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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 : 9180Z
Curtis Banks Group PLC
06 September 2018
Curtis Banks Group plc
("Curtis Banks", the "Group")
Interim results for the 6 months to 30 June 2018
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 2018.
Highlights
-- Operating Revenue increased by 7.5% to GBP23.0m (2017: GBP21.4m) -- Adjusted profit before tax(1) increased by 16% to GBP5.8m (2017: GBP5.0m) -- Adjusted operating margin(2) increased to 26.2% (2017: 24.7%) -- Profit before tax increased by 17% to GBP4.8m (2017: GBP4.1m) -- Adjusted diluted EPS increased by 16% to 8.33p (2017: 7.18p) -- Gross organic growth in own SIPP numbers of 3,512 with total SIPPs administered now 77,552 -- Assets under administration increased by 9% to GBP25.1bn (2017: GBP23.1bn) -- Interim dividend of 2.0p per share (2017: 1.5p)
-- Will Self takes over as Group CEO in January 2019, with Rupert Curtis maintaining an active role as Founder and Senior Adviser
-- Jane Ridgley to join the Board in January 2019 as Chief Operating Officer
Highlights and key performance indicators for the period include:
Hot Features
Premium
Unaudited Unaudited
six month six month Audited
period ended period ended year ended
30 June 2018 30 June 2017 31 December
2017
Financial
Operating Revenue GBP23.0m GBP21.4m GBP43.6m
Adjusted Profit1 GBP5.8m GBP5.0m GBP10.7m
Profit before Tax GBP4.8m GBP4.1m GBP5.9m
Adjusted Operating Margin2 26.2% 24.7% 25.8%
Diluted EPS 7.05p 5.84p 9.26p
Diluted EPS on Adjusted profit
(applying an effective tax
rate) 8.33p 7.18p 15.38p
Operational Highlights
Number of SIPPs Administered 77,552 74,900 76,474
Assets under Administration GBP25.1bn GBP23.1bn GBP24.7bn
Total organic new own SIPPs
in period 3,512 4,534 8,719
1 Profit before tax, amortisation and non- recurring costs
2The ratio of operating profits before amortisation and non-recurring costs to operating revenues
Commenting on the results and prospects, Rupert Curtis, CEO of Curtis Banks, said:
"We made good progress during the first half of the year and these results show encouraging growth in profits during a period in which we concentrated on completing our consolidation activities and preparing the launch of our new SIPP proposition.
We have focused on further investment in the business to support continued organic growth and build on our position as the UK's largest dedicated SIPP provider. This has involved developing a new sales team and a new SIPP proposition, both of which will be operating in the second half of this year.
We are well positioned to grow the business and are also proactively exploring possible acquisitions. The investments we are making across the business put us in good stead for the future, broadening our penetration of the SIPP market and creating further shareholder value.
As this is my final set of results as Chief Executive I would like to thank all of our valued shareholders for their continued support, and I am very pleased to have a strong successor in Will Self who will start in this position in January 2019. I am delighted to confirm that I will remain actively involved as a senior adviser to the business."
Analyst Presentation:
There will be a presentation on Thursday 6 September 2018 at 9.30am for institutional investors and analysts at Peel Hunt LLP, Moor House, 120 London Wall, London EC2Y 5ET. Those wishing to attend should contact jake.thomas@camarco.co.uk.
Copies of the audited accounts of the Group will be available on the Group website today.
For more information:
Curtis Banks Group plc www.curtisbanks.co.uk Rupert Curtis - Chief Executive Officer +44 (0) 117 9107910 Paul Tarran - Chief Financial Officer Will Self - Deputy Chief Executive Officer Peel Hunt LLP (Nominated Adviser & Joint Broker) +44 (0) 20 7418 8900 Guy Wiehahn Rishi Shah N+1 Singer (Joint Broker) +44 (0) 20 7496 3000 Mark Taylor Rachel Hayes Camarco +44 (0) 20 3757 4984 Ed Gascoigne-Pees Hazel Stevenson Jane Glover
LEI Code: 213800LYP7YTVDXRMP40
Notes to Editors:
Curtis Banks administers over 77,000 Self-Invested Pension Schemes, principally SIPPs and SSASs. The Group commenced trading in 2009 and has successfully developed, through a combination of organic growth and acquisitions, into one of the largest UK providers of these products. The Group currently employs approximately 570 staff in its head office in Bristol and regional offices in Ipswich and Dundee.
For more information - www.curtisbanks.co.uk
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon publication of this announcement, this inside information is now considered to be in the public domain.
Overview
Curtis Banks Group PLC ("Curtis Banks" or "the Group") is one of the United Kingdom's leading administrators of self-invested pension products, principally SIPPs and SSASs. The Group commenced trading in 2009 and has successfully developed, through a combination of organic growth and acquisitions, into one of the largest UK providers of these products.
At 30 June 2018 the Group administered circa GBP25.1bn (2017: GBP23.1bn) of pension assets on behalf of over 77,500 (2017: 74,900) active customers. Approximately 567 staff are employed across its head office in Bristol and our regional offices in Ipswich and Dundee.
On 25 May 2016 the Group completed its largest acquisition to date, the purchase of Suffolk Life Group Limited, a large and long established provider of SIPPs. The period since then has been one of consolidation, alignment and building a strong platform for the future expansion of the business. A single management structure is in place under the Curtis Banks brand. A new single SIPP proposition is being developed for launch by the end of 2018, supported by a new enhanced Group Sales function. Property legal and management services have been launched and the Group is actively exploring acquisition opportunities.
