TIDMFCAP
RNS Number : 6452F
finnCap Group PLC
18 November 2020
18 November 2020
finnCap Group plc ("finnCap" or the "Company")
Interim results for the six months ended 30 September 2020 and
interim dividend
finnCap Group plc (AIM:FCAP), (together with its subsidiaries
the "Group"), today announces its unaudited interim results for the
six months ended 30 September 2020 ("H1 or H1 21").
Financial Highlights - revenue growth, cost control, balance
sheet strengthened
-- Revenue up 44% to GBP20.5m (H1 20: GBP14.2m)
-- Pre-tax profit up 166% to GBP3.6m (H1 20: GBP1.4m)
-- Adjusted pre-tax profit(1) up 189% to GBP4.3m (H1 20: GBP1.5m)
-- Adjusted EPS(1) of 2.19p per share (H1 20: 0.76p)
-- Interim dividend of 0.5p per share declared
-- Substantially strengthened balance sheet; cash(2) of GBP12.1m (H1 20: GBP5.1m)
Operational Highlights - strong performance in COVID-19 impacted
period, further revenue generating investment
-- Completed 35 transactions across a broad range of sectors and products (H1 20: 29)
-- Total deal and advisory fees up 53% to GBP14.2m (H1 20: GBP9.2m)
-- ECM: completed 17 equity issues raising a total over GBP300m
for listed clients, completed second IPO of FY21; and advised on 4
completed public takeovers with a total deal value of GBP212m
-- M&A: Completed 5 private M&A mandates (H1 20: 8)
-- Average monthly retainers GBP530k (H1 20: GBP529k), client base stable at 125
-- Investment in sector coverage: Family Offices, Human Capital,
Technology, UK M&A and Alternative Capital fundraising
-- finnCap Analytics: new Equity Advisory team established
within the Institutional Sales and Trading department, expected to
start operating by mid-2021
Current Trading
-- Q3 has started well with the completion of the IPO of Fonix
Mobile plc raising GBP45m and the GBP87m placing and open offer for
Synairgen plc; good pipeline in both ECM and M&A for remainder
of H2
-- Expectation of a good result for the year ending 31 March
2021, well ahead of the prior year, notwithstanding the uncertain
operating environment
-- Disposal of 70% of holding in PrimaryBid Limited for
c.GBP700k. Completion expected in early 2021 subject, inter alia,
to regulatory approval
Commenting on the results, Sam Smith, Chief Executive Officer,
said:
"In an unprecedented period, our team has delivered a great
result for our first half, with revenue up over 40%, and a record
half year for finnCap.
COVID-19 related cost control action and higher revenues have
boosted profit and substantially strengthened our balance sheet and
this has given the Board the confidence to resume dividend payments
today.
Our strategy of developing a full suite of products for growth
companies - which, we believe, differentiates us from our peers -
is delivering incremental revenue. Having completed the integration
of Cavendish, we are now moving into a key phase of our strategy -
carefully seeking bolt on acquisitions in adjacent sectors which
align with our culture and further our vision of building a more
broadly-based group, focused on servicing growing companies'
needs.
The uncertain operating environment means we must remain
cautious, however, Q3 has started well, with the completion of the
IPO of Fonix Mobile plc and a further large fund raising for
Synairgen plc and our pipeline of deals remains good.
Today we separately announced that our Chairman, Jon Moulton, is
stepping down from the Board on 31 December with Robert Lister
appointed to the Board as our new Chairman on 1 January 2021. In
addition, having completed oversight of the integration of
Cavendish into the Group, Lord Leigh of Hurley has decided to step
down from the Board today and return to a front-line relationship
and revenue generation role.
Jon has been an integral part of finnCap's growth and
development over the past eleven years in which we have established
the finnCap brand and culture. I would like to record my thanks for
his friendship, support and challenge throughout this period. I
would also like to thank Howard for his valuable contribution to
the Board during the integration and am delighted that he is
remaining as Senior Partner of Cavendish."
