TIDMFCAP
RNS Number : 8632E
finnCap Group PLC
09 July 2019
finnCap Group plc
Results for the 11 month period ended 31 March 2019,
Dividend Declaration, Notice of AGM and Posting of Annual
Report
finnCap Group plc (the "Company" or "finnCap") and together with
its subsidiaries (the "Group"), today announces its results for the
11 month period ended 31 March 2019 (the "Period").
During the Period, Cavendish Corporate Finance ("Cavendish") was
acquired for GBP14.6m, supporting the Group's development plan to
become the leading full-service provider of growth capital and
advisory services to public and private small and mid-cap
companies. Additionally, the year-ends of the group were aligned,
and as such, the reported figures for the Period include the
performance of finnCap Ltd for 11 months and that of Cavendish for
just under 4 months.
finnCap's shares are admitted to trading on the AIM Market of
the London Stock Exchange ("LSE"). The Company is authorised and
regulated by the Financial Conduct Authority ("FCA") and is a
member of the LSE.
Financial highlights:
-- Profit before tax and non-recurring items up 41% to GBP4.29m
(year ended 30 April 2018: GBP3.05m)
-- Record retainer revenue: GBP5.9m (year ended 30 April 2018:
GBP5.7m), with a current annualised run rate of GBP6.4m. The
monthly run rate has increased by 13% over the 11 month period
-- 7th consecutive year of growth in both total revenue and corporate finance fees
-- Adjusted* earnings per share: 2.86p (year ended 30th April 2018: 2.22p)
-- Operating cash inflow: GBP2.81m (2018: GBP0.09m)
-- Dividend declared of 0.355p per share (GBP0.6m in total)
Operational highlights:
-- finnCap's Equity Capital Markets division won 18 new quoted
clients in the period with an average market cap of GBP80m (as at
the date of take on)
-- Cavendish had its most successful year in the company's
history, closing 28 deals, generating GBP14.8m of unaudited fees
(2018: GBP10.2m). Of these, GBP3.2m were generated after the
acquisition and so are included in the Group's performance for the
Period
-- finnCap Group plc won its first debt advisory mandate, as
well as completing its first buy-side M&A deal, which
illustrates the potential of combining finnCap and Cavendish's
suite of financial services
Current trading - since the end of the financial period, finnCap
Group has:
-- continued to trade profitably
-- won 5 new high-quality corporate clients
-- executed 19 transactions
-- built a healthy pipeline of transactions for the coming
months, which are spread over a broad number of sectors and group
services, making us less reliant on the public market equity
issuance environment and giving us confidence in our portfolio
approach
-- continued to recruit high calibre individuals across the
firm, particularly within the debt advisory team.
We therefore look forward to updating the market further
following completion of the first half of the financial year.
(*) Adjusted EPS is calculated excluding share-based payments,
amortisation of intangible assets from the acquisition of
Cavendish, non-recurring items and includes a nominal tax charge.
The weighted average number of shares in issue during the period
includes shares held by the Group's Employee Benefit Trust.
Commenting on the results, CEO Sam Smith said:
"This has been a very significant year for finnCap and marks our
transformation into a full-service financial group dedicated to
helping drive the success of ambitious growth companies. To effect
this change has involved a huge commitment from all our staff,
which is greatly appreciated.
Performance in the period was strong and the financial results
were slightly ahead of management expectations. During the period
we continued to win good quality corporate clients and we are
clearly seeing the benefits of the acquisition of Cavendish and the
combination of the two firms.
