TIDMGHE
RNS Number : 3862L
Gresham House PLC
10 September 2021
Gresham House plc
("Gresham House," "the Group" or "the Company")
Interim results for the six months ended 30 June 2021
Strong AUM growth driven by international expansion and demand
for ESG-focused strategies
Gresham House plc, (AIM: GHE) the specialist alternative asset
manager, reports strong growth in assets under management (AUM) in
the first half of the year, driven by international expansion and
continued demand for its Environment, Social and Governance (ESG)
focused investment strategies, underpinned by organic and
acquisition-based growth.
HIGHLIGHTS
As at As at Change
30 Jun 2021 31 Dec 2020
(GBPm) (GBPm) (%)
-------------------------------- ---------------- ---------------- ---------
Assets under management
(AUM) 4,722 3,970 +19
Cash and liquid assets(1) 45.0 45.1 -
Six months to Six months to
30 Jun 2021 30 Jun 2020
(GBPm) (GBPm) (%)
-------------------------------- ---------------- ---------------- ---------
Total net core income 23.0 17.5 +31
Adjusted operating profit(2) 6.9 5.2 +32
Total comprehensive net
profit/(loss) 5.2 (2.2) n/a
(1) Cash and liquid assets includes cash and investments in
tangible and realisable assets
(2) Adjusted operating profit is defined as the net trading
profit of the Group after charging interest but before
depreciation, amortisation, share-based payments relating to
acquisitions, profits and losses on disposal of tangible fixed
assets, net performance fees, net development gains and exceptional
items
FINANCIAL HIGHLIGHTS
-- AUM up 19% in H1 to GBP4.7 billion
-- Organic growth of 12% (GBP453 million)
-- Net core income up 31% to GBP23.0 million (H1 2020: GBP17.5 million)
-- Adjusted operating profit up 32% to GBP6.9 million (H1 2020: GBP5.2 million)
-- Utilising balance sheet to grow the asset management business
with cash and liquid assets at 30 June 2021 of GBP45.0 million (31
December 2020: GBP45.1 million)
-- Strong post period AUM growth with fund inflows of over
GBP350 million, and the announced acquisition of the Venture
Capital Trust business of Mobeus Equity Partners LLP (Mobeus VCT
business) increasing pro forma AUM to GBP5.4 billion
-- Delivery against GH25 financial and strategic targets ahead of management expectations
STRATEGIC HIGHLIGHTS
-- Achieving international expansion through the completion of
the acquisition of Appian Asset Management in Ireland and the
expected completion of a further international forestry mandate in
Australia, subject to regulatory approval
-- Recognised for leadership in sustainable investment through fund performance and award wins
-- Increased client diversification and AUM through additional
organic fundraises post period end of over GBP350 million
-- Acquisition of the Mobeus VCT business brings additional AUM
of GBP369 million ( see today's separate RNS announcement )
SUSTAINABLE INVESTMENT HIGHLIGHTS
-- Gresham House Asset Management Limited has met the FRC's
expected standard of reporting in 2021 and been listed as a
signatory to the 2020 UK Stewardship Code
-- Sustainability Committee established by the Board which will be chaired by Gareth Davis
-- Commenced a large project this year to better understand our
climate impact as a business and as investors, ahead of planned
reporting against the TCFD recommendations in 2022
Commenting on the results, Tony Dalwood, Chief Executive Officer
said:
"Our first half performance has been very strong, with robust
AUM growth driven by organic progress and international expansion.
In addition, the acquisition of the Mobeus VCT business, announced
today, will create further shareholder value.
"We continue to see strong demand for our ESG-focused investment
strategies, underpinned by our compelling investment performance. A
number of our sustainability-focused funds have held successful
closes since the half-year end and the acquisition of the Mobeus
VCT business also brings significant scale to create a leading
player in the VCT segment.
"The Group has built an effective platform to grow AUM further
by providing outstanding products in attractive asset classes. We
are extremely well positioned for further growth in second half of
2021 and beyond."
Ends
Gresham House will be hosting a Capital Markets Day on Thursday
4 November 2021 - details to be announced in due course.
This announcement contains inside information for the purposes
of the Market Abuse Regulation (596/2014/EU)("MAR")
For more information contact:
Gresham House plc
Tony Dalwood, Chief Executive Officer
Kevin Acton, Chief Financial Officer +44 (0)20 3837 6270
Houston - PR advisors
Alexander Clelland gh@houston.co.uk
Kay Larsen +44 (0)20 4529 0549
Canaccord Genuity Limited - Nominated Adviser and Joint Broker
Bobbie Hilliam
Georgina McCooke +44 (0)20 7523 8000
Jefferies International Limited - Joint Broker and Financial Adviser
Paul Nicholls
Max Jones +44 (0)20 7029 8000
About Gresham House
Gresham House is a specialist alternative asset management
group, dedicated to sustainable investments across a range of
strategies, with expertise across forestry, housing,
infrastructure, renewable energy and battery storage, public and
private equity.
Our origins stretch back to 1857, while our focus is on the
future and the long term. Quoted on the London Stock Exchange
(GHE:LN) we actively manage c.GBP4.7 billion of assets (as at 30
June 2021) on behalf of institutions, family offices, charities and
endowments, private individuals and their advisers. We act
responsibly within a culture of empowerment that encourages
individual flair and entrepreneurial thinking.
As a signatory to the UN-supported Principles for Responsible
Investment (PRI), our vision is to always make a positive social or
environmental impact, while delivering on our commitments to
shareholders, employees and investors.
www.greshamhouse.com
CHAIRMAN'S STATEMENT
It has been very pleasing to see the ongoing momentum of Gresham
House in the first half of 2021, with strong progress against the
financial and strategic targets of the five-year plan, 'GH25'.
Growth in AUM has proceeded apace towards the GH25 target of GBP6.0
billion. AUM was up 19% to GBP4.7 billion in the half through
organic and acquisition activity, reflecting our commitment to
creating shareholder value through growth and performance on
various metrics.
Moreover, our plan to establish a platform for international
growth is now evident in both Europe and Asia Pacific.
We were pleased to complete the acquisition of Appian Asset
Management (Appian), now Gresham House Ireland, on 29 June
following regulatory approval from the Central Bank of Ireland,
cementing the Group's international expansion plans with the
addition of a regulated EU-based platform post-Brexit, alongside
our intention to scale our activities in Ireland.
In addition, post period end, we were appointed as asset manager
for a 24,800-hectare Australian forestry investment, Green Triangle
Forest Products (GTFP), for AXA IM Alts, expanding our presence
outside Europe and growing our relationship with AXA IM Alts
following our appointment to manage a 4,074-hectare portfolio of
forests in Ireland in 2019. This is pending regulatory approval,
which we hope to provide an update on by the end of the year.
Our leadership in sustainable investing continues to be
underpinned by our broad product range and growth across all areas,
from renewable energy and sustainable infrastructure to housing and
forestry. We are increasingly recognised across the industry as
being at the forefront of sustainable investment, investing in
people and areas of opportunity which are evolving rapidly, whilst
demonstrating innovation and resilience in performance across our
product set.
