TIDMCBP
RNS Number : 9180Z
Curtis Banks Group PLC
06 September 2018
Curtis Banks Group plc
("Curtis Banks", the "Group")
Interim results for the 6 months to 30 June 2018
Curtis Banks Group PLC, one of the UK's leading SIPP providers,
is pleased to announce its interim results for the 6 months to 30
June 2018.
Highlights
-- Operating Revenue increased by 7.5% to GBP23.0m (2017: GBP21.4m)
-- Adjusted profit before tax(1) increased by 16% to GBP5.8m (2017: GBP5.0m)
-- Adjusted operating margin(2) increased to 26.2% (2017: 24.7%)
-- Profit before tax increased by 17% to GBP4.8m (2017: GBP4.1m)
-- Adjusted diluted EPS increased by 16% to 8.33p (2017: 7.18p)
-- Gross organic growth in own SIPP numbers of 3,512 with total SIPPs administered now 77,552
-- Assets under administration increased by 9% to GBP25.1bn (2017: GBP23.1bn)
-- Interim dividend of 2.0p per share (2017: 1.5p)
-- Will Self takes over as Group CEO in January 2019, with
Rupert Curtis maintaining an active role as Founder and Senior
Adviser
-- Jane Ridgley to join the Board in January 2019 as Chief Operating Officer
Highlights and key performance indicators for the period
include:
Unaudited Unaudited
six month six month Audited
period ended period ended year ended
30 June 2018 30 June 2017 31 December
2017
Financial
Operating Revenue GBP23.0m GBP21.4m GBP43.6m
Adjusted Profit1 GBP5.8m GBP5.0m GBP10.7m
Profit before Tax GBP4.8m GBP4.1m GBP5.9m
Adjusted Operating Margin2 26.2% 24.7% 25.8%
Diluted EPS 7.05p 5.84p 9.26p
Diluted EPS on Adjusted profit
(applying an effective tax
rate) 8.33p 7.18p 15.38p
Operational Highlights
Number of SIPPs Administered 77,552 74,900 76,474
Assets under Administration GBP25.1bn GBP23.1bn GBP24.7bn
Total organic new own SIPPs
in period 3,512 4,534 8,719
1 Profit before tax, amortisation and non- recurring costs
2The ratio of operating profits before amortisation and
non-recurring costs to operating revenues
Commenting on the results and prospects, Rupert Curtis, CEO of
Curtis Banks, said:
"We made good progress during the first half of the year and
these results show encouraging growth in profits during a period in
which we concentrated on completing our consolidation activities
and preparing the launch of our new SIPP proposition.
We have focused on further investment in the business to support
continued organic growth and build on our position as the UK's
largest dedicated SIPP provider. This has involved developing a new
sales team and a new SIPP proposition, both of which will be
operating in the second half of this year.
We are well positioned to grow the business and are also
proactively exploring possible acquisitions. The investments we are
making across the business put us in good stead for the future,
broadening our penetration of the SIPP market and creating further
shareholder value.
As this is my final set of results as Chief Executive I would
like to thank all of our valued shareholders for their continued
support, and I am very pleased to have a strong successor in Will
Self who will start in this position in January 2019. I am
delighted to confirm that I will remain actively involved as a
senior adviser to the business."
Analyst Presentation:
There will be a presentation on Thursday 6 September 2018 at
9.30am for institutional investors and analysts at Peel Hunt LLP,
Moor House, 120 London Wall, London EC2Y 5ET. Those wishing to
attend should contact jake.thomas@camarco.co.uk.
Copies of the audited accounts of the Group will be available on
the Group website today.
For more information:
Curtis Banks Group plc www.curtisbanks.co.uk
Rupert Curtis - Chief Executive Officer +44 (0) 117 9107910
Paul Tarran - Chief Financial Officer
Will Self - Deputy Chief Executive
Officer
Peel Hunt LLP (Nominated Adviser
& Joint Broker) +44 (0) 20 7418 8900
Guy Wiehahn
Rishi Shah
N+1 Singer (Joint Broker) +44 (0) 20 7496 3000
Mark Taylor
Rachel Hayes
Camarco +44 (0) 20 3757 4984
Ed Gascoigne-Pees
Hazel Stevenson
Jane Glover
LEI Code: 213800LYP7YTVDXRMP40
Notes to Editors:
Curtis Banks administers over 77,000 Self-Invested Pension
Schemes, principally SIPPs and SSASs. The Group commenced trading
in 2009 and has successfully developed, through a combination of
organic growth and acquisitions, into one of the largest UK
providers of these products. The Group currently employs
approximately 570 staff in its head office in Bristol and regional
offices in Ipswich and Dundee.
For more information - www.curtisbanks.co.uk
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014. Upon publication of
this announcement, this inside information is now considered to be
in the public domain.
Overview
Curtis Banks Group PLC ("Curtis Banks" or "the Group") is one of
the United Kingdom's leading administrators of self-invested
pension products, principally SIPPs and SSASs. The Group commenced
trading in 2009 and has successfully developed, through a
combination of organic growth and acquisitions, into one of the
largest UK providers of these products.
At 30 June 2018 the Group administered circa GBP25.1bn (2017:
GBP23.1bn) of pension assets on behalf of over 77,500 (2017:
74,900) active customers. Approximately 567 staff are employed
across its head office in Bristol and our regional offices in
Ipswich and Dundee.
On 25 May 2016 the Group completed its largest acquisition to
date, the purchase of Suffolk Life Group Limited, a large and long
established provider of SIPPs. The period since then has been one
of consolidation, alignment and building a strong platform for the
future expansion of the business. A single management structure is
in place under the Curtis Banks brand. A new single SIPP
proposition is being developed for launch by the end of 2018,
supported by a new enhanced Group Sales function. Property legal
and management services have been launched and the Group is
actively exploring acquisition opportunities.
The Executive Directors have proven experience in the pensions
market and operate a business that focuses on a service-driven
proposition for the administration of flexible SIPPs. The Group's
products are distributed by authorised and regulated financial
advisers, targeted towards pension savers who wish to take full
advantage of the features and flexibility offered in the UK's
modern and changing pension regime. Long standing relationships
with key distributors result in high levels of repeat business and
demonstrate satisfaction with products and services provided.
The Group is focussed on continuing to deliver increased value
to both customers and shareholders in the years ahead.
