TIDMFCAP
RNS Number : 7501S
finnCap Group PLC
18 November 2021
finnCap Group plc ("finnCap" or the "Company")
Interim Results and Dividend for the six months ended 30
September 2021
Record Half Year Revenue Performance - Dividend Upgrade
Financial Highlights
-- Revenue up 55% to GBP31.7m (H121: GBP20.5m)
-- finnCap Capital Markets revenue GBP15.6m (H121: GBP16.3m) - third best half year
-- finnCap Cavendish revenue up 283% to GBP16.1m (H121: GBP4.2m) - record half year
-- Adjusted PBT(1) of GBP7.2m up 67% (H121: GBP4.3m); PBT of
GBP6.3m up 75% (H121: GBP3.6m)
-- Adjusted EPS:(1) 3.54p up 62% (H121: 2.19p); Basic EPS: 2.96p up 60% (H121: 1.85p)
-- Cash balances: GBP22.6m at 30 September 2021 (31 Mar 2021: GBP20.4m)
H122 Operational Highlights - Record half year performance
-- Total Deal and Advisory fees up 75% to GBP24.9m (H121: GBP14.2m)
-- Completed 39 transactions including:
o raised GBP250m equity through 14 public market placings and 1 IPO
o advised on 13 private M&A transactions with an aggregate value of c.GBP1 billion
o advised on 4 public company M&A transactions with an aggregate value of c.GBP500 million
o completed 6 new debt financing mandates; c.GBP250 million raised
-- Investment in client service and revenue generation:
o New hires in ECM and M&A execution and client service teams
o Consumer Investment Banking - further team hire
o Equity Sales and Trading: sales team increased to support
existing client service and future growth
o Equity Research: life sciences research team hire
o finnCap Analytics: launched and generating incremental revenue and relationships
o Origination hires to support our private M&A activity and PE coverage
Current Trading
-- Q3 started well with a further placing for Genedrive Plc, the
completed sales of GCSEPod and Intelling by the M&A team, and
the IPO of Eneraqua plc raising GBP20m - due to complete in the
next few days
-- Deal pipeline remains solid with further potential IPOs,
equity fund raisings and private M&A transactions scheduled to
complete in the coming months
-- FY22 outlook upgraded with October trading statement: revenue
expected to be in the GBP45-GBP50m range; staff costs (excluding
share-based payments) c.58-62% and non-staff costs c.GBP10m(3)
FY22 Interim and Full Year Dividends
-- Interim dividend +20% to 0.6p per share to be paid in January.
-- Increased dividends guidance for FY22 - total of 1.75p per share(2) (FY21: 1.5p)
Commenting on the results, Sam Smith, Chief Executive Officer,
said:
"Today's results show that our strategy of building a broader
financial advisory firm - focused on servicing the needs of the
business of tomorrow - is working. We will continue to invest
across all areas of the business to broaden our offering and ensure
that we can help our clients drive their growth, capitalise on
opportunity and deliver their ambition.
In H1, with an exceptionally busy M&A market, our team
delivered a really outstanding performance with overall revenue up
55% and completing transactions with an aggregate deal value of
c.GBP2 billion.
We made key hires across our Private Equity coverage, product
expertise and into our client service teams to ensure we have the
capacity to execute and maintain high quality service across all
products.
Q3 has begun well. Our pipeline of deals expected to complete in
H2 remains good and our revenue guidance remains unchanged from our
October upgrade.
