23 Sep 2014 07:00
Panmure Gordon & Co. plc
Panmure Gordon reports 2014 first half results
London, 23 September 2014 – Panmure Gordon & Co. plc (“Panmure Gordon” or “the Group”), a leading independent stockbroker and investment bank, today announces its unaudited results for the first half ended 30 June 2014.
Financial highlights
Pre-tax profit from continuing operations of £1.9m (H1 2013: £0.3m) Post-tax profits of £1.6m (H1 2013: £0.1m) Earnings per share of 10.00p (H1 2013: 0.93p) 26% increase in net commission and trading income to £5.4m (H1 2013: £4.3m) 22% increase in corporate finance and related income to £11.5m (H1 2013: £9.5m) Debt free balance sheetOperational highlights
Significant growth in revenues across both primary and secondary businesses Growth in corporate finance and related income reflects a strong client list Selective investment in new people continues across the firmPhillip Wale, Chief Executive, commented:
“I am pleased to report an impressive start to the year built on the hard work of recent years as we continue to be engaged on more transactions for our clients in a market that, whilst challenging, has improved over the period. As we have stated before, we look to strengthen the solid underlying business with additional diversity of earnings and a continued investment in good people when the opportunities present themselves.
We have an encouraging pipeline of corporate transactions and look forward to the rest of the year with confidence.”
Enquiries:
Panmure Gordon
Phillip Wale, Chief Executive
Philip Tansey, Chief Financial Officer 020 7886 2500
Newgate Threadneedle
Josh Royston 020 7653 9844
Roddy Watt 020 7653 9855
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett/Salmaan Khawaja/Jen Clarke 020 7383 5100
Chief Executive’s review
Panmure Gordon continues to build upon the success of 2013 following the turnaround strategy with a 25% increase in net commission and fee income to £16.2m (H1 2013: £13.0m) and an increase in continuing pre-tax profits to £1.9m (H1 2013: £0.3m). In the reporting period we were active on 10 significant transactions for our clients helping them to raise more than £400 million and our pipeline of corporate transactions for the remainder of the year is healthy.
Corporate finance and related income rose by 22% to £11.5m (H1 2013: £9.5m) in what was an extremely busy six months. This was matched by an excellent 26% increase in net commission and trading income which was achieved despite the continuing decline in market volumes.
The impact of discontinued business from our previous holding in the US has been reduced to effectively nil (H1 2013: £(0.1m)) and we are pleased to report that a court order dated 3 September 2014 confirmed that the share premium account and deferred share capital have been cancelled and extinguished, thus allowing the company in the future to return profits to shareholders by the payment of dividends.
We are delighted to have invested in many significant new hires across the firm and look forward to their contribution to a stronger and more successful business.
Subject to continued profitability in the remainder of the year and the availability of sufficient distributable reserves, it is the intention of the Board to recommend to shareholders at the AGM in 2015 that the company pay a dividend.
Outlook
We have recorded an impressive start to the year in the first half as all of our teams contribute to providing an excellent service to our clients. We will look to further invest on a selective basis in good people and business opportunities whilst remaining focussed on controlling the cost base.
Markets are healthier than in recent years though remain challenging. However, our strong pipeline of corporate transaction activity supported by our re-invigorated team of excellent people means we look forward with confidence to the remainder of the year.
