16 Jul 2012 07:00
For Immediate Release | 16 July 2012 |
Arden Partners plc
("Arden" or the "Group")
Interim results for the six months ended 30 April 2012
Arden Partners plc (AIM: ARDN.L), the institutional stockbroking company, today announces its unaudited interim results for the six month period ended 30 April 2012.
Highlights
·; Revenue £5.6m (2011: £7.4m)
·; Profit before tax £0.6m (2011: £1.2m)
·; Underlying* profit before tax £1.0m (2011: £1.5m)
·; Basic earnings per share 1.7p (2011: 3.7p)
·; Underlying basic earnings per share** 3.1p (2011: 4.8p)
·; Strong Balance Sheet underpinned by liquid resources
·; Proposed interim dividend of 0.65 pence per share (2011: Nil)
(* underlying profit before tax are profits before share based payments and reorganisation costs of £0.4m (2011: £0.3m))
(** underlying basic earnings per share is basic earnings per share adjusted for the post current tax effect of share based payments and reorganisation costs of £0.3m (2011: £0.3m))
Commenting on the interim results CEO Jonathan Keeling said:
"Trading in the markets, so far in the second half, has been challenging, due largely to the ongoing Eurozone problems and these conditions are anticipated to remain until such time as a substantive geopolitical resolution is found....the balance sheet continues to be strong and allows the Board to manage the business without any short term cash concerns, continue to win new clients and provide all of our corporate clients with the comfort that they are looked after by a strongly capitalised broker..."
Arden Partners plc | 0207 614 5900 |
Jonathan Keeling - Chief Executive Officer | |
Trevor Norris - Group Finance Director | |
Altium - NOMAD to Arden Partners plc | 0207 484 4040 |
Phil Adams | |
Sam Fuller | |
Buchanan | 0207 466 5000 |
Mark Edwards Nicola Cronk |
CHIEF EXECUTIVE'S STATEMENT
Financial review
Against a continuing difficult macroeconomic and market backdrop I am pleased to report that Arden made an underlying profit, for the six months ended 30 April 2012, of £1.0m before charging £0.4m for both share-based payments and reorganisation costs giving rise to a profit before tax of £0.6m (2011: £1.2m).
Revenues and costs were in line with our expectations and management continues to focus on driving the cost base to maximise profitability and cash generation.
Consolidated net assets at the period end were £12.6m up from £12.1m at the end of April 2011. On 15 June 2012 the Company cancelled the 2.4 million shares it held in Treasury. This does not impact on the reported net asset position.
During the six month period ended 30 April 2012 Arden was involved in placing £71 million for its clients.
In light of the continued cash generation and inherent strength of Arden's balance sheet, the Directors have proposed the payment of an interim dividend of 0.65 pence per share.
Outlook
Trading in the markets, so far in the second half, has been challenging, due largely to the ongoing Eurozone problems and these conditions are anticipated to remain until such time as a substantive geopolitical resolution is found.
Structural change within the broking sector, as we have previously referred to, continues to affect the sector as a whole and provides an additional headwind. These issues are, however, at last providing a gradual reduction in some of the markets' overcapacity and for the first time we are seeing wage deflation and a broad pool of talent available at more competitive remuneration levels than has been seen in a long time. It is likely that continued weakness for the rest of 2012 will further drive excess capacity out of the market.
Arden's second half pipeline is good, but as ever, remains market dependent.
The balance sheet continues to be strong and allows the Board to manage the business without any short term cash concerns, continue to win new clients and to provide all of our corporate clients with the comfort that they are looked after by a strongly capitalised broker - very much a positive for stability as well as providing significant opportunities for attracting new business.
Against this strong cash backdrop I am very pleased to announce that, after a break of four years, Arden is returning to the dividend list.