Contacts
finnCap Group plc Tel: +44 (0) 20 7220 0500
Sam Smith, Chief Executive Officer
investor.relations@finncap.com
Richard Snow, Chief Financial Officer
Grant Thornton (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Philip Secrett/Samantha Harrison/Seamus Fricker
finnCap Ltd (Broker) Tel: +44 (0) 20 7220 0500
Rhys Williams / Tim Redfern
Sapience Communications (PR Adviser) Tel: +44 (0) 20 3195 3240
Richard Morgan Evans
Notes to Editors
finnCap Group plc (together with its subsidiaries the "Group")
provides financial services to growth companies both public and
private. It provides advisory, broking and research services to 125
companies on AIM and on the London Stock Exchange Main Market and
also advises on M&A, with a specialism in sell-side M&A
through Cavendish Corporate Finance, as well as corporate debt and
private company fundraisings. finnCap also provides trading
services to a broad range of institutional investors
Notes:
(1) The calculation of underlying pre-tax profit and adjusted
earnings per share is shown in note 9 of the Interim Financial
Statements.
(2) At 30 September 2020, amounts due to HMRC under COVID-19
arrangements were GBP0.8m and are repayable over the next 3-6
months and the amount due on the 5 year fit out loan which is
repayable in equal instalments and matures in June 2025 was
GBP1.7m. Cash at 30 September is stated after deducting market
making working capital.
finnCap group PLC ("finnCap" or the "Company")
Interim results for the six months ended 30 September 2020 and
interim dividend
In March 2020, in line with most UK corporates, we undertook
rapid preparations for the anticipated adverse impact of COVID-19
related measures on the UK economy and the businesses of our
clients by cutting costs and taking action to strengthen our
balance sheet. These measures included implementing immediate and
significant pay reductions for staff and all directors for the
first three months of this financial year ("FY21"); the cessation
of dividend payments and the cancellation of discretionary bonus
payments for FY20. We also took action to reduce non-staff costs
where this was possible, for example by reducing the Group's
discretionary marketing spend.
Against our initial expectations, activity in our markets in H1
has been strong, with increased equity fundraisings to support our
clients' financial needs and investment in strong business cases.
We have also benefited from on-going long-term investment in
building leading expertise in the healthcare, biotech and tech
sectors where there has been significant corporate activity. As a
result, revenue generation in H1 has proven to be stronger than we
expected and, with cost actions outlined above, we have therefore
delivered materially higher profits and cashflow than in H1 last
year.
This performance has strengthened the financial resilience of
the Group with cash(2) at 30 September 2020 of GBP12.1m vs GBP4.7m
at 31 March 2020. It has also given us confidence to continue to
invest in the business and to consider new growth opportunities. We
have made senior hires for the M&A business (including
specialists in Human Capital, Technology, and UK M&A),
Alternative Capital and a specialist to cover Family Offices. In H2
we will be making additional, focused headcount investment in the
ECM and equities business including the establishment of a new
venture which will develop market analysis strategies for large
institutions and hedge funds - a completely new business activity
and customer segment for finnCap. We have now hired the leadership
team for this venture, which is expected to start trading in the
middle of CY 2021, and is discussed, further, below.
The pandemic continues to disrupt the UK economy materially and,
although recent developments around vaccines are encouraging, we
remain cautious about prospects for our clients and our business in
2021. However, our strategy of developing a full suite of products
for growing companies, which differentiates us from our peers, is
working well and, with a good pipeline for the remainder of the
year, we look forward to a good performance for the year to 31
March 2021 with substantially higher profits than the prior
year.
Further discussion of our results is set out below.
ECM
The equity capital markets division delivered GBP16.3m of
revenue in the period (H1 20: GBP9.2m), with deal fees exceeding
GBP10m for the first time, stable retainers and a strong
contribution from trading. The individual contributors to this
performance are considered below.
