INVESTOR RELATIONS

Latest Results

Final Results for the 12 months ended 31 December 2019

STM Group Plc (AIM: STM), the multi-jurisdictional financial services group, is pleased to announce its audited final results for the 12 months ended 31 December 2019.

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Financial Highlights:

 2019
(reported)
2019
(underlying)**
2018 (reported)2018
(underlying)**
Revenue£23.2m£22.9m£21.4m£20.5m
Profit before other items*£3.5m£4.2m£4.7m£4.4m
Margin15%18%22%21%
Profit before taxation ("PBT") (and exceptional bargain purchase gain)£3.9m£2.6m£4.0m£3.7m
Earnings per share5.73pN/A6.20pN/A
Cash at bank (net of borrowings)£17.2mN/A£15.6mN/A
Second interim dividend (2019) / final dividend (2018)0.75pN/A1.30pN/A
Total dividend1.50pN/A2.00pN/A

* Profit before other items is defined as revenue less operating expenses i.e. profit before taxation, finance income and costs, depreciation, amortisation, bargain purchase gain and gain on the call options

** Underlying statistics are net of certain transactions which do not form part of the regular operations of the business as further detailed in Table 2 below

Operational Highlights:

  • Redefined Purpose and Vision that sets out our roadmap for the future
  • The continued repositioning of the Group as a UK centric PLC with more UK focussed pensions and life products
  • Repositioned the Carey name to our new UK brand; "Options, for your tomorrow"
  • Entered the developing and exciting UK workplace pension solutions market via the Carey acquisition - a sector now effectively closed to new entrants
  • Implementation of new Target Operating Model allowing for clearer and more efficient reporting lines, stronger governance and control
  • Ongoing IT development to achieve greater efficiencies and enhance margins
  • Carey acquisition now operationally integrated to allow for cost benefits to materialise
  • Pipeline of acquisition opportunities, particularly in the UK
  • Launch of our new flexible annuity product as an alternative to a SIPP

Commenting on the results and prospects for STM, Alan Kentish, Chief Executive Officer, said:

"2019 has been a year of transition for the Group as we move towards a more efficient and unified business. This has meant that the 2019 numbers have included some additional investments in infrastructure under our revised Operating Model, and we saw a timing delay in the uptake of certain new business initiatives, however despite that, we delivered a statutory profit before tax of £3.9 million for the year.

"The completion of the Carey acquisition occurred in February 2019, with all operational integration now finalised giving us one solid UK hub for our SIPP and Workplace pension solutions businesses from which to further expand. This expansion will be driven organically through the relaunch of our UK products under the new brand of "Options, for your tomorrow". This growth will be complemented by selective acquisitions in the UK market.

"2020 has started with the unprecedented impact of the COVID-19 virus which has thrown the health, social and financial environments of the world into turmoil. It is likely the financial impact of this will have longer term implications on many industry sectors. The resilience of our business model will be tested, but we are confident that the nature of our annual recurring fees, which are predominantly based on a fixed quantum rather than a percentage of Assets Under Administration (‘AUA'), gives a high degree of visibility for the majority of our revenue for the foreseeable future. An assessment of our business has indicated that based on existing interest rates and current depressed financial markets only £0.4 million of our 2019 £18 million of recurring revenue is at risk with a similar consequential risk to profitability. As one would expect, our priority is to protect our colleagues and maintain our service levels to our customers; and in this regard the Board has implemented various business continuity plans to ensure that our colleagues can work productively from home. At this point in time we have not seen that these actions have added any material cost to the business."

 

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Chairman's statement

I am pleased to present our 2019 financial statements which reflect a challenging year but nevertheless one of significant progress for delivering on the future aspirations of the STM business. I have also cross referenced below the dramatic impact to world economies being caused by COVID-19 and the potential consequential impact on the STM Group.