Phillip Wale
Chief Executive
Condensed consolidated interim income statement (unaudited)
For the half year to 30 June 2014
|
£‘000 |
Notes | 6 months 30 June 2014 | 6 months 30 June 2013 | 12 months 31 December 2013 | |||||||||||||||||||
| Continuing operations | |||||||||||||||||||||||
| Commission and trading income | 6,115 | 5,215 | 11,264 | ||||||||||||||||||||
| Commission and trading expense | (758) | (953) | (1,469) | ||||||||||||||||||||
| Net commission and trading income | 5,357 | 4,262 | 9,795 | ||||||||||||||||||||
| Corporate finance and related income | 11,516 | 9,471 | 18,103 | ||||||||||||||||||||
| Loss on corporate investments | 11 | (642) | (774) | (580) | |||||||||||||||||||
| Net commission and fee income | 16,231 | 12,959 | 27,318 | ||||||||||||||||||||
| Net (loss) on available for sale investments | - | (7) | (39) | ||||||||||||||||||||
| Administrative expenses1 | (13,828) | (12,160) | (24,569) | ||||||||||||||||||||
| Redundancy, restructuring and other non-recurring charges1 | 7 | (198) | (223) | (1,209) | |||||||||||||||||||
| Operating profit before share-based payments | 2,205 | 569 | 1,501 | ||||||||||||||||||||
| Share-based payments1 | 3 | (274) | (229) | (349) | |||||||||||||||||||
| Operating profit | 1,931 | 340 | 1,152 | ||||||||||||||||||||
| Financial income | - | - | 34 | ||||||||||||||||||||
| Financial expense | (5) | (5) | (19) | ||||||||||||||||||||
| Net financial (expense)/income | (5) | (5) | 15 | ||||||||||||||||||||
| Profit before tax from continuing operations | 1,926 | 335 | 1,167 | ||||||||||||||||||||
| Income tax | 4 | (401) | (49) | (335) | |||||||||||||||||||
| Profit from continuing operations | 1,525 | 286 | 832 | ||||||||||||||||||||
| Profit/(loss) on discontinued operation (net of tax) | 10 | 29 | (141) | (627) | |||||||||||||||||||
| Profit for the period attributable to the owners of the Company | 1,554 | 145 | 205 | ||||||||||||||||||||
| Basic profit per share from continuing operations | 5 | 9.81p | 1.84p | 5.36p | |||||||||||||||||||
| Diluted profit per share from continuing operations | 5 | 9.62p | 1.81p | 5.28p | |||||||||||||||||||
| Basic profit per share | 5 | 10.00p | 0.93p | 1.32p | |||||||||||||||||||
| Diluted profit per share | 5 | 9.80p | 0.92p | 1.30p |
1 Administrative expenses which total £14.3m (6 months 30 June 2013: £12.6m, 12 months 31 December 2013: £26.1m) have been presented separately here owing to their individual nature and size
The notes below form part of these financial statements.
Condensed consolidated interim statement of comprehensive income (unaudited)
For the half year to 30 June 2014
| £‘000 | 6 months 30 June 2014 | 6 months 30 June 2013 | 12 months 31 December 2013 | ||||||||||||||||
| Profit for the period attributable to the owners of the Company | 1,554 | 145 | 205 | ||||||||||||||||
| Other comprehensive profit/(loss) | |||||||||||||||||||
| Foreign exchange translation differences | - | - | - | ||||||||||||||||
| Foreign currency translation reserve recycled on disposal of subsidiary | - | - | - | ||||||||||||||||
| Total other comprehensive loss for the period net of tax | - | - | - | ||||||||||||||||
| Total comprehensive profit for the period attributable to the owners of the Company | 1,554 | 145 | 205 |
Condensed consolidated interim statement of financial position (unaudited)
At 30 June 2014
| £‘000 |
Notes | As at 30 June 2014 | As at 30 June 2013 | As at 31 December 2013 | |||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||
| Intangibles | 13,201 | 13,201 | 13,201 | ||||||||||||||||||||||||||||
| Plant and equipment | 2,004 | 2,008 | 2,011 | ||||||||||||||||||||||||||||
| Available for sale investments | 8 | 152 | 8 | ||||||||||||||||||||||||||||
| Deferred tax asset | 562 | 1,206 | 857 | ||||||||||||||||||||||||||||
| Other receivables | 8 | 725 | 1,642 | 1,311 | |||||||||||||||||||||||||||
| Total non-current assets | 16,500 | 18,209 | 17,388 | ||||||||||||||||||||||||||||
| Securities held for trading | 9,828 | 7,413 | 11,224 | ||||||||||||||||||||||||||||
| Trade and other receivables | 8 | 64,959 | 41,490 | 29,894 | |||||||||||||||||||||||||||
| Cash and cash equivalents | 6,544 | 5,966 | 6,058 | ||||||||||||||||||||||||||||
| Total current assets | 81,331 | 54,869 | 47,176 | ||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||||
| Trade payables | 9 | (57,026) | (34,041) | (21,832) | |||||||||||||||||||||||||||
| Tax and social security | (690) | (700) | (823) | ||||||||||||||||||||||||||||
| Corporation tax liabilities | (153) | - | (7) | ||||||||||||||||||||||||||||
| Other payables | 9 | (3,965) | (4,277) | (4,582) | |||||||||||||||||||||||||||
| Held for trading liabilities | (1,866) | (1,689) | (4,891) | ||||||||||||||||||||||||||||
| Total current liabilities | (63,700) | (40,707) | (32,135) | ||||||||||||||||||||||||||||
| Net current assets | 17,631 | 14,162 | 15,041 | ||||||||||||||||||||||||||||
| Deferred tax liability | (1,011) | (1,033) | (952) | ||||||||||||||||||||||||||||
| Total non-current liabilities | (1,011) | (1,033) | (952) | ||||||||||||||||||||||||||||
| Net assets | 33,120 | 31,338 | 31,477 | ||||||||||||||||||||||||||||
| Equity | |||||||||||||||||||||||||||||||
| Issued share capital | 6,187 | 6,183 | 6,187 | ||||||||||||||||||||||||||||
| Share premium account | 36,740 | 36,709 | 36,740 | ||||||||||||||||||||||||||||
| Merger reserve | 21,810 | 21,810 | 21,810 | ||||||||||||||||||||||||||||
| Other reserve | (7,626) | (7,365) | (7,441) | ||||||||||||||||||||||||||||
| Retained earnings | (23,991) | (25,999) | (25,819) | ||||||||||||||||||||||||||||
| Total equity | 33,120 | 31,338 | 31,477 |
The notes below form part of these financial statements.
