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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Curtis Banks Group Plc | LSE:CBP | London | Ordinary Share | GB00BW0D4R71 | ORD 0.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 349.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCBP
RNS Number : 8784X
Curtis Banks Group PLC
03 September 2020
3 September 2020
Curtis Banks Group plc
("Curtis Banks", the "Group")
Interim Results for 6 months to 30 June 2020
Curtis Banks Group PLC, one of the UK's leading SIPP providers, is pleased to announce its interim results for the 6 months to 30 June 2020.
Highlights
-- Revenue maintained at GBP24.5m (2019: GBP24.5m) -- Adjusted profit before tax(1) increased by 0.6% to GBP6.3m (2019: GBP6.2m) -- Adjusted operating margin(2) increased to 26.4% (2019: 26.3%) -- Adjusted diluted EPS maintained at 9.5p (2019: 9.5p)(3) -- Assets under administration increased by 4.0% to GBP28.6bn (2019: GBP27.5bn) -- Interim dividend of 2.5p per share (2019: 2.5p)
Highlights and key performance indicators for the period include:
Hot Features
Premium
Unaudited six Unaudited six month Audited year
month period ended period ended 30 ended 31 December
30 June 2020 June 2019 2019
Financial
Revenue GBP24.5m GBP24.5m GBP48.9m
Adjusted Profit before tax1 GBP6.3m GBP6.2m GBP13.4m
Profit before Tax GBP4.0m GBP5.4m GBP10.9m
Adjusted Operating Margin2 26.4% 26.3% 28.1%
Diluted EPS3 5.3p 8.2p 16.2p
Adjusted diluted EPS3 9.5p 9.5p 19.8p
Operational Highlights
Number of SIPPs Administered 76,306 77,175 76,541
Assets under Administration GBP28.6bn GBP27.5bn GBP29.1bn
Total organic new own SIPPs
in period 2,107 2,220 4,567
Number of properties administered 6,480 6,336 6,352
1 Profit before tax, amortisation and non-recurring costs
2 The ratio of operating profit before amortisation and non-recurring costs to revenue
3 Adjusted to exclude anti-dilutive options, see note 4 to the financial statements for further detail
Commenting on the results, Will Self, CEO of Curtis Banks, said:
"I am pleased to report a solid six months for the Curtis Banks Group. The first six months of the year has seen the business affected by COVID-19; however, our fixed, recurring fee model has insulated the Group from the worst of the effects of the pandemic, to date.
"I am delighted to report that core product growth during the period is up year-on-year, driven in part by organic growth in our new investment product, Your Future SIPP. In addition, the acquisitions of Dunstan Thomas and Talbot and Muir post-period end are very exciting for all of us at Curtis Banks as we look to grow through increasing scale and adding new revenue streams.
I would like to pay thanks to all our employees for their efforts during this testing time. I'm extremely proud of the way they have adapted to remote working during the COVID-19 pandemic and minimised the effect of COVID-19 on the Group."
Analyst Presentation:
There will be a presentation for analysts and investors via webcast on Thursday 3(rd) September 2020 at 9.30am. The webcast details are as follows:
URL: https://zoom.us/j/92145482793?pwd=Y2VmbFE4dHlmb1l2bWorTGsza2xzZz09
Meeting ID: 921 4548 2793
Passcode: CBG3092020
Dial in details for audio only: 020 8080 6592
For more information:
Curtis Banks Group plc www.curtisbanks.co.uk
Will Self - Chief Executive Officer +44 (0) 117 9107910
Dan Cowland - Chief Financial Officer
Peel Hunt LLP (Nominated Adviser +44 (0) 20 7418
& Joint Broker) 8900
James Britton
Rishi Shah
Nplus1 Singer Capital Markets Limited +44 (0) 20 7496
(Joint Broker) 3000
Mark Taylor
Rachel Hayes
+44 (0) 20 3757
Camarco (Financial PR) 4984
Ed Gascoigne-Pees
Georgia Edmonds
Jake Thomas
Chief Executive Officer's Review
Summary
I am pleased to report a solid six months for the Curtis Banks Group. The first six months of the year has seen the business affected by COVID-19; however, our fixed, recurring fee model has insulated the Group from the worst of the effects of the pandemic, to date.
I believe that the progress we have made during the period, including the acquisitions of Talbot and Muir and the fintech provider, Dunstan Thomas, post period end, is evidence that we continue to deliver on our strategy and build greater scale and additional, complementary revenue streams.
I am delighted to report that core product growth during the period is up year-on-year, driven in part by organic growth in our new investment product, Your Future SIPP. The period has been dominated by the COVID-19 pandemic impacting the wider pension market. However, I am very pleased that the business responded to the outbreak by quickly and successfully implementing our Business Continuity Plan and I am very proud of the way my colleagues have adapted to the new working environment.
Our market leading product continues to have a positive impact on the Group's organic growth and our relationships with advisers. The product means that we are extremely well placed to further increase our organic growth of Full and Mid SIPPs over the coming years.
The financial performance of the business was robust with revenue maintained year-on-year at GBP24.5m (H1 2019: GBP24.5m). Adjusted profit before tax increased by 0.6% to GBP6.3m (H1 2019: GBP6.2m). Our adjusted operating margin increased slightly compared to the prior year period to 26.4%, and we continue on our journey of operational efficiencies over the period that will benefit us in pursuit of our target operating model of 30%.
The launch of Your Future SIPP in 2019 was an important milestone for the Group. The product has been well received by advisers and we continue to grow new advisor relationships. As at August 2020, we have now registered 3,600 advisers and 3,100 clients to use the new adaptive portal.
Our mission to diversify the business has continued through focusing on areas of complementary strategic interest including the acquisition of Dunstan Thomas as detailed below. Rivergate Legal Limited continues to attract revenue, both as a result of being selected from the Curtis Banks Panel of Solicitors and also via instructions that are independent of Curtis Banks. A significant portion of Rivergate's revenue is derived from clients selecting its services from the 'Curtis Banks Panel' of Solicitors. Rivergate has remained focused on the supply of commercial property and real estate services in line with the Group's strategy. Total properties administered by the Group has increased to 6,480 (H1 2019: 6,336) and we expect this upward trend to continue.
SIPP Numbers
As at 30 June 2020, the number of SIPPs administered fell slightly to 76,306 (H1 2019: 77,175), partly due to COVID-19 impacting sales activity in H1 as well as the ongoing proactive management of the non-core legacy products.
