Final Results
Cenkos Securities plc (the "Company") together with its subsidiaries (the "Group")
ANNUAL FINANCIAL RESULTS OF THE GROUP FOR THE YEAR ENDED 31 DECEMBER 2012
Cenkos Securities plc today announced its audited final results for the year to 31 December 2012. The highlights of the results, comparing them with the prior year, are:
Highlights
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31 December 2012
|
31 December 2011 |
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Revenue from continuing operations
|
up 16% |
£43.2m |
£37.4m |
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Operating profit from continuing operations
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up 35% |
£6.5m |
£4.8m |
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Profit before tax from continuing operations
|
up 37% |
£7.0m |
£5.1m |
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Basic and diluted earnings per share from continuing operations
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up 48% |
7.4p
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5.0p |
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Basic and diluted earnings per share from continuing and discontinued operations |
up 132% |
12.1p
|
5.2p |
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Full year dividend per share paid and proposed - Final dividend proposed 4.0p (2011: 1p) |
up 50% |
7.5p |
5p |
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Shares bought back and cancelled - 12.3% of the share capital in issue at 1 January 2012 (2011: 0%) |
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£6.3m |
£0.0m |
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Cash |
up 59% |
£22.3m |
£14.0m |
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Capital resources in excess of Pillar 1 and 2 regulatory capital requirements - after share buy backs |
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£5.8m |
£7.7m |
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Nominated adviser or corporate broker / financial adviser to |
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119 companies |
111 companies |
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Commenting on the final results, Chief Executive Officer Jim Durkin noted:
"Due to our business model, our dedicated staff and the much appreciated support of our clients, we have been profitable every year since the Company was founded in 2005. Prior to today's declaration of a final dividend of 4p per share, we have paid out 68.5p in dividends to our shareholders. In 2012, we have also bought back in for cancellation 8.9m shares representing 12.3% of our then issued share capital, which will enhance earnings per share in the future. Whilst not immune to events in the general economy, our pipeline remains strong and we have made an encouraging start to 2013."
For further information contact:
Jim Durkin - 020 7397 8900 David Rydell - 020 7861 3886 Nick Donald - 020 7991 1504
Chief Executive Officer Pelham Bell Pottinger HSBC (Nomad)
Cenkos Securities plc
BUSINESS REVIEW
Cenkos is pleased to report that, despite the difficult economic conditions that prevailed during the period, revenues and profits are well ahead of last year. We continue to grow our client base and raise equity capital for our corporate clients. We are rated as one of the leading brokers in London for growth companies. A March 2013 survey* ranks us as the top financial adviser for all AIM clients by clients' market capitalisation, number two by number of AIM clients and joint number two financial adviser for the total number of stock market clients.
These results have been achieved against an on-going backdrop of fragile and volatile equity markets. Our business model ensures a relatively low fixed cost base and a remuneration structure highly geared to performance. We maintain a positive cash cycle and a limited exposure to credit and market risk. This, combined with the high quality, dedication and experience of our employees and the much appreciated support of our clients has enabled Cenkos to be profitable every year since the Company was founded in 2005. Prior to today's declaration of a final dividend of 4p per share, we have paid out 68.5p in dividends to our shareholders.
Our strategy
Our prime strategy is to become the principal UK institutional broker to growth companies who are admitted to trading or listed on a UK market. We aim to achieve this through:
- Understanding the needs of our clients, enabling us to provide successful fund raising and advice through an innovative and entrepreneurial approach;
- Delivering sustainable, diversified and growing income streams;
- Adding high quality individuals to the teams; and
- Managing costs and risks carefully,
thereby providing shareholder value through earnings growth and an attractive dividend yield.
Our business
We provide corporate advice, broking and a complete securities service to growth companies across a wide range of industry sectors including investment funds. We focus on companies that want their shares to be admitted to trading on AIM or are already traded on AIM or listed on the LSE's main market. For growing companies that require access to capital and international exposure, AIM's flexibility, with its Nominated Advisor (Nomad) system of control, provides a strong basis for financing and corporate development. We offer our clients advice and access to equity finance at all stages of their development.
Revenue streams
Cenkos earns fees from primary and secondary equity fund raising, acting as a key intermediary between growth companies or investment funds and institutional providers of capital. From when we were founded in 2005 to the end of 2012 we have raised circa £7.4 billion for our clients. We aim to provide strong and supportive shareholder lists for companies, and healthy returns for institutional investors. Corporate finance fees are earned from providing strategic advice and regulatory guidance to clients, as well as advice on all forms of corporate transactions including fundraisings, mergers and acquisitions, disposals, restructurings and tender offers. Fees are also generated from acting as Nomad or broker or financial advisor to our corporate clients. Commission is earned for published equity research. Our experienced trading teams earn commission from market making and sales trading in equities on markets such as AIM and the LSE Official List.
Management systems and controls
We operate an efficient and flexible business model, well adapted to a highly regulated environment. It is therefore important that we continue to maintain an appropriate and proportionate level of systems and controls, commensurate with our size and complexity. Our risk management processes are outlined in more detail in the Corporate Governance section of this Annual Report.
We manage our cost base carefully. We offer our client facing staff relatively low basic salaries but reward their performance based on factors that include their net income generation. This cost flexibility allows us to manage economic downturns better than many of our competitors who have higher levels of fixed or guaranteed pay. We selectively use outsourcing partners to help us maintain this cost flexibility in areas where volumes can be unpredictable. Our core trading systems, settlement systems and internal audit function are all outsourced.
* Adviser Rankings Limited's Corporate Advisers Rankings Guide (the successor to the Morningstar All-Market Rankings Guide)
Culture and people
Our success is based on maintaining experienced and stable teams, whose members build professional relationships and achieve results through a committed and entrepreneurial approach. We endeavour to remunerate our staff to a level which not only retains but also motivates them to behave in line with our required standards and the longer-term growth objectives of the Company.
Key performance indicators (KPIs)
Cenkos' Key Performance Indicators (KPIs) include, but are not limited to, measures such as:
- Profit before tax, earnings per share;
- The size and quality of our corporate client base (Nomad / broker appointments), the aggregate funds raised for clients; and
- Various key risk indicators, including capital resources and cash.
Our main KPI's are noted in the Summary Information section of this Annual Report and commented on below.
Financial results
Total revenue from continuing operations for the year increased by 16% to £43.2 million (2011: £37.4 million). The rise in revenues reflects higher income from placings, corporate finance fees and market making revenues. This is a creditable result given that the economic slowdown continues to impact equity markets, with the total funds being raised by all companies on AIM falling by 26% in the year. This fall continues to impact the stockbroking and advisory industry's profitability and is leading to long overdue consolidation in our sector. Given our continued profitability, this backdrop provides us with an opportunity to win new clients and to add high quality individuals to our existing teams.
Costs of continuing operations rose by £4.1 million (13%) in the period, primarily driven by higher levels of staff costs including performance-related pay. Operating profit from continuing operations rose 35% to £6.5 million and profit before tax from continuing operations was £7.0 million (2011: £5.1 million). This 37% rise reflects higher revenues being only partially offset by higher performance related pay. The tax charge for the year from continuing operations was £1.9 million (2011: £1.5 million), which equates to an effective rate of tax of 26% (2011: 30%). Basic and diluted earnings per share from continuing operations rose by 48% to 7.4 pence (2011: 5.0p).
Segment results
Corporate Broking and Advisory
Revenue in this segment is made up of placing commissions on fund raisings, corporate finance fees and retainer income, market making profits and commissions on secondary market transactions. Revenue was up 14% to £40.1 million (2011: £35.2 million) due largely to Cenkos undertaking more fundraisings in 2012, an expanding list of corporate clients and more profitable trading conditions experienced by our market making operations. Corporate finance revenues were £27.2 million (2011: £25.8 million), whilst corporate broking and market making fees were £10.7 million (2011: £6.7 million). The segment result before unallocated administrative expenses was up 16% to £18.8 million (2011: £16.2 million) as set out in note 3 to the financial statements.
In our core market, AIM, the total value of all primary admissions to AIM rose slightly from £609 million in 2011 to £707 million in 2012, but subsequent placings on AIM fell from £3,660 million to £2,437 million in 2012 (source: LSE AIM factsheet December 2012). Against this backdrop, we are pleased to announce that during the year we completed 46 transactions, raising a total of £711 million (2011: £838 million), which included seven primary issuances. This performance is particularly encouraging as it was achieved during a period of limited transactional revenue and continued competitive pressure. Our broking teams cover a wide range of sectors. We have been ranked highly by Morningstar Professional Services Rankings Guide for Q4 2012, where we were the top Nomad by number of clients for the Oil & Gas sector, and ranked second for both the Telecommunications and Financial sectors.
As at 31 December 2012, the Company was nominated adviser, broker or financial adviser to 119 companies or trusts (2011: 111).
