TIDMMGR
RNS Number : 0585I
Miton Group Plc
19 March 2018
MITON GROUP PLC
FINAL RESULTS FOR THE YEARED 31 DECEMBER 2017
"Strong financial performance and progress in 2017 - significant
momentum carried into 2018"
Miton Group plc (the 'Company' or 'Group'), the AIM quoted asset
management group, today announces its final results for the year
ended 31 December 2017.
2017 Results
-- GBP3,823 million closing Assets under Management ('AuM'), up
from GBP2,905 million at the start of 2017.
-- Average AuM up by 21% for the year at GBP3,361 million (2016: GBP2,783 million).
-- Positive net inflows of GBP494 million across a range of strategies (2016: GBP1 million).
-- Adjusted profit before tax increased by 33% to GBP6.8 million
for the year (2016: GBP5.1 million).
-- Proposed dividend of 1.4p, up 40% reflecting confidence in
future prospects and momentum in AuM.
-- A total of 15,152,963 shares acquired and cancelled at a cash cost of GBP6 million.
-- Group remains robustly financed with total cash of GBP19.9m (2016: GBP21.3 million).
Fund highlights
-- 87% of funds are first or second quartile* (2016: 86%).
-- The equity fund range grew by 37% to end the year at GBP2,350
million (2016: GBP1,714 million).
-- The multi-asset fund range grew by 29% to end the year at
GBP868 million (2016: GBP672 million).
-- The LF Miton UK Value Opportunities Fund saw positive inflows
of GBP32 million during the year.
-- The LF Miton US Opportunities Fund ended the year above GBP380 million.
* Since launch or manager tenure up to 31 December 2017
Current Trading
-- GBP4,057 million unaudited closing AuM at 15 March 2018.
-- Positive net inflows of GBP190 million in the two months to 28 February 2018.
-- Two new funds launched to date in 2018.
David Barron, Chief Executive Officer of Miton Group, said:
"I am pleased to report on a year of significant progress for
Miton. Positive net flows of GBP494 million demonstrated the appeal
of our genuinely active investment strategies. We have produced
good long-term investment performance across a range of funds as
well as making our operating platform even more efficient to grow
the AuM"
"2018 has commenced strongly. We have seen positive net flows
with AuM passing GBP4 billion"
2017 2016
GBPm GBPm %
Closing AuM 3,823 2,905 +32
Average AuM(1) 3,361 2,783 +21
Net revenue 21.8 19.0 +15
Adjusted Profit before tax(2) 6.8 5.1 +33
Profit before tax(3) 6.2 4.3 +44
Total cash 19.9 21.3 -7
pence pence %
Adjusted earnings per share(2) 3.60 2.67 +35
Diluted adjusted earnings per share(4) 3.38 2.40 +41
Basic earnings per share 3.27 2.14 +53
Proposed dividend per share 1.40 1.00 +40
Notes
(1) Average AuM is based on the total month end closing AuM for
each product managed by the Group.
(2) Adjusted Profit is calculated before the deduction of
amortisation, exceptionals and associated taxation.
(3) Profit before tax includes exceptional operating expenses of
GBP0.352m relating predominantly to changes in the Board structure
completed in the year. In 2016 the exceptional items related to the
implementation of a new remuneration structure for the fund
management team and the cancellation of the Growth Share Plan for
those participants who had no value accrued in the scheme.
(4) Diluted adjusted earnings per share involves a dilution of
7% largely as a result of an estimate of the Miton Group plc shares
which would be issued if all the Growth Share Plan shares with an
accrued value at 31 December 2017 had vested and had been exchanged
for Miton Group plc ordinary shares at that date.
S
For further information, please contact:
Miton Group plc 020 3714 1474
David Barron
Chief Executive Officer
MHP Communications miton@mhpc.com
Reg Hoare / Simon Hockridge / Charlie Barker 020 3128 8100
Peel Hunt (Nominated adviser and Broker) 020 7418 8893
Guy Wiehahn / Rishi Shah
Note to Editors:
Miton Group plc (referred to as the "Company" or "Group"), is a
multi-asset and equity asset management specialist based in London.
As at 15 March 2018 the Group managed GBP4.1 billion* of assets
including eleven OEICs, two unit trusts and four investment trusts.
www.mitongroup.com
*estimated unaudited balance
Chairman's Statement
I am delighted to be taking up the role of Chairman at Miton
Group plc at such an exciting point in the Group's evolution and
particularly pleased to introduce the Annual Report and to present
a strong set of full year results.
Results
The Group has enjoyed a very positive year both in terms of
investment performance and organic growth in assets. At the end of
2016 Assets under Management ('AuM') stood at GBP2.9bn and,
pleasingly, this figure rose to GBP3.8bn at the year end, a 32%
increase.
