SNN.L Regulatory News (SNN)

11 September 2018

Sanne Group plc

("the Company") together with its subsidiaries ("the Group" or "SANNE")

Interim results for the six months ended 30 June 2018

The Group delivered a good performance in the first half of 2018 against strong prior year comparatives reflecting an atypical first half weighting of results in 2017. The continued growth momentum across the business and increased annualised new business wins underpin the Board's confidence that the business will deliver its expectations for the full year.

1. Restated for prior year adjustment detailed in note 9

2. The items classified as non-underlying are as detailed in note 4

3. At constant currency

Operational Highlights:

- New Business wins continue with annualised fees of approximately £11.5 million won in the first six months (H1 2017: £10.0 million)

- Strong underlying performance within the Group's EMEA and North America alternatives business divisions with organic growth in the period of 13.3%3 and 10.9%3 respectively while the Corporate and Private Client business was broadly flat

- Growth momentum building in the Group's Asia-Pacific & Mauritius business with organic growth in the period of 5.2%3 and significant client wins expected to drive a higher growth rate for the full year

- Continued investment to drive operational efficiency and effectiveness and to enhance the platform for future growth

- Organic revenue growth of 8.7%3 on a constant currency basis and underlying operating margin at 30.3%, with margin impacted by the continued investment; both metrics expected to improve in H2

Acquisition of AgenSynd:

- SANNE has, in September 2018, acquired AgenSynd S.L. ("AgenSynd"), a leading European loan agency administration specialist headquartered in Madrid

- The acquisition augments SANNE's existing loan agency business and adds an additional footprint in Madrid and Paris as well as enhancing SANNE's existing London presence

- The transaction involved upfront consideration of €11.4 million, settled 65% in cash and 35% in new SANNE shares as well as an earn-out based on AgenSynd's performance to 31 December 2018

Outlook and current trading

- Strong momentum of the business in the first six months has continued post H1 period end

- The Board remains confident that the Group will deliver a full year result in line with its expectations

- Continued focus on acquisition prospects

Dean Godwin, Chief Executive Officer of Sanne Group plc, said:

"These results demonstrate the continuing momentum in our business and the result of the investment we are making to enhance our platforms and capabilities. We delivered a strong performance in our core alternatives divisions and we continue to broaden our geographic presence and client offering. Our most recent acquisitions in Mauritius and Luxembourg are integrating successfully and contributing to the Group's performance and we are pleased to announce today the acquisition of AgenSynd which further expands our European footprint and capabilities within the private debt market."

"We will build on this progress in the second half of the year, given the strong new business pipeline, and remain confident in meeting our expectations for the full year. SANNE remains well-positioned to capture the exciting long-term opportunities in our markets."

Enquiries:

Investor and analyst webcast:

The Company will be hosting an investor and analyst presentation at 09:30am (GMT) on 11 September 2018. This presentation can be viewed live on the 'investor relations' section of the SANNE website:

https://www.sannegroup.com/investor-relations/half-year-results-2018-webcast/

Participants can also dial into the presentation in listen-only mode using the following details:

Number: +44 20 3713 5011

Access Code: 492-915-541

A replay of the presentation will be available on the SANNE website shortly after the conclusion of the webcast.

Notes:

SANNE is a leading global provider of alternative asset and corporate services. Established for over 30 years and listed as a FTSE 250 company on the Main Market of the London Stock Exchange, SANNE employs more than 1,300 people worldwide and administers structures and funds that have in excess of £200 billion of assets.

Key clients include alternative asset managers, financial institutions, family offices, ultra-high net-worth individuals and corporates.

SANNE operates from a global network of offices located in leading financial jurisdictions, which are spread across the Americas, Europe, Africa and Asia-Pacific.

www.sannegroup.com

INTERIM MANAGEMENT REPORT

First half review

The Group's core business lines continued to see good revenue growth in the first half of the year driven by strong organic growth performance on a constant currency basis. This was combined with a five month contribution from Luxembourg Investment Solutions S.A. and Compliance Partners S.A. (LIS) which were acquired in February 2018. This pleasing result was partially offset by a decline in the Group's Private Client business.

