TIDMBRK
RNS Number : 3604S
Brooks Macdonald Group PLC
17 March 2016
BROOKS MACDONALD GROUP PLC
FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
Brooks Macdonald Group plc ("Brooks Macdonald" or the "Group"),
the AIM listed integrated wealth management group, today announces
its report for the six months ended 31 December 2015.
Financial Highlights
Half Half Change
year year
ended ended
31.12.15 31.12.14
Total discretionary funds
under management ("FUM") GBP7.82bn GBP6.95bn 12%
Revenue GBP38.70m GBP37.50m 3%
Underlying pre-tax profit* GBP7.13m GBP6.72m 6%
Underlying earnings per
share* 42.59p 41.25p 3%
Pre-tax profit GBP5.48m GBP4.48m 22%
Earnings per share 32.44p 26.63p 22%
Interim dividend 12p 10p 20%
*Adjustments are in respect of acquisition costs, the costs of
deferred consideration and the amortisation of intangible
assets
Business Highlights:
-- Double digit growth in FUM drove half year increases in profit and earnings per share
-- Almost all of the growth in FUM was derived from organic growth in the half year period:
o Organic growth (net new discretionary business) of GBP394m or
5.3% over the half year period excluding market growth
o Total growth of over GBP870m or 12% year on year includes
benefit of market growth and prior period acquisitions
o WMA Balanced index declined by 0.75% over the six month
period
-- Property assets under administration, managed by Braemar
Estates, of GBP1.13bn (December 2014: GBP1.09bn)
-- Third party assets under administration are now in excess of
GBP270m (December 2014: >GBP225m)
-- Interim dividend increased by 20% to 12p (2014: 10.0p)
reflecting the Board's continued confidence in the Group's progress
and the continued rebalancing between the interim and final
dividend.
Commenting on the results and outlook, Chris Macdonald, Chief
Executive, said:
"Brooks Macdonald has continued to make good progress, with
double digit growth in discretionary funds under management during
the first half driving increases in profit and earnings per share.
In uncertain markets, we have achieved strong risk adjusted returns
for our clients and have progressed a number of significant
projects across the Group which will help drive future growth."
"We have continued to see strong organic growth in the early
weeks of the second half, albeit the volatility in markets since
the New Year is likely to have impacted the Group's funds under
management."
"Our second half will benefit from the year on year growth of
funds under management, but will be impacted by the continuing
planned conversion of advisory to discretionary assets by Brooks
Macdonald International. Overall subject to the level of the
market, we expect to make further progress for the year as a
whole."
An analyst meeting will be held at 9.15 for 9.30am on Thursday,
17 March at the offices of MHP Communications, 6 Agar Street,
London, WC2N 4HN. Please contact Charlie Barker on
020 3128 8540 or e-mail brooks@mhpc.com for further details.
Enquiries to:
Brooks Macdonald Group plc www.brooksmacdonald.com
Chris Macdonald, Chief Executive 020 7499 6424
Simon Jackson, Finance Director
Andrew Shepherd, Deputy Chief
Executive
Peel Hunt LLP (Nominated Adviser
and Broker)
Guy Wiehahn / Adrian Haxby 020 7418 8900
MHP Communications
Reg Hoare / Simon Hockridge /
Giles Robinson / Charlie Barker 020 3128 8100
Notes to editors
Brooks Macdonald Group plc is an AIM listed, integrated, wealth
management group. The Group consists of six principal companies:
Brooks Macdonald Asset Management Limited, a discretionary asset
management business; Brooks Macdonald Funds Limited, a fund
management business; Brooks Macdonald Financial Consulting Limited,
a financial advisory and employee benefits consultancy; Brooks
Macdonald Asset Management (International) Limited, a Jersey and
Guernsey based provider of discretionary investment management and
stockbroking; Brooks Macdonald Retirement Services (International)
Limited, a Jersey and Guernsey based retirement planning services
provider; and Braemar Estates (Residential) Limited, an estate
management company.
CHAIRMAN'S STATEMENT
Introduction
In the six months to the end of December 2015 the Group
continued to make good progress, with positive growth in
discretionary funds under management driving increases in profit
and earnings per share. These increases were achieved despite the
impact of the planned movement of advisory clients to discretionary
mandates in Brooks Macdonald International, which reduced fee
revenues by more than anticipated.
In uncertain markets, we have achieved strong risk adjusted
returns for our clients and have progressed a number of significant
projects across the Group which will help drive future growth.
Results
Revenues have risen to GBP38.70m (2014: GBP37.50m) and
underlying pre-tax profit has increased by 6% to GBP7.13m (2014:
GBP6.72m), with underlying earnings per share up 3% to 42.59p
(2014: 41.25p).
Statutory profit before tax was GBP5.48m compared to GBP4.48m in
the same period last year.
Reconciliation of underlying profit before tax to profit before
tax
2015 2014
GBPm GBPm
Underlying profit before
tax 7.13 6.72
Amortisation of client
relationships and software (1.36) (1.35)
Finance costs of deferred
consideration (0.29) (0.47)
Changes in fair value
of deferred consideration - (0.30)
Acquisition costs - (0.12)
------- -------
Profit before tax 5.48 4.48
------- -------
Cash resources at the period end amounted to GBP15.43m (2014:
GBP11.77m). The Group had no borrowings as at 31 December 2015
(2014: GBPnil).
Dividend
The Board has declared an interim dividend of 12p (2014: 10p).
This represents an increase of 20% compared to the previous year,
reaffirming the Group's progressive dividend policy while
continuing the planned move towards a more balanced split between
interim and final. The interim dividend will be paid on 26 April
2016 to shareholders on the register as at 29 March 2016.
Funds under Management (FUM)
I am pleased to report that the Group saw continued growth in
its three core investment businesses: Asset Management,
International and Funds. This growth, which was ahead of our
expectations, comprised of GBP394m of organic new business and
GBP15m of portfolio performance over the period.
As previously announced, the Group's discretionary funds under
management rose to GBP7.82bn as at 31 December 2015 (as at 30 June
2015: GBP7.41bn), representing a rise of 5.52% compared to the WMA
index, which declined 0.75% over the same six month period.