The Executive Directors have proven experience in the pensions market and operate a business that focuses on a service-driven proposition for the administration of flexible SIPPs. The Group's products are distributed by authorised and regulated financial advisers, targeted towards pension savers who wish to take full advantage of the features and flexibility offered in the UK's modern and changing pension regime. Long standing relationships with key distributors result in high levels of repeat business and demonstrate satisfaction with products and services provided.
The Group is focussed on continuing to deliver increased value to both customers and shareholders in the years ahead.
Note: The Group includes an insurance company, Suffolk Life Annuities Ltd, which provides SIPPs through non-participating individual insurance contracts. Due to Suffolk Life Annuities Limited's status as an insurance company, the consolidated results for the whole Group are required to include insurance policyholder assets and liabilities as well as the assets and liabilities and profits attributable to our shareholders. Notes 8 and 9 to the financial statements illustrate the split between policyholder and shareholder assets and liabilities and cash flows.
Chairman's Statement
I am pleased to report the interim results for Curtis Banks Group for the six months period ended 30 June 2018. These results show encouraging growth in profits during a period in which we have made good progress towards completing our consolidation activities and preparing the launch of our new SIPP proposition.
We announce today that Rupert Curtis will be stepping back as Chief Executive on 31 December 2018. Rupert was a founder of the Group, and has overseen the growth of the business and the board are very grateful for all his contributions both when the company was private and since listing in 2015. I am pleased that Rupert will remain as a senior adviser to the business post January as well as aiding his successor. To this end over the past six months the board has been involved in recruiting a new CEO and I am delighted to announce that Will Self will take over the role in January 2019. Will has been a member of the board since 2016 having worked in the sector for over 15 years including gaining his MBA from Cranfield in 2009. Will has been CEO of Suffolk Life for the last 5 years and is currently Deputy CEO. He was the outstanding candidate and we very much welcome Will to the role.
I am also pleased to announce that Jane Ridgley will be joining the Board in January 2019. Jane is currently Chief Operating Officer for the Group and will continue in that role as an executive director of the Board. Jane has worked with Suffolk Life for over 5 years and before that with Legal & General for 25 years most recently as Product Director in workplace savings.
The period under review has shown an increase in all key financial metrics. Operating revenue has increased by 7.5% to GBP23.0m compared to the same period last year, adjusted profit before tax increased by 16% to GBP5.8m and adjusted diluted earnings per share increased by 16% to 8.33p. It is particularly pleasing to be able to report these results following a period of considerable internal development. Our adjusted operating margin continues to show improvement as we grow both the top line and realise greater operational alignment across the Group.
Operationally, we have expanded further into the UK's commercial property market with the launch of two new companies: Rivergate Legal Limited which offers a range of legal services to SIPP, SSAS and open market customers relating to commercial property transactions and Templemead Property Solutions Limited which will provide valuation services and negotiate other professional services on behalf of Curtis Banks Group customers. In February, we launched our new corporate branding which brings one consistent identity to all businesses within the Group, a key strategic objective following the acquisition of Suffolk Life. We are working on a new Group website, which reflects this new brand identity and have brought forward work to upgrade our front-end portal for our customers. This will improve the customer and adviser experience and will be completed during 2018.
We are pleased that the total number of SIPPs administered by the Group now is 77,552, reflecting an increase of 3,512 in own SIPP numbers in the period. This is a result of continued new organic growth as well as stable attrition rates.
We are investing in developing a new sales team and a new SIPP proposition, both of which are well advanced and will be implemented in the latter half of this calendar year. While these enhancements and our expansion into UK's commercial property market will increase our cost base, we are confident that after a period of transition these initiatives will result in greater top-line growth.
Dividends
Your Board has agreed an interim dividend of 2.0p per share (2017: 1.5p) to be paid on 15 November 2018 to shareholders on the register at the close of business on 12 October 2018. The shares will be marked ex-dividend on 11 October 2018. It is expected that a final dividend will be recommended in respect of the current financial year.
Summary and Outlook
We are well positioned to grow the business organically and are actively seeking new acquisition opportunities. Ongoing regulatory pressure on SIPP operators, and increased capital requirements for businesses, means consolidation opportunities are still present. The business is well funded with cash surpluses of approximately GBP9 million at the half year and we will continue to look at compatible opportunities to supplement organic growth.
Our position in the market is strong and we intend to consolidate our status as the SIPP operator of choice for independent financial advisers. The investments we are making across the business puts us in good stead for the future, broadening our penetration of the SIPP market and creating further shareholder value.
Chris Macdonald
Chairman
5 September 2018
Operational Review
Summary
The first half of 2018 has seen us deliver strong and profitable growth. This has arisen as a result of continued organic growth in SIPPs and with the benefit of enhanced interest income. The Group has also benefited from the efficiencies that we implemented in the business in 2017 and into 2018, including the rationalisation of our office network to three sites.
We have achieved an improved adjusted profit margin of 26.2% (2017: 24.7%) for the first 6 months of this year and we are on track to deliver further improvements to the operating margin in the second half of this year.
Our products and sales strategy
The growth in the overall SIPP market continues to be strong, with SIPPs the product of choice for pension transfers. We are keen to maximize our share of this market and a key focus for us is the launch of our new SIPP proposition for the Group, backed by an enhanced sales team.
