Final Results

RNS Number : 2547J

Mattioli Woods PLC

08 September 2016

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.  Upon the publication of this announcement, this inside information is now considered to be in the public domain. 

8 September 2016

Mattioli Woods plc

("Mattioli Woods", "the Company" or "the Group")

Final results

Mattioli Woods plc (AIM: MTW.L), the specialist wealth management and employee benefits business, today reports its final results for the year ended 31 May 2016. 

Financial highlights

·     Adjusted EBITDA¹ up 25.7% to £9.3m (2015: £7.4m):

-  Adjusted EBITDA margin ¹ of 21.6% (2015: 21.3%)

-  Adjusted EPS^2.3 up 14.0% to 31.0p (2015: 27.2p)

·     Revenue up 24.3% to £43.0m (2015: £34.6m)

·     Recurring revenues represent 82.6% (2015: 81.4%)

·     Proposed total dividend up 19.0% to 12.5p (2015: 10.5p)

·     Strong financial position with net cash of £29.8m (2015: £10.6m)

Operational highlights

·     Total client assets up 22.2% to £6.61bn (2015: £5.41bn):

-  Discretionary AuM up 15.8% to £1.17bn (2015: £1.01bn)

-  £98.4m of new equity raised by Custodian REIT

·     Net organic revenue growth⁴ of 11.3% (2015: 19.2%):

-  Over 1,100 new client wins

-  104 (2015: 81) consultants at year end

·     June 2015 placing raised gross proceeds of £18.6m:

-  Earnings enhanced by five acquisitions completed in year

-  All businesses integrating well

-  Increased headroom on regulatory capital requirements

·     Broadening proposition as adviser, manager and provider

Recent developments and outlook

·     Expect increasing demand for advice post-Brexit

·     Acquisition of MC Trustees in September 2016

·     Strong pipeline of further acquisition opportunities

·     Planned launch of new structured product fund

·     Appointment of Anne Gunther as Non-Executive Director

·     Building work on new Leicester office started in May 2016

·     Opening new Manchester office

1 Earnings before interest, taxation, depreciation, amortisation and acquisition-related costs. 

² Basic EPS up 7.7% to 21.1p (2015: 19.6p).

3 Before acquisition-related costs, amortisation and impairment of acquired intangibles, and notional finance income and charges. 

⁴ Excluding banking income. 

Commenting on the final results, Bob Woods, Executive Chairman, said:

"I am pleased to report another year of strong growth, with organic growth supplemented by the five acquisitions completed during the period.  Revenue was up 24.3% to £43.0m (2015: £34.6m), with strong growth in our wealth management business following the announcement of the Government's new pension freedoms and a 22.2% increase in the value of total client assets under management, administration and advice to £6.61bn at the year-end. 

"This strong revenue growth translated to growth in Adjusted EPS of 14.0% to 31.0p (2015: 27.2p).  Accordingly, the Board is pleased to recommend the payment of an increased final dividend of 8.65 pence per share (2015:  7.16 pence).  This makes a proposed total dividend for the year of 12.5 pence (2015: 10.5 pence), a year-on-year increase of 19.0%, while maintaining an appropriate level of dividend cover. 

"Acquisitions are a core part of our growth strategy and the five acquisitions completed in the year are integrating well.  The acquisition of Old Station Road Holdings Limited and its subsidiaries (together "MC Trustees"), which we announced today, is another excellent strategic and cultural fit with our existing business and we continue to seek further value-enhancing acquisitions. 

"The accelerating pace of consolidation within the SIPP market is putting smaller operators under increasing pressure to join forces with larger firms.  I expect this trend to continue following the introduction of increased regulatory capital requirements for SIPP operators on 1 September 2016. 

"Finally, as I prepare to hand over Chairmanship to Joanne Lake, I am confident that her great understanding of our business and formidable diligence will be of immense value in helping our executive team drive the business towards its goals.  Throughout its 25 year history, in both good and bad economic conditions, Mattioli Woods has grown by being focused on the delivery of quality advice, services and products, growing our clients' assets and enhancing their financial outcomes.  I am convinced this proposition will allow us to continue to differentiate ourselves and secure better outcomes for an increasing number of clients, thereby delivering value for our shareholders." 

For further information please contact:

Mattioli Woods plc
Ian Mattioli, Chief Executive
Nathan Imlach, Finance Director	Tel: [phone]
	www.mattioliwoods.com

Canaccord Genuity Limited
Roger Lambert, Corporate Broking	Tel: [phone]
Kit Stephenson, Corporate Broking
Sunil Duggal, Investment Banking	www.canaccordgenuity.com

Media enquiries:

Camarco
Ed Gascoigne-Pees	Tel: [phone]
	www.camarco.com

Analyst presentation

There will be an analyst presentation to discuss the results at 08:30am today at Canaccord Genuity Limited, 88 Wood Street, London, EC2V 7QR. 

Those analysts wishing to attend are asked to contact Ed Gascoigne-Pees at Camarco on [phone] or at [e-mail]. 

Strategic report

Chairman's statement

I am delighted to report another year of strong growth, with revenues up 24.3% to £43.0m (2015: £34.6m) despite unsettled markets.  Adjusted EPS⁵ for the year was up 14.0% to 31.0p (2015: 27.2p).  As a result of this strong performance the Board is pleased to recommend an increased final dividend of 8.65p (2015: 7.16p) up 20.8% on the prior year. 

Last year, I announced I would be stepping-down as Executive Chairman and so this is my last report after 11 years as Chairman of an AIM listed business.  I am immensely proud of our team, which has grown in strength and delivered consistent growth throughout this period.  We are very fortunate in having appointed Joanne Lake to succeed me as Non-Executive Chairman.  Joanne has known the business since we first considered floating and has served as an independent Non-Executive Director since July 2012.  She has a great understanding of our business and I know her formidable diligence will be of immense value in helping our executive team drive the business towards its goals. 

Over the last 25 years, we have shown in good and bad economic conditions that we have a robust business model, which can deliver additional shareholder value through organic growth, the development of new revenue streams and the acquisition of similar or complementary businesses.  We have continued to enjoy strong organic growth in our wealth management business, winning a record number of new wealth management cases during the year, comprising over 1,000 new SIPP, SSAS and personal clients with total assets under management, administration and advice of over £350m.  In addition, our employee benefits business won over 100 new corporate clients. 

The Government's new pension freedoms created additional demand for advice, which more than offset an anticipated fall in banking income, following further cuts in the interest margins available from our banking partners.  As in previous times of change, our proposition as adviser, administrator, product provider and asset manager sets us apart and positions us well to deal with the challenges of changing investment markets to secure better outcomes for our clients. 