The Board has a clear growth strategy in place which has driven a commitment of resources in strengthening and broadening our operating model. This in turn will allow for future growth of our revenue line whilst still being able to deliver on our service levels and operating margins, a key requirement for satisfying our various stakeholders.

The acquisition of Carey in February 2019 has, as intended, increased our UK footprint and given STM more depth to its UK product base. This makes us a more robust business and diversifies us away from being seen purely as a business that caters for UK expatriates. There will be specific focus during 2020 in finalising the IT and wider efficiencies gains which were implicit in the Carey acquisition case.

There continues to be a major focus on building our distribution network for the UK market, with a view that this in turn will accelerate our underlying revenue and hence profitability going forward.

I should also recognise that the Board naturally shares the disappointment of the messages in our trading update in November which resulted in revised 2019 profit expectations and a knock-on effect into our 2020 forecasts. However, we continue to strongly believe that our overall business strategy is resilient and progressive, and will bear fruit in enhancing future shareholder value.

As a board, we also believe that there remain opportunities to make strategic acquisitions to complement our existing Group companies and deliver enhanced shareholder value. The Board also recognises that the Group has significant capital tied up across its businesses and is actively investigating ways to make itself more efficient in this regard.

I would like to take this opportunity to thank the Group's Directors, executive and all our colleagues for their relentless efforts during 2019. I look forward to updating all our stakeholders as we focus on and execute our 2020 plans with real determination and skill.

Finally, I am conscious that COVID-19 pandemic continues to unfold and inflict enormous disruptions both at a personal, as well as economic level. The delay from intending to announce our results on 24 March until today, has allowed us to challenge and assess the resilience of our business model, and I am pleased to confirm that the majority of our recurring annual revenue is not sensitive to interest rates or Assets Under Administration ("AUA") and thus remains predictable for the foreseeable future.

I would like to confirm that my primary concern remains protecting the welfare of our staff, their families and our clients, whilst continuing to manage the day to day operations of the business. Bearing this in mind we have implemented a range of local and focussed contingency measures to achieve these aims as best we can.

 

Duncan Crocker
Chairman

Chief Executive's statement

Introduction

2019 has been a year of transition Group-wide, not just in our operating model but across the various companies and product areas, to create a more efficient and unified business. The acquisition of Carey Pensions, completed in February 2019, added another positive dimension.

Our new operating model now defines the accountabilities and responsibilities of the various functions within the Group and our subsidiaries, which will enable more efficient and effective ways of working. This model has given the Group additional resources in the form of a COO, Head of IT and Head of Human Resources, which in turn has helped us to structure the Group for further expansion both by acquisitions and organic growth, while further strengthening our governance and controls.

The Group delivered an overall profit before tax of £3.9 million in 2019, similar to 2018 at £4.0 million. Our profit before other items, (defined as profit before taxation, finance income and costs, depreciation, amortisation, bargain purchase gain and gain on the call options) was £3.5 million for 2019 compared to £4.7 million in 2018.

Revenue increased by almost 9% to £23.2 million (2018: £21.4 million), although underlying profit margins (before other items) have reduced from 21% in 2018 to 18% in 2019, on the back of the Group-wide investment and the development of the Workplace pensions business which, as anticipated, is yet to reach breakeven.

The SIPP market remains in a state of uncertainty with the Berkeley Burke appeal not proceeding due to lack of funding and the Carey vs Adams case of March 2018 still not having a published determination. This has driven additional costs within the market, such as rising professional indemnity insurance, as well as concerns from intermediaries in providing advice that have all created an unhelpful market backdrop.

The Carey acquisition has meant that we have now relocated our UK trading hub from Haywards Heath to Milton Keynes, which has taken some time and effort to achieve. Integration costs of bringing Carey into the Group amounted to circa £0.5 million, whilst the primary benefits will only be seen in 2020 onwards. On top of these costs, the Carey pensions group included the Corporate UK Auto-enrolment business that was still loss making at the time, and eroded £0.6 million of underlying Group profitability. As described in more detail below, this particular business is scheduled to move into profitability in 2020. On the positive side, but not forming part of operating profits, the Group was able to demonstrate a bargain purchase of £1.7 million upon acquiring the Carey businesses. 2019 concluded with the rebranding of the Carey businesses to our new UK brand, Options.

