TIDMARDN
RNS Number : 9410B
Arden Partners plc
16 January 2018
Arden Partners plc
("Arden" or the "Company" or the "Group")
Audited results for the year ended 31 October 2017
Arden Partners plc (AIM: ARDN), the institutional stockbroking
company, today announces audited results for the year ended 31
October 2017.
Financial highlights
-- Revenue GBP10.5 million (2016: GBP5.9 million)
-- Profit before tax GBP0.7 million (2016 loss: GBP0.4 million)
-- Underlying profit before tax* GBP1.2 million (2016 loss: GBP0.5 million)
-- Basic earnings per share 3.3p (2016 loss per share: 2.5p)
-- Capital adequacy ratio 652% (2016: 404%)
-- Proposed dividend 1.0p per share (2016: nil)
* Profit before tax as adjusted for the effect of share based
payments, restructuring costs (including non recurring costs
related to the appointment and termination of personnel) and lease
settlement credit
Commenting on the results and Arden's outlook, Luke Johnson,
Chairman, said:
"We are confident that the business is in the midst of a
successful turnaround. A new executive team has been appointed, and
they have rapidly taken the business from losses into net profits
for the full year. There is still much to be done, but I believe
that Arden now has the resources and the people to deliver."
"As a demonstration of our confidence in the future we are
pleased to propose a 1p per share final dividend."
Arden Partners plc 020 7614 5900
Donald Brown - Chief Executive Officer
James Reed-Daunter - Executive Director
GCA Altium Limited 020 7484 4040
Sam Fuller / Tim Richardson
Chairman's Statement
The last few years have been challenging for the broking
industry, and in particular for small and mid-cap stockbrokers. A
sustainable revival in corporate performance is dependent on
confidence amongst fund managers and a significant indicator of
this is their willingness to invest in their brokers.
Arden Partners announced in June this year that it raised GBP5m
of inward investment to reinforce our already strong balance sheet,
and I am pleased that we now have some of the major names in the
fund management industry as shareholders.
We were delighted to announce the appointment of Donald Brown as
our new Chief Executive Office in May 2017. Our enlarged balance
sheet has heightened our profile in the sector and enabled us to
attract key new appointments - including experienced and senior
staff. We have taken the opportunity to reshape our equities
operation and the new structure has already had a demonstrably
positive impact on our revenues.
We are confident that the business is in the midst of a
successful turnaround. A new executive team has been appointed, and
they have rapidly taken the business from losses into net profits
for the full year. There is still much to be done, but I believe
that Arden now has the resources and the people to deliver.
The Company continues to monitor its cost base carefully and our
staff numbers remain steady. Our corporate client numbers also
remained consistent and we aim to both deepen existing
relationships and develop new ones.
The broking industry is in need of further consolidation and we
are always prepared to explore opportunities to combine with
complementary businesses to facilitate cost savings and revenue
expansion. Meanwhile our healthy balance sheet puts us in an
excellent position for possible expansion.
As a demonstration of our confidence in the future we are
pleased to propose a 1p per share final dividend.
I would like to thank my Board, our corporate and institutional
clients and all our hard-working staff for the support during this
year. We look forward to the future with considerable
anticipation.
Luke Johnson
Chairman
Chief Executive's Statement
In my first statement as Chief Executive of Arden Partners plc,
I am pleased to report a pre-tax profit for the year ended 31
October 2017 of GBP700,000 and underlying profit before tax of
GBP1.2 million. The Company was loss-making in 2016 with
corresponding figures of GBP400,000 and GBP500,000
respectively.
Financial Review
Revenue for the full year totalled GBP10.5 million, a 79%
increase on 2016 and the highest figure in five years. The
Company's results were significantly weighted towards the second
half of the year with a revenue contribution of GBP7.6 million.
Basic earnings per share were 3.3p and the Board is pleased to
propose a final dividend to shareholders for the first time since
2014 of 1p per share.
