TIDMCBP
RNS Number : 3715T
Curtis Banks Group PLC
20 March 2019
Curtis Banks Group plc
("Curtis Banks", the "Company")
Final Results for 12 months to 31 December 2018
Strong financial and operating performance combined with margin
enhancement
Curtis Banks Group plc, one of the UK's leading SIPP providers,
is pleased to announce its final results for the 12 months to 31
December 2018.
Highlights
-- Operating Revenue increased by 6% to GBP46.1m (2017: GBP43.6m)
-- Adjusted profit before tax increased by 13% to GBP12.1m (2017: GBP10.7m)
-- Adjusted operating margin2 increased to 27.1% (2017: 25.8%)
-- Profit before tax increased by 72% to GBP10.1m
-- Adjusted diluted EPS increased by 13% to 17.32p
-- Gross organic growth in own SIPP numbers of 9% with total administered now 77,739
-- Assets under administration increased by 0.4% to GBP24.8bn
-- Proposed final dividend of 6.00p (2017: 4.75p) making a full
year payment of 8.00p (2017: 6.25p)
Highlights and key performance indicators for the year
include:
2018 2017
Financial
Operating Revenue GBP46.1m GBP43.6m
Adjusted Profit before tax1 GBP12.1m GBP10.7m
Profit before Tax GBP10.1m GBP5.9m
Adjusted Operating Margin2 27.1% 25.8%
Diluted EPS 14.45p 9.26p
Adjusted diluted EPS 17.32p 15.38p
Operational Highlights
Number of SIPPs Administered 77,739 76,474
Assets under Administration GBP24.8bn GBP24.7bn
Total organic new own SIPPs
in year 5,838 8,719
Number of Properties Administered 6,231 6,031
(1) Profit before tax, amortisation and non- recurring costs
(2) The ratio of operating profit before net finance costs,
amortisation and non-recurring costs to operating revenues
Commenting on the results, Will Self, CEO of Curtis Banks,
said:
"In my first results as Chief Executive of the Group I am
delighted to report another year of strong and profitable growth.
The past year has seen the Company make significant investment to
support further organic growth, building on the consolidation and
integration prioritised over the last two years.
We believe we are setting a high bar with the introduction of
our new SIPP proposition. Coupled with our new distribution
structure we are now well-placed to increase our organic growth of
full and mid SIPPs over the next full reporting period. We are also
well positioned to grow the business inorganically and are
proactively exploring possible acquisitions.
In January our CFO Paul Tarran announced his decision to stand
down from the Board. A process has begun to find his successor and
Paul remains in his current role until this process is complete in
order to ensure a smooth transition.
The SIPP market is undergoing an evolution and, as one of the
UK's leading providers, we have entered 2019 in an extremely strong
position and I am confident about our prospects for growth and our
broadening capability to deliver enhanced services for our
customers as well as our ability to deliver against our strategic
objectives."
Analyst and Investor Presentation:
There will be a presentation on Wednesday 20(th) March 2019 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
For more information:
Curtis Banks Group plc www.curtisbanks.co.uk
Will Self - Chief Executive
Officer +44 (0) 117 9107910
Paul Tarran - Chief Financial
Officer
Peel Hunt LLP (Nominated Adviser
& Broker) +44 (0) 20 7418 8900
Guy Wiehahn
Rishi Shah
N+1 Singer +44 (0) 20 7496 3000
Mark Taylor
Rachel Hayes
Camarco (Financial PR) +44 (0) 20 3757 4984
Ed Gascoigne-Pees
Hazel Stevenson
Jane Glover
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 employs approximately 560
staff in its head office in Bristol and regional offices in Ipswich
and Dundee.
For more information - www.curtisbanks.co.uk
Chairman's Statement
I am pleased to report the Curtis Banks Group final results for
the year ended 31 December 2018. These results show solid growth in
all financial KPI's over a transitional period in which we have
made important operational developments.
I would like to start by thanking our former Chief Executive
Officer Rupert Curtis for being instrumental in the evolution of
the business over a number of years from founding the business to
the successful IPO in 2015. I am delighted that he remains a
strategic advisor to the business. I would also like to thank Paul
Tarran following his announcement to step down by the end of the
year. Paul has made an enormous contribution to the business over a
number of years. The search for his successor has already
begun.
Taking Rupert Curtis' place is our new Chief Executive Officer,
Will Self. Will has been with the business since 2016 and with
strong credentials, over 15 years' experience and a member of the
Board since 2016, I believe he is very well positioned to lead the
business through the next stage of its growth. I am also delighted
that Jane Ridgley has now joined the Board. Jane is currently Chief
Operating Officer for the Group and will continue in that role as
an executive director of the Board.
The period under review has shown an increase in all key
financial metrics. Operating revenue has increased by 6% from
GBP43.6m to GBP46.1m compared to the same period last year, with
adjusted profit before tax increasing by 13% from GBP10.7m to
GBP12.1m. Adjusted operating margin increased to 27.1% (2017:
25.8%) and profit before tax increased 72% to GBP10.1m. Fully
diluted earnings per share on these adjusted operating results
(after tax) amounted to 17.32p per share (2017: 15.38p). It is
extremely pleasing during this period of transition for the Group
to be able to report both top line growth and margin
improvement.
We have invested significantly in our products this year and
launched 'Your Future SIPP' in February 2019. In a sense, this
development is the culmination of the Suffolk Life integration, as
the product combines the best features of both companies' services
into one industry leading proposition. We have also invested in our
sales team and digital portals throughout the year and I am
confident that these enhancements, combined with our expansion into
UK's commercial property market, will lead to greater top-line
growth.
The total number of SIPPs currently administered by the Group
now exceeds 77,000. This is a result of continued new organic
growth of all SIPPs and our attrition rates remaining stable with
previous years.
Dividends
We paid an interim dividend of 2.00p per share (2017: 1.50p per
share) on 15 November 2018 and the Board proposes a final dividend
of 6.00p per share (2017: 4.75p per share) which, if approved, will
be paid to shareholders on the register at the close of business on
26 April 2019. The shares will be marked ex-dividend on 25 April
2019 and the proposed dividend paid on 23 May 2019. This will mean
the total dividend paid in respect of the year ended 31 December
2018 will amount to 8.00p per share (2017: 6.25p).
Summary and outlook
We are well positioned to grow the business and we continue to
actively seek appropriate acquisition opportunities. Following a
year of successfully implementing change within the Group, we have
entered 2019 in a strong position for the year ahead. We continue
to invest in the business to ensure we stay industry leaders and
are in a strong position to grow revenues and maximise stakeholder
value.