Retainers - Total fees from retainers in the period were GBP3.2m
(H1 20: GBP3.2m). In an environment where winning new clients was
challenging, we were pleased to have won 11 new retained clients.
The natural loss of clients to M&A and delisting continued and
the retained client base, therefore, remained stable.
Transactions - Total fees received from transactions in the
period were GBP10.1m (H1 20: GBP4.3m). In H1, we raised over
GBP300m across 15 equity fundraisings for listed clients and 2
IPOs. We also advised on a total of 4 completed takeovers and plc
advisory roles with an aggregate deal value of GBP212m.
The debt advisory team, which works across both finnCap and
Cavendish, completed 4 advisory mandates and billed GBP0.5m in
H1.
Trading - Trading revenues were GBP3.1m (H1 20: GBP1.8m) with
the team providing critical liquidity to our corporate and
institutional clients during a very volatile trading period and
benefitting from increased corporate activity across the equity
capital markets
finnCap Analytics: We have now hired the senior members of a new
team to lead an expansion of our equity sales and trading business
into servicing a new group of institutional investors, through
offering analysis of market trends and events to develop sales and
trading ideas and execution predominantly in relation to large cap
equities. Our objective is to grow our secondary commission
business and to bring more balance to sources of revenue within
ECM, as well as establishing relationships with institutions that
will be increasingly important to our growing corporate clients as
they seek to access larger institutional investors. This unit is
expected to be fully operational from mid CY 21.
In order to incentivise this team and to attract further talent,
an equity programme has been put in place whereby the Company will
issue options - across the whole team - over up to 20 million new
ordinary shares at a price of 20p per share. Awards of the share
options, which will be made in four equal tranches exercisable
between April 2024 and April 2028, are conditional on achievement
of annual, increasing unit PBT targets over the 4 financial years
to 31 March 2025 and on continued employment. In aggregate the team
must deliver unit PBT of GBP8.5m in order to be awarded the
incentive plan in full. Although the equity programme is
potentially large, it enables us to enter a completely new line of
business that is highly complementary to our existing offering, at
low financial risk and with appropriate and challenging
hurdles.
M&A Advisory
Cavendish generated revenues of GBP4.2m in H1, down on H1 20
(GBP5.0m) but significantly ahead of H2 20 (GBP2.4m). In total, it
closed 5 private M&A transactions. Whilst this level of revenue
is below Cavendish's recent average run rates, we believe this is a
performance comparative with Cavendish's peers.
Activity remains stable in Cavendish and the revenue pipeline
for the remainder of the year is stronger than for H1 and currently
includes one fee potentially material in the context of the Group.
In H2 we expect to start to benefit from business brought in by our
new sector M&A specialists.
Administrative expenses
Costs in the period increased over the prior half-year primarily
as the result of the substantially higher discretionary bonus
accrual which reflected the Group's strong financial performance.
Despite this increase, staff costs as a percentage of revenue
decreased to 59% from 62% in H1 last year.
Non-employee costs per staff member have increased by GBP4k to
GBP33k due to a significant introductory fee paid to a third-party
in connection with an M&A transaction. Excluding third party
introductory fees in each period, non-employee cost declined by 5%.
Lower discretionary marketing, travel and entertainment spend has
significantly exceeded increased IT and communication costs from
home working and higher trading costs arising from increased
trading revenue and volumes. We now expect that our operating costs
for FY21 (excluding bonuses, share based payments and third-party
introductory fees) will be around 3-5% below those for FY20.
Non-recurring items
In September, the Group occupied its new offices at One
Bartholomew Close having completed a COVID-19 compliant fit out. We
have treated the lease and related costs of c.GBP848k (being
interest and depreciation under IFRS 16) for the overlap period
until occupation in August as a non-recurring item. In addition,
the Group incurred GBP70k of moving costs and c.GBP73k of COVID-19
related redundancy settlements. Dilapidations and related costs
arising from our surrender of leases for our previous offices were
previously provided.
