08:00 Wed 10 Apr 2019
Frenkel Topping Grp - Final Results
("
Results for the 12 months ended
The first six months of the year saw a period of significant investment in marketing, HR, the
Financial Highlights:
|
FY 2018 |
HY 2018 |
FY 2017 |
Revenue |
|
|
|
Recurring revenue |
|
|
|
Gross profit |
|
|
|
Profit from operations* |
|
|
|
Pre-tax profit |
|
|
|
Basic EPS |
1.11p |
0.32p |
2.24p |
Cash from operations |
|
|
|
Net cash and marketable securities |
|
|
|
Total dividends (paid and proposed) |
1.29p per share |
0.32p per share |
1.22p per share |
* Profit from Operations is before share based compensation and reorganisation costs
Operational Highlights
· Tenth consecutive year of very high client retention (98%) for investment management services
· Assets under management ("AUM")
· Assets on a discretionary mandate
· Expert Witness new instruction, a key pipeline for future AUM growth, increased by 33%
"Last year we identified a number of risks to
"The Company is in a good position as we scale up for our next period of growth. We remain focused on delivering outstanding service to our clients and sustaining our very high client retention rate, as well as consolidating our position as the
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
For further information:
|
|
|
Tel: 0161 886 8000 |
|
|
|
|
finnCap Ltd |
Tel: 020 7220 0500 |
|
|
|
|
TB Cardew |
|
|
0207 930 0777 0777 584 8537
|
About
The Company provides a range of wealth management services including bespoke investment portfolios, personal and corporate financial advice and tax planning. It is focused on increasing its assets under management by continued growth of the business by an increase in the number of highly qualified fee earners for the provision of its industry leading specialisms.
It has a national presence with offices in
Chairman's Statement
Overview
I am pleased to report a year of good progress underpinned by a significant programme of targeted investments in developing talent, marketing and technology. Total investments amounted to
At the period end
Digital innovation is vital to any asset management business and as such, we have invested in technology to provide our clients with instant access to their investments and ensure we have numerous touch points. This, however, does not negate the importance of the human interaction our consultants have with their clients and the requisite emotional intelligence they require when advising someone who has been through a catastrophic, life changing event.
We established the Obiter brand in 2018 in response to demand from the solicitors and clients we work with, widening our expert witness services to include divorce cases, wills and probates and MBOs (Management Buy Outs).
For the last 40 years,
Key drivers
In line with our objective to increase shareholder value and create long-term sustainable growth the Company has established a five-year plan which is outlined in detail in the CEO report. While investments have been made, the Board is mindful that there needs to be a consistent drive to ensure the business continues on its growth trajectory and maintains its position as the
The Company specialises in multi-track claims and the main issues arising in 2019 will be surrounding the Ogden Rate and the impact of the Discount Rate. The Civil Liability Bill gained Royal Ascent in
Client Retention
Client retention is key, particularly as we implement our M&A strategy. Consumer confidence in financial services has room for improvement and we endeavour to strive to achieve the highest possible standards of customer service in our industry.
As a rule, the British do not find it easy to talk about money. Often, clients are seeking to validate how they are managing their finances and whether their peers are pursuing the same approach. Building trust happens over time and although statistics show people regularly switch providers, it is not an easy thing to get right. The Group will continue with its multi-faceted approach to investment in order to improve touchpoints, use data to enhance client relationships and consider all areas of the business within our client retention strategy.
Socially Responsive Investing - Impact Investing
Investors, particularly millennials, are increasingly seeking to make investments in socially responsible businesses. Millennials will receive more than
People Development Strategy
Further investments will be made in the
Our objective is to create a high-performance business that is driven by talented individuals at varying levels. Creating internal opportunities will be equally as important as external recruitment as we seek to become an 'employer of choice'.
As announced in our interim report, we were pleased to welcome
Our people
On behalf of the Board, I would like to thank our employees for their hard work and commitment to
Dividends
Reflecting the Board's confidence in the Company's growth trajectory, the Directors intend to continue the Company's progressive dividend policy and total dividends (paid and proposed) are up 5.7% to 1.29p per share (FY 2017: 1.22p).
Subject to shareholder approval at the Company's Annual General Meeting on
Future increases in dividends will take account of our ambitions to grow the business through acquisitions over the next few years.
