TIDMEVG
RNS Number : 1515J
Evolution Group PLC
25 March 2010
Embargoed until 7.00am 25 March 2010
The Evolution Group Plc
(the "Evolution Group", the "Group", the "Company")
Preliminary statement for the year ended 31 December 2009
Evolution Group, the listed investment bank and private client investment
management group, today announces its preliminary statement for the year ended
31 December 2009.
Financial and Operational Highlights
· Record total group income of GBP129.4m, up 103% on 2008.
· Adjusted profit before tax from continuing operations1 of GBP21.1m, up
GBP19.2m from GBP1.9m in 2008.
· Statutory profit before tax from continuing operations of GBP11.1m (2008:
Statutory loss before tax GBP12.7m).
· Strong cash generation from operations of GBP33.8m.
· Balance sheet remains strong with GBP109.5m of cash.
· Year end final dividend increased 34% year on year to 1.70p.
· Full year dividend increased 24% year on year to 2.50p.
Private Clients2
· Assets under management ("AUM") up 37% to a record level of GBP5.2bn
(2008: GBP3.8bn).
· Record income up 23% to GBP42.4m (2008: GBP34.5m).
· Management fee income of GBP24.4m up 40% on 2008.
· Transactional income of GBP17.0m, up 21% on 2008.
· Adjusted operating profit1 of GBP4.1m increased by 14% from GBP3.6m in
2008.
· Philip Howell appointed Chief Executive Officer in March 2010.
Investment Banking3
· Record income up 193% to GBP87.0m (2008: GBP29.7m).
· Strong profitability - Adjusted operating profit1 of GBP18.5m compared
with a loss of GBP5.4m.
· Record Equities income of GBP36.2m, up 170% on 2008.
· Record Fixed income revenue of GBP35.3m, up 397% on 2008.
· Number of institutional clients increased to 942 (2008: 586).
· Voted Top European Fixed Income Agency Broker of 2009 by Credit Magazine.
· Voted Number 1 AIM advisor of 2009 by Growth Company Investor Magazine.
Commenting on the results and outlook, Martin Gray, the Chairman of Evolution
Group said:
"These excellent results, which have been achieved despite highly challenging
market conditions in each of our businesses, are the result of our continuing
strategic focus on building a Group which can create shareholder value
throughout the business cycle. While activity levels last year remained
depressed and investor sentiment proved highly sensitive to risk and volatility,
the Group nevertheless delivered an extremely impressive financial performance,
with significant growth in both income and profit.
Throughout the recession of the past two years we have maintained our focus on
achieving sustainable earnings growth, high cash generation and low fixed costs,
and the strength of our balance sheet again enabled us last year to take
advantage of opportunities to broaden our business in line with our strategy to
develop both quality and breadth of income streams.
Our business is built upon long term client relationships and is underpinned by
financial strength and a partnership culture. We are confident that our business
is better placed than ever to face ongoing challenges in the economic
environment and we look forward to delivering sector-leading shareholder returns
in the future."
Key Performance Indicators
+------------------------------------------------+--------+---+------+-+------+----+-----+----------+----------+--------------+
| | 2009 | | 2008 | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| Private Clients2 | | | | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| | | | | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| Fund inflows (GBPm) | 322 | | 550 | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| No. of clients | 14,343 | | 11,803 | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| Income per average head (GBP000) | 163 | | 160 | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| Income per average front office head4 (GBP000) | 337 | | 345 | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| Core operating costs per average front office | 240 | | 250 | | |
| head (GBP000) | | | | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| Adjusted operating profit1 (GBPm) | 4.1 | | 3.6 | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| Adjusted operating margin | 10% | | 10% | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| AUM (GBPbn) | 5.2 | | 3.8 | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| Net increase in year end headcount | 8 | | 80 | | |
+------------------------------------------------+--------+---+--------+------+-----------------------------------------------+
| | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Investment Banking3 | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Market share by value traded | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| LSE Market - FTSE 100 (%) | 1.5% | | 0.6% | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| LSE Market - Total FTSE (%) | 1.8% | | 0.7% | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| LSE Market - AIM (%) | 5.4% | | 5.1% | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Corporate clients | 76 | | 70 | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Institutional clients | 942 | | 586 | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Transactional volumes (millions) | 3.0 | | 1.6 | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Funds raised (GBPm) | 451 | | 157 | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Income per average head (GBP000) | 486 | | 217 | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Income per average front office head5 (GBP000) | 640 | | 300 | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Core operating costs per average front office | 280 | | 271 | |
| head (GBP000) | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Adjusted operating profit / (loss)1 (GBPm) | 18.5 | | (5.4) | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Adjusted operating margin | 21% | | - | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Net increase / (decrease) in year end | 95 | | (33) | |
| headcount | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| | | | | |
+------------------------------------------------+--------+---+--------+------------------------------------------------------+
| Notes | | | | | |
+--------------------------------------------------------------------+-------------+-----+----------+----------+--------------+
| | | | | | |
+--------------------------------------------------------------------+-------------+-----+----------+----------+--------------+
| 1Adjusted operating profit, adjusted profit before tax from continuing | |
| operations, adjusted earnings from continuing operations and adjusted | |
| earnings per share are defined in the Financial Review section. | |
| | |
| 2The results of Private Clients are defined as those arising from Williams | |
| de Broë ("WDB") Limited, WDB Assetmaster Management Company Limited, WDB | |
| Asset Management Limited and WDB Capital Limited. | |
| | |
| 3The results of Investment Banking are defined as those arising from | |
| Evolution Securities Limited ("ESL") and its subsidiary Evolution | |
| Securities (US) Inc. ("ESUS"). | |
| | |
| 4 Front office head count for Private Clients is defined as including | |
| investment managers, dealers, financial planners and investment assistants. | |
| | |
| 5 Front office head count for Investment Banking is defined as including | |
| all client facing staff, including corporate finance executives, market | |
| makers, sales and sales traders, and research analysts. | |
| | |
+-----------------------------------------------------------------------------+-----------------------------------------------+
| | | | | | | | | | | |
+------------------------------------------------+--------+---+------+-+------+----+-----+----------+----------+--------------+
For further information, please contact:
+---------------------------------------------+----------------------+
| The Evolution Group Plc | 020 7071 4300 |
| Alex Snow, Chief Executive Officer | |
| Andrew Westenberger, Finance Director | |
+---------------------------------------------+----------------------+
| | |
+---------------------------------------------+----------------------+
| Pelham Bell Pottinger | 020 7337 1546 |
| Charles Cook | |
| Victoria Geoghegan | |
+---------------------------------------------+----------------------+
FORWARD-LOOKING STATEMENTS
This Annual 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
I am delighted to report such excellent results for the Group. In my report last
year I said we believed the challenging market and economic conditions
experienced in 2008 would continue throughout 2009. To a large extent, 2009
unfolded in line with this premise. Financial markets stabilised after worldwide
Government backed rescues of troubled banks combined with unprecedented
injections of liquidity into financial markets by several Central Banks through
the policy of quantitative easing.
Risk appetite, almost non-existent at the end of 2008 and early in 2009, has
somewhat returned as a result, although it has remained volatile throughout 2009
and indeed into the early months of this year, as investor sentiment remains
highly sensitive to further shocks, such as Sovereign default risk.
Against this backdrop the Group has begun to deliver impressive growth in income
and profitability. I said last year that our strategy would enable us to take
advantage of opportunities as they arose, to continue to recruit quality people
and to invest in new income streams. The Group has been able to progress this
strategy in 2009 and completed two significant investments in the development of
the fixed income agency business and the large-cap equity business. Both these
investments add significant potential for the Group to grow further in the
future.
As I write, financial and economic conditions remain challenging with the
additional uncertainty presented by the political agendas surrounding the
elections in both the UK and the US in 2010. We do, however, see some signs that
risk appetite is continuing to improve gradually. We are hopeful that
politicians and policy makers in general can maintain and encourage a stable and
consistent macro environment, specifically with regard to inflation, interest
rates, taxation and regulation, conducive to continued growth in activity across
all areas of the economy.
I am pleased to announce that we have made further progress in strengthening the
Group's Board. Andrew Westenberger was appointed as Group Finance Director on 8
April 2009; Chris Chambers joined as a Non-Executive on 3 November 2009 and
Roger Perkin joined as a Non-Executive on 27 January 2010. All three have made
valuable contributions to the management of the Group. Roger Perkin replaced
Nick Irens who resigned on 31 December 2009 as Chairman of the Audit committee.
Andrew Umbers also resigned from the Board on 3 February 2010. We wish them both
well and thank them for their significant contributions to the success of the
Group over the past few years. As well as these Group Board changes, a new Chief
Executive Officer for Williams de Broë Limited, Philip Howell, joined the Group
in March 2010.
As ever, a key decision for us is how to reward (both to retain and motivate)
the key people for the future success of the Group. Accordingly, the Group has
put in place new long term partnership equity plans, both for the Group
Executives and senior employees within our operating divisions. These plans were
designed after extensive consultation with our major shareholders and were
approved at an EGM on 22 January 2010. During the year we have continued to
recruit very high calibre people and will continue to do so. Our staff have
managed our business in a very impressive way and once again I thank them all
for their professionalism and their commitment.
In summary, I believe the Group remains better placed than ever to face the
challenges ahead and deliver continued growth to our shareholders.
Martin Gray
Chairman
25 March 2010
CHIEF EXECUTIVE'S REPORT
Results
After the extraordinarily difficult business environment of 2008, 2009 presented
no less a challenging period. Equity market volumes continued to decline, whilst
corporate fund raising activity continued for much of the year at the depressed
levels seen in 2008, albeit beginning to tentatively recover in the second half
of 2009. It is therefore very satisfying to report a return to profitability for
the year.
Group statutory profit before tax for the year increased substantially to
GBP11.1m (2008: GBP12.7m loss). Group adjusted operating profit improved
similarly to GBP20.8m for the period (2008: GBP2.7m loss). Adjusted diluted
earnings per share was 7.83p (2008: 1.17p) with statutory diluted earnings per
share from continuing operations of 3.87p (2008: 5.18p loss).
These results were achieved through a diversified mix of income which totalled
GBP129.4m (2008: GBP63.9m) and a continued discipline on costs.
Group full year dividend is up 24% year on year to 2.50p, more than covered by
adjusted and statutory earnings.
The Group has retained its Balance Sheet strength and strong liquidity position
with year end cash and cash equivalents up GBP5.9m to GBP109.5m.
Both principal operating businesses, Investment Banking (Evolution Securities
Limited) and Private Clients (Williams de Broë Limited) traded profitably during
2009 with Investment Banking reporting a significant improvement in adjusted
operating profit to GBP18.5m for 2009 (2008: GBP5.4m loss).