Underlying trading performance across the various subsidiaries was very much in line with management expectations. The Group saw a slight slowing down of new business volume for its ROPs and International SIPP products when compared to 2018 volumes, however attrition rates remain low when compared to the UK SIPP product. The UK focussed flexible annuity products and the re-launch of the Carey SIPP did not generate the volumes initially expected, and this appears to be down to a longer than expected timeline to conversion as opposed to the products themselves.

Following the strengthening of our IT operating model and controls, 2019 saw the initiation of a number of important IT projects that will deliver efficiencies and improved margins upon their successful conclusion during 2020 and early 2021.

As noted within the operational highlights below, the strong common theme underpinning our core business units is the significantly high percentage of recurring revenue. This predictability allows us the confidence to invest for the future knowing that such investment will provide enhanced operating margins going forward. Within the "Outlook" section below, we consider in more detail impact of the COVID-19 virus on our existing revenue stream, and our expectations for 2020 new business revenues.

Financial Review

Performance in the year

The principal key performance indicators used by the Board to assess the financial performance of the Group are as per Table 1 below.

Profitability in 2019 remained similar to that of 2018 and amounted to a reported profit before tax ("PBT") of £3.9 million (2018: £4.0 million), and profit before other items of £3.5 million (2018: £4.7 million).

Within this measure there are a number of one off non-recurring movements, and accounting adjustments as shown in Table 2 below. Some of these accounting adjustments are inevitable for an acquisitive group, and will either occur at profit before other items level or at reported PBT level. Non-recurring costs of approximately £0.6 million were incurred in relation to the application for authorisation for the workplace pension business, recruitment costs in building the enhanced infrastructure, assurance reviews over board efficiencies and the write off of some legacy issues surrounding the CTS and Spanish entities.

Underlying profit before other items has remained similar between the years, with £4.2 million in 2019 and £4.4 million in 2018. However, 2019 includes the impact of applying IFRS 16: Leases, which for 2019 reduced operating expenses by £0.7 million and increased depreciation and interest charges by this amount.

In addition, and offsetting the IFRS 16 impact, 2019 results include the underlying expected losses for Carey of £0.7 million. Adjusting for these and the IFRS 16 impact would result in a like for like underlying profit before other items for 2019 of £4.2 million demonstrating a stable and predictable business.

The underlying PBT for the year amounted to £2.6 million (2018: £3.7 million). Underlying Group revenue (defined on a consistent basis with underlying PBT and profit before other items) for 2019 has increased from £20.5 million to £22.9 million, with overall Group reported revenue of £23.3 million (2018: £21.4 million).

Pleasingly, recurring annual revenue, which is an important key performance indicator for the Board remains steady at 77% of 2019 total revenues (2018: 76%), thus a total of £18.0 million (2018: £16.3 million).

Table 1   
KPIDefinition2019 result2018 result
    
Revenue (£'000s)Income derived from the provision of services23,25121,401
Profit before other items (£'000s)Revenue less operating expenses i.e. profit before taxation, finance income and costs, depreciation, amortisation, bargain purchase gain and gain on the call options3,4754,709
Profit before other items margins (%)Profit before other items divided by revenue15%22%

Profit before tax

Profit before taxation3,9234,033
    
Underlying revenue (£'000)Revenue net of non-recurring costs and other exceptional items including bargain purchase gains and technical reserve releases that do not form part of the normal course of business as per Table 2 below.22,91120,518
Underlying profit before other items (£'000s)Profit before other items net of non-recurring costs and other exceptional items including bargain purchase gains and technical reserve releases that do not form part of the normal course of business as per Table 2 below.4,2354,421
Underlying profit before tax (£'000s)Profit before tax net of non-recurring costs and other exceptional items including bargain purchase gains and technical reserve releases that do not form part of the normal course of business as per Table 2 below.2,5653,745
Underlying profit margins (%)Underlying profit before other items divided by revenue.18%21%
    