Condensed consolidated interim statement of cash flows (unaudited)
| £‘000 | 6 months 30 June 2014 | 6 months 30 June 2013 | 12 months 31 December 2013 | ||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||
| Profit after tax | 1,554 | 145 | 205 | ||||||||||||||||
| Net financial expense/(income) | 5 | 5 | (15) | ||||||||||||||||
| Depreciation and amortisation | 170 | 127 | 295 | ||||||||||||||||
| Net loss on available for sale investments | - | 7 | 39 | ||||||||||||||||
| (Profit)/loss on disposal of subsidiary | (29) | 141 | - | ||||||||||||||||
| Movement in securities held for trading | (1,631) | (2,920) | (3,527) | ||||||||||||||||
| Increase in amounts owed by market counterparties | 1,105 | (1,948) | (3,286) | ||||||||||||||||
| Decrease/(increase) in trade and other receivables | (168) | (1,046) | (408) | ||||||||||||||||
| (Decrease) in trade payables and provisions | (826) | (1,656) | (668) | ||||||||||||||||
| IFRS 2 share-based payments and related charges | 274 | 229 | 349 | ||||||||||||||||
| Income tax expense | 401 | 49 | 335 | ||||||||||||||||
| Net cash flow from operating activities | 855 | (6,867) | (6,681) | ||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||
| Financial income received | - | - | 34 | ||||||||||||||||
| Acquisition of plant and equipment | (177) | (452) | (623) | ||||||||||||||||
| Proceeds from disposal of investments and dividends | 27 | 125 | |||||||||||||||||
| Net cash from investing activities | (177) | (425) | (464) | ||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||
| Proceeds from the issue of share capital | - | - | 35 | ||||||||||||||||
| Purchase of own shares for EBT | (197) | (352) | (532) | ||||||||||||||||
| Financial expense | (5) | (5) | (19) | ||||||||||||||||
| Repayment of EBT loan | 10 | 24 | 128 | ||||||||||||||||
| Net cash from financing activities | (192) | (333) | (388) | ||||||||||||||||
| Net increase in cash and cash equivalents | 486 | (7,625) | (7,533) | ||||||||||||||||
| Cash and cash equivalents at 1 January | 6,058 | 13,591 | 13,591 | ||||||||||||||||
| Cash and cash equivalents at 30 June / 31 December | 6,544 | 5,966 | 6,058 |
Condensed consolidated interim statement of changes in equity for the half year to 30 June 2014
| £‘000 | Issued share capital | Share premium | Merger reserve | Special reserve | Other reserve | Treasury shares | Retained earnings | Total equity | |||||||||
| At 1 January 2014 | 6,187 | 36,740 | 21,810 | - | (7,441) | - | (25,819) | 31,477 | |||||||||
| Total comprehensive income for the period | |||||||||||||||||
| Profit for the period | - | - | - | - | - | - | 1,554 | 1,554 | |||||||||
| Other items recorded directly in equity | |||||||||||||||||
| Share-based payments | - | - | - | - | - | - | 274 | 274 | |||||||||
| Shares transferred under employee share plans | - | - | - | - | - | - | - | - | |||||||||
| Transfer of special reserve to retained earnings | - | - | - | - | - | - | - | - | |||||||||
| Purchase of own shares for EBT | - | - | - | - | (195) | - | - | (195) | |||||||||
| Decrease in shares held by EBT | - | - | - | - | 10 | - | - | 10 | |||||||||
| At 30 June 2014 | 6,187 | 36,740 | 21,810 | - | (7,626) | - | (23,991) | 33,120 |
Condensed consolidated interim statement of changes in equity for the half year to 30 June 2013
| £‘000 | Issued share capital | Share premium | Merger reserve | Special reserve | Other reserve | Treasury shares | Retained earnings | Total equity | |||||||||
| At 1 January 2013 | 6,183 | 36,709 | 21,810 | 9,595 | (6,734) | (303) | (35,968) | 31,292 | |||||||||
| Total comprehensive income for the period | |||||||||||||||||
| Profit for the period | - | - | - | - | - | - | 145 | 145 | |||||||||