Note: The Group includes an insurance company, Suffolk Life
Annuities Ltd, which provides SIPPs through non-participating
individual insurance contracts. Due to Suffolk Life Annuities
Limited's status as an insurance company, the consolidated results
for the whole Group are required to include insurance policyholder
assets and liabilities as well as the assets and liabilities and
profits attributable to our shareholders. Notes 8 and 9 to the
financial statements illustrate the split between policyholder and
shareholder assets and liabilities and cash flows.
Chairman's Statement
I am pleased to report the interim results for Curtis Banks
Group for the six months period ended 30 June 2018. These results
show encouraging growth in profits during a period in which we have
made good progress towards completing our consolidation activities
and preparing the launch of our new SIPP proposition.
We announce today that Rupert Curtis will be stepping back as
Chief Executive on 31 December 2018. Rupert was a founder of the
Group, and has overseen the growth of the business and the board
are very grateful for all his contributions both when the company
was private and since listing in 2015. I am pleased that Rupert
will remain as a senior adviser to the business post January as
well as aiding his successor. To this end over the past six months
the board has been involved in recruiting a new CEO and I am
delighted to announce that Will Self will take over the role in
January 2019. Will has been a member of the board since 2016 having
worked in the sector for over 15 years including gaining his MBA
from Cranfield in 2009. Will has been CEO of Suffolk Life for the
last 5 years and is currently Deputy CEO. He was the outstanding
candidate and we very much welcome Will to the role.
I am also pleased to announce that Jane Ridgley will be joining
the Board in January 2019. Jane is currently Chief Operating
Officer for the Group and will continue in that role as an
executive director of the Board. Jane has worked with Suffolk Life
for over 5 years and before that with Legal & General for 25
years most recently as Product Director in workplace savings.
The period under review has shown an increase in all key
financial metrics. Operating revenue has increased by 7.5% to
GBP23.0m compared to the same period last year, adjusted profit
before tax increased by 16% to GBP5.8m and adjusted diluted
earnings per share increased by 16% to 8.33p. It is particularly
pleasing to be able to report these results following a period of
considerable internal development. Our adjusted operating margin
continues to show improvement as we grow both the top line and
realise greater operational alignment across the Group.
Operationally, we have expanded further into the UK's commercial
property market with the launch of two new companies: Rivergate
Legal Limited which offers a range of legal services to SIPP, SSAS
and open market customers relating to commercial property
transactions and Templemead Property Solutions Limited which will
provide valuation services and negotiate other professional
services on behalf of Curtis Banks Group customers. In February, we
launched our new corporate branding which brings one consistent
identity to all businesses within the Group, a key strategic
objective following the acquisition of Suffolk Life. We are working
on a new Group website, which reflects this new brand identity and
have brought forward work to upgrade our front-end portal for our
customers. This will improve the customer and adviser experience
and will be completed during 2018.
We are pleased that the total number of SIPPs administered by
the Group now is 77,552, reflecting an increase of 3,512 in own
SIPP numbers in the period. This is a result of continued new
organic growth as well as stable attrition rates.
We are investing in developing a new sales team and a new SIPP
proposition, both of which are well advanced and will be
implemented in the latter half of this calendar year. While these
enhancements and our expansion into UK's commercial property market
will increase our cost base, we are confident that after a period
of transition these initiatives will result in greater top-line
growth.
Dividends
Your Board has agreed an interim dividend of 2.0p per share
(2017: 1.5p) to be paid on 15 November 2018 to shareholders on the
register at the close of business on 12 October 2018. The shares
will be marked ex-dividend on 11 October 2018. It is expected that
a final dividend will be recommended in respect of the current
financial year.
Summary and Outlook
We are well positioned to grow the business organically and are
actively seeking new acquisition opportunities. Ongoing regulatory
pressure on SIPP operators, and increased capital requirements for
businesses, means consolidation opportunities are still present.
The business is well funded with cash surpluses of approximately
GBP9 million at the half year and we will continue to look at
compatible opportunities to supplement organic growth.
Our position in the market is strong and we intend to
consolidate our status as the SIPP operator of choice for
independent financial advisers. The investments we are making
across the business puts us in good stead for the future,
broadening our penetration of the SIPP market and creating further
shareholder value.
Chris Macdonald
Chairman
5 September 2018
Operational Review
Summary
The first half of 2018 has seen us deliver strong and profitable
growth. This has arisen as a result of continued organic growth in
SIPPs and with the benefit of enhanced interest income. The Group
has also benefited from the efficiencies that we implemented in the
business in 2017 and into 2018, including the rationalisation of
our office network to three sites.
We have achieved an improved adjusted profit margin of 26.2%
(2017: 24.7%) for the first 6 months of this year and we are on
track to deliver further improvements to the operating margin in
the second half of this year.
Our products and sales strategy
The growth in the overall SIPP market continues to be strong,
with SIPPs the product of choice for pension transfers. We are keen
to maximize our share of this market and a key focus for us is the
launch of our new SIPP proposition for the Group, backed by an
enhanced sales team.
We have focused our new SIPP proposition on "mid and full SIPP"
products, sold by regulated financial advisers. These are SIPPs
backed by a high quality personal service, allowing customers full
flexibility on investment choice and benefit options. Fund sizes
tend to be larger and the target customer tends to be higher net
worth and wanting a superior quality product. Fee levels are higher
and this strategy plays to our strengths as experienced providers
of service-driven products. The new product will be launched by the
end of this year on our Navision Platform and we are confident that
it will significantly increase our organic growth levels. In the
interim we are closing some legacy and low fee products in order to
focus our attention on our target market.
We have seen good levels of new business in our target market
over the first half of the year, evidencing our focus on this
sector. Levels of new SIPPs are down on last year due to a number
of industry wide factors. Across the industry there has been a
widely acknowledged slowdown in new pension transfers largely
considered to be caused by the wider economic uncertainty. More
specifically we have seen some advisers retrench from the pension
transfer sector where elements of their business were exposed to
defined benefit transfers as well as increased regulatory scrutiny
of all regulated transfer activities.
The new proposition as highlighted above will be supported by
our new Group sales team structure. We have a target of seven
Business Development Managers (BDMs) to be in place across the
Group by the end of this year and have already hired four, with a
National Sales Manager recently appointed as part of this
initiative. In addition, we already have in place a number of Key
Account Directors and a sales support network. This represents a
significant enhancement to our previous sales functions and all
current new recruits bring with them a wealth of industry
experience.
