9 Aug 2011 07:00
Share plc - Press Release
Interim Results announcement for the six months to 30 June 2011
Share plc (AIM: SHRE.LN), parent company of The Share Centre (a leading independent retail stockbroker and operator of Sharemark, the trading platform for growing companies) and Sharefunds (the Group's investment management and fund administration subsidiary), announces its unaudited results for the six months to 30 June 2011.
Highlights
§ Revenue decreased 2% to £7.4m (2010: £7.5m).
§ Operating profit decreased by 40% to £0.9m (2010: £1.5m)
§ Excluding the impact of the Group's Interest Rate Floor Policy (IRFP) (*) revenues increased 19% to £7.4m (2010: £6.2m) and operating profit increased 703% to £0.9m (2010: £0.2m)
§ Benchmarked market share of peer group revenues increased to 6.12% in the first half of 2011 (2010: 5.08% excluding the IRFP)
§ Underlying (**) basic and diluted earnings per share 0.6p (2010: 0.8p)
§ Strong balance sheet with £11.4m in cash (2010: £15.0m)
(*) The Interest Rate Floor Policy (IRFP) was taken out by the Group to protect interest income. It ensured the Group received 3.5% interest on £90 million of deposits when base rates fell below that level. It expired on 1 November 2010.
(**) Excludes the impact of some items, in particular any large non-recurring items and share based payment charges as defined in note 6. Basic and diluted earnings per share were 0.5p (2010: 0.7p)
Sir Martin Jacomb, Chairman, commented on the results:
"I am pleased to be able to report that the Group continues to deliver strong underlying growth, albeit this is masked in the headline performance by the fact that our unique interest rate floor policy which protected our interest income in a low rate environment ended last November.
The first half of the year has been a period of economic uncertainty characterised by a range of global sovereign debt crises. This has resulted in volatile markets testing the patience of personal investors who continue to look to the markets for a return on capital in the face of prolonged low interest rates.
The Group continues to innovate and I am pleased to note we have launched new services in recent weeks and to announce today that we have signed an agreement to deposit funds with another building society, replicating the arrangement we announced last December. I am also delighted to welcome Francesca Ecsery to the Board as a new non-executive director.
Notwithstanding current market conditions, we look forward with confidence and trading continues at a satisfactory level."
Gavin Oldham - Chief Executive 01296 439 100 / 07767 337 696
Richard Stone - Finance Director 01296 439 270 / 07919 220 599
Guy Wiehahn 0207 418 8900
Peel Hunt LLP - Nominated advisor and broker
Inez de Konig - Lansons Communications 0207 294 3623
Risk Warning:
This document is not intended to constitute an offer or agreement to buy or sell investments and does not constitute a personal recommendation. The investments and services referred to in this document may not be suitable for every investor and if in doubt independent financial advice should be sought. No liability is accepted whatsoever for any loss howsoever arising from any information in this document subject to the rules of the Financial Services Authority or the Financial Services and Markets Act 2000. Share prices, values and income can go down as well as up and investors may get back less than their initial investment. The Share Centre is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority under reference 146768. Sharemark constitutes a Multilateral Trading Facility and is not a recognised investment exchange, clearing house or regulated market within the meaning of the Markets in Financial Instruments Directive.
Notes for Editors:
1. Share plc is the parent holding company of The Share Centre Ltd and Sharefunds Limited and its shares are traded on Sharemark (www.sharemark.com), the auction-based trading platform designed especially for growing companies, as well as on AIM and PLUS Markets.
2. The Share Centre was formed in 1990 and provides a range of account-based services to enable investors to share in the wealth of the stock market.
3. Retail services include ISAs, CTF accounts and SIPPs, all with the benefit of investment advice, and dealing in a wide range of investments.
4. Services available to corporate clients include Share plan administration, Fund administration and 'white-label' dealing platforms.
5. For more details contact 0800 800 008, or visit www.share.com.
Share plc
Interim report and accounts 2011
Chairman's statement
I am pleased to present the results of Share plc for the half year to 30 June 2011, a period which saw our principal trading company, The Share Centre, celebrate its 20th Anniversary.