Our suite of financial services now includes being able to
advise on all significant forms of financing, across both debt and
equity, including private equity, IPOs and secondary public
offerings. In addition, we can advise on buy-side and sell-side
M&A, exit planning, bid defence and offer PLC regulatory
counsel.
finnCap is well positioned, with a strong multi product
offering, a very capable management team and a strengthened board
to actively pursue our strategy to become the advisor of choice to
ambitious growth companies, supporting them as they seek to
accelerate their own business expansion and achieve their strategic
goals. "
Commenting on the results, Non-Executive Chairman Jon Moulton
said:
"I'm very pleased to chair a financial services group that now
occupies a very distinctive market position and boasts an
unrivalled suite of services focused on enhancing the prospects of
ambitious growth companies. Such businesses have probably never had
more funding options but the sheer variety of choices means that
having an experienced adviser is essential to ensure they choose
the right route. finnCap is now very well placed to offer such
advice across the debt and equity spectrum and we look forward to
playing a strong role in supporting scale-up businesses and
realising our own potential as a dynamic, forward thinking
financial services group."
Dividend
The Company is declaring a dividend of 0.355p per share. The
dividend will be paid to shareholders on 9 August 2019 with an
associated record date of 19 July 2019 and ex-dividend date of 18
July 2019.
Notice of AGM and Posting of Annual Report
The Company announces that it will hold its Annual General
Meeting ("AGM") at 12:30pm on 26 September 2019 at the offices of
finnCap Group plc, 60 New Broad Street, London EC2M 1JJ.
Copies of the Notice of AGM and the Company's Annual Report will
be posted to shareholders on or before 31 July 2019 and are
available on the Company's website www.finncap.com.
Contacts
finnCap Group plc Tel: +44 (0) 20 7220 0500
Sam Smith, Chief Executive Officer
investor.relations@finncap.com
Tom Hayward, Chief Financial Officer
Grant Thornton (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Philip Secrett/Samantha Harrison/Seamus Fricker
finnCap Limited (Broker) Tel: +44 (0) 20 7220 0500
Rhys Williams / Tim Redfern
Sapience Communications (PR adviser to the Group) Tel: +44 (0) 20 3195 3240
Richard Morgan Evans
Chairman's Statement
This report covers the eleven month period from 1 May 2018 to 31
March 2019, an exciting period for finnCap Group plc ("finnCap",
the "Group" or the "Firm"). We started the period principally as a
public market focused organisation servicing the needs of quoted
companies. Following the acquisition of Cavendish Corporate Finance
("Cavendish") in December 2018 and the development of new revenue
lines, we are now a full-service financial services group for
ambitious growth companies. The combination has started well.
With our IPO on AIM in December 2018, we joined many of our
retained corporate clients on the public markets and continue to
provide them and private companies with advice on public and
private fundraisings, IPOs, debt, mergers and acquisitions, and
technical public market bids; effectively servicing the lifetime
financial needs of a high growth business.
Our financial results, which are slightly ahead of management's
expectations, reflect the performance of finnCap Ltd for 11 months
(due to the alignment of year ends), and for Cavendish for just
under four months (since the date of its acquisition). Set out
below is a summary of the Group's performance for the period, and
that of its constituent parts, to allow readers to more clearly
understand the financial performance of the enlarged business.
Group
finnCap
Ltd Cavendish Cavendish Cavendish IFRS accounts
11 months 12 months 11 months
to 8 months 4 months to to
31 March 31 March 31 March
2019 pre-IPO* post-IPO 2019* 2019
Revenue 21,287 11,568 3,229 14,797 24,516
Profit before
taxation and
non-recurring
items 4,294
*Unaudited
The current scale of the combined business can be seen if the
performance of finnCap Ltd is annualised and combined with the
unaudited outturn for the full 12 months for Cavendish. This shows
the Group generating just over GBP38m of revenue (although we do
not expect Cavendish to perform as strongly in the current
financial year).
We are delighted to report that we are clearly seeing the
benefits of combining the two businesses. Every year finnCap's
corporate clients have undertaken acquisitions and disposals, or
debt raisings, that we have previously been unable to service.
Similarly, Cavendish has been asked to consider flotations and
fundraisings alongside disposals for their clients that it was
unable to execute. As a result of combining these two businesses,
and in January 2019, adding a buy-side advisory service, the
enlarged Group can now offer the full suite of financial services
to all clients, and we have already seen the first examples of
these revenue synergies. We have completed our first buy-side
mandate and we have assisted an existing finnCap corporate client
with debt advice. We also have a good number of IPO leads from
Cavendish and its associated overseas offices through its
membership of Oaklins.