The results for 2009 reflect the transformation of the Group, achieved over the
last three years. The business mix is radically different today in terms of both
the quality and breadth of income streams within the Group as shown below:
+---------------------+-------+-----+------+----------------+-------+------+
| | 2003 - | | | 2008 - |
| | 2007 | | | 2009 |
| | Total | | | Total |
| | Income | | | Income |
+---------------------+-------------+------+----------------+--------------+
| | GBPm | % | | | GBPm | % |
+---------------------+-------+-----+------+----------------+-------+------+
| | | | | | | |
+---------------------+-------+-----+------+----------------+-------+------+
| Corporate Finance | 142.3 | 42% | | Corporate | 24.7 | 13% |
| | | | | Finance | | |
+---------------------+-------+-----+------+----------------+-------+------+
| Private Clients | 77.8 | 23% | | Private | 76.9 | 40% |
| | | | | Clients | | |
+---------------------+-------+-----+------+----------------+-------+------+
| Fixed Income | 4.6 | 1% | | Fixed Income | 42.4 | 22% |
+---------------------+-------+-----+------+----------------+-------+------+
| Equity Sales | 49.9 | 15% | | Equity Sales | 36.5 | 19% |
+---------------------+-------+-----+------+----------------+-------+------+
| Equity Trading | 59.7 | 17% | | Equity Trading | 13.1 | 7% |
+---------------------+-------+-----+------+----------------+-------+------+
| Other | 7.3 | 2% | | Other | (0.3) | (1%) |
+---------------------+-------+-----+------+----------------+-------+------+
| | 341.6 | | | | 193.3 | |
+---------------------+-------+-----+------+----------------+-------+------+
Operational Review
Private Clients
Private Clients activities comprises Williams de Broë Limited, one of the UK's
leading and fastest growing retail investment managers, WDB Capital Limited, the
investment manager to WDB Capital UK Equity Fund Limited, and WDB Assetmaster,
the investment manger of our multi manager collectives.
Williams de Broë Limited continues to increase in significance to the Group,
both in terms of current performance, and in terms of business development
momentum it is now displaying. Organic growth over the last five years, together
with the successful integration in 2009 of the new teams in Edinburgh and from
Singer & Friedlander Investment Management Limited ("SFIM") in London, has
created a market leading business of scale in its sector.
+-------------------------+---+------+------+------+------+------+------+
| Income and AUM Trend | | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
+-------------------------+---+------+------+------+------+------+------+
| | | | | | | | |
+-------------------------+---+------+------+------+------+------+------+
| Total Net Income (GBPm) | | 9.1 | 11.1 | 20.1 | 31.8 | 34.5 | 42.4 |
+-------------------------+---+------+------+------+------+------+------+
| | | | | | | | |
+-------------------------+---+------+------+------+------+------+------+
| Assets Under Management | | 0.6 | 0.8 | 2.2 | 2.8 | 3.8 | 5.2 |
| (GBPbn) | | | | | | | |
+-------------------------+---+------+------+------+------+------+------+
The Private Client business performed robustly in 2009 despite the uncertain
market conditions. Total net income for the year of GBP42.4m was up 23% on the
prior period (2008: GBP34.5m). Recurring management fee income of GBP24.4m
(2008: GBP17.4m) accounted for 58% of total net income, compared with 50% in the
comparative period. Transactional volumes increased 47% to 167,000 (2008:
114,000) driving transactional income to GBP17.0m in the year (2008: GBP14.1m).
Adjusted operating profit increased by 14% to GBP4.1m (2008: GBP3.6m), with a
strong performance in the second half of 2009 as new teams started to register
and margin improvement initiative began to deliver.
Growth in assets under management remained a core focus within Williams de Broë
during 2009. At 31 December 2009, total assets under management reached a record
level of GBP5.2bn, an increase of 37% from GBP3.8bn at the end of 2008. This
represents an excellent performance for a period that saw the recruitment of no
new investment managers or acquisitions of businesses, whilst management focused
on completing the integration of the prior year. Headcount remained largely
unchanged during the year at 268 (2008: 260). Net fund sales were achieved
solely from organic growth. Net fund inflows of GBP322m (2008: GBP550m) were
achieved by our discretionary sales team together with our investment managers.
+-------------------------------------------+-+-------+-+--------+
| | | | | |
+-------------------------------------------+-+-------+-+--------+
| Movement in assets under management and | | GBPbn | | % |
| administration | | | | |
+-------------------------------------------+-+-------+-+--------+
| | | | | |
+-------------------------------------------+-+-------+-+--------+
| Assets under management and | | 3.8 | | |
| administration - 31 December 2008 | | | | |
+-------------------------------------------+-+-------+-+--------+
| | | | | |
+-------------------------------------------+-+-------+-+--------+
| Assets under administration - 31 December | | (0.4) | | |
| 2008 | | | | |
+-------------------------------------------+-+-------+-+--------+
| | | | | |
+-------------------------------------------+-+-------+-+--------+
| Managed assets under management - 31 | | 3.4 | | |
| December 2008 | | | | |
+-------------------------------------------+-+-------+-+--------+
| | | | | |
+-------------------------------------------+-+-------+-+--------+
| AUM performance | | 0.6 | | 17.6% |
+-------------------------------------------+-+-------+-+--------+
| Fund sales | | 0.3 | | 8.8% |
+-------------------------------------------+-+-------+-+--------+
| Redemptions | | (0.1) | | (2.9)% |
+-------------------------------------------+-+-------+-+--------+
| | | | | |
+-------------------------------------------+-+-------+-+--------+
| Managed assets under management - 31 | | 4.2 | | |
| December 2009 | | | | |
+-------------------------------------------+-+-------+-+--------+
| | | | | |
+-------------------------------------------+-+-------+-+--------+
| Assets under administration - 31 December | | 1.0 | | |
| 2009 | | | | |
+-------------------------------------------+-+-------+-+--------+
| | | | | |
+-------------------------------------------+-+-------+-+--------+
| Assets under management and | | 5.2 | | |
| administration - 31 December 2009 | | | | |
+-------------------------------------------+-+-------+-+--------+
With a heritage dating back to 1869, Williams de Broë has always prided itself
on the quality of its people and the service it gives to clients. Its reputation
has been founded on the following core values:
· Personal service - we have a personal service driven culture and our
ethos is to maintain investment managers dedicated to our individual client's
needs;
· Bespoke by nature - we tailor our services to fulfil our individual
client's specific investment objectives and risk criteria;
· Sound investment process - we maintain a significant resource in our
investment process and have a strong focus to achieve investment excellence;
· True independence - we select "best of breed" investments, which are
appropriate for our clients, without conflicts of interest. We also develop
close relationships with our professional intermediary partners; and
· Quality business infrastructure, back office and compliance departments.
In summary, 2009 represents a year of significant achievement for Williams de
Broë with the successful integration of new teams in London and Edinburgh
combining with organic sales momentum across the business to deliver sound
investment performance and record results.
Whilst management initiatives to improve operating margins are now beginning to
deliver, we have also ensured that there has been a commensurate investment in
new systems and governance processes to anticipate the increased demands of our
current growth ambitions.
The potent combination of a high quality team of investment professionals, a
differentiated product, a respected brand and a highly scalable infrastructure
together with sound financial strength of the Group has firmly positioned
Williams de Broë as an engine for significant further growth in the short and
medium term.
Investment Banking
2009 saw a significant expansion to our investment banking division. Overall
headcount grew significantly from 125 to 220 (up 76%) as a result of our two key
business initiatives: the significant expansion of the agency fixed income team
and the significant large-cap equities team. The business was able to instigate
these transforming initiatives for modest upfront investment in the midst of the
continued market upheavals experienced in the early part of 2009.
As a result of these initiatives the investment banking division produced a
record level of income in the period of GBP87.0m (2008: GBP29.7m), nearly three
times (up 193%) the level of income achieved in 2008. As a result adjusted
operating profit increased GBP23.9m to GBP18.5m from a loss of GBP5.4m in 2008.
All areas of the business contributed to this significant growth in the period,
however, the main drivers were our agency equities and fixed income businesses.
Equity sales commission income of GBP23.2m recorded a GBP9.9m (up 74%) increase
on the prior year (2008: GBP13.3m) and fixed income commission of GBP35.3m
recorded a GBP28.2m (up 397%) increase on the prior year (2008 GBP7.1m). Our
equity market making team achieved income of GBP13.0m compared with GBP0.1m in
the prior period an increase of GBP12.9m. Corporate finance achieved income of
GBP15.5m (2008: GBP9.2m), up GBP6.3m (up 68%) through the successful raising of
GBP451m for our corporate clients (2008: GBP157m).
Equities
2009 was a transformational year for our equities business, our existing UK mid
market equities platform was repositioned to include increased coverage of UK
and European large-cap equities. We made significant hires across the equities
platform, increasing the client facing staff by 108% over the year.
Research
The strength and quality of our research lies at the heart of our equities
offering and we now cover 312 companies compared with 176 in the prior year (up
77%). In 2009, we expanded our research coverage to include: Banks, Beverages,
Consumers and Food Producers, Economics and Strategy, Food Retail, General
Financials, Income Service, Luxury Goods, Pharmaceuticals and Biotech, Property,
Support Services, Telecoms and Tobacco. We have also added more resource to our
existing sector strengths in Aerospace, Industrials and Engineering, Mining,
Oils, Travel and Leisure, Utilities and Growth companies.
Our research team now has significant coverage of UK and Pan-European large cap
and UK mid and growth companies. The build-out of our research team is now
largely complete, although we anticipate some selective hires in the current
year, particularly where we can emphasise our key strengths of industry
knowledge, sector expertise and research experience. As a result of the
investment made in research through 2009, we have experienced a significant
re-rating of our research product from our institutional clients through the
second half of 2009 and into the current year. We are confident that this
momentum will continue.
Sales & Trading
Our clients have an increasing requirement for high quality sales, sales trading
and trading services. 2009 saw the transformation of our offering, our new
colleagues have increased the strength and capability of our distribution
strengths and execution services. During the second half of 2009, we began to
experience the income opportunity that is available to our new platform,
notwithstanding, the well documented concerns over market volumes and market
values in 2009. We have added to our mid and small cap UK trading expertise by
now providing market making and distribution in the Euro Stox 300, and through
our algorithmic trading functionality we have access to a large number of
different pools of liquidity both light and dark, on behalf of our clients, in
addition to all primary exchanges enabling us to offer our clients a first class
execution capability. We have established offices in New York, Boston and Madrid
in the second half of 2009 and continue to grow our distribution expertise at
the local level, and although only 10 months into our expansion plans, we
continue to see growing evidence and validation from our clients that the
product offering is of the highest quality.
During 2009 income within our equities business grew by GBP22.8m to GBP36.2m, an
increase of 170%, and the number of institutional clients' accounts grew by 89
to 597 an increase of 18%.