We have focused our new SIPP proposition on "mid and full SIPP" products, sold by regulated financial advisers. These are SIPPs backed by a high quality personal service, allowing customers full flexibility on investment choice and benefit options. Fund sizes tend to be larger and the target customer tends to be higher net worth and wanting a superior quality product. Fee levels are higher and this strategy plays to our strengths as experienced providers of service-driven products. The new product will be launched by the end of this year on our Navision Platform and we are confident that it will significantly increase our organic growth levels. In the interim we are closing some legacy and low fee products in order to focus our attention on our target market.
We have seen good levels of new business in our target market over the first half of the year, evidencing our focus on this sector. Levels of new SIPPs are down on last year due to a number of industry wide factors. Across the industry there has been a widely acknowledged slowdown in new pension transfers largely considered to be caused by the wider economic uncertainty. More specifically we have seen some advisers retrench from the pension transfer sector where elements of their business were exposed to defined benefit transfers as well as increased regulatory scrutiny of all regulated transfer activities.
The new proposition as highlighted above will be supported by our new Group sales team structure. We have a target of seven Business Development Managers (BDMs) to be in place across the Group by the end of this year and have already hired four, with a National Sales Manager recently appointed as part of this initiative. In addition, we already have in place a number of Key Account Directors and a sales support network. This represents a significant enhancement to our previous sales functions and all current new recruits bring with them a wealth of industry experience.
The new SIPP proposition, supported by the enhanced sales structure, will be an exciting catalyst to our organic business growth and is on track for delivery in Q4. We are confident that, whilst our investment into this proposition will increase our cost base, it will begin to deliver good results in 2019 and beyond and enhance our position as the leading dedicated SIPP provider.
We have also progressed with the development of enhanced property services to provide an in-house capability to those customers with SIPPs invested in our portfolio of over 6,000 commercial properties, who currently contract with third parties for legal, management, inspection and valuation services. Our legal services company, Rivergate Legal Limited, was authorised by the Solicitors' Regulatory Authority in May of this year, followed more recently by Templemead Property Solutions Limited receiving approval from the Royal Institute of Chartered Surveyors. Both will contribute to operating revenue in the second half of this year.
SIPP Numbers
At the period end the number of SIPPs administered increased to 77,552. 3,512 own new SIPPs were added and attrition rates on own SIPPs remained in line from previous years. More detail is set out in the table below.
Full SIPPs Mid SIPPs eSIPPs Total own Third Party Total
SIPPs Administered
As at 30 June
2018 20,281 25,597 23,157 69,035 8,517 77,552
----------- ---------- ------- ---------- -------------- -------
As at 31 December
2017 20,539 24,682 22,193 67,414 9,060 76,474
----------- ---------- ------- ---------- -------------- -------
Annualised
gross organic
growth rate* 3.60% 13.26% 13.56% 10.42% 0.77% 9.28%
----------- ---------- ------- ---------- -------------- -------
SIPPs added
organically 370 1,637 1,505 3,512 35 3,547
----------- ---------- ------- ---------- -------------- -------
SIPPs lost
through attrition -628 -722 -541 -1,891 -578 -2,469
----------- ---------- ------- ---------- -------------- -------
Annualised
attrition rate* 6.12% 5.85% 4.88% 5.61% 12.76% 6.46%
----------- ---------- ------- ---------- -------------- -------
(*) 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 2018.
Growth rates in the "mid and full SIPP" remain strong although lower than in previous periods. We expect this to continue during the transitional period until we launch our new product when the revised features and enlarged sales team will help to counter the industry wide challenges described above. We are nevertheless very pleased to be maintaining our overall financial performance during this period.
The impact of attrition rates on Third Party Administered SIPPs is ameliorated as a large proportion of these fees are fixed or guaranteed minimums.
We are grateful to our professional introducers for their continued support.
Acquisitions
As one of the UK's leading SIPP providers we are well positioned to continue our role as a consolidator in the SIPP market and inorganic growth is an important strand of our strategy. As part of our capital management, we have available cash funds of approximately GBP9 million to help fund future acquisitions.
We will continue to deploy a disciplined approach to acquisitions and consider each opportunity from both an earnings per share and return on investment perspective. We have a strategy in place and are pursuing a number of opportunities. Acquisitions of SIPP businesses are becoming a more competitive process, but we continue to believe that attractive opportunities still exist and we remain the most experienced acquirer in the market place.
Regulation
Our simple model of working with regulated financial advisers means that the Group is not subject to some of the increasing regulatory scrutiny that faces a number of the market participants in the wider pensions and wealth management industry. Regulatory scrutiny of the SIPP market continues, but our business model, whereby we do not give any advice or provide the investments held within the SIPPs, positions us well within the complex regulatory environment facing the wider industry.
A recent area of media focus is on the underlying nature of some assets held within SIPPs and whether the assets are standard or non-standard, i.e. illiquid. This is largely a legacy issue for the industry, related to the acceptance of non-standard assets, and the Group has and continues to undertake robust due diligence on non-standard investments.
Other areas of regulatory and media focus are transfers from defined benefit schemes, and acceptance of business from unregulated introducers. The Group does not transact with unregulated introducers and monitors the quality of any defined benefit transfer business accepted, requiring a positive recommendation to transfer from a regulated adviser.
In-specie contributions and associated tax relief is an issue that HMRC is looking at closely and the outcome and impact on the industry are not known at this stage. We do not believe however that the net exposure arising from this will be material to the Group.
During the period we have successfully implemented a GDPR framework throughout the Group.