I joined the Company on 24 May 2017 and subsequently secured the
services of a number of highly experienced staff. Our results
demonstrate the immediate impact this has had and I am confident
that our team, whose overall number has remained broadly consistent
year on year, can maintain the positive trend in transactions and
revenue.
During the year we raised GBP150 million in funds for our
corporate clients, an increase of 145% on 2016. Our total number of
corporate clients has remained broadly in line with previous years
at 38.
Outlook
After the strong second half, the Company's momentum has carried
over into 2018. We recognise that the broking services industry
will experience challenges in the year ahead, especially in the
light of the introduction of the MiFIDII regulations on 3 January
2018. We will continue to hire experienced staff where we see
complementary opportunities, and I look forward to the forthcoming
year with confidence.
I would like to thank all our clients and shareholders for their
continued support and to express the appreciation of the entire
Board for the considerable hard work and commitment of our
staff.
Donald Brown
Chief Executive Officer
Consolidated Statement of Comprehensive Income
For the year ended 31 October 2017
2017 2016
Note GBP'000 GBP'000
-------------------------------- ------ --------- ---------
Revenue 2 10,477 5,857
Administrative expenses (9,741) (6,323)
-------------------------------- ------
Profit/(loss) from operations 736 (466)
Finance income 34 40
Finance expense (23) (3)
-------------------------------- ------
Profit/(loss) before taxation 747 (429)
Income tax charge (15) (41)
-------------------------------- ------ --------- ---------
Profit/(loss) after taxation 732 (470)
Other comprehensive income
for the year:
Items that will or may be
reclassified subsequently
to profit or loss:
Decrease in fair value of
available for sale financial
assets (8) (5)
Transfer to profit or loss
on disposal of available for
sale assets 13
Deferred tax taken to equity 4 -
-------------------------------- ------ --------- ---------
Total comprehensive income
for the year attributable
to equity shareholders 741 (475)
================================ ====== ========= =========
Profit/(loss) per share
Basic 3 3.3 (2.5p)
================================ ====== ========= =========
Diluted 3 3.2 (2.5p)
================================ ====== ========= =========
Consolidated Statement of Financial Position
At 31 October 2017
2017 2017 2016 2016
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----- --------- --------- --------- ---------
Assets
Non-current assets
Property, plant and
equipment 67 27
Deferred tax asset 39 50
Total non-current
assets 106 77
------------------------------------- --------- --------- --------- ---------
Current assets
Assets held at fair
value 2,806 1,489
Available for sale
financial assets 503 552
Trade and other receivables 2,714 2,544
Collateral deposits 48 58
Cash and cash equivalents 9,037 5,170
Total current assets 15,108 9,813
------------------------------------- --------- --------- --------- ---------
Total assets 15,214 9,890
------------------------------------- --------- --------- --------- ---------
Current liabilities
Financial liabilities
held at fair value (171) (48)
Trade and other payables (2,494) (2,719)
Total current liabilities (2,665) (2,767)
------------------------------------- --------- --------- --------- ---------
Total liabilities (2,665) (2,767)
------------------------------------- --------- --------- --------- ---------
Net assets 12,549 7,123
===================================== ========= ========= ========= =========
Shareholders' equity
Called up share capital 3,338 2,063
Capital redemption
reserve 700 700
Share premium account 6,691 2,933
Employee Benefit Trust
reserve (849) (849)
Available for sale
reserve (6) (11)
Retained earnings 3,547 2,836
----------------------------- -------- -------
Total equity before
deduction of own shares 13,421 7,672
Own shares (872) (549)
----------------------------- -------- -------
Total equity 12,549 7,123
============================= ======== =======
Consolidated Statement of Cash Flows
For the year ended 31 October 2017
2017 2016
GBP'000 GBP'000
----------------------------------- --------- ---------
Operating activities before
taxation
Profit/(loss) before tax 747 (429)
Adjustments for:
