TIDMQYM
RNS Number : 2632O
Quayle Munro Holdings PLC
15 September 2011
Quayle Munro Holdings PLC
("Quayle Munro" or the "Group")
Results for the year ended 30 June 2011
Highlights
Strong Performance from Advisory Business
-- Revenue GBP14.7m compared with GBP15.7m last year.
-- Normalised profit before tax GBP3.0m (2010 - GBP3.1m).
-- Statutory profit before tax, including the impact of share
awards, bonus payments and impairment charges GBP0.2m (2010 -
GBP10.9m).
-- Strong second half performance from the advisory business -
good pipeline of work.
-- Advised on a number of major transactions, for companies
including Virgin Group, Lloyds Development Capital, Pell
Frischmann, Telereal Trillium and TDR Capital.
-- Final dividend of 22p per share - increased by 10%. Total
dividends 32p per share (2010 - 30p per share, excluding 2010
special dividend of 100p per share).
-- Net asset value per share at 30 June 2011, 908p per share,
(2010 - 1002p per share).
-- Basic earnings (23.2)p per share (2010 - 203.1p) with fully
diluted earnings of (21.2)p per share (2010 - 194.4p).
Andrew Tuckey, Chairman, commented:
"After a slow start I am pleased that business picked up
considerably in the second half and revenues for the year were only
marginally lower than last year. We regard this as being a most
acceptable outcome, particularly when viewed against the market for
advisory business which was especially difficult last year. While
it is hard in our business to predict the outcome of the following
year, our pipeline of prospects is good and our name and reputation
in the market is growing."
For further information:
Quayle Munro Holdings PLC
Andrew Tuckey, Chairman 020 7907 4200
Brewin Dolphin Limited (Nominated Advisor)
Sandy Fraser 0131 529 0272
Smithfield (Financial PR)
John Kiely 020 7360 4900
Chairman's statement
I am pleased to report on our results for the latest financial
year. Whilst on the face of it the overall result is disappointing,
largely due to the statutory accounting requirements relating to
impairment and share scheme cost charges as set out below, the
strong performance from the advisory business is a considerable
achievement in difficult market conditions.
Results
The Group result derives almost entirely from the advisory
business which had another successful year. In contrast to last
year there were no material investment gains and furthermore, in
compliance with IAS 36, we were required to take an impairment
accounting charge relating to our investments in Tayside Flow
Technology Limited ("TFT") and Nevis Range Development Company plc
("Nevis"). Both investments were previously impaired in our balance
sheet under UK generally accepted accounting practice. In value
terms for our shareholders, there is no change resulting from the
impairment accounting charge.
A summary of the Group's results is shown below. We show the
figures both as set out in the statutory accounts and adjusted for
the share scheme component in our remuneration. Under IFRS 2, (the
accounting standard) we are required to amortise the costs of share
issues over the vesting period; however, the Board regards the
decision to award shares as a substitute for a cash bonus as being
a commitment at the time it is made as these awards have been
allocated from the bonus pool in each year. Accordingly, the table
below also shows the effect on profits if all the commitments to
award shares are charged against the year when they are made. In
addition, the table also shows the Group's pre tax profit adjusted
for non recurring items:
2011 2010
GBP'000 GBP'000
------------------------------------------------------------- ---------- ----------
Profit before tax - under IFRS 162 10,860
------------------------------------------------------------- ---------- ----------
***Profit before tax adjusted to account for JOE*
and LTIP** schemes - to illustrate the effect
on profits if all the commitments to award shares
are charged against the year when they are made
Add the cost of the un-charged 2010 JOE bonus
cost - (1,517)
Remove 2010 JOE cost - accounted for in 2011 708 -
Add the cost of the un-charged 2011 JOE bonus
cost (684) -
Remove future LTIP tranche costs - IFRS accounted
for in 2011 751 -
------------------------------------------------------------- ---------- ----------
Re-stated profit before tax 937 9,343
------------------------------------------------------------- ---------- ----------
Profit before tax adjusted to normalise for non
recurring items
Add exceptional items 202 1,200
Remove investment gains (167) (7,107)
Remove share of profits of associate (sold FY
09/10) - (602)
Add impairment of investments held as available-for-sale 2,019 125
Add loss for the year from discontinued operations - 95
Re-stated profit before tax 2,991 3,054
------------------------------------------------------------- ---------- ----------
*Jointly owned equity award (JOE).
**Long term incentive plan (LTIP). The LTIP was awarded in July
2010, with the primary objective of retaining key staff.
