PMR.L Regulatory News (PMR)

24 Sep 2013 07:00

Panmure Gordon & Co. plc

Panmure Gordon reports 2013 first half results

London, 24 September 2013 – 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 2013.

Financial highlights

Profit from continuing operations of £0.3m (H1 2012: £1.2m) Overall profitability of £0.1m (H1 2012: loss of £0.8m) after the effect of discontinued operations 44% increase in corporate finance and other income to £9.5m (H1 2012: £6.6m) 16% increase in net commission and fee income to £13.0m (H1 2012: £11.2m) Debt free balance sheet

Operational highlights

Growth in corporate finance revenues reflecting a strong client list 24% growth in corporate client list to 119 (2012: 96); this has grown to 123 since period end Active on three IPOs in the reporting period, including the largest IPO of the year to date in London and also the first IPO by the investment funds team since joining Hired new Leeds-based corporate finance team Since period end, new heads of trading and securities have been appointed

Phillip Wale, Chief Executive, commented:

“I am pleased to report that we have enjoyed an encouraging year to date, based on the continuation of the turnaround strategy that we implemented last year.

“We have added greater diversity to our revenues, which also helped us to increase the number of retained corporate clients and transaction revenues. In all, we were active on 16 transactions for our clients, helping to raise over £900m during the reporting period.

“Whilst our underlying business remains solid, we continue to look for new ways to deploy our capital more effectively. We are also working more closely with QInvest, our major shareholder, to exploit potential synergies.

“Looking ahead, markets are likely to remain challenging. However, we have an encouraging pipeline of corporate transactions and with our financial strength, absence of debt and disciplined cost to revenue controls, we look forward to the remainder of the year with confidence.”

Enquiries:

Panmure Gordon
Phillip Wale, Chief Executive
Philip Tansey, Chief Financial Officer		020 7886 2500
Capital MSL
Adam Leviton		020 7307 5339
Simon Evans		020 7307 5330
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett/Salmaan Khawaja/Jen Clarke		020 7383 5100

Publication quality photos are available from Capital MSL

Chief Executive’s review

Panmure Gordon’s refocusing of its business commenced in 2012 and this year the Group is beginning to reap the benefits of the important structural changes we have made.

Our reputation as a provider of high quality advice to companies seeking access to the London market is reflected in our increasing corporate finance and other income, which rose 44% to £9.5m (H1 2012: £6.6m). The increase is in part down to the excellent performance of our investment funds team which completed its first IPO, raising more than £150m for our client. In the reporting period, we were active on 16 significant transactions for our clients, helping them to raise over £900m, and our pipeline of corporate transactions for the remainder of the year is healthy.

Commission and trading income of £5.2m was marginally up (H1 2012: £5.2m) reflecting the continued lack of volume in equity markets and volatile trading conditions, but the significant improvement in corporate finance revenues drove a 16% increase in overall net commission and fee income to £13.0m (H1 2012: £11.2m). Net commission and fee income is stated after losses of £0.8m (2012: nil) on corporate investments which are expected to be recouped in time.

While the overall profit attributable to shareholders in the period was a modest £0.1m, it represents a turn-around from losses (H1 2012: loss of £0.8m), reflecting in part the much lower negative impact of our former US business. The continuing business showed an operating profit of £0.3m (H1 2012: £1.2m). Increased administrative costs include some non-recurring items and reflect the acquisition of new teams associated with a sharpened focus on allocating resources to revenue generation. Nevertheless, pre-bonus operating costs are expected to be lower in the second half of the year than in the first six months as a consequence of management action already undertaken in the business transformation programme.

Outlook

We have started the year profitably and the corporate client list continues to grow. Nevertheless, we remain vigilant and continue to focus on tightly controlling costs and building our business by ensuring our resources are appropriately allocated to revenue opportunities. The acquisition of new teams associated with the increased costs will, we believe, drive increased returns in the future.

Markets are likely to remain challenging, but our healthy pipeline of corporate transaction activity, financial strength, and the continued strong support of our major shareholder, QInvest, means we look forward to the remainder of the year with confidence.

