TIDMARDN

RNS Number : 2067H

Arden Partners plc

05 April 2022

Arden Partners plc

("Arden" or the "Company" or the "Group")

Audited results for the year ended 31 October 2021

Arden Partners plc (AIM: ARDN), the institutional stockbroking company, today announces audited results for the year ended 31 October 2021 ("FY21").

HIGHLIGHTS

Market overview

-- UK equity markets remained buoyant throughout FY21, continuing the trend that started in the second half of 2020, with institutional investors prepared to support ambitious growing companies

-- The AIM IPO market performed strongly in 2021 with 87 AIM IPOs raising a cumulative GBP1.9bn (2020: 32 IPOs raising a cumulative GBP0.5bn) (source: London Stock Exchange)

-- The secondary fundraise market also had significant growth with GBP6.9bn raised by AIM listed companies in 2021, up from GBP5.3bn in 2020 (source: London Stock Exchange)

   --      Competition for capital was fierce, particularly in the second half of 2021 
   --      M&A activity for both public and private companies remained strong 

Operational highlights

   --       Arden completed 29 transactions in FY21 (FY20: 22 transactions) including: 

o Three IPOs/Reverse Take Overs (FY20: 1 IPO/RTO)

o 15 equity fundraisings (FY20: 10 equity fundraisings)

   --       GBP193 million raised for listed clients (FY20: GBP90 million) 
   --       Three Takeover Code transactions completed (FY20: 2 transactions) 

-- The work of the Company's Research and Corporate Finance teams was recognised by judges in a number of industry awards

Financial highlights

   --       Revenue up 56.5% to GBP9.3 million (FY20: GBP5.9 million) 
   --       Profit before tax of GBP0.8 million (FY20: GBP1.4 million loss before tax) 
   --       Basic earnings per share of 4.8p (FY20: 5.0p loss per share) 
   --       Net asset value per share at year end up 24.4% to 17.3p (FY20: 13.9p) 

Recommended all share offer for Arden Partners plc by The Ince Group plc (the "Acquisition")

-- On 26 October 2021, the boards of The Ince Group plc ("Ince") and Arden announced that they had reached agreement on the terms of a recommended all share offer by Ince for the entire issued and to be issued ordinary share capital of Arden

-- Strategic and financial rationale for the Acquisition as set out in the Scheme Document published on 20 December 2021

-- Seven Ince shares for every 12 Arden shares allows Arden shareholders to participate in the potential value creation of the combined business

   --      Arden shareholder approval for the Acquisition obtained on 19 January 2022 
   --      The Acquisition remains conditional on: 

o the approval of the London Stock Exchange to Arden's re-application to be a nominated adviser on AIM following the change of control of Arden

o final sanction by the Court

Commenting on the results and Arden's outlook, Mark Ansell, Chairman, said:

"The excellent performance in FY21 was enabled by the strategies adopted by the Group to address industry and regulatory changes and the challenges posed by Covid-19. I continue to be very proud of our employees' efforts in ensuring that our business was able to deliver these strong results through such a challenging period.

"We believe the longer-term outlook for the UK equity markets remains robust despite the short-term economic outlook being highly uncertain. Arden's pipeline of both primary and secondary transactions is reassuring and we entered the new financial year with a positive outlook.

"Notwithstanding the current pipeline, as Arden is reliant on one-off and sizeable corporate transactions, it is dependent upon its clients and the business impact of short and long-term downturns in the market. The Board believes that the recommended all share offer benefits all stakeholders by securing Arden's position and enabling it to offer a wider range of services to a larger client base as part of a more diversified entity. We are working towards completing this deal in the near term."

For further enquiries:

 
  Arden Partners plc 
   Donald Brown - Chief Executive Officer 
   James Reed-Daunter - Executive Director 
   Steve Douglas - Group Finance Director      020 7614 5900 
  Houlihan Lokey UK Limited (NOMAD) 
   Tim Richardson                              020 7484 4040 
  SEC Newgate Communications (Press 
   enquiries) 
   Clotilde Gros/Richard Bicknell              020 7653 9850 
 

Notes for editors

Arden is a dedicated corporate adviser and multi-service stockbroker to small and mid-cap companies in the UK and their investors.

The core purpose of our business is the effective management of the needs of our significant and growing base of corporate clients, and the effective support of their relationships with existing and potential shareholders.