Even with the challenging backdrop, we added 2,107 gross new own SIPPs organically, which are administered directly by the Group (H1 2019: 2,220), representing a gross annualised organic growth rate of 6.07% (H1 2019: 6.55%). In our two core areas of strategic focus, the Full SIPP saw a slightly lower level of gross annualised organic growth than last year at 2.90% (H1 2019: 3.35%) but our mid SIPP gross organic growth rate increased slightly to 11.20% (H1 2019: 10.78%). Our total own SIPP annualised attrition rate reduced to 6.14% during the year (H1 2019: 7.04%).
Acquisitions
The acquisitions of Dunstan Thomas and Talbot and Muir post-period end are very exciting for all of us at Curtis Banks.
Both these businesses are high-quality and they focus on Curtis Banks' resilient core market. The acquisitions have a strategic rationale that is in line with our stated strategy of growing the Group via acquisitions, be it through increasing scale or adding new revenue streams.
Talbot and Muir is a well-respected SIPP and SSAS provider and administrator with a very similar business model to our own with strong levels of reoccurring revenues based on a fixed fee model. Talbot and Muir is a strong cultural and structural fit with a similar product offering, customer profile and operating models. It delivers additional scale to the Group through 6,600 plans and Assets under Administration of approximately GBP3.6bn, with 71 employees across offices in Nottingham and Leeds, joining the Group. We exchanged contracts with Talbot and Muir on 23 July and are currently seeking FCA change of control approval, expected in mid Q4 2020.
Dunstan Thomas is a highly regarded fintech provider offering technology solutions to the pre, post and at retirement market through a small number of developed products. Curtis Banks has a long history of working with Dunstan Thomas, who have been a technology supplier to the Group for over five years. This acquisition will support the successful delivery and execution of Curtis Banks' own technology strategy. It also expands our own customer proposition offering both our existing and future clients access to a broader product and services while giving us the opportunity to take our own product offering to other target markets.
I am delighted that we have managed to announce these acquisitions and I would like to pay a warm welcome to our new colleagues at Dunstan Thomas and Talbot and Muir.
We continue to seek acquisitions as part of our stated growth strategy. We remain disciplined in our approach and will carefully examine any opportunity. Similar to the acquisitions of Dunstan Thomas and Talbot and Muir, we are committed to exploring opportunities to add scale to our existing SIPP book and expand our offering through complementary acquisitions.
Target Operating Model
Our Operating Margin of 26.4% (H1 2019: 26.3%) has increased slightly compared to the prior year period. We have continued to make good progress over the past six months in moving towards our target of a 30% operating margin for our core business.
During the period we have progressed towards the centralisation of the Group's commercial property administration. In addition to this, the strategy to transition the Group to a single administration system remains on target and within budget.
As at 30 June 2020, we are progressing our systems strategy and development work continues and is on track for completion in accordance with the original project plan.
Industry context and outlook
The pension market has been a continued focus of the regulator during the first half of the year. Our business model is clear and we only work with regulated financial advisers and do not give any advice or provide the investments held within our SIPPs. Our fee structures also remain fair, transparent and competitive for our target market.
Non-standard investments continue to receive a large amount of media coverage. While these are a significant issue for the wider industry, we do not consider them to be a material risk to our business. The Group continues to carry out robust due diligence on non-standard investments both at outset and throughout the life of the investment and all new Curtis Banks products have a clear Schedule of Allowable Investments.
Our organisation remains resilient from both a regulatory perspective but also in weathering the medium term economic impact of the COVID-19 pandemic. As a Group we continue to explore ways to further diversify our revenue generation and reduce our sensitivity to market conditions.
Our People and Culture
I would like to pay tribute to Greg Kingston, who very sadly passed away recently. Greg had joined Suffolk Life in 2007 and made a huge contribution to the full integration of the Curtis Banks Group brand and proposition. He was a true friend to many of us and a charismatic colleague to us all. Our thoughts and prayers are with his family, to whom we express our deepest sympathy.
As a Group we remain committed to our corporate social responsibility activities, acknowledging the role we play in the communities around us. This year we have commenced a programme of work with Victoria Evans at Sea Change Sport, supporting her in her ambition to row solo across the Atlantic.
As a business we are committed to being a diverse and inclusive workplace. We continue to strive for ways in which we can improve in this area. To this end, I am delighted that we have further evolved our flexible working policies and again supported Mental Health awareness throughout our locations. Our initiatives in this space will continue.
I'm extremely proud of the way my colleagues have adapted to remote working during the COVID-19 pandemic and they have continued to deliver excellent customer service. As a robust financial services organisation we have not benefitted financially from any government schemes, including Furlough, during the COVID-19 pandemic and although we paused recruitment for a short period of time, have continued to grow staff numbers as we invest in our business.
I would like to pay thanks to all our employees for their efforts during this testing time. They have minimised the effect of COVID-19 on the Group and I look forward to welcoming them back to the office.
Will Self
Chief Executive Officer
2 September 2020
Financial Review
Results
Group financial performance for the six month period to 30 June 2020 resulted in an adjusted profit before tax of GBP6.3m (2019: GBP6.2m), an increase of 0.6% over the previous interim reporting period, with the adjusted operating margin improving to 26.4% (H1 2019: 26.3%).
Profit before tax, which is stated after amortisation and non-recurring costs, decreased by 27% to GBP4.0m. Adjusted diluted EPS was maintained at 9.5p (H1 2019: 9.5p), while diluted EPS on a statutory basis decreased by 35.8% to 5.3p (H1 2019: 8.2p).
The resilient performance of the first six months of 2020 was achieved despite the challenging economic conditions brought about by Brexit and the COVID-19 pandemic. Organic growth has remained robust in the face of these challenges and the strategy to deliver a Target Operating Model, and centralise commercial property administration within one office, has remained on track in H1 2020. The centralisation of the commercial property administration within one office brings with it non-recurring redundancy and restructuring costs associated with the transition of work between office locations.
Revenues
Revenues of GBP24.5m in the six months ended 30 June 2020 were consistent with the comparable period.
Fee revenue from SIPPs and SSASs remains the predominant source of income for the Group with a strong emphasis on recurring annual fee income. In the six months ended 30 June 2020 fee income represented 73% of the total income and 84% of this fee income is recurring.
SIPP fees are based on a recurring fixed monetary annual fee and a menu of additional fixed fees depending on the services provided to the SIPP. All these fees are subject to contractual annual inflationary rises linked to the measurement of Average Weekly Earnings ("AWE").
