TIDMSGR
RNS Number : 0290S
Shore Capital Group Limited
28 September 2017
Shore Capital Group Limited
("Shore Capital," the "Group" or the "Company")
Interim results for the six months ended 30 June 2017
Shore Capital, the independent investment group specialising in
capital markets, principal finance and asset management, today
announces its interim results for the six months ended 30 June
2017.
Financial highlights
-- Revenue up 13.0% to GBP20.3 million (2016: GBP18.0
million)
-- Profit before tax of GBP2.5 million (2016: GBP2.4
million)
-- Earnings per share of 6.7p (2016: 6.5p)
Operational highlights
-- Capital Markets advised on ten secondary fundraisings and
three IPOs
-- Eight new retained corporate clients won, including
Non-Standard Finance; Oxford Biodynamics; and UP Global Sourcing
Holdings
-- Market Making operation increased revenues and profits by 15%
compared to the previous year
-- Investment in research platform with the establishment of a
new distribution channel in North America
-- Strong fundraising performance for the Asset Management
division, particularly the Puma EIS Service and Puma Heritage plc,
reflecting long term investment in the business
-- Latest VCT, Puma VCT 13, launched post period end
-- New GBP21 million joint venture established with investment
into the UK supported living sector
Commenting on the results, Howard Shore, Executive Chairman,
said:
"The Group has continued to make progress amid a challenging
market and in the face of domestic political uncertainty driven by
the weakened majority of the UK government following the General
Election in June.
"I am encouraged by the performance of our Capital Markets and
Asset Management divisions. There is a significant opportunity for
these businesses to continue winning market share as a number of
major international banks either reduce capacity or withdraw from
certain segments of the market. We therefore remain confident about
the Group's medium-term prospects for growth."
- Ends -
Enquiries:
Shore Capital +44 (0) 20 7468
Howard Shore, Executive 7911
Chairman +44 (0) 14 8172
Lynn Bruce, Director 8902
Grant Thornton UK LLP
(Nominated Adviser)
Philip Secrett
Jamie Barklem +44 (0) 20 7383
Carolyn Sansom 5100
Montfort Communications
(Public Relations) +44 (0) 78 1234
Olly Scott 5205
About Shore Capital
Shore Capital is an AIM quoted independent investment group.
Founded and majority owned by entrepreneurs, for three decades
Shore Capital has been helping entrepreneurial businesses reach
their full potential, find committed long term investors and
develop into significant enterprises. The business offers
innovative corporate advice; a leading market making business; some
of the most respected investment research available in the UK; and
a diverse range of high quality investment opportunities, including
its hugely successful VCTs and principal finance activities.
The Group is based in Guernsey, London, Liverpool, Edinburgh and
Berlin. Shore Capital Stockbrokers Limited, Shore Capital and
Corporate Limited, Shore Capital Limited and Puma Investment
Management Limited are each authorised and regulated by the
Financial Conduct Authority. Shore Capital Stockbrokers Limited is
a member of the London Stock Exchange.
www.shorecap.gg
Chairman's statement
Introduction
The Group has continued to make progress amid a challenging
market and in the face of domestic political uncertainty driven by
the weakened majority of the UK Government following the General
Election in June.
I am pleased to report, as anticipated, a seamless change of
management as I step down from my position as Chief Executive, and
Simon Fine and David Kaye took over as joint Chief Executives.
Despite the challenges posed by the market environment, it is
encouraging to see continued resilience in our Capital Markets and
Asset Management divisions.
Revenues for the Group during the period grew by 13.0% to
GBP20.3 million, (2016: GBP18.0 million). Group profit before tax
increased by 2.2% to GBP2.5 million, (2016: GBP2.4 million). Basic
earnings per share increased 3.6% to 6.7p, (2016: 6.5p).
Revenues from the Capital Markets division increased by 13.0% to
GBP14.8 million, (2016: GBP13.1 million) increasing profit before
tax by 12.7% to GBP3.4 million, (2016: GBP3.0 million). Asset
Management revenues decreased by 5.7% to GBP4.9 million, (2016:
GBP5.2 million) generating profits of GBP0.4 million, (2016: GBP1.3
million). The Principal Finance division recorded a pre-tax loss of
GBP0.4 million (2016: loss of GBP1.2 million).
The Capital Markets division marked a strong first half,
participating in three IPOs and 10 secondary fundraisings. The
business also continued to grow the quality and diversity of its
retained client base, winning eight new corporate clients,
including Non-Standard Finance; Oxford Biodynamics; and UP Global
Sourcing Holdings.
The Company's continued focus on serving the needs of its
clients has resulted in a number of strategic investments in high
calibre individuals and teams to continue its positive momentum. We
were also delighted to announce the appointment of Matthew Elliott
as a Senior Political Adviser earlier this year, providing our
Capital Markets business and institutional and corporate clients
with a unique political insight to help them manage the economic
and political challenges of the current market environment.
We have also invested in our research platform and established a
new distribution channel in North America. Shore Capital covers
approximately two-thirds of the FTSE 100 plus many of the strongest
midcap stocks. We are committed to meeting the growing demand for
our highly regarded research product, which is already widely
recognised in the UK for its outstanding insight, actionable ideas
and unparalleled quality.
The Group's market making operation increased revenues and grew
profits by 15% compared to the previous year. This is an extremely
commendable result and underpins our position as one of London's
top three market makers.
The Asset Management division recorded notable successes across
its Institutional and Private Client businesses. Having taken the
decision not raise a fund in the 2016/17 tax year in view of the
many changes to VCT investment rules which had been introduced, the
Group is pleased to have launched its latest VCT for the current
tax year, Puma VCT 13, after the period end. Having allowed some
time for these new rules to bed in and with good progress made in
deploying the funds raised in previous VCTs, we are pleased to
offer investors the opportunity to capitalise on our strong track
record.
In the Institutional business, Brandenburg Realty successfully
implemented its strategy for commercial and residential portfolios
in Potsdam and for the Monumentenstrasse residential building in
Berlin. In Monumentenstrasse, we were pleased to have sold nine
units since acquisition at prices significantly higher than their
underwriting value. The advisory team remains opportunistic in its
approach and continues to actively seek compelling acquisitions to
build on the fund's latest successes.