Climate change is at the top of most investors' agendas and we
have worked with a number of clients to meet their increasing
climate reporting requirements. In addition, we provide our clients
with a range of solutions that take advantage of climate related
opportunities and positively influence environmental outcomes.
The Taskforce on Climate-Related Financial Disclosures (TCFD)
has become the widely recognised standard for climate reporting,
and we commenced a large project this year to better understand our
climate impact as a business and as investors. We are planning to
report against the TCFD recommendations in 2022 and will be
starting work with an external expert to provide our first climate
footprint as well as forward looking climate analysis.
Our investment expertise has been recognised in awards,
including Alternatives Manager of the Year from Pensions Age, and
more widely across our business with our UK Multi Cap Income Fund
winning awards from both Investment Week and Citywire. We are proud
to be finalists for many awards due to be judged in the second half
of 2021 and will be delighted to add to this roster.
Clearly clients are the focus for a long term, sustainable,
profitable and growing business like Gresham House, and as such, we
are pleased that the investment performance of our funds remains
strong and continues to attract new investors.
Activity in the period
The robust rise in AUM growth in the period reflects this strong
performance at a fund and strategic level across the business, as
well as net inflows and the completion of the Appian acquisition
(EUR396 million at 30 June 2021).
We expect this growth to continue with the fund launches
highlighted in the 2020 annual report which are on track. This
includes the Gresham House Forest Growth & Sustainability LP
securing GBP25 million by the end of the period and Gresham House
Residential Secure Income LP (ReSI LP) achieving commitments of
GBP70 million, with GBP16 million deployed by the end of the
period.
Our commitment to investing in people to support growth remains,
with senior hires across the business, including James Lindsay as
Head of Institutional Business to complement Heather Fleming and
our existing senior expertise in this area.
Results
I am also pleased to report continuing progress towards the
financial goals of GH25, with Net Core Income up 31% in the first
half of 2021 to GBP23.0 million (H1 2020: GBP17.5 million), and the
Adjusted Operating Profit up 32% in the same period to GBP6.9
million (H1 2020: GBP5.2 million).
We continue to invest in the business, with an operating margin
of 30% in the first half of 2021 (H1 2020: 30%), as we focus on
growing the business in areas of high-growth potential and where we
have sector/technical expertise to outperform versus the
market.
Board
As highlighted previously, Richard Chadwick will be standing
down as Audit Committee Chairman and Non-Executive Director at the
conclusion of the 2022 AGM.
We have completed the recruitment process for Richard's
replacement and I am pleased to welcome Richard's successor, Sarah
Ing as the Audit Committee Chair Designate, taking on full
responsibility on Richard's retirement at the conclusion of the
2022 AGM. Sarah will act as Richard's alternate from 15 September
2021 until Richard's retirement.
Sarah is a chartered accountant, with listed company experience
as a Non-Executive Director on XPS Pensions Group plc and CMC
Markets plc boards. Richard will handover through the 2021 year-end
process to ensure a smooth transition. I look forward to working
with Sarah as we continue the Company's growth story.
Outlook
Assets with a focus on ESG factors are on track to exceed $53
trillion by 2025, representing more than a third of the $140.5
trillion in projected total global assets under management,
according to Bloomberg.[1]
Gresham House is well positioned to take advantage of this
growth as many of our investment solutions contribute positively to
environmental and social outcomes, whilst offering investors strong
investment returns.
To that end, I am pleased to note that Gresham House Energy
Storage Fund plc (GRID), Gresham House Forest Growth &
Sustainability LP, and BSIF II LP, and ReSI LP have all held
successful closes since 30 June, adding over GBP350 million to AUM
and setting the Group in great stead for the second half of 2021
and beyond.
In addition, the acquisition of the Mobeus VCT business and the
associated equity raise will boost our AUM and significantly
enhance our profitability, marking substantial progress towards
achieving the targets laid out in our GH25 five-year plan. Pro
forma AUM increases to GBP5.4 billion after adding post period AUM
raised of over GBP350 million and GBP369 million from the Mobeus
VCT business acquisition.
As the VCT segment continues to consolidate, this latest
acquisition provides substantial scale to compete effectively amid
rising demand for early-stage growth capital from a range of
emerging disruptive businesses. The benefits to both the Baronsmead
and Mobeus VCT shareholders are clear from the increased resources
and platform that Gresham House can provide, including ESG
leadership.
We approach the second half of 2021 with real optimism having
laid down a solid platform to grow AUM we are ahead of management
expectations for 2021, and remain on track to deliver GH25 and
create further shareholder value.
Anthony Townsend
Chairman
9 September 2021
CHIEF EXECUTIVE'S REPORT
It has been 18 months since we set out our five-year strategy
'GH25' to target long-term shareholder value and I am delighted to
say we have been making strong progress against all our strategic
and financial objectives despite the challenges presented by the
global macro environment as a result of the pandemic.
We are increasingly recognised as leaders in ESG and sustainable
investing: the vast majority of our investment products are
outperforming their benchmarks; we are building significant market
share in specialist products; building on our international
presence and increasing client diversification and depth. All of
the above are enhancing our brand value and reputation and this has
been reflected in various industry awards alongside new investors
approaching us to become clients or work on a partnership
basis.
Whilst the environment has been challenging, with the UK in
lockdown for much of the first half of this year, we have seized
the opportunities across the business to improve our position in a
number of key areas.
Our culture is strong and contributes significantly to our
success. In our employee survey, 94% of respondents would recommend
Gresham House as a place to work. The Management Committee view
this as significant and important for the long-term growth
ambitions of the Group. We want people to enjoy their work and we
know this is a key ingredient in delivering for our clients.
We will continue to invest in growth areas, recruiting
high-calibre talent, while remaining focused on maintaining and
improving operating margins in line with the target in GH25.
Achieving AUM growth of 19%, taking us to GBP4.7 billion at the
half-way point of the year, is testament to the success of our
strategy to grow organically supported by acquisition, and we are
pleased to have already made such good progress against our target
of GBP6.0 billion by 2025.
We welcome our new colleagues in Ireland, where the Appian
acquisition builds on our existing presence managing forestry
assets for AXA IM Alts, and we foresee further growth under the new
name Gresham House Ireland, both in Ireland and across the EU from
this important platform.
We committed significant time to launching new funds and to
fundraising in the first half of 2021, which means we approach the
rest of the year with confidence.
Progress on 2021 priorities - Financial
Our significant AUM growth to date in 2021 and a series of
successful fundraises across our product set reflect the sustained
interest in ESG investing and the breadth of our offering.
In Housing, ReSI LP, a closed-ended limited partnership aiming
to deliver secure income returns by investing in portfolios of
shared ownership and rental homes, had a successful first close
with commitments of GBP70 million and we expect this vehicle to
scale over time. We are delighted that ReSI Homes, the registered
provider within ReSI LP, has been selected as a strategic partner
of the Greater London Authority to deliver affordable housing over
the next five years. Nationally ReSI Homes is one of only three
institutional investors to have been selected.
We continue to develop utility scale battery storage projects to
support the growth of Gresham House Energy Storage Fund plc (GRID)
and have GBP11 million invested in projects at the end of the
period and also completed the sale of 30MW to GRID in H1, deploying
balance sheet capital to support growth.
