TIDMIHP
RNS Number : 4888O
IntegraFin Holdings plc
18 May 2018
IntegraFin Holdings plc - Interim Results for the Six Months
Ended 31 March 2018
IntegraFin Holdings plc was admitted to the London Stock
Exchange on 2 March 2018, and is pleased to report its Interim
Results for the six months to 31 March 2018 as a listed
company.
Highlights
-- Funds under direction GBP29.75bn
-- Gross inflows of GBP3bn in the first half of the year
Ian Taylor, Chief Executive Officer, commented:
"Following a successful IPO, we are pleased to announce a
pleasing set of results for the first half of the year. Despite the
backdrop of stock market volatility, Transact achieved its highest
ever H1 inflows.
Given our differentiated premium offering and the quality of the
service we offer to advisers and their clients, we remain confident
in our ability to sustain growth as we move into the second half of
the year."
Financial Highlights
Six months ended Six months ended Year ended 30
31 March 2018 31 March 2017 September 2017
GBPm GBPm GBPm
Fee generating
funds under direction 29,753 25,548 27,927
Revenue 44.6 38.7 80.2
Profit before tax 18.7 17.3 37.0
Basic and diluted
earnings per share 4.4p 4.2p 9.0p
Adjusted operating
profit 21.2 17.3 37.5
Adjusted operating
profit margin 48% 45% 47%
Adjusted basic
and diluted earnings
per share 5.2p 4.2p 9.2p
Contacts
Media
Lansons +44 (0)7979 692287, or +44 (0)20 7490 8828
Tony Langham
Maddy Morgan-Williams
Eva Murphy
Investors
Mark Mochalski +44 (0)20 7608 5339
Analyst Presentation
IntegraFin Holdings plc will be hosting an analyst presentation
on 18 May 2018 following the release of these results for the half
year ended 31 March 2018. Attendance is by invitation only. Slides
accompanying the analyst presentation will be available on the
IntegraFin Holdings plc website.
Cautionary Statement
These Interim Results have been prepared in accordance with the
requirements of English Company Law and the liabilities of the
Directors in connection with these Interim Results shall be subject
to the limitations and restrictions provided by such law.
These Interim Results are prepared for and addressed only to the
Company's shareholders as a whole and to no other person. The
Company, its Directors, employees, agents or advisers do not accept
or assume responsibility to any other person to whom these Interim
Results are shown or into whose hands it may come and any such
responsibility or liability is expressly disclaimed.
These Interim Results contain forward looking statements, which
are unavoidably subject to risk and uncertainty because they relate
to events and depend upon circumstances that will occur in the
future. It is believed that the expectations set out in these
forward looking statements are reasonable but they may be affected
by a wide range of variables which could cause future outcomes to
differ from those foreseen. All statements in these Interim Results
are based upon information known to the Company at the date of this
report. Except as required by law, the Company undertakes no
obligation to publicly update or revise any forward looking
statement, whether as a result of new information, future events or
otherwise.
Operating and Financial Review
The first six months of financial year 2018 saw good levels of
client inflows onto Transact, despite market volatility in the
second half of the period. Growth in Funds Under Direction (FUD)
was affected by this volatility in the three months to 31 March
2018, but still ended the interim period some GBP1.8bn higher than
at 2017 financial year end.
FUD, inflows and outflows
Six months Six months Year ended
ended 31 March ended 31 March 30 September
2018 2017 2017
GBPm GBPm GBPm
Opening fee generating
FUD 27,927 22,686 22,686
Inflows 3,007 2,470 5,310
Outflows (840) (774) (1,647)
------------------------ ---------------- ---------------- --------------
Net flows 2,167 1,696 3,663
Market movements (319) 1,093 1,425
Other movements(1) (22) 73 153
------------------------ ---------------- ---------------- --------------
Closing fee generating
FUD 29,753 25,548 27,927
Other FUD(2) 0 1,657 1
Total closing FUD 29,753 27,205 27,928
(1) Other movements includes dividends, interest, fees and tax
charges and rebates.
