TIDMWCW
RNS Number : 7238C
Walker Crips Group plc
30 June 2016
30 June 2016
News Release
Walker Crips Group plc
Steady growth and significant investment for future
development
Walker Crips Group plc ("Walker Crips", the "Company" or the
"Group"), the financial services group, with activities covering
stockbroking, investment and wealth management services, announces
audited results for the year ended 31 March 2016.
HIGHLIGHTS
-- Group revenues increased by 13.5% to GBP26.1 million (2015: GBP23.0 million)
-- Gross profit (net revenues) increased by 15.0% to GBP17.6 million (2015: GBP15.3 million)
-- Operating profit, before exceptional expenses, up 20.4% to
GBP0.65 million (2015: GBP0.54 million)
-- Exceptional costs of GBP0.8 million incurred in upgrade of
client information and communication systems
-- One-off gain of GBP0.9 million on sale of Euroclear shares
-- Reported pre-tax profit more than doubled to GBP0.94 million (2015: GBP0.44 million)
-- Non-broking income as a percentage of total income increased
to 61.8% (2015: 56.3%), reflecting further reduction in reliance on
transaction-driven commission revenue
-- Discretionary and advisory assets under management increased
by 15.0% to a high of GBP2.3 billion (2015: GBP2.0 billion)
-- Proposed final dividend increased by 8.5% to 1.27 pence per
share (2015: 1.17 pence per share) bringing total dividends for the
year to 1.85 pence per share (2015: 1.70 pence per share)
David Gelber, Chairman, Walker Crips, says:
"We continue to achieve substantial growth and to refine our
strategy and business model to make further strides towards
attaining our long-term strategic goals. Against a background of
difficult markets, we have striven to set higher regulatory
standards and client service levels as we deliver our strategy for
growth.
"At a macro level the extent of the economic and political
instability created by Brexit is difficult to predict. In addition,
at a micro level, we face significant demands from continuing
regulatory initiatives and their associated costs over the next 18
months.
"We will monitor diligently the impact of these factors and will
react promptly as we consider appropriate. Nonetheless, despite
these challenges, we consider that it is our emphasis on integrity,
service and good customer outcomes which will drive our public
profile and competitive positioning to deliver underlying stability
and growth in the next phase of the Group's development."
For further information, please contact:
Walker Crips Group plc Tel: +44 (0)20 3100 8000
Geri Jacks
Four Broadgate Tel: +44 (0)20 3697 4200
Roland Cross/Gareth David/Josh
Voulters
Cantor Fitzgerald Europe Tel: +44 (0) 20 7894
7667
Rishi Zaveri
Further information on Walker Crips Group is available on the
Company's website: www.wcgplc.co.uk
Chairman and Chief Executive's Statement
Performance overview
It is pleasing to report that despite the particularly difficult
markets in the second half of the year a rise in revenue of 13.5%
to a record GBP26.1 million for the current full year has driven
the strong increase in profit before tax and exceptional items to
GBP0.8 million, an increase of 20% reflecting the continuing impact
of our strategy for growth. After including exceptional costs,
profits on disposal of available-for-sale investments and net
investment income, profit before tax has more than doubled to
GBP0.9 million (2015: GBP0.4 million).
Dividend / earnings per share
In recognition of this year's further progress the Board is
recommending an 8.5% increase in the final dividend to 1.27 pence
per share (2015: 1.17 pence per share) reflecting its continued
confidence in the Group's long-term prospects.
Combined with the interim dividend of 0.58 pence per share
(2015: 0.53 pence per share), this makes a higher total dividend
for the year of 1.85 pence per share (2015: 1.70 pence per share),
an 8.8% increase, made possible by the 20% increase in
pre-exceptional operating profit before tax.
The final dividend will be paid on 12 August 2016 to
shareholders on the register at the close of business on 29 July
2016.
Earnings per share for the year were 2.11 pence (2015: 0.69
pence) which includes the effect of the one-off gain on sale of our
Euroclear shares.
Strategy
We have continued to advance the delivery of our strategy for
growth and have consolidated the progress we have made over the
previous three years whilst preserving our healthy cash balance as
a buffer for unforeseen events which may lie ahead in these
turbulent times.
The delivery of personal investment management advice remains at
the core of our approach.
In particular, alongside our focus on growing the discretionary
and fee-paying portion of the business, there have been
opportunities which have been taken to capitalise on our larger
competitors' reluctance to continue offering the more heavily
regulated and costly advisory component of our proposition to
clients.