Fees are not dependent on movements in the value of underlying assets within SIPPs and as a result the recurring fee income of the Group has not been directly affected by the volatility in financial markets experienced in the last six months. This is a key differential that sets us apart from most of our competitors and provides an attractive product in terms of fees for higher value SIPPs. As the value of a SIPP increases our product becomes increasingly affordable.
Expenses
The period ended 30 June 2020 saw administrative expenses remain static at GBP18.1m.
Staff costs for the period decreased by 2% to GBP11.4m (2019: GBP11.7m) whilst the overall headcount increased slightly as recruitment picked up towards the end of June. Staff costs in the period were impacted by further share based payment awards under the Group's Long Term Incentive Plan and Save As You Earn ("SAYE") option schemes, as well as the annual pay review. The commitment to all of these awards demonstrates the Group's continuing commitment to improving levels of key staff retention and morale, which in turn provide the service levels to clients required from our introducers of business.
Overall headcount stood at 639 as at 30 June 2020 compared to 610 as at 30 June 2019 and 605 as at 31 December 2019. This number will increase over the remainder of the year due to the acquisitions of Dunstan Thomas and Talbot and Muir, which provide the Group with 164 additional members of staff.
The Group continues to take steps to improve its adjusted operating margin through a combination of revenue enhancements, cost saving measures and operational improvements. The Board remain confident that an improved operating margin is achievable through both our planned internal strategic activities and the recently announced acquisitions of Dunstan Thomas and Talbot and Muir which are both revenue enhancing and diversifying.
Non-recurring costs
Non-recurring costs for the six months ended 30 June 2020 of GBP1.4m comprise principally of internal restructuring costs and some of the external costs associated with the acquisitions of Dunstan Thomas and Talbot and Muir.
As referenced earlier, the centralisation of commercial property administration within one office has progressed throughout the six months, resulting in a non-recurring cost of GBP0.7m being recognised during the period.
GBP0.4m of costs have been recognised in relation to the external legal and financial due diligence performed as part of the acquisitions of Dunstan Thomas and Talbot and Muir.
As noted in our last annual financial statements, management had initiated a review of data records relating to properties held within SIPPs administered by the Group. Based on a detailed review of a sample of properties and extrapolation of the initial findings across the full population of relevant properties, the Directors recognised that additional direct costs may be incurred in completing this data cleansing exercise, including from any potential remediation. The data cleansing exercise is continuing with any remedial follow up actions to be completed by the end of 2020. Of the original provision of GBP500,000 made at 31 December 2018, there is a remaining provision of GBP141,000 as at 30 June 2020. This is still considered to be adequate to cover any remaining costs.
Impairment
Impairment charges totalling GBP344,000 against the value of the Group's client portfolios within intangible assets have been recognised during the six month period ended 30 June 2020 (H1 2019: GBPnil). This relates to changes in the estimate of future cash flows expected on these assets over their remaining useful economic lives owing to increased uncertainty over the longevity of the current low interest rate environment.
Accounting Policies
There have been no changes in accounting policies during the period.
Cash flows
Shareholder cash balances at period end were GBP24.9m compared to GBP25.7m at the end of the previous interim period to 30 June 2019.
Net cash inflows from shareholder operating activities for the period were GBP0.4m (H1 2019: GBP4.4m net cash inflow), the decline in cash generation attributable to a reduction in profit before tax for the period in addition to greater amounts of accrued interest being receivable and a higher amount of tax paid in the period.
Suffolk Life Annuities Limited
Part of the Group, Suffolk Life Annuities Limited, is an insurance company that writes SIPP Products as insurance contracts. These are all non-participating insurance policy contracts and so the Group does not bear any insurance risk. As the policies are non-participating contracts, the client related assets and liabilities in Suffolk Life Annuities Limited match. In addition, the revenues, expenses and investment returns of the non-participating insurance policy contracts are shown in the consolidated statement of comprehensive income. Again, these income, expense items and investment returns due to the policy holders are completely matched. An illustrative balance sheet as at 30 June 2020 showing the financial position of the Group excluding the policy holder assets and liabilities is included as supplementary information after the notes to the financial statements. An illustrative cash flow on the same basis has also been provided.
Systems Development
As reported in our financial statements for the year ended 31 December 2019, the decision was taken to improve our IT infrastructure by both upgrading the existing operating systems at Curtis Banks and to move all the back office systems onto one of our incumbent systems (Navision).
Costs associated with these upgrades and operating system changes where appropriate will be capitalised and amortised in accordance with their useful economic life. Amortisation will commence once the upgrades are completed and fully operational.
Employee Benefit Trust
The Group operates an independent Employee Benefit Trust ("EBT") to acquire shares in the Company in the market to satisfy future option and long term incentive awards. The financial statements of the EBT are consolidated within the overall Group financial statements and these shares are shown on the balance sheet of the Group as Treasury Shares and are included within total equity.
Capital requirements
The Group's regulated subsidiary companies submit regular returns to the FCA and the PRA relating to their capital resources. At 30 June 2020 the total regulatory capital requirement across the Group was GBP14.7m and the Group had an aggregate surplus above this of GBP15.4m across all regulated entities. In addition to this it is Group internal policy for regulated companies within the Group to hold at least 130% of their required regulatory capital and this has been maintained throughout the period.
Two of the principal trading subsidiaries of the Group are regulated by the FCA and the capital adequacy rules of that organisation do not allow current year profits to contribute towards solvency requirements until such profits are audited or externally verified. If the interim profits were taken into account the regulatory capital surplus at 30 June 2020 increases to GBP19.2m.
Financial Position
The statement of Financial Position as at 30 June 2020 shows a strong position with shareholder net assets increasing from GBP51.6m at 30 June 2019 to GBP54.6m as at 30 June 2020.
As at the 30 June 2020 the Group had net shareholder cash (after debt) of GBP15.1m (2019: GBP12.8m).
Summary and outlook
Despite the political and economic turbulence of the past six months, the Group has once again demonstrated its financial robustness and a high degree of insensitivity to market volatility, upon which our business model is based. The strong operating performance reported within these statements is testament to this although there is no doubt that the current economic environment, influenced primarily by COVID-19, will continue to provide challenges within our industry and the persistence of the current low interest rate environment will require the Group to remain dynamic in its approach to maintaining those current levels of performance.
Strategically, the Board remains confident in the Group's ability to achieve its stated objectives, both internally and through acquisition.
