Preliminary results - year ended 31 March 2020

RNS Number : 1845S

finnCap Group PLC

07 July 2020

 

finnCap Group plc ("finnCap" or "the Company")

Preliminary results for the year ended 31 March 2020
 

Financial Highlights⁽¹⁾:

· Turnover of £26.0m (FY19: £24.5m)

· Equity Capital Markets division turnover of £18.7m (FY19: £21.3m)

· M&A division turnover of £7.3m (FY19: £3.2m; 12 months to 31 March 2019: £14.9m)

· Pre-tax profit £1.4m before non-recurring costs of £0.2m (FY19: £4.3m before non-recurring costs of £1.1m)

· Basic EPS: 0.49p (FY19: 1.85p).  Adjusted EPS: ⁽²⁾ 0.80p (FY19: 2.86p)

· Cash of £4.7m (31 Mar 2019: £4.7m)

Strategic Development ⁽¹⁾ :

· Completed 61 transactions with total deal and advisory fees of £16.0m (FY19: £15.2m)

· Completed 13 private M&A transactions in Cavendish

· Completed 3 debt mandates and signed up 9 new mandates for FY21

· Hired new revenue generators to cover target sectors and services

· Debt advisory and private growth capital practices launched, further diversifying revenue

Current Trading (unaudited)⁽³⁾

· Q1 2021 revenue £9.8m (Q120: £6.5m) including £6.5m of advisory fees (Q120: £4.3m)

· COVID-19: significantly reduced cost base and enhanced cash generation

· Cash⁽⁴⁾  at 30 June 2020 was £8.5m (excluding proceeds from property loan and HMRC deferrals)

Commenting on the results, Sam Smith, Chief Executive Officer, said:

"The financial year was dominated by the uncertain political and economic backdrop which is reflected in our results.  Equity issuance levels reached a multi-year low and M&A deal cycles lengthened considerably during the latter half of the year. Nonetheless we have continued to concentrate on expanding services, such as debt advisory and private growth capital, to enhance our product line up, as well as investing in sector coverage from which we expect to derive the benefit in future years.

At the end of March we anticipated a difficult trading environment due to COVID-19 and took the right steps to prepare quickly.  In Q1 2021, we helped clients raise significant equity to strengthen balance sheets and support investment cases from a range of companies, many of which operate in areas such as life sciences and tech and are at the forefront of the UK's efforts to recover from the pandemic. This contributed to making the period the best quarter we have ever recorded.

Our capital raising activity and market volatility also helped drive higher trading revenues. While the global M&A business slowed, our team still completed several mandates, both public and private. 

This strong performance in Q1 coupled with our actions to significantly reduce costs has resulted in us having a much more resilient balance sheet at 30 June 2020.

The overall outlook for the global economy and the effects of COVID-19 remain uncertain and we must continue to be cautious about the overall prospects for the current financial year.  In the shorter term, our pipeline of deals for the first half remains good and we will continue to deliver on our strategy for growth."

Contacts

finnCap Group plc  Tel: [phone]

Sam Smith, Chief Executive Officer    [e-mail]

Richard Snow, Chief Financial Officer

Grant Thornton (Nominated Adviser)  Tel: [phone]

Philip Secrett/Samantha Harrison/Seamus Fricker

finnCap Ltd (Broker)  Tel: [phone]

Rhys Williams / Tim Redfern

Sapience Communications (PR adviser)    Tel: [phone]

Richard Morgan Evans

Notes to Editors

About finnCap Group

finnCap Group plc provides financial services to growth companies both public and private. We provide advisory, broking and research services to 126 companies on AIM and on the London Stock Exchange Main Market and also advises on M&A, with a specialism in sell-side M&A through Cavendish Corporate Finance, corporate debt and private company fundraisings.  finnCap also provides trading services to a broad range of institutional investors.

Notes:

(1) The FY19 comparable figures throughout this announcement, except for the M&A revenue comparative, are for the 11 month period from 1 May 2018 to 31 March 2019 because of a change in year-end and the approximately 4 months results of Cavendish Corporate Finance following its acquisition on 5 December 2018.  In order to provide an appropriate 12 month comparative for the performance of the M&A segment, the comparative revenue for the M&A divisions is extracted from the audited accounts of Cavendish Corporate Finance LLP for the 12 months ended 31 March 2019.

