TIDMWCW
RNS Number : 4947X
Walker Crips Group plc
20 November 2014
20(th) November 2014
Walker Crips Group plc
Results for the six months ended 30 September 2014
Walker Crips Group plc ("Walker Crips", the "Company" or the
"Group"), the financial services group with activities covering
stockbroking, investment and wealth management services today
announces unaudited results for the six months ended 30 September
2014 (the "Period").
Highlights
-- Revenue for the Period increased 12.4% to GBP10.9 million
(2013: GBP9.7 million)
-- Gross profit (Net Revenue) for the Period increased 10.4% to
GBP7.4 million (2013: GBP6.7 million) reflecting considerable
progress made in investment and wealth management businesses
-- Excluding uncontrollable FSCS levy costs and despite volatile
markets, Group operating profit of GBP0.28 million in the Period
compares with GBP0.36 million in the prior period
-- Group operating profit of GBP0.13 million in the Period
(2013: operating profit of GBP0.26 million) after FSCS levy costs
of GBP0.15 million (2013: GBP0.10 million)
-- Administrative expenses of GBP7.3 million (2013: GBP6.4
million) reflect growth costs incurred expanding the number of
investment managers whose revenue benefits are expected to accrue
in future periods
-- Interim dividend up 3.9% to 0.53 pence per share (2013: 0.51
pence per share)
-- Discretionary and Advisory Assets under Management (AUM) at
Period end increased 26.1% to GBP1.45 billion year on year (30
September 2013: GBP1.15 billion) and 9.4% over the period (31 March
2014: GBP1.32 billion)
-- Total Assets under Management and Administration increased
24.9% year on year to GBP2.66 billion (30 September 2013; GBP2.13
billion) and 6.0% over the period (31 March 2014: GBP2.51
billion)
-- Fees and non-broking income up 23.5% to GBP6.3 million (2013:
GBP5.1 million) representing 57% of total income (2013: 52%)
Commenting, David Gelber, Chairman of Walker Crips, says:
"As we approach the end of our centenary year in 2014, the
implementation of our strategic plan continues to strengthen the
business and evidences our ability and commitment to expand.
The successful execution of the strategy is becoming
increasingly recognised by market participants. We remain committed
to increasing shareholder value and to growing the dividend for
shareholders not only by focusing on organic growth but also
through expansion in London, York and targeted regions through new
hires. In each of these earnings enhancing initiatives we are ahead
of expectations. We also continue to evaluate target companies and
businesses for suitably measured and value-added acquisitions."
For further information, please contact:
Walker Crips Goupr plc Telephone: +44 (0)20 3100 8000
Louie Perry, Media Relations
Broadgate Mainland Telephone: +44 (0)20 7726 6111
Roland Cross, Director
Roddi Vaughan-Thomas
Cantor Fitzgerald Europe Telephone: +44 (0)20 7894 7667
Rishi Zaveri
Further information on Walker Crips Group plc is available on
the Company's website: www.wcgplc.co.uk
Chairman's Statement
Introduction
I am very pleased to report a continuation of the successful
implementation of our strategy for expansion reflected by a rise in
Revenue of 12.4% to GBP10.9 million for the first half of our
current year.
Development through organic growth and recruitment in our
investment and wealth management divisions has been continuing
apace. The steady influx of additional Investment Managers with
strong revenue bases now exceeds 40 since April 2012. The full
impact of the new revenues of the most recent seven such
individuals will be felt materially in the second half year, most
of whom have commenced towards the end of the period being
reported. They have strong backgrounds and expertise having
transferred from some of our peers such as Barclays Wealth, JM
Finn, Charles Stanley and EFG Harris Allday with the attraction
being a combination of the Group's committed advisory offering, a
strong control and reporting framework and a traditional approach
to client relationship management.
Notwithstanding the increase in revenue, after recording an
increase in administrative expenses, a material proportion of which
relate to the development and growth of existing businesses
referred to above from which future revenues will emerge. The
operating profit for the period consequently showed a reduction,
which we believe to be temporary, of 51% to GBP128,000 from
GBP263,000 for the prior period. These results also include
uncontrollable half year costs levied by the Financial Services
Compensation scheme of GBP155,000 (2013: GBP102,000) being an
increase of 52% over the prior period levy. Nevertheless the
overall trend is encouraging given the full year loss of GBP1.1
million in year ended 31 March 2012.