Analysis of discretionary fund flows over the period
Six months Six months
to Year to to
31 Dec 30 Jun 31 Dec
2015 2015 2014
GBPm GBPm GBPm
Opening discretionary
FUM 7,413 6,550 6,550
Net new discretionary
business 394 645 238
Investment growth 15 218 165
----------- -------- -----------
Total FUM growth 409 863 403
Closing FUM 7,822 7,413 6,953
Organic growth (net
of markets) % 5.31% 9.8% 3.7%
Total growth % 5.52% 13.2% 6.2%
Business review
Asset Management continues to grow its professional connections
and now works with over 900 introducing firms who refer new
business to the Group. Internationally, Brooks Macdonald continues
to gain positive traction in South Africa from a distribution
perspective, managing the assets won out of its offices in the
Channel Islands.
Brooks Macdonald's Funds business continues to gain traction and
increase its FUM, with particular momentum within its Multi-Asset
Fund (MAF) range. However the business incurred a loss for the half
year, principally as a result of costs and charges incurred in two
specialist funds which have not achieved critical mass.
Braemar Estates, the Group's property management business, saw a
small decline in the value of property assets under administration
over the period to GBP1.13bn (June 2015: GBP1.14bn).
Brooks Macdonald International achieved lower profits due to the
planned conversion of advisory accounts to discretionary accounts.
Advisory accounts deliver higher short term revenues, while
discretionary accounts are charged in arrears but at higher overall
rates. This led to reduced revenues on these accounts during the
period. However, over the medium term, this focus on discretionary
accounts should enhance fee income, in line with the strategic
focus of the Group as a whole.
Financial Consulting continues to be a significant introducer of
Investment Management work across the Group. The consultancy
division had a satisfactory period, albeit the employee benefits
market remains challenging and behind our expectations.
(MORE TO FOLLOW) Dow Jones Newswires
March 17, 2016 03:00 ET (07:00 GMT)
The Group continues to pursue an organic growth strategy,
through investing in infrastructure and the long term development
of the business. The Group continues to make good progress with its
information technology upgrade and implementation plan, and has
added to the scope of the upgrade to include enhancements and to
reflect the latest regulatory thinking. The project remains on
course to be completed by the end of 2016. It also includes
investment in growing the Group's fund management capabilities
(trainees, research and investment managers), while expanding
Brooks Macdonald's new business teams both on and offshore. The
purpose for this is to ensure that the Group stays at the forefront
of the industry, delivering consistently strong investment
performance and high service levels to its clients and professional
intermediary partners.
Outlook and Summary
The Group remains focussed on delivering strong performance at
all levels of the business following good progress in the first
half. We have continued to see strong organic growth in the early
weeks of the second half, albeit volatility in markets since the
New Year has inevitably impacted the Group's funds under
management.
Our second half will benefit from the year on year growth of FUM
but will be impacted by the continuing planned conversion of
advisory to discretionary assets by Brooks Macdonald International.
Overall subject to the absolute level of the market, we expect to
make further progress for the year as a whole.
Christopher Knight
Chairman
16 March 2016
BROOKS MACDONALD GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 December 2015
Year ended
Six months Six months
ended 31 ended 31
Dec 2015 Dec 2014 30 Jun 2015
Note (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 38,698 37,503 77,686
Administrative costs 5 (32,287) (32,398) (65,371)
Realised gain on investment 6 20 - 540
Other gains and losses 7 (572) (166) (754)
Operating profit 5,859 4,939 12,101
Finance income 22 60 86
Finance costs 8 (292) (471) (763)
Share of results of joint
venture 15 (107) (45) (4)
Profit before tax 5,482 4,483 11,420
Taxation 9 (1,109) (921) (2,269)
Profit for the period attributable
to equity holders of the
Company 4,373 3,562 9,151
------------- ------------- -------------
Other comprehensive income:
Items that may be reclassified
subsequently to profit or
loss
Revaluation of available
for sale financial assets - (401) -
Revaluation reserve recycled
to profit and loss - - 68
Total comprehensive income
for the period 4,373 3,161 9,219
------------- ------------- -------------
Earnings per share
Basic 10 32.44p 26.63p 68.30p
Diluted 10 32.28p 26.51p 68.14p
The accompanying notes form an integral part of these condensed
consolidated financial statements.
BROOKS MACDONALD GROUP PLC
CONDENSED Consolidated Statement of Financial Position
as at 31 December 2015
30 Jun
31 Dec 2015 31 Dec 2014 2015
Note (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 12 65,495 65,565 65,258
Property, plant and equipment 13 3,558 2,658 3,539
Available for sale financial
assets 14 1,358 2,031 1,532
Investment in joint venture 15 221 566 628
Deferred tax assets 710 524 709
------------- ------------- -----------
Total non-current assets 71,342 71,344 71,666
Current assets
Trade and other receivables 21,866 20,054 21,402
Financial assets at fair
value through profit or
loss 16 5 328 3
Cash and cash equivalents 15,425 11,768 19,274
------------- ------------- -----------
Total current assets 37,296 32,150 40,679
Total assets 108,638 103,494 112,345
------------- ------------- -----------
Liabilities
Non-current liabilities
Deferred consideration 17 (7,890) (11,770) (9,442)
Deferred tax liabilities (4,151) (5,011) (4,694)
Other non-current liabilities (29) (42) (95)
------------- ------------- -----------
Total non-current liabilities (12,070) (16,823) (14,231)
Current liabilities
Trade and other payables (14,348) (13,769) (16,894)
Current tax liabilities (1,487) (702) (1,463)
Deferred tax liabilities (157) - (119)
Provisions 18 (5,109) (4,024) (5,474)
------------- ------------- -----------
Total current liabilities (21,101) (18,495) (23,950)
Net assets 75,467 68,176 74,164
------------- ------------- -----------
Equity
Share capital 137 136 136
Share premium account 35,623 35,163 35,600
Other reserves 5,049 4,092 5,101
Retained earnings 34,658 28,785 33,327
------------- ------------- -----------
Total equity 75,467 68,176 74,164
------------- ------------- -----------
The condensed consolidated financial statements were approved by
the Board of Directors and authorised for issue on 16 March 2016,
signed on their behalf by:
C A J Macdonald S J Jackson
Chief Executive Finance Director
Company registration number: 4402058
The accompanying notes form an integral part of these condensed
consolidated financial statements.