The Private Client business continued to grow its assets under
management, attracting significant capital inflows into the Puma
EIS Service. Fundraising continued successfully during the 2016/17
tax year; and the amount in the EIS Service now stands at c.GBP53
million.
Puma Heritage celebrated its fourth anniversary in June 2017 and
achieved a significant acceleration in its net asset value ("NAV")
to GBP37.0 million by the period end, driven by subscriptions from
new shareholders and encouraging levels of returns from its
diversified loan book. By the end of the period, Puma Heritage had
made 409 loans, of which 46 were live and 363 had been repaid in
full.
The Puma AIM Inheritance Tax Service celebrated its third
anniversary in June 2017 during which time it has achieved a 67.36%
return for investors, outperforming the FTSE AIM All Share Index by
44.37%. The Service seeks to mitigate inheritance tax by investing
in carefully selected AIM shares and has again been nominated as
the Best AIM Investment Manager in the 2017 Growth Investor Awards,
an accolade it won in 2016.
Across our businesses, we have maintained our commitment to
offering customers high quality advice, research, ideas and
investment opportunities; and helping entrepreneurial management
teams to grow their businesses.
Financial review
Income and expenditure
Revenue for the period increased by 13.0% to GBP20.3 million
(2016: GBP18.0 million), whilst administrative expenses increased
by 14.3% to GBP17.7 million (2016: GBP15.5 million), generating an
operating profit of GBP2.7 million (2016: GBP2.5 million). Group
profit before tax increased by 2.2% to GBP2.5 million (2016: GBP2.4
million).
Revenue from the Capital Markets division increased by 13.0% to
GBP14.8 million (2016: GBP13.1 million). Profit before tax was up
12.7% to GBP3.4 million (2016: GBP3.0 million), with a net margin
of 23.0% (2016: 23.0%).
Revenue from the Asset Management division was down 5.7% to
GBP4.9 million (2016: GBP5.2 million), generating profit before tax
of GBP0.4 million (down 68.6% from 2016: GBP1.3 million),
representing a net margin of 8.3% (2016: 25.0%).
The Principal Finance division recorded a pre-tax loss of GBP0.4
million (2016: loss of GBP1.2 million).
Basic earnings per share
The Group generated basic earnings per share of 6.7p (2016:
6.5p).
Comprehensive earnings per share
On a comprehensive basis, the Group generated earnings of 7.5p
per share (2016: 7.6p).
Liquidity
As at the balance sheet date, available liquidity was GBP33.1
million (2016: GBP24.8 million), comprising GBP31.5 million (2016:
GBP16.0 million) of cash and GBP1.6 million (2016: GBP8.8 million)
of gilts and bonds. In addition, the Group has a GBP20 million
working capital facility which was undrawn at the period end.
This liquidity underpins the Group's continuing ability to
undertake a range of transactions as opportunities arise in the
near term.
Balance sheet
The Group's balance sheet remains strong. Total equity at the
period end was GBP66.2 million (2016: GBP66.9 million), the
reduction reflecting the net of the repurchase/cancellation of
shares of GBP2.2 million and the issue of new shares of GBP1.5
million following the exercise of options.
In addition to the GBP31.5 million of cash and GBP1.6 million of
gilts and bonds (as referred to above), at the period end the Group
held GBP4.1 million in various of its Puma Funds; GBP3.9 million
share of associates; GBP3.6 million net in quoted equities; and a
further GBP3.1 million in other unquoted holdings.
The remainder of the balance sheet was GBP18.3 million net,
which included GBP16.7 million of net market and other debtors in
the Company's stockbroking subsidiary. In addition, the remaining
licences held in Spectrum Investments were valued at GBP2.2 million
(on a gross basis, before allowing for minority interests).
Net Asset Value per Share
Net asset value per share at the period end was 266.6p (2016:
270.3p).
Dividend
The Board proposes to pay an interim dividend of 5.0p (2016:
nil). The interim dividend is expected to be paid on Tuesday, 24
October 2017 to shareholders on the register as at Friday 6
October, 2017. Shares will be marked ex-dividend date on 5 October
2017.
Operating review
Capital Markets
Overview
The Capital Markets division enjoyed a highly successful first
half of 2017, increasing revenues and profits by double digit
percentages; further growing its client base; and continuing to
develop its service offering.
The team participated in a significant number of high-profile
transactions, including the period's second largest UK Main Market
IPO, as well as adding eight new retained corporate clients.
Additional investment has been made to augment our research and
equity sales proposition, with the addition of a distribution
capability in North America and a political economy resource to
complement our broad sector coverage.
Our Market Making and Fixed Income businesses have performed
well in the face of ongoing political uncertainty, delivering a
good level of profitability and providing a key source of liquidity
to equity and debt markets.
On 3 January 2018, the EU's revised Markets in Financial
Instruments Directive ("MiFID") and Markets in Financial
Instruments Regulation ("MiFIR") (together "MiFID II") will come
into force. There will be strategic and operational challenges for
the buy-side and sell-side as a result of the rules; but we believe
we will be fully prepared for the changes when they come into
effect. In anticipation of the new rules our focus has remained on
our institutional and corporate clients, to help them work within
the new regime, to continue delivering the best service and
outcomes for our clients.
The business continues to invest in high calibre individuals and
teams where the Company identifies opportunities for incremental
growth.
Corporate Broking and Advisory
During the period the team has been very active and participated
in a number of significant transactions including three IPOs and
ten secondary fundraisings. Notable transactions completed during
the period included:
-- acting as joint bookrunner on the GBP337 million placing of
ordinary shares in Playtech plc;
-- acting as joint bookrunner on the GBP126.5 million placing by
NextEnergy Solar Fund Limited;
-- acting as lead manager on the Main Market IPO of Global Ports
Holding plc, raising US$230 million; and
-- acting as sponsor, global coordinator and joint-bookrunner on
the Main Market IPO of UP Global Sourcing Holdings plc, raising
GBP52.6 million.