The Board is further encouraged by growth of 26.1% in
Discretionary and Advisory Assets under Management over the six
month period during which the value of the FTSE Index recorded a
material decrease.
Trading
Revenue for the Period was GBP10.9 million (2013: GBP9.7
million), an increase of 12.4%.
Gross Profit (Net Revenue) in the Period increased by 10.4% to
GBP7.4 million (2013: GBP6.7 million), further demonstrating the
pleasing rate of growth driven by our strategy for our Investment
and Wealth Management businesses in the last three years.
Non-broking income as a proportion of total income increased to
57% (2013: 52%) as the conversion of our client base to
discretionary or portfolio-managed mandates gathers pace, fuelled
by incoming new advisers whose clients already provide
predominantly fee driven revenue streams and a further shift by
existing clients to fee-based charging.
Higher employment costs, particularly in revenue generating
areas, will yield corresponding higher revenues after the
inevitable delay in transferring new clients and assets across.
Overall administrative expenses in the Period were GBP7.3 million
(2013: GBP6.4 million).
After payment of the final and special dividends in relation to
the previous year end, at the Period end, the Group had net assets
of GBP20.9 million (31 March 2014: GBP21.5 million) including net
cash of GBP7.8 million (31 March 2014: GBP8.2 million), a very
strong balance sheet from which to generate further growth in line
with the Board's Strategic Plan.
Operations
Investment Management
Discretionary and Advisory assets under management at the Period
end were GBP1.45 billion (30 September 2013: GBP1.15 billion; 31
March 2014: GBP1.33 billion). This increase is a clear reflection
of the Company's greater emphasis on fee generation rather than
transactional brokerage. Discretionary assets were GBP0.57 billion
(30 September 2013: GBP0.47 billion) and Advisory assets were
GBP0.88 billion (30 September 2013: GBP0.68 billion).
Revenues from the Investment Management division increased by
10.5% during the Period to GBP9.5 million (2013: GBP8.6 million), a
significant improvement considering the uncertainty in investment
sentiment and lower market volumes of recent months.
Despite challenging market conditions for structured products,
continued low interest rates and low equity market volatility, our
Structured Investments business has continued to deliver consistent
results both in terms of revenue for the firm but moreover,
consistent returns for investors.
Wealth Management
Revenues and profits increased materially by 27% and 115%
respectively at our York-managed wealth management division
following a strong contribution from our recently acquired
Inverness branch, improving joint venture profits and a significant
overall increase in AUM.
Dividend
A 3.9% increase in the interim dividend to 0.53 pence per share
(2013: 0.51 pence per share) recognises the encouraging progress
being made in the Group's trading performance and the confidence of
much greater profitability in the near future. The interim dividend
will be paid on 19 December 2014 to those shareholders on the
register at the close of business on 5 December 2014.
Directors, Account Executives and Staff
I would like to thank all my fellow directors, account
executives and members of staff for their continued support. Their
professionalism, diligence and loyalty give the Company every
reason to be regarded as a special place to work in this most
exciting phase of our long history.
Outlook
As we approach the end of our centenary year in 2014, the
implementation of our strategic plan continues to strengthen the
business and evidences our ability and commitment to expand.
The successful execution of the strategy is becoming
increasingly recognised by market participants. We remain committed
to increasing shareholder value and to growing the dividend for
shareholders not only by focusing on organic growth but also
through expansion in London, York and targeted regions through new
hires. In each of these earnings enhancing initiatives we are ahead
of expectations. We also continue to evaluate target companies and
businesses for suitably measured and value-added acquisitions.
The Group has continued trading profitably since the Period end
and remains in a strong financial position. Since the reporting
date, encouragement has been gained from revenues of the newly
recruited investment managers which are now coming through and we
remain cautiously optimistic in volatile markets.
