TIDMFCAP
RNS Number : 4130S
finnCap Group PLC
14 July 2022
finnCap Group plc ("finnCap" or "the Company")
Results for the year ended 31 March 2022
Record revenue performance
Financial Highlights
-- Revenue up 13% to GBP52.5m (FY21: GBP46.6m)
-- finnCap Cavendish revenue up 101% to GBP24.3m (FY21: GBP12.1m)
-- finnCap Capital Markets revenue down 18% to GBP28.3m (FY21: GBP34.5m)
-- Adjusted PBT(1) of GBP9.3m (FY21: GBP9.6m); PBT of GBP8.1m (FY21: GBP8.4m)
-- Adjusted EPS:(1) 4.51p (FY21: 4.80p); Basic EPS: 3.95p (FY21: 4.41p)
-- Total dividends 1.75p per share (FY21: 1.5p)
-- Cash at the year-end: GBP24.4m (31 Mar 2021: GBP20.4m)
FY22 Key Achievements - delivering diversified revenues and
services
-- Deal and advisory fees of GBP40.0m (FY21: GBP33.4m) with c50% from non-ECM services
-- Completed transactions with aggregate deal value of over GBP3.2 billion:
o raised GBP700m equity
o advised on 29 public and private M&A transactions with an aggregate value of c2.1 billion:
o raised c.GBP400m debt finance
-- Key hires to support client service and revenue generation:
o Consumer M&A
o Life Sciences: Senior ECM and Research
o Series A private growth capital fund raising
o Senior M&A execution; and
o Expanded origination/lead generation function to support private M&A activity
-- finnCap Analytics launched: servicing larger hedge funds and institutional investors
-- Post year end, acquired 50% of Energise Limited, a UK based sustainability consultancy
ESG - Operating Responsibly
-- Sustainability: second external audit of our operating carbon
footprint completed; offset measures implemented
-- Social Responsibility - Education Focus: supported four
charities and enterprises focused on encouraging
entrepreneurship skills and understanding of business at junior
and senior schools
Current Trading (unaudited)
-- Start to FY23 in ECM has been challenging across the market
with very low deal volumes; private and public M&A activity
remains good and the finnCap Cavendish M&A deal pipeline
remains strong
-- FY23 outlook: expect revenue and financial performance to be
substantially below FY22 levels
FY22 Dividends
-- Proposed final dividend for FY22 to be 1.15p per share paid
after AGM in September. Total dividends
for FY22 of 1.75p per share (FY21: 1.5p)
Commenting on the results, Sam Smith, Chief Executive Officer,
said:
" Our FY22 results reflect the benefit of our sustained
investment in our team over many years, and to their absolute focus
on delivering our clients' ambitions. We completed transactions
worth over GBP3.2 billion, further strengthened our balance sheet
and delivered 50% of revenue from services established since our
acquisition of Cavendish in 2018.
With weak and volatile equity markets, the start to FY23 has
been challenging in ECM across the market although we do continue
to see good transaction levels in M&A, both plc and private,
where our pipelines remain good. Inevitably these conditions will
mean substantially lower results in FY23 but we remain confident
that, through the teams we have developed and the client base and
reputation we have established over many years, finnCap is well
placed to resume growth once market conditions permit.
A few weeks ago, I announced that I intended to step back from
the CEO role and leave the Board after 24 years leading the finnCap
businesses and move into an advisory role from early September.
These will be my last results and I would like to thank all my
colleagues in finnCap for their hard work in delivering an amazing
FY22 and also wish the new team - which will be ably led by our
future CEO John Farrugia - the very, very best for the future."
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 a leading advisory firm for the business of
tomorrow. The sector specialist service offering ranges from ECM
and IPO, to Plc strategic advisory, debt advisory, M&A and
private growth capital. finnCap Group comprises finnCap Capital
Markets, finnCap Cavendish as a market-leading strategic M&A
firm and has a global reach through its membership of Oaklins.
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.