We make markets in the securities of all the companies where we have a broking relationship to support the other services we provide to our clients. We actively provide liquidity to the market and facilitate institutional business in both small and large cap equities. Our trading desks now make markets in the shares of 342 companies and investment trusts. We continue to actively restrict the amount of capital committed to this activity to limit the market risk exposure without adversely affecting the revenue generated.
Institutional Equities
Commission is earned from institutional investors for our published equity research based on its perceived value. Whilst many of our clients continue to pay for our research services directly, more are choosing to transact business through Cenkos as well.
Revenues for the year for this segment were up 40% to £3.0 million (2011: £2.2 million). The segment result improved to £1.0 million (2011: £0.5 million). The pressure on secondary commissions shows no sign of relenting, despite investors' requirements for more independent research around takeovers and IPOs. We are confident that we can prosper in this environment because of our flexible cost model in which remuneration is linked to net income.
Our execution business is strictly focused on client facilitation. We believe that this segment continues to enhance Cenkos' overall service offering to its expanding client base.
Fund and Wealth Management
Our offshore fund and wealth management services were provided through Cenkos Channel Islands Limited (CCIL), a Guernsey based company. Following a strategic review, in April 2012 we sold our controlling interest in CCIL, reducing our stake from 50% to 10%. This remaining 10% stake was sold in October 2012.
As noted in our 2011 Annual Report, in February 2012 we also completed the sale of our onshore fund management business, Cenkos Fund Managers Limited (CFM).
Cenkos generated a profit after tax from discontinued operations of £3.3 million in 2012 (2011: £0.4 million).
Financial position and cash flow
We continue to manage the amount of capital committed to our market making activities closely. As at 31 December 2012, our net trading investments were £6.9 million (2011: £7.7 million).
Cash held at 31 December 2012 is £22.3 million (2011: £14.0 million), including £0.5 million (2011: £0.5 million) held on trust for creditors as a result of the cancellation of our share premium account in 2010. The year to 31 December 2012 saw an inflow of cash and cash equivalents of £8.3 million against an outflow of cash of £14.5 million in 2011. The inflow in 2012 reflects a number of factors including the Company's profitable trading over the period generating £16.2 million, net cash inflow from the sale of our shareholding in CCIL, lower dividend payments made during the year when compared to 2011 and the receipt of premiums to pay up for some Cenkos B shares, partially offset by £6.3 million of cash used to buy back and cancel own shares.
Dividend and capital levels
As we have consistently stated, we intend to retain sufficient capital and reserves to meet the Company's regulatory capital and cash requirements, after taking account of the likely future working capital requirements of the Company. Since our flotation onto AIM in October 2006, we have paid out 68.5 pence in dividends prior to the 4p proposed final dividend for 2012. During the year, the Company bought back and cancelled 8.9 million shares at a cost of £6.3 million (2011: nil), thereby increasing the Company's prospective earnings per share. Additionally, the Cenkos Securities Employee Benefit Trust ("CSEBT") purchased shares at a cost of £0.8 million (2011: £42,875). The Board proposes a final dividend of 4p per share (2011: 1p). This makes a total dividend of 7.5p for the year (2011: 5p).
Subject to approval at the Annual General Meeting to be held on 10 May 2013, the final dividend will be paid on 14 May 2013 to all shareholders on the register at 19 April 2013.
The Company retains sufficient capital to satisfy the UK Financial Services Authority's capital requirements. These requirements vary from time to time depending on the business conducted by the Company. As at 31 December 2012, Cenkos had a solvency ratio based on capital resources against Pillar 1 capital requirement of 198% (2011: 227%) based on audited profits and a capital resources surplus (including £0.5 million held on trust for creditors) of £5.8 million (2011: £7.7 million) in excess of our Pillar 1 and 2 regulatory capital requirements. Surplus capital fell by £2.0 million from 2011 due to the value of share buy backs exceeding both the £3.3 million profit on sale of discontinued operations and the receipt of £1.4 million of premiums to fully pay up 1.5 million Cenkos B shares.
Principal risks and uncertainties
We face a range of risks and uncertainties which could affect both our financial performance and the achievement of our strategic objectives. One of our key risks is that our income is dependent on the health of the financial markets and in particular the economic conditions of the UK. The continued uncertain economic outlook may lead to a continuation of the slowdown in primary and secondary fundraising seen in 2012. Our business model has been designed to minimise the impact of lower revenues by ensuring that performance related pay also falls to help compensate for this. The primary economic environment in which we operate is the UK and the majority of our transactions are in UK based equities. We therefore have limited direct exposure to the Eurozone or any material foreign exchange risk due to any weakness in sterling.
Aside from the health of UK equity markets, the remaining risks outlined below are those that we believe have the potential to have a significant detrimental impact on our financial performance and future prospects. These risks should not be regarded as a comprehensive list of all the risks and uncertainties that the Company may potentially face, which could adversely impact performance or future prospects. The key risk areas that could impact the Company's future performance - and how they are managed - are noted below, along with comments as to how our risk profile has changed in the year.
Reputational risk
The Company believes that one of the greatest risks it faces comes from the potential loss of our reputation. All new business proposals are subject to a rigorous appraisal process followed by consideration by the New Business Committee. This committee's remit is designed to ensure that new business proposals meet our strict criteria.
Operational risk
Operational risk is the risk that the Company suffers a loss directly or indirectly from inadequate or failed internal processes, people, systems, or external events. The Company's control functions and senior management continually review the risk framework to ensure it properly reflects the risks to which Cenkos is exposed and that any significant operational risks and their controls are reviewed, tested and assessed and, where applicable, corrective action plans put in place. There is also an on-going process for identifying, evaluating and managing the significant risks faced by the Company, including fraud. Cenkos' low cost and responsive business model relies on consistent delivery from our key suppliers for our trading systems and settlements. We maintain regular dialogue and meetings with these vendors and ensure there is the necessary oversight of the risks associated with outsourcing. We continuously review our business continuity plans, and have disaster recovery facilities in place in order to mitigate any substantial disruption to our operations. In February 2013 the Company's business continuity plan was tested. No issues of concern were raised in respect of this test.
Other specific operational risks that are material to the Company's performance are regulatory risk, people risk and litigation risk. These are commented on in more detail below.
Regulatory risk
The Company has a strong culture of regulatory and legal compliance. There is strict adherence to applicable regulation, focusing particularly on our on-going obligations and responsibilities as an AIM nominated advisor (Nomad) and a UK Listing Authority (UKLA) Sponsor. We continue ensure that the appropriate systems and controls, reporting, capital and liquidity requirements are in place to meet the on-going obligations of an FSA regulated (BIPRU Investment) firm. As at 31 December 2012 the Company's capital resources were £5.8 million in excess of Pillar 1 and 2 regulatory requirements. In light of the increasing regulatory burden being placed on regulated entities such as ourselves, we have increased resources in our compliance function in the year, and continued to enhance our systems, processes and controls. This expanded compliance function undertook a wide range of risk based reviews and other assurance tasks.
People risk
Our employees are our greatest asset and the future success of the Company depends on our ability to attract and retain high quality employees. We seek to minimise this risk by creating the right culture and working environment and by rewarding employees through an overall remuneration package that is geared towards performance and aims to align the interests of both employees and shareholders. People risk is also mitigated via a succession planning process overseen by the Remuneration Committee. During the year, we upgraded our appraisal processes. As noted below in the 'People' section of this Business Review, there have been a number of Board changes in 2012. All of the new Board members have extensive experience in financial services.
Litigation risk
There is always a risk that some form of litigious action may be taken against the Company. Before any decision to enter into litigation is made the Board, senior management and the Company's legal advisers will review all aspects of the case to assess and consider if it is in the best interests of the Company and ultimately the shareholders to either instigate proceedings or defend ourselves against any potential litigation. During the year, settlement was agreed with a former member of staff over a dispute.
Credit risk
Although Cenkos' transaction fees are generally paid out of the proceeds of any funds raised, Cenkos faces some credit risk in respect of collecting fees due for other advice provided, such as Nomad fees. We also face credit risk in terms of our bank deposits and in respect of the unpaid share premium due on B shares. The Company faces limited credit risks in the normal course of business as our market making activities are carried out on a delivery versus payment basis. Hence any counterparty exposure here will manifest itself as either an operational risk (in the form of settlement risk), or a market risk in terms of an underlying exposure to equities. Overdue fees are reviewed regularly and appropriate action taken to ensure recoverability. The banks with which the Company deposits money are reviewed on an annual basis by the Board and are required to have at least an investment grade credit rating. A number of banks are used in order to limit the concentration risk in relation to cash deposits.
Market risk
The Company is exposed to market risk arising from our short-term positions in predominantly market making stocks in AIM listed companies. To mitigate this risk the Company manages market risk by establishing individual stock position limits and overall trading book limits. There are daily procedures in place to monitor any position limit excesses. These limits are reviewed on an on-going basis by the Chief Executive Officer and also by the Risk and Compliance Committee. Cenkos does, from time to time, take shares in lieu of fees subject to appropriate internal sign offs. Some stocks traded on AIM are subject to low levels of underlying liquidity.