D. M. Gelber
Chairman
20 November 2014
Walker Crips Group plc
Walker Crips Group plc
Condensed Consolidated Income Statement
For the six months ended 30
September 2014
Unaudited Unaudited Audited
Notes Six months Six months Year to
to to
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 2 10,881 9,722 20,688
Commission payable (3,507) (3,052) (6,584)
------------- ------------- ---------
Gross profit 7,374 6,670 14,104
Share of after tax profit of
joint venture 7 4 17
Administrative expenses (7,253) (6,411) (13,651)
Operating profit 128 263 470
Gain on disposal of investments 3 - 1,836 1,836
Loss on disposal of subsidiary
undertaking 4 - (8) (13)
Investment revenues 143 141 240
Finance costs (1) (2) (4)
Profit before tax 270 2,230 2,529
Taxation (65) (524) (495)
Profit for the period attributable
to equity holders of the company 205 1,706 2,034
------------- ------------- ---------
Earnings per share 5
Basic 0.55p 4.62p 5.50p
Diluted 0.55p 4.52p 5.39p
Walker Crips Group plc
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2014
Unaudited Unaudited Audited
Six months Six months Year to
to to
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
Profit for the period 205 1,706 2,034
Other comprehensive income:
Profit on revaluation of available-for-sale
investments taken to equity - 62 243
Deferred tax on profit on available-for-sale
investments - (13) (35)
Long Term Incentive Plan (LTIP)
credit to equity - - 13
Total comprehensive income for
the period
attributable to equity holders
of the company 205 1,755 2,255
Walker Crips Group plc
Condensed Consolidated Statement of Financial Position
As at 30 September 2014
Unaudited Unaudited Audited
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
Non-current Assets
Goodwill 2,901 2,901 2,901
Other intangible assets 1,148 1,279 1,168
Property, plant and equipment 801 846 872
Investment in joint ventures 34 30 38
Available for sale investments 2,458 1,142 2,404
------------- ------------- ---------
7,342 6,498 7,383
Current Assets
Trade and other receivables 29,568 41,388 46,648
Trading Investments 2,015 1,071 1,670
Deferred tax asset - 16 -
Cash and cash equivalents 7,857 9,970 8,173
------------- ------------- ---------
39,440 52,445 56,491
Total assets 46,782 58,943 63,874
------------- ------------- ---------
Current liabilities
Trade and other payables (25,238) (37,148) (41,801)
Current tax liabilities (388) (544) (330)
Bank Overdrafts (40) (91) (70)
Deferred tax liabilities (202) - (202)
------------- ------------- ---------
(25,868) (37,783) (42,403)
Net current assets 13,572 14,662 14,088
------------- ------------- ---------
Net assets 20,914 21,160 21,471
============= ============= =========
Equity
Share capital 2,515 2,515 2,515
Share premium account 1,818 1,818 1,818
Own shares (312) (312) (312)
Revaluation reserve 827 668 827
Other reserves 4,668 4,668 4,668
Retained earnings 11,398 11,803 11,955
Equity attributable to
equity holders of the company 20,914 21,160 21,471
============= ============= =========
Walker Crips Group plc
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2014
Unaudited Unaudited Audited
Six months Six months Year to
to to
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
Operating activities
Cash generated/(used) by operations 953 (3,149) (3,074)
Interest received 46 157 229
Interest paid (1) (2) (4)
Tax paid - - -
Net cash generated/(used) by operating
activities 998 (2,994) (2,849)
------------------- ------------------- -------------------------
Investing activities
Purchase of property, plant and
equipment (104) (345) (542)
Purchase of intangible assets (116) (474) (602)
Net (purchase)sale of investments
held for trading (345) (408) (1,036)
Net sale of available for sale investments - 6,248 5,466
Net cash received on disposal of
subsidiary - 292 292
Dividends received 43 39 42
Net cash (used)/generated by from
investing activities (522) 5,352 3,620
------------------- ------------------- -------------------------
Financing activities
Proceeds on issue of shares - 6 6
Dividends paid (762) (333) (522)
Net cash used in financing activities (762) (327) (516)
------------------- ------------------- -------------------------
Net (decrease)/increase in cash
and cash equivalents (286) 2,031 255
Net cash and cash equivalents at
the start of the period 8,103 7,848 7,848
Net Cash and cash equivalents at
the end of the period 7,817 9,879 8,103
Cash and cash equivalents 7,857 9,970 8,173
Bank overdrafts (40) (91) (70)
------------------- ------------------- -------------------------
7,817 9,879 8,103
------------------- ------------------- -------------------------
Walker Crips Group plc
Condensed Consolidated Statement Of Changes In Equity