In particular, I am pleased to report that the Group continues to show strong growth characteristics - albeit this is masked in the headline figures by the ending of the interest rate floor policy which we put in place to protect our interest income, and which ended on 1 November 2010. The steps we have taken to help mitigate some of the impact of the ending of that policy have included seeking innovative ways to improve our interest income whilst always giving priority to the protection and security of our clients' funds. To that end we announced in December agreement with a building society for a secured deposit. I am pleased to be able to announce today that we have now reached agreement with a second building society for a similar arrangement which will further improve our interest income.
I am also delighted to welcome to the Board Francesca Ecsery as a new Non-Executive Director. Francesca, who was previously the Global Business Development Director at Cheapflights, will bring valuable experience to the Board especially in the field of online marketing. This area is of great importance to our core retail stockbroking business - The Share Centre - since the internet (www.share.com) now provides the gateway through which the majority of our new customers come to us and transact the majority of their account activity.
Market conditions
At a summary level, the market (FTSE All Share) ended the half year pretty much where it started. However, this overlooks what has been a period of two distinct quarters. The first was characterised by volatile markets but an overall sense of renewed optimism as the 2010 year end reporting season progressed. Dealing volumes were high continuing the pattern seen in the previous two years. This was overtaken in the second quarter by a return of anxiety and in particular concern over stability in the Eurozone, with the risk of potential contagion beyond Ireland and Greece, and the strength of the UK recovery.
We reported on our trading in the first quarter back in April, noting strong year on year growth in dealing commission and fees. The second quarter started with a flurry of bank holidays and dealing volumes fell back quite sharply across the market. Activity levels have remained subdued as caution has got the upper hand in the face of renewed economic uncertainty, giving investors no particular impetus to increase trading activity ahead of the usually quieter summer period.
As we enter the second half, questions regarding the Eurozone economies have again come to the fore. In addition, in the UK, further retail sector company failures and profits warnings, along with inflation figures, give weight to the view that the economic recovery is at best anaemic. As a result we continue to see volatile markets, cautious investors and no particular triggers for volumes or market values to increase significantly beyond the Q2 levels.
Headline performance
Overall revenues for the first half of the year were £7.4 million (2010 £7.5 million), a fall of just under 2% on the same period in 2010. Excluding the interest rate floor policy (IRFP), which protected our interest income until its expiry in November 2010 and which we have discussed in previous reports, revenues showed growth of 19% to £7.4 million from £6.2 million in the prior year.
Operating profit was £0.9 million (2010: £1.5 million) and overall profit after tax was £0.8 million (2010: £1.2m). The impact of the IRFP on revenues - which had no associated costs - naturally has a direct impact on profitability as well and excluding that from operating profit and profit after tax in the prior year would result in both measures demonstrating significant growth in the current period.
Underlying earnings per share (i.e. excluding one-off items and share-based payments) were 0.6 pence per share as compared to 0.8 pence per share in 2010. Basic and diluted earnings per share were 0.5 pence per share (2010: 0.7 pence per share).Share plc
Interim report and accounts 2011
Chairman's statement (continued)
Operating performance - revenues
As noted above, in the first half of 2011 headline revenues were marginally lower than in the same period last year. As a result of the impact of the IRFP this does not reflect the true picture of the Group's performance and if each revenue stream is looked at in turn a more representative view emerges.
In terms of dealing commission, as we stated in April, the first quarter saw strong volumes and growth in dealing commission revenue. Much of that growth was given up on the back of weaker second quarter activity levels and when compared to very strong second quarter comparables from 2010. The overall result for the first half was that dealing commission showed growth of just under 5% to £3.1 million (2010: £3.0 million).
Fees showed much stronger performance year on year as market values held the levels achieved in the recovery seen during the second half of 2010. Indeed, by way of illustration, the FTSE 100 closed the first half of 2010 below 5,000 and the first half of 2011 just below 6,000. In addition, the Group's fees were helped by the growth in account numbers, increase in customers taking our frequent trading option and growth in the Group's Sharefunds business: this did not start to have a material impact on the Group's revenues until the second half of 2010. Overall fee revenues showed growth of more than 23% to reach £3.3 million (2010: £2.7 million).