Carefully considered acquisitions continue to contribute to our growth.  In June 2015, we raised £18.6m (before expenses) by way of a placing with institutional investors ("the Placing") to allow us to pursue further acquisition opportunities.  At the same time, we announced the acquisition of Boyd Coughlan Limited ("Boyd Coughlan"), which was followed by the purchase of the Taylor Patterson Group Limited ("Taylor Patterson") in September 2015, the Lindley Trustees pension business in October 2015, Maclean Marshall Healthcare, a specialist healthcare and protection business in January 2016 and Stadia Trustees' pension business in February 2016. 

The five businesses acquired during the year are integrating well and have all contributed positively to the Group's trading results since acquisition, increasing earnings and enhancing value. 

The acquisition of Old Station Road Holdings Limited and its subsidiaries (together "MC Trustees"), which we announced today, is another excellent strategic and cultural fit with our existing pension business.  MC Trustees provides trustee and administration services to over 1,500 SIPP and SSAS schemes and offers the opportunity to realise synergies from the merger of its business onto Mattioli Woods' bespoke pension administration platform. 

In addition, the Company has signed heads of terms to acquire MC Holdings (Malta) Limited and its subsidiary (together "MC Malta").  MC Malta operates Qualifying Recognised Overseas Pension Schemes ("QROPS"), providing arrangements suitable for expatriates from the UK or people who have earned a pension in the UK and now live abroad, extending the Group's existing pension offering.  The acquisition of MC Malta is expected to complete following approval of the proposed transaction by the Malta Financial Services Authority.  

The accelerating pace of consolidation within the SIPP market is putting smaller operators under increasing pressure to join forces with larger firms.  I expect this trend to continue following the introduction of increased regulatory capital requirements for SIPP operators on 1 September 2016.  We continue to seek further value-enhancing acquisitions and were delighted to be one of only three operators to be awarded an 'A' rating in a recent independent report on the sustainability of the bespoke SIPP market. 

One of the Group's subsidiaries, Custodian Capital Limited ("Custodian Capital"), is the discretionary investment manager of Custodian REIT plc ("Custodian REIT"), a closed-ended property investment company listed on the Main Market of the London Stock Exchange.  Custodian Capital's management fees are based on the net asset value of Custodian REIT, which now has a market capitalisation of over £300m following £98.4m of new share issues during the last financial year.  Following the UK referendum Custodian REIT has maintained a premium to net asset value, against a backdrop of mass redemptions across the open-ended property funds.  I anticipate the long-term secure income it offers investors will ensure it remains an attractive investment, given the likelihood that low interest rates will endure for some time to come. 

In August 2015, we announced plans to build a new central Leicester office on the site of the former Leicester City Council headquarters at New Walk.  Construction commenced in May 2016, with completion scheduled for the end of 2017. 

In July 2016, we announced a three-year deal with rugby giants Leicester Tigers to strengthen the Group's brand awareness.  The new agreement will include shirt sponsorship on the Tigers' home and away shirts, a dedicated Mattioli Woods stand at the 26,000 capacity Welford Road stadium, corporate hospitality rights and the provision of exclusive content to Tigers fans from the start of the 2016/17 season. 

Our recent achievements have been recognised with a number of industry awards for individual and corporate achievements nationally and locally, including Best Wealth Management Adviser at the Money Marketing Awards 2016, as well as being highly commended as Best Investment Adviser.  Our focus is on ensuring we continue to address our clients' changing needs and our ambition is to see our brand become an even stronger force in the UK financial services sector. 

⁵ Before acquisition-related costs, amortisation and impairment of acquired intangibles, and notional finance income and charges. 

Acquisitions

We have invested over £40m since our admission to AIM in 2005 in bringing 18 businesses or client portfolios into the Group.  Accordingly, we have developed considerable expertise and a strong track record in the execution and subsequent integration of such deals. 

The Boyd Coughlan and Taylor Patterson acquisitions have provided the Group with a wider audience for its products and services and extended our wealth management and employee benefits capabilities, with the experienced management teams of both companies remaining part of the enlarged Group. 

Lindley Trustees provided trustee and administration services to over 130 SSAS schemes, and post-acquisition we have integrated this business into Taylor Patterson's operations.  The acquisition of Maclean Marshall Healthcare brought additional scale and expertise to our corporate healthcare proposition. 

In February 2016, we worked closely with the Financial Conduct Authority ("FCA") to secure our appointment to administer the wind-up of the SIPP schemes operated by Stadia Trustees and transfer the members' assets to new pension arrangements, including a default arrangement provided by Mattioli Woods.  We had completed the transfer of 287 active schemes into the default arrangement at 31 May 2016, with a further 174 schemes transferring over since the year end. 

With increasing complexity and continuing consolidation across the key markets in which we operate, we are confident there will be further opportunities to expand our operations by acquisition, accelerating our already strong growth. 

Assets under management, administration and advice

Total client assets under management, administration and advice increased by 22.2% to £6.61bn at 31 May 2016 (2015: £5.41bn) as follows:

	SIPP and SSAS6 £m	Employee benefits £m	Personal and other pension £m	Total £m
At 1 June 2015	3,376.2	1,059.4	974.8	5,410.4
Boyd Coughlan	-	89.6	166.9	256.5
Taylor Patterson	336.3	87.5	263.3	687.1
Lindley Trustees	112.8	-	-	112.8
Stadia Trustees	24.7	-	-	24.7
Acquisitions during the year7	473.8	177.1	430.2	1,081.1
Net inflow/(outflow), including market movements	146.1	(78.3)	46.6	114.4
Assets under management, administration and advice8	3,996.1	1,158.2	1,451.6	6,605.9

Acquisitions during the year added £1,081.1m of client assets, with a net inflow of £114.4m during the period comprising:

·     An increase of £146.1m in SIPP and SSAS funds under trusteeship, following net organic growth of 3.6% in the number of schemes being administered at the year end.  We enjoyed 12.4% organic growth in direct⁹ schemes, which was partly offset by a net loss in the number of schemes the Group operates on an administration-only basis (before acquisitions during the year).  In recent years, we have been appointed to operate or wind-up a number of distressed SIPP portfolios following the failure of the previous operator, with lost schemes including the transfer of members of these distressed portfolios to alternative arrangements;

·     A £46.6m increase in other personal and pension assets, with over 350 new personal clients won during the period; and

·     A £78.3m fall in the value of assets held in the corporate pension schemes advised by our employee benefits business, primarily due to retrenchment amongst our clients in the North Sea oil and gas industry.  However, revenues in our employee benefits business are not linked to the value of client assets in the same way that certain of our wealth management revenue streams are. 