Chris Macdonald
Chairman
19 March 2019
Chief Executive's Review
Business Review
My first review as Chief Executive of the Group reports that
2018 has been another year of strong and profitable growth,
building on the foundations of consolidation and integration
prioritised over the last two years. It goes without saying that I
would like to thank my predecessor Rupert Curtis who, along with
Chris Banks and Paul Tarran, founded the business and helped build
the industry leading Group that we have today. Their vision and
belief in the SIPP market has enabled the Group to remain at the
top of our sector and created a platform for the next stage of our
journey.
One of the founding principles of the Group was to deliver high
quality service. The Group remains a customer centric organisation,
and I would also like to thank our hugely valued staff members who
deserve recognition for the many and varied achievements over the
last 12 months. Their success in meeting the challenges we present
to them plays a vital role in delivering the increasing
expectations of our customers at the same time as we evolve our
business. The SIPP market is experiencing rapid change, and it is
the hard work and dedication of each and every member of the
business that enables us to deliver these final results for the
year ended 31 December 2018.
We have focussed on adjusted operated margin as one of our key
performance indicators, and I am pleased to report that this has
further increased to 27.1% (2017: 25.8%). We remain confident that
a 30% adjusted operating margin is sustainable with our current
model. Adjusted profit before tax increased 13% to GBP12.1m (2017:
GBP10.7m) as a result of strong revenue growth and further
operational alignment within the Group.
2018 was a year of transition for some elements of the Group. We
completed the delivery of our new brand, consolidating under a
single identity and completing a journey that began internally with
our staff, offices and culture. This has delivered a platform from
which we can invest in and grow our market presence and reputation
within our market. In April, we announced the appointment of Jane
Ridgley to Chief Operating Officer of the Group. Jane brings a
wealth of experience to the role, having previously held senior
roles in Suffolk Life and Legal & General. She is a member of
the Group Executive Committee and, as of January 2019, a member of
the Board. Her extensive footprint within the company continues to
drive cohesiveness within the Group's core operational teams and
will engender enhanced collaboration.
In other areas of the Group we focussed on five key deliverables
to provide the foundation required for us to deliver the next stage
of our journey:
New single SIPP proposition - We have successfully launched our
new SIPP product 'Your Future SIPP' which replaces the current
range of products with a combined product offering the best
features of the Curtis Banks and Suffolk Life SIPPs. It capitalises
on our new brand, with a clear single market presence for our
customers, and its enhanced digital functionality and customer
focused service model is more efficient and appealing for both
advisers and their clients.
New national sales function - Distributing 'Your Future SIPP' is
our fully resourced, significantly enhanced sales team, headed by
our Group Sales Director, Dave Stratton, a National Sales Manager
and a team of seven Business Development Managers. Dedicated sales
resource is also focussed on key adviser networks and investment
partners to capitalise on other distribution channels.
Expanded commercial property expertise - We also have expanded
further into the UK's commercial property market with the launch of
two new companies. Rivergate Legal Limited offers a range of legal
services to SIPP, SSAS and open market customers relating to
commercial property transactions; and Templemead Property Solutions
Limited provides valuation services and negotiates other
professional services on behalf of Curtis Banks Group clients.
GDPR - During the period we also successfully implemented a GDPR
framework throughout the Group without material financial or
operational impact. As a Group we interact with a large number of
external parties and I am pleased that this has been completed
effectually.
IT Strategy - We continue to progress with the work to simplify
our IT Infrastructure, as previously outlined. We launched our new
website and secure portal, marking a material shift in and
de-risking of our digital infrastructure. We now continue to
explore the best routes to further exploit this investment.
Having successfully navigated a period in which we delivered
both transitional and structural growth, we are well positioned to
continue to grow the business and deliver against our strategic
objectives.
Sales Growth
At the year end the number of SIPPs administered increased to
77,739 with 5,838 gross new own SIPPs added organically. Our two
core areas of strategic focus, the Full SIPP and Mid SIPP both saw
encouraging levels of new gross organic growth. Attrition rates on
own SIPPs remain stable at 6.07%. The table below sets out more
detail on SIPPs numbers and rates of attrition.
Full SIPPs Mid SIPPs eSIPPs Total own Third Party Total
SIPPs Administered
2018 number 20,450 26,354 22,935 69,739 8,000 77,739
----------- ---------- -------- ---------- -------------- --------
2017 number 20,539 24,682 22,193 67,414 9,060 76,474
----------- ---------- -------- ---------- -------------- --------
Gross organic
growth rate* 3.14% 12.43% 9.58% 8.66% 0.73% 7.72%
----------- ---------- -------- ---------- -------------- --------
SIPPs added
organically 644 3,068 2,126 5,838 66 5,904
----------- ---------- -------- ---------- -------------- --------
SIPPs added
through acquisitions - 578 - 578 - 578
----------- ---------- -------- ---------- -------------- --------
Conversions
and reclassifications 507 (507) - - - -
----------- ---------- -------- ---------- -------------- --------
SIPPs lost through
attrition (1,240) (1,467) (1,384) (4,091) (1,126) (5,217)
----------- ---------- -------- ---------- -------------- --------
Attrition rate
* 6.04% 5.94% 6.24% 6.07% 12.43% 6.82%
----------- ---------- -------- ---------- -------------- --------
(*) Growth and attrition percentage rate based on opening SIPP
numbers at the beginning of the year
Our strategic focus remains on the Full and Mid SIPP market
where our expertise, charging model and customer service focus are
concentrated in 'Your Future SIPP'. The Full SIPP market is
relatively mature, with historic restrictions on annual
contributions and annual allowances meaning that gross flow
predominantly comes from existing SIPP customers. Many of these
clients seek to add Commercial Property as an asset class or wish
to move their existing SIPP to a new provider. Mid SIPPs continue
to be the product of choice for pension consolidation and the first
step for many pension customers from default funds into investment
selection, therefore contributing material gross flow.
There have been some well publicised challenges, from which no
provider has been immune, which have led to lower gross sales
across the industry. The Defined Benefits ('DB') transfer review
has impacted all Professional Advisers, spanning both 'DB' and
Defined Contribution pension transfer advice. Liabilities arising
from SIPPs holding non-standard assets have reduced confidence in
the SIPP market, and the general economic environment has reduced
consumers' focus on pension savings. All of these factors have been
felt across the industry but we believe that our robust financial
strength, quality of administration and our new proposition puts us
at the forefront of the sector.
