TIDMEVG
RNS Number : 1560Y
Evolution Group PLC
28 August 2009
The Evolution Group Plc
(the "Evolution Group", the "Group", the "Company")
Half Year results for the six months ended 30 June 2009
INTERIM MANAGEMENT REPORT - 2009
Evolution Group, the listed investment bank and private client investment
management group, today announces its half yearly financial report for the six
months ended 30 June 2009.
Performance Highlights (unaudited)
+-------------------------------------------------+--+----------+----+----------+--+------------+
| | | Half | | Half | | Half Year |
| | | Year | | Year | | Ended1 |
| | | Ended | | Ended | | 30.06.08 |
| | | 30.06.09 | | 31.12.08 | | |
| | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| | | GBPm | | GBPm | | GBPm |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| Total income | | 52.6 | | 29.0 | | 34.9 |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| Adjusted operating profit / (loss) 2 | | 9.1 | | (7.2) | | 4.5 |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| Adjusted earnings / (loss) 2 | | 8.2 | | (2.7) | | 5.6 |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| Adjusted diluted earnings / (loss) per share 2 | | 3.54p | | (1.10p) | | 2.24p |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| Statutory profit / (loss) before tax from | | 3.6 | | (13.1) | | 0.4 |
| continuing operations | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| Diluted earnings / (loss) per share from | | 1.21p | | (3.95p) | | (0.50p) |
| continuing operations | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| | | | | | | |
+-------------------------------------------------+--+----------+----+----------+--+------------+
| Dividend per Share | | 0.80p | | 1.27p | | 0.75p |
+-------------------------------------------------+--+----------+----+----------+--+------------+
* Record Group income of GBP52.6m for the half year ended 30 June 2009, up 51%
compared with 30 June 2008: GBP34.9m.
* Adjusted operating profit1 of GBP9.1m for the half year ended 30 June 2009, up
102% compared with 30 June 2008: GBP4.5m.
* Investment Banking income of GBP33.9m for the half year ended 30 June 2009, up
93% compared with 30 June 2008: GBP17.6m, mainly from more sustainable secondary
equities and fixed income commissions.
* Williams de Broë client assets have increased to record levels of GBP4.2bn, a
50% increase from GBP2.8bn at 30 June 2008, despite a 24% decline in FTSE All
Share Index over the same period, and an increase on the balance of GBP3.8bn at
31 December 2008.
* Record Private Client income of GBP18.8m for the half year ended 30 June 2009,
up 9% compared with 30 June 2008: GBP17.2m.
* Balance sheet strength maintained, with net assets at GBP147.1m (31 December
2008: GBP147.2m).
* Adjusted diluted earnings per share of 3.54p for the first year half, up 58%
compared with 30 June 2008: 2.24p.
* Continued growth in interim dividend of 7% to 0.80p (2008: 0.75p).
* Voted Number 1 AIM advisor of 2009 by Growth Company Investor Magazine.
* Voted Number 1 European Fixed Income Agency Broker of 2009 by Credit Magazine.
1 30 June 2008 figures have been restated due to Evolution Securities China
Limited becoming a discontinued operation in December 2008. Further information
can be found in the notes to the interim financial information.
2Adjusted operating profit, adjusted earnings and adjusted diluted earnings per
share are defined in the Financial Business Review section.
Commenting on the results and outlook, Martin Gray, Chairman of Evolution Group
said:
We are hopefully beginning to exit from the most challenging market and economic
conditions experienced in generations. However, even during these difficult
conditions we have significantly built our equities and fixed income businesses
within Evolution Securities, and integrated the Singer and Friedlander
Investment Management business acquired last year within Williams de Broë. We
have achieved this whilst delivering record levels of income, growing profits
and maintaining a strong and liquid balance sheet.
The Group's strategy remains one of growth and financial strength. We are very
pleased with the Group's progress in the first half of 2009 and believe the
Group continues to be well positioned for the future.
The Evolution Group Plc
The Evolution Group Plc is the holding company of Evolution Securities Limited
and Williams de Broë Limited. Founded in April 2001 and originally listed on
AIM, the Evolution Group joined the LSE Official List in 2003 and re-entered the
FTSE 250 in 2009, the Group now has a market capitalisation of over GBP300
million.
Evolution Securities Limited is a leading investment bank focused on serving our
international institutional and UK corporate client base. It provides a range of
investment banking services including equity research, institutional sales and
trading, fixed income, market making and corporate finance advice. Evolution
Securities Limited is authorised and regulated by the Financial Services
Authority.
Williams de Broë Limited is a leading private client investment manager, with
offices in Bath, Birmingham, Bournemouth, Edinburgh, Exeter, Guildford and
London. Williams de Broë is authorised and regulated by the Financial Services
Authority.
For further information, please contact:
+---------------------------------------------------+------------------------+
| The Evolution Group Plc | 020 7071 4300 |
| Alex Snow, Chief Executive Officer | |
| Andrew Westenberger, Finance Director | |
+---------------------------------------------------+------------------------+
| | |
+---------------------------------------------------+------------------------+
| Bell Pottinger Corporate and Financial | 020 7861 3232 |
| Charles Cook | |
| Emma Kent | |
| Victoria Geoghegan | |
+---------------------------------------------------+------------------------+
FORWARD-LOOKING STATEMENTS
This Half Yearly Financial Report contains forward-looking statements with
respect to the financial condition, results, operations and businesses of the
Evolution Group plc. Although the Group believes that the expectations reflected
in these forward-looking statements are reasonable, we can give no assurance
that these expectations will prove to have been correct. Such statements and
forecasts involve risk and uncertainty because they relate to future events and
depend upon circumstances that will occur in the future. There are a number of
factors that could cause actual results or developments to differ materially
from those expressed or implied by forward-looking statements and forecasts.
Forward-looking statements and forecasts are based on the Directors' current
view and information known to them at the date of this statement. The Directors
do not make any undertaking to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
CHAIRMAN'S STATEMENT
Review of the half year ended 30 June 2009
Evolution Group ("Evolution" or the "Group") has performed strongly given the
challenging economic climate of 2009 and results reported in 2008. The Group
traded profitably in each of the six months of 2009, generating an adjusted
operating profit of GBP9.1m for the first six months of 2009, compared with
GBP4.5m in the first half of 2008, and a loss of GBP7.2m in the second half of
2008. I am pleased to report the Group has achieved record income of GBP52.6m
for the half year, up 51% from GBP34.9m in the first half of 2008, with adjusted
earnings of GBP8.2m (30 June 2008: GBP5.6m).
Our Business Model
Our aim as a group is to generate a growing return for our Shareholders on the
financial capital they have invested. That growth will come from both our
operating businesses, which we believe are well placed in their respective areas
through our differentiated business model.
At the heart of our model are two core values
* A performance culture in which there is an appropriate alignment and sharing of
reward between our employees (the human capital) and our Shareholders (the
financial capital).
* A disciplined, conservative investment approach. We treat our stewardship of
investors' capital with the utmost care and accordingly carefully evaluate all
risks (including liquidity) when investing that capital. Moreover, we have a
conservative accounting philosophy whereby, for example, comparatively few
investment costs are capitalised, save for larger acquisitions. This approach
reflects our internal discipline and is also reflected in our reported results.
Our Businesses
Investment Banking (Evolution Securities)
Underpinning our investment banking division's current success are firstly our
clean balance sheet, free of any legacy of write downs or risks not yet
reflected in results and, secondly our efficient fixed cost platform with low
central overheads.
This differentiates us from our competitors. The transparency of our performance
pay model, without cross subsidies between individual businesses and benefiting
from lower fixed costs, combined with our agency led focus, results in superior
rewards for Shareholders and employees alike.
Private Client (Williams de Broë)
Our success in having built the division to the scale which we now have
(GBP4.2bn funds under management and administration) in a short period should
not be underestimated. We have done this through the toughest market conditions
(from 2007 to date). During this period the private client division has made an
excellent contribution to the Group's overall results and has played no small
part in preserving the financial and balance sheet strength we retain today. We
believe we have laid the foundations for a top class private client wealth
management business at the heart of which are superior client service, a
pre-eminent brand name, and good investment advice. This is coupled, as in
investment banking, with a performance culture which seeks to align, the rewards
to employees with the returns to our Shareholders.
2009 Performance
Investment Banking
2009 saw significant expansion of the Group's investment banking business.
Firstly we continued to recruit in our fixed income business resulting in record
levels of income from this activity. Our equities business in May 2009 announced
the recruitment of 45 equities staff from the former Dresdner Kleinwort
securities business. Over the last few months we have made further significant
hires into our equities business. These investments have increased the headcount
of our client facing equity staff by 52 (an increase of 100%), and provides us
with a significant opportunity to grow our pan European equities business. I am
pleased to report that we have made significant progress with both this
integration and development of each of these business units; but we would not
expect to see the full potential of these investments until 2010. The growth in
our fixed income and equities businesses has resulted in the Group's investment
banking division reporting income of GBP33.9m, up 93% on the first half of 2008,
and up 180% on the second half of 2008.
