Interim Results

RNS Number : 1404O

Cenkos Securities PLC

17 September 2013

UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2013

Cenkos Securities plc. (the "Company" or "Cenkos") together with its subsidiaries is an independent, specialist institutional stockbroking business, focused on small and mid-cap companies and investment funds.

Cenkos' shares are admitted to trading on the Alternative Investments Market ("AIM"). The Company is authorised and regulated by the Financial Conduct Authority (FCA) and is a member of the London Stock Exchange (LSE).

Financial highlights	30 June 2013	30 June 2012
Revenue from continuing operations	£20.0m	£20.2m
Underlying profit before tax from continuing operations *	£4.1m	£3.8m
Profit before tax from continuing operations	£3.1m	£3.5m
Underlying profit after tax from continuing operations *	£3.1m	£2.7m
Profit after tax from continuing operations	£2.3m	£2.5m
Basic and diluted earnings per share from continuing operations	3.9p	3.6p
Interim dividends per share declared	3.5p	3.5p
Cash and cash equivalents	£16.3m	£22.9m
Capital resources in excess of Pillar 1 and 2 regulatory capital requirements	£6.4m	£7.4m

Operational highlights

Nominated adviser, corporate broker or financial adviser to

122 companies

118 companies

* The Company uses non-Generally Accepted Accounting Practice ("non-GAAP") financial measures, "Underlying operating profit from continuing operations, Underlying profit before tax from continuing operations and Underlying profit after tax from continuing operations", in addition to those reported under IFRS. This gives a clearer picture of the underlying financial and operating performance of the Company, since it adjusts for the impact of payments made under the Compensatory Award Plan 2009 ("CAP"). The quantum of payment made is determined by the last dividend declared on ordinary shares, and is recorded in the period in which the dividend is declared.

Commenting on the interim results, Chief Executive Officer Jim Durkin noted:

"I am pleased to report a solid, profitable performance for the first six months of 2013. We have increased our earnings per share on continuing operations and continue to raise funds for our expanding client base.

Our successful strategy of being a leading UK institutional broker to listed growth companies through understanding our clients' needs, delivering sustainable, diversified and growing income streams, adding high quality individuals to our teams and managing our costs and risks carefully has led to us being profitable in every year since our formation in 2005. This approach continues to bear fruit and we have made an encouraging start to the second half of 2013 with a healthy pipeline of deals."

For further information contact:

Jim Durkin 020 7397 8900 David Rydell / Duncan Mayall / Guy 020 7861 3232

Chief Executive Officer Scarborough

Cenkos Securities plc. Pelham Bell Pottinger

Nick Donald 020 7991 1504

HSBC (Nomad)

Business Review

Strategy and business model

Our strategy

Our prime strategy is to become the principal UK institutional broker to growth companies which 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 our teams; and

- Managing costs and risks carefully;

thereby providing shareholder value through earnings growth and an attractive dividend yield.

Our business model

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 June 2013 we have raised circa £7.8 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. Our experienced trading teams make trading profits from market making activities and commission is generated from sales, sales trading and research activities in the shares of companies traded on numerous execution venues including 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. 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 currently outsourced.

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 and in a manner 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 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.

Commentary on KPIs is included in this Business Review.

Review of performance

Overall performance

The Company is pleased to report that it has remained profitable and continues to grow its client base. As at 30 June 2013, Cenkos was nominated adviser, broker or financial adviser to 122 companies or trusts (H1 2012: 118). Revenues are broadly flat but as noted below, cost rises due to dividend related payments have meant that profits have fallen when compared to the same period last year. This has been achieved against an on-going backdrop of fragile and volatile equity markets. Our business model ensures a low fixed cost base and a remuneration structure highly geared to performance. We maintain a positive operating cash cycle and a limited exposure to credit and market risk. This, combined with the high quality, dedication and experience of our employees, has enabled Cenkos to produce this performance.

Underlying profit before tax on continuing operations was £4.1 million (H1 2012: £3.8 million). As noted below, this 8% increase reflected a fall in revenues but also a greater fall in administrative expenses. Profit before tax on continuing operations was £3.1 million (H1 2012: £3.5 million).

During 2012, we bought back and cancelled 12.3% of the Company's issued share capital at a cost of £6.3m and in H1 2013 bought back and cancelled 0.4 million shares. Additionally, in H1 2013 the unpaid portion of the remaining 2.1 million B shares issued in 2009 were fully paid up. The net impact of these capital changes, combined with lower profit after tax, meant that basic and diluted earnings per share on continuing operations rose by 7% to 3.9p (H1 2012: 3.6p).

Cenkos continues to maintain a firm control over risk, enjoys healthy cash levels and remains well capitalised against regulatory requirements.

Revenues

Total revenue on continuing operations for the period decreased by 1% to £20.0 million (H1 2012: £20.2 million). The economic slowdown continues to impact equity markets with the total funds being raised by all companies on AIM falling by 19% to £1,418 million from H1 2012 to H1 2013 (source: LSE AIM factsheet June 2013). This fall continues to impact the stockbroking and advisory industry's profitability and is leading to on-going consolidation amongst our competitors. Given our strong market position and continued profitability, this continued turmoil provides us with an opportunity to win new clients and to continue to add high quality individuals to our existing teams. We are ranked as one of the leading brokers in London for growth companies. Cenkos remains highly placed in its chosen markets, as noted in Adviser Rankings' July 2013 'AIM Adviser Rankings Guide' where we were ranked second in terms of both 'Nomad' and 'Stockbroker' for all AIM clients by number of clients, top 'Nomad' for Oil and Gas companies and second 'Nomad' for both Financials and Technology companies by number of AIM clients.

During the period we completed 18 transactions and helped our clients raise a total of £322 million excluding £100m of tap issues for our investment fund clients (H1 2012: £306 million excluding £47m of tap issues for our investment fund clients). In the period we also completed two M&A corporate finance transactions (H1 2012: two). This performance is particularly encouraging as it was achieved during a period where there was limited transactional revenue and continued competitive pressure. Our corporate finance revenue (including fees from placings) rose from £12.9m in H1 2012 to £13.1m in H1 2013.

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 333 (2012: 351) 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. Our corporate broking, market making, research and commission revenues fell from £7.3m in H1 2012 to £6.9m in H1 2013. Although we have increased the number of clients we advise, trading volumes were slightly more subdued in H1 2013. 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 primarily focused on client facilitation. We believe that this offering continues to enhance Cenkos' overall service offering to its expanding client base.

Costs

Costs of continuing operations rose by £0.1 million (1%) in the period, reflecting a fall in operating costs and performance related pay being offset by a £0.7m rise in staff bonuses resulting from the Compensatory Award Phantom Dividend Plan 2009 ("CAP"). Payments under this scheme are only triggered by the payment of a dividend to ordinary shareholders. This amounted to a 4p final dividend for 2012 paid in H1 2013 (1p for 2011's final dividend paid in H1 2012).