Phillip Wale

Chief Executive

Condensed consolidated interim income statement (unaudited)

For the half year to 30 June 2013

£‘000		Notes		6 months 30 June 2013		6 months 30 June 2012		12 months 31 December 2012
Continuing operations
Commission and trading income				5,215		5,159		10,139
Commission and trading expense				(953)		(553)		(1,072)
Net commission and trading income				4,262		4,606		9,067
Corporate finance and other income				9,471		6,597		12,156
Loss on corporate investments		11		(774)		-		-
Net commission and fee income				12,959		11,203		21,223
Net loss on available for sale investments				(7)		(31)		1,286
Administrative expenses1				(12,160)		(8,709)		(20,464)
Redundancy, restructuring and other non-recurring charges1		7		(223)		(200)		(504)
Operating profit before share-based payments				569		2,263		1,541
Share-based payments1		3		(229)		(240)		(969)
Operating profit				340		2,023		572
Financial income				-		15		28
Financial expense				(5)		(2)		(5)
Net financial (expense)/income				(5)		13		23
Profit before tax from continuing operations				335		2,036		595
Income tax		4		(49)		(842)		(563)
Profit from continuing operations				286		1,194		32
Discontinued operation
Loss on discontinued operation (net of tax)		10		(141)		(2,014)		(3,555)
Profit/(loss) for the period attributable to the owners of the Company				145		(820)		(3,523)
Basic profit per share from continuing operations2		5		1.84p		7.95p		0.21p
Diluted profit per share from continuing operations2		5		1.81p		7.75p		0.20p
Basic profit/(loss) per share2		5		0.93p		(5.46)p		(23.08)p
Diluted profit/(loss) per share2		5		0.92p		(5.46)p		(23.08)p

1 Administrative expenses which total £12.6m (6 months 30 June 2012: £9.1m, 12 months 31 December 2012: £21.9m) have been presented separately here owing to their individual nature and size

2 The comparative figures have been restated to reflect the share capital reorganisation which took place in the 6 months to 30 June 2013

The notes below form part of these financial statements.

Condensed consolidated interim statement of comprehensive income (unaudited)

For the half year to 30 June 2013

£‘000		6 months30 June2013		6 months30 June2012		12 months31 December2012
Profit/(loss) for the period attributable to the owners of the Company		145		(820)		(3,523)
Other comprehensive loss
Foreign exchange translation differences		-		(56)		(56)
Foreign currency translation reserve recycled on disposal of subsidiary		-		(3,084)		(3,084)
Total other comprehensive loss for the period net of tax		-		(3,140)		(3,140)
Total comprehensive profit/(loss) for the period attributable to the owners of the Company		145		(3,960)		(6,663)

Condensed consolidated interim statement of financial position (unaudited)

At 30 June 2013

£‘000		Notes		As at 30 June 2013		As at 30 June 2012		As at 31 December 2012
Assets
Intangibles				13,201		13,201		13,201
Plant and equipment				2,008		186		1,683
Available for sale investments				152		1,008		188
Deferred tax asset				1,206		882		1,179
Other receivables		8		1,642		82		1,917
Total non-current assets				18,209		15,359		18,168
Securities held for trading				7,413		3,941		4,563
Trade and other receivables		8		41,490		27,237		15,712
Cash and cash equivalents				5,966		11,687		13,591
Total current assets				54,869		42,865		33,866
Current liabilities
Trade payables		9		(34,041)		(19,179)		(11,743)
Tax and social security				(700)		(417)		(846)
Other payables		9		(4,277)		(1,998)		(5,421)
Held for trading liabilities				(1,689)		(1,889)		(1,759)
Total current liabilities				(40,707)		(23,483)		(19,769)
Net current assets				14,162		19,382		14,097
Deferred tax liability				(1,033)		(952)		(973)
Total non-current liabilities				(1,033)		(952)		(973)
Net assets				31,338		33,789		31,292
Equity
Issued share capital				6,183		6,042		6,183
Shares to be issued (including share premium)				-		41		-
Share premium account				36,709		36,665		36,709
Merger reserve				21,810		21,810		21,810
Special reserve				-		9,595		9,595
Other reserve				(7,365)		(6,336)		(6,734)
Treasury shares				-		(303)		(303)
Retained earnings				(25,999)		(33,725)		(35,968)
Total equity				31,338		33,789		31,292

The notes below form part of these financial statements.