AUM growth has continued since 30 June 2021, with new fund
inflows of over GBP350 million. A further GBP100 million was raised
for GRID in early July and the launch of the Gresham House Forest
Growth & Sustainability LP, with a first close in August, added
a further GBP102 million to close at GBP127 million. In addition,
in sustainable infrastructure - BSIF II (British Sustainable
Infrastructure Fund II), reached a first close in August of GBP100
million. We also achieved a follow-on close for ReSI LP in August
for a further GBP50 million.
We expect this growth to continue through the second half of the
year, with further international expansion in Asia Pacific as we
pursue Carbon Credit opportunities in forestry and the anticipated
close of our new Australian forestry mandate with AXA IM Alts by
the end of 2021.
In Public Equity, we have seen continued inflows into our UK
Micro Cap and UK Multi Cap Income funds managed by the
award-winning Ken Wotton, Brendan Gulston and team. In line with
the specialist nature of Gresham House products, these funds focus
on small, mid-cap companies and micro-cap companies using a
fundamentals-based approach and a private equity philosophy,
designed to deliver attractive returns with a low correlation to
their peer group.
Our disciplined process leverages the fundamentals-driven
attributes of private equity, and our highly-resourced team has
access to specialist expertise via an extensive network derived
from their private equity heritage, alongside investment committees
with broad experience and successful track records. This is evident
in the growth in NAVs at Strategic Equity Capital (SEC) and Gresham
House Strategic (GHS), which grew by 24% and 22% respectively in
the first half. Importantly, the long-term track records of the
teams managing these investment funds are clearly very strong and
we are proud of the platform Gresham House provides for these teams
to flourish and add value to portfolio investments.
There was also successful fundraising in Private Equity, with a
successful close for the last fundraising round by the Baronsmead
VCTs, raising a total of GBP65 million, the highest amount raised
by these two VCTs to date (GBP32 million in 2021).
We remain focused on our other financial targets and have
achieved an operating profit margin of 30% in the period, and
alongside this an operating profit of GBP6.9 million. We have
continued to invest in the business for the long term, while
focused on productivity and efficiency throughout and the timing of
AUM delivery in 2021 will provide greater benefit to the second
half of 2021 and profitability in future years.
As part of GH25 we target a ROIC of 15%+ and we have continued
to use our balance sheet to invest, with the ultimate goal of
growing AUM while delivering 15%+ returns.
Progress on 2021 priorities - Strategic
In line with our ambition for Gresham House to be a leader in
sustainable investment, including ESG, we conducted a corporate ESG
gap analysis to identify where there are opportunities to develop
our business practices to reflect our ambition for leadership more
closely. From this analysis, we have identified several priorities
for the business:
1. Evolve our management and measurement of climate related
risks and opportunities at a corporate and investment level
2. Further enhance Diversity and Inclusion across the business
3. Evaluate sustainability factors across material supply chains
that our investments are a part of
To support the development of these priorities, we have further
invested in our Sustainable Investment Team by increasing the team
from one to three individuals. This will significantly bolster our
capacity to enhance our sustainable investment processes across all
divisions as well as at a corporate level.
In addition, the Board have established a Sustainability
Committee to provide oversight and accountability for our
sustainability related practices across the business. This
Committee will work closely with our Managing Director, Rupert
Robinson and Director of Sustainable Investment, Rebecca
Craddock-Taylor to progress the various priorities we have set
ourselves in relation to becoming a leader in this area. Further
details on our progress and plans can be found in the Sustainable
Investment overview.
Our plans for international expansion are advancing, and the
completion of our acquisition of Appian Asset Management, now
Gresham House Ireland, and the Australian forestry mandate, subject
to regulatory approval, are enabling us to operate in carefully
identified areas of the world where we see a business and cultural
fit.
We continue to maintain market share in specialist areas and
have seen further growth in our Forestry and New Energy businesses,
and we expect to grow in other areas with the close of additional
fundraises over the course of the year.
We are working to increase our client diversification and depth
and have had success with fund launches attracting new
institutional and long-term clients. We have also further invested
in our distribution team.
People
The Covid-19 pandemic has been a test of the culture of
organisations across the world. I am proud to say that my
colleagues across Gresham House responded in exemplary fashion to
the challenges it presented and our culture has remained strong
throughout these difficult times, including the periods of lockdown
we experienced earlier this year.
We have followed government guidelines closely to maintain the
safety of our teams, enabling our people to work remotely and
managing logistics around office work effectively. Following
consultation with the teams, our return to the office more
permanently will continue to focus on the wellbeing of our
employees and we will be adopting a hybrid working model,
recognising the benefits of this way of working for both the
Company and our people. We will be moving into a new office in
London, which has been designed to accommodate hybrid working
alongside improved facilities to support sustainability and the
growth of the business.
We continue to invest in talent across the business, including
notable senior hires in James Lindsay as Head of Institutional
Business, and Fernando Casas Garcia as Head of Operations for New
Energy, where increasing scale in areas such as battery storage has
driven the need for greater expertise in this area. This is also
the case with our Sustainable Investment team - it is an important
and growing part of the business and we are committed to working
with the highest quality talent.
Delivering top-quality service is our priority and we will
continue to invest in teams across the business to ensure this is
the case.
Outlook
We have enjoyed an encouraging H1 2021 and the outlook for the
rest of the year and beyond indicates a continuation of this
positive momentum. Whilst macroeconomic challenges are clear, the
structural growth in our areas of investment remains evident with
increasing asset allocation to real assets and specialist or
strategic equity.
In the first half, we have made good progress in many areas
against our GH25 objectives and our business has the opportunity to
grow further across the board, with our client base broadening and
deepening, and as we venture further into international
geographies.
I am also pleased to welcome the Mobeus VCT business to the
Gresham House family following the announced acquisition and equity
fund raise today. Together this adds scale to our expertise in
venture investing, while adding scale and enhancing earnings for
shareholders.
With Gresham House's positive reputation growing across the
spectrum of investment performance, product innovation, a focus on
appropriate governance, social benefits and environmental
awareness, we have completed the groundwork for a number of our
planned funds. We have held first closes in H1 and have a strong
pipeline of new investors lined up for closes in H2 having already
closed funds with AUM of over GBP350 million since the end of June,
bringing pro forma AUM to GBP5.1 billion. After the acquisition of
the Mobeus VCT business, pro forma AUM increases to GBP5.4 billion.
We are therefore confident that we will outperform the current
market expectations for the end of 2021.
Tony Dalwood
Chief Executive
9 September 2021
SUSTAINABILITY AT GRESHAM HOUSE
Progress on our corporate sustainability plan
Environmental awareness, understanding and action
In the past few months, we have been working to appoint an
external expert to help us measure our current carbon emissions
across our operations and our investments. The purpose of this
exercise will be to understand our baseline, so we can then set
targets and actions to reduce the impact we have on the environment
as a business and as investors.
