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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Premier Asset Management Group Plc | LSE:PAM | London | Ordinary Share | GB00BZB2KR63 | ORD 0.02P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 183.50 | 180.00 | 187.00 | 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
TIDMPMI
RNS Number : 6872N
Premier Miton Group PLC
22 May 2020
PREMIER MITON GROUP PLC
HALF YEAR RESULTS FOR THE SIX MONTHSED 31 MARCH 2020
Premier Miton Group plc ('Premier Miton', 'Company' or 'Group'), the AIM quoted fund management group, today announces its half year results for the six months ended 31 March 2020 (the 'Period').
Highlights
-- GBP9,145 million closing AuM versus GBP6,793 million at 31 March 2019 -- GBP9,925 million closing AuM as at 30 April 2020 -- Net outflows of GBP389 million in the Period -- Eight funds at Period end each with AuM greater than GBP300 million -- Adjusted profit before tax of GBP12.2 million (2019 half year: GBP9.3 million) -- Half year cash balances totalled GBP29.3 million (30 September 2019: GBP20.7 million)
Financial performance
Hot Features
Premium
Unaudited Unaudited
six months six months Audited year
to to to
31 March 31 March 30 September
2020 2019 2019
GBPm GBPm % GBPm
------------------------------- ----------- ----------- ----- -------------
Closing AuM 9,145 6,793 +34.6 6,556
Average AuM(1) 9,928 6,643 +49.4 6,695
Net revenue 33.4 24.0 +39.2 48.6
Adjusted profit before tax(2) 12.2 9.3 +31.2 19.0
Profit before tax(3) 5.3 7.2 -26.4 13.7
Total cash 29.3 15.3 +91.5 20.7
------------------------------- ----------- ----------- ----- -------------
pence pence pence
------------------------------- ----------- ----------- ----- -------------
Adjusted earnings per share(2) 7.29 7.22 +0.97 15.10
Basic earnings per share 2.35 5.30 -55.7 10.82
------------------------------- ----------- ----------- ----- -------------
Notes
(1) Average AuM is calculated on a daily basis for each product managed by the Group.
(2) Adjusted profit and adjusted earnings per share are calculated before the deduction of amortisation, exceptional items and share-based payments.
(3) There were exceptional items of GBP3.1 million during the period (30 September 2019: GBP1.2 million).
Mike O'Shea, Chief Executive of Premier Miton Group, commented:
"I am pleased to announce that we are ahead of target with the integration of our two highly regarded companies. It has been a period of considerable change and challenge but despite this, we continue to build a scalable platform for growth."
"Our people have shown substantial resilience and dedication during the recent COVID-19 pandemic. By continuing with clear implementation plans, straightforward communication and the passion of our staff we have delivered our goal of business continuity, notwithstanding the challenging circumstances we are experiencing across the globe."
"As we look forward, the business is well placed to take advantage of the broad range of investment capabilities, collegiate investment culture and the scalable operating platform we now have for the benefit of our clients and stakeholders."
SFor further information, please contact:
Premier Miton Group plc Mike O'Shea (Chief Executive Officer) 01483 306 090 Numis Securities Limited (NOMAD and Broker) Kevin Cruickshank / Charles Farquhar / Huw Jeremy 020 7260 1000 Liberum Capital Limited (Joint Broker) Richard Crawley / Jamie Richards 020 3100 2000 Smithfield Consultants (Financial PR) 020 3047 2544 / John Kiely / Andrew Wilde 07785 275665
www.premiermiton.com
About Premier Miton
Premier Miton Investors is focused on delivering good investment outcomes for investors through relevant products and active management across its range of investment strategies, which include multi-asset, equity, absolute return and fixed income. The Company had assets under management of GBP9.1 billion at 31 March 2020.
LEI Number: 213800LK2M4CLJ4H2V85
Chairman's Statement - Merger Update
This has been a period of positive corporate change for our business, coupled with significant global events. On 4 September 2019 the respective Boards of Premier Asset Management Group plc ('Premier') and Miton Group plc ('Miton') announced a recommended all-share merger via a court-sanctioned scheme of arrangement (the 'merger').
The merger became effective on 15 November 2019 with the enlarged business being named Premier Miton Group plc (the 'Group').
The bringing together of the two businesses has created a more diversified client-focused UK asset manager with stronger active management investment capabilities, enhanced intermediary distribution relationships and greater financial strength. This makes us even better positioned to serve our clients and grow as the enlarged Group has a greater footprint in the UK adviser and wealth management markets.
At the end of the half year Assets under Management ('AuM') stood at GBP9.15 billion, following an unprecedented market environment in the second quarter.
The falls and volatility in markets are challenging for any business in the asset management sector and we have taken appropriate steps to ensure the Group maintains a strong financial position whilst working to balance the requirements of all stakeholders.
The Board has declared interim dividends of 1.75p and 0.75p during the period, with an expectation to now adopt a dividend policy that targets an ordinary dividend pay-out of approximately 50 to 65% of profit after tax, adjusted for exceptional costs, share-based payments and amortisation.
Further to the merger there were a number of executive management and directorate changes. I am delighted to chair the enlarged Group. Mike O'Shea continues as the Chief Executive Officer with Piers Harrison, previously Chief Operating Officer of Miton Group plc, appointed as Chief Financial Officer.
Two Miton directors, David Barron, previously Chief Executive Officer of Miton, and Katrina Hart became Non-Executive Directors of the new Group. Neil Macpherson, Finance Director of Premier resigned as a Director and Luke Wiseman, Non-Executive Director of Premier also resigned from the Board. Robert Colthorpe and William Smith continue as Non-Executive Directors.
We now have the added challenge of COVID-19. The situation is changing rapidly but we have a clear response focused on several key areas: the health and wellbeing of our staff; playing an active role in trying to reduce the transmission of the virus in our wider community; and continuing to provide a full investment management service to our clients.
Despite these challenges, we have created a financially stronger and broader business which makes us better positioned to serve our clients through genuinely active management, both today and in the future.