6 Value of funds under trusteeship in SIPP and SSAS schemes administered by Mattioli Woods and its subsidiaries. 

7 Value at 31 May 2016. 

8 Certain pension scheme assets, including clients' own commercial properties, are only subject to a statutory valuation at a benefit crystallisation event. 

9 SIPP and SSAS schemes where the Group acts as pension consultant and administrator. 

Staff

We continue our transition from small to big, retaining our core principles as a business built on the integrity and expertise of our people.  Our total headcount at 31 May 2016 had increased to 504 (2015: 406) and we continue to invest in our graduate recruitment programme, with 25 (2015: 14) new graduates and 15 (2015: 8) apprentices joining the Group during the year.  We continue to expand our consultancy and technical teams to take advantage of new business opportunities, with the number of consultants having increased to 104 (2015: 81) at the year end.  

We also welcomed 76 new employees to the Group as part of the acquisitions completed during the period.  As an Investors in People company we are committed to developing our people and building the capacity to deliver sustainable growth.  Once complete, our new office in Leicester will provide our staff there with a modern working environment and capacity for further growth. 

We enjoy a strong team spirit and facilitate employee equity ownership through the Mattioli Woods plc Share Incentive Plan ("the Plan") and other share schemes.  I am delighted that the proportion of eligible staff investing via the Plan has increased to 61% (2015: 59%) and we will continue to encourage broader participation in the Plan.  I would like to thank all our staff for their continued commitment, enthusiasm and professionalism in dealing with our new and existing clients' affairs.  

Board changes

Following the retirement of the Group's senior Non-Executive Director, John Redpath, earlier this year, we were delighted to welcome Anne Gunther as a Non-Executive Director in June 2016.  Anne's many years' experience in banking and private client asset management will be a great asset to the Group as we continue to grow and develop our business. 

In June 2015 we announced the appointment of Joanne Lake as Deputy Chairman, as an interim step prior to her proposed appointment as Non-Executive Chairman at the Annual General Meeting in October 2016.  The period since then has allowed a considered handover of responsibilities and I believe this is the optimal time for the role of Chairman to be separated from executive responsibilities. 

Joanne has a broad understanding of financial services with over 30 years of corporate finance and City experience.  She has been a Non-Executive Director and Chairman of the audit committee since July 2012 and I wish her every success in her new role. 

On stepping down from the Board, I will continue in a full-time executive role as Senior Adviser to the Group.  As previously announced, my focus will be on my client portfolio, new business development and acting as an ambassador for Mattioli Woods.  I will also support the development of the Group's high end corporate and private clients. 

Dividends

The Board is pleased to recommend the payment of an increased final dividend of 8.65 pence per share (2015: 7.16 pence).  This makes a proposed total dividend for the year of 12.5 pence (2015: 10.5 pence), a year-on-year increase of 19.0% (2015: 15.4%).  The Board remains committed to growing the dividend, while maintaining an appropriate level of dividend cover.  If approved, the final dividend will be paid on 1 November 2016 to shareholders on the register at the close of business on 23 September 2016. 

Strategy

Our strategy remains focused on the pursuit of strong organic growth, supplemented by strategic acquisitions that enhance value and broaden or deepen our expertise and services.  Our distribution channels include our consultancy team, a nationwide network of professional introducers and, increasingly, our workplace financial educational programmes. 

We continue to invest in our bespoke pension administration and wealth management platform, with the first phase of a new customer relationship management system in the final stages of testing.  This is expected to realise operational efficiencies across the Group and we recognise the increasing consumer requirement for a strong advisory service blended with on-line functionality, visibility and product availability. 

Our focus is on ensuring we continue to address our clients' changing needs and our ambition is to see our brand become an even stronger force in the UK financial services sector. 

Outlook

I am very proud that throughout the 25 years since Ian Mattioli and I founded Mattioli Woods, delivering great client outcomes has remained at the heart of everything we do.  Successive Governments have instigated pension reform and I expect further legislative changes to support growth in our advice-led business, where we are recognised experts in the field of wealth management and retirement planning. 

We saw some slowdown in investment activity over the summer months as investors held their breath following the UK referendum.  Last week, the International Monetary Fund reported that while the short-term turbulence in financial markets triggered by the Brexit vote has subsided, recent data points to an even more modest pace of global growth this year.  Although further volatility in financial markets may impact how our investment and asset management revenues are derived, it remains a great strength of our business that we can continue to derive income from investments in all asset classes, while ensuring our clients' investment strategies are appropriately aligned to the prevailing conditions and suitable for their financial needs. 

I believe Mattioli Woods' vertically-integrated models for wealth management and employee benefits, combining our capabilities as adviser, administrator, product provider and asset manager, positions us well to secure further profitable growth going forward.  

Bob Woods

Chairman

7 September 2016

Strategic report

Chief Executive's review

Introduction

I am pleased to report another very successful year, with revenue in the year ended 31 May 2016 up 24.3% to £43.0m (2015: £34.6m).  We have made strong progress towards our medium term goal of growing revenues to £100m and remain a business built on the integrity and expertise of our people.  We continue to focus on delivering great outcomes for our clients, with one of our key aims being to grow and preserve their investment assets. 

Strong demand for advice and the continued development of our consultancy team has driven increased new business flows, with organic revenue growth of 8.7% (2015: 16.5%) despite an anticipated fall in banking revenues within our pension consultancy and administration business to £0.4m (2015: £1.2m).  The Bank of England's decision to cut the base rate to a historic low of 0.25% last month has eliminated the small banking margin we had retained until then, with client rates on our core pension scheme accounts also falling to zero.  With some commentators speculating that we might see the introduction of negative interest rates in the UK, we are reviewing how we might enhance our existing client banking model. 

In recent years our clients have increasingly focused on income-generating alternatives to cash and I anticipate this further reduction in base rates will stimulate growth in our investment and asset management business. 

We have developed bespoke investment propositions, including our Private Investors Club, structured product and property investment initiatives, which all have the benefit of low correlation with mainstream equity and bond markets.  I believe these initiatives, in conjunction with further product development, will help us deliver positive investment returns despite what are expected to be difficult mainstream markets. 

Subject to regulatory approval, we plan to launch a new structured product fund later this year and have strengthened our client proposition with the launch of a new inheritance service, 'Progression', which will complement our existing estate planning provision. 

Organic growth was supplemented by £5.2m of revenues generated by the five businesses acquired during the year, plus full-year revenues of £0.5m (2015: £0.2m) from the UK Wealth Management and Torquil Clark pension administration businesses acquired in August 2014 and January 2015 respectively.  

EBITDA¹⁰ was up 25.4% to £8.9m (2015: £7.1m), with a small increase in EBITDA margin to 20.7% (2015: 20.5%) despite further investment in the infrastructure of our business and the fall in banking revenues.  

