FEN24 Mar 2011 07:26
CHAIRMAN'S STATEMENT
Results
I am pleased to report record Frenkel Topping Group results for the year ended 31 December 2010, which show a profit from operations before share based compensation of £733,355 (2009: £208,211) and a profit before taxation of £647,213 (2009: £123,437). These results have been achieved following an extensive period of reconstruction and the Board is delighted at the progress that has been made by the Group.
The Group generated £394,861 of cash from its operating activities during the year (2009: £175,389). The Group has also repaid its long-term debt of £200,000 and at the year-end held a minimal net overdraft at the bank of £42,937 (2009: £146,853). The Group is operating well within its current bank facilities and the Board expects this situation to continue into the future.
The net asset value of the Group, before non controlling interests at 31 December 2010 was £5,131,685 (2009: £4,774,008).
The Group's income is derived from fees on our clients' initial investments and the recurring income from servicing the client's portfolios within the Funds in the Investment Management Service (FIMS). The Group revenue of £3.6m (£2009: £3.0m) includes fees from initial investment of £1.2m (2009: £1.4m) and £2.4m (2009: £1.6m) of recurring income from FIMS.
The total FIMS has risen to £356m as at 31 December 2010 from £282m (as redefined), at the commencement of the year. As a result of this growth we expect the recurring income to show further growth in 2011.
The Group's financial strategy has been to become less reliant on fees from initial business, with more emphasis on the growth of FIMS and the resulting increase in the level of recurring fees, which now represents 67% (2009: 53%) of total Group revenue. We expect this trend to continue.
By the start of 2011 the Group had successfully assembled its strongest selection to date of authorised individuals covering various areas of expertise, which will facilitate the planned increases in new FIMS.
We continue to embrace the evolving recommendations from the FSA Retail Distribution Review, as we believe it will form the basis for the future structure of independent professional financial advice. At its core is the principle of Treating Customers Fairly, which the Group has embraced for a number of years. The Board continues to develop the service offering to our clients and to attract new relationships.
The Group has a number of new strategic partnerships within its investment offering, including the New Horizon OEIC, which is managed by Goldman Sachs and Morgan Stanley. Due to the significant balance of FIMS the Group has at its disposal, we are able to attract the services of substantial global investment managers and thus open up their expertise to our clients. To this end the Group has established F