BROOKS MACDONALD GROUP PLC
CONDENSED Consolidated Statement of Changes in Equity
for the period 1 July 2013 to 31 December 2015
Share
Share premium Other Retained
capital account reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 July 2014 135 35,147 4,720 27,456 67,458
--------- --------- ---------- ---------- --------
Comprehensive income
Profit for the period - - 3,562 3,562
Revaluation of available
for sale financial asset - - (401) - (401)
Total comprehensive income - - (401) 3,562 3,161
Transactions with owners
Issue of ordinary shares 1 16 - - 17
Share-based payments - - 685 - 685
Share-based payments transfer - - (1,045) 1,045 -
Purchase of own shares by
employee benefit trust - - - (743) (743)
Deferred tax on share options - - 133 - 133
Dividends paid (note 11) - - - (2,535) (2,535)
--------- --------- ---------- ---------- --------
Total transactions with
owners 1 16 (227) (2,233) (2,443)
Balance at 31 December 2014 136 35,163 4,092 28,785 68,176
(MORE TO FOLLOW) Dow Jones Newswires
March 17, 2016 03:00 ET (07:00 GMT)
--------- --------- ---------- ---------- --------
Comprehensive income
Profit for the period - - - 5,589 5,589
Other comprehensive income:
Revaluation of available
for sale financial asset - - 469 - 469
--------- --------- ---------- ---------- --------
Total comprehensive income - - 469 5,589 6,058
Transactions with owners
Issue of ordinary shares - 437 - - 437
Share-based payments - - 632 - 632
Share-based payments transfer - - (291) 291 -
Deferred tax on share options - - 199 - 199
Dividends paid (note 11) - - - (1,338) (1,338)
--------- --------- ---------- ---------- --------
Total transactions with
owners - 437 540 (1,047) (70)
Balance at 30 June 2015 136 35,600 5,101 33,327 74,164
--------- --------- ---------- ---------- --------
Comprehensive income
Profit for the period - - - 4,373 4,373
--------- --------- ---------- ---------- --------
Total comprehensive income - - 4,373 4,373
Transactions with owners
Issue of ordinary shares 1 23 - - 24
Share-based payments - - 375 - 375
Share-based payments transfer - - (575) 575 -
Purchase of own shares by
employee benefit trust - - - (859) (859)
Deferred tax on share options - - 148 - 148
Dividends paid (note 11) - - - (2,758) (2,758)
--------- --------- ---------- ---------- --------
Total transactions with
owners 1 23 (52) (3,042) (3,070)
Balance at 31 December 2015 137 35,623 5,049 34,658 75,467
--------- --------- ---------- ---------- --------
The accompanying notes form an integral part of these condensed
consolidated financial statements.
BROOKS MACDONALD GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 31 December 2015
Six months Six months
ended ended Year ended
31 Dec 2015 31 Dec 2014 30 Jun 2015
Note (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Cash generated from operations 19 5,203 7,241 20,094
Taxation paid (1,443) (983) (1,756)
Net cash generated from
operating activities 3,760 6,258 18,338
Cash flows from investing
activities
Purchase of property, plant
and equipment 13 (568) (204) (1,558)
Purchase of intangible assets 12 (1,598) (823) (1,879)
Purchase of available for
sale financial assets - (250) (250)
Acquisition of subsidiary
companies, net of cash acquired - (687) 37
Deferred consideration paid 17 (1,772) (7,001) (9,218)
Interest received 22 60 86
Purchase of financial assets
at fair value through profit
or loss - - (40)
Proceeds of sale of financial
assets at fair value through
profit or loss - - 263
Investment in joint venture 15 (100) (380) (400)
------------- ------------- -------------
Net cash used in investing
activities (4,016) (9,285) (12,959)
Cash flows from financing
activities
Proceeds of issue of shares 24 17 454
Purchase of own shares by
employee benefit trust (859) (743) (742)
Dividends paid to shareholders 11 (2,758) (2,535) (3,873)
------------- ------------- -------------
Net cash used in financing
activities (3,593) (3,261) (4,161)
Net (decrease)/ increase
cash and cash equivalents (3,849) (6,288) 1,218
Cash and cash equivalents
at beginning of period 19,274 18,056 18,056
------------- ------------- -------------
Cash and cash equivalents
at end of period 15,425 11,768 19,274
------------- ------------- -------------
The accompanying notes form an integral part of these condensed
consolidated financial statements.
BROOKS MACDONALD GROUP PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 31 December 2015
1. General information
Brooks Macdonald Group plc ('the Company') is the parent company
of a group of companies ('the Group'), which offers a range of
investment management services and related professional advice to
private high net worth individuals, charities and trusts. The Group
also provides financial planning as well as offshore fund
management and administration services and acts as fund manager to
regulated OEICs, providing specialist funds in the property and
structured return sectors and managing property assets on behalf of
these funds and other clients. The Group's primary activities are
set out in its Annual Report and Accounts for the year ended 30
June 2015.
The Group has offices in London, Edinburgh, Guernsey, Hale,
Hampshire, Jersey, Leamington Spa, Manchester, Taunton, Tunbridge
Wells and York. The Company is a public limited company,
incorporated and domiciled in the United Kingdom under the
Companies Act 2006 and listed on AIM. The address of its registered
office is 72 Welbeck Street, London, W1G 0AY.
The consolidated interim financial information was approved for
issue on 16 March 2016. It has been independently reviewed but is
not audited.
2. Accounting policies
a) Basis of preparation
The Group's condensed consolidated half yearly financial
statements are prepared and presented in accordance with IAS 34
'Interim Financial Reporting' as adopted by the European Union.
They have been prepared on a going concern basis with reference to
the accounting policies and methods of computation and presentation
set out in the Group's consolidated financial statements for the
year ended 30 June 2015, except as stated below. The half yearly
financial statements should be read in conjunction with the Group's
audited financial statements for the year ended 30 June 2015, which
have been prepared in accordance with IFRS as adopted by the
European Union.