IT strategy
As announced in our last full year results, we have decided to materially upgrade our existing back office operating systems, our front end portal and to unify the Group with a single web presence. This will ensure that they are appropriate for the enlarged Group as we continue to grow and meet the needs of our customers.
We have decided to reprioritise the front end portal and website work streams ahead of the work to upgrade the back office systems. A key factor in making this decision to reprioritise the work streams is that it enables us to maintain an implementation plan that is robust and delivers key customer enhancements linked to the launch of our new proposition. Our systems are stable, our IT strategy focuses on enhancing functionality and delivering operating line margin improvement, and this reprioritisation does not impact the timetable or overall anticipated costs and benefits of our IT Strategy.
The upgraded front end portal on our customer websites will result in increased functionality for our customers and their advisers. At the same time, we are upgrading our online presence into a single Group website. Our new SIPP Proposition is to be run on our Navision Platform.
People and culture
Our office rationalisation has resulted in a small decrease in the number of employees, but we anticipate employee numbers increasing over the next 12 months to match the continued growth of the business. We value our people and the positive contribution they make to our culture and the performance of our business and have extended our long term incentive plan for key staff as one aspect of incentivising them and aligning their interest with shareholders.
During the period we have recruited a new National Sales Manager, who has been tasked with helping to implement the new sales team structure that I outlined above. In addition, Jane Ridgley has been appointed as Chief Operating Officer for the whole Group.
I am extremely proud of the incredible contribution made by all our employees and thank them for their loyalty to the Group.
We have also grown our corporate social responsibility activities, promoting our presence in our local communities and increasing our support for our people's own fundraising activities.
As this is my last formal statement as Chief Executive Officer, I would like to take the opportunity to thank everyone who has taken part in making Curtis Banks the success it is today and welcome Will Self to the role from the beginning of 2019. I am also pleased that Jane Ridgley will be joining the Board.
I am very proud of what we have achieved at Curtis Banks since we founded the business in 2009 and it has been a great privilege to have led and worked with such a capable team of people through such a successful period. I look forward to continuing to work with them in my new role in the business.
My thanks go to our Board, the senior management and everyone in Curtis Banks for making these achievements possible. I would also like to thank our shareholders for their support since we listed the Group in 2015.
The Group is well positioned for the considerable opportunities that lie ahead and I am confident that, under Will Self's leadership, Curtis Banks will continue to go from strength to strength.
Rupert Curtis
Chief Executive Officer
5 September 2018
Financial Review
Operational revenues of GBP23m in the six months ended 30 June 2018 have increased by 7.5% over the comparable period.
Fee revenue 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 2018 annual fees represented 77% of the total income and 84% of this fee income is recurring. 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. 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 is not directly affected by movements in financial markets.
Staff costs for the period totalled GBP10.9m compared to GBP10.4m for the six month period ended 30 June 2017. Staff costs have increased partly due to annual pay reviews related to average earnings increases. In addition, the continued operation of the Executive Bonus Scheme and Long Term Incentive Plan (LTIP) for key members of staff, introduced in June 2017, has resulted in a H1 2018 impact of GBP568k compared to GBPnil in H1 2017. A further offering of the Save as You Earn option schemes for all staff members has also led to an increase in staff costs over the comparable period last year. Whilst such measures have a financial impact their introduction results in the retention and reward of key members of staff that is necessary to grow and develop the business.
Overall staff numbers have reduced to 567 as at 30 June 2018 compared to 597 as at 31 December 2017, the fall arising largely from the closure of the Market Harborough office in January 2018. This has resulted in a significant reduction in staff costs which, together with savings from internal staff restructuring, has helped to partly offset the increases noted above.
Staff costs in H2 2018 are likely to increase as we invest for the future with the enhancement of the Group sales team structure as set out in the operational review.
Integration Activities
A review of costs across the Group is continuing to identify areas where further cost efficiencies can be made as well as more efficient operational processing of the day to day SIPP administration activities. The objective of this review is to continue our progress in improving the adjusted profit margin to our target run-rate of 30%. This will be achieved by a combination of revenue enhancements, in year cost savings and operating improvements. These will not only benefit the Group but will also enhance the level and quality of services that are being provided to customers and introducers of business. A number of these enhancements have already been actioned and the adjusted operating profit margin for the six months ended 30 June 2018 increased to 26.2% from 24.7% in the comparable period last year.
Financial Position
The statement of Financial Position as at 30 June 2018 shows a strong position with shareholder net assets increasing from GBP44.6m at 31 December 2017 to GBP46.2m as at 30 June 2018.
In 2016 the Group borrowed GBP23m for the acquisition of Suffolk Life. This comprised a GBP15m term loan repayable over 5 years and a revolving credit facility of GBP8m. Interest on this debt accrues at the rate of 2.25% plus LIBOR. The debt continues to be repaid in line with scheduled terms and the covenants required by the bank in respect of this gearing continue to be covered. As at the 30 June 2018 the Group had net shareholder cash (after debt) of GBP5.9m (2017: GBP3.6m).
Cash flows
Shareholder cash balances at period end were GBP21.9m compared to GBP22.8m at the end of the previous period to 30 June 2017. After regulatory capital requirements are taken into account at period end there were free shareholder cash balances of approximately GBP9m available.
The first half of the financial year has been cash depletive due to payments of the final dividend of GBP2.6m in May 2018, payment of redundancy and associated costs in January 2018 of GBP500k relating to the closure of the Market Harborough office, further loans of GBP500k to the Group Employee Benefit Trust and additional bonus payments in March 2018 of GBP500k above the level of those paid in 2017. Other than the payment of an interim dividend in November 2018, and any further loans to the employee benefit trust, none of these cash flows will recur in the second half of the year.