Exceptional costs
During the second half of the year our Executive Directors and
investment managers have, with the assistance of external advisers,
been heavily engaged in a major upgrading of our systems and our
record-keeping to meet our own rising regulatory standards and
those seen across our sector.
This has led to a significant redefinition of the way in which
we communicate with our substantial client base with a much greater
use of technology. We are moving forward to complete this exercise
next year. The outcome is intended to reinforce our current
offering to our clients by first building and maintaining a deeper
understanding of each client's circumstances and thus the
suitability of the service being provided.
We are hugely appreciative of our clients' understanding
throughout this time-consuming, but important process. We firmly
believe it will underpin our future prosperity with a stronger
foundation to ensure a Company-wide emphasis on achieving good
client outcomes in a manner aligned with our culture.
The decline from operating profits last year to an operating
loss this year is due to: the exceptional costs associated with
these changes and improvements; and, to some extent, the
consequence of the inevitable diversion away from new business
generation.
Disposal of available-for-sale investment
In December 2015, the Group took the opportunity of
participating in a corporate buy-back programme and disposed of its
holding of 1,809 shares in Euroclear plc, a relatively illiquid
investment which had been held since February 2000, for a cash
consideration of GBP1,017,000, crystallising a gain on disposal of
GBP942,000.
Operations
Encouragingly, following its acquisition in March 2015, Barker
Poland Asset Management (BPAM) has made its first full contribution
to our results above expectation which has helped our stated aim of
materially increasing the proportion of our revenues earned as
fees, rather than through transaction-driven commissions. This is a
key performance indicator reflecting the changing shape of the
business from traditional stockbroking to an integrated investment
and wealth management model.
Despite an increase in administrative expenses, a material
proportion of which relate to
the development and growth of acquired businesses, as well as a
30% increase in our Financial Services Compensation Scheme (FSCS)
levy and a one-off property cost provision of GBP132,000 relating
to the change of ownership and premature forthcoming termination of
the lease of our London head office, costs were strictly monitored
and headcount largely restricted to incoming revenue earners and
their support teams.
The uncontrollable costs levied by the FSCS of GBP402,000 (2015:
GBP310,000) are an indication of the costs of absorbing a share of
losses incurred by failed competitors.
Investment Management
The Company's assets under management have continued growing to
unprecedented levels in a climate in which portfolio valuations
have been affected by market uncertainty and substantial falls in
some sectors of the FTSE 100 and other major indices.
We recognise the growing importance of scale which gives clients
and market participants some degree of reassurance of the security
of their assets as well as confidence in the strength and stability
of the organisation. With total Assets under Management and
Administration (AUMA) at the year end standing at a high of GBP4.1
billion (31 March 2015: GBP3.8 billion), despite declines in equity
markets, our target of GBP5 billion AUMA by 2018 is within reach,
with GBP10 billion being a potential milestone over the next ten
years.
Discretionary and Advisory assets under management (AUM) at the
year end were GBP2.3 billion (31 March 2015: GBP2.0 billion),
reflecting the inflows from the clients of new advisers and
investment managers and the longer term revenue benefits of our
asset gathering strategy alongside transactional brokerage.
Commission income from broking remained stable, whilst Investment
Management fees increased by 30.6% to GBP13.6 million (2015:
GBP10.4 million).
Gross revenues from the Investment Management division increased
by 14.8% during the period to GBP23.6 million (2015: GBP20.6
million), another marked improvement and clear demonstration that
the scope for additional expansion continues to be a realistic
prospect.
Further boosts to the ISA regime were provided by the last
budget with the addition to the ISA product stable of another
savings product called the Lifetime ISA (LISA) and the increase in
the subscription allowance to GBP20,000 for April 2017. Investors
and savers of all age groups now have much greater flexibility
ensuring "cradle to grave" access to ISAs, and the ISA AUM grew by
4.2% to over GBP600 million. The forthcoming additional
tax-efficient transferability allowances will also encourage
inherited funds to remain invested under our management.
The Structured Investments team has continued to broaden its
intermediary client base and increase assets under management over
the financial year. Our competitive range of structured investment
products continues to garner strong demand amongst financial
advisers and their clients. With the addition of new product lines
we anticipate another strong contribution from this key offering
over the coming year.
Wealth Management
Our innovative Wealth Management division, run from York,
continues to be driven by focused management and a competent team
of advisers, who provide a committed, high quality service to its
widening client base.