In the advisory space, the team acted as Corporate Broker to
Market Tech Holdings Limited in relation to its GBP892.3 million
takeover by LabTech Investments Limited and for Staunton Holdings
Limited in relation to its GBP37.3 million offer for FIH Group
plc.
The Company continues to grow its retained client base and
during the period added eight new retained corporate clients,
including Non-Standard Finance plc; Oxford BioDynamics Plc; and UP
Global Sourcing Holdings plc.
Research and Sales
Despite the political upheaval of a weakened government
following the General Election, equity capital markets have
remained robust with international earners in particular reflecting
London's continued status as a global financial centre. In the more
UK-centric FTSE 250 index, the prevailing market environment
reflected a less certain mood. Shore Capital covers approximately
two-thirds of the FTSE 100 plus many of the strongest midcap
stocks, thereby maintaining our relevance as a research house to a
wide variety of investors.
Compounding the challenges created by the economic and political
environment in Europe, the equity capital market industry is
approaching the entry into force of MiFID II. Shore Capital
continues to develop and implement its plans for MiFID II,
encouraged by the investment community's continued engagement and
support for our research and idea generation in the UK and further
afield. We regard the changes to come from MiFID II as a process
more than simply an event.
In terms of support from the market, we were pleased to achieve
further progress in our 2017 Extel rankings, achieving the number
one rating in insurance; and top five ratings in retail, consumer
goods, financials, media and transport. Our sales team made strong
progress up the rankings, rising to sixth position. Our success in
the Extel rankings was bolstered by another strong representation
in the Thomson Reuters analysts' awards. Shore Capital continues,
person for person, to punch well above its weight in this respect
and we appreciate the support of the market.
Our rankings performance reflects the talent, hard work and
capabilities of our team, which we continue to develop and build.
In the first half of the year we established a distribution
capability in New York City and created a political economy
resource through the addition of Matthew Elliott to our team. Our
depth and experience as a research house and the stability of our
team contributed to the Company's corporate broking wins.
Market Making
The Group's Market Making operation performed well in the first
half of the year, increasing revenue and growing profits by 15%
from the previous year. This is a very commendable result in light
of market uncertainty surrounding the UK general election.
Although clearly sensitive to the overall market environment,
Shore Capital remains focused and adaptable to changes in trading
conditions and to the needs of clients. Market Making operations
continue to benefit from the team's wide stock coverage and its
reputation as a strong and trusted counterparty. The team comprises
highly experienced traders who are able to identify revenue
opportunities despite challenging market conditions, whilst
operating within a risk framework that ensures loss days are a rare
occurrence.
Fixed Income
The fixed income team's extensive experience enables the Group
to offer its clients a fuller range of financing options for
mid-sized corporates, creating exciting opportunities for growth in
the Capital Markets business. Challenging debt market conditions
have continued during the period with yields/credit spreads
remaining at historic lows combined with low volatility. Trading
has remained subdued with performance comparable to 2016's
levels.
Asset Management
Overview
The Asset Management division continued to grow assets under
management in its Private Client operations, with significant
inflows into the Puma EIS Service. Puma Heritage and Puma AIM
celebrated their fourth and third anniversaries respectively in the
period; and both continued to achieve impressive returns for
investors. Whilst delaying the launch of its latest VCT offering
from the 2016/17 tax year to the current year resulting in lower
revenues and profits, the team launched Puma VCT 13 after the
period end and is optimistic about its prospects.
In the Institutional business, Brandenburg Realty and Puma
Brandenburg achieved some significant planning successes in their
respective portfolios: Brandenburg Realty drew down on a new EUR28
million refinancing facility; and Puma Brandenburg agreed improved
terms on its existing borrowing facilities.
Overall AUM for the Asset Management division at 30 June 2017
was GBP810 million.
Institutional Asset Management
Brandenburg Realty
The asset advisory team continues to assist Brandenburg Realty
(the "Fund") to implement the agreed strategy for the commercial
and residential portfolio in Potsdam and the Monumentenstrasse
residential building in Berlin. In Potsdam, a full planning
application to construct c.1,800 sq m of new residential space has
been submitted and the process to obtain condominium title for the
existing residential units is underway and due for completion by
the year end. At Monumentenstrasse, nine units have been sold since
acquisition, achieving significantly higher prices than the
underwriting at the time of acquisition. This reflects not just the
strength of Berlin's residential property market, but also the
successful efforts of the asset advisory team.
During the period a EUR27.5 million, a six year debt financing
facility was drawn from Unicredit to refinance the acquisition of
both assets.
The asset advisory team also continues to seek and recommend
additional acquisition opportunities to the Fund and the
acquisition of a further residential asset was notarised in June
2017. Located in the highly sought-after Pankow area of Berlin,
this asset offers 1,500 sq m of space.
Puma Brandenburg Limited ("PBL")
The Group has continued to assist PBL to achieve significant
success across its portfolio.
Achievements in the period with which the Group has assisted PBL
include:
-- At the Hyatt Regency, Cologne, planning permission for the
construction of two new restaurants (total internal space of 500 sq
m) on the river bank in front of the hotel was obtained. Detailed
planning for the construction of these value enhancing restaurants
is now at an advanced stage; and
-- Ongoing close cooperation with Lidl to maximise value in the
portfolio of stores located across Germany. The latest mutually
beneficial agreement was signed in August 2017 and provides for
lease extensions (ranging from five to 12 years) at 10 stores. In
total, over the last 12 months the lease term has been extended at
14 stores.
During the period, PBL completed a tender offer to acquire the
remaining interests of the minority shareholders at EUR6 per unit
comprising a combined A and B Share. The take-up was extremely
strong. PBL acquired 26.7% of the company, resulting in Howard and
Andrée Shore increasing their shareholding to 90% of the company.
This represented an equivalent cash distribution for Shore
shareholders who held their shares since the time of the demerger
in 2010 of GBP5.15 per share in Shore Capital.
Puma Social Care Investments ("PSCI")
The Group launched PSCI during the period, a new joint venture
focused on real estate opportunities in the supported living
sector, with equity commitments totalling GBP21 million, to be
contributed equally from the Group alongside two family offices in
the United States.
