TIDMWHI
RNS Number : 7518U
W.H. Ireland Group PLC
07 December 2021
WH Ireland Group plc
("WH Ireland" or the "Company")
Interim Results for the Six Months ended 30 September 2021
"Good strategic progress, maintaining our return to profit and
investing significantly in both divisions"
Financial Highlights
-- Revenue increased 38% to GBP17.5m (H12020: GBP12.7m(*) )
o Wealth Management division revenue GBP7.8m (H12020:
GBP6.1m)
o Capital Markets division revenue GBP9.7m (H12020: GBP6.5m)
-- Significant increase in underlying profit before tax to
GBP1.1m (H12020: GBP0.6m)(+)
-- Statutory profit before tax unchanged at GBP0.3m (H12020:
GBP0.5m)
-- Underlying basic earnings per share 1.87p (H12020:
1.32p)(+)
-- Group regulatory capital solvency ratio (CET1): 18.4%
(H12020: 15.1%)
-- Cash balances at GBP8.4m (H12020: GBP5.8m; FY2021
GBP8.2m)
Divisional Highlights
-- Wealth Management (including Harpsden):
o Total group AUM up 41% to GBP2.4bn (H12020 (excluding IOM sold
Oct 2020): GBP1.7bn)
o WM AUM held on SEI (UK) platform of GBP1.6bn (H12020:
GBP1.2bn)
o Discretionary assets under management rose 67% to GBP1.2bn
(H12020: GBP0.7bn)
o Encouraging discretionary net inflows (excluding market
performance) of GBP43m representing 4.1% of opening assets
o Largely completed the transfer of the Harpsden assets to our
SEI (UK) platform with minimal attrition, and developed a more
focussed approach to our WM acquisition pipeline
-- Capital Markets:
o Increase in number of corporate clients to 86 (H12020: 80)
o 20 transactions completed in H1 raising GBP193m (H12020:
GBP104m) including four IPOs
o Reinforced our ability to distribute to not only institutional
clients but also to high net worth (HNW) clients, a key point of
differentiation
o Re-launched our Investor Forum in September 2021:
-- Enables our HNW clients to participate in our public and
private offerings
-- Over 300 HNWs have already signed up to date
Board strengthened
-- New CFO, Simon Jackson appointed in October 2021 bringing
significant experience in growing a wealth management business
-- Helen Sinclair and Tom Wood appointed as non-executive
directors, both of whom bring recent current experience and
valuable expertise in key areas
Current trading and outlook
-- Trading in line with our expectations of a sustainable return
to profitability
-- Good second half pipeline in Capital Markets but market
dependent
-- Momentum in Wealth Management supported by investment and the
recent acquisition of Harpsden
Commenting, Phillip Wale, Chief Executive Officer said:
"WH Ireland has continued to make progress in the first half,
maintaining our return to profit and further improving our
financial position, despite the overhang of the Covid pandemic. We
have made a cautious return to our offices, whilst further
enhancing our control framework and investing in growth
opportunities to increase the customer base of both sides of our
business.
"Following the good start reported today, we expect to see
continued momentum in the business albeit in somewhat more
challenging markets."
WH Ireland is hosting a webcast for analysts and investors at
9.30am today.
Please contact whireland@mhpc.com for further details.
For further information please contact:
WH Ireland Group plc www.whirelandplc.com
Phillip Wale, Chief Executive
Officer +44(0) 20 7220 1666
Canaccord Genuity Limited www.canaccordgenuity.com
Andrew Potts / Tom Diehl +44(0) 20 7523 8000
MHP Communications whireland@mhpc.com
Reg Hoare / James Bavister +44 (0) 20 3128 8793
*The comparative information for the period end 30 September
2020 has been reclassified to reflect the correct loss on
discontinued operations, together with a reclassification of
investment gains to revenue as laid out in the report and accounts
year ending 31 March 2021. See note 1 for further information.
(+) A reconciliation from underlying profits to statutory
profits is shown within the Chief Executive's statement below
Notes to Editors:
About WH Ireland Group plc
Wealth Management Division
WH Ireland provides independent financial planning advice and
discretionary investment management. Our goal is to build long
term, mutually beneficial, working relationships with our clients
so that they can make informed and effective choices about their
money and how it can support their lifestyle ambitions. We can
trace our history of helping individuals and their families as well
as entrepreneurs, charities and trustees back to 1872. By building
a financial plan and investment strategy with us, our clients are
free to focus on the important things, like life.