Capital and liquidity
The Group's cash position improved substantially to GBP12.1m
from GBP4.7m at 31 March 2020. Cash is stated before deducting
c.GBP0.8m deferred taxes due to HMRC under COVID-19 arrangements,
which will be repaid by January 2021 under terms agreed with them
and the balance of the GBP1.7m fit out loan which will be repaid
over the next 5 years. The capital expenditure on fit-out was c
GBP1.9m and has been capitalised and will be substantially written
off over the life of the 10 years lease.
In October, the Group accepted a cash offer for 70% of its
holding in PrimaryBid Limited. On completion, which is expected
during the early part of CY21, we will receive c.GBP700k in cash
which will further bolster our cash resources. The uplift from this
sale and the increased value of our remaining stake are recorded
within other income as a mark to market adjustment.
A stronger liquidity position and the longer-term financing of
our office move means that the Group is well positioned to
withstand a challenging economic environment and also positions us
to make further strategic moves over time. This may include
expansion into new business areas servicing growing companies
either organically or inorganically.
Interim dividend
The Board recognises the importance of income to its
shareholders and appreciated the support it received from
shareholders for its cancellation of the final dividend for FY 20
which, in conjunction with the comparable contribution made by
employees and directors has improved the balance sheet resilience
of the Group.
In light of the financial performance for H1, the Directors have
approved an interim dividend of 0.5p per share. This will be paid
on 18 December 2020 to shareholders on the register on 4 December
2020. The associated ex-dividend date is 3 December 2020.
Current trading and outlook
With the completion of the IPO of Fonix Mobile plc and an GBP87m
placing and open offer for Synairgen plc, alongside a number of
other smaller transactions, Q3 has started well and our pipeline of
business looks promising for the forthcoming months.
Whilst we have experienced a sustained period of good trading so
far in FY21, we must accept that the economic environment remains
uncertain and is likely to be so for some considerable period
ahead. Notwithstanding this, with a strong performance in H1 and a
good start to Q3 we expect to deliver a good result for FY2021 with
profits well up on last year. Our stronger balance sheet gives us
the ability to continue to invest in our strategy of building a
wider range of products and services and sector expertise,
servicing the needs of growing companies in the UK.
Sam Smith , Chief Executive Officer
18 November 2020
Consolidated Statement of Comprehensive Income
Unaudited for the 6 months ended 30 September 2020
12 months
6 months ended 6 months ended ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Notes
Revenue 2 20,492 14,182 26,006
Other operating income 3 716 25 (115)
---------------------------------- ------- --------------- --------------- --------------
Total income 21,208 14,207 25,891
Administrative expenses 4 (16,560) (12,857) (24,522)
---------------------------------- ------- --------------- --------------- --------------
Operating profit before non-recurring
items 4,648 1,350 1,369
Non-recurring
items 5 (991) - (188)
Operating profit 3,657 1,350 1,181
Finance income 9 13 26
Finance charge (40) - (24)
--------------------------------- ------- --------------- --------------- --------------
Profit before
taxation 3,626 1,363 1,183
Taxation (702) (276) (411)
Profit attributable to
equity shareholders 2,924 1,087 772
----------------------------------- ------- --------------- --------------- --------------
Total comprehensive income
for the year 2,924 1,087 772
-------------------------------------------- --------------- --------------- --------------
Earnings per share
(pence)
Basic 6 1.85 0.68 0.49
Diluted 6 1.74 0.63 0.46
Consolidated Statement of Financial Position
Unaudited for the 6 months ended 30 September 2020
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
Non-current
assets
Property, plant and
equipment 8 i) 15,219 1,126 635
Intangible