Recurring revenue (£'000s)Revenue derived from annual management charges and/or contractual fixed fee agreements.18,02516,300
Like for like underlying profit before other items (£'000s)Underlying profit before other items adjusted for the impact of new accounting standards and acquisitions in the year of acquisition 4,2004,400
Table 2   
 RevenueProfit before other itemsProfit before tax
 2019
£000's
2018
£000's
2019
£000's
2018
£000's
2019
£000's
2018
£000's
Reported measure23,25121,4013,4754,7093,9234,033
Less: release on technical reserve(946)(583)(946)(583)(946)(583)
Add/(less): adjustment due to revenue recognition policy changes on acquisitions606*(300)606*(300)606* (300)
       
Less: bargain purchase gain on acquisition and gain on call options----(2,118)-
Add: integration and acquisition costs --461-461-
       
Add: costs of skilled person review on Gibraltar regulated entities---275-275
Add: other non-recurring costs--639320639320
Underlying measure22,91120,5184,2354,4212,5653,745

* As more fully disclosed in Note 5 an exercise was carried out following the acquisition of CAHL to align their accounting policies with the Group's which resulted in a pre-acquisition adjustment in CAHL's financial statements. This amount is not included in our consolidated reported measures but represents the revenue and profit that would have been obtained if STM Group plc had had full ownership of CAHL for the full year.

Profit before other items as a percentage of revenue in 2019 was 15% (2018: 22%) resulting in an actual figure of £3.5 million (2018: £4.7 million). The fall in margin results from specific one-off costs and infrastructure initiatives rather than an erosion of profitability at subsidiary trading levels, as further detailed above.

As detailed above, financing, depreciation and amortisation costs have been impacted by this year's adoption of IFRS 16. This is most significant in depreciation and amortisation which has increased by £0.9 million from £0.4 million in 2018 to £1.3 million in 2019. A total of £0.5 million is as a result of IFRS 16 with the remaining increase being predominantly due to the recognition of the intangible assets acquired with the Carey Group.

Following the acquisition of the Carey Group in February 2019 and as previously reported, the Board has determined that this acquisition has resulted in a bargain purchase gain as defined by International Financial Accounting Standard ("IFRS") 3, Business Combinations. This is in effect negative goodwill as a result of the consideration paid plus the amount of the non-controlling interest being lower than the fair value of the net assets acquired, which comprise mainly the SIPP and the Corporate Pension client portfolios. The value of the bargain purchase gain has been calculated at £1.7 million and is recognised immediately in the Statement of Comprehensive Income.

Furthermore, the Group entered into call option agreements to acquire the non-controlling interests in the Carey Group from the current owner of the non-controlling interests. These have been valued at £0.4 million which is also recognised in the Statement of Comprehensive Income.

Tax Charge and Earnings per Share

The tax charge for the year was £0.5 million (2018: £0.4 million). This is an effective tax rate of 13% (2018: 9%) which is in line with expectations.

Earnings per share ("EPS") for 2019 is 5.73p compared to 6.20p for 2018. Diluted earnings per share takes into consideration the long-term incentive plan as approved by the shareholders at the Annual General Meeting on 18 May 2016 which expired in April 2019. This stipulated a maximum dilution factor of 5% resulting in diluted EPS of 5.64p (2018: 5.90p).

Cashflows

Cash and cash equivalents amounted to £18.4 million as at 31 December 2019 (2018: £17.3 million) with net cash inflow from operating activities of £3.1 million for the year ended 31 December 2019 (2018: £2.6 million).