The growth in dealing commission and fee revenue streams - which reflect the increased level of overall customer engagement and activity combined with higher market values (and thus overall funds under administration) - was offset by the sharp decline in interest income resulting from the ending of the IRFP. Overall interest income was £0.9 million (2010: £1.9 million) a fall of 50% on the prior year. We have taken steps to mitigate some of the impact of the ending of the IRFP including our secured deposit with a building society and the use of some longer term deposits. These steps have resulted in an increase in underlying interest income of 79% from £0.5 million to £0.9 million, but clearly in the environment of continued low interest rates this has not been sufficient to replace the policy in full.
Operating performance - market share
The principal measure the Group uses to assess its performance in the market is the benchmark revenue share indicator based on data collected by Compeer from nine other companies in addition to Share plc (*). We have consistently reported this value on a quarterly basis for several years. In the second quarter of 2011 the benchmark revenue share increased slightly to 6.13% when compared to the first quarter (6.10%). Overall for the first half of 2011 the benchmark revenue share was 6.12%, the same as in the first half of 2010. The fact that the Group's market share has held up in the face of the ending of the IRFP indicates the strength of the Group's relative performance in terms of dealing commission, fees and underlying interest income. Indeed, excluding the IRFP from the prior year comparative the market share value was 5.08%.
By way of comparison:
- Share plc has delivered growth in dealing commission of 5% compared to the first half of 2010, for the peer group this revenue stream fell by 8% over the same period.
- Share plc has delivered growth in fees of 23% compared to the first half of 2010, for the peer group fee revenues grew by just 6% over the same period.
Share plc
Interim report and accounts 2011
Chairman's statement (continued)
Operating performance - other metrics
During the first half of 2011 The Share Centre - Share plc's principal trading subsidiary - welcomed over 8,000 new accounts. We transacted just over 290,000 trades on behalf of our customers (2010: 301,000) and received a total of just 1.1 complaints per 1,000 accounts (2010: 0.8).
Total customer funds under administration within The Share Centre were just over £1.6bn an increase of 6% since the end of 2010.
Operating performance - costs and operating profit
As detailed above, revenues excluding the IRFP increased by 19%. Costs have not shown a commensurate increase, rising by just over 6% to £6.4 million (2010: £6.1 million).
This increase in costs principally reflects increased salary costs as we have expanded some areas - in particular our Sharefunds and systems teams. Overall headcount at the end of June 2011 was 148 staff and directors as compared to 136 a year earlier.
The net impact of the increased costs when compared to the slight reduction in overall revenues has been a fall in operating profit to £0.9 million from £1.5 million in the first half of 2010. Dividend income and interest on our own cash balances is largely in line with the prior year so that the fall in operating profit flows directly through to profit before tax which was £1.1 million (2010: £1.6 million).
The overall operating margin was 12.6% (2010: 19.3%), below the level we believe is achievable as the business gains further scale and interest rates return to higher levels.
Outlook and trading update
The second half of the year has started with further concerns being expressed over Eurozone stability, the US budget deficit and hence global growth prospects with consequent volatility in stockmarkets. As already noted, the result of this is that volumes remain subdued and we believe they will continue to do so through the summer months and until issues regarding Greece and other sovereign debt concerns are resolved.
With the UK recovery also looking fragile, the path for interest rates remains uncertain but the persistence of rates at very low levels continues to help boost interest in the market. This is because investors increasingly turn, through the internet, to self-select brokers such as The Share Centre in order to derive an income from capital. This in some way helps to counteract the extent of any nervousness arising from the state of markets more generally.
The second half of the year has also already seen our Group launch two new initiatives.
The first is a new tariff from The Share Centre aimed particularly at high frequency trading personal investors. The all in tariff of £2,500 + VAT per annum, with no additional dealing or administration fees, or £3,500 + VAT per annum if the customer wishes to benefit from additional information services, is simple, clear and, we believe, unique within the market.
The second initiative is a new primary fund-raising service launched by Sharemark. This is designed to offer companies a low cost means of raising equity capital, particularly targeted at companies seeking to raise sums up to €5m. The government has made clear the need to support small to medium sized enterprises (SMEs) as it will be these organisations which will drive growth and employment in the UK economy. SMEs have always found capital raising complex and costly to the extent that it is often prohibitive, stifling expansion and growth opportunities. We believe our new service, which can have a linked loan component, may help unlock some of those difficulties as well as giving retail investors better access to investment opportunities in SME companies which historically have been the preserve of institutional investors.