Liquidity risk
The Company is also exposed to liquidity risk being that we are unable to fund our commitments as and when they arise. To mitigate this risk, the Company has in place an appropriate liquidity risk management framework for the management of the Company's short, medium and long-term funding and liquidity management requirements. The Board has oversight and approves the liquidity risk management framework and Individual Liquidity Adequacy Assessment at least annually. The Company also manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Given the nature of the Company's business, the Company does not run any significant liquidity mismatches and financial liabilities are on the whole short-term.
Financial risks also include capital, equity price risk, credit risk and liquidity risk. It is not anticipated that our risk profile will change materially in 2013.
People
The professionalism of our employees has enabled us to achieve a robust performance for the year. I am proud to lead a company of such dedicated and talented individuals. Their skill, commitment and determination will continue to provide us with a solid platform on which to continue to build our franchise.
During the year there were a number of changes to the Board. Gerry Aherne was appointed as a non-executive Director of the Company on 4 April 2012, and replaced Peter Sullivan as Chairman on 10 May 2012. Both Peter Sullivan and David Henderson stepped down as a non-executive Directors of the Company on 10 May 2012. On 15 May 2012 Dr Anthony Hotson was appointed as a non-executive Director. On 8 June 2012, Mike Chilton, Paul Hodges, Joe Nally and Jeremy Warner Allen were all appointed executive Directors of the Company.
Outlook
Whilst not immune to events in the general economy, our pipeline remains strong and we have made an encouraging start to 2013.
Jim Durkin
Chief Executive Officer
5 April 2013
Responsibility statement
The Directors confirm that to the best of their knowledge:
- the financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
- the management report, (which is incorporated into the Business Review), includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole.
Forward-looking statements
These financial statements contain forward-looking statements with respect to the financial condition, results, operations and businesses of the Company. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Such statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by forward-looking statements and forecasts. Forward-looking statements and forecasts are based on the Directors' current view and information known to them at the date of this statement. The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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Consolidated income statement for the year ended 31 December 2012 |
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Restated |
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1 January |
1 January |
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2012 to |
2011 to |
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31 December |
31 December |
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2012 |
2011 |
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Note |
£ 000's |
£ 000's |
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Continuing operations |
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Revenue |
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3 |
43,155 |
37,360 |
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Administrative expenses |
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(36,670) |
(32,556) |
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Operating profit |
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6,485 |
4,804 |
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Investment income - interest income |
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4 |
357 |
319 |
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Gain on disposal of available-for-sale financial asset |
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170 |
- |
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Interest expense |
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5 |
(6) |
(8) |
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Profit before tax from continuing operations for the year |
7 |
7,006 |
5,115 |
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Tax |
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8 |
(1,855) |
(1,537) |
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Profit after tax from continuing operations for the year |
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5,151 |
3,578 |
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Discontinued operations |
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Profit after tax from discontinued operations for the year |
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9 |
3,329 |
433 |
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Profit for the year |
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8,480 |
4,011 |
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Attributable to: |
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Equity holders of the parent |
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8,392 |
3,711 |
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Non-controlling interests |
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88 |
300 |
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8,480 |
4,011 |
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Earnings per share |
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From continuing operations |
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Basic and diluted |
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11 |
7.4p |
5.0p |
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From continuing and discontinued operations |
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Basic and diluted |
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11 |
12.1p |
5.2p |
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The 2011 figures have been restated to reflect the reclassification of the Fund and Wealth Management segment as a discontinued operation. |
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The profit after tax attributable to the Company in the year ended 31 December 2012 was £8,758,102 (31 December 2011: £3,933,666). |
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Consolidated statement of comprehensive income for the year ended 31 December 2012 |
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1 January |
1 January |
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2012 to |
2011 to |
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31 December |
31 December |
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2012 |
2011 |
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£ 000's |
£ 000's |
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Profit for the year |
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8,480 |
4,011 |
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Available-for-sale financial assets: |
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Mark to market gain on valuation of available-for-sale financial assets |
170 |
- |
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Gain on disposal of available-for-sale financial assets transferred to income statement |
(170) |
- |
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Other comprehensive income for the year |
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- |
- |
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Total comprehensive income for the year |
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8,480 |
4,011 |
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Attributable to: |
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Equity holders of the parent |
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|
8,392 |
3,711 |
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Non-controlling interests |
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|
88 |
300 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
8,480 |
4,011 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Consolidated statement of financial position as at 31 December 2012 |
|
|
|||||||||||
|
|
|
|
|
|
|
31 December |
31 December |
|
||||||
|
|
|
|
|
|
|
2012 |
2011 |
|
||||||
|
|
|
|
|
|
|
£ 000's |
£ 000's |
|
||||||
|
|
Non-current assets |
|
|
|
|
|
|
|
||||||
|
|
Property, plant and equipment |
|
|
|
|
550 |
1,133 |
|
||||||
|
|
Deferred tax asset |
|
|
|
|
272 |
97 |
|
||||||
|
|
Trade and other receivables |
|
|
|
|
- |
3,839 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
822 |
5,069 |
|
||||||
|
|
Current assets |
|
|
|
|
|
|
|
||||||
|
|
Trade and other receivables |
|
|
|
|
15,534 |
21,800 |
|
||||||
|
|
Available-for-sale financial assets |
|
|
|
|
1,000 |
- |
|
||||||
|
|
Other current financial assets |
|
|
|
|
9,786 |
10,263 |
|
||||||
|
|
Cash and cash equivalents |
|
|
|
|
22,271 |
14,010 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
48,591 |
46,073 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Total assets |
|
|
|
|
49,413 |
51,142 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Current liabilities |
|
|
|
|
|
|
|
||||||
|
|
Trade and other payables |
|
|
|
|
(24,336) |
(23,518) |
|
||||||
|
|
Other current financial liabilities |
|
|
|
|
(2,848) |
(2,539) |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
(27,184) |
(26,057) |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Net current assets |
|
|
|
|
21,407 |
20,016 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Total liabilities |
|
|
|
|
(27,184) |
(26,057) |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Net assets |
|
|
|
|
22,229 |
25,085 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Equity |
|
|
|
|
|
|
|
||||||
|
|
Share capital |
|
|
|
|
638 |
728 |
|
||||||
|
|
Own shares |
|
|
|
|
(2,945) |
(2,190) |
|
||||||
|
|
Retained earnings |
|
|
|
|
24,536 |
25,142 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Equity attributable to equity holders of the parent |
|
|
22,229 |
23,680 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Non-controlling interests |
|
|
|
|
- |
1,405 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Total equity |
|
|
|
|
22,229 |
25,085 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
The financial statements were approved by the Board of Directors and authorised for issue on 5 April 2013. They were signed on its behalf by: |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Gerry Aherne |
|
|
Jim Durkin |
|
|
|
|
||||||
|
|
Chairman |
|
|
Chief Executive Officer |
|
|
|
|||||||
|
|
5 April 2013 |
|
|
5 April 2013 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Registered Number: 05210733
|
|
|
|
|
|
|
|
||||||
|
|
Consolidated cash flow statement for the year ended 31 December 2012 |
|
|
|||||||||||
|
|
|
|
|
|
|
1 January |
1 January |
|
||||||
|
|
|
|
|
|
|
2012 to |
2011 to |
|
||||||
|
|
|
|
|
|
|
31 December |
31 December |
|
||||||
|
|
|
|
|
|
|
2012 |
2011 |
|
||||||
|
|
|
|
|
|
Notes |
£ 000's |
£ 000's |
|
||||||
|
|
Profit for the year |
|
|
|
|
8,480 |
4,011 |
|
||||||
|
|
Adjustments for: |
|
|
|
|
|
|
|
||||||
|
|
Net finance income |
|
|
|
|
(351) |
(315) |