The acquisitions of Dunstan Thomas and Talbot and Muir, which were announced at the end of July, will be funded through a combination of equity and debt. Despite the difficult market conditions, the Group achieved a successful equity placing of GBP25m and as part of this issuance was able to add a number of significant new institutional investors to the shareholder register. The Group also successfully re-negotiated its borrowing facilities with Santander which now provide up to GBP30m of borrowing on the same terms as the previous debt facility and the combination of these two transactions has also enabled the Group to strengthen its overall cash position.
Dan Cowland
Chief Financial Officer
2 September 2020
Condensed consolidated statement of comprehensive income
Unaudited 6 month period Unaudited 6 month period Audited year ended 31 December
ended 30 June 2020 ended 30 June 2019 2019
Before Before Before
amortisation Amortisation amortisation Amortisation amortisation Amortisation
and and and and and and
non-recurring non-recurring non-recurring non-recurring non-recurring non-recurring
costs costs Total costs costs Total costs costs Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 24,529 - 24,529 24,491 - 24,491 48,949 - 48,949
Administrative
expenses (18,061) (1,978) (20,039) (18,059) (795) (18,854) (35,218) (2,470) (37,688)
Impairment on
client
portfolios 5 - (344) (344) - - - - - -
Policyholder
investment
returns* (113,907) (113,907) 232,517 232,517 365,815 365,815
Non-participating
investment
contract expenses (17,531) - (17,531) (16,503) - (16,503) (33,943) - (33,943)
Changes in
provisions:
Non-participating
investment
contract
liabilities 131,438 - 131,438 (216,014) - (216,014) (331,872) - (331,872)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ----------
Policyholder total - - - - - - - - -
Operating profit 6,468 (2,322) 4,146 6,432 (795) 5,637 13,731 (2,470) 11,261
Finance income 53 - 53 77 - 77 145 - 145
Finance costs (240) - (240) (266) - (266) (523) - (523)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Profit before tax 6,281 (2,322) 3,959 6,243 (795) 5,448 13,353 (2,470) 10,883
Tax (1,496) 441 (1,055) (1,107) 151 (956) (2,502) 469 (2,033)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Total comprehensive
income
for the period 4,785 (1,881) 2,904 5,136 (644) 4,492 10,851 (2,001) 8,850
============== ============== ========== ============== ============== ========== ============== ============== ============
Attributable to:
Equity holders of
the
company 2,904 4,490 8,850
Non-controlling - 2 -
interests
---------- ---------- ------------
2,904 4,492 8,850
========== ========== ============
Earnings per
ordinary
share on net
profit
Basic (pence) 4 5.4 8.4 16.5
Diluted (pence)** 4 5.3 8.2 16.2
*Policyholder investment returns were previously presented within revenue. Amounts for the current period and comparatives are now represented alongside non-participating investment contract expenses and changes in provisions for non-participating investment contract liabilities to better reflect the fact that all such returns are due back to policyholders under non-participating investment contracts, and therefore have nil impact on shareholder profit or loss. Please see note 2.3 to the financial statements for further information.
**Adjusted to exclude anti-dilutive options, see note 4 to the financial statements for further detail
Condensed consolidated statement of changes in equity
Equity
share
Issued Share based Treasury Retained Non-controlling Total
capital premium payments shares earnings Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1
January 2019
- audited 269 33,451 1,357 (716) 15,295 49,656 14 49,670
Comprehensive
income
for the
period - - - - 4,490 4,490 2 4,492
Share based
payments - - 463 - - 463 - 463
Deferred tax
on share
based
payments - - - - 140 140 - 140
Ordinary - - - - - - - -
shares bought
and sold by
EBT
Ordinary
dividends
paid - - - - (3,212) (3,212) - (3,212)
---------
As at 30 June
2019 -
unaudited 269 33,451 1,820 (716) 16,713 51,537 16 51,553
Comprehensive
income
for the
period - - - - 4,360 4,360 (2) 4358
Share based
payments - - 493 - - 493 - 493
Deferred tax
on share
based
payments - - - - 7 7 - 7
Ordinary
shares issued 2 208 - - - 210 - 210
Ordinary
shares bought
and sold by
EBT - - - 182 - 182 - 182
Ordinary
dividends
paid - - - - (1,350) (1,350) - (1,350)
---------
As at 31
December 2019
- audited 271 33,659 2,313 (534) 19,730 55,439 14 55,453
Comprehensive
income
for the
period - - - - 2,904 2,904 - 2,904
Share based
payments - - 410 - - 410 - 410
Ordinary
shares bought
and sold by
EBT - - - (590) - (590) - (590)
Deferred tax
on share
based
payments - - - - (312) (312) - (312)
Ordinary
dividends
paid - - - - (3,507) (3,507) - (3,507)
As at 30 June
2020 -
unaudited 271 33,659 2,723 (1,124) 18,815 54,344 14 54,358
======== ======== ========= ========= ========= ======== ================ ========
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
30-Jun-20 30-Jun-19 31-Dec-19
Notes GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 5 42,750 43,937 43,427
Investment property 1,219,856 1,271,004 1,265,784
Property, plant and equipment 5,742 6,629 6,195
Investments 1,842,818 1,961,654 1,994,197
Deferred tax asset 435 855 911
----------- ----------- -----------
3,111,601 3,284,079 3,310,514
----------- ----------- -----------
Current assets
Trade and other receivables 30,976 21,827 19,915
Cash and cash equivalents 440,790 412,710 421,547
Current tax asset 604 274 446
----------- ----------- -----------
472,370 434,811 441,908
----------- ----------- -----------
Total assets 3,583,971 3,718,890 3,752,422
----------- ----------- -----------
LIABILITIES
Current liabilities
Trade and other payables 16,893 15,405 15,608
Deferred income 26,345 24,532 26,192
Borrowings 34,486 32,303 28,215
Lease liabilities 909 904 719
Provisions 408 450 553
Deferred consideration - 380 214
Current tax liability - 1,005 738
----------- ----------- -----------
79,041 74,979 72,239
----------- ----------- -----------
Non-current liabilities
Borrowings 46,617 47,258 48,911
Lease liabilities 3,377 4,109 3,915
Non-participating investment
contract liabilities 3,400,578 3,540,991 3,571,904
3,450,572 3,592,358 3,624,730
----------- ----------- -----------
Total liabilities 3,529,613 3,667,337 3,696,969
----------- ----------- -----------
Net assets 54,358 51,553 55,453
----------- ----------- -----------
Equity attributable to owners
of the parent
Issued capital 271 269 271
Share premium 33,659 33,451 33,659
Equity share based payments 2,723 1,820 2,313
Treasury shares (1,124) (716) (534)
Retained earnings 18,815 16,713 19,730
----------- ----------- -----------
54,344 51,537 55,439
Non-controlling interest 14 16 14
Total equity 54,358 51,553 55,453
----------- ----------- -----------
Approved by the Board and authorised for issue on 2 September 2020. Dan Cowland - Chief Financial Officer
Condensed consolidated statement of cash flows
Unaudited Unaudited
6 month 6 month Audited
period ended period ended year ended
30-Jun-20 30-Jun-19 31-Dec-19
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit before tax 3,959 5,448 10,883
Adjustments for:
Depreciation 694 636 1,321
Amortisation and impairments 941 627 1,379
Interest expense 240 261 523
Share based payment expense 410 463 956
Fair value losses/(gains) on