***In accordance with IFRS 2, the current year results include a
charge of GBP1.2m in respect of the LTIP scheme reflecting
amortisation of the cost of (all four tranches of) the LTIP award,
from scheme implementation on 1 July 2010. Subject to achieving
profit targets, each tranche vests annually (between December 2010
and December 2013) accordingly the LTIP cost chargeable against
future profits will reduce in subsequent years as each tranche
becomes fully vested. The effect of the LTIP adjustment above is to
account for only the cost of the LTIP first tranche, granted on 1
July 2010 (vested 31 December 2010), leaving further LTIP grants to
be accounted for in future financial years. In addition, under IFRS
2, the JOE share based bonus is apportioned over the scheme vesting
period. The current year bonus includes GBP0.4m (2010 - GBP0.5m) of
such cost, leaving a balance of GBP0.7m (2010 - GBP1.5m) chargeable
against future profits.
Group administrative expenses (after bonus and before
exceptional items and share based reward costs) were GBP10.2m, a
decrease from GBP10.6m in 2010. Other operating expenses and gains
(reflecting share based reward costs) were GBP2.8m, increasing from
GBP1.1m in the previous year, reflecting charges for the 2011 JOE
award and additional charges for both the 2010 LTIP and JOE
schemes.
Total bonuses for the year, as approved by the Remuneration
Committee of the Board, amounted to GBP3.8m, including GBP0.7m of
JOE share based bonus, chargeable against future profits - (2010 -
GBP5.4m including GBP1.5m of JOE share based bonus, chargeable
against future profits). 28% of the bonus pool has not been paid in
cash but awarded in shares, the recipients being Managing Directors
and a small number of senior employees. These shares are awarded
after the balance sheet date and will be held in a joint ownership
structure, vesting in three equal amounts at the end of each year
commencing 31 December 2012. The total number of shares to be
issued under this scheme is approximately 175,000. The final award
will be based on the average closing share price over the ten days
immediately after the release of the annual results.
The bonus scheme is extremely important in retaining our key
producers and attracting new talent. Paying part of the bonus in
shares which vest over time is not only essential in aligning
employees with shareholders but is in line with best practice as
set out in the new Remuneration Code.
After the impairment of TFT and Nevis and after share option
charges, basic earnings per share were (23.2)p (2010 - 203.1p) with
fully diluted earnings per share of (21.2)p (2010 - 194.4p).
Adjusting for deferred bonuses as if they were cash settled in the
year and for non recurring items, basic earnings per share rise to
45.0p.
Advisory business
After a slow start, business picked up considerably in the
second half and revenues for the year were only marginally lower
than last year. I regard this as being a most satisfactory outcome,
particularly when viewed against the market for advisory business
which was especially difficult last year.
The sectors in which we participate are unchanged and, as with
the previous year, the media group is our largest contributor. We
continue to diversify our sources of revenue both by increasing our
business in the other sectors and by seeking more public company
and general advisory work. In addition, we are encouraged by the
progress made in our debt advisory business, although this is still
at an early stage of development. Some highlights from a wide range
of assignments undertaken during the year are set out below:
-- Media - advising on the sale of Bentek and Steel Business
Briefing to Platts, a division of The McGraw-Hill Companies and the
sale of ODS Petrodata to IHS Inc.
-- Financial Institutions - advising TDR Capital on the
acquisition of Lowell Group from Exponent.
-- Energy and Renewables - advising on the sale of a majority
stake in Baillie Wind Farm to Statkraft, the state owned Norwegian
utility.
-- Infrastructure - advising the Community Lighting Partnership
consortium comprising Pell Frischmann and Telereal Trillium on the
Oldham & Rochdale street lighting projects.
-- Education - advising University of Strathclyde on the
sourcing and negotiation of a GBP90m loan facility from the
European Investment Bank.
Despite strenuous efforts and some good relationships, no
transactions were completed in the retail sector during the year,
although we continue to believe this sector provides good
opportunities for us in the future.
As reported at the interim stage, Tim Shortland and Stuart
Roberts joined as Managing Directors during the year, strengthening
our capabilities at a senior level. We continue to recruit at other
levels and have recently added new associates and analysts and the
business is now better balanced between origination and execution.
The market for good staff remains very competitive and we devote
much time and effort to recruitment, ensuring we only hire the
highest quality professionals.
The advisory business is tightly managed to ensure we pursue the
right new business opportunities, maintain the highest standards in
client approvals and ensure our excellent reputation for execution
is sustained.
The pipeline for the current year is strong and the team
continues to be very busy and we are hopeful of another good
result.
Morris
While the housing market has seen a measure of recovery,
macroeconomic conditions remain challenging and it is anticipated
that the market place will remain constrained in the medium term.