|
||||||
|
|
Tax expense |
|
|
|
|
1,855 |
1,549 |
|
||||||
|
|
Depreciation of property, plant and equipment |
|
|
|
331 |
362 |
|
|||||||
|
|
Profit on sale of fixed assets |
|
|
|
|
- |
(1) |
|
||||||
|
|
Gain on disposal of available-for-sale financial asset |
|
(170) |
- |
|
|||||||||
|
|
Attributable tax expense from discontinued operations |
|
- |
(105) |
|
|||||||||
|
|
Gain on disposal of discontinued operation and change in fair value of interest retained before deduction of non-controlling interest |
(1,586) |
296 |
|
||||||||||
|
|
Non-controlling interest in net assets sold |
|
|
|
|
(1,567) |
(162) |
|
||||||
|
|
Shares in lieu of fees and options received in kind |
(2,898) |
(607) |
|
||||||||||
|
|
Share-based payment expense |
|
|
|
|
335 |
195 |
|
||||||
|
|
Operating cash flows before movements in working capital |
4,429 |
5,223 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Adjustment for deconsolidation of subsidiaries |
|
|
|
184 |
(190) |
|
|||||||
|
|
Decrease in net trading investments |
|
|
|
2,685 |
365 |
|
|||||||
|
|
Decrease in trade and other receivables |
|
|
|
10,152 |
6,151 |
|
|||||||
|
|
Increase / (decrease) in trade and other payables |
|
|
|
297 |
(17,199) |
|
|||||||
|
|
Net cash flow from operating activities |
17,747 |
(5,650) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Interest paid |
|
|
|
|
(6) |
(9) |
|
||||||
|
|
Tax paid |
|
|
|
|
(1,509) |
(2,172) |
|
||||||
|
|
Net cash flow from operating activities |
16,232 |
(7,831) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Investing activities |
|
|
|
|
|
|
|
||||||
|
|
Interest received |
|
|
|
|
309 |
124 |
|
||||||
|
|
Acquisition of interest in a subsidiary by a subsidiary |
|
- |
(8) |
|
|||||||||
|
|
Net proceeds from sale of available-for-sale financial assets |
|
|
1,170 |
- |
|
||||||||
|
|
Net proceeds from sale of fixed assets |
|
|
|
|
- |
5 |
|
||||||
|
|
Purchase of property, plant and equipment |
|
|
|
|
(92) |
(568) |
|
||||||
|
|
Cash flow from sale of discontinued operations, net of cash disposed |
|
9 |
848 |
- |
|
||||||||
|
|
Net cash flow from investing activities |
2,235 |
(447) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Financing activities |
|
|
|
|
|
|
|
||||||
|
|
Dividends paid |
|
|
|
10 |
(3,165) |
(5,699) |
|
||||||
|
|
Distributions made to non-controlling interests |
|
|
|
- |
(345) |
|
|||||||
|
|
Payments in relation to pre-IPO share options |
|
|
|
- |
(69) |
|
|||||||
|
|
Acquisition of own shares by Cenkos Securities Employee Benefit Trust |
|
(755) |
(43) |
|
|||||||||
|
|
Acquisition of own shares for cancellation |
|
|
|
|
(6,286) |
- |
|
||||||
|
|
Acquisition of own shares by a subsidiary |
|
|
|
|
- |
(24) |
|
||||||
|
|
Net cash used in financing activities |
(10,206) |
(6,180) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Net increase/(decrease) in cash and cash equivalents |
8,261 |
(14,458) |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Cash and cash equivalents at beginning of year |
14,010 |
28,468 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Cash and cash equivalents at end of year |
|
|
|
|
22,271 |
14,010 |
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Consolidated statement of changes in equity for the year ended 31 December 2012 |
|
|||||||||||||
|
|
Equity attributable to equity holders of the parent |
|
||||||||||||
|
|
Share capital |
Own Shares |
Available-for-sale reserve |
Retained earnings |
Total |
Non-controlling interests |
Total |
|||||||
|
|
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
At 1 January 2011 |
728 |
(2,147) |
- |
27,134 |
25,715 |
1,540 |
27,255 |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
Profit for the year |
- |
- |
- |
3,711 |
3,711 |
300 |
4,011 |
|||||||
|
Total comprehensive income for the year |
- |
- |
- |
3,711 |
3,711 |
300 |
4,011 |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
Own shares acquired in the year |
- |
(43) |
- |
- |
(43) |
- |
(43) |
|||||||
|
Increase of investment in subsidiary |
- |
- |
- |
(62) |
(62) |
54 |
(8) |
|||||||
|
Subsidiary's acquisition of own shares |
- |
- |
- |
- |
- |
(24) |
(24) |
|||||||
|
Share of profit/(loss) from discontinued operations attributable to non-controlling interests |
- |
- |
- |
- |
- |
(162) |
(162) |
|||||||
|
Credit to equity for equity-settled share-based payments |
- |
- |
- |
153 |
153 |
42 |
195 |
|||||||
|
Payments in relation to pre-IPO share options |
- |
- |
- |
(69) |
(69) |
- |
(69) |
|||||||
|
Deferred tax on share-based payments |
- |
- |
- |
(26) |
(26) |
- |
(26) |
|||||||
|
Dividends paid |
- |
- |
- |
(5,699) |
(5,699) |
(345) |
(6,044) |
|||||||
|
At 31 December 2011 |
728 |
(2,190) |
- |
25,142 |
23,680 |
1,405 |
25,085 |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
Profit for the year |
- |
- |
- |
8,392 |
8,392 |
88 |
8,480 |
|||||||
|
Mark to market gain on valuation of available-for-sale financial assets |
- |
- |
170 |
- |
170 |
- |
170 |
|||||||
|
Gain on disposal of available-for-sale financial assets transferred to income statement |
- |
- |
(170) |
- |
(170) |
- |
(170) |
|||||||
|
Total comprehensive income for the year |
- |
- |
- |
8,392 |
8,392 |
88 |
8,480 |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
Own shares acquired in the year |
- |
(755) |
- |
- |
(755) |
- |
(755) |
|||||||
|
Own shares acquired in the year for cancellation |
(90) |
- |
- |
(6,196) |
(6,286) |
- |
(6,286) |
|||||||
|
Share of profit/(loss) from discontinued operation attributable to non-controlling interests |
- |
- |
- |
- |
- |
(1,567) |
(1,567) |
|||||||
|
Adjustment for capital contribution previously made from sale of discontinued operation |
- |
- |
- |
102 |
102 |
- |
102 |
|||||||
|
Credit to equity for equity-settled share-based payments |
- |
- |
- |
233 |
233 |
102 |
335 |
|||||||
|
Other reserve movements |
- |
- |
- |
28 |
28 |
(28) |
- |
|||||||
|
Dividends paid |
- |
- |
- |
(3,165) |
(3,165) |
- |
(3,165) |
|||||||
|
At 31 December 2012 |
638 |
(2,945) |
- |
24,536 |
22,191 |
- |
22,229 |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Notes to the financial statements for the year ended 31 December 2012
1. Accounting policies
General information
Cenkos Securities plc is a company incorporated in the United Kingdom under the Companies Act 2006 (Company Registration No. 05210733). These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates. The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 and therefore has not produced a Company income statement or accompanying notes.
Prior year comparatives have been amended to conform to the presentation in the current period, due to the treatment of discontinued operations as required by IFRS 5 in the Consolidated income statement.
Basis of accounting
The Group's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, with the prior period being presented on the same basis.
Adoption of new and revised standards
During the year, a number of amendments to IFRS became effective and were adopted by the Group, none of which had a material impact on the Group or Company's net cash flows, financial position, statement of comprehensive income or earnings per share.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling party's share of changes in equity since the date of the combination. Losses applicable to the non-controlling party in excess of the non-controlling party's interest in the subsidiary's equity are allocated against the interests of the Group except to the extent that the non-controlling party has a binding obligation and is able to make an additional investment to cover the losses.
The results of subsidiaries acquired or disposed of during a year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Going concern
The Group's business activities, together with the factors likely to affect its future development and performance, the financial position of the Group, its cash flows and liquidity position are set out in the Business Review.
The Directors have considered forecasts taking account of the current uncertain market conditions which demonstrate that the Group can continue to operate within its own resources without recourse to the banking facilities available to it. The forecasts used for this exercise are based on various assumptions regarding expected levels of income and cost. They have stress tested these basic assumptions and this testing reveals that the Group can maintain acceptable cash levels even if it relies only on recurring revenue streams and maintains its existing cost base. A major factor allowing this to be the case is the flexible nature of the Group's performance related remuneration policy.
As a result, the Directors believe that, at the time of approving the financial statements, the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook and that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, at least 12 months from the date of signature of the financial statements. Accordingly, the Directors consider it appropriate to adopt the going concern basis in preparing the financial statements of the Group and the Company.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.
Financial Assets
Financial assets are recognised and derecognised on trade date when the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the time frame established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as fair value. Financial assets are classified into the following specified categories: financial assets as "at fair value through profit or loss" (FVTPL), "held-to-maturity", "available-for-sale", and "loans and receivables". The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Financial assets at fair value through profit or loss
Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.
Trading investments
Trading investments pertain to investment securities which are held for trading purposes. These investments comprise both long and short positions and are initially measured at fair value excluding transaction costs. Subsequently and at each reporting date, these investments are measured at their fair values, with the resultant gains and losses arising from changes in fair value being taken to the income statement. Trading investments include securities, which have been received as consideration for corporate finance and other services rendered.
Derivative financial assets
Derivative financial assets include equity options and warrants over listed securities earned by the Company as part of fee arrangements. The Directors consider that the initial valuation reflects fair consideration for the services provided. All gains and losses on subsequent valuations are recorded within revenue in the income statement.
Financial assets are classified as financial assets at FVTPL where the Group acquires the financial asset principally for the purpose of selling it in the near term, the financial asset is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit taking as well as all derivatives that are not designated as FVTPL and hedging instruments. Financial assets at fair value through profit or loss are stated at fair value, with any resulting gain or loss recognised in the income statement. The net gain or loss recognised in the income statement incorporates any dividend or interest earned on the financial asset.
Held-to- maturity investments
Debentures with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis.