Adjusted EPS¹¹ increased 14.0% to 31.0p (2015: 27.2p), while basic EPS increased 7.7% to 21.1p (2015: 19.6p), with 22.3% growth in operating profits offset by the dilutive effect of issuing of 3,795,918 shares under the Placing and 655,630 shares as initial consideration on the Boyd Coughlan and Taylor Patterson acquisitions.  Basic EPS was also impacted by £0.5m of notional finance charges (2015: £0.2m) on the unwinding of discounts on long-term provisions and £0.3m (2015: £0.3m) of acquisition-related costs.  The effective rate of taxation fell to 16.5% (2015: 24.0%) due to the recalculation of deferred tax liabilities on acquired intangibles following cuts in the UK corporation tax rate. 

Our success is based upon the delivery of quality advice, services and products, growing our clients' assets and enhancing their financial outcomes.  The foundation of this success is the development of our people and I am delighted we have created a business our clients are proud to be a part of, our people feel proud to work for and is one that recognises and rewards talent and hard work.  

10 Earnings before interest, taxation, depreciation and amortisation.

11 Before acquisition-related costs, notional finance costs and amortisation and impairment of intangible assets arising on acquisitions.   

Industry overview

Mattioli Woods operates within the UK's financial services industry, which is subject to the effects of volatile markets and economic conditions.  In recent years, we have seen a period of unprecedented change in legislation, regulation and customer needs.  We continue to be proactive in relation to the opportunities this creates, with our specialists dedicated to keeping up with the pace of change.  Our entrepreneurial model allows us to adapt and advise our clients accordingly. 

Our markets are highly fragmented and serviced by a wide range of suppliers offering diverse services to both individual and corporate clients.  These markets remain highly competitive, with recent regulatory changes, including the abolition of provider commissions on corporate pensions in April 2016 and increased capital requirements for SIPP operators from 1 September 2016, driving further consolidation across the industry.  

We continue to invest in the development of our IT platform and I believe the entry of new competitors with innovative technology (such as 'robo-advice') may drive some margin compression in the wider market.  The FCA's 'regulatory sandbox', which opened in May 2016, provides firms with an opportunity to test innovative products, services, business models and delivery mechanisms in a live environment without immediately incurring all the normal regulatory consequences of pilot activities. 

In addition, some commentators believe the Government and FCA's joint report on the financial advice market ("the FAMR") published in March 2016 may lead to further regulatory or legislative pressure to reduce the cost to consumers.  I expect regulatory and market concerns over pricing to further validate our vertically-integrated model, where seeking operational efficiencies in the back office and reducing investment management and platform costs are key elements of our drive to reduce our clients' total expense ratios ("TERs") while maintaining our target profit margin. 

Our services

Our core pension and wealth management offering serves the higher end of the market, including controlling directors and owner-managed businesses, professionals, executives and affluent retirees.  Our broad range of employee benefit services is targeted towards medium-sized and larger corporates. 

In recent years, the Group has developed a broader wealth management proposition, grown from its strong pensions advisory and administration expertise, with the Group's income now derived from four key service lines:

·     Investment and asset management;

·     Pension consultancy and administration;

·     Employee benefits; and

·     Property management.

Investment and asset management

Investment and asset management revenues generated from advising clients on both pension and personal investments increased 49.1% to £17.0m (2015: £11.4m), representing 39.6% (2015: 32.9%) of total Group revenues.  Income from initial and ongoing portfolio management charges increased to £8.8m (2015: £5.4m), as the value of assets held in clients' discretionary portfolios increased 7.3% to £0.88bn (2015: £0.82bn). 

I am pleased with the investment performance delivered by both our core portfolio management service and Custodian REIT during the period.  The Group's total discretionary assets under management, including Custodian REIT and the Thoroughbred OEIC, totalled £1.17bn (2015: £1.01bn) at the year end.  

Adviser charges (including legacy investment commissions and revenues from protection business) increased to £8.2m (2015: £6.0m), with adviser charges primarily based on the value of assets under advice during the period.  Assets under advice include over £111.4m of clients' assets held in structured products.  Our structured product initiative has been a great success, delivering returns of over 6% per annum on average for matured plans since inception in 2005.  We plan to launch a new structured product fund later this year to build on this foundation by targeting similar returns, but with the benefits of collateralisation, instant diversification, continuous availability and liquidity that are not available under our current plan arrangements. 

The growth of funds under management and advice has enhanced the quality of earnings through an increase in recurring revenues, with the proportion of investment and asset management revenues which are recurring increasing to 81.7% (2015: 78.2%).  As with other firms, these income streams are linked to the value of funds under management and advice, and are therefore affected by the performance of financial markets. 

Pension consultancy and administration

Retirement planning is often central to our clients' wealth management strategies.  We maintain our technical edge through our widely acknowledged understanding of UK pension legislation, which allows our consultancy team to deliver meaningful guidance to our clients.  Our client base primarily comprises owner-managers, senior executives and members of the professions.  Additional fees are generated from the provision of specialist ad hoc consultancy services.  

Pension consultancy and administration revenues were up 6.4% to £16.6m (2015: £15.6m), representing 38.6% (2015: 45.1%) of Group revenues, of which 82.6% (2015: 86.1%) are recurring.  This increase was driven by the total number of SIPP and SSAS schemes administered by the Group increasing 19.6% to 7,872 (2015: 6,580) at the year end, with acquisitions completed during the year adding 1,054 new schemes. 

Direct pension consultancy¹² and administration fees increased 9.5% to £12.7m (2015: £11.6m), with additional one-off revenues earned following significant changes in pension legislation, including restrictions on contributions for high earners and a further reduction in the lifetime allowance.  The number of direct schemes administered by the Group increased 19.4% to 4,598 (2015: 3,850), with 665 (2015: 455) new schemes gained in the year (excluding acquisitions), representing 17.3% (2015: 12.9%) growth on the number of schemes at the start of the year.  Client wins included 162 new Mattioli Woods Personal Pensions, a product launched last year to provide a wrapper allowing smaller pension funds efficient access to our discretionary portfolio management service, and we extended this initiative through the launch of a new discretionary investment proposition for employees earlier this year. 

Our focus remains on the quality of new business, with an average new SIPP value of over £0.3m and average new SSAS value of over £0.70m.  We also maintained strong client retention, with an external loss rate¹³ of 2.4% (2015: 2.8%) and an overall attrition rate¹⁴ of 3.6% (2015: 3.0%).  

In July 2015 the Government published a Green Paper on the possibility of a radical departure from the current tax regime, such as replacing upfront tax relief on pension contributions with tax-free pension payments.  The consultation on tax relief reform has led to heated debate and while continual change (and talk of change) to the UK pensions system may work against the Government's aim to ensure all individuals save for their retirement, I expect it to drive sustained demand for advice, benefiting our core pensions business. 