In spite of the above the overall SIPP market opportunity
remains strong, with SIPPs still benefitting from the introduction
of the pension freedoms and favoured as a way of allowing
individuals to have greater access, control and responsibility over
their pension savings. SIPPs are now being considered by a much
larger group of consumers than ever before and are no longer
perceived as reserved solely for those with large pension fund
values.
'Your Future SIPP' - our new SIPP proposition
'Your Future SIPP' was launched following detailed adviser
research and combines the best of the Curtis Banks and Suffolk Life
SIPPs into one of the industry's leading propositions. Your Future
SIPP accesses a high quality customer-focussed service model with
specialised teams across the Group, and is competitively priced,
with no application fees for online applications coupled with a
tiered annual administration fee.
A new online portal has been launched that directly supports
'Your Future SIPP'. This will deliver efficiencies for advisers,
reducing the time spent on administration. Advisers and clients
will benefit from more digital functionality than before and it is
accessible from desktop computers, tablets and mobiles. Other
features include market access to virtually any investment
solution, easy management of cash and automated adviser
charging.
'Your Future SIPP' benefits from our highly experienced
commercial property team, now enhanced by the legal and property
management solutions within the Group offered by Rivergate Legal
and Templemead Property Solutions, adding experience and value to
customers with property investments.
We are still in the very early stages of the new proposition but
believe our new proposition is market leading with a suite of
features, flexibility and attractive pricing. Coupled with our new
distribution structure we are now well-placed to increase our
organic growth of Full and Mid SIPPs.
Acquisitions
Investing to add high quality assets is a core component of our
future growth strategy. In December 2018, we announced the
completion of the purchase of wealth manager Hargreave Hale's book
of SIPPs. This comprised 578 SIPPs invested in assets valued at c
GBP180 million. This SIPP book represented a good fit for our
business model and marked the tenth asset purchase by Curtis Banks
since the company was founded in 2009.
We remain disciplined in our approach to acquisitions where we
consider each opportunity from both an earnings per share and
return on investment perspective. We are committed to exploring
further opportunities to add scale and expand our offering to
greater numbers of clients.
Industry context and regulation
Regulatory scrutiny continues in the pension market. Our
business model means that we only work with regulated financial
advisers and do not give any advice or provide the investments held
within our SIPPs. In addition our fee structures remain fair and
transparent.
The issue of non-standard investments has received increased
media attention. Whilst we acknowledge that these issues are
significant within the wider industry, and that some uncertainty
still persists, we do not consider them to be a material risk to
our business. The Group continues to carry out robust due diligence
on non-standard investments and our new product has a clear
Schedule of Allowable Investments.
We have also taken a prudent approach to our legacy book,
composed of our own SIPPs as well as a large number of historic
acquisitions, and have undertaken a detailed review of this
business. There are areas where we will need to take remedial
action but these are limited. Commercial Property remains a complex
asset class and we are now undertaking a comprehensive data cleanse
in this area.
Our People and Culture
Our Chief Financial Officer, Paul Tarran, has notified the Board
that he intends to stand down from the Board by the end of 2019. A
process has begun to identify and recruit a successor as Chief
Financial Officer, who can continue our journey to enhanced
financial reporting and discipline while ensuring that the Group
can capitalise on strategic growth opportunities. Paul will retain
his current responsibilities until this process is complete to
ensure a smooth transition.
We value our people and the positive contribution they make to
our culture and the performance of our business. In late 2018 we
appointed a new Group HR Director to lead us on defining a modern,
forward looking people strategy. In doing so we are reviewing all
elements of our culture from recruitment methodologies to long term
incentives to ensure that all staff throughout the group are given
the opportunity to develop and succeed.
Our wider strategy
The Group has considerable experience of administration of
complex assets within a regulated environment coupled with
management of complex data from multiple and diverse
counterparties. We intend to formulate a strategy that delivers
revenue growth and diversity in our areas of expertise. We have
three areas of strategic focus:
-- Organic sales - supported by our new national sales function and market leading proposition
-- Acquisition opportunities - driving growth through additional books of business
-- Diversifying revenue streams - building on our core
capabilities of complex administration and commercial property, and
expanding our service into Legal and Property Management
offerings
In addition to this we will continue to focus on our core
operating models to ensure that our risks remain effectively
managed, and that operational opportunities and efficiencies are
realised and able to meet our future strategic ambitions.
The SIPP market is undergoing an evolution and, as one of the
leading providers, we have looked to the future and created the new
SIPP proposition that advisers asked for, supported by a nationwide
adviser support network. We have broadened our appeal and
capability to commercial property clients and will place structured
focus on other strategic growth opportunities. We have entered 2019
in a strong position and I am confident about our prospects for
growth and our broadening capability to deliver enhanced services
for our customers.
Will Self
Chief Executive Officer
19 March 2019
Chief Financial Officer's Review
Results
A healthy Group financial performance for the year ended 31
December 2018 resulted in an increased adjusted profit before tax
of GBP12.1m (2017: GBP10.7m), an increase of 13% over the previous
year. Statutory profit before tax, which is stated after
amortisation and non-recurring costs increased by 72% to GBP10.1m.
Adjusted diluted EPS similarly increased by 13% to 17.32p, while
diluted EPS on a statutory basis increased by 56% to 14.45p.
The performance was achieved despite incurring upfront costs for
laying the groundwork for enhanced future revenue generation
through the new single Group wide product (as discussed in the
Chief Executive's report), fully adopting the Curtis Banks brand
and identity throughout the Group and expanding our sales team to
provide nationwide coverage.
During the year costs were also incurred for the launch of the
new companies to provide SIPP property valuation services
("Templemead Property Solutions Limited") and legal services
("Rivergate Legal Limited") to the 6,000+ commercial properties
held by SIPPs & SSASs administered by the Group.
These results show an improvement in adjusted operating margin
of 27.1% (2017: 25.8%). This has been achieved not only by the
revenue growth but also following efficiency gains made on closure
of our Market Harborough office in early 2018, and cost saving
measures achieved through further alignment and amalgamation of
suppliers, technology, processes and staff departments within the
Group.
Revenue
Operational revenues of GBP46.1m in 2018 (2017: GBP43.6m)
increased by 6% over the comparable period, driven by further good
organic growth in numbers of SIPPs held and increased interest
income.
Fee revenue from SIPPs & SSASs remains the predominant
source of fee income for the Group with 87% (2017: 84%) of these
fees being recurring fixed annual fees. These fees are subject to
contractual annual inflationary rises. A menu of additional fixed
fees are charged depending on the transactional services provided
on the products.
