13 November
2024
Tatton Asset Management
plc
("TAM plc", the
"Group" or the "Company")
AIM:
TAM.L
UNAUDITED INTERIM
RESULTS
For the six-month
period ended 30 September 2024
"Record net Inflows continue to
drive shareholder returns"
Tatton Asset Management plc, the investment
management and IFA support services group, today
announces its interim results for the six-month period ended 30
September 2024 (the "Period").
FINANCIAL
HIGHLIGHTS
●
|
Group revenue increased 23.7% to £21.660m (Sep
2023: £17.506m)
|
●
|
Adjusted operating profit1 up 22.8% to £10.894m (Sep
2023: £8.872m)
|
●
|
Adjusted operating profit1 margin 50.3% (Sep 2023:
50.7%)
|
●
|
Adjusted fully diluted EPS2 increased 30.0% to 13.67p
(Sep 2023: 10.52p)
|
●
|
Strong financial liquidity position, with net
cash of £26.916m (Mar 2024: £24.838m)
|
●
|
Interim dividend up 18.8% to 9.5p (Sep 2023:
8.0p)
|
●
|
Strong balance sheet with net assets of
£47.386m
|
OPERATIONAL
HIGHLIGHTS
●
|
Assets Under Management/Influence
("AUM/I3") increased 34.9% to £19.948bn (Sep 2023:
£14.784bn). AUM/I3 at 31 March 2024 £17.604bn, an
annualised increase of 26.6%
|
●
|
Current (November 2024) AUM/I3 is
£20.605bn and year to date net inflows are £2.221bn
|
●
|
Organic net inflows were £1.832bn (Sep 2023:
£0.910bn), an annualised increase of 22.1% of opening AUM with an
average run rate of £305m per month
|
●
|
Tatton's IFA firms increased by 6.5% to 1,038
(Mar 2024: 975) and the number of accounts increased by an
annualised 10.4% to 139,330 (Mar 2024: 126,150)
|
●
|
Paradigm Mortgages completions reduced by 4.3%
to £6.6bn (Sep 2023: £6.9bn). Paradigm Mortgages member firms
increased to 1,930 members (Mar 2024: 1,916 members)
|
●
|
Paradigm Consulting members increased to 437
(Mar 2024: 424)
|
●
|
Launch of new range of Passive funds following
demand from our IFAs
|
1
|
Operating profit before share-based payment charges,
amortisation of acquired intangibles and operating loss relating to
non-controlling interest.
|
2
|
Adjusted fully diluted earnings per share is adjusted for
share-based payment charges, amortisation of acquired intangibles,
the unwinding of discount on deferred consideration and the tax
thereon. The dilutive shares for this measure assume that all
contingently issuable shares will fully vest.
|
3
|
"AUM/I" is Assets under management and influence including
100% of 8AM Global Limited AUM
|
Paul Hogarth,
Chief Executive Officer of Tatton Asset Management,
commented:
"We have delivered record net
inflows of £1.8bn in the first half of the year, which is an
exceptional achievement for Tatton and I could not be more
delighted.
"Our record organic net inflows
driven by our strong proposition, consistent investment performance
and market leading service have underpinned our performance in this
period. We continue to deliver against our strategic objectives,
positioning the business for long term growth on an organic basis
and we remain well positioned to execute our New Roadmap to Growth
target of £30bn AUM/I by March 2029. Looking to the future,
the IFA sector remains in good health and we will continue to seek
further opportunities to support the IFA community through creating
a more holistic approach to our long-term
relationships. More widely,
assets on platform continue to grow but importantly, the Model
Portfolio Service proposition continues to be a strategic growth
driver within the wealth management sector, all of which help to
support our long term growth ambitions.
"Paradigm continues to deliver
stable and robust results given the wider UK economy and political
changes seen in the period.
"Macro and geopolitical uncertainty
remains; however, I am confident that Tatton's strong foundations
will support our continued consistent growth. While our net inflows
in this period have been exceptional, we expect them to return to
more normal levels of c.£200m per month as we move into the second
half of the year.
"The Board is confident in the
future prospects of the Group, and we remain on track to meet the
Board's expectations for the full year."
For further
information please contact:
Tatton Asset
Management plc
Paul Hogarth (Chief Executive
Officer)
Paul Edwards (Chief Financial
Officer)
Lothar Mentel (Chief Investment
Officer)
|
+44 (0) 161 486 3441
|
Zeus - Nomad
and Broker
Martin Green (Investment
Banking)
Dan Bate (Investment Banking and QE)
|
+44 (0) 20 3829 5000
|
Singer Capital
Markets - Joint Broker
Peter Steel (Investment Banking)
|
+44 (0) 20 7496 3000
|
Gracechurch
Group - Financial PR and IR
Heather Armstrong / Henry Gamble / Rebecca
Scott
|
+44 (0) 20 4582 3500
tatton@gracechurchpr.com
|
Trade Media
Enquiries
Roddi Vaughan Thomas
|
+44 (0) 7469 854 011
|
For more information, please visit:
www.tattonassetmanagement.com
OPERATIONAL REVIEW
Record net inflows continue to drive
shareholder returns
The Group has
made strong progress in the first half of this financial year,
delivering record net inflows of £1.832bn over the six months,
which in turn have driven continued growth in revenue and profits.
Our AUM/I1 has increased from £17.604bn at 31 March 2024
to £19.948bn at 30 September 2024, as we continue to drive the
business towards the £30bn target by 31 March 2029 that we
announced in our 2024 full year results.
Group revenue for the period increased by 23.7%
to £21.660m (Sep 2023: £17.506m). Adjusted operating
profit1 for the period increased by 22.8% to £10.894m
(Sep 2023: £8.872m), with adjusted operating profit
margin1 at 50.3% (Sep 2023: 50.7%).
Profit before tax, after the impact of
share-based payment charges, amortisation of intangibles relating
to acquisitions, and net finance income, increased to £10.102m (Sep
2023: £7.693m) and taxation charges for the period were £2.382m
(Sep 2023: £2.302m). This gives an effective tax rate of 23.6%
when measured against profit before tax.
Basic earnings per share was 13.03p
(Sep 2023: 8.97p). When adjusted for share-based payment
charges, amortisation of intangibles relating to acquisitions, and
finance costs relating to the unwinding of discounts on deferred
consideration, basic adjusted earnings per share1 was
14.29p (Sep 2023: 11.08p). Adjusted earnings per share fully
diluted for the impact of share options1 was 13.67p
(Sep 2023: 10.52p), an increase of 30.0%.
Tatton
Overview of performance
Tatton continues to perform strongly with
increased momentum of organic net inflows driven by a strong
proposition, consistent investment performance and market leading
service. These factors have ensured the continued support from
our independent financial advisers ("IFAs"). The total
AUM/I1 at the end
of the period increased to £19.948bn (Mar 2024: £17.604bn). In the
last six months, organic net inflows have averaged £305m per month
and increased by 101% to £1.832bn (Sep 2023: £910m). We are
particularly pleased with the consistency of the level of net
inflows seen over the last six months, which have ranged between a
high of £375m and a low of £260m per month. This compares with
an average of £192m per month delivered in the previous
financial year. The strong support and increase in net inflows
continue to come from both existing and new IFAs alike, and are
supported by an increase in the ratio of back book migrations
as well as increasing the number of white label,
co-branded propositions and appointed investment adviser ("AIA")
relationships. These relationships, coupled with the continued
support across the base of our firms, have helped to contribute to
a record level of net inflows in the first half
of this financial year.
The strong growth in net inflows, investment
returns and our increased distribution activity have all
contributed to Tatton's revenue, which has grown by 28.1% to
£18.508m (Sep 2023: £14.451m) and now accounts for 85.4% of total
Group revenue. Meanwhile, Tatton's adjusted operating
profit1 grew
by 30.3% to £11.712m (Sep 2023: £8.986m), delivering an adjusted
operating profit margin1
of 63.3% (Sep 2023: 62.2%).
Tatton at the heart of the IFA
community
The IFA sector remains in very good health and
there has never been more demand for its services. We remain a
passionate supporter of IFAs and continue to champion the sector at
every opportunity and in turn, we remain thankful for the continued
support and loyalty shown to us by the IFA community, which
has been hard earned. Our business model focuses on keeping the IFA
at the heart of our business and at the centre of our
value chain.
We continue to work closely with IFAs,
supporting them in the services they provide to meet their
clients' needs. This allows us to develop a deep understanding of
our IFAs, which helps us to continue to develop and improve our
products and services. Accordingly, during this period, we were
pleased to launch a range of highly competitive Passive funds
in response to demand from our IFAs and their clients. These funds
offer a low cost, diversified investment option that aligns
with the principles of long-term wealth
accumulation.
Managed Portfolio Services ("MPS") - long-term
growth opportunity
While we are happy to offer new products
and services, the core of our strategy and product range will
remain MPS, and we will continue to promote and support the growth
of the on-platform MPS market through wide-ranging IFA engagement.
As assets on platforms continue to increase, now at over £722bn
(Platforum July 2024), there remains a significant opportunity for
providers who have strong and high value propositions, which
include having a broad range of portfolios, a full service
offering, strong customer service and, importantly, consistent
good long-term investment performance. We are pleased to
report that Tatton meets all these criteria.
In July 2024, there was £139bn invested
in MPS on platform (Platforum July 2024) and the view remains
that, by 2026, this is likely to increase to over £200bn.
Our goal in taking advantage of this growing market is to continue
to increase the momentum of our market penetration through a
broadened distribution base. As a minimum, we aim to maintain our
market share and continue to grow our distribution footprint
through adding more new firms and have a broader, more holistic
relationship with the IFA community. In support of this, we have
been pleased to see our IFA firms grow by 6.5% to 1,038
(Mar 2024: 975) over this period. We look forward to seeing these
close relationships develop in the coming months as intensive
activity continues to further promote the Tatton
service.