These relationships are enhanced by the quality of our corporate finance advice and industry research, and the strong market presence of our sales and trading teams.

Our corporate finance capabilities encompass M&A, corporate finance advisory, broking and Sponsor and NOMAD services. We represent our clients in private transactions and AIM and Main Market share issues.

Our research is designed to be sector focused, concentrating on top down thematic trends which highlight companies giving investors an exposure to the real growth areas of the small-cap and AIM markets.

The sales team's role is to keep institutions abreast of these themes and stock ideas. When there is a requirement for our corporate clients to raise money to fulfil their growth ambitions, the sales team is in a strong position to effect this, with its entrenched relationships with the UK institutional and non-institutional markets.

Our market making and trading teams provide liquidity in the shares of our corporate clients. We also trade the shares of non-client corporates on behalf of institutions.

The Arden Wealth Management team offers a bespoke service to our clients, with the ability to trade/invest in equities, bonds and a range of global investment funds, as well as allowing clients to participate in Primary and Secondary equity placings.

CHAIRMAN'S STATEMENT

In 2021, we saw a continued market recovery and equity market conditions that, for the most part, were very supportive of both primary and secondary fundraisings. Further, M&A conditions were strong with both corporate acquirors and private equity looking to deploy substantial cash piles. This was very much a continuation of the macro agenda from H2 2020.

Investors, however, began to show more caution towards the end of 2021, which we believe was a combination of investor fatigue, the high volume of deals looking for funding and concern over inflation, interest rates and supply chain issues.

Despite these challenges, we believe the outlook for UK equity markets remains robust. Investors still have substantial cash piles to deploy and the UK market remains attractively valued relative to global peers. We are announcing these results, however, against the backdrop of the human tragedy unfolding in Ukraine and our thoughts are with those who are directly and indirectly affected. Understandably, the market has been more volatile as a result of events in Ukraine and the number of new transactions is likely to remain subdued until this period of uncertainty is resolved.

We were pleased with the performance of the Company in FY21. Performance levels were much improved on recent years and were particularly strong in the first half. However, in common with much of the market, we saw a lull in activity in the summer period and we noted the caution and competition in the market towards the end of FY21. Despite these challenges, Arden continued to transact both primary and secondary business.

Overall, revenues for the year rose by 56.5% to GBP9.3 million (FY20: GBP5.9 million), with profit before tax of GBP0.8 million (FY20: GBP1.4 million loss before tax) and earnings per share of 4.8p (FY20: loss per share of 5.0p). We continued to keep a tight control on costs throughout FY21.

Our balance sheet remains strong. As at 31 October 2021 our net asset value per share was 17.3p (31 October 2020: 13.9p). We hold cash and cash equivalents in excess of our capital adequacy requirements and sufficient to protect us against short to medium term market fluctuations.

The current financial year started in a promising and profitable manner as we completed two IPOs and two equity fundraisings. We are also currently active on a number of M&A transactions. However, the short-term economic and geopolitical outlook is highly uncertain, resulting in a challenging time for investors and corporate clients alike. Beyond this, Arden's pipeline of both primary and secondary transactions is reassuring and we have a positive longer term outlook. We continue to believe the Group is well positioned in its markets, a position from which we can continue to execute our ongoing growth strategy.

Finally, we believe the recommended all share offer from Ince, announced on 26 October 2021, is an exciting strategic development for Arden as it secures it's position as an adviser and broker able to offer a wider range of services to a wider client base. The all share nature of the offer enables Arden shareholders to participate fully in the potential value creation of the enlarged group.

Mark Ansell

Chairman

4 April 2022

CHIEF EXECUTIVE'S STATEMENT

Overview

I was pleased with our performance over the financial year as a whole which resulted in a marked increase in revenue and our return to profitability. There was a good level of activity across all divisions and we were able to serve our clients with confidence and commitment.

I would like to thank all our clients and shareholders for their continued support and to express the appreciation of the entire Board for the considerable hard work and commitment of our staff.

Business review

During the year under review revenues increased by 56.5% to GBP9.3 million (2020: GBP5.9 million) and we achieved a profit before tax of GBP0.8 million (2020: loss before tax of GBP1.4 million). All divisions performed well with each delivering increased revenues.