We are looking to expand our services further: to cement our
position as one of a small number of firms able to provide a full
suite of advisory and execution services to our target clients,
whilst building strong long-term relationships.
Dividend
Immediately prior to flotation, the Board of finnCap Ltd
declared an interim dividend of 0.207p per share. Post flotation,
the Board of finnCap Group plc declared an interim dividend of
0.148p per share. On the back of the performance in the Period, the
Board is now declaring an interim dividend for the financial period
ended 31 March 2020 of 0.355p per share. The dividend will be paid
to shareholders on 9 August 2019 with an associated record date of
19 July 2019 and ex-dividend date of 18 July 2019. The Board does
not intend to declare a final dividend for the Period, or in future
financial periods, as the Company has determined that the timely
payment of dividends for its shareholders (and in particular
employee shareholders) is important.
As set out in the Group's AIM Admission Document, the Board has
adopted a dividend policy to reflect the Group's performance during
the financial year, the expectation of future cash flow generation
and its long-term earnings potential. The Board intends that the
Group pay two dividends each year initially aiming for a 5 per cent
yield based on the IPO price of 28p per share for the year ended 31
March 2020 (excluding the above interim dividend of 0.355p per
share), with the total split in the proportion 30/70 between
them.
Investors should note that there can be no guarantee of any
dividend payment and the Board may revise the Group's dividend
policy at any time.
Commercial and Regulatory Environment
During the period under review, the public markets have been
volatile with a marked decline over the course of November and
December 2018, whilst the longer-term shift of raising growth
capital from the public markets to alternative private sources of
fundraising has slowly continued.
The FTSE Small Cap index, in the first eight months of the
period, depreciated by 15%, before then rallying by 10% in the last
three months. As such, much of the period was spent in a declining
market that impacted on the market's enthusiasm for primary
fundraisings. Alternative sources of funds (private equity, venture
capital, angels, P2P or public sector) have continued to become
more popular (approximately GBP10bn was funded from such sources in
2018, compared to GBP5.5bn raised on AIM). To best service their
clients, financial intermediaries need to be able to advise on all
sources of funding and investment.
On the public equity markets, daily trading volumes and values
remained relatively consistent in 2018 compared to the previous
year but execution commission rates were much lower as a result of
MiFID II, which we further comment on below. M&A volumes
benefited from concerns about the impact of Brexit and the
political risk of a future increase in the taxation of capital
gains.
The Firm is regulated and overseen by a variety of different
regulators, exchanges and non-statutory bodies, and the cost of
risk management and compliance continues to increase. The Group
continues to increase staffing levels and training group-wide to
ensure that that it complies with all regulatory requirements and
best practice and maintains a culture that is appropriate for the
regulatory environment in which it operates. The Board has also
established a very active Risk and Compliance Committee.
The current period was the first complete period in which the
Group was required to comply with MiFID II which, among other
things, required the separation of charges for research and
execution. Our response was to make the research that we produce in
respect of our corporate clients free to all, but to continue to
charge institutional clients for access to our research analysts,
their models and non-client research.
We do not believe that the market properly recognises the
differences between the large cap market (which is generally highly
liquid and where execution is typically automated) and the smaller
companies' market (where matching buyers and sellers is more
dependent on local market knowledge and relationships, and
therefore is more manual and costly) thereby leading to a
significant underpayment for the trading services offered. The Firm
has made a material investment in technology to automate the
exchange of information with institutional investors that MiFID II
requires, but this has added further cost to the execution of
trades in the smaller companies' market.
The period saw the implementation of systems and processes to
prepare the Firm for the impact of the EU General Data Protection
Regulation. The Group is also currently preparing for the arrival
of the FCA's Senior Managers and Certification Regime in December
2019.