During the year the Company repaid the remaining balance of the bank loan taken out in 2016 for the acquisition of London & Colonial. Whilst this loan was a three year loan it was interest only for the first year thus repaid during 2018 and 2019. Repayments during 2019 for this loan amounted to £1.65 million (2018: £1.65 million). In addition the Company took out a separate bank loan for £1.20 million, repayable over one year, the funds of which are earmarked for Carey Corporate should the need arise through a trigger event, as defined by The Pension Regulator. This loan was outstanding as at 31 December 2019.

Net cash and cash equivalents as at 31 December 2019 were £17.2 million (2018: £15.6 million). However, as would be expected for a Group with regulated entities, a significant proportion of this balance forms part of the regulatory and solvency requirements.

In addition to the bank borrowing repayments, the Group has paid consideration in relation to both Harbour and Carey acquisitions amounting to £0.4 million. This cash outflow on acquisitions is consistent with the prior year where the Group also paid £0.8 million to the previous shareholders of the Harbour business.

As with most services businesses, the Group had accrued income in the form of work performed for clients but not yet billed which at the 2019 year end amounted to £1.2 million (2018: £0.8 million). The reason for the increase is largely due to the new auto-enrolment business acquired from Carey. These amounts will be billed during the course of 2020.

Deferred income (a liability in the statement of financial position), representing fees billed in advance yet to be credited to the statement of total comprehensive income, has increased slightly this year and stands at £4.2 million as at 31 December 2019 (2018: £4.0 million). This is predominantly due to increased revenues within the business.

Other large balance sheet items relate to trade and other receivables of £5.8 million as at 31 December 2019 (2018: £6.3 million). It should be noted that within this balance, trade receivables at the year end stood at £3.9 million, an increase from prior year's balance of £3.5 million due to the acquisition of the Carey Group and the revenue growth across the overall Group.

Dividend

In light of the exceptional and continuing global impact of COVID-19, the Board considers it appropriate to take a prudent approach to cash management. Accordingly, and in order to provide the Board with maximum flexibility, instead of proposing a Final Dividend at the forthcoming AGM the Directors have declared a second interim cash dividend to shareholders of 0.75p per share. This together with the first interim dividend of 0.75p (2018: 0.70p) brings the total dividend proposed in respect of the year to 1.50p per share (2018: 2.00p).

The Board has decided that it would be prudent to maintain higher cash balances at this time, whilst recognising that the high proportion of recurring revenues gives the Board confidence in the resilience of the business
The second interim dividend will be paid on 26 June 2020 to shareholders on the register at the close of business on 5 June 2020. The ordinary shares will be marked ex-dividend on 4 June 2020.

Operational Overview

Pensions

Our pension administration businesses are the life-blood of our group, and the corner stone to our profitability.

Over the last few years we have successfully moved from offering solely pension solutions to expatriates, through to offering SIPP and other solutions to UK residents. The addition of our Workplace pensions solutions for UK corporate businesses delivers a further string to our bow.

This strategic diversification invariably makes our business model more robust, and less reliant on one specific product. In addition, it provides financial intermediaries with a full range of retirement solutions for their clients within one group.

Unfortunately, as noted above, the uncertainty in the SIPP market in relation to the legal duties of a SIPP provider continue to have a negative impact on the industry generally.

Total revenue across our pensions businesses amounted to £14.1 million (2018: £11.5 million) and accounted for 61% of total Group revenue (2018: 54%).

The administration of our ROPS products continues to be our largest revenue generator accounting for £10.1 million of revenue (2018: £10.0 million). This administration is carried out in Malta and Gibraltar with the revenue split 75% and 25% respectively (2018: 74% and 26%).

The acquisition of the Carey SIPP business in February 2019 has helped to bolster our overall SIPP revenue stream from £1.6 million in 2018 to £2.7 million in 2019, allowing the businesses to gain more efficiencies through the integration of the two UK offices. Whilst the integration costs incurred effectively offset any profit contribution for 2019, these recurring benefits will be apparent in 2020.