We set out below a schedule which re-analyses information included in the statutory income statement. The Company uses non-Generally Accepted Accounting Practice ("non-GAAP") financial measures, "Underlying operating profit from continuing operations, Underlying profit before tax from continuing operations and Underlying profit after tax from continuing operations" in addition to those reported under IFRS. This gives a clearer picture of the underlying financial and operating performance of the Company, since it adjusts for the impact of payments made under the Compensatory Award Plan 2009 ("CAP"). The quantum of payment made is determined by the last dividend declared on ordinary shares, and is recorded in the period in which the dividend is declared. These adjusting items amount to £1.0 million in the period to 30 June 2013 (H1 2012: £0.3 million).

As can be seen, administrative expenses before the staff bonuses under the CAP, decreased by £0.6 million. This resulted in the underlying profit before tax from continuing operations increasing by 8% to £4.1 million (H1 2012: £3.8 million) and underlying profit after tax on continuing operations increasing by 13% to £3.1 million (H1 2012: £2.7 million)

	Unaudited	Unaudited	Audited
	Six months ended		Year ended
	30 June	30 June	31 December
	2013	2012	2012
	£'000s	£'000s	£'000s
Continuing operations
Revenue	19,995	20,238	43,155
Administrative expenses	(16,013)	(16,625)	(35,529)
Underlying operating profit	3,982	3,613	7,626
Investment income - interest income	102	182	357
Gain on disposal of available-for-sale financial asset	-	-	170
Interest expense	-	(9)	(6)
Underlying profit before tax from continuing operations	4,084	3,786	8,147
Tax on underlying profit	(1,008)	(1,062)	(2,135)
Underlying profit after tax from continuing operations	3,076	2,724	6,012
Staff bonus under CAP	(956)	(257)	(1,141)
Tax impact of Staff bonus under CAP	222	63	280
Profit after tax from continuing operations	2,342	2,530	5,151

Discontinued operations

We sold our controlling interest in our offshore fund and wealth management business, Cenkos Channel Islands Limited (CCIL - now renamed 'Ravenscroft'), in April 2012, reducing our stake from 50% to 10%. This 10% residual stake was then sold in October 2012. As noted in our 2012 Annual Report, we generated £3.3 million profit after tax on discontinued operations in 2012.

As described in note 2 of these condensed consolidated financial statements, subsequent to these disposals, the Company has changed the way the business is assessed and performance reviewed and consequently has consolidated its reportable segments into one. This reflects the fact that Cenkos is managed as an integrated UK institutional stockbroking business.

Statement of consolidated financial position and cash flow

At 30 June 2013, we held net assets of £21.7 million of which £16.3 million (H1 2012: £22.9 million) was represented by cash. During the six months to 30 June 2013 there has been a net decrease in cash and cash equivalents of £5.9 million (H1 2012: net increase of £8.9 million due in part to the cash generated by the disposal of discontinued operations). This is largely due to the payment of accrued bonuses in respect of 2012, the 2012 final dividend of 4p per share and corporation tax payments more than offsetting the cash inflow from the Company's profitable trading in H1 2013 and the receipt of the unpaid premiums due on the remaining 2.1 million 'B' shares noted below.

Dividend and capital levels

The Company retains sufficient capital to satisfy the UK Financial Conduct Authority's capital requirements. These requirements vary from time to time depending on the business conducted by the Company. As at 30 June 2013, the Company had a solvency ratio based on capital resources against Pillar 1 capital requirement of 205% (H1 2012: 220%) based on audited profits, and a capital resources surplus of £6.4 million (H1 2012: £7.4 million) in excess of our Pillar 1 and 2 regulatory capital requirements.

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 72.5p in dividends prior to the 3.5p proposed interim dividend for 2013 and bought back 9.3 million shares at a cost of £6.5 million for cancellation. In addition, 3.1 million shares have been purchased by the Cenkos Securities Employee Benefit Trust ("EBT") at a cost of £3.2 million.

During the period, the Company bought back and cancelled 0.4 million shares at a cost of £0.3 million (H1 2012: nil), thereby increasing the Company's earnings per share. Additionally, the unpaid premium due on the remaining 2.1 million B shares was received in the period. Whilst the B shares were not admitted to trading on AIM, upon payment of the required premium the B shares were converted into Ordinary shares and admitted to trading on AIM. The Company confirms that all the outstanding amounts due in respect of the B shares that had previously been issued have now been fully paid.

The Board proposes an interim dividend of 3.5p per share, in line with last year's interim dividend of 3.5p per share. The dividend will be paid on 7 November 2013 to all shareholders on the register at 11 October 2013. In line with existing shareholder authorisation, the Board will continue to assess opportunities for share buy backs and the funding of share purchases by the EBT where this is beneficial to shareholders.

People

The continued professionalism of our employees has enabled us to achieve the robust performance for the period. We continue to look to recruit staff who are attracted by our culture and business model. We endeavour to remunerate our staff to a level and in a manner which not only retains but also motivates them to behave in line with the longer-term growth objectives of the Company. I am proud to lead a group 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.

Principal risks and uncertainties

The principal risks and uncertainties that Cenkos currently faces and how these are managed, have not materially changed from those outlined in our 2012 Annual Report. Aside from the health of UK equity markets, the other key changes that may impact Cenkos' risk profile over the next six months, and how they are being managed, relate to:

- The pace of change in the regulatory environment - Cenkos continues to focus heavily on prudential risks to ensure the appropriate systems and controls, reporting, capital and liquidity requirements, resources and culture are all in place to meet the ongoing obligations of an FCA regulated (BIPRU Investment) firm; and

- Ensuring that we continue to retain and attract high quality staff. We continue to pursue a policy of maintaining a low fixed cost base including low basic salaries and rewarding net income generation. Potential regulatory changes in 2014 to 'banker's bonuses' arrangements may mean that we have to change the remuneration arrangements of certain members of staff.

Outlook

I am pleased to report a solid, profitable performance for the first six months of 2013. We have increased our earnings per share on continuing operations and continue to raise funds for our expanding client base.

Jim Durkin

Chief Executive Officer

16 September 2013

Responsibility statement

We confirm that to the best of our knowledge:

a) The condensed set of financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of Cenkos Securities plc. and the undertakings included in the consolidation taken as a whole as at 30 June 2013, and

b) The interim management report set out in the Business Review includes a fair review of the development and performance of the business and the position of Cenkos Securities plc. and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Forward-looking statements

These financial statements contain forward-looking statements with respect to the financial condition, results, operations and businesses of Cenkos Securities plc. 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.

