Premier Miton Regulatory News (PMI)

23 May 2019

Premier Asset Management Group PLC

("Premier" or the "Company")

Unaudited Interim Results for the six months ended 31 March 2019

Highlights

Assets under management

· Total assets under management (AUM) were £6.8 billion as at 31 March 2019 (31 March 2018: £6.4 billion)

· Assets under management as at close of business on 30 April 2019 were £7.0 billion

Inflows

· Total net inflows of £67m in the six months to 31 March 2019 (6 months to 31 March 2018: £411m)

· Twenty fourth successive quarter of positive net inflows

· Total net inflows of £390m for the rolling twelve months to 31 March 2019 (rolling twelve months to 31 March 2018: £847m)

Investment performance

· Continued strong investment performance net of fund charges1:

o Over five years to 31 March 2019: 84% of AUM were above median

o Over three years to 31 March 2019: 72% of AUM were above median

Financials

· Adjusted EBITDA2 of £9.38m (H1 FY18: £9.15m)

· Adjusted profit before tax3 of £9.26m (H1 FY18: £9.03m)

· Profit before tax of £7.22m (H1 FY18: £7.91m)

· Earnings per share of 5.30p (H1 FY18: 5.91p)

· Quarterly dividend per share of 1.70p vs 1.65p for the same period last year

1 Performance figures represent 81% of Premier's total AUM as at 31 March 2019 and exclude absolute return funds, property securities fund, investment trusts and segregated mandates. Figures are shown relative to respective Investment Association sectors. Source: FE Analytics, data to 31 March 2019. Net income reinvested. Data shown net of all fund charges. Premier Diversified Growth Fund: class D income share class. Premier UK Money Market Fund: class B income units. Other funds: Class C income or accumulation shares.

2  Adjusted EBITDA

Definition:  Earnings before interest, taxation, depreciation, amortisation of intangible assets, exceptional items and share based payments

Reason for use: To provide a measure of profitability which is aligned with the requirements of shareholders and potential shareholders and which excludes the effects of taxation, financing (net interest payable), capital investment (depreciation and amortisation), non-recurring exceptional items and share based payments, enabling comparison with the Group's competitors who may use different accounting policies and finance methods.

3 Adjusted profit before tax

Definition:  Profit before taxation, amortisation of intangible assets, exceptional items, share based payments and net interest

Reason for use: This measure of profitability presents users of the accounts with a clear view of what the Group considers to be the results of its underlying operations after excluding the effects of taxation, financing (interest payable), capital investment (amortisation), non-recurring exceptional items and share based payments, thereby enabling consistent period on period comparisons and making it easier for users of the accounts to identify trends.

Mike O'Shea, Chief Executive, commented:

"Our business environment continues to be dominated by political uncertainty and low investor confidence, resulting in record low levels of UK investment industry net retail sales. Against this challenging backdrop, we are pleased to have recorded two quarters of positive net sales.

Over the period, the quality of our investment teams, products and performance continued to win awards, including Professional Adviser Awards for multi-asset group of the year, best rising income multi-asset fund and best positive return multi-asset fund, and Specialist Management Group of the Year (under £10 billion AUM) at the Investment Week Specialist Investment Awards 2018.

During the period we strengthened our product range by launching three new multi-asset funds, designed to attract a broader range of investors. We continue to believe that our focus on relevant investment solutions for UK retail investors, including our range of fifteen multi-asset funds, means that as investor confidence returns, we are well positioned for the future."

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

Chief Executive's statement

Despite continued political uncertainty caused by the ongoing Brexit negotiations, low investor confidence, volatile markets and record low investment industry net flow figures, we are pleased to announce that Premier saw positive net inflows into its funds. We are also pleased to have achieved good long term investment performance for investors after all fund charges. Over the period we continued to develop our multi-asset proposition through the launch of three new funds.

Net flows

Over the six month period to 31 March 2019, we saw net flows into Premier funds of £67m. This compares with £411m in the six months to 31 March 2018. Inflows continue to be affected by low levels of investor confidence but despite this, we are pleased that the quarter to 31 March 2019 was the twenty fourth successive quarter of positive net inflows into our funds.

These inflows, plus market movements, resulted in our assets under management closing the period at £6.8 billion. This meant that AUM reduced by 1% over the six months ended 31 March 2019 (six months to 31 March 2018: 4.5% growth) and was up by 7% from the AUM level twelve months ago.

Assets under management as at close of business on 30 April 2019 were £7.0 billion.