Outlook
Our focus in 2019 is to deliver growth, both organically and through selective acquisitions. With a clear strategy and a strong foundation in place following a period of investment, we are well placed to generate shareholder value. While our conservative approach is suited to investing through uncertain times and we do not envisage our business being affected on a day to day basis by Brexit, we are highly vigilant and monitor macroeconomic indicators continuously to mitigate risk.
We have made good progress in 2018 and the first three months of trading in 2019 is encouraging. The Board is confident of the future and looks forward to delivering further growth.
CEO Statement
Introduction
This has been a year of two clear halves; in H1 we made significant investments in marketing, HR, the
The Group's revenue increased by c.5% to
The reduction in profit compared to last year reflects the planned investment into the business of
Cash generated from operations was
Despite the well documented uncertainties of the market, our client retention rate for the investment management services has remained high at 98%.
This is mainly due to the unique demographic of our clients in the core business from personal injury and clinical negligence. This protects us to a greater extent from the potential downsides mentioned above.
We have delivered a positive investment performance and secured a record
Our Expert Witness new instructions a key pipeline for future AUM growth increased by 33% on the previous year, which has ensured a solid start to the Company's 2019 financial year.
Our investments
There were a number of risks that were identified in last year's annual report which related to the ongoing development of the business. We took action and targeted investments were made to mitigate these risks over the course of the year. These investments are critical to the future growth of this business both within the specialist market it operates in and to widen our appeal.
Specifically, the de-risking strategy included the following:
· Increasing exposure within the legal sector through marketing and lead generation activities. This has supported the increase of expert witness instructions which rose by 33% YOY and has a close correlation to future AUM. In addition to this, there was an additional
· Investing in our graduate programme and developing an apprenticeship programme in order to ensure that regular talent enters the business in a timely manner enabling relationships to be built. This has been a good investment for the Group with graduates already completing cases and adding AUM
· Improving client retention (now at 98%) and protection of AUM - regular contact is important to ensure an effective client journey. In addition to this, many of the systems have been integrated and there are a number of projects in place to improve management information so that client information is easily accessible
· Widening our specialist Expert Witness area to cover a more generalist proposition and build a challenger wealth management brand through Obiter Wealth Management
· Evolution of
In summary, the following has been undertaken in 2018:
2017/18 RISK IDENTIFIED |
2018 INVESTMENT AREAS |
2018 OUTPUTS / RESULTS |
· Increased competitor activity · Protecting AUM · Consistent client service levels · Pricing proposition · Compliance · Succession planning / talent · M&A strategy · Too specialised with FTL Proposition, limited widening appeal
|
· Investment in infrastructure-people / processes / business development · Graduate scheme and inception of apprenticeship graduates · Migration and development of IO CRM system · Development of leading expert in setting the Ogden Rate · Initial due diligence of potential acquisitions · Client relationship team inception · Marketing and business development activities increased · Development of Obiter |
· Record year of AUM additions at · 33% increase in Expert Witness instructions · Additional graduates taken on under scheme · First · · General increase in coverage in specialist press · Re-brand across all the major brands · Creation of additional JVs · Launch of SRI portfolios bearing fruit within the first six months despite volatile markets
|
1. Investment in People and the
A risk identified in 2018 was the threat of new entrants in this specialist IFA space. In addition, we wanted to ensure the quality of consultants (IFAs) that have been trained and developed within the
As a Group we have always been very proud to nurture and promote these skills in our employees, however due to the departure of some senior members of staff in 2017, it was clear that we needed a strategy to sustain our leading position in the market as a specialist IFA by investing in our people. The business has invested heavily in our graduate programme and created the Academy last year. All members of the Academy follow a programme designed to help them understand the different areas of the business and all the external and internal touchpoints for the target markets we serve. Considering the thousands of graduates that enter the market each year, we see a substantial opportunity for us to develop 'home grown' talent.
In addition to this, the development of Obiter Wealth Management has also attracted a different breed of IFAs which complements the overall business proposition. This strategy will be further developed and in 2019 we will extend our apprenticeship programme to include Obiter.
