TIDMPMK
Interim results for the six months to 30 June 2011
PLUS Markets Group plc ("PMG" or the "Group") reports its interim results for
the six months to 30 June 2011.
Key highlights
* First half of 2011 showing stable revenues from PLUS Stock Exchange
("PLUS-SX") with 12 new listings.
* The Group is now operating on its reduced cost base.
* Revenues at GBP1.46 million (2010 - GBP1.53 million) on administrative expenses
of GBP2.91 million (2010 - GBP4.03 million).
* Losses reduced by 43% on the prior year at GBP1.45 million (2010 - GBP2.54
million) before depreciation, amortisation, impairment and interest
received. The Group has no debt and retained a cash balance of GBP4.60
million as at the balance sheet date.
Post balance sheet events
* PLUS-SX restructured to pursue listings business and wind down of non
revenue generating services.
* PLUS Derivatives Exchange ("PLUS-DX") authorised by the Financial Services
Authority and signs its first trading member.
* Establishment of PLUS Trading Solutions ("PLUS-TS"), an innovative trading
platform technology services provider enabling investment banks, brokers
and trading venues to establish outsourced matching systems that are
designed to be fully compliant with regulatory initiatives.
Commenting on the interim results, Chief Executive Officer Cyril Théret said:
"The first six months of 2011 have seen continuing rapid progress towards our
stated objective of creating the next-generation stock exchange by responding
to new commercial and regulatory needs. The Group now operates three core
businesses: PLUS Stock Exchange providing IPO and execution services, PLUS
Derivatives Exchange responding to changes in the OTC derivatives markets, and
PLUS-TS, a fully managed trading services company."
For further information, please contact:
Cyril Théret / Nemone Wynn-Evans 020 7429 7800
PLUS Markets Group plc
Alexander Dewar 0845 213 1010
Brewin Dolphin Limited (Nominated Advisor)
Jeff Watt 020 7324 5482
Greentarget (PR Enquiries)
Chairman's statement
In the first half of 2011, the Group has delivered the foundations for a highly
scalable exchange based on three core competencies: technology, market
regulation, and compliance. It is our plan to monetise these across all three
of the Group's businesses (PLUS-SX, PLUS-DX, and PLUS-TS). The management team
has combined the Group's lower cost base with new business areas that offer
significant growth opportunities, ensuring that we are able to lead some of the
market structure changes that are occurring, rather than following a `me too'
approach of other exchanges and trading platforms.
The scope of our market has now increased from small and mid cap IPOs to
cover listed markets, OTC markets, and multiple trading venues. It is
important to note that our diversification strategy also provides a much wider
range of revenue streams: PLUS-SX is a mix of relatively low-margin transaction
and subscription based revenues; PLUS-DX has a higher margin transaction
revenue model, and PLUS-TS has a licence based pricing model.
Traditional exchanges are all involved in M&A activity to maintain their
revenues under depressed market conditions, while consolidation is their only
response to increased competition from new trading venues and increased
regulation. It is also interesting to note that many of the newer trading
venues, which have had several tens of millions of pounds invested in them, are
struggling to reach breakeven. This indicates that, despite achieving
significant market shares in their chosen segments, their business models are
not ultimately scalable.
We have observed these trends and absorbed their implications rapidly, and that
is why the company has pursued its new structure. We therefore look forward to
updating the market in the coming months on the future financial performance of
the Group, particularly on the results of our diversification strategy.
Financial performance
The financial performance of the Group for the first six months of 2011
reflects the first full reporting period of operations on its new cost base,
following the reduction of annual running costs down to the GBP5 million level.
The market for IPOs remains very difficult, but we have been encouraged that
revenues from the Group's core PLUS-SX business remain stable. The Group is
reporting a basic loss per share of 0.37 pence, down from a loss per share of
0.64 pence for the same period in 2010. The Group has also placed a great
emphasis on conserving its cash and bank balances which were GBP4.60 million at
the balance sheet date, within regulatory requirements. Meeting these
regulatory capital requirements, and the adoption of the going concern
principle, is discussed further in Note 1 to the condensed financial
statements.
The Board's intention remains to achieve a break-even run rate in 2012. PLUS-SX
is expected to benefit from a new tariff for its Market Data services with
effect from 1 January 2012, representing an average increase of 40% across its
product range of proprietary data. This has already been announced to customers
and is in line with current market practice. The Board has decided to wind down
the retail trade reporting service from early January 2012, because it does not
generate any direct revenues.