assets 8 ii) 13,476 13,593 13,533
Financial assets
held at fair value 1,344 476 393
Deferred tax
asset 8 iii) 171 365 171
Total non-current
assets 30,210 15,560 14,732
------------------------------- ------- ------------- ------------- ---------
Current assets
Trade and other receivables 8 iv) 6,860 7,757 9,037
Current assets held
at fair value 610 533 431
Cash and cash equivalents 12,137 5,056 4,695
Total current
assets 19,607 13,346 14,163
------------------------------ ------- ------------- ------------- ---------
Total assets 49,817 28,906 28,895
------------------------------ ------- ------------- ------------- ---------
Non-Current
liabilities
Lease liability 13,555 - -
Borrowings 8 v) 1,307 - -
Provisions 40 58 40
-------------------------------
Total non-Current
liabilities 14,902 58 40
------------------------------- ------- ------------- ------------- ---------
Current liabilities
Trade and other payables 9,963 7,061 8,469
Corporation
taxation 658 256 64
Borrowings 8 v) 394 - -
Total current
liabilities 11,015 7,317 8,533
------------------------------ ------- ------------- ------------- ---------
Equity
Share capital 1,730 1,697 1,697
Share premium 893 616 616
Own shares
held 8 vi) (1,636) (1,636) (1,636)
Merger relief reserve 8 vii) 10,482 10,482 10,482
Share based payments
reserve 732 371 388
Retained earnings 11,699 10,001 8,775
Total equity 23,900 21,531 20,322
------------------------------ ------- ------------- ------------- ---------
Total equity and
liabilities 49,817 28,906 28,895
------------------------------- ------- ------------- ------------- ---------
Consolidated Statement of Cash Flows
Unaudited for the 6 months ended 30 September 2020
12 months
6 months ended 6 months ended ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 3,626 1,363 1,183
Adjustments for:
Depreciation 531 495 948
Non-recurring depreciation and
finance charge 768 - -
Amortisation of intangible assets 39 59 79
Finance income (9) (13) (26)
Finance charge 40 - -
Share based payments charge 344 79 110
Net fair value gains recognised
in profit or loss (716) (38) 115
Payments received of non-cash
assets (207) (224) (275)
4,416 1,721 2,134
Changes in working capital:
Decrease/(increase) in trade
and other receivables 2,177 784 (495)
(Decrease)/increase in trade
and other payables 1,495 (1,685) 173
Increase/(decrease) in provisions - (5) (23)
Cash generated from operations 8,088 815 1,789
Net cash payments for current
asset investments
held at fair value through profit
or loss (179) 578 680
Tax paid (108) (518) (845)
Net cash inflow from operating
activities 7,801 875 1,624
-------------------------------------- --------------- --------------- ----------
Cash flows from investing activities
Purchase of property, plant
and equipment (1,911) (99) (262)
Purchase of intangible assets - (9) (9)
Proceeds on sale of investments - 477 508
Interest received 9 13 26
Net cash (outflow)/inflow from
investing activities (1,902) 382 263
-------------------------------------- --------------- --------------- ----------
Cash flows from financing activities
Equity dividends paid - (557) (1,218)
Proceeds from exercise of options 310 50 50
Lease liabilities payments (468) (353) (683)
Proceeds from borrowings 1,701 - -
Net cash outflow from financing
activities 1,543 (860) (1,851)
-------------------------------------- --------------- --------------- ----------
Net increase/(decrease) in cash
and cash equivalents 7,442 397 36
Cash and cash equivalents at
beginning of period 4,695 4,659 4,659
Cash and cash equivalents at
end of period 12,137 5,056 4,695
-------------------------------------- --------------- --------------- ----------
Consolidated Statement of Changes in Equity
Unaudited for the 6 months ended 30 September 2020
Share
Own Merger Based
Share Share Shares Relief Payment Retained Total
Capital Premium Held Reserve Reserve Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March 2019 1,688 575 (1,636) 10,482 292 9,534 20,935
----------------------------- -------- -------- -------- -------- -------- --------- --------
Total comprehensive income
for the period - - - - - 1,087 1,087
Transactions with owners:
Share based payments charge - - - - 79 - 79