2. Marketing &
A significant area of investment has been in marketing and business development to reinvigorate
· Brand development across all businesses within the
· Increased lead generation activities in order to stimulate and keep
· Increased exposure through events in the legal sector through conferences and events
· Promotion of
· Increased market exposure through a range of media, including key legal publications
· Launched Obiter Wealth Management, a generalist IFA brand in response to demand from the legal sector and leveraging incumbent relationships with our solicitor network
· Development and evolution of
· Creation of distinct brands within the Group which both serve the core Frenkel Topping Limited brand but also widen its potential market reach over the next five years
This investment has generated momentum and much of the traction that had been lost in 2017 and early 2018 has now been recovered. We expect this to continue through 2019 and over the next five years, through our exposure in different markets and as we grow the
3. A Specialist
In the
Our data has consistently demonstrated the correlation between Expert Witness Report production and selection of the IFA to manage the AUM award post settlement. Enquiries for this area are increasing on a monthly basis, and building this pipeline is a key metric for future growth and forecasting.
We use applications which will enable the business to 'smarter' utilise data to predict certain outcomes and manage clients especially between pre and post settlement thereby ensuring we are front of mind with the solicitor or deputy managing the caseload. One ongoing strategy for
4. Client retention and protecting AUM including improvements in infrastructure
It is crucial for
· Strengthening relationships with the law firms we work with and with professional deputies. (Also referred to as 'introducers' of work)
· Strengthening relationships with clients across all
The business has made considerable improvements in this area through increased market exposure and regular communication to introducers of work. We have also made improvements to how we manage our clients:
· We have invested heavily in consolidating several different operating systems and modernising to a single Cloud-based Customer Relationship Management (CRM) system called IO - a specialised system for IFAs
· The data strategy is extended to integration with any claims management portals being used by legal firms with whom we have JV arrangements so that instructions can be passed seamlessly to
· We have made considerable headway to move to a flexible and agile system that is both efficient and provides a single platform to view client investments and our interactions with them. This has been introduced in under 12 months with a measurable impact on the business
· In addition to this,
Clients can feel aggrieved when they do not have easy access to information especially given recent market volatility. Therefore, ensuring that we communicate effectively with our clients is more important than ever.
In addition to the technical enhancements, the Company has developed a dedicated Client Relationship Team which examines every client touchpoint, so that we humanise the interaction with clients both pre and post settlement. Investment in technology for
5. Launch of Obiter Wealth Manager - A Challenger Generalist IFA Brand
2018 saw the development of the Obiter brand within the
6. Development of
In the year under review, all our model portfolios in the investment management business achieved positive returns, reflecting our expertise and the conservative approach we have to take in protecting our clients' money and generating returns. Early in 2018, we appointed
There is an increasing focus on socially responsible investing. Investors, particularly millennials, are becoming more selective by looking for companies that have a positive impact. In response to this, we launched our Socially Responsible Model Portfolio which is managed by
Pleasingly, these funds are performing well despite market volatility and we are seeking to expand our offering in this space.
Strategy
I am very pleased with the investments the team has made over the last 12 months and that the strategies we have pursued have put us in a good position as we scale up for our next period of development. Our scale up strategy entails further investment in key areas with an emphasis on the following objectives:
1. Continued development of the strategies set in 2018
2. Widening our market reach through our M&A strategy and development of the Obiter WM brand
3. Increasing the strength of the DFM through Ascencia and developing SRI / ESG Portfolios
4. Developing a digitised offering and using technology across all touchpoints within our business
5. Continually nurturing and developing our talent across all levels of the business
6. Launch of Equatas - an accountancy practice to add value to the client relationship
7. Creating excellence in everything we do
2019 RISK IDENTIFIED |
2019 OBJECTIVES AND INVESTMENT AREAS |
· Lack of confidence in financial markets · Integration strategy for new acquisitions · Economies of scale · Competitors at heels consistently · Client Retention on generalist IFA Proposition · Managed and sustainable growth · People - scope / structure / talent · Consistency of effort - too many projects · Consistent service levels · Monetising all marketing and business development opportunities
|
· Developing our positioning in the market as leaders in the 'vulnerable' space specifically around financial abuse · Successful Integration of acquisitions from a people, processes and asset transfer perspective · Ongoing investment in the · Further investment in marketing and business development · Continual programmes to improve client experience · Retention and cross-selling opportunities through Equatas · New websites across all the business with online enquiry management, conference booking and report payment tools · App development · Campaigns to develop Ascencia and Obiter as standalone brands · · Implementation of white-labelled Hubwise platform |
M&A Strategy and the Generalist IFA Market
In 2018,
Current Trading
We are pleased to announce that Q1 trading is encouraging and that those areas invested into are already supporting growth in 2019. Our recent investments in training and development have helped to underpin that growth and provide a strong platform for the future. Our business model remains robust, supported by a conservative investment approach that ensures we look after the complex needs of our clients throughout the investment cycle and look to the future with optimism.