In the first six months of the year the Group secured new business from both new and existing clients totalling approximately £11.5 million on a projected annualised fee basis (compared to £10.0 million in the same period in 2017). Of this approximately £5.7 million was from clients that are new to SANNE. As in previous reporting periods the full revenue impact of many of these new structures will commence in the second half of the financial year with the remaining structures commencing in 2019 as implementation is completed.

Organic growth in the period was a result of good momentum from new business opportunities delivered throughout 2017. This is despite the fact that the Group has seen a headwind from foreign exchange translation versus results for the same period in the prior year, in particular the movement between sterling and the US dollar. The combination of these factors and the acquisition of LIS has resulted in revenue increasing by 17.1%, or 19.7% on a constant currency basis, to £65.9 million compared with the same period in the prior year. Underlying operating profit for the period was £20.0 million, which is broadly flat on the same period in the prior year. In additional to the currency headwind between H1 2017 and H1 2018, this relative performance comparison is adversely distorted by the fact that in 2017, 54% of the full year underlying operating profit was recognised in the first half as a result of the significant second half weighting of investment spend in 2017 whereas the Group is expecting results in 2018 to return to the traditional second half weighting.

SANNE's core alternatives market continues to grow strongly, driven by a growing number and size of alternative funds and the ever-increasing regulatory obligations on fund managers increasing the attractiveness of outsourcing. These fundamentals both grow SANNE's potential client base and create new opportunities to provide additional services, with GDPR a particularly good example in the first half of 2018. This growth is well demonstrated in the Group's EMEA Alternatives business that has delivered over 13% organic growth on a constant currency basis in the first half of 2018 compared with the same period in the prior year. In addition, as we start to leverage our Mauritius presence to drive growth across Asia, we have seen some large and high profile new client wins in our Asia-Pacific & Mauritius business.

The Group also continues to target the corporate administration and private client markets. The corporate administration market enjoys a healthy growth in demand from which SANNE continues to benefit. The Group has taken the opportunity to bring together all its services to corporate clients, previously the separate Corporate & Institutional, Executive Incentive and Treasury divisions, in order to target opportunities across the common client base. The Group's Private Client business has experienced headwinds in the period which has resulted in substantial realignment of the business in H1.

The Group has continued to invest in strengthening its capabilities and infrastructure to capture the global opportunities in its markets. The investment has impacted the underlying operating profit margins in the second half of 2017 and into the first half of 2018. This investment is focused on people, processes and technology including a number of Group-wide initiatives. These initiatives include the development of the Group's dedicated business development team to help capture future growth. They also include the creation of centralised payment processing and on-boarding teams. The Group has also continued to invest in its risk and compliance functions to ensure SANNE is best placed to meet its increasing regulatory obligations it faces as it becomes a larger and more geographically diverse operator in an increasingly regulated global environment.

In terms of the investment in people, the executive management team continues to be strengthened to deliver the necessary strategic capacity to drive the business forward for the next phase of growth. In the period this change has included Spencer Daley, formerly the Group's Chief Financial Officer ("CFO"), moving into a new role as Head of M&A and Strategy. James Ireland has joined the Group as CFO from Investec having worked closely with the business over the past four years both at the time of the Group's IPO and through its subsequent growth and development. Both Mel Carvill and Julia Chapman joined the Sanne Group plc Board as Non-Executive Directors in the period bringing with them extensive experience in the global financial services and alternative assets industries respectively.

In addition to increasing the leadership capability at Board level, the Group has continued to invest and enhance the senior management to ensure the Group has the best people and skills to take advantage of its attractive market opportunities. In the period this has included Martin Schnaier becoming the Group's Chief Commercial Officer, responsible for Client Services, Jonathan Ferrara and Peter Nagle joining as heads of the Jersey and Mauritius offices respectively, and Martin Pearson appointed as the Group's new Chief Risk Officer.