Share plc
Interim report and accounts 2011
Chairman's statement (continued)
Finally, I am delighted to be able to announce today that the Group has reached agreement with a second building society to replicate the deposit arrangement we announced with a society in December 2010. This arrangement will involve the deposit of £15 million of customer monies secured by a charge over mortgage assets with a value of at least £22.5 million. The interest rate receivable on this deposit is a variable rate above and linked to the base rate. In addition to improving our return on cash deposits this also therefore serves to ensure our interest income increases in line with any increase in rates and does not suffer a lag which would be evident with more typical longer term deposit arrangements.
Notwithstanding current market conditions, our new initiatives and the agreement with a further building society all combine to the effect that we enter the second half of the year confidently. We will give a further update when we announce our third quarter benchmark revenue share data in October 2011.
Sir Martin Jacomb
Chairman
8 August 2011
(*) Benchmarked revenue peer group includes: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing, HSBC Stockbrokers, NatWest Stockbrokers, SAGA Personal Finance, Selftrade and TD Waterhouse Investor Services Europe.Share plc
Interim report and accounts 2011
Consolidated income statement
For the six months ended 30 June 2011
Notes | Half Year 30 June 2011 (unaudited) | Half Year 30 June 2010 (unaudited) | Year 31 December 2010 (audited) | |
£'000 | £'000 | £'000 | ||
Revenue | 7,373 | 7,521 | 15,591 | |
Administrative expenses | (6,442) | (6,066) | (12,548) | |
Operating profit | 931 | 1,455 | 3,043 | |
Investment revenues | 122 | 135 | 217 | |
Other gains and losses | - | (6) | (6) | |
Profit before taxation | 1,053 | 1,584 | 3,254 | |
Taxation | 5 | (307) | (428) | (978) |
Profit for the period | 746 | 1,156 | 2,276 | |
Basic earnings per share* | 6 | 0.5p | 0.7p | 1.5p |
Diluted earnings per share* | 6 | 0.5p | 0.7p | 1.5p |
All results are in respect of continuing operations.
* The Directors consider that the underlying earnings per share as presented in note 6 represent a more consistent measure of the underlying performance of the business as this measure excludes 'Other gains and losses' and one-off items of income or expense.
Share plc
Interim report and accounts 2011
Consolidated statement of comprehensive income
For the six months ended 30 June 2011
Half Year 30 June 2011 (unaudited) | Half Year 30 June 2010 (unaudited) | Year 31 December 2010 (audited) | ||
£'000 | £'000 | £'000 | ||
Profit for the year | 746 | 1,156 | 2,276 | |
(Losses)/gains on revaluation of available-for-sale investments taken to equity | 156 | (343) | 197 | |
Tax on gains/(losses) on revaluation of available-for-sale investments at 26% | (16) | 97 | (26) | |
Exchange gains on available-for-sale investments taken directly to equity | 50 | (134) | (32) | |
Tax on exchange (losses)/gains on available-for-sale investments taken directly to equity at 26% | (9) | 37 | 12 | |
Recycled from equity to income in respect of the cash flow hedge | - | (1,339) | (2,249) | |
Tax on income recycled from equity to income in respect of the cash flow hedge | - | 375 | 629 | |
(Losses)/Gains on revaluation of cash flow hedge taken directly to equity | - | 243 | 222 | |
Tax on gain on revaluation of cash flow hedge taken directly to equity | - | (71) | (40) | |
Net (loss)/income recognised directly in equity | 181 | (1,135) | (1,287) | |
Total comprehensive income for the period | 927 | 21 | 989 | |
Attributable to equity shareholders | 927 | 21 | 989 | |
Share plc
Interim report and accounts 2011
Consolidated statement of changes in equity
For the six months ended 30 June 2011
Share capital | Capital redemption reserve | Share premium account | Employee benefit reserve | Retained earnings | Revaluation reserve | Attributable to equity holders of the company | |
Balance at 1 January 2010 | 804 | 19 | 1,072 | (487) | 14,233 | 3,079 | 18,720 |