The new SIPP proposition, supported by the enhanced sales
structure, will be an exciting catalyst to our organic business
growth and is on track for delivery in Q4. We are confident that,
whilst our investment into this proposition will increase our cost
base, it will begin to deliver good results in 2019 and beyond and
enhance our position as the leading dedicated SIPP provider.
We have also progressed with the development of enhanced
property services to provide an in-house capability to those
customers with SIPPs invested in our portfolio of over 6,000
commercial properties, who currently contract with third parties
for legal, management, inspection and valuation services. Our legal
services company, Rivergate Legal Limited, was authorised by the
Solicitors' Regulatory Authority in May of this year, followed more
recently by Templemead Property Solutions Limited receiving
approval from the Royal Institute of Chartered Surveyors. Both will
contribute to operating revenue in the second half of this
year.
SIPP Numbers
At the period end the number of SIPPs administered increased to
77,552. 3,512 own new SIPPs were added and attrition rates on own
SIPPs remained in line from previous years. More detail is set out
in the table below.
Full SIPPs Mid SIPPs eSIPPs Total own Third Party Total
SIPPs Administered
As at 30 June
2018 20,281 25,597 23,157 69,035 8,517 77,552
----------- ---------- ------- ---------- -------------- -------
As at 31 December
2017 20,539 24,682 22,193 67,414 9,060 76,474
----------- ---------- ------- ---------- -------------- -------
Annualised
gross organic
growth rate* 3.60% 13.26% 13.56% 10.42% 0.77% 9.28%
----------- ---------- ------- ---------- -------------- -------
SIPPs added
organically 370 1,637 1,505 3,512 35 3,547
----------- ---------- ------- ---------- -------------- -------
SIPPs lost
through attrition -628 -722 -541 -1,891 -578 -2,469
----------- ---------- ------- ---------- -------------- -------
Annualised
attrition rate* 6.12% 5.85% 4.88% 5.61% 12.76% 6.46%
----------- ---------- ------- ---------- -------------- -------
(*) Growth and attrition percentage rates are annualised and are
based on the 6 months' worth of SIPPs added organically or lost
through attrition to 30 June 2018.
Growth rates in the "mid and full SIPP" remain strong although
lower than in previous periods. We expect this to continue during
the transitional period until we launch our new product when the
revised features and enlarged sales team will help to counter the
industry wide challenges described above. We are nevertheless very
pleased to be maintaining our overall financial performance during
this period.
The impact of attrition rates on Third Party Administered SIPPs
is ameliorated as a large proportion of these fees are fixed or
guaranteed minimums.
We are grateful to our professional introducers for their
continued support.
Acquisitions
As one of the UK's leading SIPP providers we are well positioned
to continue our role as a consolidator in the SIPP market and
inorganic growth is an important strand of our strategy. As part of
our capital management, we have available cash funds of
approximately GBP9 million to help fund future acquisitions.
We will continue to deploy a disciplined approach to
acquisitions and consider each opportunity from both an earnings
per share and return on investment perspective. We have a strategy
in place and are pursuing a number of opportunities. Acquisitions
of SIPP businesses are becoming a more competitive process, but we
continue to believe that attractive opportunities still exist and
we remain the most experienced acquirer in the market place.
Regulation
Our simple model of working with regulated financial advisers
means that the Group is not subject to some of the increasing
regulatory scrutiny that faces a number of the market participants
in the wider pensions and wealth management industry. Regulatory
scrutiny of the SIPP market continues, but our business model,
whereby we do not give any advice or provide the investments held
within the SIPPs, positions us well within the complex regulatory
environment facing the wider industry.
A recent area of media focus is on the underlying nature of some
assets held within SIPPs and whether the assets are standard or
non-standard, i.e. illiquid. This is largely a legacy issue for the
industry, related to the acceptance of non-standard assets, and the
Group has and continues to undertake robust due diligence on
non-standard investments.
Other areas of regulatory and media focus are transfers from
defined benefit schemes, and acceptance of business from
unregulated introducers. The Group does not transact with
unregulated introducers and monitors the quality of any defined
benefit transfer business accepted, requiring a positive
recommendation to transfer from a regulated adviser.
In-specie contributions and associated tax relief is an issue
that HMRC is looking at closely and the outcome and impact on the
industry are not known at this stage. We do not believe however
that the net exposure arising from this will be material to the
Group.
During the period we have successfully implemented a GDPR
framework throughout the Group.
IT strategy
As announced in our last full year results, we have decided to
materially upgrade our existing back office operating systems, our
front end portal and to unify the Group with a single web presence.
This will ensure that they are appropriate for the enlarged Group
as we continue to grow and meet the needs of our customers.
We have decided to reprioritise the front end portal and website
work streams ahead of the work to upgrade the back office systems.
A key factor in making this decision to reprioritise the work
streams is that it enables us to maintain an implementation plan
that is robust and delivers key customer enhancements linked to the
launch of our new proposition. Our systems are stable, our IT
strategy focuses on enhancing functionality and delivering
operating line margin improvement, and this reprioritisation does
not impact the timetable or overall anticipated costs and benefits
of our IT Strategy.
The upgraded front end portal on our customer websites will
result in increased functionality for our customers and their
advisers. At the same time, we are upgrading our online presence
into a single Group website. Our new SIPP Proposition is to be run
on our Navision Platform.
People and culture
Our office rationalisation has resulted in a small decrease in
the number of employees, but we anticipate employee numbers
increasing over the next 12 months to match the continued growth of
the business. We value our people and the positive contribution
they make to our culture and the performance of our business and
have extended our long term incentive plan for key staff as one
aspect of incentivising them and aligning their interest with
shareholders.
During the period we have recruited a new National Sales
Manager, who has been tasked with helping to implement the new
sales team structure that I outlined above. In addition, Jane
Ridgley has been appointed as Chief Operating Officer for the whole
Group.
I am extremely proud of the incredible contribution made by all
our employees and thank them for their loyalty to the Group.
We have also grown our corporate social responsibility
activities, promoting our presence in our local communities and
increasing our support for our people's own fundraising
activities.
As this is my last formal statement as Chief Executive Officer,
I would like to take the opportunity to thank everyone who has
taken part in making Curtis Banks the success it is today and
welcome Will Self to the role from the beginning of 2019. I am also
pleased that Jane Ridgley will be joining the Board.
I am very proud of what we have achieved at Curtis Banks since
we founded the business in 2009 and it has been a great privilege
to have led and worked with such a capable team of people through
such a successful period. I look forward to continuing to work with
them in my new role in the business.