+------------------------------------------+-----+-------+-------+-------+
| | | 2009 | 2008 | |
+------------------------------------------+-----+-------+-------+-------+
| | | | | |
+------------------------------------------+-----+-------+-------+-------+
| Headcount | | 108 | 52 | |
+------------------------------------------+-----+-------+-------+-------+
| LSE Market - FTSE 100 (%) | | 1.5% | 0.6% | |
+------------------------------------------+-----+-------+-------+-------+
| LSE Market - Total FTSE (%) | | 1.8% | 0.7% | |
+------------------------------------------+-----+-------+-------+-------+
| LSE Market - AIM (%) | | 5.4% | 5.1% | |
+------------------------------------------+-----+-------+-------+-------+
| Research stocks covered | | 312 | 176 | |
+------------------------------------------+-----+-------+-------+-------+
| Institutional clients | | 597 | 508 | |
+------------------------------------------+-----+-------+-------+-------+
| Equity sales commission (GBPm) | | 23.2 | 13.3 | |
+------------------------------------------+-----+-------+-------+-------+
| Equity market making (GBPm) | | 13.0 | 0.1 | |
+------------------------------------------+-----+-------+-------+-------+
Fixed Income
During 2009, our fixed income business saw significant upgrades in headcount and
quality of product. The business was able to recruit a range of high quality
specialists, with wide ranging experience and track records of providing their
clients with well priced liquidity. Strategically, we have set out to develop
our fixed income service to be "best in league" to offer genuinely un-conflicted
research with no principal client conflicts. This provides a real focus on the
buyer and seller, solving their liquidity requirements and providing transparent
pricing. The fixed income business now principally covers six product areas
across UK and Europe; Investment Grade Bonds, Asset Backed Securities, Emerging
Markets, Government Bonds, High Yield and Distressed Bonds, and Illiquids (prefs
and Pibs). Importantly Evolution Securities Fixed Income team 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.
During the year fixed income revenues grew by GBP28.2m to GBP35.3m, an increase
of 397%, whilst the number of institutional client accounts grew by 267 to 345,
an increase of 342%.
+------------------------------------------+-----+--------+-------+-------+
| | | 2009 | 2008 | |
+------------------------------------------+-----+--------+-------+-------+
| | | | | |
+------------------------------------------+-----+--------+-------+-------+
| Headcount | | 35 | 13 | |
+------------------------------------------+-----+--------+-------+-------+
| Institutional / client accounts | | 345 | 78 | |
+------------------------------------------+-----+--------+-------+-------+
| Fixed income revenue (GBPm) | | 35.3 | 7.1 | |
+------------------------------------------+-----+--------+-------+-------+
| Bonds priced | | 3,500+ | 200+ | |
+------------------------------------------+-----+--------+-------+-------+
Corporate Finance
Equity Corporate Finance and Corporate Broking
In 2009 we successfully completed 20 (2008: 9) placings on behalf of our
clients, raising GBP451m (2008: GBP157m), which together with other advisory
fees and retainers generated income of GBP15.5m up 68% in the year (2008:
GBP9.2m). Overall retained corporate clients grew from 70 to 76 during the
course of 2009, and our efforts on the AIM market were recognised by Growth
Company Investor Magazine (as voted by Directors of public companies) who voted
Evolution Securities Ltd, No. 1 AIM advisor for 2009.
Debt Capital Markets
Strategically, the core offering of strength in distribution was complemented
during 2009 by the recruitment of key professionals in both Debt Advisory and
Debt Capital Markets teams. It is already clear that there is a real requirement
for corporates to look at a range of financing alternatives including Investment
Grade and Non-Investment Grade bonds as well as private placement strategies, as
traditional lending channels have become less obvious. The team are currently
working on a range of mandates for potential transactions in 2010, enhancing
upon the global distribution strengths that have been built during the year, and
providing depth and clarity on pricing to our corporate clients.
In 2010 we will further recruit into our corporate finance division to continue
the momentum of growth in new corporate client capture, but also to make sure
that the coverage of our significantly expanded equities and fixed income
business is suitably aligned with the strengths required in our corporate
finance department.
+------------------------------------------+-----+-------+-------+-------+
| | | 2009 | 2008 | |
+------------------------------------------+-----+-------+-------+-------+
| | | | | |
+------------------------------------------+-----+-------+-------+-------+
| Headcount | | 27 | 25 | |
+------------------------------------------+-----+-------+-------+-------+
| Corporate clients | | 76 | 70 | |
+------------------------------------------+-----+-------+-------+-------+
| Corporate finance revenue (GBPm) | | 15.5 | 9.2 | |
+------------------------------------------+-----+-------+-------+-------+
| Funds raised (GBPm) | | 451 | 157 | |
+------------------------------------------+-----+-------+-------+-------+
Investment banking - Outlook
Evolution Securities has made significant progress in 2009, both quantitatively
and qualitatively, and we intend to continue to build on that growth in 2010.
The distribution strengths that have been established in both equities and fixed
income securities have been remarkable. A key opportunity is to marry these
strengths with our capital markets services in both equity and debt, allowing us
to find new and innovative financing solutions for our clients in a changing
financing environment.
Group - Outlook
The core of the Group strategy since early 2007 has been principally based
around risk avoidance, combined with tight control of costs and a highly liquid
and unencumbered Balance Sheet. This allowed the Group to capture significant
optionality at the end of 2008 and into the beginning of 2009, in both the
Investment Banking and Private Clients businesses. Already in 2009 we are
beginning to see the returns and momentum that these actions have produced. A
key part of our strategy is to continue to increase our strategic risk appetite
within the parameters that we have laid out in this report, in order to continue
to develop our recurring revenue and profit potential, and to drive further
shareholder returns.
We note the regulatory dislocation beginning within the Investment Banking
sector and the inevitable exit of capital deployed, and continue to see
opportunities for increasing our risk appetite and potential returns. Our
emphasis on agency skills, wherever possible, and a partnership structure
achieved through shared future equity returns, allows flexibility of
remuneration to play a key role in the retention of our talent and the
attraction of new partners. In the future this should be at the core of further
real and sustained growth.
The Group is very well positioned, and aims to continue to develop the strong
momentum in revenue and profit growth in 2009 from all our activities. Although
there is much uncertainty in global markets which provides challenges to short
term trading, this only goes to underpin the long term stability that the
markets require to operate more effectively, and in fact reflects an
underestimation of the global economic recovery and the beneficial impact of the
robust nature of the capitalist model.
We look forward to further opportunities for growth in 2010, and I would like to
thank all our employees for the extraordinary efforts to deliver the
transformations to the Group over the course of 2009.
Alex Snow
Chief Executive Officer
25 March 2010
FINANCIAL REVIEW - Group results
Group Results
The Group returned to profitability in 2009 with statutory operating profit of
GBP11.1m, increasing by GBP28.4m from the GBP17.3m loss reported in 2008.
Adjusted operating profit1 (the Group's principal performance measure) also
increased significantly to GBP20.8m.
The increase in profitability was principally due to the Investment Banking
division generating a much improved performance, resulting in its adjusted
operating profit growing to GBP18.5m (2008: GBP5.4m loss).
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | |
| | | Adjusted | | Statutory |
| | | Basis1 | | |
+-----------------------------+----------+------------------+-+------------------+
| | | 2009 | 2008 | | 2009 | 2008 |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | GBPm | GBPm | | GBPm | GBPm |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Total income | | 129.4 | 63.9 | | 129.4 | 63.9 |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Net loss from | | - | - | | (1.7) | - |
| available-for-sale | | | | | | |
| financial assets | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Operating expenses | | (108.6) | (66.6) | | (116.6) | (81.2) |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Operating profit / (loss) | | 20.8 | (2.7) | | 11.1 | (17.3) |
| from continuing operations | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Net finance income | | 0.3 | 4.6 | | 0.3 | 4.6 |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Associates | | - | - | | (0.3) | - |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Profit / (loss) before tax | | 21.1 | 1.9 | | 11.1 | (12.7) |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Tax (expense) / credit | | (2.7) | 1.0 | | (1.9) | 1.7 |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Profit / (loss) after tax | | 18.4 | 2.9 | | 9.2 | (11.0) |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Discontinued operations | | - | - | | (2.3) | (2.5) |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Profit / (loss) for the | | 18.4 | 2.9 | | 6.9 | (13.5) |
| year | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Diluted earnings per share | | | | | | |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Continuing operations | | 7.8p | 1.2p | | 3.9p | (5.2)p |
+-----------------------------+----------+---------+--------+-+---------+--------+
| Discontinued operations | | - | - | | (0.8)p | (0.9)p |
+-----------------------------+----------+---------+--------+-+---------+--------+
1An explanation of the adjusted basis performance measurement, details of the
adjusted items and reconciliation between adjusted earnings and statutory
earnings is given below. Analysis and commentary below within the financial
review is based upon the adjusted basis unless otherwise indicated.
Total Income
Total Group income for the year more than doubled to GBP129.4m reflecting record
levels in both divisions. Investment Banking income grew by 193% to GBP87.0m, as
a result of strong growth across all areas of its business, in particular the
institutional markets businesses (equities and fixed income). Private Client
income grew by 23% to GBP42.4m, as a result of continued strong growth in assets
under management ("AUM"), up 37% to GBP5.2 billion.
Operating Expenses
Adjusted operating expenses in 2009 were GBP108.6m (2008: GBP66.6m) made up as
follows:
+------------------------------------------+-----+-------+-------+--------+
| | | 2009 | 2008 | Change |
+------------------------------------------+-----+-------+-------+--------+
| | | GBPm | GBPm | |
+------------------------------------------+-----+-------+-------+--------+
| Core operating costs | | | | |
+------------------------------------------+-----+-------+-------+--------+
| Staff costs | | 30.7 | 22.1 | |
+------------------------------------------+-----+-------+-------+--------+
| Transaction related costs | | 8.2 | 5.9 | |
+------------------------------------------+-----+-------+-------+--------+
| IT costs (market data, systems, | | 8.9 | 6.1 | |
| communications) | | | | |
+------------------------------------------+-----+-------+-------+--------+
| Property related costs | | 6.1 | 4.8 | |
+------------------------------------------+-----+-------+-------+--------+
| Other costs | | 13.7 | 11.9 | |
+------------------------------------------+-----+-------+-------+--------+
| Core operating costs | | 67.6 | 50.8 | 33% |
+------------------------------------------+-----+-------+-------+--------+
| | | | | |
+------------------------------------------+-----+-------+-------+--------+
| Performance costs | | 41.0 | 15.8 | 159% |
+------------------------------------------+-----+-------+-------+--------+
| | | | | |
+------------------------------------------+-----+-------+-------+--------+
| Total costs | | 108.6 | 66.6 | 63% |
+------------------------------------------+-----+-------+-------+--------+
Core operating costs increased by 33% to GBP67.6m (2008: GBP50.8m). This was
driven by the expansion of headcount in the year. Average front office headcount
increased by 32% in the year with total average headcount increasing by 25% to
457.