Private Client
The Group's private client activities have performed robustly given the decline
of UK indices in the period, coupled with the sharp decline in Bank of England
interest rates (affecting interest margins on client cash holdings). Net income
for the period of GBP18.8m is up 9% on the first and second halves of 2008. The
acquisition of the investment management team of Singer and Friedlander
Investment Management Limited ("SFIM") as reported on 21 October 2008
contributed significantly to the growth in client assets, enabling the business
to absorb the consequences of the current economic conditions. With the benefit
of this acquisition, client assets continued to grow when compared with the
first half (up 50%) and second half (up 11%) of 2008. This acquisition is
proving very successful and over GBP1bn of client assets were transferred to the
existing Williams de Broë platform in January 2009.
Dividend
In light of these results the Board declares an interim dividend of 0.80p per
share, up 7% from the prior year dividend of 0.75p. This reflects the Board's
continuing commitment to a progressive dividend policy as set out in the 2008
Annual Report and Accounts. The dividend is payable on 9 October 2009 to
shareholders on the register at 11 September 2009.
Balance sheet, cash and other items
The Group's balance sheet strength is being maintained, with net assets of
GBP147.1m at the period end (31 December 2008: GBP147.2m) including cash and
cash equivalents of GBP68.8m (31 December 2008: GBP103.6m). Cash has reduced in
the period due to the Group's natural cash cycle where June is historically a
low point of the year. In addition, cash has been employed as working capital,
which overall has increased by GBP35.9m in the six months to 30 June 2009; this
has been to support the growth of our equities and fixed income businesses.
Outlook
We continue to believe challenging economic conditions may continue for some
time. However, even during the difficult conditions of the past year we have
made significant progress in both the investment banking and private client
businesses.
We will continue to invest organically in all our businesses where we see
opportunities which fit with our core values set out above. We are seeking to
build the foundations for future growth for 2010 and beyond when much of our
current investments will begin to reach their full potential. In particular, we
will invest to expand our fixed income and equities securities businesses, by
adding international reach to our client distribution network and further
developing our product capabilities. In private clients, not only will we
continually examine opportunities to invest in our business model, to improve
efficiency and margins, but we will also ensure that sufficient investment in
our control environment continues to be made in order that it keeps pace with
the increasing regulatory demands being put upon UK private wealth managers.
Despite the continuing UK recession and the current uncertainty over the
financial sector, we are confident the Group is sufficiently capitalised with a
strong and liquid balance sheet to deliver future growth. The Group's continued
strategy is growth and financial strength. We believe the Group continues to be
well positioned for the future.
Martin Gray
Chairman
28 August 2009
FINANCIAL BUSINESS REVIEW
Adjusted operating profit
The Group's principal performance measure, 'Adjusted Operating Profit'
(excluding costs not considered part of the ongoing business profitability and
the cost of share options) is followed by the analyst community. While such
costs continue to be material, the Board considers it appropriate to disclose
their impact through the reconciliation below:
+-----------------------------------------------+------+----------+------------+----+----------+
| | Note | Half | Half year | Half year |
| | | year | ended | ended |
| | | ended | 31.12.08 | 30.06.08 |
| | | 30.06.09 | | |
+-----------------------------------------------+------+----------+------------+---------------+
| | | GBPm | GBPm | GBPm |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Total income | | 52.6 | 29.0 | 34.9 |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Operating expenses | | (48.9) | (44.3) | (36.9) |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Operating profit / (loss) from continuing | | 3.7 | (15.3) | (2.0) |
| operations | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Items not included within adjusted operating | | | | |
| profit / (loss): | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Amortisation of intangibles | | 0.8 | 0.4 | 0.2 |
+-----------------------------------------------+------+----------+-----------------+----------+
| Income statement charge for share options | | 3.3 | 5.4 | 6.3 |
| granted to employees1 | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Non-recurring operating expenses | | 1.3 | 2.3 | - |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Adjusted operating profit / (loss) | | 9.1 | (7.2) | 4.5 |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Net finance income | | 0.3 | 2.2 | 2.4 |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Adjusted profit / (loss) before tax | | 9.4 | (5.0) | 6.9 |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Tax (expense) / credit2 | | (1.2) | 2.3 | (1.3) |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Adjusted earnings / (loss) | | 8.2 | (2.7) | 5.6 |
+-----------------------------------------------+------+----------+-----------------+----------+
| | | | | |
+-----------------------------------------------+------+----------+-----------------+----------+
| Adjusted diluted earnings / (loss) per share | 4 | 3.54p | (1.10p) | 2.24p |
+-----------------------------------------------+------+----------+------------+----+----------+
1 Represents the Income Statement charge for the fair value of options granted
to employees. The Group continues to purchase shares through the Trust to
satisfy obligations in respect of share options and call rights granted to
employees (refer to note 10).
2 Excludes the tax effect of non-recurring operating expenses.
FINANCIAL BUSINESS REVIEW
Investment Banking
Evolution Securities provides equity and fixed income research, institutional
sales and trading, equity market making, corporate finance and corporate broking
advice. Within Evolution Securities, the core strategic objective is to maintain
a balanced business, between equities and fixed income, servicing the needs of
Institutional and Corporate customers in both of these product areas.
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| | | Half Year | Half Year | Half |
| | | Ended | Ended | Year |
| | | 30.06.09 | 31.12.08 | Ended |
| | | | | 30.06.08 |
+----------------------------------------------+------+--------------+-------------+-----------+
| | | | GBPm | | GBPm | | GBPm |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| | | | | | | | |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Corporate finance income | | | 3.5 | | 3.6 | | 5.6 |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Equity commission and trading income | | | 14.4 | | 4.5 | | 8.9 |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Fixed income commission | | | 16.0 | | 4.0 | | 3.1 |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Total income | | | 33.9 | | 12.1 | | 17.6 |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| | | | | | | | |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Operating expenses | | | (25.6) | | (19.1) | | (16.1) |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| | | | | | | | |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Adjusted operating profit / (loss) | | | 8.3 | | (7.0) | | 1.5 |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| | | | | | | | |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| | | | | | | | |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Key metrics | | | | | | | |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Headcount - Total | | | 189 | | 125 | | 131 |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Corporate clients - Total | | | 76 | | 70 | | 74 |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
| Transactional volumes (000's) | | | 1,264 | | 773 | | 781 |
+----------------------------------------------+------+----+---------+--+----------+--+--------+
Backdrop
The last two years have seen significant changes to the shape of revenues within
the Investment Banking sector. Over this period, primary income from IPO's has
fallen to virtually zero, equity market levels are lower with volumes down by 30
to 40%, and capital market activity has proven more difficult. During the last
two years Evolution Securities reduced its cost base down by 30%, and
subsequently re-aligned its business toward recurring revenue streams. Over the
last six to nine months we have re-invested this cost saving; in people,
services and products in Equities and Fixed Income. Not only have we enhanced
our core market position within the UK but we are creating a leading independent
position in Pan European Equities and Fixed Income, increasing our value to
clients and developing a culture to create an environment for success through
co-operation and teamwork. Our business model aligns costs with reward
structures, assesses risks at every level whilst putting our client first.
Results
Results in the first half of 2009 only partly reflect some of the changes we
have made to Fixed Income and Equities. In the period, equities sales
commissions and market making income accounted for GBP14.4m or 42% of total
income in the business (30 June 2008: GBP8.9m, 51% total income). Sales and
trading volume reached record levels of 1.3million for the period, up 62% from
the same period last year (30 June 2008: 0.8million). Fixed Income, in the first
half, recorded record levels of income of GBP16m, up 416% period on period (30
June 2008: GBP3.1m). Including Corporate Finance, total income was GBP33.9m, up
93% period on period (30 June 2008: GBP17.6m).
FINANCIAL BUSINESS REVIEW
Investment Banking
Strategy for Growth
Equities
In Equities, on 11th May 2009, our business offering was transformed by the
decision of over 45 former Dresdner Kleinwort Securities equities staff across
Research, Trading, Sales Trading and Sales to join our platform. Over the last
few months we have made further significant hires into our Equities business.
These investments have increased our headcount of client facing staff by 52 (an
increase of 100%). We now have significant growth opportunities across UK and
European Equities.
By the end of 2009, we estimate that we will have research coverage for
approximately 80% of the UK and European equity market by market capitalisation.
Our research is independent, non conflicted, client led, and ranges from
Economics and Strategy through to Pan European Large Cap to UK Small Cap. Our
sector coverage includes; Banks, General Financials, Industrials, Engineering,
Aerospace, Oil and Gas, Mining, Real Estate, Beverages, Food Producers, Tobacco,
Household Products, Luxury Goods, Support Services, Utilities, Pharmaceutical,
Healthcare, Medtech, Biotech, Technology, Media, Telecoms, Travel and Leisure,
Food and General Retail. In addition, we have a dedicated team who cover 'growth
companies' in the UK as well as a full income service in equities and bonds. Our
analyst teams are both experienced and well regarded.