On 14 May 2020, we announced the appointment of a new Non-Executive Director, Alison Fleming and the stepping down of Katrina Hart from her role as Non-Executive Director on the same date. I would like to thank Katrina for her valued contribution to the Group and her stewardship of the Miton group over the last nine years.
Lastly, I would also like to thank my past and present Directors, as well as our staff across our whole business for their hard work and commitment. We look forward to a bright future for Premier Miton.
Mike Vogel
Chairman
21 May 2020
Chief Executive's Statement
On 15 November 2019 we commenced the start of a new journey with the amalgamation of two complementary businesses and I am pleased to report that there has been good progress made on the post-merger integration. This is testament to the dedication of our teams across our newly enlarged business as we continue to deliver our goal of business continuity, despite the challenging circumstances that the COVID-19 pandemic has presented across the globe.
Our aim is to create a Group that is purposefully balanced to meet and beat the expectations of our clients, with a broader product range and greater financial strength.
Following the merger, the Group launched its brand name, Premier Miton Investors. This new personality of our business provides a framework of how we operate and was incorporated in all marketing materials, documentation, websites and advertising.
An Integration Committee, comprised of key senior individuals selected from both sides of the business, was established on day one to drive and supervise the integration process. This committee continues to manage the merger process as well as communications with our customers, clients and staff.
The potential to deliver compelling value creation was underpinned by expected recurring synergies of approximately GBP7 million per annum to be achieved three years after completion of the merger. The elements of these cost synergies, which were expected to originate from both Premier and Miton, included:
1) Rationalisation of central and head office functions - circa 20% of total synergies
Progress in the period:
-- Completed. Central and head office functions have been amalgamated.
-- Additional capacity for staff has been facilitated at the head office in London without any additional cost.
-- Rationalisation of existing office space across the Group is under way.
2) Harmonisation of operating models from alignment of third-party service providers, IT systems as well as consolidated operating functions - circa 45% of total synergies
Progress in the period:
-- On track for completion by 31 December 2020.
-- From 24 April 2020 all fund management moved to a single entity, Premier Fund Managers Limited. This represents a key milestone in the process of creating a unified product range, one investment team, one fund management company, and one consistent range of fund names.
-- As a result, the Group's high-quality investment teams covering multi-asset, bond, equity and absolute return funds are able to come together as a single team allowing for the sharing of ideas, learning and collaboration.
3) Other areas of overlap including the elimination of duplication in staff roles, whilst retaining the best of both franchises - circa 35% of total synergies
Progress in the period:
-- Duplicated staff roles have been removed.
-- The Group moved swiftly to provide clarity to all staff with clear reporting lines and responsibilities implemented across the enlarged Group.
-- Other areas of overlap are on track to be completed by 31 December 2021.
Non-recurring integration costs of GBP10 million were expected over the three-year period. At 31 March 2020 GBP3 million of exceptional costs had been incurred, see note 5 for further details.
There has been a lot of work undertaken to get us to this point, including managing the legal change of companies, amalgamation of systems such as Bloomberg, establishing a centralised dealing desk and much more besides.
Our overriding objective has been to allow the best ideas and best practices from both businesses to flourish to ensure we are in the strongest position to deliver the best outcomes for our clients.
Any merger will naturally create change which can be unsettling. However, I have been impressed with the enthusiasm, skill and good humour of the entire Premier Miton team in ensuring that our progress to date has been achieved with the minimum of disruption to our clients. I would like to say thank you to every member of the Premier Miton team for their efforts and energy in adapting to this challenge whilst at the same time dealing with the threat and restrictions that COVID-19 has placed upon society.
By continuing with clear implementation plans, straightforward communication and the passion of our staff, I am confident that we will continue to deliver on our merger plans. This will leave the business extremely well placed to capitalise on the broad range of investment capabilities, collegiate investment culture and scalable operating platform for the benefit of our clients and stakeholders.
Mike O'Shea
Chief Executive Officer
21 May 2020
Financial Review
Assets under Management ('AuM')
AuM ended the period at GBP9,145 million (2019 FY: GBP6,556 million), an increase of 39% on the opening position for the period. The increase was driven by the merger with Miton Group plc which completed on 14 November 2019 adding GBP4,701 million in AuM at that date.
The Group saw net outflows for the period of GBP389 million (2019 HY: GBP67 million net inflows). Within this total, the equity funds had net inflows of GBP116 million with the main contributor being the LF Miton European Opportunities Fund. The fixed income funds saw outflows of GBP180 million along with GBP325 million of outflows across a range of multi-asset funds in the period.
AuM and flows by asset class and fund type
Opening Closing
AuM Merger AuM
1 October 14 November Half year Market/ investment 31 March
2019 2019 net flows(1) performance(1) 2020
GBPm GBPm GBPm GBPm GBPm
-------------------- ---------- ------------ ------------- ------------------ ---------
Equity funds 1,312 3,406 116 (784) 4,050
Multi-asset funds 4,423 795 (325) (801) 4,092
Fixed income funds 576 - (180) (13) 383
Investment trusts 150 500 - (119) 531
Segregated mandates 95 - - (6) 89
-------------------- ---------- ------------ ------------- ------------------ ---------
Total 6,556 4,701 (389) (1,723) 9,145
-------------------- ---------- ------------ ------------- ------------------ ---------
(1) Includes the former Miton Group plc fund range with effect from close of business 14 November 2019
The market turbulence from the COVID-19 pandemic has created volatility in the Group's revenue base arising from the falls in underlying market valuations and the resulting AuM managed by the Group.
By 31 March 2020, the world's principal global equity indices had fallen within an approximate range of 15% to 30% from the position at 31 December 2019. Comparatively, the Group's AuM saw an aggregate reduction of 20.9% to GBP9,145 million including net outflows of GBP167 million for the three months to 31 March 2020.