(2) FUD held historically for a single private client, for which
the only charge was a nominal fee for custody.
Gross inflows for the six months to 31 March 2018 increased by
GBP537m or 21.7% from the six months to 31 March 2017. Gross
inflows for the first half of financial year 2018 are the highest
since the platform's inception. Gross outflows grew by 8.5%. Lower
outflow growth than inflow growth led to an increase in net flows
of GBP471m (27.8%).
Despite significantly less favourable market conditions in the
second quarter, FUD continued to grow, ending the reporting period
6.5% higher than at the 2017 financial year end.
Financial performance
Six months ended Six months ended Year ended 30
31 March 2018 31 March 2017 September 2017
GBPm GBPm GBPm
Revenue 44.6 38.7 80.2
Cost of sales (0.4) (0.2) (0.6)
-------------------- ----------------- ----------------- ----------------
Gross profit 44.2 38.5 79.6
Operating expenses (25.7) (21.3) (42.8)
Operating profit
attributable
to shareholder
returns 18.5 17.2 36.8
Interest income 0.2 0.1 0.2
-------------------- ----------------- ----------------- ----------------
Profit before
tax attributable
to shareholder
returns 18.7 17.3 37.0
Tax on ordinary
shareholder only
activities (4.1) (3.3) (7.1)
-------------------- ----------------- ----------------- ----------------
Profit after
tax 14.6 13.9 29.9
Total gross profit in the six months to 31 March 2018 increased
by GBP5.7m, or 14.8%, from the same period in financial year 2017.
This growth was driven by the increase in value of FUD due to
strong inflows in the period and an increase in the number of tax
wrappers.
Components of revenue
Six months ended Six months ended Year ended 30
31 March 2018 31 March 2017 September 2017
GBPm GBPm GBPm
Annual commission
income 38.8 33.5 69.5
Wrapper fee income 3.9 3.5 7.3
Other income 1.9 1.7 3.4
-------------------- ----------------- ----------------- ----------------
Total revenue 44.6 38.7 80.2
Revenue comprises three elements. Of these, annual commission
income and wrapper fee income constitute the recurring revenue.
Other income includes "buy commission" and "dealing income".
Annual commission income increased by GBP5.3m, or 15.8%, in the
period versus the same period in the prior financial year. This
growth was due to increased value of FUD arising from strong
inflows and, in the first quarter, market growth. This increase in
annual commission was achieved even after a planned reduction in
the annual commission rate effective from 1 April 2017.
Wrapper fee income increased by GBP0.4m (11.4%) in the 2018
period. This was due to an increase in the number of both new and
existing clients on the platform with open tax wrappers. This has
been offset by wrappers being closed.
These recurring revenue streams constituted 95.7% of total fee
income in the six months to 31 March 2018.
The main constituent of other income is buy commission, which
accounts for GBP1.7m (89.5%) of other income in the 2018 six month
period, and GBP1.5m (88.2%) in the 2017 six month period.
Operating Expenses
Six months ended Six months ended Year ended 30
31 March 2018 31 March 2017 September 2017
GBPm GBPm GBPm
Staff costs 17.2 15.2 30.5
Occupancy 1.6 1.8 3.5
Regulatory and
professional
fees 4.5 2.2 4.5
Other costs 2.1 1.8 3.7
------------------- ----------------- ----------------- ----------------
Total expenses 25.4 21.0 42.2
Depreciation
and amortisation 0.3 0.3 0.6
------------------- ----------------- ----------------- ----------------
Total operating
expenses 25.7 21.3 42.8
Total operating expenses increased by GBP4.4m (21.0%) in the six
months to 31 March 2018, compared with the same period in the prior
financial year. This increase arose predominantly from professional
fees and additional staff costs associated with the listing of
IntegraFin Holdings plc (IHP) on the London Stock Exchange on 2
March 2018. Additionally there was an increase in client servicing
staff numbers in the period to 31 March 2018.