The information in this announcement does not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. The Group's accounts for the year ended 30 June 2015 have
been reported on by the Group's auditors and delivered to the
Registrar of Companies. The report of the auditors was unqualified
and did not draw attention to any matters by way of emphasis. It
contained no statement under section 498(2) or (3) of the Companies
Act 2006.
b) Changes in accounting policies
The Group's accounting policies that have been applied in
preparing these financial statements are consistent with those
disclosed in the Annual Report and Accounts for the year ended 30
June 2015, except as described below.
New accounting standards, amendments and interpretations adopted
in the period
In the six months ended 31 December 2015, the Group did not
adopt any new standards or amendments issued by the IASB or
interpretations issued by the IFRS Interpretations Committee (IFRS
IC) that have had a material impact on the condensed consolidated
financial statements.
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March 17, 2016 03:00 ET (07:00 GMT)
Other new standards, amendments and interpretations listed in
the table below were newly adopted by the Group but have not had a
material impact on the amounts reported in these financial
statements. They may however impact the accounting for future
transactions and arrangements.
Standard, Amendment or Interpretation Effective
date
--------------------------------------------------- -----------
Contributions to defined benefit plans (amendments 1 February
to IAS 19) 2015
--------------------------------------------------- -----------
Annual improvements (2010-2012 cycle) 1 February
2015
--------------------------------------------------- -----------
Annual improvements (2011-2013 cycle) 1 January
2015
--------------------------------------------------- -----------
New accounting standards, amendments and interpretations not yet
adopted
A number of new standards, amendments and interpretations, which
have not been applied in preparing these financial statements, have
been issued and are effective for annual and interim periods
beginning after 1 July 2015:
Standard, Amendment or Interpretation Effective
date
---------------------------------------------------- ----------
Disclosure initiative (amendments to IAS 1) 1 January
2016
---------------------------------------------------- ----------
Accounting for acquisitions of interests in 1 January
joint operations (amendments to IFRS 11) 2016
---------------------------------------------------- ----------
Investment entities: applying the consolidation 1 January
exception (amendments to IFRS 10, IFRS 12 and 2016
IAS 28)
---------------------------------------------------- ----------
Clarification of acceptable methods of depreciation 1 January
and amortisation (amendments to IAS 16 and IAS 2016
38)
---------------------------------------------------- ----------
Annual improvements (2012-2014 cycle) 1 July
2016
---------------------------------------------------- ----------
Recognition of deferred tax assets for unrealised 1 January
losses (amendments to IAS 12) 2017
---------------------------------------------------- ----------
Disclosure initiative (amendments to IAS 7) 1 January
2017
---------------------------------------------------- ----------
Revenue from contracts with customers (IFRS 1 January
15) 2018
---------------------------------------------------- ----------
Financial instruments (IFRS 9) 1 January
2018
---------------------------------------------------- ----------
Leases (IFRS 16) 1 January
2019
---------------------------------------------------- ----------
Not yet endorsed for use in the EU
The impact of these changes is currently being reviewed and
there is no intention to early adopt.
Only IFRS 16 Leases is expected to have a significant impact on
the Group's future consolidated financial statements. This new
standard will require the recognition a right-of-use asset and
associated lease liability for the office premises that are leased
by the Group. The asset would be depreciated over the lease term
and the liability would accrue interest, resulting in a
front-loaded expense profile. This accounting treatment contrasts
with the current treatment for operating leases, where no asset or
liability is recognised and the lease payments are charged to the
Consolidated Statement of Comprehensive Income on a straight line
basis over the term of the lease.
3. Financial risk factors
The Group's activities expose it to a variety of financial and
non-financial risks. The principal risks faced by the Group are
described on pages 58 and 59 of the Annual Report and Accounts for
the year ended 30 June 2015. These key risks include: loss of
clients or reputational damage as a result of poor performance or
service; regulatory breaches; loss of key staff; potential service
issues with IT infrastructure; operational risk due to inadequate
processes and controls; and financial risks such as liquidity risk,
market risk and credit risk. These remain our principal risks for
the second half of the financial year. There have been no
significant changes affecting the fair value or classification of
financial assets during the period.
4. Segmental information
For management purposes the Group's activities are organised
into four operating divisions: investment management, financial
planning, fund and property management and international. The
Group's other activity, offering nominee and custody services to
clients, is included within investment management. These divisions
are the basis on which the Group reports its primary segmental
information. In accordance with IFRS 8 'Operating Segments',
disclosures are required to reflect the information which the Board
uses internally for evaluating the performance of its operating
segments and allocating resources to those segments. The
information presented in this note follows the presentation for
internal reporting to the Group Board of Directors.
Revenues and expenses are allocated to the business segment that
originated the transaction. Revenues and expenses that are not
directly originated by a particular business segment are reported
as unallocated. Sales between segments are carried out at arm's
length. Centrally incurred expenses are allocated to business
segments on an appropriate pro-rata basis. Segment assets and
liabilities comprise operating assets and liabilities, being the
majority of the balance sheet.
Fund
and
Investment Financial property
management planning management International Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months ended 31 Dec
2015 (unaudited)
Total segment revenues 27,908 2,103 3,146 5,747 38,904
Inter segment revenues (110) (64) (32) - (206)
------------ ---------- ------------ -------------- --------
External revenues 27,798 2,039 3,114 5,747 38,698
------------ ---------- ------------ -------------- --------
Segment result 8,504 (13) (1,061) 245 7,675
Unallocated items (2,193)
--------
Profit before tax 5,482
Taxation (1,109)
--------
Profit for the period 4,373
--------
Six months ended 31 Dec
2014 (unaudited)
Total segment revenues 25,948 1,967 2,812 6,897 37,624
Inter segment revenues (54) (46) (21) - (121)
------------ ---------- ------------ -------------- --------
External revenues 25,894 1,921 2,791 6,897 37,503
------------ ---------- ------------ -------------- --------
Segment result 6,601 (50) (457) 609 6,703
Unallocated items (2,220)
--------
Profit before tax 4,483
Taxation (921)
--------
Profit for the period 3,562
--------
Year ended 30 Jun 2015 (audited)
Total segment revenues 54,464 4,191 6,044 13,200 77,899
Inter segment revenues (101) (69) (43) - (213)
------------ ---------- ------------ -------------- --------
External revenues 54,363 4,122 6,001 13,200 77,686
------------ ---------- ------------ -------------- --------
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March 17, 2016 03:00 ET (07:00 GMT)
Segment result 15,774 (68) (564) 1,315 16,457
Unallocated items (5,037)
--------
Profit before tax 11,420
Taxation (2,269)
--------
Profit for the year 9,151
--------
a) Geographic analysis
The Group's operations are located in the United Kingdom and the
Channel Islands. The following table presents external revenue
analysed by the geographical location of the Group entity providing
the service.