This performance, together with our strong balance sheet
position, has given us confidence to increase our dividend plans
for FY22 as part of our long-term commitment to give shareholders
an attractive payout which increases over time. We now expect to
pay shareholders a total of not less than 1.75p for FY22 with 0.6p
at the half year."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
Contacts
finnCap Group plc Tel: +44 (0) 20 7220 0500
Sam Smith, Chief Executive Officer
investor.relations@finncap.com
Richard Snow, Chief Financial Officer
Grant Thornton (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Philip Secrett/Samantha Harrison/George Grainger
Oberon Capital (Joint broker) Tel: +44 (0) 20 3179 5344
Mike Seabrook
finnCap Ltd (Joint Broker) Tel: +44 (0) 20 7220 0500
Rhys Williams / Tim Redfern
Hudson Sandler (PR adviser) Tel: +44 (0) 20 7796 4133
Dan de Belder/Rebekah Chapman
Notes to Editors
About finnCap Group
finnCap Group is building an advisory service business focused
on the business of tomorrow. It currently provides strategic
advice, capital raising and related services to corporate and
institutional clients and high net worth investors including
private equity and family offices. Established in 2007 the Group
has built a strong track record in equity advice and fund-raisings,
public and private M&A, debt arrangement and advice and act as
NOMAD for clients listed on AIM with a particular focus on the
technology, life sciences, consumer and business services
sectors.
Notes: (1) Adjusted PBT and EPS are calculated excluding
share-based payments, amortisation of intangible assets from the
acquisition of Cavendish, non-recurring costs, the uplift from the
sale of the Group's stake in PrimaryBid Limited in FY21 and
includes, for EPS, an adjustment to normalise tax. The weighted
average number of shares in issue during the period excludes shares
held by the Group's Employee Benefit Trust. (2) subject to
unforeseen circumstances (3) excluding third party introductory
fees which are not netted against revenue.
Investor Presentation
Sam Smith CEO and Richard Snow CFO will provide a live
presentation relating to these interim results for the six months
ended 30 September 2021 via the Investor Meet Company platform on
18 November 2021 at 12:30pm. The presentation is open to all
existing and potential shareholders. Investors can sign up to
Investor Meet Company for free and add to meet FINNCAP GROUP PLC
via:
https://www.investormeetcompany.com/finncap-group-plc/register-investor
Record half yearly revenues
In H1 2022, we delivered our best ever half-yearly revenue with
an exceptionally active period for the M&A team and another
strong period in ECM. Revenue in H122 was GBP31.7m, up 55% on H121
(GBP20.5m). With costs in line with our expectations, adjusted PBT
at GBP7.2m was also substantially ahead of the prior period (H121:
GBP4.3m).
After the payment of our second interim dividend and staff
discretionary bonuses for FY21 in H1, our record results helped us
to strengthen further our balance sheet and, at 30 September, cash
was c.GBP22.6m.
Alongside an exceptional period of delivering for clients, we
also invested in the business - recruiting people to grow our
sector coverage, PE coverage, deal origination team and to support
our high-quality service for retained clients.
Market dynamics
Overall equity issuance on AIM in H1 was broadly stable at
c.GBP3.0bn (H121: GBP2.9bn) (source: London Stock Exchange) with a
number of larger transactions. Our market share was c.6% (AIM
fundraisings greater than GBP5m) (H121: 7%) reflecting slightly
lower deal activity in our client base which had been boosted by
COVID-19 related deal flow in the previous year. Market trading
activity has been lower since Summer which, we believe, was also
influenced by lower retail trading in AIM stocks with the broad
return to office work across the UK being a particular driver.
The M&A market saw a continuation of the strong activity
levels from Q4 of last year, with several high-quality mandates
already under execution. Committed buyers in competitive processes
have helped us to close deals and deliver attractive valuations for
our clients.
Divisional performance
finnCap Capital Markets generated GBP15.6m in H122 its third
best half year performance (H121: GBP16.3m).
Retainers - Total fees from retainers in the period were stable
at GBP3.2m (H121: GBP3.2m) and client numbers were also broadly
stable at 116 with several new clients currently in our formal
take-on process.
Transactions - Total fees received from transactions in the
period were GBP8.7m (H121: GBP10.1m).
In the half year, finnCap Capital Markets raised over GBP250m
across 14 equity fundraisings for listed clients and completed
another IPO. The debt advisory team, which works across both
finnCap Capital Markets and finnCap Cavendish, completed 6 new
fund-raising mandates and billed over GBP0.6m c.20% up on H121.