The number of SSAS and SIPP schemes the Group operates on an administration-only basis increased to 3,274 (2015: 2,730) at the year end.  In recent years, Mattioli Woods has been appointed to operate or wind-up a number of distressed SIPP portfolios following the failure of the previous operator.  Lost schemes include the planned transfer of members of these distressed SIPP portfolios to alternative arrangements, with the 324 lost schemes during the period being more than offset by the 783 administration-only schemes acquired as part of the Taylor Patterson, Lindley Trustees and Stadia Trustees portfolios plus organic growth.  Overall, third party administration fees increased 25.0% to £3.5m (2015: £2.8m). 

The strong growth in direct and third party administration fees was offset by a £0.8m fall in banking revenues to £0.4m (2015: £1.2m). 

¹² SIPP and SSAS schemes where the Group acts as pension consultant and administrator. 

13 Direct schemes lost to an alternative provider as a percentage of average scheme numbers during the period. 

14 Direct schemes lost as a result of death, annuity purchase, external transfer or cancellation as a percentage of average scheme numbers during the period. 

Property management

Property management revenues increased to £4.1m (2015: £2.8m) or 9.5% of total revenue (2015: 8.1%), of which 91.6% (2015: 90.3%) represented recurring annual management charges.  The majority of our property management revenues are derived from the services provided by Custodian Capital to Custodian REIT. 

Following the UK referendum, Custodian REIT has maintained a premium to net asset value, with its market capitalisation now over £300m.  As manager, Custodian Capital charges annual management fees based on the net asset value of the investment company, with the Group's recurring revenues being enhanced as a result of Custodian REIT raising £98.4m (2015: £50.2m) of new equity during the year. 

A strong income focus allows Custodian REIT to offer one of the highest yields¹⁵ among its UK property investment company peer group, coupled with the potential for capital growth from a balanced portfolio of real estate assets.  I anticipate the long-term secure income it offers investors will remain very attractive given the further cut in what were already historically low interest rates post referendum. 

In addition, Custodian Capital continues to facilitate direct property ownership on behalf of pension schemes and private clients and also manages the "Private Investors Club", which offers alternative investment opportunities to suitable clients by way of private investor syndicates.  This continues to be well received by clients, with £9.9m (2015: £4.0m) invested in eight (2015: four) new syndicates completed during the year. 

15 Source:  Numis Securities Limited, Investment Companies Daily News dated 24 August 2016. 

Employee benefits

The employee benefits market has adjusted following the abolition of provider commissions in April 2016 and I am delighted over 100 new corporate clients were attracted to the Group's broader range of employee benefits services during the year. 

Employee benefits revenues were up 10.4% to £5.3m (2015: £4.8m), representing 12.3% of total revenue (2015:13.9%).  The move to a fee-based proposition has been well-received by corporate clients and has led to an increase in recurring revenues, with 78.7% (2015: 68.5%) of employee benefits revenues now recurring.  The oil and gas sector is cyclical and has been in a downward phase over the last year, with a number of cost control measures implemented by the industry, including redundancies.  This has impacted revenues from clients operating in the oil and gas industry, but we continue to diversify our revenue streams within employee benefits through growth in different locations and by acquisition. 

We continue to seek opportunities to enhance our revenues from non-pension related areas and recent acquisitions have diversified our employee benefits revenues, both geographically and through the addition of new specialisms, such as the charity sector and health insurance.  We have also extended our reach through the launch earlier this year of a new discretionary investment proposition for employees, using the MW Private Pension. 

We are delighted to confirm the appointment of Saira Chambers to our employee benefits team, who joins the business next month to lead our newly created International Desk.  Saira brings a wealth of experience in international employee benefits and her focus will be on developing our international reach and additional growth opportunities.  She will be based in our new Manchester office, which will act as a hub for both wealth management and employee benefits consultants. 

We are also delighted to announce the strengthening of our Aberdeen, Leicester, Newmarket and London teams with the appointment of new consultants in each area.  At a time when the employee benefits market is going through extensive transition, we are growing our consultancy team as we believe the opportunities are extensive. 

The need for advice from both corporates and their staff is likely to increase following the UK referendum result, and I expect our Executive Financial Counselling, Boardroom Pay and Financial Education initiatives to continue to gather pace.  In addition, the FAMR highlighted concerns around a developing 'advice gap', driven by:

·     Increasing responsibility on individuals to manage their own financial affairs;

·     The ability of individuals to pay for advice; and

·     Advice needs arising from pensions' liberalisation and auto-enrolment. 

The aim of the FAMR was to set out measures to improve the affordability and access to advice for consumers.  While the RDR has been effective in moving the industry to a fee-based model, there has been a reduction in the number of financial advisers and advice in relation to the investment of smaller amounts is expensive.  As a result, the main recommendations of the review focus on affordability and accessibility, with a significant emphasis on workplace advice and funding this pre-retirement and annually. 

Complementing this initiative, in the last Budget the Government announced a consultation to increase the tax-free contribution employers can make to employees for employer-arranged pension advice from April 2017 from £150 to £500, making the provision of comprehensive financial advice a viable employee benefit without incurring a P11D liability.  I believe the opportunities this presents to our employee benefits business will enable us to realise further synergies with our wealth management business, building on the £0.6m of revenues generated in cross referrals between the two divisions during the last financial year. 

Key performance indicators

The directors consider the key performance indicators ("KPIs") for the Group are as follows:

Strategy/objective	Performance indicator
Organic growth and growth by acquisition	Revenue - total income (excluding VAT) from all revenue streams.
Operating efficiency	Adjusted EBITDA margin - profit generated from the Group's operating activities before financing income or costs, taxation, depreciation, amortisation and acquisition-related costs, divided by revenue.
Shareholder value and financial performance	Adjusted EPS - total comprehensive income for the year, net of taxation, attributable to equity holders of the Company, adjusted to add back acquisition-related costs, notional finance charges on the unwinding of discounts on long‑term provisions and the amortisation of acquired intangible assets, divided by the number of ordinary shares in issue.
Growth in the value of assets under management, administration and advice	Assets under management, administration and advice - the value of all client assets the business gives advice upon, manages or administers.
Excellent client service and retention	Client loss rate - the number of direct SSAS and SIPP schemes lost as a result of death, annuity purchase, external transfer or cancellation as a percentage of average scheme numbers during the period.
Financial stability	Debtors' days - this is the average number of days' sales outstanding in trade receivables at any time.
Financial stability	Surplus on regulatory capital requirement - this is the aggregate surplus on the total regulatory capital requirement of the Group.