Finally, the acquisition of the Carey corporate pension business has generated a new and exciting growth area for our pensions business. Whilst, as with all the auto-enrolment master trusts, it is in its fledgling days and incurred an expected loss of £0.6 million for 2019, based on revenue for the 10 months of £1.3 million, the market place allows for significant organic growth going forward. The business model is very scalable with an underlying fixed cost base, with further efficiencies coming through as part of a specific IT project that will conclude towards the end of 2020.

The performance of the various pension revenue streams within the Group is as follows:

ProductRevenue
2019
Revenue
2018
Recurring percentage
2019
Recurring percentage
2018
 £m£m%%
ROPS10.110.094%94%
SIPPs2.71.676%83%
Workplace pensions1.3-95%-
Totals 14.111.690%92%

Life Assurance

The Group currently has two Gibraltar based Life Assurance companies, with the original intention of relocating one of these to Malta. Given the length of time that has passed, and with no successful outcome in sight, it has been agreed that a more efficient use of capital can be attained by initiating a portfolio transfer of policies from one life company to the other. This will ultimately allow a release of capital once that company no longer carries on insurance business and surrenders its license. Currently there is agreement from the European regulators that Gibraltar insurance companies are able to continue to service existing EU policies. Discussions are taking place to allow this to continue post 31 December 2020. However, if EU trade negotiations do not result in a favourable outcome in this respect STM Life has other options for this client portfolio.

The 2019 combined revenue figure was £4.8 million compared to £4.7 million for 2018. In both years there have been releases of technical reserves that are reflected as one-off contributions to revenue. For 2019 this amounted to £0.9 million (2018: £0.6 million), giving a like for like net revenue comparison of £3.8 million in 2019 as compared to £4.1 million in 2018.

In a similar manner to that of our pensions administration businesses, recurring revenue is a significant proportion of revenue (net of revenue releases) being 75% in 2019, and 84% in 2018, giving a predictable revenue trait to this business.

Corporate and Trustee Services (CTS)

Turnover from the Corporate and Trustee Services (CTS) division for the year was £3.7 million (2018: £4.2 million) thus accounting for 16% of the Group's total turnover (2018: 20%).

Our Jersey business contributed 52% (2018: 62%) of this revenue, with Gibraltar contributing the other 48% (2018: 38%).

Recurring revenue for the CTS operating segment was £1.3 million (2018: £1.5 million) and thus 35% of the total CTS revenues (2018: 35%).

As noted in previous year's reports, the CTS environment and sector remains challenging, and it is fully recognised by the Group that this will be a difficult segment to grow organically.

Other trading divisions

Turnover classified as "other trading divisions" relate to the Spanish office that provides tax compliance and conveyancing to the expatriate market, and the now discontinued insurance management business and amounted to £0.7 million (2018: £1.0 million).

COVID-19

The COVID-19 virus has not only created unprecedented times from a health and social perspective but has changed the economic landscape for the immediate future, and probably for significantly longer. It is difficult to assess the long term financial impact on the business community generally, however our business model of fixed annual fees should mean that our existing recurring annual revenue stream is largely protected from any significant downturn.

The recently enforced delay in announcing our preliminary results originally intended for 24 March, has given us time to assess potential impacts on our business as a result of COVID-19's challenges to the world economy. Under this assessment, and based on current interest rates and the existing fall in AUA values as a result of COVID-19, we estimate that some £0.4 million of our existing £18 million of 2020 recurring revenue is at risk, with a similar consequential risk to profitability. In a similar vein and with depressed financial markets we would not expect to see increased attrition rates within our existing business.

At this time, it is incredibly difficult to assess the likely impact of COVID-19 on new business income for 2020, with the primary variables being the unknown impact on timeframe for individuals to make decisions in the financial services market, as well as the general ability for financial intermediaries to be able to interact with their clients in relation to that decision making process.