Complementing this division and also operating from York is our
Pensions unit administering Self Invested Personal Pensions (SIPP)
and Small Self Administered Schemes (SSAS), along with a small
number of Funded Unapproved Retirement Benefit Schemes (FURBS).
Importantly and despite difficult market conditions AUMA of the
combined divisions (an increasingly significant measure) increased
to GBP501 million (2015: GBP495 million).
Turnover across both divisions remained stable; however, strong
headwinds including a large increase in regulatory fees, combined
with provision for potential claims and increased non-recurring
costs and investment in the back and mid-office support functions,
led to a decrease in profitability for this sector of the
business.
Looking ahead there are sound reasons for optimism with revenue
boosted by several initiatives and a stronger level of work in
progress in the opening weeks of the
new year.
Regulation
Preparations are well underway to meet the challenges posed by
the MiFID II initiative. We continue to fully support and reinforce
the Financial Conduct Authority (FCA) guidance on its drive to
ensure advice given to clients by our account executives is
suitable and properly recorded. Our culture of serving clients in
their best interests is well established in our DNA as we continue
to strive to deliver good customer outcomes.
Statement of financial position
As at 31 March 2016, the Group maintained a steady level of net
assets of GBP20.6 million (2015: GBP20.9 million), including net
cash of GBP7.2 million (2015: GBP6.5 million).
Going concern
The Group continues to maintain a robust financial position.
Having conducted detailed cash flow and working capital forecasts
and appropriate stress-testing on liquidity, profitability and
regulatory capital, taking account of possible adverse changes in
trading performance, the Board has sufficient grounds to believe
the Group is well placed to manage its business risks adequately,
and that it will be able to operate within the level of its current
financing arrangements and regulatory capital limits. Accordingly,
the Board continues to adopt the going concern basis for the
preparation
Viability Statement
The Directors have assessed the outlook of the Company over
longer periods than the twelve months required by the "Going
Concern" statement in accordance with the 2014 UK Corporate
Governance Code.
The Directors' assessment has been made with reference to the
historic resilience of the Group, strong cash flows, its current
strategy, the Board's risk appetite and the Group's principal risks
and how these are managed.
The assessment relied on the Group's annual 21 month budget, a
three year stress-tested forecast of profitability, cash flow and
regulatory capital and its Internal Capital Adequacy Assessment
Process (ICAAP) which incorporates an evaluation of the Group's
principal risks and uncertainties, including those that would
threaten its business model, future performance or solvency.
In addition, in light of the decision for Britain to leave the
European Union following the recent referendum, the directors have
also considered the impact of this event on its ability to continue
as a Going Concern as well as other areas of risk where critical
accounting judgements and estimation uncertainty have been
considered.
Following this assessment, the Directors have concluded that the
Viability Statement should cover a period of three years. Whilst
the Directors have no reason to believe that the Group will not be
viable over a longer period from its review of its five year
forecasts, this period has been chosen because a three year time
horizon has a much greater degree of certainty and thus provides a
more appropriate longer-term outlook in our potentially volatile
investment sector.
Taking account of the Group's current position and principal
risks, the Directors have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as
they fall due over a period of at least three years.
Directors, account executives and staff
After another year of increasing numbers of revenue generators
and the absorption of their additional investment business, through
transfers of clients and their assets, we would like to thank all
our fellow Directors, investment managers and advisers, and members
of our operations team for their continuing hard work and diligence
in shouldering this burden.
Management have worked hard to continue increasing the level of
communication with our personnel to impart up-to-date information
and encourage feedback whilst re-emphasising the culture and
behaviour essential to the core values of the Company. Integrity,
courtesy, fairness, diligence, responsibility and loyalty make it
an appealing firm for prospective clients and professionals to
join.
Annual General Meeting
This year's Annual General Meeting will be held at the South
Place Hotel, 3 South Place, London EC2M 2AF on 3 August 2016 at
11.00 a.m.
Outlook
We continue to achieve substantial growth and to refine our
strategy and business model to make further strides towards
attaining our long-term strategic goals.
Against a background of difficult markets, we have striven to
set higher regulatory standards and client service levels as we
deliver our strategy for growth.
Trading activity in the opening weeks of the new financial year
has been quiet and your Board correspondingly looks to the
immediate future with cautious optimism.
At a macro level the extent of the economic and political
instability created by Brexit is difficult to predict. In addition,
at a micro level, we face significant demands from continuing
regulatory initiatives and their associated costs over the next 18
months.