Fair value adjustments (27) (205)
Gain on sale of available (50) -
for sale asset
Depreciation of fixtures,
fittings and computer equipment 21 23
Net interest receivable (11) (37)
Share based payments 4 22
------------------------------------ --------- ---------
Operating cash flow before
changes in working capital 684 (626)
(Increase)/decrease in operating
assets (1,437) 88
Decrease/(increase) in operating
liabilities (102) 682
Purchase of available for
sale investments (509) (50)
Proceeds from disposal of 600 -
available for sale investments
Cash (used in)/generated from
operations (764) 94
Income taxes paid - 10
------------------------------------ --------- ---------
Net cash flows from operating
activities (764) 104
------------------------------------ --------- ---------
Investing activities
Purchases of property, plant
and equipment (61) (25)
Net interest received 11 37
------------------------------------ --------- ---------
Net cash flows from investing
activities (50) 12
------------------------------------ --------- ---------
Financing activities
Exercise of share options (15) (31)
Proceeds from the sale of
own shares - 133
Purchase of own shares (337) (420)
Issue of shares 5,033 -
----------------------------------- --------- ---------
Net cash flows from financing
activities 4,681 (318)
------------------------------------ --------- ---------
Decrease in cash and cash
equivalents 3,867 (202)
Cash and cash equivalents
at the beginning of the year 5,170 5,372
------------------------------------ --------- ---------
Cash and cash equivalents
at the end of the year 9,037 5,170
==================================== ========= =========
Consolidated Statement of Changes in Equity
For the year ended 31 October 2017
Capital Employee Available
Share Redemption Own Benefit for
Share Premium Reserve Shares Trust sale Retained
Capital Account Reserve Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ---------- ---------- ------------- ---------- ---------- ------------- ----------- ---------
Balance
at
1 November
2015 2,063 2,933 700 (295) (849) (6) 3,348 7,894
Profit for
year - - - - - - (470) (470)
Deferred - - - - - - - -
tax taken
to equity
Revaluation
of available
for sale
financial
assets - - - - - (5) - (5)
Total
comprehensive
income for
the year - - - - - (5) (470) (475)
Contributions
by and
distributions
to owners
Purchase
of own shares - - - (420) - - - (420)
Sale of
own shares - - - 134 - - - 134
Share based
payments - - - - - - 22 22
Share options
exercised - - - 32 - - (64) (32)
Balance
at
31 October
2016 2,063 2,933 700 (549) (849) (11) 2,836 7,123
Profit for
year - - - - - - 732 732
Deferred
tax taken
to equity - 4 4
Transferred
to profit
or loss
on disposal
of available
for sale
assets - - - - - 13 - 13
Revaluation
of available
for sale
financial
assets (8) - (8)
Total
comprehensive
income for
the year - - - - - 5 736 741
Contributions
by and
distributions
to owners
Issue of
ordinary
shares net
of expenses 1,275 3,758 - - - - - 5,033
Purchase
of own shares - - - (337) - - - (337)
Share based
payments - - - - - - 4 4
Share options
exercised - - - 14 - - (29) (15)
Balance
at
31 October
2017 3,338 6,691 700 (872) (849) (6) 3,547 12,549
================ ========== ========== ============= ========== ========== ============= =========== =========
Notes
1. The capital redemption reserve represents the nominal value
of shares that have been cancelled that were previously held as Own
Shares.
2. Own Shares represents shares purchased to be held as treasury shares at historical cost.
3. The Employee Benefit Trust reserve represents shares held in
the parent Company by the Arden Partners Employee Benefit Trust
which is consolidated in the Group's financial statements.
4. Share premium represents the excess over nominal value of the
fair value consideration received for equity shares net of expenses
of the share issues amounting to GBP67,000.
NOTES
1) Basis of preparation
The financial information set out in this announcement has been
prepared in accordance with the recognition and measurement
principles of IFRS as endorsed for use in the European Union.
The financial information set out in this announcement does not
constitute the Group's statutory accounts for the year ended 31
October 2017 or the year ended 31 October 2016 under the meaning of
s434 Companies Act 2006, but is derived from those accounts.