| Other items recorded directly in equity | |||||||||||||||||
| Share-based payments | - | - | - | - | - | - | 229 | 229 | |||||||||
| Shares transferred under employee share plans | - | - | - | - | (303) | 303 | - | - | |||||||||
| Transfer of special reserve to retained earnings | - | - | - | (9,595) | - | - | 9,595 | - | |||||||||
| Purchase of own shares for EBT | - | - | - | - | (352) | - | - | (352) | |||||||||
| Decrease in shares held by EBT | - | - | - | - | 24 | - | - | 24 | |||||||||
| At 30 June 2013 | 6,183 | 36,709 | 21,810 | - | (7,365) | - | (25,999) | 31,338 |
Consolidated statement of changes in equity for the year ended 31 December 2013
| £‘000 | Issued share capital | Share premium | Merger reserve | Special reserve | Other reserve | Treasury shares | Retained earnings | Total equity | |||||||||
| At 1 January 2013 | 6,183 | 36,709 | 21,810 | 9,595 | (6,734) | (303) | (35,968) | 31,292 | |||||||||
| Total comprehensive income for the period | |||||||||||||||||
| Profit for the year | - | - | - | - | - | - | 205 | 205 | |||||||||
| Other comprehensive income | |||||||||||||||||
| Other items recorded directly in equity | |||||||||||||||||
| Share-based payments | - | - | - | - | - | - | 349 | 349 | |||||||||
| Shares issued under employee share plans | 4 | 31 | - | - | - | - | - | 35 | |||||||||
| Shares transferred under employee share plans | - | - | - | - | (303) | 303 | - | - | |||||||||
| Transfer of special reserve to retained earnings | - | - | - | (9,595) | - | - | 9,595 | - | |||||||||
| Purchase of own shares for EBT | - | - | - | - | (532) | - | - | (532) | |||||||||
| Decrease in shares held by EBT | - | - | - | - | 128 | - | - | 128 | |||||||||
| At 31 December 2013 | 6,187 | 36,740 | 21,810 | - | (7,441) | - | (25,819) | 31,477 |
1 Legal status and basis of preparation
1.1 Legal status
Panmure Gordon & Co. plc (the “Company”) is a company domiciled in the United Kingdom. The address of the Company’s registered office is One New Change, London, EC4M 9AF. The consolidated interim financial statements of the Company for the 6 months ended 30 June 2014 relate to the Company and its subsidiaries (together referred to as the “Group”).
1.2 Basis of preparation and statement of compliance with International Financial Reporting Standards
The interim consolidated financial statements of the Group have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (‘IASB’) and as endorsed by the EU. They do not include all of the information required for full annual financial statements and should be read in conjunction with the Group’s consolidated financial statements for the year ended 31 December 2013, which were prepared in accordance with International Financial Reporting Standards (‘IFRSs’) as issued by the IASB and as endorsed by the EU. EU-endorsed IFRSs may differ from IFRSs as issued by the IASB if, at any point in time, new or amended IFRSs have not been endorsed by the EU.
The accounting policies are consistent with those applied by the Group in its 2013 annual financial statements. During the period ended 30 June 2014, the Group adopted a number of amendments to standards and interpretations which did not have a significant effect on the consolidated financial statements of the Group.
The Group earned a profit during the period ended 30 June 2014 although it has a negative retained earnings position. The directors note that the continuing business was profitable during the period and during the previous financial year and the Group had cash resources of £6.5m at 30 June 2014 (2013: £6.0m) and no short term borrowings (2013: nil). Consequently the directors believe 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 these interim results.