Market Making has historically been focused in UK Small and Mid Cap stocks and
in serving the retail stock broker. In response to client demand and because we
had invested in our platform in this area over the last few years, we were able
to significantly expand our capabilities in the first half of 2009. We now have
dedicated trading teams in the Eurostoxx 300 and in European Mid and Small Cap
stocks. We are committed to best execution and excellent risk management. In
Distribution (sales and sales trading), recognising that good relationships are
at the core of a broker/client partnership, we have also significantly expanded
and improved our capabilities to service clients in the UK, Europe and US. The
sales teams we have hired to achieve this are experienced and well regarded, and
will leverage our substantial independent research platform and significant
trading capability.
Fixed Income
During 2009, the Fixed Income business has also seen some significant changes to
both its strategic direction and headcount. Over the first half of 2009, we have
increased our headcount by 18 (an increase of 140%), recruiting high calibre
individuals with specialist skills. Strategically, we have set out to develop
fixed income as the "best in league" to offer genuinely independent research, no
client-principal conflicts, with a pure focus on the buyer and seller, solving
their liquidity needs. Pricing over 4,000 bonds daily, without principal
position taking, we offer our clients an un-conflicted service. The Fixed Income
business now encompasses 6 product areas across the UK and Europe; Investment
Grade Bonds, Asset Backed Securities, Government Bonds, Emerging Markets, High
Yield and Distressed Bonds, and Illiquid Bonds (Prefs and Pibs). During the
first half of 2009 we have seen significant market share gains in Sterling based
markets, and a rapidly growing position in Euro, ABS, High Yield and Inflation
linked bonds. Fixed Income now has a global client base. Importantly, Evolution
Fixed Income has been rated for 2009 as the No 1 UK and European Fixed Income
Agency House by Credit Magazine, polling over 52% of the vote.
Corporate Finance
Corporate Finance successfully executed 5 placings in the first Half of 2009; (1
IPO and 4 secondary placings) which together with other advisory fees and
retainers generated income of GBP3.5m in the period to 30th June 2009 (30 June
2008 GBP5.6m). This level of primary fee income has been impacted by prevailing
market conditions. Momentum in Corporate Finance and Corporate Broking is very
good as demonstrated by successfully winning 16 new clients during this period.
In 2009 our efforts were recognised by Growth Company Investor Magazine (as
voted by Directors of publicly quoted companies) who voted us as the Number 1
AIM advisor for 2009. Looking after UK companies in both the Small and Mid cap
sectors is our core franchise within Corporate Finance and Corporate Broking,
and whether this is on the Main list or on AIM market, we believe we are well
equipped to give the right service to any size of company. Looking at our
secondary market strengths in Equities (research and distribution), and firmly
believing that many corporates would desire access to both advice and placement
capability in Fixed Income we have recruited Debt Capital Markets expertise.
This unit will co-exist with Corporate Finance from September 2009. We firmly
believe that Evolution Corporate Finance and Corporate Broking can retain,
service and attract a very good corporate client base.
Outlook
Evolution Securities has the ambition to become a leading UK Investment Bank in
Equity and Debt markets. Some of these foundation stones, enabling us to attract
the talent to attain our goals, are now in place. We believe that the changes we
have made over the first half of 2009 enable us to capitalise on opportunities
for further growth.
FINANCIAL BUSINESS REVIEW
Private Client Investment Management
Private Client Investment Management results are defined as those arising from
the results of Williams de Broë Limited, which is a leading private client
investment manager, with offices in Bath, Birmingham, Bournemouth, Edinburgh,
Exeter, Guildford and London, and WDB Capital Limited which is the investment
manager of WDB Capital Fund Limited. Both Williams de Broë Limited and WDB
Capital Limited ("WdB") are authorised and regulated by the Financial Services
Authority.
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| | | Half Year | Half Year | Half Year |
| | | Ended | Ended | Ended |
| | | 30.06.09 | 31.12.08 | 30.06.08 |
+----------------------------------------------+--+---------------+-------------+-------------+
| | | | GBPm | | GBPm | | GBPm |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| | | | | | | | |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Management fees | | | 10.8 | | 9.9 | | 7.5 |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Transactional income | | | 7.3 | | 5.8 | | 8.3 |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Segregated interest income | | | 0.7 | | 1.6 | | 1.4 |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Total income | | | 18.8 | | 17.3 | | 17.2 |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| | | | | | | | |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Operating expenses | | | (17.6) | | (16.5) | | (14.4) |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| | | | | | | | |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Adjusted operating profit | | | 1.2 | | 0.8 | | 2.8 |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| | | | | | | | |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Key metrics | | | | | | | |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Headcount - Total | | | 261 | | 252 | | 213 |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Total client assets | | | GBP4.2bn | | GBP3.8bn | | GBP2.8bn |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
| Fund Sales | | | GBP0.2bn | | GBP0.2bn | | GBP0.3bn |
+----------------------------------------------+--+----+----------+--+----------+--+----------+
WdB has again delivered a robust performance despite a 1.65% fall in the FTSE
all share and a fall of 4.1% in the FSTE APCIMS balanced index since 31 December
2008, coupled with the sharp decline in Bank of England interest rates affecting
interest margins. Despite this, total client assets were GBP4.2bn, up by 50%
from GBP2.8bn at 30 June 2008 and have increased 11% on the balance of GBP3.8bn
at 31 December 2008, demonstrating our continuing success in growing client
assets. The acquisition of SFIM has proved successful with over GBP1bn of client
assets transferred onto the existing WdB platform in January 2009.
Management fee income of GBP10.8m has grown in line with client assets; up 44%
from GBP7.5m in the first half of 2008. Further growth is expected in the second
half as clients continue to be integrated following the acquisition of SFIM. We
are also pleased to see transactional incomes and volumes recovering from the
lows seen in the second half of 2008, with the second quarter of 2009 being a
record quarter for volumes and income. However, segregated interest income has
been exposed to sharp declines in interest rates and yields. As a result
segregated interest income of GBP0.7m is down 50% on the first half of 2008.
In addition, WdB's dedicated intermediary sales team continued to deliver strong
new asset sales in the first six months of 2009 of GBP0.2bn (30 June 2008:
GBP0.3bn). The below table shows WdB movement in client assets during the
period:
+--------------------------------------------------+---+-------------+---+--------+
| | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| Movement in funds under management and | | GBPBillions | | % |
| administration | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| Funds under management and administration - | | 3.8 | | |
| December 2008 | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| Non managed funds - December | | (0.4) | | |
+--------------------------------------------------+---+-------------+---+--------+
| | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| Managed assets under management - December 2008 | | 3.4 | | |
+--------------------------------------------------+---+-------------+---+--------+
| | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| Performance | | 0.1 | | 2.9% |
+--------------------------------------------------+---+-------------+---+--------+
| Fund Sales | | 0.2 | | 5.9% |
+--------------------------------------------------+---+-------------+---+--------+
| Redemptions | | (0.1) | | (2.9%) |
+--------------------------------------------------+---+-------------+---+--------+
| | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| Managed assets under management - June 2009 | | 3.6 | | |
+--------------------------------------------------+---+-------------+---+--------+
| | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| Non managed funds - June | | 0.6 | | |
+--------------------------------------------------+---+-------------+---+--------+
| | | | | |
+--------------------------------------------------+---+-------------+---+--------+
| Funds under management and administration - June | | 4.2 | | |
| 2009 | | | | |
+--------------------------------------------------+---+-------------+---+--------+
OTHER INTERIM INFORMATION
Group activities
A summary of Group Activities can be found on Page 18 of the 2008 Annual Report
and Accounts.
Key events and transactions
A summary of the operational highlights and their impact on the performance and
financial position of the Group is given in the Chairman's Statement above.
Principal risks and uncertainties
Information on the principal risks and uncertainties are included within the
2008 Annual Report and Accounts where the Group's key risks and its risk
management framework can be found in the Directors' Report on page 19 and in
Note 2 respectively. The Board believes the Group's principal risks and
uncertainties which could have a material impact over the remaining six months
of the financial year remain consistent with those disclosed within the 2008
Annual Report and Accounts. Each of the Group's divisions considers strategic,
operational and financial risks and identifies actions to mitigate those risks.
These risk profiles are updated at least annually.
Related parties
Related party transactions are described in Note 37 of our 2008 Annual Report
and Accounts. Additional related party disclosures are given in Note 12 to the
condensed consolidated interim financial information.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Board confirm, to the best of their knowledge, that this condensed
consolidated interim financial information has been prepared in accordance with
IAS 34 as adopted by the European Union and that the Interim Management Report
includes a fair review of the information required by:
* DTR 4.2.7: an indication of important events that have occurred during the first
six months and their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the financial year; and
* DTR 4.2.8: material related party transactions in the first six months and any
material changes in the related party transactions described in the last Annual
Report and Accounts.