Record Results
In the year ended 31 March 2022, we delivered another record
revenue performance, with our second-best result in the finnCap
Capital Markets ("ECM") business and doubling revenues in finnCap
Cavendish, our private M&A business.
In FY22 total revenue was GBP52.5m, up 13% on FY21 (GBP46.6m).
Adjusted PBT at GBP9.3m was broadly in line with last year. Our
cash position remained strong and, at the year end, stood at
c.GBP24.4m (FY21: GBP20.4m).
Post year end, we also made further progress with our strategy
of building a more broadly based advisory business through our
acquisition of a 50% stake in Energise Limited, a rapidly growing
sustainability consultancy. Energise brings us a new set of
advisory services outside the Group's historic, financial services
focus and I am pleased that we have the option to acquire the
remainder after September 2025.
Market Dynamics
Overall equity issuance on the AIM market was again high with
c.GBP6bn raised in the year. Our market share was c.11%
(fundraisings greater than GBP5m) reflecting our particular
strength and historic investment in the technology, life sciences
and consumer sectors. Volumes and activity reduced during Q4 with
issuance reduced to levels not seen since the summer of 2019. The
start to FY23 has been very quiet across the market reflecting
investor uncertainty around the implications of the war in Ukraine
and the challenges for the global economic outlook.
The M&A market was vibrant in the UK, our primary geographic
market, with strong interest in assets from both private equity and
strategic buyers. This was driven by significant liquidity, in
particular from PE investors and pent-up corporate demand from
COVID-19 related disruption. In 2021, total deals completed were up
c.33% on 2020 by number and up c.75% by aggregate value.
Strong Divisional Performance
finnCap Capital Markets generated its second highest level of
revenue at GBP28.3m, 18% down on last year's record performance
(FY21: GBP34.5m).
Retainers - Total fees from retainers in the period were up 3%
at GBP6.6m (FY21: GBP6.4m). We won 18 new clients during FY21 and,
reflecting normal levels of M&A, de-listing and client
turnover, client numbers were essentially stable at 118 at the year
end. (FY21: 119).
Transactions - Total fees received from transactions in the
period were GBP15.8m (FY21: GBP21.3m).
During the year, finnCap Capital Markets executed 34
transactions, raising over GBP661m (FY21: GBP720m) across 21 equity
fundraisings for listed clients and three IPOs.
Notable equity deals (>GBP10m) included:
Life Sciences: Angle PLC (GBP20m)
Tech: Access Intelligence (GBP50m); Argo Blockchain (GBP126m);
Ideagen (GBP104m)
Consumer: BOTB (GBP60m); Revolution Bars (GBP21m)
Resources: Chariot Oil & Gas (GBP16m); Savannah Resources (2
deals: GBP59m)
Other key deals: K3 Capital (GBP10m); GRIT (GBP57m)
It was pleasing to bring three great companies to market in the
year:
IPOs: Poolbeg Pharma (GBP25m); Eneraqua (GBP20m); and Gelion
(GBP19m).
We also advised on a total of 7 plc M&A deals with an
aggregate deal value of GBP822m.
PLC M&A transactions included:
The sale of Telit Communications PLC (GBP307m); Cambria Bidco's
offer for Cambria Automobiles PLC (GBP83m); a mandatory offer for
Gulfsands Petroleum PLC (GBP23m); the sale of Proactis Holdings PLC
(GBP75m); a mandatory offer for Photo-Me International PLC
(GBP285m); the sale of Universe Group PLC (GBP33m); and an offer by
Polygon for Watchstone Group PLC (GBP17m).
The debt advisory team, which works across both finnCap and
Cavendish, completed 9 mandates raising GBP370m.
Trading - Trading revenues were GBP5.9m (FY 21: GBP6.8m).
Although market activity was substantially lower than in FY21 -
where we benefitted from significant COVID-19 related trading by
institutional clients - this decline in revenue was offset by a
good contribution from our Analytics team and an increased volume
of block trades for owners of corporate clients.