financial investments 82,297 (175,076) (232,848)
Additions of financial investments (298,196) (255,361) (532,717)
Disposals of financial investments 367,278 281,842 584,425
Fair value losses on investment
properties 57,664 7,981 12,469
(Decrease)/increase in liability
for investment contracts (171,327) 135,561 166,476
Changes in working capital:
Increase in trade and other
receivables (10,460) (3,359) (1,730)
Increase/(decrease) in trade and
other payables 772 (139) 1,990
Taxes paid (2,063) (1,073) (2,454)
Net cash flows from operating
activities 32,209 (2,189) 10,673
-------------- -------------- ------------
Cash flows from investing
activities
Purchase of intangible
assets (264) (454) (696)
Purchase of property, plant & equipment (241) (770) (1,015)
Purchase of investment property (66,685) (51,399) (125,848)
Purchase and sale of shares
in the Group by the EBT (590) - 182
Receipts from sale of investment
property 54,948 46,865 122,047
Net cash flows from acquisitions (152) - (166)
Net cash flows used in investing
activities (12,984) (5,758) (5,496)
-------------- -------------- ------------
Cash flows from financing activities
Equity dividends paid (3,507) (3,212) (4,562)
Net proceeds from issue of ordinary
shares - - 210
Net increase/(decrease) in borrowings 3,981 (6,988) (9,456)
Principal elements of lease payments (422) (421) (933)
Interest paid (34) (298) (465)
Net cash flows used in financing
activities 18 (10,919) (15,206)
-------------- -------------- ------------
Net increase/(decrease) in cash and
cash equivalents 19,243 (18,866) (10,029)
-------------- -------------- ------------
Cash and cash equivalents at the
beginning of the period 421,547 431,576 431,576
============== ============== ============
Cash and cash equivalents at the
end of the period 440,790 412,710 421,547
============== ============== ============
Notes to the financial statements
1 Corporate information
Curtis Banks Group PLC ("the Company") is a public limited company incorporated and domiciled in England and Wales, whose shares are publicly traded on the AIM market of the London Stock Exchange PLC. The interim condensed consolidated financial statements were authorised for issue in accordance with a resolution of the Directors on 2 September 2020.
The principal activity of the Group is that of the provision of pension administration services principally for Self-Invested Personal Pension schemes ("SIPPs") and Small Self-Administered Pension schemes ("SSASs"). The Group is staffed by experienced professionals who all have proven track records in this sector.
2 Basis of preparation and accounting policies 2.1 Basis of preparation
The interim condensed consolidated financial statements comprise the Company and its subsidiaries ("the Group") and have been prepared on a historical cost basis modified by revaluation of financial assets and financial liabilities through profit and loss where held at fair value, and are presented in pounds sterling, with all values rounded to the nearest thousand pounds except when otherwise indicated.
The interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting except for certain requirements in relation to financial instrument disclosure. The board has considered the requirements of IAS 34 in relation to policyholder assets and liabilities and, given the unit-linked nature of these assets and liabilities, has concluded that revaluing certain policyholder financial instruments for the purposes of these interim financial statements would incur expense which is disproportionate to any potential benefits of doing so. Further, the board considers that the omission of updated valuations for these certain policyholder financial instruments will not influence the economic decisions of users of these financial statements, as all revenue and expenditure associated with these policyholder assets and liabilities is due back to the policyholders under non-participating investment contracts and therefore has nil impact on shareholder equity.
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's financial statements for the year ended 31 December 2019, which were prepared in accordance with International Financial Reporting Standards adopted by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") of the IASB (together "IFRS") as adopted by the European Union, and in accordance with the requirements of The Companies Act 2006 applicable to companies reporting under IFRS.
The information relating to the six months ended 30 June 2020 and the six months ended 30 June 2019 is unaudited and does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2019 have been reported on by its auditor and delivered to the Registrar of Companies. The report of the auditor was unmodified and did not contain a statement under section 498(2) or (3) of The Companies Act 2006.
The interim condensed consolidated financial statements have been reviewed by the auditor and their report to the Board of Curtis Banks Group PLC is included within this interim report.
2.2 Basis of consolidation
The interim condensed consolidated financial statements consolidate the financial statements of the Company and its subsidiaries up to 30 June each year.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All inter-Group balances, income and expenses and unrealised gains and losses resulting from intra-Group transactions are eliminated in full.
The trading subsidiaries of Curtis Banks Group PLC as at 30 June 2020 and 30 June 2019 were Curtis Banks Limited, Curtis Banks Investment Management Limited, Suffolk Life Annuities Limited, Suffolk Life Pensions Limited, Rivergate Legal Limited and Templemead Property Solutions Limited.
Certain trading subsidiaries of Curtis Banks Group PLC hold the entire issued share capital of a number of non-trading trustee companies. All of these companies are nominee companies for the pension products administered by the trading subsidiaries of Curtis Banks Group PLC and have been dormant or non-trading throughout the period and are expected to remain dormant or non-trading.
2.3 Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2019 except for the following change in policy.
Presentation of policyholder investment returns
Policyholder investment returns were previously presented within revenue in the Consolidated Statement of Comprehensive Income. To better reflect the fact that all such returns are due back to policyholders under non-participating investment contracts the Group has decided to present such amounts alongside non-participating investment contract expenses and changes in provisions for non-participating investment contract liabilities, such that the nil impact on shareholder profit or loss is evident.
New standards issued but not yet effective
The IASB and IFRIC have issued standards and interpretations with an effective date for periods starting on or after the date on which these financial statements start. There are no newly issued standards expected to potentially have a material impact on the condensed consolidated interim financial statements and the consolidated financial statements to the Group.
Financial statements for the year ending 31 December 2020
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements will be consistent with those to be followed in the preparation of the Group's annual financial statements for the year ending 31 December 2020.