Our IFA centric ethos remains the
cornerstone of our strategy. We remain dedicated to enhancing
our support of the IFA community, integrating our propositions
and where possible, taking a more holistic approach to our
relationships to support mutual growth of both IFA businesses
and Tatton.
Finally, we wanted to provide an update on
Perspective Financial Group ("Perspective"), an IFA consolidator in
the UK which has been a founder firm since Tatton's inception
in 2013. We currently provide investment management services
to Perspective's fund management capability (Cambridge),
supporting c.£2.5bn of AUM and delivering consistent returns
over the long term for their underlying clients.
The existing contract is due to come to an end
in January 2026 and although discussions are ongoing, both parties
may mutually agree to end the existing relationship. This
relationship delivered £385m of net inflows and contributed revenue
of £0.5m in this period and regardless of the outcome of these
discussions, we anticipate no impact to our revenue and earnings
for the current financial year FY25 and any potential impact on
forecasts for FY26 and onwards is expected to be
negligible.
Summary
We are mindful of the impact that the
recent Autumn Budget may have on investor sentiment, however we do
not believe that new measures materially impact or change the MPS
landscape and opportunity.
We continue to maintain our strong organic
growth momentum into the second half of the financial year and,
regardless of the outcome of our discussions with Perspective, we
look forward with real confidence to meeting the target of £30bn of
AUM by FY29.
Paradigm
Overview of performance
Paradigm has delivered a steady and
resilient performance in the period, delivering revenue of
£3.152m (Sep 2023: £3.059m) and adjusted operating
profit1 of £0.915m (Sep 2023: £0.959m). Paradigm
Mortgages increased the number of mortgage firms utilising its
services to 1,930 (Mar 2024: 1,916) and Paradigm Consulting
increased its members to 437 (Mar 2024: 424). As a whole, the
Paradigm division now accounts for 14.6% of Group
revenue.
Paradigm Consulting continues to
perform very consistently and in line with
our expectations as it delivers best-in-class IFA compliance
and support services. It remains a strategically important part of
the Group, giving invaluable insight into the needs,
wants and demands of the IFA community.
Paradigm Mortgages has delivered a resilient
performance, delivering £6.6bn (Sep 2023: £6.9bn) of mortgage
completions and, while slightly behind the first half of the prior
financial year, it has seen a 6.5% increase on the £6.2bn delivered
in the second half of the prior financial year. The product mix for
the year to date has improved, with a shift away from less
profitable product transfers towards new purchase and remortgage
lending, which has contributed towards an increase
in mortgage income despite the overall completion levels being
slightly behind the prior year.
Paradigm performing robustly against the wider
Mortgage market
This activity is against the backdrop of UK
Finance having previously predicted a gross lending market of
c.£215bn in 2024, a fall of 5% against 2023 volumes. However,
the market has proved a little more resilient and revised
forecasts predict the market to potentially rise to c.£250bn
in 2024. Encouragingly, the intermediary channel share of the wider
mortgage market, as opposed to mortgages sold directly by
banks, continues to grow, reaching c.88% of all new sales and
record product transfer maturities. New mortgage and remortgage
activity helped Paradigm Mortgages participate in completions
totalling £6.6bn in the first six months of this
financial year, which compares well with the total market and
demonstrates the resilience of the
Paradigm business.
Outlook - opportunities for Paradigm in an
evolving market
Looking forward, the UK housing market
continues to experience a mixture of price growth and moderating
activity, with several factors influencing the overall outlook. It
is generally expected that the Bank of England will reduce interest
rates faster than what was anticipated only months ago, boosted by
lower than predicted inflation trends. However, the reaction to the
recent Autumn Budget and other macroeconomic and geopolitical
factors pose risks that could affect this trajectory. That said,
many commentators feel a further 25bps reduction is expected before
the financial year end, which will be a welcome stimulus to the
market in general.
While mortgage rate reductions and price growth
in certain areas are supporting market activity, affordability
remains a key issue. As such, a good leading indicator for the
health of the market is new mortgage applications. Recent
applications have seen a strong improvement, with September 2024
being 16% up on August 2024 and, importantly, 47% higher than
September 2023. In the second half of this financial year, we
anticipate that market conditions will improve and we are
optimistic that, coupled with the increase in applications, this
will lead to a greater level of completions. As guidance, we
anticipate the second half of the year to be similar to the first,
although there remains potential for upside.
Longer term, supply constraints are expected to
persist, continuing to influence activity across the UK. However,
the new Government's pledge to almost double the rate of new
builds in the next five years will potentially ease some of the
issues in the housing and corresponding mortgage sector,
if this is achieved. It will also provide opportunities for
Paradigm's longer-term growth.
Separately disclosed items and alternative
performance measures
Alternative performance measures ("APMs")
provide additional information to investors and other external
shareholders to support further understanding of the Group's
results of operations as supplemental measures of performance.
The APMs are used by the Board and management to analyse the
business and financial performance, track the Group's
progress and help develop long-term strategic plans. Some APMs
are also used as key management incentive metrics.
Separately disclosed items are adjusting items to operating
profit and total £1.3m. These items include the cost
of share-based payments of £0.8m, in line with the prior year
of £0.8m, and amortisation of acquisition-related intangible assets
of £0.3m. An adjustment has also been made to remove the
operating loss relating to the non-controlling interest in
Fintegrate Financial Solutions Limited ("Fintegrate") of £0.1m
to reflect the adjusted operating profit1
attributable to shareholders of Tatton Asset Management
plc.
Statement of financial position and
cash
The Group's balance sheet remains strong, with
net assets of £47.4m (Sep 2023: £40.3m) and cash of £26.9m (Mar
2024: £24.8m). The Group maintains a strong operating cash
conversion of 94%, with cash from operations being offset by
dividends of £4.7m paid in the period and corporation tax
payments of £2.7m. In addition, £1.0m was invested as seeding into
our new range of Passive funds and this will be repaid when the
funds have reached an appropriate scale. Our financial resources
are kept under continual review, ensuring that we have headroom
over our regulatory capital requirements at both a Group and entity
level. We formally review and conduct comprehensive stress and
scenario testing on at least an annual basis. As at 30
September 2024, our total qualifying capital resources were £17.8m,
being 390% of our requirement of £4.6m.
Issue of new shares
In the period, the Group issued 37,480
new shares, which were issued to satisfy the exercise of
options related to the Company's Save As You Earn ("SAYE") employee
share option schemes.
Dividend proposal
In this interim period, the Board recommends an
increase in the interim dividend to 9.5p (Sep 2023: 8.0p), an
increase of 18.8%. This proposed dividend follows the 50/50 split
implemented in the prior year, maintaining our policy of
paying a dividend that is approximately 70% of adjusted earnings.
This dividend reflects the confidence of the Board in the Group's
financial performance, high levels of cash and liquidity, and
headroom over our regulatory capital requirement.
The interim dividend of 9.5p per share,
totalling £5.7m, will be paid on 13 December 2024 to shareholders
on the register at close of business on 22 November 2024 and
will have an ex-dividend date of 21 November 2024. In accordance
with International Financial Reporting Standards ("IFRSs"),
the interim dividend has not been included as a liability
in this interim statement.
Business risk
The Board identified principal risks and
uncertainties which may have a material impact on the Group's
performance in the Group's 2024 Annual Report and Accounts (pages
23 and 24) and believes that the nature of these risks remains
largely unchanged at the half year. The Board will continue to
monitor and manage identified principal risks throughout the second
half of the year.
Post balance sheet events
There have been no post balance
sheet events.
Going concern
As stated in note 2.2 of these condensed
financial statements, the Directors believe that the business
is well placed to manage its business risk successfully and
are satisfied that the Group has adequate resources to continue in
operational existence for at least twelve months from the date
that the financial statements are authorised for issue.
Accordingly, these condensed financial statements have been
prepared on a going concern basis.
Summary and outlook
The Group has delivered a record first
half result, maintaining strong organic growth of revenue and
profits and delivering against our strategic objectives. Positive
markets helped support asset growth, with AUM/I1
reaching £19.948bn at the end of this period and we are very
pleased with the overall performance of the Group.
Net inflows remained very strong in the
first six months and we remain focused on continuing to
deliver consistent growth as we maintain our £30bn
AUM/I1 forecast for 2029. We are, however, mindful of
the ongoing geopolitical and economic uncertainty
and anticipate net inflows returning to more normal
levels in the second half of this financial year. Paradigm should
continue to perform in line with the first half of the
year.
In summary, we look forward to making further
progress over the rest of the financial year and the Board remains
confident in the future prospects of the Group.
1. Alternative performance
measures are detailed in note 27 of the 2024 Annual Report and
Accounts.