Strategic Report
This strategic report should be read in conjunction with the Chairman's statement which also covers our strategy and future developments.
Results
Revenue for the year amounted to
The performance during 2018, in terms of profitability, has reflected the Board's focus to develop
Assets added in 2018 of
We are pleased to report that for the tenth consecutive year we have maintained our very high client retention rate 98% for the period.
Closing cash and marketable securities as at
Total Assets as at
Business Model
The main activity of the Group is providing independent financial advice and investment management services to personal injury and clinical negligence victims.
The business model of the Group is to earn income from providing expert witness reports to the court for clients who are in the process of litigation as a result of a personal injury or clinical negligence claim. Once the claims have been settled the Group then seeks to give advice to the clients on how to invest their damages award. Once the client has been given financial advice the Group seeks to service the clients with continued investment and financial advice for which it charges the client a fee.
Strategy
The Board's strategy is to develop the business by:
· continuing to offer expert witness and Independent Financial Advice to clients who have suffered personal injury or medical negligence claims as the established market leader
· continuing to offer low risk investment products through
· continuing to offer financial advice to clients, who may include professionals, such as lawyers and accountants, the vendors of recently sold family businesses, divorcees and retirees who have large sums they need to invest. This advice is provided through the recently launched
Objectives
The primary objective of the Group is to grow the assets under management (AUM).
Risks
Set out below are the key risks and uncertainties which affect the Group. This does not represent a comprehensive list of all the risks the Group faces but focuses on those that are currently considered to be most relevant at the present time. This assessment may change over time:
· Competitor activity - the activity of competitors may result in a reduction in the level of AUM.
· Client service - shortfalls in the service we provide could lead to compensation, regulatory investigation and sanction and reputational damage and reduction in the level of AUM.
· Pricing, service and market changes - if the pricing proposition becomes uncompetitive in the marketplace, this may lead to failure to win new business and/or retain existing business.
· Regulatory, legal and tax developments - the environment in which the Group operates is susceptible to change by Government, legislation or regulatory developments.
· Compliance - failure to comply with the regulatory requirements to which the Group is subject may have an adverse effect on the Group and its business.
· People, recruitment, training and retention - the Group's ability to recruit, train and retain its staff.
· Advice - failure to provide appropriate advice to clients may lead to regulatory investigation or sanction, claims or reputational damage.
· Economic and political changes - change in the economic or political environment could result in increased costs or operational challenges.
The Group's income is driven from fees on initial investment but also recurring income from maintaining its relationship and servicing of its clients.
The main KPIs that the Board considers are:
· Client retention
· Growth in AUM, and
· Delivery against a target level of fees from new business.
The Board monitors client retention on a monthly basis and, during 2018, 2% (2017: 5%) of clients were lost. The Board agrees new business targets with the
Working capital is monitored daily against forecast and the Board is satisfied that cash resources are adequate for the Group's requirements.
Personal injury claims continue to grow and whilst this market continues to be competitive, the Directors believe the Group's brand name, expertise and knowledge provide a degree of protection. The Directors actively monitor our competitors, our own pricing structure and proactively market the Group brand to ensure we remain leaders in our field.
The Group's employees are an important factor in the success of the Group and the Board seeks to ensure employees are motivated and rewarded fairly for their contributions to the business. Employee remuneration represents the largest cost to the Group. The Board reviews market rate for key employees and ensures the remuneration package is consistent with market levels.
The Group needs to maintain its authorisation with the
The Group finances its operations through retained cash.
The Group has no overseas assets or liabilities and therefore has no foreign currency risk.
Review of the year
The review of the year is included in the Chairman's and Chief Executive Officer's Statement.