PSCI has been established to acquire newly built or converted
assets which provide residential accommodation in the form of
self-contained apartments for individuals with learning
disabilities, enabling them to live independently with the support
of on-site care. Accommodation of this nature allows local
authorities in the United Kingdom to meet their statutory
obligations with regard to care and housing provision, while also
addressing the UK government's stated desire to locate individuals
needing care within their local community. Each site will typically
have between 10 and 20 units.
The assets targeted will benefit from long-term, typically 25 or
30 year, inflation-linked leases to a variety of housing
associations. Rental income paid from housing associations will be
funded from Housing Benefit payments from central government.
During the period, the Group advised PSCI on the acquisition of
four properties comprising 58 units. A further two acquisitions
have been completed since the period end, and PSCI has now deployed
GBP17 million of its GBP21 million initial equity commitments.
St Peter Port Capital ("SPPC")
SPPC announced its results for the year ended 31 March 2017 on 9
May 2017. As at that date, it had investments in 12 companies
(excluding companies in the portfolio it had written down to zero)
and reported that it had generated GBP218,000 from realisations
since 1 April 2016.
The company launched a strategic review in the last quarter of
2016 and continues to seek a buyer (either of the company or some
of its assets). The significant majority of the company's value
resides in its four largest holdings but all of these portfolio
companies remain illiquid.
The directors of SPPC continue to believe that the portfolio
offers the potential for capital gain from the values at which the
investments are currently being held but that, if SPPC itself were
wound up prematurely, it would be difficult to secure good value
for these illiquid investments. In June 2017 the shareholders voted
in favour of extending the company's life on a one year annual
rolling basis in order to allow the directors more time to realise
value for the investments. In addition the company is undergoing a
cost review to reduce expenditure wherever possible.
Private Client Investments
Puma Venture Capital Trusts ("VCTs")
Since 2005 over GBP220 million has been raised for the Group's
Puma VCTs and almost GBP100 million has been distributed to their
shareholders.
Puma's strong VCT track record is evidenced by each of the first
five Puma VCTs having led their peer group for total returns, with
Puma VCT V having returned 106.3p per share (on a net cost of
investment of 70p) in cash distributions to shareholders over its
life. The most recently closed fund, Puma VCT 12, raised GBP30.9
million which accounted for more than half of the total funds
raised in the limited-life VCT market in the 2015/16 tax year. The
current stable of funds are all performing well and have paid out
tax-free dividends of between 5p and 7p per annum to
shareholders.
Having taken the decision not raise a fund in the 2016/17 tax
year in view of the many changes to VCT investment rules which had
been introduced, the Group is pleased to have launched its latest
VCT for the current tax year, Puma VCT 13, after the period end.
Having allowed some time for these new rules to bed in and with
good progress made in deploying the funds raised in previous VCTs,
we are pleased to offer investors the opportunity to capitalise on
our strong track record.
Puma Heritage plc
Puma Heritage was launched in June 2013 to operate in a range of
sectors, with a primary focus on secured lending. It focuses on
capital preservation, whilst seeking to produce regular returns for
shareholders intended to counter long-term inflationary pressures.
An investment in Puma Heritage is intended to benefit from 100%
relief from Inheritance Tax after two years.
The company celebrated its fourth anniversary in June 2017,
having recorded a significant acceleration in its net asset value,
("NAV") during the period. Subscriptions from new shareholders and
good levels of return generated from its diversified loan book have
increased the company's NAV to over GBP37 million by 30 June 2017.
Puma Heritage has participated in loans totalling GBP186 million to
date. The business has a strong pipeline of loan candidates in
which to deploy current and future funds; and remains optimistic
about the prospects for further NAV growth over the coming months
and years.
During the period, we advised Puma Heritage on the completion of
several asset-backed loans across a number of sectors, all secured
with a first charge over real estate at conservative lending
ratios. As at 30 June 2017, Puma Heritage had made 409 loans of
which 46 were live and 363 had been repaid in full. The team
continues to assist the business, helping it to source and analyse
new lending opportunities. Puma Heritage remains open for
investment and having reached critical mass, is in a position to
continue growing rapidly.
Puma EIS
The Puma EIS portfolio service, (the "EIS Service") was launched
in November 2013 to offer investors the opportunity to invest in
Enterprise Investment Scheme qualifying companies utilising the
team's strong track record and expertise in asset-backed investing
gained from their experience running the Puma VCTs. The EIS Service
aims to invest into growth oriented, asset focussed businesses.
Fundraising continued successfully throughout the 2016/17 tax year,
increasing funds in the EIS Service to c.GBP53 million. To date,
the EIS Service has invested into seven portfolio companies and has
a good pipeline of further deployment opportunities.
Puma AIM Inheritance Tax Service
The Puma AIM IHT Service, (the "AIM Service") is a discretionary
portfolio service that seeks to mitigate Inheritance Tax by
investing in a carefully selected portfolio of AIM shares and is
particularly attractive for those that wish to invest via an ISA.
It is available to clients with a Financial Adviser directly
through Puma Investments.
The AIM Service celebrated its third anniversary at the end of
June 2017. In those three years it has delivered a 67.36% return,
outperforming the FTSE AIM All Share Index by 44.37%, representing
a compound annual growth rate of 18.73%. We have also been
nominated for the Best AIM Investment Manager award at the Growth
Investor Awards for 2017, which we won in 2016.
During the period, the AIM Service has continued to grow assets
and investor numbers for advised clients coming direct to Puma. We
have also signed discretionary fund management agreements with a
number of advisers enabling them to access the AIM Service. It
became available through the Ascentric, Standard Life and Transact
platforms during the period and saw its first inflows through this
channel.
Principal Finance
The Principal Finance division seeks to use the Group's strong
balance sheet to invest in attractive opportunities and seed new
funds.
Supported Living joint venture
As referred to above, during the period the Group committed GBP7
million as part of a one-third share in a new joint venture, Puma
Social Care Investments ("PSCI"), focused on real estate
opportunities in the UK supported living sector.