+------------------------------------------+-----+-------+-------+--------+
| Headcount - Average | | 2009 | 2008 | Change |
+------------------------------------------+-----+-------+-------+--------+
| | | | | |
+------------------------------------------+-----+-------+-------+--------+
| Front office | | 262 | 199 | 32% |
+------------------------------------------+-----+-------+-------+--------+
| Back office | | 195 | 167 | 17% |
+------------------------------------------+-----+-------+-------+--------+
| | | 457 | 366 | 25% |
+------------------------------------------+-----+-------+-------+--------+
| | | | | |
+------------------------------------------+-----+-------+-------+--------+
| Core operating cost per front office | | 258 | 255 | |
| head GBP000 | | | | |
+------------------------------------------+-----+-------+-------+--------+
Core operating costs per front office head have marginally increased to
GBP258,000 per annum from 2008. The Group continues to manage its core operating
cost base very carefully.
Performance costs include all short term incentive remuneration, inclusive of
employers national insurance and the cost of those share options arising from
the deferral of elements of annual bonus into Evolution Group shares (2009:
GBP1.0m, 2008: GBPnil). Performance costs increased by 159% in the period to
GBP41.0m (2008: GBP15.8m), in line with increased revenue and profitability
levels.
Financing
Net finance income declined to GBP0.3m in 2009 from GBP4.6m in 2008 as a result
of lower interest rates impacting the income the Group received from its excess
cash balances.
Taxation
The Group's statutory tax charge was GBP1.9m, equivalent to 17% of statutory
profit before tax of GBP11.1m. The tax charge in 2009 is lower than the UK tax
rate of 28% primarily due to deferred tax on options arising from the movement
in the Group's share price more than offsetting the impact of disallowable
expenses. The Group's continuing utilisation of its historic tax losses means
that no material corporation tax is payable.
Balance Sheet
The Group's Balance Sheet remains strong. The Group continues to carry capital
significantly in excess of the minimum regulatory requirements.
Non Current Assets
Non current assets increased in the period due to the inclusion of investments
in associates following disposals of majority stakes in ESCL and WDB Capital UK
Equity Fund.
Other non-current assets declined by GBP2.1m in the year from GBP30.8m to
GBP28.7m, primarily as a result of the release of deferred tax assets upon the
exercise of employee share options during the period.
Working Capital
+------------------------------------------+-----+--------+-------+--------+
| | | 2009 | 2008 | Change |
+------------------------------------------+-----+--------+-------+--------+
| | | GBPm | GBPm | |
+------------------------------------------+-----+--------+-------+--------+
| | | | | |
+------------------------------------------+-----+--------+-------+--------+
| Trading portfolio balances | | 10.4 | 0.8 | 9.6 |
+------------------------------------------+-----+--------+-------+--------+
| Trading counterparty balances | | (0.2) | 3.9 | (4.1) |
+------------------------------------------+-----+--------+-------+--------+
| Net trade and other balances | | (21.7) | (4.4) | (17.3) |
+------------------------------------------+-----+--------+-------+--------+
| | | (11.5) | 0.3 | (11.8) |
+------------------------------------------+-----+--------+-------+--------+
The Group had negative working capital at 31 December 2009 compared to a small
positive amount at the end of 2008. The increase in working capital of GBP5.5m
over the year from investment banking institutional market activities (trading
portfolio and trading counterparty balances) was more than offset by the
negative working capital impact of higher staff performance incentive accruals
as at 31 December 2009 compared to 31 December 2008.
Trading Positions
Net trading portfolio assets increased by GBP9.6m in the year.
+------------------------------------------+-----+-------+-------+-------+
| | | 2009 | 2008 | |
+------------------------------------------+-----+-------+-------+-------+
| | | GBPm | GBPm | |
+------------------------------------------+-----+-------+-------+-------+
| | | | | |
+------------------------------------------+-----+-------+-------+-------+
| Trading portfolio assets | | 13.3 | 5.0 | |
+------------------------------------------+-----+-------+-------+-------+
| Trading portfolio liabilities | | (2.9) | (4.2) | |
+------------------------------------------+-----+-------+-------+-------+
| | | 10.4 | 0.8 | |
+------------------------------------------+-----+-------+-------+-------+
| | | | | |
+------------------------------------------+-----+-------+-------+-------+
This reflects more normalised levels of risk appetite on equity small and mid
cap market making books, with inventory levels severely cut at the end of 2008
during the dislocation in financial markets.
The average net trading positions during 2009 were GBP6.7m (2008: GBP11.2m).
+------------------------------------------+-----+--------+--------+-------+
| Net Counterparty Receivables | | 2009 | 2008 | |
+------------------------------------------+-----+--------+--------+-------+
| | | GBPm | GBPm | |
+------------------------------------------+-----+--------+--------+-------+
| | | | | |
+------------------------------------------+-----+--------+--------+-------+
| Counterparty receivables | | 57.8 | 39.0 | |
+------------------------------------------+-----+--------+--------+-------+
| Counterparty payables | | (58.0) | (35.1) | |
+------------------------------------------+-----+--------+--------+-------+
| | | (0.2) | 3.9 | |
+------------------------------------------+-----+--------+--------+-------+
| | | | | |
+------------------------------------------+-----+--------+--------+-------+
Working capital resulting from the Group's public markets activities continues
to be carefully managed and average working capital balances during 2009 were
GBP30.4m (2008: GBP33.8m).
Cash balances remain strong with cash and cash equivalents of GBP109.5m at the
end of 2009, an increase of GBP5.9m (2008: GBP103.6m). The Group maintains its
policy of maintaining a highly liquid Balance Sheet at all times. Cash balances
at 31 December 2009 represent 80% of shareholder funds (2008: 70%) and are held
in call or overnight cash deposits.
Cash flow
The Group generated net positive cash flow of GBP6.1m in 2009 (2008: GBP1.8m).
This resulted from very strong growth in cash from operating activities of
GBP33.8m (2008: GBP15.6m) due to the increased level of operating profitability
and positive in flows from working capital reductions.
Capital expenditure on fixed assets and intangibles of GBP2.7m remained at
similarly low levels to 2008 (2008: GBP2.3m).
Net cash out flows from financing activities increased significantly during 2009
to GBP25.2m (2008: GBP5.7m). This resulted from a significant increase in the
purchase of Group shares (on behalf of the Employee Share Trust) to satisfy
outstanding employee share option awards.
This was based on the Group's decision to fully hedge all outstanding employee
share options during the year. This was achieved via the purchase of 16 million
shares during the period at a cost of GBP23.7m.
Adjusted basis explanation
The Group has historically measured performance on an Adjusted Basis, as it has
considered this to be a better reflection of the underlying performance of the
Group's businesses. In addition to being the basis of performance criteria
against which incentive awards were measured, adjusted measures such as Adjusted
Operating Profit and Adjusted EPS have been followed by research analysts
covering the Group.
Items of income and expense falling in the categories explained in more detail
below are excluded from the Group's results on an adjusted basis.
Whilst such items have continued to represent a material impact on the Group's
results, the Board has considered it appropriate to disclose their impact and
focus its financial review of the year on 'Adjusted Basis' figures where
appropriate. In particular, the Group's principal performance measure, 'Adjusted
Operating Profit' (which excludes the net loss on AFS financial instruments,
various expense items not considered part of the ongoing business profitability
and the cost of share options), is used as the basis for discussion of the Group
and divisional performance for 2009.
The total impact of adjusted items on the Group's results is steadily declining
and accordingly the Board anticipates altering its principal performance measure
to Statutory Operating Profit from 2010 onwards.
Adjusted items
+-------------------------------------+-+------------+------------+
| | | 2009 | 2008 |
+-------------------------------------+-+------------+------------+
| | | GBPm | GBPm |
+-------------------------------------+-+------------+------------+
| (i) Net (loss) on | | | |
| available-for-sale financial assets | | | |
+-------------------------------------+-+------------+------------+
| Net (loss) on available-for-sale | | (1.7) | - |
| financial assets | | | |
+-------------------------------------+-+------------+------------+
| | | | |
+-------------------------------------+-+------------+------------+
| (ii) Operating expenses | | | |
+-------------------------------------+-+------------+------------+
| Charge for share options granted | | (3.8) | (11.7) |
+-------------------------------------+-+------------+------------+
| Private Client integration costs | | (2.0) | (1.3) |
+-------------------------------------+-+------------+------------+
| Amortisation of certain intangibles | | (1.5) | (0.6) |
+-------------------------------------+-+------------+------------+
| Non-recurring items | | (0.7) | (1.0) |
+-------------------------------------+-+------------+------------+
| | | (8.0) | (14.6) |
+-------------------------------------+-+------------+------------+
| | | | |
+-------------------------------------+-+------------+------------+
| (iii) Associate results | | | |
+-------------------------------------+-+------------+------------+
| Evolution Securities China Ltd | | (0.7) | - |
| ("ESCL") | | | |
+-------------------------------------+-+------------+------------+
| WDB Capital UK Equity Fund | | 0.4 | - |
+-------------------------------------+-+------------+------------+
| | | (0.3) | - |
+-------------------------------------+-+------------+------------+
| | | | |
+-------------------------------------+-+------------+------------+
| (iv) Discontinued operations | | | |
+-------------------------------------+-+------------+------------+
| Loss after tax (ESCL) | | (1.3) | (2.5) |
+-------------------------------------+-+------------+------------+
| Loss arising on disposal | | (1.0) | - |
+-------------------------------------+-+------------+------------+
| | | (2.3) | (2.5) |
+-------------------------------------+-+------------+------------+
| | | | |
+-------------------------------------+-+------------+------------+
| Tax effect on the above adjustments | | 0.8 | 0.7 |
+-------------------------------------+-+------------+------------+
| | | | |
+-------------------------------------+-+------------+------------+
| Total adjustments | | (11.5) | (16.4) |
+-------------------------------------+-+------------+------------+
| | | | |
+-------------------------------------+-+------------+------------+
| Reconciliation of earnings | | | |
+-------------------------------------+-+------------+------------+
| Statutory profit / (loss) | | 6.9 | (13.5) |
+-------------------------------------+-+------------+------------+
| Total adjustments net of tax | | 11.5 | 16.4 |
+-------------------------------------+-+------------+------------+
| Adjusted profit after tax | | 18.4 | 2.9 |
+-------------------------------------+-+------------+------------+
| | | | |
+-------------------------------------+-+------------+------------+
| | | | |
+-------------------------------------+-+------------+------------+
Notes:
Net loss on available-for-sale financial assets
The net loss on AFS financial assets relates primarily to the write off to the
income statement of accumulated losses on impaired investments originally
acquired as consideration for corporate finance fees dating from 2005. Such
losses were previously recorded in equity reserves.