Following the commencement of the war in Ukraine and development
of broader concerns over inflation and economic growth, equity
market activity in Q1 was lower and our pipeline is much quieter
than in the comparative period last year.
finnCap Cavendish took advantage of strong M&A market
conditions and, having built a sizeable book of sale mandates
throughout FY21, delivered excellent outcomes for both sellers and
buyers.
finnCap Cavendish generated revenues of GBP24.3m, up 101% on
FY21 (GBP12.1m). In total, it closed 22 private M&A
transactions with an aggregate value of over GBP1.3bn.
Key deals included the sales of: Reward Gateway; Pimlico
Plumbers; Sentenial; Xexec; Rayware; Responsible Life; KM Products;
Wood Thilsted; Boku; Mail Manager; Intelling; Soundbite Learning;
Datrix and Big Green Smile.
In Q1 22, activity levels remain good across the M&A market
and in finnCap Cavendish. We have around 40 live deals under
execution,and, if conditions in the M&A market remain good,
this should provide a sound basis to deliver a good result in the
current year.
Diversified services - Delivering our Strategy
In 2018, before our IPO, finnCap's business was concentrated
almost entirely on services related to the Equity Markets - a
cyclical business with performance highly linked to equity market
performance. The IPO enabled the acquisition of Cavendish, a
private M&A business and since then we have grown other areas
of adjacent service - public market take-over advice, debt
advisory, private capital raising, PE coverage and a focused
origination team We have also expanded the scope of our
institutional equities business into large and hedge fund investors
through our Analytics team
In FY22, the revenue from these new services represented around
half of the Group's total.
Whilst the Group's current set of services have their own market
cycle, this diversification is a key part of building a different
type of advisory firm that can service the needs of boards, private
equity and institutional investors focused on mid-market companies.
As we broaden our range of services we should increase our
relevance to clients and potential clients and, ideally, reduce
market related cyclicality.
We continued to invest in people to drive our broad financial
services strategy across the business.
In FY22, we have made key hires across:
-- Consumer M&A;
-- Life Sciences: Senior ECM and Research;
-- Series A private growth capital fund-raising;
-- Senior M&A execution; and
-- expanded of our origination/lead generation function to primarily support our M&A efforts
In Sales and Trading, our Analytics team started operating and
made a good contribution to sales and trading revenues. Our debt
advisory business delivered just under GBP1m revenue and, in Q1,
our Private Growth Capital team completed their first material
mandate.
In M&A we have made good progress in developing stronger
relationships with Private Equity firms through our origination
team. This has been rewarded with an increased number of PE
sell-side mandates and a number of PE buy-side mandates. Our lead
generation team, which we hired in late FY21, has developed our
in-house database of potential sale candidates, begun active
marketing of all the group's products and originated its first
pitches and mandates. We have also sectorised our M&A teams and
developed our sector teams across all disciplines of the firm to
increase our idea generation and the quality of coverage we give to
existing and target clients.
We have also made good progress with our inorganic strategy. In
late 2020 we began to review potential M&A opportunities
including business services sectors and specific companies that
might form part of a third leg of the finnCap group, with a
particular emphasis on professional service companies that focus on
advising boards on sustainability, diversity, inclusion and related
areas. We believe that these services have become increasingly
important to boards in the mid-market in the past two to three
years and that there will be continued growth for companies that
offer good advice at an appropriate price level for mid-market
companies, ideally coupled with a tech or software aspect.