Staff costs increased by GBP2m, or 13.2%, in the six months to
31 March 2018, compared with the six months to 31 March 2017. This
is in line with staff numbers increasing to 507 from 451, an
increase of 12.4%. The main area of people growth was in the area
that provides service to advisers and clients and reflects the
increase in business volumes and the Group's commitment to
maintaining premium service. There were some increases in
governance staffing ahead of the listing.
The increase in regulatory and professional fees of GBP2.3m, or
104.5%, in the six months to 31 March 2018 compared with the six
months to 31 March 2017 was mostly due to the increase of GBP2.2m
in professional fees from GBP1.4m to GBP3.6m across the comparative
periods. The increase is attributable to non-recurring IPO expenses
which totalled GBP4.0m across all periods.
Profit Before Tax Attributable to Shareholder Returns
Profit before tax increased by GBP1.4m, or 8.1%, comparing the
six months to 31 March 2018 with the six months to 31 March 2017.
This growth was despite the IPO costs included in the financial
year 2018 period and reflects strong revenue growth and general
control of expenses.
Six months ended Six months ended
31 March 2018 31 March 2017
GBPm GBPm
Operating profit attributable
to shareholder returns 18.5 17.2
IPO adjustments 2.9 0.4
Other adjustments (0.2) (0.3)
---------------------------------------- ----------------- -----------------
Adjusted operating profit attributable
to shareholder returns 21.2 17.3
The operating margin was 41.5% in the six months to March 2018.
Allowing for IPO one off costs of GBP0.4m in the six months to
March 2017 and GBP2.9m in the six months to March 2018, offset by
other adjustments in both periods, the adjusted operating margin
increased from 44.7% in the six months to March 2017, to 47.5% in
the six months to March 2018.
Dividends
During the six month period to 31 March 2018 the Company paid an
interim dividend of GBP19.4m and a special dividend of GBP11.4m to
shareholders. This compares with an interim dividend of GBP13.5m in
the six month period to 31 March 2017.
Earnings Per Share
Six months ended Six months ended
31 March 2018 31 March 2017
Profit after tax for the period GBP14.6m GBP13.9m
Number of shares in issue 331.3m 331.3m(1)
Earnings per share - basic and
diluted 4.4p 4.2p
Adjusted profit after tax for GBP17.3m GBP14.0m
the period
Number of shares in issue 331.3m 331.3m(1)
Adjusted earnings per share -
basic and diluted 5.2p 4.2p
(1 Shares in issue restated for financial year 2017 periods to
reflect number of shares in issue following the IHP listing.)
Earnings per share has grown by 4.8% comparing the six months to
31 March 2018 with the six months to 31 March 2017, and adjusted
earnings per share has grown by 23.8%.
Principal Risks and Uncertainties
The principal risks and uncertainties which affect the Group are
those detailed on Pages 24 to 26 of the Group's Annual Report and
Financial Statements for the year ended 30 September 2017. The
principal risks and uncertainties remain unchanged from year end
and are not expected to change for the remainder of the financial
year. The key risks and uncertainties are listed below.
Financial risks:
-- Market risk - impact of changes in the following on the value
of client Portfolios, which can affect future charges and expenses:
equity, property market values, currency exchange rates, credit
spreads, interest rates and inflation;
-- Liquidity risk - the Group not having sufficient financial
resources to meet its obligations;
-- Outflow risk - loss of future profits due to unexpectedly high client outflows;
-- Expense risk - impact of expenses rising faster than expected.
Non-financial risks:
-- Regulatory risk - impact of new regulatory requirements on
the Group's business model, or the Group failing to comply with
regulations;
-- Operational risk - risk of loss from inadequate or failed
internal processes, people, systems, or external events;
-- Competition risk - risk of competitor activity reducing inflows, and increasing outflows;
-- Geopolitical risk - changes in the political landscape
disrupting the business, or requiring development spending;
-- Reputational risk - risk of clients no longer wishing do
business with the Group due to a poor perception of Transact
service in the market place.