PLUS-SX will continue to focus on IPOs for its PLUS Listed and PLUS Growth
Markets, which will continue to be supported by the market maker model. PLUS-SX
remains fully committed to market making for small and mid-cap stocks.
Additionally, the Board believe that the PLUS-DX and PLUS-TS businesses
represent exciting commercial opportunities for the Group.
Trading activity
The first half of 2011 saw the rate of new admissions to the PLUS-SX Growth
Market hold steady, with 12 companies joining (2010 - 12), resulting in 155
companies on the market at the period end. However, the amount of funds raised
on the market (via both primary and secondary market fundraisings) increased
significantly, to some GBP24 million over the period, while trading activity
increased over 150%.
PLUS-SX has received a positive response its initiatives to raise the
visibility of its Growth Market. These include the development of online
trading for PLUS-SX stocks and the launch of PLUS Analytix, a new web-based
service providing investors with information about the fundamentals of PLUS-SX.
As of September 2011, PLUS Analytix is now available on Interactive Investor.
Beyond PLUS-SX, the management team are now pressing on with our two new
initiatives in PLUS-DX and PLUS-TS to achieve the growth that we all seek
resulting in profitability for the Group.
Giles Vardey
Chairman
22 September 2011
Independent Review Report to PLUS Markets Group Plc
We have been engaged by the Company to review the condensed consolidated set of
financial statements in the half-yearly financial report for the six months
ended 30 June 2011 which comprises the Condensed Consolidated Income Statement,
the Condensed Consolidated Statement of Financial Position, the Condensed
Consolidated Statement of Cash Flows, the Condensed Consolidated Statement of
Changes in Equity and related notes 1 to 4. We have read the other information
contained in the half-yearly financial report and considered whether it
contains any apparent misstatements or material inconsistencies with the
information in the condensed consolidated set of financial statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our review work, for this report, or for the conclusions
we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the AIM Rules of the London
Stock Exchange.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed consolidated set of financial statements included in this half-yearly
financial report have been prepared in accordance with the accounting policies
the Group intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
consolidated set of financial statements in the half-yearly financial report
based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed consolidated set of financial statements in the
half-yearly financial report for the six months ended 30 June 2011 is not
prepared, in all material respects, in accordance with the AIM Rules of the
London Stock Exchange.
Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
22 September 2011
Condensed Consolidated Income Statement
For the six months ended 30 June 2011
Six months Six months Year ended
ended ended 31 December
30 June 2011 30 June 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Continuing Operations
Revenue 1,463 1,528 3,046
Administrative expenses (2,905) (4,031) (9,036)
(Charge)/credit in relation to (8) (32) 213
share-based payments
Loss before depreciation, (1,450) (2,535) (5,777)
amortisation and impairment
charge
Depreciation and amortisation (19) (12) (17)
Operating loss (1,469) (2,547) (5,794)
Finance income 33 65 135
Finance costs - - (8)
Loss on ordinary activities (1,436) (2,482) (5,667)
before taxation
Taxation - - -
Loss for the period (1,436) (2,482) (5,667)
attributable to equity holders
of the parent
Loss per share
Basic (0.37)p (0.64)p (1.46)p
Diluted (0.37)p (0.63)p (1.44)p
There were no other items of income in the period or comparative period.
Condensed Consolidated Statement of Financial Position
As at 30 June 2011
As at As at As at
30 June 30 June 31 December
Note 2011 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 86 11 11
86 11 11
Current assets
Available-for-sale investments - - -
Trade and other receivables 637 1,122 662
Cash and bank balances 2&4 4,604 9,728 5,888
5,241 10,850 6,550
Total assets 5,327 10,861 6,561
Current liabilities
Trade and other payables (771) (1,243) (1,271)
Provisions - (177) -
Deferred income (871) (898) (177)
(1,642) (2,318) (1,448)
Net current assets 3,599 8,532 5,102
Net assets 3,685 8,543 5,113
Equity
Share capital 19,345 19,345 19,345
Share premium account 18,021 18,021 18,021
Retained deficit (33,681) (28,823) (32,253)
Equity attributable to equity 3,685 8,543 5,113
holders of the parent
These financial statements were approved by the Board of Directors and
authorised for issue on 22 September 2011.
