5 May 2009 07:00
Share plc
Q1 2009 benchmarked revenue data and trading update
Peer group market share grows to 5.67%
50% growth in number of new customer accounts being opened
Dealing commissions up 25% on Q1 2008
Overall revenue growth of 10% on Q1 2008
Strong Q1 profitability
Share plc today announces its quarterly benchmarked revenue figures for its main operating subsidiary, The Share Centre Limited, one of the UK's leading independent stockbrokers.
The Share Centre's market share of total peer group revenues† grew to 5.67% in Q1 2009 from 5.33% in Q4 2008. This continues the upward trend experienced over the last three years.
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| Overall | Q1 06 | Q2 06 | Q3 06 | Q4 06 | Q1 07 | Q2 07 | Q3 07 | Q4 07 | Q1 08 | Q2 08 | Q3 08 | Q4 08 | Q1 09 |
| Market Share | 4.54% | 4.69% | 5.08% | 4.96% | 5.13% | 5.05% | 5.21% | 5.24% | 5.53% | 5.31% | 5.18% | 5.33% | 5.67% |
http://www.rns-pdf.londonstockexchange.com/rns/6268R_-2009-5-1.pdf
The increased market share reflects two specific positive factors:
The level of dealing commission has increased by 25% as a result of increased dealing volumes.
The company is benefiting from its interest rate floor policy which we believe is unique in the stockbroking market, and which is described more fully in the Group's annual report and accounts. This has ensured robust interest income at a time when sharply reduced rates has impacted the interest based revenues of our peers.
The progress has been achieved notwithstanding the fact that The Share Centre's business model is less heavily focused on dealing commission than the peer group. As a result, the increase in commission across the market disproportionately benefits the peer group when relative total revenues are analysed.
Welcoming the strong performance, Chief Executive Gavin Oldham said "This increase in market share shows the positive progress the Group is continuing to make in these challenging times for the financial services industry. While our interest rate floor policy is ensuring continuity of our interest margin at these very low rates of interest, the same low rates are encouraging investors to look for income from stockmarket assets such as corporate bonds and equity income shares. Meanwhile our strong market profile is proving attractive for those looking for a new home for their savings."
The above data highlights the strength of the first quarter revenue performance relative to our peers. That performance is strong in absolute terms as well as relative terms. Whilst the peer group saw revenues increase by 7% from Q1 2008 to Q1 2009, Share plc has seen a 10% increase in revenues over the same period.
The rate at which new customers have been opening accounts has been particularly encouraging with a 50% increase in new accounts opened in the first quarter of 2009 relative to 2008. In line with much of the market, dealing volumes have been higher than Q1 2008; in The Share Centre's case, rising by 54%.
Costs have remained relatively static as compared with 2008 so the increased revenues have translated into strong profitability in the first quarter. Volatility remains a key feature of the financial markets - the FTSE All Share Index fell by 10% in the first quarter - and it is, of course, too early to adjust forecast results for 2009 based solely on the first quarter. However, if trading conditions continue to outperform 2008 as at present and in the absence of a further significant reduction in the level of the stockmarket, the Group believes its comments regarding current year trading contained in its last annual report and accounts may prove conservative.
† This 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 The Share Centre against a peer group of 10 other companies. The peer group comprises: Alliance Trust Savings, Barclays Stockbrokers, E\* Trade Securities, Equiniti, Halifax Sharedealing, HSBC Stockbrokers, NatWest Stockbrokers, Saga Personal Finance, Selftrade, and T D Waterhouse Investor Services Europe.
For further information please contact:
Share plc 01296 414141
Gavin Oldham, Chief Executive
Richard Stone, Finance Director
Barbara Pierssene, Company Secretary
KBC Peel Hunt Ltd, Nominated Adviser and Broker 020 7418 8900
Guy Wiehahn or Oliver Stratton