Trading - Trading revenues were GBP3.7m (H121: GBP3.1m).
Overall, market volumes and activity have decreased during H1 but
the sales and trading team delivered revenue ahead of last year
benefitting from one very significant sell down and the first
contribution from the finnCap Analytics team.
We are currently close to completion of the IPO of Eneraqua plc
and our pipeline of potential transactions in ECM remains good.
After experiencing very high client activity last year, in our
strongest sectors, delivering H2 revenue at levels similar to H1
would be an excellent outcome for the Capital Markets team.
finnCap Cavendish delivered its best ever half year revenue
closing 13 transactions with an aggregate deal value of GBP1
billion. The buyer confidence and competition for quality companies
that we saw towards the end of FY21 continued throughout H1 and our
team capitalised on this to deliver positive outcomes for
clients.
Overall finnCap Cavendish generated revenues of GBP16.1m, up
283% on H121 (GBP4.2m) with 4 deals accounting for about 35% of H1
M&A revenue closing in the final days of the period. Activity
levels are now lower than in H1, but the finnCap Cavendish team has
already completed a further two deals since the half year end and
we expect the team to deliver a good full year result with revenue
above GBP20m.
Continued strategic development
We continued to invest in driving our strategy to broaden our
product offering and increase our sector coverage, in
particular:
o Consumer Investment Banking team hire
o ECM: further investment in sales and trading, life sciences research
o finnCap Analytics: launched and generating incremental revenue and relationships
o Origination hires to support our private M&A activity and PE coverage
In addition to our equity sales and trading team hires, we have
also hired junior execution team members in both Capital Markets
and M&A to ensure we have the capacity to service the future
needs of our clients.
finnCap Analytics, which offers analysis of market trends and
events and execution services predominantly around large cap
equities, began trading in April and is already making a meaningful
contribution to our secondary commission and trading business. It
is also utilising its established relationships with the larger
institutions and hedge funds to add liquidity to our retained and
target client base and add incremental market making revenues.
Our Debt Advisory business generated revenue of GBP0.6m (H121:
GBP0.5m) and continues to source mandates from a wide range of
situations across our PE, M&A and ECM clients.
We continue to review potential M&A opportunities. We are
currently focusing on ESG related consultancies with established
track records and repeatable revenue as part of our strategy to
broaden our range of strategic advisory to the C-suite and
expanding our business potentially beyond its core financial
services offering.
Administrative expenses and FY22 costs expectations
Administrative costs increased by 52% over H121 - in line with
revenue - reflecting a substantially higher discretionary bonus
accrual arising from the Group's record financial performance.
Despite higher discretionary pay, staff costs (excluding
equity-based payments) as a percentage of revenue remained at 60%
in line with last year and in the middle of our 58-62% guidance
range.
Non-employee costs in H1 were c.GBP5.2m, up 14% on H121
(GBP4.5m) and were in line with our expectations and guidance for
the full year (c.GBP10m excluding third-party introductory
fees).
Third-party introductory fees reduced significantly compared
with H121, but investment in IT and Data - in part to support the
development of finnCap Analytics, the higher cost of our new office
- which provides significant scope for headcount growth; and higher
trading fees driven by activity early in the period were the key
drivers.
We also saw more normal levels of marketing, travel and
entertainment expenditure post the second COVID-19 UK lock down.
Non staff costs per employee - a key efficiency measure - was
broadly stable at GBP34k (H121: GBP33k).
No items of an exceptional nature were recorded in the first
half.
Capital and liquidity position remains strong
The Group's cash position improved to GBP22.6m from GBP20.4m at
31 March 2021 with a strong trading performance fully offsetting
the seasonal flows from the second interim dividend for FY21 and
payment of the FY21 employee discretionary bonus. Trade debtors
rose significantly reflecting the completion of sizeable M&A
deals at the end of September. These fees were received in October.
Cash is stated before the GBP1.4m balance of the fit-out loan which
is payable in instalments over the next 4 years.