Ambition Nation
Ambition Nation is finnCap's nationwide campaign that explores
the key issues facing the UK's ambitious growth businesses,
spotlights fast-growth companies from around the country, convenes
the entrepreneurs who are building these businesses and thereby
encourages future growth. It centres particularly around how
leaders can navigate the current investment landscape and access
the capital they need to thrive.
The Ambition Nation series of events drives content and insights
to inform, inspire and fuel business growth. It provides the
opportunity to reach out to a wider business community and convene
influential individuals from across our target market. Ultimately
it drives differentiated lead generation by building a thriving
community of CEOs, business leaders and investors.
During the financial period, the Firm hosted the annual Ambition
Nation summit, focusing on "Building An Ambitious Future"; the
bi-annual Female Leaders series in September 2018, focusing on the
funding gap; and On Track in April 2019, discussing key indicators
of growth. Across these events, we welcomed contributions from over
30 speakers and 800 attendees. In 2019/20, we are looking to expand
the Female Leaders series regionally; to launch our Driving
Ambition film series in August 2019; as well as to host our
inaugural Ambition Nation Listed 50 Awards in October 2019.
Board
The Board has evolved over the period. On the completion of the
acquisition of Cavendish in December 2018, Lord Leigh of Hurley
(Cavendish's co-founding partner) and Joe Stelzer (its Managing
Partner) both joined the Board as executive directors, along with
Andy Hogarth and Barbara Firth as independent non-executive
directors. The Board is notably stronger. As announced in January
2019, Joe Stelzer has stepped away from the Board and out of the
day-to-day management of the business for medical reasons, and his
responsibilities have been assumed by Tom Hayward (Group CFO).
The current Board of Directors holds in total 47% of the issued
share capital of the Group.
People
As a financial services firm, finnCap's main assets are its
reputation and its people. We recognise the huge commitment that
our staff have made to the firm, both in terms of their time and
their financial investment, and we thank them for this. Between
them, the Board and employees own 78% of the Group. External
shareholders can take comfort in the level of investment that the
team has in the business and, accordingly, their interest in its
commercial success.
We consider our culture to be one of our strongest
differentiators. We are focused on a highly collegiate approach
which brings many benefits, including higher productivity, lower
staff turnover, and helping to reduce many of the business's risks.
Our remuneration policy is formulated to encourage this approach,
and hence seeks to deliver the best long-term result for the
Group.
finnCap's Employee Benefit Trust has built a material holding of
shares in finnCap over the years, and as the share price has risen
over this time, there is now an accumulated value in the EBT of
GBP2.1m measured using the period-end share price. These shares are
available to satisfy existing options and to further incentivise
and reward staff, at no cash cost to the Group.
Outlook
Since the start of the current financial year, we have continued
to trade profitably, winning new high-quality corporate clients and
have executed 19 transactions. In addition, we have continued to
recruit high calibre individuals across the firm, particularly
within the debt advisory team.
The market backdrop remains difficult, particularly with Brexit
still to be resolved, but we have a healthy pipeline of
transactions for the coming months, which are spread over a broad
number of sectors and group services, making us less reliant on the
public market equity issuance environment and giving us confidence
in our portfolio approach. We therefore look forward to updating
the market further following completion of the first half of the
financial year.
Jon Moulton
Non-Executive Chairman
8 July 2019
Financial Performance and Position
Equity Capital Markets
The equity capital markets division of the Group delivered
GBP21.3m of turnover in the 11 month period to 31 March 2019 (12
months to 30 April 2018: GBP22.1m). This was a very good
performance given the market conditions in November and December,
the impact of MiFID II on trading incomes across the market and the
resulting impact on the performance of our peer group. The
individual contributors to this performance are considered
below.
