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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Integrafin Holdings Plc | LSE:IHP | London | Ordinary Share | GB00BD45SH49 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-3.00 | -0.98% | 303.50 | 303.50 | 304.50 | 308.00 | 301.00 | 301.00 | 129,942 | 10:48:54 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Investment Advice | 134.9M | 49.9M | 0.1506 | 20.25 | 1.01B |
TIDMIHP
RNS Number : 4888O
IntegraFin Holdings plc
18 May 2018
IntegraFin Holdings plc - Interim Results for the Six Months Ended 31 March 2018
IntegraFin Holdings plc was admitted to the London Stock Exchange on 2 March 2018, and is pleased to report its Interim Results for the six months to 31 March 2018 as a listed company.
Highlights
-- Funds under direction GBP29.75bn -- Gross inflows of GBP3bn in the first half of the year
Ian Taylor, Chief Executive Officer, commented:
"Following a successful IPO, we are pleased to announce a pleasing set of results for the first half of the year. Despite the backdrop of stock market volatility, Transact achieved its highest ever H1 inflows.
Given our differentiated premium offering and the quality of the service we offer to advisers and their clients, we remain confident in our ability to sustain growth as we move into the second half of the year."
Financial Highlights
Six months ended Six months ended Year ended 30 31 March 2018 31 March 2017 September 2017 GBPm GBPm GBPm Fee generating funds under direction 29,753 25,548 27,927 Revenue 44.6 38.7 80.2 Profit before tax 18.7 17.3 37.0 Basic and diluted earnings per share 4.4p 4.2p 9.0p Adjusted operating profit 21.2 17.3 37.5 Adjusted operating profit margin 48% 45% 47% Adjusted basic and diluted earnings per share 5.2p 4.2p 9.2p
Contacts
Media
Lansons +44 (0)7979 692287, or +44 (0)20 7490 8828
Tony Langham
Maddy Morgan-Williams
Eva Murphy
Investors
Mark Mochalski +44 (0)20 7608 5339
Analyst Presentation
IntegraFin Holdings plc will be hosting an analyst presentation on 18 May 2018 following the release of these results for the half year ended 31 March 2018. Attendance is by invitation only. Slides accompanying the analyst presentation will be available on the IntegraFin Holdings plc website.
Cautionary Statement
These Interim Results have been prepared in accordance with the requirements of English Company Law and the liabilities of the Directors in connection with these Interim Results shall be subject to the limitations and restrictions provided by such law.
These Interim Results are prepared for and addressed only to the Company's shareholders as a whole and to no other person. The Company, its Directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom these Interim Results are shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed.
These Interim Results contain forward looking statements, which are unavoidably subject to risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. It is believed that the expectations set out in these forward looking statements are reasonable but they may be affected by a wide range of variables which could cause future outcomes to differ from those foreseen. All statements in these Interim Results are based upon information known to the Company at the date of this report. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise.
Operating and Financial Review
The first six months of financial year 2018 saw good levels of client inflows onto Transact, despite market volatility in the second half of the period. Growth in Funds Under Direction (FUD) was affected by this volatility in the three months to 31 March 2018, but still ended the interim period some GBP1.8bn higher than at 2017 financial year end.
FUD, inflows and outflows
Six months Six months Year ended ended 31 March ended 31 March 30 September 2018 2017 2017 GBPm GBPm GBPm Opening fee generating FUD 27,927 22,686 22,686 Inflows 3,007 2,470 5,310 Outflows (840) (774) (1,647) ------------------------ ---------------- ---------------- -------------- Net flows 2,167 1,696 3,663 Market movements (319) 1,093 1,425 Other movements(1) (22) 73 153 ------------------------ ---------------- ---------------- -------------- Closing fee generating FUD 29,753 25,548 27,927 Other FUD(2) 0 1,657 1 Total closing FUD 29,753 27,205 27,928
(1) Other movements includes dividends, interest, fees and tax charges and rebates.
(2) FUD held historically for a single private client, for which the only charge was a nominal fee for custody.
Gross inflows for the six months to 31 March 2018 increased by GBP537m or 21.7% from the six months to 31 March 2017. Gross inflows for the first half of financial year 2018 are the highest since the platform's inception. Gross outflows grew by 8.5%. Lower outflow growth than inflow growth led to an increase in net flows of GBP471m (27.8%).