We will monitor diligently the impact of these factors and will
react promptly as we consider appropriate. Nonetheless, despite
these challenges, we consider that it is our emphasis on integrity,
service and good customer outcomes which will drive our public
profile and competitive positioning to deliver underlying stability
and growth in the next phase of the Group's development.
David Gelber Rodney FitzGerald FCA
Chairman Chief Executive Officer
30 June 2016
Consolidated income statement
Year ended 31 March 2016
2016 2015
Notes GBP'000 GBP'000
--------------------------------------- ------ --------- ---------
Continuing operations
Revenue 6 26,070 22,994
Commission payable (8,433) (7,653)
--------------------------------------- ------ --------- ---------
Gross profit 17,637 15,341
Share of after tax profits of
joint ventures 10 13
--------------------------------------- ------ --------- ---------
Administrative expenses - other (16,996) (14,810)
Administrative expenses - exceptional
item 3 (778) (329)
--------------------------------------- ------ --------- ---------
Total administrative expenses (17,774) (15,139)
--------------------------------------- ------ --------- ---------
Operating (loss)profit (127) 215
--------------------------------------- ------ --------- ---------
Analysed as:
Profit before tax and exceptional
item 651 544
Administrative expenses - exceptional
item 3 (778) (329)
--------------------------------------- ------ --------- ---------
Operating (loss)profit (127) 215
Gain on disposal of investment 4 942 -
Investment revenues 131 225
Finance costs (2) (1)
--------------------------------------- ------ --------- ---------
Profit before tax 944 439
Taxation (149) (182)
--------------------------------------- ------ --------- ---------
Profit for the year attributable
to equity holders of the Company 795 257
--------------------------------------- ------ --------- ---------
Earnings per share
Basic 2 2.11 0.69
Diluted 2 2.11 0.68
--------------------------------------- ------ --------- ---------
Consolidated statement of comprehensive income
Year ended 31 March 2016
2016 2015
GBP'000 GBP'000
---------------------------------------------- -------- --------
Loss on revaluation of available-for-sale
investments taken to equity - (88)
Reversal of revaluation of available-for-sale
investments (959)
Deferred tax on loss on available-for-sale
investments - 28
Reversal of deferred tax charge on
revaluation of available-for-sale
investments 192 -
----------------------------------------------- -------- --------
Net loss recognised directly in equity (767) (60)
Profit for the year 795 257
----------------------------------------------- -------- --------
Total comprehensive income for the
year attributable to equity holders
of the Company 28 197
----------------------------------------------- -------- --------
Consolidated statement of financial position
31 March 2016
Group Group
2016 2015
GBP'000 GBP'000
-------------------------------------- -------- --------
Non-current assets
Goodwill 4,388 4,388
Other intangible assets 7,992 6,631
Property, plant and equipment 841 1,110
Interest in joint ventures 28 28
Available-for-sale investments 57 2,417
--------------------------------------- -------- --------
13,306 14,574
Current assets
Trade and other receivables 38,799 28,332
Trading investments 1,237 2,701
Cash and cash equivalents 7,257 6,635
--------------------------------------- -------- --------
47,293 37,668
-------------------------------------- -------- --------
Total assets 60,599 52,242
--------------------------------------- -------- --------
Current liabilities
Trade and other payables (36,424) (27,537)
Current tax liabilities (141) (239)
Deferred tax liabilities (517) (741)
Bank overdrafts (77) (134)
Shares to be issued (912) (298)
--------------------------------------- -------- --------
(38,071) (28,949)
-------------------------------------- -------- --------
Net current assets 9,222 8,719
--------------------------------------- -------- --------
Long term liability - deferred
cash consideration (1,556) (1,930)
Long term liability - shares to
be issued (218) (453)
Long term liability - dilapidation
provision (132) -
--------------------------------------- -------- --------
Net assets 20,622 20,910
--------------------------------------- -------- --------
Equity
Share capital 2,595 2,545
Share premium account 2,279 1,988
Own shares (312) (312)
Retained earnings 11,392 11,254
Revaluation reserve - 767
Other reserves 4,668 4,668
--------------------------------------- -------- --------
Equity attributable to equity holders
of the Company 20,622 20,910
--------------------------------------- -------- --------