Operating Expenses
Expense items excluded from adjusted results have fallen principally into three
categories:
· Charge for share options granted.
This relates to the income statement costs of share options granted to
employees. This charge peaked in the years 2006, 2007 and 2008 and primarily
resulted from the options granted to key employees in the period 2003 to 2008.
The incidence of such option grants has declined significantly and going forward
the Group's key long term equity incentive component of performance pay will be
achieved through the new partnership equity plans. A GBP1.0m charge relating to
deferred bonuses is included in the adjusted basis results as an operating
expense in 2009.
· Private Client integration and take on costs associated with material
acquisitions such as Williams de Broë, Singer & Friedlander and the Edinburgh
team within Private Clients.
· Non recurring costs, which for 2009 comprise the settlement of a dispute
with HMRC concerning potential tax obligations of certain legacy employees. The
prior year comparative figure relates to redundancy costs.
The table below summarises the calculation of adjusted basis EPS:
+-------------------------+----------+------------+----------+-----------+------------+
| | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| | Year ended 31 | | Year ended 31 |
| | December 2009 | | December 2008 |
+-------------------------+-----------------------+----------+------------------------+
| | | Weighted | | | Weighted |
| | | Average | | | Average |
+-------------------------+----------+------------+----------+-----------+------------+
| | | (Millions) | | | (Millions) |
+-------------------------+----------+------------+----------+-----------+------------+
| | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Basic shares | | 221.6 | | | 213.2 |
+-------------------------+----------+------------+----------+-----------+------------+
| Diluted shares | | 234.7 | | | 247.9 |
+-------------------------+----------+------------+----------+-----------+------------+
| | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| | Earnings | EPS | | Earnings | EPS |
| | GBPm | (Pence) | | GBPm | (Pence) |
+-------------------------+----------+------------+----------+-----------+------------+
| Basic EPS from | 9.2 | 4.10p | | (11.0) | (5.18p) |
| continuing operations | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Basic EPS from | (1.9) | (0.86p) | | (1.8) | (0.85p) |
| discontinued operations | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Diluted EPS from | 9.2 | 3.87p | | (11.0) | (5.18p) |
| continuing operations | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Diluted EPS from | (1.9) | (0.81p) | | (1.8) | (0.85p) |
| discontinued operations | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Diluted EPS from | 9.2 | 3.87p | | (11.0) | (5.18p) |
| continuing operations | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Total adjustments to | 8.0 | 3.43p | | 14.6 | 5.89p |
| operating expenses | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Tax effect of | (0.8) | (0.34p) | | (0.7) | (0.26p) |
| adjustments above | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Adjustment for share of | 0.3 | 0.14p | | - | - |
| associates losses | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Net loss on | 1.7 | 0.73p | | - | - |
| available-for-sale | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
| Adjusted earnings / | 18.4 | 7.83p | | 2.9 | 1.17p |
| Adjusted diluted EPS | | | | | |
+-------------------------+----------+------------+----------+-----------+------------+
FINANCIAL REVIEW - Private clientS
+---------------------------------+----------+----------+--------+--------+
| | Half | Half | 2009 | 2008 |
| | Year | Year | | |
| | 30.06.09 | 31.12.09 | | |
+---------------------------------+----------+----------+--------+--------+
| | GBPm | GBPm | GBPm | GBPm |
+---------------------------------+----------+----------+--------+--------+
| | | | | |
+---------------------------------+----------+----------+--------+--------+
| Management fees | 10.8 | 13.6 | 24.4 | 17.4 |
+---------------------------------+----------+----------+--------+--------+
| Transactional income | 7.3 | 9.7 | 17.0 | 14.1 |
+---------------------------------+----------+----------+--------+--------+
| Segregated interest income | 0.7 | 0.3 | 1.0 | 3.0 |
+---------------------------------+----------+----------+--------+--------+
| Total income | 18.8 | 23.6 | 42.4 | 34.5 |
+---------------------------------+----------+----------+--------+--------+
| | | | | |
+---------------------------------+----------+----------+--------+--------+
| Expenses | (17.6) | (20.7) | (38.3) | (30.9) |
+---------------------------------+----------+----------+--------+--------+
| | | | | |
+---------------------------------+----------+----------+--------+--------+
| Operating profit | 1.2 | 2.9 | 4.1 | 3.6 |
+---------------------------------+----------+----------+--------+--------+
| | | | | |
+---------------------------------+----------+----------+--------+--------+
| Headcount - Year end | 261 | 268 | 268 | 260 |
+---------------------------------+----------+----------+--------+--------+
| Assets Under Management (GBPbn) | 4.2 | 5.2 | 5.2 | 3.8 |
+---------------------------------+----------+----------+--------+--------+
| Fund sales (GBPm) | 123 | 199 | 322 | 550 |
+---------------------------------+----------+----------+--------+--------+
Results
Private Clients adjusted operating profit increased by 14% to GBP4.1m (2008:
GBP3.6m). The operating profit margin improved to 12% in the second half of 2009
from 6% in the first half, resulting in a 10% full year margin, in line with
2008.
Total income grew by 23% to GBP42.4m for the year, primarily due to a 40%
increase in management fees to GBP24.4m (2008: GBP17.4m). This was driven by
continued strong growth in assets under management (up 37% to GBP5.2bn from
GBP3.8bn) which resulted from net new fund sales of GBP322m (2008: GBP550m) and
increases in equity market valuations (25% increase in FTSE All-share and 13% in
FTSE APCIMS - Balanced).
Transactional income increased by 21% to GBP17.0m in 2009 (2008 GBP14.1m),
continuing the recovery from the second half of 2008.
Segregated interest income was significantly lower in 2009 at GBP1.0m (2008:
GBP3.0m) as a result of the sharp and prolonged decline in interest rates during
the year.
Operating expenses in 2009 were GBP38.3m (2008: GBP30.9m), made up as follows:
+---------------------------------+--------+--------+
| | 2009 | 2008 |
+---------------------------------+--------+--------+
| | GBPm | GBPm |
+---------------------------------+--------+--------+
| | | |
+---------------------------------+--------+--------+
| Staff costs | 13.0 | 10.6 |
+---------------------------------+--------+--------+
| Transactional related costs | 5.2 | 4.2 |
+---------------------------------+--------+--------+
| IT costs (market data, systems | 2.0 | 1.5 |
| and communications) | | |
+---------------------------------+--------+--------+
| Property related costs | 2.5 | 1.7 |
+---------------------------------+--------+--------+
| Other costs | 7.6 | 7.0 |
+---------------------------------+--------+--------+
| Core operating costs | 30.3 | 25.0 |
+---------------------------------+--------+--------+
| | | |
+---------------------------------+--------+--------+
| Performance costs | 8.0 | 5.9 |
+---------------------------------+--------+--------+
| | | |
+---------------------------------+--------+--------+
| Total costs | 38.3 | 30.9 |
+---------------------------------+--------+--------+
Core operating costs increased by 21% to GBP30.3m (2008: GBP25.0m). This was
driven by the increase in average headcount throughout the year and
transactional related costs.
+------------------------------+-+-------+-------+--------+
| Headcount - Average | | 2009 | 2008 | Change |
+------------------------------+-+-------+-------+--------+
| | | | | |
+------------------------------+-+-------+-------+--------+
| Front office | | 126 | 100 | 26% |
+------------------------------+-+-------+-------+--------+
| Back office | | 134 | 116 | 16% |
+------------------------------+-+-------+-------+--------+
| | | 260 | 216 | 20% |
+------------------------------+-+-------+-------+--------+
| | | | | |
+------------------------------+-+-------+-------+--------+
| Core operating cost per | | 240 | 250 | |
| front office head (GBP000) | | | | |
+------------------------------+-+-------+-------+--------+
The reduction in core operating costs per average front office headcount
reflects continued cost control within the business and 2008 costs incurred on
the integration of the Singer & Friedlander and Edinburgh teams.
Performance costs increased to GBP8.0m from GBP5.9m in 2008, a 36% increase.
This was as a result of increased formulaic payments driven by higher revenues
and profitability, together with integration linked costs associated with the
Singer & Friedlander acquisition.
FINANCIAL REVIEW - investment banking
Investment Banking activities are organised into two principal areas:
1. Corporate Finance, which encompasses providing corporate finance and
broking services, including equity and debt capital raisings, to our corporate
clients.
2. Markets, which encompasses our secondary market activities, including
research, equity sales, market making and agency fixed income broking, to our
institutional clients.
+--------------------------------+----------+----------+--------+--------+
| | Half | Half | 2009 | |
| | Year | Year | | 2008 |
| | 30.06.09 | 31.12.09 | | |
+--------------------------------+----------+----------+--------+--------+
| | GBPm | GBPm | GBPm | GBPm |
+--------------------------------+----------+----------+--------+--------+
| | | | | |
+--------------------------------+----------+----------+--------+--------+
| Corporate finance | 3.5 | 12.0 | 15.5 | 9.2 |
+--------------------------------+----------+----------+--------+--------+
| Markets | | | | |
+--------------------------------+----------+----------+--------+--------+
| - Equity sales commission | 6.6 | 16.6 | 23.2 | 13.3 |
+--------------------------------+----------+----------+--------+--------+
| - Equity market making | 7.8 | 5.2 | 13.0 | 0.1 |
+--------------------------------+----------+----------+--------+--------+
| - Total equities | 14.4 | 21.8 | 36.2 | 13.4 |
+--------------------------------+----------+----------+--------+--------+
| - Fixed income | 16.0 | 19.3 | 35.3 | 7.1 |
+--------------------------------+----------+----------+--------+--------+
| | | | | |
+--------------------------------+----------+----------+--------+--------+
| Total income | 33.9 | 53.1 | 87.0 | 29.7 |
+--------------------------------+----------+----------+--------+--------+
| | | | | |
+--------------------------------+----------+----------+--------+--------+
| Expenses | (25.6) | (42.9) | (68.5) | (35.1) |
+--------------------------------+----------+----------+--------+--------+
| | | | | |
+--------------------------------+----------+----------+--------+--------+
| Operating profit / (loss) | 8.3 | 10.2 | 18.5 | (5.4) |
+--------------------------------+----------+----------+--------+--------+
| | | | | |
+--------------------------------+----------+----------+--------+--------+
| Key metrics | | | | |
+--------------------------------+----------+----------+--------+--------+
| Headcount - Year end | 189 | 220 | 220 | 125 |
+--------------------------------+----------+----------+--------+--------+
| Corporate clients | 76 | 76 | 76 | 70 |
+--------------------------------+----------+----------+--------+--------+
| Transactional volumes | 1.3 | 1.7 | 3.0 | 1.6 |
| (millions) | | | | |
+--------------------------------+----------+----------+--------+--------+
Results
In a year of substantial transformation and investment, the business generated a
profit of GBP18.5m (2008: GBP5.4m loss). Total income increased by 193% to
GBP87.0m (2008: GBP29.7m) with all businesses, corporate finance, equities and
fixed income contributing to the significant increase.