Available-for-sale investments
Listed shares and unlisted shares held by the Group are classified as available-for-sale investments and are initially measured at fair value, including transaction costs. At each reporting date, these investments are measured at their fair values and the resultant gains and losses, after adjusting for taxation, are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period.
Trade and other receivables
Market debtors are measured at fair value. Unpaid share premium and loans due from staff are initially measured at fair value and amortised back to par using the EIR (Effective Interest Rate) method. All other debtors are measured at amortised cost using the effective interest method, less any impairment. Appropriate allowance for estimated irrecoverable amounts is recognised in the profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the assets carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.
Impairment of financial assets
Financial assets, other than those held for trading purposes or held at fair value through profit or loss, are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. For loans and receivables the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Financial liabilities
Financial liabilities are classified as either financial liabilities 'at FVTPL' or 'other financial liabilities'.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL where the financial liability is either held for trading or it is designated as at FVTPL upon initial recognition.
A financial liability is classified as held for trading if:
• it has been incurred principally for the purpose of disposal in the near future; or
• it is part of an identified portfolio of financial instruments that the Group manages together and has a recent pattern of short term profit taking; or
• it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:
• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the Group is provided internally on that basis; or
• it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
Trade and other payables
Trade payables are initially measured at fair value. At each reporting date, these trade payables are measured at amortised cost using the effective interest rate method.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Derivative financial instruments
The Group has no significant exposure to derivative financial instruments but will occasionally enter into futures to manage its exposure to market risk.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The resulting gain or loss is recognised in the profit or loss immediately.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Non-current assets held for sale and discontinued operations
Non-current assets and disposal groups classified as held-for-sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held-for-sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available-for-immediate-sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
In the statement of comprehensive income, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the statement of comprehensive income.
Property, plant and equipment and intangible assets once classified as held-for-sale are not depreciated or amortised.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. Gains and losses arising during the year on transactions denominated in foreign currencies are translated at the prevailing rate and included in the income statement.
Investments in subsidiary undertakings
Investments held as fixed assets are stated at cost, less any provision for diminution in value.
Operating leases
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Where a rent free period or discount is negotiated it is amortised over the period of the lease.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its estimated useful life as follows:
Leasehold improvements: Remaining term of the lease
Fixtures and fittings: Three years
IT equipment: Three years
The carrying values of property, plant and equipment are subject to annual review and any impairment is charged to the income statement.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of pay aways, discounts, VAT and other sales related taxes.
Revenue comprises fees for corporate finance advisory services which are taken to the income statement at the point in time when, under the terms of the contract, the conditions have been met such that Cenkos is entitled to the fees specified. Revenue also comprises profits on dealing operations, being gains less losses, both realised and unrealised, on financial assets, arrived at after taking into account attributable dividends and directly related interest, together with commission income receivable.
Interest income is recognised at the effective interest rate applicable, which is the rate that discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.
Revenue includes the fair value of options over securities which have been received as consideration for corporate finance or other services rendered.
Segment reporting
IFRS 8 requires that an entity disclose financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments. These operating segments are identified on the basis of internal reports that are regularly reviewed by the Chief Executive Officer to allocate resources and to assess performance. Using the Group's internal management reporting as a starting point, the reporting segments set out in note 3 have been identified.
Share-based payments
The Group has applied the requirements of IFRS 2: Share-based payment. The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
Related party disclosures
Key management personnel comprise Directors of the Company as they are able to exert significant influence over the financial and operating policies of the Group.
Standards issued but not yet effective
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.
IAS 1 Presentation of items of Other Comprehensive income - Amendments to IAS 1
The amendments to IAS 1 change the grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or "recycled") to profit or loss at a future point in time (for example, net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement, on cash flow hedges and net loss or gain on available-for-sale financial assets) would be presented separately from items that will never be classified (for example, actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affects presentation only and has no impact on the Group's financial position or performance. The amendments become effective for annual periods beginning on or after 1 July 2012, and will therefore be applied in the Group's first annual report after becoming effective.
IAS 32 Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32
These amendments clarify the meaning of "currently has a legally enforceable right to set-off". The amendments also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. These amendments are not expected to impact the Group's financial position or performance and become effective for annual periods beginning on or after 1 January 2014.
IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities - Amendments to IFRS 7
These amendments require an entity to disclose information about rights to set-off and related arrangements (e.g. collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity's financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with IAS 32. These amendments will not impact the Group's financial position or performance and become effective for annual periods beginning on or after 1 January 2013.
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 9, as issued, reflects the first phase of the IASB's work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after 1 January 2013, but Amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to 1 January 2015. In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of the Group's financial assets, but will not have an impact on classification and measurements of financial liabilities. The Group will quantify the effect in conjunction with the other phases, when the final standard, including all phases, is issued.
IFRS 12 Disclosure of Interest in Other Entities
IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity's interests in subsidiaries, joint arrangements, associated and structured entities. A number of new disclosures are also required, but has no impact on the Group' financial position or performance. The standard becomes effective for annual periods beginning on or after 1 January 2013.
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to sue fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The Group is currently assessing the impact that this standard will have on the financial position and performance but, based on the preliminary analysis, no material impact is expected. This standard becomes effective for annual periods beginning on or after 1 January 2013.
2. Critical accounting judgement and key sources of estimation uncertainty
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of judgements, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. The estimates and assumptions that have a significant effect on the carrying amounts of assets and liabilities are set out below:
a) Equity-settled share-based payments
The fair value of share based payments is calculated by reference to a Monte Carlo simulation model. Inputs into the model are based on management's best estimates of appropriate volatility, discount rate and share price growth.
b) Valuation of derivative financial assets
Derivative financial assets comprise equity options and warrants over listed securities which include those received as non-cash consideration for advisory and other services. On grant, these instruments are fair valued by reference to a Monte Carlo Simulation model. Inputs to the model include share price, risk free rate of return and implied volatility. Although the underlying securities are listed, the equity options and warrants themselves are not. As a measure of implied volatility of the instrument is therefore not available either the historic volatility of the underlying securities share price or that of a comparable company has been used as a proxy. The Directors consider that the initial valuation reflects fair consideration for the services provided.
c) Bad debt policy
The Group regularly reviews all outstanding balances, including the unpaid amounts relating to the partly paid B shares and provides for amounts where there is significant doubt over the recoverability of the balance.
d) Provisions and contingent liabilities
Provisions are measured at the Directors' best estimate of the expenditure required to settle obligations.
3. Business and geographical segments
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive Officer to monitor segment performance and to allocate resources between segments.
Based on its internal management reporting, the Group has identified three reportable segments:
Corporate Broking and Advisory
This segment reflects the corporate finance, corporate broking and market making services provided to growth companies and investment funds.
Institutional Equities
This segment reflects the institutional equities team who provide research-driven investment recommendations and execution capabilities to institutional clients.
Fund and Wealth Management
Offshore wealth management and stock broking services were provided through the Cenkos Channel Islands Group ("CCIL") and our fund management business was provided by Cenkos Fund Managers Limited. During the year, the Group sold its entire holding of shares in Cenkos Fund Managers Limited and CCIL. The results of these companies comprise the entire performance of this segment and have been treated as a discontinued operation. These transactions are fully described in note 9.
