TIDMWCW
RNS Number : 2121G
Walker Crips Group plc
19 November 2015
19(th) November 2015
Walker Crips Group plc
Results for the six months ended 30 September 2015
Walker Crips Group plc ("Walker Crips", the "Company" or the
"Group"), is a financial services group with activities including
stockbroking, investment and wealth management
HIGHLIGHTS
-- Group revenues increased by 22% to GBP13.3m (2014: GBP10.9m)
-- Gross profit (net revenues) increased by 20% to GBP8.9m (2014: GBP7.4m)
-- Increase in FSCS Levy charged to income for the period to
GBP402,000 (2014 restated: GBP310,000) being a full year's cost
taken completely in the first half year under IFRIC21
-- Profit before taxation up five-fold to GBP589,000 (2014 restated: GBP115,000)
-- Interim dividend increased by 9% to 0.58p per share (2014: 0.53p per share)
-- Fee and non-broking income now 60% of total income (2014:
57%), reflecting the strategy to reduce reliance on
transaction-driven commission revenue
-- Total Assets under Management and Administration (AUMA)
increased by 22% to GBP3.9 billion (30 Sep 2014: GBP3.2 billion; 31
Mar 2015: GBP3.8 billion)
-- Discretionary and Advisory Assets under Management represent
GBP2.1 billion (30 September 2014: GBP1.6 billion), an increase of
31%
David Gelber, Chairman, Walker Crips, says:
"In my year end statement I reported that the Group had started
its new financial year strongly. I am pleased to report that this
trend has continued, despite difficult markets, and is reflected in
the significant progress we have made during the first half.
"Following its acquisition in March 2015, Barker Poland Asset
Management has made its first full contribution to our results and
we continue to increase the proportion of our revenues earned as
fees, rather than through transaction-driven commissions.
"Whilst striving to set higher regulatory standards and client
service levels, incurring increasing related costs, we continue to
drive our strategy for growth, with its focus on premium service
and integrity in all we do for clients. This will enable us to
deliver further value to shareholders through increasing dividends
as we look to the future with growing confidence."
For further information, please contact:
Four Broadgate Tel: +44 (0)20 3697 4200
Roland Cross / Gareth
David
walkercrips@fourbroadgate.com
Walker Crips Group plc Tel: +44 (0)20 3100 8000
Geri Jacks, Group Marketing
Manager
Further information on Walker Crips Group is available on the
Company's website: www.wcgplc.co.uk
Chairman's Statement
Introduction
In my year end statement I reported that the Group had started
its new financial year strongly, I am pleased to report that this
trend has continued, despite difficult markets, and is reflected in
the significant progress we have made during the first half. A rise
in Revenue of 22% to GBP13.3 million for the first half of our
current year has underpinned the strong increase in profit before
tax to GBP0.6 million, which has increased more than five-fold when
compared to the prior year.
It is also pleasing to record that, following its acquisition in
March 2015, Barker Poland Asset Management (BPAM) has made its
first full contribution to our results in line with expectations.
This has also helped to materially increase the proportion of our
revenues earned as fees, rather than through transaction-driven
commissions.
Despite an increase in administrative expenses, a material
proportion of which relate to the development and growth of
acquired businesses, the growth in revenue led to a substantially
improved profit before tax for the period, from the restated prior
period amount of GBP0.1 million to GBP0.6 million.
These results also include uncontrollable costs levied by the
Financial Services Compensation Scheme (FSCS) of GBP402,000 (2014
restated: GBP310,000) being an increase of 30% over the prior
period levy. These results include the impact of reporting the
entire annual FSCS charge in the first half of both years following
the adoption of IFRIC 21 (see Note 1)
The Board is further encouraged by growth of 31% in
Discretionary and Advisory Assets under Management over the last 12
months and of 5% over the current six month period during which the
value of the FTSE100 Index recorded a material decrease.