Financial performance and future developments

Group results

Revenues were up 24.3% to £43.0m (2015: £34.6m), with sustained demand for the Group's services.  We are particularly pleased with the continued development of our broader wealth management proposition and the integration of recently acquired businesses during the year.  The mix between the Group's key revenue streams changed during the period, summarised as follows: 

·     39.6% investment and asset management (2015: 32.9%);

·     38.6% pension consultancy and administration (2015: 45.1%);

·     12.3% employee benefits (2015: 13.9%); and

·     9.5% property management (2015: 8.1%). 

Unadjusted EBITDA increased 25.4% to £8.9m (2015: £7.1m), with an increase in EBITDA margin to 20.7% (2015: 20.5%) despite further investment in the infrastructure of our business, a fall in banking revenues and costs associated with the completion and integration of recent acquisitions. 

To facilitate a like-for-like comparison with prior years, acquisition costs of £0.3m (2015: £0.3m) incurred on acquisitions during the year have been added back in calculating adjusted EBITDA and adjusted profit before tax.  Adjusted EBITDA¹⁶ increased 25.7% to £9.3m (2015: £7.4m), while adjusted EBITDA margin increased to 21.6% (2015: 21.4%). 

As highlighted in my Industry Overview, I see both a market expectation and possible regulatory or legislative pressure to reduce product costs.  Previously, I have set out our aim to reduce the TERs incurred by clients and I anticipate we will see some continued pressure on margins, which we plan to offset by securing operational efficiencies through the further development of our IT platform and by reducing investment management and platform costs. 

16 Adding back £0.3m (2015: £0.3m) of acquisition-related costs. 

Net finance costs

Net finance costs were £0.3m (2015: £0.1m) due to the impact of £0.5m (2015: £0.2m) of notional finance charges on the unwinding of discounts on long‑term provisions.  The Group has maintained a positive net cash position, with average balances significantly higher than the prior year following the Placing in June 2015, putting us in strong position to continue acquiring suitable businesses. 

Taxation

The effective rate of taxation on profit on ordinary activities decreased to 16.5% (2015: increased to 24.0%) primarily due to the recalculation of deferred tax liabilities on acquired intangibles following a cut in the substantively enacted rate of UK corporation tax from 20% to 18%.  The net deferred taxation liability carried forward at 31 May 2016 was £3.0m (2015: £1.9m).

Earnings per share and dividend

Adjusted EPS¹⁷ was up 14.0% at 31.0p (2015: 27.2p), with basic EPS increased 7.7% to 21.1p (2015: 19.6p), due to the impact of strong revenue growth and an increase in underlying operating profits being offset by notional finance charges on the unwinding of discounts on long‑term provisions and an increase in acquisition-related costs during the year.  Diluted earnings per share increased 8.8% to 21.1p (2015: 19.4p), with the exercise of 281,338 options issued under the Company's share option plans during the period.  A proposed increase of 19.0% in the total dividend for the year to 12.5p (2015: 10.5p) demonstrates our desire to deliver value to shareholders and confidence in the outlook for our business. 

17 Before acquisition-related costs, amortisation and impairment of acquired intangibles, and notional finance income and charges. 

Cash flow

Cash generated from operations increased to £11.8m or 133% of EBITDA (2015: £7.6m or 107%), with the cash conversion ratio improving due to:

·     EBITDA for the period being stated after a £1.1m increase in non-cash costs, being a £0.80m increase in share-based payment costs and a £0.3m increase in notional interest costs, representing the unwinding of discounting on long‑term provisions; and

·     A £1.3m fall in the Group's working capital requirement (2015: increase of £0.3m), with a £0.5m (2015: £1.7m) increase in trade and other receivables being offset by a £1.6m (2015: £1.4m) increase in trade and other payables and a £0.2m (2015: £0.01m) increase in provisions. 

New client wins and recent legislative changes led to increased activity and hence an increase in accrued income and trade receivables in our direct pension business (where fees are typically invoiced six months in arrears), with higher discretionary funds under management increasing accrued income in investment and asset management (including property management). 

Trade and other payables increased due to:

·     A £0.7m increase in trade payables at the year end due to a higher value of property insurance invoices outstanding at the year end following strong growth in our property management business, the timing of expenditure on legal and professional fees and a general increase in overheads as a result of continued growth;

·     A £0.5m increase in accrued staff bonuses at the year end, following a successful year where results are ahead of target; and

·     A £0.3m increase in deferred income following growth in our third party administration business, (where annual fees are typically paid annually in advance). 

Net cash at 31 May 2016 was £29.8m (2015: £10.6m) after the Placing raised net proceeds of £17.9m, with £6.8m cash outflow and £3.2m cash acquired on the five acquisitions completed during the year, plus £1.1m (2015: £2.4m) of deferred consideration paid in cash on historic acquisitions, with £0.95m being an accelerated payment of deferred consideration on the Atkinson Bolton acquisition to complete its integration into the Group's wealth management and employee benefits divisions. 

Outstanding trade receivables fell to 46 days' sales (2015: 52 days), with a continued focus on credit control, while trade payables increased to 52 days' purchases (2015: 32 days) due to the higher value of invoices for property insurances, legal and professional fees and other overheads outstanding at the year end. 

Capital expenditure in the year was £1.7m (2015: £1.0m), with the most significant costs being investment in new computer hardware and software and the purchase of new company cars following continued expansion of the consultancy team.  The continued development of the Group's technology infrastructure is a key part of our strategy and we continue to invest in our bespoke pension administration and wealth management platform.  The first phase of our new customer relationship management system is in the final stages of user acceptance testing and is expected to realise operational efficiencies across the Group.  Although the development of our platform is taking longer than we initially anticipated, the expected development costs remain in line with our initial estimates. 

Bank facilities

The Group previously maintained borrowing facilities with Lloyds Bank plc ("Lloyds"), which comprised a £5.0m overdraft facility.  The facility was repayable upon demand and expired on 31 January 2016. 

We did not renew the overdraft facility due to the headroom the Group's current cash balances provide on its working capital requirements.  Management will continue to review the level of bank facilities the Group may require going forward. 

Capital structure

The Group's capital structure is as follows:

	2016 £000	2015 £000
Net cash	(29,809)	(10,570)
Shareholders' equity	65,581	39,467
Capital employed	35,772	28,897

The Group continues to maintain a net cash position and net cash balances have increased to £29.8m (2015: £10.6m) following the Placing and an increase in trade and other payables to £10.0m (2015: £8.0m). 