Six months
ended Year ended
31 Dec Six months 30 Jun
2015 ended 2015
31 Dec
(unaudited) 2014 (unaudited) (audited)
GBP'000 GBP'000 GBP'000
United Kingdom 32,951 30,606 64,486
Channel Islands 5,747 6,897 13,200
Total revenue 38,698 37,503 77,686
------------- ------------------- -----------
b) Major clients
The Group is not reliant on any one client or group of connected
clients for the generation of revenues.
5. Administrative costs
The following items are included within administrative expenses
in the Condensed Consolidated Statement of Comprehensive
Income.
Acquisition costs
Directly attributable business acquisition costs of GBPnil were
incurred in the six months ended 31 December 2015 (six months ended
31 December 2014: GBP120,000; year ended 30 June 2015:
GBP120,000).
Financial Services Compensation Scheme levies
A charge of GBPnil was incurred in respect of Financial Services
Compensation Scheme ('FSCS') levies in the six months ended 31
December 2015 (six months ended 31 December 2014: GBPnil; year
ended 30 June 2015: GBP510,000).
6. Realised gain on investment
During the six months ended 31 December 2015, the Group realised
an additional gain of GBP20,000 (six months ended 31 December 2014:
GBPnil; year ended 30 June 2015: GBP540,000) on the final disposal
of its investment in Sancus Holdings Limited through the voluntary
winding up of the company.
7. Other gains and losses
Other gains and losses represent the net changes in the fair
value of the Group's financial instruments recognised in the
Consolidated Statement of Comprehensive Income.
Six months Six months
ended ended
31 Dec 2015 31 Dec 2014 Year ended
30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Impairment of available
for sale financial assets
(note 14) (174) - (718)
Unrealised gain / (loss)
from changes in fair value
of financial assets at fair
value through profit or
loss (note 16) 2 (150) (252)
Impairment of investment
in joint venture (note 15) (400) - -
(Loss) / gain from changes
in fair value of deferred
consideration (note 17) - (16) 216
------------- ------------- -------------
Other gains and losses (572) (166) (754)
------------- ------------- -------------
8. Finance costs
Six months
ended
Six months
31 Dec 2015 ended Year ended
31 Dec 2014 30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Bank interest payable - 2 3
Finance cost of deferred
consideration 292 469 760
------------- -------------- -------------
Total finance costs 292 471 763
------------- -------------- -------------
9. Taxation
The current tax expense for the six months ended 31 December
2015 was calculated based on the estimated average annual effective
tax rate. The overall effective tax rate for this period was 20.23%
(six months ended 31 December 2014: 20.54%; year ended 30 June
2015: 19.87%).
Six months
ended
Six months
31 Dec 2015 ended Year ended
31 Dec 2014 30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Current tax
United Kingdom taxation 1,437 1,001 2,776
Under / (over) provision
in prior years 196 (196) (231)
------------- -------------- -------------
Total current taxation 1,633 805 2,545
Deferred tax
Origination and reversal
of temporary differences (190) 116 (276)
Effect of change in tax
rate on deferred tax (334) - -
Total deferred taxation (524) 116 (276)
Total income tax expense 1,109 921 2,269
------------- -------------- -------------
On 1 April 2015 the standard rate of Corporation Tax in the UK
was reduced from 21% to 20%. The Finance Act 2015 will further
reduce the main rate of UK Corporation Tax to 19% with effect from
1 April 2017 and 18% with effect from 1 April 2020. As a result the
effective rate of Corporation Tax applied to the taxable profit for
the period ended 31 December 2015 is 20.00% (six months ended 31
December 2014: 20.75%; year ended 30 June 2015: 20.75%).
Deferred tax assets and liabilities are calculated at the rate
that is expected to be in force when the temporary differences
unwind, but limited to the extent that such rates have been
substantively enacted. Consequently the tax rate used to measure
the deferred tax assets and liabilities of the Group is 18.90% (six
months ended 31 December 2014: 20.00%; year ended 30 June 2015:
20.00%) on the basis that they will materially unwind after 1 April
2020.
10. Earnings per share
The directors believe that underlying earnings per share provide
a truer reflection of the Group's performance. Underlying earnings
per share are calculated based on 'underlying earnings', which is
defined as post-tax profit attributable to equity holders of the
Company ('earnings') before acquisition costs, finance costs of
deferred consideration, changes in the fair value of deferred
consideration and amortisation of intangible non-current assets.
The tax effect of these adjustments is also considered and the tax
charge is adjusted accordingly.
Earnings for the period used to calculate earnings per share as
reported in these condensed consolidated financial statements were
as follows:
Six months
ended
Six months
31 Dec 2015 ended Year ended
31 Dec 2014 30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Earnings 4,373 3,562 9,151
Acquisition costs (note
5) - 120 120
Finance cost of deferred
consideration (note 17) 292 469 760
Changes in fair value of
deferred consideration - 302 70
Amortisation (note 12) 1,361 1,345 2,708
Tax impact of adjustments (284) (281) (571)
------------- -------------- -------------
Underlying earnings 5,742 5,517 12,238
------------- -------------- -------------
Basic earnings per share is calculated by dividing earnings by
the weighted average number of shares in issue throughout the
period. Diluted earnings per share represents the basic earnings
per share adjusted for the effect of dilutive potential shares
issuable on exercise of employee share options under the Group's
share-based payment schemes, weighted for the relevant period.