|
|
An analysis of the Group's revenue and result by reportable segment is as follows: |
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
1 January 2012 to 31 December 2012 |
|
|||||||||||||||||||||||||||||||||||
|
|
|
|
Corporate |
|
Fund |
|
|
|
||||||||||||||||||||||||||||||||
|
|
|
|
Broking and |
Institutional |
and Wealth |
Discontinued |
Group |
|
||||||||||||||||||||||||||||||||
|
|
|
|
Advisory |
Equities |
Management |
Operations |
Total |
|
||||||||||||||||||||||||||||||||
|
|
Segment revenues and results |
|
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|
||||||||||||||||||||||||||||||||
|
|
Corporate finance |
|
27,151 |
1,173 |
- |
- |
28,324 |
|
||||||||||||||||||||||||||||||||
|
|
Corporate broking & market making |
10,668 |
348 |
- |
- |
11,016 |
|
|||||||||||||||||||||||||||||||||
|
|
Research fees & commission |
2,291 |
1,524 |
- |
- |
3,815 |
|
|||||||||||||||||||||||||||||||||
|
|
Management fees & stockbroking services |
- |
- |
1,520 |
(1,520) |
- |
|
|||||||||||||||||||||||||||||||||
|
|
Segment revenue |
|
40,110 |
3,045 |
1,520 |
(1,520) |
43,155 |
|
||||||||||||||||||||||||||||||||
|
|
Allocated administrative expenses |
(21,346) |
(2,033) |
(1,337) |
1,337 |
(23,379) |
|
|||||||||||||||||||||||||||||||||
|
|
Segment results |
|
18,764 |
1,012 |
183 |
(183) |
19,776 |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Unallocated administrative expenses |
|
|
|
|
(13,291) |
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Operating profit |
|
|
|
|
|
6,485 |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Investment income - interest income |
|
|
|
357 |
|
||||||||||||||||||||||||||||||||||
|
|
Gain on disposal of available-for-sale financial asset |
|
|
|
170 |
|
||||||||||||||||||||||||||||||||||
|
|
Interest expense |
|
|
|
|
|
(6) |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Profit before tax from continuing operations for the year |
|
7,006 |
|
||||||||||||||||||||||||||||||||||||
|
|
Tax |
|
|
|
|
|
(1,855) |
|
||||||||||||||||||||||||||||||||
|
|
Profit after tax from discontinued operations for the year (in Fund and Wealth Management) * |
|
3,329 |
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Profit for the year |
|
|
|
|
|
8,480 |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
*See note 9 for details. |
|
||||||||||||||||||||||||||||||||||||||
|
|
|
31 December 2012 |
|
|||||||||||||||||||||||||||||||||||||
|
|
|
Corporate |
|
Fund |
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Broking and |
Institutional |
and Wealth |
Discontinued |
|
Group |
|
|||||||||||||||||||||||||||||||||
|
|
|
Advisory |
Equities |
Management |
Operations |
Unallocated |
Total |
|
||||||||||||||||||||||||||||||||
|
|
|
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|
||||||||||||||||||||||||||||||||
|
|
Other segment information: |
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Assets |
11,640 |
- |
- |
- |
37,773 |
49,413 |
|
||||||||||||||||||||||||||||||||
|
|
Liabilities |
(13,643) |
(165) |
- |
- |
(13,376) |
(27,184) |
|
||||||||||||||||||||||||||||||||
|
|
Depreciation and amortisation |
- |
- |
- |
- |
331 |
331 |
|
||||||||||||||||||||||||||||||||
|
|
Additions to non-current assets |
- |
- |
- |
- |
93 |
93 |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Segment assets have been allocated on the basis of the internal reports received by the Chief Executive Officer for the purposes of monitoring segment performance and allocating resources between segments. |
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
|
|
1 January 2011 to 31 December 2011 |
|
||||||||||||||||||||||||||||||||||||
|
|
|
Corporate |
|
Fund |
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
Broking and |
Institutional |
and Wealth |
Discontinued |
Group |
|
|||||||||||||||||||||||||||||||||
|
|
|
Advisory |
Equities |
Management |
Operations |
Total |
|
|||||||||||||||||||||||||||||||||
|
Segment revenues and results |
|
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|
|||||||||||||||||||||||||||||||||
|
Corporate finance |
|
25,754 |
239 |
- |
- |
25,993 |
|
|||||||||||||||||||||||||||||||||
|
Corporate broking & market making |
6,665 |
548 |
- |
- |
7,213 |
|
||||||||||||||||||||||||||||||||||
|
Research fees & commission |
2,760 |
1,394 |
- |
- |
4,154 |
|
||||||||||||||||||||||||||||||||||
|
Management fees & stockbroking services |
- |
- |
6,745 |
(6,745) |
- |
|
||||||||||||||||||||||||||||||||||
|
Segment revenue |
|
35,179 |
2,181 |
6,745 |
(6,745) |
37,360 |
|
|||||||||||||||||||||||||||||||||
|
Allocated administrative expenses |
(18,995) |
(1,638) |
(6,226) |
6,226 |
(20,633) |
|
||||||||||||||||||||||||||||||||||
|
Segment results |
|
16,184 |
543 |
519 |
(519) |
16,727 |
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
Unallocated administrative expenses |
|
|
|
(11,923) |
|
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
Operating profit |
|
|
|
|
|
4,804 |
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
Investment income - interest income |
|
|
319 |
|
||||||||||||||||||||||||||||||||||||
|
Interest expense |
|
|
|
|
|
(8) |
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
Profit before tax from continuing operations for the year |
|
|
|
5,115 |
|
|||||||||||||||||||||||||||||||||||
|
Tax |
|
|
|
|
|
(1,537) |
|
|||||||||||||||||||||||||||||||||
|
Profit after tax from discontinued operations for the year (in Fund and Wealth Management) * |
|
433 |
|
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
Profit for the year |
|
|
|
|
|
4,011 |
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
*See note 9 for details. |
|
|||||||||||||||||||||||||||||||||||||||
|
|
31 December 2011 |
|
||||||||||||||||||||||||||||||||||||||
|
|
Corporate |
|
Fund |
|
|
|
|
|||||||||||||||||||||||||||||||||
|
Broking and |
Institutional |
and Wealth |
Discontinued |
|
Group |
|
||||||||||||||||||||||||||||||||||
|
|
Advisory |
Equities |
Management |
Operations |
Unallocated |
Total |
|
|||||||||||||||||||||||||||||||||
|
Other segment information: |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|
|||||||||||||||||||||||||||||||||
|
Assets |
13,475 |
- |
8,141 |
(300) |
29,826 |
51,142 |
|
|||||||||||||||||||||||||||||||||
|
Liabilities |
(8,784) |
(10) |
(4,984) |
4 |
(12,283) |
(26,057) |
|
|||||||||||||||||||||||||||||||||
|
Depreciation and amortisation |
21 |
4 |
85 |
(1) |
253 |
362 |
|
|||||||||||||||||||||||||||||||||
|
Additions to non-current assets |
- |
- |
368 |
- |
200 |
568 |
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 1. Segment profit represents the profit earned by each segment before unallocated central administrative costs, investment revenue and finance costs, and income tax expense. This is the measure reported to the Chief Executive Officer for the purpose of resource allocation and assessment of segment performance. |
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
An analysis of the Group's revenue and result by geographical location is as follows: |
|
|
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Geographical information |
1 January 2012 to 31 December 2012 |
1 January 2011 to 31 December 2011 |
|
||||||||||||||||||||||||||||||||||||
|
|
|
United |
Channel |
Group |
United |
Channel |
Group |
|
||||||||||||||||||||||||||||||||
|
|
|
Kingdom |
Islands |
Total |
Kingdom |
Islands |
Total |
|
||||||||||||||||||||||||||||||||
|
|
|
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Revenue from continuing operations |
43,155 |
- |
43,155 |
37,360 |
- |
37,360 |
|
||||||||||||||||||||||||||||||||
|
|
Revenue from discontinued operations |
67 |
1,453 |
1,520 |
402 |
6,343 |
6,745 |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Revenue from continuing and discontinued |
43,222 |
1,453 |
44,675 |
37,762 |
6,343 |
44,105 |
|
||||||||||||||||||||||||||||||||
|
|
operations (a) |
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Non-current assets |
822 |
- |
822 |
4,712 |
357 |
5,069 |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
(a) Revenues are attributed on the basis of the entities' location. Discontinued operations were located in both the United Kingdom and the Channel Islands. |
|
||||||||||||||||||||||||||||||||||||||
|
|
Certain items have been reclassified from those previously reported. |
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Major clients |
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
No one particular client's revenues amounted to more than 10% of the Group's total revenue. |
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
4. Investment income - interest income |
|
|
1 January |
1 January |
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
2012 to |
2011 to |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
31 December |
31 December |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
2012 |
2011 |
|
||||||||||||||||||||||||||||||||
|
|
Interest income generated from: |
|
£ 000's |
£ 000's |
|
|||||||||||||||||||||||||||||||||||
|
|
Cash and cash equivalents |
|
|
113 |
56 |
|
||||||||||||||||||||||||||||||||||
|
|
Held to maturity investments |
|
|
19 |
22 |
|
||||||||||||||||||||||||||||||||||
|
|
Trade and other receivables |
|
|
|
224 |
241 |
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
357 |
319 |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Interest income generated from trade and other receivables includes the recognition of the unwinding of the discount factor applied to loans due from staff related to the issue of the partly paid B shares, which amounted to £224,597 (2011: £209,513).These loans were fair valued when granted and the discount factor unwinds over the period until they are due to be repaid. |
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
5. Interest expense |
|
|
|
|
1 January |
1 January |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
2012 to |
2011 to |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
31 December |
31 December |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
2012 |
2011 |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
£ 000's |
£ 000's |
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
Interest on bank overdrafts and loans |
|
|
6 |
8 |
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
|
6. Staff costs |
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
Continuing operations |
Discontinued operations |
Total |
||||||||||||||||||||||||||||||||||||
|
|
|
1 January |
1 January |
1 January |
1 January |
1 January |
1 January |
|||||||||||||||||||||||||||||||||
|
|
|
2012 to |
2011 to |
2012 to |
2011 to |
2012 to |
2011 to |
|||||||||||||||||||||||||||||||||
|
|
|
31 December |
31 December |
31 December |
31 December |
31 December |
31 December |
|||||||||||||||||||||||||||||||||
|
|
|
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
|||||||||||||||||||||||||||||||||
|
|
|
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|||||||||||||||||||||||||||||||||
|
|
Staff costs comprise: |
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
Wages and salaries |
24,208 |
22,171 |
586 |
3,077 |
24,794 |
25,248 |
|||||||||||||||||||||||||||||||||
|
|
Social security costs |
3,210 |
2,800 |
36 |
142 |
3,246 |
2,942 |
|||||||||||||||||||||||||||||||||
|
|
IFRS 2 share based payment expense |
335 |
111 |
- |
148 |
335 |
259 |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
27,753 |
25,082 |
622 |
3,367 |
28,375 |
28,449 |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
The Company does not operate a pension scheme on behalf of its employees. It does, however, provide access to a Company designated stakeholder pension scheme. |