In April 2022 we were delighted to announce the acquisition of a
50% stake in Energise Limited, a net zero and sustainability
consultancy, for c.GBP2.1m. Energise offers a broad range of
services from strategic advice to Boards around energy efficiency,
net zero planning and risk management to more regular annual
services such as SECR and carbon footprint calculations. In late
2021, it launched a tech enabled service - the Net Zero Club for
smaller businesses to use to measure carbon footprints and evolve
their net zero plans. Energise is a rapidly growing business. It
generated revenue of cGBP1.1m for its year ended 30 September 2021
and is on track to increase this by c.50-70% in its current
financial year. Most of the group's investment has been put into
Energise to fund its expansion, including into the Diversity and
Inclusion advisory business. It will continue to be led by its
founders as co-CEOs and we have the option to acquire the remaining
50% interest in the 12 months after the accounts for the year ended
30 September 2025 have been drawn up.
Administrative expenses and FY22 costs expectations
Administrative costs increased by 17% over FY21 reflecting
higher employee compensation arising from the Group's strong
financial performance in particular in the M&A division where
competition for professionals remains intense. Staff costs
(excluding share based payments) as a percentage of revenue were
61% - broadly in line with FY21 and within our 58-62% guidance
range. Our staff costs percentage remains in line with or below
much of our peer group.
Non-employee costs were markedly higher reflecting the full year
costs of our new office - which provides substantial scope for
expansion - as well as additional trading platform and IT costs and
recruitment fees. We also saw a return to more normal levels of
travel and entertaining costs as market activity normalised post
COVID-19.
Non-people costs per employee - a key efficiency measure - have
remained stable at GBP70k per employee.
Looking forward to FY23, non-staff costs (excluding third party
introductory fees) are expected to remain broadly stable at
c.GBP11m.
Non-recurring items
There were no non-recurring items in FY22 (FY23: GBP1.0m)
Capital and liquidity
The Group's year end cash position improved again to GBP24.4m
from GBP20.4m at 31 March 2021 as a result of the strong financial
performance.
In FY21, the significant working capital inflow is driven by the
payment to employees (and related payroll taxes) of the FY21
discretionary bonus after the year end and the absence of such an
accrual for FY20. In FY22, we saw more normal accruals and working
capital flows.
Cash is stated before the balance of the GBP1.2m fit-out loan
which will be repaid over the next 4 years. We completed the fit
out of our offices in FY22 and these costs will be written off over
the remaining life of the 10 year lease.
In April 2021 we received GBP708k in cash for the sale of part
of our stake in PrimaryBid Limited.
Our liquidity objective is to hold more than GBP10m free cash
after taking account of market making funding together with
expected dividends, financial and capital commitments, corporation
tax liabilities and employee discretionary bonuses.
A stronger 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 dividend payments to
shareholders and also allows us to consider further strategic
investment over time.
Operating Responsibly
finnCap continues to operate responsibly and engaging actively
with its key stakeholders and the wider community, in particular
encouraging youth entrepreneurship through education.
We believe that businesses should be involved in social good,
and, in terms of wider social engagement, we have since the start
of FY22:
-- Acted as lead sponsor for the "Your Side Hustle" youth
entrepreneurship competition with our partners YourGamePlan and
ACCA. Staff members have signed up to provide regular business
mentoring which is offered to all competitors who made the final in
London. We are running the second event in the Summer of 2022.
-- Created an Entrepreneurship Module with YourGamePlan
educational products to support young people who would like to
start their own business or develop key life skills to improve
their career opportunities. Over 1,200 students have completed the
module to date.
-- Supported the All-Party Parliamentary Group for Entrepreneurship to develop a white paper on Entrepreneurship Education to advise government on the benefits of including entrepreneurship into the UK school curriculum.
-- Continued our support (both financial and through
volunteering) for icanyoucantoo which seeks to turn inequality into
opportunity for non-privileged young people.
-- Sponsored ten Ukrainian refugees to gain English language and
UK accreditation through sponsorship of Refuaid - part of the
Ukraine Business Consortium.
-- Supported the Whitechapel Mission (an East London based
charity that provides food, clothing and support for people in
need) through employee volunteering.
We have now operated our Employee Volunteer scheme for over 12
months. Staff members have volunteered over 300 hours to clean up
canals, train as swimming judges, run winter coat collections, and
raise money for a wide variety of charities.
We have also hosted client education events around ESG,
targeting NEDs, executives and investors focused on ESG
reporting.
