|
1.5
|
0.2
|
0.9
|
|
|
|
|
Total underlying costs
|
(46.5)
|
(44.4)
|
(93.5)
|
|
|
|
|
Underlying profit before tax
|
17.1
|
14.5
|
30.3
|
|
|
|
|
Underlying adjustments
|
(17.9)
|
(4.7)
|
(8.1)
|
|
|
|
|
Statutory (loss)/profit before tax
|
(0.8)
|
9.8
|
22.2
|
|
|
|
|
Taxation
|
(2.6)
|
(1.6)
|
(4.1)
|
|
|
|
|
Statutory (loss)/profit after tax
|
(3.4)
|
8.2
|
18.1
|
|
|
|
|
Underlying profit margin before
tax
|
26.9%
|
24.6%
|
24.5%
|
Underlying basic earnings per
share
|
81.6p
|
74.4p
|
153.8p
|
Underlying diluted earnings per
share
|
80.4p
|
72.5p
|
151.0p
|
Statutory (loss)/profit margin
before tax
|
(1.3)%
|
16.6%
|
17.9%
|
Statutory basic (loss)/earnings per
share
|
(21.1)p
|
51.8p
|
114.7p
|
Statutory diluted (loss)/earnings
per share
|
(21.1)p
|
50.6p
|
112.6p
|
Own Funds adequacy ratio
|
295.9%
|
267.8%
|
328.1%
|
Dividends per share
|
29.0p
|
28.0p
|
75.0p
|
Funds under management
The table below shows the opening
and closing FUM position and the movements during the period broken
down by segment and by our key services within UK Investment
Management ("UKIM").
Table 2 - Movements in funds under
management
|
Six months ended 31 December
2023 (£m)
|
|
|
|
|
Opening FUM
1 Jul 23
|
Organic net new
business
|
Total inv.
perf.
|
Closing
FUM
31 Dec 23
|
Total organic net new
business
|
Total mvmt
|
|
|
Q1
|
Q2
|
Total
|
|
BPS
|
8,527
|
(98)
|
(94)
|
(192)
|
477
|
8,812
|
(2.3)%
|
3.3%
|
|
MPS
Custody
|
966
|
(14)
|
(21)
|
(35)
|
39
|
970
|
(3.6)%
|
0.4%
|
|
MPS
Platform
|
3,489
|
147
|
121
|
268
|
173
|
3,930
|
7.7%
|
12.6%
|
|
MPS
total
|
4,455
|
133
|
100
|
233
|
212
|
4,900
|
5.2%
|
10.0%
|
|
UKIM discretionary
|
12,982
|
35
|
6
|
41
|
689
|
13,712
|
0.3%
|
5.6%
|
|
Funds
- DCF
|
338
|
(26)
|
(23)
|
(49)
|
18
|
307
|
(14.5)%
|
(9.2)%
|
|
Funds
- Other
|
1,370
|
(52)
|
(48)
|
(100)
|
75
|
1,345
|
(7.3)%
|
(1.8)%
|
|
Funds total
|
1,708
|
(78)
|
(71)
|
(149)
|
93
|
1,652
|
(8.7)%
|
(3.3)%
|
|
UKIM total
|
14,690
|
(43)
|
(65)
|
(108)
|
782
|
15,364
|
(0.7)%
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
International
|
2,157
|
(27)
|
(33)
|
(60)
|
118
|
2,215
|
(2.8)%
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
16,847
|
(70)
|
(98)
|
(168)
|
900
|
17,579
|
(1.0)%
|
4.3%
|
|
|
|
|
Total investment
performance
|
|
5.3%
|
MSCI PIMFA Private Investor Balanced
Index1
|
|
5.6%
|
|
|
|
|
|
|
|
|
|
|
|
| |
1. Capital-only
index.
During H1 FY24, FUM increased by
£0.7 billion or 4.3%, to £17.6 billion at 31 December 2023 (31
December 2022: £16.2 billion; 30 June 2023: £16.8 billion). The
Group has delivered robust gross inflows of £1.2 billion in the
period, however, gross outflows were elevated, particularly in BPS
and Funds, driven by the prevailing backdrop of market volatility
and higher interest rates continuing to affect client behaviour,
resulting in net outflows for the period of £0.2
billion.
Investment performance of 5.3% was
broadly in line with the MSCI PIMFA Private Investor Balanced
Index, up 5.6% over the same period, adding £0.9 billion to the
closing FUM.
BPS experienced net outflows of £0.2
billion or 2.3% during the first six months of the financial year,
as clients withdrew funds to repay debt or to hold higher cash
balances. Within BPS, the recently launched gilts offering had
closing FUM of £0.2 billion at the end of the period, meeting
client demand for their portfolios to take advantage of higher
interest rates, while avoiding equity risk.
Platform MPS, including the Group's
B2B offering for financial advisers, BM Investment Solutions
("BMIS"), grew to £3.9 billion, an increase of 12.6%, with organic
net flows contributing 7.7%.
Funds saw net outflows during the
period, driven by the wider market conditions and in line with the
trend observed across the sector.
International FUM grew moderately by
2.7% over the period with marginal net outflows offset by
investment performance.
As at 31 December 2023, the Group
had £5.2 billion Funds under Management or Advice ("FUM/A") with
private clients who deal with the Group directly. £4.4
billion related to portfolios in the Group's investment management
and £0.8 billion to portfolios with third-party investment
managers.
Revenue
Table 3 - Breakdown of the Group's total
revenue
|
Six months
to
31 Dec 2023
£m
|
Six months
to
31 Dec
2022
£m
|
12 months
to
30 Jun
2023
£m
|
Fee income
|
45.7
|
45.7
|
91.5
|
Transactional and FX
income
|
6.7
|
5.7
|
13.3
|
Financial planning income
|
4.1
|
2.4
|
6.6
|
Interest income
|
7.1
|
5.1
|
12.4
|
Total revenue
|
63.6
|
58.9
|
123.8
|
Total revenue for the Group
increased by 8.0% to £63.6 million in the first half of the
financial year. Fee income was flat at £45.7 million, a combination
of impact from flows, product mix, and investment performance.
Transactional and FX income of £6.7 million was up by 17.5% on the
prior period as a result of increased trading volumes during the
first half of the financial year.
Integrity Wealth Solutions and
Adroit Financial Planning, the businesses acquired during H1 FY23,
contributed additional financial planning income of £1.7 million in
the current period.
Interest income, net of amounts paid
out to clients on cash holdings, increased from £5.1 million to
£7.1 million, driven by the rise in the Bank of England base rates
since H1 FY23.
Revenue, yields and average FUM
Table 4 - Revenue, average FUM, and yields
|
Revenue
|
Average FUM
|
Yields
|
|
H1
FY24
|
H1
FY23
|
Change
|
H1
FY24
|
H1
FY23
|
Change
|
H1
FY24
|
H1
FY23
|
Change
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
%
|
bps
|
bps
|
bps
|
BPS fees
|
27.1
|
27.2
|
(0.1)
|
8,446
|
8,253
|
2.3
|
63.8
|
65.3
|
(1.5)
|
BPS non-fees (transactional
and FX)
|
5.8
|
4.4
|
1.4
|
-
|
-
|
-
|
13.7
|
10.6
|
3.1
|
BPS non-fees (interest
turn)
|
5.6
|
3.8
|
1.8
|
-
|
-
|
-
|
13.2
|
9.1
|
4.1
|
Total BPS
|
38.5
|
35.4
|
3.1
|
8,446
|
8,253
|
2.3
|
90.7
|
85.0
|
5.7
|
MPS Custody
|
2.9
|
2.8
|
0.1
|
963
|
962
|
0.1
|
59.3
|
58.5
|
0.8
|
MPS Platform
|
3.3
|
2.3
|
1.0
|
3,663
|
2,347
|
56.1
|
18.0
|
19.3
|
(1.3)
|
MPS Custody non-fees (interest
turn)
|
0.6
|
0.5
|
0.1
|
-
|
-
|
-
|
13.2
|
9.5
|
3.7
|
Total MPS
|
6.8
|
5.6
|
1.2
|
4,626
|
3,309
|
39.8
|
29.3
|
33.4
|
(4.1)
|
UKIM discretionary
|
45.3
|
41.0
|
4.3
|
13,072
|
11,562
|
13.1
|
69.0
|
70.3
|
(1.3)
|
Funds
|
4.3
|
5.0
|
(0.7)
|
1,805
|
2,027
|
(11.0)
|
47.3
|
48.8
|
(1.5)
|
Total UKIM
|
49.6
|
46.0
|
3.6
|
14,877
|
13,589
|
9.5
|
66.4
|
67.1
|
(0.7)
|
International fees
|
7.9
|
8.1
|
(0.2)
|
2,171
|
2,213
|
(1.9)
|
72.1
|
72.6
|
(0.5)
|
International non-fees
(transactional)
|
0.8
|
1.3
|
(0.5)
|
-
|
-
|
-
|
7.8
|
11.6
|
(3.8)
|
International non-fees (interest
turn)
|
0.9
|
0.7
|
0.2
|
-
|
-
|
-
|
7.9
|
5.9
|
2.0
|
Total International
|
9.6
|
10.1
|
(0.5)
|
2,171
|
2,213
|
(1.9)
|
87.8
|
90.6
|
(2.8)
|
Total FUM-related revenue
|
59.2
|
56.1
|
3.1
|
17,048
|
15,802
|
7.9
|
69.1
|
70.3
|
(1.2)
|
Financial planning
|
4.1
|
2.4
|
1.7
|
|
|
|
|
|
|
Other income
|
0.3
|
0.4
|
(0.1)
|
|
|
|
|
|
|
Total non-FUM-related revenue
|
4.4
|
2.8
|
1.6
|
|
|
|
|
|
|
Total Group revenue
|
63.6
|
58.9
|
4.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MSCI PIMFA Private Investor Balanced
Index1
|
|
1,745
|
1,633
|
6.9
|
|
|
|
1 Capital-only
index (average based on quarterly closing balances)
The Group's average FUM increased by
7.9% from H1 FY23, which was ahead of the movement in the MSCI
PIMFA Private Investor Balanced Index, which increased by 6.9% on
an average basis from H1 FY23 to H1 FY24.
The yield on BPS fees for UKIM
decreased by 1.5bps to 63.8bps driven by underlying product mix and
rates achieved on new business.
The BPS non-fee transactional income
yield increased by 3.1bps and the yield on interest turn, net of
interest paid to clients, grew by 4.1bps to 13.2bps due to the
increase of the Bank of England base rates between the two
periods.
The yield on MPS custody increased
by 0.8bps, whilst the yield on MPS Platform decreased by 1.3bps to
18.0bps. Within MPS Platform, BMIS attracts relatively larger
mandates, which benefit from discounted tiered rates. This has
resulted in the overall MPS yield decreasing from 33.4bps to
29.3bps in the current period.
The Funds fee yields reduced by
1.5bps to 47.3bps during the first half of the year, as a result of
intra-month market volatility and timing of flows during the
period.
International fee income yield
decreased by 0.5bps during the first half of the year as a result
of the change in product mix, whilst non-fees interest turn yield
increased by 2.0bps due to higher interest rates earned on both GBP
and foreign currency account balances.
Underlying costs
Total underlying costs of £46.5
million increased by 4.7% on the prior period (H1 FY23: £44.4
million) in line with guidance. This included the full period
impact of the two recent acquisitions, adding £1.4 million to the
Group's cost base compared to H1 FY23.
Table 5 - Breakdown of net movement in total underlying costs
into staff and non-staff costs
|
Total
£m
|
Integrity
& Adroit
£m
|
BM
Core
£m
|
Staff costs increase
|
3.1
|
1.3
|
1.8
|
Non-staff costs increase
|
0.3
|
0.1
|
0.2
|
Net finance income
increase
|
(1.3)
|
-
|
(1.3)
|
Net
increase in underlying costs
|
2.1
|
1.4
|
0.7
|
The below commentary excludes the
full period impact of the acquisitions.
Staff costs
Excluding the impact of
acquisitions, staff costs increased by 7.0% from £25.6 million to
£27.4 million. Fixed staff costs increased by 3.3% from £21.3
million to £22.0 million driven by inflationary pay rises and net
new hires. As announced in October 2023, the Group will benefit
from savings in staff costs in H2 FY24 arising from an
organisational restructure undertaken in December 2023.
Variable staff costs increased by
£1.1m to £5.4 million, largely driven by an increase in the
pre-variable pay profit. The share-based payment charge was down
£0.2 million due to lapses recognised in H1 FY24 and a reduction in
the Group's share price impacting the associated employer national
insurance contributions.
Non-staff costs
Non-staff costs from ongoing
activities, amounted to £18.9 million, a net increase of £0.2
million from the prior period, a reflection of management's
continued cost discipline to help mitigate cost
inflation.
Profit before tax
Combined, the above gave rise to an
underlying profit before tax for the half year of £17.1 million, an
increase of 17.9% on the prior period (H1 FY23: £14.5 million)
resulting in a profit margin of 26.9%, up 2.3 percentage points on
last year (H1 FY23: 24.6%).