Suffolk Life Annuities Limited
Part of the Suffolk Life Group of Companies, 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 policyholder assets and liabilities are shown on the balance sheet of Suffolk Life Annuities Limited, these also show on the Group balance sheet on consolidation. As the policies are non-participating contracts, the Customer 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. The acquisition was accounted for in accordance with IFRS 3 Business Combinations. An illustrative balance sheet as at 30 June 2018 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.
Non-recurring costs
Non-recurring costs for the six months ended 30 June 2018 of GBP0.4m comprise principally internal restructuring costs and further costs following acquisitions of businesses in prior years.
Systems Development
As previously noted, after a full review of our IT Infrastructure, the decision has been taken to upgrade the existing back office systems at Curtis Banks whilst also investing in new front end customer portals.
Costs associated with these upgrades will be capitalised and amortised in accordance with our normal accounting policy. Amortisation will commence once the upgrades are completed and fully operational.
Employee Benefit Trust
The Group operates an independent Employee Benefit Trust ("EBT") administered by Saffery Champness Registered Fiduciaries to acquire shares in the Company in the market to satisfy future option and long term incentive awards. The EBT is funded by loans from the Group. During the period the Group lent a further GBP500,000 to the EBT to enable further acquisitions of shares to be made. As at 30 June 2018 the EBT held 274,275 shares in Curtis Banks Group plc funded by a total of GBP750,000 of loans from the Group. 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. During the period 3,313 of the shares in the Company held by the EBT were used to satisfy share options exercised.
Earnings per Share
Fully diluted Earnings per Share ("EPS") based on adjusted profits after tax have increased by 16% in the six months ended 30 June 2018 from 7.18p for the six months ended 30 June 2017 to 8.33p. Based on the profit after tax the fully diluted EPS shows a 21% increase in the same period from 5.84p to 7.05p. With the historic granting of options, and further grants in the six months ended 30 June 2018, diluted EPS is considered to be a more meaningful measure of performance for investors than basic EPS.
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 2018 the total regulatory capital requirement across the Group was GBP12m and the Group had an aggregate surplus of GBP8.6m 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 resulting in the aggregate surplus reducing to GBP4.3m. The Group is currently assessing the impact of IFRS 16 (accounting for leases) on the regulatory capital requirement of the Group. This accounting standard becomes effective from 1 January 2019. All the regulated firms within the Group maintained surplus regulated capital throughout the period. The two 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.
Paul Tarran
Chief Financial Officer
5 September 2018
Condensed consolidated statement of comprehensive income
Unaudited 6 month period Unaudited 6 month period Audited year ended 31 December
ended 30 June 2018 ended 30 June 2017 2017
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
Operating revenue 22,960 - 22,960 21,362 - 21,362 43,573 - 43,573
Policyholder
investment
returns 115,017 - 115,017 179,262 - 179,262 343,009 - 343,009
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Revenue 137,977 - 137,977 200,624 200,624 386,582 - 386,582
Administrative
expenses (16,940) - (16,940) (16,090) - (16,090) (32,336) - (32,336)
Non-participating
investment
contract expenses (17,299) - (17,299) (17,872) - (17,872) (34,560) - (34,560)
Changes in
provisions:
Non-participating
investment
contract
liabilities (97,718) - (97,718) (161,390) - (161,390) (308,449) - (308,449)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ----------
Policyholder total
expenses (115,017) - (115,017) (179,262) - (179,262) (343,009) - (343,009)
Operating profit
before
amortisation and
non-recurring
costs 6,020 - 6,020 5,272 - 5,272 11,237 - 11,237
Non-recurring costs 3 - (357) (357) - (364) (364) - (3,754) (3,754)
Amortisation and
impairment - (706) (706) - (561) (561) - (1,131) (1,131)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Operating profit 6,020 (1,063) 4,957 5,272 (925) 4,347 11,237 (4,885) 6,352
Finance income 49 - 49 32 - 32 67 - 67
Finance costs (228) - (228) (298) - (298) (562) - (562)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Profit before tax 5,841 (1,063) 4,778 5,006 (925) 4,081 10,742 (4,885) 5,857
Tax (972) 202 (770) (985) 178 (807) (1,565) 940 (625)
-------------- -------------- ---------- -------------- -------------- ---------- -------------- -------------- ------------
Total comprehensive
income
for the period 4,869 (861) 4,008 4,021 (747) 3,274 9,177 (3,945) 5,232
============== ============== ========== ============== ============== ========== ============== ============== ============
Attributable to:
Equity holders of
the
company 4,004 3,269 5,222
Non-controlling
interests 4 5 10
---------- ---------- ------------
4,008 3,274 5,232
========== ========== ============
Earnings per
ordinary
share on net
profit
Basic (pence) 4 7.46 6.10 9.75
Diluted (pence) 4 7.05 5.84 9.26
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 2017
- audited 268 33,425 239 - 7,589 41,521 9 41,530
Comprehensive
income
for the
period - - - - 3,269 3,269 5 3,274
Share based
payments - - 127 - - 127 - 127
Ordinary
shares bought