(2) Adjusted EPS is calculated excluding share-based payments, amortisation of intangible assets from the acquisition of Cavendish, non-recurring costs and includes an adjustment to normalise tax. The weighted average number of shares in issue during the period excludes shares held by the Group's Employee Benefit Trust.

(3) The Q1 19 comparable period includes trading for three months for both finnCap Ltd and Cavendish Corporate Finance LLP.

(4) Cash at 30 June excludes £1.8m proceeds from the 5-year loan announced on 26 May for fitting out the new premises at One Bartholomew (which was drawn in June 2020 and which will be spent over the next three months) and amounts due to HMRC under COVID-19 arrangements and repayable over the next 6-12 12 months of c.£1.6m.  Cash is stated before any deduction for market making working capital.

 

Business review

During FY20, we made significant progress with business integration, in consolidating our existing client offerings, improving our infrastructure and investing in new services which are central to delivering our strategy for growth and strengthening the business.

However, the operating environment for UK financial services was challenging and volatile.  Business confidence was significantly impacted by the protracted discussion on Brexit timing in the first part of the financial year and then the resulting change in Conservative Party leadership and general election.  Completing transactions in both Equity Capital Markets ("ECM") and Mergers and Acquisitions ("M&A") was significantly harder than in the prior year.  This was particularly evident in the quantum of funds raised on AIM during the period with the funds raised in the calendar year 2019 amounting to only £3.8bn, a reduction of 30% on prior year and the lowest since 2012.

In this context, whilst the result for the year was disappointing, with revenue per head declining markedly to £189k (FY19: £230k), it was important to remain profitable and continue the development of the business.

ECM

Our equity capital markets division of the Group delivered £18.7m of turnover in the year (FY19: £21.3m). The principal reason for the reduction in turnover was a significant reduction in deal fees as a result of lower equity issuance by our corporate clients consistent with the equity market activity as a whole.  The individual contributors to this performance are considered below.

Retainers - Total fees from retainers in the year were £6.5m (FY19: £5.9m).  Retainers have remained stable on a pro rata basis which does not reflect the significant change in the client base in the year. Our focus on client service saw 24 new client wins which was offset by client losses principally due to delistings and takeovers.

Transactions - Total fees received from transactions in the year were £8.7m (FY19: £12.0m).

Notable public market fundraisings and advisory mandates included:

· Xeros Technology Group plc - £5.7m Equity Fundraising

· Trackwise Designs plc - £5.9m Equity Fundraising

· Synairgen plc - £14.0m Equity Fundraising

· The Barkby Group plc - Admission to AIM, £5.0m Equity Fundraising; £30.6m reverse takeover

· FFI Holdings plc - £39.5m recommended offer by Lumiere Acquisitions - Rule 3 Adviser

· Nasstar plc - £79.4m recommended offer by GCI - Rule 3 Adviser, NOMAD and Broker

· SCISYS Group plc - £78.9m recommended offer by CGI Inc - Rule 3 Adviser, NOMAD and Broker

· Kingswood Holdings plc - advice on £80.0m Convertible Preference Shares issue

Our debt advisory team - which works across Cavendish and finnCap - closed three deals and signed up a further 9 mandates for FY21 and our private capital team closed 4 fundraisings including for Parsley Box and Bella & Duke. Together these generated £0.4m revenue.

Trading - trading revenues were £3.6m (FY19: £3.4m), an improvement on the previous year, despite market conditions. This reflects our core focus on providing liquidity to our corporate client list.

M&A Advisory 

Cavendish generated revenues of £7.3m in the year (FY19: £3.2m being c.4 months since acquisition), closing 13 private M&A transactions.  Revenue was well down on the previous full financial year (year to 31 March 2019: £14.9m) reflecting the impact of political uncertainty in H2 on buyer and seller confidence and the cancellation of a small number of high value deals that would have made a material difference to the year's outturn.

Activity improved in the final quarter and the team signed up a significant number of new retainers which, we believe, demonstrates the strength of the Cavendish brand and its engagement with clients in the private sell-side market.  This should benefit revenue when buyer confidence returns to the market although COVID-19 is clearly delaying many deal timetables.