Average AuM over the year was GBP3,361m, up from GBP2,783m in
2016, representing an increase of 21% with growth spread across the
product range. Assets in the multi-asset range have grown by 29%,
UK equities by 27%, US equities by 60% and European equities by
121%.
87% of Miton's funds are first or second quartile since launch
or fund manager tenure. This strong performance is coupled with the
fact that our equity funds have an average active share of 84% or
greater, underlining our commitment to genuinely active
investing.
The Group's strategic position is clear: it has a broad and
distinctive range of investment strategies, good investment
performance, growing distribution capability and a scalable
operating platform. In an ever competitive landscape these
characteristics are important to achieve growth.
In March the Group continued to diversify its product range with
the launch of a global infrastructure income fund. In January 2018
we launched a new multi-asset fund followed by a US smaller
companies fund in March.
Our ambition is straightforward: to be recognised as a leading
active investment management firm delivering value to our clients
through investment outperformance.
By delivering our goal "to make more money for more investors
through genuinely active investing and a relentless pursuit of
exceptional standards" and continuing to build a culture that puts
our customers at the heart of our business model we will be well
positioned to meet our ambitions and continue to grow.
People
I take over the Chairmanship at a time when high aspirations are
paired with energy and ambition of the Board, the management team
and our employees and I would like to acknowledge their skill and
commitment in delivering these results. I would also like to thank
Ian Dighé for his stewardship of the Company in his capacity as
Chairman over the last seven years.
Charitable activity
Upon my appointment I was pleased to see that the Group has
historically supported the National Youth Advocacy Service
('NYAS'). NYAS is a rights-based charity operating across England
and Wales for children, young people and adults, providing them
with advocacy and legal representation when important decisions are
being made about them. During the three-year partnership the Group
has worked with NYAS and spread the word of the vital role it plays
in society. Since 2014 the Group has hosted a series of fundraising
events and has donated GBP78,233 to support the NYAS national
helpline.
Dividend
The Group's continuing strong cash generation enables the Board
to maintain a progressive dividend policy whilst continuing to
invest in the business. The Board is proposing an annual dividend
of 1.4p (2016: 1.00p), which is an increase of 40%. If approved by
the shareholders at the Annual General Meeting on 8 May 2018, the
dividend will be paid on 11 May 2018 to shareholders on the
register at the close of business on 3 April 2018.
With increasing levels of profit after taxation, the Group can
continue to increase the level of distribution made to shareholders
while retaining appropriate working capital for further investment
and expansion. The Group remains soundly financed with no debt and
cash balances as at 31 December 2017 of GBP19.9m (2016:
GBP21.3m).
Outlook
We continue to diversify the base of the business where we
emphasise the complementary nature of our products to the growing
passive investment market. We recognise that we now operate in a
more regulated environment and welcome the opportunity to exhibit
best in industry practices in adopting new regulation.
The Board and Senior Executive Group are encouraged by the
current progress of the Group and are ambitious to capitalise on
this to grow the business further.
I look forward to working with my new colleagues, across all
areas of the business, to build on the solid achievements made in
2017 and to deliver future value for our shareholders.
Jim Pettigrew
Chairman
16 March 2018
Chief Executive Officer's Report
I am pleased to report on a year of significant progress for
Miton in this, my first Annual Report as Chief Executive. Positive
net flows of GBP494m demonstrated the appeal of our genuinely
active investment strategies. We have produced good long-term
investment performance across a range of funds as well as making
our operating platform even more efficient to grow the Assets under
Management ('AuM').
Our strategy and performance
We see a number of forces shaping the asset management industry
and recognise the growing importance of individual investors and
their advisers as the source of new flows into our funds. Employer
or government-supported pension schemes continue to diminish in
importance leading to a greater focus by regulators on creating a
regulatory framework where the interests of individual savers are
protected, such that investors can have confidence and trust in the
savings market. Technology will impact asset management in many
areas, not least in enabling the delivery of low-cost passive or
quasi-passive strategies on an industrial scale.
Against this backdrop, we believe that an active manager
offering access to differentiated, active strategies that are
straightforward with the prospect of good long-term returns after
taking into account all costs, will prosper. Miton's clients are
principally fund of fund managers, advisers and discretionary
managers in the UK who have stewardship of the savings on behalf of
individuals and pensioners. We offer active equity funds, which can
complement more benchmark-aware strategies. Our multi-asset funds
offer a range of solutions that meet the needs of advisers who seek
transparent long-term investments with differing risk and return
characteristics.
We believe this combination of single-strategy equity funds and
multi-asset funds is a source of real strength for the Company. The
demand for single-strategy funds may rise and fall with wider
market conditions, and whilst we aim to offer strongly performing
equity funds that have appeal as long-term investments, the
multi-asset range meets differing client expectations and brings
diversity to the business.