Revenue summary

 
  Division                                 2021      2020    % change 
                                          GBP'm     GBP'm 
-------------------------------------  --------  --------  ---------- 
 
  Equities                                  1.3     (0.5)       340.0 
  Corporate Finance (incl. corporate 
   retainers)                               7.8       6.3        22.5 
  Wealth Management                         0.2       0.1        73.8 
 
  Total Revenue                             9.3       5.9        56.5 
 
 

Corporate Finance

 
                                       2021    2020    % change 
-----------------------------------  ------  ------  ---------- 
 
  Revenue (GBP'm)                       7.8     6.3        22.5 
 
  Number of corporate transactions       29      22        31.8 
  Funds raised (GBP'm)                  193      90       114.4 
  Number of corporate clients 
   at year end                           42      47      (10.6) 
 
 

Corporate finance revenue growth of 22.5% resulted from an increase in deal volumes. The IPO market was buoyant throughout FY21 and investors were receptive to a wider range of investment opportunities than in previous years. We completed three IPOs in the year (2020: one) and 15 secondary fundraisings (2020: 10 secondary fundraisings) together with a number of M&A (both public and private) assignments and other transactions. In total we raised GBP193 m illion in new equity for our clients, a significant increase from the GBP90 million raised in FY20.

Investors began to show caution towards the end of 2021 which we believe was a combination of investor fatigue, the high volume of deals looking for funding and signs of concern over the economic outlook, particularly with regard to inflation, interest rates and supply chain issues. Although the short-term geopolitical and macroeconomic outlook is highly uncertain and creating challenges for investors and corporate clients alike, we believe the longer term outlook for UK equity markets remains robust.

The decrease in client numbers was disappointing, although this was partly the result of M&A and a number of de-listings. Retainer revenue from corporate clients was therefore broadly flat year on year. This trend, however, has been reversed in the new financial year and we have been delighted to have been appointed as advisor and/or broker to three new clients since our year end.

Equities

 
                2021      2020    % change 
               GBP'm     GBP'm 
----------  --------  --------  ---------- 
 
  Revenue        1.3     (0.5)       340.0 
 
 

Our equities division benefited from strong returns produced by its equity trading operations, particularly in the first half of the year. As a provider of liquidity in more volatile small and mid-cap equities we are exposed to a certain level of market risk. In FY21, however, this volatility created a positive backdrop to the trading environment.

Other equity and research income remained broadly flat year on year. The repercussions of MiFID II, introduced in January 2018, will continue to impact this operation for as long as they remain in force in their current guise. We have been pleased to see a number of consultations by regulators and political bodies into various aspects of the UK equity markets and we have actively engaged on a number.

Access to research is a vital part of small and mid-cap investing. Our Research Portal provides investors with the greatest possible access to our corporate client research and is available by registering on our website ( www.arden-partners.com ). Our research is also available via the ResearchTree portal where our analysts have again been highly ranked this year.

Donald Brown

Chief Executive Officer

04 April 2022

FINANCE REVIEW

Revenue

Revenue for the full year totalled GBP9.3 million, an increase of 56.5% on the prior year. The increase in revenue was driven by an increase in the number of corporate transactions completed in the year, an increase in the funds raised for our clients and a material improvement in the profitability of the equity trading operation, particularly in the first half of the year.

 
                                     2021    2020    % change 
---------------------------------  ------  ------  ---------- 
  Revenue (GBP'm)                     9.3     5.9        56.5 
  Average number of employees          38      43      (11.6) 
  Revenue per employee (GBP'000)      244     138        77.0 
---------------------------------  ------  ------  ---------- 
 

Average headcount decreased by 11.6% in the year. The market for talent became increasingly competitive through the year as transactional activity levels remained high. Post year end, we have invested in a number of the teams, particularly at the junior and mid-level, in response to continued high transactional levels.

Average revenue per employee shows a substantial growth year-on-year, one of our key performance indicators.

Costs

 
                                      2021      2020    % change 
                                     GBP'm     GBP'm 
--------------------------------  --------  --------  ---------- 
  Staff costs                          4.7       4.0        16.0 
  Non-staff costs                      3.5       3.1        13.2 
  Total administrative expenses        8.2       7.1        14.8 
--------------------------------  --------  --------  ---------- 
 

Staff costs increased reflecting higher discretionary bonus payments in the year arising from the Company's financial performance. Non-staff costs continued to be tightly controlled, and with less impact than expected from Covid-19, reverted to a more normal level.