Financial Statements
CONSOLIDATED STATEMENT OF TOTAL
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2024
|
Note
|
Unaudited six months ended
30-Sep 2024 (£'000)
|
Unaudited six months ended
30-Sep 2023 (£'000)
|
Audited year ended
31-Mar 2024 (£'000)
|
Revenue
|
|
21,660
|
17,506
|
36,807
|
Share of post-tax (loss)/profit from joint
venture
|
|
(81)
|
257
|
(1,188)
|
Administrative expenses
|
|
(11,939)
|
(10,030)
|
(19,155)
|
Operating profit
|
|
9,640
|
7,733
|
16,464
|
Share-based payment costs
|
5
|
843
|
829
|
1,458
|
Amortisation of acquisition-related
intangibles
|
5
|
329
|
310
|
633
|
Operating loss relating to non-controlling
interest
|
5
|
82
|
-
|
59
|
Gains arising on changes in fair value of
contingent consideration
|
|
-
|
-
|
(1,350)
|
Exceptional items
|
|
-
|
-
|
1,250
|
Adjusted operating profit (before separately
disclosed items)1
|
|
10,894
|
8,872
|
18,514
|
Finance income
|
|
485
|
206
|
640
|
Finance costs
|
|
(23)
|
(246)
|
(353)
|
Profit before tax
|
|
10,102
|
7,693
|
16,751
|
Taxation charge
|
6
|
(2,382)
|
(2,302)
|
(3,830)
|
Profit and total comprehensive income for the
financial year
|
|
7,720
|
5,391
|
12,921
|
Profit and total comprehensive income
attributable to the owners of the Parent Company
|
|
7,806
|
5,391
|
12,986
|
Profit and total comprehensive income
attributable to
non-controlling interests
|
|
(86)
|
-
|
(65)
|
|
|
|
|
|
Earnings per share - Basic
|
7
|
13.03p
|
8.97p
|
21.39p
|
Earnings per share - Diluted
|
7
|
12.69p
|
8.66p
|
21.02p
|
Adjusted earnings per share -
Basic1
|
7
|
14.29p
|
11.08p
|
23.73p
|
Adjusted earnings per share -
Diluted1
|
7
|
13.91p
|
10.69p
|
23.32p
|
Adjusted earnings per share - Fully
Diluted1
|
7
|
13.67p
|
10.52p
|
22.91p
|
1. See note 27 of the 2024
Annual Report and Accounts.
All revenue, profit and earnings are with
respect to continuing operations.
There were no other recognised gains or losses
other than those recorded above in the current or prior period and
therefore a statement of other comprehensive income has not been
presented.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 30 SEPTEMBER 2024
|
Note
|
Unaudited six months ended
30-Sep 2024 (£'000)
|
Unaudited six months ended
30-Sep 2023 (£'000)
|
Audited year ended
31-Mar 2024 (£'000)
|
Non-current assets
|
|
|
|
|
Investment in joint ventures
|
9
|
5,298
|
6,820
|
5,352
|
Goodwill
|
10
|
9,796
|
9,337
|
9,796
|
Intangible assets
|
11
|
3,510
|
3,405
|
3,686
|
Property, plant and equipment
|
12
|
700
|
328
|
816
|
Deferred tax assets
|
|
3,174
|
1,541
|
2,571
|
Other receivables
|
13
|
-
|
188
|
188
|
Total non-current assets
|
|
22,478
|
21,619
|
22,409
|
Current assets
|
|
|
|
|
Trade and other receivables
|
13
|
5,268
|
4,078
|
5,108
|
Financial assets at fair value through profit or
loss
|
15
|
1,132
|
175
|
106
|
Corporation tax
|
|
200
|
570
|
-
|
Cash and cash equivalents
|
|
26,916
|
24,222
|
24,838
|
Total current assets
|
|
33,516
|
29,045
|
30,052
|
Total assets
|
|
55,994
|
50,664
|
52,461
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
14
|
(7,626)
|
(8,013)
|
(8,109)
|
Corporation tax
|
|
-
|
-
|
(2)
|
Total current liabilities
|
|
(7,626)
|
(8,013)
|
(8,111)
|
Non-current liabilities
|
|
|
|
|
Other payables
|
14
|
(982)
|
(2,315)
|
(1,016)
|
Total non-current liabilities
|
|
(982)
|
(2,315)
|
(1,016)
|
Total liabilities
|
|
(8,608)
|
(10,328)
|
(9,127)
|
Net assets
|
|
47,386
|
40,336
|
43,334
|
Equity
|
|
|
|
|
Share capital
|
|
12,110
|
12,102
|
12,102
|
Share premium account
|
|
15,614
|
15,487
|
15,487
|
Own shares
|
|
(2,695)
|
(2,567)
|
(3,278)
|
Other reserve
|
|
2,041
|
2,041
|
2,041
|
Merger reserve
|
|
(28,968)
|
(28,968)
|
(28,968)
|
Retained earnings
|
|
49,312
|
42,241
|
45,892
|
Equity attributable to equity holders of the
entity
|
|
47,414
|
40,336
|
43,276
|
Non-controlling interest
|
|
(28)
|
-
|
58
|
Total equity
|
|
47,386
|
40,336
|
43,334
|
The financial statements were approved by the
Board of Directors on 13 November 2024 and were signed on its
behalf by:
PAUL EDWARDS
DIRECTOR
Company registration number: 10634323
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2024
|
Share capital (£'000)
|
Share premium (£'000)
|
Own Shares (£'000)
|
Other reserve (£'000)
|
Merger reserve (£'000)
|
Retained earnings (£'000)
|
Total equity attributable to share-holders
(£'000)
|
Non-controlling interest (£'000)
|
Total equity (£'000)
|
At 1 April 2023
|
12,011
|
15,259
|
-
|
2,041
|
(28,968)
|
41,438
|
41,781
|
-
|
41,781
|
Profit and total comprehensive income
|
-
|
-
|
-
|
-
|
-
|
5,391
|
5,391
|
-
|
5,391
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(6,006)
|
(6,006)
|
-
|
(6,006)
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
521
|
521
|
-
|
521
|
Deferred tax on share-based payments
|
-
|
-
|
-
|
-
|
-
|
254
|
254
|
-
|
254
|
Current tax on share-based payments
|
-
|
-
|
-
|
-
|
-
|
643
|
643
|
-
|
643
|
Issue of share capital on exercise of employee
share options
|
91
|
228
|
-
|
-
|
-
|
-
|
319
|
-
|
319
|
Own shares acquired in the period
|
-
|
-
|
(2,567)
|
-
|
-
|
-
|
(2,567)
|
-
|
(2,567)
|
At 30 September 2023
|
12,102
|
15,487
|
(2,567)
|
2,041
|
(28,968)
|
42,241
|
40,336
|
-
|
40,336
|
Profit and total comprehensive income
|
-
|
-
|
-
|
-
|
-
|
7,595
|
7,595
|
(65)
|
7,530
|
Acquisition of a subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
123
|
123
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(4,840)
|
(4,840)
|
-
|
(4,840)
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
459
|
459
|
-
|
459
|
Deferred tax on share-based payments
|
-
|
-
|
-
|
-
|
-
|
506
|
506
|
-
|
506
|
Own shares acquired in the year
|
-
|
-
|
(780)
|
-
|
-
|
-
|
(780)
|
-
|
(780)
|
Own shares utilised on exercise of
options
|
-
|
-
|
69
|
-
|
-
|
(69)
|
-
|
-
|
-
|
At 31 March 2024
|
12,102
|
15,487
|
(3,278)
|
2,041
|
(28,968)
|
45,892
|
43,276
|
58
|
43,334
|
Profit and total comprehensive income
|
-
|
-
|
-
|
-
|
-
|
7,806
|
7,806
|
(86)
|
7,720
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(4,740)
|
(4,740)
|
-
|
(4,740)
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
438
|
438
|
-
|
438
|
Deferred tax on share-based payments
|
-
|
-
|
-
|
-
|
-
|
574
|
574
|
-
|
574
|
Current tax on share-based payments
|
-
|
-
|
-
|
-
|
-
|
(75)
|
(75)
|
-
|
(75)
|
Issue of share capital on exercise of employee
share options
|
8
|
127
|
-
|
-
|
-
|
-
|
135
|
-
|
135
|
Own shares utilised on exercise of
options
|
-
|
-
|
583
|
-
|
-
|
(583)
|
-
|
-
|
-
|
At 30 September 2024
|
12,110
|
15,614
|
(2,695)
|
2,041
|
(28,968)
|
49,312
|
47,414
|
(28)
|
47,386
|
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2024
|
Note
|
Unaudited six months ended 30-Sep 2024
(£'000)
|
Unaudited six months ended 30-Sep 2023
(restated*)
(£'000)
|
Audited year ended 31-Mar 2024
(£'000)
|
Operating activities
|
|
|
|
|
Cash generated from operations
|
19
|
10,233
|
8,266
|
16,930
|
Corporation tax paid
|
|
(2,715)
|
(2,160)
|
(3,740)
|
Net cash from operating activities
|
|
7,518
|
6,106
|
13,190
|
Investing activities
|
|
|
|
|
Payment for the acquisition of a joint venture,
net of cash acquired
|
|
-
|
-
|
(254)
|
Dividends received from joint venture
|
|
-
|
120
|
255
|
Purchase of intangible assets
|
11
|
(125)
|
(120)
|
(249)
|
Purchase of property, plant and
equipment
|
12
|
(36)
|
(66)
|
(115)
|
Payments for financial assets at fair value
through profit or loss
|
|
(1,000)
|
-
|
-
|
Interest received
|
|
510
|
210
|
640
|
Contingent consideration
|
|
-
|
-
|
(937)
|
Net cash (used in)/from investing
activities
|
|
(651)
|
144
|
(660)
|
Financing activities
|
|
|
|
|
Interest paid
|
|
-
|
(64)
|
(63)
|
Dividends paid
|
8
|
(4,740)
|
(6,006)
|
(10,846)
|
Proceeds from the issue of shares
|
|
88
|
249
|
249
|
Purchase of own shares
|
|
-
|
(2,567)
|
(3,278)
|
Repayment of loan liabilities
|
|
(19)
|
-
|
(18)
|
Repayment of lease liabilities
|
|
(118)
|
(134)
|
(230)
|
Net cash used in financing activities
|
|
(4,789)
|
(8,522)
|
(14,186)
|
Net increase/(decrease) in cash and cash
equivalents
|
|
2,078
|
(2,272)
|
(1,656)
|
Cash and cash equivalents at beginning of
period
|
|
24,838
|
26,494
|
26,494
|
Net cash and cash equivalents at end of
period
|
|
26,916
|
24,222
|
24,838
|
*
See note 2.1 for details regarding the prior period
restatement.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
1. General Information
Tatton Asset Management plc (the "Company") is
a public company limited by shares. The address of the registered
office is Paradigm House, Brooke Court, Lower Meadow Road,
Wilmslow, SK9 3ND. The registered number is
10634323.