Rewarding Shareholders
Given the strong financial performance in FY22 and the improved
balance sheet position of the Group, the Directors have proposed a
final dividend of 1.15p per share - up 15% on FY21 - bringing a
total dividend for FY22 to 1.75p.
The final dividend will be approved by shareholders at and paid
after our AGM in September.
As we grow and diversify the Group it is important that we
continue to reward shareholders with regular and attractive
dividends. Although results in the current year will be
substantially lower than in FY22 due primarily to equity market
conditions, we expect to pay an attractive dividend for the current
financial year but will make the decision on quantum later in the
year once market conditions and our financial performance become
clearer.
Q1 Trading and Outlook
The current financial year has been complicated by the tragic
conflict in Ukraine and rising macro risk including rising
inflation, high energy prices, concerns over food prices and the
consequent impact on consumer confidence in key markets. This has
significantly impacted the level of ECM activity, IPOs and equity
issuance across all market participants.
Equity issuance through our Capital Markets division has been
very low but we continue to execute plc M&A mandates. Sales and
trading activity has remained broadly stable.
In contrast, the private M&A market and our team's M&A
performance has been strong and we have closed several private
M&A transactions post year end.
As we enter Q2, our public and private M&A pipeline remains
good and we have seen some marginal signs of improvement in ECM
activity. The outcome for the year will remain highly influenced by
the geopolitical and macroeconomic factors outlined above.
As a result of market conditions, we expect revenue and
financial performance to be substantially lower than in FY22.
However, we have a strong client base and a growing range of
services to offer them and will continue to selectively invest in
people to drive future growth in the medium-term.
We have a stronger balance sheet than before the COVID-19
pandemic and are confident, with our broader product offering
across the Group, that the business will grow once external
conditions improve.
Sam Smith
Chief Executive Officer
14 July 2022
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 March 2022 31 March
2021
(audited) (audited)
GBP'000 GBP'000
Revenue 52,545 46,629
Other operating income 13 926
---------------------------------------------- -------------- -----------
Total income 52,558 47,555
Administrative expenses (43,941) (37,628)
---------------------------------------------- -------------- -----------
Operating profit before non-recurring items 8,617 9,927
Non-recurring items - (1,047)
---------------------------------------------- -------------- -----------
Operating profit 8,617 8,880
Finance income 12 16
Finance charge (524) (519)
---------------------------------------------- -------------- -----------
Profit before taxation 8,105 8,377
Taxation (1,594) (1,346)
---------------------------------------------- -------------- -----------
Profit attributable to equity shareholders 6,511 7,031
---------------------------------------------- -------------- -----------
Total comprehensive income for the year 6,511 7,031
---------------------------------------------- -------------- -----------
Earnings per share (pence)
Basic 3.95 4.41
Diluted 3.57 4.24
There are no items of other comprehensive income.
All results derive from continuing operations.
Consolidated Statement of Financial Position
31 March 31 March
2022 2021
(audited) (audited)
GBP'000 GBP'000
Non-current assets
Property, plant, and equipment 13,304 14,589
Intangible assets 13,512 13,413
Financial assets held at fair
value 802 1,685
Deferred tax asset 620 888
------------------------------------ ---------- ----------
Total non-current assets 28,238 30,575
------------------------------------ ---------- ----------
Current assets
Trade and other receivables 13,074 7,782
Current assets held at fair value 871 -
Cash and cash equivalents 24,435 20,434
------------------------------------ ---------- ----------
Total current assets 38,380 28,216
------------------------------------ ---------- ----------
Total assets 66,618 58,791
------------------------------------ ---------- ----------
Non-current liabilities
Trade and other payables 11,151 12,548
Borrowings 851 1,207
Provisions 94 95
------------------------------------ ---------- ----------
Total non-current liabilities 12,096 13,850
------------------------------------ ---------- ----------
Current liabilities
Trade and other payables 20,389 15,478
Current liabilities held at fair
value - 72
Corporation taxation 714 748
Borrowings 356 343
------------------------------------ ---------- ----------
Total current liabilities 21,459 16,641
------------------------------------ ---------- ----------
Equity
Share capital 1,799 1,737