Capital Markets Division
Our Capital Markets Division is specifically focused on the
public and private growth company marketplace. The team's
significant experience in this exciting segment means that we are
able to provide a specialist service to each of its respective
participants. For companies, we raise public and private growth
capital, as well as providing both day-to-day and strategic
corporate advice. Our tailored approach means that our teams engage
with all of the key investor groups active in our market - High Net
Worth Individuals, Family Offices, Wealth Managers and Funds. Our
broking, trading and research teams provide the link between growth
companies and this broad investor base. In our latest financial
period, we successfully completed the IPOs of ITIM, Northcoders,
Mailbox REIT and Orcadian Energy, we raised capital for companies
such as Jubilee Metals and i3 Energy; while welcoming nine new
quoted companies to our corporate client roster.
Chairman's Statement
Review and Outlook
The first half of the financial year has seen WH Ireland
continue to grow, improve the quality of its business and invest to
ensure that momentum continues. A year on year increase in
underlying profitability has been achieved despite the costs of the
continuing integration of Harpsden and further investment in
people. The 23% organic growth in Discretionary Funds Under
Management is also pleasing. Net inflows (excluding market
performance) were GBP43.4m, which is encouraging, especially as we
believe the continued integration of Harpsden will allow Wealth
Management to further develop and improve its proposition to its
customers into the future.
We have now largely completed the transfer of the Harpsden
assets to our wealth management platform (SEI) with minimal
attrition. The expertise we have gained from this complex process
prepares us well for further acquisitions. We have also established
a systematic approach to our wealth management acquisition
pipeline, with support from our Capital Markets division, to ensure
we are well placed for our target market. Whilst larger
acquisitions have continued to attract significant interest from a
range of market participants, the smaller opportunities remain
attractive, particularly for us given the potential for synergies
as we transfer assets onto our platform. However, we remain patient
to ensure we generate significant value from each acquisition.
Our Capital Markets division has shown real progress across a
number of fronts, all of which point to the improvement in quality
we are seeking. The number of companies who rely on us for advice
and distribution has continued to grow and has now reached 86 from
just 80 a year ago. We successfully completed four IPOs making us
one of the leading AIM IPO advisers and we completed one of our
largest ever placings in September 2021. We re-launched our
Investor Forum in September 2021 which allows our high net worth
clients ("HNW") to participate in our Public and Private offerings,
and over 300 HNWs have already signed up. This further reinforces,
what we believe is a key point of differentiation, namely our
ability to distribute to HNW and Ultra HNW individuals.
I am also delighted that we have attracted significant talent in
the first half. This has included two new Board members, Helen
Sinclair and Tom Wood, both of whom bring experience and valuable
expertise in areas very important to WH Ireland. Our new CFO, Simon
Jackson, is already making good progress in a number of areas as we
continue to drive efficiencies as we grow. His experience, gained
as Brooks Macdonald grew to its current size, is already very
evident. The arrival of a new Head of Wealth Planning, Steve
Pennington, will allow us to pursue our stated aim of greater
penetration of financial planning through the whole business as we
strive to lead our proposition with the very best wealth planning
capability whilst providing independent financial advice and
product selection.
There remains much work to do in order for us to achieve our
collective ambitions for both businesses, but we have made progress
towards the GBP3bn Discretionary Funds under Management target. We
are now very focused on seeing the benefits of this increased scale
fall through to the margin. We have also made good progress towards
the GBP20m revenue target from our Capital Markets division while
improving the overall quality of that revenue.
Phil Shelley
6 December 2021
Chief Executive Officer's Report
Overview
WH Ireland has continued to make progress in the first half of
this financial year despite the ongoing issues of the Covid
pandemic. We have made a cautious return to our offices and again I
thank all our employees, clients, customers, and business partners
for their support. During this period we have invested in the
business and enhanced our control framework, while maintaining a
return to profitability. Investment in our Capital Markets division
has been made in Healthcare, Climate Aligned Capital, HNW &
Family Office distribution and Private Growth Capital segments as
well as in Wealth Planning. We remain focused to ensure that we
retain the benefits of last year's first profitable year in five
years, especially the retention of our people; and pursuing
opportunities to grow both sides of our business and grow our
customer base.