The Group comprises the Company and its
subsidiaries. The Group's principal activities are discretionary
fund management, the provision of compliance and support services
to independent financial advisers, the provision of mortgage
adviser support services and the marketing and promotion of
multi-manager funds.
The condensed consolidated interim financial
statements for the six months ended 30 September 2024 do not
constitute statutory accounts as defined under section 434 of the
Companies Act 2006. The Annual Report and Accounts (the "financial
statements") for the year ended 31 March 2024 were approved by the
Board on 17 June 2024 and have been delivered to the Registrar
of Companies. The auditor, Deloitte LLP, reported on these
financial statements; its report was unqualified, did
not contain an emphasis of matter paragraph and did not
contain statements under section 498 (2) or (3) of the Companies
Act 2006.
News updates, regulatory news and financial
statements can be viewed and downloaded from the Group's website,
www.tattonassetmanagement.com. Copies can also be requested from:
The Company Secretary, Tatton Asset Management plc, Paradigm House,
Brooke Court, Lower Meadow Road, Wilmslow, SK9 3ND.
2. Accounting Policies
The principal accounting policies applied in
the presentation of the interim financial statements are set out
below. The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in the
consolidated financial statements.
2.1 Basis of preparation
The unaudited condensed consolidated interim
financial statements for the six months ended 30 September
2024 have been prepared in accordance with IAS 34 "Interim
Financial Reporting" as adopted by the United Kingdom. The
condensed consolidated interim financial statements should be read
in conjunction with the financial statements for the year ended 31
March 2024, which have been prepared in accordance with
International Financial Reporting Standards as adopted by the
United Kingdom. The condensed consolidated interim financial
statements were approved for release on 13 November
2024.
The condensed consolidated financial statements
have been prepared on a going concern basis and prepared on a
historical cost basis, except for financial assets and financial
liabilities measured at fair value. The consolidated financial
statements are presented in sterling and have been rounded to the
nearest thousand (£'000). The functional currency of the Company is
sterling as this is the currency of the jurisdiction wherein
all of the Group's sales are made.
The preparation of financial information in
conformity with IFRSs requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual events may
ultimately differ from those estimates.
The key accounting policies set out below have,
unless otherwise stated, been applied consistently to all periods
presented in the consolidated financial statements.
A restatement has been made to the Consolidated
Statement of Cash Flows for the interim period ending 30
September 2023 to reflect dividends received from joint ventures as
cash flows from investing activities, whereas it was shown as cash
flows from financing activities in the prior year. This has reduced
cash flows used in investing activities and increased cash flows
used in financing activities by £120,000 in the interim period
ended 30 September 2023. In addition, interest received of £210,000
in September 2023 has been restated to be included within Net cash
(used in)/from investing activities. This has reduced Net cash used
in financing activities by £210,000 in the interim period ended 30
September 2023.
In the prior interim period, a separate Joint
venture reserve of £37,000 was presented in the Consolidated
Statement of Financial Position. This has been included within
Retained earnings in the current year and the comparatives
restated.
The accounting policies adopted by the Group in
these interim financial statements are consistent with those
applied by the Group in its consolidated financial statements for
the year ended 31 March 2024.
2.2 Going concern
The Board has reviewed detailed papers prepared
by management that consider the Group's expected future
profitability, dividend policy, capital position and liquidity,
both as they are expected to be and also under more stressed
conditions. In doing so, the Directors have considered the current
economic environment, with its high interest rates, high yet
falling inflation, cost of living pressures, and the impact of
climate change.
Whilst macroeconomic conditions and the impact
of climate change may affect the Group, and are considered
under the Group's principal risks, these are not considered to
impact the going concern basis of the Group - the Board is
satisfied that the business can operate successfully in these
conditions but will continue to monitor developments in these
areas. The Board uses the approved budget as its base case and then
applies stress tests to this. In its stress tests, the Board has
considered a significant reduction in equity market values, for
example if there was a repeat of market impacts seen at the start
of COVID-19, or sudden and high volumes of outflows from AUM
as a result of a reputational, regulatory or performance issues.
This would reduce revenue and profitability, however the results of
these tests show that there are still sufficient resources to
continue as a going concern. There are not considered to be any
plausible scenarios which would lead to the failure of the Company.
The Board closely monitors KPIs and reports from management around
investment performance, feedback from IFAs and key regulatory
changes or issues. Accordingly, the Directors continue to adopt the
going concern basis in preparing these financial
statements.
2.3 Adoption of new and revised
standards
New and amended IFRS standards that are
effective for the current year
· Amendment to
IFRS 16 "Lease Liability in a Sale and Leaseback"
· Amendment to
IAS 1 "Classification of Liabilities as Current or
Non-current"
· Amendments to
IAS 1 "Non-current Liabilities with Covenants"
· Amendments to
IAS 7 and IFRS 7 "Supplier Finance Arrangements"
The Directors adopted the new or revised
standards listed above, but they have had no material impact
on the financial statements of the Group.
Standards in issue but not yet
effective
The following IFRS and IFRIC interpretations
have been issued but have not been applied by the Group in
preparing these financial statements, as they are not yet
effective. The Group intends to adopt these standards and
interpretations when they become effective, rather
than adopting them early.
Effective date 1 January 2025 or
later:
· IFRS S1
"General Requirements for Disclosure of Sustainability-related
Financial Information" and IFRS S2
"Climate-related Disclosures"
· Amendments to
IAS 21 "Lack of Exchangeability"
· IFRS 18
"Presentation and Disclosure in Financial Statements"
· Amendments to
the Classification and Measurement of Financial Instruments
(Amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial
Instruments: Disclosures")
· IFRS 19
"Subsidiaries without Public Accountability:
Disclosures"
With the exception of the adoption of IFRS 18,
the adoption of the above standards and interpretations is not
expected to lead to any changes to the Group's accounting policies
nor have any other material impact on the financial position or
performance of the Group. The impact of IFRS 18 on the Group is
currently being assessed and it is not yet practicable to
quantify the effect of this standard on these consolidated
financial statements. However, there is no impact on presentation
for the Group in the current year given the effective date -
this will be applicable for the Group's 2027/28 Annual Report and
Accounts.
2.4 Operating segments
The Board is considered to be the chief
operating decision maker ("CODM"). The Group comprises two
operating segments, which are defined by trading
activity:
· Tatton -
investment management services
· Paradigm - the
provision of compliance and support services to IFAs and mortgage
advisers
Some centrally incurred overhead costs are
allocated to the Tatton and Paradigm divisions on an appropriate
pro rata basis. There remain central overhead costs within the
Operating Group which have not been allocated to the Tatton and
Paradigm divisions which are classified as "Unallocated"
within note 4.
2.5 Significant judgements, key assumptions
and estimates
In the process of applying the Group's
accounting policies, which are described in the consolidated
financial statements for the year ended 31 March 2024, management
have made judgements and estimations about the future that have an
effect on the amounts recognised in the financial statements. The
estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Changes for accounting estimates would be accounted for
prospectively under IAS 8.
The judgements, estimates and assumptions
applied in the interim financial statements, including the key
sources of estimation uncertainty, were the same as those applied
in the Group's last annual financial statements for the year
ended 31 March 2024. Management have reviewed those key estimates
which were disclosed in the 31 March 2024 financial statements and
are satisfied that the methodology applied and criteria assessed
are still appropriate.
3. Capital Management
The components of the Group's capital are
detailed on the Consolidated Statement of Financial Position and as
at the reporting date the Group had capital of £47,386,000 (Mar
2024: £43,334,000; Sep 2023: £40,366,000). Capital generated from
the business is both reinvested in the business to generate future
growth and returned to shareholders, principally in the form of
dividends.
The Group's objectives when managing capital
are (i) to safeguard the Group's ability to continue as a going
concern so that it can continue to provide returns for shareholders
and benefits for other stakeholders; (ii) to maintain a strong
capital base and utilise it efficiently to support the development
of its business; and (iii) to comply with the regulatory capital
requirements set by the FCA. Capital adequacy and the use of
regulatory capital are monitored by the Group's management and
Board. There is one active regulated entity in the Group: Tatton
Investment Management Limited, regulated by the FCA.
Regulatory capital is determined in accordance
with the requirements of the FCA's Investment Firms Prudential
Regime and the Capital Requirements Directive IV prescribed in the
UK by the FCA. The Directive requires continual assessment of the
Group's risks that is underpinned by the Group's internal
capital adequacy and risk assessment ("ICARA"). The ICARA considers
the relevant current and future risks to the business and the
capital considered necessary to support these
risks.
The Group actively monitors its capital base to
ensure that it maintains sufficient and appropriate capital
resources to cover the relevant risks to the business and to meet
consolidated and individual regulated entity regulations and
liquidity requirements. The Group frequently assesses the adequacy
of its own funds on a consolidated and legal entity basis. This
includes continuous monitoring of "K-factor" variables, which
captures the variable nature of risk involved in the Group's
business activities. A regulatory capital update is
additionally provided to senior management on a monthly basis. In
addition to this, the Group has implemented a number of
"Key Risk Indicators", which act as early warning signs with the
aim of notifying senior management if own funds misalign with the
Group's risk appetite and internal thresholds.
The FCA requires the Group to hold more
regulatory capital resources than the total capital resource
requirement. The total capital requirement for the Group is
the higher of the Group's Own Funds requirement (based on 25% of
fixed overheads), its Own Harm requirement (based on the
Group's requirement for harms from ongoing activities as
calculated in the ICARA) and Wind-down requirement (capital
requirement should the firm wind down). The total capital
requirement for the Group is £4.6 million, which is based on
the Group's fixed overhead requirement. As at 30 September 2024,
the Group has regulatory capital resources of £17.8 million,
significantly in excess of the Group's total capital requirement.
