TIDMFKE
RNS Number : 1425G
Fiske PLC
28 February 2018
28 February 2018
Fiske Plc
('Fiske' or 'the Company')
Interim Results
Fiske Plc (the 'Company') announces its interim results for the
six months ended 30 November 2017. In accordance with rule 26 of
the AIM Rules for Companies this information is also available,
under the Investors section, at the Company's website,
http://www.fiskeplc.com .
For further information please contact:
-- Salmaan Khawaja/Richard Tonthat, Grant Thornton UK LLP
(Nominated Adviser)
(tel: 020 7383 5100)
-- Gerard Luchini, Fiske Plc - Compliance Officer
(tel: 020 7448 4700)
Chairman's Statement
Trading
We are pleased to report a further improvement in profitability
for the six months to 30 November 2017. Our pre-tax profit was
GBP190,000 which compares to a profit of GBP19,000 in the six
months to 30 November 2016.
The highlight of the first half was the completion of the
acquisition of Fieldings Investment Management ("Fieldings").
Accordingly the group results to 30 November 2017 include a
contribution of some three and a half months from Fieldings. In
addition Fiske incurred over GBP100,000 of transaction related
costs which under IFRS fall to be expensed rather than capitalised
as part the cost of the investment in a subsidiary. Nevertheless
Fieldings has made an important contribution to the group's results
for the first half. We are pleased to welcome the Fieldings staff
into our expanded team and as we migrate more of the Fieldings'
clients onto our platform we expect further financial benefits.
On a like for like basis, excluding Fieldings, revenues
increased by some 4% whilst Fiske, as the parent company, operated
profitably in the period. Over time we will be integrating
Fieldings' operations into Fiske's and the parent/subsidiary
distinction will have less meaning. In parallel to Fieldings, we
continue to attract new investment managers and their clients to
join the company.
This time last year we received the annual dividend from our
holding in Euroclear. In 2017 the dividend was paid in May which
was slightly earlier than normal. Accordingly we have not received
any dividend income from Euroclear in the first half of 2018.
Overall, our combined revenues for the first half were
GBP2,074,000 which is an increase of 33% over the comparable period
in 2016. Our operating expenses rose by 12% to GBP1,769,000
resulting in an operating profit of GBP190,000. This compares
favourably to an operating loss of GBP109,000 in the six months to
30 November 2016. Our operating profit margin for the first half of
2018 was 9.2%.
A dominant theme of the last calendar year and in particular the
six months to 30 November 2017 has been the considerable time and
effort devoted by the company to the implementation of sweeping new
regulations known as MiFID II. In order to ensure that our systems
were updated and our personnel appropriately trained we have
incurred significant costs to the business. Whilst it is reasonable
to expect most of these expenses to be non-recurring there are
parts of MiFID II that continue to require software development and
staff training during 2018. In addition the implementation of the
General Data Protection Regulation (GDPR) will become effective on
25 May 2018 and will require some additional costs to be
incurred.
Share Capital
In August the Company raised an additional GBP1,292,500 of share
capital to finance the acquisition of Fieldings. We were encouraged
by the ready support of investors for this transaction.
Balance Sheet
We maintain our strong financial position with our cash balance
now standing at GBP2,252,000.
In relation to our holding in Euroclear it was with considerable
interest that we noted the recent sale of a 4.7% holding in
Euroclear by Royal Bank of Scotland to Intercontinental Exchange
Holdings (ICE) the owner of The New York Stock Exchange. This sale
was completed at a price of EUR1,853 per share which is
substantially above the highest price paid by Euroclear of EUR774
per share in their most recent buyback in April 2017. As we
currently value our holding in Euroclear at EUR774 per share this
transaction gives us increased confidence in the carrying value,
being EUR2.464m, of our shares in Euroclear.
Dividend
The Board has resolved not to pay an interim dividend for the
six month period to 30 November 2017.
Markets
The scope for policy error from central banks in the US, UK,
Europe, Japan and China is growing steadily as they all begin to
tighten monetary conditions. The Federal Reserve is most advanced
in this tightening cycle though it is only in the last few months
that the reductions in their balance sheet are starting to have an
impact.