Miton invests without regard to benchmark weightings, allocating
our clients' savings to companies and assets that we believe
deliver good returns with proper regard to risk and preservation of
capital. The performance record of our funds is outstanding with 13
from 15 funds being in the first or second quartiles since
inception or the date the current managers took over.
Distribution and customer service
The second key element of our strategy comes from understanding
what our clients want from an active manager. We have developed a
strong and effective distribution force, with gross inflows of
GBP1.1bn in the financial year being testament to our strengths. We
are seen by clients as having strong offerings in many of the key
asset classes to which they allocate funds. We have added to our
distribution capability during the year and relaunched our website
which will improve our engagement with clients. We believe our
strong distribution capability across the adviser and wealth
manager markets is a key part of our success.
We have invested significantly in the infrastructure of the
business over the past three years to support the next phase of our
growth strategy.
Regulation and the business environment
Our industry is subject to significant external scrutiny. The
FCA's Asset Management Market Study put forward a series of
measures to improve transparency, particularly around costs and
product governance. We welcome these measures and are confident our
business model will enable us to embrace any final recommendations
from the study with little operating or financial impact.
More widely there is much talk of fee pressure on active
managers. The dominant forces shaping the industry will mean that
clients continue to look closely at whether the costs, including
management fees, are justified by the expected returns. Many of our
clients are themselves subject to similar scrutiny on fees and
costs and they will in turn look for their suppliers to offer value
for money to the end client. Over time, we expect to see much more
variability in pricing of fund management services as investors
look to pay fees that reflect the value of the investment decisions
driving returns. We believe our primary competition to be other
active strategies rather than passive products which are less
expensive and which offer market returns.
We focus on continuing to deliver good investment performance,
after costs, by providing excellence in distribution, transparency
in all we do and by engendering trust and confidence in our
business and brand.
Preparation for the implementation of MiFID II consumed much
energy and time in the sector. One of the most focused on elements
of MiFID II was the unbundling of the research and trading elements
of brokerage commission. We took the decision to seek to agree a
specific charge with our clients to cover external research.
External research is an important input to our investment processes
and we regard our approach of having a transparent budget agreed
with clients as offering the strongest assurance to clients that
the integrity of our investment approaches is not compromised by
the unforeseen consequences of regulatory change. We recognise that
many, often larger firms, have adopted a different approach. In our
view, the debate has become over simplified without recognising
that different approaches to research will suit different firms and
their investment processes. We continue to monitor this area and
client responses carefully.
Business performance
At the end of 2016 AuM stood at GBP2.9bn so it is gratifying to
see this extend beyond GBP3.8bn at the year end. The momentum
behind this 32% increase is high, along with the potential for the
business to grow further in 2018 and beyond.
Average AuM over the year was GBP3,361m, up from GBP2,783m in
2016, representing an increase of 21%, further exemplifying our
trajectory.
The net management fee margin declined slightly from 68.2bps to
64.9bps; however, the Group's operating margin increased from 26.8%
to 31.2%, reflecting the benefits of greater scale.
By streamlining the business and focusing on efficiency, we have
maintained overheads at a similar level to previous years. Fixed
personnel costs have remained broadly static in 2017.
Much of the focus of our distribution efforts has been on the
continued diversification of our business to build resilience. The
first of our single-strategy funds launched in 2011, LF Miton UK
Multi Cap Income Fund, now has over GBP1bn in client assets which
is a testament to its differentiation, performance since launch and
our distribution strengths. The net positive flows from funds
launched thereafter accounted for some two-thirds of Group net
flows as these strategies gained longer performance records. The
multi-asset range saw positive net flows in excess of GBP127m and
creations in 49 out of 52 weeks. At the year end we managed over
GBP868m across the multi-asset range.
Miton has launched six single-strategy funds since 2011 which
had a combined AuM at the year end of GBP2,168m. All these funds
and the FP Miton Income Fund, which we acquired, have clearly
defined objectives and are differentiated from the mainstream.
The LF Miton US Opportunities Fund passed GBP380m in AuM (five
years since launch) and the LF Miton European Opportunities Fund
reached GBP181m in AuM in less than two years since launch. It is
also encouraging that, on the back of exceptional performance, the
LF Miton UK Value Opportunities Fund saw a return to net creations
and ended the year with GBP389m of AuM. These three single-strategy
funds have significant capacity and we are optimistic about their
prospects and those of our other strategies.
We are confident that our operating platform is scalable and
when we see client demand we can deliver additional strategies from
our existing capabilities efficiently.
We believe our remuneration and reward structures are
competitive and transparent. The final tranche of Growth Shares
will be eligible to exchange into plc shares in September 2018,
thereafter all fund manager remuneration will be recognised via
profit and loss rather than through share dilution.
We have made good quality hires across all areas of our business
and enabled our people to expand their roles in the firm. We
believe Miton offers an attractive working environment.