Despite significantly less favourable market conditions in the second quarter, FUD continued to grow, ending the reporting period 6.5% higher than at the 2017 financial year end.
Financial performance
Six months ended Six months ended Year ended 30 31 March 2018 31 March 2017 September 2017 GBPm GBPm GBPm Revenue 44.6 38.7 80.2 Cost of sales (0.4) (0.2) (0.6) -------------------- ----------------- ----------------- ---------------- Gross profit 44.2 38.5 79.6 Operating expenses (25.7) (21.3) (42.8) Operating profit attributable to shareholder returns 18.5 17.2 36.8 Interest income 0.2 0.1 0.2 -------------------- ----------------- ----------------- ---------------- Profit before tax attributable to shareholder returns 18.7 17.3 37.0 Tax on ordinary shareholder only activities (4.1) (3.3) (7.1) -------------------- ----------------- ----------------- ---------------- Profit after tax 14.6 13.9 29.9
Total gross profit in the six months to 31 March 2018 increased by GBP5.7m, or 14.8%, from the same period in financial year 2017. This growth was driven by the increase in value of FUD due to strong inflows in the period and an increase in the number of tax wrappers.
Components of revenue
Six months ended Six months ended Year ended 30 31 March 2018 31 March 2017 September 2017 GBPm GBPm GBPm Annual commission income 38.8 33.5 69.5 Wrapper fee income 3.9 3.5 7.3 Other income 1.9 1.7 3.4 -------------------- ----------------- ----------------- ---------------- Total revenue 44.6 38.7 80.2
Revenue comprises three elements. Of these, annual commission income and wrapper fee income constitute the recurring revenue. Other income includes "buy commission" and "dealing income".
Annual commission income increased by GBP5.3m, or 15.8%, in the period versus the same period in the prior financial year. This growth was due to increased value of FUD arising from strong inflows and, in the first quarter, market growth. This increase in annual commission was achieved even after a planned reduction in the annual commission rate effective from 1 April 2017.
Wrapper fee income increased by GBP0.4m (11.4%) in the 2018 period. This was due to an increase in the number of both new and existing clients on the platform with open tax wrappers. This has been offset by wrappers being closed.
These recurring revenue streams constituted 95.7% of total fee income in the six months to 31 March 2018.
The main constituent of other income is buy commission, which accounts for GBP1.7m (89.5%) of other income in the 2018 six month period, and GBP1.5m (88.2%) in the 2017 six month period.
Operating Expenses
Six months ended Six months ended Year ended 30 31 March 2018 31 March 2017 September 2017 GBPm GBPm GBPm Staff costs 17.2 15.2 30.5 Occupancy 1.6 1.8 3.5 Regulatory and professional fees 4.5 2.2 4.5 Other costs 2.1 1.8 3.7 ------------------- ----------------- ----------------- ---------------- Total expenses 25.4 21.0 42.2 Depreciation and amortisation 0.3 0.3 0.6 ------------------- ----------------- ----------------- ---------------- Total operating expenses 25.7 21.3 42.8
Total operating expenses increased by GBP4.4m (21.0%) in the six months to 31 March 2018, compared with the same period in the prior financial year. This increase arose predominantly from professional fees and additional staff costs associated with the listing of IntegraFin Holdings plc (IHP) on the London Stock Exchange on 2 March 2018. Additionally there was an increase in client servicing staff numbers in the period to 31 March 2018.
Staff costs increased by GBP2m, or 13.2%, in the six months to 31 March 2018, compared with the six months to 31 March 2017. This is in line with staff numbers increasing to 507 from 451, an increase of 12.4%. The main area of people growth was in the area that provides service to advisers and clients and reflects the increase in business volumes and the Group's commitment to maintaining premium service. There were some increases in governance staffing ahead of the listing.
The increase in regulatory and professional fees of GBP2.3m, or 104.5%, in the six months to 31 March 2018 compared with the six months to 31 March 2017 was mostly due to the increase of GBP2.2m in professional fees from GBP1.4m to GBP3.6m across the comparative periods. The increase is attributable to non-recurring IPO expenses which totalled GBP4.0m across all periods.