Financial results

Adjusted EBITDA during the six months to 31 March 2019 totalled £9.4m, an increase of 2.5% on the £9.2m for the six months to 31 March 2018. The key driver behind the increase in EBITDA was the impact of higher AUM levels on management fees.

Investment performance

Our investment performance continues to be strong. Based on 81% of AUM, (which means our total assets under management excluding absolute return funds, property securities fund, investment trusts and segregated mandates), 72% of our AUM has achieved above sector median performance, net of all fund charges, over three years and the figure is 84% over five years. Our two absolute return funds, which are not measured against a peer group, both continued with their 100% record of producing positive returns over rolling three-year periods.

Many of our multi-asset and equity funds have income as a primary objective. These funds continue to offer attractive yields against their comparative benchmarks.

The quality of our performance and investment teams has been recognised by more awards over the period, including winning Multi-Asset Group of the Year, Best Multi-Asset Fund: Rising Income, and Best Multi-Asset Fund: Positive Return at the Professional Adviser Awards 2019, and Specialist Management Group of the Year (under £10 billion AUM) at the Investment Week Specialist Investment Awards 2018.

Business development

Our focus continues to be on our existing investment products, including our multi-asset, equity and absolute return funds. But we also look for ways of developing our product range to meet client demand.

Premier already has a strong presence in the UK retail market for multi-asset funds and over this period we strengthened our multi-asset product range further with the launch of three new funds.

At the start of the period, we offered twelve multi-asset funds covering different investment objectives and two investment styles: multi-manager and directly invested.

Our most established multi-asset funds are run on a multi-manager basis. These funds actively research, select and blend what we believe are the best underlying managers to deliver specific investment outcomes for investors. As always, we focus on producing good investment outcomes after all charges and these funds have built strong performance records for consistent dividend payments, total return with income reinvested and risk adjusted returns.

Since 2013, we have also offered our Diversified fund range. These are multi-asset funds that are directly invested in a diversified portfolio of different shares, bonds, property and alternative investments. In March 2019, we launched three new directly invested multi-asset funds, allowing us to offer five funds in this range, catering for growth and income, and different client risk profiles. The new funds are: Premier Diversified Cautious Growth Fund, Premier Diversified Balanced Growth Fund and Premier Diversified Dynamic Growth Fund.

At the end of the period, we managed £4.4 billion across our whole range of multi-asset funds, and we believe our expanded range of fifteen multi-asset funds is well placed to meet the needs of advisers and their clients, looking for convenient, well managed investment solutions covering different investment objectives, risk profiles and cost levels.

We have also been working to enhance the service and value part of our multi-asset proposition by developing our PremierConnect platform to provide advisers and their clients with a no cost platform, therefore reducing the total cost of ownership of our funds, including our fifteen multi-asset funds.

We are developing PremierConnect with FNZ, and although we are keen to launch as soon as possible, our key priority is making sure we launch only when we are confident that PremierConnect can offer the appropriate levels of service that advisers expect. We expect an internal, staff only soft launch in the third quarter of our financial year, and once we are satisfied that the platform is working as expected, we will start work with selected advisers to move them and their clients on to PremierConnect.

Our regulator, the Financial Conduct Authority, has issued new rules requiring authorised fund managers to appoint a minimum of two independent directors to their fund boards and for them to comprise at least 25% of the total board membership. The aim of this change, which will come into effect on 30 September 2019, is to help make sure that the best interests of investors are subject to independent scrutiny and challenge. We are pleased to announce that Robert Colthorpe and William Smith will be appointed to the board of Premier Portfolio Managers Ltd. with effect from 30 September 2019. Robert and William are independent directors on the board of Premier Asset Management Group plc and therefore already have a good understanding of our overall business. They are already attending Premier Portfolio Managers Ltd. board meetings to help ensure a smooth transition into their new roles and we look forward to working with them in their new capacity from September.

Outlook

At the time of writing, it is difficult to assess when political conditions will improve or the impact that this prolonged uncertainty will have on the UK economy. It is therefore impossible to predict when investor confidence will improve.

However, we believe there is room for optimism about the UK investment industry, as advisers and their clients look for relevant ways to save and invest. In what might well be a generally lower investment return environment, we strongly believe there is a good case for investing with experienced active managers who offer the potential to deliver positive investment outcomes for investors.

We believe the combination of our relevant product range, investment performance record, strong brand and distribution capabilities, means we are well placed to help our clients in these challenging conditions and when the investment environment and confidence improves.

Mike O'Shea

Chief Executive Officer

Interim Unaudited condensed consolidated statement of comprehensive income

For the six months ended 31 March 2019 

All the amounts relate to continuing operations.