Restriction of availability of finance for buyers along with
fragile consumer confidence continue to impact sales activity and
the volume of housing transactions in the UK.
Morris performed well for the year ended 31 March 2011, audited
results include; sales of GBP136m (2010 - GBP126m), pre-exceptional
operating profits of GBP22m (2010 - GBP19m) and pre-exceptional
profits before tax of GBP3m, compared to GBP2m in the previous
year.
Morris believes that it is well placed to address the market
challenges, largely due to re-structuring the business over the
last two years along with its strong history of developing high
quality homes.
During the year Morris put in place a new bank facility for 3
years to 31 March 2014 with its existing bankers RBS and the Bank
of Ireland.
The current financial year has started cautiously, with some
slippage in volume, albeit that this is largely offset by strong
operating margins. On a calendar year basis there is a marked
improvement in trading with turnover up 20% and operating profits
up 16% on the prior year.
We have carefully considered the valuation of our holding in
Morris. Discounting the net tangible worth basis remains an
appropriate valuation basis rather than using price earnings
multiples which make little sense with continued earnings
volatility in this sector. Using this basis (and applying a
discount of 44%) results in an un-changed valuation of GBP5.1m for
our equity interest, which when combined with our loan stock (fair
valued at par) gives an un-changed total valuation of GBP9.3m (2010
- GBP9.3m).
Other investments
We continue to hold a number of other small unquoted
investments. As mentioned above, we were required to impair the
investments in TFT and Nevis. As one of its original investors, we
have supported TFT over many years. TFT has recently received
further funding from a number of new investors but it will need to
raise further significant amounts of new funding in order to
commercialise its products. Nevis, the outdoor sports facility near
Fort William, has continued to broaden its range of visitor
activities and had a satisfactory year. AMG Security Systems is
continuing to perform well and is winning a number of new orders.
As indicated in our interim results, Duncton, the subprime car loan
provider, which recently changed its name to Moneybarn, completed a
major refinancing last October. We have made small adjustments to
our carrying valuations of AMG and Duncton.
Net assets and liquidity
In November 2010 the Company issued 258,001 ordinary shares of
which 229,473 shares were allocated under the 2010 JOE share based
award jointly to qualifying employees and to the trustee of The
Quayle Munro Holdings PLC Employees' Share Trust ("the offshore
Employee Benefit Trust").
After the 2010 special and final dividends, the Group's retained
earnings fell from GBP24.2m to GBP18.0m. At 30 June 2011, net asset
value per share was 908p (2010 - 1,002p).
After payment of the proposed dividends, set out below, and the
cash element of the staff bonus, the Group has cash resources of
approximately GBP13.7m. We will continue to buy in shares when
opportunities arise and where this is financially beneficial to the
Company. Given the low level of market activity in our shares, this
also provides liquidity for shareholders. Over many years the
Company has been successful in making investments in businesses in
which we have some involvement and, very selectively, we expect to
continue this policy in the future.
Dividend
The Company paid a final dividend of 20p per share and a special
dividend of 100p per share during November 2010 and an interim
dividend of 10p per share in March this year. It is now proposed to
pay a final dividend of 22p per share, an increase of 10% over last
year. The final dividend will be paid on 10 November 2011 to
shareholders who are on the register on 14 October 2011.
Board and management
There have been no changes to the Board during the year and I am
grateful to my colleagues for their time and commitment to the
business.
The management structure which we put in place last year with
Andrew Adams in London and Rob Cormie in Edinburgh jointly running
the advisory business, with support from Simon Woolton as COO,
continues to work well.
Staff
The result this year would not have been possible without the
dedication of staff who, particularly in the second half, worked
all hours and many weekends. On your behalf I would like to express
my thanks to all our staff, both the professionals and support
staff, for their fine efforts. We now have a professional team of
the very highest order who have the ability and ambition to take
the business to the next level.
Prospects
I said last year that it is particularly difficult in our
business to predict the outcome of the following year and this is
compounded by the volatile and uncertain markets in which we
currently operate. However, our pipeline of prospects is good and
our name and reputation in the market is growing.