My thanks go to our Board, the senior management and everyone in
Curtis Banks for making these achievements possible. I would also
like to thank our shareholders for their support since we listed
the Group in 2015.
The Group is well positioned for the considerable opportunities
that lie ahead and I am confident that, under Will Self's
leadership, Curtis Banks will continue to go from strength to
strength.
Rupert Curtis
Chief Executive Officer
5 September 2018
Financial Review
Operational revenues of GBP23m in the six months ended 30 June
2018 have increased by 7.5% over the comparable period.
Fee revenue remains the predominant source of income for the
Group with a strong emphasis on recurring annual fee income. In the
six months ended 30 June 2018 annual fees represented 77% of the
total income and 84% of this fee income is recurring. Fees are
based on a recurring fixed monetary annual fee and a menu of
additional fixed fees depending on the services provided to the
SIPP. Fees are not dependent on movements in the value of
underlying assets within SIPPs and as a result the recurring fee
income of the Group is not directly affected by movements in
financial markets.
Staff costs for the period totalled GBP10.9m compared to
GBP10.4m for the six month period ended 30 June 2017. Staff costs
have increased partly due to annual pay reviews related to average
earnings increases. In addition, the continued operation of the
Executive Bonus Scheme and Long Term Incentive Plan (LTIP) for key
members of staff, introduced in June 2017, has resulted in a H1
2018 impact of GBP568k compared to GBPnil in H1 2017. A further
offering of the Save as You Earn option schemes for all staff
members has also led to an increase in staff costs over the
comparable period last year. Whilst such measures have a financial
impact their introduction results in the retention and reward of
key members of staff that is necessary to grow and develop the
business.
Overall staff numbers have reduced to 567 as at 30 June 2018
compared to 597 as at 31 December 2017, the fall arising largely
from the closure of the Market Harborough office in January 2018.
This has resulted in a significant reduction in staff costs which,
together with savings from internal staff restructuring, has helped
to partly offset the increases noted above.
Staff costs in H2 2018 are likely to increase as we invest for
the future with the enhancement of the Group sales team structure
as set out in the operational review.
Integration Activities
A review of costs across the Group is continuing to identify
areas where further cost efficiencies can be made as well as more
efficient operational processing of the day to day SIPP
administration activities. The objective of this review is to
continue our progress in improving the adjusted profit margin to
our target run-rate of 30%. This will be achieved by a combination
of revenue enhancements, in year cost savings and operating
improvements. These will not only benefit the Group but will also
enhance the level and quality of services that are being provided
to customers and introducers of business. A number of these
enhancements have already been actioned and the adjusted operating
profit margin for the six months ended 30 June 2018 increased to
26.2% from 24.7% in the comparable period last year.
Financial Position
The statement of Financial Position as at 30 June 2018 shows a
strong position with shareholder net assets increasing from
GBP44.6m at 31 December 2017 to GBP46.2m as at 30 June 2018.
In 2016 the Group borrowed GBP23m for the acquisition of Suffolk
Life. This comprised a GBP15m term loan repayable over 5 years and
a revolving credit facility of GBP8m. Interest on this debt accrues
at the rate of 2.25% plus LIBOR. The debt continues to be repaid in
line with scheduled terms and the covenants required by the bank in
respect of this gearing continue to be covered. As at the 30 June
2018 the Group had net shareholder cash (after debt) of GBP5.9m
(2017: GBP3.6m).
Cash flows
Shareholder cash balances at period end were GBP21.9m compared
to GBP22.8m at the end of the previous period to 30 June 2017.
After regulatory capital requirements are taken into account at
period end there were free shareholder cash balances of
approximately GBP9m available.
The first half of the financial year has been cash depletive due
to payments of the final dividend of GBP2.6m in May 2018, payment
of redundancy and associated costs in January 2018 of GBP500k
relating to the closure of the Market Harborough office, further
loans of GBP500k to the Group Employee Benefit Trust and additional
bonus payments in March 2018 of GBP500k above the level of those
paid in 2017. Other than the payment of an interim dividend in
November 2018, and any further loans to the employee benefit trust,
none of these cash flows will recur in the second half of the
year.
Suffolk Life Annuities Limited
Part of the Suffolk Life Group of Companies, Suffolk Life
Annuities Limited, is an insurance company that writes SIPP
Products as insurance contracts. These are all non-participating
insurance policy contracts and so the Group does not bear any
insurance risk. As the policyholder assets and liabilities are
shown on the balance sheet of Suffolk Life Annuities Limited, these
also show on the Group balance sheet on consolidation. As the
policies are non-participating contracts, the Customer related
assets and liabilities in Suffolk Life Annuities Limited match. In
addition the revenues, expenses and investment returns of the
non-participating insurance policy contracts are shown in the
consolidated statement of comprehensive income. Again, these
income, expense items and investment returns due to the policy
holders are completely matched. The acquisition was accounted for
in accordance with IFRS 3 Business Combinations. An illustrative
balance sheet as at 30 June 2018 showing the financial position of
the Group excluding the policy holder assets and liabilities is
included as supplementary information after the notes to the
financial statements. An illustrative cash flow on the same basis
has also been provided.
Non-recurring costs
Non-recurring costs for the six months ended 30 June 2018 of
GBP0.4m comprise principally internal restructuring costs and
further costs following acquisitions of businesses in prior
years.
Systems Development
As previously noted, after a full review of our IT
Infrastructure, the decision has been taken to upgrade the existing
back office systems at Curtis Banks whilst also investing in new
front end customer portals.
Costs associated with these upgrades will be capitalised and
amortised in accordance with our normal accounting policy.
Amortisation will commence once the upgrades are completed and
fully operational.
Employee Benefit Trust
The Group operates an independent Employee Benefit Trust ("EBT")
administered by Saffery Champness Registered Fiduciaries to acquire
shares in the Company in the market to satisfy future option and
long term incentive awards. The EBT is funded by loans from the
Group. During the period the Group lent a further GBP500,000 to the
EBT to enable further acquisitions of shares to be made. As at 30
June 2018 the EBT held 274,275 shares in Curtis Banks Group plc
funded by a total of GBP750,000 of loans from the Group. The
financial statements of the EBT are consolidated within the overall
Group financial statements and these shares are shown on the
balance sheet of the Group as Treasury Shares and are included
within total equity. During the period 3,313 of the shares in the
Company held by the EBT were used to satisfy share options
exercised.