At the period end, the Group had invested GBP3.9 million of its
total commitment, enabling PSCI to acquire four properties
comprising 58 units. A further two assets have been purchased by
PSCI since the period end, with the Group investing a further
GBP1.8 million of its committed funds.
Investment in DBD
This division also holds the Group's investment in DBD, which
holds, through a subsidiary, 32 regional radio spectrum licences in
Germany of indefinite duration (the "Licences"). Shore Capital
holds a 59.94% interest in Spectrum Investments Limited, the parent
company of DBD.
DBD has been given consent by the German Telecoms Regulator
("BNetzA") to test the LTE TDD technology which will support its
business plan for the future use of the Licences, premised upon a
small radio cells network concept. Initial pilot schemes have been
commenced in Berlin, Karlsruhe and Dusseldorf, and DBD plans to
roll out additional pilots in other areas covered by the
Licences.
For the initial trials, at the request of BNetzA, DBD is using a
temporary test licence granted to it by BNetzA. However, DBD
believes that, as a result of Article 9a of the EU Framework
Directive (2002/21/EC, as amended), implemented in Germany by Sec.
150 para 8 of the German Telecommunications Act, it should be
permitted to use its existing Licences to conduct the pilot schemes
and to support the roll out of its services in the future.
Agreement on this point has not yet been reached with BNetzA and
correspondence between DBD and BNetzA is ongoing.
In correspondence with DBD, BNetzA has noted that its ongoing
consideration of the status and use of the Licences should be taken
in the context of its ongoing review of spectrum frequency planning
for the years after 2021/2022 and in particular its frequency
concept for the 3.5GHz band, into which the Licences fall.
Current trading and prospects
I am encouraged by the performance of our Capital Markets and
Asset Management divisions. There is a significant opportunity for
these businesses to continue winning market share as a number of
major international banks either reduce capacity or withdraw from
certain segments of the market. We therefore remain confident about
the Group's medium-term prospects for growth.
Howard P Shore
Executive Chairman
28 September 2017
Independent review report to Shore Capital Group Limited (the
"Group")
We have been engaged by Shore Capital Group Limited to review
the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2017 which
comprises the consolidated income statement, the consolidated
statement of comprehensive income, the consolidated statement of
financial position, the consolidated statement of changes in
equity, the consolidated cash flow statement and related notes 1 to
8. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the Group in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. Our work has been undertaken so that we
might state to the Group those matters we are required to state to
it in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Group, for our review work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report as required by the
AIM rules issued by the London Stock Exchange and the Bermuda Stock
Exchange.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Group a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2017 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union, and the AIM rules of the London Stock Exchange.
Deloitte LLP
Chartered Accountants
Guernsey, Channel Islands
28 September 2017
Consolidated Income Statement
For the six months ended 30 June 2017 (unaudited)
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
Notes GBP'000 GBP'000 GBP'000
---------------------------- ------ ----------- ----------- -------------
Revenue 3 20,328 17,988 39,408
Administrative expenditure (17,702) (15,490) (34,187)
Balance sheet impairments - - (2,664)
Share of results of 40 - -
associates
Operating profit 2,666 2,498 2,557
----------- ----------- -------------
Interest income 81 102 239
Finance costs (252) (159) (391)
Profit before taxation 3 2,495 2,441 2,405
----------- ----------- -------------
Taxation (567) (628) (554)
----------- ----------- -------------
Profit for the period 1,928 1,813 1,851
----------- ----------- -------------
Attributable to:
Equity holders of the
parent 1,453 1,407 1,302
Non controlling interests 475 406 549
----------- ----------- -------------
1,928 1,813 1,851
----------- ----------- -------------
Earnings per share
Basic 4 6.7p 6.5p 6.0p
Diluted 4 6.6p 6.2p 5.8p
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2017 (unaudited)
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- -------------
Profit for the period 1,928 1,813 1,851
Losses on revaluation of
available-for-sale investments
taken to equity (185) (128) (43)
Gains / (Losses) on cash
flow hedges 61 (210) 70
Taxation (12) 42 (14)
----------- ----------- -------------
49 (168) 56
Exchange difference on
translation of foreign
operations 427 777 468
Other comprehensive income
for the period, net of
tax, from continuing operations 476 609 211
----------- ----------- -------------
Total comprehensive income
for the period, net of
tax 2,219 2,294 2,332
----------- ----------- -------------
Attributable to:
Equity holders of the parent 1,627 1,658 1,582
Non controlling interests 592 636 750
2,219 2,294 2,332
----------- ----------- -------------
Comprehensive earnings
per share
Basic 7.5p 7.6p 7.3p
Diluted 7.4p 7.4p 7.1p
Consolidated Statement of Financial Position
As at 30 June 2017 (unaudited)
Notes As at As at As at
31 December
2016
30 June 30 June
2017 2016
GBP'000 GBP'000 GBP'000
----------------------------- ------ --------- ---------- -------------
Non-current assets
Goodwill 381 381 381
Intangible assets 2,196 2,091 2,135
Property, plant &
equipment 8,720 11,721 9,423
Investment properties - - 2,885
Interests in associates 8 3,896 - -
Principal Finance
investments 7,530 7,020 8,221
Deferred tax asset 18 - -
22,741 21,213 23,045
--------- ---------- -------------
Current assets
Trading assets 5,719 12,121 12,290
Trade and other receivables 67,324 124,974 51,774
Financial instruments 94 - 123
Cash and cash equivalents 31,514 15,988 23,937
104,651 153,083 88,124
--------- ---------- -------------
Total assets 3 127,392 174,296 111,169
--------- ---------- -------------
Current liabilities
Trading liabilities (816) (773) (765)
Trade and other payables (48,894) (94,085) (31,126)
Financial instruments (143) (688) (224)
Tax liabilities (1,029) (805) (770)
Borrowings (409) (401) (431)
(51,270) (96,752) (33,316)
--------- ---------- -------------
Non-current liabilities
Borrowings (9,901) (10,110) (10,649)
Deferred tax liability - (318) (15)
Provision for liabilities
and charges (143) (176) (104)
(10,044) (10,604) (10,768)
Total liabilities 3 (61,314) (107,356) (44,084)
--------- ---------- -------------
Net Assets 66,078 66,940 67,085