Deferred tax on share-based
payments - - - - - (63) (63)
Dividends - - - - - (557) (557)
Share options exercised 9 41 - - - - 50
9 41 - - 79 (620) (491)
----------------------------- -------- -------- -------- -------- -------- --------- --------
Balance at 30 September
2019 1,697 616 (1,636) 10,482 371 10,001 21,531
----------------------------- -------- -------- -------- -------- -------- --------- --------
Total comprehensive income
for the period - - - - - (315) (315)
Transactions with owners:
Share based payments charge - - - - 31 - 31
Implementation of IFRS16
(note 24) - - - - - (70) (70)
Deferred tax on share-based
payments - - - - - (194) (194)
Dividends - - - - - (661) (661)
Share options exercised - - - - (14) 14 -
- - - - 17 (911) (894)
----------------------------- -------- -------- -------- -------- -------- --------- --------
Balance at 31 March 2020 1,697 616 (1,636) 10,482 388 8,775 20,322
----------------------------- -------- -------- -------- -------- -------- --------- --------
Total comprehensive income
for the period - - - - - 2,924 2,924
Transactions with owners:
Share based payments charge - - - - 344 - 344
Deferred tax on share-based
payments - - - - - - -
Dividends - - - - - - -
Share options exercised 33 277 - - - - 310
33 277 - - 344 - 654
----------------------------- -------- -------- -------- -------- -------- --------- --------
Balance at 30 September
2020 1,730 893 (1,636) 10,482 732 11,699 23,900
----------------------------- -------- -------- -------- -------- -------- --------- --------
Notes to the Financial Statements
Unaudited for the 6 months ended 30 September 2020
1. Basis of preparation
finnCap Group plc (the "Company") is a public limited company,
limited by shares, incorporated and domiciled in England and Wales.
The Company was incorporated on 28 August 2018. The registered
office of the Company is at 1 Bartholomew Close, London EC1A 7BL,
United Kingdom. The registered company number is 11540126. The
Company is listed on the AIM Market of the London Stock
Exchange.
These unaudited consolidated Interim Financial Statements have
been prepared in accordance with AIM Rule 18. The financial
information contained in the Interim Financial Statements is
unaudited and does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006.
The statutory accounts for the 12 months ended 31 March 2020
have been delivered to the Registrar of Companies. The statutory
accounts have been prepared in accordance with International
Financial Reporting Standards and International Accounting
Standards as adopted by the European Union and the IFRS
Interpretation Committee interpretations (collectively IFRSs), and
in accordance with applicable law. The Independent Auditor's Report
to the members of finnCap Group plc contained no qualification or
statement under section 498 (2) or (3) of the Companies Act
2006.
These consolidated Interim Financial Statements contain
information about the Group and have been prepared on a historical
cost basis except for certain financial instruments which are
carried at fair value. Amounts are rounded to the nearest thousand,
unless otherwise stated and are presented in pounds sterling, which
is the currency of the primary economic environment in which the
Group operates.
The preparation of these Interim Financial Statements requires
the use of certain critical accounting estimates. It also requires
Group management to exercise judgement in applying the Group's
accounting policies. Judgements and estimates used in these Interim
Financial Statements have been applied on a consistent basis with
those use in the statutory accounts for the 12 months ended 31
March 2020.
The Directors believe that the company has adequate resources to
continue trading for at least 12 months from the date of approval
of this report. Accordingly, they continue to adopt the going
concern basis in preparing the Interim Financial Statements.
2. Segmental reporting
The Group is managed as an integrated full-service financial
services group and the different revenue streams are considered to
be subject to similar economic characteristics. Consequently, the
Group is managed as one business unit.