Signed on behalf of the Board of Directors
Giles Vardey
Chairman
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2011
Six months
Six months ended Year ended
ended 30 June 2010 31 December
30 June 2011 Unaudited 2010
Unaudited Restated Audited
GBP'000 GBP'000 GBP'000
Net loss from operating activities (1,469) (2,547) (5,794)
Adjustments for non cash items:
Depreciation of property, plant and 19 12 17
equipment
Profit on disposal of - - -
available-for-sale investment
Share-based payment charge/(credit) 8 32 (213)
Operating cash flows before (1,442) (2,503) (5,990)
movements in working capital
Decrease/(increase) in other bank 1,000 (1,500) 2,000
balances
Decrease/(increase) in trade and 25 (95) 365
other receivables
Increase in trade and other payables 194 1,519 649
and deferred income
Net cash generated by/(used in) (223) (2,579) (2,976)
operating activities
Investing activities
Interest received 33 65 135
)
Interest paid - - (8)
Purchase of non-current assets (94) (2) (7)
Net cash (used in)/generated by (61) 63 120
investing activities
Net decrease in cash and cash (284) (2,516) (2,856)
equivalents
Cash and cash equivalents at 2,888 5,744 5,744
beginning of period/year
Cash and cash equivalents at end of 2,604 3,228 2,888
period/year
Condensed Consolidated Statement of Changes in Equity
Unaudited for the six months ended 30 June 2010, audited for the year ended 31
December 2010 and unaudited for the six months ended 30 June 2011.
Share Share Retained
capital premium earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
Attributable to equity holders of 19,345 18,021 (26,373) 10,993
the parent at 1 January 2010
Share based payment charge - - 32 32
Loss for the half year - - (2,482) (2,482)
Attributable to equity holders of 19,345 18,021 (28,823) 8,543
the parent at 30 June 2010
Attributable to equity holders of 19,345 18,021 (26,373) 10,993
the parent at 1 January 2010
Reversal of share based payment - - (213) (213)
charge
Loss for the year - - (5,667) (5,667)
Attributable to equity holders of 19,345 18,021 (32,253) 5,113
the parent at 31 December 2010
Attributable to equity holders of 19,345 18,021 (32,253) 5,113
the parent at 1 January 2011
Share based payment charge - - 8 8
Loss for the half year - - (1,436) (1,436)
Attributable to equity holders of 19,345 18,021 (33,681) 3,685
the parent at 30 June 2011
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2011
1. Accounting Policies
General information
PLUS Markets Group plc ("the Company") is a company incorporated in the United
Kingdom under the Companies Act 2006. The Company's principal activity is that
of a holding company, owning 100% of PLUS Markets plc, which is engaged in the
operation of the PLUS market and is authorised and regulated by the Financial
Services Authority ("FSA"), and 80% of PLUS Derivatives Exchange Limited, which
is in the process of launching the PLUS Derivatives Exchange and became
authorised and regulated by the FSA on 18 July 2011. These condensed
consolidated financial statements are presented in Pounds Sterling because that
is the currency of the primary economic environment in which the Company and
its subsidiaries (together "the Group") operate.
Basis of accounting
The condensed consolidated financial information contained within these
financial statements, which are unaudited, has been prepared using accounting
policies consistent with International Financial Reporting Standards ("IFRS")
as adopted by the European Union. This condensed consolidated financial
information should be read in conjunction with the statutory accounts for the
year ended 31 December 2010 which were prepared in accordance with IFRS as
adopted by the European Union. The same accounting policies, presentation and
methods of computation are followed in the condensed set of financial
statements as applied in the Group's latest annual audited financial
statements. In the current financial year the Group has not adopted any new
IFRSs. While the financial figures included in this half-yearly report have
been computed in accordance with IFRS applicable to interim periods, this
half-yearly report does not contain sufficient information to constitute an
interim financial report as that term is defined in IAS 34. There is no
requirement for AIM companies to prepare their half-yearly reports in
accordance with IAS 34.
The information for the year ended 31 December 2010 does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was not qualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying the report and did not contain statements under
section 498(2) or (3) of the Companies Act 2006. The condensed consolidated
financial statements are prepared under the historical cost convention, with
the exception of investments which have been fair valued under IAS 39.