Andrew Tuckey
15 September 2011
Group statement of comprehensive income
For the year ended 30 June 2011
2011 2010
GBP'000 GBP'000
--------- ---------
Continuing
operations
Revenue 14,744 15,662
--------- ---------
Administrative
expenses (10,188) (10,564)
Impairment of
investments held
as available
for-sale (2,019) (125)
Gain on sale of
available-for-sale
investments - 2,297
Gain on sale of
associate 167 4,810
Exceptional
expenses (202) (1,200)
Other operating
expenses and
gains (2,811) (1,077)
(15,053) (5,859)
--------- ---------
Share of profit of
associate
accounted for
using the equity
method - 602
--------- ---------
Group operating
(loss) / profit (309) 10,405
--------- ---------
Finance income 439 563
Other finance
income / (costs) -
pensions 32 (13)
471 550
--------- ---------
Profit for the year
from continuing
operations 162 10,955
Discontinued
operations
Loss for the year
from discontinued
operations - (95)
Profit on ordinary
activities before
tax 162 10,860
Tax expense (1,123) (1,606)
--------- ---------
(Loss) / profit on
ordinary
activities after
tax (961) 9,254
--------- ---------
Group statement of comprehensive income (continued)
For the year ended 30 June 2011
Note 2011 2010
GBP'000 GBP'000
-------- --------
(Loss) / profit for the year attributable
to shareholders of the Company (961) 9,254
Other comprehensive income / (expense)
Gain / (loss) on valuation of
available-for-sale financial assets 368 (58)
Actuarial gain on defined benefit pension
scheme 213 42
Total comprehensive (expense) / income
for the year (380) 9,238
-------- --------
Earnings per share (pence)
Basic earnings per share 3 (23.2) p 203.1 p
Diluted earnings per share 3 (21.2) p 194.4 p
Group statement of financial position
At 30 June 2011
2011 2010
GBP'000 GBP'000
-------- --------
Non-current assets
Property, plant and equipment 742 731
Intangible assets 11,630 11,630
Financial assets 10,070 9,655
Defined benefit pension scheme
surplus 785 265
23,227 22,281
-------- --------
Current assets
Trade and other receivables 5,571 2,300
Current tax asset 49 12
Cash and short-term deposits 17,494 23,237
--------
23,114 25,549
-------- --------
Total assets 46,341 47,830
-------- --------
Current liabilities
Trade and other payables 4,137 3,831
Current tax liabilities 456 883
--------
4,593 4,714
-------- --------
Non-current liabilities
Financial liabilities 260 6
Deferred tax liability 50 4
--------
310 10
-------- --------
Total liabilities 4,903 4,724
-------- --------
Net assets 41,438 43,106
-------- --------
Capital and reserves
Equity share capital 11,145 9,277
Revaluation reserve 9,303 6,916
Other reserves 2,953 2,734
Retained earnings 18,037 24,179
-------- --------
Total equity 41,438 43,106
-------- --------
Andrew Tuckey
Chairman
15 September 2011
Group statement of changes in equity
For the year ended 30 June 2011
Share Own Total
Equity Capital option shares Total equity
share Revaluation redemption Merger expense held other Retained and
capital reserve reserve reserve reserve reserve reserves earnings reserves
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------- ------------ ----------- -------- -------- -------- --------- --------- ---------
Balance at 30
June 2009 9,305 7,262 127 1,229 1,151 - 2,507 17,639 36,713
Comprehensive
Income
Profit for the
year - - - - - - - 9,254 9,254
Realised on sale
of investments - (413) - - - - - - (413)
Loss on
revaluation of
investments - (58) - - - - - - (58)
Re-classification
of previous
impairment - 125 - - - - - - 125
Actuarial gain on
defined benefit
pension scheme - - - - - - - 42 42
Transactions with
owners
Share based
payments - - - - 929 - 929 - 929
Purchase of shares
for Employee
Benefit Trust - - - - - (730) (730) - (730)
Cancelled shares (28) - 28 - - - 28 (1,400) (1,400)
Equity dividends
paid - - - - - - - (1,356) (1,356)
------------------- -------- ------------ ----------- -------- -------- -------- --------- --------- ---------
Balance at 30
June 2010 9,277 6,916 155 1,229 2,080 (730) 2,734 24,179 43,106
Comprehensive
income
Loss for the year - - - - - - - (961) (961)
Gain on
revaluation of
investments - 368 - - - - - - 368
Re-classification
of previous
impairment - 2,019 - - - - - - 2,019
Actuarial gain on
defined benefit
pension scheme - - - - - - - 213 213
Transactions with
owners
Share based
payments - - - - 2,372 - 2,372 - 2,372
Issue of shares 1,868 - - - - - - - 1,868
Movement of shares
in Employee
Benefit Trust - - - - - (2,153) (2,153) 29 (2,124)
Equity dividends
paid - - - - - - - (5,423) (5,423)
------------------- -------- ------------ ----------- -------- -------- -------- --------- --------- ---------
Balance at 30
June 2011 11,145 9,303 155 1,229 4,452 (2,883) 2,953 18,037 41,438
------------------- -------- ------------ ----------- -------- -------- -------- --------- --------- ---------
Group statement of cash flows
For the year ended 30 June 2011
2011 2010
GBP'000 GBP'000
-------- --------
Operating activities