by EBT - - - (250) - (250) - (250)
Ordinary
dividends
paid - - - - (1,605) (1,605) (5) (1,610)
---------
As at 30 June
2017 -
unaudited 268 33,425 366 (250) 9,253 43,062 9 43,071
Comprehensive
income
for the
period - - - - 1,953 1,953 5 1,958
Share based
payments - - 365 - - 365 - 365
Ordinary
shares issued 1 26 - - - 27 - 27
Ordinary
dividends
paid - - - - (803) (803) - (803)
---------
As at 31
December 2017
- audited 269 33,451 731 (250) 10,403 44,604 14 44,618
Comprehensive
income
for the
period - - - - 4,004 4,004 4 4,008
Share based
payments - - 215 - - 215 - 215
Deferred tax
on share
based
payments - - - - 395 395 - 395
Ordinary
shares bought
and sold by
EBT - - - (498) - (498) - (498)
Ordinary
dividends
paid - - - - (2,551) (2,551) (6) (2,557)
As at 30 June
2018 -
unaudited 269 33,451 946 (748) 12,251 46,169 12 46,181
======== ======== ========= ========= ========= ======== ================ ========
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
30-Jun-18 30-Jun-17 31-Dec-17
Notes GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 5 43,910 46,937 44,593
Investment property 1,259,400 1,181,385 1,206,298
Property, plant and equipment 1,130 1,079 1,148
Investments 2,002,611 1,987,136 2,032,293
Deferred tax asset 648 - 124
----------- ----------- -----------
3,307,699 3,216,537 3,284,456
----------- ----------- -----------
Current assets
Trade and other receivables 19,879 17,382 16,687
Cash and cash equivalents 427,256 428,617 437,849
Current tax asset 17 - 310
----------- ----------- -----------
447,152 445,999 454,846
----------- ----------- -----------
Total assets 3,754,851 3,662,536 3,739,302
----------- ----------- -----------
LIABILITIES
Current liabilities
Trade and other payables 13,103 13,606 12,658
Deferred income 18,600 10,810 24,374
Borrowings 30,597 25,183 29,444
Provisions 150 - 641
Deferred consideration 341 384 341
Current tax liability - 785 -
----------- ----------- -----------
62,791 50,768 67,458
----------- ----------- -----------
Non-current liabilities
Borrowings 58,800 70,668 64,584
Provisions 102 - 259
Deferred consideration 261 626 454
Non-participating investment
contract liabilities 3,586,716 3,497,359 3,561,929
Deferred tax liability - 44 -
----------- ----------- -----------
3,645,879 3,568,697 3,627,226
----------- ----------- -----------
Total liabilities 3,708,670 3,619,465 3,694,684
----------- ----------- -----------
Net assets 46,181 43,071 44,618
----------- ----------- -----------
Equity attributable to owners
of the parent
Issued capital 269 268 269
Share premium 33,451 33,425 33,451
Equity share based payments 946 366 731
Treasury shares (748) (250) (250)
Retained earnings 12,251 9,253 10,403
----------- ----------- -----------
46,169 43,062 44,604
Non-controlling interest 12 9 14
Total equity 46,181 43,071 44,618
----------- ----------- -----------
Approved by the Board and authorised for issue on 5 September 2018
Paul Tarran
Chief Financial Officer
Condensed consolidated statement of cash flows
Unaudited Unaudited
6 month 6 month Audited
period ended period ended year ended
30-Jun-18 30-Jun-17 31-Dec-17
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit before tax 4,778 4,081 5,857
Adjustments for:
Depreciation 300 286 570
Amortisation and impairments 706 561 3,126
Interest expense 226 293 554
Share based payment expense 215 129 492
Fair value gains on financial
investments (24,728) (82,770) (156,046)
Additions of financial investments (246,430) (256,994) (493,638)
Disposals of financial investments 300,841 277,540 542,304
Fair value gains on investment
properties (34,015) (20,913) (44,074)
Increase in liability for investment
contracts 24,792 102,955 167,525
Changes in working capital:
Decrease/(increase) in trade
and other receivables (3,367) 69 (433)
Increase/(decrease) in trade and
other payables (5,794) (9,915) 4,193
Taxes paid (625) (524) (999)
Net cash flows from operating
activities 16,899 14,798 29,431
-------------- -------------- ------------
Cash flows from investing
activities
Purchase of intangible
assets (23) (56) (277)
Purchase of property, plant & equipment (77,768) (71,346) (161,923)
Receipts from sale of property, plant
& equipment 58,401 59,717 148,191
Purchase of treasury shares (498) (250) (250)
Net cash flows from acquisitions (193) (452) (669)
Net cash flows from investing
activities (20,081) (12,387) (14,928)
-------------- -------------- ------------
Cash flows from financing activities
Equity dividends paid (2,557) (1,610) (2,413)
Net proceeds from issue of ordinary
shares - - 27
Net decrease in borrowings (4,651) (19,427) (21,274)
Interest paid (203) (267) (504)
Net cash flows from financing activities (7,411) (21,304) (24,164)
-------------- -------------- ------------
Net decrease in cash and cash equivalents (10,593) (18,893) (9,661)
-------------- -------------- ------------
Cash and cash equivalents at the
beginning of the period 437,849 447,510 447,510
============== ============== ============
Cash and cash equivalents at the
end of the period 427,256 428,617 437,849
============== ============== ============
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 comprise the Company and its subsidiaries ("the Group") and have been prepared under the historical cost convention as modified by the revaluation of land and buildings, derivatives, financial assets and liabilities at fair value through profit and loss. The interim condensed consolidated financial statements have been presented in pounds sterling, with all values rounded to the nearest thousand pounds except when otherwise indicated, and were authorised for issue in accordance with a resolution of the directors on 5 September 2018.