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The weighted average number of shares in issue during the period
was as follows:
Six months
ended
31 Dec Six months
2015 ended Year ended
31 Dec 30 Jun 2015
(unaudited) 2014 (unaudited) (audited)
Number Number Number of
of shares of shares shares
Weighted average number
of shares in issue 13,481,029 13,375,142 13,399,031
Effect of dilutive potential
shares issuable on exercise
of employee share options 67,712 61,955 30,996
------------- ------------------- -------------
Diluted weighted average
number of shares in issue 13,548,741 13,437,097 13,430,027
------------- ------------------- -------------
Six months
ended
31 Dec Six months
2015 ended Year ended
31 Dec 30 Jun 2015
(unaudited) 2014 (unaudited) (audited)
p p p
Based on reported earnings:
Basic earnings per share 32.44 26.63 68.30
Diluted earnings per share 32.28 26.51 68.14
------------- ------------------- -------------
Based on underlying earnings:
Basic earnings per share 42.59 41.25 91.33
Diluted earnings per share 42.38 41.06 91.12
------------- ------------------- -------------
11. Dividends
Six months Six months
ended ended
31 Dec 2015 31 Dec 2014 Year ended
30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Interim dividend paid on
ordinary shares - - 1,338
Final dividend paid on ordinary
shares 2,758 2,535 2,535
------------- ------------- -------------
Total dividends 2,758 2,535 3,873
------------- ------------- -------------
An interim dividend of 12.0p (2014: 10.0p) per share was
declared by the Board of Directors on 16 March 2016. It will be
paid on 26 April 2016 to shareholders who are on the register at
the close of business on 29 March 2016. In accordance with IAS 10,
this dividend has not been included as a liability in the financial
statements at 31 December 2015.
A final dividend for the year ended 30 June 2015 of 20.5p (2014:
19.0p) per share was paid on 28 October 2015.
12. Intangible assets
Contracts
Acquired acquired
client with
relationship fund
Goodwill Software contracts managers Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 July 2014 24,793 411 32,747 3,048 60,999
Additions 11,213 349 - 474 12,036
At 31 December 2014 36,006 760 32,747 3,522 73,035
Additions - 1,056 - - 1,056
At 30 June 2015 36,006 1,816 32,747 3,522 74,091
Additions - 1,598 - - 1,598
At 31 December 2015 36,006 3,414 32,747 3,522 75,689
--------- --------- -------------- ---------- --------
Accumulated amortisation
At 1 July 2014 - 269 3,771 2,085 6,125
Amortisation charge - 53 1,084 208 1,345
--------- --------- -------------- ---------- --------
At 31 December 2014 - 322 4,855 2,293 7,470
Amortisation charge - 76 1,083 204 1,363
--------- --------- -------------- ---------- --------
At 30 June 2015 - 398 5,938 2,497 8,833
Amortisation charge - 60 1,089 212 1,361
--------- --------- -------------- ---------- --------
At 31 December 2015 - 458 7,027 2,709 10,194
--------- --------- -------------- ---------- --------
Net book value
At 1 July 2014 24,793 142 28,976 963 54,874
At 31 December 2014 36,006 438 27,892 1,229 65,565
At 30 June 2015 36,006 1,418 26,809 1,025 65,258
--------- --------- -------------- ---------- --------
At 31 December 2015 36,006 2,956 25,720 813 65,495
--------- --------- -------------- ---------- --------
a) Goodwill
Goodwill acquired in a business combination is allocated at
acquisition to the cash generating units ('CGUs') that are expected
to benefit from that business combination. The carrying amount of
goodwill in respect of these CGUs within the operating segments of
the group comprises:
31 Dec 2015
31 Dec 2014 30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Fund and property management
Braemar Group Limited ('Braemar') 3,550 3,550 3,550
Levitas Investment Management
Services Limited ('Levitas') 11,213 11,213 11,213
------------- ------------- ------------
14,763 14,763 14,763
International
Brooks Macdonald Asset Management
(International) Limited, Brooks
Macdonald Retirement Services
(International) Limited and
DPZ Capital Limited (collectively
'Brooks Macdonald International') 21,243 21,243 21,243
Total goodwill 36,006 36,006 36,006
------------- ------------- ------------
At the reporting date, there were no indicators that the
carrying amount of goodwill should be impaired.
b) Computer software
Software costs are amortised over an estimated useful life of
four years on a straight line basis.
c) Acquired client relationship contracts
This asset represents the fair value of future benefits accruing
to the Group from client relationship contracts acquired either as
part of a business combination or when separate payments are made
to third parties in exchange for a book of clients. The
amortisation of client relationship contracts is charged to the
Condensed Consolidated Statement of Comprehensive Income on a
straight line basis over their estimated useful lives (15 to 20
years).
d) Contracts acquired with fund managers
This asset represents the fair value of future benefits accruing
to the Group from contracts acquired with individual fund managers
when they are recruited by the group. Payments made to acquire such
contracts are initially recognised at cost and amortised on a
straight line basis over an estimated useful life of five
years.
13. Property, plant and equipment
During the six months ended 31 December 2015, the Group acquired
assets at a cost of GBP568,000 (six months ended 31 December 2014:
GBP204,000; year ended 30 June 2015: GBP1,531,000). The net book
value of fixed assets disposed of in the period was GBP11,000 (six
months ended 31 December 2014: GBPnil; year ended 30 June 2015:
GBPnil), resulting in a gain on disposal of GBPnil (six months
ended 31 December 2014: GBPnil; year ended 30 June 2015:
GBPnil).
14. Available for sale financial assets
The Group holds investments of 1,426,793.64 class B ordinary
shares, representing an interest of 10.88%, in Braemar Group PCC
Limited Student Accommodation Cell ('Student Accommodation fund')
and 750,000 zero dividend preference shares in GLI Finance Limited
('GLIF'), an AIM-listed company incorporated in Guernsey.
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The Student Accommodation fund is promoted by Brooks Macdonald
Funds Limited, a subsidiary of the Group. At 31 December 2015, the
estimated fair value of the Group's investment was GBP608,000 (at
31 December 2014: GBP1,031,000; at 30 June 2015: GBP782,000). An
impairment loss of GBP174,000 was recognised in the Consolidated
Statement of Comprehensive Income during the six months ended 31
December 2015 (six months ended 31 December 2014: GBPnil; year
ended 30 June 2015: GBP718,000), reflecting the perceived permanent
diminution in value of the investment.