Earnings per Share
Fully diluted Earnings per Share ("EPS") based on adjusted
profits after tax have increased by 16% in the six months ended 30
June 2018 from 7.18p for the six months ended 30 June 2017 to
8.33p. Based on the profit after tax the fully diluted EPS shows a
21% increase in the same period from 5.84p to 7.05p. With the
historic granting of options, and further grants in the six months
ended 30 June 2018, diluted EPS is considered to be a more
meaningful measure of performance for investors than basic EPS.
Capital requirements
The Group's regulated subsidiary companies submit regular
returns to the FCA and the PRA relating to their capital resources.
At 30 June 2018 the total regulatory capital requirement across the
Group was GBP12m and the Group had an aggregate surplus of GBP8.6m
across all regulated entities. In addition to this it is Group
internal policy for regulated companies within the Group to hold at
least 130% of their required regulatory capital resulting in the
aggregate surplus reducing to GBP4.3m. The Group is currently
assessing the impact of IFRS 16 (accounting for leases) on the
regulatory capital requirement of the Group. This accounting
standard becomes effective from 1 January 2019. All the regulated
firms within the Group maintained surplus regulated capital
throughout the period. The two principal trading subsidiaries of
the Group are regulated by the FCA and the capital adequacy rules
of that organisation do not allow current year profits to
contribute towards solvency requirements until such profits are
audited or externally verified.
Paul Tarran
Chief Financial Officer
5 September 2018
Condensed consolidated statement of comprehensive income
Unaudited 6 month period Unaudited 6 month period Audited year ended 31 December
ended 30 June 2018 ended 30 June 2017 2017
Before Before Before
amortisation Amortisation amortisation Amortisation amortisation Amortisation
and and and and and and
non-recurring non-recurring non-recurring non-recurring non-recurring non-recurring
costs costs Total costs costs Total costs costs Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating revenue 22,960 - 22,960 21,362 - 21,362 43,573 - 43,573
Policyholder
investment
returns 115,017 - 115,017 179,262 - 179,262 343,009 - 343,009
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Revenue 137,977 - 137,977 200,624 200,624 386,582 - 386,582
Administrative
expenses (16,940) - (16,940) (16,090) - (16,090) (32,336) - (32,336)
Non-participating
investment
contract expenses (17,299) - (17,299) (17,872) - (17,872) (34,560) - (34,560)
Changes in
provisions:
Non-participating
investment
contract
liabilities (97,718) - (97,718) (161,390) - (161,390) (308,449) - (308,449)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ----------
Policyholder total
expenses (115,017) - (115,017) (179,262) - (179,262) (343,009) - (343,009)
Operating profit
before
amortisation and
non-recurring
costs 6,020 - 6,020 5,272 - 5,272 11,237 - 11,237
Non-recurring costs 3 - (357) (357) - (364) (364) - (3,754) (3,754)
Amortisation and
impairment - (706) (706) - (561) (561) - (1,131) (1,131)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Operating profit 6,020 (1,063) 4,957 5,272 (925) 4,347 11,237 (4,885) 6,352
Finance income 49 - 49 32 - 32 67 - 67
Finance costs (228) - (228) (298) - (298) (562) - (562)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Profit before tax 5,841 (1,063) 4,778 5,006 (925) 4,081 10,742 (4,885) 5,857
Tax (972) 202 (770) (985) 178 (807) (1,565) 940 (625)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Total comprehensive
income
for the period 4,869 (861) 4,008 4,021 (747) 3,274 9,177 (3,945) 5,232
============== ============== ========== ============== ============== ========== ============== ============== ============
Attributable to:
Equity holders of
the
company 4,004 3,269 5,222
Non-controlling
interests 4 5 10
---------- ---------- ------------
4,008 3,274 5,232
========== ========== ============
Earnings per
ordinary
share on net
profit
Basic (pence) 4 7.46 6.10 9.75
Diluted (pence) 4 7.05 5.84 9.26
Condensed consolidated statement of changes in equity
Equity
share
Issued Share based Treasury Retained Non-controlling Total
capital premium payments shares earnings Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1
January 2017
- audited 268 33,425 239 - 7,589 41,521 9 41,530
Comprehensive
income
for the
period - - - - 3,269 3,269 5 3,274
Share based
payments - - 127 - - 127 - 127
Ordinary
shares bought
by EBT - - - (250) - (250) - (250)
Ordinary
dividends
paid - - - - (1,605) (1,605) (5) (1,610)
---------
As at 30 June
2017 -
unaudited 268 33,425 366 (250) 9,253 43,062 9 43,071
Comprehensive
income
for the
period - - - - 1,953 1,953 5 1,958
Share based
payments - - 365 - - 365 - 365
Ordinary
shares issued 1 26 - - - 27 - 27
Ordinary
dividends
paid - - - - (803) (803) - (803)
---------
As at 31
December 2017
- audited 269 33,451 731 (250) 10,403 44,604 14 44,618
Comprehensive
income
for the
period - - - - 4,004 4,004 4 4,008
Share based
payments - - 215 - - 215 - 215
Deferred tax
on share
based
payments - - - - 395 395 - 395
Ordinary
shares bought
and sold by
EBT - - - (498) - (498) - (498)
Ordinary
dividends
paid - - - - (2,551) (2,551) (6) (2,557)
As at 30 June
2018 -
unaudited 269 33,451 946 (748) 12,251 46,169 12 46,181
======== ======== ========= ========= ========= ======== ================ ========
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
30-Jun-18 30-Jun-17 31-Dec-17
Notes GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 5 43,910 46,937 44,593
Investment property 1,259,400 1,181,385 1,206,298
Property, plant and equipment 1,130 1,079 1,148
Investments 2,002,611 1,987,136 2,032,293
Deferred tax asset 648 - 124
----------- ----------- -----------
3,307,699 3,216,537 3,284,456
----------- ----------- -----------
Current assets
Trade and other receivables 19,879 17,382 16,687
Cash and cash equivalents 427,256 428,617 437,849
Current tax asset 17 - 310
----------- ----------- -----------
447,152 445,999 454,846
----------- ----------- -----------
Total assets 3,754,851 3,662,536 3,739,302
----------- ----------- -----------
LIABILITIES
Current liabilities
Trade and other payables 13,103 13,606 12,658
Deferred income 18,600 10,810 24,374
Borrowings 30,597 25,183 29,444
Provisions 150 - 641
Deferred consideration 341 384 341
Current tax liability - 785 -
----------- ----------- -----------
62,791 50,768 67,458
----------- ----------- -----------
Non-current liabilities
Borrowings 58,800 70,668 64,584
Provisions 102 - 259
Deferred consideration 261 626 454
Non-participating investment
contract liabilities 3,586,716 3,497,359 3,561,929
Deferred tax liability - 44 -
----------- ----------- -----------
3,645,879 3,568,697 3,627,226
----------- ----------- -----------
Total liabilities 3,708,670 3,619,465 3,694,684
----------- ----------- -----------
Net assets 46,181 43,071 44,618
----------- ----------- -----------