In my statement to you with our full year results to 31 May 2017
which was dated 31 August 2017 I referred to the Dow Jones Index
breaking through the important psychological level of 20,000 points
in February 2017. Since that date irrational exuberance has driven
that Index to a peak of 26,616 points on the 26 January 2018, a
little over one month ago.
Apart from the actual levels what is surprising is this strong
market has occurred at the same time as the Federal Reserve was
warning of further imminent rate rises of a scale greater than
previously indicated. There has been a clear adjustment in the bond
markets especially in the US where the 10 year Treasury bond is now
trading at 2.84% whilst both personal leverage and margin trading
in the markets is at record levels.
Irrational exuberance first became accepted terminology for a
market losing touch with reality in 1997 when Greenspan was
Chairman of the Fed. He wisely warned market participants about
their behaviour and then proceeded to totally ignore his own
warnings. In due course starting some two and half years later in
the second quarter of 2000 a major market correction began that
drove the S&P 500 Index down 47% over the ensuing two and a
half years.
Strong stock markets currently imply that investors are more
focused on the positive growth indicators than on risk. Indeed the
recent 10% 'tantrum' in markets is a reminder of the many risks
inherent in markets. Small improvements in global productivity and
the continuing low level of bond yields point to more modest
expectations for growth in the future.
However history tells us that trying to time markets is fraught
with difficulty. Rather taking a long term view and investing with
an active investment strategy is the best way in which we can serve
our clients. Accordingly we are investing steadily whilst
maintaining a cautious view at present market levels and consider
an element of fixed interest and/or cash a prudent insurance
policy.
Outlook
The second half of our financial year has continued in a similar
vein to the first. December was quiet as is normally the case
whilst business has improved in January. We now anticipate a busy
period in the run up to the end of the tax year.
Clive F Harrison
Chairman
27 February 2018
Independent Review Report to Fiske plc
We have been engaged by the Group to review the condensed set of
financial statements in the half-yearly financial report for the
six months ended 30 November 2017 which comprise the consolidated
statement of comprehensive income, the consolidated statement of
changes in equity, the consolidated statement of financial
position, the consolidated cash flow statement and the related
notes 1 to 4. We have read the other information contained in the
half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the Group in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Group those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Group, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The
condensed set of financial statements included in this half-yearly
financial report have been prepared in accordance with the
accounting policies the Group intends to use in preparing its next
annual financial statements.
Our responsibility
Our responsibility is to express to the Group a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
November 2017 is not prepared, in all material respects, in
accordance with accounting policies the Group intends to use in
preparing its next annual financial statements and the AIM Rules of
the London Stock Exchange.
Deloitte LLP
Statutory Auditor
London
United Kingdom
27 February 2017
Consolidated Statement of Comprehensive Income
for the six months ended 30 November 2017
Six months Six months Year
ended ended ended
30 November 30 November 31 May
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------------ ------------ --------
Fee and commission
income 2,074 1,554 3,204
Fee and commission
expenses (186) (193) (476)
--------------------------- ------------ ------------ --------
Net fee and commission
income 1,888 1,361 2,728
Other income 75 49 99
--------------------------- ------------ ------------ --------
Total revenue 1,963 1,410 2,827
Profit on disposal - - -
of available-for-sale
investments
Profit/(Loss) on
investments held
for trading (4) 57 66
Operating expenses (1,769) (1,576) (3,039)
Operating profit/
(loss) 190 (109) (146)
Investment revenue - 92 168
Finance income - 36 10
Finance costs - - (1)
Profit/(Loss) on
ordinary activities
before taxation 190 19 31
Taxation - - -
-------------------------- ------------ ------------ --------
Profit/(Loss) on
ordinary activities
after taxation 190 19 31
--------------------------- ------------ ------------ --------
Other comprehensive
income/(expense)
Movement in unrealised
appreciation of
investments 25 223 244
Deferred tax on
movement in unrealised
appreciation of
investments 12 (11) (25)
--------------------------- ------------ ------------ --------
Net other comprehensive
(expense)/ income 37 212 219
=========================== ============ ============ ========
Total comprehensive
income / (loss)
for the period/year
attributable to
equity shareholders 227 231 250
=========================== ============ ============ ========
Earnings per ordinary
share (pence), excluding
other comprehensive
income
Basic 1.9p 0.2p 0.4p
Diluted 1.8p 0.2p 0.4p
All results are from continuing operations and are attributable
to equity shareholders of the parent company.