Condensed consolidated interim statement of cash flows (unaudited)

£‘000		6 months 30 June 2013		6 months 30 June 2012		12 months 31 December 2012
Cash flows from operating activities
Profit/(loss) after tax		145		(820)		(3,523)
Net financial (income)/expense		5		(12)		(23)
Depreciation and amortisation		127		99		200
Net profit/(loss) on available for sale investments		7		31		(1,286)
Loss on disposal of subsidiary		141		274		1,815
Movement in securities held for trading		(2,920)		1,573		821
Increase in amounts owed by market counterparties		(1,948)		(1,684)		(956)
(Increase)/decrease in trade and other receivables		(1,046)		1,585		200
(Decrease)/increase in trade payables and provisions		(1,656)		(2,077)		3,212
IFRS 2 share-based payments and related charges		229		937		1,397
Income tax expense		49		842		563
Net cash flow from operating activities		(6,867)		748		2,420
Income taxes received		-		-		-
Net cash from operating activities		(6,867)		748		2,420
Cash flows from investing activities
Financial income received		-		14		28
Acquisition of plant and equipment		(452)		-		(1,654)
Proceeds from disposal of investments and dividends		27		289		2,418
Disposal of discontinued operation net of cash		-		(4,954)		(4,954)
Net cash from investing activities		(425)		(4,651)		(4,162)
Cash flows from financing activities
Proceeds from the issue of share capital		-		33		177
Purchase of own shares for EBT		(352)		(259)		(663)
Financial expense		(5)		(2)		(5)
Repayment of EBT loan		24		19		25
Net cash from financing activities		(333)		(209)		(466)
Net decrease in cash and cash equivalents		(7,625)		(4,112)		(2,208)
Cash and cash equivalents at 1 January		13,591		15,855		15,855
Effect of exchange rate fluctuations		-		(56)		(56)
Cash and cash equivalents at 30 June / 31 December		5,966		11,687		13,591

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

Condensed consolidated interim statement of changes in equity for the half year to 30 June 2012

£‘000		Issued share capital				Shares to be issued		Share premium		Merger reserve		Special reserve		Other reserve		Foreign currency translation reserve		Treasury shares		Retained earnings		Total equity
At 1 January 2012		6,009				86		36,620		21,810		9,595		(3,873)		3,140		(2,526)		(33,842)		37,019
Total comprehensive income for the period
Loss for the period		-				-		-		-		-		-		-		-		(820)		(820)
Other comprehensive income
Foreign currency translation differences		-				-		-		-		-		-		(56)		-		-		(56)
Foreign currency translation recycled to other comprehensive income on disposal		-				-		-		-		-		-		(3,084)		-		-		(3,084)
Other items recorded directly in equity
Share-based payments		-				-		-		-		-		-		-		-		937		937
Shares issued under employee share plans		33				(45)		45		-		-		-		-		-		-		33
Shares transferred under employee share plans		-				-		-		-		-		(2,223)		-		2,223		-		-
Purchase of own shares for EBT		-				-		-		-		-		(259)		-		-		-		(259)
Decrease in shares held by EBT		-				-		-		-		-		19		-		-		-		19
At 30 June 2012		6,042				41		36,665		21,810		9,595		(6,336)		-		(303)		(33,725)		33,789
Consolidated statement of changes in equity for the year ended 31 December 2012
£‘000				Issued share capital		Shares to be issued		Share premium		Merger reserve		Special reserve		Other reserve		Foreign currency translation reserve		Treasury shares		Retained earnings		Total equity
At 1 January 2012				6,009		86		36,620		21,810		9,595		(3,873)		3,140		(2,526)		(33,842)		37,019
Total comprehensive income for the period
Loss for the year				-		-		-		-		-		-		-		-		(3,523)		(3,523)
Other comprehensive income
Foreign currency translation differences				-		-		-		-		-		-		(56)		-		-		(56)
Foreign currency translation recycled to P&L on disposal				-		-		-		-		-		-		(3,084)		-		-		(3,084)
Other items recorded directly in equity
Share-based payments				-		-		-		-		-		-		-		-		1,397		1,397
Shares issued under employee share plans				174		(86)		89		-		-		-		-		-		-		177
Shares transferred under employee share plans				-		-		-		-		-		(2,223)		-		2,223		-		-
Purchase of own shares for EBT				-		-		-		-		-		(663)		-		-		-		(663)
Decrease in shares held by EBT				-		-		-		-		-		25		-		-		-		25
At 31 December 2012				6,183		-		36,709		21,810		9,595		(6,734)		-		(303)		(35,968)		31,292

Notes to the condensed consolidated interim financial statements (unaudited)

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 interim financial statements of the Company for the 6 months ended 30 June 2013 comprise 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 2012, 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 2012 annual financial statements. During the period ended 30 June 2013, 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 incurred a slight profit during the period ended 30 June 2013 and has a negative retained earnings position. However, 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 £6.0m at 30 June 2013 (2012: £11.7m) and no short term borrowings (2012: 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 2012 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 2012. 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.