Regulatory capital

The Board considers it prudent for the Group to maintain headroom of at least 25% over the FCA regulatory capital requirement.  The Group's regulatory capital requirement has increased in recent years, and in addition its capital is eroded when it makes acquisitions due to the requirement for intangible assets arising on acquisition to be deducted from Tier 1 Capital.  To provide the flexibility to take advantage of further acquisition opportunities, the Company raised net proceeds of £17.9m pursuant to the Placing, which has been allocated as follows:

·     £4.0m to satisfy the initial cash consideration and deal costs payable on the acquisition of Boyd Coughlan, plus £2.5m of contingent deferred consideration payable in cash in the two years following completion;

·     £2.2m to satisfy the initial cash consideration and deal costs payable on the acquisition of Taylor Patterson, plus £3.3m of contingent deferred consideration payable in cash in the three years following completion;

·     £0.3m to satisfy the cash consideration and deal costs payable on the acquisition of Lindley Trustees;

·     £0.2m to satisfy the cash consideration and deal costs payable on the acquisition of Maclean Marshall Healthcare; and

·     £0.1m to satisfy the cash consideration and deal costs payable on the acquisition of Stadia Trustees. 

The balance of the Placing proceeds has given the enlarged Group greater headroom on its increased regulatory capital requirement following these acquisitions, allowing us to pursue further acquisition opportunities. 

Acquisitions

The five businesses acquired during the year continue to integrate well.  The rebranding of Boyd Coughlan was completed in December 2015 and the trade and assets of Taylor Patterson were hived-up into Mattioli Woods following the year end.  Both acquisitions have provided the Group with a wider audience for its products and services and extended our wealth management and employee benefits capabilities, with the experienced management teams of both businesses remaining part of the enlarged Group. 

Lindley Trustees provides trustee and administration services to a portfolio of SSAS schemes, and following its acquisition we have integrated this business into Taylor Patterson's operations. 

Maclean Marshall Healthcare has brought additional scale and expertise to our corporate healthcare proposition, with our appointment to administer the wind-up of the SIPP schemes operated by Stadia Trustees and transfer the members' assets to new pension arrangements adding scale to our SIPP administration business. 

We are confident there will be further opportunities to expand our operations by acquisition, accelerating our already strong growth. 

Relationships

The Group's performance and value to our shareholders are influenced by other stakeholders, principally our clients, suppliers, employees, the Government and our strategic partners.  Our approach to all these parties is founded on the principle of open and honest dialogue, based on a mutual understanding of needs and objectives. 

Relationships with our clients are managed on an individual basis through our client relationship managers and consultants.  Employees have performance development reviews and employee forums also provide a communication route between employees and management.  Mattioli Woods also participates in trade associations and industry groups, which give us access to client and supplier groups and decision-makers in Government and other regulatory bodies.  Mattioli Woods is a member of the Association of Member-directed Pension Schemes and the Quoted Companies Alliance. 

Resources

The Group aims to safeguard the assets that give it competitive advantage, including its reputation for quality and proactive advice, its technical competency and its people.  

Our core values provide a framework for responsible and ethical business practices.  Structures for accountability from our administration teams through to the operational management team and the Group's Board are clearly defined.  The proper operation of the supporting processes and controls are regularly reviewed by the Audit Committee and take into account ethical considerations, including procedures for 'whistle-blowing'. 

Forward-looking statements

The strategic report is prepared for the members of Mattioli Woods and should not be relied upon by any other party for any other purpose.  Where the report contains forward-looking statements these are made by the Directors in good faith based on the information available to them at the time of their approval of this report.  Consequently, such statements should be treated with caution due to the inherent uncertainties, including both economic and business risks underlying such forward-looking statements and information.  The Group undertakes no obligation to update these forward-looking statements. 

Principal risks and uncertainties

There are a number of potential risks which could hinder the implementation of our strategy and have a material impact on our long‑term performance.  These arise from internal or external events, acts or omissions which could pose a threat to the Group. 

We are proud of our consistently high client retention rate, but continue seeking ways to strengthen this.  We believe the most significant risk we face is potential damage to our reputation as a result of poor client service and we are determined not to let standards slip.  We address this through ongoing quality control procedures and the provision of regular training for all our staff. 

Pension regulations will continue to be reviewed.  Future changes may not produce an environment that is advantageous to the Group and any changes in regulation may be retrospective.  To address this risk, we are committed to ensuring that our views are expressed during consultation exercises and that we respond positively and rapidly to new regulations. 

We also recognise that a significant skills shortage would represent a risk to growth.  We are mitigating this risk through investment in our graduate and apprentice recruitment programmes and by providing incentives to motivate and retain our existing employees. 

One source of revenue is based on the value of cash balances held in clients' schemes.  These balances are not included in the Consolidated or Company statements of financial position.  In recent years, lower banking margins due to a continued low interest rate environment have resulted in a decline in these revenues.  We are reviewing our banking relationships to ensure we can access competitive interest rates for our clients, but the Bank of England's decision to cut the base rate to a historic low of 0.25% last month has eliminated the small banking margin we had retained until then, with client rates on our core pension scheme accounts also falling to zero.  With some commentators speculating that we might see the introduction of negative interest rates in the UK, we are reviewing how we might enhance our client banking model. 

The Group has an indirect exposure to security price risk on investments held by clients, with discretionary portfolio management fees, adviser charges (including legacy investment commissions) and property management fees being based on the value of clients' assets under management, administration or advice.  Periods of volatility in a particular asset class may see changes in how our investment revenues are derived.  However, a great strength of our business is that we can continue to derive income from investments in all asset classes, while ensuring our clients' investment strategies are appropriately aligned to the prevailing market conditions and suitable for their financial needs. 

The table below outlines the current risk factors for the business identified by the Group.  The risk factors mentioned do not purport to be exhaustive as there may be additional risks that materialise over time that the Group has not yet identified or deemed to have a potentially material adverse effect on the business:

Industry risks
Risk type	Risk	Mitigating factors
Changes in investment markets and poor investment performance	Volatility may adversely affect trading and/or the value of the Group's assets under management, administration and advice, from which we derive revenues.	·      Majority of clients' funds held within registered pension schemes or ISAs, where less likely to withdraw funds and lose tax benefits.  ·      Broad range of investment solutions enables clients to shelter from market volatility through diversification, while continuing to generate revenues for the Group.  ·      Market volatility is closely monitored by the Investment Committee.
Changing markets and increased competition	The Group operates in a highly competitive environment with evolving characteristics and trends.	·      Consolidating market position develops the Group's pricing power. ·      Control over scalable and flexible bespoke pension administration platform. ·      Experienced management team with a strong track record.  ·      Loyal customer base and strong client retention. ·      Broad service offering gives diversified revenue streams.
Evolving technology	The Group's technology could become obsolete if we are unable to develop our systems to accommodate changing client needs, new products and the emergence of new industry standards.	·      Track record of successful development. ·      High awareness of the importance of technology at Board level. ·      Expanded systems development with phased implementation of Group-wide platform.
Regulatory risk	The Group may be adversely affected as a result of new or revised legislation or regulations or by changes in the interpretation or enforcement of existing laws and regulations.	·      Strong compliance culture.  ·      External professional advisers are engaged to review and advise upon control environment.  ·      Business model and culture embraces FCA principles, including treating clients fairly.  ·      Financial strength provides comfort should capital resource requirements be increased.
Changes in tax law	Changes in tax legislation could reduce the attractiveness of long-term savings via pension schemes, particularly SSASs and SIPPs.	·      The Government has a desire to encourage long-term savings to plan for an ageing population, which is currently under-provided for.  ·      Changes in pension legislation create the need for clients to seek advice.  ·      The development of the Group's investment and asset management services has reduced dependency on pension planning.