All SIPP & SSAS fees levied are fixed monetary amounts and
are not a percentage based charge on the value of the underlying
assets held within SIPPs and SSASs. As a result the income of the
Group is not affected by movements in financial markets and
property values. This is a key differential that sets us apart from
most of our competitors and provides an attractive product in terms
of fees to higher value SIPPs.
Interest income on the margin on client funds remains a
significant part of Group income. In the year ended 31 December
2018 GBP10.8m of the Group operating revenues were from interest
margin (2017: GBP9.5m). Structural efficiencies in treasury
management and the further strengthening of our relationships with
deposit providers have led to the increase over last year in
addition to favourable movements in base rates during the year.
Both Rivergate Legal Limited and Templemead Property Solutions
Limited, since their launch in 2018, have positively contributed to
revenue in 2018 and the further development of these companies is
expected to drive higher operational revenues through 2019.
Expenses
The year ended 31 December 2018 saw administrative expenses
increase by 4.0% to GBP33.6m from GBP32.3m.
Staff costs for the year increased by 4% to GBP21.9m (2017:
GBP21.1m). Savings from the closure of the Market Harborough office
were partly offset by recruitment in the second half of the year of
an expanded Group wide sales team that achieves full national
coverage of the UK. This coincided with the launch in early 2019 of
our new Group product, 'Your Future SIPP', consistent with our
strategy of investing for future organic growth.
Staff costs were also impacted by further share based payment
awards under the Group's Long Term Incentive Plan and Save As You
Earn option schemes, the annual pay review and required increases
under auto enrolment of staff pension contributions. These measures
however continue to contribute to improved levels of key staff
retention and morale and provide the service levels to clients
required from our introducers of business.
Staff numbers have decreased slightly to 558 as at 31 December
2018 (2017: 597), reflecting the closure of the Market Harborough
office during the year offset by organic growth of staff numbers to
service increasing SIPP numbers and our expanded sales team to
achieve nationwide coverage.
The Group continues to take steps to improve its adjusted
operating margin through a combination of revenue enhancements,
cost saving measures and operational improvements. The Group also
reduced computer costs by GBP0.2m year on year through
renegotiation of contracts with key suppliers, and further
alignment of suppliers and services between each of the Group's
offices.
Provisions as at 31 December 2017 of GBP0.9m relating to the
closure of the Group's Market Harborough office were fully utilised
during 2018. A tenant was procured in 2018 to occupy the office for
the remaining lease period providing sub-let income equivalent to
the head lease rental payable over the remainder of the lease.
Finance costs reduced by GBP0.1m year on year as the company
continues to repay borrowings taken out to facilitate the Suffolk
Life acquisition in 2016. The debt continues to be repaid in line
with scheduled terms and conditions and the covenants required by
the bank in respect of this gearing are well covered. Interest on
the debt accrues at a rate of 2.25% plus LIBOR.
Non-Recurring costs
Non-recurring costs for the year have reduced significantly
following the provisions last year for the closure of the Market
Harborough Office and the expensing of exceptional IT impairment
costs.
Current year non-recurring costs have arisen from further
restructuring costs within the Group, the costs associated with the
acquisition of the Hargreave Hale book of SIPPs during the year and
provisions arising as part of the consolidation and integration
exercises undertaken over the past year.
As part of these exercises, management initiated a review of
data records relating to properties held within SIPPs administered
by the Group. Based on a detailed review of a sample of properties
and extrapolation of the initial findings across the full
population of relevant properties, the directors recognise that
additional direct costs may be incurred in completing this data
cleansing exercise, including from any potential remediation. A
provision of GBP0.5m has been made for this matter, being the
directors' best estimate of the direct costs the Group may have to
bear.
Suffolk Life Annuities
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
investment 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. Assets in the SIPPs
administered by the rest of the Group are held in trust and not
under insurance contracts and therefore do not need to be included
on the balance sheet. As the policies are non-participating
contracts, the client related assets and liabilities in Suffolk
Life Annuities Limited match. In addition the revenues, expenses
and investment returns of the non-participating investment
contracts are shown in the consolidated statement of comprehensive
income. Again, these income, expense items and investment returns
due to the policyholders are completely matched. An illustrative
balance sheet as at 31 December 2018 showing the financial position
of the Group excluding the policyholder assets and liabilities is
included as supplementary unaudited information after the notes to
the financial statements. An illustrative cash flow on the same
basis has also been provided.
Employee Benefit Trust ("EBT")
The EBT set up during the previous year continues to be used to
acquire shares in the Company in the market to satisfy future
vesting of options and long term incentive awards. The EBT is
funded by loans from the Group. As at 31 December 2018 the EBT held
263,790 shares in Curtis Banks Group plc. A further GBP0.5m was
advanced to the EBT by the Company during the year. A number of
options awarded under the Company's Save As You Earn schemes vested
during the year and awards were made from the shares held by the
EBT.
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.
Capital requirements
The Group's regulated subsidiary companies submit regular
returns to the FCA and the PRA relating to their capital resources.
At 31 December 2018 the total regulatory capital requirement across
the Group was GBP11.6m and the Group had an aggregate surplus of
GBP18.0m 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 GBP14.5m. All the regulated
firms within the Group maintained surplus regulated capital
throughout the year.
After taking into account the regulatory capital requirements
set out above, assuming all these were required to be held in cash,
the Group had surplus 'free' cash available of approximately
GBP13m.
Financial Position
The Group increased net assets by 12% to GBP49.7m as at 31
December 2018 (2017: GBP44.6m), and increased shareholder cash
reserves from GBP25.7m to GBP28.0m over the same period.
As at 31 December 2018, the Group had net shareholder cash
(after debt) of GBP13.6m (2017: GBP8.1m).
The Group will have to adopt the provisions of IFRS 16,
accounting for leases, for accounting periods commencing from 1
January 2019. We have evaluated the effect of this on our financial
performance and this is not material. We have also had confirmation
from our principal lenders that the provisions of IFRS 16 do not
need to be taken into account when calculating our banking
covenants. We have also received confirmation from the FCA that at
this point in time the provisions of IFRS 16 do not need to be
taken into account in calculating our regulatory capital
calculations.