The Group recognised a statutory
loss before tax of £0.8 million (H1 FY23: £9.8 million),
contributed by the impairment charge in relation to the goodwill
held in respect of the International business.
Segmental analysis
The Group reports its results across
two key operating segments: UK Investment Management and
International. The tables below provide a breakdown of the half
year performance broken down by these segments, with
comparatives.
Table 6 - Segmental analysis
H1
FY24 (£m)
|
UK Investment
Management
|
International
|
Group and
consolidation
|
Total
|
Revenue
|
54.2
|
9.4
|
-
|
63.6
|
Direct costs
|
(23.3)
|
(6.4)
|
(18.3)
|
(48.0)
|
Operating contribution
|
30.9
|
3.0
|
(18.3)
|
15.6
|
Internal cost recharges
|
(13.8)
|
(2.9)
|
16.7
|
-
|
Net finance income
|
0.8
|
0.3
|
0.4
|
1.5
|
Underlying profit/(loss) before tax
|
17.9
|
0.4
|
(1.2)
|
17.1
|
Underlying adjustments
|
(3.6)
|
(2.2)
|
(12.1)
|
(17.9)
|
Statutory profit/(loss) before tax
|
14.3
|
(1.8)
|
(13.3)
|
(0.8)
|
Underlying profit margin before tax
|
33.0%
|
4.3%
|
n/a
|
26.9%
|
Statutory profit/(loss) margin before tax
|
26.4%
|
(19.1)%
|
n/a
|
(1.3)%
|
H1 FY23 (£m)
|
UK
Investment Management
|
International
|
Group and
consolidation
|
Total
|
Revenue
|
48.8
|
10.1
|
-
|
58.9
|
Direct costs
|
(20.7)
|
(6.6)
|
(17.3)
|
(44.6)
|
Operating contribution
|
28.1
|
3.5
|
(17.3)
|
14.3
|
Internal cost recharges
|
(11.3)
|
(3.8)
|
15.1
|
-
|
Net finance income
|
0.1
|
0.1
|
-
|
0.2
|
Underlying profit/(loss) before tax
|
16.9
|
(0.2)
|
(2.2)
|
14.5
|
Underlying adjustments
|
(2.1)
|
(0.8)
|
(1.8)
|
(4.7)
|
Statutory profit/(loss) before tax
|
14.8
|
(1.0)
|
(4.0)
|
9.8
|
Underlying profit/(loss) margin before tax
|
34.6%
|
(2.0)%
|
n/a
|
24.6%
|
Statutory profit/(loss) margin before tax
|
30.3%
|
(9.9)%
|
n/a
|
16.6%
|
UKIM, which includes the Group's
Private Clients business, reported a 11.1% increase in revenue
driven by higher Financial Planning revenue, interest and
transactional income. The segment reported an underlying profit
£17.9 million, up 5.9% from the prior period, and an underlying
profit margin of 33.0%, a reduction of 1.6 percentage points on the
prior period.
International saw an improvement in
segmental performance, going from an underlying loss of £0.2
million in H1 FY23 to an underlying profit of £0.4 million in the
current period, returning an underlying profit margin of 4.3%. The
reduction in revenue of 6.5% was offset by a decrease in total
costs of 10.5%.
Reconciliation between underlying and statutory
profits
Underlying profit before tax is
considered by the Board to be an appropriate reflection of the
Group's performance when compared to the statutory results as this
excludes income and expense categories, which are deemed of a
non-recurring nature or a non-cash operating item. Reporting at an
underlying basis is also considered appropriate for external
analyst coverage and peer group benchmarking, allowing a
like-for-like comparison. Underlying profit is deemed to be an
Alternative Performance Measure ("APM"); refer to the Non-IFRS
financial information section for a glossary of the Group's APMs,
their definitions, and the criteria for how underlying adjustments
are considered.
A reconciliation between underlying
and statutory profit before tax for the six months ended 31
December 2023, with comparatives is shown in the following
table:
Table 7 - Reconciliation between underlying profit and
statutory (loss)/profit before tax
|
Six months
to
31 Dec 2023
£m
|
Six months
to
31 Dec
2022
£m
|
12 months
to
30 Jun
2023
£m
|
|
Underlying profit before tax
|
17.1
|
14.5
|
30.3
|
|
|
|
|
Goodwill impairment
|
(11.6)
|
-
|
-
|
Organisational
restructure
|
(3.0)
|
-
|
-
|
Amortisation of client
relationships
|
(3.0)
|
(2.8)
|
(5.7)
|
Acquisition and integration-related
costs
|
(0.3)
|
(0.3)
|
(0.6)
|
Dual running operating platform
costs
|
-
|
(1.6)
|
(1.6)
|
Changes in fair value and finance
cost of deferred contingent consideration
|
-
|
-
|
(0.2)
|
Total underlying adjustments
|
(17.9)
|
(4.7)
|
(8.1)
|
|
|
|
|
Statutory (loss)/profit before tax
|
(0.8)
|
9.8
|
22.2
|
Goodwill impairment (£11.6 million charge)
Goodwill is reviewed for impairment
indicators at each reporting period, and if indicators are present,
an impairment test is carried out based on the carrying value of
the asset compared to its expected recoverable amount. The review
of our International business indicated that the estimated
recoverable amount arising from future cash flows, is less than the
carrying value of the goodwill held on the Group's Condensed
consolidated statement of financial position that was recognised
upon the acquisition of the business in 2012. The goodwill
impairment charge has been excluded from underlying profit in view
of its non-recurring nature, and the fact that it does not impact
cash or regulatory capital. Refer to Note 11 to the Condensed
consolidated financial statements for more details.
Organisational restructure (£3.0 million
charge)
The Group carried out an
organisational restructure in December 2023 to ensure it is set up
for future success. The Group identified opportunities to
streamline and remove duplication from core processes, resulting in
redundancy and associated third-party consultancy costs. These have
been excluded from underlying earnings in view of their one-off
nature.
Amortisation of client relationships (£3.0 million
charge)
These intangible assets are created
in the course of acquiring funds under management and are amortised
over their useful life, which have been assessed to range between 6
and 20 years. The increase is due to the full period impact of the
prior year acquisitions of Integrity Wealth Solutions and Adroit
Financial Planning. This amortisation charge has been excluded from
the underlying profit since it is a significant non-cash item.
Refer to Note 11 of the Condensed consolidated financial statements
for more details.
Acquisition and integration-related costs (£0.3 million
charge)
These represent the share-based
payment integration charge for share options awarded to acquired
employees as part of acquisitions in the prior period. Prior year
costs were incurred in relation to the acquisitions of Integrity
Wealth Solutions on 31 October 2022 and Adroit Financial Planning
on 15 December 2022.
FY23 Dual running operating platform costs (£1.6 million
charge)
The Group has outsourced certain
middle and back-office processes to a suite of systems offered by
the technology partner SS&C. The migration to the outsourced
platform was executed at the end of July 2022, however, as part of
the transition process, the Group has incurred net incremental
costs in running two operating platforms concurrently. The dual
running costs were excluded from underlying profit in view of their
non-recurring nature.
FY23 Changes in fair value and finance cost of deferred
contingent consideration (£0.2 million charge)
This comprises the fair value
measurement arising on deferred consideration payments from
acquisitions carried out by the Group, together with their
associated net finance costs where applicable. Refer to Note 16 of
the Condensed consolidated financial statements for more
details.
Taxation
The Group's Corporation Tax charge
on underlying profits for the period was £4.0 million (H1 FY23:
£2.8 million) representing an effective tax rate of 23.4% (H1 FY23:
19.0%). The increase is driven by higher profits and the higher
Corporation Tax rate of 25.0% for the full current period, coming
into force from April 2023. Moreover, the H1 FY23 numbers reflected
the benefit of an R&D credit, which has not been recognised in
H1 FY24 as this process is still in progress. The statutory
Corporation Tax charge was £2.6 million, up 62.5% from the prior
period (H1 FY23: £1.6 million).
Earnings per share
The Group's basic statutory loss per
share for the six months ended 31 December 2023 was (21.1)p, as a
result of the International goodwill impairment (H1 FY23: basic EPS
51.8p). On an underlying basis, basic earnings per share increased
by 9.7% to 81.6p (H1 FY23: 74.4p). Details on the basic and diluted
earnings per share are provided in Note 9 of the Condensed
consolidated financial statements.
Financial position and regulatory capital
Net assets decreased by 2.3% to
£147.6 million at 31 December 2023 (H1 FY23: £151.1 million), as a
result of the impairment to goodwill. Excluding this, the net
assets increased by 5.4%. The Group's tangible net assets (net
assets excluding intangibles) were £61.7 million at 31 December
2023 (H1 FY23: £48.6 million). As at 31 December 2023, the Group
had regulatory capital resources of £64.3 million (H1 FY23: £52.7
million). As at 31 December 2023, the Group had an own funds
adequacy ratio of 295.9% (H1 FY23: 267.8%). The own funds adequacy
ratio is defined as the Group's own funds as a proportion of the
fixed overhead requirement. The total net assets and the own funds
adequacy ratio calculation take into account the respective
period's profits (net of the declared interim dividends) as these
are deemed to be verified at the date of publication of the annual
results.
Dividend
The Board recognises the importance
of dividends to shareholders and the benefit of providing
sustainable shareholder returns. In determining the level of
dividend in any year, the Board considers a number of factors such
as the level of retained earnings, future cash commitments,
statutory profit cover, capital and liquidity requirements and the
level of profit retention required to sustain the growth of the
Group. The Board has declared an interim dividend of 29.0p (H1
FY23: 28.0p). This represents an increase of 3.6% compared to the
previous period. The interim dividend will be paid on 16 April 2024
to shareholders on the register as at 15 March 2024. Refer to Note
10 of the Condensed consolidated financial statements for more
details.
Cash flow and capital expenditure
The Group continues to have strong
levels of cash generation from operations. Total cash resources at
the end of December 2023 of £59.0 million had increased by £5.6
million from the cash balance at 30 June 2023 (H1 FY23: £37.6
million; FY23: £53.4 million). This increase was a direct impact of
the cash generated from operating activities, refer to the
Condensed consolidated statement of cashflows for further details.
The Group continued to have no borrowings at 31 December
2023.
During the six months ended 31
December 2023, the Group incurred capital expenditure of £0.7
million down considerably from prior periods as increased capital
expenditure was incurred by the Group in relation to the migration
of services and processes to SS&C in advance of, and shortly
after the migration at the end of July 2022. The current period
expenditure comprised technology-related development of £0.6
million and property-related costs of £0.1 million.
Condensed consolidated statement of comprehensive
income
for the six months ended 31 December
2023
|
Note
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022 (unaudited)
£'000
|
Year
ended
30 Jun
2023
(audited)
£'000
|
Revenue
|
4
|
63,611
|
58,908
|
123,777
|
Administrative costs
|
|
(54,283)
|
(49,287)
|
(102,207)
|
Gross profit
|
|
9,328
|
9,621
|
21,570
|
|
|
|
|
|
Other gain/(losses) - net
|
5
|
46
|
2
|
(162)
|
|
|
|
|
|
Operating profit
|
|
9,374
|
9,623
|
21,408
|
|
|
|
|
|
Goodwill impairment
|
11
|
(11,641)
|
-
|
-
|
Finance income
|
6
|
1,596
|
356
|
1,127
|
Finance costs
|
6
|
(112)
|
(135)
|
(296)
|
(Loss)/profit before tax
|
|
(783)
|
9,844
|
22,239
|
|
|
|
|
|
Taxation
|
7
|
(2,601)
|
(1,657)
|
(4,090)
|
|
|
|
|
|
(Loss)/profit for the period attributable to equity holders of
the Company
|
|
(3,384)
|
8,187
|
18,149
|
|
|
|
|
|
Other comprehensive
income
|
|
-
|
-
|
-
|
|
|
|
|
|
Total comprehensive (expense)/income for the
period
|
|
(3,384)
|
8,187
|
18,149
|
|
|
|
|
|
(Loss)/earnings per share
|
|
|
|
|
Basic
|
9
|
(21.1)p
|
51.8p
|
114.7p
|
Diluted
|
9
|
(21.1)p
|
50.6p
|
112.6p
|
Condensed consolidated statement of financial
position
as at 31 December 2023
|
Note
|
31 Dec 2023
(unaudited)
£'000
|
31 Dec
20221
(unaudited)
£'000
|
30 Jun
2023
(audited)
£'000
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Intangible assets
|
11
|
85,911
|
102,500
|
100,582
|
Property, plant and
equipment
|
12
|
1,767
|
2,222
|
2,123
|
Right-of-use assets
|
13
|
4,232
|
4,663
|
4,329
|
Financial assets at fair value
through other comprehensive income
|
14
|
500
|
500
|
500
|
Total non-current assets
|
|
92,410
|
109,885
|
107,534
|
Current assets
|
|
|
|
|
Trade and other
receivables
|
14
|
29,414
|
32,844
|
33,542
|
Financial assets at fair value
through profit or loss
|
14
|
871
|
786
|
825
|
Cash and cash equivalents
|
14
|
59,000
|
37,573
|
53,355
|
Total current assets
|
|
89,285
|
71,203
|
87,722
|
Total assets
|
|
181,695
|
181,088
|
195,256
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Other non-current
liabilities
|
14
|
(869)
|
(400)
|
(783)
|
Net deferred tax
liabilities
|
15
|
(5,605)
|
(5,764)
|
(6,033)
|
Deferred contingent
consideration
|
16
|
-
|
(1,039)
|
-
|
Provisions
|
17
|
(262)
|
(304)
|
(322)
|
Lease liabilities
|
|
(2,485)
|
(3,641)
|
(3,181)
|
Total non-current liabilities
|
|
(9,221)
|
(11,148)
|
(10,319)
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
14
|
(21,358)
|
(15,286)
|
(22,521)
|
Current tax liabilities
|
14
|
(423)
|
(128)
|
(645)
|
Lease liabilities
|
|
(2,177)
|
(2,008)
|
(1,960)
|
Deferred contingent
consideration
|
16
|
(225)
|
(333)
|
(1,467)
|
Provisions
|
17
|
(644)
|
(1,099)
|
(1,000)
|
Total current liabilities
|
|
(24,827)
|
(18,854)
|
(27,593)
|
Net
assets
|
|
147,647
|
151,086
|
157,344
|
|
|
|
|
|
Equity
|
|
|
|
|
Share capital
|
19
|
164
|
163
|
164
|
Share premium
|
19
|
82,617
|
80,240
|
81,830
|
Other reserves
|
|
8,934
|
10,364
|
9,112
|
Retained earnings
|
|
55,932
|
60,319
|
66,238
|
Total equity
|
|
147,647
|
151,086
|
157,344
|
1
The Group has reclassified the deferred tax
balances to offset deferred tax assets and liabilities and present
net deferred tax balances by jurisdiction to ensure consistent
reporting with the current period. In the prior year, the reported
deferred tax asset was £3,642,000, which has been netted off in the
deferred tax liabilities balance.