Jonathan Keeling
Chief Executive
16 July 2012
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 April 2012
Six months ended 30 April 2012 Unaudited |
Six months ended 30 April 2011 Unaudited |
Year ended 31 October 2011 Audited | ||
Note | £'000 | £'000 | £'000 | |
Revenue | 2 | 5,629 | 7,417 | 12,381 |
Administrative expenses | 3 | (5,028) | (6,243) | (11,826) |
Share based payments | (135) | (279) | (512) | |
Reorganisation costs | (257) | (20) | (178) | |
Other expenses | (4,636) | (5,944) | (11,136) | |
Profit from operations | 601 | 1,174 | 555 | |
Finance income | 29 | 13 | 60 | |
Finance cost | (2) | (2) | (3) | |
Profit before taxation | 628 | 1,185 | 612 | |
Income tax | (225) | (319) | (106) | |
Profit after taxation attributable to equity holders of the parent | 403 | 866 | 506 | |
Other comprehensive income for the period | - | - | - | |
Total comprehensive income for the period | 403 | 866 | 506 | |
Earnings per share | ||||
Basic | 4 | 1.7p | 3.7p | 2.2p |
Diluted | 4 | 1.6p | 3.5p | 2.0p |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 April 2012
At 30 April 2012 Unaudited | At 30 April 2011 Unaudited | At 31 October 2011 Audited | ||
£'000 | £'000 | £'000 | ||
Assets | ||||
Non-current assets | ||||
Plant, property and equipment | 294 | 312 | 394 | |
Deferred tax | 90 | 277 | 125 | |
Total non-current assets | 384 | 589 | 519 | |
Current assets | ||||
Trading investments | 7,957 | 5,831 | 5,920 | |
Trade and other receivables | 13,665 | 8,390 | 23,872 | |
Stock borrowing collateral | 1,568 | - | - | |
Cash and cash equivalents | 4,091 | 6,318 | 5,201 | |
Total current assets | 27,281 | 20,539 | 34,993 | |
Total assets | 27,665 | 21,128 | 35,512 | |
Current liabilities | ||||
Trade and other payables | (14,751) | (8,701) | (23,369) | |
Corporation tax liability | (316) | (304) | (126) | |
Total current liabilities | (15,067) | (9,005) | (23,495) | |
Net assets | 12,598 | 12,123 | 12,017 | |
Financed by: | ||||
Called up share capital | 2,738 | 2,679 | 2,700 | |
Share premium account | 2,933 | 2,933 | 2,933 | |
Employee Benefit Trust reserve | (607) | (612) | (612) | |
Profit and loss account | 8,727 | 8,316 | 8,189 | |
Total equity before deduction of own shares | 13,791 | 13,316 | 13,210 | |
Own shares | (1,193) | (1,193) | (1,193) | |
Total equity | 12,598 | 12,123 | 12,017 |
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 30 April 2012
| Six months ended 30 April 2012 Unaudited | Six months ended 30 April 2011 Unaudited | Year ended 31 October 2011 Audited |
£'000 | £'000 | £'000 | |
Operating activities before taxation | |||
Net profit from ordinary activities before tax | 628 | 1,185 | 612 |
Adjustments for: | |||
Fair value adjustments in respect of unrealised profits | (412) | (390) | (34) |
Depreciation | 124 | 101 | 214 |
Net interest receivable | (27) | (11) | (57) |
Share based payments | 135 | 279 | 512 |
Operating surplus before changes in working capital | 448 | 1,164 | 1,247 |
Decrease/(increase) in trade and other receivables | 8,651 | (2,146) | (17,629) |
Increase in trading investments | (1,625) | (2,233) | (2,679) |
(Decrease)/increase in trade and other payables | (8,626) | 1,808 | 16,477 |
Cash generated from operations | (1,152) | (1,407) | (2,584) |
Income taxes paid | - | (237) | (49) |
Cash flows from operating activities | (1,152) | (1,644) | (2,633) |
Investing activities | |||
Purchases of property, plant and equipment | (23) | (12) | (207) |
Interest received | 27 | 11 | 57 |
Net cash from investing activities | 4 | (1) | (150) |
Financing activities | |||
Purchase of own shares | - | (1,193) | (1,193) |
Issue of shares | 38 | 142 | 163 |
Net cash from financing activities | 38 | (1,051) | (1,030) |
Decrease in cash and cash equivalents | (1,110) | (2,696) | (3,813) |
Cash and cash equivalents at the beginning of the period | 5,201 | 9,014 | 9,014 |
Cash and cash equivalents at the end of the period | 4,091 | 6,318 | 5,201 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Consolidated Statement of changes in equity for the six months ended 30 April 2012
Share Capital | Share Premium Account | Own shares | Employee Benefit Trust Reserve | Retained earnings | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 31 October 2011 | 2,700 | 2,933 | (1,193) | (612) | 8,189 | 12,017 |
Changes in equity for period | ||||||
Total comprehensive income for the period | - | - | - | - | 403 | 403 |
Share based payments | - | - | - | - | 135 | 135 |
Issue of shares | 38 | - | - | - | - | 38 |
Sale of shares held by the Employee Benefit Trust | - | - | - | 5 | - | 5 |
Balance at 30 April 2012 | 2,738 | 2,933 | (1,193) | (607) | 8,727 | 12,598 |
Unaudited Consolidated Statement of changes in equity for the six months ended 30 April 2011
Share Capital | Share Premium Account | Own shares | Employee Benefit Trust Reserve | Retained earnings | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 31 October 2010 | 2,544 | 2,926 | - | (648) | 7,171 | 11,993 |
Changes in equity for period | ||||||
Total comprehensive income for the period | - | - | - | - | 866 | 866 |
Share based payments | - | - | - | - | 279 | 279 |
Issue of shares | 135 | 7 | - | - | - | 142 |
Purchase of own shares | - | - | (1,193) | - | - | (1,193) |
Sale of shares held by the Employee Benefit Trust | - | - | - | 36 | - | 36 |
Balance at 30 April 2011 | 2,679 | 2,933 | (1,193) | (612) | 8,316 | 12,123 |
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1) Basis of preparation
As permitted, IAS 34, 'Interim Financial Reporting' has not been applied in this interim report.