Future Outlook
The future outlook for the Group is noted in the Chairman's and Chief Executive Officer's Statement.
group STATEMENT of comprehensive income
for the year ended
|
|
Group |
Group |
|
|
2018 |
2017 |
|
|
|
|
|
Notes |
|
£ |
|
|
|
|
REVENUE |
1 |
7,660,551 |
7,321,509 |
Direct staff costs |
|
(2,942,534) |
(2,561,057) |
|
|
_______ |
_______ |
GROSS PROFIT |
|
4,718,017 |
4,760,452 |
|
|
|
|
ADMINISTRATIVE EXPENSES |
|
|
|
Share based compensation |
|
(386,243) |
(417,372) |
Formal sale and reorganisation costs |
|
(164,717) |
(254,557) |
Investment in developing business |
|
(700,985) |
(142,774) |
Other |
|
(2,309,319) |
(2,433,325) |
|
|
_______ |
_______ |
TOTAL ADMINISTRATIVE EXPENSES |
|
(3,561,264) |
(3,248,028) |
|
|
|
|
Profit from operations before share based compensation and |
|
|
|
reorganisation costs |
|
1,707,713 |
2,184,353 |
- share based compensation |
|
(386,243) |
(417,372) |
- formal sale and reorganisation costs |
|
(164,717) |
(254,557) |
|
|
|
|
Other gains and losses |
|
- |
150,000 |
|
|
_______ |
_______ |
profit from operations |
|
1,156,753 |
1,662,424 |
|
|
|
|
Finance income |
|
- |
234,284 |
Finance costs |
|
(12,579) |
- |
Share of profit of investments accounted for using the equity method |
|
- |
13,925 |
|
|
_______ |
_______ |
profit BEFORE TAX |
|
1,144,174 |
1,910,633 |
|
|
|
|
Income tax expense |
2 |
(348,750) |
(378,796) |
|
|
_______ |
________ |
PROFIT FOR THE YEAR |
|
795,424 |
1,531,837 |
ITEMS THAT WILL NOT BE SUBSEQUENTLY RECLASSIFIED TO REPORT OR LOSS: |
|
|
|
Gains on property revaluation arising net of tax |
|
26,776 |
80,336 |
|
|
_______ |
_______ |
TOTAL COMPREHENSIVE INCOME FOR YEAR |
|
822,200 |
1,612,173 |
|
|
_______ |
_______ |
PROFIT ATTRIBUTABLE TO: Owners of the parent undertaking Non-controlling interests |
|
766,735 28,689 |
1,612,173 - |
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: |
|
|
|
Owners of the parent undertaking |
|
793,511 |
1,612,173 |
Non-controlling interests |
|
28,689 |
- |
|
|
_______ |
_______ |
|
|
|
|
Earnings per ordinary share - basic (pence) |
3 |
1.11p |
2.24p |
Earnings per ordinary share - diluted (pence) |
3 |
1.11p |
2.24p |
|
|
_______ |
_______ |
group STATEMENT of FINANCIAL POSITION
As at
|
|
|
|
Group |
Group |
|
|
Notes |
|
2018 |
2017 |
|
|
|
|
£ |
£ |
assets NON CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
7,020,287 |
7,020,287 |
Property, plant and equipment |
|
|
|
1,423,837 |
1,405,750 |
Investments |
|
|
|
- |
13,975 |
Deferred taxation |
|
|
|
10,290 |
31,306 |
|
|
|
|
_______ |
______ |
|
|
|
|
8,454,414 |
8,471,318 |
CURRENT ASSETS |
|
|
|
|
|
Accrued income |
|
|
|
981,558 |
731,092 |
Trade receivables |
|
|
|
1,535,537 |
1,329,826 |
Other receivables |
|
|
|
160,127 |
274,839 |
Investments |
|
|
|
1,136,222 |
117,916 |
Cash and cash equivalents |
|
|
|
848,391 |
1,815,935 |
|
|
|
|
_______ |
_______ |
|
|
|
|
4,661,835 |
4,269,608 |
|
|
|
|
_______ |
_______ |
total assets |
|
|
|
13,116,249 |
12,740,926 |
|
|
|
|
_______ |
_______ |
equity and liabilities equity |
|
|
|
|
|
Share capital |
|
|
|
393,287 |
393,287 |
Share Premium |
|
|
|
400,194 |
400,194 |
Merger reserve |
|
|
|
5,314,702 |
5,314,702 |
Revaluation reserve |
|
|
|
178,103 |
151,327 |
Other reserve |
|
|
|
(341,174) |
(341,174) |
Own share reserves |
|
|
|
(4,566,926) |
(4,448,906) |
Retained earnings |
|
|
|
10,552,643 |
10,252,775 |
|
|
|
|
_______ |
_______ |
|
|
|