Net management fees and margins
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
--------------------------------- ------------ ------------ -------------
Average AuM1 (GBPm) 9,928 6,643 6,695
--------------------------------- ------------ ------------ -------------
Net management fees2 (GBPm) 33.5 24.0 48.4
Other income (GBPm) (0.1) - 0.2
--------------------------------- ------------ ------------ -------------
Net revenues (GBPm) 33.4 24.0 48.6
--------------------------------- ------------ ------------ -------------
Net management fee margin3 (bps) 67.4 72.4 72.3
--------------------------------- ------------ ------------ -------------
1 Average AuM is calculated on a daily basis
2 Being gross management fee income less trail/renewal commission expenses and the cost of fund accounting and external ACDs for the former Miton fund range
3 Net management fee margin represents net management fees divided by the average AuM
Net management fees for the period were GBP33.5 million, an increase of 40% over the comparative period reflecting the enlarged AuM being managed by the Group as a result of the merger.
Net management fee margin reduced to 67.4bps (2019 HY: 72.4bps) reflecting the post merger contribution of the Miton product range which is reported after the deduction of associated Authorised Corporate Director ('ACD') and fund accounting fees. The audited 2019 net management fee margin for the stand alone Miton group was 60.6bps.
On 11 December 2019 the Group launched the Premier Managed Index Balanced Fund. At the period end the Group managed 46 products (30 September 2019: 29 products).
Administration expenses
Administration expenses (excluding share-based payments) for the period were GBP21.3 million (2019 HY: GBP14.8 million), representing an increase of 43%. The increase included GBP5.2 million of Miton related costs since the merger completed.
The residual increase of GBP1.3 million was driven by:
-- GBP0.4 million of additional staff costs associated with annual base salary rises coupled with employer's national insurance due on the first tranche of options that vested in the period.
-- Increased regulatory costs of GBP0.25 million due to the inclusion of the FSCS levy costs which were presented as exceptional in the comparative period. See note 5 for further detail.
-- Increased depreciation of GBP0.15 million reflecting the charge associated with the development costs of the Connect platform. Connect is a no-cost multi-asset portal enabling advisers to hold and manage their clients' investments in a range of Premier Miton Funds.
The largest component of administration expenses for both businesses, before the merger and as an enlarged Group, were staff costs. These amounted to GBP12.2 million during the period, representing 57% of total administration costs (2019 HY: 55%).
IFRS 16 'Leases'
The Group has commenced accounting for IFRS 16 from 1 October 2019 and now recognises a right-of-use ('ROU') asset and a corresponding lease liability in the balance sheet.
The nature of the expense has also changed with the recognition of a depreciation charge to unwind the ROU and an interest expense on the lease liabilities rather than a lease rental expense as in previous years.
Lease rental payments are now reflected in the cash flow statement under financing activities as and when they are paid. The Group has applied the modified retrospective approach, meaning any cumulative effect at 1 October 2019 is reflected in the retained earnings with no restatement of the comparatives.
Adjusted profit and Profit before Tax
Unaudited Unaudited Audited
six months six months 12 months
to 31 March to 31 March to 30 September
2020 2019 2019
GBPm GBPm GBPm
--------------------------- ------------ ------------ ----------------
Net revenue 33.4 24.0 48.6
Administrative expenses (21.3) (14.8) (29.6)
Adjusted profit before tax 12.2 9.3 19.0
--------------------------- ------------ ------------ ----------------
Amortisation (2.1) (0.8) (1.5)
Share-based payments (1.6) (1.0) (2.6)
Exceptional costs (3.1) (0.3) (1.2)
--------------------------- ------------ ------------ ----------------
Profit before tax 5.3 7.2 13.7
--------------------------- ------------ ------------ ----------------
Amortisation
The amortisation of intangible assets in the period increased to GBP2.1 million (2019 HY: GBP0.8 million). The increase reflects a charge of GBP1.3 million arising from the intangible assets recognised as a result of the merger. See note 8 for further detail.
Share-based payments
The share-based payments charge increased to GBP1.6 million (2019 HY: GBP1.0 million) reflecting a full six month charge for the awards issued in the previous financial year.
As at 31 March 2020 the Group's Employee Benefit Trusts ('EBTs') held 9,921,565 ordinary shares representing 6.3% of the issued ordinary share capital (2019 HY: 3,242,830).
At the period end the outstanding awards totalled 7,324,487 compared to 3,020,000 as at 31 March 2019.
The increase in outstanding awards reflects not only the awards issued in the period but also the outstanding awards in the former Miton schemes which were converted at the merger exchange ratio of 0.30186 on 14 November 2019. See note 12 for further detail.
Exceptional costs
Exceptional costs incurred in the period amounted to GBP3.1 million (2019 HY: GBP0.3 million). As detailed in the Scheme Document released on 17 September 2019, the Group anticipated annualised synergies being achieved in year three after the merger of GBP7 million.
The exceptional costs to achieve these synergies were estimated at GBP10 million. During the period exceptional merger related costs totalled GBP3.0 million. See note 5 for further detail.
COVID-19
From 16 March 2020 all employees transitioned to remote working using the Group's business continuity arrangements. No material expenditure was required for the transition to remote working. All systems are continuing to operate as planned.
While the full implications of COVID-19 on the financial performance for the year remain difficult to determine at this stage, the Group has seen a recovery in AuM since the period end.
AuM at 30 April 2020 was GBP9.9 billion with net positive inflows of GBP19 million for the month of April.
We note that there are a number of measures available to the Board to reduce the cost base of the Group and to align expenditure with a more volatile revenue base.
Cuts to certain discretionary expenditure have already been implemented and, in addition, the senior management team have elected to take a reduction in salary for a period of six months.
The Group's COVID-19 Response Committee closely monitors government advice. Our primary aims are to protect the health and safety of our staff, minimising the spread of the virus and continuing to provide investment management services to our clients.
The Directors continue to adopt the going concern basis of accounting in preparing the interim unaudited Condensed Consolidated Financial Statements as outlined in note 1.
