26 Apr 2016 07:00
AIM: SHRE
Share plc
("Share" or "the Group")
Trading Update and Major New Partnership
Share, which operates The Share Centre Limited, one of the leading independent UK stockbrokers, announces an update on trading for the first quarter of its financial year, including its Q1 performance against its peers,* and a major new partnership.
Trading in the first quarter remained in line with management expectations and the Group continues to increase its market share of peer group revenues.
*as independently measured by ComPeer Limited.
Major New Partnership
The Share Centre continues to execute on its strategy of signing strategic partnerships and is pleased to announce today that it has signed Heads of Terms for the provision of its dealing services to a major financial services business. Once concluded this contract is expected to add materially to the Group's revenues and profits from 2017 onwards.
Trading Update
Share's market share of peer group revenues for the first quarter increased to 7.50%, up from 7.17% in Q4 2015 (Q1 2015: 7.48%) and, excluding interest, the Group's market share rose to 9.47%, up from 8.98% in Q4 2015 (Q1 2015: 8.35%).
As expected, market conditions remained challenging during the period reflecting continued stockmarket volatility and subdued investor activity, and revenues decreased by 3% year-on-year. Excluding interest, revenues were flat year-on-year, representing a stronger performance than Share's peer group, whose commission and fee revenues decreased by 13%.
Assets held on behalf of customers in Q1 increased by 18.5% year-on-year from £2.7bn to £3.2bn, demonstrating the underlying strength of customer interaction and the benefit of acquiring accounts from Henderson and Barclays. The rise in assets compared to a fall of 7% in the FTSE All Share index over the same period.
Analysis of Share's income streams for Q1 shows:
- Dealing commission (which currently accounts for c.46% of Group revenues) increased by 1% relative to Q1 2015. This performance compares favourably with that of the peer group, which experienced a decrease of 12%. ComPeer estimates that on-exchange trades by retail firms fell by 5% in Q1 2016 compared to Q1 2015. Share has a relatively small SIPP business and we believe that the peer group benefited from the additional volumes arising from the impact of the anticipated pension changes in the April Budget;
- Fee income (which currently accounts for c.46% of Group revenues) decreased by 1% relative to Q1 2015, again significantly outperforming the fall of 17% for the peer group for the same period;
- Interest income decreased by 33% relative to Q1 2015, compared to an increase of 34% for the peer group. Interest income currently accounts for c.8% of Group revenues, significantly less than the peer group where interest represents over 20% of its revenues and exceeds its fee income. For Share, whilst cash held on behalf of customers has increased, banks have significantly reduced interest rates during 2015 and into 2016. We also believe that in response to the changes to the client asset rules, some of our peers are now using relatively higher risk counterparties than ourselves, where money can be placed at higher interest rates. A number of our peers are also part of larger banking entities, who we believe can benefit from higher internal rates on money.
Quarter | Q1 16 | Q4 15 | Q3 15 | Q2 15 | Q1 15 | Q4 14 | Q3 14 |
Market Share | 7.50% | 7.17% | 8.41% | 8.16% | 7.48% | 7.61% | 7.62% |
Quarter | Q2 14 | Q1 14 | Q4 13 | Q3 13 | Q2 13 | Q1 13 |
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Market Share | 8.15% | 7.30% | 7.20% | 7.33% | 6.95% | 7.19% |
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Quarterly market share data: Source - ComPeer Limited
* 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:
Share plc |
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Richard Stone - Chief Executive | 01296 439 270 / 07919 220 599 |
Mike Birkett - Finance Director | 01296 439 479 |
Joe Dumont - Head of Corporate Communications | 01296 439 426 |
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Cenkos Securities plc (Nominated Adviser) |
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Ivonne Cantu, Mark Connelly | 020 7397 8900 |
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KTZ Communications (Financial Public Relations) | 020 3178 6378 |
Katie Tzouliadis |
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Notes for Editors:
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
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 Conduct 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 Conduct Authority under reference 146768. Sharefunds is authorised and regulated by the Financial Conduct Authority under reference 227807.