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 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 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 policyholder financial instruments will not influence the economic decisions of users of these financial statements.
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 2017, 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 2018 and the six months ended 30 June 2017 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 2017 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 Basis of preparation and accounting policies - continued 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 2018 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. The trading subsidiaries of Curtis Banks Group PLC as at 30 June 2017 were Curtis Banks Limited, Curtis Banks Investment Management Limited, Suffolk Life Annuities Limited and Suffolk Life Pensions 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 2017 other than the adoption of the provisions IFRS9 in reviewing impairment on receivables.
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. Except for IFRS 16 (accounting for leases) no other newly issued standards are expected to potentially have a material impact on the condensed consolidated interim financial statements and the consolidated financial statements to the Group. The potential impact of IFRS 16 is currently being evaluated.
Financial statements for the year ending 31 December 2018
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 2018.
2 Basis of preparation and accounting policies - continued 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. Key areas of judgement and estimation uncertainty are disclosed below:
Customer portfolios
Customer portfolios acquired are amortised over their estimated useful economic life (UEL) of 20 years. This UEL is based upon Management's historical experience of similar portfolios.
Additionally, the Group reviews whether acquired customer portfolios are impaired at least on an annual basis. This comprises an estimation of future cash flows expected to arise from each customer 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 relevant operating subsidiary and applying this against forecast revenue from the relevant customer portfolio.
Computer software
In capitalising the costs of computer software as intangible assets management judge these costs to have an economic value that will extend into the future and meet the recognition criteria under IAS 38. Computer software costs are then amortised over an estimated UEL on a project by project basis.
Additionally, the Group determines whether computer software is impaired at least on an annual basis. This requires an estimation of the value in use. In assessing value in use the estimated future cash flows expected to arise from the software are 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.
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-18 30-Jun-17 31-Dec-17
GBP'000 GBP'000 GBP'000
Set up costs associated with the
take on of SIPPs - 20 20
Exceptional legal fees - 5 67
Redundancy & restructuring costs following
acquisitions 308 95 1,143
Suffolk Life acquisition costs - 46 72
European Pensions Management acquisition
costs 49 198 328
Exceptional impairment charge - - 2,124
357 364 3,754
=========== =========== ============
Redundancy & restructuring costs following acquisitions
During the six month period ended 30 June 2018, the Group restructured its sales team and reduced overlapping operational management.
During the year ended 31 December 2017 a full strategic review of all the office locations used by the Group was carried out. As a result of that review, and after full consultation with all relevant staff, the decision was taken to close the Group's office in Market Harborough. The closure was effective from the end of January 2018. Full provision has been made in the financial statements for the year ended 31 December 2017 for all the financial costs arising from the decision to close that office including redundancy payments, amounts due under onerous leases and cost of relocating the activities of that office to other Company locations.
Exceptional impairment charge
During the year ended 31 December 2017 the Group continued and completed the review if its operating systems following the acquisition of the Suffolk Life business in May 2016. As a result of this review the Group concluded that the most cost effective, appropriate and lowest risk solution was, subject to contract, to implement a material upgrade of the existing back office operating system at the Group.
As a result of this decision, costs of approximately GBP2.1 million incurred and capitalised on the initial development, installation, evaluation and testing of an alternative system over recent years have now been written off as an exceptional impairment charge in the financial statements for the year ended 31 December 2017. Other than GBP0.1m, all of these costs were originally incurred in accounting periods up to and including the year to 31 December 2016.
European Pensions Management acquisition costs
The Group incurred considerable legal and professional fees in connection with the acquisition of the trade and assets of European Pensions Management Limited. In accordance with IFRS 3 Business Combinations, these have been expensed and treated as non-recurring costs.
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 period Audited
period ended ended year ended
30-Jun-18 30-Jun-17 31-Dec-17
GBP'000 GBP'000 GBP'000
Net profit available
to equity holders of the Group 4,004 3,269 5,222
============== ================ ============
Net profit before non-recurring
costs and amortisation available
to equity holders of the Group 5,841 5,006 10,742
Number Number Number
Weighted average number of ordinary
shares:
Issued ordinary shares at start
of period 53,807,346 53,599,769 53,599,669
Effect of shares held by Employee
Benefit Trust (130,869) (99,155) (78,941)
Effect of shares issued in current
period - - 25,127
-------------- ---------------- ------------
Basic weighted average number of
shares 53,676,477 53,500,614 53,545,855
Effect of options exercisable at
the reporting date 971,616 800,000 800,000
Effect of options not yet exercisable
at the reporting date 2,133,896 1,666,350 2,044,484
Diluted weighted average number
of shares 56,781,989 55,966,964 56,390,339
============== ================ ============
Pence Pence Pence
Earnings per share:
Basic 7.46 6.10 9.75
Diluted 7.05 5.84 9.26
Earnings per share on profit before
non-recurring costs and amortisation,
less an effective tax rate*:
Basic 8.81 7.49 16.20
Diluted 8.33 7.18 15.38
*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 2018 is 19.00% (2017: 19.25%).