Condensed consolidated income statement for the six months ended 30 June 2013
										Unaudited			Unaudited		Audited
										Six months ended					Year ended
								Notes		30 June			30 June		31 December
										2013			2012		2012
										£'000s			£'000s		£'000s
Continuing operations
Revenue								2		19,995			20,238		43,155
Administrative expenses										(16,969)			(16,882)		(36,670)
Operating profit										3,026			3,356		6,485
Investment income - interest income										102			182		357
Gain on disposal of available-for-sale financial asset										-			-		170
Interest expense										-			(9)		(6)
Profit before tax from continuing operations										3,128			3,529		7,006
Tax								3		(786)			(999)		(1,855)
Profit after tax from continuing operations										2,342			2,530		5,151
Discontinued operations
Profit after tax from discontinued operations								4		-			3,478		3,329
Profit										2,342			6,008		8,480

Attributable to:
Equity holders of the parent										2,342			5,920		8,392
Non-controlling interests										-			88		88
										2,342			6,008		8,480

Earnings per share - basic and diluted
From continuing operations								6		3.9			3.6		7.4
From continuing and discontinued operations								6		3.9			8.3		12.1

Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2013
										Unaudited			Unaudited		Audited
										Six months ended					Year ended
										30 June			30 June		31 December
										2013			2012		2012
										£'000s			£'000s		£'000s
Profit										2,342			6,008		8,480
Net other comprehensive income to be re-classified to profit or loss in subsequent periods
Available-for-sale financial assets
Mark to market gain on valuation of available-for-sale financial asset										-			250		170
Gain on disposal of available-for-sale financial asset transferred to income statement										-			-		(170)
Other comprehensive income										-			250		-
Total comprehensive income										2,342			6,258		8,480

Attributable to:
Equity holders of the parent										2,342			6,170		8,392
Non-controlling interests										-			88		88
										2,342			6,258		8,480

Condensed consolidated statement of financial position as at 30 June 2013
										Unaudited			Unaudited		Audited
								Notes		30 June			30 June		31 December
										2013			2012		2012
										£'000s			£'000s		£'000s
Non-current assets
Property, plant and equipment								7		499			699		550
Available-for-sale financial asset										-			1,250		-
Deferred tax asset										330			164		272
Trade and other receivables										-			3,751		-
										829			5,864		822
Current assets
Trade and other receivables										30,857			24,375		15,534
Available-for-sale financial asset										1,000			-		1,000
Other current financial assets										10,144			7,354		9,786
Cash and cash equivalents										16,343			22,880		22,271
										58,344			54,609		48,591
Total assets										59,173			60,473		49,413
Current liabilities
Trade and other payables										(33,451)			(28,623)		(24,336)
Other current financial liabilities										(4,029)			(2,767)		(2,848)
										(37,480)			(31,390)		(27,184)
Net current assets										20,864			23,219		21,407
Total liabilities										(37,480)			(31,390)		(27,184)
Net assets										21,693			29,083		22,229

Equity
Share capital								8		635			728		638
Own shares										(3,180)			(2,413)		(2,945)
Available-for-sale reserve										-			250		-
Retained earnings										24,238			30,518		24,536
Total equity										21,693			29,083		22,229

Condensed consolidated cash flow statement for the six months ended 30 June 2013

										Unaudited			Unaudited		Audited
										Six months ended					Year ended
										30 June			30 June		31 December
								Notes		2013			2012		2012
										£'000s			£'000s		£'000s

Profit										2,342			6,008		8,480
Adjustments for:
Net finance income										(102)			(173)		(351)
Tax expense										786			999		1,855
Depreciation of property, plant and equipment										159			153		331
Gain on disposal of available-for-sale financial asset										-			-		(170)
Gain on disposal of discontinued operation and change in fair value of interest retained before deduction of non-controlling interest										-			(1,734)		(1,586)
Non-controlling interests in net assets sold										-			(1,568)		(1,567)
Shares in lieu of fees and options received in kind										(2,005)			(1,089)		(2,898)
Share-based payment expense										76			241		335
Operating cash flows before movements in working capital										1,256			2,837		4,429
Adjustments for deconsolidation of subsidiaries										-			197		184
Decrease in net trading investments										2,828			4,225		2,685
(Increase) / decrease in trade and other receivables										(15,255)			(2,402)		10,152
Increase in trade and other payables										9,326			4,657		297

Cash flow (used in) / from operating activities										(1,845)			9,514		17,747

Interest paid										-			(9)		(6)
Tax paid										(1,055)			(618)		(1,509)

Net cash flow (used in) / from operating activities										(2,900)			8,887		16,232

Investing activities
Interest received										34			97		309
Net proceeds from the sale of available-for-sale financial assets										-			-		1,170
Purchase of property, plant and equipment										(108)			(63)		(92)
Cash flow from sale of discontinued operations, net of cash disposed								4		-			881		848

Net cash flow (used in) / from investing activities										(74)			915		2,235

Financing activities
Dividends paid										(2,430)			(709)		(3,165)
Acquisition of own shares by Cenkos Securities Employee Benefit Trust										(235)			(223)		(755)
Acquisition of own shares for cancellation										(289)			-		(6,286)

Net cash used in financing activities										(2,954)			(932)		(10,206)

Net (decrease) / increase in cash and cash equivalents										(5,928)			8,870		8,261
Cash and cash equivalents at beginning of period										22,271			14,010		14,010
Cash and cash equivalents at end of period										16,343			22,880		22,271

Condensed consolidated statement of changes in equity for the six months ended 30 June 2013

		Share capital		Own shares		Available-for-sale reserve			Retained earnings			Total		Non-controlling interests		Total
		£'000s		£'000s		£'000s			£'000s			£'000s		£'000s		£'000s