Outlook
I believe Miton is fundamentally well-placed in a rapidly
changing sector. In my first year it has been important to deliver
increased profitability, higher operating margin and improved
returns to shareholders.
My focus is on ensuring:
-- our clients and partners recognise that Miton has strengths
in many product areas and that the firm is a stable long-term
partner;
-- the business is streamlined and efficient, transparently led
and can capitalise on our natural advantages of size and nimbleness
to make good, timely decisions;
-- we continue to diversify the base of the business through
selling more funds to a broader customer base;
-- investment in our distribution capability (further sales
hires and our new website being tangible examples); and
-- we embrace technological developments and ensuring the Group
can meet changes in regulation and reporting requirements.
This year we have delivered solid organic growth, strong cash
generation and the completion of two share buybacks. There is
significant scope for further growth from our existing strategies.
The attractions of Miton, we believe, will be increasingly
recognised.
2018 has commenced strongly. Net flows were GBP190m in the first
two months of the year with closing AuM at 28 February 2018 of
GBP3,963m. We have launched two new funds from existing
capabilities demonstrating further scope for organic growth.
Markets remain volatile, and there could be further setbacks,
which may impact client confidence. However, by the key measures of
the health of an asset management firm, investment performance and
whether clients wish to commit more investment to our strategies,
Miton is performing well.
As always, our staff are key to Miton's success. We are greater
than the sum of our parts and it is a genuine team effort. I would
like to thank all staff for their hard work and diligence and I
look forward to building on this over the coming years.
David Barron
Chief Executive Officer
16 March 2018
Financial and Operating Review
Assets under Management ('AuM')
AuM ended the year at GBP3,823m, an increase of GBP918m (32%)
over the comparative period. The increase was driven by positive
net flows and strong market/investment performance achieved
consistently throughout the year.
Average AuM for 2017 was GBP3,361m, an increase of GBP578m (21%)
on the previous year.
2017 2016 %
AuM and flows GBPm GBPm change
------------------------------ ----- ----- -------
Opening AuM 2,905 2,784
Net flows 494 1
Market/investment performance 424 120
------------------------------ ----- ----- -------
Closing AuM 3,823 2,905 +32%
------------------------------ ----- ----- -------
Average AuM 3,361 2,783 +21%
------------------------------ ----- ----- -------
Positive net flows were experienced across all asset classes
managed by the Group.
2017 2016 %
AuM by asset class and fund type GBPm GBPm change
--------------------------------- ----- ----- -------
Equity funds 2,350 1,714 +37%
Multi-asset funds 868 672 +29%
Investment trusts 605 519 +17%
--------------------------------- ----- ----- -------
Total 3,823 2,905 +32%
--------------------------------- ----- ----- -------
Equity funds
The focus on diversification of the fund range remains a key
priority. 2017 saw the launch of a global infrastructure income
fund which had attracted GBP20m in AuM as at 31 December 2017.
The AuM of the US Opportunities Fund increased by 60% to end the
year at GBP381m. Since inception this fund has delivered first
quartile performance. On 14 March 2018 the Group expanded its US
product range with the launch of a new US Smaller Companies Fund
drawing on the team's track record in this area of the market.
Pleasingly, the European Opportunities Fund launched in December
2015 ended the year with GBP181m of AuM, an increase of 121%.
The UK Multi Cap Income Fund reached the landmark of passing
through GBP1bn in AuM during the year.
Multi-asset funds
The multi-asset franchise achieved positive net flows of GBP127m
for the year with the total AuM managed by the team increasing by
29% to GBP868m.
In January 2018, the Group continued to broaden its multi-asset
suite of products with the launch of a balanced multi-asset fund in
the IA Mixed Investment 40%-85% shares sector.
Net management fees and margins
Net management fees for 2017 were GBP21.8m (2016: GBP19.0m), an
increase of 15%.
The net management fee margin reduced to 64.9bps (2016: 68.2bps)
primarily due to the change in the product mix and early stage
products contributing at lower founder investor margins.
%
Net management fees and margins 2017 2016 change
-------------------------------- ----- ------ -------
Net management fees (GBPm) 21.8 19.0 +15%
-------------------------------- ----- ------ -------
Average AuM (GBPm) 3,361 2,783 +21%
-------------------------------- ----- ------ -------
Net management fee margin (bps) 64.9 68.2 -5%
-------------------------------- ----- ------ -------
Administration expenses
Administration expenses (excluding share-based payments) for the
year were GBP14.4m, an increase of GBP1.3m (10%). As in previous
years staff costs represented the major component, totalling
GBP10.1m (2016: GBP8.8m).
Staff costs consist of two elements, the first being 'fixed'
(base salaries, pension, NI, fixed settlement amounts and indirect
costs of employment), which rose by 5% to GBP6.7m. Included within
this amount is GBP0.16m of non-recurring staff costs.