Trading
Gross Profit (Net Revenue) in the Period increased by 20% to
GBP8.9 million (2014: GBP7.4 million), further demonstrating the
pleasing rate of growth driven by our strategy for our Investment
and Wealth Management businesses in the last few years.
Non-broking income as a proportion of total income increased to
60% (2014: 57%) as the conversion of our client base to
discretionary or portfolio-managed mandates gathers pace, fuelled
by incoming new advisers and the fee-based revenue stream of our
latest corporate acquisition, BPAM.
Higher employment costs, particularly in revenue generating
areas, will yield correspondingly higher revenues after the
inevitable delay in transferring new clients and assets across.
Overall administrative expenses in the Period were GBP8.4 million
(2014 restated: GBP7.4 million).
After payment of the final dividend in relation to the previous
year end, at the Period end, the Group had net assets of GBP21.0
million (31 March 2015: GBP21.0 million) including net cash of
GBP6.9 million (31 March 2015: GBP6.5 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 GBP2.1 billion (30 September 2014: GBP1.6 billion; 31
March 2015: GBP2.0 billion). This increase over the prior year is a
clear reflection of the Company's greater emphasis on fee
generation rather than transactional brokerage. Discretionary
assets were GBP0.94 billion (30 September 2014: GBP0.57 billion)
and Advisory assets were GBP1.19 billion (30 September 2014:
GBP0.98 billion).
Revenues from the Investment Management division increased by
26% during the Period to GBP12.0 million (2014: GBP9.5 million), a
significant improvement driven primarily by additional revenue from
our acquisition BPAM and business transferred in by new investment
managers and advisers.
Against the backdrop of a continuing low interest rate
environment, our Structured Investments business has delivered a
strong performance for the first half of this year. The demand for
our award winning product range continues to be high amongst
investors seeking the balance between equity exposure and capital
preservation, a key element in our defensive range of structured
investments.
Wealth Management
Revenues and profits dipped by 10% and 34% respectively when
compared to an exceptionally good first 6 months last year at our
York-managed wealth management division. However when compared with
the 6 months to 31 March 2015, I am pleased to report an
improvement to both gross revenue (up 18.5%) and profits (up 32%).
Importantly and despite market falls, AUMA of this division (an
increasingly significant measure) has increased by 10.4% to GBP479m
(2014: GBP434m).
Dividend
An increase of 9.4% in the interim dividend to 0.58 pence per
share (2014: 0.53 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 11 December 2015 to those
shareholders on the register at the close of business on 27
November 2015.
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 in recent years give the
Company every reason to be regarded as a special place to work, as
we now start to bear the fruits directly resulting from our
collective efforts.
Outlook
Whilst striving to set higher regulatory standards and client
service levels, incurring increasing related costs, we continue to
drive our strategy for growth, with its focus on premium service
and integrity in all we do for clients. This will enable us to
deliver further value to shareholders through increasing dividends
as we look to the future with growing confidence.
Alongside our expansion through the addition of capable
individuals who bring expertise and clients, we also continue to
evaluate target companies and businesses for suitably measured and
value-added acquisitions.
Although we remain cautious due to continued market volatility,
I am pleased to report the Group has continued trading profitably
since the Period end and that it remains in a strong financial
position.