Share premium 1,475 956
Own shares held (1,926) (1,726)
EBT reserve (322) -
Merger relief reserve 10,482 10,482
Share based payments reserve 1,294 1,132
Retained earnings 20,261 15,719
------------------------------------ ---------- ----------
Total equity 33,063 28,300
------------------------------------ ---------- ----------
Total equity and liabilities 66,618 58,791
------------------------------------ ---------- ----------
Consolidated Statement of Cashflows
Year ended Year ended
31 March 31 March
2022 2021
(audited) (audited)
GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 8,105 8,377
Adjustments for:
Depreciation 1,739 1,957
Amortisation of intangible assets 83 120
Finance income (12) (16)
Finance charge 524 519
Share based payments charge 1,100 744
Net fair value gain recognised
in profit or loss (55) (926)
Payments received for non-cash
assets (448) (237)
-------------------------------------------- ----------- -----------
11,036 10,538
Working capital movements:
Change in trade and other receivables (5,292) 1,255
Change in trade and other payables 4,456 6,050
Change in provisions (1) 55
-------------------------------------------- ----------- -----------
Cash generated from operations 10,199 17,898
Net receipts for current asset
held at fair value (943) 503
Tax paid (1,628) (662)
-------------------------------------------- ----------- -----------
Net cashflow generated from
operating activities 7,628 17,739
-------------------------------------------- ----------- -----------
Purchase of property, plant and
equipment (454) (2,042)
Purchase of intangible assets (182) -
Proceeds on sale of investments 1,515 20
Interest received 12 16
-------------------------------------------- ----------- -----------
Net cashflow generated from
investing activities 891 (2,006)
-------------------------------------------- ----------- -----------
Equity dividends paid (2,639) (804)
Proceeds from exercise of options 581 380
Purchase of own shares (843) (90)
Interest paid (51) (46)
Lease liability payments (1,223) (984)
Proceeds from /(repayments of)
borrowings (343) 1,550
-------------------------------------------- ----------- -----------
Net cashflow generated from
financing activities (4,518) 6
-------------------------------------------- ----------- -----------
Net increase in cash and cash
equivalents 4,001 15,739
Cash and cash equivalents at
beginning of year 20,434 4,695
-------------------------------------------- ----------- -----------
Cash and cash equivalents at
end of year 24,435 20,434
-------------------------------------------- ----------- -----------
Reconciliation of net debt
Net proceeds from/(repayments
of) borrowings (343) 1,550
Borrowings at beginning of year 1,550 -
Borrowings at end of year 1,207 1,550
-------------------------------------------- ----------- -----------
Consolidated Statement of Changes in Equity
Own Merger Share based
Share Share shares EBT relief payments Retained Total
capital premium held reserve reserve reserve earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- -------- -------- -------- ------------ --------- --------
31 March 2020 1,697 616 (1,636) - 10,482 388 8,775 20,332
----------------------------- -------- -------- -------- -------- -------- ------------ --------- --------
Total comprehensive income
for the period - - - - - - 7,031 7,031
Transactions with owners:
Share-based payments
charge - - - - - 744 - 744
Deferred tax on
share-based payments - - - - - - 717 717
Purchase of own shares - - (90) - - - - (90)
Dividends - - - - - - (804) (804)
Share options exercised 40 340 - - - - - 380
----------------------------- -------- -------- -------- -------- -------- ------------ --------- --------
40 340 (90) - - 744 (87) 947
----------------------------- -------- -------- -------- -------- -------- ------------ --------- --------
31 March 2021 1,737 956 (1,726) - 10,482 1,132 15,719 28,300
----------------------------- -------- -------- -------- -------- -------- ------------ --------- --------
Total comprehensive income
for the period - - - - - - 6,511 6,511
Transactions with owners:
Share based payments
charge - - - - - 1,100 - 1,100
Deferred tax on
share-based payments - - - - - - (268) (268)
Purchase of own shares - - (843) - - - - (843)
EBT gift - - - 100 - - - 100
Dividends - - - - - - (2,639) (2,639)
Share options exercised 62 519 643 (422) - (938) 938 802
----------------------------- -------- -------- -------- -------- -------- ------------ --------- --------
62 519 (200) (322) - 162 (1,969) (1,748)
----------------------------- -------- -------- -------- -------- -------- ------------ --------- --------
31 March 2022 1,799 1,475 (1,926) (322) 10,482 1,294 20,261 33,063
----------------------------- -------- -------- -------- -------- -------- ------------ --------- --------
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 UK Adopted International Accounting Standards.