Directors' Responsibility Statement
The Directors confirm to the best of their knowledge:
-- The unaudited condensed consolidated set of financial
statements has been prepared in accordance with IAS 34 "Interim
Financial Reporting" as adopted by the EU, and gives a true and
fair view of the assets, liabilities, financial position, and
profit and loss of the Group;
-- The interim management report includes a fair review of the
information required by sections 4.2.7R and 4.2.8R of the
Disclosure and Transparency Rules of the UK Financial Conduct
Authority; and
-- The condensed financial statements have been prepared in
accordance with ASB's 2007 statement half yearly reports.
By Order of the Board
David Johnson
Company Secretary
Registered Office
29 Clement's Lane
London
EC4N 7AE
17 May 2018
Independent Review Report to IntegraFin Holdings plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 March 2018 which comprises the condensed
consolidated profit and loss and other comprehensive income,
condensed consolidated statement of financial position, condensed
consolidated statement of cash flows and condensed consolidated
statement of changes in shareholder's equity; and the related
notes.
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.
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 Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
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 has been prepared in accordance with International
Accounting Standard 34, "Interim Financial Reporting", as adopted
by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half-yearly financial reporting in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
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 Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, 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 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 31
March 2018 is not prepared, in all material respects, in accordance
with International Accounting Standard 34, as adopted by the
European Union, and the Disclosure Guidance and Transparency Rules
of the United Kingdom's Financial Conduct Authority.
BDO LLP
Chartered Accountants
London
United Kingdom
Date
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Interim Consolidated Profit and Loss and Other Comprehensive
Income
Unreviewed
Six months Six months
Note to 31 March to 31 March
2018 2017
GBP'000 GBP'000
Revenue
Fee income 4 44,596 38,743
Cost of sales (441) (254)
--------------------------------------- ------- ------------- -------------
Gross profit 44,155 38,489
Administrative expenses (25,685) (21,314)
Net income / (expense) attributable
to policyholder returns (5,744) 7,406
Operating profit 12,726 24,581
--------------------------------------- ------- ------------- -------------
Operating profit/(loss) attributable
to policyholder returns (5,744) 7,406
Operating profit attributable
to shareholder returns 18,470 17,176
Interest income 152 86
Profit on ordinary activities
before taxation 12,878 24,668
--------------------------------------- ------- ------------- -------------
Profit/(loss) on ordinary activities
before taxation attributable to
policyholder returns (5,744) 7,406
Profit on ordinary activities
before taxation attributable to
shareholder returns 18,622 17,262
Policyholder tax 5,807 (7,394)
Tax on profit on ordinary activities 6 (4,088) (3,345)
Profit after tax 14,596 13,928
Other comprehensive income
Exchange gains/(losses) arising
on translation of foreign operations (76) 49
Total other comprehensive income
for the period (76) 49
Profit for the period 14,520 13,976
--------------------------------------- ------- ------------- -------------
Earnings per share
Ordinary shares - basic and diluted 5 4.4p 4.2p
All activities of the Group are classed as continuing.