2.4 Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In preparing the financial statements the Group has selected and applied various accounting policies which are described in the notes to the financial statements. In order to apply these accounting policies the Group has made estimates and judgements concerning the future.
There are no critical judgements in the application of accounting policies.
The key sources of estimation uncertainty are disclosed below:
IFRS 9 impairment
Trade and other receivables are impaired based on the IFRS 9 simplified approach to measure expected credit losses using a lifetime expected loss allowance for all trade receivables. The loss allowances for trade and other receivables are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group's past history of shared credit risk characteristics, days past due, existing market conditions, including the COVID-19 pandemic, as well as forward looking estimates at the end of each reporting period.
The loss rates are considered the key source of estimation uncertainty because the impact of a change in these could result in a material change in the expected credit loss. The Group determines its loss rates by reference to the underlying level of liquidity in each of the Group's clients' SIPPs because clients' fees are normally settled directly from their SIPP cash holdings. A lower level of liquidity in the SIPP, or indeed illiquidity, indicates reduced credit quality in the related trade receivable balance.
Changes in macroeconomic factors may impact the Group's clients' use of the SIPP and cause the level of liquidity in the SIPP to increase or decrease. A 10% increase or decrease in loss rates estimated at the period end would have the following impact:
Increase / (decrease) Effect on profit
in percentage before tax
Period ended 30 June 2020 rates GBP'000
Loss rate 10% (270)
Loss rate (10)% 445
The Group charges fixed fees for its services reducing its exposure to changes in macroeconomic factors such as COVID-19 which may otherwise impact a percentage basis point fee charging model.
The Group continually assesses historical recovery data to help determine how the underlying level of liquidity in the SIPPs fits into each of the credit quality ratings. Future historical data available may lead to changes in the estimated categorisation of trade receivables gross carrying amounts and associated loss allowance.
Where trade and other receivables have been outstanding for more than six years, amounts are deemed to have no reasonable expectation of recovery and are written off.
Client portfolios
Client portfolios acquired are amortised over their useful economic life ("UEL") which management estimate to be 20 years. This estimated UEL is based upon management's historical experience of similar portfolios and expectation of the future persistency of the portfolio. The reasonableness of this estimated is assessed annually by comparison to actual lapse rates and consideration of factors that may affect it in the future, for example, changes to products.
Additionally, the Group reviews and judges whether acquired client portfolios show any indicators of impairment at least on an annual basis by considering actual versus forecast lapse rates and comparing the carrying value and recoverable amount. An impairment would exist where the recoverable amount determined is less than the carrying value of the asset.
Assessing recoverable amount through value in use comprises an estimation of future cash flows expected to arise from each client portfolio, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to that asset, together with an estimated rate of attrition for each portfolio. The estimation of future cash flows is derived by taking the current earnings before tax, interest, depreciation and amortisation ("EBITDA") margin of the Group and applying this against forecast revenue from the relevant client portfolio.
One key source of estimation uncertainty is the level of future interest income expected, and in particular the longevity of the current low interest rate environment. Another key source of estimation uncertainty arises from the attrition rates used. The recoverable amount is most sensitive to both of these assumptions.
3 Non-recurring costs
Non-recurring costs comprise the following items:
Unaudited Unaudited
6 month 6 month
period period Audited
ended ended year ended
30-Jun-20 30-Jun-19 31-Dec-19
GBP'000 GBP'000 GBP'000
Hargreave Hale acquisition costs - 40 32
Redundancy & restructuring costs following
acquisitions 814 128 696
European Pensions Management acquisition
costs - - 29
Costs relating to directorate and
senior management changes - - 334
Dunstan Thomas acquisition costs 195 - -
Talbot and Muir acquisition costs 220 - -
Other acquisition related costs 152
1,381 168 1,091
=========== =========== ============
Redundancy & restructuring costs following acquisitions
During the year ended 31 December 2019 and into the six month period ended 30 June 2020, the Group progressed its strategy to deliver its Target Operating Model and centralise commercial property administration within one office location. Redundancy costs associated with this decision as well as costs associated with duplicated staff efforts while work is transferred between offices have been included within non-recurring cost.
Costs relating to directorate and senior management changes
During the year ended 31 December 2019, the incumbent Chief Financial Officer of the Group announced he was stepping down from the role and a successor was recruited. An orderly handover of responsibilities took place between the previous Chief Financial Officer and the new Chief Financial Officer. Costs associated with this transitional period, including recruitment costs and costs of associated senior staff changes, have been treated as non-recurring costs.
Dunstan Thomas acquisition costs
The Group acquired fintech provider Dunstan Thomas on 3 August 2020 and has incurred legal and professional fees in connection with this acquisition during the six month period ended 30 June 2020. In accordance with IFRS 3 Business Combinations, these have been expensed and treated as non-recurring costs.
Talbot and Muir acquisition costs
The Group entered into an agreement to acquire fellow SIPP provider Talbot and Muir on 3 August 2020 subject to regulatory approval and has incurred legal and professional fees in connection with this acquisition during the six month period ended 30 June 2020. In accordance with IFRS 3 Business Combinations, these have been expensed and treated as non-recurring costs.
Other acquisition related costs
During the six month period ended 30 June 2020, the Group incurred some further final costs in relation to deferred consideration payable on the client portfolio acquired from Friends Life in 2015.
4 Earnings per ordinary share
Basic earnings per share amounts are calculated by dividing net profit for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
Changes in income or expense that would result from the conversion of the dilutive potential ordinary shares are deemed to be trivial, and therefore no separate diluted net profit is presented. The following reflects the income and share data used in the basic and diluted earnings per share computations:
Unaudited Unaudited
6 month 6 month Audited
period ended period ended year ended
30-Jun-20 30-Jun-19 31-Dec-19
GBP'000 GBP'000 GBP'000
Net profit available
to equity holders of the Group 2,904 4,490 8,850
============== ============== ============
Net profit before tax, non-recurring
costs (note 3) and amortisation
(note 5) available to equity holders
of the Group 6,281 6,432 13,353
Number Number Number
Weighted average number of ordinary
shares:
Issued ordinary shares at start
of period 54,142,346 53,807,346 53,807,346
Effect of shares issued during the
year - - 90,192
Effect of shares held by Employee
Benefit Trust (211,890) (266,482) (244,741)
Basic weighted average number of
shares 53,930,456 53,540,864 53,652,797
Effect of options exercisable at
the reporting date** 578,795 644,471 1,173,236
Effect of options not yet exercisable
at the reporting date** 609,081 531,552 1,000,925
Diluted weighted average number
of shares 55,118,332 54,716,887 55,826,958
============== ============== ============
Pence Pence Pence
Earnings per share:
Basic 5.4 8.4 16.5
Diluted** 5.3 8.2 16.2
Earnings per share on profit before
non-recurring costs and amortisation,
less an effective tax rate*:
Basic 9.7 9.7 20.2
Diluted** 9.5 9.5 19.8
*The effective tax rate used is the current tax rate applicable to the accounting year. The current tax rate applicable for the year ending 31 December 2020 is 19.00% (2019: 19.00%).