Profit Before Tax Attributable to Shareholder Returns
Profit before tax increased by GBP1.4m, or 8.1%, comparing the six months to 31 March 2018 with the six months to 31 March 2017. This growth was despite the IPO costs included in the financial year 2018 period and reflects strong revenue growth and general control of expenses.
Six months ended Six months ended 31 March 2018 31 March 2017 GBPm GBPm Operating profit attributable to shareholder returns 18.5 17.2 IPO adjustments 2.9 0.4 Other adjustments (0.2) (0.3) ---------------------------------------- ----------------- ----------------- Adjusted operating profit attributable to shareholder returns 21.2 17.3
The operating margin was 41.5% in the six months to March 2018. Allowing for IPO one off costs of GBP0.4m in the six months to March 2017 and GBP2.9m in the six months to March 2018, offset by other adjustments in both periods, the adjusted operating margin increased from 44.7% in the six months to March 2017, to 47.5% in the six months to March 2018.
Dividends
During the six month period to 31 March 2018 the Company paid an interim dividend of GBP19.4m and a special dividend of GBP11.4m to shareholders. This compares with an interim dividend of GBP13.5m in the six month period to 31 March 2017.
Earnings Per Share
Six months ended Six months ended 31 March 2018 31 March 2017 Profit after tax for the period GBP14.6m GBP13.9m Number of shares in issue 331.3m 331.3m(1) Earnings per share - basic and diluted 4.4p 4.2p Adjusted profit after tax for GBP17.3m GBP14.0m the period Number of shares in issue 331.3m 331.3m(1) Adjusted earnings per share - basic and diluted 5.2p 4.2p
(1 Shares in issue restated for financial year 2017 periods to reflect number of shares in issue following the IHP listing.)
Earnings per share has grown by 4.8% comparing the six months to 31 March 2018 with the six months to 31 March 2017, and adjusted earnings per share has grown by 23.8%.
Principal Risks and Uncertainties
The principal risks and uncertainties which affect the Group are those detailed on Pages 24 to 26 of the Group's Annual Report and Financial Statements for the year ended 30 September 2017. The principal risks and uncertainties remain unchanged from year end and are not expected to change for the remainder of the financial year. The key risks and uncertainties are listed below.
Financial risks:
-- Market risk - impact of changes in the following on the value of client Portfolios, which can affect future charges and expenses: equity, property market values, currency exchange rates, credit spreads, interest rates and inflation;
-- Liquidity risk - the Group not having sufficient financial resources to meet its obligations;
-- Outflow risk - loss of future profits due to unexpectedly high client outflows; -- Expense risk - impact of expenses rising faster than expected.
Non-financial risks:
-- Regulatory risk - impact of new regulatory requirements on the Group's business model, or the Group failing to comply with regulations;
-- Operational risk - risk of loss from inadequate or failed internal processes, people, systems, or external events;
-- Competition risk - risk of competitor activity reducing inflows, and increasing outflows;
-- Geopolitical risk - changes in the political landscape disrupting the business, or requiring development spending;
-- Reputational risk - risk of clients no longer wishing do business with the Group due to a poor perception of Transact service in the market place.
Directors' Responsibility Statement
The Directors confirm to the best of their knowledge:
-- The unaudited condensed consolidated set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU, and gives a true and fair view of the assets, liabilities, financial position, and profit and loss of the Group;
-- The interim management report includes a fair review of the information required by sections 4.2.7R and 4.2.8R of the Disclosure and Transparency Rules of the UK Financial Conduct Authority; and
-- The condensed financial statements have been prepared in accordance with ASB's 2007 statement half yearly reports.