Consolidated Statement of Changes in Equity
Share Share Revaluation Retained Total
Capital Premium Reserve Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- -------- ----------- --------- -------
Balance at 1
December 2016 2,115 1,222 1,452 (1,321) 3,468
Profit on ordinary
activities after
taxation - - - 12 12
Other comprehensive
income - - 7 - 7
-------------------- -------- -------- ----------- --------- -------
Total comprehensive
income/(loss)
for period - - 7 12 19
-------------------- -------- -------- ----------- --------- -------
Dividends paid - - - - -
-------------------- -------- -------- ----------- --------- -------
Balance at 31
May 2017 2,115 1,222 1,459 (1,309) 3,487
-------------------- -------- -------- ----------- --------- -------
Profit on ordinary
activities after
taxation - - - 190 190
Other comprehensive
income - - 37 - 37
-------------------- -------- -------- ----------- --------- -------
Total comprehensive
income for period - - 37 190 227
-------------------- -------- -------- ----------- --------- -------
Dividends paid - - - - -
-------------------- -------- -------- ----------- --------- -------
Issue of ordinary
share capital 775 735 - - 1,510
-------------------- -------- -------- ----------- --------- -------
Balance at 30
November 2017 2,890 1,957 1,496 (1,119) 5,224
==================== ======== ======== =========== ========= =======
Consolidated Statement of Financial Position
30 November 2017
As at As at As at
30 November 30 November 31 May
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------------ ------------ --------
Non-current assets
Goodwill 1,524 395 395
Other intangible
assets 146 162 144
Property, plant
and equipment 20 14 10
Available-for-sale
investments 2,468 2,424 2,444
Total non-current
assets 4,158 2,995 2,993
--------------------------- ------------ ------------ --------
Current assets
Trade and other
receivables 2,508 2,347 2,315
Investments held
for trading 8 11 19
Cash and cash equivalents 2,252 863 1,035
--------------------------- ------------ ------------ --------
Total current assets 4,768 3,221 3,369
--------------------------- ------------ ------------ --------
Current liabilities
Trade and other
payables 3,418 2,537 2,650
Current tax liabilities 71 - -
Total current liabilities 3,489 2,537 2,650
--------------------------- ------------ ------------ --------
Net current assets 1,279 684 719
--------------------------- ------------ ------------ --------
Non-current liabilities
Deferred tax liabilities 213 211 225
--------------------------- ------------ ------------ --------
Total non-current
liabilities 213 211 225
--------------------------- ------------ ------------ --------
Net assets 5,224 3,468 3,487
=========================== ============ ============ ========
Equity
Share capital 2,890 2,115 2,115
Share premium 1,957 1,222 1,222
Revaluation reserve 1,496 1,452 1,459
Retained earnings (1,119) (1,321) (1,309)
--------------------------- ------------ ------------ --------
Shareholders' equity 5,224 3,468 3,487
=========================== ============ ============ ========
Consolidated Cash Flow Statement
For the six months ended 30 November 2017
Six months Six months Year
ended ended ended
30 November 30 November 31 May
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------ --------
Operating activities 190 (109) (146)
(Profit) on disposal - - -
of available-for-sale
investments
Depreciation of tangible
and intangible assets 32 24 50
Decrease/(increase)
in investments held
for trading 11 5 (3)
Remove opening receivables
of acquisition (568) - -
Remove opening payables
of acquisition 475 - -
Decrease/(increase)
in receivables (252) 450 482
Increase/(decrease)
in payables 768 17 130
-------------------------------- ------------ ------------ --------
Cash generated from
/ (used in) operations 656 387 513
Tax recovered 71 38 38
-------------------------------- ------------ ------------ --------
Net cash (used in)/generated
from operating activities 727 425 551
-------------------------------- ------------ ------------ --------
Investing activities
Interest received 0 36 10
Investment income
received 0 92 168
Interest paid (1) - (2)
Proceeds on disposal - - -
of available-for-sale
investments
Purchases of available-for-sale - - -
investments
Purchases of property,
plant and equipment (10) (5) (7)
Purchases of other
intangible assets (12) (90) (90)
Payments to acquire
subsidiary undertaking (3,357) - -
Cash acquired with
subsidiary undertaking 2,320 - -
Net cash (used in)/
generated from investing
activities (1,060) 33 79
-------------------------------- ------------ ------------ --------
Financing activities
Proceeds from issue
of ordinary share
capital 1,550
Dividends paid - - -
-------------------------------- ------------ ------------ --------
Net cash used in
financing activities 1,550 - -
-------------------------------- ------------ ------------ --------
Net increase / (decrease)
in cash and cash
equivalents 1,217 458 630
Cash and cash equivalents
at beginning of period 1,035 405 405
Cash and cash equivalents
at end of period/year 2,252 863 1,035
-------------------------------- ------------ ------------ --------
Notes to the Interim Financial Statements
1. Basis of preparation
The financial information contained in this half-yearly
financial report does not constitute statutory accounts as defined
in section 434 of the Companies Act 2006.