|
11,930,829 |
11,772,205 |
|
|
|
|
|
|
Non-controlling interests |
|
|
|
42,877 |
- |
|
|
|
|
_______ |
_______ |
TOTAL EQUITY |
|
|
|
11,973,706 |
11,722,205 |
|
|
|
|
_______ |
_______ |
CURRENT LIABILITES |
|
|
|
|
|
Current taxation |
|
|
|
216,413 |
138,592 |
Trade and other payables |
|
|
|
926,130 |
880,129 |
|
|
|
|
_______ |
_______ |
TOTAL LIABILITIES |
|
|
|
1,142,543 |
1,018,721 |
|
|
|
|
_______ |
_______ |
TOTAL EQUITY AND LIABILITIES |
|
|
|
13,116,249 |
12,740,926 |
|
|
|
|
|
|
|
|
|
|
_______ |
_______ |
group STATEMENT of Changes in Equity
For the year ended
|
Capital |
|
|
Reserve |
Reserve |
|
Revaluation reserve |
Total controlling interest |
Non controlling interests |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance |
384,954 |
361,028 |
5,314,702 |
(341,174) |
(774,197) |
9,346,735 |
70,991 |
14,363,039 |
- |
14,363,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
New shares issued |
8,333 |
39,166 |
- |
- |
- |
- |
- |
47,499 |
- |
47,499 |
|
Purchase of own shares |
- |
- |
- |
- |
(3,674,709) |
- |
- |
(3,674,709) |
- |
(3,674,709) |
|
Share based payments (note 4) |
- |
- |
- |
- |
- |
231,521 |
- |
231,521 |
- |
231,521 |
|
Tax credit relating to share option scheme |
- |
- |
- |
- |
- |
10,936 |
- |
10,936 |
- |
10,936 |
|
Dividend paid |
- |
- |
- |
- |
- |
(868,254) |
- |
(868,254) |
- |
(868,254) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Total transactions with owners recognised in equity |
8,333 |
39,166 |
- |
- |
(3,674,709) |
(625,797) |
- |
(4,253,007) |
- |
(4,253,007) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Profit for year |
- |
- |
- |
- |
- |
1,531,837 |
- |
1,531,837 |
- |
1,531,837 |
|
Other comprehensive income |
- |
- |
- |
- |
- |
- |
80,336 |
80,336 |
- |
80,336 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Total comprehensive income |
- |
- |
- |
- |
- |
1,531,837 |
80,336 |
1,612,173 |
- |
1,612,173 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Balance at |
393,287 |
400,194 |
5,314,702 |
(341,174) |
(4,448,906) |
10,252,775 |
151,327 |
11,722,205 |
- |
11,722,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of own shares |
- |
- |
- |
- |
(118,020) |
- |
- |
(118,020) |
- |
(118,020) |
|
Share based payments (note 4) |
- |
- |
- |
- |
- |
404,402 |
- |
404,402 |
- |
404,402 |
|
Tax credit relating to share option scheme |
- |
- |
- |
- |
- |
(10,936) |
- |
(10,936) |
- |
(10,936) |
|
Dividend paid |
- |
- |
- |
- |
- |
(860,333) |
- |
(860,333) |
- |
(860,333) |
|
Acquisition of subsidiary |
- |
- |
- |
- |
- |
- |
- |
- |
14,188 |
14,188 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______- |
_______ |
|
Total transactions with owners recognised in equity |
- |
- |
- |
- |
(118,020) |
(466,867) |
- |
(584,887) |
14,188 |
(570,699) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Profit for year |
- |
- |
- |
- |
- |
766,735 |
- |
766,735 |
28,689 |
795,424 |
|
Other comprehensive income |
- |
- |
- |
- |
- |
- |
26,776 |
26,776 |
- |
26,776 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
- |
- |
- |
- |
- |
766,735 |
26,776 |
793,511 |
28,689 |
822,200 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Balance at |
393,287 |
400,194 |
5,314,702 |
(341,174) |
(4,566,926) |
10,552,643 |
178,103 |
11,930,829 |
42,877 |
11,973,706 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
The share capital represents the number of shares issued at nominal price.