1.3 Comparative information
These interim consolidated financial statements include comparative information as required by IAS 34 and the AIM rules for Companies.
The comparative figures for the financial year ended 31 December 2013 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
1.4 Use of estimates and assumptions
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. Judgements made by management in the application of adopted IFRSs that have a significant effect on the financial statements and estimates with a significant risk of material adjustment are discussed in note 1.1 within the Report and Financial Statements 2013. The areas highlighted in the year-end financial statements include:
i) Goodwill and investment in subsidiaries
ii) Deferred tax
iii) Provisions
iv) Share-based payments
2 Segmental analysis
The Group reports its operating segments according to how the Group's Chief Operating Decision Maker (CODM) allocates resources to each segment and assesses performance. In this respect the Group's CODM has been defined as the Group's CEO.
Following the disposal of the Group’s US business during 2012, the geographical division is made between the UK and Swiss operations only. In the segmental table below, the results of the Swiss office appear in the ‘Other’ column, together with the results of the discontinued operation.
There are no regular major customers that account for more than 10% of revenue.
Segmental analysis for the 6 months to 30 June 2014, the 6 months to 30 June 2013 and the 12 months to 31 December 2013, reconciled to the income statement
| UK | Other | Total | |||||||||||||||||
| 6 months 30 Jun 2014 | 6 months 30 Jun 2013 | 12 months 31 Dec 2013 | 6 months 30 Jun 2014 | 6 months 30 Jun 2013 | 12 months 31 Dec 2013 | 6 months 30 Jun 2014 | 6 months 30 Jun 2013 | 12 months 31 Dec 2013 | |||||||||||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |||||||||||
| Net commission and trading income | 4,877 | 3,606 | 8,672 | 480 | 656 | 1,123 | 5,357 | 4,262 | 9,795 | ||||||||||
| Corporate finance fee income | 11,150 | 9,095 | 17,635 | 19 | 19 | 38 | 11,169 | 9,114 | 17,673 | ||||||||||
| Loss on corporate investments | (642) | (774) | (580) | - | - |
| (642) | (774) | (580) | ||||||||||
| Wealth management and other income | 347 | 357 | 430 | - | - | - | 347 | 357 | 430 | ||||||||||
| Net (loss) on AFS investments | - | (7) | (39) | - | - | - | - | (7) | (39) | ||||||||||
| Foreign exchange (loss)gain | (22) | 16 | (17) | (6) | 17 | 6 | (28) | 33 | (11) | ||||||||||
| On-going administration costs | (13,191) | (11,416) | (23,200) | (609) | (777) | (1,358) | (13,800) | (12,193) | (24,558) | ||||||||||
| Segmental operating profit/(loss) | 2,519 | 877 | 2,901 | (116) | (85) | (191) | 2,403 | 792 | 2,710 | ||||||||||
| Redundancy and restructuring charges | (198) | (223) | (1,209) | - | - | - | (198) | (223) | (1,209) | ||||||||||
| Share-based payment charges | (274) | (229) | (349) | - | - | - | (274) | (229) | (349) | ||||||||||
| Operating profit/(loss) | 2,047 | 425 | 1,343 | (116) | (85) | (191) | 1,931 | 340 | 1,152 | ||||||||||
| Net financial (expense)/ income | (5) | (5) | 15 | - | - | - | (5) | (5) | 15 | ||||||||||
| Profit/(loss) before tax | 2,042 | 420 | 1,358 | (116) | (85) | (191) | 1,926 | 335 | 1,167 | ||||||||||
| Income tax on continuing operations | (384) | (49) | (335) | (17) | - | - | (401) | (49) | (335) | ||||||||||
| Profit/(Loss) on disposal of discontinued operation | - | - | - | 29 | (141) | (627) | 29 | (141) | (627) | ||||||||||
| Profit/(loss) for period attributable to the owners of the Company |
1,658 |
371 |
1,023 |
(104) |
(226) |
(818) |
1,554 |
145 |
(205) | ||||||||||
| Net Assets | UK | Other1 | Total | ||||||||||||||||
| As at 30 Jun 2014 | As at 30 Jun 2013 | As at 31 Dec 2013 | As at 30 Jun 2014 | As at 30 Jun 2013 | As at 31 Dec 2013 | As at 30 Jun 2014 | As at 30 Jun 2012 | As at 31 Dec 2013 | |||||||||||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |||||||||||
| Non-current assets (inc goodwill) | 16,500 | 18,209 | 17,388 | - | - | - | 16,500 | 18,209 | 17,388 | ||||||||||
| Current assets | 81,331 | 54,869 | 47,176 | - | - | - | 81,331 | 54,869 | 47,176 | ||||||||||
| Current liabilities | (63,700) | (40,707) | (32,135) | - | - | - | (63,700) | (40,707) | (32,135) | ||||||||||
| Non-current liabilities | (1,011) | (1,033) | (952) | - | - | - | (1,011) | (1,033) | (952) | ||||||||||
| Capital expenditure | (177) | (452) | (623) | - | - | - | (177) | (452) | (623) | ||||||||||
1 The Swiss business operates as a representative office of the UK business and therefore shares assets with the UK business
3 Share-based payments
The Group’s share based payment plans are described in full within the Group’s consolidated financial statements for the year ended December 2013.