The financial information presented in this report has been prepared using accounting policies that are expected to be applied in the preparation of the financial statements for the year ending 31 October 2012.
These policies are in accordance with the recognition and measurement principles of International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board as endorsed for use in the European Union, and these principles are disclosed in the Financial Statements for the year ended 31 October 2011.
The financial information in this interim report does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006.
The Annual Report and Financial Statements for 2011 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2011 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
2) Revenue
Six months ended 30 April 2012 Unaudited | Six months ended 30 April 2011 Unaudited | Year ended 31 October 2011 Audited | ||
£'000 | £'000 | £'000 | ||
Equities division | 3,534 | 5,937 | 7,638 | |
Corporate Finance division | 2,095 | 1,480 | 4,743 | |
Total revenue | 5,629 | 7,417 | 12,381 | |
3) Administrative expenses
Six months ended 30 April 2012 Unaudited | Six months ended 30 April 2011 Unaudited | Year ended 31 October 2011 Audited | |
£'000 | £'000 | £'000 | |
Staff costs including incentive scheme | 2,378 | 3,116 | 5,608 |
Other overheads | 1,489 | 1,969 | 3,736 |
Staff and overhead costs | 3,867 | 5,085 | 9,344 |
Share based payments | 135 | 279 | 512 |
Reorganisation costs | 257 | 20 | 178 |
Depreciation | 124 | 101 | 214 |
Total overhead costs | 4,383 | 5,485 | 10,248 |
Variable overheads including settlement costs | 645 | 758 | 1,578 |
Total administrative costs | 5,028 | 6,243 | 11,826 |
4) Earnings per share
The basic earnings per share of 1.7p (2011: 3.7p) is calculated on a profit after tax of £403,000 (2011: £866,000) and 23,729,453 (2011: 23,143,927) being the weighted average number of ordinary shares in issue during the period less shares held in Treasury and by the Arden Partners Employee Benefit Trust.
Diluted earnings per share takes account of the weighted average number of outstanding share options being 1,022,480 (2011: 1,557,827).
The underlying basic earnings per share of 3.1p (2011: 4.8p) for the six months ended 30 April 2012 is calculated on a profit after tax of £728,000 (2011: £1,114,000) being the result after tax, adjusted for the current tax impact of IFRS 2 costs of £135,000 (2011: £248,000) and reorganisation costs of £190,000 (2011: £Nil).
5) Dividends
Six months ended 30 April 2012 Unaudited | Six months ended 30 April 2011 Unaudited | Year ended 31 October 2011 Audited | |
£'000 | £'000 | £'000 | |
Final dividend year ended 31 October 2011 | - | - | - |
Interim dividend period ended 30 April 2012 | 160 | - | - |
Distribution to equity shareholders | 160 | - | - |
The Directors have proposed an interim dividend of 0.65 pence per share (2011: Nil). This has not been recognised as a liability of the company as at 30 April 2012.
The interim dividend will be paid on 29 August 2012 to shareholders on the register at close of business on 27 July 2012.
INDEPENDENT REVIEW REPORT TO ARDEN PARTNERS PLC
Introduction
We have been engaged by the group to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2012 which comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statements of changes in equity and the related explanatory notes that have been reviewed.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the group's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the group a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the group in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2012 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.
BDO LLP
Chartered Accountants and Registered Auditors
London
United Kingdom
16 July 2012
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127