Diversity and Inclusion (D&I) awareness, understanding and
action
In 2020 we published our first D&I policy setting out our
commitments to enhance D&I at Gresham House. This year we have
established a D&I Committee with representatives from across
the business who are tasked with implementing our D&I strategy
to set out the internal behaviours and actions to be rolled out to
improve diversity and inclusion across the Company and meet our
policy commitments. The D&I strategy will also establish a
range of objectives we want to achieve to support our company
strategy. The D&I strategy provides a shared direction,
commitment and set of goals and work streams for us over the next
four years. It outlines the key roles and responsibilities and how
we will track progress and measure success and is an integral part
of the financial and strategic targets of the GH25 plan.
In addition, we signed up to the #100blackinterns last year and
subsequently hired two individuals to work in our Sustainable
Infrastructure and Housing strategies and within our Sustainable
Investment team throughout the summer of 2021. We are building on
this and will be developing a formal internship programme to ensure
interns that work with us are able to gain valuable skills that can
be translated into their future careers.
People and community
Our people are our greatest asset and we have worked extremely
hard throughout the Covid-19 pandemic to ensure staff satisfaction
remains high. We will be completing our second employee engagement
survey in October, which will provide useful insights for the
Gresham House leadership team to understand where improvements have
been made relative to the results in 2020, and what areas need to
be prioritised in the remainder of 2021 and into 2022.
Communication and transparency
We published our first Sustainable Investment Report earlier
this year which includes case studies, measurements of what we have
achieved and key Group milestones. The report demonstrated what has
been achieved over the last year and the contribution that our
business and investments are having on the environment and
society.
Accreditations and commitments
We have maintained our London Stock Exchange Green Economy Mark
for Gresham House plc as well as for our listed battery storage
fund Gresham House Energy Storage Fund plc (GRID). Gresham House
Asset Management Limited has also met the expected standard of
reporting in 2021 and has been listed as a signatory to the 2020 UK
Stewardship Code. Earlier this year we reported for the second time
for the PRI and await the 2021 rating outcomes. We have also been
shortlisted for Best Sustainable & ESG Fund Management Group of
the Year (AUM under GBP20 billion), as well as Best Sustainable
& ESG Alternative Assets Fund for GRID at the 2021 Investment
Week Sustainable & ESG Investment Awards.
Policies, processes and systems
The Board has established a Sustainability Committee which will
be chaired by Gareth Davis. This Committee will provide oversight
and accountability for Gresham House plc's sustainability strategy
across our business operations and investment practices. The
Committee met for the first time in August 2021 where a range of
sustainability factors were discussed, including how we will
advance our management of climate change risks and
opportunities.
In addition, we also have our Sustainable Investing Committee
(SIC), which operates at the divisional level. This forum focuses
on sharing best practice between different divisions, whilst also
working as a unit to drive sustainability related deliverables
applicable to all divisions. The SIC's objective for the remainder
of 2021 is to build on existing processes and systems to enhance
our monitoring of sustainability factors during the holding period
of our investments.
Measurable investment actions
1. Planted 7 million trees in 2021 (versus 9 million for the calendar year 2020)*
2. Our existing forestry captured the equivalent CO2 generated
by 266,000 people in the UK annually (versus 270,000 in 2020)**
3. Invested in two businesses that plan to connect 5,000+ homes to the internet in 2021
4. Solar and wind projects generated enough energy to power over
131,000 homes in the last year (versus 117,000 homes in 2020)
5. Invested in a further 733 shared ownership homes (166 homes
in 2020) with a total shared ownership portfolio of 936 homes (205
homes in 2020)
6. Improved portfolio company engagement in 2020. We voted 97%
for management recommendations, 3% against, and had 0% abstentions.
(2019, we voted 94% for management recommendations, 6% against, and
had 0% abstentions)
* As at 7 September 2021. Based on 1,100 trees per hectare for
broadleaves and, 2,700 trees per hectare for conifers
** Existing forestry is captured in the UK national account, so
no direct offsetting claims can be made. Calculated using the
Woodland Carbon Code and based on the managed area decreasing from
141,000 hectares to 136,000 hectares
FINANCIAL REVIEW
We set out our priorities for 2021 and it is pleasing to see
that during the first half of the year we have made good
progress.
The Group's AUM increased to GBP4.7 billion at the end of the
first half, up 19% on the beginning of the year (GBP4.0 billion)
and we have since achieved a number of fund closes, which sets the
Group up well to deliver ahead of expectations in the second half
of the year.
Gresham House has seen net core income grow in the period by 31%
to GBP23.0 million compared to GBP17.5 million in the first half of
2020 and this has driven the adjusted operating profits of the
Group up by 32% to GBP6.9 million (H1 2020: GBP5.2 million). We
have continued our focus on the long-term scalable areas of the
business and continued to invest in people and systems and as such
the Group's operating margin has remained at 30% (H1 2020:
30%).
The Group also delivered total comprehensive income of GBP5.2
million (H1 2020: total comprehensive loss of GBP2.2 million),
reflecting the strong performance of the Group's balance sheet
investments in the period.
We have continued to use the Group's balance sheet to invest in
areas which will lead to increasing AUM and the generation of
long-term management fees.
Assets under management
AUM grew by 19% in the first six months of the year to GBP4.7
billion (Dec 2020: GBP4.0 billion). In line with our strategy this
was achieved through both organic growth of GBP453 million (12%)
and acquisition growth of GBP299 million (7%).
GBP millions AUM Net Fund Performance Funds Acquired/Won AUM Total
Dec-20 Flows(1) Jun-21 Growth
%
Strategic Equity
Public Equity 508 53 149 255 965 90.0%
Private Equity 412 11 54 - 477 15.8%
Subtotal 920 64 203 255 1,442 56.7%
Real Assets
Forestry 1,811 25 149 - 1,985 9.6%
New Energy &
Sustainable Infrastructure 932 - (4) - 928 (0.4)%
Housing 307 16 - 44 367 19.5%
Subtotal 3,050 41 145 44 3,280 7.5%
Total AUM 3,970 105 348 299 4,722 19.0%
1. Including funds raised, redemptions and distributions
Net fund inflows of GBP105 million across Strategic Equity,
Forestry and Housing highlighted the demand for the Group's
offering in these asset classes. We set out the key funds that we
were focused on raising in 2021 and these have shown good progress
with a first close for Gresham House Residential Secured Income LP
(ReSI LP), our shared ownership housing fund with committed capital
of GBP70 million, and deployed capital of GBP16 million by the end
of June 2021.
The performance of the Strategic Equity division in the period
was strong with GBP203 million growth in AUM, reflecting the high
performing nature of the funds managed by Ken Wotton and his
team.
We also completed the acquisition of Appian Asset Management
Limited (Appian), which has since been rebranded as Gresham House
Ireland and is an exciting platform to pursue our international
growth plans. The acquired AUM of GBP299 million (EUR350 million)
reflects the AUM at exchange in December 2020 and it is pleasing to
see that the AUM has since grown to GBP340 million (EUR396 million)
across the equities and property funds managed by Gresham House
Ireland.
Adjusted operating profit
The adjusted operating profit for the Group grew in the first
half of 2021 by 32% to GBP6.9 million (H1 2020: GBP5.2 million). We
use the non-GAAP measure of adjusted operating profit as a key
performance indicator for Gresham House as an alternative asset
manager and have separated out net performance fees and net gains
on investments. As set out in the 2020 Annual Report, the adjusted
operating profit is defined as the net trading profit of the Group
before deducting amortisation, depreciation and exceptional items
relating to acquisition and restructuring costs and share-based
payments relating to acquisitions.