Having undertaken significant capex in the prior year -
primarily related to the fit out of the Group's new offices - capex
levels were low in H122. Lease liability payments - recorded in our
cash flow statement - will now rise following the end of our
rent-free period in November 2021.
A strong liquidity position and the longer-term financing of our
office move means that the Group is better able to withstand
challenging operating conditions, to support its policy of
maintaining and growing dividend payments to shareholders as we
grow profits and also positions us to make further strategic
investment over time.
Operating responsibly
finnCap continues to focus on operating responsibly and engaging
actively with its key stakeholders and the wider community, in
particular around youth entrepreneurship. During H1 we held the
successful The Side Hustle competition with our partners ACCA and
YourGamePlan providing the winners with funding to grow their
businesses and active mentoring by our corporate finance and
marketing teams.
We continue to benchmark our environmental, social and
governance (ESG) metrics. We have completed our second carbon
footprint audit and received PlanetMark accreditation and will
complete our second WorldWideGeneration survey shortly.
We also continued to show leadership in the governance and
measurement around ESG with the publication of the second edition
of our finnCap ESG Scorecard and a Practical Guide to its
implementation. Together these provide an effective way for small
and mid-cap clients to formalise ESG reporting and to facilitate
monitoring to drive change.
We have also hosted client education events around ESG,
targeting NEDs and executives and investors focused on ESG
reporting, COP26 and sustainability with a number of expert
partners.
Looking at community engagement, in June, we launched our online
training course, certified by the CPD, titled 'Introduction to
Entrepreneurship'. Schools and students can access the course for
free on YourGamePlan, the free-of-charge digital learning platform
to support young people as they transition from education into
employment, and equipping them with vital entrepreneurial skills.
The course is designed specifically to fill the knowledge gap
around entrepreneurship and to help inspire young people -
regardless of their social, cultural, or ethnic background - to
consider setting up their own business. More than 1097 schools and
79 colleges across the UK have signed up to YourGamePlan's digital
training platform.
During FY21 we introduced a Volunteer Day programme which allows
employees to donate two days each year of their time to a chosen
charity or good cause without loss of pay. Our colleagues have
already used this to arrange team events in two neighbouring London
boroughs including a canal clean-up and working for a homeless
charity.
Rewarding shareholders with increasing dividends
The Board recognises the importance of income to its
shareholders and intends to continue to pay an attractive and
growing dividend.
Given the strong financial performance so far in FY22 and the
Group's much improved balance sheet position, the directors intend
to pay an interim dividend of 0.6p per share, a rise of 20% on last
year.
In addition, following the upgrade in our revenue guidance
range, the Board has increased its dividend payment intention for
FY22 to a total of 1.75p per share (subject to unforeseen
circumstances).
The interim dividend will be paid to shareholders on the
register as at 7 January 2022 with a payment being made on 21
January 2022. The corresponding ex-dividend date will be 6 January
2022.
COVID Options
As part of the Group's preparation for a potentially severely
adverse impact from the COVID-19 pandemic, the directors and staff
gave up a significant portion of their salaries for 3 months to
improve the funding position of the Group providing a cash benefit
to the Group of around GBP1m.
At the same time, as a staff retention measure, employees
(excluding the directors) were given an aggregate c.5.3m options
over finnCap shares at a 1p exercise price of which 4.9m are
currently outstanding. These options are in-the-money and became
exerciseable on 1 October for a period of 3 years. Employees who
exercise options will face an immediate tax liability and, as the
options envisage issuance of new shares, create c.3% dilution for
our shareholders.
The Board has resolved to make an offer via the EBT to
facilitate exercise of these options and arrange for settlement of
the related tax subject to employees locking in their remaining
holding for 12 months post exercise . Utilising shares already
owned by the EBT also reduces the dilutive impact by using shares
that are already in issue. In the event that all optionholders were
to take advantage of the offer, the EBT would purchase c.3m
ordinary shares at a cost (based on a share price of 36p) of
c.GBP0.8m after deducting the related corporation tax benefit. If
all optionholders elect to exercise and sell shares to cover their
tax liability, the net holding of the EBT would reduce to c.10m
shares from its current holding of c.12m shares and the total
number of shares in issue would remain unchanged.