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
The average number of employees (including executive Directors) was: |
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
|
2012 |
2011 |
|||||||||||||||||||||||||||||||||||||
|
|
|
Continuing |
Discontinued |
|
Continuing |
Discontinued |
|
|||||||||||||||||||||||||||||||||
|
|
|
operations |
operations |
Total |
operations |
operations |
Total |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
No. |
|
|
No. |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
Corporate finance |
18 |
- |
18 |
18 |
- |
18 |
|||||||||||||||||||||||||||||||||
|
|
Corporate broking |
53 |
5 |
58 |
56 |
19 |
75 |
|||||||||||||||||||||||||||||||||
|
|
Administration |
27 |
5 |
32 |
23 |
21 |
44 |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
98 |
10 |
108 |
97 |
40 |
137 |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
2012 |
2011 |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
£ 000's |
£ 000's |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
The total emoluments of the highest paid Director serving during the year were: |
677 |
457 |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
7. Profit for the year |
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
Profit for the year has been arrived at after charging/(crediting): |
|
|
|||||||||||||||||||||||||||||||||||||
|
|
|
Continuing operations |
Discontinued operations |
Total |
||||||||||||||||||||||||||||||||||||
|
|
|
1 January |
1 January |
1 January |
1 January |
1 January |
1 January |
|||||||||||||||||||||||||||||||||
|
|
|
2012 to |
2011 to |
2012 to |
2011 to |
2012 to |
2011 to |
|||||||||||||||||||||||||||||||||
|
|
|
31 December |
31 December |
31 December |
31 December |
31 December |
31 December |
|||||||||||||||||||||||||||||||||
|
|
|
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
|||||||||||||||||||||||||||||||||
|
|
|
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
Operating lease rentals |
523 |
519 |
47 |
207 |
570 |
726 |
|||||||||||||||||||||||||||||||||
|
|
Auditors' remuneration |
153 |
135 |
23 |
56 |
176 |
191 |
|||||||||||||||||||||||||||||||||
|
|
Depreciation of property, plant and equipment |
310 |
279 |
21 |
83 |
331 |
362 |
|||||||||||||||||||||||||||||||||
|
|
Staff costs (see note 6) |
27,753 |
25,082 |
622 |
3,367 |
28,375 |
28,449 |
|||||||||||||||||||||||||||||||||
|
|
Change in fair value of financial assets designated as at fair value through profit or loss |
(623) |
323 |
- |
- |
(623) |
323 |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
1 January |
1 January |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
||||||||||||||||||||||||||||||||||
|
The analysis of auditors' remuneration is as follows: |
|
|
|
£ 000's |
£ 000's |
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Fees payable to the Company's auditor and their associates for the audit of the Group's annual accounts and consolidation |
110 |
112 |
||||||||||||||||||||||||||||||||||||||
|
Fees payable to the Company's auditor for other services to the Group: |
|
|
||||||||||||||||||||||||||||||||||||||
|
- The audit of the Company's subsidiaries |
- |
5 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Fees payable to other auditors for the audit of the Company's subsidiaries |
- |
42 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Total audit fees |
|
|
|
|
110 |
159 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Fees payable to the Company's auditor for other services to the Group: |
|
|
||||||||||||||||||||||||||||||||||||||
|
- Half year review of the Group's interim statement |
25 |
18 |
||||||||||||||||||||||||||||||||||||||
|
- Other advisory services - taxation |
|
|
18 |
- |
||||||||||||||||||||||||||||||||||||
|
Fees payable to other auditors for the half year review of the Company's subsidiaries |
23 |
14 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Total non-audit fees |
|
|
|
|
59 |
32 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
176 |
191 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
8. Tax |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
The tax charge comprises: |
|
|
1 January |
1 January |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||
|
Current tax |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
United Kingdom corporation tax at 24.5% (2011: 26.5%) based on the profit for the year |
1,943 |
1,473 |
||||||||||||||||||||||||||||||||||||||
|
Adjustment in respect of prior period |
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
United Kingdom corporation tax at 24.5% (2011: 26.5%) |
|
|
87 |
63 |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Total current tax |
|
|
|
|
2,030 |
1,536 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Deferred Tax |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Credit on account of temporary differences |
|
|
|
(175) |
(94) |
|||||||||||||||||||||||||||||||||||
|
Charge on account of temporary differences |
- |
95 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Total deferred tax |
|
|
|
|
(175) |
1 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Total tax on profit on ordinary activities from continuing operations |
1,855 |
1,537 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
8. Tax (continued) |
|
|
|
|
1 January |
1 January |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
||||||||||||||||||||||||||||||||||
|
The tax expense in the income statement is disclosed as follows: |
|
|
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||||
|
Income tax expense on continuing operations |
|
|
|
1,855 |
1,537 |
|||||||||||||||||||||||||||||||||||
|
Income tax expense / (credit) on discontinued operations |
5 |
(93) |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
1,860 |
1,444 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
The tax charge for the year differs from that resulting from applying the standard rate of UK corporation tax of 24.5% (2011: 26.5%) to the profit before tax for the reasons set out in the following reconciliation. |
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
1 January |
1 January |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Profit before tax from continuing operations |
|
|
|
7,006 |
5,115 |
|||||||||||||||||||||||||||||||||||
|
Profit before tax from discontinued operations |
3,333 |
524 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
10,339 |
5,639 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Tax on profit on ordinary activities at the UK corporation tax rate of 24.5% (2011: 26.5%) |
2,533 |
1,494 |
||||||||||||||||||||||||||||||||||||||
|
Tax effect of: |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Expenses that are not deductible in determining taxable profits |
|
|
211 |
172 |
||||||||||||||||||||||||||||||||||||
|
Non-taxable gain on disposal of discontinued operations |
|
|
(853) |
- |
||||||||||||||||||||||||||||||||||||
|
Different tax rates of subsidiaries operating in other jurisdictions |
- |
(226) |
||||||||||||||||||||||||||||||||||||||
|
Income not subject to corporation tax |
|
|
|
(55) |
(61) |
|||||||||||||||||||||||||||||||||||
|
Expenses not allowable on disposal of discontinued operations |
|
- |
(13) |
|||||||||||||||||||||||||||||||||||||
|
Adjustment for loss relief not claimed |
|
|
|
12 |
15 |
|||||||||||||||||||||||||||||||||||
|
Adjustment in respect of prior period |
|
|
12 |
63 |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Tax expense for the period |
|
1,860 |
1,444 |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
In addition to the amount credited to the income statement, deferred tax relating to share-based payments amounting to nil has been charged directly to equity (2011: £25,992). |
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
1 January |
1 January |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
||||||||||||||||||||||||||||||||||
|
Deferred tax |
|
|
|
|
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Arising on share-based payments |
|
|
- |
(26) |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Total income tax recognised directly in equity |
- |
(26) |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
9. Discontinued operations |
|
|
|
|||||||||||||||||||||||||||||||||||||
|
As disclosed and accounted for in the Group's 2011 audited accounts, on 1 February 2012, Cenkos disposed of its entire holding in Cenkos Fund Managers Limited, which carried out all of the Group's onshore fund management activity. |
||||||||||||||||||||||||||||||||||||||||
|
Following a strategic review, Cenkos decided that CCIL was not core to Cenkos' business strategy and operations. On 2 April 2012 the Group completed the disposal of 80% of its 50% holding in CCIL, which carried out all of the Group's offshore wealth management and offshore stock broking activity, for a consideration of £4 million. This operation is based in the Channel Islands. |
||||||||||||||||||||||||||||||||||||||||
|
The remaining 10% interest in the shares of CCIL was classified in the balance sheet as an available-for-sale financial asset. Thereafter, it was marked to market as the shares are quoted on the Channel Islands Stock Exchange. On 31 October 2012, Cenkos sold this remaining 10% interest in the shares of CCIL for £1.17 million. |
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
The results of the discontinued operations, which have been included in the consolidated income statement, were as follows: |
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
1 January |
1 January |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Revenue |
|
|
|
|
1,520 |
6,745 |
||||||||||||||||||||||||||||||||||
|
Administrative expenses |
|
|
(1,337) |
(6,226) |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Operating profit |
|
|
|
|
183 |
519 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Investment income - interest income |
|
1 |
6 |
|||||||||||||||||||||||||||||||||||||
|
Interest expense |
|
(3) |
(1) |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Profit before tax |
|
|
|
|
181 |
524 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Attributable tax expense |
|
|
(5) |
93 |
||||||||||||||||||||||||||||||||||||
|
Gain / (loss) on disposal of discontinued operations |
2,467 |
(184) |
||||||||||||||||||||||||||||||||||||||
|
Gain on fair value of retained interest at the point of disposal of controlling interest |
686 |
- |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Profit after tax for the year from discontinued operations |
3,329 |
433 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
Cenkos |
Cenkos |
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
Channel |
Fund |
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
Islands |
Managers |
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
Limited |
Limited |
Total |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
£ 000's |
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||
|
Cash inflow on sale |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Consideration received |
|
|
|
4,000 |
- |
4,000 |
||||||||||||||||||||||||||||||||||
|
Legal fees and other associated costs |
|
|
(104) |
(68) |
(172) |
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
3,896 |
(68) |
3,828 |
||||||||||||||||||||||||||||||||||
|
Cash disposed in sale of discontinued operations |
(2,736) |
(244) |
(2,980) |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
1,160 |
(312) |
848 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
Cenkos |
Cenkos |
|
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
Channel |
Fund |
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
Islands |