The merger reserve represents the cost of the shares issued to purchase the non-controlling interest at market value at the date of the acquisition and the excess of fair value over nominal value of shares issued to acquire
The share premium represents the amount paid over the nominal value for new shares issued.
The other reserve represents the excess paid for the non-controlling interest over the book value at the date of the acquisition.
The revaluation reserve reflects the cumulative surplus arising on the revaluation of freehold property to market value, net of deferred tax.
The own shares reserve represents the cost of the 3,067,576 shares (2017: 3,040,000) held by the Company and the 6,648,016 (2017: 6,348,016) shares held by the Frenkel Topping Group Employee Benefit Trust. The open market value of the shares held at 31 December 2018 was £2,826,222 (2017: £5,069,529).
Retained earnings represents the profit generated by the Group since trading commenced, together with dividends paid, share premium cancelled and share based payment credits.
The addition of the non-controlling interest during the year is in connection with the change in treatment of Frenkel Topping Associates Limited.
The Group has conformed with all capital requirements as imposed by the
GROUP CASH FLOW STATEMENT For the year ended 31 December 2018 |
|
|
|
|
|
Year ended |
Year ended |
|
|
31 December 2018 |
31 December 2017 |
|
|
£ |
£ |
|
|
|
|
Profit before tax |
|
1,144,174 |
1,910,633 |
Adjustments to reconcile profit for the year to cash (used in)/generated from operating activities: |
|
|
|
Finance income |
|
- |
(234,284) |
Finance cost |
|
12,579 |
- |
Other gains and losses |
|
- |
(150,000) |
Share based compensation |
|
404,402 |
231,521 |
Depreciation and loss of on disposal |
|
95,460 |
70,659 |
Share of profit of investments accounted for using the equity method |
|
- |
|
(Increase)/decrease in accrued income, trade and other receivables |
|
(291,831) |
|
Increase/(decrease) in trade and other payables |
|
26,576 |
209,783 |
|
|
|
|
Cash generated from operations |
|
1,391,360 |
2,065,018 |
Income tax paid |
|
(267,550) |
(112,345) |
|
|
|
|
Cash generated from operating activities |
|
1,123,810 |
1,952,673 |
|
|
|
|
Investment activities |
|
|
|
Acquisition of property, plant and equipment |
|
(86,771) |
(132,217) |
Cash acquired on the acquisition of control in the subsidiary |
|
4,655 |
- |
Acquisition of shares in joint ventures |
|
- |
(50) |
Investment purchases |
|
(1,765,000) |
(4,468,085) |
Investment disposals |
|
734,115 |
7,511,638 |
Disposal of shares in investment |
|
- |
150,000 |
|
|
|
|
Cash (used in)/generated from investment activities |
|
(1,113,001) |
3,061,286 |
Financing activities |
|
|
|
Shares issued |
|
- |
47,499 |
Own shares purchased |
|
(118,020) |
(3,674,709) |
Dividend paid |
|
(860,333) |
(868,254) |
Interest on loans and borrowings |
|
- |
- |
Interest received on loans |
|
- |
134,795 |
Dividend received |
|
- |
- |
|
|
|
|
Cash used in financing |
|
(978,353) |
(4,360,669) |
(Decrease)/Increase in cash and cash equivalents |
|
(967,544) |
|
Opening cash and cash equivalents |
|
1,815,935 |
|
|
|
|
|
Closing cash and cash equivalents |
|
848,931 |
1,815,935 |
Reconciliation of cash and cash equivalents |
|
|
|
|
|
|
|
Cash at bank and in hand |
|
848,391 |
1,162,645 |
Cash and cash equivalents are held at National Westminster Bank Plc.
General information
The preliminary financial information does not constitute full accounts within the meaning of section 434 of the Companies Act 2006 but is derived from accounts for the years ended 31 December 2018 and 31 December 2017. The figures for the year ended 31 December 2018 are audited. The preliminary announcement is prepared on the same basis as set out in the statutory accounts for the year ended 31 December 2018. Those accounts, upon which the auditors issued an unqualified opinion, did not include a reference to any matters to which the auditors drew attention by way of emphasis, without qualifying their report, and made no statement under section 498(2) or (3) of the Companies Act 2006, will be delivered to the Registrar of Companies following the Annual General Meeting.