The Condensed consolidated financial
statements were approved by the Board of Directors and authorised
for issue on 6 March 2024, signed on their behalf by:
Andrew Shepherd
CEO
Andrea Montague
CFO
Company registration number:
4402058
Condensed consolidated statement of changes in
equity
for the six months ended 31 December
2023
|
Note
|
Share
capital
£'000
|
Share
premium
£'000
|
Other
reserves
£'000
|
Retained
earnings
£'000
|
Total
£'000
|
Balance at 30 June 2022
|
|
162
|
79,141
|
9,962
|
59,160
|
148,425
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
Profit for the period
|
|
-
|
-
|
-
|
8,187
|
8,187
|
Other comprehensive
income
|
|
-
|
-
|
-
|
-
|
-
|
Total comprehensive income
|
|
-
|
-
|
-
|
8,187
|
8,187
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
Issue of ordinary shares
|
19
|
1
|
1,099
|
-
|
-
|
1,100
|
Share-based payments
|
|
-
|
-
|
1,953
|
-
|
1,953
|
Share-based payments
exercised
|
|
-
|
-
|
(1,794)
|
1,794
|
-
|
Purchase of own shares by
employee
benefit trust
|
|
-
|
-
|
-
|
(1,800)
|
(1,800)
|
Tax on share options
|
|
-
|
-
|
243
|
-
|
243
|
Dividends paid
|
10
|
-
|
-
|
-
|
(7,022)
|
(7,022)
|
Total transactions with owners
|
|
1
|
1,099
|
402
|
(7,028)
|
(5,526)
|
|
|
|
|
|
|
|
Balance at 31 December 2022
|
|
163
|
80,240
|
10,364
|
60,319
|
151,086
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
Profit for the period
|
|
-
|
-
|
-
|
9,962
|
9,962
|
Other comprehensive
income
|
|
-
|
-
|
-
|
-
|
-
|
Total comprehensive income
|
|
-
|
-
|
-
|
9,962
|
9,962
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
Issue of ordinary shares
|
19
|
1
|
1,590
|
-
|
-
|
1,591
|
Share-based payments
|
|
-
|
-
|
733
|
-
|
733
|
Share-based payments
exercised
|
|
-
|
-
|
(1,407)
|
1,407
|
-
|
Purchase of own shares by
employee
benefit trust
|
|
-
|
-
|
-
|
(1,050)
|
(1,050)
|
Tax on share options
|
|
-
|
-
|
(578)
|
-
|
(578)
|
Dividends paid
|
10
|
-
|
-
|
-
|
(4,400)
|
(4,400)
|
Total transactions with owners
|
|
1
|
1,590
|
(1,252)
|
(4,043)
|
(3,704)
|
|
|
|
|
|
|
|
Balance at 30 June 2023
|
|
164
|
81,830
|
9,112
|
66,238
|
157,344
|
|
|
|
|
|
|
|
Comprehensive income/(expense)
|
|
|
|
|
|
|
Loss for the period
|
|
-
|
-
|
-
|
(3,384)
|
(3,384)
|
Other comprehensive
income
|
|
-
|
-
|
-
|
-
|
-
|
Total comprehensive expense
|
|
-
|
-
|
-
|
(3,384)
|
(3,384)
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
Issue of ordinary shares
|
19
|
-
|
787
|
-
|
-
|
787
|
Share-based payments
|
|
-
|
-
|
1,757
|
-
|
1,757
|
Share-based payments
exercised
|
|
-
|
-
|
(1,793)
|
1,793
|
-
|
Purchase of own shares by
employee
benefit trust
|
|
-
|
-
|
-
|
(1,248)
|
(1,248)
|
Tax on share options
|
|
-
|
-
|
(142)
|
-
|
(142)
|
Dividends paid
|
10
|
-
|
-
|
-
|
(7,467)
|
(7,467)
|
Total transactions with owners
|
|
-
|
787
|
(178)
|
(6,922)
|
(6,313)
|
Balance at 31 December 2023
|
|
164
|
82,617
|
8,934
|
55,932
|
147,647
|
Condensed consolidated statement of cash
flows
for the six months ended 31 December
2023
|
Note
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022
(unaudited)
£'000
|
Year
ended
30 Jun
2023
(audited)
£'000
|
Cash flow from operating activities
|
|
|
|
|
Cash generated from
operations
|
18
|
18,879
|
5,515
|
30,093
|
Corporation Tax paid
|
|
(3,367)
|
(2,605)
|
(5,134)
|
Net
cash generated from operating activities
|
|
15,512
|
2,910
|
24,959
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchase of computer
software
|
11
|
(643)
|
(1,911)
|
(2,954)
|
Purchase of property, plant and
equipment
|
12
|
(70)
|
(414)
|
(745)
|
Purchase of financial assets at fair
value through profit or loss
|
|
-
|
-
|
(30)
|
Deferred contingent consideration
paid
|
16
|
(625)
|
-
|
(334)
|
Consideration paid
|
8
|
-
|
(14,865)
|
(15,111)
|
Interest received
|
|
1,575
|
356
|
1,127
|
Net
cash generated/(used) in investing activities
|
|
237
|
(16,834)
|
(18,047)
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Dividends paid to
shareholders
|
10
|
(7,467)
|
(7,022)
|
(11,422)
|
Payment of lease
liabilities
|
|
(1,551)
|
(1,109)
|
(2,304)
|
Proceeds of issue of
shares
|
19
|
162
|
100
|
1,691
|
Purchase of own shares by Employee
Benefit Trust
|
|
(1,248)
|
(1,800)
|
(2,850)
|
Net
cash used in financing activities
|
|
(10,104)
|
(9,831)
|
(14,885)
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents
|
|
5,645
|
(23,755)
|
(7,973)
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period
|
|
53,355
|
61,328
|
61,328
|
Cash and cash equivalents at end of period
|
|
59,000
|
37,573
|
53,355
|
Notes to the condensed consolidated financial
statements
for the six months ended 31 December
2023
1.
General information
Brooks Macdonald Group plc ("the
Company") is the Parent Company of a group of companies ("the
Group"), which provides leading wealth management services in the
UK and internationally. The Group offers outsourced discretionary
investment management for intermediaries and integrated wealth
management for private clients, and acts as fund manager to a range
of onshore and international funds.
The Company is a public limited
company, incorporated and domiciled in the United Kingdom under the
Companies Act 2006 and listed on AIM. The address of its registered
office is 21 Lombard Street, London, EC3V 9AH.
The Interim Report and Accounts were
approved for issue on 6 March 2024. The Condensed consolidated
financial statements have been independently reviewed but not
audited.
2.
Accounting policies
a)
Basis of preparation
The Group's Condensed consolidated
financial statements have been prepared in accordance with
UK-adopted International Accounting Standards ("IAS") 34, 'Interim
Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct
Authority ("FCA"). The Condensed consolidated financial statements
have been prepared on the historical cost basis, except for the
revaluation of financial assets at fair value through other
comprehensive income, financial assets at fair value through profit
or loss and deferred contingent consideration such that they are
measured at their fair value.
At the time of approving the
Condensed consolidated financial statements, the Directors have a
reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis
in preparing the Condensed consolidated financial
statements.
The information in this Interim
Report and Accounts does not comprise statutory financial
statements within the meaning of section 434 of the Companies Act
2006. The Group's Financial statements for the year ended 30 June
2023 have been reported on by its auditors and delivered to the
Registrar of Companies. The Condensed consolidated financial
statements should be read in conjunction with the Group's audited
Financial statements for the year ended 30 June 2023, which are
prepared in accordance with UK-adopted International Accounting
Standards.
Developments in reporting standards and
interpretations
Standards and interpretations
adopted during the current reporting period
In the six months ended 31 December
2023, the Group did not adopt any new standards or amendments
issued by the International Accounting Standards Board ("IASB") or
interpretations by the IFRS Interpretations Committee ("IFRS IC")
that have had a material impact on the Condensed consolidated
financial statements.
Future new standards and interpretations
A number of new standards are
effective for annual periods beginning after 1 July 2023 and
earlier application is permitted; however, the Group has not early
adopted the new or amended standards in preparing these Condensed
consolidated financial statements. None of the standards not yet
effective are expected to have a material impact on the Group's
financial statements.
b)
Changes in accounting policies
The accounting policies applied in
these Condensed consolidated financial statements are the same as
those applied in the Group's Consolidated financial statements as
at and for the year ended 30 June 2023.
In the six months ended 31 December
2023, the Group did not adopt any new standards or amendments
issued by the IASB or interpretations issued by the IFRS IC that
have had a material impact on the Condensed consolidated financial
statements.
New standards, amendments and
interpretations listed below were newly adopted by the Group but
have not had a material impact on the amounts reported in these
Financial statements. They may, however, impact the accounting for
future transactions and arrangements.
• IFRS 17
'Insurance contracts'
• Narrow scope
(Amendment to IAS 1, IAS 8, and IFRS Practice statement
2)
• Deferred tax
assets and liabilities arising from a single transaction
(Amendments to IAS 12)
• Changes in
Accounting Estimates and Errors - Definition of Accounting
Estimates (Amendments to IAS 8)
• International
tax reform - pillar two model rules (Amendments to IAS
12)
c)
Critical estimates and significant judgements
The Group has reviewed the
judgements and estimates that affect its accounting policies and
amounts reported in its Condensed consolidated financial
statements. These are unchanged from those reported in the Group's
Financial statements for the year ended 30 June 2023.
3.
Segmental information
For management purposes, the Group's
activities are organised into two operating divisions: UK
Investment Management and International. The Group's other
activity, offering nominee and custody services to clients, is
included within UK Investment Management. These divisions are the
basis on which the Group reports its primary segmental information
to the Group Board of Directors, which is the Group's chief
operating decision-maker. In accordance with IFRS 8 'Operating
Segments', disclosures are required to reflect the information that
the Board of Directors uses internally for evaluating the
performance of its operating segments and allocating resources to
those segments. The information presented in this Note is
consistent with the presentation for internal reporting.
The UK Investment Management segment
offers a range of investment management services to private high
net worth individuals, pension funds, institutions, charities, and
trusts, as well as wealth management services to high net worth
individuals and families, giving independent 'whole of market'
financial advice, enabling clients to build, manage and protect
their wealth. The International segment is based in the Channel
Islands and the Isle of Man, offering a similar range of investment
management and wealth management services as the UK Investment
Management segment. The Group segment principally comprises the
Group Board's management and associated costs, along with the
consolidation adjustments.
Revenues and expenses are allocated
to the business segment that originated the transaction. Sales
between segments are carried out at arm's length. Centrally
incurred expenses are allocated to business segments on an
appropriate pro rata basis.