Managers |
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
Limited |
Limited |
Total |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
£ 000's |
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
The major classes of assets and liabilities disposed of were as follows: |
|
|
|
|||||||||||||||||||||||||||||||||||||
|
Property, plant and equipment |
|
344 |
- |
344 |
||||||||||||||||||||||||||||||||||||
|
Trading investments - long positions |
|
|
56 |
- |
56 |
|||||||||||||||||||||||||||||||||||
|
Trade and other receivables |
|
35,768 |
58 |
35,826 |
||||||||||||||||||||||||||||||||||||
|
Cash and cash equivalents |
|
2,736 |
244 |
2,980 |
||||||||||||||||||||||||||||||||||||
|
Trade and other payables |
|
(35,768) |
(298) |
(36,066) |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
3,136 |
4 |
3,140 |
||||||||||||||||||||||||||||||||||
|
Adjustment for interest in CCIL reclassified as available-for-sale * |
(314) |
- |
(314) |
|||||||||||||||||||||||||||||||||||||
|
Adjustment for capital contribution previously made |
102 |
- |
102 |
|||||||||||||||||||||||||||||||||||||
|
Adjustment for non-controlling interest in net assets sold |
(1,565) |
(2) |
(1,567) |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Parental share of net assets disposed |
1,359 |
2 |
1,361 |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Gain on disposal of discontinued operations and fair value of interest retained |
|
|
|
|||||||||||||||||||||||||||||||||||||
|
Consideration received |
|
|
|
4,000 |
- |
4,000 |
||||||||||||||||||||||||||||||||||
|
Legal fees |
|
|
|
(104) |
(68) |
(172) |
||||||||||||||||||||||||||||||||||
|
Less: Parental share of net assets disposed |
|
|
(1,359) |
(2) |
(1,361) |
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Gain on disposal of discontinued operations |
2,537 |
(70) |
2,467 |
|||||||||||||||||||||||||||||||||||||
|
Gain on fair value of interest retained |
|
|
686 |
- |
686 |
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
3,223 |
(70) |
3,153 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
As the decision to sell Cenkos Fund Managers Limited was taken prior to 31 December 2012, the assets and liabilities classified as part of a disposal group held for sale as at 31 December 2011 are no longer included in the statement of financial position. |
||||||||||||||||||||||||||||||||||||||||
|
* The adjustment above reflects the 10% interest Cenkos Securities plc retained in the shares of CCIL from the disposal on 2 April 2012. This was classified in the statement of financial position as an available-for-sale financial asset until its subsequent sale on 31 October 2012. |
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Earnings per share from discontinued operations |
|
1 January |
1 January |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Basic and diluted |
|
|
|
|
4.8p |
0.6p |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
10. Dividends |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Amounts recognised as distributions to equity holders in the period: |
1 January |
1 January |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Amounts recognised as distributions to equity holders in the year: |
|
|
||||||||||||||||||||||||||||||||||||||
|
Final dividend for the year ended 31 December 2011 of 1p (December 2010: 4p) per share |
709 |
2,849 |
||||||||||||||||||||||||||||||||||||||
|
Interim dividend for the period to 30 June 2012 of 3.5p (June 2011: 4p) per share |
2,456 |
2,850 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
3,165 |
5,699 |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
A final dividend of 4 pence per share has been proposed for the year ended 31 December 2012 (2011: 1p). |
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
11. Earnings per share |
|
|
|
|
1 January |
1 January |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 to |
2011 to |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
31 December |
31 December |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
2012 |
2011 |
|||||||||||||||||||||||||||||||||||
|
From continuing operations |
|
|
||||||||||||||||||||||||||||||||||||||
|
Basic and diluted |
7.4p |
5.0p |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
From continuing and discontinued operations |
|
|
||||||||||||||||||||||||||||||||||||||
|
Basic and diluted |
12.1p |
5.2p |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||||||||||
|
The calculation of the basic and diluted earnings per share is based on the following data: |
£ 000's |
£ 000's |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Earnings |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent |
8,392 |
3,711 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Effect of dilutive potential ordinary shares: |
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Share options |
|
|
|
|
- |
- |
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Earnings for the purpose of diluted earnings per share |
|
8,392 |
3,711 |
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
No. |
No. |
||||||||||||||||||||||||||||||||||
|
Number of shares |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Weighted average number of ordinary shares for the purposes of basic earnings per share |
69,341,308 |
71,250,584 |
||||||||||||||||||||||||||||||||||||||
|
Effect of dilutive potential ordinary shares: |
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
Share options |
|
|
- |
- |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Weighted average number of ordinary shares for the purpose of diluted earnings per share |
69,341,308 |
71,250,584 |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
The weighted average number of shares considered for the period also includes the total number of B shares, even though they are partly paid shares, as these shares are entitled to a full dividend payout. |
||||||||||||||||||||||||||||||||||||||||
|
The Board has agreed to continue to fund the Company's Employee Benefit Trust (EBT) so that it can make market purchases in Cenkos Securities plc shares as and when market conditions allow. During the year, 1,259,974 ordinary shares were purchased for an aggregate consideration of £755,150. As at 31 December 2012 the EBT held a total of 2,843,724 ordinary shares at an aggregate consideration of £2.94 million, as shown in the table below. These shares are held by the trust in treasury and have been excluded from the weighted average number of shares calculation. |
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
2012 |
2011 |
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No. |
No. |
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Number of shares held by the Company's EBT |
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At 1 January |
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|
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|
1,583,750 |
1,518,750 |
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Acquired during the period |
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1,259,974 |
65,000 |
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2,843,724 |
1,583,750 |
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1 January |
1 January |
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2012 to |
2011 to |
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31 December |
31 December |
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2012 |
2011 |
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Note |
£ 000's |
£ 000's |
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From continuing operations |
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Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent |
8,392 |
3,711 |
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Adjustment to exclude parent share of discontinued operations: |
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|
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|
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Profit after tax from discontinued operations for the year |
9 |
(3,329) |
(433) |
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Profit attributable to non-controlling interests up to the point of disposal |
|
88 |
300 |
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Earnings from continuing operations for the purpose of basic earnings per share excluding discontinued operations |
|
5,151 |
3,578 |
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Effect of dilutive potential ordinary shares: |
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Share options |
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- |
- |
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Earnings from continuing operations for the purpose of diluted earnings per share excluding discontinued operations |
5,151 |
3,578 |
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The denominators used are the same as those detailed above for both basic and diluted earnings per share from continuing and discontinued operations. |
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12. Provisions |
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As disclosed in the 2011 Financial Statements, a cash-settled shadow equity scheme was set up in 2009 for the Cenkos team based in Edinburgh. The Company re-organised this office in 2010 resulting in the cessation of this arrangement and a number of staff leaving the Company. A provision for this re-organisation was established in 2010 to cover any resultant liabilities. During the year, the Company remained in dispute with a former member of staff on this issue, resulting in a claim being issued against the Company. Cenkos agreed to settle this dispute with the former employee in December 2012. The terms of this settlement are confidential. The Company is not aware of any residual claims arising from this re-organisation. |
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13. Contingent liabilities |
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As noted in the Group's 2011 Financial Statements, certain underlying clients of CCIL had exposure to MF Global UK Limited when that company entered the Special Administration Regime on 31 October 2011. These exposures were subsequently settled in August 2012 with no material financial impact on CCIL or Cenkos. |
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14. Events after the reporting period |
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On 29 January 2013, the Company purchased in the market 215,837 ordinary shares of 1p at 75p each. These shares were cancelled by the Company.
There have been no other events subsequent to the year-end which have had a material impact on the estimates, provisions or other balances made within these financial statements. |
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Additional Information The financial information included in this statement does not constitute the Group's statutory accounts (within the meaning of section 434 of the Companies Act 2006) for the years ended 31 December 2012 or 2011, but is derived from those accounts. Statutory accounts for 2011 have been delivered to the Registrar of Companies and those for 2012 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006 or equivalent preceding legislation. The Annual General Meeting of Cenkos Securities plc will be held at 6.7.8. Tokenhouse Yard, London EC2R 7AS on 10 May 2013 at 12.00 noon. |
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This information is provided by RNS
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