In previous years the CODM has allocated resources across the Group based on results and performance in each geographic area of operation. Following the disposal of the Group’s US business during 2012, the geographical division is now 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.

The basis of segmentation in respect of assets and non-current assets has also changed as above. There are no regular major customers that account for more than 10% of revenue.

Segmental analysis for the 6 months to 30 June 2013, the 6 months to 30 June 2012 (rebased) and the 12 months to 31 December 2012 (rebased), reconciled to the income statement

		UK						Other						Total
		6 months 30 Jun 2013		6 months 30 Jun 2012		12 months 31 Dec 2012		6 months 30 Jun 2013		6 months 30 Jun 2012		12 months 31 Dec 2012		6 months 30 Jun 2013		6 months 30 Jun 2012		12 months 31 Dec 2012
		£’000		£’000		£’000		£’000		£’000		£’000		£’000		£’000		£’000
Net commission and trading income		3,606		3,905		7,834		656		701		1,233		4,262		4,606		9,067
Corporate finance fee income		9,095		6,507		11,923		19		19		162		9,114		6,526		12,085
Loss on corporate investments		(774)		-		-		-		-				(774)		-		-
Wealth management and other income		357		71		71		-		-		-		357		71		71
Net (loss)/gain on AFS investments		(7)		(31)		1,286		-		-		-		(7)		(31)		1,286
Foreign exchange gain/(loss)		16		(4)		(9)		17		4		(3)		33		-		(12)
On-going administration costs		(11,416)		(7,985)		(19,073)		(777)		(724)		(1,379)		(12,193)		(8,709)		(20,452)
Segmental operating profit/(loss)		877		2,463		2,032		(85)		-		13		792		2,463		2,045
Redundancy and restructuring charges		(223)		(200)		(504)		-		-		-		(223)		(200)		(504)
Share-based payment charges		(229)		(240)		(969)		-		-		-		(229)		(240)		(969)
Operating profit/(loss)		425		2,023		559		(85)		-		13		340		2,023		572
Net financial (expense)/ income		(5)		13		23		-		-		-		(5)		13		23
Profit/(loss) before tax		420		2,036		582		(85)		-		13		335		2,036		595
Income tax on continuing operations		(49)		(842)		(563)		-		-		-		(49)		(842)		(563)
Loss on disposal of discontinued operation		-		-		-		(141)		(2,014)		(3,555)		(141)		(2,014)		(3,555)
Profit/(loss) for period attributable to the owners of the Company		371		1,194		19		(226)		(2,014)		(3,542)		145		(820)		(3,523)

Net assets		UK						Other1						Total
		As at 30 Jun 2013		As at 30 Jun 2012		As at 31 Dec 2012		As at 30 Jun 2013		As at 30 Jun 2012		As at 31 Dec 2012		As at 30 Jun 2013		As at 30 Jun 2012		As at 31 Dec 2012
		£’000		£’000		£’000		£’000		£’000		£’000		£’000		£’000		£’000
Non-current assets (inc goodwill)		18,209		15,359		18,168		-		-		-		18,209		15,359		18,168
Current assets		54,869		42,865		33,866		-		-		-		54,869		42,865		33,866
Current liabilities		(40,707)		(23,483)		(19,769)		-		-		-		(40,707)		(23,483)		(19,769)
Non-current liabilities		(1,033)		(952)		(973)		-		-		-		(1,033)		(952)		(973)
Capital expenditure		(452)		-		(1,654)		-		-		-		(452)		-		(1,654)

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 2012.

The fair value of options granted during the period have been estimated using a Black-Scholes valuation model and a Monte Carlo simulation. Where options have been granted with an exercise price of 4p or less, the fair value of options on the date of grant has been estimated at their intrinsic value as this does not give a materially different result to the Black-Scholes model. The significant inputs to the model were:

(a) Share price on the date of grant;

(b) Exercise price;

(c) Expected volatility (38% based on historic volatility) (2012: 52%);

(d) Risk free rate on the date of grant; and

(e) Expected dividend yield (nil).

The weighted average fair value of share-based payments granted during the period was £1.63.