Dividend
Dividends totalling GBP10.6 million were paid in the period (2019 HY: GBP7.2 million). See note 3 for further detail.
During the period the Board adopted a dividend policy that targets an ordinary dividend pay-out of approximately 50 to 65% of profit after tax, adjusted for exceptional costs, share-based payments and amortisation.
Due to the risks and global impact from COVID-19, and the uncertainties as to the duration and impact of the pandemic, the Board took the prudent decision to reduce the quantum of the second interim dividend to 0.75p per share payable on 29 May 2020.
For future dividends, the Group will distribute on a twice-yearly basis, moving away from the payment of quarterly interim dividends. Dividends going forward will be aligned with the Group's reporting calendar.
Balance sheet and cash management
At 31 March 2020 the cash balances of the Group totalled GBP29.3 million (2019 HY: GBP15.3 million). The Group has no debt.
In April the Group settled the variable remuneration relating to the Miton financial year ended 31 December 2019, the Group's remuneration cycles will now be aligned in accordance with the year ended 30 September 2020.
Piers Harrison
Chief Financial Officer
21 May 2020
Unaudited Condensed Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2020
Unaudited
Unaudited six months Audited
six months to to year to
31 March 31 March 30 September
2020 2019 2019
Notes GBP000 GBP000 GBP000
------------------------------------- ----- -------------- ----------- --------------
Revenue 4 38,514 26,154 52,821
Fees and commission expenses (5,117) (2,133) (4,235)
------------------------------------- ----- -------------- ----------- --------------
Net revenue 33,397 24,021 48,586
Administration expenses (21,251) (14,761) (29,617)
Share-based payment expense 12 (1,636) (1,006) (2,551)
Amortisation of intangible assets 8 (2,055) (761) (1,522)
Exceptional items 5 (3,127) (270) (1,178)
------------------------------------- ----- -------------- ----------- --------------
Operating profit 5,328 7,223 13,718
Finance revenue 17 - -
------------------------------------- ----- -------------- ----------- --------------
Profit for the period before
taxation 5,345 7,223 13,718
Taxation 6 (2,140) (1,790) (2,696)
------------------------------------- ----- -------------- ----------- --------------
Profit for the period after taxation
attributable to equity holders
of the parent 3,205 5,433 11,022
------------------------------------- ----- -------------- ----------- --------------
pence pence pence
--------------------------- ---- ----- ----- -----
Basic earnings per share 7(a) 2.35 5.30 10.82
--------------------------- ---- ----- ----- -----
Diluted earnings per share 7(a) 2.27 5.15 10.44
--------------------------- ---- ----- ----- -----
No other comprehensive income was recognised during 2020 or 2019. Therefore, the profit for the period is also the total comprehensive income.
Unaudited Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 March 2020
Employee Capital
Share Merger Benefit redemption Retained
capital reserve Trust reserve earnings Total
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------------- ----- -------- -------- -------- ----------- --------- --------
At 1 October 2019 50 - (6,944) 4,532 47,688 45,326
----------------------------------- ----- -------- -------- -------- ----------- --------- --------
Profit for the period - - - - 3,205 3,205
Issue of share capital on merger 8,11 10 94,312 - - - 94,322
Purchase of own shares held
by an EBT 12(a) - - (2,669) - - (2,669)
Own shares held by an EBT acquired
on merger 8 - - (5,178) - - (5,178)
Exercise of options - - 142 - (15) 127
Share-based payment expense 12 - - - - 1,636 1,636
Deferred tax direct to equity - - - - (4) (4)
Equity dividends paid 3 - - - - (10,589) (10,589)
----------------------------------- ----- -------- -------- -------- ----------- --------- --------
At 31 March 2020 (Unaudited
half year) 60 94,312 (14,649) 4,532 41,921 126,176 ----------------------------------- ----- -------- -------- -------- ----------- --------- -------- At 1 October 2018 50 - (4,047) 4,532 44,733 45,268 ----------------------------------- ----- -------- -------- -------- ----------- --------- -------- Profit for the period - - - - 5,433 5,433 Share-based payment expense 12 - - - - 1,006 1,006 Equity dividends paid 3 - - - - (7,179) (7,179) ----------------------------------- ----- -------- -------- -------- ----------- --------- -------- At 31 March 2019 (Unaudited half year) 50 - (4,047) 4,532 43,993 44,528 ----------------------------------- ----- -------- -------- -------- ----------- --------- -------- At 1 October 2018 50 - (4,047) 4,532 44,733 45,268 ----------------------------------- ----- -------- -------- -------- ----------- --------- -------- Profit for the year - - - - 11,022 11,022 Purchase of own shares held by an EBT - - (2,897) - - (2,897) Share-based payment expense - - - - 2,551 2,551 Equity dividends paid - - - - (10,618) (10,618) ----------------------------------- ----- -------- -------- -------- ----------- --------- -------- At 30 September 2019 (Audited) 50 - (6,944) 4,532 47,688 45,326 ----------------------------------- ----- -------- -------- -------- ----------- --------- --------
Unaudited Condensed Consolidated Statement of Financial Position
As at 31 March 2020
Unaudited Unaudited Audited
31 March 31 March 30 September
2020 2019 2019
Notes GBP000 GBP000 GBP000
--------------------------------------- ----- --------- --------- -------------
Non-current assets
Goodwill 8 71,478 15,597 15,597
Intangible assets 8 34,057 12,718 11,957
Other investments 100 - -
Property and equipment 2,683 1,069 874
Right-of-use assets 2,777 - -
Deferred tax asset 793 317 1,111
Trade and other receivables 152 - -
--------------------------------------- ----- --------- --------- -------------
112,040 29,701 29,539
--------------------------------------- ----- --------- --------- -------------
Current assets
Financial assets at fair value through
profit and loss 1,618 4,905 827
Trade and other receivables 66,969 63,922 49,038
Cash and cash equivalents 9 29,259 15,339 20,689
--------------------------------------- ----- --------- --------- -------------
97,846 84,166 70,554
--------------------------------------- ----- --------- --------- -------------
Total assets 209,886 113,867 100,093
--------------------------------------- ----- --------- --------- -------------
Current liabilities