Total comprehensive income for the period | 1,059 | (1,038) | 21 | ||||
Dividends | (396) | (396) | |||||
Purchase of Employee Share Ownership Plans (ESOP) shares | (130) | (130) | |||||
Sales of ESOP shares | 53 | 53 | |||||
Cost of matching and free shares in SIP | 71 | (71) | - | ||||
Profit on sale of ESOP shares and dividends received | (18) | 18 | - | ||||
Share-based payment credit | |||||||
Deferred tax on share-based payment | (11) | (11) | |||||
Other Deferred tax | |||||||
Balance at 30 June 2010 (unaudited) | 804 | 19 | 1,072 | (511) | 14,832 | 2,041 | 18,257 |
Total comprehensive income for the period | 1,197 | (229) | 968 | ||||
(Buyback)/Issues of share capital | (85) | 85 | 26 | (3,837) | (3,811) | ||
Purchase of ESOP shares | (423) | (423) | |||||
Sales of ESOP shares | 139 | 139 | |||||
Cost of matching and free shares in SIP | 71 | (71) | - | ||||
Profit on sale of ESOP shares and dividends received | 38
| (21) | 17 | ||||
Share-based payment credit | 295 | 295 | |||||
Deferred tax on share-based payment | (5) | (5) | |||||
Other Deferred tax | |||||||
Balance at 31 December 2010 (audited) | 719 | 104 | 1,098 | (686) | 12,390 | 1,812 | 15,437 |
Total comprehensive income for the period | 787 | 140 | 927 | ||||
Dividends | (422) | (422) | |||||
Purchase of ESOP shares | (224) | (224) | |||||
Sales of ESOP shares | 33 | 33 | |||||
Cost of matching and free shares in SIP | 78 | (78) | - | ||||
Profit on sale of ESOP shares and dividends received | 16 | (16) | - | ||||
Share-based payment credit | 107 | 107 | |||||
Deferred tax on share-based payment | (9) | (9) | |||||
Other Deferred tax | |||||||
Balance at 30 June 2011 (unaudited) | 719 | 104 | 1,098 | (783) | 12,759 | 1,952 | 15,849 |
Share plc
Interim report and accounts 2011
Consolidated balance sheet
Notes | Half Year 30 June 2011 (unaudited) | Half Year 30 June 2010 (unaudited)) | Year 31 December 2010 (audited) | |
£'000 | £'000 | £'000 | ||
Non-current assets | ||||
Intangible assets | 270 | 86 | 126 | |
Property, plant and equipment | 189 | 235 | 213 | |
Available-for-sale investments | 3,736 | 2,888 | 3,530 | |
Deferred tax assets | 111 | 157 | 148 | |
4,306 | 3,366 | 4,017 | ||
Current assets | ||||
Trade and other receivables | 16,254 | 15,026 | 16,832 | |
Cash and cash equivalents | 7 | 11,382 | 14,963 | 11,999 |
Derivative financial instruments | - | 932 | - | |
27,636 | 30,921 | 28,831 | ||
Total assets | 31,942 | 34,287 | 32,848 | |
Current liabilities | ||||
Trade and other payables | (15,001) | (14,696) | (16,110) | |
Current tax liabilities | (261) | (424) | (494) | |
(15,262) | (15,120) | (16,604) | ||
Net current assets | 12,374 | 15,801 | 12,227 | |
Non-current liabilities | ||||
Deferred tax liabilities | (831) | (910) | (807) | |
Total liabilities | (16,093) | (16,030) | (17,411) | |
Net assets | 15,849 | 18,257 | 15,437 | |
Equity | ||||
Share capital | 719 | 804 | 719 | |
Capital redemption reserve | 104 | 19 | 104 | |
Share premium account | 1,098 | 1,072 | 1,098 | |
Employee benefit reserve | (783) | (511) | (686) | |
Retained earnings | 12,759 | 14,832 | 12,390 | |
Revaluation reserve | 1,952 | 2,041 | 1,812 | |
Equity shareholders' funds | 15,849 | 18,257 | 15,437 |
This condensed set of financial statements was approved by the Board on 8 August 2011
Signed on behalf of the Board
Sir Martin Jacomb
Share plc
Interim report and accounts 2011
Consolidated cash flow statement
Notes | Half Year 30 June 2011 (unaudited) | Half Year 30 June 2010 (unaudited) | Year 31 December 2010 (audited) | |
£'000 | £'000 | £'000 | ||
Net cash from operating activities | 8 | (141) | 1,247 | 2,088 |
Investing activities | ||||
Interest received | 50 | 64 | 118 | |
Dividend received from trading investments | 72 | 71 | 99 | |
Purchase of property, plant and equipment | (18) | (33) | (56) | |
Purchase of intangible investments |
(158) |
(59) |
(112) | |
Purchase of available-for-sale investments
|
- |
(473)
|
(473) | |
Net cash received from investing activities | (195) | 430 | (424) | |
Financing activities | ||||
Equity dividends paid | 9 | (422) | (396) | (396) |