During the period, the Group and its regulated subsidiary entities
complied with all regulatory capital requirements.
4. Segment Reporting
Information reported to the Board of Directors
as the chief operating decision maker for the purposes of
resource allocation and assessment of segmental performance is
focused on the type of revenue. The principal types of revenue are
discretionary fund management and the marketing and promotion
of the funds run by the companies under Tatton Capital Limited
("Tatton") and the provision of compliance and support services to
IFAs and mortgage advisers ("Paradigm").
The Group's reportable segments under IFRS 8
are, therefore, Tatton and Paradigm, with centrally incurred
overhead costs applicable to the segments being allocated to the
Tatton and Paradigm divisions on an appropriate pro rata basis.
Unallocated central overhead costs of the Operating Group are
classified as "Unallocated" in the tables that follow to provide a
reconciliation of the segment information to the financial
statements. Unallocated costs include general corporate expenses,
head office salaries, and other administrative costs that are not
directly attributable to the operating segments. These costs are
managed at the corporate level and are not allocated to the
segments for performance evaluation.
The principal activity of Tatton is that of
discretionary fund management of investments on-platform and the
provision of investment wrap services.
The principal activity of Paradigm is that of
the provision of support services to IFAs and mortgage advisers.
The Paradigm division includes the trading subsidiaries of Paradigm
Partners Limited and Paradigm Mortgages Services LLP, which operate
as one operating segment as they have the same economic
characteristics, they are run and managed by the same management
team, and the methods used to distribute the products to customers
are the same.
For management purposes, the Group uses the
same measurement policies as are used in its financial statements.
The information presented in this note is consistent with the
presentation for internal reporting. Total assets
and liabilities for each operating segment are not
regularly provided to the CODM.
Period ended
30 September 2024
|
Tatton
(£'000)
|
Paradigm
(£'000)
|
Unallocated
(£'000)
|
Group
(£'000)
|
Revenue
|
18,508
|
3,152
|
-
|
21,660
|
Share of post-tax loss from joint
ventures
|
(81)
|
-
|
-
|
(81)
|
Administrative expenses
|
(7,209)
|
(2,419)
|
(2,311)
|
(11,939)
|
Operating profit/(loss)
|
11,218
|
733
|
(2,311)
|
9,640
|
Share-based payment costs
|
183
|
82
|
578
|
843
|
Amortisation of acquisition-related intangibles
assets
|
311
|
18
|
-
|
329
|
Non-controlling interest
|
-
|
82
|
-
|
82
|
Adjusted operating
profit/(loss)1
|
11,712
|
915
|
(1,733)
|
10,894
|
Period ended
30 September 2024
|
Tatton
(£'000)
|
Paradigm
(£'000)
|
Unallocated (£'000)
|
Group
(£'000)
|
Statutory operating costs included the
following:
|
|
|
|
|
Depreciation
|
97
|
47
|
8
|
152
|
Amortisation
|
385
|
20
|
-
|
405
|
1. Adjusted operating profit
is one of the APMs that the business uses. Full details of the KPIs
and APMs that the key decision makers use are detailed in note 27
of the 2024 Annual Report and Accounts.
Period ended
30 September 2023
|
Tatton
(£'000)
|
Paradigm
(£'000)
|
Unallocated
(£'000)
|
Group
(£'000)
|
Revenue
|
14,451
|
3,059
|
(4)
|
17,506
|
Share of post-tax profit from joint
ventures
|
257
|
-
|
-
|
257
|
Administrative expenses (restated)
|
(6,242)
|
(2,186)
|
(1,602)
|
(10,030)
|
Operating profit/(loss) (restated)
|
8,466
|
873
|
(1,606)
|
7,733
|
Share-based payment costs (restated)
|
210
|
86
|
533
|
829
|
Amortisation of acquisition-related intangibles
assets
|
310
|
-
|
-
|
310
|
Adjusted operating
profit/(loss)1
|
8,986
|
959
|
(1,073)
|
8,872
|
Period ended
30 September 2023
|
Tatton
(£'000)
|
Paradigm
(£'000)
|
Unallocated
(£'000)
|
Group
(£'000)
|
Statutory operating costs included the
following:
|
|
|
|
|
Depreciation
|
122
|
64
|
6
|
192
|
Amortisation
|
324
|
6
|
-
|
330
|
Note that the share-based payments costs in
period to 30 September 2023 have been restated to reflect the
charge relating to employees of the relevant divisions. This has
reduced administrative expenses within "Unallocated", with an
increased charge being reflected in Tatton
and Paradigm.
Year ended
31 March 2024
|
Tatton (£'000)
|
Paradigm
(£'000)
|
Unallocated
(£'000)
|
Group (£'000)
|
Revenue
|
30,864
|
5,943
|
-
|
36,807
|
Share of post-tax loss from joint
ventures
|
(1,188)
|
-
|
-
|
(1,188)
|
Administrative expenses
|
(11,092)
|
(4,421)
|
(3,642)
|
(19,155)
|
Operating profit/(loss)
|
18,584
|
1,522
|
(3,642)
|
16,464
|
Share-based payment costs
|
340
|
186
|
932
|
1,458
|
Gain arising on changes in fair value
of contingent consideration
|
(1,350)
|
-
|
-
|
(1,350)
|
Exceptional items
|
1,250
|
-
|
-
|
1,250
|
Amortisation of acquisition-related intangibles
assets
|
621
|
12
|
-
|
633
|
Non-controlling interest
|
-
|
59
|
-
|
59
|
Adjusted operating
profit/(loss)1
|
19,445
|
1,779
|
(2,710)
|
18,514
|
Year ended 31 March
2024
|
Tatton
(£'000)
|
Paradigm
(£'000)
|
Unallocated
(£'000)
|
Group
(£'000)
|
Statutory operating costs included the
following:
|
|
|
|
|
Depreciation
|
249
|
112
|
14
|
375
|
Amortisation
|
734
|
16
|
-
|
750
|
All turnover arose in the United
Kingdom.
5. Separately Disclosed Items
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Share-based payments charges
|
843
|
829
|
1,458
|
Amortisation of acquisition-related intangible
assets
|
329
|
310
|
633
|
Operating loss due to non-controlling
interest
|
82
|
-
|
59
|
Gain arising on changes in the fair value of
contingent consideration
|
-
|
-
|
(1,350)
|
Exceptional items
|
-
|
-
|
1,250
|
Total separately disclosed costs
|
1,254
|
1,139
|
2,050
|
Separately disclosed items that are shown
separately on the face of the Statement of Total Comprehensive
Income reflect costs and income that do not reflect the Group's
trading performance and may be considered material (individually or
in aggregate if of a similar type) due to their size or
frequency, and are adjusted to present adjusted operating profit so
as to ensure consistency between periods. The costs or income above
are all included within administrative expenses except for the
Exceptional costs in March 2024 of £1,250,000, which is recognised
within the Share of loss of joint ventures.
Although some of these items may recur from one
period to the next, operating profit has been adjusted for these
items to give better clarity regarding the underlying performance
of the Group. The APMs are consistent with how the business
performance is planned and reported within the internal management
reporting to the Board. Some of these measures are also used for
the purpose of setting remuneration targets.
Share-based payment charges
Share-based payments is a recurring item,
although the value will change depending on the estimation of the
satisfaction of performance obligations attached to certain awards.
It is an adjustment to operating profit since it is a significant
non-cash item. Adjusted operating profit represents largely
cash-based earnings and more directly relates to the trading
performance of the financial reporting period.
Amortisation of client relationship intangible
assets
Payments made for the introduction of client
relationships and brands that are deemed to be intangible
assets are capitalised and amortised over their useful life, which
has been assessed to be ten years. This includes £104,000 (Sep
2023: £104,000) of amortisation of the intangibles
recognised on the acquisition of 8AM Global Limited ("8AM"), where
the amortisation charge is included within the Share of profit
from joint venture on the Consolidated Statement of Total
Comprehensive Income. This amortisation charge is recurring over
the life of the intangible asset, although it is an adjustment
to operating profit since it is a significant non-cash item.
Adjusted operating profit represents largely cash-based earnings
and more directly relates to the trading performance of the
financial reporting period.
Operating loss due to non-controlling
interest
There are £82,000 (2023: £nil) of losses within
the Group's operating profit relating to the non-controlling
interest in Fintegrate Financial Solutions Limited. This has been
excluded from the Group's adjusted operating profit to reflect the
adjusted operating profit attributable to the Group.
Gain arising on changes in the fair value of
contingent consideration
In the year ending 2024, the Group revalued its
financial liability at fair value through profit or loss relating
to the contingent consideration on the acquisition of the Verbatim
funds business and 8AM Global Limited. This resulted in a credit of
£1,350,000 being recognised during the year. There was no change in
the fair value in the six month period to 30 September
2024.
Exceptional items
During the year ending March 2024, the Group
reviewed the investment in the 8AM joint venture for impairment and
recognised an impairment loss in the year of £1,250,000. As the
impairment of the investment is a non-cash item, there are no cash
flows from exceptional items included on the Consolidated Statement
of Cash Flows. No such impairment was identified at the interim
period to 30 September 2024.