Profit before tax 162 10,860
Adjustments to reconcile profit before tax
to net cash inflow from operating activities
Finance income (439) (563)
Finance expense - 1
Depreciation 180 151
Share of profit of associate - (602)
Share-based payments 2,372 929
Gain on disposal of equipment (6) -
Gains on disposals of financial assets (167) (7,107)
Impairment of financial assets 2,019 125
Movement in pensions (181) (52)
(Increase) / decrease in assets (3,271) 1,215
Increase in liabilities 570 2,441
-------- --------
Cash generated from operations 1,239 7,398
Income taxes paid (1,545) (1,057)
Net cash flow from operating activities (306) 6,341
-------- --------
Investing activities
Finance income received 334 548
Proceeds from sales of available-for-sale
financial assets 167 16,057
Proceeds on disposal of equipment 93 -
Payments to acquire plant and equipment (278) (178)
Payments to acquire available-for-sale financial
assets (47) (3,046)
Net cash flow from investing activities 269 13,381
-------- --------
Financing activities
Dividends paid to equity shareholders of the
parent (5,423) (1,356)
Own shares purchased (283) (2,182)
Repayment of borrowings - loan notes repaid - (499)
Finance expense paid - (14)
Net cash flow from financing activities (5,706) (4,051)
-------- --------
(Decrease) / increase in cash and cash equivalents (5,743) 15,671
Cash and cash equivalents at the beginning
of the year 23,237 7,566
-------- --------
Cash and cash equivalents at the end of the
year 17,494 23,237
-------- --------
Notes to the Group financial statements
At 30 June 2011
1. The financial statements of Quayle Munro Holdings PLC and its
subsidiaries (the "Group and Parent Company financial statements")
for the year ended 30 June 2011 were authorised for issue by the
Board of Directors on 15 September 2011 and the statement of
financial position was signed on the Board's behalf by Andrew
Tuckey. Quayle Munro Holdings PLC is a public limited company
incorporated and domiciled in Scotland. The Company's ordinary
shares are traded on the Alternative Investment Market.
The Group's financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union as they apply to the
financial statements of the Group for the year ended 30 June
2011.
2. The Group is managed primarily by class of business and
presents the segmental analysis on that basis. The Group's
activities are organised in two primary divisions: Advisory and
Other (Head Office). Fund management activity was discontinued in
the previous year. The following table presents revenue and results
information regarding the Group's business segments for the years
ended 30 June 2011 and 2010.
Year Year
ended ended
30 June 30 June
2011 Fund 2010
Advisory Other Total Advisory Management Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- -------- -------- --------- ----------- -------- --------
Segment
revenue 14,472 272 14,744 15,452 210 - 15,662
--------- --------- -------- -------- --------- ----------- -------- --------
Segment
profit
/
(loss)
before
tax 2,358 (2,196) 162 4,336 (745) 7,269 10,860
--------- --------- -------- -------- --------- ----------- -------- --------
3. Basic earnings per share is calculated by dividing earnings
for the year of GBP(1.0)m (2010 - GBP9.3m) attributable to ordinary
equity holders of the parent by 4.1m, being the weighted average
number of shares in issue during the year (2010 - 4.6m). Diluted
earnings per share is calculated by dividing the earnings
attributable to ordinary equity holders of the parent by 4.5m,
being the weighted average of ordinary shares outstanding during
the year plus the weighted average number of ordinary shares that
would be issued on the conversion of all the dilutive potential
ordinary shares into ordinary shares (2010 - 4.8m).
4. In view of the Group's continuing strong liquidity and a
satisfactory level of continuing activity, the Directors recommend
a final dividend of 22p per share. The final dividend will be paid
on 10 November 2011 to shareholders who are on the register on 14
October 2011.
5. The statement of comprehensive income and statement of
financial position for the year ended 30 June 2011 do not
constitute statutory accounts within the meaning of s240 Companies
Act 2006. They are an extract from the full Group accounts, which
will be the subject of an unqualified audit report.
6. The net asset value per share was 908p (2010 - 1002p) based
on net assets of GBP41.4m (2010 - GBP43.1m) and on 4.6m (2010 -
4.3m) ordinary shares being in issue at 30 June 2011 and 2010.
7. The Annual Report will be circulated to all shareholders and,
thereafter, copies will be available from the Company Secretary at
102 West Port, Edinburgh EH3 9DN.
8. Notice is hereby given that the thirty first Annual General
Meeting of the Company will be held at 22-24 Berners Street,
London, W1T 3LP on 9 November 2011, at 12 noon.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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