Attributable to equity holders of the parent at 1 January 2012		728		(2,190)		-			25,142			23,680		1,405		25,085
Profit		-		-		-			5,920			5,920		88		6,008
Revaluation of available-for-sale investment		-		-		250			-			250		-		250
Total comprehensive income		-		-		250			5,920			6,170		88		6,258
Own shares acquired in the period		-		(223)		-			-			(223)		-		(223)
Share of profit from discontinued operations attributable to non-controlling interest		-		-		-			-			-		(1,568)		(1,568)
Credit to equity for equity settled share-based payments		-		-		-			137			137		103		240
Other reserve movements		-		-		-			28			28		(28)		-
Dividends paid		-		-		-			(709)			(709)		-		(709)
Attributable to equity holders of the parent at 30 June 2012		728		(2,413)		250			30,518			29,083		-		29,083
Profit		-		-		-			2,472			2,472		-		2,472
Mark to market movement on valuation of available-for-sale financial assets		-		-		(80)			-			(80)		-		(80)
Gain on disposal of available-for-sale financial assets transferred to income statement		-		-		(170)			-			(170)		-		(170)
Total comprehensive income		-		-		(250)			2,472			2,222		-		2,222
Own shares acquired in the period		-		(532)		-			-			(532)		-		(532)
Own shares acquired for cancellation in the period		(90)		-		-			(6,196)			(6,286)		-		(6,286)
Adjustment for capital contribution previously made from sale of discontinued operations		-		-		-			103			102		-		102
Credit to equity for equity-settled share-based payments		-		-		-			95			95		-		95
Dividends paid		-		-		-			(2,456)			(2,456)		-		(2,456)
Attributable to equity holders of the parent at 31 December 2012		638		(2,945)		-			24,536			22,229		-		22,229
Retained profit		-		-		-			2,342			2,342		-		2,342
Total comprehensive income		-		-		-			2,342			2,342		-		2,342
Own shares acquired in the period		-		(235)		-			-			(235)		-		(235)
Own shares acquired for cancellation in the period		(3)		-		-			(286)			(289)		-		(289)
Credit to equity for equity settled share-based payments		-		-		-			76			76		-		76
Dividends paid		-		-		-			(2,430)			(2,430)		-		(2,430)
At 30 June 2013		635		(3,180)		-			24,238			21,693		-		21,693

Notes to the condensed consolidated financial statements
1. Accounting policies
General information
The interim condensed consolidated financial statements of Cenkos Securities plc. ("Cenkos" or the "Company" together with its subsidiaries) for the six months ended 30 June 2013 are unaudited and were approved by the Board of Directors for issue on 16 September 2013. Cenkos Securities plc. (The "Company") is a company incorporated in United Kingdom under the Companies Act 2006 (Company Registration No. 05210733), whose shares are publicly traded. The Company's principal activity is as an institutional broker to growth companies in the UK and abroad. These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of 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 of estimates.
These financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments.
Basis of accounting
The interim condensed consolidated financial statements for the six months ended 30 June 2013 have been prepared in accordance with International Accounting Standard ("IAS") 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements for the year ended 31 December 2012.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2012, which are prepared in accordance with IFRSs as adopted by the European Union.
The financial information contained in these interim condensed consolidated financial statements does not constitute the Company's statutory accounts within the meaning of section 434 of the Companies Act 2006. The comparative information contained in this report for the year ended 31 December 2012 does not constitute the statutory accounts for that financial period. Those accounts have been reported on by the Company's auditors Ernst & Young LLP, and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
Going concern
The Company's business activities, together with the factors likely to affect its future development and performance, the Company's principal risks and uncertainties and the financial position of the Company, are set out in the Company's Annual Report for the year ended 31 December 2012. The Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, the Directors continue to adopt a going concern basis in preparing the interim financial statements.
Adoption of new and revised standards
During the period, a number of amendments to International Financial Reporting Standards ("IFRS") became effective and were adopted by the Company, none of which had a material impact on the Company's net cash flows, financial position, consolidated statement of comprehensive income or earnings per share, except for the adoption of new standards and interpretations as of 1 January 2013, noted below:
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 use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not materially impacted the fair value measurements carried out by the Company. IFRS 13 also requires specific disclosures on fair values, some of which replace existing disclosure requirements in other standards, including IFRS 7 Financial Instruments: Disclosures. Some of these disclosures are specifically required for financial instruments by IAS 34.16A (j), thereby affecting the interim condensed consolidated financial statements period. The Company provides these disclosures in note 10 of these condensed consolidated financial statements.
2. Business and geographical segments
Following the disposal in its entire holding in CFM and CCIL, as disclosed in the Company's 2012 Annual Report, the Company has changed the way the business is assessed and performance reviewed; as such, Cenkos has consolidated its reportable segments into one. This reflects the fact that Cenkos is managed as an integrated UK institutional stockbroking business and although it has different revenue streams, the nature of its activities are considered to be subject to similar economic characteristics. The internal reports used by the Chief Executive Officer for the purpose of monitoring performance and allocating resources reflect that Cenkos is managed as a single business unit.
An analysis of the Company's revenue and result by geographical location is as follows:

Geographical information
												United			Channel
												Kingdom			Islands		Total
Six months ended 30 June 2013												£'000s			£'000s		£'000s
Revenue from continuing operations												19,995			-		19,995

Non-current assets												829			-		829

												United			Channel
												Kingdom			Islands		Total
Six months ended 30 June 2012												£'000s			£'000s		£'000s
Revenue from continuing operations												20,238			-		20,238
Revenue from discontinued operations												67			1,453		1,520
Revenue from continuing and discontinued operations (a)												20,305			1,453		21,758

Non-current assets												5,864			-		5,864

												United			Channel
												Kingdom			Islands		Total
Year ended 31 December 2012												£'000s			£'000s		£'000s
Revenue from continuing operations												43,155			-		43,155
Revenue from discontinued operations												67			1,453		1,520
Revenue from continuing and discontinued operations (a)												43,222			1,453		44,675

Non-current assets												822			-		822

(a) Revenues are attributed on the basis of the location of each entity. Discontinued operations were located in the United Kingdom and Channel Islands and comprised the revenues and results of CFM and CCIL which were disposed of by the Company in 2012.

Major clients
In the six months ended 30 June 2013, no one particular client's revenues accounted for more than 10% of the Company's total revenue (Six months ended 30 June 2012: One client contributed £2.99 million of revenue; year ended 31 December 2012: None).

3. Tax
												Six months ended					Year ended
												30 June			30 June		31 December
												2013			2012		2012
												£'000s			£'000s		£'000s
The tax charge comprises:
Current tax
United Kingdom corporation tax at 23.25% (2012: 24.5%) based on the profit for the period												843			974		1,943

Adjustment in respect of prior period
United Kingdom corporation tax												-			92		87

Total current tax												843			1,066		2,030
Deferred tax
Credit on account of temporary differences												(57)			(79)		(175)
Charge on account of temporary differences												-			12		-
Total deferred tax												(57)			(67)		(175)
Total tax on profit on ordinary activities from continuing activities												786			999		1,855

The tax expense in the income statement is disclosed as follows:
Income tax expense on continuing operations												786			999		1,855
Income tax expense on discontinued operations												-			5		5
												786			1,004		1,860

The tax charge for the period differs from that resulting from applying the standard rate of UK corporation tax of 23.25% (2012: 24.5%) to the profit before tax for the reasons set out in the following reconciliation:
												Six months ended					Year ended
												30 June			30 June		31 December
												2013			2012		2012
												£'000s			£'000s		£'000s
Profit before tax from continuing operations												3,128			3,529		7,006
Profit before tax from discontinued operations												-			3,483		3,334
Profit before tax from continuing and discontinued operations												3,128			7,012		10,340