Paul Tarran
Chief Financial Officer
19 March 2019
Consolidated Statement of Comprehensive Income
Year ended 31 December 2018 Year ended 31 December 2017
Before amortisation Amortisation Before amortisation Amortisation
and non-recurring and non-recurring and non-recurring and
costs costs costs non-recurring
Total costs Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating revenue 46,125 - 46,125 43,573 - 43,573
Policyholder
investment returns 41,677 - 41,677 343,009 - 343,009
---------- -------------- -------- ---------- ------------ --------
Revenue 2 87,802 - 87,802 386,582 - 386,582
Administrative
expenses (33,637) - (33,637) (32,336) (32,336)
Non-participating
investment
contract
expenses (34,477) - (34,477) (34,560) - (34,560)
Changes in
provisions:
Non-participating
investment
contract
liabilities (7,200) - (7,200) (308,449) - (308,449)
--------- --------- ---------- ----------
Policyholder total
expenses (41,677) - (41,677) (343,009) - (343,009)
---------- -------------- ---------- ------------
Operating profit
before
amortisation
and non-recurring
costs 12,488 - 12,488 11,237 - 11,237
Non-recurring costs 4 - (748) (748) - (3,754) (3,754)
Amortisation 3 - (1,268) (1,268) - (1,131) (1,131)
---------- -------------- -------- ---------- ------------ --------
Operating profit 12,488 (2,016) 10,472 11,237 (4,885) 6,352
Finance income 116 - 116 67 - 67
Finance costs (467) - (467) (562) - (562)
---------- -------------- -------- ---------- ------------ --------
Profit before tax 12,137 (2,016) 10,121 10,742 (4,885) 5,857
Tax 6 (2,294) 383 (1,911) (1,565) 940 (625)
---------- -------------- -------- ---------- ------------ --------
Total comprehensive income
for the year 9,843 (1,633) 8,210 9,177 (3,945) 5,232
========== ============== ======== ========== ============ ========
Attributable to:
Equity holders of
the
company 8,204 5,222
Non-controlling
interests 6 10
-------- --------
8,210 5,232
======== ========
Earnings per
ordinary
share on net
profit
Basic (pence) 7 15.30 9.75
Diluted (pence) 7 14.45 9.26
The consolidated statement of comprehensive income has been
prepared on the basis that all operations are continuing
operations.
Consolidated Statement of Financial Position
Group
Group Notes As at As at
31-Dec-18 31-Dec-17
GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 8 44,110 44,593
Investment property 9 1,274,452 1,206,298
Property, plant and equipment 10 1,216 1,148
Investments 1,813,057 2,032,293
Deferred tax asset 595 124
----------- -----------
3,133,430 3,284,456
----------- -----------
Current assets
Trade and other receivables 18,055 16,687
Cash and cash equivalents 11 431,576 437,849
Current tax asset 243 310
----------- -----------
449,874 454,846
----------- -----------
Total assets 3,583,304 3,739,302
----------- -----------
LIABILITIES
Current liabilities
Trade and other payables 15,204 12,658
Deferred income 24,601 24,374
Borrowings 12 30,005 29,444
Provisions 500 641
Deferred consideration 255 341
Current tax liability 991 -
----------- -----------
71,556 67,458
----------- -----------
Non-current liabilities
Borrowings 12 56,525 64,584
Provisions - 259
Deferred consideration 125 454
Non-participating investment
contract liabilities 3,405,428 3,561,929
3,462,078 3,627,226
----------- -----------
Total liabilities 3,533,634 3,694,684
----------- -----------
Net assets 49,670 44,618
----------- -----------
Equity attributable to owners
of the parent
Issued capital 269 269
Share premium 33,451 33,451
Equity share based payments 1,357 731
Treasury shares (716) (250)
Retained earnings 15,295 10,403
----------- -----------
49,656 44,604
Non-controlling interest 14 14
Total equity 49,670 44,618
----------- -----------
Approved by the Board of Directors and authorised for issue on
19 March 2019.
Paul Tarran
Chief Financial Officer
Company Registration No. 07934492
Consolidated Statement of Changes in Equity
Issued Share Equity Treasury Retained Total Non-controlling Total
capital premium share shares earnings GBP'000 interest equity
GBP'000 GBP'000 based GBP'000 GBP'000 GBP'000 GBP'000
payments
GBP'000
At 1 January
2017 268 33,425 239 - 7,589 41,521 9 41,530
Total
comprehensive
income
for the
year - - - - 5,222 5,222 10 5,232
Share based
payments - - 492 - - 492 - 492
Ordinary
shares
bought
by EBT - - - (250) - (250) - (250)
Ordinary
shares
issued 1 26 - - - 27 - 27
Ordinary
dividends
declared
and paid - - - - (2,408) (2,408) (5) (2,413)
---------
At 31 December
2017 269 33,451 731 (250) 10,403 44,604 14 44,618
Total
comprehensive
income
for the
year - - - - 8,204 8,204 6 8,210
Share based
payments - - 626 - - 626 - 626
Ordinary
shares
bought
and sold
by EBT - - - (466) - (466) - (466)
Deferred
tax on
share based
payments - - - - 310 310 - 310
Ordinary
dividends
declared
and paid - - - - (3,622) (3,622) (6) (3,628)
At 31 December
2018 269 33,451 1,357 (716) 15,295 49,656 14 49,670
======== ======== ========= ========= ========= ======== ================ ========
Consolidated Statement of Cash Flows
Group
Year ended 31 December
2018 2017
GBP'000 GBP'000
Cash flows from operating activities
Profit before tax 10,121 5,857
Adjustments for:
Depreciation 596 570
Amortisation and impairments 1,268 3,126
Interest expense 467 554
Share based payment expense 626 492
Fair value losses/(gains) on financial investments 116,517 (156,046)
Additions of financial investments (490,830) (493,638)
Disposals of financial investments 593,549 542,304
Fair value gains on investment properties (47,275) (44,074)
(Decrease)/increase in liability for investment contracts (156,498) 167,525
Changes in working capital:
Decrease/(increase) in trade and other receivables 247 (433)
Increase in trade and other payables 992 4,193
Taxes paid (1,375) (999)
Net cash flows received from operating activities 28,405 29,431
------------ -----------
Cash flows from investing activities
Purchase of intangible assets (785) (277)
Purchase of property, plant and equipment (202,089) (161,923)
Purchase and sale of shares in the Group by the EBT (466) (250)
Receipts from sale of property, plant and equipment 180,546 148,191
Net cash flows from acquisitions (421) (669)
Net cash flows used in investing activities (23,215) (14,928)
------------ -----------
Cash flows from financing activities
Equity dividends paid (3,628) (2,413)
Net proceeds from issue of ordinary shares - 27
Net decrease in borrowings (7,538) (21,274)
Interest paid (297) (504)
Net cash used in financing activities (11,463) (24,164)
------------ -----------
Net decrease in cash and cash equivalents (6,273) (9,661)
------------ -----------
Cash and cash equivalents at the beginning of the year 437,849 447,510
============ ===========
Cash and cash equivalents at the end of the year 431,576 437,849
============ ===========
Notes to the Financial Statements
1 Corporate information
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 31 December 2018 the Group administered circa GBP24.8bn
(2017: GBP24.7bn) of pension assets on behalf of over 77,700 (2017:
76,500) active customers. Approximately 560 staff are employed
across its head office in Bristol and regional offices in Ipswich
and Dundee.