Consolidated statement of cash flows
Year ended 31 March 2016
2016 2015
GBP'000 GBP'000
--------------------------------------------- -------- --------
Operating activities
Cash (used)/generated by operations (1,119) 3,806
Interest received 85 78
Interest paid (2) (1)
Tax paid (120) (337)
---------------------------------------------- -------- --------
Net cash (used)/generated by operating
activities (1,156) 3,546
---------------------------------------------- -------- --------
Investing activities
Purchase of property, plant and
equipment (247) (565)
Net sale/(purchase) of investments
held for trading 1,464 (1,031)
Net sale proceeds/cost of available-for-sale
investments 2,044 -
Consideration paid on acquisition
of businesses (810) (765)
Consideration paid on acquisition
of subsidiary (13) (1,875)
Dividends received 54 46
---------------------------------------------- -------- --------
Net cash generated/(used) by investing
activities 2,492 (4,190)
---------------------------------------------- -------- --------
Financing activities
Dividends paid (657) (958)
---------------------------------------------- -------- --------
Net cash used by financing activities (657) (958)
---------------------------------------------- -------- --------
Net increase/(decrease) in cash
and cash equivalents 679 (1,602)
Net cash and cash equivalents at
beginning of year 6,501 8,103
---------------------------------------------- -------- --------
Net cash and cash equivalents at
end of year 7,180 6,501
---------------------------------------------- -------- --------
Cash and cash equivalents 7,257 6,635
Bank overdrafts (77) (134)
---------------------------------------------- -------- --------
7,180 6,501
--------------------------------------------- -------- --------
Notes to the accounts
Year ended 31 March 2016
1. Going concern
The Group has healthy financial resources together with a long
established, well proven and tested business model. As a
consequence, the Directors believe that the Group is well placed to
manage its business risks successfully despite the current
difficult climate.
After conducting enquiries, the Directors believe that the
Company and the Group have adequate resources to continue in
existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the financial
statements.
2. Earnings per share
The calculation of basic earnings per share for continuing
operations is based on the post-tax profit for the financial year
of GBP795,000 (2015: GBP257,000) and on 37,678,525 (2015:
37,017,924) Ordinary Shares of 62/3 pence, being the weighted
average number of Ordinary Shares in issue during the year.
3. Administrative expenses - exceptional item
As a result of its materiality the Directors decided to disclose
certain amounts separately in order to present results which are
not distorted by significant non-recurring events.
2016 2015
GBP'000 GBP'000
-------------------------------------- -------- --------
Short Term Lending Fund winding down
costs - 68
Costs incurred on acquisitions - 261
Costs incurred on suitability project 778 -
-------------------------------------- -------- --------
778 329
-------------------------------------- -------- --------
During the period to 31 March 2016, the Group incurred legal and
professional adviser costs relating to enhancements made to the
Group's regulatory control framework in relation to suitability of
advice given to clients.
Towards the end of the prior year, a decision was made to wind
down our Short Term Lending Fund. All investors received a full
return of the sums invested. Administrative costs associated with
the wind down were provided for in the prior year's results. Prior
year acquisition costs are largely made up of legal and
professional costs being incurred and payable on completion of the
acquisition of BPAM on 6 March 2015.
4. Gains on disposal of investments
Net gains comprise:
2016 2015
GBP'000 GBP'000
-------------------------------------------- -------- --------
Gain on disposal of investment in Euroclear
shares 942 -
-------------------------------------------- -------- --------
During the period to 31 March 2016, the Group disposed of its
holding of 1,809 shares in Euroclear plc realising a gain of
GBP942,000.
During the period to 31 March 2015, there were no gains or
losses on disposal of investments.
Due to their level of materiality and one-off nature, the Board
has decided to disclose these items separately.
5. Segmental analysis
For management purposes the Group is currently organised into
two operating divisions - Investment Management and Wealth
Management. These divisions, both of which conduct business in the
United Kingdom only, are the basis on which the Group reports its
primary segment information.