The second 'variable' element includes discretionary bonus
arrangements and the fund management remuneration scheme. Variable
staff costs increased by GBP0.8m to GBP3.0m reflecting the
increased net revenues generated by the Group and the underlying
profitability.
Overheads rose by GBP0.2m mainly due to targeted investment in
the Group's digital assets and updated visual identity, including
the new website and annual report.
Other costs consist principally of depreciation and
irrecoverable VAT.
Adjusted Profit and Profit before Tax
Adjusted profit increased to GBP6.8m from GBP5.1m in the
comparative year; the increase reflects the higher average AuM for
the year.
2017 2016
GBPm GBPm
--------------------------- ------ ------
Net revenue 21.8 19.0
Administrative expenses (14.4) (13.1)
Share-based payments (0.6) (0.7)
--------------------------- ------ ------
Adjusted Profit before tax 6.8 5.1
--------------------------- ------ ------
Amortisation (0.3) (0.3)
Exceptional costs (0.4) (0.6)
--------------------------- ------ ------
Profit before tax 6.2 4.3
--------------------------- ------ ------
Share-based payments
The share-based payment expense for the year was GBP0.6m (2016:
GBP0.7m).
Exceptional costs
Exceptional restructuring costs incurred during the year
amounted to GBP0.4m. These costs predominantly related to the
changes in the Board structure (2016: GBP0.6m relating to the
cancellation of the Growth Share Plan ('GSP') and costs associated
with the implementation of the new remuneration structure for the
fund management team).
Earnings per share
The adjusted earnings per share of 3.6p represents an increase
of 35% (2016: 2.67p).
Basic earnings per share was 3.27p (2016: 2.14p).
Diluted adjusted earnings per share of 3.38p (2016: 2.40p) shows
a theoretical dilution of 7% (2016: 11%) largely from an estimate
of the number of Miton Group plc shares which would have been
issued if the 100 outstanding Growth Shares with accrued value at
31 December 2017 (2016: 200 Growth Shares) had been converted at
that date.
The theoretical dilution has fallen as a result of an exchange
notice being served on 100 Growth Shares during the year and the
subsequent issue of Miton Group plc shares.
Dilution also arises from the Management Equity Incentive
('MEI') and the Management Incentive Plan ('MIP') where the
exercise prices are below the average share price during the year
of 38.64p (2016: 27.32p).
Dividend
The Board is proposing to increase the annual dividend by 40% to
1.4p per share (2016: 1.0p). The proposed dividend payment totals
GBP2.1m (2016: GBP1.5m).
The Group's policy is to have a progressive dividend, which
reflects an appropriate level of dividend cover, taking into
account the Board's overall confidence in the Group's growth
prospects, resilience of the balance sheet and the macro
environment.
The dividend cover was 2.34 times (profit after taxation divided
by proposed dividend amount) (2016: 2.15 times).
Balance sheet and cash management
At 31 December 2017 the Group's cash balances totalled GBP19.9m
(2016: GBP21.3m).
The Group generated positive operating cash flows after taxation
of GBP6.3m (2016: GBP8.5m). These have been substantially utilised
in the year to facilitate distributions to shareholders in the form
of the annual dividend and two share buyback programmes completed
in the year.
The buybacks were undertaken to ameliorate the dilutive impact
of shares issued to participants under the GSP.
On 23 February 2017 the Group acquired and cancelled 6,606,900
ordinary 0.1p shares at a cash cost of GBP2.6m.
On 6 December 2017 the second buyback was completed. 8,546,063
ordinary 0.1p shares were acquired and cancelled at a cash cost of
GBP3.4m.