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 Limited, 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 15 and 16 to this
Announcement illustrate the split between policyholder and
shareholder assets and liabilities and cash flows.
2 Revenue
Revenue is wholly derived from activities undertaken within the
United Kingdom and comprises the following categories:
Year ended 31 December
2018 2017
GBP'000 GBP'000
Fees 35,352 34,073
Interest income 10,773 9,500
Policyholder investment returns 41,677 343,009
87,802 386,582
=============================== ===============================
3 Profit for the year
Profit for the year is arrived at after:
Year ended 31 December
2018 2017
GBP'000 GBP'000
Charging:
Amortisation of intangible assets 1,268 1,131
Depreciation of property, plant
and equipment 596 570
Auditors remuneration:
- audit of the financial statements
of the Group 234 177
- audit of the financial statements
of the Company 56 29
- audit related assurance services 8 97
=============================== ===============================
4 Non-recurring costs
Non-recurring costs include the following significant
amounts:
Year ended 31 December
2018 2017
GBP'000 GBP'000
Set up costs associated with the
take on of SIPPs - 20
Hargreave Hale acquisition costs 45 -
Exceptional legal fees - 67
Redundancy & restructuring costs
following acquisitions 156 1,143
Suffolk Life acquisition costs - 72
European Pension Management acquisition
costs 47 328
Exceptional impairment charge - 2,124
Data Cleansing provision 500 -
748 3,754
=============================== ===============================
Redundancy & restructuring costs following acquisitions
During the year ended 31 December 2018, the two existing sales
teams within the Group were restructured into one to coincide with
the launch of a new Group wide product in H1 2019.
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, the decision was taken to close the Group's
office in Market Harborough and full provision was made for this in
the financial statements for the year ended 31 December 2017
Exceptional impairment charge
During the year ended 31 December 2017 the Group 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 were written off as an exceptional impairment charge
in the financial statements for the year ended 31 December
2017.
Data Cleansing Provision
As part of the consolidation and integration exercise undertaken
in the past year management initiated a review of data records
relating to properties held within SIPPs administered by the
Group.
Based on a detailed review of a sample of properties and
extrapolation of the initial findings across the full population of
relevant properties, the directors recognise that additional direct
costs will be incurred in completing this data cleansing exercise.
These costs include incremental costs of completing the review, as
well as some potential costs of remediation. A provision of
GBP500,000 has been recognised for this matter, being the
directors' best estimate of the direct costs the Group may have to
bear.
In estimating the amount provided, the main areas of uncertainty
include:
-- The number of properties within the population that may require remediation; and
-- The nature and financial impact of the remediation required
5 Directors and employees
Year ended 31 December
2018 2017
GBP'000 GBP'000
Wages and salaries 18,034 17,585
Social security costs 1,627 1,630
Other pension costs 1,413 1,337
Share-based incentive awards 626 492
------------------------------- -------------------------------
21,700 21,044
=============================== ===============================
2018 2017
The average number of employees during Number Number
the year was:
Directors 6 7
Administration 552 571
558 578
=============================== ===============================
Details of emoluments paid to the directors and key management
personnel are as follows:
Year ended 31 December
2018 2017
GBP'000 GBP'000
Total emoluments paid to:
Directors
Wages and salaries 1,876 1,411
Social security costs 139 123
Post-employment costs 33 21
Share-based incentive awards 467 83
Key management personnel
Wages and salaries 1,151 806
Social security costs 135 93
Post-employment costs 60 47
Share-based incentive awards 130 184
------------------------------- -------------------------------
3,991 2,768
=============================== ===============================
Emoluments of highest paid director:
Wages and salaries 377 468
Pension contribution 13 8
------------------------------- -------------------------------
390 476
=============================== ===============================
6 Taxation
Year ended 31 December
2018 2017
GBP'000 GBP'000
Current tax
UK Corporation tax 2,072 791
Deferred tax
Origination and reversal of temporary
differences (161) (166)
1,911 625
============================= =============================
Factors affecting the tax charge for
the year
Profit before tax 10,121 5,857
============================= =============================
Profit before tax multiplied by standard
rate of UK Corporation tax of 19.00%
(2017: 19.25%) 1,923 1,127
----------------------------- -----------------------------
Effects of:
Adjustment to prior year 23 (305)
Non-deductible expenses 10 13
Other tax adjustments (45) (210)
----------------------------- -----------------------------
(12) (502)
Total tax charge 1,911 625
============================= =============================
7 Earnings per share
Basic earnings per share amounts are calculated by dividing net
profit for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year.
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 year 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:
2018 2017
GBP'000 GBP'000
Net profit available to equity holders of
the Group 8,204 5,222
================= ===========
Net profit before tax, non-recurring costs
(note 4) and amortisation (note 3) available
to equity holders of the Group. 12,137 10,742
================= ===========
Weighted average number of ordinary shares: Number Number
Issued ordinary shares at start of the
year 53,809,146 53,599,669
Effect of shares issued in the current
year - 25,127
Effect of shares held by employee benefit
trust (201,622) (78,941)
Basic weighted average number of shares 53,607,524 53,545,855
Effect of options exercisable at the reporting
date 985,661 800,000
Effect of options not yet exercisable at
the reporting date 2,165,288 2,044,484
----------------- -----------
Diluted weighted average number of shares 56,758,473 56,390,339
================= ===========
Pence Pence
Earnings per share:
Basic 15.30 9.75
Diluted 14.45 9.26
Earnings per share on net profit before
non-recurring costs and amortisation, less
an effective tax rate*:
Basic 18.34 16.20
Diluted 17.32 15.38
*In order to reduce the impact of accounting measures such as
deferred tax, and the timing of tax reliefs, the effective tax rate
matches the current tax rate applicable to the accounting year. The
current tax rate applicable for the year ended 31 December 2018 was
19.00% (2017: 19.25%).