Liquidity position

The Group's liquidity position (which comprises cash and cash equivalents, market making equity positions, trade and other receivables) was GBP6.8 million at the year end (2020: GBP6.3 million).

Cash at bank as at 31 October 2021 was GBP2.5 million, a similar level to the prior year (2020: GBP2.4 million).

The Board believes that the liquidity position, which is an alternative performance measure, provides more useful information for shareholders on the underlying liquidity of the Group than the reported net assets number, as it focuses solely on the liquid assets of the Group.

Net asset position and capital adequacy

The Group's net assets at the year-end were GBP5.8 million (2020: GBP4.6 million), the increase being the result of the profitable trading in the year and the partial recognition of a deferred tax asset. Given the positive outlook for the Company together with the substantial tax losses available to it, the Board has taken the view to recognise some of these losses as a deferred tax asset. The capital adequacy ratio as at 31 October 2021 was 217% (2020: 249%).

The Group holds surplus capital on its balance sheet and continually assesses this position throughout the year. During the year, the Group improved the liquidity of its capital resources by realising certain assets into cash. This exercise confirmed to the Board that the Group's liquid assets could be accessed, at short notice, should market conditions remain depressed.

Steven Douglas

Group Finance Director

04 April 2022

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 October 2021

 
                                                               2021       2020 
                                                    Note    GBP'000    GBP'000 
------------------------------------------------  ------  ---------  --------- 
 
    Revenue                                          2        9,276      5,929 
  Administrative expenses                            3      (8,155)    (7,105) 
  Expected credit loss                               3        (268)      (210) 
------------------------------------------------  ------  --------- 
  Profit/(loss) from operations                                 853    (1,386) 
  Finance income                                                 12         44 
  Finance expense                                              (20)       (14) 
------------------------------------------------  ------  --------- 
  Profit/(loss) before taxation                                 845    (1,356) 
  Income tax charge                                  4          415        (2) 
------------------------------------------------  ------  ---------  --------- 
  Profit/(loss) after taxation                                1,260    (1,358) 
  Other comprehensive income for the 
   year: 
   Items that will or may be reclassified 
   subsequently to profit or loss: 
  Deferred tax taken to equity                                    -          - 
  Total comprehensive income/(loss) for 
   the year attributable to equity shareholders               1,260    (1,358) 
================================================  ======  =========  ========= 
 
 
    Profit/(loss) per share 
  Basic                                              5         4.8p     (5.0p) 
================================================  ======  =========  ========= 
  Diluted                                            5         4.3p     (4.9p) 
================================================  ======  =========  ========= 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 October 2021

 
                                                2021       2021       2020       2020 
                                             GBP'000    GBP'000    GBP'000    GBP'000 
---------------------------------  ------  ---------  ---------  ---------  --------- 
  Assets 
  Non-current assets 
  Property, plant and equipment                              56                    71 
  Right of use assets                                       450                   164 
  Deferred tax                                              416                     - 
  Total non-current assets                                  922                   235 
-----------------------------------------  ---------  ---------  ---------  --------- 
  Current assets 
  Assets held at fair value 
   through P&L                                 3,314                 1,955 
  Trade and other receivables                  2,619                 2,464 
  Collateral deposits                            118                    48 
  Cash and cash equivalents                    2,481                 2,400 
-----------------------------------------  ---------  ---------  ---------  --------- 
  Total current assets                                    8,532                 6,867 
-----------------------------------------  ---------  ---------  ---------  --------- 
  Total assets                                            9,454                 7,102 
-----------------------------------------  ---------  ---------  ---------  --------- 
  Current liabilities 
  Financial liabilities held 
   at fair value 
  through P&L                                  (315)                 (149) 
  Trade and other payables                   (2,969)               (2,199) 
  Lease liabilities                            (334)                  (66) 
  Total current liabilities                             (3,618)               (2,414) 
-----------------------------------------  ---------  ---------  ---------  --------- 
  Non-current liabilities 
  Lease liabilities                             (74)                  (52) 
-----------------------------------------  ---------  ---------  ---------  --------- 
  Total non-current liabilities                            (74)                  (52) 
-----------------------------------------  ---------  ---------  ---------  --------- 
  Total liabilities                                     (3,692)               (2,466) 
-----------------------------------------  ---------  ---------  ---------  --------- 
  Net assets                                              5,762                 4,636 
=========================================  =========  =========  =========  ========= 
  Shareholders' equity 
  Called up share capital                                 3,338                   3,338 
  Capital redemption reserve                                700                     700 
  Share premium account                                   6,691                   6,691 
  Employee Benefit Trust reserve                          (391)                   (182) 
  Retained earnings                                     (3,134)                 (4,469) 
-----------------------------------------  ---------  ---------  ---------  ----------- 
  Total equity before deduction 
   of own shares                                          7,204                   6,078 
  Own shares                                            (1,442)                 (1,442) 
-----------------------------------------  ---------  ---------  ---------  ----------- 
  Total equity                                            5,762                   4,636 
=========================================  =========  =========  =========  =========== 
 