6. Taxation
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Current tax
|
|
|
|
Current tax on profits for the period
|
2,609
|
2,354
|
4,798
|
Adjustment for under-provision in prior
periods
|
(173)
|
-
|
(290)
|
|
2,436
|
2,354
|
4,508
|
Deferred tax
|
|
|
|
Current year (credit)/charge
|
(54)
|
5
|
(173)
|
Adjustment in respect of previous
years
|
-
|
-
|
(505)
|
Effect of changes in tax rates
|
-
|
(57)
|
-
|
|
(54)
|
(52)
|
(678)
|
Total tax expense
|
2,382
|
2,302
|
3,830
|
The reasons for the difference between the
actual tax charge for the period and the standard rate of
corporation tax in the UK applied to profit for the period are as
follows:
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Profit before taxation
|
10,102
|
7,693
|
16,751
|
Tax at UK corporation tax rate of 25%
(2023: 25%)
|
2,526
|
1,923
|
4,188
|
Expenses not deductible for
tax purposes
|
51
|
44
|
462
|
Income not taxable
|
-
|
-
|
(443)
|
Adjustments in respect of
previous years
|
(173)
|
-
|
(795)
|
Effect of changes in tax rates
|
-
|
(57)
|
-
|
Capital allowances in excess of
depreciation
|
(12)
|
22
|
6
|
Deferred tax asset not recognised
|
-
|
-
|
142
|
Share-based payments
|
(10)
|
370
|
270
|
Total tax expense
|
2,382
|
2,302
|
3,830
|
The deferred tax asset in both the current and
prior year was calculated based on the expected timing of reversal
of the related temporary differences.
7. Earnings per Share
Basic earnings per share is calculated by
dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares during the
period.
Number of
shares
|
Unaudited six months ended
30-Sep 2024
|
Unaudited six months ended
30-Sep 2023
|
Audited
year ended
31-Mar 2024
|
Basic
|
|
|
|
Weighted average number of shares in
issue1
|
60,517,749
|
60,127,572
|
61,064,870
|
Effect of own shares held by an Employee
Benefit Trust ("EBT")
|
(601,783)
|
(60,761)
|
(358,196)
|
|
59,915,966
|
60,066,811
|
60,706,674
|
Diluted
|
|
|
|
Effect of weighted average number of options
outstanding for the year
|
1,607,132
|
2,182,144
|
1,075,124
|
Weighted average number of shares in issue
(diluted)2
|
61,523,098
|
62,248,955
|
61,781,798
|
Fully diluted
|
|
|
|
Effect of full dilution of employee share
options which are contingently issuable or have future
attributable service costs
|
1,095,272
|
1,012,719
|
1,096,621
|
Adjusted diluted weighted average number of
options and shares for the year3
|
62,618,370
|
63,261,674
|
62,878,419
|
Own shares held by an EBT represents the
Company's own shares purchased and held by the EBT, shown at
cost. The EBT has not purchased any of the Company's own share in
the period (2023: 139,500). The Company utilised 117,084 (2023:
139,500) of the shares during the period to satisfy the
exercise of employee share options. At September 2024, there
remained 541,716 (2023: nil) of the Company's own shares being held
by the EBT (2023: nil).
1. The weighted average
number of shares in issue includes contingently issuable shares
where performance obligations have been met and there will be
little to no cash consideration, but the share options have
yet to be exercised.
2. The weighted average
number of shares is diluted due to the effect of potentially
dilutive contingent issuable shares from share option
schemes.
3. The dilutive shares used
for this measure differ from those used for statutory dilutive
earnings per share; the future value of service costs attributable
to employee share options is ignored and contingently issuable
shares for long-term incentive plan options are assumed
to fully vest.
|
Unaudited six months ended
30-Sep 2024
|(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Earnings attributable to ordinary
shareholders
|
|
|
|
Basic and diluted profit
for the period
|
7,806
|
5,391
|
12,986
|
Share-based payments charge
|
843
|
829
|
1,458
|
Amortisation of acquisition-related intangible
assets
|
329
|
310
|
633
|
Exceptional costs
|
-
|
-
|
1,250
|
Gain arising on changes in the fair value of
contingent consideration
|
-
|
-
|
(1,350)
|
Unwinding of discount on deferred
consideration
|
23
|
100
|
201
|
Tax impact of adjustments
|
(440)
|
27
|
(770)
|
Adjusted basic and diluted profits for the
period and attributable earnings
|
8,561
|
6,657
|
14,408
|
|
|
|
|
Earnings per share (pence) - Basic
|
13.03
|
8.97
|
21.39
|
Earnings per share (pence) - Diluted
|
12.69
|
8.66
|
21.02
|
Adjusted earnings per share (pence) -
Basic
|
14.29
|
11.08
|
23.73
|
Adjusted earnings per share (pence) -
Diluted
|
13.91
|
10.69
|
23.32
|
Adjusted earnings per share (pence) - Fully
Diluted
|
13.67
|
10.52
|
22.91
|
8. Dividends
The Directors consider the Group's capital
structure and dividend policy at least twice a year ahead of
announcing results and do so in the context of its ability to
continue as a going concern, to execute its strategy and to invest
in opportunities to grow the business and enhance shareholder
value. The Company's dividend policy is described in the Directors'
Report on pages 62 and 63 of the 2024 Annual Report and Accounts.
As at 30 September 2024, the Company's distributable reserves were
£7,717,000 (March 2024: £7,761,000).
During the period, Tatton Asset Management plc
paid the final dividend related to the year ended 31 March 2024 of
£4,740,000, representing a payment of 8p per share.
During the year ended 31 March 2024, £6,006,000
was paid as the final dividend related to the year ended
31 March 2023, representing 10p per share. In addition, the Company
paid an interim dividend of £4,840,000 relating to the year ended
31 March 2024 (2023: £2,904,000) to its equity shareholders. This
represents a payment of 8.0p per share (2023: 4.5p per
share).
The Directors are proposing an interim dividend
with respect to the financial year ended 31 March 2025 of 9.5p
(2024: 8p) per share, which will absorb £5,701,000 (2023:
£4,840,000) of shareholders' funds. It will be paid on 13 December
2024 to shareholders who are on the register of members on 22
November 2024.
9. Investment in Joint Ventures
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Opening investment
|
5,352
|
6,762
|
6,762
|
Profit for the period after tax
|
23
|
257
|
269
|
Amortisation of intangible assets relating to
joint ventures
|
(104)
|
(104)
|
(207)
|
Deferred tax credit
|
27
|
25
|
33
|
Impairment loss
|
-
|
-
|
(1,250)
|
Distribution of profits
|
-
|
(120)
|
(255)
|
Closing investment
|
5,298
|
6,820
|
5,352
|
Impairment in the year ended March 2024 relates
to an impairment review which was carried out over the investment
in 8AM Global Limited. A value in use calculation was performed,
with the recoverable amount being lower than the carrying value of
the investment. An impairment loss of £1,250,000 was recognised
within administrative expenses in the Consolidated Statement of
Total Comprehensive Income in the prior year.
10. Goodwill
|
Goodwill (£'000)
|
Cost and carrying value at 31 March 2023 and
30 September 2023
|
9,337
|
Recognised as part of a business
combination
|
459
|
Cost and carrying value at 31 March 2024 and
30 September 2024
|
9,796
|
The carrying value of goodwill includes £9.0
million allocated to the Tatton operating segment and
cash-generating unit ("CGU"). This is made up of £2.5 million
arising from the acquisition in 2014 of an interest in
Tatton Oak Limited by Tatton Capital Limited, consisting of the
future synergies and forecast profits of the Tatton Oak business,
£2.0 million arising from the acquisition in 2017 of an interest in
Tatton Capital Group Limited, £1.4 million of goodwill generated on
the acquisition of Sinfonia and £3.1 million of goodwill generated
on the acquisition of the Verbatim funds business.
The carrying value of goodwill also includes
£0.8 million allocated to the Paradigm operating segment and CGU,
£0.4 million relating to the acquisition of Paradigm Mortgage
Services LLP and £0.4 million of goodwill generated on the
acquisition of 56.49% of Fintegrate Financial Solutions Limited
within the prior year.
Goodwill relating to 8AM Global Limited is
shown within Investments in Joint Ventures (see note
9).
None of the goodwill is expected to be
deductible for income
tax purposes.
Impairment loss and subsequent reversal
Goodwill is subject to an annual impairment
review based on an assessment of the recoverable amount from future
trading. Where, in the opinion of the Directors, the
recoverable amount from future trading does not support the
carrying value of the goodwill relating to a subsidiary company,
then an impairment charge is made. Such an impairment is charged to
the Statement of Total Comprehensive Income.
Impairment testing
For the purpose of impairment testing, goodwill
is allocated to the Group's operating companies, which
represent the lowest level within the Group at which the
goodwill is monitored for internal management accounts purposes.
Goodwill acquired in a business combination is allocated, at
acquisition, to the CGUs or group of units that are expected
to benefit from that business combination. The Directors test
goodwill annually for impairment, or more frequently if there are
indicators that goodwill might be impaired. The Directors do not
consider there to be any indicators of impairment at 30 September
2024. The growth rates, discount rates and cash flow assumptions
used in the impairment review at 31 March 2024 are detailed in the
2024 Annual Report and Accounts.
11. Intangibles
|
Computer software
(£'000)
|
Client
relationships (£'000)
|
Brand
(£'000)
|
Total
(£'000)
|
Cost
|
|
|
|
|
Balance at 1 April 2023
|
1,235
|
4,034
|
98
|
5,367
|
Additions
|
120
|
-
|
-
|
120
|
Balance at 30 September 2023
|
1,355
|
4,034
|
98
|
5,487
|
Additions
|
129
|
-
|
-
|
129
|
Acquired as a business combination
|
365
|
-
|
-
|
365
|
Balance at 31 March 2024
|
1,849
|
4,034
|
98
|
5,981
|
Additions
|
125
|
-
|
-
|
125
|
Balance at
30 September 2024
|
1,974
|
4,034
|
98
|
6,106
|
Accumulated amortisation and
impairment
|
|
|
|
|
Balance at 1 April 2023
|
(892)
|
(845)
|
(15)
|
(1,752)
|
Charge for the period
|
(123)
|
(202)
|
(5)
|
(330)
|
Balance at
30 September 2023
|
(1,015)
|
(1,047)
|
(20)
|
(2,082)
|
Charge for the period
|
(6)
|
(202)
|
(5)
|
(213)
|
Balance at 31 March 2024
|
(1,021)
|
(1,249)
|
(25)
|
(2,295)
|
Charge for the period
|
(95)
|
(201)
|
(5)
|
(301)
|
Balance at
30 September 2024
|
(1,116)
|
(1,450)
|
(30)
|
(2,596)
|
Carrying amount
|
|
|
|
|
At 1 April 2023
|
343
|
3,189
|
83
|
3,615
|
At 30 September 2023
|
340
|
2,987
|
78
|
3,405
|
At 31 March 2024
|
828
|
2,785
|
73
|
3,686
|
At 30 September 2024
|
858
|
2,584
|
68
|
3,510
|
All amortisation charges on intangible assets
are included within administrative expenses in the Consolidated
Statement of Total Comprehensive Income.