The Directors of the Group are listed in the 2008 Annual Report and Accounts; in
addition Andrew Westenberger was appointed a director on 8 April 2009. Other
than this appointment there have been no changes in the period to 30 June 2009.
A list of the current Directors is maintained on the Group's website:
www.evgplc.com.
The Directors are responsible for the maintenance and integrity of the Group web
site, www.evgplc.com. Legislation in the UK governing the preparation and
dissemination of Financial Statements may differ from legislation in other
jurisdictions.
By order of the Board
Alex Snow
Chief Executive Officer
28 August 2009
INDEPENDENT REVIEW REPORT TO THE EVOLUTION GROUP PLC
Introduction
We have been engaged by the Company to review the condensed consolidated interim
financial information in the Half Yearly Financial Report for the six months
ended 30 June 2009, which comprises the Consolidated Income Statement,
Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet,
Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement
and related notes. We have read the other information contained in the Half
Yearly Financial Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
consolidated interim financial information.
Directors' responsibilities
The Half Yearly Financial Report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the Half Yearly
Financial Report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed consolidated interim financial information included in this Half
Yearly Financial Report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted by the
European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
consolidated interim financial information in the Half Yearly Financial Report
based on our review. This report, including the conclusion, has been prepared
for and only for the Company for the purpose of the Disclosure and Transparency
Rules of the Financial Services Authority and for no other purpose. We do not,
in producing this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed consolidated interim financial information in the Half Yearly
Financial Report for the six months ended 30 June 2009 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
28 August 2009
INTERIM FINANCIAL INFORMATION
CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited)
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | Half Year | | Half Year | | |
| | | Ended | | Ended | | Half Year |
| | | 30.06.09 | | 31.12.08 | | Ended 1 |
| | | | | | | 30.06.08 |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | Note | GBPm | | GBPm | | GBPm |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Total income | | 52.6 | | 29.0 | | 34.9 |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Operating expenses | | (48.9) | | (44.3) | | (36.9) |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Operating profit / (loss) from | | 3.7 | | (15.3) | | (2.0) |
| continuing operations | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Finance income | | 0.5 | | 2.9 | | 2.7 |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Finance expense | | (0.2) | | (0.7) | | (0.3) |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Share of post tax results of associates | | (0.4) | | - | | - |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Profit / (loss) before tax from | | 3.6 | | (13.1) | | 0.4 |
| continuing operations | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Tax (expense) / credit | 6 | (0.7) | | 3.0 | | (1.3) |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Profit / (loss) after tax from | | 2.9 | | (10.1) | | (0.9) |
| continuing operations | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| (Loss) from discontinued operations | 11 | (2.3) | | (2.1) | | (0.4) |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Profit / (loss) after tax from total | | 0.6 | | (12.2) | | (1.3) |
| operations | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Profit / (loss) attributable to: | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Minority interests | | (0.4) | | (0.9) | | 0.2 |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Equity holders of The Evolution Group | | 1.0 | | (11.3) | | (1.5) |
| Plc | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | 0.6 | | (12.2) | | (1.3) |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Earnings / (loss) per share | | | | | | |
| attributable to the equity holders of | | | | | | |
| The Evolution Group Plc during the | | | | | | |
| period: | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Basic earnings / (loss) per share from | 4 | 1.28p | | (4.59p) | | (0.59p) |
| continuing operations | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Basic (loss) per share from | 4 | (0.86p) | | (0.70p) | | (0.14p) |
| discontinued operations | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | 0.42p | | (5.29p) | | (0.73p) |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Diluted earnings / (loss) per share | 4 | 1.21p | | (3.95p) | | (0.50p) |
| from continuing operations | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Diluted (loss) per share from | 4 | (0.81p) | | (0.61p) | | (0.12p) |
| discontinued operations | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | 0.40p | | (4.56p) | | (0.62p) |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| Dividend proposed / paid per share - | 5 | 0.80p | | - | | 0.75p |
| Interim | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| - Final | 5 | - | | 1.27p | | - |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
| | | | | | | |
+-----------------------------------------+-------+------------+--+-----------+--+------------+
1 H1 2008 figures have been restated due to Evolution Securities China Limited
becoming a discontinued operation in December 2008. Further information can be
found in the notes to the interim financial information.
The notes below form an integral part of this condensed consolidated interim
financial information. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
+-------------------------------------------------+----------+---+-----------+---+------------+
| | Half | | Half Year | | Half Year |
| | Year | | Ended | | Ended |
| | Ended | | 31.12.08 | | 30.06.08 |
| | 30.06.09 | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| | GBPm | | GBPm | | GBPm |
+-------------------------------------------------+----------+---+-----------+---+------------+
| | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Profit / (loss) for the financial period | 0.6 | | (12.2) | | (1.3) |
+-------------------------------------------------+----------+---+-----------+---+------------+
| | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Revaluation of available-for-sale financial | - | | (0.5) | | (0.1) |
| assets, net of tax | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Foreign exchange translation | (0.2) | | 0.4 | | - |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Deferred income tax credit / (debit) on share | 1.2 | | (0.3) | | (0.7) |
| options taken to equity | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Other comprehensive income / (expense) for the | 1.0 | | (0.4) | | (0.8) |
| period, net of tax | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Total comprehensive income / (expense) for the | 1.6 | | (12.6) | | (2.1) |
| period | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Attributable to: | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Minority interests | (0.4) | | (0.9) | | 0.2 |
+-------------------------------------------------+----------+---+-----------+---+------------+
| Equity holders of The Evolution Group Plc | 2.0 | | (11.7) | | (2.3) |
+-------------------------------------------------+----------+---+-----------+---+------------+
| | 1.6 | | (12.6) | | (2.1) |
+-------------------------------------------------+----------+---+-----------+---+------------+
| | | | | | |
+-------------------------------------------------+----------+---+-----------+---+------------+
The notes below form an integral part of this condensed consolidated interim
financial information.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
+--------------------------------------------------+------+--------------+--+---------------+
| |Note | 30.06.09 | | 31.12.08 |
| | | GBPm | | GBPm |
+--------------------------------------------------+------+--------------+--+---------------+
| ASSETS | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Non-current assets | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Goodwill | | 10.4 | | 10.4 |
+--------------------------------------------------+------+--------------+--+---------------+
| Other intangible assets | | 7.2 | | 7.6 |
+--------------------------------------------------+------+--------------+--+---------------+
| Investment in associates | 7 | 13.3 | | - |
+--------------------------------------------------+------+--------------+--+---------------+
| Property, plant and equipment | | 3.1 | | 3.4 |
+--------------------------------------------------+------+--------------+--+---------------+
| Deferred tax assets | | 9.8 | | 9.4 |
+--------------------------------------------------+------+--------------+--+---------------+
| Total non-current assets | | 43.8 | | 30.8 |
+--------------------------------------------------+------+--------------+--+---------------+
| | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Current assets | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Trade and other receivables | | 432.6 | | 58.7 |
+--------------------------------------------------+------+--------------+--+---------------+
| Available-for-sale investments | | 1.1 | | 1.1 |
+--------------------------------------------------+------+--------------+--+---------------+
| Trading portfolio assets | 8 | 32.2 | | 5.0 |
+--------------------------------------------------+------+--------------+--+---------------+
| Cash and cash equivalents | | 68.8 | | 103.6 |
+--------------------------------------------------+------+--------------+--+---------------+
| Assets of disposal groups classified as | 11 | - | | 28.1 |
| held-for-sale | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Total current assets | | 534.7 | | 196.5 |
+--------------------------------------------------+------+--------------+--+---------------+
| Total assets | | 578.5 | | 227.3 |
+--------------------------------------------------+------+--------------+--+---------------+
| | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| LIABILITIES | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Current liabilities | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Trade and other payables | | 415.1 | | 60.2 |
+--------------------------------------------------+------+--------------+--+---------------+
| Trading portfolio liabilities | 9 | 13.9 | | 4.3 |
+--------------------------------------------------+------+--------------+--+---------------+
| Current income tax liabilities | | - | | 0.1 |
+--------------------------------------------------+------+--------------+--+---------------+
| Liabilities of disposal groups classified as | 11 | - | | 12.9 |
| held-for-sale | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Total current liabilities | | 429.0 | | 77.5 |
+--------------------------------------------------+------+--------------+--+---------------+
| | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Non-current liabilities | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Deferred tax liabilities | | 1.6 | | 1.8 |
+--------------------------------------------------+------+--------------+--+---------------+
| Provisions for liabilities | | 0.8 | | 0.8 |
+--------------------------------------------------+------+--------------+--+---------------+
| Total non-current liabilities | | 2.4 | | 2.6 |
+--------------------------------------------------+------+--------------+--+---------------+
| Total liabilities | | 431.4 | | 80.1 |
+--------------------------------------------------+------+--------------+--+---------------+
| | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| EQUITY | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Capital and reserves attributable to equity | | | | |
| shareholders | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Share capital | | 2.3 | | 2.2 |