Piers Harrison
Chief Operating Officer
16 March 2018
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2017
2017 2016
Notes GBP000 GBP000
------------------------------------ ----- -------- --------
Revenue 27,789 24,067
Fees and commission expenses (5,983) (5,079)
------------------------------------ ----- -------- --------
Net revenue 21,806 18,988
Administration expenses (14,440) (13,122)
Share-based payment expense (548) (739)
Amortisation of intangible assets (280) (290)
Exceptional operating expenses 3(c) (352) (598)
------------------------------------ ----- -------- --------
Operating profit 3(a) 6,186 4,239
Finance revenue 3 11
------------------------------------ ----- -------- --------
Profit for the year before taxation 6,189 4,250
Taxation (1,184) (1,002)
------------------------------------ ----- -------- --------
Profit for the year after taxation
attributable to equity holders
of the parent 5,005 3,248
------------------------------------ ----- -------- --------
pence pence
--------------------------- ---- ----- -----
Basic earnings per share 4(a) 3.27 2.14
--------------------------- ---- ----- -----
Diluted earnings per share 4(a) 3.06 1.92
--------------------------- ---- ----- -----
No other comprehensive income was recognised during 2017 or
2016. Therefore, the profit for the year is also the total
comprehensive income.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2017
Employee Capital
Share Share Benefit Treasury redemption Retained
capital premium Trust shares reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- -------- -------- -------- -------- ----------- --------- -------
At 1 January 2016 171 2,661 (6,520) (26) - 61,931 58,217
Profit for the year - - - - - 3,248 3,248
Release of Treasury shares - - - 15 - - 15
Purchase of Employee Benefit
Trust shares - - (10) - - - (10)
Share-based payment - - - - - 1,215 1,215
Settlement of options - - - - - (159) (159)
Share issues on exchange of
Growth Shares 7 - - - - (7) -
Dividends paid - - - - - (1,012) (1,012)
-------------------------------- -------- -------- -------- -------- ----------- --------- -------
At 1 January 2017 178 2,661 (6,530) (11) - 65,216 61,514
-------------------------------- -------- -------- -------- -------- ----------- --------- -------
Profit for the year - - - - - 5,005 5,005
Release of Treasury shares - - - 7 - - 7
Settlement of options - - - - - (220) (220)
Share-based payment - - - - - 548 548
Share issues on exchange of
Growth Shares 10 - - - - (10) -
Cancellation of ordinary shares (15) - - - 15 (5,965) (5,965)
Dividends paid - - - - - (1,509) (1,509)
-------------------------------- -------- -------- -------- -------- ----------- --------- -------
At 31 December 2017 173 2,661 (6,530) (4) 15 63,065 59,380
-------------------------------- -------- -------- -------- -------- ----------- --------- -------
Consolidated Statement of Financial Position
as at 31 December 2017
2017 2016
Notes GBP000 GBP000
--------------------------------- ----- ------- -------
Non-current assets
Goodwill 41,070 41,070
Intangible assets 537 817
Other investments 100 100
Property and equipment 52 86
Deferred tax asset 55 44
Trade and other receivables 20 -
--------------------------------- ----- ------- -------
41,834 42,117
--------------------------------- ----- ------- -------
Current assets
Trade and other receivables 3,016 2,415
Cash and cash equivalents 5 19,902 21,288
--------------------------------- ----- ------- -------
22,918 23,703
--------------------------------- ----- ------- -------
Total assets 64,752 65,820
Current liabilities
Trade and other payables (5,072) (3,953)
Provisions (285) -
--------------------------------- ----- ------- -------
(5,357) (3,953)
--------------------------------- ----- ------- -------
Non-current liabilities
Provisions (15) (187)
Deferred tax liability - (166)
--------------------------------- ----- ------- -------
(15) (353)
Total liabilities (5,372) (4,306)
--------------------------------- ----- ------- -------
Net assets 59,380 61,514
--------------------------------- ----- ------- -------
Equity
Share capital 173 178
Share premium 2,661 2,661
Employee Benefit Trust (6,530) (6,530)
Treasury shares (4) (11)
Capital redemption reserve 15 -
Retained earnings 63,065 65,216
--------------------------------- ----- ------- -------
Total equity shareholders' funds 59,380 61,514
--------------------------------- ----- ------- -------
David Barron
Chief Executive Officer
16 March 2018
Consolidated Statement of Cash Flows
for the year ended 31 December 2017
2017 2016
Notes GBP000 GBP000
-------------------------------------- ----- ------- -------
Cash flows from operating activities
Profit for the year after taxation 5,005 3,248
Adjustments to reconcile profit
to net cash flow from operating
activities:
Tax on continuing operations 1,184 1,002
Finance revenue (3) (11)
Depreciation 66 86
Loss on disposal of fixed assets 2 1
Increase in employee benefit
liability 83 -
Purchase of plan assets (held
for employee benefit liability) (83) -
Amortisation of intangible assets 280 290
Share-based payment expense 548 1,215
(Increase)/decrease in trade
and other receivables (622) 1,661
Increase in trade and other payables 770 934
Increase in provisions 113 98
-------------------------------------- ----- ------- -------
Cash generated from operations 7,343 8,524
Income tax paid (1,011) (42)
-------------------------------------- ----- ------- -------
Net cash flow from operating
activities 6,332 8,482
-------------------------------------- ----- ------- -------
Cash flows from investing activities:
Interest received 3 11
Purchase of property and equipment (34) (12)
Purchase of other investments - (100)
-------------------------------------- ----- ------- -------
Net cash flow from investing
activities (31) (101)
-------------------------------------- ----- ------- -------
Cash flows from financing activities:
Release of Treasury shares 7 15
Purchase of Employee Benefit
Trust shares - (10)
Settlement of options (220) (159)
Acquisition and cancellation
of ordinary shares (5,965) -
Dividend paid (1,509) (1,012)
-------------------------------------- ----- ------- -------
Net cash flow from financing
activities (7,687) (1,166)
-------------------------------------- ----- ------- -------
(Decrease)/increase in cash and
cash equivalents (1,386) 7,215
Cash and cash equivalents at
the beginning of the year 21,288 14,073
-------------------------------------- ----- ------- -------
Cash and cash equivalents at
the end of the year 5 19,902 21,288
-------------------------------------- ----- ------- -------
Notes to the Consolidated Financial Statements
for the year ended 31 December 2017
1. Authorisation of financial statements and statement of
compliance with IFRS
The financial statements of Miton Group plc and its subsidiaries
(the 'Group') for the year ended 31 December 2017 were authorised
for issue by the Board of Directors on 16 March 2018 and the
Consolidated Statement of Financial Position was signed on the
Board's behalf by the Chief Executive, David Barron. Miton Group
plc is a public limited company incorporated and domiciled in
England and Wales. The Company's ordinary shares are traded on
AIM.