8 Intangible assets
Group
Goodwill Client Portfolios Computer Total
GBP'000 GBP'000 Software GBP'000
GBP'000
Cost
At 1 January 2017 28,903 18,430 3,116 50,449
Additions - 5 272 277
Disposals - (2) (1,993) (1,995)
At 31 December
2017 28,903 18,433 1,395 48,731
Additions - 433 352 785
Disposals - - (266) (266)
At 31 December
2018 28,903 18,866 1,481 49,250
---------- ------------------ ---------- ----------
Amortisation
At 1 January 2017 - 2,533 474 3,007
Charge for the
year - 922 209 1,131
At 31 December
2017 - 3,455 683 4,138
Charge for the
year - 924 344 1,268
Disposals - - (266) (266)
At 31 December
2018 - 4,379 761 5,140
---------- ------------------ ---------- ----------
Net book value
At 1 January 2017 28,903 15,897 2,642 47,442
========== ================== ========== ==========
At 31 December
2017 28,903 14,978 712 44,593
========== ================== ========== ==========
At 31 December
2018 28,903 14,487 720 44,110
========== ================== ========== ==========
Goodwill
Goodwill arose on the acquisition of Suffolk Life Group Limited
and its subsidiaries on 25 May 2016. The Group tests goodwill for
impairment annually or more frequently if there are indications
that goodwill might be impaired. The recoverable amount of goodwill
has been determined based on value-in-use calculations using a
discount rate appropriate to the risk profile of the asset. These
calculations use operating cash flow projections based on financial
budgets approved by management covering a three year period,
assuming business then continues onwards after this period at a
steady rate for the purpose of the analysis.
Client Portfolios
Client portfolios represent individual client portfolios
acquired through business combinations and accounted for under the
acquisition method. The directors consider that there is no
impairment to assets as at the year end. The client portfolios are
being amortised over a period of 20 years.
The brought forward balance relates to the purchase by Curtis
Banks Limited, a subsidiary company, of the trade and assets of
Montpelier Pension Administration Services Limited on 13 May 2011,
the full SIPP business of Alliance Trust Savings Limited on 18
January 2013, the full SIPP business and certain assets of Pointon
York SIPP Solutions Limited on 31 October 2014, the full SIPP
business of Rathbones Pension & Advisory Services Limited on 31
December 2014, and a book of full SIPPs from Friends Life PLC (now
Aviva PLC) on 13 March 2015.
The brought forward balance also includes the purchase by
Suffolk Life Pensions Limited, a subsidiary company, of the trade
and assets of European Pensions Management Limited on 14 July 2016,
and books of SIPPs purchased from Pointon York SIPP Solutions
Limited on 9 November 2012, Pearson Jones PLC on 30 April 2013, and
Origen Investment Services Limited on 22 May 2013.
Additions in the year comprise the purchase by Curtis Banks
Limited of a book of 578 SIPPs from Hargreave Hale Limited for cash
consideration of GBP433,000, all of which was settled on the
acquisition completion date of 10 December 2018. Acquisition
related costs of GBP45,000 were incurred in relation to this which
have been expensed as non-recurring costs.
All acquisitions have been accounted for under the acquisition
method of accounting.
The directors have considered the carrying value of the client
portfolios and have concluded that no impairment is required. The
client portfolios are being amortised over a period of 20 years and
have an average remaining expected useful economic life as at 31
December 2018 of 15 years and 7 months.
Computer Software
Computer software contains costs that meet the recognition
criteria under IAS 38 as Intangible Assets. General small computer
software costs are amortised over their useful economic life of
four years on a straight-line basis. Computer software costs for
significant projects are amortised over an estimated UEL on a
project by project basis.
9 Investment Property
Assets held at fair value
Group
Year ended 31 December
2018 2017
GBP'000 GBP'000
Fair value
At 1 January 1,206,298 1,149,135
Additions 201,425 161,280
Disposals (180,546) (148,191)
Fair value gains 47,275 44,074
At 31 December 1,274,452 1,206,298
==================== ====================
All investment properties have been valued at the year end by
reference to most recent professional valuations and this is
further adjusted by applying the corresponding property index
available. Investment properties held to cover the linked
policyholder business are included in non-participating investment
contract liabilities.
10 Property, plant and equipment
Assets held at cost
Group
Leasehold Computer equipment Office equipment, Total
Improvements fixtures &
fittings
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2017 54 3,606 1,093 4,753
Additions - 520 125 645
Disposals - (42) - (42)
At 31 December 2017 54 4,084 1,218 5,356
Additions - 318 346 664
Disposals (54) (64) (36) (154)
At 31 December 2018 - 4,338 1,528 5,866
------------------ ------------------- ---------------------------- ------------------
Depreciation
At 1 January 2017 28 2,697 955 3,680
Charge for the year 13 493 64 570
Disposals - (42) - (42)
At 31 December 2017 41 3,148 1,019 4,208
Charge for the year 13 471 112 596
Disposals (54) (64) (36) (154)
At 31 December 2018 - 3,555 1,095 4,650
------------------ ------------------- ---------------------------- ------------------
Carrying value
At 1 January 2017 26 909 138 1,073
================== =================== ============================ ==================
At 31 December 2017 13 936 199 1,148
================== =================== ============================ ==================
At 31 December 2018 - 783 433 1,216
================== =================== ============================ ==================
11 Cash and cash equivalents
As at 31 December 2018 and 2017 cash and cash equivalents were
as follows:
Group
As at 31 December
2018 2017
GBP'000 GBP'000
Cash at bank and in hand 28,018 25,673
Deposits with credit institutions 402,216 412,128
Cash equivalents 1,342 48
Cash and cash equivalents 431,576 437,849
========= =========
12 Borrowings
Group
As at 31 December
2018 2017
GBP'000 GBP'000
Current
Bank loans 30,005 29,444
30,005 29,444
--------- ---------
Non-current
Bank loans 56,525 64,584
56,525 64,584
--------- ---------
Total borrowings 86,530 94,028
========= =========
Bank borrowings
The bank borrowings are repayable as follows:
Group
As at 31 December
2018 2017
GBP'000 GBP'000
Within 1 year 30,005 29,444
Between 1 year and 5 years 38,306 44,158
After more than 5 years 18,219 20,426
86,530 94,028
========= =========
Total borrowings of the Group include liabilities of
GBP72,085,000 (2017: GBP76,464,000) secured by legal charge over
certain properties held within non-participating investment
contracts, and liabilities of GBP14,554,000 (2017: GBP17,666,000)
secured on the shares of Curtis Banks Limited, Suffolk Life
Pensions Limited and Suffolk Life Annuities Limited.