+--------------------------------------------------+------+--------------+--+---------------+
| Share premium | | 30.0 | | 29.8 |
+--------------------------------------------------+------+--------------+--+---------------+
| Other reserves | | 27.6 | | 27.8 |
+--------------------------------------------------+------+--------------+--+---------------+
| Retained earnings | | 87.2 | | 86.5 |
+--------------------------------------------------+------+--------------+--+---------------+
| Shareholders' equity excluding minority | | 147.1 | | 146.3 |
| interests | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Minority interests in equity | | - | | 0.9 |
+--------------------------------------------------+------+--------------+--+---------------+
| Total equity | | 147.1 | | 147.2 |
+--------------------------------------------------+------+--------------+--+---------------+
| | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
| Total equity and liabilities | | 578.5 | | 227.3 |
+--------------------------------------------------+------+--------------+--+---------------+
| | | | | |
+--------------------------------------------------+------+--------------+--+---------------+
The notes below form an integral part of this condensed consolidated interim
financial information.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | Share | Share | Other | Retained | Total | Minority | Total |
| | capital | premium | Reserves | earnings | | | equity |
| | | | | | | Interest | |
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Balance at 1 January 2009 | 2.2 | 29.8 | 27.8 | 86.5 | 146.3 | 0.9 | 147.2 |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Profit / (loss) for the period | - | - | - | 1.0 | 1.0 | (0.4) | 0.6 |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Revaluation of available-for-sale | - | - | - | - | - | - | - |
| financial assets | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Deferred income tax credit on share | - | - | - | 1.2 | 1.2 | - | 1.2 |
| options taken to equity | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Foreign exchange revaluations | - | - | (0.2) | - | (0.2) | - | (0.2) |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Total comprehensive income for the | - | - | (0.2) | 2.2 | 2.0 | (0.4) | 1.6 |
| period | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Issuance of ordinary shares | 0.1 | 0.2 | - | - | 0.3 | - | 0.3 |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Purchase of Trust shares | - | - | - | (2.4) | (2.4) | - | (2.4) |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Dividends paid | - | - | - | (2.8) | (2.8) | - | (2.8) |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Share options: value of services | - | - | - | 3.4 | 3.4 | - | 3.4 |
| provided | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Disposal of subsidiaries deferred tax | - | - | - | 0.2 | 0.2 | - | 0.2 |
| and share options | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Schedule 23 deduction on options | - | - | - | 0.1 | 0.1 | - | 0.1 |
| exercised | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Reversal of minority interest on | - | - | - | - | - | (0.5) | (0.5) |
| disposal | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Balance at 30 June 2009 | 2.3 | 30.0 | 27.6 | 87.2 | 147.1 | - | 147.1 |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | Share | Share | Other | Retained | Total | Minority | Total |
| | capital | premium | Reserves | earnings | | Interest | equity |
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Balance at 1 January 2008 | 2.2 | 28.8 | 49.9 | 72.4 | 153.3 | 1.9 | 155.2 |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| (Loss) / profit for the period | - | - | - | (1.5) | (1.5) | 0.2 | (1.3) |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Revaluation of available-for-sale | - | - | (0.1) | - | (0.1) | - | (0.1) |
| financial assets | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Deferred income tax (debit) on share | - | - | - | (0.7) | (0.7) | - | (0.7) |
| options taken to equity | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Total comprehensive expense for the | - | - | (0.1) | (2.2) | (2.3) | 0.2 | (2.1) |
| period | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Issuance of ordinary shares | - | 0.8 | - | - | 0.8 | - | 0.8 |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Purchase of Trust shares | - | - | - | (1.6) | (1.6) | - | (1.6) |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Dividends paid | - | - | - | (2.7) | (2.7) | - | (2.7) |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Share options: value of services | - | - | - | 6.4 | 6.4 | - | 6.4 |
| provided | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Schedule 23 deduction on options | - | - | - | 0.1 | 0.1 | - | 0.1 |
| exercised | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Investment by third parties into WDB | - | - | - | - | - | 4.7 | 4.7 |
| Capital Fund | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| | | | | | | | |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
| Balance at 30 June 2008 | 2.2 | 29.6 | 49.8 | 72.4 | 154.0 | 6.8 | 160.8 |
+----------------------------------------+---------+---------+----------+----------+-------+----------+--------+
The notes below form an integral part of this condensed consolidated interim
financial information.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Unaudited)
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| | | Half | | Half | | Half |
| | | Year | | Year | | Year |
| | | Ended | | Ended | | Ended |
| | | 30.06.09 | | 31.12.08 | | 30.06.08 |
| | | GBPm | | GBPm | | GBPm |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Profit / (loss) before tax from continuing | | 3.6 | | (13.1) | | 0.4 |
| operations | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Adjustments for: | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Non cash items | | 4.7 | | 6.7 | | 8.6 |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Movement in working capital | | (35.9) | | 21.1 | | (5.7) |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Tax paid | | (0.6) | | (0.6) | | (0.1) |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Cash flows generated from / (absorbed by) | | 0.1 | | (1.6) | | (0.1) |
| discontinued operations | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Net cash (absorbed by) / generated from operating | | (28.1) | | 12.5 | | 3.1 |
| activities - total | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Cash flows from investing activities from | | | | | | |
| continuing operations: | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Acquisition of business | | - | | (4.4) | | - |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Purchase of available-for-sale investments | | - | | - | | (1.0) |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Purchase of property, plant and equipment and | | (1.3) | | (0.9) | | (1.4) |
| intangible assets | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Cash flows (absorbed by) investing activities of | | - | | (0.4) | | - |
| discontinued operation | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Net cash (absorbed by) investing activities - total | | (1.3) | | (5.7) | | (2.4) |
| | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Cash flows from financing activities from | | | | | | |
| continuing operations: | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Issues of ordinary share capital | | - | | - | | 0.2 |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Dividends paid to the Company's shareholders | | (2.8) | | (1.6) | | (2.7) |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Purchase of shares held by the Trust | | (2.4) | | - | | (1.6) |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Cash flows from financing activities of | | - | | - | | - |
| discontinued operation | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Net cash (absorbed by) from financing activities - | | (5.2) | | (1.6) | | (4.1) |
| total | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Net (decrease) / increase in cash and cash | | (34.6) | | 5.2 | | (3.4) |
| equivalents | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Cash and cash equivalents at beginning of period | | 103.6 | | 100.2 | | 122.7 |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Exchange gains | | - | | 0.6 | | 0.2 |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Less: cash and cash equivalents classified as | | - | | (2.4) | | (19.3) |
| held-for-sale | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Less: cash deconsolidated during the period from | | (0.2) | | - | | - |
| discontinued operations | | | | | | |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
| Cash and cash equivalents at end of period | | 68.8 | | 103.6 | | 100.2 |
+-----------------------------------------------------+---+----------+--+----------+--+----------+
The notes below form an integral part of this condensed consolidated interim
financial information.
NOTES TO THE INTERIM FINANCIAL INFORMATION
1. BASIS OF PREPARATION
This condensed consolidated interim financial information for the six months
ended 30 June 2009 has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority, IAS 34, 'Interim
financial reporting' as adopted by the European Union, with the 'Accounting
Policies' set out in the 2008 Annual Report and Accounts and Note 2 below. The
condensed consolidated interim financial information should be read in
conjunction with the Annual Report and Accounts for the year ended 31 December
2008, which have been prepared in accordance with IFRSs as adopted by the
European Union.
The condensed consolidated interim financial information in this Half Yearly
Financial Report does not constitute the Statutory Accounts within the meaning
of Section 434 of the Companies Act 2006. The Annual Report and Accounts for the
year ended 31 December 2008 were approved by the Board of directors on 8 April
2009 and delivered to the Registrar of Companies. The report of the auditors on
those accounts was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under Section 237 of the Companies Act 1985.
This condensed consolidated interim financial information has been reviewed, not
audited.
The Evolution Group Plc is a UK listed holding company for financial services
companies. The Company is a public limited company incorporated in the United
Kingdom. The address of its registered office is: 100 Wood Street, London, EC2V
7AN.
2. ACCOUNTING POLICIES
The accounting policies adopted are consistent with those of the Annual Report
and Accounts for the year ended 31 December 2008, except as set out below.
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 January 2009.
* IAS 1 (revised), 'Presentation of financial statements' is required to be
adopted for the Group for the financial year beginning 1 January 2009. The
revised standard prohibits the presentation of items of income and expenses in
the statement of changes in equity, requiring 'non-owner changes in equity' to
be presented separately from owner changes in equity. All 'non-owner changes in
equity' are required to be shown in a performance statement. The Group has elected to present two statements: an income statement and a
statement of comprehensive income. The interim financial statements have been
prepared under the revised disclosure requirements;
* IFRS 7 (amended), 'Financial instruments; disclosure' is required to be adopted
for the Group for the financial year beginning 1 January 2009. The amended
standard requires the fair value measurements of financial instruments to be
classified using a three tier fair value hierarchy, which reflects the
significance of the inputs used in making the measurements. The Group will adopt
this disclosure in the 2009 annual financial statements, but has not been
included these disclosures within the half yearly report; and
* IFRS 8, 'Operating segments' is required to be adopted for the Group for the
financial year beginning 1 January 2009. The standard requires a 'management
approach' under which segmental information is presented using the same method
as that adopted for internal reporting purposes. The presentation of the
segmental information in note 3 has been prepared using this method.