Six Months to 30 September 2021
The start of the financial year was very different from that
faced in 2020. Given our hybrid working model, a market still in
turmoil created by the Covid-19 pandemic and UK markets that have
underperformed those of the US and Asia in recovery terms, I still
believe we are performing well. Our employees once again showed
great flexibility and maintained a seamless service to all our
clients. The investment in new people and teams within Capital
Markets, has continued, despite tougher market conditions than the
second half of last year. Wealth Management continued its
successful drive to improve quality of earnings with an increase in
the proportion of its assets under discretionary management, and by
fully integrating its first acquisition, Harpsden Wealth Management
Limited. Overall revenue for the Group rose 38% to GBP17.5m (2020
H1 restated: GBP12.7m) and our underlying profit before tax
increased to GBP1.1m (2020: GBP0.6m) whilst our statutory profit
for the period was GBP0.3m (2020 H1 restated: GBP0.5m).
Underlying profit before tax is considered by the Board to be a
more accurate reflection of the Group's performance when compared
to the statutory results as this excludes income and expense
categories, which are deemed of a non-recurring nature or a
non-cash operating item. Reporting at an underlying basis is also
considered more appropriate for external analyst coverage and peer
group benchmarking, allowing a more accurate like-for-like
comparison. A reconciliation between underlying and statutory
profit before tax for the six months ended 30 September 2021, with
comparatives is shown in the following table:
6m to 6m to 12m to
GBPm 30 30 31 Mar
Sept Sep 2021
2021 2020
Underlying profit before tax 1.10 0.65 1.68
------- ------ --------
Acquisition related items
------- ------ --------
Deal restructuring and integration
costs 0.40 - 0.46
------- ------ --------
Amortisation of acquired brand and
client relationships 0.22 0.06 0.22
Changes in fair value and finance 0.31 - -
cost of deferred consideration
Other items
Dual running platform costs - 0.01 0.04
Restructuring costs 0.30 0.11 0.13
Net changes in the value of non-current
investment assets (0.46) - (0.22)
------- ------ --------
Statutory profit before tax 0.33 0.47 1.05
------- ------ --------
Clients
Our clients are at the heart of everything that we do. Our
central mission is to provide excellent service to our corporate,
institutional, and private clients, and this remains our priority.
I would like to take the opportunity to thank all our clients for
their loyalty and patience as we have worked through the inevitable
disruption from the scale and pace of change we have instigated
this year.
It was pleasing to see from our annual client satisfaction
survey that our discretionary managed clients have awarded us
higher ratings this year, with marked progress amongst our
wealthiest clients, brand perception and the transparency of our
services and costs.
Further efficiencies within our infrastructure has given WH
Ireland a platform that we believe is able to provide the quality
of service that will differentiate us in the future, and which has
shown it is sufficiently robust to successfully navigate challenges
and embrace growth within the business.
Staff
We continue to encourage excellence within the Group, and we
continue to attract new individuals and teams across both
divisions. I thank all our members of staff for their commitment
and hard work in the past year as they managed the uncertainty and
challenges of the ever-changing working model while maintaining
client service as a priority. Group headcount, excluding
non-executive directors is now 142, increased from 124 in September
2020, which includes the 17 additional staff that joined with the
Harpsden acquisition.
We have also strengthened our Wealth Management division with
the appointment of Steve Pennington. Steve joined WH Ireland in
November 2021 as Director, Head of Wealth Planning. His previous
role was at Arbuthnot Latham & Co. Limited where he led the
transformation and integration of their Wealth Planning
proposition. He is a Chartered Financial Planner, Fellow of the
Personal Finance Society and Chartered FCSI.
Shareholders
I am delighted with the support, both in terms of capital
investment and guidance, received from our major shareholders and
thank them and the new investors who have joined and supported WH
Ireland in this period.
Capital
The first half of this year has seen total equity increase to
GBP15.7m (H1 2020: GBP8.6m). Cash at the period end was GBP8.4m
which has increased 45% over the year (H1 2020: GBP5.8m). The Group
has no debt.
Wealth Management (WM)
This has been a pivotal year for the Wealth Management division.
Following a year of cost reduction, legacy system elimination and
control framework improvement, coupled with the rationalisation of
non-optimal teams and offices and the repricing of the WM
offerings, the division was able to grow AUM with the acquisition
of Harpsden Wealth Management Limited ("Harpsden"). The team at
Harpsden has developed, what we believe is an excellent business
with professionalism and care. It brought both GBP250m of
discretionary assets and a profitable business that, once the
integration is complete, we believe will provide clients with even
better value products and pricing.