Six
months ended 31 Dec 2023 (unaudited)
|
UK Investment
Management
£'000
|
International
£'000
|
Group and consolidation
adjustments
£'000
|
Total
£'000
|
Total revenue
|
56,529
|
9,421
|
-
|
65,950
|
Inter-segment revenue
|
(2,339)
|
-
|
-
|
(2,339)
|
External revenue
|
54,190
|
9,421
|
-
|
63,611
|
Underlying administrative
costs
|
(23,329)
|
(6,425)
|
(18,274)
|
(48,028)
|
Operating contribution
|
30,861
|
2,996
|
(18,274)
|
15,583
|
|
|
|
|
|
Allocated costs
|
(13,813)
|
(2,860)
|
16,673
|
-
|
Net finance income
|
875
|
294
|
368
|
1,537
|
Underlying profit/(loss) before tax
|
17,923
|
430
|
(1,233)
|
17,120
|
|
|
|
|
|
Goodwill impairment
|
-
|
-
|
(11,641)
|
(11,641)
|
Organisational
restructure
|
(1,756)
|
(829)
|
(452)
|
(3,037)
|
Amortisation of client relationship
contracts
|
(1,691)
|
(1,233)
|
-
|
(2,924)
|
Integration-related costs
|
(293)
|
-
|
-
|
(293)
|
Finance cost of deferred contingent
consideration
|
-
|
-
|
(8)
|
(8)
|
Profit/(loss) mark-up on Group
allocated costs
|
117
|
(115)
|
(2)
|
-
|
Total underlying adjustments
|
(3,623)
|
(2,177)
|
(12,103)
|
(17,903)
|
|
|
|
|
|
Profit/(loss) before tax
|
14,300
|
(1,747)
|
(13,336)
|
(783)
|
|
|
|
|
|
Taxation
|
|
|
|
(2,601)
|
Loss for the period attributable to equity holders of the
Company
|
|
|
|
(3,384)
|
Six
months ended 31 Dec 2023 (unaudited)
|
UK Investment
Management
£'000
|
International
£'000
|
Group and consolidation
adjustments
£'000
|
Total
£'000
|
Total assets
|
87,565
|
26,019
|
68,111
|
181,695
|
Total liabilities
|
28,835
|
2,516
|
2,697
|
34,048
|
Net
assets
|
58,730
|
23,503
|
65,414
|
147,647
|
Six
months ended 31 Dec 2023 (unaudited)
|
UK Investment
Management
£'000
|
International
£'000
|
Group and consolidation
adjustments
£'000
|
Total
£'000
|
Statutory operating costs included
the following:
|
|
|
|
|
- Amortisation
|
2,101
|
608
|
964
|
3,673
|
- Depreciation
|
1,123
|
363
|
-
|
1,486
|
- Interest income
|
946
|
315
|
321
|
1,582
|
Six
months ended 31 Dec 2022 (unaudited)
|
UK
Investment Management
£'000
|
International
£'000
|
Group and
consolidation adjustments
£'000
|
Total
£'000
|
Total revenue
|
52,271
|
10,121
|
-
|
62,392
|
Inter segment revenue
|
(3,484)
|
-
|
-
|
(3,484)
|
External revenue
|
48,787
|
10,121
|
-
|
58,908
|
Underlying administrative
costs
|
(20,723)
|
(6,636)
|
(17,285)
|
(44,644)
|
Operating contribution
|
28,064
|
3,485
|
(17,285)
|
14,264
|
|
|
|
|
|
Allocated costs
|
(11,301)
|
(3,794)
|
15,095
|
-
|
Net finance income
|
150
|
55
|
29
|
234
|
Underlying profit/(loss) before tax
|
16,913
|
(254)
|
(2,161)
|
14,498
|
|
|
|
|
|
Amortisation of client relationship
contracts
|
(793)
|
(513)
|
(1,451)
|
(2,757)
|
Dual running costs of operating
platform
|
(1,420)
|
(191)
|
-
|
(1,611)
|
Acquisition-related costs
|
(23)
|
-
|
(244)
|
(267)
|
Finance cost of deferred contingent
consideration
|
-
|
(6)
|
(13)
|
(19)
|
Profit/(loss) mark-up on Group
allocated costs
|
166
|
(166)
|
-
|
-
|
Total underlying adjustments
|
(2,070)
|
(876)
|
(1,708)
|
(4,654)
|
|
|
|
|
|
Profit/(loss) before tax
|
14,843
|
(1,130)
|
(3,869)
|
9,844
|
|
|
|
|
|
Taxation
|
|
|
|
(1,657)
|
Profit for the period attributable to equity holders of the
Company
|
|
|
|
8,187
|
Six
months ended 31 Dec 2022 (unaudited)
|
UK
Investment Management
£'000
|
International
£'000
|
Group and
consolidation adjustments
£'000
|
Total
£'000
|
Total assets
|
85,023
|
27,356
|
68,709
|
181,088
|
Total liabilities
|
21,959
|
2,488
|
5,555
|
30,002
|
Net
assets
|
63,064
|
24,868
|
63,154
|
151,086
|
The Group has reclassified the
deferred tax balances to offset deferred tax assets and liabilities
and present net deferred tax balances by jurisdiction to ensure
consistent reporting with the current period. In the prior year,
the reported deferred tax asset was £3,642,000, which has been
netted off in the deferred tax liabilities balance.
Six
months ended 31 Dec 2022 (unaudited)
|
UK
Investment Management
£'000
|
International
£'000
|
Group and
consolidation adjustments
£'000
|
Total
£'000
|
Statutory operating costs included
the following:
|
|
|
|
|
- Amortisation
|
1,216
|
447
|
1,595
|
3,258
|
- Depreciation
|
945
|
356
|
10
|
1,311
|
- Interest income
|
244
|
83
|
16
|
343
|
Year ended 30 June 2023 (audited)
|
UK
Investment Management
£'000
|
International
£'000
|
Group and
consolidation adjustments
£'000
|
Total
£'000
|
Total revenue
|
109,737
|
20,319
|
-
|
130,056
|
Inter segment revenue
|
(6,279)
|
-
|
-
|
(6,279)
|
External revenue
|
103,458
|
20,319
|
-
|
123,777
|
Underlying administrative
costs
|
(47,405)
|
(13,576)
|
(33,373)
|
(94,354)
|
Operating contribution
|
56,053
|
6,743
|
(33,373)
|
29,423
|
|
|
|
|
|
Allocated costs
|
(22,127)
|
(6,844)
|
28,971
|
-
|
Net finance income
|
590
|
226
|
88
|
904
|
Underlying profit/(loss) before tax
|
34,516
|
125
|
(4,314)
|
30,327
|
|
|
|
|
|
Amortisation of client relationship
contracts
|
(3,205)
|
(2,465)
|
-
|
(5,670)
|
Dual running costs of operating
platform
|
(1,424)
|
(192)
|
-
|
(1,616)
|
Acquisition and integration-related
costs
|
(499)
|
-
|
(69)
|
(568)
|
Changes in fair value of deferred
contingent consideration
|
-
|
-
|
(173)
|
(173)
|
Finance cost of deferred contingent
consideration
|
-
|
(7)
|
(54)
|
(61)
|
Profit/(loss) mark-up on Group
allocated costs
|
299
|
(299)
|
-
|
-
|
Total underlying adjustments
|
(4,829)
|
(2,963)
|
(296)
|
(8,088)
|
|
|
|
|
|
Profit/(loss) before tax
|
29,687
|
(2,838)
|
(4,610)
|
22,239
|
|
|
|
|
|
Taxation
|
|
|
|
(4,090)
|
Profit for the period attributable to equity holders of the
Company
|
|
|
|
18,149
|
Year ended 30 June 2023 (audited)
|
UK
Investment Management
£'000
|
International
£'000
|
Group and
consolidation adjustments
£'000
|
Total
£'000
|
Total assets
|
91,141
|
26,537
|
77,578
|
195,256
|
Total liabilities
|
30,175
|
2,541
|
5,196
|
37,912
|
Net
assets
|
60,966
|
23,996
|
72,382
|
157,344
|
Year ended 30 June 2023 (audited)
|
UK
Investment Management
£'000
|
International
£'000
|
Group and
consolidation adjustments
£'000
|
Total
£'000
|
Statutory operating costs included
the following:
|
|
|
|
|
- Amortisation
|
3,429
|
912
|
2,491
|
6,832
|
- Depreciation
|
1,943
|
689
|
17
|
2,649
|
- Interest income
|
762
|
279
|
51
|
1,092
|
4.
Revenue
Six
months ended 31 Dec 2023 (unaudited)
|
UK Investment
Management
£'000
|
International
£'000
|
Total
£'000
|
Investment management
fees
|
33,563
|
5,949
|
39,512
|
Transactional income
|
5,908
|
862
|
6,770
|
Fund management fees
|
4,399
|
1,749
|
6,148
|
Wealth management fees
|
4,065
|
-
|
4,065
|
Interest turn
|
6,255
|
861
|
7,116
|
Total revenue
|
54,190
|
9,421
|
63,611
|
Six
months ended 31 Dec 2022 (unaudited)
|
UK
Investment Management
£'000
|
International
£'000
|
Total
£'000
|
Investment management
fees
|
32,558
|
6,114
|
38,672
|
Transactional income
|
4,325
|
1,405
|
5,730
|
Fund management fees
|
5,152
|
1,887
|
7,039
|
Wealth management fees
|
2,361
|
56
|
2,417
|
Interest turn
|
4,391
|
659
|
5,050
|
Total revenue
|
48,787
|
10,121
|
58,908
|
|
|
|
|
Year ended 30 June 2023 (audited)
|
UK
Investment Management
£'000
|
International
£'000
|
Total
£'000
|
Investment management
fees
|
65,626
|
12,292
|
77,918
|
Transactional income
|
10,578
|
2,704
|
13,282
|
Fund management fees
|
9,983
|
3,739
|
13,722
|
Wealth management fees
|
6,446
|
-
|
6,446
|
Interest turn
|
10,825
|
1,584
|
12,409
|
Total revenue
|
103,458
|
20,319
|
123,777
|
a)
Geographic analysis
The Group's operations are located
in the United Kingdom, Channel Islands and Isle of Man. The
following table presents external revenue analysed by the
geographical location of the Group entity providing the
service.
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022 (unaudited)
£'000
|
Year
ended
30 Jun
2023
(audited)
£'000
|
United Kingdom
|
54,190
|
48,787
|
103,458
|
Channel Islands
|
9,342
|
10,050
|
20,173
|
Isle of Man
|
79
|
71
|
146
|
Total revenue
|
63,611
|
58,908
|
123,777
|
b)
Major clients
The Group is not reliant on any one
client or group of connected clients for the generation of
revenues.
5.
Other gains/(losses) - net
Other gains and losses represent the
net changes in the fair value of the Group's financial instruments
and intangible assets recognised in the Condensed consolidated
statement of comprehensive income.
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022 (unaudited)
£'000
|
Year
ended
30 Jun
2023
(audited)
£'000
|
Changes in fair value of deferred
contingent consideration (Note 16)
|
-
|
-
|
(173)
|
Changes in fair value of financial
assets at fair value through profit or loss (Note 14)
|
46
|
2
|
11
|
Total other gains/(losses) - net
|
46
|
2
|
(162)
|
6.
Finance income and finance costs
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022 (unaudited)
£'000
|
Year
ended
30 Jun
2023
(audited)
£'000
|
Finance income
|
|
|
|
Bank interest on deposits
|
1,582
|
343
|
1,092
|
Dividends on preference
shares
|
14
|
13
|
35
|
Total finance income
|
1,596
|
356
|
1,127
|
|
|
|
|
Finance costs
|
|
|
|
Finance cost of lease
liabilities
|
104
|
117
|
235
|
Finance cost of deferred contingent consideration
|
8
|
18
|
61
|
Total finance cost
|
112
|
135
|
296
|
7.
Taxation
The current tax expense for the six
months ended 31 December 2023 was calculated based on the
Corporation Tax rate of 25.0%, applied to the taxable profit for
the six months ended 31 December 2023 (six months ended 31 December
2022: 20.5%; year ended 30 June 2023: 20.5%).
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022 (unaudited)
£'000
|
Year
ended
30 Jun
2023
(audited)
£'000
|
UK Corporation Tax
|
2,887
|
2,806
|
5,703
|
Over provision in prior
years
|
-
|
(830)
|
(834)
|
Total current taxation
|
2,887
|
1,976
|
4,869
|
Deferred tax credits
|
(286)
|
(194)
|
(1,189)
|
(Over)/under provision of deferred
tax in prior years
|
-
|
(125)
|
410
|
Total income tax expense
|
2,601
|
1,657
|
4,090
|
Taxation for other jurisdictions is
calculated at the rates prevailing in the respective
jurisdictions.