The following new interpretations are mandatory for the first time for the
financial year beginning 1 January 2009, but are not currently relevant for the
Group:
* IFRIC 13, 'Customer loyalty programmes';
* IFRIC 15, 'Amendments for the construction of real estate'; and
* IFRIC 16, 'Hedges of a net investment in a foreign operation'.
Discontinued operations and disposal groups held-for-sale
Evolution Securities China Limited
The Group disclosed within its Annual Report and Accounts for 31 December 2008
Evolution Securities China Limited ("ESCL") as a discontinued operation
following the Board's decision to dispose of a controlling interest in the
business on 18 December 2008.
On 1 April 2009 the Company announced the completion of an investment in ESCL by
First Eastern. As a result of this transaction the Group's interest in ESCL has
fallen to 48.5%. Prior to the completion of this transaction in 2009 the Group
consolidated ESCL and presented it as a discontinued operation. From 1 April
2009 ESCL and its subsidiary have been deconsolidated and are accounted for by
the equity method of accounting in accordance with IAS 28.
WDB Capital Fund
The Group classified its subsidiary WDB Capital Fund as held-for-sale as at 31
December 2008. This was based on the Group Board's intention to reduce its
holding below 50% during 2009. On 1 April 2009 the Group's holding fell below
50%. From 1 April 2009 WDB Capital Fund is accounted for by the equity method of
accounting in accordance with IAS 28. At 30 June 2009 the Group's interest in
WDB Capital Fund is 48.1%.
Investment in associated undertaking
Associates are those entities in which the Group has significant influence, but
not control, over the financial and operating policies and in which the Group
generally has between 20% and 50% voting power. The Group accounts for
associates using the equity method. Under this method, the consolidated
financial statements show the Group's share of the total recognised gains and
losses of associates and their net assets, from the date that significant
influence or joint control commences until the date they cease. Any premium over
net asset value paid to acquire an interest in an associate is recognised as
goodwill, within the same line as the underlying investment.
3. SEGMENTAL INFORMATION
By business segment
Investment banking refers to the business carried out in Evolution Securities
Limited and Evolution Securities (US) Inc. Private client refers to Private
Client Investment Management under the Williams de Broë brand. Other includes
central administrative costs which are not recharged to the operating
businesses.
+------------------------------------+---------------+------------+------------+------------+
| | Half Year Ended 30.06.09 |
+------------------------------------+------------------------------------------------------+
| Income statement | Investment | Private | Other | Total |
| | banking | client | | |
+------------------------------------+---------------+------------+------------+------------+
| | GBPm | GBPm | GBPm | GBPm |
+------------------------------------+---------------+------------+------------+------------+
| | | | | |
+------------------------------------+---------------+------------+------------+------------+
| Total income | 33.9 | 18.8 | (0.1) | 52.6 |
+------------------------------------+---------------+------------+------------+------------+
| Adjusted operating profit / (loss) | 8.3 | 1.2 | (0.4) | 9.1 |
+------------------------------------+---------------+------------+------------+------------+
| | | | | |
+------------------------------------+---------------+------------+------------+------------+
| Charge for share options granted | | | | (3.3) |
| to employees | | | | |
+------------------------------------+---------------+------------+------------+------------+
| Amortisation of intangibles | | | | (0.8) |
+------------------------------------+---------------+------------+------------+------------+
| Non-recurring operating expenses | | | | (1.3) |
+------------------------------------+---------------+------------+------------+------------+
| Operating profit from continuing | | | | 3.7 |
| operations | | | | |
+------------------------------------+---------------+------------+------------+------------+
| | | | | |
+------------------------------------+---------------+------------+------------+------------+
| Finance income | | | | 0.5 |
+------------------------------------+---------------+------------+------------+------------+
| Finance expense | | | | (0.2) |
+------------------------------------+---------------+------------+------------+------------+
| Share of post tax results of | | | | (0.4) |
| associates | | | | |
+------------------------------------+---------------+------------+------------+------------+
| | | | | |
+------------------------------------+---------------+------------+------------+------------+
| Profit before tax from continuing | | | | 3.6 |
| operations | | | | |
+------------------------------------+---------------+------------+------------+------------+
| | | | | |
+------------------------------------+---------------+------------+------------+------------+
| Discontinued operations | | | | (1.0) |
+------------------------------------+---------------+------------+------------+------------+
| | | | | |
+------------------------------------+---------------+------------+------------+------------+
| Profit before tax from total | | | | 2.6 |
| operations | | | | |
+------------------------------------+---------------+------------+------------+------------+
+-----------------------------------+---------------+------------+------------+------------+
| | Half Year Ended 31.12.08 |
+-----------------------------------+------------------------------------------------------+
| Income Statement | Investment | Private | Other | Total |
| | banking | client | | |
+-----------------------------------+---------------+------------+------------+------------+
| | GBPm | GBPm | GBPm | GBPm |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Total income | 12.1 | 17.3 | (0.4) | 29.0 |
+-----------------------------------+---------------+------------+------------+------------+
| Adjusted operating (loss) / | (7.0) | 0.8 | (1.0) | (7.2) |
| profit | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Charge for share options granted | | | | (5.4) |
| to employees | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Amortisation of intangibles | | | | (0.4) |
+-----------------------------------+---------------+------------+------------+------------+
| Non-recurring operating expenses | | | | (2.3) |
+-----------------------------------+---------------+------------+------------+------------+
| Operating (loss) from continuing | | | | (15.3) |
| operations | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Finance income | | | | 2.9 |
+-----------------------------------+---------------+------------+------------+------------+
| Finance expense | | | | (0.7) |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| (Loss) before tax from continuing | | | | (13.1) |
| operations | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Discontinued operations | | | | (2.6) |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| (Loss) before tax from total | | | | (15.7) |
| operations | | | | |
+-----------------------------------+---------------+------------+------------+------------+
+-----------------------------------+---------------+------------+------------+------------+
| | Half Year Ended 30.06.08 |
+-----------------------------------+------------------------------------------------------+
| Income Statement | Investment | Private | Other | Total |
| | banking | client | | |
+-----------------------------------+---------------+------------+------------+------------+
| | GBPm | GBPm | GBPm | GBPm |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Total income | 17.6 | 17.2 | 0.1 | 34.9 |
+-----------------------------------+---------------+------------+------------+------------+
| Adjusted operating profit | 1.5 | 2.8 | 0.2 | 4.5 |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Charge for share options granted | | | | (6.3) |
| to employees | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Amortisation of intangibles | | | | (0.2) |
+-----------------------------------+---------------+------------+------------+------------+
| Operating (loss) from continuing | | | | (2.0) |
| operations | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Finance income | | | | 2.7 |
+-----------------------------------+---------------+------------+------------+------------+
| Finance expense | | | | (0.3) |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Profit before tax from continuing | | | | 0.4 |
| operations | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| Discontinued operations | | | | (0.7) |
+-----------------------------------+---------------+------------+------------+------------+
| | | | | |
+-----------------------------------+---------------+------------+------------+------------+
| (Loss) before tax from total | | | | (0.3) |
| operations | | | | |
+-----------------------------------+---------------+------------+------------+------------+
3. SEGMENT INFORMATION
By business segment
The Group's total assets are disclosed by segment below:
+-----------------------------+------------------+------------------+-------------+-------------+
| Total Assets | 30.06.09 |
+-----------------------------+-----------------------------------------------------------------+
| | Investment | Private client | Other | Total |
| | banking | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| | GBPm | GBPm | GBPm | GBPm |
+-----------------------------+------------------+------------------+-------------+-------------+
| | | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| Assets | 462.4 | 35.2 | 80.9 | 578.5 |
+-----------------------------+------------------+------------------+-------------+-------------+
| Assets of disposal group | - | - | - | - |
| held-for-sale | | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| Total assets | 462.4 | 35.2 | 80.9 | 578.5 |
+-----------------------------+------------------+------------------+-------------+-------------+
| | | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
+-----------------------------+------------------+------------------+-------------+-------------+
| Total Assets | 31.12.08 |
+-----------------------------+-----------------------------------------------------------------+
| | Investment | Private client | Other | Total |
| | banking | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| | GBPm | GBPm | GBPm | GBPm |
+-----------------------------+------------------+------------------+-------------+-------------+
| | | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| Assets | 79.5 | 34.8 | 84.9 | 199.2 |
+-----------------------------+------------------+------------------+-------------+-------------+
| Assets of disposal group | 4.8 | 23.3 | - | 28.1 |
| held-for-sale | | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| Total assets | 84.3 | 58.1 | 84.9 | 227.3 |
+-----------------------------+------------------+------------------+-------------+-------------+
+-----------------------------+------------------+------------------+-------------+-------------+
| Total Assets | 30.06.08 |
+-----------------------------+-----------------------------------------------------------------+
| | Investment | Private client | Other | Total |
| | banking | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| | GBPm | GBPm | GBPm | GBPm |
+-----------------------------+------------------+------------------+-------------+-------------+
| | | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| Assets | 298.6 | 26.6 | 89.9 | 415.1 |
+-----------------------------+------------------+------------------+-------------+-------------+
| Assets of disposal group | 7.7 | 17.3 | - | 25.0 |
| held-for-sale | | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
| Total assets | 306.3 | 43.9 | 89.9 | 440.1 |
+-----------------------------+------------------+------------------+-------------+-------------+
| | | | | |
+-----------------------------+------------------+------------------+-------------+-------------+
4. EARNINGS PER ORDINARY SHARE
The calculation of the basic earnings per ordinary share is based on the
attributable profit for the period and the weighted average number of ordinary
shares in issue during the period. The calculation of the diluted earnings per
share is based on the basic earnings per share adjusted to allow for the issue
of shares on the assumed conversion of all dilutive options.