Total Group assets under management have increased to GBP2.4bn
(H1 2020: GBP1.7bn) including GBP1.6bn in WM. Discretionary managed
assets increased by GBP460m including GBP250m from the Harpsden
acquisition, a rise over the year of 67% to GBP1.2bn (H1 2020:
GBP0.7bn).
Total revenue has increased to GBP7.8m (H1 2020: GBP6.2m) with
management fees of GBP6.7m (H1 2020: GBP4.6m) representing 86% of
revenue (H1 2020: 75%)
Capital Markets (CM)
The Capital Markets division strengthened its position as a top
five broker and top three Nominated Adviser to AIM companies, by
client numbers. Good progress in client numbers reflects the focus
placed on our target of advising 100 corporate clients by March
2024. This will be an important step in delivering a business that
can consistently deliver revenue of over GBP20m a year. During the
first half of the year this division welcomed 9 new clients,
increasing its number of retained corporate clients to 86 (H1 2020:
80) increasing retained revenue to GBP1.8m (H12020: GBP1.6m). Gross
transaction fees grew to GBP6.7m (H1 2020: GBP3.5m) as the team
completed 20 transactions raising GBP193m for clients (H1 2020: 32
and GBP104m respectively). This included four successful IPO
transactions in the period. Commission income fell slightly over
the period to GBP1.2m (H1 2020: GBP1.4m)
Looking forward
The year has started well with the final stages of the Harpsden
integration proceeding better than we had expected and with the
Capital Markets division continuing the progress it made last year
despite a more challenging trading environment.
Following the good start reported today, we expect to see
continued momentum in the business albeit in somewhat more
challenging markets.
Phillip Wale
6 December 2021
Consolidated Statement of Comprehensive Income
UNAUDITED FOR THE 6 MONTHSED 30 SEPTEMBER 2021
6 months 6 months 12 months
ended ended ended
30 Sep 2021 30 Sep 2020* 31 Mar
2021
Note (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 2 17,502 12,717 29,559
Administrative expenses (16,823) (12,188) (28,418)
------------------------------------- ----- ------------- ------------
Operating profit 679 529 1,141
Operating profit before exceptional
items: 1,021 757 1,757
Exceptional items (342) (228) (616)
------------------------------------- ----- -------------------------- ------------- ------------
Operating profit after exceptional
items 679 529 1,141
Finance income - 2 2
Finance expense 5 (354) (63) (96)
------------------------------------- ----- ------------- ------------
Profit before tax 325 468 1,047
Tax income - - 192
------------------------------------- ----- ------------- ------------
Profit from continuing operations 325 468 1,239
Loss from discontinued operations - (86) (86)
Profit and total comprehensive
income for the year 325 382 1,153
------------------------------------- ----- -------------------------- ------------- ------------
Earnings per share 7
------------------------------ ------ -------- --------
From continuing operations
Basic 0.55p 0.96p 2.47p
Diluted 0.49p 0.96p 2.07p
------------------------------ ------ -------- --------
From discontinued operations
Basic - (0.18p) (0.17p)
------------------------------ ------ -------- --------
Total
Basic 0.55p 0.78p 2.30p
Diluted 0.49p 0.78p 1.93p
------------------------------ ------ -------- --------
Consolidated Statement of Financial Position
UNAUDITED AS AT 30 SEPTEMBER 2021
30 Sep 2021 30 Sep 2020 31 Mar
2021
Note (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------- ----- ------------ ------------ ----------
ASSETS
Non-current assets
Intangible assets 4,512 696 4,764
Goodwill 3,539 - 3,539
Property, plant and equipment 376 618 511
Investments 3 1,783 1,986 1,099
Right of use asset 1,377 2,203 1,603
Deferred tax asset 190 - 190
11,777 5,503 11,706
------------------------------- ----- ------------ ------------ ----------
Current assets
Trade and other receivables 5,652 4,355 5,156
Other investments 3 1,675 1,726 2,490
Cash and cash equivalents 4 8,377 5,849 8,211
15,704 11,930 15,857
------------------------------- ----- ------------ ------------ ----------
Total assets 27,481 17,433 27,563
------------------------------- ----- ------------ ------------ ----------
LIABILITIES
Current liabilities
Trade and other payables (7,001) (6,054) (7,623)
Lease liability (516) (765) (552)
Deferred consideration 5 (1,291) - (1,087)
(8,808) (6.819) (9,262)
------------------------------- ----- ------------ ------------ ----------
Non-current liabilities
Lease liability (1,224) (1,981) (1,506)
Deferred tax liability (772) - (799)
Deferred consideration 5 (1,011) - (909)
(3,007) (1,981) (3,214)
------------------------------- ----- ------------ ------------ ----------