The tax on the Group's profit before
tax differs from the theoretical amount that would arise using the
time apportioned tax rate applicable to profits of the consolidated
entities in the UK as follows, split out between underlying and
statutory profits:
Six
months ended 31 Dec 2023 (unaudited)
|
Underlying
profit
£'000
|
Underlying profit
adjustments
£'000
|
Statutory
profit
£'000
|
Profit before taxation
|
17,120
|
(17,903)
|
(783)
|
|
|
|
|
Profit multiplied by the standard rate of tax in the UK of
25.0%
|
4,281
|
(4,476)
|
(195)
|
Tax effect of amounts that are not
deductible/(taxable) in calculating taxable income:
|
|
|
|
- Depreciation and
amortisation
|
2
|
29
|
31
|
- Disallowable expenses
|
185
|
2
|
187
|
- Impairment charge
|
-
|
2,910
|
2,910
|
- Share-based payments
|
28
|
-
|
28
|
- Lower tax rates in other
jurisdictions in which the Group operates
|
(184)
|
124
|
(60)
|
- Overseas tax losses not available
for UK tax purposes
|
(68)
|
-
|
(68)
|
- Non-taxable income
|
(232)
|
-
|
(232)
|
Income tax expense
|
4,012
|
(1,411)
|
2,601
|
|
|
|
|
Effective tax rate
|
23.4%
|
n/a
|
n/a
|
Six
months ended 31 Dec 2022 (unaudited)
|
Underlying
profit
£'000
|
Underlying
profit adjustments
£'000
|
Statutory
profit
£'000
|
Profit before taxation
|
14,498
|
(4,654)
|
9,844
|
|
|
|
|
Profit multiplied by the standard rate of tax in the UK of
20.5%
|
2,972
|
(954)
|
2,018
|
Tax effect of amounts that are not
deductible/(taxable) in calculating taxable income:
|
|
|
|
- Depreciation and
amortisation
|
794
|
(145)
|
649
|
- Disallowable expenses
|
153
|
3
|
156
|
- Share-based payments
|
(216)
|
-
|
(216)
|
- Lower tax rates in other
jurisdictions in which the Group operates
|
(63)
|
-
|
(63)
|
- Overseas tax losses not available
for UK tax purposes
|
106
|
-
|
106
|
- Over provision in prior
periods
|
(958)
|
-
|
(958)
|
- Non-taxable income
|
(35)
|
-
|
(35)
|
Income tax expense
|
2,753
|
(1,096)
|
1,657
|
|
|
|
|
Effective tax rate
|
19.0%
|
n/a
|
16.8%
|
Year ended 30 June 2023 (audited)
|
Underlying
profit
£'000
|
Underlying
profit adjustments
£'000
|
Statutory
profit
£'000
|
Profit before taxation
|
30,327
|
(8,088)
|
22,239
|
|
|
|
|
Profit multiplied by the standard rate of tax in the UK of
20.5%
|
6,217
|
(1,658)
|
4,559
|
Tax effect of amounts that are not
deductible/(taxable) in calculating taxable income:
|
|
|
|
- Depreciation and
amortisation
|
604
|
(285)
|
319
|
- Non-taxable income
|
(124)
|
-
|
(124)
|
- Overseas tax losses not available
for UK tax purposes
|
67
|
-
|
67
|
- Disallowable expenses
|
(107)
|
-
|
(107)
|
- Lower tax rates in other
jurisdictions in which the Group operates
|
263
|
48
|
311
|
- Share-based payments
|
(512)
|
-
|
(512)
|
- Over provision in prior
periods
|
(423)
|
-
|
(423)
|
Income tax expense
|
5,985
|
(1,895)
|
4,090
|
|
|
|
|
Effective tax rate
|
19.7%
|
n/a
|
18.4%
|
On 11 March 2021 it was outlined in
the Finance Bill 2021, and substantively enacted having received
royal ascent on 10 June 2021, that the UK Corporation Tax rate
would increase to 25.0% from 1 April 2023 and remain at 19.0% until
that date. As a result, the effective rate of Corporation Tax
applied to the taxable profit for the six months ended 31 December
2023 is 25.0% (six months ended 31 December 2022: 20.5%; year ended
30 June 2023: 20.5%). Deferred tax assets and liabilities are
calculated at the rate that is expected to be in force when the
temporary differences unwind.
8.
Business combinations
Prior period
Integrity
On 31 October 2022, the Group
acquired Integrity Wealth Bidco Limited and Integrity Wealth
(Holdings) Limited, together with its subsidiary Integrity Wealth
Solutions Limited ("IWS"), (collectively "Integrity"). The
acquisition brings a successful and rapidly growing Independent
Financial Adviser ("IFA") business into the Group and brings scale
to the Group's Private Clients business, adding distinctive
expertise in their specialist area. The acquisition consisted of
acquiring 100% of the issued share capital of Integrity Wealth
(Holdings) Limited and Integrity Wealth Bidco Limited (intermediate
holding company), which was funded through existing financial
resources. On 14 April 2023, the Group acquired an additional
client book, which was incorporated into the Integrity business and
acquisition accounting. This resulted in an additional £246,000 of
initial cash consideration and £214,000 deferred contingent
consideration at fair value.
The acquisition was accounted for
using the acquisition method and details of the purchase
consideration are as follows:
|
Note
|
£'000
|
Initial cash
consideration
|
|
4,000
|
Shares consideration
|
i
|
1,000
|
Excess for net assets
|
ii
|
601
|
Deferred contingent consideration at
fair value
|
iii
|
1,026
|
Total purchase consideration
|
|
6,627
|
i. The Group issued
52,084 ordinary shares to the previous shareholders of Integrity
Wealth (holdings) Limited and Integrity Wealth Bidco Limited at a
price of £19.20 per share. The amount of shares issued was based on
the share price at the completion date to provide the equivalent
consideration value of £1,000,000.
ii. In accordance with
the Sale and Purchase agreement ("SPA"), the Group was required to
pay the difference between the available capital and the required
regulatory capital for Integrity.
iii. The total estimated cash
deferred contingent consideration is £1,275,000, payable in three
years following completion, based on revenue criteria of the
acquired business. As outlined in the SPA, the maximum cash
deferred contingent consideration payable is up to £2,500,000 if
certain revenue criteria are met.
On 30 June 2023, the Group agreed to
renegotiate the deferred contingent consideration, which resulted
in the Group recognising a change in fair value of deferred
contingent consideration of £173,000 on 30 June 2023. See Note 16
for further details.
Client relationship intangible
assets of £2,543,000 were recognised on acquisition in respect of
the expected cash inflows and economic benefit from the acquired
business. An associated deferred tax liability of £636,000 was
recognised in relation to the expected cash inflows on the acquired
client relationship intangible asset. Goodwill of £3,945,000 was
recognised on acquisition in respect of the expected growth in the
acquired business and associated cash inflows. The fair value of
the assets acquired were the gross contractual amounts and were all
considered to be fully recoverable. The fair value of the
identifiable assets and liabilities acquired, at the date of
acquisition, are detailed below.
Net
assets acquired through business combination
|
£'000
|
Trade and other
receivables
|
270
|
Cash at bank
|
804
|
Trade and other payables
|
(167)
|
Corporation tax payable
|
(132)
|
Total net assets recognised by acquired
companies
|
775
|
Fair value adjustments:
|
|
Client relationship
contracts
|
2,543
|
Deferred tax liabilities
|
(636)
|
Net
identifiable assets
|
1,907
|
Goodwill
|
3,945
|
Total purchase consideration
|
6,627
|
The trade and other receivables were
recognised at their fair value, being the gross contractual
amounts, deemed fully recoverable.
Adroit
On 15 December 2022, the Group
acquired Adroit Financial Planning Limited ("Adroit"), a successful
and rapidly growing Independent Financial Adviser ("IFA") business.
The acquisition brings further scale to the Group's Private Clients
business, adding distinctive expertise in their specialist area.
The acquisition consisted of acquiring 100% of the issued share
capital of Adroit Financial Planning Limited, which was funded
through existing financial resources.
The acquisition was accounted for
using the acquisition method and details of the purchase
consideration are as follows:
|
Note
|
£'000
|
Initial cash
consideration
|
|
10,991
|
Additional consideration
|
i
|
270
|
Total purchase consideration
|
|
11,261
|
i. In accordance
with the Sale and Purchase agreement ("SPA"), the Group was
required to pay an additional amount based on the number of days
between the date of exchange and date of completion.
Client relationship intangible
assets of £2,931,000 were recognised on acquisition in respect of
the expected cash inflows and economic benefit from the acquired
business. An associated deferred tax liability of £733,000 was
recognised in relation to the expected cash inflows on the acquired
client relationship intangible asset. Goodwill of £8,541,000 was
recognised on acquisition in respect of the expected growth in the
acquired business and associated cash inflows. The fair value of
the assets acquired were the gross contractual amounts and were all
considered to be fully recoverable. The fair value of the
identifiable assets and liabilities acquired, at the date of
acquisition, are detailed in below.
Net assets acquired through business
combination
|
£'000
|
Trade and other
receivables
|
533
|
Cash at bank
|
193
|
Trade and other payables
|
(204)
|
Total net assets recognised by acquired
companies
|
522
|
Fair value adjustments:
|
|
Client relationship
contracts
|
2,931
|
Deferred tax liabilities
|
(733)
|
Net
identifiable assets
|
2,198
|
Goodwill
|
8,541
|
Total purchase consideration
|
11,261
|
The trade and other receivables were
recognised at their fair value, being the gross contractual
amounts, deemed fully recoverable.
Acquisition impact on reported results
In the period from acquisition to 31
December 2022, directly attributable acquisition costs of £267,000
were incurred in relation to the acquisitions, which were charged
to administrative costs in the Condensed consolidated statement of
comprehensive income but excluded from underlying
profit.
In the period from acquisition to 31
December 2022, the two acquisitions earned revenue of £443,000 and
statutory profit before tax of £108,000. Had the acquisitions been
consolidated from 1 July 2022, the Condensed consolidated statement
of comprehensive income would have included revenue of £2,176,000
and statutory profit before tax of £564,000.
Net
cash outflow resulting from business combinations
|
£'000
|
Total purchase
consideration
|
18,348
|
Less shares issued as
consideration
|
(1,000)
|
Less deferred cash contingent
consideration at fair value
|
(1,240)
|
Cash paid to acquire business combinations
|
16,108
|
Less cash held by acquired
entities
|
(997)
|
Net
cash outflow - investing activities
|
15,111
|
9.
Earnings per share
The Board of Directors considers
that underlying earnings per share provides an appropriate
reflection of the Group's performance in the period. Underlying
earnings per share are calculated based on 'underlying earnings',
which is defined as earnings before underlying adjustments listed
below. The tax effect of these adjustments has also been
considered. Underlying earnings is an Alternative Performance
Measure ("APM") used by the Group.
Earnings for the period used to
calculate (loss)/earnings per share as reported in these Condensed
consolidated financial statements were as follows:
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022 (unaudited)
£'000
|
Year
ended
30 Jun
2023
(audited)
£'000
|
(Loss)/earnings attributable to ordinary
shareholders
|
(3,384)
|
8,187
|
18,149
|
|
|
|
|
Underlying adjustments
|
|
|
|
Goodwill impairment
|
11,641
|
-
|
-
|
Organisational restructure
costs
|
3,037
|
-
|
-
|
Amortisation of acquired client
relationship contracts (Note 11)
|
2,924
|
2,757
|
5,670
|
Integration and acquisition-related
costs
|
293
|
267
|
568
|
Finance cost of deferred contingent
consideration (Note 16)
|
8
|
19
|
61
|
Dual running costs of operating
platform
|
-
|
1,611
|
1,616
|
Changes in fair value of deferred
consideration (Note 16)
|
-
|
-
|
173
|
Tax impact of adjustments (Note
7)
|
(1,411)
|
(1,096)
|
(1,895)
|
Underlying earnings attributable to ordinary
shareholders
|
13,108
|
11,745
|
24,342
|
Basic earnings per share is
calculated by dividing earnings attributable to ordinary
shareholders by the weighted average number of shares in issue
throughout the period. Included in the weighted average number of
shares for basic earnings per share purposes are employee share
options at the point all necessary conditions have been satisfied
and the options have vested, even if they have not yet been
exercised.
Diluted earnings per share
represents the basic earnings per share adjusted for the effect of
dilutive potential shares issuable on exercise of employee share
options under the Group's share-based payment schemes, weighted for
the relevant period. The diluted weighted average number of shares
in issue and diluted earnings per share considers the effect of all
dilutive potential shares issuable on exercise of employee share
options. The potential shares issuable includes the contingently
issuable shares that have not yet vested and the vested unissued
share options that are either nil cost options or have little or no
consideration.
The weighted average number of
shares in issue during the six months ended 31 December 2023 were
as follows:
|
Six months
ended
31 Dec 2023
(unaudited)
Number of
shares
|
Six months
ended
31 Dec
2022
(unaudited)
Number of
shares
|
Year
ended
30 Jun
2023 (audited)
Number of
shares
|
Weighted average number of shares in issue
|
16,060,677
|
15,791,432
|
15,825,397
|
Effect of dilutive potential shares
issuable on exercise of employee share options
|
247,947
|
398,960
|
293,992
|
Diluted weighted average number of shares in
issue
|
16,308,624
|
16,190,392
|
16,119,389
|
|
Six months
ended
31 Dec 2023
(unaudited)
|
Six months
ended
31 Dec
2022 (unaudited)
|
Year
ended
30 Jun
2023
(audited)
|
|
p
|
p
|
p
|
Based on reported (loss)/earnings:
|
|
|
|
Basic (loss)/earnings per
share
|
(21.1)
|
51.8
|
114.7
|
Diluted (loss)/earnings per
share
|
(21.1)
|
50.6
|
112.6
|
Based on underlying earnings:
|
|
|
|
Basic earnings per share
|
81.6
|
74.4
|
153.8
|
Diluted earnings per
share
|
80.4
|
72.5
|
151.0
|
10.