The current period and prior period/year presentation of the Consolidated
Statement of Financial Position and Consolidated Statement of Cash Flows has
been amended for the presentation of cash and bank balances as described in
note 2 of the condensed consolidated financial statements.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of 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 results ultimately may differ
from those of estimates.
Going concern
The Directors continue to adopt the going concern basis in preparing the
condensed consolidated financial statements for the period ended 30 June 2011.
At the balance sheet date, the Group held GBP4.6 million of cash and bank
balances and, as well as considering the ability to satisfy its liabilities
over the next 12 months, the Directors have considered the Group's ability to
meet its regulatory capital requirements in this period. In making this
assessment the Directors have used forecast revenues and costs.The cost
forecasts include continuing expected reductions in the cost base, including
those from the wind down of the retail trade reporting service. Revenue
forecasts include anticipated revenues from its existing PLUS-SX revenues only.
Not withstanding the inherent uncertainties involved in forecasting revenues
and costs for this type of business, the Directors believe that the Group will
be able to meet its regulatory capital requirements using these base case
forecasts and other contingencies have been examined in the event of certain
deviations from forecasts. Whilst revenues from the new PLUS-DX and PLUS-TS
business have not been included in the base case going concern analysis, the
Directors do expect new revenues within the next twelve months which will
provide further contingency. The level of these revenues will be a key
determinant in the longer term strategy of the Group.
2. Re-statement Note
The Group holds balances with banks for the purposes of meeting short term cash
flow requirements, in the ordinary course of its treasury management. These
balances include current accounts with instant access and term deposits with
maturities up to six months. In the current and comparative period/year, these
balances are included within the caption "Cash and bank balances" in the
Condensed Consolidated Statement of Financial Position. In order to reflect
better the Group's range of access terms and deposit maturities, Cash and Cash
Equivalents in the Condensed Consolidated Statement of Cash Flows have been
re-defined as those where the Group can require the principal balances to be
returned within three months of the placing. A similar treatment was adopted in
the Group's latest annual audited financial statements.
Within the Condensed Consolidated Statement of Cash Flows, this has resulted in
the Cash and Cash Equivalents balances at the beginning of the period ended 30
June 2010 being decreased by GBP5.00 million and the Cash and Cash Equivalents at
the end of the period ended 30 June 2010 being reduced by GBP6.50 million. As a
result the reduction in Cash and Cash Equivalents has increased by GBP1.50
million with a corresponding decrease of GBP1.50 million in other bank balances.
These changes are presentational and there is no impact on the Condensed
Consolidated Income Statement and the Condensed Consolidated Statement of
Changes in Equity.
Balances held with banks were shown as Cash and cash equivalents in the
Condensed Consolidated Statement of Financial Position in the previous period/
year and are shown as Cash and bank balances in the current period. As there
is no overall change in the balances held with banks and the presentational
impacts are reflected in the Condensed Consolidated Statement of Cash Flows and
the balance sheet description, the directors have not felt it necessary to
include further comparative information to show the impact of these changes on
the opening balances of the comparative period/year.
3. Share Options
On 21 January 2011, the Group cancelled the majority (97%) of the outstanding
share options granted under its existing EMI share option scheme and replaced
this with a new EMI share option scheme, under which 12,171,100 options were
granted with a three year vesting period, subject to performance conditions,
and with an exercise price of GBP0.05. During the period ended 30 June 2011, the
Group incurred an accelerated share based payment charge of GBP4,000 in respect
of the cancellation of its existing share option scheme and a share based
payment charge of GBP4,000 in respect of its new share option scheme.
4. Cash and Bank Balances
As stated in note 2, the Group has a range of current accounts with instant
access and term deposits with maturities of up to six months, described as Cash
and bank balances included in the Consolidated Statement of Financial Position.
A reconciliation to Cash and cash equivalents is given below:
As at As at As at
30 June 30 June 31 December
2011 2010 2010
GBP'000 GBP'000 GBP'000
Cash and bank balances per 4,604 9,728 5,888
Consolidated Statement of
Financial Position
Bank balances with access (2,000) (6,500) (3,000)
after more than 3 months but
less than 6 months
Cash and cash equivalents per 2,604 3,228 2,888
Consolidated Statement of
Cash Flows
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial information differs from legislation in other jurisdictions.
END
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