Six months Six months
to 30 June to
2021 30 June 2020
GBP'000 GBP'000
Gross core income 23,648 17,803
Rebates, distribution costs and fundraising
costs (611) (254)
---------------- -----------------
Net core income 23,037 17,549
---------------- -----------------
Administration overheads (excluding amortisation,
depreciation, exceptional items and acquisition
related share-based payments) (16,041) (12,307)
Finance costs (102) (5)
Adjusted operating profit 6,894 5,237
---------------- -----------------
Adjusted operating margin 30% 30%
Performance fees (gross) 1,912 -
Variable compensation attributable to performance (1,497) -
fees
---------------- -----------------
Performance fees net of costs 415 -
---------------- -----------------
Realised gains on development projects 818 -
Variable compensation attributable to realised (511) -
gains
Development project costs (219) -
---------------- -----------------
Realised gains on development projects net 88 -
of costs
---------------- -----------------
Adjusted operating profit including performance
fees and net realised gains on development
projects 7,397 5,237
---------------- -----------------
Amortisation and depreciation (4,191) (4,482)
Acquisition related share-based payments
charges (253) (296)
Exceptional items (102) (1,170)
Net gains/(losses) on investments and other
fair value movements 3,305 (898)
Tax (908) (623)
---------------- -----------------
Operating profit/(loss) after tax 5,248 (2,232)
---------------- -----------------
Loss from discontinued operations (5) (6)
---------------- -----------------
Total comprehensive net income 5,243 (2,238)
---------------- -----------------
Income
Net core income in the period increased by 31% to GBP23.0
million (H1 2020: GBP17.5 million). This increase reflects the
organic growth in AUM across the business alongside AUM activity in
the second half of 2020 which is now coming through fully in the
first half of 2021.
The long-term nature of the Group's Real Asset management
contracts highlight the stable revenue streams for the business
with over GBP1.4 billion of AUM in Limited Partnership management
contracts with a weighted average contract length of 14 years. The
underlying assets within these funds of forests, infrastructure,
renewable energy and housing continue to provide a stable platform
to grow the business.
Administration expenses
Administration expenses, (excluding amortisation, depreciation,
share-based payments relating to acquisitions and exceptional
items) have increased in the period by 30% to GBP16.0 million (H1
2020: GBP12.3 million). We continue to manage costs diligently
while ensuring that we invest in critical areas of the business.
This includes a focused investment in our distribution and
investment teams as the key drivers of growth, as well as in
critical support functions such as compliance and legal. Headcount
for the Group increased to 138 at the end of June (H1 2020: 129
people), and a further 23 joined from Appian.
Performance fees
The Group received a performance fee of GBP1.9 million (H1 2020:
GBPnil) from Gresham House Strategic plc (GHS) in recognition of
the performance of GHS exceeding the NAV growth hurdle as set out
in the investment management agreement. This is a key tool to
incentivise the entire team that work on GHS and as such this is
allocated to the team, with the Group retaining GBP415,000.
Realised gains on investments
The Group sold one of the battery storage development projects,
Byers Brae, in the period to Gresham House Energy Storage Fund plc
(GRID), realising a gain of GBP818,000. The development of these
sites is also used to incentivise the team and as such a proportion
of the gain is paid to the team as a variable incentive. Other
costs associated with battery storage development projects were
GBP219,000 in the period.
Exceptional items in the first half of the year of GBP0.1
million (H1 2020: GBP1.2 million) reflect the fact that there were
lower acquisition related costs or restructuring in the first half
of the year. The majority of costs relating to the Appian
acquisition were recognised at the point of exchange in December
2020.
Gains and losses on investments
Gains on investments in the period of GBP3.3 million reflect the
recognition of the Group's investments in associates as well as the
fair value movements other investments and contingent consideration
relating to previous acquisitions. The treatment of GHS as an
associate requires the Group to recognise its share of profits or
losses in the period last reported by GHS. GHS has announced its
annual results for the period to 31 March 2021 and under associate
accounting the Group's share of the profits of GHS over this time
frame is GBP2.5 million. Other notable gains were Gresham House
Energy Storage Fund plc of GBP0.1 million, Strategic Equity Capital
plc of GBP0.2 million and Strategic Public Equity (SPE)
co-investments of GBP0.4 million.
Contingent consideration payable to the sellers of acquired
businesses is fair valued at each period end, with the movement
reflecting assessments of the expected final payment as well as the
discount over time. The fair value movement in the period of GBP0.4
million was primarily driven by the unwind of the discount (H1
2020: GBP0.7 million).
Financial position
The Group's focus on using its balance sheet to grow was key in
the first half of the year as investments grew from GBP23.3 million
to GBP34.9 million. Cash has reduced as a result of this from
GBP21.9 million to GBP10.1 million and we have drawn GBP5.0 million
of the Revolving Credit Facility (RCF).
The Group received proceeds of GBP5.0 million from the sale of
battery storage projects and some of the other smaller holdings in
the Group. This has been used alongside the RCF funds and operating
cash flows to fund a number of activities. These include c.GBP11.0
million investment into battery storage development projects,
commitments to new funds launched by the Group, the investment in
SEC plc following winning the mandate in 2020 and an investment in
a new sustainable infrastructure asset to develop land banks to
establish new biodiversity, Environment Bank Limited.
The remaining cash movement reflects the dividend paid in May
2021 of GBP1.9 million and the completion of the acquisition of
Appian for GBP0.8 million.
Outlook
Since the period end the Group has increased its AUM in ESG
attractive asset classes. In July GRID raised a further GBP100
million, the Gresham House Forest Growth & Sustainability Fund
LP added a further GBP102 million, BSIF II LP, the Group's second
sustainable infrastructure fund held a first close for GBP100
million and ReSI LP added a further GBP50 million of commitments.
This increases pro forma AUM to GBP5.1 billion and post the
acquisition of the Mobeus VCT business to GBP5.4 billion, setting
the Group up well for the rest of 2021 to achieve it's 2021
priorities and continue to deliver shareholder value.