Interim Consolidated Statement of Financial Position
Restated
31 March 30 September
Note 2018 2017
GBP'000 GBP'000
Non-current assets
Loans and receivables 3,698 1,873
Intangible assets 12,976 12,986
Property, plant and equipment 1,860 1,858
Deferred acquisition costs 42,394 38,295
Investments and cash held for
the benefit of policyholders 12,877,070 11,947,652
-------------------------------------- ----- ----------- --------------
12,937,998 12,002,664
Current assets
Financial assets at fair value
through profit or loss 6,178 8,895
Other prepayments and accrued
income 10,516 10,252
Trade and other receivables 2,780 1,456
Cash and cash equivalents 97,205 105,829
-------------------------------------- ----- ----------- --------------
116,680 126,432
Current liabilities
Trade and other payables 18,956 15,208
Current tax liabilities 4,032 2,803
-------------------------------------- ----- ----------- --------------
22,987 18,011
Non-current liabilities
Provisions for liabilities 19,059 11,831
Deferred income liability 42,394 38,295
Liabilities for linked investment
contracts 12,877,070 11,947,652
Deferred tax liabilities 6,896 10,781
-------------------------------------- ----- ----------- --------------
12,945,418 12,008,559
Net assets 86,273 102,526
-------------------------------------- ----- ----------- --------------
Capital and reserves
Called up equity share capital 7 3,313 57
Capital redemption reserve 2 2
Share-based payment reserve 308 308
Foreign exchange reserve (34) 42
Other non-distributable reserves 8 5,722 5,722
Non-distributable insurance reserves 501 501
Profit or loss account 76,460 95,894
-------------------------------------- ----- ----------- --------------
Total equity 86,273 102,526
-------------------------------------- ----- ----------- --------------
These interim financial statements were approved by the Board of
Directors on 17 May 2018 and are signed on their behalf by:
Ian Taylor, Director
Company Registration Number: 08860879
Interim Consolidated Statement of Cash Flows
Unreviewed
Six months Six months
to 31 March to 31 March
2018 2017
GBP'000 GBP'000
Cash flows from operating activities
Profit before tax 12,878 24,667
Adjustments for:
Amortisation and depreciation 300 288
Interest (152) (86)
Increase in loans and receivables (3,414) (359)
Increase in payables 3,748 3,456
Decrease in current asset investments 2,717 37
Increase in provisions 3,343 1,941
Cash generated from operations 19,419 29,944
Income taxes (paid)/received 2,947 (10,592)
Net cash flows from operating
activities 22,366 19,352
Investing activities
Acquisition of tangible assets (291) (340)
Interest received 152 86
Net cash used in investing activities (140) (254)
Financing activities
Equity dividends paid (30,780) (13,521)
---------------------------------------- ------------- -------------
Net cash used in financing activities (30,780) (13,521)
Net increase/(decrease) in cash
and cash equivalents (8,554) 5,577
Cash and cash equivalents at
beginning of period 105,829 90,571
Exchange gains/(losses) on cash
and cash equivalents (70) 49
---------------------------------------- ------------- -------------
Cash and cash equivalents at
end of period 97,205 96,196
Interim Consolidated Statement of Changes in Equity
Restated
Share Non-distrib-utable Other
based insurance Non-distrib-utable
Share Other payment reserves reserves Retained Total
capital reserves reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ------------------- ------------------- --------- ---------
Balance at
1 October
2016 57 34 308 501 5,722 79,622 86,244
Comprehensive
income for
the year:
Profit for
the year - - - - - 13,928 13,928
Other
comprehensive
income - 49 - - - - 49
Other movement - - - - - (96) (96)
--------- --------- --------- ------------------- ------------------- --------- ---------
Total
comprehensive
income for
the year - 49 - - - 13,832 13,881
Distributions
to owners:
Dividends - - - - - (13,521) (13,521)
--------- --------- --------- ------------------- ------------------- --------- ---------
Total
distributions
to owners - - - - - (13,521) (13,521)
--------- --------- --------- ------------------- ------------------- --------- ---------
Balance at
31
March 2017 57 83 308 501 5,722 79,933 86,604
--------- --------- --------- ------------------- ------------------- --------- ---------
Balance at
1 October
2017 57 44 308 501 5,722 95,894 102,526
Comprehensive
income for
the year:
Profit for
the year - - - - - 14,596 14,596
Other
comprehensive
income - (76) - - - - (76)
Other movement - - - - - 6 6
--------- --------- --------- ------------------- ------------------- --------- ---------
Total
comprehensive
income for
the year - (76) - - - 14,602 14,526
Distributions
to owners:
Issue of share
capital 3,256 (3,256) -
Dividends - - - - - (30,780) (30,780)
--------- --------- --------- ------------------- ------------------- --------- ---------
Total
distributions
to owners 3,256 - - - - (34,036) (30,780)
--------- --------- --------- ------------------- ------------------- --------- ---------
Balance at
31 March 2018 3,313 (32) 308 501 5,722 76,460 86,273
--------- --------- --------- ------------------- ------------------- --------- ---------
Notes to the Financial Statements
1. Basis of preparation
The consolidated interim financial statements have been prepared
and approved by the Directors in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the EU, and in
accordance with the International Accounting Standard (IAS) 34
Interim Financial Reporting, and the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority (FCA).