At 31 December 2015 the market value of the GLIF preference
shares was GBP750,000 (at 31 December 2014: GBPnil; at 30 June
2015: GBP750,000).
At 31 December 2014, available for sale financial assets also
included an investment in Sancus Holdings Limited, an unlisted
company incorporated in Guernsey, with a market value of
GBP1,000,000. Full details of this investment are provided in note
16 of the Group's 2015 Annual Report and Accounts.
Six months
ended
Six months
31 Dec 2015 ended Year ended
31 Dec 2014 30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
At beginning of period 1,532 2,182 2,182
Additions - 250 250
Disposals - - (250)
Loss from changes in fair
value - (401) -
Accumulated loss or revaluation
reserve recycled - - 68
Impairment loss (174) - (718)
At end of period 1,358 2,031 1,532
------------- -------------- -------------
15. Investment in joint venture
Brooks Macdonald Funds Limited, a subsidiary of Brooks Macdonald
Group plc, holds a 60% interest in North Row Capital LLP. The Group
has joint control over the partnership, with the remaining interest
owned by two individual partners who developed the investment
approach behind the IFSL North Row Liquid Property Fund, which was
launched in February 2014. The fund offers investors liquid
exposure to global real estate markets by investing predominantly
in property derivatives, as well as property equity and debt, to
gain exposure to the direct property markets.
During the six months ended 31 December 2015, the Group provided
additional working capital totalling GBP100,000 to the partnership
(six months ended 31 December 2014: GBP380,000; year ended 30 June
2015: GBP400,000), which is recognised as increase in the
investment in joint venture on the Consolidated Statement of
Financial Position. The Group's share of the loss for the period
reported by North Row Capital LLP was GBP107,000 (six months ended
31 December 2014: loss of GBP45,000; year ended 30 June 2015: loss
of GBP4,000) which has been recognised in the Condensed
Consolidated Statement of Comprehensive Income with a corresponding
reduction in the investment in joint venture in the Condensed
Consolidated Statement of Financial Position.
The carrying amount of the Group's investment in North Row
Capital LLP at 31 December 2015 has been reduced to its estimated
recoverable amount by recognition of an impairment loss of
GBP400,000 against the investment in joint venture (six months
ended 31 December 2014: GBPnil; year ended 30 June 2015: GBPnil).
The expense is included within other gains and losses on the
Condensed Consolidated Statement of Comprehensive Income. The
impairment arose as the forecast future cash flows from the
partnership are now estimated to accumulate slower than originally
anticipated and as a result it will take longer for the Group to
realise a cash return on its investment in the joint venture.
16. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss comprise
equity share capital investments. The cost of the investments at 31
December 2015 was GBP4,000 (at 31 December 2014: GBP478,000; at 30
June 2015: GBP4,000) and their market value at 31 December 2015 was
GBP5,000 (at 31 December 2014: GBP328,000; at 30 June 2015:
GBP3,000). These investments are classified as level 1 within the
fair value hierarchy, as the inputs used to determine the fair
value are quoted prices in active markets for the equity shares at
the measurement date.
17. Deferred consideration
Deferred consideration, which is also included within provisions
in current liabilities (note 18) to the extent that it is due to be
paid within one year of the reporting date, relates to the
directors' best estimate of amounts payable in the future in
respect of certain client relationships and subsidiary undertakings
that were acquired by the Group. Deferred consideration is measured
at its fair value based on discounted expected future cash flows.
The movements in the total deferred consideration balance during
the year were as follows:
Six months
ended
Six months
31 Dec 2015 ended Year ended
31 Dec 2014 30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
At beginning of the period 13,826 11,236 11,236
Added on acquisitions during
the period - 11,264 11,264
Finance cost of deferred
consideration 292 469 760
Fair value adjustments - 16 (216)
Payments made during the
period (1,772) (7,725) (9,218)
At end of the period 12,346 15,260 13,826
------------- -------------- -------------
Analysed as:
Amounts falling due within
one year 4,456 3,490 4,384
Amounts falling due after
more than one year 7,890 11,770 9,442
At end of period 12,346 15,260 13,826
------------- -------------- -------------
Payments totalling GBP1,772,000 were made during the period (six
months ended 31 December 2014: GBP7,725,000; year ended 30 June
2015: GBP9,218,000), representing GBP524,000 to the vendor of JPAM
Limited and GBP1,248,000 to the vendors of Levitas Investment
Management Services Limited.
18. Provisions
Six months Six months
ended ended Year ended
31 Dec 2015 31 Dec 2014 30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Client compensation
At beginning of the period 701 503 503
Movement during the period (48) 31 198
------------- ------------- -------------
At end of the period 653 534 701
------------- ------------- -------------
Deferred consideration
At beginning of the period 4,384 8,293 8,293
Added on acquisitions during
the period - 2,304 2,304
Finance costs 292 120 278
Fair value adjustments - - (216)
Transfer from non-current
liabilities 1,552 498 2,943
Utilised during the period (1,772) (7,725) (9,218)
At end of the period 4,456 3,490 4,384
------------- ------------- -------------
Other provisions
At beginning of the period 389 351 351
Utilised during the period (389) (351) (472)
FSCS levy (note 5) - - 510
-------------
At end of the period - - 389
------------- ------------- -------------
Total provisions at beginning
of the period 5,474 9,147 9,147
------------- ------------- -------------
Total provisions at end
of the period 5,109 4,024 5,474
------------- ------------- -------------
a) Client compensation
Client compensation provisions relate to the potential liability
arising from client complaints against the Group. Complaints are
assessed on a case by case basis and provisions for compensation
are made where judged necessary. Complaints are on average settled
within eight months (six months ended 31 December 2014: eight
months; year ended 30 June 2015: eight months) from the date of
notification of the complaint.
b) Deferred consideration
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Deferred consideration has been included within provisions as a
current liability to the extent that it is due to be paid within
one year of the reporting date. Details of the total deferred
consideration payable are provided in note 17.