Total liabilities (11,815) (8,800) (12,476)
------------------------------- ----- ------------ ------------ ----------
Total net assets 15,666 8,633 15,087
------------------------------- ----- ------------ ------------ ----------
Capital and reserves
Share capital 6 3,001 2,335 3,001
Share premium 19,083 14,414 19,083
Other reserves 981 981 981
Retained earnings (6,755) (8,453) (7,334)
Treasury shares (644) (644) (644)
------------------------------- ----- ------------ ------------ ----------
Shareholders' funds 15,666 8,633 15,087
------------------------------- ----- ------------ ------------ ----------
Signed on behalf of the board
P A Wale
6 December 2021
Consolidated Statement of Cash Flows
UNAUDITED FOR THE 6 MONTHSED 30 SEPTEMBER 2021
6 months 6 months 12 months
ended ended ended
30 Sep 30 Sep 31 Mar
2021 2020* 2021
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
Operating activities:
Profit/(loss) for the period:
Continuing operations 325 468 1,239
Discontinuing operations - (86) (86)
325 382 1,153
Adjustments for:
Depreciation, amortisation and impairment 611 647 1,242
Finance income - (2) (2)
Finance expense 354 63 96
Tax - - (196)
Non-cash adjustment for share option
charge 254 - 90
(Increase)/ decrease in trade and other
receivables (951) 2,056 1,815
(Decrease)/ increase in trade and other
payables (55) 1,536 2,602
Decrease/(increase) in current asset
investments 3 815 (869) (1,706)
(Increase) in non-current asset investments 3 (839) (1,303) -
Net cash generated from operations 514 2,510 5,094
Income taxes received/(paid) - - -
Net cash inflows from operating activities 514 2,510 5,094
--------------------------------------------- ----- ------------ ------------ ----------
Investing activities:
Cost on disposal of subsidiary undertaking - (90) (90)
Interest received - 2 3
Investment in subsidiary - - (4,765)
Acquisition of property, plant and
equipment (4) (75) (201)
Net cash used in investing activities (4) (163) (5,053)
--------------------------------------------- ----- ------------ ------------ ----------
Finance activities:
Proceeds from issue of share capital - - 5,335
Lease liability payments (344) (232) (898)
Interest paid - - (1)
Net cash (used)/gained in financing
activities (344) (232) 4,436
--------------------------------------------- ----- ------------ ------------ ----------
Net increase in cash and cash equivalents 166 2,115 4,477
Cash and cash equivalents at beginning
of period 8,211 3,734 3,734
Cash and cash equivalents at end of
period 8,377 5,849 8,211
--------------------------------------------- ----- ------------ ------------ ----------
*Comparative figures have been reclassified to reflect the
correct loss on discontinued operations and to reflect the
reclassification of realised gains to revenue for the six months to
30 September 2020.
Consolidated Statement of Changes in Equity
UNAUDITED FOR THE 6 MONTHSED 30 SEPTEMBER 2021
Share Share Other Retained Treasury Total
capital premium reserves earnings shares equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- --------- --------- --------- --------
Balance at 1 April 2020 2,335 14,414 981 (8,580) (644) 8,506
Profit and total comprehensive
income for the period - - - 382 - 382
--------------------------------- -------- -------- --------- --------- --------- --------
Employee share option - - - - - -
scheme
Other movements - - - (255) - (255)
--------------------------------- -------- -------- --------- --------- --------- --------
Balance at 30 September
2020 2,335 14,414 981 (8,453) (644) 8,633
Profit and total comprehensive
income for the period - - - 771 - 771
Employee share option
scheme - - - 90 - 90
New share capital issued 666 4,669 - - - 5,335
Other movements - - - 258 - 258
Balance at 31 March 2021 3,001 19,083 981 (7,334) (644) 15,087
Balance at 1 April 2021 3,001 19,083 981 (7,334) (644) 15,087
Profit and total comprehensive
income for the year - - - 325 - 325
--------------------------------- -------- -------- --------- --------- --------- --------
Employee share option
scheme - - - 254 - 254
Other movements - - - - - -
-------------------------------- -------- -------- --------- --------- --------- --------
Balance at 30 September
2021 3,001 19,083 981 (6,755) (644) 15,666
--------------------------------- -------- -------- --------- --------- --------- --------
Notes to the Consolidated Statements
(UNAUDITED)
1. General information
WH Ireland Group plc is a public company incorporated in the
United Kingdom. The shares of the Company are traded on AIM, a
market operated by the London Stock Exchange Group plc. The address
of its registered office is 24 Martin Lane, London, EC4R 0DR.