As part of our objective to increase equity ownership below the
Board and enhance staff retention (as we disclosed in the FY21
Remuneration Committee report) in H1 we made aggregate option
grants over c.3.3m shares at a price of 1p which vest in 3 years'
time, subject to continued employment (none of which were made to
directors or PDMRs). These grants are part of a 5 year incentive
plan (the "New Programme") that will see further grants in the next
2 years.
Q3 Trading and Outlook
The equity market is quieter in terms of trading volumes than at
this time last year. The issuance market remains solid although,
with higher institutional sensitivity to valuations, getting deals
done is comparatively more difficult. Activity in the M&A
market remains favourable, although we do not expect to match the
H1 revenue performance in H2.
Q3 has started well with the completion of a placing for
Genedrive plc, the sales of Intelling Limited and GCSEPod and the
IPO of Eneraqua plc which is due to complete shortly. Our overall
pipeline remains good with further ECM and private M&A deals
underway and which are scheduled to complete before year end.
With a good start to the second half and costs trending in line
with our expectations, we are confident of delivering full year
revenue within our recently upgraded guidance range of
GBP45-50m.
Sam Smith
Chief Executive Officer
18 November 2021
Consolidated Statement of Comprehensive Income
Unaudited for the 6 months ended 30 September 2021
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Notes
Revenue 2 31,687 20,492 46,629
Other operating income 3 (26) 716 926
------------------------------- ------ ------------- ------------- ----------
Total income 31,661 21,208 47,555
Administrative expenses 4 (25,120) (16,560) (37,628)
------------------------------- ------ ------------- ------------- ----------
Operating profit before
non-recurring items 6,541 4,648 9,927
Non-recurring items 5 - (991) (1,047)
Operating profit 6,541 3,657 8,880
Finance income 6 9 16
Finance charge (265) (40) (519)
------------------------------- ------ ------------- ------------- ----------
Profit before taxation 6,282 3,626 8,377
Taxation (1,484) (702) (1,346)
Profit attributable to equity
shareholders 4,798 2,924 7,031
------------------------------- ------ ------------- ------------- ----------
Total comprehensive income
for the year 4,798 2,924 7,031
------------------------------- ------ ------------- ------------- ----------
Consolidated Statement of Financial Position
Unaudited as at 30 September 2021
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant
and equipment 13,833 15,219 14,589
Intangible assets 13,372 13,476 13,413
Financial assets
held at fair value 635 1,344 1,685
8
Deferred tax asset i) 888 171 888
Total non-current
assets 28,728 30,210 30,575
------------------------------------ ------------- ------------- ---------
Current assets
Trade and other 8
receivables ii) 12,725 6,860 7,782
Current assets
held at fair value 967 610 -
Cash and cash equivalents 22,588 12,137 20,434
Total current assets 36,280 19,607 28,216
------------------------------------ ------------- ------------- ---------
Total assets 65,008 49,817 58,791
------------------------------------ ------------- ------------- ---------
Non-Current liabilities
Lease liability 13,876 13,555 12,548
Borrowings 1,037 1,307 1,207
Provisions 261 40 95
------------------------------------
Total non-Current
liabilities 15,174 14,902 13,850
------------------------------------ ------------- ------------- ---------
Current liabilities
Trade and other
payables 15,158 9,963 15,478
Current liabilities
held at fair value - - 72
Corporation taxation 1,600 658 748
Borrowings 343 394 343
Total current liabilities 17,101 11,015 16,641
------------------------------------ ------------- ------------- ---------
Equity
Share capital 1,779 1,730 1,737
Share premium 1,355 893 956
8
Own shares held iii) (1,726) (1,636) (1,726)
8
Merger relief reserve iv) 10,482 10,482 10,482
Share based payments
reserve 1,964 732 1,132
Retained earnings 18,879 11,699 15,719
Total equity 32,733 23,900 28,300
------------------------------------ ------------- ------------- ---------
Total equity and
liabilities 65,008 49,817 58,791
------------------------------------ ------------- ------------- ---------
