SHRE.L Regulatory News (SHRE)

Share plc - Press Release

Strong Market Share Achieved - Benchmarked Revenue Data - Q1 2012

Quarterly Peer Group Market Share of 6.46% (Q1 2011: 6.10%)

Share plc (AIM: SHRE), whose principal business is The Share Centre Limited, one of the leading independent UK stockbrokers, is pleased to announce that its market share was 6.46% of peer group revenues in the first quarter of 2012. This represents a strong performance against the ongoing challenging market backdrop, showing an improvement on Q1 2011 and broadly maintaining the record performance achieved in Q4 2011 - Q4 typically being our strongest quarter. The data is compiled by Compeer Limited, the independent company which collates data across the stockbroking and wealth management communities, and compares the revenue data of Share plc against nine other peers*.

The track record of growth in market share over the last four years is shown below, excluding the effects of the interest rate floor policy (IRFP) from which the Group benefited between Q4 2008 and Q4 2010:

The first quarter of 2012 has been challenging for the industry as a whole with retail investor appetite remaining subdued. In this context the Group's market share has remained strong. As can be seen from the above data, the Group regularly sees a slight dip in market share in the first quarter of a year as against the prior year fourth quarter. This is a function of typically greater dealing activity in the first quarter and the Group's model being more heavily weighted to fees and interest than those of its peers. The Q1 market share value represents good progress on the comparable first quarter in 2011.

Overall, Share plc's revenues in the first quarter of 2012 were 9% higher than in the fourth quarter of 2011, helped by stronger dealing activity. However, that activity remained significantly lower than in the same period in 2011 and overall revenues were 4.7% lower than in the first quarter of 2011. Nonetheless, as reflected in the market share data above, this performance is stronger than that seen collectively by our peers, in large part as a result of the lower dependency on dealing commission revenues.

As noted above, the Group continues to maintain a more balanced model than its peers. This is principally reflected in the difference in the contribution from dealing commission which accounted for 40% of the Group's revenues in the first quarter of 2012 compared to 61% of total peer revenues. Looking at the relative components of overall revenue:

- dealing commission for the Group decreased by 17% relative to Q1 2011. This compares to a decrease across the peers collectively of 20%. Compared to Q4 2011, dealing commission increased 26%, as compared to a 22% increase experienced by our peers.

- account fee income for the Group decreased by just 1% relative to Q1 2011. This compares to a collective decrease across the peers of 12%. Compared to Q4 2011, fees decreased by just 2% for the Group as compared to a 19% decline experienced by the peers.

- interest and other income for the Group increased by 30% relative to Q1 2011. This compares to an increase across the peers of 48% and may reflect the fact that the Group put in place initiatives, such as the deposits with building societies, in 2010, earlier than the peer group. Compared to Q4 2011, the Group increased interest income 8% as compared to a decrease of 4% across the peers.

The second quarter benchmarked revenue data figures will be released with the Group's interim results for 2012, expected to be released to the market on Tuesday 7th August 2012.

Financial Services Compensation Scheme (FSCS) Interim Levy

Following the preliminary results announcement in March 2012, the Group received an invoice from the FSA for £208,000, being our share of an additional levy of £60m charged by the Financial Services Compensation Scheme (FSCS) to investment intermediaries to compensate customers of failed businesses. The majority of this levy is driven by claims relating to MF Global, Arch Cru, and further costs of Keydata claims which gave rise to a similar additional levy (£276,000) in 2010-11.

Due to the timing of the levy, the charge will not impact the published results for 2012, since it appears as an expense in The Share Centre Limited's accounts to 31 December 2011 and will be shown as a prior year adjustment in respect of 2011 in the 2012 Group Accounts. This technical accounting treatment does not diminish either its cash impact or our frustration at having to bear such costs for the second year running. In respect of 2011, the inclusion of this sum in the Group accounts would have reduced overall profit after tax by £154,000 and reduced basic and diluted earnings per share from 0.9 pence per share to 0.8 pence per share.

Alongside the rest of the industry, the Group pays its fees and levies to the FSA to finance the good governance and regulation of the sector, maintaining customer confidence in all that we collectively do. To be hit with additional costs for compensation claims when poorly run or higher risk firms, with activities far removed from our own, fail appears akin to paying both the insurance premium and the costs when something goes awry.

The Group considers that the current means of funding the FSCS is not appropriate and disproportionately impacts those firms which engage in lower risk activities, are generally well controlled and managed and which are smaller than their peers. To this end we will, as a Group and alongside our peers and industry trade groups, continue to press for reform of these funding structures and explore alternative funding schemes which may be more appropriate.

Commenting on the market share data, Gavin Oldham, Chief Executive of Share plc, said

"Share plc has delivered good growth in its market share year-on-year. Furthermore, it has almost matched its record market share achieved in Q4 2011 despite the final months of the calendar normally representing our strongest quarter for market share. Whilst investor confidence remains subdued, we continue to provide our customers with industry leading stockbroking services and we remain confident in the Group's long term ability to grow both revenues and margins."

* The peer group comprises: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing (HBoS), HSBC Stockbrokers, NatWest Stockbrokers (RBS), Saga Personal Finance, Selftrade and TD Waterhouse Investor Services Europe.

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