 

The Financial Statements were approved by the Board of Directors and authorised for issue on DD MMM 2022.

   Steven Douglas                                        Mark Ansell 
   Group Finance Director                       Chairman 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 October 2021

 
                                                       2021       2020 
                                                    GBP'000    GBP'000 
-----------------------------------------------   ---------  --------- 
Operating activities before taxation 
Profit/(loss) before taxation                           845    (1,356) 
Adjustments for: 
Fair value adjustments                                (146)      (252) 
  Depreciation charges - Property, plant 
   and equipment                                         55         66 
  Depreciation charges - Right of use 
   assets                                               333        337 
  Net interest receivable                              (12)       (44) 
  Net interest paid on lease liabilities                 20         14 
  Share based payment expense                            75        147 
------------------------------------------------  ---------  --------- 
  Operating cash flow before changes 
   in working capital                                 1,170    (1,088) 
  (Increase)/decrease in operating assets           (2,045)      1,691 
  Increase/(decrease) in operating liabilities        1,538      (139) 
  Cash from operations                                  663        464 
  Income taxes paid                                     (1)          - 
-----------------------------------------------   ---------  --------- 
  Net cash flows from operating activities              662        464 
------------------------------------------------  ---------  --------- 
  Investing activities 
  Purchases of property, plant and equipment           (40)       (26) 
  Net interest received                                  12         44 
------------------------------------------------  ---------  --------- 
  Net cash flows from investing activities             (28)         18 
------------------------------------------------  ---------  --------- 
  Financing activities 
  Payment of lease liability                          (325)      (395) 
  Net interest paid on lease liabilities               (20)       (14) 
  Purchase of own shares                              (208)      (211) 
  Net cash flows used in financing activities         (553)      (620) 
------------------------------------------------  ---------  --------- 
  Increase/(decrease) in cash and cash 
   equivalents                                           81      (138) 
  Cash and cash equivalents at the beginning 
   of the year                                        2,400      2,538 
------------------------------------------------  ---------  --------- 
  Cash and cash equivalents at the end 
   of the year                                        2,481      2,400 
================================================  =========  ========= 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 October 2021

 
 
                                                                              Employee 
                                         Share         Capital                 Benefit 
                             Share     Premium      Redemption         Own       Trust     Retained 
                           Capital     Account         Reserve      Shares     Reserve     Earnings      Total 
                           GBP'000     GBP'000         GBP'000     GBP'000     GBP'000      GBP'000    GBP'000 
----------------------  ----------  ----------  --------------  ----------  ----------  -----------  --------- 
  At 31 October 
   2019                      3,338       6,691             700     (1,442)       (974)      (2,255)      6,058 
  Loss for year                  -           -               -           -           -      (1,358)    (1,358) 
  Total comprehensive 
   income for the 
   year                          -           -               -           -           -      (1,358)    (1,358) 
  Contributions by 
   and distributions 
   to owners 
  Purchase of 
   EBT shares                    -           -               -           -       (211)            -      (211) 
  Distribution 
   of EBT shares                 -           -               -           -       1,003      (1,003)          - 
  Share based 
   payments                      -           -               -           -           -          147        147 
  Balance at 
   31 October 2020           3,338       6,691             700     (1,442)       (182)      (4,469)      4,636 
  Profit for year                -           -               -           -           -        1,260      1,260 
                        ----------  ----------  --------------  ----------  ----------  -----------  --------- 
  Total comprehensive 
   income for the 
   year                          -           -               -           -           -        1,260      1,260 
  Contributions 
   by and 
   distributions 
   to owners 
  Purchase of 
   EBT shares                    -           -               -           -       (209)            -      (209) 
  Share based 
   payments                      -           -               -           -           -           75         75 
  Balance at 
   31 October 2021           3,338       6,691             700     (1,442)       (391)      (3,134)      5,762 
======================  ==========  ==========  ==============  ==========  ==========  ===========  ========= 
 

Notes

1. The capital redemption reserve represents the nominal value of shares that have been cancelled that were previously held as Own Shares.