The trading operations of the Group comprise of Corporate
Advisory and Broking, M&A Advisory and Institutional
Stockbroking. The Group's revenues are derived from activities
conducted in the UK, although several of its corporate and
institutional investors and clients are situated overseas. All
assets of the Group reside in the UK.
12 months
6 months ended 6 months ended ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenues
Retainers 3,179 3,172 6,471
Transactions 10,079 4,268 8,642
Corporate advisory
and broking 13,258 7,440 15,113
Institutional Stockbroking 3,073 1,767 3,567
Total
ECM 16,331 9,207 18,680
Sell Side M&A advisory 4,161 4,975 7,326
Total Revenue 20,492 14,182 26,006
----------------------------- --------------- --------------- --------------
Services transferred at
a point in time 14,932 10,154 18,777
Services transferred over
a period of time 5,560 4,028 7,229
Total Revenue 20,492 14,182 26,006
----------------------------- --------------- --------------- --------------
3. Other operating income
12 months
6 months ended 6 months ended ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Other operating income 716 25 (115)
-------------------------- --------------- --------------- --------------
At the reporting date, the Group's holding in PrimaryBid Limited
was revalued by GBP0.7m to reflect the increase in fair value as
the result of our agreement to sell of 70% of this investment. This
is a private company investment included in level 3 of the fair
value hierarchy as disclosed in the year end accounts.
4. Expenses by Nature
12 months
6 months ended 6 months ended ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Employee benefit expense 12,042 8,859 16,095
Non-employee
costs 4,518 3,998 8,427
Total administrative
expenses 16,560 12,857 24,522
----------------------------- --------------- --------------- --------------
Total number of employees 135 137 140
----------------------------- --------------- --------------- --------------
Employee benefit expense includes share-based payments which
increased to GBP344k (H1 20: GBP79k). This reflected
incentivisation options granted to employees in the period
including those granted in relation to the salary reductions
applied in Q1 21.
5. Non-recurring items
12 months
6 months ended 6 months ended ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Non-recurring
items 991 - 188
---------------- --------------- --------------- --------------
Non-recurring items in the period relate to overlap (GBP848k)
and moving costs (GBP70k) in connection with the relocation of the
Group to 1 Bartholomew Close as well as GBP73k of group
restructuring costs.
6. Earnings per share
12 months
6 months ended 6 months ended ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Earnings per
share
Number of shares
Weighted average number of shares for
the purposes
of basic earnings
per share 158,227,046 156,745,094 157,093,604
-------------------------------------- ----------------- --------------- --------------
Weighted average dilutive effect of conditional
share
awards 9,994,919 14,040,237 9,553,641
----------------- --------------- --------------
Weighted average number of shares for
the purposes
of diluted earnings
per share 168,221,965 170,785,331 166,647,245
-------------------------------------- ----------------- --------------- --------------
Profit per ordinary
share (pence)
Basic profit per ordinary
share 1.85 0.68 0.49
Diluted profit per
ordinary share 1.74 0.63 0.46
-------------------------------------- ----------------- --------------- --------------
The shares held by the Group's Employee Benefit Trust have been
excluded from the calculation of earnings per share.
7. Dividends
12 months
6 months ended 6 months ended ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Dividends proposed and paid
during the year - 557 1,218
--------------------------------- ---------------- --------------- --------------
Dividends per share -p 0.35p 0.78p
--------------------------------- ---------------- --------------- --------------
8. Balance Sheet Items
i) Plant, property and equipment.