Trade and other payables (75,945) (69,339) (54,767)
Lease liabilities (784) - -
--------------------------------------- ----- --------- --------- -------------
(76,729) (69,339) (54,767)
--------------------------------------- ----- --------- --------- -------------
Non-current liabilities
Provisions 10 (389) - -
Deferred tax liability 8 (4,104) - -
Lease liabilities (2,488) - -
--------------------------------------- ----- --------- --------- -------------
Total liabilities (83,710) (69,339) (54,767)
--------------------------------------- ----- --------- --------- -------------
Net assets 126,176 44,528 45,326
--------------------------------------- ----- --------- --------- -------------
Equity
Share capital 11 60 50 50
Merger reserve 8 94,312 - -
Own shares held by an Employee Benefit
Trust 12 (14,649) (4,047) (6,944)
Capital redemption reserve 4,532 4,532 4,532
Retained earnings 41,921 43,993 47,688
--------------------------------------- ----- --------- --------- -------------
Total equity shareholders' funds 126,176 44,528 45,326
--------------------------------------- ----- --------- --------- -------------
Unaudited Condensed Consolidated Statement of Cash Flows
For the six months ended 31 March 2020
Unaudited Unaudited
six months six months Audited
to to year to
31 March 31 March 30 September
2020 2019 2019
Notes GBP000 GBP000 GBP000
Cash flows from operating activities:
-------------------------------------------- ----- ----------- ----------- --------------
Profit after taxation 3,205 5,433 11,022
Adjustments to reconcile profit to net
cash flow from operating activities:
Tax on continuing operations 6 2,140 1,790 2,696
Finance revenue (17) - -
Interest payable on leases 34 - -
Depreciation - fixed assets 301 119 224
Depreciation - leases 327 - -
Gain on sale of financial asset at fair
value through profit and loss (13) - (19)
Loss/(gain) on revaluation of financial
assets at fair value through profit and
loss 241 7 (7)
Loss on disposal of property, plant and
equipment - - 327
Increase in employee benefit liability 1,182 - -
Purchase of plan assets (held for employee
benefit liability) (1,182) - -
Amortisation of intangible assets 8 2,055 761 1,522
Share-based payment expense 12 1,636 1,006 2,551
(Increase)/decrease in trade and other
receivables (13,866) (10,212) 4,671
Increase/(decrease) in trade and other
payables 1,419 7,084 (5,058)
Cash generated from operations (2,538) 5,988 17,929
Income tax paid (1,791) (54) (4,182)
-------------------------------------------- ----- ----------- ----------- --------------
Net cash flow from operating activities (4,329) 5,934 13,747
-------------------------------------------- ----- ----------- ----------- --------------
Cash flows from investing activities:
Interest received 17 - -
Acquisition of assets at fair value through
profit and loss (11,308) (4,218) (4,229)
Proceeds from disposal of assets at fair
value through profit and loss 10,290 217 4,338
Purchase of property and equipment (120) (189) (426)
Cash acquired on merger 8 27,296 - -
-------------------------------------------- ----- ----------- ----------- --------------
Net cash flow from investing activities 26,175 (4,190) (317)
-------------------------------------------- ----- ----------- ----------- --------------
Cash flows from financing activities:
Lease payments (145) - - Exercise of options 127 - - Purchase of owns shares held an EBT 12(a) (2,669) - (2,897) Equity dividends paid 3 (10,589) (7,179) (10,618) Net cash flow from financing activities (13,276) (7,179) (13,515) -------------------------------------------- ----- ----------- ----------- -------------- Increase/(decrease) in cash and cash equivalents 8,570 (5,435) (85) Opening cash and cash equivalents 20,689 20,774 20,774 -------------------------------------------- ----- ----------- ----------- -------------- Closing cash and cash equivalents 9 29,259 15,339 20,689 -------------------------------------------- ----- ----------- ----------- --------------
Notes to the Unaudited Condensed Consolidated Financial Statements
For the six months ended 31 March 2020
1. Basis of accounting
These interim unaudited Condensed Consolidated Financial Statements do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. They have been prepared on the basis of the accounting policies as set out in the Group's Annual Report for the year ended 30 September 2019, with the exception of IFRS 16, as discussed below.
The interim unaudited Condensed Consolidated Financial Statements to 31 March 2020 have been prepared in accordance with IAS 34 'Interim Financial Reporting' and the Listing Rules of the Financial Conduct Authority.
Premier Miton Group plc (the 'Group') is the Parent Company of a group of companies which provide a range of investment management services in the United Kingdom and Channel Islands.
The Group's 2019 Annual Report is prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union, and is available on the Premier Miton Group plc website (www.premiermiton.com).
The Group has considerable financial resources and ongoing investment management contracts. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the interim unaudited Condensed Consolidated Financial Statements. This assessment has been made after considering the impact of COVID-19 on the business. The Directors note that the Group has no external borrowings and maintains significant levels of cash reserves. The Group has conducted financial modelling at materially lower levels of AuM with the business remaining cash generative.
These interim unaudited Condensed Consolidated Financial Statements were approved and authorised for issue by the Board acting through a duly appointed committee of the Board of Directors on 21 May 2020.
The full-year accounts to 30 September 2019 were approved by the Board of Directors on 27 November 2019 and have been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006. The figures for the six months ended 31 March 2020 and the six months ended 31 March 2019 have not been audited.
IFRS 16 'Leases'
The Directors have applied the IFRS 16 modified retrospective approach with the cumulative effect of adopting IFRS 16 being recognised as an adjustment to the opening balance of retained earnings as at 1 October 2019, with no restatement of comparative information. The adoption of IFRS 16 in the six months ended 31 March 2020 resulted in an increase in depreciation of GBP326,730 and finance costs of GBP33,695. Other administration expenses decreased by GBP184,425.