In February 2018 the Group acquired LIS. Headquartered in Luxembourg and with operational capabilities in Dublin, LIS is a leading third party Alternative Investment Fund Manager (AIFM) authorised to deliver Management Company services. The acquisition increases the scale and capability of the Group's Luxembourg operations and further enhances SANNE's ability to provide an integrated full service offering of fund administration, ManCo and AIFMD compliant Depositary services.

Strategy for growth

The Group's strategic focus is to continue building scale in established and emerging markets and to be recognised as one of the world's leading providers of alternative asset and corporate services.

In September 2018, SANNE has acquired AgenSynd S.L. ("AgenSynd"). Founded in 2012, AgenSynd provides agency services to more than 150 transactions. It employs around 20 people and has offices in Madrid, Paris and London. Like SANNE, AgenSynd has an institutional client base, and is well known in the European Agency market for providing high levels of client service. The acquisition adds further strength and depth to SANNE's existing agency service offering. The combination of AgenSynd and SANNE positions the combined business strongly in Europe as one of the leading providers of this specialist service. AgenSynd's two shareholders, Manuel Rodríguez de Andrés and Fernando García Molina are intending to stay with the Group and continue to grow the combined loan agency business.

The Group continues to invest in its people and infrastructure in support of its strategic objectives while maintaining the financial discipline required to deliver value for shareholders. This includes further leveraging of the technology platform in support of client service initiatives and an increasing demand for transparent, real time reporting.

While there has been a continued focus on integration and delivering organic growth, the Group has also continued to focus on and evaluate acquisition opportunities that enable SANNE to deepen existing capabilities, broaden its product offering and deliver greater jurisdictional diversification. This has been demonstrated by the completion in the first half of 2018 of the acquisition of LIS which builds SANNE's presence in Luxembourg as well as adding the new capability of AIFMD ManCo services. In addition, the acquisition of AgenSynd in September 2018 augments the Group's existing presence in the European loan agency market as well as adding a presence in Madrid and Paris.

Operational Review:

EMEA Alternatives (EMEA)

The four key alternative asset strategies (Debt, Real Estate, Private Equity and Hedge) within EMEA make up the EMEA Alternatives business. Revenues for the first six months were £32.7 million (six months to June 2017: £23.1 million) with a gross profit of £19.7 million (six months to June 2017: £14.2 million).

As a whole, EMEA Alternatives saw revenue growth in the period of 41.2% (39.8% on a constant currency basis). This was driven by good organic growth of 14.0% (13.3% on constant currency basis) and the acquisition of LIS which contributed for five months of the period. Fund administration related work contributed to the majority of that growth, followed by corporate services and loan agency thereafter.

The Debt business has enjoyed another period of strong growth with continued traction in the capital markets space. The business's Luxembourg and Dublin operational teams were particularly busy in the period as a result of growth in the number of debt funds that in recent years have been looking to northern European countries for deal flow. The business is also beginning to take advantage of cross-selling opportunities in the US which is the largest and most mature market for private, non-governmental debt globally. This should represent an attractive opportunity in future years as SANNE builds its presence in North America.

During the first half of 2018, the Private Equity business has seen continued growth from both new and existing institutional clients. The Private Equity fund raising market remains particularly strong which, together with good portfolio performance, has resulted in a number of private equity managers returning to the market and successfully raising significantly larger funds while continuing to look to SANNE for administration support. In addition there has been continued growth as established Private Equity Managers have expanded their geographies for both fund raising and the deployment of capital. SANNE has been able to benefit from this as our global private equity platform has offered multiple cross selling opportunities, particularly from the US into Luxembourg. Having one service provider across multiple jurisdictions is particularly appealing for a number of managers and continues to offer growth opportunities.