Key transactions included:

· Java Republic - sale to Spanish coffee group Cafento

· Centaur Media - sale of three subsidiaries as part of its strategic refocus

· The Farm Post Production - advised the founders and WPP plc on the sale to Picture Head Group

· Avicenna Holdings - sale to Juno Health

· Lay & Wheeler - advised Naked Wines Plc on its sale Coterie Limited

· Star Professional - sale to IRIS Software Group

· Falcon Green - sale of a minority stake to two private business investors

· AltoDigital Holdings - sale to Xerox.

Administrative expenses

Costs increased as a result of the longer duration of the financial period, the cost base assumed from the acquisition of Cavendish, and the additional costs of being a public company throughout the period. 

The average operating cost per employee reduced to £175k (FY19: £191k) primarily as a result of lower bonus payments.  Average staff costs per employee reduced by 15% to £115k (FY19: £136k).  Staff costs to revenue were broadly stable at 62% (FY19: 59%).  Non staff operating cost per employee increased by 10% to £60k partly as the result of the transition to being a listed company.  However, cost action decisions taken during Q4 reduced our quarterly cost run rate and we currently expect that operating costs excluding variable compensation and non-recurring costs (primarily redundancy and property move) in FY21 to be roughly 10% below FY20.

Capital and liquidity

The Group's cash and cash equivalents, net of borrowings, did not change over the period at £4.7m.

The Group has implemented IFRS 16 for the current period, resulting in an increase in the carrying value of Property, Plant and Equipment, and a corresponding creditor. As both of the Group's office leases are into their last year, the impact on both the Consolidated Statement of Financial Position and the Consolidated Statement of Comprehensive Income is not material.

COVID-19 Response and Dividend

At the time of its admission, we set a dividend policy reflecting the historic performance of each business, the expectation of future cash flow generation and long-term earnings potential of the Group. During FY19 the Group made dividend payments of £1.2m.

The COVID-19 pandemic required a rapid response and, reflecting the expectation of a severe economic impact, it appeared only sensible to preserve cash resources as a buffer against future developments.

To reduce cost, we implemented a 3-month voluntary and Group-wide reduction in salaries and directors' remuneration, deferred recruiting and reduced discretionary expenditure.  In addition, we have made limited redundancies and staff furloughs.  Alongside this, we also took the difficult decision to not pay any further dividends relating to the year ended 31 March 2020.

The Board recognises the importance of income to its shareholders, and is keen to reinstate the dividend, but will only do so when the operating environment is more certain and the visibility of revenue becomes clearer.

We will review our position again in November with our interim results.  We further recognise our employees' and directors' contribution to the firm's financial resilience in these testing times.

Current trading and outlook

In the 3 months to 30 June 2020, the Group recorded turnover (unaudited) of £9.8m (Q119: £6.5m), up by 51% and the best quarter on record.

Our ECM division has benefitted from a number of equity fund raisings by clients to invest in COVID-19 related activities, support balance sheets and to accelerate investment.  Alongside this we have completed a number of public M&A transactions, experienced favourable market-making conditions and continued to win clients.

In the M&A division transactions have continued to complete and our team has continued to win new mandates, although several transactions we expected to close in the first quarter have been delayed as a result of COVID-19.

The trading performance, combined with the actions taken to protect the business during the initial stage of the COVID-19 pandemic, led to an increase in cash at 30 June to £8.5m⁽⁴⁾.  This level of liquidity is substantially in excess of our capital requirements and provides an excellent platform as we look to an uncertain future.

In September, the Group will move into its new premises at 1 Bartholomew Close which will enable us to operate and leverage our two brands from a single base and to share best practice, cross sell and win new clients. The £1.8m fit out cost will be financed by our 5-year loan announced in May.  We expect to record c.£800k as a non-recurring cost in H121 as a result of having overlapping properties.  Given the long rent-free period for 1 Bartholomew Close the cash impact is very substantially lower.

Whilst we have experienced a good start to the year and have a good pipeline of deals for the next few months, the fact remains that the outlook is uncertain and we therefore remain cautious about the prospects for the year and particularly the trading period post September. 

Regardless, we will continue to drive our strategy and, as the result of our actions in March and a strong Q1 performance, we have a more resilient balance sheet to capture the opportunities that arise in the post COVID-19 period as we service the needs of ambitious growing companies.