Dividends
|
Six months
ended
31 Dec 2023
(unaudited)
|
Six months
ended
31 Dec
2022 (unaudited)
|
Year
ended
30 Jun
2023 (audited)
|
|
£'000
|
£'000
|
£'000
|
Final dividend paid on ordinary
shares
|
7,467
|
7,022
|
7,021
|
Interim dividend paid on ordinary
shares
|
-
|
-
|
4,401
|
Total dividends
|
7,467
|
7,022
|
11,422
|
An interim dividend of 29.0p (six
months ended 31 December 2022: 28.0p) per share was declared by the
Board of Directors on 6 March 2024. It will be paid on 16 April
2024 to shareholders who are on the register at the close of
business on 15 March 2024.
In accordance with IAS 10, this
dividend has not been included as a liability in the Condensed
consolidated financial statements at 31 December 2023.
A final dividend for the year ended
30 June 2023 of 47.0p (year ended 30 June 2022: 45.0p) per share
was paid to shareholders on 3 November 2023.
11.
Intangible assets
|
Goodwill
£'000
|
Computer
software
£'000
|
Acquired
client
relationship
contracts
£'000
|
Contracts
acquired with
fund
managers
£'000
|
Total
£'000
|
Cost
|
|
|
|
|
|
At 30 June 2022
|
51,887
|
6,930
|
70,011
|
3,521
|
132,349
|
Additions
|
12,486
|
1,911
|
5,474
|
-
|
19,871
|
At 31 December 2022
|
64,373
|
8,841
|
75,485
|
3,521
|
152,220
|
Additions
|
-
|
1,043
|
613
|
-
|
1,656
|
Disposals
|
-
|
(1,054)
|
-
|
(3,521)
|
(4,575)
|
At 30 June 2023
|
64,373
|
8,830
|
76,098
|
-
|
149,301
|
Additions
|
-
|
643
|
-
|
-
|
643
|
At
31 December 2023
|
64,373
|
9,473
|
76,098
|
-
|
149,944
|
|
|
|
|
|
|
Accumulated amortisation and impairment
|
|
|
|
|
|
At 30 June 2022
|
11,213
|
251
|
31,477
|
3,521
|
46,462
|
Amortisation charge
|
-
|
501
|
2,757
|
-
|
3,258
|
At 31 December 2022
|
11,213
|
752
|
34,234
|
3,521
|
49,720
|
Amortisation charge
|
-
|
661
|
2,913
|
-
|
3,574
|
Accumulated amortisation on
disposals
|
-
|
(1,054)
|
-
|
(3,521)
|
(4,575)
|
At 30 June 2023
|
11,213
|
359
|
37,147
|
-
|
48,719
|
Amortisation charge
|
-
|
749
|
2,924
|
-
|
3,673
|
Impairment
|
11,641
|
-
|
-
|
-
|
11,641
|
At
31 December 2023
|
22,854
|
1,108
|
40,071
|
-
|
64,033
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
At 30 June 2022
|
40,674
|
6,679
|
38,534
|
-
|
85,887
|
At 31 December 2022
|
53,160
|
8,089
|
41,251
|
-
|
102,500
|
At 30 June 2023
|
53,160
|
8,471
|
38,951
|
-
|
100,582
|
At
31 December 2023
|
41,519
|
8,365
|
36,027
|
-
|
85,911
|
a)
Goodwill
Goodwill acquired in a business
combination is allocated at acquisition to the cash generating
units ("CGUs") that are expected to benefit from that business
combination. The carrying amount of goodwill in respect of these
CGUs within the operating segments of the Group
comprises:
|
31 Dec 2023
(unaudited)
£'000
|
31 Dec
2022 (unaudited)
£'000
|
30 Jun
2023 (audited)
£'000
|
Funds
|
|
|
|
Braemar Group Limited
("Braemar")
|
3,320
|
3,320
|
3,320
|
|
|
|
|
International
|
|
|
|
Brooks Macdonald Asset Management
(International) Limited and Brooks Macdonald Retirement Services
(International) Limited (collectively "International")
|
9,602
|
21,243
|
21,243
|
|
|
|
|
Cornelian
Cornelian Asset Managers Group
Limited ("Cornelian")
|
16,111
|
16,111
|
16,111
|
|
|
|
|
Integrity
Integrity Wealth (Holdings) Limited
("Integrity")
|
3,945
|
3,945
|
3,945
|
|
|
|
|
Adroit
Adroit Financial Planning Limited
("Adroit")
|
8,541
|
8,541
|
8,541
|
|
|
|
|
Total goodwill
|
41,519
|
53,160
|
53,160
|
Each reporting period, Management
review each CGU for impairment indicators. If impairment indicators
are present, an impairment review is carried out. At the reporting
date there were no indicators that the carrying amount of goodwill
in relation to the Funds, Cornelian, Integrity, or Adroit CGUs
should be impaired, therefore calculations regarding recoverability
in respect of these CGUs have not been performed.
The prevailing macroeconomic
environment and market volatility seen during the reporting period,
had an impact on client sentiment and new business, whilst the
higher interest rate environment resulted in higher outflows with
client withdrawing funds to repay debt. This gave rise to
impairment indicators in relation to the International CGU, that
was recognised upon the acquisition of the Spearpoint business in
2012. Accordingly, an impairment review was carried out for this
CGU, and based on a value-in-use calculation, the recoverable
amount of the International CGU at 31 December 2023 did not support
the carrying amount of the International CGU of £31,311,000. As a
result, the International goodwill balance has been impaired by
£11,641,000, leaving a goodwill balance of £9,602,000 at 31
December 2023.
The value-in-use calculation is
based on a discounted cash flow model, with the key underlying
assumptions being the discount rate, medium-term growth in earnings
and FUM flows, and the long-term growth rate of the business. The
revenue growth is forecast based on new business targets, expected
outflows and estimated impact of market performance on FUM,
multiplied by estimated fee yields. The period covered is five
years and the forecasts are based on management's growth
projections for the business based on its strategic objectives,
taking into account historic performance and prevailing market and
economic conditions. A pre-tax discount rate of 12% (FY23: 13%),
based on the Group's assessment of the risk-free rate of interest
and specific risks relating to Brooks Macdonald International. A 2%
long-term growth rate has been applied which is considered prudent
in the context of the long-term average growth rate for the
industries in which the CGU operates.
Management believes the impairment
to be a fair reflection of the underlying business valuation in the
backdrop of current market conditions, net FUM outflows and the
knock-on impact of revenue in the short term.
b)
Computer software
Computer software costs are
amortised on a straight-line basis over an estimated useful live
(four to eight years). Costs incurred on internally developed
computer software are initially recognised at cost and when the
software is available for use the costs are amortised on a
straight-line basis over an estimated useful life of four years.
Capitalised costs incurred on the Group's partnership with SS&C
to transform the Group's client and intermediary-facing processes,
launch a digital onboarding solution and enhance the Group's
operating platform are amortised on a straight-line basis over the
remaining agreement length with SS&C of eight years from the
start of amortisation in FY23, the estimated period the Group will
generate positive economic benefit from the capitalised
costs.
c)
Acquired client relationship contracts
This asset represents the fair value
of future benefits accruing to the Group from acquired client
relationship contracts. The amortisation of client relationships is
charged to the Condensed consolidated statement of comprehensive
income on a straight-line basis over their estimated useful lives
(6 to 20 years).
12.
Property, plant and equipment
|
Leasehold
improvements
£'000
|
Fixtures, fittings and office
equipment
£'000
|
IT
equipment
£'000
|
Total
£'000
|
Cost
|
|
|
|
|
At 30 June 2022
|
2,688
|
741
|
1,246
|
4,675
|
Additions
|
356
|
50
|
8
|
414
|
At 31 December 2022
|
3,044
|
791
|
1,254
|
5,089
|
Additions
|
121
|
24
|
186
|
331
|
Disposals
|
(19)
|
(173)
|
(474)
|
(666)
|
At 30 June 2023
|
3,146
|
642
|
966
|
4,754
|
Additions
|
3
|
44
|
23
|
70
|
At
31 December 2023
|
3,149
|
686
|
989
|
4,824
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
At 30 June 2022
|
1,131
|
513
|
829
|
2,473
|
Depreciation charge
|
246
|
50
|
98
|
394
|
At 31 December 2022
|
1,377
|
563
|
927
|
2,867
|
Depreciation charge
|
289
|
52
|
89
|
430
|
Depreciation on disposals
|
(19)
|
(173)
|
(474)
|
(666)
|
At 30 June 2023
|
1,647
|
442
|
542
|
2,631
|
Depreciation charge
|
282
|
44
|
100
|
426
|
At
31 December 2023
|
1,929
|
486
|
642
|
3,057
|
|
|
|
|
|
Net
book value
|
|
|
|
|
At 30 June 2022
|
1,557
|
228
|
417
|
2,202
|
At 31 December 2022
|
1,667
|
228
|
327
|
2,222
|
At 30 June 2023
|
1,499
|
200
|
424
|
2,123
|
At
31 December 2023
|
1,220
|
200
|
347
|
1,767
|
13.
Right-of-use assets
|
Cars
£'000
|
Property
£'000
|
Total
£'000
|
Cost
|
|
|
|
At 30 June 2022
|
328
|
9,425
|
9,753
|
Additions
|
272
|
334
|
606
|
At 31 December 2022
|
600
|
9,759
|
10,359
|
Additions
|
198
|
379
|
577
|
At 30 June 2023
|
798
|
10,138
|
10,936
|
Additions
|
41
|
922
|
963
|
At
31 December 2023
|
839
|
11,060
|
11,899
|
|
|
|
|
Accumulated depreciation
|
|
|
|
At 30 June 2022
|
37
|
4,745
|
4,782
|
Depreciation charge
|
67
|
847
|
914
|
At 31 December 2022
|
104
|
5,592
|
5,696
|
Depreciation charge
|
91
|
820
|
911
|
At 30 June 2023
|
195
|
6,412
|
6,607
|
Depreciation charge
|
109
|
951
|
1,060
|
At
31 December 2023
|
304
|
7,363
|
7,667
|
|
|
|
|
Net
book value
|
|
|
|
At 30 June 2022
|
291
|
4,680
|
4,971
|
At 31 December 2022
|
496
|
4,167
|
4,663
|
At 30 June 2023
|
603
|
3,726
|
4,329
|
At
31 December 2023
|
535
|
3,697
|
4,232
|
14.
Financial instruments
The analysis of financial assets and
liabilities into their categories as defined in IFRS 9 'Financial
Instruments' is set out in the following table.
|
31 Dec 2023
(unaudited)
£'000
|
31 Dec
2022
(unaudited)
£'000
|
30 Jun
2023
(audited)
£'000
|
Financial assets
|
|
|
|
Financial assets at fair value through profit or
loss:
|
|
|
|
Investment in regulated
OEICs
|
871
|
786
|
825
|
Financial assets at fair value through other comprehensive
income:
|
|
|
|
Unlisted redeemable preference
shares
|
500
|
500
|
500
|
Financial assets at amortised cost:
|
|
|
|
Trade and other
receivables
|
29,414
|
32,844
|
33,542
|
Cash and cash equivalents
|
59,000
|
37,573
|
53,355
|
Total financial assets
|
89,785
|
71,703
|
88,222
|
|
|
|
|
Financial liabilities
|
|
|
|
Financial liabilities at fair value through profit or
loss:
|
|
|
|
Deferred contingent consideration
(Note 16)
|
225
|
1,372
|
1,467
|
Financial liabilities at amortised cost:
|
|
|
|
Trade and other payables
|
21,358
|
15,286
|
22,521
|
Current tax liabilities
|
423
|
128
|
645
|
Provisions (Note 17)
|
906
|
1,403
|
1,322
|
Lease liabilities
|
4,662
|
5,649
|
5,141
|
Other non-current
liabilities
|
869
|
400
|
783
|
Total financial liabilities
|
28,443
|
24,238
|
31,879
|
The following table provides an
analysis of the financial assets and liabilities that, subsequent
to initial recognition, are measured at fair value. These are
grouped into the following levels within the fair value hierarchy,
based on the degree to which the inputs used to determine the fair
value are observable:
• Level 1 -
derived from quoted prices in active markets for identical assets
or liabilities at the measurement date;
• Level 2 -
derived from inputs other than quoted prices included within level
1 that are observable, either directly or indirectly;
and
• Level 3 -
derived from inputs that are not based on observable market
data.
|
Level 1
£'000
|
Level 2
£'000
|
Level 3
£'000
|
Total
£'000
|
Financial assets
|
|
|
|
|
At 1 July 2022
|
784
|
-
|
500
|
1,284
|
Net changes in fair value
|
2
|
-
|
-
|
2
|
At 31 December 2022
|
786
|
-
|
500
|
1,286
|
Additions
|
30
|
-
|
-
|
30
|
Net changes in fair value
|
9
|
-
|
-
|
9
|
At 30 June 2023
|
825
|
-
|
500
|
1,325
|
Net changes in fair value
|
46
|
-
|
-
|
46
|
At
31 December 2023
|
871
|
-
|
500
|
1,371
|
|
|
|
|
|
Comprising:
|
|
|
|
|
Financial assets at fair value
through other comprehensive income
|
-
|
-
|
500
|
500
|
Financial assets at fair value
through profit and loss
|
871
|
-
|
-
|
871
|
Total financial assets
|
871
|
-
|
500
|
1,371
|
At 31 December 2023, the Group held
an investment of 500,000 redeemable £1 preference shares in an
unlisted company incorporated in the UK. The preference shares
carry an entitlement to a fixed preferential dividend at a rate of
4% per annum. Unlisted preference shares are classified as
financial assets at fair value through other comprehensive income.