The Real Estate business continues to grow quickly and has benefited from the strong growth in Luxembourg real estate funds in the period. The acquisition of LIS has provided a number of good cross-selling opportunities and exposure to a new range of institutional real estate fund managers. Strong transactional activity in Europe from key US customers has also supported strong revenue growth. Despite UK CGT changes and the uncertainty surrounding Brexit negotiations the division continues to see increased demand for real estate administration services across our offices in London, Dublin, Luxembourg and the Netherlands.

The Hedge business, which has been historically entirely focused on the South African market, has seen a more difficult trading period with trading results broadly flat on the prior year given a backdrop of very tough market conditions. The period saw the South African Rand devalue by 7% impacting fund performance and the region, like many emerging markets, has suffered net fund outflows driven by political uncertainty. Despite the difficult backdrop in its traditional geography, the Division has invested in growth in Europe having successfully applied for the amendment of its Irish administrative licence to cover the servicing of hedge fund products. The ability to service such funds, along with the closer working relationship with LIS, will ensure that AIFM funds can be hosted as well as administered out of Ireland, breaking new ground for the Group.

The acquisition of LIS completed in February 2018 has significantly enhanced the Group's Luxembourg operations in both scale and capability. LIS is the leading independent Management Company (ManCo) platform in Luxembourg for servicing closed ended Alternative Investment Funds (AIFs) as well as open ended mutual funds (UCITS). Since acquisition, the business has delivered good organic growth, benefiting from its leading market position as well as strong growth in the Luxembourg market. LIS's core ManCo services are highly complementary to SANNE's existing fund administration and depositary service offering, providing customers with a full AIFMD compliant solution. LIS has therefore been able to pitch a combined solution for clients which has seen good take-up in the first five months.

North America Alternatives (NA)

Revenues for the first six months were £9.7 million (six months to June 2017: £9.5 million) with a gross profit of £4.6 million (six months to June 2017: £4.7 million). The results for the North America Alternatives were negatively impacted by currency headwinds when compared with the same period in the prior year with revenue growth of 2.1% on the first half of 2017 which equated to 10.9% on a constant currency basis.

Organic growth in the period has been driven by continued growth from existing clients as well as some new client wins, partially offset by the runoff of certain niche, ancillary services provided to some more mature funds. The business also continued to source additional business to SANNE's EMEA operations through the cross-selling to existing clients of offshore (non-US) services.

Underlying market conditions in the US for alternative asset management continue to be positive, with an increasing trend of investment managers outsourcing back and middle office functions in response to investor demands for independent oversight and the managers seeking efficiencies offered by an outsourced platform. This growth also is driven by increased reporting requirements from underlying investors, as well as increased regulatory reporting requirements for the managers.

Asia-Pacific & Mauritius Alternatives (APM)

The APM Alternatives business is predominantly made up of real estate, private equity and a growing proportion of debt across Asia-Pacific and Mauritius. Revenues for the first six months were £13.7m (six months to June 2017 £14.0m) with a gross profit of £9.9m (six months to June 2017 £10.9.m). The APM business books revenue and costs in USD and therefore the prior period comparatives reflect the FX fluctuation between GBP and USD. As a result of the currency headwind, first half revenue was down 2.0% on the first half of 2017. On a constant currency basis the business has grown revenue by 5.2% and this growth rate is expected to increase as the benefits of new growth initiatives are realised.

During the first half of the year, strong growth has been delivered within the Asia-Pacific business in Hong Kong, Shanghai and Singapore, with this region doubling the number of client groups and exhibiting 23.9% revenue growth on a constant currency basis. A strong pipeline exists to ensure continued growth despite some business wins deferring launch towards the latter part of the year.