Tax on profit on ordinary activities at the UK corporation tax rate of 23.25% (2012: 24.5%)												727			1,718		2,533
Tax effect of:
Expenses that are not deductible in determining taxable profits												64			68		211
Non-taxable gain on disposal of discontinued operations												-			(848)		(853)
Income not subject to corporation tax												(15)			(33)		(55)
Adjustment for loss relief not claimed												10			7		12
Adjustment in respect of prior period												-			92		12
Tax expense for the period												786			1,004		1,860

4. Discontinued operations
As disclosed and accounted for in the Company's 2012 audited accounts, on 1 February 2012 Cenkos disposed of its entire holding in CFM, which carried out all of the Cenkos' 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 Company completed the disposal of 80% of its 50% holding in CCIL, which carried out all of Cenkos' 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. For details of the results of the discontinued operations see note 9 of the Company's 2012 Annual Report.
5. Dividends
											Six months ended						Year ended
											30 June			30 June			31 December
											2013			2012			2012
											£'000s			£'000s			£'000s
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2012 of 4p (2011: 1p) per share											2,430			709			709
Interim dividend for the period to 30 June 2012 of 3.5p (June 2011: 4p) per share											-			-			2,456
											2,430			709			3,165

The proposed interim dividend for 30 June 2013 of 3.5p (30 June 2012: 3.5p) per share was approved by the Board on 16 September 2013 and has not been included as a liability as at 30 June 2013. The dividend will be payable on 7 November 2013 to all shareholders on the register at 11 October 2013.

6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
											Six months ended						Year ended
											30 June			30 June			31 December
											2013			2012			2012
											£'000s			£'000s			£'000s
Basic and diluted
Earnings from continuing operations											3.9p			3.6p			7.4p
Earnings from continuing and discontinued operations											3.9p			8.3p			12.1p
Earnings from continuing and discontinued operations
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit attributable to equity holders of the parent											2,342			5,920			8,392

											No.			No.			No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic and diluted earnings per share											60,725,002			70,963,336			69,341,308

The calculation of the weighted average number of shares also includes the total number of B shares, even though they were partly paid shares, as these shares were entitled to a full dividend pay-out.

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 period, 263,503 ordinary shares were purchased for an aggregate consideration of £234,696. As at 30 June 2013 the EBT held a total of 3,107,227 ordinary shares at an aggregate consideration of £3.18 million, as shown in note 9. These shares are held by the trust in treasury and have been excluded from the weighted average number of shares calculation.

											Six months ended						Year ended
											30 June			30 June			31 December
											2013			2012			2012
											£'000s			£'000s			£'000s
Earnings from continuing operations
Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent											2,342			5,920			8,392
Profit after tax from discontinued operations for the year											-			(3,478)			(3,329)
Profit attributable to non-controlling interests up to the point of disposal											-			88			88
Earnings from continuing operations for the purpose of basic and diluted earnings per share excluding discontinued operations											2,342			2,530			5,151

The denominators used are the same as those detailed above for both basic and diluted earnings per share from continuing and discontinued operations.

7. Property, plant & equipment
During the period, the Company spent approximately £107,965 (30 June 2012: £75,694, 31 December 2012: £92,656) on property, plant and equipment. This mostly related to the cost of IT equipment.

8. Share capital
The issued share capital as at 30 June 2013 amounted to £634,821 (30 June 2012: £727,711, 31 December 2012: £638,380).

1 January 2012 to 31 December 2012
On 13 January 2012, 179,852 B shares of 1p each were converted into 179,852 ordinary shares of 1p each.
On 1 November 2012, 700,000 B shares of 1p each were converted into 700,000 ordinary shares of 1p each.
On 18 December 2012, 608,523 B shares of 1p each were converted into 608,523 ordinary shares of 1p each.
On 2 November 2012, the Company purchased in the market 6,800,000 ordinary shares of 1p at 70p each. These shares were cancelled by the Company.
On 12 December 2012, the Company purchased in the market 2,133,211 ordinary shares of 1p at 70p each. These shares were cancelled by the Company.

1 January 2013 to 30 June 2013
On 29 January 2013, 50,000 B shares of 1p each were converted into 50,000 ordinary shares of 1p each.
On 14 May 2013, 20,338 B shares of 1p each were converted into 20,338 ordinary shares of 1p each.
On 21 May 2013, 91,183 B shares of 1p each were converted into 91,183 ordinary shares of 1p each.
On 24 May 2013, 257,357 B shares of 1p each were converted into 257,357 ordinary shares of 1p each.
On 28 May 2013, 525,368 B shares of 1p each were converted into 525,368 ordinary shares of 1p each.
On 17 June 2013, 1,200,000 B shares of 1p each were converted into 1,200,000 ordinary shares of 1p each.
On 19 June 2013, 540,000 B shares of 1p each were converted into 540,000 ordinary shares of 1p each.
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.
On 24 May 2013, the Company purchased in the market 140,000 ordinary shares of 1p at 90p each. These shares were cancelled by the Company.

The ordinary shares are admitted to trading on AIM. The B shares were not admitted to trading on AIM. The B shares were issued on a partly-paid basis to certain employees prior to the Company's admission and trading on AIM in October 2006. Holders of the B shares were required to pay a further amount (the "required premium") which was specified at the time of allotment of the B shares. Upon payment of the required premium the B shares were converted automatically into ordinary shares and were admitted to trading on AIM. All shares have equal voting rights. As at 30 June 2013, the "required premium" had been fully paid up and all B shares were converted to ordinary shares and admitted to trading on AIM.

9. Own shares
The purpose of the Company's EBT is to assist and encourage the holding of shares in the Company by employees for their benefit with a view to facilitating the recruitment, retention and motivation of employees of the Company. During the period 263,503 ordinary shares were purchased for an aggregate consideration of £234,696. As at 30 June 2013 the EBT held a total of 3,107,227 ordinary shares at an aggregate consideration of £3.18 million, as shown in the table below.
	Six months ended						Six months ended							Year ended
	30 June 2013						30 June 2012							31 December 2012
	Number						Number							Number
	of shares			£'000s			of shares				£'000s			of shares			£'000s
At 1 January	2,843,724			2,945			1,583,750				2,190			1,583,750			2,190
Acquired during the period	263,503			235			349,750				227			1,259,974			755
At the period ended	3,107,227			3,180			1,933,500				2,417			2,843,724			2,945

10. Financial instruments

Capital risk management
The Company manages capital to ensure that the Company and its subsidiaries will be able to continue as a going concern while aiming to maximise the return to stakeholders. The capital structure of the Company consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in the condensed consolidated statement of changes in equity. At present the Company has no gearing and it is the responsibility of the Board to review the Company's gearing levels on an on-going basis. As at 30 June 2013, Cenkos Securities plc. had a solvency ratio of 205% (30 June 2012: 220%, 31 December 2012: 198%).