By Order of the Board
David Johnson
Company Secretary
Registered Office
29 Clement's Lane
London
EC4N 7AE
17 May 2018
Independent Review Report to IntegraFin Holdings plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2018 which comprises the condensed consolidated profit and loss and other comprehensive income, condensed consolidated statement of financial position, condensed consolidated statement of cash flows and condensed consolidated statement of changes in shareholder's equity; and the related notes.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and has been approved by the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting its responsibilities in respect of half-yearly financial reporting in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as adopted by the European Union, and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
BDO LLP
Chartered Accountants
London
United Kingdom
Date
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Interim Consolidated Profit and Loss and Other Comprehensive Income
Unreviewed Six months Six months Note to 31 March to 31 March 2018 2017 GBP'000 GBP'000 Revenue Fee income 4 44,596 38,743 Cost of sales (441) (254) --------------------------------------- ------- ------------- ------------- Gross profit 44,155 38,489 Administrative expenses (25,685) (21,314) Net income / (expense) attributable to policyholder returns (5,744) 7,406 Operating profit 12,726 24,581 --------------------------------------- ------- ------------- ------------- Operating profit/(loss) attributable to policyholder returns (5,744) 7,406 Operating profit attributable to shareholder returns 18,470 17,176 Interest income 152 86 Profit on ordinary activities before taxation 12,878 24,668 --------------------------------------- ------- ------------- ------------- Profit/(loss) on ordinary activities before taxation attributable to policyholder returns (5,744) 7,406 Profit on ordinary activities before taxation attributable to shareholder returns 18,622 17,262 Policyholder tax 5,807 (7,394) Tax on profit on ordinary activities 6 (4,088) (3,345) Profit after tax 14,596 13,928 Other comprehensive income Exchange gains/(losses) arising on translation of foreign operations (76) 49 Total other comprehensive income for the period (76) 49 Profit for the period 14,520 13,976 --------------------------------------- ------- ------------- ------------- Earnings per share Ordinary shares - basic and diluted 5 4.4p 4.2p
All activities of the Group are classed as continuing.
Interim Consolidated Statement of Financial Position
Restated 31 March 30 September Note 2018 2017 GBP'000 GBP'000 Non-current assets Loans and receivables 3,698 1,873 Intangible assets 12,976 12,986 Property, plant and equipment 1,860 1,858 Deferred acquisition costs 42,394 38,295 Investments and cash held for the benefit of policyholders 12,877,070 11,947,652 -------------------------------------- ----- ----------- -------------- 12,937,998 12,002,664 Current assets Financial assets at fair value through profit or loss 6,178 8,895 Other prepayments and accrued income 10,516 10,252 Trade and other receivables 2,780 1,456 Cash and cash equivalents 97,205 105,829 -------------------------------------- ----- ----------- -------------- 116,680 126,432 Current liabilities Trade and other payables 18,956 15,208 Current tax liabilities 4,032 2,803 -------------------------------------- ----- ----------- -------------- 22,987 18,011 Non-current liabilities Provisions for liabilities 19,059 11,831 Deferred income liability 42,394 38,295 Liabilities for linked investment contracts 12,877,070 11,947,652 Deferred tax liabilities 6,896 10,781 -------------------------------------- ----- ----------- -------------- 12,945,418 12,008,559 Net assets 86,273 102,526 -------------------------------------- ----- ----------- -------------- Capital and reserves Called up equity share capital 7 3,313 57 Capital redemption reserve 2 2 Share-based payment reserve 308 308 Foreign exchange reserve (34) 42 Other non-distributable reserves 8 5,722 5,722 Non-distributable insurance reserves 501 501 Profit or loss account 76,460 95,894 -------------------------------------- ----- ----------- -------------- Total equity 86,273 102,526 -------------------------------------- ----- ----------- --------------
These interim financial statements were approved by the Board of Directors on 17 May 2018 and are signed on their behalf by:
Ian Taylor, Director
Company Registration Number: 08860879
Interim Consolidated Statement of Cash Flows
Unreviewed Six months Six months to 31 March to 31 March 2018 2017 GBP'000 GBP'000 Cash flows from operating activities Profit before tax 12,878 24,667 Adjustments for: Amortisation and depreciation 300 288 Interest (152) (86) Increase in loans and receivables (3,414) (359) Increase in payables 3,748 3,456 Decrease in current asset investments 2,717 37 Increase in provisions 3,343 1,941 Cash generated from operations 19,419 29,944 Income taxes (paid)/received 2,947 (10,592) Net cash flows from operating activities 22,366 19,352 Investing activities Acquisition of tangible assets (291) (340) Interest received 152 86 Net cash used in investing activities (140) (254) Financing activities Equity dividends paid (30,780) (13,521) ---------------------------------------- ------------- ------------- Net cash used in financing activities (30,780) (13,521) Net increase/(decrease) in cash and cash equivalents (8,554) 5,577 Cash and cash equivalents at beginning of period 105,829 90,571 Exchange gains/(losses) on cash and cash equivalents (70) 49 ---------------------------------------- ------------- ------------- Cash and cash equivalents at end of period 97,205 96,196