On 2 April, the Group took possession of its new lease at 1
Bartholomew Close. The right of use asset created by this lease is
recognised in this reporting period. Due to the rent-free period,
it is shown as non-current in the balance sheet. As at March 2020,
the Group had a lease liability of GBP0.4m included in current
liabilities relating to the leases on its previous properties.
ii) Intangible assets
Intangible assets includes goodwill of GBP13,335,000 recognised
on the acquisition of all the share capital of Cavendish Corporate
Finance (UK) Limited and all of the partnership rights of Cavendish
Corporate Finance LLP on the 5(th) December 2018.
iii) Deferred tax asset
Deferred taxation for the Group relates to timing difference on
the taxation relief on the exercise of options. The amount of the
asset is determined using tax rates that have been enacted or
substantively enacted when the deferred tax assets are expected to
be recovered.
iv) Trade and other receivables
Trade and other receivable principally consist of amounts due
from client, brokers and other counterparties. In addition, the
Company has credit risk exposure to the gross value of unsettled
trades (on a delivery versus payment basis) at its agency
settlement agent (Pershing, a wholly owned subsidiary of Bank of
New York Mellon Corporation).
v) Borrowings
The balance as at 30 September 2020 relates to a loan taken out
to fund the fit out of the Group's new premises.
vi) Own shares held
The value of own shares held is the cost of shares purchased the
Group's Employee Benefit Trust. The Trust has the authority to
acquire shares in finnCap Group plc and is funded by the Group
vii) Merger relief reserve
The merger relief reserve, which is not distributable,
represents:
-- the difference between net book value of finnCap Ltd and the
nominal value of the shares issued due to the share for share
exchange on the acquisition of finnCap Ltd. Upon consolidation,
part of the merger relief reserve is eliminated to recognise the
pre-acquisition share premium and capital redemption reserve of
finnCap Ltd; and
-- the difference between the fair value and nominal value of
shares issued for the acquisition of Cavendish Corporate Finance
(UK) Limited and Cavendish Corporate Finance LLP
9. Alternative performance measures
The Non-GAAP alternative performance measures used in this
statement are described below.
Adjusted earnings per share and profit before tax
Measure: Adjusted earnings per share is calculated excluding
share-based payments, non-recurring items, amortisation of
intangible assets from the acquisition of Cavendish, the gain from
the sale and related revaluation of the group's stake in PrimaryBid
Limited and includes a notional tax charge adjustment. As with
earnings per share, the weighted average number of shares in issue
during the period excludes shares held by the Group's Employee
Benefit Trust.
Measure: Adjusted profit before tax is calculated on a
comparable basis with Adjusted EPS
Use: Both measures provide a consistent measure of the earnings
performance of the core business activities.
12 months
6 months ended 6 months ended ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit attributable to equity
shareholders 2,924 1,087 772
Fair value gains on long
term investments (716) - -
Non-recurring
items 991 - 188
Share based
payments 344 79 110
Amortisation 39 39 79
Taxation 702 276 411
----------------------------------- --------------- --------------- --------------
Underlying pre-tax
profit 4,284 1,481 1,560
Notional tax (814) (281) (296)
Adjusted earnings 3,470 1,200 1,264
-------------------------------- --------------- --------------- --------------
Basic shares 158,227,046 156,745,094 157,093,604
Basic
EPS 1.85 0.68 0.49
Adjusted EPS 2.19 0.76 0.80
10. Post Balance Sheet Events
On 26 October 2020 the Group agreed to sell 70% of its stake in
PrimaryBid Limited for c.GBP700k in cash. Completion is expected to
complete in early 2021 subject, inter alia, to regulatory
approval.
On 17 November 2020, the equity incentive plan for the finnCap
Analytics team was established whereby the Company will issue up to
20 million new ordinary shares at a price of 20p per share subject
to achievement of certain unit profit hurdles and continued
employment. These shares will be issued in four equal tranches
between April 2024 and April 2028 and are conditional on
achievement of annual, increasing unit PBT targets over the 4
financial years to 31 March 2025. In aggregate the team must
deliver unit PBT of GBP8.5m in order to be awarded the incentive
plan in full.
END
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END
IR FFUFAWESSEEF
(END) Dow Jones Newswires
November 18, 2020 02:00 ET (07:00 GMT)
Grafico Azioni Finncap (LSE:FCAP)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Finncap (LSE:FCAP)
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Da Apr 2023 a Apr 2024