D. M. Gelber
Chairman
19 November 2015
Walker Crips Group plc
Walker Crips Group plc
Condensed Consolidated Income Statement
For the six months ended
30 September 2015
Unaudited Unaudited Audited
Notes Six months Six months Year to
to to
30 September 30 September 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
(restated
-note 1)
Continuing operations
Revenue 2 13,265 10,881 22,944
Commission payable (4,397) (3,507) (7,653)
------------- ------------- ---------
Gross profit 8,868 7,374 15,341
Share of after tax profit
of joint venture 6 7 13
(MORE TO FOLLOW) Dow Jones Newswires
November 19, 2015 02:00 ET (07:00 GMT)
Administrative expenses (8,372) (7,408) (15,139)
Operating profit/(loss) 502 (27) 215
Investment revenues 88 143 225
Finance costs (1) (1) (1)
Profit before tax 589 115 439
Taxation (130) (32) (182)
Profit for the period
attributable to equity
holders of the company 459 83 257
------------- ------------- ---------
Earnings per share 4
Basic 1.22p 0.22p 0.69p
Diluted 1.22p 0.22p 0.68p
Walker Crips Group plc
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2015
Unaudited Unaudited Audited
Six months Six months Year to
to to
30 September 30 September 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
(restated
-note 1)
Profit for the period 459 83 257
Other comprehensive income:
(Loss) on revaluation
of available-for-sale
investments taken to
equity - - (88)
Deferred tax on profit
on available-for-sale
investments - - 28
Total comprehensive income
for the period
attributable to equity
holders of the company 459 83 197
Walker Crips Group plc
Condensed Consolidated Statement of Financial Position
As at 30 September 2015
Unaudited Unaudited Audited
30 September 30 September 31 March
2015 2014 2015
Notes GBP'000 GBP'000 GBP'000
(restated
-note 1)
Non-current Assets
Goodwill 4,388 2,901 4,388
Other intangible
assets 6,580 1,148 6,631
Property, plant and
equipment 960 801 1,110
Investment in joint
ventures 34 34 28
Available for sale
investments 3 1,034 2,458 2,417
------------- ------------- ---------
12,996 7,342 14,574
Current Assets
Trade and other receivables 41,068 29,413 28,332
Trading Investments 1,793 2,015 2,701
Cash and cash equivalents 6,916 7,857 6,635
------------- ------------- ---------
49,777 39,285 37,668
Total assets 62,773 46,627 52,242
------------- ------------- ---------
Current liabilities
Trade and other payables (38,168) (25,238) (27,537)
Current tax liabilities (363) (355) (239)
Bank Overdrafts (6) (40) (134)
Deferred tax liabilities (740) (202) (741)
Shares to be issued (362) - (298)
------------- ------------- ---------
(39,639) (25,835) (28,949)
Net current assets 10,138 13,450 8,719
------------- ------------- ---------
Long term liability
- deferred cash consideration (1,815) - (1,930)
Long term liability
- shares to be issued (348) - (453)
Net assets 20,971 20,792 20,910
============= ============= =========
Equity
Share capital 2,551 2,515 2,545
Share premium account 2,023 1,818 1,988
Own shares (312) (312) (312)
Revaluation reserve 767 827 767
Other reserves 4,668 4,668 4,668
Retained earnings 11,274 11,276 11,254
Equity attributable
to equity holders
of the company 20,971 20,792 20,910
============= ============= =========
Walker Crips Group plc
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2015
Unaudited Unaudited Audited
Six months Six months Year to
to to
30 September 30 September 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Operating activities
Cash (used by)/generated
from operations (1,243) 953 3,806
Interest received 39 46 78
Interest paid (1) (1) (1)
Tax paid (6) - (337)
Net cash (used) by/generated
from operating activities (1,211) 998 3,546
----------------- ------------------- -------------------------
Investing activities
Purchase of property, plant
and equipment (109) (104) (565)
Purchase of intangible assets (170) (116) (765)
Net sale (purchase) of
investments held for trading 908 (345) (1,031)
Consideration paid on acquisition
of subsidiary - - (1,875)
Net sale proceeds of available
for sale investments 1,383 - -
Dividends received 47 43 42
Net cash generated from/(used
by) investing activities 2,059 (522) (4,190)
----------------- ------------------- -------------------------
Financing activities
Dividends paid (439) (762) (958)
Net cash used in financing
activities (439) (762) (958)
----------------- ------------------- -------------------------
Net increase/(decrease)
in cash and cash equivalents 409 (286) (1,602)
Net cash and cash equivalents