Interim Consolidated Statement of Changes in Equity
Restated Share Non-distrib-utable Other based insurance Non-distrib-utable Share Other payment reserves reserves Retained Total capital reserves reserve earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 --------- --------- --------- ------------------- ------------------- --------- --------- Balance at 1 October 2016 57 34 308 501 5,722 79,622 86,244 Comprehensive income for the year: Profit for the year - - - - - 13,928 13,928 Other comprehensive income - 49 - - - - 49 Other movement - - - - - (96) (96) --------- --------- --------- ------------------- ------------------- --------- --------- Total comprehensive income for the year - 49 - - - 13,832 13,881 Distributions to owners: Dividends - - - - - (13,521) (13,521) --------- --------- --------- ------------------- ------------------- --------- --------- Total distributions to owners - - - - - (13,521) (13,521) --------- --------- --------- ------------------- ------------------- --------- --------- Balance at 31 March 2017 57 83 308 501 5,722 79,933 86,604 --------- --------- --------- ------------------- ------------------- --------- --------- Balance at 1 October 2017 57 44 308 501 5,722 95,894 102,526 Comprehensive income for the year: Profit for the year - - - - - 14,596 14,596 Other comprehensive income - (76) - - - - (76) Other movement - - - - - 6 6 --------- --------- --------- ------------------- ------------------- --------- --------- Total comprehensive income for the year - (76) - - - 14,602 14,526 Distributions to owners: Issue of share capital 3,256 (3,256) - Dividends - - - - - (30,780) (30,780) --------- --------- --------- ------------------- ------------------- --------- --------- Total distributions to owners 3,256 - - - - (34,036) (30,780) --------- --------- --------- ------------------- ------------------- --------- --------- Balance at 31 March 2018 3,313 (32) 308 501 5,722 76,460 86,273 --------- --------- --------- ------------------- ------------------- --------- ---------
Notes to the Financial Statements
1. Basis of preparation
The consolidated interim financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, and in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting, and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority (FCA).
The financial information contained in these interim financial statements does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The information has been reviewed by the company's auditor, BDO LLP, and their report is presented on page 7-8.
The same accounting policies, methods of calculation and presentation have been followed in the preparation of the interim financial statements for the six months to 31 March 2018 as were applied in the Audited Annual Financial Statements for the year ended 30 September 2017.
The financial statements have been prepared on a going concern basis following an assessment by the Directors.
Principal risks and uncertainties
The Group's principal risks and uncertainties have not changed from year end, and are listed on page 5.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries.
Future standards, amendments to standards, and interpretations not early-adopted in the 2018 consolidated interim statements
A full impact assessment of IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers, and IFRS 17 Insurance Contracts was conducted at financial year 2017 year end. None of the standards was found to have a material impact on the Group, and this position has not changed.
An initial assessment of the impact of IFRS 16 Leases was conducted at financial year 2017 year end, which indicated that whilst there will be a material adjustment to gross assets and liabilities as a result of bringing leased assets on balance sheet, there is unlikely to be a material net impact at Group level. This position has not changed.
2. Critical accounting estimates and judgements
The preparation of interim consolidated financial statements in compliance with IAS 34 requires the use of certain critical accounting estimates. There have been no material revisions to the Group's critical accounting estimates and judgements methodology from year ending 30 September 2017.
3. Financial instruments
Financial assets and liabilities have been classified into categories that determine their basis of measurement and, for items measured at fair value, whether changes in fair value are recognised in the profit and loss and other comprehensive income statement. The following tables show the carrying values of assets and liabilities for each of these categories.