Equity attributable to owners
of the parent
Issued capital 269 268 269
Share premium 33,451 33,425 33,451
Equity share based payments 946 366 731
Treasury shares (748) (250) (250)
Retained earnings 12,251 9,253 10,403
----------- ----------- -----------
46,169 43,062 44,604
Non-controlling interest 12 9 14
Total equity 46,181 43,071 44,618
----------- ----------- -----------
Approved by the Board and authorised for issue on 5 September
2018
Paul Tarran
Chief Financial Officer
Condensed consolidated statement of cash flows
Unaudited Unaudited
6 month 6 month Audited
period ended period ended year ended
30-Jun-18 30-Jun-17 31-Dec-17
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit before tax 4,778 4,081 5,857
Adjustments for:
Depreciation 300 286 570
Amortisation and impairments 706 561 3,126
Interest expense 226 293 554
Share based payment expense 215 129 492
Fair value gains on financial
investments (24,728) (82,770) (156,046)
Additions of financial investments (246,430) (256,994) (493,638)
Disposals of financial investments 300,841 277,540 542,304
Fair value gains on investment
properties (34,015) (20,913) (44,074)
Increase in liability for investment
contracts 24,792 102,955 167,525
Changes in working capital:
Decrease/(increase) in trade
and other receivables (3,367) 69 (433)
Increase/(decrease) in trade and
other payables (5,794) (9,915) 4,193
Taxes paid (625) (524) (999)
Net cash flows from operating
activities 16,899 14,798 29,431
-------------- -------------- ------------
Cash flows from investing
activities
Purchase of intangible
assets (23) (56) (277)
Purchase of property, plant & equipment (77,768) (71,346) (161,923)
Receipts from sale of property, plant
& equipment 58,401 59,717 148,191
Purchase of treasury shares (498) (250) (250)
Net cash flows from acquisitions (193) (452) (669)
Net cash flows from investing
activities (20,081) (12,387) (14,928)
-------------- -------------- ------------
Cash flows from financing activities
Equity dividends paid (2,557) (1,610) (2,413)
Net proceeds from issue of ordinary
shares - - 27
Net decrease in borrowings (4,651) (19,427) (21,274)
Interest paid (203) (267) (504)
Net cash flows from financing activities (7,411) (21,304) (24,164)
-------------- -------------- ------------
Net decrease in cash and cash equivalents (10,593) (18,893) (9,661)
-------------- -------------- ------------
Cash and cash equivalents at the
beginning of the period 437,849 447,510 447,510
============== ============== ============
Cash and cash equivalents at the
end of the period 427,256 428,617 437,849
============== ============== ============
Notes to the financial statements
1 Corporate information
Curtis Banks Group PLC ("the Company") is a public limited
company incorporated and domiciled in England and Wales, whose
shares are publicly traded on the AIM market of the London Stock
Exchange PLC. The interim condensed consolidated financial
statements comprise the Company and its subsidiaries ("the Group")
and have been prepared under the historical cost convention as
modified by the revaluation of land and buildings, derivatives,
financial assets and liabilities at fair value through profit and
loss. The interim condensed consolidated financial statements have
been presented in pounds sterling, with all values rounded to the
nearest thousand pounds except when otherwise indicated, and were
authorised for issue in accordance with a resolution of the
directors on 5 September 2018.
The principal activity of the Group is that of the provision of
pension administration services principally for Self Invested
Personal Pension schemes ("SIPPs") and Small Self-Administered
Pension schemes ("SSASs"). The Group is staffed by experienced
professionals who all have proven track records in this sector.
2 Basis of preparation and accounting policies
2.1 Basis of preparation
The interim condensed consolidated financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting
except for certain requirements in relation to financial instrument
disclosure. The board has considered the requirements of IAS 34 in
relation to policyholder assets and liabilities and, given the
unit-linked nature of these assets and liabilities, has concluded
that revaluing policyholder financial instruments for the purposes
of these interim financial statements would incur expense which is
disproportionate to any potential benefits of doing so. Further,
the board considers that the omission of updated valuations for
policyholder financial instruments will not influence the economic
decisions of users of these financial statements.
The interim condensed consolidated financial statements do not
include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group's financial statements for the year ended 31 December 2017,
which were prepared in accordance with International Financial
Reporting Standards adopted by the International Accounting
Standards Board ("IASB") and interpretations issued by the
International Financial Reporting Interpretations Committee
("IFRIC") of the IASB (together "IFRS") as adopted by the European
Union, and in accordance with the requirements of The Companies Act
2006 applicable to companies reporting under IFRS.
The information relating to the six months ended 30 June 2018
and the six months ended 30 June 2017 is unaudited and does not
constitute statutory financial statements within the meaning of
section 434 of the Companies Act 2006. The Group's statutory
financial statements for the year ended 31 December 2017 have been
reported on by its auditor and delivered to the Registrar of
Companies. The report of the auditor was unmodified and did not
contain a statement under section 498(2) or (3) of The Companies
Act 2006.
The interim condensed consolidated financial statements have
been reviewed by the auditor and their report to the Board of
Curtis Banks Group PLC is included within this interim report.
2 Basis of preparation and accounting policies - continued
2.2 Basis of consolidation
The interim condensed consolidated financial statements
consolidate the financial statements of the Company and its
subsidiaries up to 30 June each year.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date that such control
ceases. The financial statements of subsidiaries are prepared for
the same reporting period as the parent company, using consistent
accounting policies. All inter-group balances, income and expenses
and unrealised gains and losses resulting from intra-group
transactions are eliminated in full.
The trading subsidiaries of Curtis Banks Group PLC as at 30 June
2018 were Curtis Banks Limited, Curtis Banks Investment Management
Limited, Suffolk Life Annuities Limited, Suffolk Life Pensions
Limited, Rivergate Legal Limited and Templemead Property Solutions
Limited. The trading subsidiaries of Curtis Banks Group PLC as at
30 June 2017 were Curtis Banks Limited, Curtis Banks Investment
Management Limited, Suffolk Life Annuities Limited and Suffolk Life
Pensions Limited.