Consolidated
year
ended
Investment Wealth 31 March
Management Management 2016
2016 GBP'000 GBP'000 GBP'000
-------------------------------- ----------- ----------- ------------
Revenue
External sales 23,639 2,431 26,070
-------------------------------- ----------- ----------- ------------
Result
Segment result 987 165 1,152
Unallocated corporate expenses (1,279)
-------------------------------- ----------- ----------- ------------
Operating loss (127)
Gain on disposal of investments 942
Investment revenues 131
Finance costs (2)
-------------------------------- ----------- ----------- ------------
Profit before tax 944
Tax (149)
-------------------------------- ----------- ----------- ------------
Profit after tax 795
-------------------------------- ----------- ----------- ------------
Consolidated
year
ended
Investment Wealth 31 March
Management Management 2016
2016 GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- ------------
Other information
Capital additions 231 16 247
Depreciation 497 19 516
Statement of financial position
Assets
Segment assets 52,131 1,963 54,094
Unallocated corporate assets 6,505
---------------------------------- ----------- ----------- ------------
Consolidated total assets 60,599
---------------------------------- ----------- ----------- ------------
Liabilities
Segment liabilities 39,018 543 39,561
Unallocated corporate liabilities 416
---------------------------------- ----------- ----------- ------------
Consolidated total liabilities 39,977
---------------------------------- ----------- ----------- ------------
Consolidated
year
ended
Investment Wealth 31 March
Management Management 2015
2015 GBP'000 GBP'000 GBP'000
------------------------------- ----------- ----------- ------------
Revenue
External sales 20,590 2,404 22,994
------------------------------- ----------- ----------- ------------
Result
Segment result 931 338 1,269
Unallocated corporate expenses (1,054)
------------------------------- ----------- ----------- ------------
Operating profit 215
Investment revenues 225
Finance costs (1)
------------------------------- ----------- ----------- ------------
Profit before tax 439
Tax (182)
------------------------------- ----------- ----------- ------------
Profit after tax 257
------------------------------- ----------- ----------- ------------
Consolidated
year
ended
Investment Wealth 31 March
Management Management 2015
2015 GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- ------------
Other information
Capital additions 552 13 565
Depreciation 380 16 396
Statement of financial position
Assets
Segment assets 44,322 2,074 46,396
Unallocated corporate assets 5,846
---------------------------------- ----------- ----------- ------------
Consolidated total assets 52,242
---------------------------------- ----------- ----------- ------------
Liabilities
Segment liabilities 30,532 615 31,147
Unallocated corporate liabilities 185
---------------------------------- ----------- ----------- ------------
Consolidated total liabilities 31,332
---------------------------------- ----------- ----------- ------------
6. Revenue
An analysis of the Group's revenue is as follows:
2016 2016 2015 2015
Broking Non-broking 2016 Broking Non-broking 2015
income income Total income income Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- ------------ -------- -------- ------------ --------
Stockbroking commission 10,007 - 10,007 10,152 - 10,152
Fees and other revenue - 13,632 13,632 - 10,438 10,438
------------------------ -------- ------------ -------- -------- ------------ --------
Investment Management 10,007 13,632 23,639 10,152 10,438 20,590
Wealth Management - 2,431 2,431 - 2,404 2,404
------------------------ -------- ------------ -------- -------- ------------ --------
Revenue 10,007 16,063 26,070 10,152 12,842 22,994
Net investment revenue - 129 129 - 224 224
------------------------ -------- ------------ -------- -------- ------------ --------
Total income 10,007 16,192 26,199 10,152 13,066 23,218
------------------------ -------- ------------ -------- -------- ------------ --------
% of total income 38.2 61.8 100.0 43.7 56.3 100.0
------------------------ -------- ------------ -------- -------- ------------ --------
7. Contingent liability
The Group has received an assessment from HMRC to pay a
significant sum of Income Tax and National Insurance plus interest.
The assessment relates to moneys apparently paid to two of its
former fund managers arising out of their employment with Walker
Crips Asset Managers Limited (WCAM), a former wholly-owned
subsidiary of the group which was sold on 12 April 2012.
The Directors believe that the amount assessed may relate to
subsequent payments made to the two WCAM Managers by the purchasers
of WCAM, a transaction in which the Group was not involved. Under
the terms of the Sale and Purchase Agreement of 12 March 2012, the
purchaser is considered by the Directors to be ultimately liable
for any tax arising in respect of any such payments made to the
Manager.
A successful appeal to postpone any tax payable has been made
whilst a more detailed investigation is being undertaken. In the
opinion of the Directors, there is insufficient information at the
date of these financial statements to allow the Board to conclude
that a liability exists at 31 March 2016. They have therefore made
no provision in these financial statements in respect of this
matter.
8. Basis of preparation of financial statements
The financial information set out in these financial statements
does not constitute the Group's statutory accounts for the years
ended 31 March 2016 and 2015.
The statutory accounts for 31 March 2016 to which these
non-statutory accounts relate have not been delivered to the
registrar of companies.
The auditor's report has been signed and was unqualified.
This preliminary announcement is based on the Group financial
statements which are prepared in accordance with IFRS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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