5 Intangible assets
Computer software
Goodwill Customer portfolios GBP'000 Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2017 28,903 18,430 3,116 50,449
Additions - 4 52 56
At 30 June 2017 28,903 18,434 3,168 50,505
Additions - 1 220 221
Disposals - (2) (1,993) (1,995)
At 31 December 2017 28,903 18,433 1,395 48,731
Additions - - 23 23
At 30 June 2018 28,903 18,433 1,418 48,754
----------- ---------------------- ------------------ ----------
Amortisation and impairments
At 1 January 2017 - 2,533 474 3,007
Charge for the period - 460 101 561
At 30 June 2017 - 2,993 575 3,568
Charge for the period - 462 108 570
At 31 December 2017 - 3,455 683 4,138
Charge for the period - 462 244 706
At 30 June 2018 - 3,917 927 4,844
----------- ---------------------- ------------------ ----------
Net book value
At 31 December 2016 28,903 15,897 2,642 47,442
=========== ====================== ================== ==========
At 30 June 2017 28,903 15,441 2,593 46,937
=========== ====================== ================== ==========
At 31 December 2017 28,903 14,978 712 44,593
=========== ====================== ================== ==========
At 30 June 2018 28,903 14,516 491 43,910
=========== ====================== ================== ==========
6 Dividends paid
Unaudited Unaudited
6 month period 6 month period Audited
ended ended year ended
30-Jun-18 30-Jun-17 31-Dec-17
GBP'000 GBP'000 GBP'000
Ordinary dividends paid 2,551 1,605 2,408
2,551 1,605 2,408
================ ================ ============
A second interim dividend of 3p per ordinary share in respect of the year ended 31 December 2016 was paid on 12 May 2017.
An interim s dividend of 1.5p per ordinary share in respect of the year ended 31 December 2017 was paid on 15 November 2017.
A final share dividend of 4.75p per ordinary share in respect of the year ended 31 December 2017 paid on 18 May 2018.
7 Income tax
Tax is charged at 19.00% for the six months ended 30 June 2018 (30 June 2017: 19.25%) 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 Illustrative condensed consolidated statement of financial position as at 30 June 2018 split between insurance policy holders and the Group's shareholders
ASSETS GBP'000 GBP'000 GBP'000
Group Total Policyholder Shareholder
Non-current assets
Intangible assets 43,910 - 43,910
Investment property 1,259,400 1,259,359 41
Property, plant and equipment 1,130 - 1,130
Investments 2,002,611 2,002,611 -
Deferred tax asset 648 - 648
------------ ------------- ------------
3,307,699 3,261,970 45,729
------------ ------------- ------------
Current assets
Trade and other receivables 19,879 8,371 11,508
Cash and cash equivalents 427,256 405,327 21,929
Current tax asset 17 590 (573)
------------ ------------- ------------
447,152 414,288 32,864
------------ ------------- ------------
Total assets 3,754,851 3,675,258 78,593
------------ ------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 13,103 8,805 4,298
Deferred income 18,600 7,345 11,255
Borrowings 30,597 27,441 3,156
Provisions 150 - 150
Deferred consideration 341 - 341
62,791 43,591 19,200
------------ ------------- ------------
Non-current liabilities
Borrowings 58,800 45,951 12,849
Provisions 102 - 102
Deferred consideration 261 - 261
Non-participating investment
contract liabilities 3,586,716 3,586,716 -
3,645,879 3,632,667 13,212
------------ ------------- ------------
Total liabilities 3,708,670 3,675,258 32,412
------------ ------------- ------------
Net assets 46,181 - 46,181
------------ ------------- ------------
Equity attributable to owners
of the parent
Issued capital 269 - 269
Share premium 33,451 - 33,451
Equity share based payments 946 - 946
Treasury shares (748) - (748)
Retained earnings 12,251 - 12,251
------------ ------------- ------------
46,169 - 46,169
Non-controlling interest 12 - 12
Total equity 46,181 - 46,181
------------ ------------- ------------
9 Illustrative condensed consolidated statement of cash flows for the six month period ended 30 June 2018 split between insurance policy holders and the Group's shareholders
GBP'000 GBP'000 GBP'000
Group Total Policyholder Shareholder
Cash flows from operating
activities
Profit before tax 4,778 - 4,778
Adjustments for:
Depreciation 300 - 300
Amortisation and impairments 706 - 706
Interest expense 226 - 226
Share based payment expense 215 - 215
Fair value gains on financial
investments (24,728) (24,728) -
Additions of financial investments (246,430) (246,430) -
Disposals of financial investments 300,841 300,841 -
Fair value gains on investment
properties (34,015) (34,015) -
Increase in liability for investment
contracts 24,792 24,792 -
Changes in working capital:
Increase in trade and other
receivables (3,367) (499) (2,868)
Decrease in trade and other payables (5,794) (4,653) (1,141)
Taxes paid (625) - (625)
Net cash flows from operating
activities 16,899 15,308 1,591
------------- -------------- -------------
Cash flows from investing
activities
Purchase of intangible
assets (23) - (23)
Purchase of property, plant & equipment (77,768) (77,486) (282)
Receipts from sale of property,
plant & equipment 58,401 58,401 -
Purchase of treasury shares (498) - (498)
Net cash flows from acquisitions (193) - (193)
Net cash flows from investing
activities (20,081) (19,085) (996)
------------- -------------- -------------
Cash flows from financing activities
Equity dividends paid (2,557) - (2,557)
Net decrease in borrowings (4,651) (3,072) (1,579)
Interest paid (203) - (203)
Net cash flows from financing activities (7,411) (3,072) (4,339)
------------- -------------- -------------
Net decrease in cash and cash equivalents (10,593) (6,849) (3,744)
------------- -------------- -------------
Cash and cash equivalents at the
beginning of the period 437,849 412,176 25,673
============= ============== =============
Cash and cash equivalents at the
end of the period 427,256 405,327 21,929
============= ============== =============
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR DELFBVKFLBBD
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