Retainer revenues - Total fees from retainers in the 11 months
ended 31 March 2019 were GBP5.9m, or a monthly average rate of
GBP538k. This compares to GBP5.7m in the 12 months ended 30(th)
April 2018, or a monthly average rate of GBP477k, and therefore
represents growth on a like-for-like basis of 13%. During the year
we won 18 new clients (with an average market capitalisation at the
date of take on of GBP80m), including Revolution Bars Group Plc,
Gateley (Holdings) plc, Mothercare Plc, Filtronic Plc, Grit Real
Estate Income Group Limited, M.P. Evans Group Plc and Shoe Zone
Plc, whilst 16 clients were lost mainly as a result of delisting
and takeovers. The total market capitalisation of our retained
clients at the period end was GBP10,858m, and the average was
GBP86m. Of note is the growth in our investment companies' mandate
from 6 to 10 retained clients.
Transactions - Total fees received from transactions in the 11
month period to 31 March 2019 were GBP12.0m (12 months to 30 April
2018: GBP11.3m). Notable deals completed during the period
included:
Public Market Fundraisings
-- acting as financial adviser and sole broker to Ideagen
raising GBP30m to support an acquisition
-- acting as sponsor to PPHE on its move to the Official List
and then acting as joint broker on a GBP149m block trade
-- acting as financial adviser and sole broker to Altitude
raising GBP9m to support its working capital needs and to make an
acquisition
-- acting as financial adviser and sole broker to DX Group in a
balance sheet restructuring, whitewash and fundraising of
GBP4.8m
-- acting as financial adviser and sole broker to Angle on its
GBP12.7m working capital fundraising
PLC M&A Advisory
-- acting as financial adviser to Taptica on its GBP135m offer for RhythmOne
-- acting as joint Rule 3 adviser to Tax Systems on its GBP110m acquisition by Bowmark
-- acting as financial adviser to Ligland Pharmaceuticals on its GBP33m offer for Vernalis
-- acting as Nomad and joint broker to Cityfibre on its GBP538m
acquisition by consortium of infrastructure investors
Investment Companies
-- acting as financial adviser and joint UK placing agent on the
IPO of GRIT Real Estate raising $132m
-- acting as sponsor for the restructuring, tender offer and
move to Official List for Vietnam Holding
Private Company
-- advising DivideBuy on a GBP62m financing in the form of debt
and equity to finance the working capital requirements for
growth
Trading - The period under review was the first to reflect the
material full impact of MiFID II on the trading side of our
business. Whereas trading revenues (from both agency and principal
trading) had been relatively consistent for the last three years at
approximately GBP5m, in the current period these declined to
GBP3.4m (12 months to 30 April 2018: GBP5.1m). The decrease is the
product of slightly lower volumes and a lower average rate of
commission as a result of MiFID II, offset partially by the
introduction of research payments.
M&A Advisory
Cavendish had its best ever year for the 12 months to 31 March
2019, closing 28 deals and generating GBP14.8m (unaudited) of fees
(2018: GBP10.2m). GBP3.2m of fees is included in the financial
statements for the four months after the acquisition. Notable
transactions included:
-- the sale of Tpay to Helios Partners.
-- the dual track sale/IPO process for Zenith Hygiene Group that
resulted in its sale to Diversey
-- the sale of Rapidata Services Limited to Access Group
-- the sale of Indigo Group Holdings to Growth Capital Partners
-- a dual-track debt/equity process for Manolete Partners
-- advising on the successful bid by Inflexion for Creative
Parking. This was the Group's first buyside transaction of this
kind
As stated in our Admission Document, we believe the Cavendish
performance for the period is significantly better than the
business would normally generate, and in part was due to the
unusually high level of inbound deal flow resulting from concerns
about the political environment and potential changes to the future
taxation of entrepreneurs. We do not consider this level of
performance to be sustainable in more normal trading conditions.
Our strategy for future growth is to focus on a sectoral approach
to both lead generation and transaction execution, recruitment of
further sectoral and geographic specialists, cross referrals
between the two sides of the Group and brand development.
finnCap Group
Although the historic performance of the two sides of the
business was separated out above for clarity, significant
investment is being made to integrate them, in order to realise the
revenue synergies that are the rationale for the original business
combination.