They have been valued using a perpetuity income model, which is
based upon the preference dividend cash flows.
The Group holds 500,000 shares in
five of the SVS Cornelian Risk Managed Passive Funds. During the
six months ended 31 December 2023, the Group recognised a gain on
these investments of £36,000, resulting in a value at 31 December
2023 of £629,000 (31 December 2022: £588,000; 30 June 2023:
£593,000).
The Group holds an investment in the
Blueprint Multi Asset Fund range across the various models within
the fund range. During the six months ended 31 December 2023, the
Group recognised a gain on these investments of £10,000, resulting
in a value at 31 December 2023 of £242,000 (31 December 2022:
£198,000; 30 June 2023: £232,000).
|
Level 1
£'000
|
Level 2
£'000
|
Level 3
£'000
|
Total
£'000
|
Financial liabilities
|
|
|
|
|
At 1 July 2022
|
-
|
-
|
327
|
327
|
Additions
|
-
|
-
|
1,026
|
1,026
|
Finance cost of deferred contingent
consideration
|
-
|
-
|
19
|
19
|
At 31 December 2022
|
-
|
-
|
1,372
|
1,372
|
Finance cost of deferred contingent
consideration
|
-
|
-
|
42
|
42
|
Additions
|
-
|
-
|
214
|
214
|
Changes in fair value
|
-
|
-
|
173
|
173
|
Payments made
|
-
|
-
|
(334)
|
(334)
|
At 30 June 2023
|
-
|
-
|
1,467
|
1,467
|
Finance cost of deferred contingent
consideration
|
-
|
-
|
8
|
8
|
Cash consideration paid
|
-
|
-
|
(625)
|
(625)
|
Shares issued as consideration (Note
19)
|
-
|
-
|
(625)
|
(625)
|
At
31 December 2023
|
-
|
-
|
225
|
225
|
|
|
|
|
|
Comprising:
|
|
|
|
|
Deferred contingent consideration
(Note 16)
|
-
|
-
|
225
|
225
|
Total financial liabilities
|
-
|
-
|
225
|
225
|
Deferred contingent consideration is
recognised at fair value through profit or loss and is valued using
the net present value of the expected amounts payable based on
management's forecasts and expectations. For more details see Note
16.
15.
Deferred income tax
Deferred income tax assets are only
recognised to the extent that it is probable that future taxable
profit will be available against which the temporary differences
can be utilised. An analysis of the Group's deferred assets and
deferred tax liabilities is shown below.
|
31 Dec 2023
(unaudited)
|
|
UK
£'000
|
CI
£'000
|
Total
£'000
|
Deferred tax assets
|
|
|
|
Share-based payments
|
2,189
|
-
|
2,189
|
Trading losses carried
forward
|
-
|
359
|
359
|
Dilapidations
|
99
|
8
|
107
|
Accelerated capital
allowances
|
163
|
-
|
163
|
Total deferred tax assets
|
2,451
|
367
|
2,818
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
Intangible asset
amortisation
|
(6,460)
|
(1,032)
|
(7,492)
|
Accelerated capital allowances on
research and development
|
(931)
|
-
|
(931)
|
Total deferred tax liabilities
|
(7,391)
|
(1,032)
|
(8,423)
|
|
|
|
|
Net
deferred tax liability
|
(4,940)
|
(665)
|
(5,605)
|
|
31 Dec 2022
(unaudited)
|
|
UK
£'000
|
CI
£'000
|
Total
£'000
|
Deferred tax assets
|
|
|
|
Share-based payments
|
2,984
|
-
|
2,984
|
Trading losses carried
forward
|
-
|
325
|
325
|
Dilapidations
|
65
|
10
|
75
|
Accelerated capital
allowances
|
258
|
-
|
258
|
Total deferred tax assets
|
3,307
|
335
|
3,642
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
Intangible asset
amortisation
|
(7,713)
|
(781)
|
(8,494)
|
Accelerated capital allowances on
research and development
|
(912)
|
-
|
(912)
|
Total deferred tax liabilities
|
(8,625)
|
(781)
|
(9,406)
|
|
|
|
|
Net
deferred tax liability
|
(5,318)
|
(446)
|
(5,764)
|
|
30 Jun 2023
(audited)
|
|
UK
£'000
|
CI
£'000
|
Total
£'000
|
Deferred tax assets
|
|
|
|
Share-based payments
|
2,333
|
-
|
2,333
|
Trading losses carried
forward
|
-
|
363
|
363
|
Dilapidations
|
92
|
27
|
119
|
Accelerated capital
allowances
|
164
|
-
|
164
|
Total deferred tax assets
|
2,589
|
390
|
2,979
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
Intangible asset
amortisation
|
(7,404)
|
(752)
|
(8,156)
|
Accelerated capital allowances on
research and development
|
(856)
|
-
|
(856)
|
Total deferred tax liabilities
|
(8,260)
|
(752)
|
(9,012)
|
|
|
|
|
Net
deferred tax liability
|
(5,671)
|
(362)
|
(6,033)
|
The gross movement on the deferred
income tax account during the period was as follows:
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022
(unaudited)
£'000
|
Year
ended 30 Jun 2023
(audited)
£'000
|
At beginning of period
|
(6,033)
|
(4,957)
|
(4,957)
|
Additional liability on acquisition
of client relationship intangible assets
|
-
|
(1,369)
|
(1,520)
|
Credit to the Condensed consolidated
statement of comprehensive income
|
286
|
319
|
779
|
Credit/(charge) recognised in
equity
|
142
|
243
|
(335)
|
At
end of period
|
(5,605)
|
(5,764)
|
(6,033)
|
The change in deferred income tax
assets and liabilities during the period was as follows:
|
Share-based
payments
£'000
|
Trading losses carried
forward
£'000
|
Dilapidations
£'000
|
Accelerated capital
allowances
£'000
|
Total
£'000
|
Deferred tax assets
|
|
|
|
|
|
At 1 July 2022
|
2,667
|
133
|
65
|
137
|
3,002
|
Over provision in prior
years
|
-
|
125
|
-
|
-
|
125
|
Charge to the Condensed consolidated
statement of comprehensive income
|
74
|
67
|
10
|
121
|
272
|
Credit to equity
|
243
|
-
|
-
|
-
|
243
|
At 31 December 2022
|
2,984
|
325
|
75
|
258
|
3,642
|
Over provision in prior
years
|
-
|
49
|
-
|
-
|
49
|
(Charge)/credit to the Condensed
consolidated statement of comprehensive income
|
(73)
|
(11)
|
44
|
(94)
|
(134)
|
Charge to equity
|
(578)
|
-
|
-
|
-
|
(578)
|
At 30 June 2023
|
2,333
|
363
|
119
|
164
|
2,979
|
Charge to the Condensed consolidated
statement of comprehensive income
|
(286)
|
(4)
|
(12)
|
(1)
|
(303)
|
Credit to equity
|
142
|
-
|
-
|
-
|
142
|
At
31 December 2023
|
2,189
|
359
|
107
|
163
|
2,818
|
|
31 Dec 2023
(unaudited)
£'000
|
31 Dec
2022
(unaudited)
£'000
|
30 Jun
2023
(audited)
£'000
|
Deferred tax assets
|
|
|
|
Deferred tax assets to be settled
after more than one year
|
1,861
|
2,031
|
1,198
|
Deferred tax assets to be settled
within one year
|
957
|
1,611
|
1,781
|
Total deferred tax assets
|
2,818
|
3,642
|
2,979
|
The carrying amount of the deferred
tax asset is reviewed at each reporting date and is only recognised
to the extent that it is probable that future taxable profits of
the Group will allow the asset to be recovered.
|
Accelerated capital
allowances on research and development
£'000
|
Intangible asset
amortisation
£'000
|
Total
£'000
|
Deferred tax liabilities
|
|
|
|
At 1 July 2022
|
389
|
7,570
|
7,959
|
Additional liability on acquisition
of client-relationship intangible assets
|
-
|
1,369
|
1,369
|
Charge/(credit) to the Condensed
consolidated statement of comprehensive income
|
523
|
(445)
|
78
|
At 31 December 2022
|
912
|
8,494
|
9,406
|
Additional liability on acquisition
of client-relationship intangible assets
|
-
|
151
|
151
|
Credit to the Condensed consolidated
statement of comprehensive income
|
(640)
|
(489)
|
(1,129)
|
Over provision in prior
years
|
584
|
-
|
584
|
At 30 June 2023
|
856
|
8,156
|
9,012
|
Charge/(credit) to the Condensed
consolidated statement of comprehensive income
|
75
|
(664)
|
(589)
|
At
31 December 2023
|
931
|
7,492
|
8,423
|
|
31 Dec 2023
(unaudited)
£'000
|
31 Dec
2022
(unaudited)
£'000
|
30 Jun
2023
(audited)
£'000
|
Deferred tax liabilities
|
|
|
|
Deferred tax assets to be settled
after more than one year
|
7,836
|
8,522
|
7,777
|
Deferred tax assets to be settled
within one year
|
587
|
884
|
1,235
|
Total deferred tax liabilities
|
8,423
|
9,406
|
9,012
|
16.
Deferred contingent consideration
Deferred contingent consideration is
split between non-current liabilities and current liabilities to
the extent that it is due to be paid within one year of the
reporting date. It reflects the Directors' best estimate of amounts
payable in the future in respect of certain client relationships
and subsidiary undertakings that were acquired by the Group.
Deferred contingent consideration is measured at its fair value
based on discounted expected future cash flows. The movements in
the total deferred contingent consideration balance during the
current and comparative periods were as follows:
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022 (unaudited)
£'000
|
Year
ended
30 Jun
2023 (audited)
£'000
|
At beginning of period
|
1,467
|
327
|
327
|
Additions
|
-
|
1,026
|
1,240
|
Finance cost of deferred contingent
consideration
|
8
|
19
|
61
|
Fair value adjustments
|
-
|
-
|
173
|
Cash consideration paid
|
(625)
|
-
|
(334)
|
Shares issues as
consideration
|
(625)
|
-
|
-
|
At
end of period
|
225
|
1,372
|
1,467
|
|
|
|
|
Analysed as:
|
|
|
|
Amounts falling due within one
year
|
225
|
333
|
1,467
|
Amounts falling due after more than
one year
|
-
|
1,039
|
-
|
At
end of period
|
225
|
1,372
|
1,467
|
During the six months ended 31
December 2022, the Group completed the Integrity acquisition (Note
8) and part of the consideration is to be deferred over a period of
three years. The deferred contingent consideration was payable at
the end of November 2025 based on the future revenue of the
business acquired and the estimated fair value of the deferred
contingent consideration at acquisition was £1,026,000. In April
2023 the Group acquired an additional client book, with part of the
consideration to be deferred over a one-year period. The estimated
fair value of the deferred contingent consideration at acquisition
was £214,000. The Integrity Wealth Solutions deferred contingent
consideration was renegotiated at 30 June 2023, and it was agreed
that £1,250,000 was to be paid to the vendors of Integrity Wealth
Solutions, settled in cash of £625,000 and Brooks Macdonald Group
plc shares valued at £625,000. As a result, a change in fair value
of the contingent consideration of £173,000 was recognised after 30
June 2023. This revised deferred contingent consideration was
settled during the six months ended 31 December 2023.
Deferred contingent consideration is
classified as Level 3 within the fair value hierarchy, as defined
in Note 14.
17.