12. Property, Plant and Equipment
|
Computer and office equipment
(£'000)
|
Fixtures
and fittings
(£'000)
|
Right-of-use
assets
(£'000)
|
Total
(£'000)
|
Cost
|
|
|
|
|
Balance at 1 April 2023
|
354
|
480
|
991
|
1,825
|
Additions
|
58
|
8
|
-
|
66
|
Balance at
30 September 2023
|
412
|
488
|
991
|
1,891
|
Additions
|
39
|
10
|
622
|
671
|
Disposals
|
(104)
|
-
|
(689)
|
(793)
|
Balance at 31 March 2024
|
347
|
498
|
924
|
1,769
|
Additions
|
26
|
10
|
-
|
36
|
Balance at
30 September 2024
|
373
|
508
|
924
|
1,805
|
Accumulated depreciation and
impairment
|
|
|
|
|
Balance at 1 April 2023
|
(234)
|
(398)
|
(739)
|
(1,371)
|
Charge for the period
|
(40)
|
(44)
|
(108)
|
(192)
|
Balance at
30 September 2023
|
(274)
|
(442)
|
(847)
|
(1,563)
|
Charge for the period
|
(46)
|
(29)
|
(108)
|
(183)
|
Disposals
|
104
|
-
|
689
|
793
|
Balance at 31 March 2024
|
(216)
|
(471)
|
(266)
|
(953)
|
Charge for the period
|
(44)
|
(9)
|
(99)
|
(152)
|
Balance at
30 September 2024
|
(260)
|
(480)
|
(365)
|
(1,105)
|
Carrying amount
|
|
|
|
|
At 1 April 2023
|
120
|
82
|
252
|
454
|
At 30 September 2023
|
138
|
46
|
144
|
328
|
At 31 March 2024
|
131
|
27
|
658
|
816
|
At 30 September 2024
|
113
|
28
|
559
|
700
|
All depreciation charges are included within
administrative expenses in the Consolidated Statement of Total
Comprehensive Income.
Right-of-use assets
The Group leases buildings, motor vehicles and
IT equipment. The Group has applied the practical expedient for
short-term leases and so has not recognised IT equipment
within rights-of-use assets. The average lease term is five years.
One lease expired in the year ended March 2024 and a new lease was
entered into in its place. The future lease payments relating to
lease liabilities are fixed.
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Amounts recognised in profit
and loss
|
|
|
|
Depreciation on right-of-use assets
|
(99)
|
(108)
|
(216)
|
Interest expense on lease liabilities
|
(27)
|
(3)
|
(6)
|
Expense relating to short-term leases
|
(35)
|
(33)
|
(66)
|
Expense relating to low value assets
|
(1)
|
(1)
|
-
|
|
(162)
|
(145)
|
(288)
|
At 30 September 2024, the Group is committed to
£32,000 for short-term leases (2023: £66,000).
The total cash outflow for all leases amounts
to £156,000 (2023: £168,000). The cash outflows for the principal
portion of lease liabilities and for the interest portion of lease
liabilities is shown within financing activities in the
Consolidated Statement of Cash Flows. The cash outflows for the
payments of short-term leases are shown within operating activities
in the Consolidated Statement of Cash Flows.
13. Trade and Other Receivables
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Trade receivables
|
239
|
420
|
878
|
Amounts due from related parties
|
-
|
2
|
-
|
Accrued income
|
3,874
|
2,837
|
3,427
|
Prepayments
|
673
|
760
|
756
|
Other receivables
|
482
|
247
|
235
|
|
5,268
|
4,266
|
5,296
|
Less non-current portion:
|
|
|
|
Contingent consideration
|
-
|
(188)
|
(188)
|
Total non-current trade and other
receivables
|
-
|
(188)
|
(188)
|
Total current trade and other
receivables
|
5,268
|
4,078
|
5,108
|
Trade and other receivables, excluding
prepayments, are financial assets. The carrying value of these
financial assets is considered a fair approximation of their
fair value. Accrued income is made up of contract assets, which are
balances due from customers that arise when the Group delivers the
service. Payment for services is not due from the customer until
the services are complete and therefore a contract asset is
recognised over the period in which the services are performed
to represent the entity's right to consideration for
the services transferred to date. This usually relates to
providing one month of investment management service prior to
receiving the cash from the customer in the following
month.
The Group applies the IFRS 9 simplified
approach to measuring expected credit losses ("ECLs") for trade
receivables and accrued income at an amount equal to lifetime ECLs.
In line with the Group's historical experience, and after
consideration of current credit exposures, the Group does not
expect to incur any credit losses and has not recognised any
ECLs in the current year (2023: £nil).
Trade receivable amounts are all held in
sterling.
14. Trade and Other Payables
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Trade payables
|
70
|
720
|
328
|
Accruals
|
4,675
|
3,434
|
4,389
|
Deferred income
|
111
|
121
|
238
|
Contingent consideration
|
926
|
3,089
|
903
|
Lease liabilities
|
569
|
130
|
659
|
Other payables
|
2,257
|
2,834
|
2,608
|
|
8,608
|
10,328
|
9,125
|
Less non-current portion:
|
|
|
|
Contingent consideration
|
(425)
|
(2,315)
|
(402)
|
Lease liabilities
|
(512)
|
-
|
(567)
|
Other payables
|
(45)
|
-
|
(47)
|
Total non-current trade and
other payables
|
(982)
|
(2,315)
|
(1,016)
|
Total current trade and other
payables
|
7,626
|
8,013
|
8,109
|
Trade payables, accruals, lease liabilities,
contingent consideration and other payables are considered
financial liabilities. The Directors consider that the
carrying amount of trade payables approximates to their fair
value.
Within other payables, there is a loan of
£31,000 (Mar 2024: £46,000) that holds a fixed and floating charge
over all present and future property and undertakings of
Fintegrate Financial Solutions Limited.
Trade payable amounts are all held in
sterling.
15. Financial Instruments
The Group's treasury activities are designed to
provide suitable, flexible funding arrangements to satisfy the
Group's requirements. The Group uses financial instruments
comprising borrowings, cash and items such as trade receivables and
payables that arise directly from its operations. The main risks
arising from the Group's financial instruments are interest rate
risks, credit risks and liquidity risks. The Board reviews policies
for managing each of these risks and they have been fully disclosed
in the FY24 Annual Report and Accounts. The Group finances its
operations through a combination of cash resource and other
borrowings.
Fair value estimation
IFRS 7 requires the disclosure of fair value
measurements of financial instruments by level of the following
fair value measurement hierarchy:
· Quoted prices
(unadjusted) in active markets for identical assets
or liabilities (level 1)
· Inputs other
than quoted prices included within level 1 that are observable for
the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (level 2)
· Inputs for the
asset or liability that are not based on observable market data
(that is, unobservable inputs) (level 3)
All financial assets, except for financial
investments, are held at amortised cost and are classified as level
1. The carrying amount of these financial assets are amortised at
cost approximates to their fair value. Financial investments are
categorised as financial assets at fair value through profit or
loss and are classified as level 1 and the fair value is determined
directly by reference to published prices in an active
market.
Financial assets at fair value through profit
or loss (level 1)
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
Financial investments in regulated funds or
model portfolios
|
1,132
|
175
|
106
|
All financial liabilities, except for
contingent consideration, are categorised as financial liabilities
measured at amortised cost and are also classified as level 1.
The only financial liabilities measured subsequently at fair value
on level 3 fair value measurement represent contingent
consideration relating to a business combination.
Contingent consideration has been valued using
a discounted cash flow method that was used to capture the present
value arising from the contingent consideration. The unobservable
inputs at 31 March 2024 were:
· the
risk-adjusted discount rate of 8.01%; and
· the
probability-adjusted level of assets under management,
which had a range of £246,000,000 to £390,000,000.
Financial assets at fair value through profit
or loss (level 3)
Contingent
consideration
|
£'000
|
Balance at 1 April 2023
|
2,989
|
Unwinding of discount rate
|
100
|
Balance at 30 September 2023
|
3,089
|
Contingent consideration paid
|
(937)
|
Unwinding of discount rate
|
101
|
Changes in the fair value of contingent
consideration
|
(1,350)
|
Balance at 31 March 2024
|
903
|
Unwinding of discount rate
|
23
|
Balance at 30 September 2024
|
926
|
The unwinding of the discount rate and the
changes in fair value of contingent consideration have been
recognised in the Consolidated Statement of Total Comprehensive
Income.
16. Equity
|
Number
|
Authorised, called up and fully paid
|
|
At 1 April 2023
|
60,055,722
|
Issue of share capital on exercise of employee
share options
|
455,678
|
At 30 September 2023 and 31 March
2024
|
60,511,400
|
Issue of share capital on exercise of employee
share options
|
37,480
|
At 30 September 2024
|
60,548,880
|
17. Share-based Payments
During the period, a number of share-based
payment schemes and share option schemes have been utilised by the
Company.