Basis of preparation
The condensed financial statements in this interim report for
the six months to 30 September 2021 has been prepared in accordance
with IAS 34 Interim Financial Reporting. This report has been
prepared on a going concern basis and should be read together with
the Group's annual consolidated financial statements as at and
prepared to 31 March 2021 in accordance with International
Accounting Standards in accordance with the requirements of the
Companies Act 2006.
The accounting policies, presentation and methods of computation
adopted by the Group in the preparation of its 2021 interim report
are those which the Group currently expects to adopt in its annual
financial statements for the year ending 31 March 2022 which will
be prepared in accordance with United Kingdom Adopted International
Financial Reporting Standards and are consistent with those adopted
in the audited annual Report and Accounts for the period ended 31
March 2021.
The financial information in this report does not constitute the
Company's statutory accounts. The statutory accounts for the period
ended 31 March 2021 have been delivered to the Registrar of
Companies in England and Wales. The auditor has reported on those
accounts. Its report was unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under
Section 498(2) or 498(3) of the Companies Act 2006. The financial
information for the six months to 30 September 2021 are unaudited
(six months to 30 September 2020: unaudited).
At the time of approving this interim report, the directors have
a reasonable expectation that the company has adequate resources to
continue in operational existence for the foreseeable future.
Therefore the directors continue to adopt the going concern basis
of accounting in preparing this report.
Exceptional costs
These are considered by the Board to be non-trading and
exceptional in nature. This includes costs relating to the transfer
of assets from Harpsden and other one-off costs
Finance expense
Included within finance expenses is the fair value measurement
arising on deferred consideration payments from the acquisition of
Harpsden together with the associated net finance costs.
Comparative period reclassification
As reported in the Annual Report and Accounts for the year ended
31 March 2021 the loss from discontinued operations relating to the
sale of WH Ireland (IOM) Limited was GBP86k. Therefore the profit
of GBP51k from discontinued operations included in the six months
to 30 September 2020 has been reclassified. As a result continued
operations were understated by GBP137k for the six months ended 30
September 2020. The consolidated statement of comprehensive income
has been reclassified to reflect the correct treatment. There was
no impact to total comprehensive income and retained earnings. The
reclassification has impacted the consolidated statement of
comprehensive income, the consolidated statement of cash flow, the
segment table for the six months to 30 September 2020 in note 2 and
the earnings per share on continuing and discontinued operations
for the six months to 30 September 2020 in note 7. As also reported
in the Annual Report and Accounts for the year ended 31 March 2021
realised investment gains were included in revenue. The realised
investment gains of GBP366k have therefore been moved to revenue
for the six months to 30 September 2020. There was no impact to
total comprehensive income and retained earnings. The
reclassification has impacted the consolidated statement of
comprehensive income, the consolidated statement of cash flow, the
segment table for the six months to 30 September 2020 in note 2 and
the earnings per share on continuing and discontinued operations
for the six months to 30 September 2020 in note 7.
2. Segment information
The Group has two principal operating segments, Wealth
Management (WM) and Capital Markets (CM). The WM division offers
investment management advice and services to individuals and
contains our Wealth Planning business, giving advice on and acting
as intermediary for a range of financial products. The CM division
provides corporate finance and corporate broking advice and
services to companies and acts as Nominated Adviser (Nomad) to
clients traded on AIM and contains our Institutional Sales and
Research business, which carries out stockbroking activities on
behalf of companies as well as conducting research into markets of
interest to its clients.
All divisions are located in the UK. Each reportable segment has
a segment manager who is directly accountable to, and maintains
regular contact with, the Chief Executive Officer.
No customer represents more than ten percent of the Group's
revenue.