**The diluted EPS calculated has been adjusted to exclude anti-dilutive options. Diluted EPS for the year ended 31 December 2019 and the 6 month period ended 30 June 2019 have been restated on the same basis in these financial statements. There is no impact to either the income statement or balance sheet of the Group.
5 Intangible assets
Computer software
Goodwill Client portfolios GBP'000 Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2019 28,903 18,866 1,481 49,250
Additions - - 454 454
At 30 June 2019 28,903 18,866 1,935 49,704
Additions - - 242 242
At 31 December 2019 28,903 18,866 2,177 49,946
Additions - - 264 264
At 30 June 2020 28,903 18,866 2,441 50,210
----------- -------------------- ------------------ ----------
Amortisation and impairments
At 1 January 2019 - 4,379 761 5,140
Charge for the period - 472 155 627
At 30 June 2019 - 4,851 916 5,767
Charge for the period - 469 283 752
At 31 December 2019 - 5,320 1,199 6,519
Charge for the period - 473 124 597
Impairment - 344 - 344
At 30 June 2020 - 6,137 1,323 7,460
----------- -------------------- ------------------ ----------
Net book value
At 31 December 2018 28,903 14,487 720 44,110
=========== ==================== ================== ==========
At 30 June 2019 28,903 14,015 1,019 43,937
=========== ==================== ================== ==========
At 31 December 2019 28,903 13,546 978 43,427
=========== ==================== ================== ==========
At 30 June 2020 28,903 12,729 1,118 42,750
=========== ==================== ================== ==========
Impairment charges totalling GBP344,000 against the value of the Group's client portfolios within intangible assets have been recognised during the six month period ended 30 June 2020 (H1 2019: GBPnil). This relates to changes in the estimate of future cash flows expected on these assets over their remaining useful economic lives owing to increased uncertainty over the longevity of the current low interest rate environment.
6 Dividends paid
Unaudited Unaudited
6 month period 6 month period Audited
ended ended year ended
30-Jun-20 30-Jun-19 31-Dec-19
GBP'000 GBP'000 GBP'000
Ordinary dividends paid 3,507 3,212 4,562
3,507 3,212 4,562
================ ================ ============
A final dividend of 6.00p per ordinary share in respect of the year ended 31 December 2018 was paid on 23 May 2019.
An interim dividend of 2.50p per ordinary share in respect of the year ended 31 December 2019 was paid on 14 November 2019.
A final dividend of 6.50p per ordinary share in respect of the year ended 31 December 2019 was paid on 8 June 2020.
7 Income tax
Tax is charged at 19% for the six months ended 30 June 2020 (30 June 2019: 19%) representing the best estimate of the average annual effective tax rate expected to apply for the full year, applied to the pre-tax income of the six month period.
Current tax for current and prior periods is classified as a current liability to the extent that it is unpaid. Any amounts paid in excess of amounts owed are classified as a current asset.
8 Contingent liabilities
In-specie contributions
The Group has been in correspondence with HMRC regarding processes and documentation in respect of in specie contributions. HMRC have alleged that incorrect procedures were followed and is seeking to reclaim tax reliefs granted and interest thereon. This is an industry wide issue affecting other SIPP operators and is being challenged by the industry as a whole. It is not possible to determine when this matter will be resolved and the outcome and impact are not known at this stage. We do not believe that the net exposure arising from this will be material to the Group.
Data cleansing
During the year ended 31 December 2018 management initiated a review of data records related to properties held within SIPPs administered by the Group.
This review requires a case by case assessment of each of the properties within the population in order to assess whether any remedial action is required by the Group in respect of that property or the associated SIPP.
In addition to the remaining provision of GBP141,000 for the estimated direct costs that the Group may still incur in respect of this exercise, the directors consider that it is possible that the Group may also be exposed to indirect costs in the future, depending on the outcome of the case by case reviews.
The Directors' best estimate of this contingent liability is GBP1.8m (31 December 2019: GBP2.3m). The decrease in estimate has arisen following a reduction in the total value of cases remaining.
This estimate continues to be reviewed regularly, and any changes or refinements will be reported as appropriate. The Directors currently expect that, with COVID-19 related working limitations and also additional forbearance having been permitted in connection with the COVID-19 pandemic, any potential material follow up actions will be completed by 2021.
9 Post balance sheet events
Acquisition of Dunstan Thomas
The Group is pleased to confirm its acquisition of fintech provider Dunstan Thomas which completed on 3rd August 2020 for a maximum total consideration of GBP27.5m (including GBP6m of deferred consideration on 3 year earn out period). An estimate of net assets on completion is still subject to completion accounts being prepared and subsequent fair value adjustments in accordance with IFRS 3 Business Combinations.
The acquisition has been funded through a combination of debt financing and existing cash, with existing borrowings refinanced into a new facility comprising a GBP20m term loan over 5 years and a GBP10m rolling credit facility, GBP6m of which has been utilised in relation to the Dunstan Thomas acquisition.
Acquisition of Talbot and Muir
The Group is further pleased to confirm its acquisition, subject to regulatory approval, of the SIPP and SSAS products provider Talbot and Muir. Total maximum consideration is GBP25.25m, inclusive of deferred consideration of up to GBP8.75m over a 2 year earn out period.
The acquisition is being funded through equity financing and in July 2020 the Group successfully placed 11,904,762 shares at a price of 210p per share, raising gross proceeds of GBP25m.