Kevin Acton
Chief Financial Officer
9 September 2021
UNAUDITED CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Six months Six months
ended ended Year ended
31 December
2020
30 June 2021 30 June 2020
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
Income
Asset management income 22,960 17,583 40,304
Dividend and interest income 139 200 554
Other operating income 389 20 1,078
Performance fees 1,912 - -
------------- ------------- ------------
Total income 5 25,400 17,803 41,936
Operating costs
Administrative overheads (23,323) (17,339) (42,052)
------------- ------------- ------------
Net operating profit/(loss)
before exceptional items 2,077 464 (116)
Finance costs (102) (5) (25)
Exceptional items 7 (102) (1,170) (1,775)
Net operating profit/(loss)
after exceptional items 1,873 (711) (1,916)
Gains and losses on investments
Share of associates' profits/(losses) 2,700 (177) 158
Profit on disposal of associate 413 - -
Gains and losses on investments
held at fair value 1,520 (64) 4,599
Movement in fair value of contingent
consideration (350) (657) (1,163)
Movement in value of deferred
receivable - - 224
Operating profit/(loss) before
taxation 6,156 (1,609) 1,902
Taxation (908) (623) (1,084)
------------- ------------- ------------
Operating profit/(loss) from
continuing operations 5,248 (2,232) 818
Loss from discontinued operations (5) (6) (12)
Total comprehensive income 5,243 (2,238) 806
============= ============= ============
Attributable to:
Equity holders of the parent 5,220 (2,237) 577
Non-controlling interest 23 (1) 229
------------- ------------- ------------
5,243 (2,238) 806
============= ============= ============
Basic profit/(loss) per ordinary
share (pence) 8 16.2 (7.7) 1.9
Diluted profit/(loss) per ordinary
share (pence) 8 15.3 (7.7) 1.8
Basic adjusted profit per ordinary
share (pence) 8 17.8 15.1 34.5
Diluted adjusted profit per
ordinary share (pence) 8 16.8 13.6 32.9
UNAUDITED CONDENSED GROUP STATEMENTS OF CHANGES IN EQUITY
Six months ended 30 June 2021 (unaudited)
Equity
Ordinary attributable Non-
Share Share Retained to equity controlling Total
Capital premium reserves shareholders interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 December 2020 8,023 80,042 8,402 96,467 811 97,278
Profit and total comprehensive
income for the period - - 5,220 5,220 23 5,243
Contributions by and distributions
to owners
Share-based payments - - 445 445 - 445
Issue of shares 213 953 - 1,166 - 1,166
Dividends paid - - (1,881) (1,881) - (1,881)
--------- -------- --------- ------------- ------------ --------
Total contributions by and
distributions to owners 213 953 (1,436) (270) - (270)
--------- -------- --------- ------------- ------------ --------
Balance at 30 June 2021 8,236 80,995 12,186 101,417 834 102,251
========= ======== ========= ============= ============ ========
Six months ended 30 June 2020 (unaudited)
Equity
Ordinary attributable Non-
Share Share Retained to equity controlling Total
Capital premium reserves shareholders interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 December 2019 6,956 69,242 14,039 90,237 582 90,819
Loss and total comprehensive
income for the period - - (2,237) (2,237) (1) (2,238)
Contributions by and distributions
to owners
Share-based payments 2 38 (1,715) (1,715) - (1,715)
Issue of shares 545 10,762 - 11,307 - 11,307
Dividends paid - - (1,351) (1,351) - (1,351)
--------- -------- --------- ------------- ------------ --------
Total contributions by and
distributions to owners 547 10,800 (3,106) 8,241 - 8,241
--------- -------- --------- ------------- ------------ --------
Balance at 30 June 2020 7,503 80,042 8,696 96,241 581 96,822
========= ======== ========= ============= ============ ========
Year ended 31 December 2020 (audited)
Equity
Ordinary attributable Non-
Share Share Retained to equity controlling Total
Capital premium reserves shareholders interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 December 2019 6,956 69,242 14,039 90,237 582 90,819
Profit and total comprehensive
income for the year - - 577 577 229 806
Contributions by and distributions
to owners
Share-based payments 2 38 (4,863) (4,823) - (4,823)
Issue of shares 1,065 10,762 - 11,827 - 11,827
Dividends paid - - (1,351) (1,351) - (1,351)
--------- -------- --------- ------------- ------------ --------
Total contributions by and
distributions to owners 1,067 10,800 (6,214) 5,653 - 5,653
--------- -------- --------- ------------- ------------ --------
Balance at 31 December
2020 8,023 80,042 8,402 96,467 811 97,278
========= ======== ========= ============= ============ ========
UNAUDITED CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
30 June 30 June 31 December
2021 2020 2020
Notes (unaudited) (unaudited) (audited)
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Investments 10 13,443 9,872 9,086
Tangible fixed assets 1,432 743 1,090
Investment in associates 11,012 9,009 9,142
Intangible assets 63,133 63,779 59,970
Total non-current assets 89,020 83,403 79,288
-------------- ------------- --------------------
Current assets
Trade receivables 11,067 6,092 3,184
Accrued income and prepaid expenses 16,129 6,196 13,783
Other current assets 1,955 1,071 551
Deferred tax 895 613 1,051
Cash and cash equivalents 10,144 21,864 21,886
Non-current assets held for sale
Assets of a disposal group held
for sale 15,689 35,407 7,363
-------------- ------------- --------------------
Total current & non-current assets
held for sale 55,879 71,243 47,818
-------------- ------------- --------------------
Total assets 144,899 154,646 127,106
-------------- ------------- --------------------
Current liabilities
Trade and other payables 21,315 19,618 18,780
Liabilities of a disposal group
held for sale
Liabilities of a disposal group
held for sale 6,403 31,255 2,072
-------------- ------------- --------------------
27,718 50,873 20,852
-------------- ------------- --------------------
Total assets less current liabilities 117,181 103,773 106,254
Non-current liabilities
Deferred taxation 3,784 3,037 3,227
Long-term borrowings 5,822 - -
Other creditors 5,324 3,914 5,749
-------------- ------------- --------------------
14,930 6,951 8,976
-------------- ------------- --------------------
Net assets 102,251 96,822 97,278
============== ============= ====================
Capital and reserves
Ordinary share capital 11 8,236 7,503 8,023
Share premium 80,995 80,042 80,042
Retained reserves 12,186 8,696 8,402
-------------- ------------- --------------------
Equity attributable to equity shareholders 101,417 96,241 96,467
Non-controlling interest 834 581 811
-------------- ------------- --------------------
Total equity 102,251 96,822 97,278
============== ============= ====================
Basic net asset value per ordinary
share (pence) 12 307.8 320.7 300.6
============== ============= ====================
Diluted net asset value per ordinary
share (pence) 12 291.7 288.9 287.4
============== ============= ====================
UNAUDITED CONDENSED GROUP STATEMENT OF CASH FLOWS
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2021 2020 2020
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Net cash generated from operations 13 (6,097) 6,225 17,592
Corporation tax paid (447) (98) (1,856)
Interest paid on loans (51) (5) (25)
Net cash flow from operating
activities (6,595) 6,122 15,711
============= ============= ================
Cash flow from investing activities
Acquisition of Appian Asset Management
Limited (841) - -
Acquisition of TradeRisks Limited - (8,045) (8,045)
Deferred consideration paid (794) - (9,842)
Investment in associates (15) - -
Dividends received from associates 258 82 186
Sale of associate 855 - -
Purchase of investments (6,013) (269) (1,007)
Sale of investments 1,422 187 3,032
Investment in DevCo projects (3,156) (2,021) (1,271)
DevCo loans repaid - 1,096 1,096
Proceeds received on sale of
DevCo projects 2,281 2,334 4,581
Purchase of fixed assets (87) (103) (152)
Purchase of intangible assets (371) (286) (584)
(6,461) (7,025) (12,006)
============= ============= ================
Cash flow from financing activities
New loans in period 5,000 - -
Share issue proceeds - 8,010 8,010
Share issue costs - (347) (347)
Share warrants exercised - 182 182
Share-based payments settled (1,529) (2,860) (7,125)
Dividends paid (1,881) (1,351) (1,351)
Capital element of lease payments (276) (299) (620)
------------- ------------- ----------------
1,314 3,335 (1,251)
============= ============= ================
(Decrease)/increase in cash and
cash equivalents (11,742) 2,432 2,454
Cash and cash equivalents at
start of period 21,886 19,432 19,432
Cash and cash equivalents at
end of period 10,144 21,864 21,886
============= ============= ================
NOTES TO THE ACCOUNTS
1 REPORTING ENTITY
Gresham House plc (the Company) is a public limited company
limited by shares incorporated in the United Kingdom under the
Companies Act and registered in England. The unaudited condensed
group interim financial statements of the Company as at and for the
six months ended 30 June 2021 comprise the Company and its
subsidiary undertakings (together referred to as the Group). All
intra-group transactions, balances, income and expenses are
eliminated on consolidation.