Sam Smith

Chief Executive Officer

7 July 2020

 

Consolidated Statement of Comprehensive Income

						Year ended		Period ended
					31 March 2020		31 March 2019
					Notes	£'000		£'000
Revenue					2	26,006		24,516
Other operating income						(115)		14
Total income						25,891		24,530
Administrative expenses					3	(24,522)		(20,264)
Operating profit before non-recurring items						1,369		4,266
Non-recurring items						(188)		(1,095)
Operating profit						1,181		3,171
Finance income						26		28
Finance charge						(24)		-
Profit before taxation						1,183		3,199
Taxation						(411)		(875)
Profit attributable to equity shareholders						772		2,324
Total comprehensive income for the year						772		2,324
Earnings per share (pence)
Basic					4	0.49		1.85
Diluted					4	0.46		1.65

There are no items of other comprehensive income.

All results derive from continuing operations.

 

Consolidated Statement of Financial Position

					31 March		31 March
					2020		2019
					£'000		£'000
Non-current assets
Property, plant and equipment					635		487
Intangible assets					13,533		13,644
Financial assets held at fair value					393		691
Deferred tax asset					171		428
Total non-current assets					14,732		15,250
Current assets
Trade and other receivables					9,037		8,541
Current assets held at fair value					431		1,111
Cash and cash equivalents					4,695		4,659
Total current assets					14,163		14,311
Total assets					28,895		29,561
Non-Current liabilities
Provisions					40		63
Current liabilities
Trade and other payables					8,469		8,065
Corporation taxation					64		498
Borrowings					-		-
Total current liabilities					8,533		8,563
Equity
Share capital					1,697		1,688
Share premium					616		575
Capital redemption reserve					-		-
Own shares held					(1,636)		(1,636)
EBT reserve					-		-
Merger relief reserve					10,482		10,482
Share based payments reserve					388		292
Retained earnings					8,775		9,534
Total equity					20,322		20,935
Total equity and liabilities					28,895		29,561

 

Consolidated Statement of Cashflows

		Year ended		Period ended
		31 March 2020		31 March 2019
		£'000		£'000
Cash flows from operating activities
Profit before taxation		1,183		3,199
Adjustments for:
Depreciation		948		242
Amortisation of intangible assets		79		56
Finance income		(26)		(28)
Share based payments charge		110		100
Net fair value gains recognised in profit or loss		115		(155)
Payments received of non-cash assets		(275)		(218)
		2,134		3,196
Changes in working capital:
Decrease/increase in trade and other receivables		(495)		778
Increase in trade and other payables		173		109
Decrease in provisions		(23)		(10)
Cash generated from operations		1,789		4,073
Net cash receipts /payments for current asset investments
held at fair value through profit or loss		680		(465)
Tax paid		(845)		(796)
Net cash inflow from operating activities		1,624		2,812
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired		-		(3,592)
Purchase of property, plant and equipment		(262)		(249)
Purchase of intangible assets		(9)		(30)
Proceeds on sale of investments		508		70
Interest received		26		28
Net cash (outflow)/inflow from investing activities		263		(3,773)
Cash flows from financing activities
Purchase of own shares by EBT		-		(1,260)
Sale of own share by EBT		-		693
Equity dividends paid		(1,218)		(1,635)
Proceeds from the issue of new shares net of costs		-		3,665
Proceeds from exercise of options		50		375
Lease liability payments		(683)		-
Proceeds from borrowings		-		(739)
Net cash outflow from financing activities		(1,851)		1,099
Net increase/(decrease) in cash and cash equivalents		36		138
Cash and cash equivalents at beginning of year		4,659		4,521
Cash and cash equivalents at end of year		4,695		4,659