Certain trading subsidiaries of Curtis Banks Group PLC hold the
entire issued share capital of a number of non-trading trustee
companies. All of these companies are nominee companies for the
pension products administered by the trading subsidiaries of Curtis
Banks Group PLC and have been dormant or non-trading throughout the
period and are expected to remain dormant or non-trading.
2.3 Significant accounting policies
The accounting policies adopted in the preparation of the
interim condensed consolidated financial statements are consistent
with those followed in the preparation of the Group's annual
financial statements for the year ended 31 December 2017 other than
the adoption of the provisions IFRS9 in reviewing impairment on
receivables.
New standards issued but not yet effective
The IASB and IFRIC have issued standards and interpretations
with an effective date for periods starting on or after the date on
which these financial statements start. Except for IFRS 16
(accounting for leases) no other newly issued standards are
expected to potentially have a material impact on the condensed
consolidated interim financial statements and the consolidated
financial statements to the Group. The potential impact of IFRS 16
is currently being evaluated.
Financial statements for the year ending 31 December 2018
The accounting policies adopted in the preparation of the
interim condensed consolidated financial statements will be
consistent with those to be followed in the preparation of the
Group's annual financial statements for the year ending 31 December
2018.
2 Basis of preparation and accounting policies - continued
2.4 Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
In preparing the financial statements the Group has selected and
applied various accounting policies which are described in the
notes to the financial statements. In order to apply these
accounting policies the Group has made estimates and judgements
concerning the future. Key areas of judgement and estimation
uncertainty are disclosed below:
Customer portfolios
Customer portfolios acquired are amortised over their estimated
useful economic life (UEL) of 20 years. This UEL is based upon
Management's historical experience of similar portfolios.
Additionally, the Group reviews whether acquired customer
portfolios are impaired at least on an annual basis. This comprises
an estimation of future cash flows expected to arise from each
customer portfolio, discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to that asset,
together with an estimated rate of attrition for each portfolio.
The estimation of future cash flows is derived by taking the
current earnings before tax, interest, depreciation and
amortisation ("EBITDA") margin of the relevant operating subsidiary
and applying this against forecast revenue from the relevant
customer portfolio.
Computer software
In capitalising the costs of computer software as intangible
assets management judge these costs to have an economic value that
will extend into the future and meet the recognition criteria under
IAS 38. Computer software costs are then amortised over an
estimated UEL on a project by project basis.
Additionally, the Group determines whether computer software is
impaired at least on an annual basis. This requires an estimation
of the value in use. In assessing value in use the estimated future
cash flows expected to arise from the software are discounted to
their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks
specific to that asset.
3 Non- recurring costs
Non-recurring costs comprise the following items:
Unaudited Unaudited
6 month 6 month
period period Audited
ended ended year ended
30-Jun-18 30-Jun-17 31-Dec-17
GBP'000 GBP'000 GBP'000
Set up costs associated with the
take on of SIPPs - 20 20
Exceptional legal fees - 5 67
Redundancy & restructuring costs following
acquisitions 308 95 1,143
Suffolk Life acquisition costs - 46 72
European Pensions Management acquisition
costs 49 198 328
Exceptional impairment charge - - 2,124
357 364 3,754
=========== =========== ============
Redundancy & restructuring costs following acquisitions
During the six month period ended 30 June 2018, the Group
restructured its sales team and reduced overlapping operational
management.
During the year ended 31 December 2017 a full strategic review
of all the office locations used by the Group was carried out. As a
result of that review, and after full consultation with all
relevant staff, the decision was taken to close the Group's office
in Market Harborough. The closure was effective from the end of
January 2018. Full provision has been made in the financial
statements for the year ended 31 December 2017 for all the
financial costs arising from the decision to close that office
including redundancy payments, amounts due under onerous leases and
cost of relocating the activities of that office to other Company
locations.
Exceptional impairment charge
During the year ended 31 December 2017 the Group continued and
completed the review if its operating systems following the
acquisition of the Suffolk Life business in May 2016. As a result
of this review the Group concluded that the most cost effective,
appropriate and lowest risk solution was, subject to contract, to
implement a material upgrade of the existing back office operating
system at the Group.
As a result of this decision, costs of approximately GBP2.1
million incurred and capitalised on the initial development,
installation, evaluation and testing of an alternative system over
recent years have now been written off as an exceptional impairment
charge in the financial statements for the year ended 31 December
2017. Other than GBP0.1m, all of these costs were originally
incurred in accounting periods up to and including the year to 31
December 2016.
European Pensions Management acquisition costs
The Group incurred considerable legal and professional fees in
connection with the acquisition of the trade and assets of European
Pensions Management Limited. In accordance with IFRS 3 Business
Combinations, these have been expensed and treated as non-recurring
costs.
4 Earnings per ordinary share
Basic earnings per share amounts are calculated by dividing net
profit for the period attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
Changes in income or expense that would result from the
conversion of the dilutive potential ordinary shares are deemed to
be trivial, and therefore no separate diluted net profit is
presented. The following reflects the income and share data used in
the basic and diluted earnings per share computations:
Unaudited Unaudited
6 month 6 month period Audited
period ended ended year ended
30-Jun-18 30-Jun-17 31-Dec-17
GBP'000 GBP'000 GBP'000
Net profit available
to equity holders of the Group 4,004 3,269 5,222
============== ================ ============
Net profit before non-recurring
costs and amortisation available
to equity holders of the Group 5,841 5,006 10,742
Number Number Number
Weighted average number of ordinary
shares:
Issued ordinary shares at start
of period 53,807,346 53,599,769 53,599,669
Effect of shares held by Employee
Benefit Trust (130,869) (99,155) (78,941)
Effect of shares issued in current
period - - 25,127
-------------- ---------------- ------------
Basic weighted average number of
shares 53,676,477 53,500,614 53,545,855
Effect of options exercisable at
the reporting date 971,616 800,000 800,000
Effect of options not yet exercisable
at the reporting date 2,133,896 1,666,350 2,044,484
Diluted weighted average number
of shares 56,781,989 55,966,964 56,390,339
============== ================ ============
Pence Pence Pence
Earnings per share:
Basic 7.46 6.10 9.75
Diluted 7.05 5.84 9.26
Earnings per share on profit before
non-recurring costs and amortisation,
less an effective tax rate*:
Basic 8.81 7.49 16.20
Diluted 8.33 7.18 15.38
*The effective tax rate used is the current tax rate applicable
to the accounting year. The current tax rate applicable for the
year ending 31 December 2018 is 19.00% (2017: 19.25%).