The majority of the Group's revenue originates within the
UK.
The following tables represent revenue and cost information for
the Group's business segments:
Wealth Management Capital Group and Group
Markets consolidation
6 months ended 30 Sep 2021 adjustments
(unaudited) GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ------------------ --------- --------------- ---------
Revenue 7,800 9,702 - 17,502
Direct costs (6,352) (7,269) - (13,621)
------------------ --------- --------------- ---------
Contribution 1,448 2,433 - 3,881
Indirect costs (1,614) (795) (374) (2,783)
Underlying profit/(loss) before
tax (166) 1,638 (374) 1,098
Acquisition related costs (405) - - (405)
Amortisation of acquired brand and
client relationships (218) - - (218)
Changes in fair value and finance
cost of deferred consideration (306) - - (306)
Restructuring costs (194) (102) - (296)
Net changes in the value of non-current
investment assets - 452 - 452
Profit/(loss) before tax (1,289) 1,988 (374) 325
Tax - - - -
Profit/(loss) for the year (1,289) 1,988 (374) 325
----------------------------------------- ------------------ --------- --------------- ---------
Wealth Management Capital Group and Less Discontinued Group
Markets consolidation Operations** (continuing
6 months ended 30 Sep 2020* adjustments operations)
(unaudited) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ------------------ --------- --------------- ------------------ -------------
Revenue 6,151 6,460 590 (484) 12,717
Direct costs (5,222) (4,857) (432) 570 (9,941)
------------------ --------- --------------- ------------------
Contribution 929 1,603 158 86 2,776
Indirect costs (1,385) (513) (233) - (2,131)
Underlying profit/(loss)
before tax (456) 1,090 (75) 86 645
Amortisation of acquired
client relationships (61) - - - (61)
Dual running operating platform
costs (10) - - - (10)
Restructuring costs (75) (31) - - (106)
Profit/(loss) before tax (602) 1,059 (75) 86 468
Tax - - - - -
Profit/(loss) for the year (602) 1,059 (75) 86 468
--------------------------------- ------------------ --------- --------------- ------------------ -------------
* These figures have been reclassified to reflect the correct
loss on discontinued operations and to reflect the
reclassification of realised gains to revenue for the six months to 30 September 2020.
** Discontinued operations relate to WH Ireland (IOM)
Limited
Wealth Management Capital Group and Less Discontinued Group
Markets consolidation Operations (continuing
12 months ended 31 Mar 2021 adjustments operations)
(audited) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ------------------ --------- --------------- ------------------ -------------
Revenue 13,291 16,285 467 (484) 29,559
Direct costs (10,272) (11,736) (569) 570 (22,007)
------------------ --------- --------------- ------------------
Contribution 3,019 4,549 (102) 86 7,552
Indirect costs (3,099) (1,312) (1,459) - (5,870)
Underlying profit/(loss)
before tax (80) 3,237 (1,561) 86 1,682
Acquisition related costs (465) - - - (465)
Amortisation of acquired
client relationships (218) - - - (218)
Dual running operating platform
costs (35) - - - (35)
Restructuring costs (91) (38) - - (129)
Net changes in the value
of non-current investment
assets - 212 - - 212
Profit/(loss) before tax (889) 3,411 (1,561) 86 1,047
Tax 2 - 190 - 192
Profit/(loss) for the year (887) 3,411 (1,371) 86 1,239
--------------------------------- ------------------ --------- --------------- ------------------ -------------
3. Investments
As at As at As at
30 Sep 30 Sep 31 Mar
2021 2020 2021
Investments GBP'000 GBP'000 GBP'000
-------- -------- --------
Fair value: unquoted 48 48 48
Fair value: quoted 1 1 1
Fair value: warrants 1,734 1,937 1,050
Total investments 1,783 1,986 1,099
---------------------- -------- -------- --------
Quoted and unquoted investments include equity investments other
than those in subsidiary undertakings. Warrants may be received
during the ordinary course of business; there is no cash
consideration associated with the acquisition.
Fair value, in the case of quoted investments, represents the
bid price at the reporting date. In the case of unquoted
investments, the fair value is estimated by reference to recent
arm's length transactions. The fair value of warrants is estimated
using established valuation models. These investments are included
in non-current assets.