Consolidated Statement of Changes in Equity

			Capital	Own		Merger	Share Based
	Share	Share	Redemption	Shares	EBT	Relief	Payment	Retained	Total
	Capital	Premium	Reserve	Held	Reserve	Reserve	Reserve	Earnings	Equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2018	1,180	768	452	(676)	(54)	-	247	5,418	7,335
Total comprehensive income for the period	-	-	-	-	54	-	-	2,270	2,324
Transactions with owners:
Transfer of own shares	-	-	-	(960)	-	-	-	-	(960)
Issue of share capital	134	3,616	-	-	-	-	-	-	3,750
Share issue costs	-	(85)	-	-	-	-	-	-	(85)
Shares issued as part of the
consideration in a business combination	334	-	-	-	-	9,019	-	-	9,353
Elimination in share for share acquisition	-	(1,011)	(452)	-	-	1,463	-	-	-
Share premium cancellation		(3,048)	-	-	-	-	-	3,048	-
Share based payments charge	-	-	-	-	-	-	100	-	100
Deferred tax on share based payments	-	-	-	-	-	-	-	378	378
Dividends	-	-	-	-	-	-	-	(1,635)	(1,635)
Share options exercised	40	335	-	-	-	-	(55)	55	375
	508	(193)	(452)	(960)	-	10,482	45	1,846	11,276
Balance at 31 March 2019	1,688	575	-	(1,636)	-	10,482	292	9,534	20,935
Total comprehensive income for the period	-	-	-	-	-	-	-	772	772
Transactions with owners:
Share based payments charge	-	-	-	-	-	-	110	-	110
Implementation of IFRS16								(70)	(70)
Deferred tax on share based payments	-	-	-	-	-	-	-	(257)	(257)
Dividends	-	-	-	-	-	-	-	(1,218)	(1,218)
Share options exercised	9	41	-	-	-	-	(14)	14	50
	9	41	-	-	-	-	96	(1,531)	(1,385)
Balance at 31 March 2020	1,697	616	-	(1,636)	-	10,482	388	8,775	20,322

Notes to the Financial Statements for the 12 months ended 31 March 2020

finnCap Group plc (the "Company") is a public limited company, limited by shares, incorporated and domiciled in England and Wales. The Company was incorporated on 28 August 2018. The registered office of the Company is at 1 Bartholomew Close, London, EC1A 7BL, United Kingdom. The registered company number is 11540126. The Company is listed on the AIM market of the London Stock Exchange.

1.  Basis of Preparation and Relevant Accounting Policies

a.  Basis of Preparation

The financial information set out in this announcement (the "Preliminary Financial Statements") does not constitute the Company's statutory accounts for the period ended 31 March 2020 (or the period ended 31 March 2019) under the meaning of Section 434 the Companies Act 2006 but is derived from those accounts. 

Statutory accounts for the period ended 31 March 2020 have been reported on by the Company's independent auditors, BDO LLP (the "Independent Auditors").  The Independent Auditors' Reports on the Annual Report and Financial Statements for the period ended 31 March 2020 were unmodified, did not draw attention to any matters by way of emphasis and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The statutory accounts will be available at www.finncap.com and will be delivered to the Registrar of Companies in due course.

The Preliminary Financial Statements comparatives for FY19 include the performance of finnCap Ltd for 11 months (due to the alignment of year ends), and for Cavendish for just under four months (since the date of its acquisition).

The statutory accounts have been prepared in accordance with International Financial Reporting Standards and International Accounting Standards as adopted by the European Union and the IFRS Interpretation Committee interpretations (collectively IFRSs), and in accordance with applicable law.

These consolidated Preliminary Financial Statements contain information about the Group and have been prepared on a historical cost basis except for certain financial instruments which are carried at fair value. Amounts are rounded to the nearest thousand, unless otherwise stated and are presented in pounds sterling, which is the currency of the primary economic environment in which the Group operates.

The preparation of these Preliminary Financial Statements requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies. Judgements and estimates used in these Preliminary Financial Statements have been applied on a consistent basis with those used in the statutory accounts for the year ended 31 March 2020.

b.  Basis of Consolidation

The Group's consolidated financial statements include the financial statements of the Company and all its subsidiaries. Subsidiaries are entities over which the Group has control if all three of the following elements are present: power over the investee, exposure to variable returns from the investee and the ability of the investor to use its power to affect those variable returns. Subsidiaries are fully consolidated from the date on which control is established and de-consolidated on the date that control ceases.

The acquisition method of accounting is used for the acquisition of subsidiaries. Transactions and balances between members of the Group are eliminated on consolidation and consistent accounting policies are used throughout the Group for the purposes of consolidation.

The share for share acquisition of finnCap Ltd by finnCap Group plc was a corporate reorganisation to facilitate the IPO on AIM and the subsequent purchase of Cavendish. As this was not a business combination, merger accounting principles have been applied.

The Directors believe that the company has adequate resources to continue trading for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Preliminary Financial Statements.