5 Intangible assets
Computer software
Goodwill Customer portfolios GBP'000 Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2017 28,903 18,430 3,116 50,449
Additions - 4 52 56
At 30 June 2017 28,903 18,434 3,168 50,505
Additions - 1 220 221
Disposals - (2) (1,993) (1,995)
At 31 December 2017 28,903 18,433 1,395 48,731
Additions - - 23 23
At 30 June 2018 28,903 18,433 1,418 48,754
----------- ---------------------- ------------------ ----------
Amortisation and impairments
At 1 January 2017 - 2,533 474 3,007
Charge for the period - 460 101 561
At 30 June 2017 - 2,993 575 3,568
Charge for the period - 462 108 570
At 31 December 2017 - 3,455 683 4,138
Charge for the period - 462 244 706
At 30 June 2018 - 3,917 927 4,844
----------- ---------------------- ------------------ ----------
Net book value
At 31 December 2016 28,903 15,897 2,642 47,442
=========== ====================== ================== ==========
At 30 June 2017 28,903 15,441 2,593 46,937
=========== ====================== ================== ==========
At 31 December 2017 28,903 14,978 712 44,593
=========== ====================== ================== ==========
At 30 June 2018 28,903 14,516 491 43,910
=========== ====================== ================== ==========
6 Dividends paid
Unaudited Unaudited
6 month period 6 month period Audited
ended ended year ended
30-Jun-18 30-Jun-17 31-Dec-17
GBP'000 GBP'000 GBP'000
Ordinary dividends paid 2,551 1,605 2,408
2,551 1,605 2,408
================ ================ ============
A second interim dividend of 3p per ordinary share in respect of
the year ended 31 December 2016 was paid on 12 May 2017.
An interim s dividend of 1.5p per ordinary share in respect of
the year ended 31 December 2017 was paid on 15 November 2017.
A final share dividend of 4.75p per ordinary share in respect of
the year ended 31 December 2017 paid on 18 May 2018.
7 Income tax
Tax is charged at 19.00% for the six months ended 30 June 2018
(30 June 2017: 19.25%) representing the best estimate of the
average annual effective tax rate expected to apply for the full
year, applied to the pre-tax income of the six month period.
Current tax for current and prior periods is classified as a
current liability to the extent that it is unpaid. Any amounts paid
in excess of amounts owed are classified as a current asset.
8 Illustrative condensed consolidated statement of financial
position as at 30 June 2018 split between insurance policy holders
and the Group's shareholders
ASSETS GBP'000 GBP'000 GBP'000
Group Total Policyholder Shareholder
Non-current assets
Intangible assets 43,910 - 43,910
Investment property 1,259,400 1,259,359 41
Property, plant and equipment 1,130 - 1,130
Investments 2,002,611 2,002,611 -
Deferred tax asset 648 - 648
------------ ------------- ------------
3,307,699 3,261,970 45,729
------------ ------------- ------------
Current assets
Trade and other receivables 19,879 8,371 11,508
Cash and cash equivalents 427,256 405,327 21,929
Current tax asset 17 590 (573)
------------ ------------- ------------
447,152 414,288 32,864
------------ ------------- ------------
Total assets 3,754,851 3,675,258 78,593
------------ ------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 13,103 8,805 4,298
Deferred income 18,600 7,345 11,255
Borrowings 30,597 27,441 3,156
Provisions 150 - 150
Deferred consideration 341 - 341
62,791 43,591 19,200
------------ ------------- ------------
Non-current liabilities
Borrowings 58,800 45,951 12,849
Provisions 102 - 102
Deferred consideration 261 - 261
Non-participating investment
contract liabilities 3,586,716 3,586,716 -
3,645,879 3,632,667 13,212
------------ ------------- ------------
Total liabilities 3,708,670 3,675,258 32,412
------------ ------------- ------------
Net assets 46,181 - 46,181
------------ ------------- ------------
Equity attributable to owners
of the parent
Issued capital 269 - 269
Share premium 33,451 - 33,451
Equity share based payments 946 - 946
Treasury shares (748) - (748)
Retained earnings 12,251 - 12,251
------------ ------------- ------------
46,169 - 46,169
Non-controlling interest 12 - 12
Total equity 46,181 - 46,181
------------ ------------- ------------
9 Illustrative condensed consolidated statement of cash flows
for the six month period ended 30 June 2018 split between insurance
policy holders and the Group's shareholders
GBP'000 GBP'000 GBP'000
Group Total Policyholder Shareholder
Cash flows from operating
activities
Profit before tax 4,778 - 4,778
Adjustments for:
Depreciation 300 - 300
Amortisation and impairments 706 - 706
Interest expense 226 - 226
Share based payment expense 215 - 215
Fair value gains on financial
investments (24,728) (24,728) -
Additions of financial investments (246,430) (246,430) -
Disposals of financial investments 300,841 300,841 -
Fair value gains on investment
properties (34,015) (34,015) -
Increase in liability for investment
contracts 24,792 24,792 -
Changes in working capital:
Increase in trade and other
receivables (3,367) (499) (2,868)
Decrease in trade and other payables (5,794) (4,653) (1,141)
Taxes paid (625) - (625)
Net cash flows from operating
activities 16,899 15,308 1,591
------------- -------------- -------------
Cash flows from investing
activities
Purchase of intangible
assets (23) - (23)
Purchase of property, plant & equipment (77,768) (77,486) (282)
Receipts from sale of property,
plant & equipment 58,401 58,401 -
Purchase of treasury shares (498) - (498)
Net cash flows from acquisitions (193) - (193)
Net cash flows from investing
activities (20,081) (19,085) (996)
------------- -------------- -------------
Cash flows from financing activities
Equity dividends paid (2,557) - (2,557)
Net decrease in borrowings (4,651) (3,072) (1,579)
Interest paid (203) - (203)
Net cash flows from financing activities (7,411) (3,072) (4,339)
------------- -------------- -------------
Net decrease in cash and cash equivalents (10,593) (6,849) (3,744)
------------- -------------- -------------
Cash and cash equivalents at the
beginning of the period 437,849 412,176 25,673
============= ============== =============
Cash and cash equivalents at the
end of the period 427,256 405,327 21,929
============= ============== =============
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR DELFBVKFLBBD
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