+-------------------------------+------------+------------+------------+------------+-------------+------------+
| | Half Year Ended | Half Year Ended | Half Year Ended |
| | 30.06.09 | 31.12.08 | 30.06.08 |
+-------------------------------+-------------------------+-------------------------+--------------------------+
| | | Weighted | | Weighted | | Weighted |
| | Total | | Total | | Total | |
+-------------------------------+------------+------------+------------+------------+-------------+------------+
| | shares | average | shares | average | shares | average |
+-------------------------------+------------+------------+------------+------------+-------------+------------+
| | (Millions) | (Millions) | (Millions) | (Millions) | (Millions) | (Millions) |
+-------------------------------+------------+------------+------------+------------+-------------+------------+
| | | | | | | |
+-------------------------------+------------+------------+------------+------------+-------------+------------+
| Basic shares | 223.5 | 221.8 | 215.8 | 213.2 | 213.8 | 211.4 |
+-------------------------------+------------+------------+------------+------------+-------------+------------+
| Diluted Shares | 234.5 | 234.9 | 257.2 | 247.9 | 252.1 | 250.7 |
+-------------------------------+------------+------------+------------+------------+-------------+------------+
| | | | | | | |
+-------------------------------+------------+------------+------------+------------+-------------+------------+
+-------------------------------+----------+---------+----------+---------+----------+---------+
| | Earnings | EPS | Earnings | EPS | Earnings | EPS |
| | (GBPm) | (Pence) | (GBPm) | (Pence) | (GBPm) | (Pence) |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Basic EPS from continuing | 2.9 | 1.28p | (9.8) | (4.59p) | (1.2) | (0.59p) |
| operations | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Basic EPS from discontinued | (1.9) | (0.86p) | (1.5) | (0.70p) | (0.3) | (0.14p) |
| operations | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Basic EPS from total | 1.0 | 0.42p | (11.3) | (5.29p) | (1.5) | (0.73p) |
| operations | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Diluted EPS from continuing | 2.9 | 1.21p | (9.8) | (3.95p) | (1.2) | (0.50p) |
| operations | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Diluted EPS from discontinued | (1.9) | (0.81p) | (1.5) | (0.61p) | (0.3) | (0.12p) |
| operations | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Diluted EPS from total | 1.0 | 0.40p | (11.3) | (4.56p) | (1.5) | (0.62p) |
| operations | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Diluted EPS from continuing | 2.9 | 1.21p | (9.8) | (3.95p) | (1.2) | (0.50p) |
| operations | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Total adjustments to | 5.4 | 2.31p | 8.1 | 3.26p | 6.5 | 2.59p |
| operating expenses 1 | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Tax effect of adjustments | (0.5) | (0.17p) | (0.7) | (0.26p) | - | - |
| above | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Adjustment for share of | 0.4 | 0.19p | - | - | - | - |
| associates losses | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Minority interest on | - | - | (0.3) | (0.15p) | 0.3 | 0.15p |
| subsidiaries | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| Adjusted diluted EPS | 8.2 | 3.54p | (2.7) | (1.10p) | 5.6 | 2.24p |
+-------------------------------+----------+---------+----------+---------+----------+---------+
| | | | | | | |
+-------------------------------+----------+---------+----------+---------+----------+---------+
1The non recurring operating expenses are defined in the Financial Business
Review section and are consistent with those disclosed within Note 3.
5. DIVIDENDS
+-------------------------------------------+--------------+---------------+---------------+
| | 30.06.09 | 31.12.08 | 30.06.08 |
+-------------------------------------------+--------------+---------------+---------------+
| | GBPm | GBPm | GBPm |
+-------------------------------------------+--------------+---------------+---------------+
| | | | |
+-------------------------------------------+--------------+---------------+---------------+
| Final paid | 2.8 | - | 2.7 |
+-------------------------------------------+--------------+---------------+---------------+
| Interim paid | - | 1.6 | - |
+-------------------------------------------+--------------+---------------+---------------+
| | 2.8 | 1.6 | 2.7 |
+-------------------------------------------+--------------+---------------+---------------+
| | | | |
+-------------------------------------------+--------------+---------------+---------------+
In addition, the Directors are proposing an interim dividend in respect of the
financial year ending on 31 December 2009 of 0.80p per share, which will absorb
an estimated GBP1.8m of shareholders' funds. It will be paid on 9 October 2009
to shareholders on the register of members on 11 September 2009.
6. TAX EXPENSE
Income tax expense is recognised based on management's best estimate of the
weighted average annual income tax rate expected for the full financial year.
The tax charge for continuing operations for the first half of 2009 was GBP0.7m
(2008: credit of GBP1.7m) representing an effective tax rate of 19% (2008: 13%).
The tax charge for both periods is lower than the UK tax rate of 28% (2008:
28.5%) primarily due to deferred tax on options arising from the movement in the
Group's share price more than partially offsetting the impact of disallowable
expenses.
7. INVESTMENT IN ASSOCIATES
+------------------------------------------------+------------+------------+----------------+
| | | 30.06.09 | 31.12.08 |
+------------------------------------------------+------------+------------+----------------+
| | | GBPm | GBPm |
+------------------------------------------------+------------+------------+----------------+
| | | | |
+------------------------------------------------+------------+------------+----------------+
| Beginning of period | | - | - |
+------------------------------------------------+------------+------------+----------------+
| Transfer from subsidiary undertakings of ESCL1 | | 2.1 | - |
+------------------------------------------------+------------+------------+----------------+
| Transfer from subsidiary undertakings of WDB | | 11.7 | - |
| Capital Fund2 | | | |
+------------------------------------------------+------------+------------+----------------+
| Share of ESCL's loss for the period | | (0.2) | - |
+------------------------------------------------+------------+------------+----------------+
| Share of WDB Capital Fund's loss for the | | (0.2) | - |
| period | | | |
+------------------------------------------------+------------+------------+----------------+
| Exchange differences | | (0.1) | - |
+------------------------------------------------+------------+------------+----------------+
| End of period | | 13.3 | - |
+------------------------------------------------+------------+------------+----------------+
Investments in associates at the end of the period includes goodwill of GBP0.3m.
1 On the 31 March 2009 ESCL issued new equity to First Eastern Financial
Holdings Limited. The issue of this new equity caused the Group's shareholding
in ESCL to fall from 71% to 48.5%. As a result of this transaction the Group has
reclassified its holding in ESCL from an investment in subsidiary undertakings
to an investment in associated undertakings.
2 On the 31 March 2009 WDB Capital Fund issued new equity to third party
investors. The issue of this new equity caused the Group's shareholding to fall
below 50%. As a result of this transaction the Group has reclassified its
holding in WDB Capital Fund from an investment in subsidiary undertakings to an
investment in associated undertakings.
8. TRADING PORTFOLIO ASSETS
+------------------------------------------------+------------+------------+----------------+
| | | 30.06.09 | 31.12.08 |
+------------------------------------------------+------------+------------+----------------+
| | | GBPm | GBPm |
+------------------------------------------------+------------+------------+----------------+
| | | | |
+------------------------------------------------+------------+------------+----------------+
| Long positions in market making and dealing | | 31.7 | 4.8 |
| operations | | | |
+------------------------------------------------+------------+------------+----------------+
| Other derivatives | | 0.5 | 0.2 |
+------------------------------------------------+------------+------------+----------------+
| | | 32.2 | 5.0 |
+------------------------------------------------+------------+------------+----------------+
The long trading portfolio assets include shares listed on LSE Official List,
AIM markets and other leading European exchanges.