Financial assets:
Fair value through Loans and Receivables profit or loss 31 Mar 30 Sep 31 Mar 30 Sep 2018 2017 2018 2017 GBP'000 GBP'000 GBP'000 GBP'000 Cash and cash equivalents - - 97,205 105,829 Listed shares and securities 95 83 - - Loans and receivables - - 3,698 1,873 Investments in quoted debt instruments 6,083 8,812 - - Accrued income - - 8,673 7,951 Trade and other receivables - - 2,780 1,456 Investments and cash held for the policyholders 12,877,070 11,947,652 - - Total financial assets 12,883,248 11,956,547 112,357 117,109
Financial liabilities:
Fair value through Amortised cost profit or loss 31 Mar 30 Sep 31 Mar 30 Sep 2018 2017 2018 2017 GBP'000 GBP'000 GBP'000 GBP'000 Trade and other payables - - 12,299 7,524 Accruals - - 5,538 6,454 Liabilities for linked investments contracts 12,877,070 11,947,652 - - ----------- ----------- -------- -------- Total financial liabilities 12,877,070 11,947,652 23,090 18,010
Financial Instruments - Fair Value Hierarchy
The following table shows the Group's assets measured at fair value and split into the three levels described below:
Level 1: quoted prices (unadjusted) in active markets for identical assets;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset that are not based on observable market data (unobservable inputs).
At 31 March 2018 Level 1 Level 2 Level 3 Total GBP'000 GBP'000 GBP'000 GBP'000 Investments and assets held for the benefit of policyholders * Policyholder cash 1,124,997 - - 1,124,997 * Investments and securities 336,312 102,898 1,019 440,228 * Bonds and other fixed-income securities 11,892 1,431 27 13,350 * Holdings in collective investment schemes 11,153,732 142,269 2,493 11,298,495 ----------------- -------------- -------------- ----------------- 12,626,933 246,598 3,539 12,877,070 Other investments 6,178 - - 6,178 ----------------- -------------- -------------- ----------------- Total 12,633,111 246,598 3,539 12,883,248 ----------------- -------------- -------------- ----------------- At 30 September Level 1 Level 2 Level 3 Total 2017 GBP'000 GBP'000 GBP'000 GBP'000 Investments and assets held for the benefit of policyholders * Policyholder cash 1,091,744 - - 1,091,744 * Investments and securities 351,308 94,521 1,541 447,370 * Bonds and other fixed-income securities 12,378 399 5 12,782 * Holdings in collective investment schemes 10,260,975 132,113 2,668 10,395,756 ----------------- -------------- -------------- ----------------- 11,716,405 227,033 4,214 11,947,652 Other investments 8,895 - - 8,895 ----------------- -------------- -------------- ----------------- Total 11,725,300 227,033 4,214 11,956,547 ----------------- -------------- -------------- -----------------
Level 1 valuation methodology
Financial assets included in Level 1 are measured at fair value using quoted mid prices that are available at the reporting date and are traded in active markets. These financial assets are mainly collective investment schemes and listed equity instruments.
Level 2 and Level 3 valuation methodology
The Group regularly reviews whether a market is active, based on available market data and the specific circumstances of each market. Where the Group assesses that a market is not active, then it applies one or more valuation methodologies to the specific financial asset. These valuation methodologies use quoted market prices where available, and may in certain circumstances require the Group to exercise judgement to determine fair value.
Financial assets included in Level 2 are measured at fair value using observable mid prices traded in markets that have been assessed as not active enough to be included in Level 1.
Otherwise, financial assets are included in Level 3. These are assets where one or more inputs to the valuation methodology are not based on observable market data.
Level 3 sensitivity to changes in unobservable measurements
For financial assets assessed as Level 3, based on its review of the prices used, the Company believes that any change to the unobservable inputs used to measure fair value would not result in a significantly higher or lower fair value measurement at year end, and therefore would not have a material impact on its reported results.
Changes to valuation methodology
There have been no changes in valuation methodology since year end.
Transfers between Levels
There have been no material changes between Levels since year end.
4. Segmental reporting
The revenue and profit before tax are attributable to activities carried out in the UK and Isle of Man.
The Group has three classes of business as follows:
- provision of investment administration services - transaction of ordinary long term insurance and underwriting life assurance - provision of consultancy services.
Analysis by class of business is given below:
Six months Six months to to 31 March 31 March 2017 2018 GBP'000 GBP'000 Revenue Investment administration services 23,997 21,364 Insurance and life assurance business 20,599 17,379 44,596 38,743 Profit before tax Investment administration services 8,078 8,159 Insurance and life assurance business 4,152 16,219 Consultancy services 648 290 ------------- --------------- 12,878 24,668 As at 31 March As at 30 September 2018 2017 GBP'000 GBP'000 Net assets Investment administration services 38,888 51,176 Insurance and life assurance business 46,045 50,397 Consultancy services 1,340 953 -------------------- ------------------------ 86,273 102,526
The figures above comprise the results of the companies that fall directly into each segment, as well as a proportion of the results from the other Group companies that only provide services to the revenue-generating companies. This therefore has no effect on revenue, but has an effect on the profit before tax and net assets figures.