		6 months 30 June 2013		6 months 30 June 2012		12 months 31 December2012
		£‘000		£‘000		£‘000
IFRS 2 share-based payment charges		229		355		813
National Insurance (NI) charge in respect of share-based payment schemes		-		(115)		156
IFRS 2 share-based payment charges for the continuing business		229		240		969
IFRS 2 share-based payment charges for the discontinued operation		-		582		584
IFRS 2 share-based payment charges for the Group (excluding NI)		229		937		1,397

4 Taxation

The current tax charge for the period is different to the standard rate of corporation tax in the UK of 23.25% (2012: 24.5%).

Tax on profit on ordinary activities:		6 months30 June2013		6 months30 June2012		12 months31 December 2012
		£‘000		£‘000		£‘000
Analysis of tax charge in period:
UK corporation tax at 23.25% (2012: 24.5%)
Prior year adjustments – loss carry back claim		-		-		-
Current year tax (charge)/credit		-		-		-
Foreign tax adjustments		(14)		-		(4)
		(14)		-		(4)
Deferred tax
Prior year adjustments to deferred tax credit		-		3		3
Current year deferred tax charge		(35)		(845)		(562)
		(35)		(842)		(559)
Tax charge on profits on ordinary activities		(49)		(842)		(563)
Effective tax rate charge		(25.97)%		(102.68)%		(19)%
Factors affecting tax charge:
Profit/(loss) on ordinary activities after tax		145		(820)		(3,523)
Tax on continuing operations		49		842		563
Tax on discontinued operation		-		-		-
Profit/(loss) on ordinary activities before tax		194		22		(2,960)
Profit/(loss) on ordinary activities multiplied by rate of UK corporation tax at 23.25% (2012: 24.5%)		(45)		(5)		725
Effects of:
Expenses not deductible for tax purposes		(56)		(44)		(133)
Losses utilised previously not recognised		71		-		-
Tax losses not recognised from continuing operations		-		(33)		(151)
Tax losses not recognised from discontinued operation		-		(493)		(871)
Differences relating to share schemes		(5)		(256)		(105)
Foreign tax		(15)		-		(4)
Change in corporation tax rate		-		(14)		(27)
Deemed goodwill amortisation		61		63		122
Goodwill on consolidation		(61)		(63)		(122)
Adjustment to tax charge in respect of previous periods		1		3		3
Total tax charge on profits on ordinary activities		(49)		(842)		(563)

At 30 June 2013, the Group has a recognised deferred tax asset relating to UK losses carried forward. The Group has further UK losses carried forward for which the Group has a further potential deferred tax asset of £5.5m, but this has not been recognised due to the uncertainty over the extent and timing of its recoverability.

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
		2013		20121		20121
Weighted average number of ordinary shares in issue		15,530,815		15,006,821		15,266,450
Fully diluted weighted average number of ordinary shares in issue		15,785,815		15,398,831		15,642,460
Basic profit per share		1.84p		7.95p		0.21p
Diluted profit per share		1.81p		7.75p		0.20p

Total Group

		6 months		6 months		12 months
		30 June		30 June		31 December
		2013		20121		20121
Weighted average number of ordinary shares in issue		15,530,815		15,006,821		15,266,450
Fully diluted weighted average number of ordinary shares in issue		15,785,815		15,398,831		15,642,460
Basic profit/(loss) per share		0.93p		(5.46)p		(23.08)p
Diluted profit/(loss) per share		0.92p		(5.46)p		(23.08)p

1 The comparative figures have been restated to reflect the share capital reorganisation which took place in the 6 months to 30 June 2013.

6 Reserves

During the six months to 30 June 2013, 220,099 shares were transferred out of treasury to satisfy the vesting of awards under the Company’s Matching Share Plan. Following this transfer, the Company no longer holds any of its ordinary shares as treasury shares.

At the Company’s Annual General Meeting on 22 May 2013, shareholders approved a reorganisation of the Company’s share capital which took effect on 23 May 2013. The effect of the reorganisation was that every 1,000 existing ordinary 4p shares was consolidated into one consolidated ordinary share and then each consolidated share was subdivided and reclassified into 100 new ordinary 4p shares and 100 deferred 36p shares. At 30 June 2013 the Company’s issued share capital comprised 15,458,200 New Ordinary Shares and 15,458,200 Deferred Shares.

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 2013 the Trust held 1,339,004 new ordinary shares (December 2012: 12,765,720 shares).

The ‘special reserve’ was created following the resolution passed at the extraordinary general meeting on 22 April 2005 and a Court Order dated 12 October 2005 which confirmed that the share premium account and deferred share capital were cancelled and extinguished. This reserve was to be treated as undistributable until such time as any debts or claims against the Company existing at 12 October 2005 had been paid off. As the reserve has become distributable, it has now been transferred to retained earnings.