Consolidated Statement of Cash Flows
Unaudited for the 6 months ended 30 September 2021
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit before taxation 6,282 3,626 8,377
Adjustments for:
Depreciation 845 510 1,957
Non-recurring depreciation
and finance charge - 768 -
Amortisation of intangible
assets 74 60 120
Finance income (6) (9) (16)
Finance charge 265 40 519
Share based payments charge 832 344 744
Net fair value gains recognised
in profit or loss 26 (716) (926)
Payments received of non-cash
assets - (207) (237)
8,318 4,416 10,538
Changes in working capital:
(Increase)/decrease in trade
and other receivables (4,945) 2,177 1,255
Increase in trade and other
payables 1,008 1,495 6,050
Increase in provisions 166 - 55
Cash generated from operations 4,547 8,088 17,898
Net cash payments for current
asset investments
held at fair value through
profit or loss (1,039) (179) 503
Tax paid (632) (108) (662)
Net cash inflow from operating
activities 2,876 7,801 17,739
--------------------------------- ------------- ------------- ----------
Cash flows from investing
activities
Purchase of property, plant
and equipment (74) (1,911) (2,042)
Purchase of intangible assets (46) - -
Proceeds on sale of investments 1,186 - 20
Interest received 6 9 16
Net cash (outflow)/inflow
from investing activities 1,072 (1,902) (2,006)
--------------------------------- ------------- ------------- ----------
Cash flows from financing
activities
Equity dividends paid (1,638) - (804)
Proceeds from exercise of
options 441 310 380
Purchase of own shares - - (90)
Interest paid (27) - (46)
Lease liabilities payments (400) (468) (984)
Net proceeds from borrowings (170) 1,701 1,550
Net cash outflow from financing
activities (1,794) 1,543 6
--------------------------------- ------------- ------------- ----------
Net increase in cash and
cash equivalents 2,154 7,442 15,739
Cash and cash equivalents
at beginning of period 20,434 4,695 4,695
Cash and cash equivalents
at end of period 22,588 12,137 20,434
--------------------------------- ------------- ------------- ----------
Consolidated Statement of Changes in Equity
Unaudited for the 6 months ended 30 September 2021
Share
Own Merger Based
Share Share Shares Relief Payment Retained Total
Capital Premium Held Reserve Reserve Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March 2020 1,697 616 (1,636) 10,482 388 8,775 20,322
----------------------------- -------- -------- -------- -------- -------- --------- --------
Total comprehensive income
for the period - - - - - 2,924 2,924
Transactions with owners:
Share based payments charge - - - - 344 - 344
Share options exercised 33 277 - - - - 310
33 277 - - 344 - 654
----------------------------- -------- -------- -------- -------- -------- --------- --------
Balance at 30 September
2020 1,730 893 (1,636) 10,482 732 11,699 23,900
----------------------------- -------- -------- -------- -------- -------- --------- --------
Total comprehensive income
for the period - - - - - 4,107 4,107
Transactions with owners:
Share based payments charge - - - - 400 - 400
Deferred tax on share
based payments - - - - - 717 717
Purchse of shares - - (90) - - - (90)
Dividends - - - - - (804) (804)
Share options exercised 7 63 - - - - 70
7 63 (90) - 400 (87) 293
----------------------------- -------- -------- -------- -------- -------- --------- --------
Balance at 31 March 2021 1,737 956 (1,726) 10,482 1,132 15,719 28,300
----------------------------- -------- -------- -------- -------- -------- --------- --------
Total comprehensive income
for the period - - - - - 4,798 4,798
Transactions with owners:
Share based payments charge - - - - 832 - 832
Dividends - - - - - (1,638) (1,638)
Share options exercised 42 399 - - - - 441
42 399 - - 832 (1,638) (365)
----------------------------- -------- -------- -------- -------- -------- --------- --------
Balance at 30 September
2021 1,779 1,355 (1,726) 10,482 1,964 18,879 32,733
----------------------------- -------- -------- -------- -------- -------- --------- --------
Notes to the Financial Statements
Unaudited for the 6 months ended 30 September 2021
1. Basis of preparation
finnCap Group plc (the "Company") is a public limited company,
limited by shares, incorporated and domiciled in England and Wales.