To date, this has already resulted in:
-- advising on a GBP5.0m debt facility for Universe from HSBC,
to part-fund its acquisition of Camden Technology Investments
Limited. This was the first debt advisory mandate for the Group
from an existing finnCap Ltd client, and demonstrates the potential
of rolling out this service to its existing corporate clients
-- advising on the successful bid by Inflexion for Creative
Parking. In addition, the Firm are currently working on two more
buyside mandates
-- the first signed disposal mandate for Cavendish that was introduced by finnCap
-- a number of private fundraisings for finnPrivate which were introduced by Cavendish
-- a twin track sale/IPO
-- three potential IPOs that were introduced to the Group by
Oaklins, the international network of M&A houses of which
Cavendish is a member
None of the above would have been possible for the two
businesses acting independently, and as such are incremental
revenues to the Group.
As part of the integration and expansion of services to the
clients of both sides of the business, the Group is making a
material investment in further resources. The debt advisory team
has been expanded in order to better service the Group's retained
corporate client base, and discussions are being held with a number
of sector and geographic specialists to strengthen the Group's
origination and execution capability.
Going forward, finnCap Group is positioning itself to be a fully
integrated group offering a full suite of services to ambitious
growth companies.
Financial Position
The Group's cash and cash equivalents, net of borrowings,
improved during the period from GBP3.8m to GBP4.7m. The overdraft
balance at 30 April 2018 related to the funding of unsettled trades
by Pershing through our Model A Settlement Agreement and as at 31
March 2019, there was no such balance.
Net assets grew from GBP7.3m to GBP20.9m, although the movement
was mainly as a result of the goodwill created through the
acquisition of Cavendish during the period. The Board's intention
is to grow the Firm's net assets to fund future growth in the
coming years through the retention of profits after funding
dividends.
Financial Statements
Consolidated Statement of Comprehensive Income
Period ended Year ended
31 March 2019 30 April 2018
GBP'000 GBP'000
Revenue 24,516 22,137
Other operating income 14 18
----------------------------------------- -------------- --------------
Total income 24,530 22,155
Administrative expenses (20,264) (19,137)
----------------------------------------- -------------- --------------
Operating profit before non-recurring
items 4,266 3,018
Non-recurring items (1,095) -
Operating profit 3,171 3,018
Finance income 28 32
----------------------------------------
Profit before taxation 3,199 3,050
Taxation (875) (615)
Profit attributable to equity
shareholders 2,324 2,435
------------------------------------------- -------------- --------------
Total comprehensive income for
the year 2,324 2,435
------------------------------------------- -------------- --------------
Earnings per share
(pence)
Basic 1.85 2.11
Diluted 1.65 2.04
There are no items of other comprehensive income.
All results derive from continuing operations.