This financial information does not constitute statutory
accounts, but has been extracted from the statutory accounts for
the years ended 31 December 2017 and 31 December 2016 on which
unqualified audit reports, which did not contain a statement under
s498(2) or s498(3) of the Companies Acts 2006, have been issued.
The statutory accounts for the year ended 31 December 2016 were
posted to shareholders on 27 March 2017 and delivered to the
Registrar on 1 June 2017. The results announcement has been
prepared on the same basis as that used in the preparation of the
previous year's annual report and was approved for issue by the
Board of Directors on 16 March 2018.
The statutory accounts will be delivered to the Registrar of
Companies following the Company's Annual General Meeting which will
be held at 10.30am on 8 May 2018 at the offices of Stephenson
Harwood LLP, 1 Finsbury Circus, London, EC2M 7SH.
Copies of the Annual Report and Accounts will be published on
the Group's website www.mitongroup.com on 19 March 2018 and posted
to shareholders on or before 29 March 2018.
2. Accounting policies
Basis of preparation
The Group's financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union as they apply to the financial
statements of the Group for the year ended 31 December 2017. The
consolidated financial statements have been prepared on the
historical cost basis, except for certain financial instruments
which have been measured at fair value. The consolidated financial
statements are presented in Sterling and all values rounded to the
nearest thousand pounds (GBP000). This results announcement
contains certain forward looking statements with respect to the
financial condition, results of operations and businesses and plans
for Miton Group plc. These statements and forecasts involve risk
and uncertainty because they relate to events and depend upon
circumstances that have not yet occurred. There are a number of
different factors that could cause actual results or developments
to differ materially from those expressed or implied by these
forward looking statements. Nothing in this statement should be
construed as a profit forecast.
Segmental reporting
The Group has only one operating segment, fund management, which
is derived from clients in the United Kingdom. Therefore, no
segmental reporting is presented. The Group has one cash-generating
unit ('CGU').
3. Group operating profit
(a) Operating profit is stated after charging:
2017 2016
Notes GBP000 GBP000
---------------------------------- ----- ------- -------
Auditors' remuneration 3(b) 149 170
Staff costs 10,610 9,486
Operating lease rentals - land
and buildings 485 487
Depreciation 66 86
Loss on disposal of fixed assets 2 1
Amortisation of intangible assets 280 290
Exceptional operating expenses 3(c) 352 598
---------------------------------- ----- ------- -------
The operating lease rentals charged to the Consolidated
Statement of Comprehensive Income include the service charges
associated with each lease.
(b) Auditors' remuneration
The remuneration of the auditors is analysed as follows:
2017 2016
GBP000 GBP000
------------------------------------------------------------- ------- -------
Audit of the consolidated financial
statements 40 40
Audit of the Company's subsidiaries 67 77
------------------------------------------------------------- ------- -------
107 117
------------------------------------------------------------- ------- -------
Other fees to auditors - tax compliance
services 25 38
- tax advisory services 8 7
- other assurance services 9 8
------------------------------------------------------------- ------- -------
149 170
------------------------------------------------------------- ------- -------
(c) Exceptional operating expenses
2017 2016
GBP000 GBP000
------------------------------------------------------------------------------------------ ------- -------
Internal reorganisation/redundancy 352 -
Fund manager remuneration plan - implementation
costs - 123
- acceleration of share-based payment
(non-cash) - 475
------------------------------------------------------------------------------------------ ------- -------
352 598
------------------------------------------------------------------------------------------ ------- -------
Restructuring costs in 2017 totalling GBP352,000 represented
GBP315,000 of redundancy costs and GBP37,000 of associated legal
costs. These costs predominantly related to the changes in the
Board structure completed in the year.
Exceptional costs of GBP598,000 in 2016 arose from the
cancellation of the GSP for those participants who had no accrued
value in the scheme as at 30 June 2016 along with costs associated
with the implementation of the new remuneration structure for the
fund management team.
4. Earnings per share
Basic earnings per share is calculated by dividing the profit
for the year attributable to ordinary equity shareholders of the
parent company by the weighted average number of ordinary shares
outstanding during the year.