The Company was incorporated on 28 August 2018. The registered
office of the Company is at 1 Bartholomew Close, London EC1A 7BL,
United Kingdom. The registered company number is 11540126. The
Company is listed on the AIM of the London Stock Exchange.
These unaudited consolidated Interim Financial Statements have
been prepared in accordance with AIM Rule 18. The financial
information contained in the Interim Financial Statements is
unaudited and does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006.
The statutory accounts for the 12 months ended 31 March 2021
have been delivered to the Registrar of Companies. The statutory
accounts 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 Independent Auditor's Report
to the members of finnCap Group plc contained no qualification or
statement under section 498 (2) or (3) of the Companies Act
2006.
These consolidated Interim 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.
The preparation of these Interim Financial Statements requires
the use of certain critical accounting estimates. It also requires
Group management to exercise judgement in applying the Group's
accounting policies. Judgements and estimates used in these Interim
Financial Statements have been applied on a consistent basis with
those use in the statutory accounts for the 12 months ended 31
March 2021.
The Directors believe that the company has adequate resources to
continue trading for at least 12 months from the date of approval
of this report. Accordingly, they continue to adopt the going
concern basis in preparing the Interim Financial Statements.
2. Segmental reporting
The Group is managed as an integrated full-service financial
services group and the different revenue streams are considered to
be subject to similar economic characteristics. Consequently, the
Group is managed as one business unit.
The trading operations of the Group comprise of Corporate
Advisory and Broking, M&A Advisory and Institutional
Stockbroking. The Group's revenues are derived from activities
conducted in the UK, although several of its corporate and
institutional investors and clients are situated overseas. All
assets of the Group reside in the UK.
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenues
Retainers 3,173 3,179 6,437
Transactions 8,688 10,079 21,273
Institutional Stockbroking 3,696 3,073 6,770
Total ECM 15,557 16,331 34,480
Sell Side M&A advisory 16,130 4,161 12,149
Total Revenue 31,687 20,492 46,629
----------------------------- ------------- ------------- ----------
Services transferred at
a point in time 27,254 14,932 35,291
Services transferred over
a period of time 4,433 5,560 11,338
Total Revenue 31,687 20,492 46,629
----------------------------- ------------- ------------- ----------
3. Other operating income
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Other operating income (26) 716 926
------------------------- ------------- ------------- ----------
In the prior period, the Group's holding in Primary Bid, a Level
3 private company investment, was revalued by GBP0.7m to reflect
the current fair value.
4. Expenses by Nature
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Employee benefit expense 19,958 12,042 28,072
Non-employee costs 5,162 4,518 9,556
Total administrative expenses 25,120 16,560 37,628
-------------------------------- ------------- ------------- ----------
Total number of employees 151 135 136
-------------------------------- ------------- ------------- ----------
Employee benefit expense includes share-based payments which
increased to GBP832k (H1 21: GBP344k). This reflected
incentivisation options granted to employees in the period
including those granted in relation to the salary reductions
applied in Q1 21.
5. Non-recurring items
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Non-recurring items - 991 1,047
---------------------- ------------- ------------- ----------
Non-recurring items in the prior period relate to overlap and
moving costs of the relocation of the Group to 1 Bartholomew Close
as well as GBP0.1m of group restructuring costs.