at the start of the period 6,501 8,103 8,103
Net Cash and cash equivalents
at the end of the period 6,910 7,817 6,501
Cash and cash equivalents 6,916 7,857 6,635
Bank overdrafts (6) (40) (134)
----------------- ------------------- -------------------------
6,910 7,817 6,501
----------------- ------------------- -------------------------
Walker Crips Group plc
Condensed Consolidated Statement Of Changes In Equity
For the six months ended 30 September 2015 (GBP000's)
Called Share Own Capital Other Revaluation Retained Total
up premium shares Redemption earnings Equity
share held
capital
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 (restated -note
1) - - - - - - 83 83
(MORE TO FOLLOW) Dow Jones Newswires
November 19, 2015 02:00 ET (07:00 GMT)
-------- -------- ------- ----------- ----- ----------- --------- -------
Total recognised
income and expense
for the period (restated
-note 1) - - - - - - 83 83
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 11,276 20,792
(restated -note 1)
Revaluation of investment
at fair value - - - - - (88) - (88)
Deferred tax charge
to equity - - - - - 28 - 28
Profit for the 6
months ended 31 March
2015 - - - - - - 174 174
-------- -------- ------- ----------- ----- ----------- --------- -------
Total recognised
income and expense
for the period - - - - - (60) 174 114
September 2014 interim
dividend - - - - - - (196) (196)
Issue of shares on
acquisition of subsidiary 30 170 - - - - - 200
Equity as at 31 March
2015 2,545 1,988 (312) 111 4,557 767 11,254 20,910
Profit for the 6
months ended 30 September
2015 - - - - - - 459 459
-------- -------- ------- ----------- ----- ----------- --------- -------
Total recognised
income and expense
for the period - - - - - - 459 459
March 2015 final
dividend - - - - - - (439) (439)
Issue of shares on
acquisition of intangible
asset 6 35 - - - - - 41
Equity as at 30 September
2015 2,551 2,023 (312) 111 4,557 767 11,274 20,971
Walker Crips Group plc
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2015
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 2015.
The condensed consolidated financial statements should be read
in conjunction with the Group's audited financial statements for
the year ended 31 March 2015.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 2015 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.
New standards and interpretations
In the current period, the Group has adopted IFRIC 21 'Levies'.
IFRIC 21 'Levies' changes the point at which the Group recognises a
liability in respect of Financial Services Compensation Scheme
(FSCS) levies. From 1 April 2015 the Group has recognised a
liability in respect of FSCS levies from the date at which the
triggering event specified in the legislation occurs. The
triggering event for recognition of FSCS levies occurs on the 1(st)
April and requires that the cost of the levies is recognised in
full, immediately. Accordingly the comparatives have been restated
such that the full cost of the levies for the year to 31 March
2015, is recognised in the six months ended 30 September 2014. For
the six months ended 30 September 2014, profits before tax have
been reduced by GBP155,000, profits after tax reduced by
GBP122,000, trade and other receivables reduced by GBP155,000 and
current tax liabilities reduced by GBP33,000.
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 2015.
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
2015 12,036 1,229 13,265
------------ ------------- ---------------
6m to 30 September
2014 9,514 1,367 10,881
------------ ------------- ---------------
Year to 31 March
2015 20,590 2,404 22,994
------------ ------------- ---------------
Unallocated Operating
Result (GBP'000) Costs Profit/(Loss)
6m to 30 September
2015 990 120 (608) 502
------------ ------------- ------------ ---------------
6m to 30 September
2014 (restated
-note 1) 164 247 (438) (27)
------------ ------------- ------------ ---------------
Year to 31 March
2015 931 338 (1,054) 215
------------ ------------- ------------ ---------------
3. Redemption of available for sale investments
Following the closure and liquidation of the TB Walker Crips
Income from Short Term Lending Fund (STLF), the Group's holding of
1.383m units was redeemed and repaid in full (resulting in no gain
or loss) with GBP1,383,000 being received on 7(th) September
2015.
4. Earnings per share
(MORE TO FOLLOW) Dow Jones Newswires
November 19, 2015 02:00 ET (07:00 GMT)
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