   2.    Own Shares represents shares purchased to be held as treasury shares at historical cost. 

3. The Employee Benefit Trust reserve represents shares held in the parent Company by the Arden Partners Employee Benefit Trust which is consolidated in these financial statements in accordance with the accounting policy in note 1.

NOTES TO THE ACCOUNTS

   1)       Accounting policies 

Arden Partners plc is a public limited company incorporated in the United Kingdom under the Companies Act 2006.

Basis of preparation

The same accounting policies, presentation and methods of computation are followed in these condensed set of financial statements as are applied in the Group's latest audited Report and Accounts for the year ended 31 October 2021.

   2)      Revenue 

Revenue is wholly attributable to the principal activity of the Group and arises solely within the United Kingdom.

 
                                                        2021            2020 
                                                     GBP'000         GBP'000 
-------------------------------------------   --------------  -------------- 
           Equities Division                           1,291             (538) 
           Corporate Finance Division                  7,766           6,341 
           Wealth Management Division                    219             126 
Total revenue                                          9,276           5,929 
--------------------------------------------  --------------  -------------- 
 
Services transferred at a point in time                7,202           3,590 
Services transferred over a period of time             2,074           2,339 
--------------------------------------------  --------------  -------------- 
Total revenue                                          9,276           5,959 
============================================  ==============  ============== 
 

Included within revenue of the Equities Division is a profit of GBP752,000 (2020: loss GBP1,296,000) derived from the equity trading operation.

Included within revenue of the Equities Division is a profit of GBP146,000 (2020: GBP252,000) relating to the fair value adjustment of warrants held within assets that are fair valued through profit or loss.

Included within revenue of the Equities Division is a profit of GBP146,000 (2020: GBP300,000) relating to the fair value of a warrants over securities which was received as consideration for Corporate Finance services rendered.

The Directors are of the opinion that there are three operating segments and while segment revenues are reviewed internally business resources are not allocated to segments for the purposes of deriving either profit or assets. In 2021, none of the Group's customers contributed more than 10% of the Group's total revenue. In 2020, two of the Group's customers contributed revenue of GBP1,525,000, being more than 10% of the Group's total revenue.

   3)    Administrative expenses 
 
                                                                 2021       2020 
                                                              GBP'000    GBP'000 
---------------------------------------------------------   ---------  --------- 
  Administrative expenses comprise the following: 
           Depreciation of property, plant and equipment           55         66 
           Depreciation of right of use assets                    333        337 
           Staff costs (see note 5)                             4,589      3,645 
           IT infrastructure and software costs                 1,151      1,085 
           Settlement costs                                       491        441 
           Other administrative expenses                        1,344      1,012 
           Auditor's remuneration: 
     Audit services: 
         Company                                                   48         46 
         Subsidiaries                                               2          2 
     Tax services                                                   7          6 
     Audit related assurance services                              17         15 
           Foreign currency (gains)/losses                        (9)          - 
           Share based payments                                    75        147 
           Exceptional costs                                       52          - 
           Staff termination costs (see note 5)                     -        303 
----------------------------------------------------------  ---------  --------- 
           Total administrative expenses                        8,155      7,105 
           Credit Impairment                                      270        206 
           Expected credit loss                                   (2)          4 
----------------------------------------------------------  ---------  --------- 
           Total impairment/credit losses                         268        210 
----------------------------------------------------------  ---------  --------- 
           Total expenses                                       8,423      7,315 
==========================================================  =========  ========= 
 