The weighted average of issued ordinary share capital of the
Company is reduced by the weighted average number of shares held by
the Group's Employee Benefit Trust. These shares have waived their
dividend rights.
In calculating diluted earnings per share, IAS 33 Earnings Per
Share requires that the profit is divided by the weighted average
number of ordinary shares outstanding during the year plus the
weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into
ordinary shares during the year.
The Group undertook two share buybacks during the year. The
first was completed on 23 February 2017; the Group acquired a total
of 6,606,900 ordinary 0.1p shares. The second was completed on 6
December 2017; the Group acquired a total of 8,546,063 ordinary
0.1p shares. The ordinary shares totalling 15,152,963 acquired by
the above processes were cancelled during the year. The cash cost
of the share buybacks completed in the year was GBP5.965m.
(a) Reported earnings per share
Reported basic earnings per share has been calculated as
follows:
2017 2016
------------------------------------ ------------------------------------
Basic earnings Basic earnings
Profit Shares per share Profit Shares per share
GBP000 No. pence GBP000 No. pence
----------------------------------- ------- ----------- -------------- ------- ----------- --------------
Profit attributable to ordinary
equity shareholders of the
parent company for basic earnings 5,005 3,248
----------------------------------- ------- ----------- -------------- ------- ----------- --------------
Basic earnings per share 5,005 153,198,768 3.27 3,248 152,037,715 2.14
----------------------------------- ------- ----------- -------------- ------- ----------- --------------
Diluted earnings per share has been calculated as follows:
2017 2016
--------------------------------------- --------------------------------------
Diluted Diluted earnings Diluted Diluted earnings
Profit shares per share Profit shares per share
GBP000 No. pence GBP000 No. pence
-------------------------------- -------- ----------- ---------------- ------- ----------- ----------------
Profit attributable to ordinary
equity shareholders of the
parent company for diluted
earnings 5,005 3,248
-------------------------------- -------- ----------- ---------------- ------- ----------- ----------------
Diluted earnings per share 5,005 163,362,452 3.06 3,248 169,165,834 1.92
-------------------------------- -------- ----------- ---------------- ------- ----------- ----------------
Reconciliation of weighted average number of ordinary
shares:
2017 2016
shares shares
no. no.
--------------------------------------------- ----------- -----------
Weighted average number of ordinary
shares for basic EPS* 153,198,768 152,037,715
Effects of dilution from share options 10,163,684 17,128,119
--------------------------------------------- ----------- -----------
Weighted average number of ordinary
shares adjusted for the effect of dilution* 163,362,452 169,165,834
--------------------------------------------- ----------- -----------
* The weighted average number of shares takes into account the
weighted average effect of changes in treasury share transactions
during the year.
(b) Adjusted earnings per share
Adjusted earnings per share is based on Adjusted Profit after
tax, where Adjusted Profit is stated after charging interest and
share-based payments but before amortisation, and exceptional
items.
Adjusted Profit for calculating adjusted earnings per share:
2017 2016
GBP000 GBP000
---------------------------------------------- ------- -------
Profit before taxation for the year 6,189 4,250
Add back:
Exceptional operating expenses 352 598
Amortisation 280 290
---------------------------------------------- ------- -------
Adjusted Profit before tax 6,821 5,138
---------------------------------------------- ------- -------
Taxation:
Tax charge in the Consolidated Statement
of Comprehensive Income (1,184) (1,002)
Tax effect of adjustments (122) (81)
---------------------------------------------- ------- -------
Adjusted Profit after tax for the calculation
of Adjusted earnings per share 5,515 4,055
---------------------------------------------- ------- -------
Adjusted earnings per share was as follows using the number of
shares calculated at note 4(a):
2017 2016
pence pence
---------------------------- ------ ------
Adjusted earnings per share 3.60 2.67
---------------------------- ------ ------
Diluted Adjusted earnings per share was as follows:
2017 2016
pence pence
------------------------------------ ------ ------
Diluted Adjusted earnings per share 3.38 2.40
------------------------------------ ------ ------
The dilution arises largely as a result of the Miton Group plc
shares which would be issued if all Growth Shares with an accrued
value at 31 December 2017, which will not fully vest until
September 2018, had vested and had been exchanged into Miton Group
plc ordinary shares at 31 December 2017.
5. Cash
2017 2016
GBP000 GBP000
------------------------- ------- -------
Cash at bank and on hand 19,902 21,288
------------------------- ------- -------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GGUUCWUPRGRQ
(END) Dow Jones Newswires
March 19, 2018 03:00 ET (07:00 GMT)
Miton (LSE:MGR)
Historical Stock Chart
From Apr 2024 to May 2024
Miton (LSE:MGR)
Historical Stock Chart
From May 2023 to May 2024