Issue of new shares | - | 26 | ||
Share buyback | - | (3,837) | ||
Net cash used in financing | (422) | (396) | (4,207) | |
Net (decrease)/increase in cash and cash equivalents | (617) | 421 | (2,543) | |
Cash and cash equivalents at the beginning of the period | 11,999 | 14,542 | 14,542 | |
Cash and cash equivalents at the end of the period | 11,382 | 14,963 | 11,999 | |
Share plc
Interim report and accounts 2011
Notes to the accounts
1 Basis of preparation
The financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union. However, this announcement does not itself contain sufficient information to comply with IFRSs. The Group's published full financial statements comply with IFRSs.
The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these condensed financial statements.
2 Accounting policies
The same accounting policies, presentation and methods of computation are followed in this condensed set of financial statements as applied in the Group's latest annual audited financial statements.
3 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Allowance for bad debts
The Group makes a provision for the element of fees which it believes will not be recovered from customers. This is based on past experience and detailed analysis of the outstanding fees position particularly with regard to the value of customers' portfolios relative to the fees owed.
Fair value of investments
The Group currently holds investments in the London Stock Exchange plc, Euroclear plc, WAY Group Limited, Eirx Therapeutics plc and Investbx Limited. These are held as available-for-sale financial assets and are measured at fair value at the balance sheet date.
London Stock Exchange plc shares trade in an active market and the fair value is readily determined by market price. The Euroclear plc shares do not trade in an active market, although a bulletin board system periodically collates buy and sell interest amongst shareholders. A view is therefore formed as to fair value based on the most recently traded price and the net asset value of the business adjusted for liquidity considerations. WAY Group Limited shares are carried at cost as the shares are not traded and there is no other means of determining a reliable and timely fair value based on the limited publicly available information. Both the Eirx Therapeutic plc shares and Investbx Limited shares are carried at nil value given the financial position of the companies and there recent history.
Share plc
Interim report and accounts 2011
Notes to the accounts (continued)
3 Critical accounting judgements and key sources of estimation uncertainty (continued)
Share-based payments
The Company's shares have been traded on Sharemark since 2000 and on AIM since May 2008. This provides a market price to help determine the fair value of equity-settled share-based payments but, in addition to this, estimations are made as to price volatility, risk free interest rate and expected life. These estimations enable the Black-Scholes model to then be used to determine the fair value of these equity-settled share-based payments.
Impairment
The assets on the balance sheet are reviewed for any indications of impairment. This is done with reference to the recoverability and market value of the assets concerned but may involve an element of judgement or estimation in determining whether there are any indications of impairment and the extent of any impairment loss.
4 Business and geographical segments
The Group is required to disclose segment information in its annual financial statement as required by IFRS 8 and so we have provided equivalent half year disclosure below.
The Share Centre | Sharefunds | Total | ||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Revenue | 6,954 | 7,328 | 419 | 193 | 7,373 | 7,521 |
Operating profit/(loss) | 1,066 | 1,425 | (135) | 30 | 931 | 1,455 |
It should be noted that the accounting policies of the reportable segments are the same as the Group's accounting policies and that there were no major customers contributing more than 10% of revenues in the Group as a whole.