4 Taxation
The current tax charge for the period is different from the standard rate of corporation tax in the UK of 21.50% (2013: 23.25%).
| Tax on profit on ordinary activities: | 6 months 30 June 2014 | 6 months 30 June 2013 | 12 months 31 December 2013 | ||||
| £‘000 | £‘000 | £‘000 | |||||
| Analysis of tax charge in period: | |||||||
| UK corporation tax at 21.50% (2013: 23.25%) | |||||||
| Prior year adjustments | - | - | (6) | ||||
| Current year tax (charge) | (36) | - | - | ||||
| Foreign tax adjustments | (17) | (14) | (28) | ||||
| (53) | (14) | (34) | |||||
| Deferred tax | |||||||
| Prior year adjustments to deferred tax credit | - | - | 8 | ||||
| Current year deferred tax charge | (348) | (35) | (309) | ||||
| (348) | (35) | (301) | |||||
| Tax charge on profits on ordinary activities | (401) | (49) | (335) | ||||
| Effective tax rate charge | (20.82)% | (25.97)% | (62.0)% | ||||
| Factors affecting tax charge: | |||||||
| Profit on ordinary activities after tax | 1,554 | 145 | 205 | ||||
| Tax on continuing operations | 401 | 49 | 358 | ||||
| Tax on discontinued operation | - | - | (23) | ||||
| Profit on ordinary activities before tax | 1,955 | 194 | 540 | ||||
| Profit on ordinary activities multiplied by rate of UK corporation tax at 21.50% (2013: 23.25%) | (414) | (45) | (125) | ||||
| Effects of: | |||||||
| Expenses not deductible for tax purposes | (37) | (56) | (89) | ||||
| Losses utilised previously not recognised | - | 71 | - | ||||
| Tax losses not recognised from continuing operations | - | - | (119) | ||||
| Tax losses not recognised from discontinued operation | - | - | - | ||||
| Differences relating to share schemes | 38 | (5) | (16) | ||||
| Foreign tax | (17) | (15) | (21) | ||||
| Change in corporation tax rate | 29 | - | 34 | ||||
| Deemed goodwill amortisation | 53 | 61 | 106 | ||||
| Goodwill on consolidation | (53) | (61) | (106) | ||||
| Adjustment to tax charge in respect of previous periods | - | 1 | 1 | ||||
| Total tax charge on profits on ordinary activities | (401) | (49) | (335) |
At 30 June 2014, The Group has recognised a deferred tax asset relating to UK losses carried forward.
5 Earnings per share
Earnings per share (EPS) are calculated on a net basis using the profit on ordinary activities after taxation divided by the weighted average number of shares detailed below.
Continuing business
| 6 months | 6 months | 12 months | |||||||||||||||||
| 30 June | 30 June | 31 December | |||||||||||||||||
| 2014 | 2013 | 2013 | |||||||||||||||||
| Weighted average number of ordinary shares in issue | 15,545,473 | 15,530,815 | 15,538,145 | ||||||||||||||||
| Fully diluted weighted average number of ordinary shares in issue | 15,856,678 | 15,785,815 | 15,766,145 | ||||||||||||||||
| Basic profit per share | 9.81p | 1.84p | 5.36p | ||||||||||||||||
| Diluted profit per share | 9.62p | 1.81p | 5.28p |
Total Group
| 6 months | 6 months | 12 months | |||||||||||||||||
| 30 June | 30 June | 31 December | |||||||||||||||||
| 2014 | 20131 | 2013 | |||||||||||||||||
| Weighted average number of ordinary shares in issue | 15,545,473 | 15,530,815 | 15,538,145 | ||||||||||||||||
| Fully diluted weighted average number of ordinary shares in issue | 15,856,679 | 15,785,815 | 15,766,145 | ||||||||||||||||
| Basic profit/ per share | 10.00p | 0.93p | 1.32p | ||||||||||||||||
| Diluted profit/ per share | 9.80p | 0.92p | 1.30p |
6 Share capital and reserves
The Company issued no new shares during the six months to 30 June 2014.