5. Earnings per share
Six months ended Six months ended 31 March 2018 31 March 2017 Profit Profit for the year and earnings GBP14.6m GBP13.9m used in basic and diluted earnings per share Number of shares Number of shares used in basic and diluted earnings per share 331.3m 331.3m
On 2 March 2018, as part of the IntegraFin Holdings plc IPO process, a bonus share issue occurred resulting in the numbers of shares in issue increasing from 1,137,278 to 331,322,014. The nominal value of each share was also reduced through the bonus share issue process, from 0.05p to 0.01p. The calculation of earnings per share for the comparative period presented has been adjusted retrospectively to reflect the new share structure.
Earnings per share is calculated based on the share capital of IntegraFin Holdings plc and the earnings of the consolidated Group.
6. Tax on profit on ordinary activities
Tax is charged at 22% for the six month period ended 31 March 2018 (31 March 2017: 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. The effective tax rate reflects entities in the Group operating in non-UK tax jurisdictions, and includes the effect of IPO costs not deductible for tax purposes.
7. Called up share capital - Company and Group
31 Mar 30 Sep 31 Mar 30 Sep 2018 2017 2018 2017 Allotted, called up and fully Number Number GBP'000 GBP'000 paid: Ordinary shares of GBP0.01 each 331,322,014 - 3,313 Ordinary Class A shares of GBP0.05 each 417,868 21 Ordinary Class B shares of GBP0.05 each 357,000 18 Ordinary Class C shares of GBP0.05 each 332,410 17 Ordinary Class D shares of GBP0.05 each 30,000 1 ------------------------------- ------------ ---------- -------- -------- 331,322,014 1,137,278 3,313 57
Immediately prior to Admission to the London Stock Exchange, the share capital of the Company was increased from GBP56,863.90 to GBP3,313,220.14 by virtue of a bonus issue of a further: 122,017,456 A Ordinary Shares of 0.01p each; 102,244,000 B Ordinary Shares of 0.01p each; 97,063,720 C Ordinary Shares of 0.01p each; and, 6,859,560 D Ordinary Shares of 0.01p each.
Immediately prior to Admission each A, B, C and D share was then re-designated into an Ordinary Share of 0.01p each.
8. Other non-distributable reserves
Restated 31 March 30 September 2018 2017 GBP'000 GBP'000 Other non-distributable reserves 5,722 5,722
The share premium account per the Audited Annual Financial Statements for the year ended 30 September 2017 has been reclassified as other non-distributable reserves. The share premium is held by one of the Company's subsidiaries, Integrated Financial Arrangements Limited, so it is more appropriate to classify this within other reserves on a Group level.
9. Related parties
There were no material changes to the related party transactions during the period.
10. Events after the reporting date
There are no events subsequent to the year-end that require disclosure in, or amendment to the financial statements.
11. Dividends
During the six month period to 31 March 2018 the Company paid an interim dividend of GBP19,418,436 (six months to 31 March 2017: GBP13,527,336) and a special dividend of GBP11,372,780 (six months to 31 March 2017: nil) to shareholders.
DIRECTORS, COMPANY DETAILS, ADVISERS
Executive Directors
Ian Taylor
Michael Howard
Alexander Scott
Non-Executive Directors
Christopher Munro
Patrick Snowball (appointed 1 October 2017)
Neil Holden
Company Secretary
David Johnson
Independent Auditors
BDO LLP London
Solicitors
Eversheds Sutherland, London
Principal Bankers
NatWest
Registrars
Equiniti
Registered Office
29 Clement's Lane, London, EC4N 7AE
Website
www.integrafin.co.uk
Company number
8860879
IntegraFin Holdings plc, 29 Clement's Lane, London, EC4N 7AE Tel: (020) 7608 4900 Fax: (020) 7608 5300
(Registered office: as above; Registered in England and Wales under number: 8860879)
The holding company of the Integrated Financial Arrangements Ltd group of companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFIRESIDLIT
(END) Dow Jones Newswires
May 18, 2018 02:00 ET (06:00 GMT)
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