Consolidated Statement of Financial Position
31 March 30 April
2019 2018
GBP'000 GBP'000
Non-current
assets
Property, plant and equipment 487 445
Intangible
assets 13,644 121
Financial assets held at
fair value 691 388
Deferred tax
asset 428 -
Total non-current
assets 15,250 954
--------------------------------- --------- ---------
Current assets
Trade and other receivables 8,541 9,242
Current assets held at fair
value 1,111 646
Cash and cash equivalents 4,659 4,521
Total current
assets 14,311 14,409
-------------------------------- --------- ---------
Total assets 29,561 15,363
-------------------------------- --------- ---------
Non-Current liabilities
Provisions 63 73
-------------------------------- --------- ---------
Current liabilities
Trade and other payables 8,065 6,918
Corporation taxation 498 298
Borrowings - 739
Total current liabilities 8,563 7,955
--------------------------------- --------- ---------
Equity
Share capital 1,688 1,180
Share premium 575 768
Capital redemption
reserve - 452
Own shares
held (1,636) (676)
EBT reserve - (54)
Merger relief reserve 10,482 -
Share based payments reserve 292 247
Retained earnings 9,534 5,418
Total equity 20,935 7,335
-------------------------------- --------- ---------
Total equity and liabilities 29,561 15,363
--------------------------------- --------- ---------
Consolidated Statement of Cash Flows
Period ended Year ended
31 March 30 April
2019 2018
GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 3,199 3,050
Adjustments for:
Depreciation 242 221
Amortisation of intangible assets 56 30
Finance income (28) (32)
Share based payments charge 100 85
Net fair value gains recognised
in profit or loss (155) (114)
Payments received of non-cash assets (218) (161)
3,196 3,079
Changes in working capital:
Decrease/(increase) in trade and
other receivables 778 (2,366)
Increase in trade and other payables 109 432
(Decrease) in provisions (10) (68)
Cash generated from operations 4,073 1,077
Net cash payments for current asset
investments
held at fair value through profit
or loss (465) (355)
Tax paid (796) (637)
Net cash inflow from operating
activities 2,812 85
------------------------------------------- ------------- -----------
Cash flows from investing activities
Acquisition of subsidiaries, net
of cash acquired (3,592) -
Purchase of property, plant and
equipment (249) (111)
Purchase of intangible assets (30) (85)
Proceeds on sale of investments 70 188
Interest received 28 32
Net cash (outflow)/inflow from
investing activities (3,773) 24
------------------------------------------- ------------- -----------
Cash flows from financing activities
Purchase of own shares by EBT (1,260) (620)
Sale of own share by EBT 693 40
Equity dividends paid (1,635) (1,051)
Proceeds from the issue of new
shares net of costs 3,665 -
Proceeds from exercise of options 375 25
Proceeds from borrowings (739) 739
Net cash outflow from financing
activities 1,099 (867)
------------------------------------------- ------------- -----------
Net increase/(decrease) in cash and cash
equivalents 138 (758)
Cash and cash equivalents at beginning
of year 4,521 5,279
Cash and cash equivalents at end
of year 4,659 4,521
------------------------------------------- ------------- -----------
Consolidated Statement of Changes in Equity
Capital Own Merger Share Based
Share Share Redemption Shares EBT Relief Payment Retained Total
Capital Premium Reserve Held Reserve Reserve Reserve Earnings Equity
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 May
2017 1,175 748 452 (96) (39) - 167 4,014 6,421
-------------------- -------- -------- ----------- -------- -------- -------- ------------ --------- --------
Total comprehensive
income
for the period - - - - (15) - - 2,450 2,435
Transactions with
owners:
Transfer of own
shares - - - (580) - - - - (580)
Share based
payments charge - - - - - - 85 - 85
Dividends - - - - - - - (1,051) (1,051)
Share options
exercised 5 20 - - - - (5) 5 25
5 20 - (580) - - 80 (1,046) (1,521)
-------------------- -------- -------- ----------- -------- -------- -------- ------------ --------- --------
Balance at 30 April
2018 1,180 768 452 (676) (54) - 247 5,418 7,335
-------------------- -------- -------- ----------- -------- -------- -------- ------------ --------- --------
Total comprehensive
income
for the period - - - - 54 - - 2,270 2,324
Transactions with
owners:
Transfer of own
shares - - - (960) - - - - (960)
Issue of share
capital 134 3,616 - - - - - - 3,750
Share issue costs - (85) - - - - - - (85)
Shares issued as
part of the
consideration in a
business
combination 334 - - - - 9,019 - - 9,353
Elimination in
share for share
acquisition - (1,011) (452) - - 1,463 - - -
Share premium
cancellation (3,048) - - - - - 3,048 -
Share based
payments charge - - - - - - 100 - 100
Deferred tax on
share based
payments - - - - - - - 378 378
Dividends - - - - - - - (1,635) (1,635)
Share options
exercised 40 335 - - - - (55) 55 375
508 (193) (452) (960) - 10,482 45 1,846 11,276
-------------------- -------- -------- ----------- -------- -------- -------- ------------ --------- --------
Balance at 31 March
2019 1,688 575 - (1,636) - 10,482 292 9,534 20,935
-------------------- -------- -------- ----------- -------- -------- -------- ------------ --------- --------
Notes to the consolidated financial statements
1. Accounting policies
a. Basis of preparation
These consolidated financial statements contain information
about the Group and have been prepared on a historical cost basis
except for certain financial instruments which are carried at fair
value. Amounts are rounded to the nearest thousand, unless
otherwise stated and are presented in pounds sterling, which is the
currency of the primary economic environment in which the Group
operates.