For the six months ended 30 September 2014 (GBP000's)
Called Share Own shares Capital Other Revaluation Retained Total
up share premium held Redemption earnings Equity
capital
Equity as at 31 March 2013 2,470 1,630 (312) 111 4,557 619 10,430 19,505
Revaluation of investment
at fair value 62 62
Deferred tax credit to
equity (13) (13)
Profit for the 6 months
ended 30 September 2013 1,706 1,706
--------- -------- ---------- ----------- ----- ----------- --------- -------
Total recognised income
and expense for the period 49 1,706 1,755
March 2013 final dividend (333) (333)
Issue of shares on exercise
of options 1 5 6
Issue of shares on acquisition
of intangible asset 44 183 227
Equity as at 30 September
2013 2,515 1,818 (312) 111 4,557 668 11,803 21,160
Revaluation of investment
at fair value 181 181
Deferred tax credit to
equity (22) (22)
Long Term Incentive Plan
(LTIP) credit to equity 13 13
Profit for the 6 months
ended 31 March 2014 328 328
--------- -------- ---------- ----------- ----- ----------- --------- -------
Total recognised income
and expense for the period 159 341 500
September 2013 interim
dividend (189) (189)
Equity as at 31 March 2014 2,515 1,818 (312) 111 4,557 827 11,955 21,471
Profit for the 6 months
ended 30 September 2014 205 205
--------- -------- ---------- ----------- ----- ----------- --------- -------
Total recognised income
and expense for the period 205 205
March 2014 final dividend (392) (392)
Special final dividend (370) (370)
Equity as at 30 September
2014 2,515 1,818 (312) 111 4,557 827 11,398 20,914
Walker Crips Group plc
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2014
1. Basis of preparation and accounting policies
The Group's consolidated financial statements are prepared in
accordance with International Financial Reporting Standards as
adopted by the EU (IFRS). These condensed financial statements are
presented in accordance with IAS 34 Interim Financial
Reporting.
The condensed consolidated financial statements have been
prepared on the basis of the accounting policies and methods of
computation set out in the Group's consolidated financial
statements for the year ended 31 March 2014.
The condensed consolidated financial statements should be read
in conjunction with the Group's audited financial statements for
the year ended 31 March 2014.The interim financial information is
unaudited and does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006.The Group's financial
statements for the year ended 31 March 2014 have been reported on
by the auditors and delivered to the Registrar of Companies. The
report of the auditors was unqualified and did not draw attention
to any matters by way of emphasis. They also did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
Going Concern
As both the net asset base and cash position remain healthy, the
directors are satisfied that the Group has sufficient resources to
continue in operation for the foreseeable future, a period of not
less than 12 months from the date of this report. Accordingly, they
also conclude in accordance with guidance from the Financial
Reporting Council, that the use of the going concern basis for the
preparation of the financial statements continues to be
appropriate.
Interests in joint ventures
The Group's share of the assets, liabilities, income and
expenses of jointly controlled entities are accounted for in the
consolidated financial statements under the equity method.
Income from the sale or use of the Group's share of the output
of jointly controlled assets, and its share of the joint venture
expenses, are recognised when it is probable that the economic
benefits associated with the transactions will flow to / from the
Group and their amount can be measured accurately.
Goodwill
Goodwill arising on consolidation represents the excess of the
cost of acquisition over the Group's interest in the fair value of
the identifiable assets and liabilities of a subsidiary or jointly
controlled entity at the date of acquisition. Goodwill is initially
recognised as an asset at cost and reviewed for impairment at least
annually. Any impairment is recognised immediately in the income
statement and is not subsequently reversed in future periods.
Intangible assets
At each period end date, the Group reviews the carrying amounts
of its intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss
(if any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the assets belong.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profits, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that is probable
that taxable profits will be available against which deductible
temporary differences can be utilised.