The figures and financial information for the period ended 31
May 2017 are extracted from the latest published audited financial
statements of the Group and do not constitute the statutory
financial statements for that period. The audited financial
statements for the period ended 31 May 2017 have been filed with
the Registrar of Companies. The report of the independent auditors
on those financial statements contained no qualification or
statement under section 498(2) or section 498(3) of the Companies
Act 2006.
The condensed set of financial statements has been prepared
using accounting policies consistent with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The
financial information has been prepared under the historical cost
convention, except for the revaluation of certain financial
instruments. The same accounting policies, presentation and methods
of computation are followed in these condensed set of financial
statements as applied in the Group's latest, and intends to use in
preparing its next, annual audited financial statements. While the
financial figures included in this half-yearly report have been
computed in accordance with IFRSs applicable to interim periods,
this half-yearly report does not contain sufficient information to
constitute an interim financial report as that term is defined in
IAS 34.
Under IAS 27 these financial statements are prepared on a
consolidated basis where the Group consists of Fiske plc, the
parent, with the following subsidiaries in which it owns 100% of
the voting rights:
VOR Financial Strategy Limited
Ionian Group Limited
Fiske Nominees Limited
Fieldings Investment Management Limited
The directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing this half-yearly financial
report.
2. Taxation
The tax charge for the six months to 30 November 2017 reflects
all the necessary provisions for current tax, taking into account
the availability of losses brought forward, and movements in
deferred tax. In arriving at the effective tax rate account has
been taken of the change in the rate of tax charged and the
disallowance of the cost of share-based payments charged to the
consolidated statement of comprehensive income.
3. Dividends paid
Dividends paid in the first period of 2018 GBPnil (2017 -
GBPnil).
4. Business Combinations
On 17 August 2017, the Group acquired 100% of the share capital
of Fieldings Investment Management Ltd ("Fieldings"). As announced
on 27 July 2017, the initial consideration was GBP2.3 million
subject to adjustments in relation to the net assets and assets
under management of Fieldings at 31 July 2017. The initial
consideration was adjusted accordingly to GBP2,575,230, with the
deferred consideration remaining as GBP784,267. As a result of the
acquisition, the enlarged Group is expected to benefit from a
larger and wider client base with the prospect of the double
benefit of incremental revenue and cost savings.
A provisional assessment of the goodwill arising from the
acquisition of the assets and liabilities of Fieldings Investment
Management has been carried out in arriving at the values shown in
the Consolidated Statement of Financial Position. Further
evaluation will be completed as part of the preparation of the
consolidated accounts for the year ended 31 May 2018.
Acquisition-related costs of GBP101,588 have been charged to
operating expenses in the Consolidated Statement of Comprehensive
Income for the six months ended 30 November 2017. The fair value of
the 515,000 Ordinary Shares (issued as initial consideration) paid
for Fieldings Investment Management Ltd (GBP257,500) was based on
the share price of 50p.
This information is provided by RNS
The company news service from the London Stock Exchange
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