Corporate finance income increased by 68% to GBP15.5m (2008: GBP9.2m), largely
due to some recovery of corporate activity levels in the second half of 2009.
Equity sales commissions increased by 74% in 2009 to a record level of GBP23.2m
(2008: GBP13.3m), primarily as a result of the expansion into Large-cap and
Pan-European equity coverage during the year. Commissions earned steadily
increased throughout the second half of 2009 as we integrated the new hires
across research, trading and sales. Commissions continue to increase as we gain
market share, with first quarter 2010 rates approximately 15% above second half
2009 levels, despite continued declines in market wide volumes.
Market making income increased to GBP13.0m for 2009 (2008: GBP0.1m) as equity
markets recovered some equilibrium after the dislocation experienced in 2008.
The partial return of liquidity on small and mid cap stocks, almost totally
absent towards the end of 2008 and beginning of 2009, has enabled more
normalised levels of income to be earned.
Fixed Income revenues increased substantially in 2009 to GBP35.3m (2008:
GBP7.1m), reflecting two key factors:
1. Most significantly, the increase in the breadth of product offering and
the range of clients we service increased dramatically during the year. This was
achieved through the recruitment initiative beginning at the end of 2008 and
continuing to date; and
2. The withdrawal of capital by major investment banks in the early part of
2009 resulted in significant widening of spreads across fixed income and credit
products. As stability has gradually returned to financial markets spreads have
narrowed, in particular within investment grade instruments, although not to
levels witnessed prior to the credit downturn.
Operating expenses in 2009 were GBP68.5m (2008: GBP35.1m), made up as follows:
+--------------------------------------+--------+--------+
| | 2009 | 2008 |
+--------------------------------------+--------+--------+
| | GBPm | GBPm |
+--------------------------------------+--------+--------+
| | | |
+--------------------------------------+--------+--------+
| Staff costs | 15.4 | 10.8 |
+--------------------------------------+--------+--------+
| Transactional related costs | 3.0 | 1.7 |
+--------------------------------------+--------+--------+
| IT costs (market data, systems and | 6.8 | 4.6 |
| communications) | | |
+--------------------------------------+--------+--------+
| Property related costs | 3.3 | 2.8 |
+--------------------------------------+--------+--------+
| Other costs | 9.6 | 6.7 |
+--------------------------------------+--------+--------+
| Core operating costs | 38.1 | 26.6 |
+--------------------------------------+--------+--------+
| | | |
+--------------------------------------+--------+--------+
| Performance costs | 30.4 | 8.5 |
+--------------------------------------+--------+--------+
| | | |
+--------------------------------------+--------+--------+
| Total costs | 68.5 | 35.1 |
+--------------------------------------+--------+--------+
Core operating costs increased by 43% to GBP38.1m (2008: GBP26.6m). This was
driven by the increase in average headcount throughout the year and
transactional related costs.
+----------------------------------+--+-------+-------+--------+
| Headcount - Average | | 2009 | 2008 | Change |
+----------------------------------+--+-------+-------+--------+
| | | | | |
+----------------------------------+--+-------+-------+--------+
| Front office | | 136 | 99 | 37% |
+----------------------------------+--+-------+-------+--------+
| Back office | | 43 | 38 | 13% |
+----------------------------------+--+-------+-------+--------+
| | | 179 | 137 | 31% |
+----------------------------------+--+-------+-------+--------+
| | | | | |
+----------------------------------+--+-------+-------+--------+
| Core operating cost per average | | 280 | 269 | |
| front office head (GBP000) | | | | |
+----------------------------------+--+-------+-------+--------+
The overall increase in average core operating costs per front office employee
is a result of: an increased proportion of more experienced staff earning higher
salaries, partially offset by improved utilisation of the businesses
infrastructure platform, including increased occupancy of existing office space,
from the increased headcount.
Performance costs increased to GBP30.4m in the year (2008: GBP8.5m) as a result
of higher performance incentive payments in line with the improvement in
revenues and profitability, together with the integration linked costs
associated with the build out of the Large-cap and Pan-European equities
business.
FINANCIAL REVIEW - Central functions
Other activities
The Group's other activities consist of the central support costs not recovered
from the operating businesses.
+---------------------+--------+--------+
| | 2009 | 2008 |
+---------------------+--------+--------+
| | GBPm | GBPm |
+---------------------+--------+--------+
| | | |
+---------------------+--------+--------+
| Total income | - | (0.3) |
+---------------------+--------+--------+
| | | |
+---------------------+--------+--------+
| Expenses | (1.8) | (0.6) |
+---------------------+--------+--------+
| | | |
+---------------------+--------+--------+
| Operating loss | (1.8) | (0.9) |
+---------------------+--------+--------+
| | | |
+---------------------+--------+--------+
| Headcount - Year | 21 | 15 |
| end | | |
+---------------------+--------+--------+
Other activities encompass Parent Company and central costs, including the cost
of the Group Board, in addition to central support functions (principally
finance) which are not directly recharged to the operating divisions.
Dividend
In light of these results the Board declares a final dividend of 1.70p per
share, up 34% from the prior year final dividend of 1.27p. This reflects the
Board's ongoing commitment to a progressive dividend policy. The dividend is
payable on 18 May 2010 to shareholders on the register at 16 April 2010.
Andrew Westenberger
Finance Director
25 March 2010
CONSOLIDATED INCOME STATEMENT
+--------------------+--------+----------+----------+
| | | Year | Year |
| | | Ended | Ended |
| | | 31.12.09 | 31.12.08 |
+--------------------+--------+----------+----------+
| | | GBPm | GBPm |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Fee | | 115.6 | 61.2 |
| and | | | |
| commission | | | |
| income | | | |
+--------------------+--------+----------+----------+
| Fee | | (0.8) | (0.4) |
| and | | | |
| commission | | | |
| expense | | | |
+--------------------+--------+----------+----------+
| Net | | 114.8 | 60.8 |
| fee | | | |
| and | | | |
| commission | | | |
| income | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Trading | | 13.6 | 2.0 |
| income | | | |
+--------------------+--------+----------+----------+
| Other | | 1.0 | 1.1 |
| income | | | |
+--------------------+--------+----------+----------+
| Total | | 129.4 | 63.9 |
| income | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Net | | (1.7) | - |
| (loss) | | | |
| from | | | |
| available-for-sale | | | |
| financial assets | | | |
+--------------------+--------+----------+----------+
| Operating | | (116.6) | (81.2) |
| expenses | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Operating | | 11.1 | (17.3) |
| profit / | | | |
| (loss) | | | |
| from | | | |
| continuing | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Finance | | 1.4 | 5.6 |
| income | | (1.1) | (1.0) |
| Finance | | | |
| expense | | | |
+--------------------+--------+----------+----------+
| Net | | 0.3 | 4.6 |
| finance | | | |
| income | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Share | | (0.3) | - |
| of | | | |
| post | | | |
| tax | | | |
| results | | | |
| of | | | |
| associates | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Profit | | 11.1 | (12.7) |
| / | | | |
| (loss) | | | |
| before | | | |
| tax | | | |
| from | | | |
| continuing | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Tax | | (1.9) | 1.7 |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Profit | | 9.2 | (11.0) |
| / | | | |
| (loss) | | | |
| after | | | |
| tax | | | |
| from | | | |
| continuing | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Discontinued | | (2.3) | (2.5) |
| operations | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Profit | | 6.9 | (13.5) |
| / | | | |
| (loss) | | | |
| for | | | |
| the | | | |
| year | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Attributable | | | |
| to: | | | |
+--------------------+--------+----------+----------+
| Minority | | (0.4) | (0.7) |
| interests | | | |
+--------------------+--------+----------+----------+
| Equity | | 7.3 | (12.8) |
| holders | | | |
| of The | | | |
| Evolution | | | |
| Group Plc | | | |
+--------------------+--------+----------+----------+
| | | 6.9 | (13.5) |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Earnings / (loss) per share |
| attributable to the equity |
| holders of The Evolution Group |
| Plc during the year: |
| |
| Basic |
+---------------------------------------------------+
| From | | 4.10p | (5.18p) |
| continuing | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| From | | (0.86p) | (0.85p) |
| discontinued | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Diluted | | | |
+--------------------+--------+----------+----------+
| From | | 3.87p | (5.18p) |
| continuing | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| From | | (0.86p) | (0.85p) |
| discontinued | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Dividend | | 0.80p | 0.75p |
| proposed | | | |
| / paid | | | |
| per | | | |
| share - | | | |
| Interim | | | |
| (paid) | | | |
+--------------------+--------+----------+----------+
| | | 1.70p | 1.27p |
| - | | | |
| Final | | | |
| (proposed) | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+--------------------+--------+----------+--------+----------+
| | | Year | | Year |
| | | Ended | | Ended |
| | | 31.12.09 | | 31.12.08 |
+--------------------+--------+----------+--------+----------+
| | | GBPm | | GBPm |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Profit | | 6.9 | | (13.5) |
| / | | | | |
| (loss) | | | | |
| for | | | | |
| the | | | | |
| year | | | | |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Available-for-sale | | 2.3 | | (0.6) |
| financial assets, | | | | |
| net of tax | | | | |
+--------------------+--------+----------+--------+----------+
| Deferred | | (0.2) | | (1.0) |
| tax | | | | |
| (debit) | | | | |
| on share | | | | |
| options | | | | |
| taken to | | | | |
| equity | | | | |
+--------------------+--------+----------+--------+----------+
| Currency | | - | | 0.4 |
| translation | | | | |
| differences | | | | |
+--------------------+--------+----------+--------+----------+
| Share | | (0.1) | | - |
| of | | | | |
| other | | | | |
| comprehensive | | | | |
| income of | | | | |
| associates | | | | |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Other | | 2.0 | | (1.2) |
| comprehensive | | | | |
| income / | | | | |
| (expense) for | | | | |
| the year, net | | | | |
| of tax | | | | |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Total | | 8.9 | | (14.7) |
| comprehensive | | | | |
| income / | | | | |
| (expense) for | | | | |
| the year | | | | |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Attributable | | | | |
| to: | | | | |
+--------------------+--------+----------+--------+----------+
| Minority | | (0.4) | | (0.7) |
| interests | | | | |