Principal risks and uncertainties
Under the Financial Conduct Authority's Disclosure and
Transparency Rules, the Directors are required to identify those
material risks to which the company is exposed and take appropriate
steps to mitigate those risks. The principal risks and
uncertainties faced by the Group are discussed in detail in the
Annual Report for the year ended 31 March 2014.
Related party transactions
No transactions took place in the period that would materially
or significantly affect the financial position or performance of
the group.
2. Segmental analysis
Investment Wealth Total
Management Management
Revenue (GBP'000)
6m to 30 September
2014 9,514 1,367 10,881
------------ ------------- ----------
6m to 30 September
2013 8,645 1,077 9,722
------------ ------------- ----------
Year to 31 March 2014 18,290 2,398 20,688
------------ ------------- ----------
Unallocated Operating
Result (GBP'000) Costs Profit
6m to 30 September
2014 319 247 (438) 128
------------ ------------- ------------ ----------
6m to 30 September
2013 574 115 (426) 263
------------ ------------- ------------ ----------
Year to 31 March 2014 1,150 221 (901) 470
------------ ------------- ------------ ----------
Subsequent to the sale of subsidiary Keith Bayley Rogers &
Co Ltd in the prior period, the Directors have determined that
Corporate Finance is no longer a segment of continuing significance
and has therefore been omitted from current and prior periods which
have been restated. The immaterial amounts involved have been
included within the Investment Management segment for all
periods.
3. Gain on disposal of investments
There were no disposals of investments during the period.
During the prior period, conversion and disposal of Liontrust
Convertible Unsecured Loan Stock (CULS) with a nominal value of
GBP3.03million and the redemption of the remaining holding with a
nominal value of GBP0.07m, yielded a profit of GBP1,836,000.
4. Loss on disposal of subsidiary undertaking
There were no disposals of subsidiary undertakings during the
period.
During the prior period, on 31 May 2013 the Group completed the
disposal of its subsidiary Keith Bayley Rogers & Co Limited
(following FCA approval) resulting in a loss of GBP8,000.
5. Earnings per share
The calculation of basic earnings per share for continuing
operations is based on the post-tax profit for the period of
GBP205,000 (2013: GBP1,706,000) and on 36,996,187 (2013:
36,938,203) ordinary shares of 6 2/3p, being the weighted average
number of ordinary shares in issue during the period.
The effect of the exercise of outstanding options would be to
reduce the reported earnings per share. The calculation of diluted
earnings per share is based on 37,607,437 (2013: 37,752,011)
ordinary shares, being the weighted average number of ordinary
shares in issue during the period adjusted for dilutive potential
ordinary shares.
6. Dividends
The interim dividend of 0.53 pence per share (2013: 0.51 pence)
is payable on 19 December 2014 to shareholders on the register at
the close of business on 5 December 2014. The interim dividend has
not been included as a liability in this interim report.
7. Total Income (GBP'000)
Six months Ended Six months Ended Year Ended
30 September 30 September 31 March 2014
2014 2013
Revenue 10,881 9,722 20,688
Investment revenues 143 141 240
----------------- ----------------- ---------------
11,024 9,863 20,928
----------------- ----------------- ---------------
The Group's income can also be categorised as follows for the
purpose of measuring a Key Performance Indicator, non-broking
income to total income.
Six months % Six months % Year Ended %
Income (GBP'000) Ended Ended 31 March
30 September 30 September 2014
2014 2013
Broking 4,719 43 4,722 48 9,904 47
Non-Broking 6,305 57 5,141 52 11,024 53
-------------- ---- -------------- ---- ----------- ----
11,024 100 9,863 100 20,928 100
-------------- ---- -------------- ---- ----------- ----
Directors' Responsibility Statement
The Directors confirm that to the best of their knowledge:
(a) The condensed set of financial statements contained within
the half yearly financial report has been prepared in accordance
with IAS 34 'Interim Financial Reporting' as adopted by the EU;
(b) The half yearly report from the Chairman (constituting the
interim management report) includes a fair review of the
information required by DTR 4.2.7R; and
(c) The half yearly report from the Chairman includes a fair
review of the information required by DTR 4.2.8R as far as
applicable.
On Behalf of the Board
Rodney FitzGerald
Chief Executive Officer
20 November 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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