Interim unaudited condensed consolidated statement of financial position

As at 31 March 2019

Interim unaudited condensed consolidated statement of changes in equity

For the six months ended 31 March 2019

Interim unaudited condensed consolidated statement of cash flow

For the six months ended 31 March 2019

Notes to the condensed consolidated interim financial statements

At 31 March 2019

1. Basis of accounting

a) General information

Premier Asset Management 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 2018 Annual Report is prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and is available on the Premier Asset Management Group PLC website (www.premierfunds.co.uk).

b) Basis of Accounting

These condensed and consolidated interim financial statements do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. Unless otherwise stated, 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 2018.

On 1 October 2018, the Group adopted IFRS 9 'Financial Instruments' and IFRS 15 'Revenue from Contracts with Customers

IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement and introduces new requirements for classification and measurement, impairment and hedge accounting. The adoption of IFRS 9 has not had a material effect on the classification and measurement of the Group's financial assets or liabilities.

IFRS 15 'Revenue from Contracts with Customers' supersedes IAS 11 'Construction Contracts', IAS 18 'Revenue' and related interpretations.

The Group has undertaken a comprehensive review of its contracts with customers and concluded that there is no material impact on the way in which the Group recognises revenue. The Group has applied IFRS 15 retrospectively although no restatements were required.

The interim report has been prepared in accordance with IAS 34 'Interim Financial Reporting' and the Listing Rules of the Financial Conduct Authority.

The Group has sufficient financial resources and contracts with a number of customers and suppliers such that the Directors believe that the Group is well placed to manage its business risks successfully despite the continued uncertain economic outlook.

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim report.

These unaudited financial statements were approved and authorised for issue by the Board of Directors on 22 May 2019.

The comparative figures for the financial year ended 30 September 2018 are not the Company's statutory accounts for the financial year.

The full year accounts to 30 September 2018 were approved by the Board of Directors on 28 November 2018 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 2019 and the six months ended 31 March 2018 have not been audited.

The consolidated financial statements are presented in Sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated.

c) Forward looking statements

These condensed consolidated interim financial statements which are made by the Directors in good faith based on information available to them at the time of their approval of the accounts. Forward looking statements should be treated with caution due to the inherent uncertainties, including economic, regulatory and business risk factors underlying any such statement. We undertake no obligation to update any forward looking statement whether as a result of new information, future events or otherwise. The condensed consolidated interim financial statements have been prepared to provide information to the Group's shareholders and should not be relied upon by any other party or for any other purpose.

2. Accounting policies

2.1 Basis of preparation

The consolidated Group financial statements have been prepared in accordance with IFRS. The consolidated financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities measured at fair value through profit or loss. Costs are expensed as incurred.

3. Revenue

Revenue recognised in the statement of comprehensive income is analysed as follows:

All revenue is derived from the United Kingdom and Channel Islands.

4. Exceptional items

Recognised in arriving at operating profit from continuing operations:

Exceptional items are those items of income and expense, which are considered not to be incurred in the normal course of business of the Group's operations, and because of the nature of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year.

Staff redundancy costs are in relation to the rationalisation and restructuring of various departments and functions in relation to the launch of the new PremierConnect platform. FCA FSCS levy costs in 2018 represents the 2018/19 contribution to the FSCS which have increased significantly over the previous year as a result of the increased levels of compensation paid by the FSCS. PremierConnect development costs relate to external consultants who have been deployed in the testing of the new PremierConnect platform during the development stage prior to launch. These costs will not be incurred once the development stage is completed.

5. Income taxes

Tax charged in the statement of comprehensive income:

6. Earnings per share

Reported earnings per share has been calculated as follows:

The calculation of basic earnings per share is based on profit after taxation for the period and the weighted average number of ordinary shares in issue for each period.

7. Cash and cash equivalents

8. Share capital

On 8 February 2018, following the approval of a special resolution, one redeemable deferred share with a nominal value of £28,839.74 was issued and allotted to Eastgate Court Nominees Limited.

9. Segment reporting

The Group operates a single business segment of asset management for reporting and control purposes.

IFRS 8 Operating Segments requires disclosures to reflect the information which Group 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.

Enquiries:

Note to editors 

About Premier

Premier is a UK retail asset management group with a focus on delivering good investment outcomes for investors through relevant products and active management across its range of investment strategies, which include multi-asset, equity and absolute return funds. Premier had £7.0 billion of assets under management as at 30 April 2019.

LEI Number: 213800LK2M4CLJ4H2V85