The long positions balances have been inflated to include an amount of GBP16.1m
for trading assets (31 December 2008: GBP0.4m) which were sold with a trade date
prior to the 30 June 2009 but had a settlement period which was longer than the
standard market convention and straddled the period end. All of these trades
have now settled. The other derivatives balance relates to the positive or
negative market value movement of these trades between the trade date and the
period end.
9. TRADING PORTFOLIO LIABILITIES
+------------------------------------------------+------------+------------+---------------+
| | | 30.06.09 | 31.12.08 |
+------------------------------------------------+------------+------------+---------------+
| | | GBPm | GBPm |
+------------------------------------------------+------------+------------+---------------+
| | | | |
+------------------------------------------------+------------+------------+---------------+
| Short positions in market-making and dealing | | 11.3 | 4.0 |
| operations | | | |
+------------------------------------------------+------------+------------+---------------+
| Other derivatives | | 2.6 | 0.3 |
+------------------------------------------------+------------+------------+---------------+
| | | 13.9 | 4.3 |
+------------------------------------------------+------------+------------+---------------+
The short trading portfolio liabilities represent shares listed on LSE Official
List, AIM markets and other leading European exchanges.
The short positions balance have been inflated to include an amount of GBP4.3m
for trading liabilities (31 December 2008: GBP3.3m) which were bought with a
trade date prior to the 30 June 2009 but had a settlement period which was
longer than the standard market convention and straddled the period end. All of
these trades have now settled. The other derivatives balance relates to the
positive or negative market value movement of these trades between the trade
date and the period end.
10. SHARE CAPITAL
The Evolution Group Plc Employees' Share Trust (the "Trust") administers The
Evolution Group Plc share schemes and the Share Incentive Trust and is managed
by the Sanne Trust.
In the six months to 30 June 2009 the Group purchased an additional 2,321,920
shares (30 June 2008: 1,500,000) for total consideration of GBP2.4m (30 June
2008: GBP1.6m). These shares were purchased by the Trust and are held to satisfy
share awards made to staff in the Group. The Trust held 3,315,739 shares (30
June 2008: 10,543,460) which had a market value of GBP4.8m (30 June 2008:
GBP9.8m). All of these shares were acquired in the open market. The shares held
represent 1.46% (30 June 2008: 4.70%) of the issued share capital of the Company
as at 30 June 2009. The Trust used funds provided by the Company to meet the
Group's obligations under the share option and incentive schemes in place. Share
options are granted to employees at the discretion of the Company and shares are
awarded to employees by the Trust in accordance with the recommendations of the
Company.
11. ASSETS AND LIABILITIES OF DISPOSAL GROUPS CLASSIFIED AS HELD-FOR-SALE AND
DISCONTINUED OPERATIONS
As at 31 December 2008 the assets and liabilities relating to ESCL and its
subsidiary and WDB Capital Fund were presented as held-for-sale.
+--------------------------------------------------------+--------------+---------------+
| | 30.06.09 | 31.12.08 |
+--------------------------------------------------------+--------------+---------------+
| | GBPm | GBPm |
+--------------------------------------------------------+--------------+---------------+
| (a) Assets of disposal groups classified as | | |
| held-for-sale | | |
+--------------------------------------------------------+--------------+---------------+
| | | |
+--------------------------------------------------------+--------------+---------------+
| Goodwill | - | 1.2 |
+--------------------------------------------------------+--------------+---------------+
| Property, plant and equipment | - | 0.5 |
+--------------------------------------------------------+--------------+---------------+
| Intangible assets | - | 0.3 |
+--------------------------------------------------------+--------------+---------------+
| Deferred tax assets | - | 0.8 |
+--------------------------------------------------------+--------------+---------------+
| Other non current assets | - | 0.1 |
+--------------------------------------------------------+--------------+---------------+
| Trade and other receivables | - | 2.9 |
+--------------------------------------------------------+--------------+---------------+
| Other current assets | - | 0.6 |
+--------------------------------------------------------+--------------+---------------+
| Cash and cash equivalents | - | 21.7 |
+--------------------------------------------------------+--------------+---------------+
| | | |
+--------------------------------------------------------+--------------+---------------+
| Total | - | 28.1 |
+--------------------------------------------------------+--------------+---------------+
| | | |
+--------------------------------------------------------+--------------+---------------+
| (b) Liabilities of disposal groups classified as | | |
| held-for-sale | | |
+--------------------------------------------------------+--------------+---------------+
| | | |
+--------------------------------------------------------+--------------+---------------+
| Trade and other payables | - | 12.8 |
+--------------------------------------------------------+--------------+---------------+
| Other non current liabilities | - | 0.1 |
+--------------------------------------------------------+--------------+---------------+
| Total | - | 12.9 |
+--------------------------------------------------------+--------------+---------------+
WDB Capital Fund
The Group Board's intention has been to reduce its interest in WDB Capital Fund
by way of a deemed disposal, to be effected by bringing in new investors into
WDB Capital Fund. The Group's interest in WDB Capital Fund at 30 June 2009 is
48.1%. As a result of the Group's interest in WDB Capital Fund falling below
50%, the Group now recognises its share of WDB Capital Fund as an associate
undertaking, and accounts for it by using the equity method of accounting in
accordance with IAS 28.
11. ASSETS AND LIABILITIES OF DISPOSAL GROUPS CLASSIFIED AS HELD-FOR-SALE AND
DISCONTINUED OPERATIONS (continued)
ESCL
On 18 December 2008, the Board gave approval for the Group to enter into an
investment agreement with First Eastern Financial Holdings Limited, which
resulted in a partial disposal of the Group's interest in ESCL. The investment
agreement was formally signed on 31 March 2009, and was disclosed in detail in
Note 36 of the 2008 Annual Report and Accounts. As a result of this transaction
the Group's interest in ESCL has fallen to 48.5%. Prior to the completion of
this transaction on 31 March 2009 the Group continued to consolidate and present
ESCL as a discontinued operation. From 1 April 2009 to 30 June 2009 ESCL and its
subsidiary are accounted for by the equity method of accounting in accordance
with IAS 28.
The results of ESCL and its subsidiary are shown as discontinued per the table
below:
+-------------------------------------------------+------------+-------------+-------------+
| | Period | Half Year | Half Year |
| | Ended | Ended | Ended |
+-------------------------------------------------+------------+-------------+-------------+
| | 31.03.09 | 31.12.08 | 30.06.08 |
+-------------------------------------------------+------------+-------------+-------------+
| | GBPm | GBPm | GBPm |
+-------------------------------------------------+------------+-------------+-------------+
| | | | |
+-------------------------------------------------+------------+-------------+-------------+
| Total income | 0.1 | 0.5 | 1.8 |
+-------------------------------------------------+------------+-------------+-------------+
| | | | |
+-------------------------------------------------+------------+-------------+-------------+
| Impairment | (0.4) | - | - |
+-------------------------------------------------+------------+-------------+-------------+
| Other operating expenses | (0.7) | (3.1) | (2.5) |
+-------------------------------------------------+------------+-------------+-------------+
| | | | |
+-------------------------------------------------+------------+-------------+-------------+
| Operating (loss) from discontinued operations | (1.0) | (2.6) | (0.7) |
+-------------------------------------------------+------------+-------------+-------------+
| | | | |
+-------------------------------------------------+------------+-------------+-------------+
| (Loss) before tax from discontinued operations | (1.0) | (2.6) | (0.7) |
+-------------------------------------------------+------------+-------------+-------------+
| | | | |
+-------------------------------------------------+------------+-------------+-------------+
| Tax (expense) / credit | (0.3) | 0.5 | 0.3 |
+-------------------------------------------------+------------+-------------+-------------+
| (Loss) arising on disposal | (1.0) | - | - |
+-------------------------------------------------+------------+-------------+-------------+
| | | | |
+-------------------------------------------------+------------+-------------+-------------+
| (Loss) after tax from discontinued operations | (2.3) | (2.1) | (0.4) |
+-------------------------------------------------+------------+-------------+-------------+
| | | | |
+-------------------------------------------------+------------+-------------+-------------+
| Minority interest | 0.4 | 0.6 | 0.1 |
+-------------------------------------------------+------------+-------------+-------------+
| | | | |
+-------------------------------------------------+------------+-------------+-------------+
| (Loss) attributable to equity holders of The | (1.9) | (1.5) | (0.3) |
| Evolution Group Plc | | | |
+-------------------------------------------------+------------+-------------+-------------+
12. RELATED PARTY TRANSACTIONS
Related party transactions are described in the 2008 Annual Report and Accounts.
There have been no significant changes in related party transactions described
in the 2008 Annual Report and Accounts, other than Evolution Securities China
Limited and WDB Capital Fund becoming associates as described in Note 11. The
Group's share of their post tax results are shown on the Consolidated Income
Statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFEDTSIDFIA
Grafico Azioni Evgen Pharma (LSE:EVG)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Evgen Pharma (LSE:EVG)
Storico
Da Set 2023 a Set 2024