Statutory accounts for the year ended 31 December 2017 have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis, without qualifying their report, and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), this announcement does not in itself contain sufficient information to comply with IFRSs.
Frenkel Topping Group Plc is incorporated and domiciled in the United Kingdom.
1. revenue and SEGMENTAL REPORTING
All of the Group's revenue arises from activities within the UK. Management considers there to be only one operating segment within the business based on the way the business is organised and the way results are reported internally. There was no material impact from application of IFRS 15 on the reported figures.
2. TAxation
|
Group |
Group |
|
|
2018 |
2017 |
|
|
£ |
£ |
|
Analysis of charge in year |
|
|
|
Current tax |
|
|
|
|
UK corporation tax |
321,989 |
264,860 |
|
Adjustments in respect of previous periods |
16,681 |
(27,741) |
|
|
|
|
|
Total current tax charge |
338,670 |
237,119 |
|
|
|
|
|
Deferred tax |
|
|
|
Temporary differences, origination and reversal |
10,080 |
141,677 |
|
|
|
|
|
Total deferred tax charge |
10,080 |
141,677 |
|
|
|
|
|
Tax on profit on ordinary activities |
348,750 |
378,796 |
|
|
|
|
Factors affecting tax charge for year
The standard rate of tax applied to reported profit on ordinary activities is 19 per cent (2017: 19.25 per cent). The applicable tax rate has changed following the substantive enactment of the Finance Act 2015. Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2016 on 6 September 2016. These include reductions to the main rate, to reduce the rate to 17% from 1 April 2020.
There is no expiry date on timing differences, unused tax losses or tax credits.
The charge for the year can be reconciled to the profit per the income statement as follows:
|
Group |
Group |
|
2018 |
2017 |
|
£ |
£ |
Profit before taxation |
1,144,174 |
1,910,633 |
|
|
|
Profit multiplied by main rate of corporation tax in the UK of 19% (2017: 19.25%) |
217,393 |
367,797 |
Effects of: |
|
|
Expenses not deductible |
96,722 |
83,705 |
Exercise of share options |
- |
(170,493) |
Share based payments |
73,386 |
80,344 |
Other charges/(deductions) in period |
(38,751) |
17,443 |
|
|
|
Total tax expense for year |
348,750 |
378,796 |
|
|
|
3. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is based on the following data:
|
2018 |
2017 |
|
£ |
£ |
Earnings |
|
|
Earnings for the purposes of basic earnings per share (net profit for the year attributable to equity holders of the parent) |
|
1,531,837 |
Earnings for the purposes of diluted earnings per share |
766,735 |
1,531,837 |
|
|
|
Number of shares |
|
|
Weighted average number of ordinary shares for the purposes of basic earnings per share Weighted average shares in issue |
78,657,349 |
77,785,203 |
Less: own shares held
|
(9,715,592) |
(9,388,016)
|
Effect of dilutive potential ordinary shares: |
68,941,757
|
68,397,187
|
- Share options |
- |
- |
|
|
|
Weighted average number of ordinary shares for the purposes of diluted earnings per share |
68,941,757 |
68,397,187 |
|
|
|
Earnings per ordinary share - basic (pence) |
1.11p |
2.24p |
Earnings per ordinary share - diluted (pence) |
1.11p |
2.24p |
|
|
|
4. Basis of the preliminary announcement
The board of directors of Frenkel Topping Group Plc approved the Preliminary Results on 9th April 2019.
The statutory accounts for the year ended 31 December 2018 will be delivered to the Registrar of Companies following the Annual General Meeting. The statutory accounts will be posted to shareholders on 29th April 2019. Further copies will be available to the public, free of charge, at the Company's registered office, Frenkel House, 15 Carolina Way, Salford, Manchester, M50 2ZY and the Company's website at www.frenkeltopping.co.uk
5. ANNUAL GENERAL MEETING
The Annual General Meeting will be held on 30 May 2019 at 12 noon at Frenkel House, 15 Carolina Way, Salford, Manchester, M50 2SY.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of...
FOR OUR FULL DISCLAIMER CLICK HERE