IFRS16

The Group has applied the modified retrospective approach to the two existing property leases. As such, an asset and liability were created on the 1st April 2019 and the comparative figures have not been restated. The right of use asset and lease liability have been calculated as the net present value of the remaining lease payments discounted at the incremental borrowing rate of 3.0%. As a result of this change the group, has also derecognised a rent-free period accrual and adjusted retained earnings brought forward upon creation of the IFRS 16 assets and liabilities.

At 1 April 2019, a right-of-use asset of £850k was recognised and lease liability of £1,074k. FY20 includes depreciation of £600k that would have been recognised as an operating lease expense in the prior period.

2.  Segmental reporting

The Group is managed as an integrated full-service financial services group and the different revenue streams are considered to be subject to similar economic characteristics. Consequently, the Group is managed as one business unit.

The trading operations of the Group comprise of Corporate Advisory and Broking, M&A Advisory and Institutional Stockbroking. The Group's revenues are derived from activities conducted in the UK, although several of its corporate and institutional investors and clients are situated overseas. All assets of the Group reside in the UK.

		Year ended		Period ended
		31 March 2020		31 March 2019
			£'000		£'000
Revenues
Retainers			6,471		5,922
Transactions			8,642		11,950
Corporate advisory and broking			15,113		17,872
M&A advisory			7,326		3,229
Institutional Stockbroking			3,567		3,415
Total Revenue			26,006		24,516

3.  Expenses by Nature

							12 months ended		11 months ended
						31 March 2020		31 March 2019
									Audited
							£'000		£'000
Employee benefit expense							16,095		14,451
Non-employee costs							8,427		5,813
Total administrative expenses							24,522		20,264
Average number of employees							140		106

4.  Earnings per share

		Year ended		Period ended
		31 March 2020		31 March 2019
			£'000		£'000
Earnings (£'000)
Earnings for the purposes of basic and diluted earnings
per share being profit for the year attributable to
equity shareholders			772		2,324
Number of shares
Weighted average number of shares for the purposes
of basic earnings per share		157,093,604		125,845,121
Weighted average dilutive effect of conditional share
awards		9,553,641		14,927,048
Weighted average number of shares for the purposes
of diluted earnings per share		166,647,245		140,772,169
Profit per ordinary share (pence)
Basic profit per ordinary share			0.49		1.85
Diluted profit per ordinary share			0.46		1.65

The shares held by the Group's Employee Benefit Trust have been excluded from the calculation of earnings per share.

The earnings per share for the year ended 31 March 2020 is reported after charging the non-recurring costs from restructuring costs, which equate to 0.12p per share.

The earnings per share for the 11 months ended 31 March 2019 is reported after charging the non-recurring costs from the IPO and acquisition of Cavendish, which equate to 0.87p per share.

5.  Dividends

		Year ended		Period ended
		31 March 2020		31 March 2019
			£'000		£'000
Dividends proposed and paid during the year			1,218		1,635
Dividends per share			0.78p		1.38p

6.  Balance Sheet items

i)   Plant, property and equipment

See IFRS16 disclosure above

ii)   Intangible assets

Intangible assets include goodwill of £13,335,000 recognised on the acquisition of all the share capital of Cavendish Corporate Finance (UK) Limited and all the partnership rights of Cavendish Corporate Finance LLP on the 5^th December 2018.

iii)   Deferred tax asset

Deferred taxation for the Group relates to timing differences on the taxation relief on the exercise of options. The amount of the asset is determined using tax rates that have been enacted or substantively enacted when the deferred tax assets are expected to be recovered.

iv)   Trade and other receivables

Trade and other receivables principally consist of amounts due from client, brokers and other counterparties.

v)   Own shares held

The value of own shares held is the cost of shares purchased the Group's Employee Benefit Trust. The Trust was established with the authority to acquire shares in finnCap Group plc and is funded by the Group.

vi)   Merger relief reserve

The merger relief reserve represents:

· the difference between net book value of finnCap Ltd and the nominal value of the shares issued due to the share for share exchange on the acquisition of finnCap Ltd. Upon consolidation, part of the merger reserve was eliminated to recognise the pre-acquisition share premium and capital redemption reserve of finnCap Ltd; and

· the difference between the fair value and nominal value of shares issued for the acquisition of Cavendish Corporate Finance (UK) Limited and Cavendish Corporate Finance LLP.

This reserve is not distributable.

END

 

END

 

 

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