   4)      Income tax expense 
 
                                                                   2021       2020 
                                                                GBP'000    GBP'000 
-----------------------------------------------------------   ---------  --------- 
  UK Corporation tax 
            Current tax on profit of the year                         1          - 
           Total current tax                                          1          - 
-----------------------------------------------------------   ---------  --------- 
            Deferred tax 
            Origination and reversal of timing differences        (416)          2 
           Total deferred tax                                     (416)          2 
------------------------------------------------------------  ---------  --------- 
           Total income tax (credit)/charge                       (415)          2 
============================================================  =========  ========= 
 

The tax credit in the current year of GBP0.4m benefited from the utilisation of brought-forward tax losses. The tax credit for the current year is lower than the expected 19% tax credit due to the following:

The differences are explained below:

 
                                                                 2021       2020 
                                                              GBP'000    GBP'000 
---------------------------------------------------------   ---------  --------- 
  Profit/(loss) before tax                                        845    (1,356) 
==========================================================  =========  ========= 
 
             Loss on ordinary activities at the standard 
             rate of corporation tax in the UK of 19% 
             (2020: 19%)                                          161      (258) 
 
             Effect of: 
           Losses utilised in the year                          (198)        150 
           Recognition of losses for deferred tax               (416)          - 
           Income not taxable                                     (2)        (8) 
           Expenses not deductible for tax purposes                40        119 
           Deferred tax on share options                            -        (1) 
           Total income tax (credit)/charge                     (415)          2 
==========================================================  =========  ========= 
 

The standard rate of corporation tax in the UK was 19% throughout the reporting period.

   5)       Earnings per share 

In addition to the basic earnings per share, underlying earnings per share has been shown because the Directors consider that this gives a more meaningful indication of the underlying performance of the Group. Where applicable, all adjustments are stated after taking into consideration current tax treatment ignoring deferred tax.

 
                                                           Year ended                     Year ended 
                                                         31 October 2021                31 October 2020 
                                                  Pence per     Numerator       Pence per      Numerator 
                                                      Share       GBP'000           Share        GBP'000 
--------------------------------------------  -------------  ------------  --------------  ------------- 
           Profit/(loss) per share                      4.8         1,260           (5.0)        (1,358) 
           Add: IFRS2 share-based 
            payments                                    0.3            75             0.5            147 
           Underlying basic profit/(loss) 
            per share                                   5.1         1,335           (4.5)        (1,211) 
============================================  =============  ============  ==============  ============= 
 
           Diluted Profit/(loss) 
            per share                                   4.3         1,260           (4.9)        (1,358) 
           Add: IFRS2 share-based 
            payments                                    0.3            75             0.5            147 
           Underlying diluted Profit/(loss0 
            per share                                   4.6         1,335           (4.4)        (1,211) 
============================================  =============  ============  ==============  ============= 
 
 

The Directors believe that the underlying profit/(loss) and underlying profit/(loss) per share, which are alternative performance measures, provide more useful information for shareholders on the underlying performance of the Group than the reported numbers as they fairer reflect the underlying operating performance of the Group as these costs are not considered part of the usual operations.

 
                                         Year ended     Year ended 
                                         31 October     31 October 
                                               2021           2020 
                                             Number         Number 
------------------------------------  -------------  ------------- 
  Denominator 
  Weighted average number 
   of shares in issue for 
   basic earnings calculation            26,220,293     27,308,302 
  Weighted average dilution 
   for outstanding share 
   options                                2,764,515        599,862 
------------------------------------  -------------  ------------- 
  Weighted average number 
   for diluted earnings calculation      28,984,808     27,908,164 
====================================  =============  ============= 
 
 

The 3,635,000 (2020: 1,995,000) shares held by the Arden Partners Employee Benefit Trust and 4,304,724 (2020: 4,304,724) shares held in Treasury, being the weighted average number of treasury shares in issue during the year, have been excluded from the denominator.

In the prior year no adjustment has been made to the diluted loss per share of 4.5p as the dilution effect of the weighted average number of outstanding share options of 599,862 would be to decrease the loss per share.

   6)       Annual Report and Accounts 

Copies of the 2021 Report and Accounts will be posted to shareholders shortly. Copies will also be available from the Company's registered office and from the Company's website www.arden-partners.com

The statutory accounts for the year ended 31 October 2021 will be delivered to the Registrar of Companies in due course.

Statutory accounts for the year ended 31 October 2020 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

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(END) Dow Jones Newswires

April 05, 2022 02:00 ET (06:00 GMT)

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