7 Redundancy, restructuring and other non-recurring charges

		6 months		6 months		12 months
		30 June		30 June		31 December
		2013		2012		2012
		£‘000		£‘000		£‘000
Redundancy charges		223		100		380
Litigation costs		-		100		124
Total		223		200		504

8 Trade and other receivables

		As at		As at		As at
		30 June		30 June		31 December
		2013		2012		2012
		£‘000		£‘000		£‘000
Non-current assets
Other receivables		1,642		82		1,917
Total		1,642		82		1,917
Current assets
Trade receivables		2,384		1,784		836
Stock borrow1		865		473		787
Market receivables		36,821		21,085		12,365
Corporation tax receivable		-		-		-
Other receivables		559		3,050		1,032
Prepayments and accrued income		861		845		692
Total		41,490		27,237		15,712

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. In the Company’s interim report for the six months ended 30 June 2012, these loans were included within current assets as they were due to be repaid in March 2013. However, as the directors have agreed to extend these loans for a further period of five years, these loans have been classified as non-current assets as at 31 December 2012.

9 Trade and other payables

		As at		As at		As at
		30 June		30 June		31 December
		2013		2012		2012
		£‘000		£‘000		£‘000
Market payables		(33,588)		(18,742)		(11,080)
Trade payables		(453)		(437)		(663)
Total trade payables		(34,041)		(19,179)		(11,743)
Other payables		(244)		(357)		(705)
Provisions		-		(100)		-
Accruals and deferred income		(4,033)		(1,541)		(4,716)
Total other payables		(4,277)		(1,998)		(5,421)

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.

Other commitments

Following the divesting of control of ThinkEquity LLC to its management and its subsequent filing for protection under Chapter 7 of the US Bankruptcy Code in 2012, certain claims have been asserted against the Company under first, the commitment to share certain costs with ThinkEquity LLC which had a maximum contribution limit of $900,000, and second, by property related creditors of ThinkEquity. In calculating the loss on the discontinued operation, management has assessed the validity of these claims, which will be strongly defended where appropriate.

10 Discontinued operation

Following the sale of the Company’s interest in ThinkEquity LLC in 2012 and ThinkEquity’s subsequent bankruptcy filing, some residual balances which were owed to the Company that are not expected to be realised in the near term have been written off and certain legal fees have been incurred in the period.

Results from discontinued operation		As at			As at		As at
		30 June			30 June		31 December
		2013			2012		2012
Trading activities		£‘000			£‘000		£’000
Revenue		-			9,340		9,340
Expenses		-			(11,080)		(11.080)
Results from operating activities		-			(1,740)		(1,740)
Income tax		-			-		-
Results of trading activities		-			(1,740)		(1,740)
Discontinued operation
Fair value of consideration received		-			-		-
Less fair value of net assets disposed of		-			(3,186)		(3,186)
Foreign currency translation reserve recycled to other comprehensive income		-			3,084		3,084
Other costs		(141)			(172)		(1,713)
Loss on disposal of discontinued operation		(141)			(274)		(1,815)
Loss for the year		(141)			(2,014)		(3,555)
Cash flow from discontinued operation
		As at			As at		As at
		30 June			30 June		31 December
		2013			2012		2012
		£‘000			£’000		£’000
Net cash from operating activities		-			(1,152)		(1,152)
Cash flows from investing activities		-			(4,954)		(4,954)
Net cash from financing activities		-			(11)		(11)
Net cash flow for the year		-			(6,117)		(6,117)
Effect of disposal on the financial position of the Group
Property, plant and equipment		-			(1,275)		(1,275)
Investment in associate		-			(221)		(221)
Available for sale investments		-			(55)		(55)
Cash and cash equivalents		-			(4,954)		(4,954)
Trade and other receivables		-			(2,110)		(2,110)
Trade and other payables		-			5,429		5,429
Net assets and liabilities		-			(3,186)		(3,186)
Consideration received satisfied in cash		-			-		-
Cash and cash equivalents disposed of		-			(4,954)		(4,954)
Net cash outflow		-			(4,954)		(4,954)

11 Corporate investments

During the period the Company took positions in a small number of corporate client stocks. These are valued on a mark to market basis and have declined in value by £0.774m.

12 General

The interim report was approved by the board of directors on 23 September 2013.

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 2013 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 2013 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 Audit Plc

Chartered Accountants

15 Canada Square

London E14 5GL

23 September 2013

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