(A) Schemes
(I) Tatton Asset Management plc EMI scheme
("TAM EMI scheme")
The options granted in 2021 vested and became
exercisable in July 2024. There have been 117,084 options exercised
during the period from this scheme. The weighted average share
price at the date of exercise was £6.84. No options lapsed in the
six months to 30 September 2024 (2023: 27,919). A total of
2,508,861 options remain outstanding at 30 September 2024,
2,012,966 of which are currently exercisable. 5,649 options were
forfeited in the period (2023: 6,961). The weighted average
contractual life for share options outstanding at the end of the
period was 5.10 years (March 2024: 5.55 years)
The vesting conditions for the scheme are
detailed in the Remuneration Committee Report on pages 58 to 61 of
the 2024 Annual Report and Accounts. The weighted average fair
value of the options granted during the six months to September
2024 was £6.55. Within the accounts of the Group, the fair value at
grant date is estimated using the appropriate models, including
both the Black-Scholes and Monte Carlo modelling methodologies.
Share price volatility has been estimated using the historical
share price volatility of the Company, the expected volatility
of the Company's share price over the life of the options and
the average volatility applying to a comparable group of listed
companies. Key valuation assumptions and the costs recognised in
the accounts are explained in notes 17(B) and 17(C)
respectively.
|
Number
of share
options
granted
(number)
|
Weighted
average
price
(£)
|
Outstanding at 1 April 2023
|
2,804,439
|
0.59
|
Granted during the period
|
204,523
|
-
|
Forfeited during the period
|
(6,961)
|
-
|
Lapsed during the period
|
(27,919)
|
-
|
Exercised during the period
|
(346,896)
|
|
Outstanding at 30 September 2023
|
2,627,186
|
0.63
|
Exercisable at 30 September 2023
|
1,878,861
|
0.88
|
Outstanding at 1 October 2023
|
2,627,186
|
0.63
|
Forfeited during the period
|
(57,556)
|
-
|
Outstanding at 31 March 2024
|
2,569,630
|
0.64
|
Exercisable at 31 March 2024
|
1,878,861
|
0.88
|
Outstanding at 1 April 2024
|
2,569,630
|
0.64
|
Granted during the period
|
61,964
|
-
|
Forfeited during the period
|
(5,649)
|
-
|
Exercised during the period
|
(117,084)
|
-
|
Outstanding at 30 September 2024
|
2,508,861
|
0.66
|
Exercisable at 30 September 2024
|
2,012,966
|
0.82
|
(II) Tatton Asset Management plc Sharesave scheme
("TAM Sharesave scheme")
On 6 July 2020, 2 August 2021, 4 August 2022
and 25 August 2023, the Group launched all employee Sharesave
schemes for options over shares in Tatton Asset Management plc,
with the schemes in the periods 2020 and 2021 being administered by
Yorkshire Building Society and the schemes in 2022 and 2023
being administered by Link Group. Employees are able to save
between £10 and £500 per month over the three-year life of each
scheme, at which point they each have the option to either acquire
shares in the Company or receive the cash saved.
The 2021 TAM Sharesave scheme vested in August
2024 and 37,480 share options vested, with 24,480 being exercised
in the period to 30 September 2024. Over the life of the 2022 TAM
Sharesave scheme, it is estimated that, based on current savings
rates, 45,487 share options will be exercisable at an exercise
price of £3.26. Over the life of the 2023 TAM Sharesave
scheme, it is estimated that based on current savings rates, 88,529
share options will be exercisable at an exercise price of £3.89.
24,480 options were exercised in the year, at a weighted
average share price at the date of exercise of £3.60. The weighted
average contractual life for share options outstanding at the
end of the period was 1.51 years (2023: 1.54 years).
Within the accounts of the Group, the fair
value at grant date is estimated using the Black-Scholes
methodology for 100% of the options. Share price volatility
has been estimated using the historical share price volatility of
the Company, the expected volatility of the Company's share price
over the life of the options and the average volatility applying to
a comparable group of listed companies.
Key valuation assumptions and the costs
recognised in the accounts are explained in notes 17(B) and 17(C)
respectively.
|
Number
of share
options
granted
(number)
|
Weighted
average
price
(£)
|
Outstanding at 1 April 2023
|
95,095
|
2.57
|
Granted during the period
|
27,131
|
2.91
|
Forfeited during the period
|
(2,656)
|
3.07
|
Exercised during the period
|
(108,781)
|
2.29
|
Outstanding at 30 September 2023
|
10,789
|
3.47
|
Exercisable at 30 September 2023
|
-
|
-
|
Outstanding at 1 October 2023
|
10,789
|
3.47
|
Granted during the period
|
63,342
|
2.93
|
Forfeited during the period
|
(4,154)
|
3.22
|
Outstanding at 31 March 2024
|
69,977
|
3.53
|
Exercisable at 31 March 2024
|
-
|
-
|
Outstanding at 1 April 2024
|
69,977
|
3.53
|
Granted during the period
|
23,233
|
3.63
|
Forfeited during the period
|
(1,019)
|
3.59
|
Exercised during the period
|
(24,480)
|
3.60
|
Outstanding at 30 September 2024
|
67,711
|
3.54
|
Exercisable at 30 September 2024
|
13,000
|
3.60
|
(B) Valuation assumptions
Assumptions used in the option valuation models
to determine the fair value of options at the date of grant were as
follows:
|
EMI
scheme
|
Sharesave
scheme
|
|
2024
|
2023
|
2022
|
2023
|
2022
|
Share price at grant (£)
|
7.04
|
4.74
|
4.03
|
4.91
|
4.25
|
Exercise price (£)
|
-
|
-
|
-
|
3.89
|
3.26
|
Expected volatility (%)
|
34.49
|
35.24
|
34.05
|
35.13
|
34.05
|
Expected life (years)
|
3.00
|
3.00
|
3.00
|
3.00
|
3.00
|
Risk free rate (%)
|
3.98
|
4.64
|
1.71
|
4.74
|
1.71
|
Expected dividend yield (%)
|
2.27
|
3.06
|
3.11
|
2.95
|
3.11
|
(C) IFRS 2 share-based option costs
|
Unaudited six months ended
30-Sep 2024
(£'000)
|
Unaudited six months ended
30-Sep 2023
(£'000)
|
Audited
year ended
31-Mar 2024
(£'000)
|
TAM EMI scheme
|
804
|
797
|
1,376
|
TAM Sharesave scheme
|
39
|
32
|
82
|
|
843
|
829
|
1,458
|
The Consolidated Statement of Cash Flows shows
an adjustment to Net cash from operating activities relating
to share-based payments of £818,000 (2023: £829,000). This is
a charge in the year of £843,000 (2023: £829,000) adjusted for cash
paid relating to national insurance contributions on the exercise
of share options of £25,000 (2023: £nil). Of the charge of
£843,000, £438,000 is recognised through equity, with the remaining
£405,000 relating to the cost of national insurance contributions,
which are not accounted for through equity.
18. Related Party Transactions
Ultimate controlling party
The Directors consider there to be no ultimate
controlling party.
Relationships
Balances and transactions between the Parent
Company and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note. The
Group has trading relationships with the following entities in
which Paul Hogarth, a Director, has a beneficial
interest:
Entity
|
Nature of
transactions
|
Suffolk Life Pensions Limited
|
The Group pays lease rental payments on an
office building held in a pension fund by Paul Hogarth.
|
Hermitage Holdings (Wilmslow) Limited
|
The Group incurs recharged costs from this
entity relating to trading activities.
|
|
|
30 September
2024
|
30 September
2023
|
31 March
2024
|
Entity
|
Terms and
conditions
|
Income/ (cost) (£'000)
|
Balance receivable/ (payable) (£'000)
|
Income/ (cost) (£'000)
|
Balance receivable/ (payable) (£'000)
|
Income/ (cost) (£'000)
|
Balance receivable/ (payable) (£'000)
|
Suffolk Life Pensions Limited
|
Payable in advance
|
(31)
|
(15)
|
(30)
|
-
|
(47)
|
(15)
|
Hermitage Holdings (Wilmslow) Limited
|
Repayment on demand
|
-
|
-
|
(12)
|
-
|
(12)
|
-
|
19. Reconciliation of operating profit to net cash inflow
from operating activities
|
Note
|
Unaudited six months ended 30-Sep 2024
(£'000)
|
Unaudited six months ended 30-Sep 2023
(restated) (£'000)
|
Audited year ended 31-Mar 2024
(£'000)
|
Profit for the period
|
|
7,720
|
5,391
|
12,921
|
Adjustments:
|
|
|
|
|
Corporation tax expense
|
6
|
2,382
|
2,302
|
3,830
|
Finance income
|
|
(485)
|
(206)
|
(640)
|
Finance costs
|
|
23
|
246
|
353
|
Depreciation of property, plant and
equipment
|
12
|
152
|
192
|
375
|
Amortisation of intangible assets
|
11
|
301
|
330
|
543
|
Share-based payment expense
|
17
|
818
|
829
|
1,236
|
Post-tax share of profits/(losses) of joint
venture
|
|
81
|
(153)
|
1,188
|
Changes in fair value of contingent
consideration
|
|
-
|
-
|
(1,350)
|
Fair value gains on financial assets
|
|
(26)
|
-
|
-
|
Changes in:
|
|
|
|
|
Trade and other receivables
|
|
74
|
(619)
|
(1,576)
|
Trade and other payables
|
|
(807)
|
(46)
|
50
|
Cash generated from operations
|
|
10,233
|
8,266
|
16,930
|
20. Events after the Reporting Period
There were no material post balance sheet
events.
21. Contingent Liabilities
At 30 September 2024, the Directors confirmed
there were contingent liabilities of £nil (2023: £nil).