Having said the above, it is already apparent that both intermediaries and providers, including ourselves, are embracing technology to utilise new ways of conducting business. The reality is that decisions in relation to financial planning still need to be made, arguably even more so now, and therefore new business volumes might be delayed by a number of months but will over time revert back to normal. There is therefore a risk that new business run-rates will be set back by some months, although this is not a trend that we have observed to date.

From an operational point of view, we have successfully implemented continuity plans across our businesses within the various jurisdictions. We have instigated contingency procedures within our businesses so as to both protect our staff as well as ensure that we are able to maintain service levels to our clients. Almost in their entirety, my STM colleagues have now adopted a working from home routine, and it is commendable that we have not seen any changes to our service levels to our customers, and other stakeholders.

Outlook

2019 has been a year of transition, moving from a set of small businesses that are part of a group, through to now operating in a more cohesive and collective manner. The Group infrastructure has been expanded to allow for growth, both organic as well as by acquisition. In addition, there are a number of IT initiatives that have been commenced that will improve margins going into 2020 and 2021, and the integration of our two UK businesses is now complete.

This sets out our stall for 2020, where there is a strong focus on new business revenues to complement our solid recurring revenue streams. In this regard, the first half of 2020 will showcase our UK orientated products across our rebranded SIPP and Workplace pensions offerings, as well as our unique flexible annuity wealth preservation solution. These initiatives are supported by a dedicated and expanded UK based business development team, overseen by a new Head of Distribution.

The second half of 2020 will see the launch of our international occupational pension solutions from both Malta and Gibraltar, which will give additional growth opportunities to these jurisdictions.

The Plc board remains focussed on developing the core activities of Life Assurance and Pensions administration, and will continue to look at opportunities to acquire businesses that support this strategy, whilst at the same time simplifying the overall Group structure going forward.

I would like to take this opportunity to thank all my STM colleagues for their continued hard work and professionalism in carrying out their duties, specifically at such a time of change and uncertainty. I look forward to updating the market during the course of 2020.

 

Alan Kentish
Chief Executive Officer

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR FROM 1 JANUARY 2019 TO 31 DECEMBER 2019

 Note31 December 2019
£000's
31 December 2018
£000's
Revenue923,25121,401
Administrative expenses10(19,776)(16,692)
Profit before other items113,4754,709
OTHER ITEMS   
Bargain purchase gain 61,702-
Gains from financial instruments at FVTPL 6416-
Finance costs  (325)(249)
Depreciation and amortisation14, 15(1,345)(427)
Profit before taxation 3,9234,033
Taxation13(520)(350)
Profit after taxation 3,4033,683
OTHER COMPREHENSIVE INCOME   
Items that are or may be reclassified to profit or loss   
Foreign currency translation differences for foreign operations (97)3
Total other comprehensive (loss)/income (97)3
Total comprehensive income for the year 3,3063,686
Profit attributable to:    
Owners of the Company  3,7563,686
Non-Controlling interests  (353)-
  3,4033,686
Total comprehensive income attributable to:   
Owners of the Company 3,6593,686
Non-Controlling interests (353)-
  3,3063,686
Earnings per share basic (pence)215.736.20
Earnings per share diluted (pence)215.645.90

 

The above results relate to both continuing and discontinued activities. Discontinued activities in the year are disclosed in note 4.