13 Dividends
Year to 31 December
2018 2017
GBP'000 GBP'000
Ordinary declared and paid 3,622 2,408
3,622 2,408
========== ==========
A final share dividend in respect of 2017 of 4.75p per share was
declared and paid on 18 May 2018.
An interim share dividend in respect of 2018 of 2.00p per share
was declared and paid on 15 November 2018.
14 Contingent liabilities
In specie contributions
The Group has been in correspondence with HMRC regarding
processes and documentation in respect of in specie contributions.
HMRC have alleged that incorrect procedures were followed and is
seeking to reclaim tax reliefs granted and interest thereon. This
is an industry wide issue affecting other SIPP operators and is
being challenged by the industry as a whole. It is not possible to
determine when this matter will be resolved and the outcome and
impact are not known at this stage. We do not believe that the net
exposure arising from this will be material to the Group.
Data cleansing
As reported in note 4, management initiated a review of data
records related to properties held within SIPPs administered by the
Group.
This review requires a case by case assessment of each of the
properties within the population in order to assess whether any
remedial action is required by the Group in respect of that
property or the associated SIPP.
In addition to the provision of GBP500,000 for the estimated
direct costs that the Group may incur in respect of this exercise,
the directors consider that it is possible that the Group may also
be exposed to indirect costs in the future, depending on the
outcome of the case by case reviews.
The directors' best estimate of this contingent liability is
GBP1.5m, however there are inherent uncertainties in this estimate
including due to the sampling and extrapolation approach adopted so
far, the quality of data and potential significant variations in
the assumed liabilities payable to rectify individual SIPP
positions.
This estimate will be reviewed regularly, and any changes or
refinements will be reported as appropriate. The directors
currently expect that the review will be completed by the end of
2019 with any potential material follow up actions completed by
2020.
15 Unaudited IFRS Consolidated Statement of Financial Position
as at 31 December 2018 split between insurance policy holders and
the Group's shareholders
2018 2018 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
ASSETS Group Total Policyholder Shareholder Shareholder
Non-current assets
Intangible assets 44,110 - 44,110 44,593
Investment property 1,274,452 1,274,411 41 40
Property, plant and
equipment 1,216 - 1,216 1,148
Investments 1,813,057 1,813,057 - -
Deferred tax asset 595 - 595 124
------------ ------------- ------------ ------------
3,133,430 3,087,468 45,962 45,905
------------ ------------- ------------ ------------
Current assets
Trade and other receivables 18,055 8,344 9,711 8,832
Cash and cash equivalents 431,576 403,558 28,018 25,673
Current tax asset 243 243 - -
------------ ------------- ------------ ------------
449,874 412,145 37,729 34,505
------------ ------------- ------------ ------------
Total assets 3,583,304 3,499,613 83,691 80,410
------------ ------------- ------------ ------------
LIABILITIES
Current liabilities
Trade and other payables 15,204 8,909 6,295 5,310
Deferred income 24,601 13,194 11,407 10,928
Borrowings 30,005 26,847 3,158 3,158
Provisions 500 - 500 641
Deferred consideration 255 - 255 341
Current tax liability 991 - 991 295
------------ ------------- ------------ ------------
71,556 48,950 22,606 20,673
------------ ------------- ------------ ------------
Non-current liabilities
Borrowings 56,525 45,235 11,290 14,406
Provisions - - - 259
Deferred consideration 125 - 125 454
Non-participating investment
contract liabilities 3,405,428 3,405,428 - -
------------
3,462,078 3,450,663 11,415 15,119
------------ ------------- ------------ ------------
Total liabilities 3,533,634 3,499,613 34,021 35,792
------------ ------------- ------------ ------------
Net assets 49,670 - 49,670 44,618
------------ ------------- ------------ ------------
Equity attributable
to owners of the parent
Issued capital 269 - 269 269
Share premium 33,451 - 33,451 33,451
Equity share based payments 1,357 - 1,357 731
Treasury shares (716) - (716) (250)
Retained earnings 15,295 - 15,295 10,403
------------ ------------- ------------ ------------
49,656 - 49,656 44,604
Non-controlling interest 14 - 14 14
Total equity 49,670 - 49,670 44,618
------------ ------------- ------------ ------------
16 Unaudited IFRS Consolidated Statement of Cash Flows as at 31
December 2018 split between insurance policy holders and the
Group's shareholders
2018 2018 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Group Total Policyholder Shareholder Shareholder
Cash flows from operating
activities
Profit before tax 10,121 - 10,121 5,857
Adjustments for:
Depreciation 596 - 596 570
Amortisation and impairments 1,268 - 1,268 3,126
Interest expense 467 - 467 554
Share based payment expense 626 - 626 492
Fair value losses on financial
investments 116,517 116,517 - -
Additions of financial
investments (490,830) (490,830) - -
Disposals of financial
investments 593,549 593,549 - -
Fair value gains on investment
properties (47,275) (47,275) - -
Decrease in liability
for investment contracts (156,498) (156,498) - -
Changes in working capital:
Decrease/(increase) in
trade and other receivables 247 1,019 (772) (122)
Increase in trade and
other payables 992 159 833 2,629
Taxes paid (1,375) - (1,375) (999)
Net cash flows from operating
activities 28,405 16,641 11,764 12,107
------------- -------------- ------------- -------------
Cash flows from investing
activities
Purchase of intangible
assets (785) - (785) (277)
Purchase of property, plant
& equipment (202,089) (201,425) (664) (645)
Investment in employee
benefit trust (466) - (466) (250)
Receipts from sale of
property, plant & equipment 180,546 180,546 - -
Net cash flows from acquisitions (421) - (421) (669)
Net cash flows from investing
activities (23,215) (20,879) (2,336) (1,841)
------------- -------------- ------------- -------------
Cash flows from financing
activities
Equity dividends paid (3,628) - (3,628) (2,413)
Net proceeds from issue
of ordinary shares - - - 27
Net decrease in borrowings (7,538) (4,380) (3,158) (3,158)
Interest paid (297) - (297) (504)
Net cash flows from financing
activities (11,463) (4,380) (7,083) (6,048)
------------- -------------- ------------- -------------
Net (decrease)/increase
in cash and cash equivalents (6,273) (8,618) 2,345 4,218
------------- -------------- ------------- -------------
Cash and cash equivalents
at the beginning of the
year 437,849 412,176 25,673 21,455
============= ============== ============= =============
Cash and cash equivalents
at the end of the year 431,576 403,558 28,018 25,673
============= ============== ============= =============
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
FR SFUEEUFUSELD
(END) Dow Jones Newswires
March 20, 2019 03:01 ET (07:01 GMT)
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