The financial information contained in these interim financial
statements does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The information
has been reviewed by the company's auditor, BDO LLP, and their
report is presented on page 7-8.
The same accounting policies, methods of calculation and
presentation have been followed in the preparation of the interim
financial statements for the six months to 31 March 2018 as were
applied in the Audited Annual Financial Statements for the year
ended 30 September 2017.
The financial statements have been prepared on a going concern
basis following an assessment by the Directors.
Principal risks and uncertainties
The Group's principal risks and uncertainties have not changed
from year end, and are listed on page 5.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiaries.
Future standards, amendments to standards, and interpretations
not early-adopted in the 2018 consolidated interim statements
A full impact assessment of IFRS 9 Financial Instruments, IFRS
15 Revenue from Contracts with Customers, and IFRS 17 Insurance
Contracts was conducted at financial year 2017 year end. None of
the standards was found to have a material impact on the Group, and
this position has not changed.
An initial assessment of the impact of IFRS 16 Leases was
conducted at financial year 2017 year end, which indicated that
whilst there will be a material adjustment to gross assets and
liabilities as a result of bringing leased assets on balance sheet,
there is unlikely to be a material net impact at Group level. This
position has not changed.
2. Critical accounting estimates and judgements
The preparation of interim consolidated financial statements in
compliance with IAS 34 requires the use of certain critical
accounting estimates. There have been no material revisions to the
Group's critical accounting estimates and judgements methodology
from year ending 30 September 2017.
3. Financial instruments
Financial assets and liabilities have been classified into
categories that determine their basis of measurement and, for items
measured at fair value, whether changes in fair value are
recognised in the profit and loss and other comprehensive income
statement. The following tables show the carrying values of assets
and liabilities for each of these categories.
Financial assets:
Fair value through Loans and Receivables
profit or loss
31 Mar 30 Sep 31 Mar 30 Sep
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents - - 97,205 105,829
Listed shares and securities 95 83 - -
Loans and receivables - - 3,698 1,873
Investments in quoted
debt instruments 6,083 8,812 - -
Accrued income - - 8,673 7,951
Trade and other receivables - - 2,780 1,456
Investments and cash held
for the policyholders 12,877,070 11,947,652 - -
Total financial assets 12,883,248 11,956,547 112,357 117,109
Financial liabilities:
Fair value through Amortised cost
profit or loss
31 Mar 30 Sep 31 Mar 30 Sep
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Trade and other payables - - 12,299 7,524
Accruals - - 5,538 6,454
Liabilities for linked
investments contracts 12,877,070 11,947,652 - -
----------- ----------- -------- --------
Total financial liabilities 12,877,070 11,947,652 23,090 18,010
Financial Instruments - Fair Value Hierarchy
The following table shows the Group's assets measured at fair
value and split into the three levels described below:
Level 1: quoted prices (unadjusted) in active markets for
identical assets;
Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset that are not based on observable
market data (unobservable inputs).