--------- ---------- -------------
Equity
Capital and Reserves
Called up share capital - - -
Share premium account 336 336 336
Merger reserve 16,433 17,151 17,151
Other reserves 1,452 1,402 1,596
Retained earnings 39,296 39,955 39,587
Equity attributable
to equity holders
of the parent 57,517 58,844 58,670
Non controlling interests 8,561 8,096 8,415
--------- ---------- -------------
Total equity 66,078 66,940 67,085
--------- ---------- -------------
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2017 (unaudited)
Share Share Merger Other Retained Non Total
capital Premium reserve reserves earnings controlling
account interests
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------- --------- --------- ---------- ---------- ------------- --------
At 1 January 2016 - 336 17,151 2,164 38,845 8,546 67,042
Retained profit
for the period - - - - 1,407 406 1,813
Revaluation of
available for
sale investments - - - (128) - - (128)
Foreign currency
translation - - - - 537 240 777
Valuation change
on cash flow hedge - - - (199) - (11) (210)
Tax on cash flow
hedge - - - 40 - 2 42
--------------------------- ---------- --------- --------- ---------- ---------- ------------- --------
Total comprehensive
income - - - (287) 1,944 637 2,294
Decrease in deferred
tax asset recognised
directly in equity - - - (475) - - (475)
Dividends paid
to/rebalancing
of non controlling
interests - - - - (834) (1,225) (2,059)
Investment by
non controlling
interest in subsidiaries - - - - - 138 138
---------- --------- --------- ---------- ---------- ------------- --------
At 30 June 2016 - 336 17,151 1,402 39,955 8,096 66,940
---------- --------- --------- ---------- ---------- ------------- --------
Share Share Merger Other Retained Non Total
capital Premium reserve reserves earnings controlling
account interests
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------- --------- --------- ---------- ---------- ------------- --------
At 30 June 2016 - 336 17,151 1,402 39,955 8,096 66,940
Retained profit
for the period - - - - (105) 143 38
Revaluation of
available for
sale investments - - - 85 - - 85
Foreign currency
translation - - - - (259) (50) (309)
Valuation change
on cash flow hedge - - - 255 - 25 280
Tax on cash flow
hedge - - - (51) - (5) (56)
Total comprehensive
income - - - 289 (364) 113 38
Decrease in deferred
tax asset recognised
directly in equity - - - (106) - - (106)
Dividends paid
to/rebalancing
of non controlling
interests - - - - (4) 4 -
Credit in relation
to share based
payments - - - 11 - - 11
Investment by
non controlling
interest in subsidiaries - - - - - 202 202
---------- --------- --------- ---------- ---------- ------------- --------
At 31 December
2016 - 336 17,151 1,596 39,587 8,415 67,085
---------- --------- --------- ---------- ---------- ------------- --------
Share Share Merger Other Retained Non Total
capital Premium reserve reserves earnings controlling
account interests
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------- --------- --------- ---------- ---------- ------------- --------
At 1 January 2017 - 336 17,151 1,596 39,587 8,415 67,085
Retained profit
for the period - - - - 1,453 475 1,928
Revaluation of
available for
sale investments - - - (185) - - (185)
Foreign currency
translation - - - - 320 107 427
Valuation change
on cash flow hedge - - - 51 - 10 61
Tax on cash flow
hedge - - - (10) - (2) (12)
Total comprehensive
income - - - (144) 1,773 590 2,219
Dividends paid
to equity holders - - - - (1,088) - (1,088)
Dividends paid
to/rebalancing
of non controlling
interests - - - - (976) (462) (1,438)
Repurchase/cancellation
of own shares - - (2,247) - - - (2,247)
Issue of shares - - 1,529 - - - 1,529
Investment by
non controlling
interest in subsidiaries - - - - - 18 18
---------- --------- --------- ---------- ---------- ------------- --------
At 30 June 2017 - 336 16,433 1,452 39,296 8,561 66,078
---------- --------- --------- ---------- ---------- ------------- --------
Consolidated Cash Flow Statement
For the six months ended 30 June 2017 (unaudited)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
--------------------------------- ----------- ----------- -------------
Cash flows from operating
activities
Operating profit 2,666 2,498 2,557
Adjustments for:
Depreciation and impairment
charges 442 495 3,534
Profit on disposal of (14) - -
fixed assets
Share-based payment expense - - 11
Loss/(gain) on Principal
Finance investments 237 (135) (255)
Increase/(decrease) in
provision for NIC on options 39 (359) (431)
Operating cash flows before
movement in working capital 3,370 2,499 5,416
(Increase)/decrease in
trade and other receivables (15,521) (53,181) 19,896
Increase/(decrease) in
trade and other payables 17,749 50,378 (12,765)
Increase/(decrease) in
trading liabilities positions 51 (173) (2,946)
Decrease/(increase) in
trading assets positions 6,571 (2,777) (181)
Cash generated/(utilised)
by operations 12,220 (3,254) 9,420
Interest paid (252) (159) (391)
Corporation tax paid (375) (291) (717)
Net cash generated/(utilised)
by operating activities 11,593 (3,704) 8,312
----------- ----------- -------------
Cash flows from investing
activities
Purchase of fixed assets (215) (283) (517)
Sale of fixed assets 90 - -
Sale/(purchase) of investment
property 2,885 - (2,885)
Investment in associates (3,896) - -
Purchase of Principal
Finance investments - (707) (1,808)
Sale of Principal Finance
investments 269 35 141
Interest received 81 102 239
Net cash utilised by investing
activities (786) (853) (4,830)
----------- ----------- -------------
Cash flows from financing
activities
Investment in non controlling
interest in subsidiaries 18 138 340
Repurchase/cancellation (2,247) - -
of own shares
Issue of shares 1,529 - -
Decrease in borrowings (204) (200) (430)
Dividends paid to non
controlling interests (1,438) (2,059) (2,059)
Dividends paid to equity (1,088) - -
holders
Net cash utilised by financing
activities (3,430) (2,121) (2,149)
----------- ----------- -------------
Net increase/(decrease)
in cash and cash equivalents
during the period 7,377 (6,678) 1,333
Effects of exchange rate
changes 200 553 491
Cash and cash equivalents
at beginning of period 23,937 22,113 22,113
----------- ----------- -------------
Cash and cash equivalents
at end of period 31,514 15,988 23,937
----------- ----------- -------------
Notes to the Interim Financial Report
For the six months ended 30 June 2017 (unaudited)
1. Financial information
Basis of preparation
The annual financial statements of Shore Capital Group Limited
(the "Group") are prepared in accordance with International
Financial Reporting Standards as adopted by the European Union. The
condensed set of financial statements included in this interim
financial report for the period ended 30 June 2017 has been
prepared in accordance with International Accounting Standard 34
"Interim Financial Reporting", as adopted by the European
Union.