2 STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION
The financial information presented in these interim results has
been prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006. The
principal accounting policies adopted in the preparation of the
financial information in these interim results are primarily
unchanged from those used in the Company's financial statements for
the year ended 31 December 2020 and are consistent with those that
the Company expects to apply in its financial statements for the
year ended 31 December 2021.
The financial information for the year ended 31 December 2020
presented in this Interim Report does not constitute the Company's
statutory accounts for that period but has been derived from them.
The Report and Accounts for the year ended 31 December 2020 were
audited and have been filed with the Registrar of Companies. The
Independent Auditor's Report on the Report and Accounts for the
year ended 31 December 2020 was unqualified and did not draw
attention to any matters by way of emphasis and did not contain
statements under s498(2) or (3) of the Companies Act 2006. The
financial information for the periods ended 30 June 2020 and 30
June 2021 are unaudited and have not been reviewed by the Company's
auditors.
3 ESTIMATES AND MANAGEMENT JUDGEMENTS
The preparation of the unaudited condensed group interim
financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these unaudited condensed group interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation were the same as those that applied to the group
financial statements as at and for the year ended 31 December
2020.
4 FINANCIAL RISK MANAGEMENT
The Group's financial risk management objectives and policy are
consistent with those disclosed in the group financial statements
as at and for the year ended 31 December 2020.
5 INCOME
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Asset management income
Asset management income 22,960 17,583 40,304
22,960 17,583 40,304
----------- ----------- -------------
Income from investments
Dividend income - Listed UK 106 138 316
LP Distributions 4 - -
Interest receivable - Banks 2 51 69
- Other 27 11 169
----------- ----------- -------------
139 200 554
----------- ----------- -------------
Other operating income
Other income 1 20 51
DevCo income * 388 - 1,027
----------- ----------- -------------
389 20 1,078
----------- ----------- -------------
Performance fees
Performance fees 1,912 - -
----------- ----------- -------------
1,912 - -
----------- ----------- -------------
Total income 25,400 17,803 41,936
=========== =========== =============
* DevCo income represents the net operating income in the period
from battery storage projects prior to the projects being sold to
Gresham House Energy Storage Fund plc (GRID)
NOTES TO THE ACCOUNTS
6 BUSINESS COMBINATIONS
On 29 June 2021 the Group acquired 100% of the issued share
capital of Appian Asset Management Limited (Appian), a company
registered in Ireland. Appian is an active asset manager with
around EUR350 million in Assets Under Management (AUM) as at 31
December 2020. The Acquisition enhances the Group's capabilities to
develop existing strategies in Ireland and Europe, particularly
those with a sustainability focus including Forestry, Sustainable
Infrastructure, and Housing.
The provisional fair value of the identifiable net assets
acquired, and the consideration paid under IFRS 3 are as
follows:
Net book
value Adjustments Fair value
GBP'000 GBP'000 GBP'000
Tangible fixed assets 54 616 670
Cash 2,305 - 2,305
Trade and other receivables 604 - 604
Trade and other payables (1,464) (825) (2,289)
Intangible fixed assets (including goodwill) - 6,568 6,568
Deferred tax liability - (962) (962)
Total identifiable net assets 1,499 5,397 6,896
========= ============ ===========
Under the terms of the acquisition agreement, the fair value of
the consideration paid to the vendors of Appian was:
GBP'000
Cash 3,146
Shares - 104,168 shares in Gresham House plc valued at 940.0p
per share on 29 June 2021 979
--------
Total initial consideration 4,125
Contingent consideration 2,771
Total consideration 6,896
========
The consideration shares were admitted to trading on AIM on 5
July 2021.
Contingent consideration
Contingent consideration with an expected fair value of EUR4.5
million will be payable in cash to the sellers based on the
following:
-- 1.4 times year 2 earnings, payable in 2 years. The expected
fair value at acquisition is GBP1.0 million;
-- 1.4 times year 3 earnings, payable in 3 years. The expected
fair value at acquisition is GBP1.4 million; and
-- Up to EUR0.75 million payable in 3 years based on certain AUM
and earnings targets. The expected fair value at acquisition is
GBP0.3 million
The fair value of the contingent consideration has been
estimated at the date of acquisition using estimated outcomes, the
probability of those outcomes and discounting this at 13.0%. Up to
50% of the contingent consideration may be settled in Gresham House
plc shares at the Company's discretion. As such this will be
recognised as a liability on the balance sheet and the fair value
assessed each reporting period. The fair value at the time of
acquisition was calculated as GBP2.8 million.
Revenue and profits of Appian
Appian was acquired on 29 June 2021. The Group has therefore not
recognised any revenues or costs in respect of Appian for the
period ended 30 June 2021.
Prior to acquisition by the Group, Appian had a 31 December year
end. The results for the most recent audited reporting period prior
to acquisition were to 31 December 2020. Had Appian been part of
the Group for the entire reporting period the following sums would
have been consolidated:
EUR'000
Revenue 3,403
Profit before tax 284
Goodwill
Goodwill arises due to the excess of the fair value of the
consideration payable over the fair value of the net assets
acquired. It is mainly attributable to the skills of the team
acquired, the synergies expected to be achieved from the
acquisition and the business development potential. Goodwill
arising on the Appian acquisition is not deductible for tax
purposes.
Fair value
The fair value of the management contracts and customer
relationships have been estimated using a discounted cash flow
model. The estimated cash flows have been valued at a discount of
13.0%.
NOTES TO THE ACCOUNTS
7 EXCEPTIONAL ITEMS
Six months
Six months ended Year ended
ended 30 30 June 31 December
June 2021 2020 2020
GBP'000 GBP'000 GBP'000
Acquisition costs
TradeRisks Limited - 847 868
Appian Asset Management Limited 8 - 328
Joint Venture establishment - 210 219
Other 54 30 30
----------- ----------- -------------
62 1,087 1,445
Restructuring costs 40 83 330
102 1,170 1,775
=========== =========== =============
Acquisition and associated restructuring costs are considered
exceptional and not part of the normal course of asset management
activity.
