SHRE.L Regulatory News (SHRE)

2 November 2015

AIM: SHRE

Share plc

("Share" or "the Group")

Trading Update and Market Share Results for Q3 2015

Share plc (AIM: SHRE), which operates The Share Centre Limited, a UK leading independent retail stockbroker, today provides an update on trading, including its Q3 performance against its peers (*), as independently measured by ComPeer Limited.

In addition, Share is pleased to announce that The Share Centre has retained two prestigious awards, for highest "Overall Client Satisfaction" and best "Customer Service" in the 2015 Investment Trends UK Online Broking Report.

Trading Update

We are pleased to report that Share's market share of peer group revenues for the third quarter increased to a record high of 8.41%, up from 8.16% in Q2 and significantly higher than the 7.62% achieved for Q3 last year. However, reflecting stock market volatility and subdued investor activity, revenues in the third quarter showed a 1% decrease year-on-year. This represented a stronger performance than Share's peer group, whose collective revenues decreased by 11% in Q3.

Assets held on behalf of customers decreased by 5% quarter on quarter to £2.7bn. This compared to a reduction of nearly 7% in the FTSE All Share Index over the third quarter, demonstrating the continued relative strength of customer interaction.

Analysis of Share's income streams for Q3 shows:

- Dealing commission (which currently accounts for c.46% of Group revenues) increased by 12% relative to Q3 2014. This growth was supported by the Barclays certificated trading business which commenced in April 2015, as well as strong income from our EIS administration service. Share's dealing commission performance compared favourably with the peer group, which experienced a decrease of 17%.

The Share Centre has a more balanced mix of dealing commission and fee revenue when compared to its peer group, which typically have a higher proportion of revenue derived from dealing commission;

- Fee income (which accounts for c.46% of Group revenues) decreased by 2% relative to Q3 2014, significantly outperforming the fall of 25% for the peer group during the same period.

The peer group's reduction in fees may partly be explained by the Retail Distribution Review ("RDR"), which has required companies to review their charging structures and implement new structures for all legacy business by April 2016. As a result, with trail commission no longer available, to the market is experiencing an increasing trend towards fee-based charges and increased other charges. These fee-based charges are typically based on the value of customer holdings and therefore increase or decrease with the value of those holdings. By contrast, The Share Centre's charging structure has always contained an administration fee element. In addition, the Group was an early-adopter of the RDR changes, changing its prices in 2013 to introduce a simple low fixed-rate account administration fee. As the market share data suggests, this positions The Share Centre very competitively, especially against value-related fee structures and particularly in weak markets;

- Interest income (which accounts for c. 8% of Group revenues) reduced by 38% relative to Q3 2014. This compares to an increase of 22% for the peer group. The decrease in this revenue stream reflects the fact that some of the Group's secured deposits held with building societies have matured into lower interest paying current accounts. As previously reported, changes to the Client Asset rules in July 2014, which prevent firms from using term deposits, has been disadvantageous to us. These changes fail to recognise the fact that the ability to use building society relationships to deposit money on a secured basis makes deposits safer for our customers as compared to unsecured exposure to banks. 

Trading Outlook

Dealing activity in October has continued to be weak, undermined by concerns over China and global growth, and uncertainty as to when the US Federal Reserve will raise interest rates, and the Group has yet to see the usual seasonal pick up in dealing volumes up after the quieter summer months. The Share directors therefore expect that a continuation of current subdued dealing levels for the rest of the year is likely to mean that results for 2015 would be below current market expectations.

However, looking further ahead, growth prospects remain positive. The Group is in advanced discussions on a number of partnership opportunities, which could be significant to the Group's future trading performance in 2016 and beyond. The Group hopes to announce further details in due course. As already announced, the Group has signed an agreement to acquire up to 3,000 Investment Trust ISA accounts from Henderson Global Investors Limited. The effective date of transfer will be 11 December 2015.

Awards

In October, The Share Centre won the Investment Trends 2015 award for highest 'Overall Client Satisfaction', ranking ahead of all other UK online brokers. The Company also won the Investment Trends 2015 award for best 'Customer Service'. Retaining both these awards won in 2014 is particularly pleasing and once again independently confirms our dedication to and delivery of customer satisfaction.

Investment Trends is a well-respected independent financial services research provider, which conducts annual surveys of UK retail investors. The 2015 survey included data and responses from over 11,000 individual personal investors, making it the largest annual survey of retail investor opinion undertaken in the UK.

* Benchmarked revenue peer group comprises: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing, HSBC Stockbrokers, Saga Personal Finance, Selftrade and TD Direct Investing.

For further information please contact:

About Share plc

Share plc is the parent holding company of The Share Centre Limited and Sharefunds Limited and its shares are traded on AIM. The Share Centre started trading in 1991 and provides a range of account-based services to enable investors to share in the wealth of the stock market. These include Share Accounts, ISAs, CTF accounts and SIPPs, all with the benefit of investment advice, and dealing in a wide range of investments. Services available to corporate clients include share plan administration and 'white-label' dealing platforms.

For more details contact 0800 800 008, or visit www.shareplc.com or www.share.com.