The information for the year ended 31 December 2016 does not
constitute statutory accounts. The Annual Report and Accounts of
the Group were issued on 3 April 2017. The auditor's report on
those accounts was not qualified and did not include a reference to
any matters to which the auditors drew attention by way of emphasis
without qualifying the report.
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, together with the
financial position of the Group, its liquidity position and
borrowing facilities. In addition, the principal risks and
uncertainties of the Group are discussed in note 2 to this interim
financial report.
The Group has considerable financial resources together with an
established business model. As a consequence, the directors believe
that the Group is well placed to manage its business risks
successfully.
After making enquiries, the directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
Significant accounting policies
The same accounting policies, presentation and methods of
computation are followed in the condensed set of financial
statements as are applied in the Group's latest audited Annual
Report and Accounts for the year ended 31 December 2016.
2. Principal risks and uncertainties
The Group's policies for managing the risks arising from its
activities are set out in the last audited Annual Report and
Accounts of the Group that were issued on 3 April 2017. The Group's
activities comprise equity market activities and investment in
alternative assets and property, and its income is therefore
subject to the level of general activity, sentiment and market
conditions in each of the markets in which it operates.
3. Segmental information
For management purposes, the Group is organised into business
units based on their services, and has four reportable operating
segments as follows:
-- Capital Markets provides research in selected sectors,
broking for institutional and professional clients, market making
in AIM and small cap stocks, fixed income broking and corporate
broking and advisory for mid and small cap companies.
-- Asset Management provides advisory services, and manages
specialist funds.
-- Central Costs comprises the costs of the Group's central
management team and structure.
-- Principal Finance comprises investments and other holdings
acquired, together with principal finance activities conducted,
using our own balance sheet resources.
Management monitors the operating results of its business units
separately for the purpose of making decisions about resource
allocation and performance assessment. Segmental performance is
evaluated based on operating profit or loss. Transfer prices
between operating segments are on an arm's-length basis in a manner
similar to transactions with third parties.
6 months ended Capital Asset Central Principal Consolidated
30 June 2017 Markets Management costs Finance
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------- ------------ -------- ---------- -------------
Revenue 14,756 4,904 - 669 20,328
--------- ------------ -------- ---------- -------------
Profit/(loss)
before tax 3,387 408 (876) (424) 2,495
--------- ------------ -------- ---------- -------------
Assets 80,294 5,580 2,983 38,535 127,392
--------- ------------ -------- ---------- -------------
Liabilities (48,357) (1,858) (938) (10,161) (61,314)
--------- ------------ -------- ---------- -------------
6 months ended Capital Asset Central Principal Consolidated
30 June 2016 Markets Management costs Finance
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------- ------------ -------- ---------- -------------
Revenue 13,059 5,200 - (271) 17,988
--------- ------------ -------- ---------- -------------
Profit/(loss)
before tax 3,004 1,300 (690) (1,173) 2,441
--------- ------------ -------- ---------- -------------
Assets 125,281 6,210 1,685 41,120 174,296
--------- ------------ -------- ---------- -------------
Liabilities (95,874) (2,726) (808) (7,948) (107,356)
--------- ------------ -------- ---------- -------------
Year ended 31 Capital Asset Central Principal Consolidated
December 2016 Markets Management costs Finance
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------- ------------ -------- ---------- -------------
Revenue 28,286 10,446 - 676 39,408
--------- ------------ -------- ---------- -------------
Profit/(loss)
before tax 6,787 1,980 (2,119) (4,243) 2,405
--------- ------------ -------- ---------- -------------
Assets 61,503 5,894 3,535 40,237 111,169
--------- ------------ -------- ---------- -------------
Liabilities (29,274) (2,149) (828) (11,833) (44,084)
--------- ------------ -------- ---------- -------------
4. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following:
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
--------------------------- ----------- ----------- -------------
Earnings (GBP) 1,453,000 1,407,000 1,302,000
----------- ----------- -------------
Number of shares
Basic
Weighted average number
of shares 21,718,530 21,768,791 21,768,791
Diluted
Dilutive effect of share
option scheme 393,678 787,412 578,969
----------- ----------- -------------
22,112,209 22,556,203 22,347,760
----------- ----------- -------------
Earnings per share
Basic 6.7p 6.5p 6.0p
----------- ----------- -------------
Diluted 6.6p 6.2p 5.8p
----------- ----------- -------------
5. Dividends paid
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
GBP'000 GBP'000 GBP'000
------------------------------------ ----------- ----------- -------------
Amounts recognised as distributions
to equity holders in the
period:
Final dividend for the 1,088 - -
year ended 31 December
2016 of 5.0p per share
1,088 - -
----------- ----------- -------------
6. Called up share capital
Shore Capital Group Limited - Number
ordinary shares of nil par value of shares GBP'000
----------------------------------- ----------- ----------
At 1 January 2016, 30 June 2016 21,768,791 -
and 31 December 2016
Shares repurchased/ cancelled (941,598) -
Shares issued 746,129
----------- ----------
At 30 June 2017 21,573,322 -
----------- ----------
During the period the Group repurchased for cancellation 621,598
of its ordinary shares of no par value ("Ordinary Shares") at a
price of GBP2.38 per share and a further 320,000 at GBP2.40 per
share, a total cancellation of GBP2,247,000 (including the shares
noted below).