As at As at As at
30 Sep 30 Sep 31 Mar
2021 2020 2021
Trading investments GBP'000 GBP'000 GBP'000
---------------------- -------- -------- --------
Listed investments 1,675 1,726 2,490
Investments are measured at fair value, which is determined
directly by reference to published prices in an active market where
available. Trading investments are included in current assets.
4. Cash, cash equivalents and bank overdrafts
For the purposes of the statement of cash flows, cash and cash
equivalents comprise cash in hand and deposits with banks and
financial institutions with a maturity of up to three months.
Cash and cash equivalents represent the Group's money and money
held for settlement of outstanding transactions.
Money held on behalf of clients is not included in the statement
of financial position. Client money at 30 September 2021 was
GBP0.4m (30 September 2020: GBP0.4m; 31 March 2021: GBP0.4m).
5. Deferred Consideration
As at As at As at
30 Sep 2021 30 Sep 2020 31 Mar 2021
------------ ------------ ------------
At beginning of period 1,996 - -
Additions - - 1,996
Finance expense of deferred consideration 208 - -
Change in fair value 98 - -
------------------------------------------- ------------ ------------ ------------
Balance at end of period 2,302 1,996
------------------------------------------- ------------ ------------ ------------
Analysed as:
Included in current liabilities 1,291 - 1,087
Included in non-current liabilities 1,011 - 909
Balance at end of period 2,302 - 1,996
------------------------------------------- ------------ ------------ ------------
Deferred consideration relates to the acquisition of Harpsden
Wealth Management Limited and the maximum amounts payable over a
two year period. The following assumptions were made: revenue
growth of 2%, attrition rate of 3% for larger clients and 10% for
smaller clients, discount rate of 13.5%. The total cash
consideration of GBP2.5m was recognised at its fair value of GBP2m
on acquisition.
During the six months ended 30 September 2021, the fair value of
the estimated deferred consideration for Harpsden Wealth Management
Limited was revalued by GBP98k due to the estimated timing of when
the consideration will fall due. During the six months ended 30
September 2021 the Group also recognised a finance expense of
GBP208k on the deferred consideration. The fair value of the
Harpsden deferred consideration at 30 September 2021 was GBP2.3m.
The two deferred consideration payments of GBP1.25m each are
payable in December 2021 and December 2022 respectively.
6. Share capital
The total number of ordinary shares in issue is 62.05 million
(30 September 2020: 48.70 million; 31 March 2021: 62.02
million).
7. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the
profit attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the
year, excluding ordinary shares purchased by the Company and held
as treasury shares.
Diluted EPS is the basic EPS, adjusted for the effect of
conversion into fully paid shares of the weighted average number of
all dilutive employee share options outstanding during the period.
At 30 September 2021: 6.48m (30 September 2020: nil; 31 March 2021:
6.48m) options were excluded from the EPS calculation as they were
anti-dilutive. In a period when the company presents positive
earnings attributable to ordinary shareholders, anti-dilutive
options represent options issued where the exercise price is
greater than the average market price for the period.
Reconciliation of the earnings and weighted average number of
shares used in the calculations are set out below.
As at As at As at
30 Sep 2021 30 Sep 2020* 31 Mar 2021
---------------------------------------------- ------------ ------------- ------------
Weighted average number of shares in
issue during the period ('000) 58,690 48,704 50,249
Effect of dilutive share options (thousands) 7,162 - 9,614
65,852 48,704 59,862
---------------------------------------------- ------------ ------------- ------------
Profit from continuing operations 325 468 1,239
Basic EPS 0.55p 0.96p 2,47p
Diluted EPS 0.49p 0.96p 2.07p
---------------------------------------------- ------------ ------------- ------------
Loss from discontinuing operations - (86) (86)
---------------------------------------------- ------------ ------------- ------------
Basic EPS - (0.18p) (0.17p)
---------------------------------------------- ------------ ------------- ------------
Total profit 325 382 1,153
---------------------------------------------- ------------ ------------- ------------
Basic EPS 0.55p 0.78p 2.30p
---------------------------------------------- ------------ ------------- ------------
Diluted EPS 0.49p 0.78p 1.93p
---------------------------------------------- ------------ ------------- ------------
*Comparative figures have been reworked as a result of the
reclassification of the loss on discontinued operations for the six
months to 30 September 2020.
8. Dividends
No interim dividend has been paid or proposed in respect of the
current financial period (30 September 2020: nil; 31 March 2021:
nil).
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END
IR FSIEFMEFSESE
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