Provisions
|
Client
compensation
£'000
|
Regulatory
levies
£'000
|
Leasehold
dilapidations
£'000
|
Tax-
related
£'000
|
Total
£'000
|
At 30 June 2022
|
112
|
386
|
367
|
280
|
1,145
|
Charged to the Condensed
consolidated
statement of comprehensive income
|
809
|
34
|
55
|
-
|
898
|
Utilised during the
period
|
(222)
|
(418)
|
-
|
-
|
(640)
|
At 31 December 2022
|
699
|
2
|
422
|
280
|
1,403
|
Charged to the Condensed
consolidated
statement of comprehensive income
|
(230)
|
205
|
205
|
-
|
180
|
Utilised during the
period
|
(219)
|
(40)
|
(2)
|
-
|
(261)
|
At 30 June 2023
|
250
|
167
|
625
|
280
|
1,322
|
Charged to the Condensed
consolidated
statement of comprehensive income
|
219
|
-
|
45
|
-
|
264
|
Utilised during the
period
|
(321)
|
(167)
|
(192)
|
-
|
(680)
|
At
31 December 2023
|
148
|
-
|
478
|
280
|
906
|
|
|
|
|
|
|
Analysed as:
|
|
|
|
|
|
Amounts falling due within one
year
|
148
|
-
|
216
|
280
|
644
|
Amounts falling due after more than
one year
|
-
|
-
|
262
|
-
|
262
|
Total provisions
|
148
|
-
|
478
|
280
|
906
|
a)
Client compensation
Client compensation provisions
relate to the potential liability arising from client complaints
against the Group. Complaints are assessed on a case-by-case basis
and provisions for compensation are made where judged necessary.
The amount recognised within provisions for client compensation
represents management's best estimate of the potential liability.
The timing of the corresponding outflows is uncertain as these are
made as and when claims arise.
b)
Regulatory levies
At 31 December 2023 provisions
include an amount of £nil (at 31 December 2022: £2,000; at 30 June
2023: £167,000) in respect of expected levies by the Financial
Services Compensation Scheme ("FSCS").
c)
Leasehold dilapidations
Leasehold dilapidations relate to
dilapidation provisions expected to arise on leasehold premises
held by the Group, and monies due under the contract with the
assignee of leases on the Group's leased properties. The
non-current leasehold dilapidations provision relate to expected
economic outflow at the end of lease terms, with the longest lease
term ending in four years from the Condensed consolidated statement
of financial position date.
d)
Tax-related
Tax-related provisions relate to
voluntary disclosures made by the Group to HM Revenue and Customs
("HMRC") following an input VAT review carried out by the Group
during FY22.
18.
Reconciliation of operating profit to net cash inflow from
operating activities
|
Six months
ended
31 Dec 2023
(unaudited)
£'000
|
Six months
ended
31 Dec
2022 (unaudited)
£'000
|
Year
ended
30 Jun
2023 (audited)
£'000
|
|
Operating profit before tax
|
9,374
|
9,623
|
21,408
|
|
|
|
|
Adjustments for:
|
|
|
|
- Depreciation of property, plant
and equipment
|
426
|
394
|
824
|
- Depreciation of right-of-use
assets
|
1,060
|
914
|
1,825
|
- Amortisation of intangible
assets
|
3,673
|
3,258
|
6,832
|
- Other (losses)/gains -
net
|
(46)
|
(2)
|
162
|
- Decrease/(increase) in
receivables
|
4,128
|
(1,193)
|
(2,215)
|
- Decrease in payables
|
(1,163)
|
(9,004)
|
(1,526)
|
- Decrease in provisions
|
(416)
|
(258)
|
(147)
|
- Increase/(decrease) in other
non-current liabilities
|
86
|
(170)
|
244
|
- Share-based payments
charge
|
1,757
|
1,953
|
2,686
|
Net
cash inflow from operating activities
|
18,879
|
5,515
|
30,093
|
19.
Share capital and share premium
The movements in share capital and
share premium during the six months ended 31 December 2023 were as
follows:
|
Number of
shares
|
Exercise
price
p
|
Share
capital
£'000
|
Share
premium
£'000
|
Total
£'000
|
At 30 June 2022
|
16,205,542
|
|
162
|
79,141
|
79,303
|
Shares issued:
|
|
|
|
|
|
- to Sharesave Scheme
|
7,130
|
1,922.5 -
2,250.0
|
-
|
100
|
100
|
- of consideration for the
acquisition of Integrity
|
52,084
|
1,920.0
|
1
|
999
|
1,000
|
At 31 December 2022
|
16,264,756
|
|
163
|
80,240
|
80,403
|
Shares issued:
|
|
|
|
|
|
- on exercise of options
|
1,866
|
1,629.8 -
2,260.0
|
-
|
30
|
30
|
- to Sharesave Scheme
|
133,041
|
1,400.0 -
2,300.0
|
1
|
1,560
|
1,561
|
At 30 June 2023
|
16,399,663
|
|
164
|
81,830
|
81,994
|
Shares issued:
|
|
|
|
|
|
- on exercise of options
|
2,067
|
1,900.0
|
-
|
30
|
30
|
- to Sharesave Scheme
|
10,914
|
1,172.0 -
1,704.0
|
-
|
132
|
132
|
- for deferred contingent
consideration
|
28,748
|
21,740.0
|
-
|
625
|
625
|
At
31 December 2023
|
16,441,392
|
|
164
|
82,617
|
82,781
|
The total number of ordinary shares
issued and fully paid at 31 December 2023 was 16,441,392 (at
31 December 2022: 16,264,756; at 30 June 2023:
16,399,663).
Employee Benefit Trust
The Group established an Employee
Benefit Trust ("EBT") on 3 December 2010 to acquire ordinary shares
in the
Company to satisfy awards under the Group's Long-Term Incentive
Scheme ("LTIS") and Long-Term Incentive Plan
("LTIP"). At 31 December 2023, the EBT held 505,815 (at 31 December
2022: 552,889; at 30 June 2023: 552,633) 1p ordinary shares in the
Company, acquired for a total consideration of £18,200,000 (at 31
December 2022: £15,900,000; at 30 June 2023: £16,950,000) with a
market value of £9,509,000 (at 31 December 2022: £11,700,000; at 30
June 2023: £11,633,000). They are classified as treasury shares in
the Condensed consolidated statement of financial position, with
their cost being deducted from retained earnings within
shareholders' equity.
20.
Equity-settled share-based payments
Share options granted during the six
months ended 31 December 2023 under the Group's equity-settled
share-based payment schemes were as follows:
|
Exercise
price
p
|
Fair value
p
|
Number of
options
|
Long Term Incentive Plan
|
-
|
1,514 -
1,649
|
203,739
|
No options were granted in respect
of the Company's other equity-settled share-based payment schemes
during the six months ended 31 December 2023. The charge to the
Condensed consolidated statement of comprehensive income for the
six months ended 31 December 2023 in respect of all equity settled
share-based payment schemes was £1,757,000 (six months ended
31 December 2022: £1,953,000; year ended 30 June 2023:
£2,686,000).
21.
Related party transactions
Transactions between the Company and
its subsidiaries, which are related parties, are eliminated on
consolidation. The Company's individual financial statements
include the amounts attributable to subsidiaries. These amounts are
disclosed in aggregate in the relevant company financial statements
and in detail in the following table:
|
Amounts owed by/(to) related
parties
|
|
31 Dec 2023
(unaudited)
£'000
|
31 Dec
2022 (unaudited)
£'000
|
30 Jun
2023 (audited)
£'000
|
Brooks Macdonald Asset Management
Limited
|
(223)
|
1,471
|
239
|
Brooks Macdonald Asset Management
(International) Limited
|
(28)
|
(90)
|
83
|
Brooks Macdonald Funds
Limited
|
(900)
|
(900)
|
(900)
|
Brooks Macdonald Financial
Consulting Limited
|
-
|
(34)
|
-
|
All of the above amounts are
interest-free and repayable on demand.
22.
Guarantees and contingent liabilities
In the normal course of business,
the Group is exposed to certain legal and regulatory issues, which,
in the event of a dispute, could develop into litigious proceedings
and, in some cases, may result in contingent liabilities.
Similarly, a contingent liability may arise in the event of a
finding in respect of the Group's tax affairs, including the
accounting for VAT, which could result in a financial outflow
and/or inflow from the relevant tax authorities.
A claim for unspecified losses has
been made by a client against Brooks Macdonald Financial Consulting
Limited, a subsidiary of the Group, in relation to alleged
negligent financial advice. The claimant has not yet advised the
quantum of their claim so it is not possible to reliably estimate
the potential impact of a ruling in their favour. There remains
significant uncertainty surrounding the claim and the Group's legal
advice indicates that it is not probable that the claim will be
upheld; therefore no provision for any liability has been
recognised at this stage.
As at 31 December 2023, there are no
claims issued against the Group in relation to the legacy matters
as previously announced in 2017. The Group continues to recognise a
contingent liability in relation to the possibility that one or
more of a small number of clients might seek to claim against the
Group on this matter.
Brooks Macdonald Asset Management
Limited, a subsidiary company of the Group, has an agreement with
the Royal Bank of Scotland plc to guarantee settlement for trading
with CREST stock on behalf of clients. The Group holds client
assets to fund such trading activity.
23.
Principal risks and uncertainties
The principal risks and
uncertainties facing the Group are in line with those disclosed and
included within the Group's Annual Report and Accounts for the year
ended 30 June 2023.
24.
Events since the end of the period
No material events have occurred
between the reporting date and the date of signing the Condensed
consolidated financial statements.
Non-IFRS financial information
Non-IFRS financial information or
Alternative Performance Measures ("APMs") are used as supplemental
measures in monitoring the performance of the Group. The
adjustments applied to IFRS measures to compute the Group's APMs
excludes income and expense categories which are deemed of a
non-recurring nature or a non-cash operating item. The Board
considers the disclosed APMs to be an appropriate reflection of the
Group's performance and considered appropriate for external analyst
coverage and peer group benchmarking.
The Group follows a rigorous process
in determining whether an adjustment should be made to present an
Alternative Performance Measure compared to IFRS measures. For an
adjustment to be excluded from underlying profit as an Alternative
Performance Measure compared to statutory profit, it must initially
meet at least one of the following criteria:
• It is unusual in
nature, e.g. outside the normal course of business and
operations.
• It is a
significant item, which may be recognised in more than one
accounting period.
• It has been
incurred as a result of either an acquisition, disposal or a
company restructure process.
The Group uses the below
APMs:
APM
|
Equivalent IFRS measure
|
Definition and purpose
|
Underlying profit before
tax
|
Statutory profit before
tax
|
Calculated as profit before tax
excluding income and expense categories which are deemed of a
non-recurring nature or a non-cash operating item. It is considered
by the Board to be an appropriate reflection of the Group's
performance and considered appropriate for external analyst
coverage and peer group benchmarking.
|
Underlying tax charge
|
Statutory tax charge
|
Calculated as the statutory tax
charge, excluding the tax impact of the adjustments excluded from
underlying profit.
See Note 7 Taxation
|
Underlying earnings/ Underlying
profit after tax
|
Total comprehensive
income
|
Calculated as underlying profit
before tax less the underlying tax charge.
See Note 9 for a reconciliation of
underlying profit after tax and statutory profit after
tax.
|
Underlying profit margin before
tax
|
Statutory profit margin before
tax
|
Calculated as underlying profit
before tax over revenue for the period. This is another key metric
assessed by the Board and appropriate for external analyst coverage
and peer group benchmarking.
|
Underlying basic earnings per
share
|
Statutory basic earnings per
share
|
Calculated as underlying profit after
tax divided by the weighted average number of shares in issue
during the period. This is a key management incentive metric and is
a measure used within the Group's remuneration schemes.
See Note 9 Earnings per
share.
|
Underlying diluted earnings per
share
|
Statutory diluted earnings per
share
|
Calculated as underlying profit after
tax divided by the weighted average number of shares in issue
during the period, including the dilutive impact of future share
awards. This is a key management incentive metric and is a measure
used within the Group's remuneration schemes.
See Note 9 Earnings per
share.
|
Underlying costs
|
Statutory costs
|
Calculated as total administrative
expenses, other net gains/(losses), finance income and finance
costs and excluding income and expense categories which are deemed
of a non-recurring nature or a non-cash operating item. This is a
key measure used in calculating underlying profit before
tax.
|
Segmental underlying profit before
tax
|
Segmental statutory profit before
tax
|
Calculated as profit before tax
excluding income and expense categories which are deemed of a
non-recurring nature or a non-cash operating item for each
segment.
See Note 3 Segmental
information.
|
Segmental underlying profit before
tax margin
|
Segmental statutory profit before
tax margin
|
Calculated as segmental underlying
profit before tax over segmental revenue.
|
Own Funds Capital Adequacy
Ratio
|
N/A
|
Calculated as the Group's total
regulatory resources relative to its Fixed Overhead
requirement.
|
Further information
Financial calendar
Interim results announced
|
7 March 2024
|
Ex-dividend date for interim
dividend
|
14 March 2024
|
Record date for interim
dividend
|
15 March 2024
|
Payment date of interim
dividend
|
16 April 2024
|
Cautionary statement
The Interim Report and Accounts for
the six months ended 31 December 2023 has been prepared to provide
information to shareholders to assess the current position and
future potential of the Group. The Interim Report and Accounts
contains certain forward-looking statements concerning the Group's
financial condition, operations and business opportunities. These
forward-looking statements involve risks and uncertainties that
could impact the actual results of operations, financial condition,
liquidity, dividend policy and the development of the industry in
which the Group operates and differ materially from the impression
created by the forward-looking statements. Any forward-looking
statement is made using the best information available to the
Directors at the time of their approval of this report. Past
performance cannot be relied on as a guide to future
performance.