At 30 June 2014 the Company’s issued share capital comprised 15,545,473 ordinary 4p shares and 15,458,200 deferred 36p shares. At the Company’s Annual General Meeting on 21 May 2014, shareholders approved a reduction of the Company’s share capital by cancellation of the deferred 36p shares and cancellation of the entire share premium account. Since the period end, a Court Order has been obtained confirming the share capital reduction took effect on 3 September 2014. As a consequence the amount standing to the credit of the share capital reserve in respect of the deferred shares and the full amount of the share premium reserve have been transferred to retained earnings, which as a result have become positive.
The ‘other reserve’ includes the nominal value of share capital owned by the Panmure Gordon & Co. plc No. 2 Employee Benefit Trust in respect of the 2005 Employee Share Option Plan and the cost of shares purchased in the market. At 30 June 2014 the Trust held 1,204,538 ordinary shares (December 2013: 1,190,602 shares).
7 Redundancy, restructuring and other non-recurring charges
| 6 months | 6 months | 12 months | |||||||||||||||||||||||||||||||||||||
| 30 June | 30 June | 31 December | |||||||||||||||||||||||||||||||||||||
| 2014 | 2013 | 2013 | |||||||||||||||||||||||||||||||||||||
| £‘000 | £‘000 | £‘000 | |||||||||||||||||||||||||||||||||||||
| Redundancy charges | 198 | 223 | 723 | ||||||||||||||||||||||||||||||||||||
| Litigation costs | - | - | 486 | ||||||||||||||||||||||||||||||||||||
| Total | 198 | 223 | 1,209 |
8 Trade and other receivables
| As at | As at | As at | |||||||||||||||||||||||||||||||||||||
| 30 June | 30 June | 31 December | |||||||||||||||||||||||||||||||||||||
| 2014 | 2013 | 2013 | |||||||||||||||||||||||||||||||||||||
| £‘000 | £‘000 | £‘000 | |||||||||||||||||||||||||||||||||||||
| Non-current assets | |||||||||||||||||||||||||||||||||||||||
| Other receivables | 725 | 1,642 | 1,311 | ||||||||||||||||||||||||||||||||||||
| Total | 725 | 1,642 | 1,311 | ||||||||||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||||||||||||
| Trade receivables | 615 | 2,384 | 1,225 | ||||||||||||||||||||||||||||||||||||
| Stock borrow1 | 1,043 | 865 | 1,368 | ||||||||||||||||||||||||||||||||||||
| Market receivables | 59,843 | 36,821 | 25,532 | ||||||||||||||||||||||||||||||||||||
| Other receivables | 668 | 559 | 774 | ||||||||||||||||||||||||||||||||||||
| Prepayments and accrued income | 2,790 | 861 | 995 | ||||||||||||||||||||||||||||||||||||
| Total | 64,959 | 41,490 | 29,894 |
1 Stock borrow reflects collateral placed against the value of stock borrowed.
The level of market receivables at a period end is dependent on the level of agency and trading activity in the preceding days. The majority of market receivables reside within the UK business segment.
Within non-current assets, other receivables represent loans made to employees under the Group’s Matching Share Plan.