6. Earnings per share
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Earnings per share
Number of shares
Weighted average number
of shares for the purposes
of basic earnings per share 162,321,463 158,227,046 159,581,684
------------------------------ ------------- ------------- ------------
Weighted average dilutive
effect of conditional share
awards 18,941,586 9,994,919 6,432,214
------------- ------------- ------------
Weighted average number
of shares for the purposes
of diluted earnings per
share 181,263,049 168,221,965 166,013,898
------------------------------ ------------- ------------- ------------
Profit per ordinary share
(pence)
Basic profit per ordinary
share 2.96 1.85 4.41
Diluted profit per ordinary
share 2.65 1.74 4.24
------------------------------ ------------- ------------- ------------
The shares held by the Group's Employee Benefit Trust have been
excluded from the calculation of earnings per share.
7. Dividends
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Dividends proposed and paid
during the year 1,638 - 804
------------------------------ ------------- ------------- ---------
Dividends per share 1.00p -p 0.50p
------------------------------ ------------- ------------- ---------
8. Balance Sheet Items
i) Deferred tax asset
Deferred taxation for the group relates to timing difference on
the taxation relief on the exercise of options. The amount of the
asset is determined using tax rates that have been enacted or
substantively enacted when the deferred tax assets are expected to
be recovered.
ii) Trade and other receivables
Trade and other receivable principally consist of amounts due
from client, brokers and other counterparties. In addition, the
Company has credit risk exposure to the gross value of unsettled
trades (on a delivery versus payment basis) at its agency
settlement agent (Pershing, a wholly owned subsidiary of Bank of
New York Mellon Corporation)
iii) Own Shares Held
The value of own shares held is the cost of shares purchased the
Group's Employee Benefit Trust. The Trust was established with the
authority to acquire shares in finnCap Group plc and is funded by
the Group.
iv) Merger relief reserve
The merger relief reserve represents:
-- the difference between net book value of finnCap Ltd and the
nominal value of the shares issued due to the share for share
exchange on the acquisition of finnCap Ltd. Upon consolidation,
part of the merger reserve is eliminated to recognise the
pre-acquisition share premium and capital redemption reserve of
finnCap Ltd; and
-- the difference between the fair value and nominal value of
shares issued for the acquisition of Cavendish Corporate Finance
(UK) Limited and Cavendish Corporate Finance LLP
This reserve is not distributable
9. Alternative performance measures
The below non-GAAP alternative performance measures have been
used.
Adjusted earnings per share and profit before tax
Measure: Adjusted earnings per share is calculated excluding
share-based payments, non-recurring items, amortisation of
intangible assets from the acquisition of Cavendish, the gain from
the sale and related revaluation of the group's stake in Primary
Bid plc in H1 21 and includes a nominal tax charge adjustment. As
with earnings per share, the weighted average number of shares in
issue during the period excludes shares held by the Group's
Employee Benefit Trust.
Use: Provides a consistent measure of the earnings performance
of the core business activities.
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit
attributable
to equity
shareholders 4,798 2,924 7,031
Fair value
gains on long
term
investments 26 (716) (716)
Non-recurring
items - 991 1,047
Share based
payments 832 344 744
Amortisation 39 39 120
Taxation 48 (112) (568)
---------------- ------------------------------------ ----------------------------------- -------------------------------
Adjusted
earnings 5,743 3,470 7,658
---------------- ------------------------------------ ----------------------------------- -------------------------------
Basic shares 162,321,463 158,227,046 159,581,684
Earnings per
share (basic) 2.96 1.85 4.41
----------------
Adjusted
earnings per
share
(basic) 3.54 2.19 4.80
---------------- ------------------------------------ ----------------------------------- -------------------------------
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit before tax 6,282 3,626 8,377
Fair value gains on long
term investments 26 (716) (716)
Non-recurring items - 991 1,047
Share based payments 832 344 744
Amortisation 39 39 120
Adjusted profit before tax 7,179 4,284 9,572
----------------------------- ------------- ------------- ----------
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END
IR BCBDBCSBDGBR
(END) Dow Jones Newswires
November 18, 2021 02:00 ET (07:00 GMT)
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