At 31 March 2018 Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments and
assets held for
the benefit of policyholders
* Policyholder cash 1,124,997 - - 1,124,997
* Investments and securities 336,312 102,898 1,019 440,228
* Bonds and other fixed-income securities 11,892 1,431 27 13,350
* Holdings in collective investment schemes 11,153,732 142,269 2,493 11,298,495
----------------- -------------- -------------- -----------------
12,626,933 246,598 3,539 12,877,070
Other investments 6,178 - - 6,178
----------------- -------------- -------------- -----------------
Total 12,633,111 246,598 3,539 12,883,248
----------------- -------------- -------------- -----------------
At 30 September Level 1 Level 2 Level 3 Total
2017
GBP'000 GBP'000 GBP'000 GBP'000
Investments and
assets held for
the benefit of
policyholders
* Policyholder cash 1,091,744 - - 1,091,744
* Investments and securities 351,308 94,521 1,541 447,370
* Bonds and other fixed-income securities 12,378 399 5 12,782
* Holdings in collective investment schemes 10,260,975 132,113 2,668 10,395,756
----------------- -------------- -------------- -----------------
11,716,405 227,033 4,214 11,947,652
Other investments 8,895 - - 8,895
----------------- -------------- -------------- -----------------
Total 11,725,300 227,033 4,214 11,956,547
----------------- -------------- -------------- -----------------
Level 1 valuation methodology
Financial assets included in Level 1 are measured at fair value
using quoted mid prices that are available at the reporting date
and are traded in active markets. These financial assets are mainly
collective investment schemes and listed equity instruments.
Level 2 and Level 3 valuation methodology
The Group regularly reviews whether a market is active, based on
available market data and the specific circumstances of each
market. Where the Group assesses that a market is not active, then
it applies one or more valuation methodologies to the specific
financial asset. These valuation methodologies use quoted market
prices where available, and may in certain circumstances require
the Group to exercise judgement to determine fair value.
Financial assets included in Level 2 are measured at fair value
using observable mid prices traded in markets that have been
assessed as not active enough to be included in Level 1.
Otherwise, financial assets are included in Level 3. These are
assets where one or more inputs to the valuation methodology are
not based on observable market data.
Level 3 sensitivity to changes in unobservable measurements
For financial assets assessed as Level 3, based on its review of
the prices used, the Company believes that any change to the
unobservable inputs used to measure fair value would not result in
a significantly higher or lower fair value measurement at year end,
and therefore would not have a material impact on its reported
results.
Changes to valuation methodology
There have been no changes in valuation methodology since year
end.
Transfers between Levels
There have been no material changes between Levels since year
end.
4. Segmental reporting
The revenue and profit before tax are attributable to activities
carried out in the UK and Isle of Man.
The Group has three classes of business as follows:
- provision of investment administration services
- transaction of ordinary long term insurance and underwriting life assurance
- provision of consultancy services.
Analysis by class of business is given below:
Six months Six months to
to 31 March 31 March 2017
2018
GBP'000 GBP'000
Revenue
Investment administration services 23,997 21,364
Insurance and life assurance
business 20,599 17,379
44,596 38,743
Profit before tax
Investment administration services 8,078 8,159
Insurance and life assurance
business 4,152 16,219
Consultancy services 648 290
------------- ---------------
12,878 24,668
As at 31 March As at 30 September
2018 2017
GBP'000 GBP'000
Net assets
Investment administration services 38,888 51,176
Insurance and life assurance
business 46,045 50,397
Consultancy services 1,340 953
-------------------- ------------------------
86,273 102,526
The figures above comprise the results of the companies that
fall directly into each segment, as well as a proportion of the
results from the other Group companies that only provide services
to the revenue-generating companies. This therefore has no effect
on revenue, but has an effect on the profit before tax and net
assets figures.
5. Earnings per share
Six months ended Six months ended
31 March 2018 31 March 2017
Profit
Profit for the year and earnings GBP14.6m GBP13.9m
used in basic and diluted earnings
per share
Number of shares
Number of shares used in basic
and diluted earnings per share 331.3m 331.3m
On 2 March 2018, as part of the IntegraFin Holdings plc IPO
process, a bonus share issue occurred resulting in the numbers of
shares in issue increasing from 1,137,278 to 331,322,014. The
nominal value of each share was also reduced through the bonus
share issue process, from 0.05p to 0.01p. The calculation of
earnings per share for the comparative period presented has been
adjusted retrospectively to reflect the new share structure.