+--------------------+--------+----------+--------+----------+
| Equity | | 9.3 | | (14.0) |
| holders | | | | |
| of The | | | | |
| Evolution | | | | |
| Group Plc | | | | |
+--------------------+--------+----------+--------+----------+
| Total | | 8.9 | | (14.7) |
| comprehensive | | | | |
| income / | | | | |
| (expense) for | | | | |
| the year | | | | |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
CONSOLIDATED BALANCE SHEET
+--------------------+--------+----------+--------+----------+
| | | 31.12.09 | | 31.12.08 |
| | | GBPm | | GBPm |
+--------------------+--------+----------+--------+----------+
| ASSETS | | | | |
+--------------------+--------+----------+--------+----------+
| Non-current | | | | |
| assets | | | | |
+--------------------+--------+----------+--------+----------+
| Goodwill | | 10.7 | | 10.4 |
+--------------------+--------+----------+--------+----------+
| Intangible | | 6.2 | | 7.6 |
| assets | | | | |
+--------------------+--------+----------+--------+----------+
| Property, | | 3.3 | | 3.4 |
| plant and | | | | |
| equipment | | | | |
+--------------------+--------+----------+--------+----------+
| Deferred | | 8.5 | | 9.4 |
| tax | | | | |
| assets | | | | |
+--------------------+--------+----------+--------+----------+
| Investments | | 13.4 | | - |
| in | | | | |
| associates | | | | |
+--------------------+--------+----------+--------+----------+
| | | 42.1 | | 30.8 |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Current | | | | |
| assets | | | | |
+--------------------+--------+----------+--------+----------+
| Trade | | 78.8 | | 44.2 |
| and | | | | |
| other | | | | |
| receivables | | | | |
+--------------------+--------+----------+--------+----------+
| Available-for-sale | | 1.7 | | 1.1 |
| financial assets | | | | |
+--------------------+--------+----------+--------+----------+
| Trading | | 13.3 | | 5.0 |
| portfolio | | | | |
| assets | | | | |
+--------------------+--------+----------+--------+----------+
| Cash | | 109.5 | | 103.6 |
| and | | | | |
| cash | | | | |
| equivalents | | | | |
+--------------------+--------+----------+--------+----------+
| Assets | | - | | 28.1 |
| of | | | | |
| disposal | | | | |
| groups | | | | |
| classified | | | | |
| as | | | | |
| held-for-sale | | | | |
+--------------------+--------+----------+--------+----------+
| | | 203.3 | | 182.0 |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Total | | 245.4 | | 212.8 |
| assets | | | | |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| LIABILITIES | | | | |
+--------------------+--------+----------+--------+----------+
| Current | | | | |
| liabilities | | | | |
+--------------------+--------+----------+--------+----------+
| Trade | | 102.4 | | 45.8 |
| and | | | | |
| other | | | | |
| payables | | | | |
+--------------------+--------+----------+--------+----------+
| Trading | | 2.9 | | 4.2 |
| portfolio | | | | |
| liabilities | | | | |
+--------------------+--------+----------+--------+----------+
| Current | | 0.8 | | 0.1 |
| tax | | | | |
| liabilities | | | | |
+--------------------+--------+----------+--------+----------+
| Liabilities | | - | | 12.9 |
| of disposal | | | | |
| groups | | | | |
| classified | | | | |
| as | | | | |
| held-for-sale | | | | |
+--------------------+--------+----------+--------+----------+
| | | 106.1 | | 63.0 |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Non-current | | | | |
| liabilities | | | | |
+--------------------+--------+----------+--------+----------+
| Deferred | | 1.4 | | 1.8 |
| tax | | | | |
| liabilities | | | | |
+--------------------+--------+----------+--------+----------+
| Provisions | | 0.7 | | 0.8 |
| for other | | | | |
| liabilities | | | | |
| and charges | | | | |
+--------------------+--------+----------+--------+----------+
| | | 2.1 | | 2.6 |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Total | | 108.2 | | 65.6 |
| liabilities | | | | |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| Net | | 137.2 | | 147.2 |
| Assets | | | | |
+--------------------+--------+----------+--------+----------+
| | | | | |
+--------------------+--------+----------+--------+----------+
| EQUITY | | | | |
+--------------------+--------+----------+--------+----------+
| Capital | | | | |
| and | | | | |
| reserves | | | | |
| attributable | | | | |
| to equity | | | | |
| shareholders | | | | |
+--------------------+--------+----------+--------+----------+
| Share | | 2.3 | | 2.2 |
| capital | | | | |
+--------------------+--------+----------+--------+----------+
| Share | | 33.2 | | 29.8 |
| premium | | | | |
+--------------------+--------+----------+--------+----------+
| Other | | 30.0 | | 27.8 |
| reserves | | | | |
+--------------------+--------+----------+--------+----------+
| Retained | | 71.7 | | 86.5 |
| earnings | | | | |
+--------------------+--------+----------+--------+----------+
| Shareholders' | | 137.2 | | 146.3 |
| equity | | | | |
| excluding | | | | |
| minority | | | | |
| interest | | | | |
+--------------------+--------+----------+--------+----------+
| Minority | | - | | 0.9 |
| interests | | | | |
| in equity | | | | |
+--------------------+--------+----------+--------+----------+
| Total | | 137.2 | | 147.2 |
| equity | | | | |
+--------------------+--------+----------+--------+----------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | Share | Share | Other | Retained | Total | Minority | Total |
| | | capital | premium | reserves | earnings | | interest | equity |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Balance | | 2.2 | 29.8 | 27.8 | 86.5 | 146.3 | 0.9 | 147.2 |
| at 1 | | | | | | | | |
| January | | | | | | | | |
| 2009 | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Profit | | - | - | - | 7.3 | 7.3 | (0.4) | 6.9 |
| / | | | | | | | | |
| (loss) | | | | | | | | |
| for | | | | | | | | |
| the | | | | | | | | |
| year | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Available-for-sale | | - | - | 2.3 | - | 2.3 | - | 2.3 |
| financial assets | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Deferred | | - | - | - | (0.2) | (0.2) | - | (0.2) |
| tax | | | | | | | | |
| (debit) | | | | | | | | |
| on share | | | | | | | | |
| options | | | | | | | | |
| taken to | | | | | | | | |
| equity | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Share | | - | - | (0.1) | - | (0.1) | - | (0.1) |
| of | | | | | | | | |
| other | | | | | | | | |
| comprehensive | | | | | | | | |
| income of | | | | | | | | |
| associates | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Total | | - | - | 2.2 | 7.1 | 9.3 | (0.4) | 8.9 |
| comprehensive | | | | | | | | |
| income for | | | | | | | | |
| the year | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Issuance | | 0.1 | 3.4 | - | - | 3.5 | - | 3.5 |
| of | | | | | | | | |
| ordinary | | | | | | | | |
| shares | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Purchase | | - | - | - | (23.7) | (23.7) | - | (23.7) |
| of trust | | | | | | | | |
| shares1 | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Dividends | | - | - | - | (4.7) | (4.7) | - | (4.7) |
| paid | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Share | | - | - | - | 4.7 | 4.7 | - | 4.7 |
| options: | | | | | | | | |
| value of | | | | | | | | |
| employee | | | | | | | | |
| services | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Disposal | | - | - | - | 0.2 | 0.2 | - | 0.2 |
| of | | | | | | | | |
| subsidiaries' | | | | | | | | |
| deferred tax | | | | | | | | |
| and share | | | | | | | | |
| options | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Tax | | - | - | - | 1.6 | 1.6 | - | 1.6 |
| deductions | | | | | | | | |
| on options | | | | | | | | |
| exercised | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Minority | | - | - | - | - | - | (0.5) | (0.5) |
| interest | | | | | | | | |
| disposed | | | | | | | | |
| with | | | | | | | | |
| subsidiary | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Transactions | | 0.1 | 3.4 | - | (21.9) | (18.4) | (0.5) | (18.9) |
| with | | | | | | | | |
| shareholders | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Balance | | 2.3 | 33.2 | 30.0 | 71.7 | 137.2 | - | 137.2 |
| at 31 | | | | | | | | |
| December | | | | | | | | |
| 2009 | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | Share | Share | Other | Retained | Total | Minority | Total |
| | | capital | premium | reserves | earnings | | interest | equity |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Balance | | 2.2 | 28.8 | 49.9 | 72.4 | 153.3 | 1.9 | 155.2 |
| at 1 | | | | | | | | |
| January | | | | | | | | |
| 2008 | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Loss | | - | - | - | (12.8) | (12.8) | (0.7) | (13.5) |
| for | | | | | | | | |
| the | | | | | | | | |
| year | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Available-for-sale | | - | - | (0.6) | - | (0.6) | - | (0.6) |
| financial assets | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Currency | | - | - | 0.4 | - | 0.4 | - | 0.4 |
| translation | | | | | | | | |
| differences | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Deferred | | - | - | - | (1.0) | (1.0) | - | (1.0) |
| tax | | | | | | | | |
| (debit) | | | | | | | | |
| on share | | | | | | | | |
| options | | | | | | | | |
| taken to | | | | | | | | |
| equity | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Total | | - | - | (0.2) | (13.8) | (14.0) | (0.7) | (14.7) |
| comprehensive | | | | | | | | |
| (expense) for | | | | | | | | |
| the year | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Issuance | | - | 1.0 | - | - | 1.0 | - | 1.0 |
| of | | | | | | | | |
| ordinary | | | | | | | | |
| shares | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Transfer | | - | - | (21.9) | 21.9 | - | - | - |
| of | | | | | | | | |
| merger | | | | | | | | |
| reserve | | | | | | | | |
| to | | | | | | | | |
| retained | | | | | | | | |
| earnings | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Purchase | | - | - | - | (1.6) | (1.6) | - | (1.6) |
| of trust | | | | | | | | |
| shares1 | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Dividends | | - | - | - | (4.3) | (4.3) | - | (4.3) |
| paid | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Share | | - | - | - | 11.7 | 11.7 | 0.1 | 11.8 |
| options: | | | | | | | | |
| value of | | | | | | | | |
| employee | | | | | | | | |
| services | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Minority | | - | - | - | - | - | (0.5) | (0.5) |
| interest | | | | | | | | |
| disposed | | | | | | | | |
| with | | | | | | | | |
| subsidiary | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Tax | | - | - | - | 0.2 | 0.2 | 0.1 | 0.3 |
| deductions | | | | | | | | |
| on options | | | | | | | | |
| exercised | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Transactions | | - | 1.0 | (21.9) | 27.9 | 7.0 | (0.3) | 6.7 |
| with | | | | | | | | |
| shareholders | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
| Balance | | 2.2 | 29.8 | 27.8 | 86.5 | 146.3 | 0.9 | 147.2 |
| at 31 | | | | | | | | |
| December | | | | | | | | |
| 2008 | | | | | | | | |
+--------------------+--------+---------+---------+----------+----------+--------+-----------+--------+
1 The Evolution Group Plc Employees' Share Trust (the "Trust") administers The
Evolution Group Plc share schemes. The debit shown in retained earnings of
GBP23.7m (2008: GBP1.6m) relates to the value of purchases made by the trust to
satisfy these outstanding option awards to employees of the Group.