8 EARNINGS PER SHARE
Basic and diluted profit/(loss) per share
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2021 2020 2020
Total net profit/(loss) attributable to equity
holders of the parent (GBP'000) 5,220 (2,237) 577
Weighted average number of ordinary shares
in issue during the period 32,291,046 29,099,750 30,479,015
Basic profit/(loss) per share to equity holders
of the parent (pence) 16.2 (7.7) 1.9
=========== =========== =============
Diluted profit/(loss) per share to equity
holders of the parent (pence) 15.3 (7.7) 1.8
=========== =========== =============
1,818,884 (30 June 2020: 3,301,297; 31 December 2020: 1,475,509)
shares were deemed to have been issued at nil consideration as a
result of the shareholder and supporter warrants granted (in prior
periods) and shares which could be issued under the bonus share
matching plan and long-term incentive plans which, as required
under IAS 33, Earnings per Share, were not recognised for the six
months ended 30 June 2020 as they would reduce the loss per
share.
Adjusted earnings per share
Adjusted earnings per share is based on adjusted operating
profit after tax, which is stated after charging interest but
before depreciation, amortisation, share-based payments relating to
acquisitions, profits and losses on disposal of tangible fixed
assets, net performance fees, net development gains and exceptional
items, to provide the non-GAAP measure of the performance as an
asset manager. This includes dividend and interest income received
from investment in associates.
Adjusted profit for calculating adjusted earnings per share:
Six months
Six months ended Year ended
ended 30 30 June 31 December
June 2021 2020 2020
GBP'000 GBP'000 GBP'000
Net operating profit/(loss) after exceptional
items 1,873 (711) (1,916)
Add back:
Exceptional operating expenses 102 1,170 1,775
Depreciation and amortisation 4,188 4,482 8,904
Loss on disposal of tangible fixed assets 3 - 27
Dividend income received from associates 160 - 202
Net performance fees (415) - -
Variable compensation attributable to realised
gains on development projects 511 - 2,474
Development project costs 219 - -
Share-based payments relating to acquisitions 253 296 593
----------- ----------- -------------
Adjusted operating profit attributable to
equity holders of the parent before tax 6,894 5,237 12,059
Corporation tax attributable to adjusted
operating profit (1,157) (832) (1,541)
Adjusted operating profit attributable to
equity holders of the parent after tax 5,737 4,405 10,518
Adjusted profit per share (pence) - basic 17.8 15.1 34.5
=========== =========== =============
Adjusted profit per share (pence) - diluted 16.8 13.6 32.9
=========== =========== =============
NOTES TO THE ACCOUNTS
9 DIVIDENDS
The Company paid GBP1,881,000 during the period which represents
a final dividend for the year ended 31 December 2020 of 6.0 pence
per share. A final dividend for the year ended 31 December 2019 of
4.5 pence per share totalling GBP1,351,000 was paid in May
2020.
10 INVESTMENTS - SECURITIES
Investments have been classified as follows:
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Non-current assets 13,443 9,872 9,086
Other debtors due within one year - Investment
in development projects 1,955 752 551
15,398 10,624 9,637
======== ======== ============
A further analysis of total investments is as follows:
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Listed securities - on the London Stock Exchange 6,521 6,318 3,991
Securities dealt in under AIM 1,222 395 950
Securities dealt in under Aquis Stock Exchange 6 13 7
Unlisted securities 7,649 3,898 4,689
Closing value 15,398 10,624 9,637
======== ======== ============
Investments valued at fair value through profit
or loss 13,443 9,605 8,874
Loans and receivables carried at amortised cost 1,955 1,019 763
15,398 10,624 9,637
======== ======== ============
Unlisted securities primarily include the Group's investment in
the Gresham House Forestry Fund LP (GBP3.0 million, including
non-controlling interests), investment in battery storage projects
(GBP2.0 million) included within other debtors due within one year,
an investment in Environment Bank Limited (GBP1.2 million),
co-investments into funds managed by the Group (GBP0.6 million) and
an investment of GBP0.7 million in LF GH Equity Funds.
11 SHARE CAPITAL
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Allotted: Ordinary - 32,945,875 (30 June 2020:
30,012,401; 31 December 2020: 32,091,707) fully
paid shares of 25p each 8,236 7,503 8,023
======== ======== ============
During the six months to 30 June 2021 the Company issued the
following new ordinary shares:
-- 750,000 shares on 26 March 2021 at par into the Gresham House Employee Benefit Trust; and
-- 104,168 shares on 29 June 2021 at a price of 940.0p per share
to the vendors of Appian Asset Management Limited.
NOTES TO THE ACCOUNTS
12 NET ASSET VALUE PER SHARE
Basic
30 June 30 June 31 December
2021 2020 2020
Equity attributable to holders of the parent
(GBP'000) 101,417 96,241 96,467
Number of ordinary shares in issue at the end
of the period 32,945,875 30,012,401 32,091,707
Basic net asset value (pence) 307.8 320.7 300.6
=========== =========== ============
Diluted
30 June 30 June 31 December
2021 2020 2020
Equity attributable to holders of the parent
(GBP'000) 101,417 96,241 96,467
Number of ordinary shares in issue at the end
of the period 34,764,759 33,313,698 33,567,216
Diluted net asset value (pence) 291.7 288.1 287.4
=========== =========== ============
Diluted net asset value per share is based on the number of
shares in issue at the period end together with 1,818,884 (30 June
2020: 3,301,297; 31 December 2020: 1,475,509) shares deemed to have
been issued at nil consideration as a result of the shareholder and
supporter warrants (in prior periods) and shares which could be
issued under the bonus share matching plan and long-term incentive
plans.
13 RECONCILIATION OF NET OPERATING LOSS TO OPERATING CASH
FLOWS
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Net operating profit/(loss) after exceptional
items 1,873 (711) (1,916)
Loss from discontinued operations (5) (6) (12)
Interest payable 54 5 25
Depreciation 413 529 871
Loss on disposal of tangible fixed assets 3 - 27
Amortisation 3,776 3,953 8,033
Share-based payments 1,972 1,105 2,262
8,086 4,875 9,290
(Increase)/decrease in current assets (11,284) 3,851 1,777
(Decrease)/increase in current liabilities (2,899) (2,501) 6,525
(6,097) 6,225 17,592
========= =========== ============
14 POST BALANCE SHEET EVENTS
On 29 June 2021 the proposed cancellation of part of the share
premium account of the Company totalling GBP60.0 million was
approved by the High Court of Justice in England and Wales. The
capital reduction became effective on 23 July 2021 following the
registration of the order of the Court by the Registrar of
Companies.
On 10 September 2021 the Company announced the acquisition of
the Venture Capital Trust (VCT) business of Mobeus Equity Partners
LLP, through the acquisition of the management contracts of the
VCTs and the hiring of the team. The Company will pay initial
consideration on completion of GBP20.0 million cash and GBP4.0
million in ordinary shares of the Company, with a further GBP12.1
million in deferred consideration which is subject to conditions
and performance.
[1]
https://www.bloomberg.com/professional/blog/esg-assets-may-hit-53-trillion-by-2025-a-third-of-global-aum/
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END
IR DKKBQPBKKCCD
(END) Dow Jones Newswires
September 10, 2021 02:00 ET (06:00 GMT)
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