These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards and
International Accounting Standards as adopted by the European Union
and the IFRS Interpretation Committee interpretations (collectively
IFRSs), and in accordance with applicable law.
The preparation of financial statements in compliance with
adopted IFRS requires the use of certain critical accounting
estimates. It also requires Group management to exercise judgement
in applying the Group's accounting policies.
The financial information set out in this announcement does not
constitute the Company's statutory accounts for the period ended 31
March 2019 (or the year ended 30 April 2018) under the meaning of
Section 434 the Companies Act 2006 but is derived from those
accounts. Statutory accounts for the period ended 31 March 2019 ha
been reported on by the Company's independent auditors, BDO LLP
(the "Independent Auditors"). The Independent Auditors' Reports on
the Annual Report and Financial Statements for the period ended 31
March 2019 were unmodified, did not draw attention to any matters
by way of emphasis and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006. The statutory accounts will be
available at www.finncap.com and will be delivered to the Registrar
of Companies following the Company's Annual General Meeting.
b. Basis of consolidation
The Group's consolidated financial statements include the
financial statements of the Company and all its subsidiaries.
Subsidiaries are entities over which the Group has control if all
three of the following elements are present: power over the
investee, exposure to variable returns from the investee and the
ability of the investor to use its power to affect those variable
returns. Subsidiaries are fully consolidated from the date on which
control is established and de-consolidated on the date that control
ceases.
The acquisition method of accounting is used for the acquisition
of subsidiaries. Transactions and balances between members of the
Group are eliminated on consolidation and consistent accounting
policies are used throughout the Group for the purposes of
consolidation.
The share for share acquisition of finnCap Ltd by finnCap Group
plc was a corporate reorganisation to facilitate the IPO on AIM and
the subsequent purchase of Cavendish. As this was not a business
combination, merger accounting principles have been applied. The
Group's prior year comparatives consist of the results and
financial position of finnCap Ltd for the twelve months ended 30
April 2018, amended to conform to the use of IFRS.
c. Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's Statement. The Strategic Report and
Directors' Report describe the financial position of the Group; the
Group's objectives, policies and processes for managing its
capital; its financial risk management objectives; and its exposure
to credit risk and liquidity risk.
The Directors believe that the company has adequate resources to
continue trading for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the Annual
Report and Accounts.
2. Dividends
Period ended Year ended
31 March 2019 30 April 2018
GBP'000 GBP'000
Dividends proposed and paid during
the year 1,635 1,051
-------------------------------------- -------------- --------------
Dividends per share 1.38p 0.91p
-------------------------------------- -------------- --------------
Dividends are declared at the discretion of the Board.
3. Post balance sheet events
An interim dividend of 0.355p per share was proposed by the
Directors at their meeting on 8th July 2019. These financial
statements do not reflect this dividend.
4. Market abuse regulation (MAR) disclosure
Certain information contained in this announcement would have
been deemed to be inside information for the purposes of article 7
of Regulation (EU) No 596/2014 until the release of this
announcement.
5. Website publication
The full financial statements are included in our annual report,
which is published on the Company's website in accordance with
legislation in the United Kingdom governing the preparation and
dissemination of Financial Statements, which may vary from
legislation in other jurisdictions.
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 United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UGUUAMUPBGMR
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July 09, 2019 04:29 ET (08:29 GMT)
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