The notes to the accounts form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019

 Note31 December 2019
£000's
31 December 2018
£000's
ASSETS   
Non-current assets   
Property, plant and equipment142,9531,096
Intangible assets1520,48818,966
Financial assets6416-
Deferred tax asset 92-
Total non-current assets 23,94920,062
Current assets   
Investments16-74
Accrued income 1,186787
Trade and other receivables175,7656,281
Cash and cash equivalents1818,40617,267
Total current assets 25,35724,409
Total assets 49,30644,471
EQUITY   
Called up share capital195959
Share premium account1922,37222,372
Retained earnings 12,53610,881
Other reserves (446)(250)
Equity attributable to owners of the Company 34,52133,062
Non-controlling interest (275)-
Total equity 34,24633,062
LIABILITIES   
Current liabilities   
Liabilities for current tax  1,083908
Trade and other payables2211,63410,501
Total current liabilities 12,71711,409
Non current liabilities   
Other payables 232,343-
Total non-current liabilities 2,343-
Total liabilities and equity 49,30644,471

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR FROM 1 JANUARY 2019 TO 31 DECEMBER 2019

 Note31 December 2019
£000's
31 December 2018
£000's
OPERATING ACTIVITIES   
Profit for the year before tax  3,9234,033
ADJUSTMENTS FOR:    
Depreciation of property, plant and equipment14773220
Amortisation of intangible assets15572205
Write-off of intangible assets1571-
Loss on sale of fixed asset 5-
Taxation paid (345)(515)
Bargain purchase gain6(1,702)-
Unrealised gains on financial instruments at FVTPL6(416)7
Share based payments 1855
Decrease/(increase) in trade and other receivables6,17827(437)
(Increase)/decrease in accrued income  (301)103
Decrease in trade and other payables 6, 22(326)(1,068)
Net cash from operating activities  3,0992,603
INVESTING ACTIVITIES    
Disposal of investments 74-
Purchase of property, plant and equipment 6,14(117)(60)
Increase in intangible assets15(160)(185)
Consideration paid on acquisition of subsidiary6, 22(350)(800)
Cash acquired on acquisition of subsidiary61,116302
Net cash used in investing activities  563(743)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from bank loans221,200-
Bank loan repayment22(1,650)(1,650)
Lease liabilities paid (745)-
Treasury shares purchased (117)(206)
Dividends paid19(1,218)(1,129)
Net cash from financing activities (2,530)(2,985)
Increase in cash and cash equivalents 1,132(1,125)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS   
Analysis of cash and cash equivalents during the year    
Increase in cash and cash equivalents 1,132(1,125)
Effect of movements in exchange rates on cash and cash equivalents 729
Balance at start of year 17,26718,363
Balance at end of year1818,40617,267

STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
FOR THE YEAR FROM 1 JANUARY 2019 TO 31 DECEMBER 2019

 Share
Capital
£000's
Share
Premium
£000's
Retained
Earnings
£000's
Treasury
Shares
£000's
Foreign Currency Translation
Reserve
£000's
Shares
Based
Payments
Reserve
£000's
Total
£000's
Non-Controlling Interests
£000's
Total Equity
£000's
Balance at
1 January 2018
5922,3728,327(226)358930,656-30,656
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Profit for the period--3,683---3,683-3,683
Other comprehensive income
Foreign currency translation differences----3-3-3
Transactions with owners, recorded directly in equity
Dividend paid--(1,129)---(1,129)-(1,129)
Share based payments-----5555-55
Treasury shares purchased---(206)--(206)-(206)
31 December 2018 and
1 January 2019
5922,37210,881(432)3814433,062-33,062
Adjustment on initial application of IFRS 16 (net of tax) (Note 3)--(883)---(883)-(883)
Adjusted balance at 1 January 20195922,3729,998(432)3814432,179-32,179
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Profit for the year---3,756---3,756(353)3,403
Other comprehensive income
Foreign currency translation differences----(97)-(97)-(97)
Transactions with owners, recorded directly in equity
Dividend paid--(1,218)---(1,218)-(1,218)
Treasury shares purchased---(117)--(117)-(117)
Share based payments-----1818-18
Changes in ownership interest
Acquisition of subsidiary with NCI (Note 5)-------7878
At 31 December 20195922,37212,536(549)(59)16234,521(275)34,246
Page last up-dated: 28 April 2020