A total provision for deferred consideration of GBP1,772,000 was
utilised during the six months ended 31 December 2015 (six months
ended 31 December 2014: GBP7,725,000; year ended 30 June 2015:
GBP9,218,000). This included an amount of GBP524,000 paid in
September 2015 to the vendors of JPAM Limited and GBP1,248,000 paid
in October and November 2015 to the vendors of Levitas Investment
Management Services Limited.
Details of these acquisitions are provided in the Annual Report
and Accounts for the year ended 30 June 2015 on pages 42 and
43.
c) Other provisions
Other provisions include an amount of GBPnil (at 31 December
2014: GBPnil; at 30 June 2015: GBP510,000) in respect of expected
levies by the Financial Services Compensation Scheme. The levy for
the 2016/17 scheme year has been announced by the FSCS but does not
yet meet the recognition criteria for a provision.
19. Reconciliation of operating profit to net cash inflow from operating activities
Six months Six months
ended ended Year ended
31 Dec 2015 31 Dec 2014 30 Jun 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Operating profit 5,859 4,939 12,101
Depreciation of property,
plant and equipment 549 516 990
Amortisation of intangible
assets 1,361 1,345 2,708
Other gains and losses 572 166 1,004
(Increase) / decrease in
receivables (464) 1,415 67
(Decrease) / increase in
payables (2,546) (1,432) 1,693
(Decrease) / increase in
provisions (437) (320) 236
Decrease in other non-current
liabilities (66) (73) (20)
Share-based payments 375 685 1,315
------------- ------------- -------------
Net cash inflow from operating
activities 5,203 7,241 20,094
------------- ------------- -------------
20. Related party transactions
At 31 December 2015, none of the Company's directors (at 31
December 2014: one; at 30 June 2015: one) had taken advantage of
the season ticket loan facility that is available to all staff).
The total amount outstanding at the reporting date was GBPnil (at
31 December 2014: GBPnil; at 30 June 2015: GBP5,000).
21. Share-based payment schemes
a) Long Term Incentive Scheme ('LTIS')
The Company has made annual awards under the LTIS to executive
directors and other senior executives. The conditional awards,
which vest three years after the grant date, are subject to the
satisfaction of specified performance criteria, measured over a
three year performance period. All such conditional awards are made
at the discretion of the Remuneration Committee.
b) Employee Benefit Trust
The Group established an Employee Benefit Trust ('the Trust') on
3 December 2010. The Trust was established in order to acquire
ordinary shares in the Company to satisfy rights to purchase shares
on the exercise of options awarded under the LTIS. All finance
costs and administration expenses connected with the Trust are
charged to the Condensed Consolidated Statement of Comprehensive
Income as they accrue. The Trust has waived its rights to
dividends.
A grant of 60,671 share options with an exercise price of GBPnil
was made under the scheme to directors and employees of the Group
on 29 October 2015. In respect of the six months ended 31 December
2014, a grant of 68,408 share options with an exercise price of
GBPnil was made under the scheme to directors and employees of the
Group on 14 October 2014.
As at 31 December 2015, the Company had paid GBP4,972,000 to the
Trust, which had acquired 363,590 ordinary shares on the open
market for consideration of GBP4,879,000.
In November 2015, in respect of the schemes granted in October
2011 and in October 2010, employees of the Group exercised a total
of 43,452 options and instructions were given to the Trust to
release the same number of shares. The cost of the shares released
on exercise of these options amounted to GBP529,000. At the
reporting date, the number of shares held in the Trust was 213,547
with a market value of GBP4,356,359.
In November 2014, in respect of the scheme granted in October
2011 and October 2010, employees of the Group exercised a total of
86,755 options and instructions were given to the Trust to release
the same number of shares. The cost of the shares released on
exercise of these options amounted to GBP1,002,000. At the 31
December 2014, the number of shares held in the Trust was 215,992
with a market value of GBP3,023,000.
c) Company Share Option Plan
The Company has established a Company Share Option Plan
('CSOP'), which was approved by HMRC in November 2013. The CSOP is
a discretionary scheme whereby employees or directors are granted
an option to purchase the Company's shares in the future at a price
set on the date of the grant. The maximum award under the terms of
the scheme is a total market value of GBP30,000 per recipient. The
performance conditions attached to the scheme require an increase
in the diluted earnings per share of the Company of 2% more than
the increase in the RPI over the three years starting with the
financial year in which the option is granted.
A grant of 42,501 share options with an exercise price of
GBP17.19 was made under the scheme to directors and employees of
the Group on 29 October 2015. In respect of the six months ended 31
December 2014, a grant of 22,110 share options with an exercise
price of GBP13.805 was made under the scheme to directors and
employees of the Group on 14 October 2014.
d) Other share-base payment schemes
No awards have been made under the Group's other share-based
payment schemes, details of which are provided on pages 54 to 57,
note 29 of the Annual Report and Accounts for the year ended 30
June 2015.
During the six months ended 31 December 2015, employees
exercised options over a total of 1,365 shares at a price of
GBP10.54 in respect of the 2012 Employee Sharesave Scheme and 2,400
shares at a price of GBP2.905 in respect of the Enterprise
Management Incentive Scheme 2007.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that these condensed consolidated interim
financial statements have been prepared in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and that the interim
management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
consolidated financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
The directors of Brooks Macdonald Group plc are listed on page
29.
By order of the Board of Directors
S J Jackson
Finance Director
16 March 2016
INDEPENDENT REVIEW REPORT TO BROOKS MACDONALD GROUP PLC
Introduction
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 31 December 2015, which comprise the Condensed
Consolidated Statement of Comprehensive Income, Condensed
Consolidated Statement of Financial Position, Condensed
Consolidated Statement of Changes in Equity, Condensed Consolidated
Statement of Cash Flows and the related notes. 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.
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 AIM Rules for Companies, which require that the financial
information must be presented and prepared in a form consistent
with that which will be adopted in the Company's annual financial
statements.
As disclosed in note 2, 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 consolidated set of financial statements in the Half
Yearly Financial Report based on our review. This report, including
the conclusion, has been prepared for and only for the Company for
the purpose of the AIM Rules for Companies and for no other
purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Scope of review
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