Earnings per share is calculated based on the share capital of
IntegraFin Holdings plc and the earnings of the consolidated
Group.
6. Tax on profit on ordinary activities
Tax is charged at 22% for the six month period ended 31 March
2018 (31 March 2017: 19%), representing the best estimate of the
average annual effective tax rate expected to apply for the full
year, applied to the pre-tax income of the six month period. The
effective tax rate reflects entities in the Group operating in
non-UK tax jurisdictions, and includes the effect of IPO costs not
deductible for tax purposes.
7. Called up share capital - Company and Group
31 Mar 30 Sep 31 Mar 30 Sep
2018 2017 2018 2017
Allotted, called up and fully Number Number GBP'000 GBP'000
paid:
Ordinary shares of GBP0.01
each 331,322,014 - 3,313
Ordinary Class A shares of
GBP0.05 each 417,868 21
Ordinary Class B shares of
GBP0.05 each 357,000 18
Ordinary Class C shares of
GBP0.05 each 332,410 17
Ordinary Class D shares of
GBP0.05 each 30,000 1
------------------------------- ------------ ---------- -------- --------
331,322,014 1,137,278 3,313 57
Immediately prior to Admission to the London Stock Exchange, the
share capital of the Company was increased from GBP56,863.90 to
GBP3,313,220.14 by virtue of a bonus issue of a further:
122,017,456 A Ordinary Shares of 0.01p each; 102,244,000 B Ordinary
Shares of 0.01p each; 97,063,720 C Ordinary Shares of 0.01p each;
and, 6,859,560 D Ordinary Shares of 0.01p each.
Immediately prior to Admission each A, B, C and D share was then
re-designated into an Ordinary Share of 0.01p each.
8. Other non-distributable reserves
Restated
31 March 30 September
2018 2017
GBP'000 GBP'000
Other non-distributable reserves 5,722 5,722
The share premium account per the Audited Annual Financial
Statements for the year ended 30 September 2017 has been
reclassified as other non-distributable reserves. The share premium
is held by one of the Company's subsidiaries, Integrated Financial
Arrangements Limited, so it is more appropriate to classify this
within other reserves on a Group level.
9. Related parties
There were no material changes to the related party transactions
during the period.
10. Events after the reporting date
There are no events subsequent to the year-end that require
disclosure in, or amendment to the financial statements.
11. Dividends
During the six month period to 31 March 2018 the Company paid an
interim dividend of GBP19,418,436 (six months to 31 March 2017:
GBP13,527,336) and a special dividend of GBP11,372,780 (six months
to 31 March 2017: nil) to shareholders.
DIRECTORS, COMPANY DETAILS, ADVISERS
Executive Directors
Ian Taylor
Michael Howard
Alexander Scott
Non-Executive Directors
Christopher Munro
Patrick Snowball (appointed 1 October 2017)
Neil Holden
Company Secretary
David Johnson
Independent Auditors
BDO LLP London
Solicitors
Eversheds Sutherland, London
Principal Bankers
NatWest
Registrars
Equiniti
Registered Office
29 Clement's Lane, London, EC4N 7AE
Website
www.integrafin.co.uk
Company number
8860879
IntegraFin Holdings plc, 29 Clement's Lane, London, EC4N 7AE
Tel: (020) 7608 4900 Fax: (020) 7608 5300
(Registered office: as above; Registered in England and Wales
under number: 8860879)
The holding company of the Integrated Financial Arrangements Ltd
group of companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFIRESIDLIT
(END) Dow Jones Newswires
May 18, 2018 02:00 ET (06:00 GMT)
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