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 consolidated financial information contained within these
financial statements does not constitute statutory accounts within
the meaning of Section 434 of the Companies Act 2006. The auditor
has reported on the statutory financial statements and the audit
report was unqualified. The annual report and accounts for the year
ended 31 March 2022 is expected to be filed with the Registrar of
Companies and posted to Shareholders in July. Further copies will
be available from the Company Secretary at the Company's registered
office and on the Company's web-site www.finncap.com.
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.
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
31 March 31 March
2022 2021
GBP'000 GBP'000
Dividends proposed and paid during
the year 2,639 804
------------------------------------- --------- ---------
Dividends per share paid during
the year 1.60p 0.50p
------------------------------------- --------- ---------
Dividends are proposed at the discretion of the Board.
3. Post balance sheet events
On 28 April 2022, finnCap announced that it had acquired a 50%
interest in Energise Limited ("Energise") a net zero and
sustainability consultancy, based near Cambridge.
Energise was established in 2008 by Simon and Tamsin Alsbury
with the initial objective of developing energy saving options for
corporate and public sector clients. It has since grown into a
full-service Net Zero and energy efficiency practice assisting
c.180 clients in meeting their climate change challenge with a core
focus on regulatory compliance, best practice, measurement and
emission reduction programmes to drive effective climate-focused
business transformation. Energise was awarded B-Corp status in
February 2022.
For the 12 months ended 30 September 2021, Energise generated
unaudited revenue of cGBP1.1m and EBITDA of c.GBP0.1m. The current
financial year has started well and, for the 6 months to 31 March
2022, Energise has invested in people and client growth with
consulting revenue increasing c.90% over the prior period and with
profits at breakeven level.
finnCap has acquired its 50% interest for consideration of
c.GBP2.1m payable as cash of c.GBP1.9m and 902,090 new finnCap
ordinary shares. Of the cash consideration, c.GBP1.5m will be
subscribed for new ordinary shares in Energise, providing the
capital to fund revenue growth in its existing practice and to
establish a culture and diversity practice. The remaining cash and
ordinary shares will be predominantly paid to the co-CEOs of
Energise. finnCap has also agreed to loan up to a further GBP0.3m
to support growth over the next three years.
In addition to its investment, finnCap will provide Energise
with marketing expertise; access, where appropriate, to its client
base; and broader growth advisory services.
finnCap has an option to acquire the remaining equity interests
in Energise for 12 months after approval of the accounts for the
year to 30 September 2025 based on normalised EBITDA for that year
and an EBITDA multiple of between 6-8x linked to the achievement of
its business plan and the proportion of revenue from digital
products. The option exercise consideration can be paid up to 50%
in new finnCap shares at finnCap's option.
After the year end, arrangements were entered into with Stuart
Andrews, a former director on 15 May 2022, and with Samantha Smith,
the CEO and a director of the company on 20 June 2022 relating to
their departure from the Group. The aggregate payments that could
be made by the Group under these arrangements is up to c.GBP1m
subject to their future re-employment and other conditions. The
majority of these costs will be borne in the FY23 financial year
and relevant details will be disclosed in the FY23 Remuneration
Report.
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 will be 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
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END
FR SFLESDEESEIW
(END) Dow Jones Newswires
July 14, 2022 02:00 ET (06:00 GMT)
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