Statutory accounts for the years ended 31 October 2017 and 31
October 2016 have been reported on by the Independent Auditors.
The Independent Auditors' Report on the Annual Report and
Financial Statements for the years ended 31 October 2017 and 31
October 2016 was unqualified, did not draw attention to any matters
by way of emphasis, and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006.
Statutory accounts for the year ended 31 October 2016 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 October 2017, prepared under IFRS, will be
delivered to the Registrar in due course.
2) Revenue
Revenue is wholly attributable to the principal activity of the
Group and arises solely within the United Kingdom.
2017 2016
GBP'000 GBP'000
---------------------------------- -------------- --------------
Equities Division 3,767 2,430
Corporate Finance Division 6,673 3,427
Gain on sale of available for 50 -
sale asset
Transfer to profit or loss on (13) -
disposal of available for sale
assets
---------------------------------- -------------- --------------
Total revenue 10,477 5,857
=================================== ============== ==============
Included within revenue of the Equities Division is a profit of
GBP40,000 (2016: GBP205,000) relating to the fair value adjustment
of derivatives held within assets that are fair valued through
profit or loss.
The Directors are of the opinion that there are only two
operating segments and while segment revenues are reviewed
internally business resources are not allocated to segments for the
purposes of deriving either profit or assets. In 2017, one of the
Group's customers contributed more than 10% of the Group's revenue,
the amount was GBP1,996,000. In 2016 none of the Group's customers
contributed 10% or more of the Group's revenue.
3) Earnings per Share
In addition to the basic earnings per share, underlying earnings
per share has been shown because the Directors consider that this
gives a more meaningful indication of the underlying performance of
the Group. Where applicable, all adjustments are stated after
taking into consideration current tax treatment ignoring deferred
tax.
Year ended Year ended
31 October 2017 31 October 2016
Pence per Numerator Pence per Numerator
Share GBP'000 Share GBP'000
------------------------- ------------- ------------ ---------------------- ----- --- -----------
Basic profit/(loss)
per share 3.3 732 (2.5) (470)
Add: IFRS2 share-based
payments - 4 0.1 22
Add: Restructuring
costs 2.3 517 - -
Less: Lease settlement
credit - - (0.8) (150)
Underlying basic
profit/(loss) 5.6 1,253 (3.2) (598)
========================= ============= ============ ====================== ===== === ===========
Diluted profit/(loss)
per share 3.2 732 (2.5) (470)
Add: IFRS2 share-based
payments - 4 0.1 22
Add: Restructuring
costs 2.3 517 - -
Less: Lease settlement
credit - - (0.8) (150)
Underlying diluted
profit/(loss) 5.5 1,253 (3.2) (598)
========================= ============= ============ ====================== ===== === ===========
Year ended Year ended
31 October 31 October
2017 2016
Number Number
---------------------------- ------------- -------------
Denominator
Weighted average
number of shares
in issue for basic
earnings calculation 22,188,366 18,734,234
Weighted average
dilution for outstanding
share options 406,895 541,383
---------------------------- ------------- -------------
Weighted average
number for diluted
earnings calculation 22,595,261 19,275,617
============================ ============= =============
The 1,480,700 (2016: 1,480,700) shares held by the Arden
Partners Employee Benefit and the 1,912,312 (2016: 1,200,242)
shares held in Treasury have been excluded from the
denominator.
In the prior year no adjustment has been made to the diluted
loss per share of 2.4p as the dilution effect of the weighted
average number of outstanding share options of 541,383 would be to
decrease the loss per share.
4) Annual Report and Accounts
Copies of the 2017 Report and Accounts will be posted to
shareholders in due course. Copies will also be available from the
Company's registered office and from the Company's website
www.arden-partners.com
5) Dividend
The final dividend, if approved, will be paid on 22 March 2018
to shareholders on the register at close of business on 2 March
2018, with an ex-dividend date of 1 March 2018.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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