Externally imposed capital requirement
The Company has to retain sufficient capital to satisfy the UK Financial Conduct Authority's ("FCA", formerly the Financial Services Authority) capital requirements. These requirements vary from time to time depending on the business conducted by the Company. The Company always retains a buffer above the FCA minimum requirement and has complied with these requirements during the period under review.

Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 of the Company's financial statements for the year ended 31 December 2012.

Categories of financial instruments											Carrying value
											30 June			30 June			31 December
											2013			2012			2012
											£'000s			£'000s			£'000s

Available-for-sale investments											1,000			1,250			1,000

Financial assets at fair value through profit and loss (FVTPL)
Trading investments carried at fair value											9,522			6,980			9,060
Derivative financial assets											622			231			726
Financial liabilities at fair value through profit and loss (FVTPL)
Trading investments carried at fair value											4,029			2,767			2,848
Financial liabilities held at amortised cost
Amortised cost											33,451			28,623			24,336

Financial risk management objectives
The Chief Executive Officer monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including price risk), credit risk and liquidity risk. Summaries of these reports are reviewed by the Board. Compliance with policies and exposure limits is reviewed by the Chief Executive Officer and senior management on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
Interest rate risk management
The Company is exposed to interest rate risk because the Company has financial instruments on its statement of financial position which are at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate instruments. The Company's exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity and interest rate risk table section of this note.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the balance sheet date. For floating rate assets, the analysis is prepared based on the average rate due on the asset or liability through the period. A 10 basis points increase or decrease is used when reporting interest rate risk internally to senior management and represents management's assessment of a reasonably possible change in interest rates. If interest rates had been 10 basis points higher/lower and all other variables were held constant, the Company's: • profit for the period ended 30 June 2013 would increase/decrease by £0.01 million (30 June 2012: increase/decrease by £0.01 million, 31 December 2012: increase/decrease by £0.01 million). This is mainly attributable to the Company's exposure to interest rates on its variable rate instruments; and • other comprehensive income would increase/decrease by £0.01 million (30 June 2012: increase/decrease by £0.01 million, 31 December 2012: increase/decrease by £0.01 million)
Equity price risks
The Company is exposed to equity price risks arising from equity investments. The financial instruments represent investments in listed equity securities that present the Company with opportunity for return through dividend income and trading gains. There are limits set for each financial instrument to limit the concentration of risks.
Equity price sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to equity price risks at the reporting date and, in the opinion of senior management, a material movement in equity prices. This is based on the largest fall in the All Share AIM index in one day and over a two week period. These parameters are also considered in the Company's Individual Liquidity Adequacy Assessment (ILAA). If equity prices had been 10% higher/lower:
• Net profit for the 6 months ended 30 June 2013 would have been £0.55 million higher/lower (30 June 2012: £0.46 million higher/lower, 31 December 2012: £0.69 million higher/lower) due to change in the value of FVTPL held-for-trading investments.

The Company's exposure to equity price risk is closely managed. The Company has built a framework of overall and individual stock limits and these are actively monitored by the Chief Executive Officer and senior management on a daily basis. This framework also limits the concentration of risks. The Company's overall exposure to equity price risk is set by the Board.
Foreign currency risk
The Company does not have any material dealings in foreign currency, as the majority of transactions are in UK based equities and hence denominated in sterling.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. These parties may default on their obligations due to the bankruptcy, lack of liquidity, operational failure and other reasons. The exposure of the Company to its counterparties is closely monitored and the limits set to minimise the concentration of risks, ensuring this does not exceed 25% of the Company's regulatory capital. The vast majority of the Company's credit risk arises from the settlement of security transactions. However, the settlement model primarily used by the Company does not expose the Company to a risk as a principal to a trade. Rather, the Company's exposure lies solely with Pershing Securities Limited ("Pershing"), a wholly owned subsidiary of the Bank of New York Mellon Corporation, a AA- (30 June 2012: AA-, 31 December 2012: AA-) rated bank. In addition, in circumstances in which the Company does act as principal when acting as a market maker, the counterparty will normally be an FCA regulated market counterparty rather than a corporate or individual trader. The Company does not have any significant credit risk exposure to any single counterparty with the exception of Pershing. Cash resources also give rise to potential credit risk. The Company's cash balances are held with HSBC Bank plc. ("HSBC", an AA- rated bank), Royal Bank of Scotland plc. (an A rated bank) and Barclays Bank plc. (an A rated bank). The banks with which the Company deposits money are reviewed at least annually by the Board and are required to have at least an investment grade credit rating. To limit the concentration risk in relation to cash deposits, the maximum amount which may be deposited with any one financial institution is set at no more than 100% of the Company's regulatory capital.
Trade receivables not related to the settlement of market transactions consist of outstanding corporate finance fees and retainers and are spread across a wide range of industries. All new corporate finance clients are subject to a review by the New Business Committee. This committee considers, amongst other issues, the financial soundness of any client taken on.
In 2006 the Company issued various tranches of partly paid B shares to a number of employees serving with the Company at that time. The carrying value of the unpaid portion was included in financial assets and was due to be repaid on 1 July 2013. By 30 June 2013 all outstanding amounts in respect of the B shares had been received.

The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Company's maximum exposure to credit risk without taking account of the value of any collateral obtained.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
The table below summarises the Company's exposure to credit risk by asset class according to whether the exposure is collateralised.

Exposure to Credit Risk											30 June			30 June			31 December
											2013			2012			2012
											£'000s			£'000s			£'000s
Derivative financial assets				Uncollateralised							622			231			726
Market and client receivables				Uncollateralised							28,188			22,030			10,787
Unpaid share capital and loans due from staff				Collateralised							4			1,612			1,919
Unpaid share capital and loans due from staff				Uncollateralised							-			2,139			698
Prepayments and accrued income				Uncollateralised							1,897			1,555			1,360
Other receivables				Uncollateralised							768			791			770
Cash and cash equivalents				Uncollateralised							16,343			22,880			22,271
											47,822			51,238			38,531

The table below summarises the Companies exposure to credit risk by asset class according to the credit rating of the counterparty, where appropriate.
Exposure to Credit Risk											30 June			30 June			31 December
											2013			2012			2012
											£'000s			£'000s			£'000s
Derivative financial assets				Unrated							622			231			726
Market and client receivables				Unrated							18,672			9,615			6,097
Market and client receivables				AA-							9,516			12,415			3,769
Market and client receivables				A							-			-			328
Market and client receivables				BBB							-			-			593
Unpaid share capital and loans due from staff				Unrated							4			3,751			2,617
Prepayments and accrued income				Unrated							1,897			1,555			1,360
Other receivables				Unrated							768			791			770
Cash and cash equivalents				AA-							9,810			14,880			15,162
Cash and cash equivalents				A							6,533			8,000			7,109
											47,822			51,238			38,531

Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board. It has, however, delegated day-to-day management to the Chief Executive Officer. 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 Company manages liquidity risk by maintaining adequate reserves, 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 material liquidity mismatches, financial liabilities are on the whole short-term and the Company has sufficient liquid assets to cover all of these liabilities.
Liquidity and interest risk tables
The following tables detail the Company's remaining contractual maturity for its non-derivative financial assets and liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay. The table includes both interest and principal cash flows. The tables also detail the Company's expected maturity for its non-derivative financial assets. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets.
Liquidity and interest rate table
				Weighted			No
				average			maturity				Less than			More than
				effective			date				1 month			1 month			Total
As at 30 June 2013				interest rates			£'000s				£'000s			£'000s			£'000s
Available-for-sale financial assets	Non-interest bearing						1,000				-			-			1,000
Financial assets at FVTPL	Non-interest bearing						9,522				440			182			10,144
Trade and other receivables	Non-interest bearing						-				30,857			-			30,857
Financial liabilities at FVTPL	Non-interest bearing						-				(4,029)			-			(4,029)
Trade and other payables	Non-interest bearing						-				(33,451)			-			(33,451)
Cash and cash equivalents	Variable interest rate instruments			1.00%			-				2,750			-			2,750
Cash and cash equivalents	Variable interest rate instruments			0.30%			-				3,750			-			3,750
Cash and cash equivalents	Variable interest rate instruments			0.25%			-				9,843			-			9,843
							9,522				10,160			182			19,864

Liquidity and interest risk tables continued
				Weighted			No
				average			maturity				Less than			More than
				effective			date				1 month			1 month			Total
As at 30 June 2012				interest rates			£'000s				£'000s			£'000s			£'000s
Available-for-sale financial assets	Non-interest bearing						1,250				-			-			1,250
Financial assets at FVTPL	Non-interest bearing						7,123				231			-			7,354
Trade and other receivables	Fixed interest rate instruments			5.00%			-				-			3,751			3,751
Trade and other receivables	Non-interest bearing						-				24,375			-			24,375
Financial liabilities at FVTPL	Non-interest bearing						-				(2,767)			-			(2,767)
Trade and other payables	Non-interest bearing						-				(28,623)			-			(28,623)
Cash and cash equivalents	Fixed interest rate instruments			2.40%			-				4,000			-			4,000
Cash and cash equivalents	Variable interest rate instruments			0.30%			-				4,000			-			4,000
Cash and cash equivalents	Variable interest rate instruments			0.25%			-				14,880			-			14,880
							7,123				16,096			3,751			26,970

				Weighted			No
				average			maturity				Less than			More than
				effective			date				1 month			1 month			Total
As at 31 December 2012				interest rates			£'000s				£'000s			£'000s			£'000s
Available-for-sale financial assets	Non-interest bearing						1,000				-			-			1,000
Financial assets at FVTPL	Non-interest bearing						9,060				368			358			9,786
Trade and other receivables	Fixed interest rate instruments			5.00%			-				-			2,617			2,617
Trade and other receivables	Non-interest bearing						-				12,917			-			12,917
Financial liabilities at FVTPL	Non-interest bearing						-				(2,848)			-			(2,848)
Trade and other payables	Non-interest bearing						-				(24,336)			-			(24,336)
Cash and cash equivalents	Variable interest rate instruments			1.00%			-				2,600			-			2,600
Cash and cash equivalents	Variable interest rate instruments			0.30%			-				4,500			-			4,500
Cash and cash equivalents	Variable interest rate instruments			0.25%			-				15,171			-			15,171
							9,060				8,372			2,975			20,407

Except as detailed below, the carrying amounts of financial assets recorded at amortised cost in the financial statements approximate their fair values.
	Carrying value										Fair value
	30 June			30 June			31 December				30 June			30 June			31 December
	2013			2012			2012				2013			2012			2012
	£'000s			£'000s			£'000s				£'000s			£'000s			£'000s
Non-current assets:
Loans and receivables	-			3,751			-				-			3,938			-
Available-for-sale investments	-			1,250			-				-			1,250			-
Other non-current assets	829			863			822				829			863			822
	829			5,864			822				829			6,051			822
Available-for-sale investments	1,000			-			1,000				1,000			-			1,000
Financial assets at FVTPL	10,144			7,211			9,786				10,144			7,211			9,786
Held to maturity investments	-			143			-				-			143			-
Loans and receivables	-			-			2,617				-			-			2,643
Trade and other receivables	30,857			24,375			12,917				30,857			24,375			12,917
Cash and cash equivalents	16,343			22,880			22,271				16,343			22,880			22,271
	58,344			54,609			48,591				58,344			54,609			48,617
Financial liabilities at FVTPL	(4,029)			(2,767)			(2,848)				(4,029)			(2,767)			(2,848)
Trade and other payables	(33,451)			(28,623)			(24,336)				(33,451)			(28,623)			(24,336)
	(37,480)			(31,390)			(27,184)				(37,480)			(31,390)			(27,184)
Fair value hierarchy All financial instruments carried at fair value are categorised in three categories, defined as follows: Level 1 - Quoted market prices Level 2 - Valuation techniques (market observable) Level 3 - Valuation techniques (non-marked observable) As at 30 June 2013, the Company held the following financial instruments measured at fair value:

							Level 1				Level 2			Level 3			Total
As at 30 June 2013							£'000s				£'000s			£'000s			£'000s
Available-for-sale financial assets							-				-			1,000			1,000
Financial assets at FVTPL
Derivative financial assets							-				-			622			622
Non-derivative financial assets held for trading							9,522				-			-			9,522
							9,522				-			622			10,144
							9,522				-			1,622			11,144

Financial liabilities at FVTPL
Non-derivative financial liabilities held for trading							4,029				-			-			4,029

There were no transfers between Level 1, 2 and 3 during the period.
							Level 1				Level 2			Level 3			Total
As at 30 June 2012							£'000s				£'000s			£'000s			£'000s
Available-for-sale financial assets							1,250				-			-			1,250
Financial assets at FVTPL
Derivative financial assets							-				-			231			231
Non-derivative financial assets held for trading							6,980				-			-			6,980
							6,980				-			231			7,211
Held to maturity investments							143				-			-			143
							7,123				-			231			7,354
Financial liabilities at FVTPL
Non-derivative financial liabilities held for trading							2,767				-			-			2,767


							Level 1				Level 2			Level 3			Total
As at 31 December 2012							£'000s				£'000s			£'000s			£'000s
Available-for-sale financial assets							-				-			1,000			1,000
Financial assets at FVTPL
Derivative financial assets							-				-			726			726
Non-derivative financial assets held for trading							9,060				-			-			9,060
							9,060				-			726			9,786
							9,060				-			1,726			10,786
Financial liabilities at FVTPL
Non-derivative financial liabilities held for trading							2,848				-			-			2,848

There were no transfers between Level 1, 2 and 3 during the period.