10 Illustrative condensed consolidated statement of financial position as at 30 June 2020 split between insurance policyholders and the Group's shareholders
30-Jun-20 30-Jun-20 30-Jun-20 30-Jun-19
GBP'000 GBP'000 GBP'000 GBP'000
ASSETS Group Total Policyholder Shareholder Shareholder
Non-current assets
Intangible assets 42,750 - 42,750 43,937
Investment property 1,219,856 1,219,814 42 42
Property, plant and
equipment 5,742 - 5,742 6,629
Investments 1,842,818 1,842,818 - -
Deferred tax asset 435 - 435 855
------------ ------------- ------------ ------------
3,111,601 3,062,632 48,969 51,463
------------ ------------- ------------ ------------
Current assets
Trade and other receivables 30,976 17,190 13,786 11,849
Cash and cash equivalents 440,790 415,922 24,868 25,731
Current tax asset 604 172 432 -
------------ ------------- ------------ ------------
472,370 433,284 39,086 37,580
------------ ------------- ------------ ------------
Total assets 3,583,971 3,495,916 88,055 89,043
------------ ------------- ------------ ------------
LIABILITIES
Current liabilities
Trade and other payables 16,893 10,215 6,678 6,156
Deferred income 26,345 13,776 12,569 11,594
Borrowings 34,486 33,030 1,456 3,149
Lease Liabilities 909 - 909 904
Provisions 408 - 408 450
Deferred consideration - - - 380
Current tax liability - - - 1,005
------------ ------------- ------------ ------------
79,041 57,021 22,020 23,638
------------ ------------- ------------ ------------
Non-current liabilities
Borrowings 46,617 38,317 8,300 9,743
Lease Liabilities 3,377 - 3,377 4,109
Non-participating investment
contract liabilities 3,400,578 3,400,578 - -
------------
3,450,572 3,438,895 11,677 13,852
------------ ------------- ------------ ------------
Total liabilities 3,529,613 3,495,916 33,697 37,490
------------ ------------- ------------ ------------
Net assets 54,358 - 54,358 51,553
------------ ------------- ------------ ------------
Equity attributable
to owners of the parent
Issued capital 271 - 271 269
Share premium 33,659 - 33,659 33,451
Equity share based payments 2,723 - 2,723 1,820
Treasury shares (1,124) - (1,124) (716)
Retained earnings 18,815 - 18,815 16,713
------------ ------------- ------------ ------------
54,344 - 54,344 51,537
Non-controlling interest 14 - 14 16
Total equity 54,358 - 54,358 51,553
------------ ------------- ------------ ------------
11 Illustrative condensed consolidated statement of cash flows for the six month period ended 30 June 2020 split between insurance policyholders and the Group's shareholders
30-Jun-20 30-Jun-20 30-Jun-20 30-Jun-19
GBP'000 GBP'000 GBP'000 GBP'000
Group Total Policyholder Shareholder Shareholder
Cash flows from operating
activities
Profit before tax 3,959 - 3,959 5,448
Adjustments for:
Depreciation 694 - 694 636
Amortisation and impairments 941 - 941 627
Interest expense 240 - 240 261
Share based payment expense 410 - 410 463
Fair value gains on financial
investments 82,297 82,297 - -
Additions of financial
investments (298,196) (298,196) - -
Disposals of financial
investments 367,278 367,278 - -
Fair value losses on investment
properties 57,664 57,664 - -
Decrease in liability for
investment contracts (171,327) (171,327) - -
Changes in working capital:
Increase in trade and other
receivables (10,460) (6,109) (4,351) (2,226)
Increase in trade and other
payables 772 173 599 302
Taxes paid (2,063) - (2,063) (1,073)
Net cash flows from operating
activities 32,209 31,780 429 4,438
------------- -------------- ------------- -------------
Cash flows from investing
activities
Purchase of intangible
assets (264) - (264) (454)
Purchase of property, plant
& equipment (241) - (241) (770)
Purchase of investment property (66,685) (66,685) - -
Purchase and sale of shares
in the Group by the EBT (590) - (590) -
Receipts from sale of investment
property 54,948 54,948 - -
Net cash flows from acquisitions (152) - (152) -
Net cash flows from investing
activities (12,984) (11,737) (1,247) (1,224)
------------- -------------- ------------- -------------
Cash flows from financing
activities
Equity dividends paid (3,507) - (3,507) (3,212)
Net increase/(decrease)
in borrowings 3,981 5,560 (1,579) (1,572)
Principal elements of
lease payments (422) - (422) (421)
Interest paid (34) - (34) (298)
Net cash flows from financing
activities 18 5,560 (5,542) (5,503)
------------- -------------- ------------- -------------
Net increase/(decrease)
in cash and cash equivalents 19,243 25,603 (6,360) (2,289)
------------- -------------- ------------- -------------
Cash and cash equivalents
at the beginning of the
period 421,547 390,319 31,228 28,020
============= ============== ============= =============
Cash and cash equivalents
at the end of the period 440,790 415,922 24,868 25,731
============= ============== ============= =============
12 Illustrative table of SIPP number movements over the six month period ended 30 June 2020
Full Mid SIPPs eSIPPs Total own Third Party Total
SIPPs SIPPs Administered
As at 30 June 2020 19,487 28,798 21,210 69,495 6,811 76,306
------- ---------- ------- ---------- -------------- --------
As at 31 December
2019 19,869 27,799 21,726 69,394 7,147 76,541
------- ---------- ------- ---------- -------------- --------
Annualised gross
organic growth rate* 2.90% 11.20% 2.41% 6.07% 0.20% 5.52%
------- ---------- ------- ---------- -------------- --------
SIPPs added organically 288 1,557 262 2,107 7 2,114
------- ---------- ------- ---------- -------------- --------
Conversions and
reclassifications (161) 161 - - - -
------- ---------- ------- ---------- -------------- --------
SIPPs lost through
attrition (509) (719) (778) (2,006) (343) (2,349)
------- ---------- ------- ---------- -------------- --------
Annualised attrition
rate * 5.12% 5.17% 7.16% 5.78% 9.60% 6.14%
------- ---------- ------- ---------- -------------- --------
(*Growth and attrition percentage rates are annualised and are based on the 6 months' worth of SIPPs added organically or lost through attrition to 30 June 2020)
Directors Will Self - Chief Executive Officer Dan Cowland - Chief Financial Officer Jane Ridgley - Chief Operating Officer Chris Macdonald - Chairman, Non-Executive Director Bill Rattray - Non-Executive Director Jules Hydleman - Non-Executive Director Company Secretary Dan Cowland Registered Office 3 Temple Quay Temple Back East Bristol BS1 6DZ Registered Number 07934492 Nominated Adviser and Broker Joint Broker Peel Hunt LLP N+1 Singer Moor House 1 Bartholomew Lane 120 London Wall London London EC2N 2AX EC2Y 5ET Independent Auditors PricewaterhouseCoopers LLP 2 Glass Wharf Bristol BS2 0FR Solicitors Roxburgh Milkins Limited Merchants House North Wapping Road Bristol BS1 4RW Registrars Computershare Limited The Pavilions Bridgewater Road Bristol BS13 8AE
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