2. Segmental reporting
The Group has only one business operating segment, asset management for reporting and control purposes.
IFRS 8 'Operating Segments' requires disclosures to reflect the information upon which the Group's management uses for evaluating performance and the allocation of resources. The Group is managed as a single asset management business and
as such, there are no additional operating segments to disclose. Under IFRS 8, the Group is also required to make disclosures
by geographical segments. As Group operations are solely in the UK and Channel Islands, there are no additional geographical segments to disclose.
3. Dividend
The final interim dividend for the year ended 30 September 2019 of 5.4p per share was paid on 10 January 2020 leading to a distribution of GBP7,997,698. On 28 February 2020 the first interim dividend for 2020 of 1.75p per share was paid leading to a distribution of GBP2,591,136.
The total distribution of GBP10,588,834 is reflected in the Consolidated Statement of Changes in Equity (2019 HY: GBP7,179,094).
4. Revenue
Revenue recognised in the Consolidated Statement of Comprehensive Income is analysed as follows:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
---------------- ------------ ------------ -------------
Management fees 38,591 26,110 52,624
Commissions 3 9 16
Other income (80) 35 181
---------------- ------------ ------------ -------------
Total Revenue 38,514 26,154 52,821
---------------- ------------ ------------ -------------
All revenue is derived from the United Kingdom and Channel Islands.
5. Exceptional items
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
-------------------------------------- ------------ ------------ -------------
Fund development costs 51 - -
Staff redundancy costs - 44 44
FCA FSCS levy - - 397
Connect development costs 94 226 410
Office refurbishment write-off - - 327
Merger related costs 2,091 - -
Merger employment restructuring costs 891 - -
-------------------------------------- ------------ ------------ -------------
Total exceptional items 3,127 270 1,178
-------------------------------------- ------------ ------------ -------------
Exceptional items are those items of income or expenditure that are considered significant in size and/or nature to merit separate disclosure and which are non-recurring.
Merger related costs in the period totalling GBP2,091,208 represented legal and professional fees associated with the merger with Miton Group plc of GBP1,599,536 and merger integration costs of GBP491,672.
Employment restructuring costs arising as a result of the merger totalled GBP891,103 of which GBP883,336 related to redundancy costs and GBP7,767 of associated legal costs.
FCA FSCS levy costs in the current period totalling GBP396,213 have been presented within administration expenses, of this cost,
GBP92,830 was in respect to the Miton activities. In 2019, the comparative costs were presented as exceptional as a result of rising significantly due to the increased levels of compensation paid by the FSCS and the inclusion of an amount invoiced in 2019 by the FCA but which related to the previous year.
Connect development costs relate to external consultants who have been deployed in the testing of the new Connect platform during the development stage prior to launch.
6. Taxation
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
-------------------------------------------------- ------------ ------------ -------------
Corporation tax charge 1,760 1,564 3,263
Deferred tax charge/(credit) 380 226 (567)
-------------------------------------------------- ------------ ------------ -------------
Tax charge reported in the Consolidated Statement
of Comprehensive Income 2,140 1,790 2,696
-------------------------------------------------- ------------ ------------ -------------
7. Earnings per share
Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary equity shareholders of the Parent Company by the weighted average number of ordinary shares outstanding during the period.
The weighted average of issued ordinary share capital of the Company is reduced by the weighted average number of shares held by the Group's Employee Benefit Trusts ('EBT'). Dividend waivers are in place over shares held in the Group's EBTs.
In calculating diluted earnings per share, IAS 33 'Earnings Per Share' requires that the profit is divided 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 conversion of all the dilutive potential ordinary shares into ordinary shares during the period.
(a) Reported earnings per share
Reported basic and diluted earnings per share has been calculated as follows:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
---------------------------------------------------- ------------ ------------ -------------
Profit attributable to ordinary equity shareholders
of the Parent Company for basic earnings (GBP000) 3,205 5,433 11,022
No.000 No.000 No.000
Issued ordinary shares at 1 October 105,801 105,801 105,801
Effect of own shares held by an EBT (8,517) (3,243) (3,891)
Effect of shares issued 39,297 - -
Weighted average shares in issue 136,581 102,558 101,910
---------------------------------------------------- ------------ ------------ -------------
Effect of movement in share options 4,610 2,920 3,675
---------------------------------------------------- ------------ ------------ -------------
Weighted average shares in issue - diluted 141,191 105,478 105,585
---------------------------------------------------- ------------ ------------ -------------
Basic earnings per share (pence) 2.35 5.30 10.82
Diluted earnings per share (pence) 2.27 5.15 10.44
---------------------------------------------------- ------------ ------------ -------------
(b) Adjusted earnings per share
Adjusted earnings per share is based on adjusted profit after tax, where adjusted profit is stated after charging interest but before share-based payments, amortisation and exceptional items.