The Group also issued 746,129 new ordinary shares of no par
value pursuant to the exercise of options at GBP2.05 per share
totalling GBP1,530,000, all of which were issued to directors or
persons discharging managerial responsibilities (or entities
managed or beneficially owned by them).
7. Related party transaction
On 24 March 2017 Shore Capital International Asset Management
Limited ("SCIAML"), a subsidiary of the Group, awarded growth
shares to David Kaye, the CEO of the Asset Management division. As
part of the transaction, SCIAML acquired Mr Kaye's existing shares
in Puma Investment Management Limited ("PIML") in exchange for
22.20% of the ordinary shares in SCIAML. Following the transaction,
SCIAML owns 91.85% of PIML and accordingly Mr Kaye's holding of
ordinary shares in SCIAML equates to his previous economic interest
of 20.39% in PIML.
Subject to meeting specific growth targets for the profitability
and value of the SCIAML business within a 10 year period, Mr Kaye's
holding of growth shares together with his holding of ordinary
shares in SCIAML will in aggregate represent a maximum entitlement
of 43.55% of SCIAML, which equates to an economic interest of
40.00% in PIML.
8. Financial instruments
Fair value of financial instruments
Fair value is the amount for which an asset could be exchanged,
or a liability settled, between knowledgeable, willing parties in
an arm's length transaction.
For trading portfolio assets and liabilities, financial assets
and liabilities designated at fair value and financial investments
available-for-sale which are listed or otherwise traded in an
active market, for exchange-traded derivatives, and for other
financial instruments for which quoted prices in an active market
are available, fair value is determined directly from those quoted
market prices (level 1).
For financial instruments which do not have quoted market prices
directly available from an active market, fair values are estimated
using valuation techniques, based wherever possible on assumptions
supported by observable market prices or rates prevailing at the
Balance Sheet date (level 2). This is the case for some unlisted
investments and other items which are not traded in active
markets.
For some types of financial instruments, fair values cannot be
obtained directly from quoted market prices, or indirectly using
valuation techniques or models supported by observable market
prices or rates. This is the case for certain unlisted investments.
In these cases, fair value is estimated indirectly using valuation
techniques for which the inputs are reasonable assumptions, based
on market conditions (level 3).
30 June 2017 Level Level Level
1 2 3
Quoted Market Non-market
market observable observable
price inputs inputs Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- ------------ ------------ --------
Principal Finance
investments 1,331 - 6,199 7,530
Trading assets and
other holdings at
fair value 5,719 - - 5,719
Financial instruments - 94 - 94
-------- ------------ ------------ --------
Total financial assets 7,050 94 6,199 13,343
-------- ------------ ------------ --------
Trading liabilities 816 - - 816
Financial instruments - 143 - 143
-------- ------------ ------------ --------
Total financial liabilities 816 143 - 959
-------- ------------ ------------ --------
30 June 2016 Level Level Level
1 2 3
Quoted Market Non-market
market observable observable
price inputs inputs Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- ------------ ------------ --------
Principal Finance
investments 1,191 - 5,829 7,020
Trading assets and
other holdings at
fair value 12,121 - - 12,121
-------- ------------ ------------ --------
Total financial assets 13,312 - 5,829 19,141
-------- ------------ ------------ --------
Trading liabilities 773 - - 773
Financial instruments - 688 - 688
-------- ------------ ------------ --------
Total financial liabilities 773 688 - 1,461
-------- ------------ ------------ --------
31 December 2016 Level Level Level
1 2 3
Quoted Market Non-market Total
market observable observable
price inputs inputs
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- ------------ ------------ --------
Principal Finance
investments 1,676 - 6,545 8,221
Trading assets and
other holdings at
fair value 12,276 14 - 12,290
Financial instruments - 123 - 123
-------- ------------ ------------ --------
Total financial assets 13,952 137 6,545 20,634
-------- ------------ ------------ --------
Trading liabilities 765 - - 765
Financial instruments - 224 - 224
-------- ------------ ------------ --------
Total financial liabilities 765 224 - 989
-------- ------------ ------------ --------
Included in the fair value of financial instruments carried at
fair value in the statement of financial position are those
estimated in full or in part using valuation techniques based on
assumptions that are not supported by market observable prices or
rates (level 3). For such financial instruments, the directors have
generally made reference to published net asset values (derived the
manager of such instruments) and used judgement over the use of
those net asset values. The net asset values are generally derived
from the underlying portfolios which are themselves valued using
unobservable inputs. The significant unobservable inputs comprise
the long term revenue growth rate, long term pre-tax operating
margin and discounts for lack of marketability. A change in any of
these inputs may result in a change in the fair value of such
investments.
There have been no significant movements between level 1 and
level 2 during the period.
The following table shows a reconciliation of the opening and
closing amount of Level 3 financial assets and liabilities which
are recorded at fair value:
At 1 Gains Purchases Sales At 30
January recorded and transfers and transfers June
2017 in profit 2017
or loss
----------------- --------- ----------- --------------- --------------- ------
Total financial
assets 6,545 (77) - (269) 6,199
--------- ----------- --------------- --------------- ------
Based on the established fair value and model governance
policies and the related controls and procedural safeguards the
Group employs, management believe the resulting estimates in fair
values recorded in the statement of financial position are
reasonable and the most appropriate at the Balance Sheet date.
Supported Living joint venture
As referred to above, during the period the Group committed GBP7
million as part of a one-third share in a new joint venture, Puma
Social Care Investments ("PSCI"), focused on real estate
opportunities in the UK supported living sector.
At the period end, the Group had invested GBP3.9 million of its
total commitment, enabling PSCI to acquire four properties
comprising 58 units. A further two assets have been purchased by
PSCI since the period end, with the Group investing a further
GBP1.8 million of its committed funds.
9. Events after the period
On 1 September 2017, the Group invested a further GBP1.8 million
of its committed funds into PSCI, bringing the Group's aggregate
investment in the associate to GBP5.7 million.
The interim report will be posted in due course to shareholders
on the register. Further copies of this report are available on the
Company's website at www.shorecap.gg.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFFTAAIDFID
(END) Dow Jones Newswires
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