Mauritius has started to grow on a constant currency basis as the integration of IFS Group has been largely completed and the focus has moved to rolling out growth initiatives for the business as well as building out infrastructure to support the wider business. The growth initiatives have included a significant investment in the senior team managing the business. This includes Mark Law who joined the Group in October 2017 as head of the APM region and has been instrumental in driving the strong new client growth in Asia-Pacific as well as building the sales capability in Mauritius. A new Managing Director, Peter Nagle, has also been appointed in July to head up the Mauritius office to focus on continued growth for the business. The Group has also invested in opening a representative sales office in India to further offer services to Indian corporate and institutional clients which should be fully operational by the end of 2018.

The region displays significant growth potential within the existing jurisdictional offering and looks to continue expansion not just to India but also offer full services to real estate and private equity clients in Japan.

Corporate and Private Clients (CPC)

CPC comprises two business divisions: Corporate and Private Client. The Corporate division represents the amalgamation in H1 2018 of the legacy Corporate & Institutional (C&I), Executive Incentives (EI), and Treasury (ITS) divisions, which were all previously reported separately. CPC revenues for the first six months were £9.7 million (six months to June 2017: £9.6 million) with a gross profit of £6.1 million (six months to June 2016: £6.1 million). This performance represented organic revenue growth of 0.9% on the first half of 2017 (0.7% on a constant currency basis).

The Corporate business showed good revenue and profit growth resulting from strong new business wins, cross-selling and disciplined cost management. The amalgamation of C&I, EI and Treasury further enhances operational synergies and cross-selling opportunities given the similarity of the corporate client base, particularly between the legacy C&I and EI businesses. Demand for regulatory and financial reporting services, both internal and external, saw a particularly strong increase during the period. This has resulted in additional resources being added to a growing Corporate Services team based in SANNE's South Africa operations. New business during the half year was strong with increased product and jurisdictional diversification and on the basis of a blend of both new and existing customers. A strong pipeline for H2 2018 bodes well for the full year.

The Private Client (PC) division continues its strategic focus on institutionally minded ultra-high net-worth families and their family offices, with a continued focus on meeting their needs with regards to the outsourcing of their fiduciary and administrative requirements. The PC division had a challenging first half into 2018 due in most part to client attrition, as well as managing the retirement and succession of a number of senior professionals. Recognising such challenges, the PC division has refocused in H1 2018 with initiatives that are strategically designed to better position the division for sustained growth.

Post Balance Sheet Event - Acquisition of AgenSynd

In September 2018, SANNE acquired AgenSynd S.L. ("AgenSynd"). The acquisition has been made for an upfront consideration of €11.4 million, payable 65% in cash and 35% in shares. There is also a deferred consideration mechanism agreed based on the performance of the business in the year to 31 December 2018. The deferred consideration is not payable until 2020 and is subject to a cap such that the total consideration cannot exceed €15 million.

Working capital and cash flow

Working capital at 30 June 2018 as a percentage of annualised revenue was 20.4% (30 June 2017: 11.8%).4 Underlying operating cash flow conversion for the first half was 67.9% (2017: 101.7%). Whilst the business continues to enjoy an attractive cash flow profile, the overall result was lower than prior periods due to a change to the timing of billing in the Mauritian business to align to the Group's practice and an increase in debtors in certain high growth jurisdictions. Both these impacts are expected to reverse in the second half and full year cash conversion is expected to be in line with the Group's historic levels.

The Group's net debt position at 30 June 2018 was £49.3 million (30 June 2017: £23.4 million)5 reflecting the acquisition of LIS as well as the short term working capital items described above.

4 The component parts of the balance sheet that make up working capital include trade receivables (net of allowances), accrued income, trade payables and deferred revenue.

5 Net debt includes cash and bank balances excluding cash held for regulatory capital, and borrowings. Cash held for regulatory capital is £11.1million (2017: £5.4million).

Restatement of prior period

The Group has restated its financial statements for the year ended 31 December 2017 to correct a prior period error in recognising the value of intangible assets on acquisition of IFS in Mauritius. The correction results in the creation of a deferred tax liability against the intangibles of IFS. Further details are provided in note 9.

Dividend

The Board has declared an interim dividend of 4.6pence per share (2017: 4.2 pence). The dividend will be paid on 19 October 2018 to shareholders on the register as at the close of business on the record date of 21 September 2018.

Our people

SANNE's employees around its global operations remain core to the quality of the service offering provided to clients and the Group will continue to recruit high-calibre individuals as it continues to grow. SANNE is committed to encouraging employees to continue with their professional development both through recognised qualification routes as well as continuous, industry specific learning and engagement programmes.

SANNE is also committed to developing the employee value proposition to ensure that it is recognised as nurturing a positive and supportive working environment which recognises and rewards individual and collective performance.

The Group continues to recruit in operational centres outside of the Jersey headquarters as the Group expands its service offering and client base globally.

Risk

The principal risks facing the Group are reviewed regularly and represented by those as set out in the Annual Report 2017 namely: Acquisition Risk; Strategic Risk; Competitor Risk; Business Change Risk; Data Security Risk; Process Risk; Staff Resourcing Risk; Political/Regulatory Change Risk; Regulatory Licence (Compliance) Risk; Foreign Exchange Risk and Intangible Asset Risk. During the period the Group completed the acquisitions of LIS but notwithstanding this activity, the Group's net risk determination with respect to acquisition risk (which includes integration risk) remains unchanged.

Shareholder Circular - Proposed Change of Articles

It has been over three years since the Company was listed on the London Stock Exchange and the SANNE has continued to expand, both organically and by way of acquisition. As the Company continues to grow it is important that it is able to attract and retain the best people to serve as both executive and non-executive directors of the Company. In order to facilitate this goal, it is proposed that the Company's articles of association (the "Articles") be amended to remove the current requirement that a majority of the Company's directors be resident outside the United Kingdom together with other consequential amendments. These amendments, if approved, will materially open up the pool of potential talent from which the Company can draw. In addition, to provide the Board with as much flexibility as possible with regard to the holding of meetings and conducting the business of the Company, it is also proposed that the Articles be amended to remove the absolute restriction on holding board meetings in the United Kingdom.

In addition to the above, following a review of the Articles generally, including in light of the UK Listing Rules and Corporate Governance Code, it is proposed that it be formalised by way of amendment of the Articles that all of the directors of the Company resign at each annual general meeting and offer themselves for re-appointment, as opposed to the current obligation in the Articles for certain directors to retire by rotation at each annual general meeting.

Furthermore, in order to benefit from potential future technology, it is proposed that the directors should have the flexibility in the future to hold electronic general meetings in addition to, but not instead of, physical general meetings and the Resolution contains amendments to the Articles that will provide this flexibility.

It is intended that a circular be posted to shareholders later this week.

Outlook

The Board remains confident in the continued growth of the Group. The strong momentum of the business in the first six months of the year has continued into the second half and the Company has a healthy pipeline of further new business opportunities. This is supported by compelling underlying fundamentals in SANNE's markets.

In addition, revenues for the full year are expected to return to the Group's traditional pattern of being second half weighted following the atypical first half weighting in 2017.

The Board continues to believe that results for the full year will be in line with its expectations.

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE INTERIM STATEMENT

We confirm to the best of our knowledge that:

- The condensed set of financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; and

- The interim management report includes a fair review of the information required by:

A. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

B. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

The interim statement contains certain forward looking statements which are made by the directors in good faith based on the information available to them at the time of their approval of this interim statement. Forward looking statements contained within the interim statement should be treated with some caution due to the inherent uncertainties, including economic, regulatory and business risk factors, underlying any such forward looking statements.

We undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise. The interim statement has been prepared by Sanne Group plc to provide information to its shareholders and should not be relied upon by any other party or for any other purpose.

Dean Godwin

Chief Executive Officer

11 September 2018

INDEPENDENT REVIEW REPORT TO SANNE GROUP PLC

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2018 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and related notes 1 to 17. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

St Helier, Jersey

11 September 2018