5 Taxation
Tax for the six month period is charged at 26.5% (six months ended 30 June 2010: 28%), representing the best estimate of the average annual effective tax rate expected for the full year. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. In 2011 this was 26% (2010: 27%).
Share plc
Interim report and accounts 2011
Notes to the accounts (continued)
6 Earnings per share
Half Year 30 June 2011 (unaudited) | Half Year 30 June 2010 (unaudited) | Year 31 December 2010 (audited) | |
£'000 | £'000 | £'000 | |
Earnings | |||
Earnings for the purpose of basic and diluted earnings per share, being net profit attributable to equity holders of the parent company | 746 | 1,156 | 2,276 |
Other gains and losses | - | 6 | 6 |
Non recurring expense - FSCS interim Levy | 70 | - | 207 |
Share based payments | 107 | 160 | 295 |
Related profit share paid | (22) | (21) | (106) |
Taxation impact of the above adjustments | (41) | (6) | (29) |
Earnings for the purposes of underlying basic and diluted earnings per share | 860 | 1,295 | 2,649 |
Number of shares | Number ('000) | Number ('000) | Number ('000) |
Weighted average number of ordinary shares | 147,227 | 163,386 | 157,357 |
Non-vested shares held by employee share ownership trust | (3,041) | (2,256) | (2,858) |
Basic earnings per share denominator | 144,186 | 161,130 | 154,499 |
Effect of potential dilutive share options | 108 | 838 | 845 |
Diluted earnings per share denominator | 144,294 | 161,969 | 155,344 |
Basic earnings per share (pence) | 0.5 | 0.7 | 1.5 |
Diluted earnings per share (pence) | 0.5 | 0.7 | 1.5 |
Underlying basic earnings per share (pence) | 0.6 | 0.8 | 1.7 |
Underlying diluted earnings per share (pence) | 0.6 | 0.8 | 1.7 |
Share plc
Interim report and accounts 2011
Notes to the accounts (continued)
7 Cash at bank and in hand
Half Year 30 June 2011 (unaudited) | Half Year 30 June 2010 (unaudited) | Year 31 December 2010 (audited) | |
£'000 | £'000 | £'000 | |
Cash | 10,494 | 13,775 | 11,023 |
Cash held in trust for clients (a) | 888 | 1,188 | 976 |
11,382 | 14,963 | 11,999 | |
(a) This amount is held by The Share Centre Limited in trust on behalf of clients but may be used to complete settlement of outstanding bargains and dividends due.
(b) At 30 June 2011 segregated deposit amounts held by the Group on behalf of clients in accordance with the client money rules of the Financial Services Authority amounted to £115.7 million (30 June 2010: £111.1 million). The Group has no beneficial interest in these deposits and accordingly they are not included on the balance sheet.
8 Cash flow
Reconciliation of operating profit to net cash inflow from operating activities
Half Year 30 June 2011 (unaudited) | Half Year 30 June 2010 (unaudited) | Year 31 December 2010 (audited) | |
£'000 | £'000 | £'000 | |
Operating profit | 931 | 1,455 | 3,043 |
Other gains and losses | (192) | (6) | (204) |
Depreciation of property, plant and equipment | 43 | 50 | 96 |
Amortisation of intangible assets | 14 | 8 | 22 |
Share-based payments | 107 | (71) | 153 |
Operating cash flows before movement in working capital | 903 | 1,436 | 3,110 |
Decrease/(increase) in receivables | 579 | (5,478) | (7,283) |
(Decrease)/increase in payables | (1,109) | 5,579 | 6,993 |
Cash generated by operations | 373 | 1,537 | 2,820 |
Income taxes paid | (514) | (290) | (732) |
Net cash from operating activities | (141) | 1,247 | 2,088 |
Share plc
Interim report and accounts 2011
Notes to the accounts (continued)
9 Distribution to shareholders
30 June 2011 | 30 June 2010 | 31 December 2010 | |
£'000 | £'000 | £'000 | |
2010 Final Dividend paid in current year of 0.30p per ordinary share - 2010 0.5p (2010 Interim Dividend paid of 0.25p per ordinary share) | 431 | 402 | 402 |
Less amount received on shares held via ESOP | (9) | (6) | (6) |
422 | 396 | 396 | |