9 Trade and other payables
| As at | As at | As at | |||||||||||||||||||||||||||||||||||||
| 30 June | 30 June | 31 December | |||||||||||||||||||||||||||||||||||||
| 2014 | 2013 | 2013 | |||||||||||||||||||||||||||||||||||||
| £‘000 | £‘000 | £‘000 | |||||||||||||||||||||||||||||||||||||
| Market payables | (53,249) | (33,588) | (20,961) | ||||||||||||||||||||||||||||||||||||
| Stock lending1 | (3,128) | - | - | ||||||||||||||||||||||||||||||||||||
| Trade payables | (649) | (453) | (871) | ||||||||||||||||||||||||||||||||||||
| Total trade payables | (57,026) | (34,041) | (21,832) | ||||||||||||||||||||||||||||||||||||
| Other payables | (716) | (244) | (609) | ||||||||||||||||||||||||||||||||||||
| Provisions, accruals and deferred income | (3,249) | (4,033) | (3,973) | ||||||||||||||||||||||||||||||||||||
| Total other payables | (3,965) | (4,277) | (4,582) |
1 Stock lending reflects collateral placed against the value of stock concerned.
The level of market payables at a period end is dependent on the level of agency and trading activity in the preceding days.
Litigation
In the normal course of business there may be various litigation claims and contingencies pending against the Group which, in the opinion of management, will be resolved with no material impact on the Group’s financial position or results of operations.
10 Discontinued operation
Following the sale of the Company’s interest in ThinkEquity LLC in 2012 and ThinkEquity’s subsequent bankruptcy filing, certain legal claims which were concluded and fully provided for in 2013 are due to be settled fully in 2014. It is not anticipated that any further material claims or costs associa
| Results from discontinued operation | As at | As at | As at | ||||||||||
| 30 June | 30 June | 31 December | |||||||||||
| 2014 | 2013 | 2013 | |||||||||||
| Trading activities | £‘000 | £‘000 | £’000 | ||||||||||
| Revenue | - | - | - | ||||||||||
| Expenses | - | - | - | ||||||||||
| Results from operating activities | - | - | - | ||||||||||
| Income tax | - | - | - | ||||||||||
| Results of trading activities | - | - | - | ||||||||||
| Discontinued operation | |||||||||||||
| Other income/(costs) | 29 | (141) | (627) | ||||||||||
| Profit/(Loss) on disposal of discontinued operation | 29 | (141) | (627) | ||||||||||
| Profit/(Loss) for the year | 29 | (141) | (627) | ||||||||||
| Cash flow from discontinued operation | As at | As at | As at | ||||||||||
| 30 June | 30 June | 31 December | |||||||||||
| 2014 | 2013 | 2013 | |||||||||||
| £‘000 | £’000 | £’000 | |||||||||||
| Net cash from operating activities | - | - | - | ||||||||||
| Cash flows from investing activities | (298) | - | (1,367) | ||||||||||
| Net cash from financing activities | - | - | - | ||||||||||
| Net cash flow for the year | (298) | - | (1,367) |
11 Financial Instruments
The group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements. The different levels have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).The table below analyses financial instruments carried at fair value by valuation method.
| Group | At 30 June 2014 | At 30 June 2013 | |||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||
| Available for sale assets | - | - | 8 | 8 | - | - | 152 | 152 | |||||||||||||||||||||||||||||||
| Assets held for trading | 6,622 | 3,206 | - | 9,828 | 5,788 | 1,625 | - | 7,413 | |||||||||||||||||||||||||||||||
| Liabilities held for trading | (1,538) | (327) | - | (1,866) | (1,303) | (386) | - | (1,689) | |||||||||||||||||||||||||||||||
| At 31 December 2013 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Available for sale assets | - | - | 8 | 8 | |||||||||||||||||||
| Assets held for trading | 5,566 | 5,657 | - | 11,223 | |||||||||||||||||||
| Liabilities held for trading | (1,836) | (3,056) | - | (4,892) | |||||||||||||||||||
There have been no transfers of assets between the levels noted above in the period under review.
Corporate investments
During the period the Company’s positions in a small number of corporate client stocks were valued on a mark to market basis and have declined in value by £0.642m (H1 2013: £0.774m).
12 General
The interim report was approved by the board of directors on 22 September 2014.
This report will be sent to shareholders and will be made available to the public, upon request, at the registered office of Panmure Gordon & Co. plc, One New Change, London EC4M 9AF or from the Company’s website www.panmure.com.
INDEPENDENT REVIEW REPORT TO PANMURE GORDON & CO. PLC
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2014 which comprises the condensed consolidated interim income statement, condensed consolidated interim statement of comprehensive income, condensed consolidated interim statement of financial position, condensed consolidated interim statement of cash flows, condensed consolidated interim statement of changes in equity and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.
As disclosed in note 1.2 the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.
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 UK. 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 report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the AIM Rules.
Zaffarali Khakoo
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London E14 5GL
22 September 2014
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