Adjusted Profit for calculating adjusted earnings per share:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
--------------------------------------------------- ------------ ------------ -------------
Profit before taxation 5,345 7,223 13,718
Add back:
Share-based payment expense 1,636 1,006 2,551
Amortisation of intangible assets 2,055 761 1,522
Exceptional items 3,127 270 1,178
--------------------------------------------------- ------------ ------------ -------------
Adjusted profit before tax 12,163 9,260 18,969
--------------------------------------------------- ------------ ------------ -------------
Taxation:
Tax in the Consolidated Statement of Comprehensive
Income (2,140) (1,790) (2,696)
Tax effect of adjustments (71) (69) (886)
--------------------------------------------------- ------------ ------------ -------------
Adjusted Profit after tax for the calculation
of adjusted earnings per share 9,952 7,401 15,387
--------------------------------------------------- ------------ ------------ -------------
Adjusted earnings per share was as follows using the number of shares calculated at note 7(a):
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
pence pence pence
---------------------------- ------------ ------------ -------------
Adjusted earnings per share 7.29 7.22 15.10
Diluted adjusted earnings
per share 7.05 7.02 14.57
---------------------------- ------------ ------------ -------------
8. Goodwill and other intangible assets
Cost amortisation and net book value of intangible assets are as follows:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
Goodwill GBP000 GBP000 GBP000
----------------------------- ------------ ------------ -------------
Cost:
At 1 October 22,576 22,576 22,576
Additions 55,881 - -
----------------------------- ------------ ------------ -------------
At 31 March/30 September 78,457 22,576 22,576
----------------------------- ------------ ------------ -------------
Amortisation and impairment:
At 1 October 6,979 6,979 6,979
Amortisation during the - - -
year
----------------------------- ------------ ------------ -------------
At 31 March/30 September 6,979 6,979 6,979
----------------------------- ------------ ------------ -------------
Carrying amount:
----------------------------- ------------ ------------ -------------
At 31 March/30 September 71,478 15,597 15,597
----------------------------- ------------ ------------ -------------
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
Other intangible assets GBP000 GBP000 GBP000
------------------------- ------------ ------------ -------------
Cost:
At 1 October 56,231 56,231 56,231
Additions 24,155 - -
------------------------- ------------ ------------ -------------
At 31 March/30 September 80,386 56,231 56,231
------------------------- ------------ ------------ -------------
Accumulated amortisation
and impairment:
At 1 October 44,274 42,752 42,752
Amortisation during the
year 2,055 761 1,522
------------------------- ------------ ------------ -------------
At 31 March/30 September 46,329 43,513 44,274
------------------------- ------------ ------------ -------------
Carrying amount:
------------------------- ------------ ------------ -------------
At 31 March/30 September 34,057 12,718 11,957
------------------------- ------------ ------------ -------------
As a result of the all-share merger with Miton Group plc, which was effected by way of a scheme of arrangement, the shareholders of Miton Group plc received 0.30186 of a share in Premier Miton Group plc on 15 November 2019 satisfied through newly issued shares.
The additions to goodwill and intangible assets in the period relate solely to the acquisition of Miton Group plc.
The acquired business contributed net revenues of GBP10,699,074 and a net profit after taxation of GBP3,406,754 to the Group for the period from 15 November 2019 to 31 March 2020. The contribution to the Group's net profit is after charging GBP984,925 of exceptional restructuring costs incurred since acquisition.
At the acquisition date the consideration and net assets acquired from Miton Group plc were as follows:
14 November 2019 GBP000 ----------------------------------------------------- -------- Fair value of equity consideration 94,322 Net assets acquired: Intangible assets 24,155 Deferred tax liability on intangible assets acquired (4,104) Investments 100 Cash and cash equivalents 27,296 Property, plant and equipment 491 Trade and other receivables 5,740 Loan to the Employee Benefit Trust 5,178 Trade and other payables (19,741) Provisions (389) Right-of-use assets (net) (285) ----------------------------------------------------- -------- Net assets acquired 38,441 Goodwill 55,881 ----------------------------------------------------- --------
The fair value of the equity consideration has been calculated by reference to the number of shares issued and the share price at the completion date. Intangible assets acquired in the business combination related to the investment management agreements between Miton and the funds to which Miton was the investment manager and the value arising from the underlying client relationships.
Goodwill arising on the acquisition of Miton is mainly attributable to the skills and technical talent of Miton's workforce, expected cash flows from new customers and significant synergies which are expected to be realised from integrating the company. The Group has determined that it has a single cash generating unit ('CGU') for the purpose of assessing the carrying value of goodwill. Impairment testing is performed at least annually whereby the recoverable amount of the goodwill is analysed via the value in use method and compared to the respective carrying value. In response to the market volatility arising from COVID-19, an impairment assessment was completed during the period using materially lower levels of AuM. Due to the cash generative nature of the business, no impairment was identified at these lower levels of AuM.
9. Cash and cash equivalents
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
------------------------------------ ------------ ------------ -------------
Cash at bank and in hand 28,909 15,174 20,638
Cash held in Employee Benefit Trust 350 165 51
------------------------------------ ------------ ------------ -------------
29,259 15,339 20,689
------------------------------------ ------------ ------------ -------------
10. Provisions
GBP000
----------------------------- ------
At 1 October 2019 -
Arising on merger 389
----------------------------- ------
At 31 March 2020 (Unaudited) 389
----------------------------- ------
Current -
Non-current 389
----------------------------- ------
389
----------------------------- ------
At 1 October 2018 and 31 March 2019 (Unaudited) -
At 1 October 2018 and 30 September 2019 (Audited) -
-------------------------------------------------
Provisions primarily relate to dilapidations for the offices at 6th Floor, Paternoster House, London, and the Group's disaster recovery office in Reading. The lease on Paternoster House runs to 28 November 2023 and the provision for dilapidations on this office has been disclosed as non-current.
11. Share capital
Ordinary
shares 0.02 Deferred
Allotted, called up and fully paid: pence each shares
Number of shares Number Number
-------------------------------------------------- ------------ --------
At 1 October 2019 105,801,310 1
Issued on merger 52,111,725 -
-------------------------------------------------- ------------ --------
At 31 March 2020 (Unaudited) 157,913,035 1
-------------------------------------------------- ------------ --------
At 1 October 2018 and 31 March 2019 (Unaudited) 105,801,310 1
-------------------------------------------------- ------------ --------
At 1 October 2018 and 30 September 2019 (Audited) 105,801,310 1
-------------------------------------------------- ------------ --------
Ordinary shares Deferred
Allotted, called up and fully paid: 0.02 pence each shares Total
Value of shares GBP000 GBP000 GBP000
------------------------------------------------ ---------------- -------- -------
At 1 October 2019 21 29 50
Issued on merger 10 - 10
------------------------------------------------ ---------------- -------- -------
At 31 March 2020 (Unaudited) 31 29 60
------------------------------------------------ ---------------- -------- -------
At 1 October 2018 and 31 March 2019 (Unaudited) 21 29 50
------------------------------------------------ ---------------- -------- -------
At 1 October 2018 and 30 September 2019
(Audited) 21 29 50
------------------------------------------------ ---------------- -------- -------
On 14 November 2019 the Company completed an all-share merger with Miton Group plc. The Company issued 52,111,725 new ordinary shares on 15 November 2019 ranked pari passu in all respects with the Company's existing shares in issue.