CONSOLIDATED CASH FLOW STATEMENT
+--------------------+--------+----------+----------+
| | | Year | Year |
| | | Ended | Ended |
| | | 31.12.09 | 31.12.08 |
| | | GBPm | GBPm |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Cash | | | |
| flows | | | |
| from | | | |
| operating | | | |
| activities | | | |
| from | | | |
| continuing | | | |
| operations: | | | |
+--------------------+--------+----------+----------+
| Cash | | 32.6 | 13.5 |
| generated | | | |
| from | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| Finance | | 1.4 | 5.6 |
| income | | | |
| received | | | |
+--------------------+--------+----------+----------+
| Finance | | (1.1) | (1.0) |
| expense | | | |
| paid | | | |
+--------------------+--------+----------+----------+
| Tax | | 0.7 | (0.8) |
| received | | | |
| / (paid) | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Cash | | 0.2 | (1.7) |
| flows | | | |
| generated | | | |
| from / | | | |
| (used in) | | | |
| discontinued | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| Net | | 33.8 | 15.6 |
| cash | | | |
| flows | | | |
| from | | | |
| operating | | | |
| activities | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Cash | | | |
| flows | | | |
| from | | | |
| investing | | | |
| activities | | | |
| from | | | |
| continuing | | | |
| operations: | | | |
+--------------------+--------+----------+----------+
| Acquisition | | - | (4.4) |
| of | | | |
| businesses | | | |
| and | | | |
| subsidiary, | | | |
| net of cash | | | |
| acquired | | | |
+--------------------+--------+----------+----------+
| Fees | | (0.1) | - |
| in | | | |
| relation | | | |
| to | | | |
| disposal | | | |
| of | | | |
| subsidiaries | | | |
+--------------------+--------+----------+----------+
| Net | | 0.3 | - |
| proceeds | | | |
| from | | | |
| sale of | | | |
| available-for-sale | | | |
| financial assets | | | |
+--------------------+--------+----------+----------+
| Purchase | | (1.8) | (1.6) |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+--------------------+--------+----------+----------+
| Purchase | | (0.9) | (0.7) |
| of | | | |
| intangible | | | |
| assets | | | |
+--------------------+--------+----------+----------+
| Purchase | | - | (1.0) |
| of | | | |
| available-for-sale | | | |
| financial assets | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Cash | | - | (0.4) |
| flows | | | |
| from | | | |
| investing | | | |
| activities | | | |
| of | | | |
| discontinued | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| Net | | (2.5) | (8.1) |
| cash | | | |
| used | | | |
| in | | | |
| investing | | | |
| activities | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Cash | | | |
| flows | | | |
| from | | | |
| financing | | | |
| activities | | | |
| from | | | |
| continuing | | | |
| operations: | | | |
+--------------------+--------+----------+----------+
| Issue | | 3.2 | 0.2 |
| of | | | |
| ordinary | | | |
| share | | | |
| capital | | | |
+--------------------+--------+----------+----------+
| Dividends | | (4.7) | (4.3) |
| paid | | | |
+--------------------+--------+----------+----------+
| Purchase | | (23.7) | (1.6) |
| of trust | | | |
| shares | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Net | | (25.2) | (5.7) |
| cash | | | |
| used | | | |
| in | | | |
| financing | | | |
| activities | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Net | | 6.1 | 1.8 |
| increase | | | |
| in cash | | | |
| and cash | | | |
| equivalents | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Cash | | 103.6 | 122.7 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at | | | |
| beginning | | | |
| of year | | | |
+--------------------+--------+----------+----------+
| Exchange | | - | 0.8 |
| gain on | | | |
| cash | | | |
+--------------------+--------+----------+----------+
| Less: | | (0.2) | (21.7) |
| cash | | | |
| deconsolidated | | | |
| during the | | | |
| year from | | | |
| discontinued | | | |
| operations | | | |
+--------------------+--------+----------+----------+
| | | | |
+--------------------+--------+----------+----------+
| Cash | | 109.5 | 103.6 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at end of | | | |
| year from | | | |
| continuing | | | |
| operations | | | |
+--------------------+--------+----------+----------+
1. BASIS OF PREPARATION
In preparing the financial information in this statement the Group has applied
policies in accordance with International Financial Reporting Standards ("IFRS")
as adopted by the European Union ("EU") and IFRIC interpretations and with those
parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The Financial Statements have been prepared under the historical cost
convention, as modified by the revaluation of available-for-sale financial
assets, and financial assets and financial liabilities (including derivative
instruments) at fair value through the profit or loss.
The financial information in this statement does not constitute the Groups
statutory accounts for the year ended 31 December 2009 within the meaning of the
Companies Act 2006. The statutory accounts for 2009 will be finalised on the
basis of the financial information presented by the Directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Companys Annual General Meeting.
2. TAX
+-------------+--------+--------+--------+
| | 2009 | | 2008 |
| | GBPm | | GBPm |
+-------------+--------+--------+--------+
| Current | | | |
| tax: | | | |
+-------------+--------+--------+--------+
| UK | (0.1) | | (0.2) |
| Corporation | | | |
| income tax | | | |
| on profit | | | |
+-------------+--------+--------+--------+
| Adjustments | 0.1 | | 0.7 |
| in respect | | | |
| of prior | | | |
| years | | | |
+-------------+--------+--------+--------+
| Foreign | - | | (0.2) |
| tax | | | |
+-------------+--------+--------+--------+
| Total | - | | 0.3 |
| current | | | |
| tax | | | |
| credit | | | |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Deferred | | | |
| tax: | | | |
+-------------+--------+--------+--------+
| Current | (1.9) | | 0.9 |
| year | | | |
| movement | | | |
+-------------+--------+--------+--------+
| Adjustments | - | | 0.5 |
| in respect | | | |
| of prior | | | |
| years | | | |
+-------------+--------+--------+--------+
| Total | (1.9) | | 1.7 |
| tax | | | |
| (expense) | | | |
| / credit | | | |
+-------------+--------+--------+--------+
Factors affecting the tax (expense) / credit for the year are explained below:
+-------------+--------+--------+--------+
| | 2009 | | 2008 |
| | GBPm | | GBPm |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Profit | 11.1 | | (12.7) |
| / | | | |
| (loss) | | | |
| before | | | |
| tax | | | |
| from | | | |
| continuing | | | |
| operations | | | |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Profit | (3.1) | | 3.6 |
| / | | | |
| (loss) | | | |
| multiplied | | | |
| by the | | | |
| standard | | | |
| rate of | | | |
| corporation | | | |
| tax in the | | | |
| UK of 28.0% | | | |
| (2008: | | | |
| 28.5%) | | | |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Tax | | | |
| effects | | | |
| of: | | | |
+-------------+--------+--------+--------+
| Expenses | (3.1) | | (5.0) |
| not | | | |
| deductible | | | |
| for tax | | | |
| purposes | | | |
+-------------+--------+--------+--------+
| Tax | 5.4 | | 1.9 |
| deduction | | | |
| on | | | |
| options | | | |
| exercised | | | |
+-------------+--------+--------+--------+
| Utilisation | 1.9 | | 0.1 |
| of losses | | | |
+-------------+--------+--------+--------+
| Trade | - | | (0.9) |
| losses | | | |
| carried | | | |
| back | | | |
+-------------+--------+--------+--------+
| Non | 0.1 | | 0.6 |
| taxable | | | |
| income | | | |
+-------------+--------+--------+--------+
| Adjustment | 0.1 | | 0.7 |
| in respect | | | |
| of prior | | | |
| years | | | |
+-------------+--------+--------+--------+
| Lower | - | | 0.2 |
| tax | | | |
| rates | | | |
| on | | | |
| overseas | | | |
| earnings | | | |
+-------------+--------+--------+--------+
| Share | - | | (0.2) |
| options | | | |
| taken | | | |
| to | | | |
| equity | | | |
| reserves | | | |
+-------------+--------+--------+--------+
| Overseas | - | | 0.1 |
| tax | | | |
| credit | | | |
+-------------+--------+--------+--------+
| Capital | 0.5 | | 0.6 |
| allowances | | | |
+-------------+--------+--------+--------+
| Current | (1.8) | | (1.3) |
| year | | | |
| tax | | | |
| losses | | | |
| not | | | |
| utilised | | | |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Current | - | | 0.4 |
| tax | | | |
| credit | | | |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Deferred | (1.9) | | 0.9 |
| tax | | | |
| expense | | | |
+-------------+--------+--------+--------+
| Deferred | - | | 0.4 |
| tax | | | |
| expense | | | |
| adjustment | | | |
| in respect | | | |
| of prior | | | |
| periods | | | |
+-------------+--------+--------+--------+
| Current | (1.9) | | 1.3 |
| year | | | |
| movement | | | |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Tax | (1.9) | | 1.7 |
| (expense) | | | |
| / credit | | | |
+-------------+--------+--------+--------+
The standard rate of corporation tax in the UK for the year ended 2009 is 28%
compared with 28.5% in the comparative period. The rate of 28.5% for the
comparative period comprised of 3 months (1 January 2008 - 5 April 2009) at 30%
and the remaining 9 months at 28%. In 2009 the standard rate of corporation tax
has remained unchanged at 28%.
Deferred tax on items charged to Income Statement:
+-------------+--------+--------+--------+
| | 2009 | | 2008 |
| | GBPm | | GBPm |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Deferred | (1.0) | | (0.7) |
| tax | | | |
| (expense) | | | |
| on share | | | |
| options | | | |
+-------------+--------+--------+--------+
| Deferred | 0.2 | | 0.1 |
| tax | | | |
| credit | | | |
| on | | | |
| capital | | | |
| allowances | | | |
+-------------+--------+--------+--------+
| Deferred | (1.5) | | 1.3 |
| tax | | | |
| (expense) | | | |
| / credit | | | |
| on trade | | | |
| losses | | | |
+-------------+--------+--------+--------+
| Deferred | - | | 0.5 |
| tax | | | |
| credit | | | |
| on trade | | | |
| losses - | | | |
| prior | | | |
| year | | | |
| adjustment | | | |
+-------------+--------+--------+--------+
| Deferred | 0.4 | | 0.1 |
| tax | | | |
| credit | | | |
| on | | | |
| intangibles | | | |
+-------------+--------+--------+--------+
| | | | |
+-------------+--------+--------+--------+
| Total | (1.9) | | 1.3 |
| deferred | | | |
| tax | | | |
| (credited) | | | |
| / charged | | | |
| to Income | | | |
| Statement | | | |
+-------------+--------+--------+--------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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