MJH.L Regulatory News (MJH)

17th October 2022

MJ Hudson Group plc

(the "Company", "Group" or "MJ Hudson")

Changes to guidance following audit adjustments

MJ Hudson Group plc (AIM:MJH), the specialist service provider to the asset management industry, announces that its annual results to 30th June 2022 (´´FY 22``) are expected to be below previous guidance, due to audit adjustments.

In its announcement of 12th July 2022, MJ Hudson indicated that it expected Adjusted EBITDA to be modestly ahead of £8.3 million for the financial year ended 30 June 2022 (unaudited). This was reiterated on 10th August 2022. Following recent feedback from EY in relation to the FY 22 audit, there are on-going discussions between the Company and its auditors in relation to the treatment of revenue recognition on one major contract and certain costs included in Adjusted EBITDA. The consequence of these discussions, taken as a whole, is that the Board now considers that the Company is unlikely to be in a position to meet prior guidance.

In terms of the significant potential audit adjustments -

· The potential adjustment around revenue recognition relates to the treatment under IFRS of approximately £1.3 million of revenue. This was from a single, multi-year contract with a public sector body and one which, in terms of value, is unchanged from its inception in early 2022. Given that significant time has already been incurred in providing the service, any conclusion by the auditors that it cannot now be recognised in FY 22 would reduce both FY 22 Adjusted EBITDA and profit by an equal amount and consequently should improve revenue and profits in the current and future years instead.

· The other potential adjustments relate to the capitalisation of certain IT development costs after a significant period of internal investment as well as the level of allocated costs for management time in M&A and fundraising. The Company remains in close discussion on both these issues with its auditors.

The potential audit adjustments are all non-cash in nature and do not have an impact on the operating performance of the Group in the current year (FY 23). The final outcome on these issues in relation to FY 22 is subject to the ongoing discussions with the Group's auditors. The Company will provide an update in due course.

Current trading in FY 23 is encouraging and, in particular, the Group´s key transformative growth opportunities in ESG & Sustainability and the ManCo businesses in Ireland and Luxembourg are continuing their strong gains from FY 22. 

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation

For further information, please contact:

About MJ Hudson

MJ Hudson (AIM:MJH) is the end-to-end solutions provider to the US$100 trillion+ asset management industry, specialising in its fastest growing segment, private markets (including private equity and venture capital). 

The Company offers investors access to the growth in private markets as a tech-enabled 'picks and shovels' play. 

Founded in 2010, by CEO Matthew Hudson (a private markets lawyer and former fund manager), MJ Hudson was admitted to the AIM market of the London Stock Exchange in 2019. The Group has grown to more than 300 professionals, serving more than 1,000 clients, across the globe, including some of the industry's largest players and 18 of the FTSE 100.

Several factors have contributed to the Group's success, to date, and support strong growth expectations, for the future: 

1. Private markets are growing fast, and MJ Hudson provides the picks and shovels

2. As private markets grow, so do scrutiny and regulation, increasing the need for the Group's specialist advice and services, particularly in areas like ESG, where it has award-winning solutions

3. As it evolves, the sector is increasingly embracing technology, data, and analytics, where MJ Hudson has market-leading and award-winning tools and in which it continues to invest

4. The Group's multi-service approach creates multiple client touchpoints, building stronger, longer-term relationships, and making it easier to sell in additional MJ Hudson services

5. Performing these services generates vast amounts of data, which MJ Hudson aggregates and analyses, in order to further support its clients, by developing next-generation tools and fine-tuning existing services

For more information, please visit our website: www.mjhudson.com/investors 

LinkedIn: www.linkedin.com/company/mj-hudson/ Twitter: www.twitter.com/MJHudsonCorp

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation.