Shore Capital Group Limited
("Shore Capital", the "Group", or the "Company")
Preliminary Results for the Year Ended 31 December 2018
Shore Capital, the independent investment group specialising in capital markets, asset management and principal finance, today announces its preliminary results for the year ended 31 December 2018.
Financial highlights
|
|
2018 (£ m) |
2017 (£ m) |
Change (%) |
|
Group revenue |
43.3 |
41.9 |
3.4 |
|
Profit before tax |
4.1 |
4.6 |
(11.1) |
|
Basic earnings per share |
12.6p |
13.1p |
(3.8) |
|
Final proposed dividend per share |
5.0p |
5.0p |
- |
|
Total dividends for the year (per share) |
10.0p |
10.0p |
- |
Operational highlights
§ Increased revenues have allowed further investment in both Capital Markets and Asset Management divisions, positioning us to capture market share as global banks retrench and benefit further when sentiment improves
§ Acquisition of Stockdale Securities after the year end will create
§ Agreement of a
§ DBD's 32 regional radio spectrum licences have been reallocated to the 3.700-3.730 GHz frequency band on a flexibilised basis, enabling their use for modern 4G and 5G services
Commenting on the results, Howard Shore, Chairman, said:
"We have continued to grow revenues whilst making targeted investments across our main operating divisions. This counter-cyclical strategy positions us to capture market share, further establishing our credentials as a significant presence in
"The Stockdale acquisition is evidence of our appetite for investment and will elevate our Capital Markets division to
"Whilst not immune to uncertainty in capital markets, we are excited by recent developments in all divisions - Capital Markets, Asset Management and Principal Finance - and are therefore optimistic about the prospects of our diversified business model."
- Ends -
Enquiries:
|
Shore Capital Howard Shore, Executive Chairman Simon Fine, Co-Chief Executive David Kaye, Co-Chief Executive Lynn Bruce, Director
|
+44 (0) 20 7468 4050
+44 (0) 14 8172 8902
|
|
Grant Thornton Philip Secrett Jamie Barklem Ben Roberts
|
+44 (0) 20 7383 5100 |
|
Montfort Communications (Public Relations) Olly Scott
|
+44 (0) 78 1234 5205 |
The information contained within this announcement is deemed to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014.
About Shore Capital
Shore Capital is an AIM quoted independent investment group. Founded and majority owned by entrepreneurs, for three decades Shore Capital has been helping entrepreneurial businesses reach their full potential, find committed long-term investors and develop into significant enterprises. The business offers innovative corporate advice; a leading market making business; some of the most respected investment research available in the
The Group is based in
Chairman's statement
Introduction
During 2018, the Group continued to grow revenues, allowing for further investment in both of the Group's main operating divisions and positioning us to capture market share as sentiment improves. As global investment banks and mainstream providers continue to retreat from the
Group revenue for the year increased by 3.4% to
The most important development in the Capital Markets division came after the year end with the acquisition of Stockdale Securities Limited, which is expected to complete on 31 March 2019. The acquisition will create
During the year, the Capital Markets division grew income from corporate mandates and transactions and continued to add to its high-quality retained client base. The business has performed robustly through the year, developing its integrated offering and maintaining high levels of market activity. New retained clients included a further FTSE 100, Marks and Spencer Group Plc, and FTSE 250 Sirius Minerals plc. The team advised on five new admissions, 18 secondary fundraisings and three public takeovers, including the reverse takeover and acquisition of a majority interest in Welcome Break by Applegreen plc, raising
We have continued to build our equity research coverage, underscoring our strong sector credentials, focusing primarily on growth companies in the
Our Market Making activities were impacted by tough trading conditions in the fourth quarter of 2018, but nevertheless remained profitable throughout the period. Overall the Market Making business achieved a solid, profitable performance for the year, albeit on lower revenues. The continued strength and reputation of this business is driven by its strong management and expert team, demonstrating that even in difficult conditions it is able to deliver profits whilst carefully managing risk.
In Asset Management we maintained the momentum achieved in previous years, developing exciting new opportunities for investors to grow revenues, profits and assets under management, with overall AUM growing 6.4% to
Puma Investments has developed its platform focus on private equity, property finance and listed equities. Earlier investments in new expertise and distribution capabilities have enabled the business to anticipate changing market conditions and attract a significant institutional partner. In the fourth quarter of 2018 the division secured a
Puma Private Equity continued to attract retail investment funds, with the latest Puma VCT 13 closing early due to high demand. It has now deployed over 30% of its capital. Our EIS service, Puma Alpha, has attracted over
Puma Property Finance gained significant ground during the year following its agreement with funds advised by RoundShield to provide
In Listed Equities, the Puma AIM IHT Service was Highly Commended at the 2018/19 Investment Week Tax Efficiency Awards. Assets under management, reached
During the year we also acquired a majority stake in a company investing in property in the social care sector. We have an exciting pipeline of opportunities in this space and are optimistic about prospects for further revenues from this sector.
In the Institutional asset management business, the Group has continued to assist Brandenburg Realty and Puma Brandenburg to implement their strategies. The Group has supported initiatives to renovate and generate income from assets, transact commercial and residential properties and strengthen relationships with tenants.
Given our recent expansion and together with the Stockdale acquisition, it became clear that we required new premises for our
With respect to DBD, it has now been concluded that the 32 German regional radio spectrum licences that DBD holds shall be reallocated from the 3.5 GHz frequency band to the 3.700-3.730 GHz frequency band at no cost, on a "flexibilised" basis, meaning without historic technical restrictions limiting their usage, and continue to be for perpetual duration. The flexibilisation will enable their use for modern services such as 4G and 5G. We are confident of the future prospects for DBD's business and the value that can accrete from it.
Financial review
Income and expenditure
Revenue for the year increased by 3.4% to
Revenue from Capital Markets decreased by 6.5% to
Revenue from Asset Management grew by 22.8% to
The Principal Finance division recorded a pre-tax loss of
Basic Earnings per Share
The Group generated earnings per share of 12.6p (2017: 13.1p).
Liquidity
The Group maintained a strong liquidity position enabling it to undertake a range of transactions as opportunities arise in the near term. As at the balance sheet date, available liquidity was
Balance sheet
The Group's balance sheet remains strong. Total equity at the year end was
In addition to the
The remainder of the balance sheet was
Net Asset Value per Share
Net asset value per share at the year end was 269.4p (2017: 270.0p).
Dividend
The Board proposes a final dividend of 5.0p per share (2017: 5.0p) making a total for the year of 10.0p per share (2017: 10.0p). The dividend will be paid on Wednesday 24 April 2019 to shareholders on the register as at Friday 5 April 2019.
Operating review
Capital Markets
Overview
During the year the Capital Markets business has proved robust in an environment characterised by substantial political uncertainty and significant global economic headwinds.
Revenues were 6.5% lower than the prior year, predominantly resulting from difficult market conditions in the final quarter of 2018. In that context, it has been enormously encouraging that income from corporate mandates and transactions has grown year-on-year, reflecting our sustained investment in the business. We also grew the retained client base, a particular highlight being the addition of our second FTSE 100 broking client, Marks and Spencer Group Plc.
We have worked carefully to ensure that the business is well-positioned to take advantage of market opportunities. As such, after the year end in February 2019, we were delighted to announce the acquisition of Stockdale Securities Limited, which is expected to complete on 31 March 2019. The combination of the two businesses is compelling in that it unites complementary businesses and enhances our existing operations, adding scale, expertise and diversity to the Capital Markets division.
Corporate Broking and Advisory
During 2018, we have continued to be very active and advised on five admissions consisting of two IPOs and three reverse takeovers. In the year under review Shore Capital undertook 18 secondary fundraisings and advised on three public takeovers. Significant transactions during the year included acting as:
§ Nominated Adviser, global co-ordinator and joint bookrunner on the reverse takeover and acquisition of a majority interest in Welcome Break by Applegreen plc, raising
§ Nominated Adviser sole bookrunner and broker on the IPO of Nucleus Financial Group plc, raising
§ Joint bookrunner on the
§ Joint bookrunner on the
§ Nominated Adviser and joint bookrunner the acquisition of Inprova Finance Limited by Inspired Energy plc, raising
§ Joint bookrunner on the
§ Lead Manager on the placing and re-admission to AIM of Savannah Petroleum plc, following its acquisition of certain assets from Seven Energy International Limited, raising
Our advisory work included acting as:
§ Financial and Rule 3 adviser to Produce Investments plc in relation to its
§ Financial and Rule 3 adviser to Zenith Hygiene Group plc in relation to its
§ Financial and Rule 3 adviser to Styles & Wood Group Plc in relation to its
During the year we added nine new clients including a further FTSE 100 mandate in the form of Marks and Spencer Group Plc, as well as FTSE 250 Sirius Minerals plc.
Research, Idea Generation and Distribution
Through the first year of the MiFID II Directive's implementation, Shore Capital's research and distribution teams remained focused upon producing high-quality independent and issuer sponsored equity research and idea generation, and maintaining high levels of interaction with the market. MiFID II has created significant upheaval and uncertainty for all market participants, changing the way that the industry operates. Notwithstanding this, we are very pleased to have had extensive engagement with the investment community over the year.
We have continued to build our equity research coverage, underscoring our strong sector credentials, focusing primarily on growth companies in the
Market Making
Our Market Making activities were impacted by tough trading conditions in the fourth quarter of 2018, but nevertheless remained profitable during this period. Overall the Market Making business achieved a solid, profitable performance for the year, albeit on lower revenues. The continued strength and reputation of our business is driven by its strong management and expert team, demonstrating that even in difficult conditions it is able to deliver profits whilst carefully managing risk.
Although clearly sensitive to the macroeconomic environment, we remain focused and adaptable to changing trading conditions and client needs.
Asset Management
Overview
The Asset Management division continued to make significant progress during the year, growing revenues, profits and assets under management. Overall AUM at the year end grew 6.4% to
Puma Investments
Overview
Puma Investments, our
Our potential was endorsed towards the end of 2018 with the agreement of a
Puma Private Equity
Puma Private Equity offers retail investors access to tax efficient private equity strategies through our long-standing Venture Capital Trusts ("VCTs") and Enterprise Investment Scheme ("EIS") offerings. We are sector-agnostic and seek to back well-positioned businesses led by high-quality, credible management teams who have the potential and aspiration to deliver material growth.
Since 2005, the Group has raised nearly
The Puma Alpha EIS service, ("Puma Alpha") launched in October 2017 and is run by the same experienced team responsible for the Puma VCTs, benefiting from their strong track record and expertise. Fundraising continued successfully throughout the year, increasing funds in Puma Alpha, together with its predecessor Puma EIS, to over
Puma Property Finance
Puma Property Finance offers investors access to secured, first charge loans, on
For a number of years, Private Client investors have been able to access these activities through an investment into Puma Heritage plc, which utilises its diversified loan book, (totalling over 450 loans to date) to generate regular returns for shareholders intended to counter long-term inflationary pressures. An investment in Puma Heritage is intended to benefit from 100% relief from Inheritance Tax after two years.
The net asset value of Puma Heritage has grown to over
During the year, we were delighted to agree an institutional funding line of up to
Listed Equities
The business offers retail investors access to a discretionary equity portfolio service through its Puma AIM IHT Service, (the "AIM Service") which seeks to mitigate Inheritance Tax by investing in a carefully selected portfolio of AIM shares. The AIM Service is particularly attractive for those that wish to utilise these tax advantages whilst also investing within their ISA wrapper. The service has now been running for over four years and has won many awards, most recently being Highly Commended at 2018/19s Investment Week Tax Efficiency Awards.
Despite tough equity markets over the course of 2018, the service continued to grow assets under management, reaching
Social Care
The business has enjoyed strong revenue generation from its activities in the social care sector, leveraging our many years of experience providing development funding in this area. Our broad range of relationships has enabled us to partner with external funds investing in the supported living sector, where we are providing a holistic service to source, structure and negotiate acquisitions.
During the year, we also invested
Institutional Asset Management
Brandenburg Realty
Brandenburg Realty (the "Fund") continues to seek a range of high-quality real estate opportunities and implement its asset management programme to enhance value creation across the portfolio.
During the year, the Fund took possession of the three Mitte and Prenzlauer Berg assets purchased in December 2017. Since then, the first stage of obtaining condominium title has been completed for each building. Renovation works have been planned and the first furnished apartments have been let. In December 2018 two further assets were notarised with completion expected in the second quarter of 2019.
The team also continues to assist the Fund's implementation of its strategy for the other commercial and residential assets. At the Potsdam assets, a full planning permission to construct c.1,800 sq.m. of new residential space was been secured and both plots were sold to a third party developer at a significant gain. Vacant units in the existing Potsdam residential assets are being renovated and let as furnished apartments. Meanwhile, units in
During the year the team secured debt financing with DKB for a portfolio of four assets including the three Mitte and Prenzlauer Berg assets.
The team continues to assist Mixer Global to identify and evaluate new co-working sites, especially in
Puma Brandenburg Limited ("PBL")
During the year, the Group has continued to assist PBL to execute its strategy, including:
§ The completion of two new restaurant pavilions at
§ The conversion of further apartments to add to PBL's pool of furnished apartments that are let out on short term leases; and
§ PBL's participation in the Mixer Global investment, as noted above.
St Peter Port Capital ("SPPC")
SPPC announced its results for the half year ended 30 September 2018 on 8 November 2018. As at that date, it had investments in six companies, (excluding companies in the portfolio it had written down to zero).
SPPC realised one small investment which had recently listed on a Canadian stock exchange, generating
Principal Finance
The Principal Finance division seeks to use the Group's balance sheet to invest in attractive opportunities and seed new funds.
Investment in DBD
Shore Capital holds a 59.94% interest in Spectrum Investments Limited, the parent company of DBD. DBD, through a subsidiary, has held 32 regional radio spectrum licences in
Following previous updates in respect of communications with the German Telecoms Regulator ("BNetzA"), it has now been concluded that the Licences shall be reallocated from the 3.5 GHz frequency band to the 3.700-3.730 GHz frequency band at no cost. The licences will continue to be for perpetual duration, on a "flexibilised" basis, meaning without historic technical restrictions limiting their usage. The flexibilisation will enable their use for modern services such as 4G and 5G.
We are therefore confident of the future prospects for DBD's business and the value that can accrete from it.
New offices
Since the year end, the Group has entered into a lease for new offices at Cassini House, St James's Street,
Current Trading and Prospects
Whilst not immune to uncertainty in capital markets, we are excited by recent developments in all divisions - Capital Markets, Asset Management and Principal Finance - and are therefore optimistic about the prospects of our diversified business model.
Howard Shore
Chairman
21 March 2019
Unaudited Consolidated Income Statement
For the year ended 31 December 2018
|
|
Notes |
2018 |
2017 |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
Revenue |
2 |
43,334 |
41,896 |
|
Administrative expenditure |
|
(38,929) |
(35,906) |
|
Balance sheet impairments |
|
- |
(1,883) |
|
Share of results of associates |
|
- |
805 |
|
|
|
|
|
|
Operating profit |
|
4,405 |
4,912 |
|
|
|
|
|
|
Interest income |
|
43 |
95 |
|
Finance costs |
|
(380) |
(430) |
|
|
|
(337) |
(335) |
|
|
|
|
|
|
Profit before taxation |
2 |
4,068 |
4,577 |
|
|
|
|
|
|
Taxation |
|
(485) |
(912) |
|
|
|
|
|
|
Profit for the year |
|
3,583 |
3,665 |
|
|
|
|
|
|
Attributable to: |
|
|
|
|
Equity holders of the parent |
|
2,727 |
2,826 |
|
Non-controlling interests |
|
856 |
839 |
|
|
|
|
|
|
|
|
3,583 |
3,665 |
|
|
|
|
|
|
Earnings per share |
|
|
|
|
Basic |
4 |
12.6p |
13.1p |
|
Diluted |
4 |
12.5p |
12.8p |
Unaudited Consolidated Statement of Comprehensive Income
For the year ended 31 December 2018
|
|
|
2018 |
2017 |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
Profit after tax for the year |
|
3,583 |
3,665 |
|
|
|
|
|
|
Items that may be reclassified to the income statement |
|
|
|
|
|
|
|
|
|
Losses on revaluation of available-for-sale investments |
|
- |
(14) |
|
(Losses)/gains on cash flow hedges |
|
(201) |
105 |
|
Tax thereon |
|
38 |
(20) |
|
|
|
(163) |
71 |
|
Exchange difference on translation of foreign operations |
|
299 |
516 |
|
Other comprehensive income for the year, net of tax |
|
136 |
587 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year, net of tax |
|
3,719 |
4,252 |
|
|
|
|
|
|
Attributable to: |
|
|
|
|
Equity holders of the parent |
|
2,785 |
3,260 |
|
Non-controlling interests |
|
934 |
992 |
|
|
|
|
|
|
|
|
3,719 |
4,252 |
Unaudited Consolidated Statement of Financial Position
As at 31 December 2018
|
|
Notes |
2018 |
2017 |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
Goodwill |
|
381 |
381 |
|
Intangible assets |
|
2,263 |
2,229 |
|
Property, plant & equipment |
|
7,653 |
7,699 |
|
Investment properties |
|
2,643 |
- |
|
Principal Finance Investments |
|
5,357 |
6,475 |
|
Deferred tax asset |
|
108 |
149 |
|
|
|
18,405 |
16,933 |
|
Current assets |
|
|
|
|
Trading assets |
|
9,837 |
8,154 |
|
Trade and other receivables |
|
42,058 |
52,767 |
|
Derivative financial instruments |
|
- |
32 |
|
Cash and cash equivalents |
|
31,015 |
35,673 |
|
|
|
82,910 |
96,626 |
|
Total assets |
2 |
101,315 |
113,559 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Trading liabilities |
|
(708) |
(1,017) |
|
Trade and other payables |
|
(27,877) |
(34,602) |
|
Derivative financial instruments |
|
(135) |
(12) |
|
Tax liabilities |
|
(165) |
(966) |
|
Borrowings |
|
(4,299) |
(9,726) |
|
|
|
(33,184) |
(46,323) |
|
Non-current liabilities |
|
|
|
|
Provision for liabilities and charges |
|
(68) |
(66) |
|
|
|
(68) |
(66) |
|
Total liabilities |
2 |
(33,252) |
(46,389) |
|
Net assets |
|
68,063 |
67,170 |
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
Share capital |
|
- |
- |
|
Share premium |
|
1,866 |
1,866 |
|
Merger reserve |
|
14,903 |
14,903 |
|
Other reserves |
|
1,348 |
1,596 |
|
Retained earnings |
|
39,992 |
39,882 |
|
Equity attributable to equity holders of the parent |
|
58,109 |
58,247 |
|
Non-controlling interest |
|
9,954 |
8,923 |
|
Total equity |
|
68,063 |
67,170 |
Unaudited Consolidated Statement of Changes in Equity
For the year ended 31 December 2018
|
|
Share capital |
Share premium account |
Merger reserve |
Other reserves |
Retained earnings |
Non-controlling interest |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
At 1 January 2017 |
- |
336 |
17,151 |
1,596 |
39,587 |
8,415 |
67,085 |
|
Profit for the year |
- |
- |
- |
- |
2,826 |
839 |
3,665 |
|
Revaluation of available for sale investments |
- |
- |
- |
(14) |
- |
- |
(14) |
|
Foreign currency translation |
- |
- |
- |
- |
380 |
136 |
516 |
|
Valuation change on cash flow hedge |
- |
- |
- |
84 |
- |
21 |
105 |
|
Tax on cash flow hedge |
- |
- |
- |
(16) |
- |
(4) |
(20) |
|
Total comprehensive income |
- |
- |
- |
54 |
3,206 |
992 |
4,252 |
|
|
|
|
|
|
|
|
|
|
Decrease in deferred tax asset recognised directly in equity) |
- |
- |
- |
(62) |
- |
- |
(62) |
|
Equity dividends paid |
- |
- |
- |
- |
(2,167) |
- |
(2,167) |
|
Dividends paid to non controlling interests/ rebalancing of non controlling interest |
- |
- |
- |
- |
(744) |
(694) |
(1,438) |
|
Issue of shares |
- |
1,530 |
- |
- |
- |
- |
1,530 |
|
Repurchase/cancellation of own shares |
- |
- |
(2,248) |
- |
- |
- |
(2,248) |
|
Credit in relation to share based payments |
- |
- |
- |
8 |
- |
- |
8 |
|
Investment by non controlling interest in subsidiaries |
- |
- |
- |
- |
- |
210 |
210 |
|
|
|
|
|
|
|
|
|
|
At 31 December 2017 |
- |
1,866 |
14,903 |
1,596 |
39,882 |
8,923 |
67,170 |
Unaudited Consolidated Statement of Changes in Equity
For the year ended 31 December 2018
|
|
Share capital |
Share premium account |
Merger reserve |
Other Reserves |
Retained earnings |
Non-controlling interest |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
At 1 January 2018 |
- |
1,866 |
14,903 |
1,596 |
39,882 |
8,923 |
67,170 |
|
Transition adjustment - IFRS 9 Financial instruments |
- |
- |
- |
48 |
(48) |
- |
- |
|
At 1 January 2018 (as restated) |
- |
1,866 |
14,903 |
1,644 |
39,834 |
8,923 |
67,170 |
|
Profit for the year |
- |
- |
- |
- |
2,727 |
856 |
3,583 |
|
Foreign currency translation |
- |
- |
- |
- |
224 |
75 |
299 |
|
Valuation change on cash flow hedge |
- |
- |
- |
(203) |
- |
2 |
(201) |
|
Tax on cash flow hedge |
- |
- |
- |
38 |
- |
- |
38 |
|
Total comprehensive income |
- |
- |
- |
(165) |
2,951 |
933 |
3,719 |
|
|
|
|
|
|
|
|
|
|
Equity dividends paid |
- |
- |
- |
- |
(2,158) |
- |
(2,158) |
|
Dividends paid to non controlling interests/ rebalancing of non controlling interest |
- |
- |
- |
- |
(635) |
(1,308) |
(1,943) |
|
Debit in relation to share based payments |
- |
- |
- |
(131) |
- |
- |
(131) |
|
Investment by non controlling interest in subsidiaries |
- |
- |
- |
- |
- |
1,406 |
1,406 |
|
|
|
|
|
|
|
|
|
|
At 31 December 2018 |
- |
1,866 |
14,903 |
1,348 |
39,992 |
9,954 |
68,063 |
Unaudited Consolidated Cash Flow Statement
For the year ended 31 December 2018
|
|
Notes |
2018 |
2017 |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
Operating profit |
|
4,405 |
4,912 |
|
Adjustments for: |
|
|
|
|
Depreciation and impairment charges |
|
1,262 |
2,775 |
|
Share-based payment (credit) / expense |
|
(131) |
8 |
|
Fair value (gains)/ losses on Principal Finance investments |
|
(367) |
320 |
|
Share of results of associates |
|
- |
(805) |
|
Reduction in provision for national insurance on options |
|
(36) |
(38) |
|
|
|
|
|
|
Operating cash flows before movements in working capital |
|
5,133 |
7,172 |
|
Decrease / (increase) in trade and other receivables |
|
11,787 |
(902) |
|
(Decrease) / Increase in trade and other payables |
|
(6,833) |
3,369 |
|
(Decrease) / Increase in trading liabilities |
|
(309) |
252 |
|
(Increase) / decrease in trading assets |
|
(1,683) |
4,136 |
|
Cash generated by operations |
|
8,095 |
14,027 |
|
Interest paid |
|
(380) |
(430) |
|
Corporation tax paid |
|
(1,207) |
(962) |
|
Net cash generated by operating activities |
|
6,508 |
12,635 |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Purchase of property, plant and equipment |
|
(882) |
(681) |
|
Sale of property, plant and equipment |
|
- |
80 |
|
Sale of investment property |
|
- |
2,885 |
|
Acquisition of subsidiary, net of cash acquired |
|
(826) |
- |
|
Investment in associate |
|
- |
(7,000) |
|
Redemption of shares in associate |
|
- |
7,750 |
|
Income from associate |
|
- |
55 |
|
Purchase of Principal Finance investments |
|
(803) |
- |
|
Sale of Principal Finance investments |
|
1,270 |
314 |
|
Investment by non controlling interest in subsidiaries |
|
1,331 |
210 |
|
Interest received |
|
43 |
95 |
|
Net cash generated by investing activities |
|
133 |
3,708 |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Issue of shares |
|
- |
1,530 |
|
Repurchase of own shares |
|
- |
(2,248) |
|
Decrease in borrowings |
|
(12,192) |
(393) |
|
New borrowings |
|
4,458 |
- |
|
Dividends paid to equity shareholders |
3 |
(2,158) |
(2,167) |
|
Dividends paid to non controlling interests |
|
(1,943) |
(1,438) |
|
Net cash used in financing activities |
|
(11,835) |
(4,716) |
|
|
|
|
|
|
Net (decrease) / increase in cash and cash equivalents |
|
(5,194) |
11,627 |
|
Effects of exchange rate changes |
|
536 |
109 |
|
Cash and cash equivalents at the beginning of the year |
|
35,673 |
23,937 |
|
Cash and cash equivalents at the end of the year |
|
31,015 |
35,673 |
Notes
1. Financial information
Basis of preparation
The annual financial statements of Shore Capital Group Limited (the "Company") have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("Adopted IFRS").
The accounting policies adopted are those disclosed in the 2017 Annual Report other than for the adoption of new accounting standards described below.
New standards, interpretations and amendments effective from 1 January 2018
New standards impacting the Group that have been adopted in the annual financial statements for the year ended 31 December 2018, and which have given rise to changes in the Group's accounting policies are:
§ IFRS 9 Financial Instruments (IFRS 9); and
§ IFRS 15 Revenue from Contracts with Customers (IFRS 15)
Details of the impact of these two standards will be given in the annual financial statements. However, adoption has not had a significant effect on the amounts recognised in the Group's financial statements although there have been some presentational changes.
Presentation of the financial statements and financial information
The financial information set out in the announcement does not constitute the Company's statutory accounts for the year ended 31 December 2018 within the meaning of section 244 of the Companies (
The financial information for the year ended 31 December 2017 is derived from the statutory accounts of the Company for that year. The auditors reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a statement under section 263(2) or (3) of the Companies (
The audit of the statutory accounts of Shore Capital Group Limited for the year ended 31 December 2018 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the directors in this preliminary announcement.
The statutory accounts have been prepared in accordance with IFRS as adopted by the European Union. Details of the accounting policies that will be applied in the statutory accounts will be set out in the 2018 Annual Report and Accounts of the Company.
A copy of this statement is available on the Company's website at www.shorecap.gg.
The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments. The financial statements are rounded to the nearest thousand except where otherwise indicated.
2. Segment Information
For management purposes, the Group is organised into business units based on their services, and has four reportable operating segments as follows:
§ Capital Markets provides research in selected sectors, broking for institutional and professional clients, market-making in small cap and mid-cap stocks, fixed income broking and corporate broking and advisory for large, mid and small cap companies.
§ Asset Management provides advisory services and manages specialist funds.
§ Central Costs comprises the costs of the Group's central management team and structure
§ Principal Finance comprises investments and other holdings acquired, together with principal finance activities conducted, using the Group's own balance sheet resources.
Management monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segmental performance is evaluated based on operating profit or loss. Transfer prices between operating segments are on an arms-length basis in a manner similar to transactions with third parties.
|
Year ended 31 December 2018 |
Capital Markets |
Asset Management |
Central costs |
Principal Finance |
Consolidated |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Revenue |
25,452 |
15,843 |
- |
2,039 |
43,334 |
|
|
|
|
|
|
|
|
Results |
|
|
|
|
|
|
Depreciation |
(278) |
(127) |
(67) |
(790) |
(1,262) |
|
Interest expense |
(86) |
(78) |
- |
(216) |
(380) |
|
Profit/(loss) before tax |
4,058 |
3,166 |
(1,637) |
(1,519) |
4,068 |
|
|
|
|
|
|
|
|
Assets |
56,658 |
10,018 |
1,599 |
33,040 |
101,315 |
|
|
|
|
|
|
|
|
Liabilities |
(23,337) |
(3,651) |
(855) |
(5,409) |
(33,252) |
|
Year ended 31 December 2017 |
Capital Markets |
Asset Management |
Central costs |
Principal Finance |
Consolidated |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Revenue |
27,230 |
12,906 |
- |
1,760 |
41,896 |
|
|
|
|
|
|
|
|
Results |
|
|
|
|
|
|
Share of results of associates |
- |
- |
- |
805 |
805 |
|
Balance sheet impairments |
- |
- |
- |
(1,883) |
(1,883) |
|
Depreciation |
(262) |
(87) |
(65) |
(477) |
(891) |
|
Interest expense |
(103) |
- |
- |
(327) |
(430) |
|
Profit/(loss) before tax |
5,193 |
3,001 |
(1,651) |
(1,966) |
4,577 |
|
|
|
|
|
|
|
|
Assets |
66,317 |
8,319 |
2,948 |
35,975 |
113,559 |
|
|
|
|
|
|
|
|
Liabilities |
(33,300) |
(2,622) |
(637) |
(9,830) |
(46,389) |
No material amounts of revenue or profit before tax were generated outside
3. Rates of Dividends Paid and Proposed
|
|
2018 |
2017 |
|
|
£'000 |
£'000 |
|
|
|
|
|
Amounts recognised as distributions to equity holders in the period: |
|
|
|
Final dividend for the year ended 31 December 2016 of 5.0p per share |
- |
1,088 |
|
Interim dividend for the year ended 31 December 2017 of 5.0p per share |
- |
1,079 |
|
Final dividend for the year ended 31 December 2017 of 5.0p per share |
1,079 |
- |
|
Interim dividend for the year ended 31 December 2018 of 5.0p per share |
1,079 |
- |
|
|
2,158 |
2,167 |
The directors propose a final dividend of 5.0p per share, bringing the total for the year ended 31 December 2018 to 10.0p per share (2017: 10.0p per share).
4. Earnings per Share
The earnings and number of shares in issue or to be issued used in calculating the earnings per share and diluted earnings per share in accordance with IAS 33 were as follows:
As at 31 December 2018 there were 21,573,322 ordinary shares in issue (2017: 21,573,322).
|
|
2018 |
2017 |
||
|
|
Basic |
Diluted |
Basic |
Diluted |
|
|
|
|
|
|
|
Earnings (£) |
2,727,000 |
2,727,000 |
2,826,000 |
2,826,000 |
|
Number of shares |
21,573,322 |
21,840,354 |
21,645,329 |
22,019,172 |
|
|
|
|
|
|
|
Earnings per share (p) |
12.6 |
12.5 |
13.1 |
12.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of number of shares |
2018 |
2017 |
||
|
|
Basic |
Diluted |
Basic |
Diluted |
|
|
|
|
|
|
|
Weighted average number of shares |
21,573,322 |
21,573,322 |
21,645,329 |
21,645,329 |
|
Dilutive effect of share option schemes |
- |
267,032 |
- |
373,843 |
|
|
21,573,322 |
21,840,354 |
21,645,329 |
22,019,172 |
5. Subsequent events
On 13 February 2019 Shore Capital Markets Limited, a subsidiary of the Group, agreed the acquisition of the entire issued share capital of Stockdale Securities Limited ("Stockdale") for an initial consideration of
On 12 March 2019 the Group signed a 10 year occupational lease with a 5 year break clause for its new
Notes
A copy of this announcement is available on the Company's website at www.shorecap.gg. The annual report & accounts will be sent to shareholders in due course and will also be available on the Company's website from the date of posting.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the