12. Share-based payment
The total expense recognised for share-based payments in respect of employee services received during the period to 31 March 2020 was GBP1,636,455 (2019 HY: GBP1,006,289).
During the period 2,075,000 (2019 HY: 135,000) nil cost contingent share rights over ordinary shares of 0.02p in the Company were granted to nine employees (2019 HY: two). Of the total award, 150,000 (2019: nil) nil cost contingent share rights were awarded to an Executive Director. The awards will be satisfied from the Group's EBTs in accordance with the provisions of the Premier Asset Management Group plc 2016 Long-term Incentive Plan.
The share-based payment expense is calculated in accordance with the fair value of the contingent share rights on the date of grant. The price per right at the date of grant was GBP1.35 resulting in a fair value of GBP2,801,250 to be expensed over the vesting periods of three to five years.
The key features of the awards include: a three to five-year vesting term, automatic vesting at the relevant anniversary date with the delivery of the shares to the participant within 30 days of the relevant vesting date.
During the period five participants forfeited nil cost contingent share rights over 146,460 ordinary 0.02p shares in the Company.
On 9 March 2020 1,184,476 nil cost contingent share rights over ordinary shares of 0.02p in the Company were exercised, the cost of the shares held by the EBTs was reduced by GBP15,087 being the original purchase price of the shares used to satisfy the exercises.
After the period end on 15 April 2020, 2,055,000 nil cost contingent share rights over ordinary shares of 0.02p in the Company were granted to 38 employees, of the total 400,000 were awarded to an Executive Director.
(a) Employee Benefit Trusts
Premier Miton Group plc established an EBT on 25 July 2016 to purchase ordinary shares in the Company to satisfy share awards to certain employees.
Prior to the merger, Miton Group plc had an established EBT. At merger, the EBT held 15,574,517 shares in Miton Group plc, on completion of the all-share merger these shares were converted at the merger exchange ratio of 0.30186 resulting in the EBT holding 4,701,323 ordinary 0.02p shares in Premier Miton Group plc.
During the period 1,894,043 (2019 HY: nil) shares were acquired and held by the Group's EBTs at a cost of GBP2,668,525 (2019 HY: GBPnil).
At 31 March 2020 9,921,565 (2019 HY: 3,242,830) shares are held by the Group's EBTs, of which 7,324,487 (2019 HY: 3,020,000) shares relate to outstanding awards.
At 31 March 2020, the cost of the shares held by the EBTs of GBP14,648,840 (2019 HY: GBP4,047,277) has been disclosed as own shares held by an EBT in the Consolidated Statement of Changes in Equity and the Consolidated Statement of Financial Position.
(b) Legacy Miton schemes
(i) Management Equity Incentive ('MEI')
The MEI was established on 14 April 2011. Awardees have the right to purchase Company shares at a pre-agreed subscription price.
On 14 November 2019 the outstanding MEI awards totalled 7,000,000, on completion of the all-share merger these awards were converted at the merger exchange ratio of 0.30186 resulting in 2,113,020 awards over ordinary 0.02p shares in the Company.
Following the merger, the awards continue to be subject to the terms of the Miton Management Equity Incentive Plan.
During the period, one participant elected to exercise an award over 120,744 ordinary 0.02p shares in the Company. On completion of the merger, MEI participants became entitled to receive a contingent award over additional shares if certain conditions were met. Accordingly, upon exercise of the above award the Trustees released 11,411 additional shares in the Company.
During the period three participants forfeited awards over 90,558 ordinary 0.02p shares in the Company.
At 31 March 2020 there were 1,901,718 outstanding MEI awards of which 1,343,277 had vested.
(ii) Management Incentive Plan ('MIP')
The MIP was a legacy scheme created in 2011.
On 14 November 2019 the vested outstanding MIP award of 200,000 was converted at the merger exchange ratio of 0.30186 resulting in 60,372 awards over ordinary 0.02p shares in the Company, this remained outstanding as at 31 March 2020.
Following the merger, the award continues to be subject to the terms of the Miton Management Incentive Plan.
(c) Share Incentive Plan ('SIP')
On 16 January 2020 the Group established the SIP scheme. This is an HMRC-approved scheme. Participants' contributions are matched by the Company up to a maximum contribution of GBP1,800 per year. The contributions are used to acquire ordinary 0.02p shares in the Company.
The former Miton group had a SIP scheme in place for its employees which was launched in October 2014. On the effective date of the merger this scheme ceased.
13. Subsequent events post balance sheet
As at 21 May 2020 the impact of the emerging coronavirus ('COVID-19') is being kept under review by the Group. A COVID-19 Response Committee has been appointed and is charged with managing the response to this evolving risk and to implement all government advice in order to safely continue to meet the needs of clients and stakeholders.
With effect from 16 March 2020 all employees transitioned to remote working, the Group continues to provide a full investment management service to our clients and all systems are operating as planned.
The full impact of COVID-19 on the financial performance of the Group for 2020 cannot be quantified at this stage. Should the recent volatility in financial markets due to the pandemic continue then the key impact to the Group will be a decline in revenue resulting from having lower AuM. As at 30 April 2020 the Group's AuM was GBP9.9 billion.
Premier Miton Group plc continues to carefully manage its cost base and communicate regularly with employees, shareholders, clients, IFAs and intermediaries and other suppliers as events unfold. COVID-19 will be monitored in the context of the Group's risk and control framework.
Management currently assesses these events to represent non-adjusting subsequent events as at the interim reporting date of 31 March 2020.
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
MSCGZGZKGMDGGZZ
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May 22, 2020 02:00 ET (06:00 GMT)
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