Reconciliation of recurring fair value measurements categorised within Level 3 of the fair value hierarchy
											Unlisted securities			Share options and warrants			Total
											£'000s			£'000s			£'000s
Opening balance 1 January 2013											1,000			726			1,726
Share options and warrants granted											-			-			-
Net unrealised loss recognised in income statement											-			(104)			(104)
Closing balance 30 June 2013											1,000			622			1,622

Level 3 financial instruments consist of derivative financial assets and unlisted shares received in lieu of fees. The unlisted equity shares are carried as available-for-sale financial assets classified as Level 3 within the fair value hierarchy. They are valued based on the prices paid by other participants to the transaction when the shares were acquired. Since then, the unlisted company's management accounts have shown its performance to be broadly in line with expectations and there have been no other factors brought to the Board's attention, which would suggest that there has been any impairment to this valuation in the intervening period. The derivative financial assets are carried as financial assets at FVTPL classified as Level 3 within the fair value hierarchy and comprise equity options and warrants over listed securities.
Impact of reasonably possible alternative assumptions A sensitivity analysis based on a 10% increase/decrease in the volatility measure used as an input in the valuation of the share options and warrants shows the impact of such a movement would be an increase of £64,853 / decrease of £77,324 respectively in the profit shown in the income statement.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. Financial instruments measured at fair value on an on-going basis include trading assets and liabilities and financial investments classified as available-for-sale.
Determination of fair value
Fair values are determined according to the following hierarchy: (a) Quoted market price Financial instruments with quoted prices for identical instruments in active markets. (b) Valuation technique using observable inputs Financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable. (c) Valuation technique with significant non-observable inputs Financial instruments valued using models where one or more significant inputs are not observable. The best evidence of fair value is a quoted price in an actively traded market. In the event that the market for a financial instrument is not active, a valuation technique is used. The majority of valuation techniques employ only observable market data and so the reliability of the fair value measurement is high. However, certain financial instruments are valued on the basis of valuation techniques that feature one or more significant market inputs that are not observable. For these instruments, the fair value derived is more judgemental. 'Not observable' in this context means that there are few or no current market data available from which to determine the level at which an arm's length transaction would be likely to occur. It generally does not mean that there is absolutely no market data available upon which to base a determination of fair value (historical data may, for example, be used). Furthermore, the assessment of hierarchy level is based on the lowest level of input that is significant to the fair value of the financial instrument. The valuation models used where quoted market prices are not available incorporate certain assumptions that the Company anticipates would be used by a third party market participant to establish fair value.

11. Related party transactions.
Transactions with related parties are made at arm's length. Transactions or balances between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and, in accordance with IAS 24, are not disclosed in this note. The Board includes all employees considered to be key management personnel.
The compensation of the key management personnel of the Company (including the Directors) and their interests in the shares and options over the shares of Cenkos Securities plc. was as follows:
											Six months ended						Year ended
											30 June			30 June			31 December
											2013			2012			2012
											£'000s			£'000s			£'000s
Aggregate emoluments											1,616			924			3,379
There were no Directors who were members of any Company pension scheme as at the period end (2012: none).

Related party interests in ordinary and B shares of Cenkos Securities plc.
											30 June			30 June			31 December
											2013			2012			2012
											No.			No.			No.
Number of shares											14,487,294			14,526,430			14,466,430
Percentage interest											23%			20%			23%

Related party interests in share options	Six months ended						Six months ended							Year ended
	30 June 2013						30 June 2012							31 December 2012
	Number			Weighted			Number				Weighted			Number			Weighted
				average							average						average
				exercise							exercise						exercise
				price							price						price
Outstanding at beginning of the period	1,178,710			1.11			2,793,828				1.18			2,793,828			1.18
Adjustment arising from the reclassification of related parties	-			-			(2,615,118)				1.15			(2,615,118)			1.15
Issued during the period	-			-			1,000,000				1.00			1,000,000			1.00
Outstanding at the end of the period	1,178,710			1.11			1,178,710				1.11			1,178,710			1.11
Among the Company's transactions with key management personnel was a loan to Jeremy Warner Allen, a Director of Cenkos Securities plc. This loan was repaid in full during the six months ended 30 June 2013 (30 June 2012: £507,600, 31 December 2012: £227,780) and related to the premium due on B shares in the Company. The loan was made in accordance with the terms and conditions of the issue of the B shares, which were allotted to a number of senior employees in 2006 and only the nominal value was paid on the allotment of these shares. The Company was treated as having made a loan to Jeremy Warner Allen of an amount equal to the outstanding premium to be paid (the "notional loan"). As the notional loan to Jeremy Warner Allen was free of interest, it is considered to be a taxable benefit in kind. There were no other outstanding balances or bad debt provisions for any related party balances as at 30 June 2012, and no related party transactions have been written off during the period (2012: nil).

12. Events after the reporting period
There were no material events to report on that occurred between 30 June 2013 and the date at which the Directors signed this Interim Report.
Independent review report to Cenkos Securities plc.
Introduction We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated cash flow statement, the condensed consolidated statement of changes in equity and the related notes to the condensed consolidated financial statements 1 to 12. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with International Accounting Standards 34, "Interim Financial Reporting," as adopted by the European Union. As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report have been prepared in accordance with International Accounting Standards 34, "Interim Financial Reporting," as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union. Ernst & Young LLP Registered Auditors London, United Kingdom 16 September 2013
Information for shareholders
Directors Gerry Aherne Jeff Hewitt Anthony Hotson Mike Chilton Jim Durkin Paul Hodges Joe Nally Jeremy Warner Allen Company Secretary			(non-executive chairman) (non-executive director) (non-executive director) (finance director) (chief executive officer) (executive director) (executive director) (executive director) Stephen Doherty
Financial Calendar March / April April /May September November			Year end results announced Annual General Meeting and final dividend paid Half year results announced Interim dividend paid
Company Registration Number and Country of Incorporation 05210733, England & Wales Registered Office 6.7.8 Tokenhouse Yard London EC2R 7AS Bankers HSBC West End Corporate Banking Centre 70 Pall Mall London SW1Y 5EZ Solicitors Travers Smith LLP 10 Snow Hill London EC1A 2AL Ashurst LLP Broadwalk House 5 Appold Street London EC2A 2HA					Auditors Ernst & Young LLP 1 More London Place London SE1 2AF Registrars Capita Registrars The Registry 34 Beckenham Road Beckenham Road Kent BR3 4TU Nominated Adviser and Broker HSBC 8 Canada Square London E14 5HQ Website www.cenkos.com

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