Operational risks
Risk type	Risk	Mitigating factors
Damage to the Group's reputation	There is a risk of reputational damage as a result of employee misconduct, failure to manage inside information or conflicts of interest, fraud, improper practice, poor client service or advice.	·      Strong compliance culture with a focus on positive customer outcomes. ·      High level of internal controls, including checks on new staff.  ·      Well-trained staff who ensure the interests of clients are met in the services provided.
Errors, breakdown or security breaches in respect of the Group's software or information technology systems	Serious or prolonged breaches, errors or breakdowns in the Group's software or information technology systems could negatively impact customer confidence.  It could also breach contracts with customers and data protection laws, rendering us liable to disciplinary action by governmental and regulatory authorities, as well as to claims by our clients.	·      Ongoing review of data security.  ·      IT performance, scalability and security are deemed top priorities by the Board. ·      Experienced in-house team of IT professionals and established name suppliers.
Business continuity	In addition to the failure of IT systems, there is a risk of disruption to the business as a result of power failure, fire, flood, acts of terrorism, re-location problems and the like.	·      Periodic review of Business Continuity Plan, considering best practice methodologies. ·      Disaster recovery plan and a disaster recovery team in place.  Business impact analysis has been conducted by department.
Fraud risk	There is a risk an employee defrauds either the Group or a client.	·      The Group ensures the control environment mitigates against the misappropriation of client assets.  ·      Strong corporate controls require dual signatures for all payments and Board approval for all expenditure greater than £15,000.  ·      Assessment of fraud risk every six months discussed with the Audit Committee and external auditors.  ·      Clients have view-only access to information.  ·      Ongoing review of risk of fraud due to external attack on the Group's IT systems.
Key personnel risk	The loss of, or inability to recruit, key personnel could have a material adverse effect on the Group's business, results of operations or financial condition.	·      Succession planning is a key consideration throughout the Group. ·      Success of the Group should attract high calibre candidates. ·      Share-based schemes in operation to incentivise staff and encourage retention. ·      Recruitment programmes in place to attract appropriate new staff.  ·      Cross functional acquisition team brought into acquisition projects at an early stage. ·      Keyman cover for company founders.
Litigation or claims made against the Group	Risk of liability related to litigation from clients or third parties and assurance that a claim or claims will not be covered by insurance or, if covered, will exceed the limits of available insurance coverage, or that any insurer will become insolvent and will not meet its obligations to provide the Group with cover.	·      Appropriate levels of Professional Indemnity insurance cover regularly reviewed with the Group's advisers.  ·      Comprehensive internal review procedures, including compliance sign-off, for advice and marketing materials.  ·      Maintenance of three charging models; time cost, fixed and asset based, which are aligned to specific service propositions and agreed with clients.  ·      Restricted status for our consultants to enable the recommendation of our own products versus others in the market.
Reliance on third parties	Any regulatory breach or service failure on the part of an outsourced service provider could expose the Group to the risk of regulatory sanctions and reputational damage.	·      Due diligence is part of the selection process for key suppliers. ·      Ongoing review of relationships and concentration of risk with key business partners.
Strategic risk	Risk that management will pursue inappropriate strategies or implement the Group's strategy ineffectively.	·      Experienced management team with successful track record to date. ·      Management has demonstrated a thorough understanding of the market and monitors this through regular meetings with clients.
Financial risks
Risk type	Risk	Mitigating factors
Counterparty default	That the counterparty to a financial obligation will default on repayments.	·      The Group trades only with recognised, creditworthy third parties.  ·      Customers who wish to trade on credit terms are subject to credit verification procedures.  ·      All receivables are reviewed on an ongoing basis for risk of non-collection and any doubtful balances are provided against.
Bank default	The risk that a bank could fail.	·      We only use banks with strong credit ratings.   ·      Client deposits spread across multiple banks.  ·      Regular review and challenge of treasury policy by management.
Concentration risk	A component of credit risk, arising from a lack of diversity in business activities or geographical risk.	·      The client base is broad, without significant exposure to any individual client or group of clients. ·      Broad service offering gives diversified revenue streams.
Liquidity risk	The risk the Group is unable to meet liabilities as they become due because of an inability to liquidate assets or obtain adequate funding.	·      Cash generative business. ·      Group maintains a surplus above regulatory and working capital requirements. ·      Treasury management provides for the availability of liquid funds at short notice.
Interest rate risk	Risk of decline in earnings due to a decline in banking margin or deposit rates received on surplus cash.  Low interest rates make it harder to structure compelling capital-protected products for clients.	·      Interest rates being at historic lows has resulted in associated income streams no longer being material.  ·      Good relationships with key banking partners.  ·      Access to competitive interest rates due to scale of business.
Operational risks
Risk type	Risk	Mitigating factors
Underwriting risk	When arranging new products for promotion to the Group's clients, the Group may need to guarantee a minimum aggregate investment to secure appropriate terms for the product.  If actual client investment is less than the underwritten amount, we would incur the cost of either acquiring the unsold element of the product or unwinding any hedges underlying the unsold element of the product.	·      New products created in line with client demand. ·      Potential costs are carefully considered by the Investment Committee prior to the launch of each product.

Corporate social responsibility

We believe that running a profitable and growing business, which creates jobs and contributes to the economic success of the areas in which it operates, is the basis for good corporate social responsibility. 

Mattioli Woods has a long-standing commitment to ensure our staff can engage with their local communities, playing a valuable role by forming innovative partnerships with other organisations and charities.  This social awareness is present throughout the business, from our employees to our clients, our professional connections and the suppliers we use.

We have a high level of engagement within our local communities.  Each year, we sponsor both business, sports and community awards.  Our business has benefited greatly from winning numerous awards and we feel its right to help other businesses reap the rewards of such accolades.  In addition, we sponsor a variety of local clubs, business and sports related events across the country.  We believe this brings many benefits to the local community and beyond. 

The Group is pleased to sponsor the Rothley 10k, one of the most celebrated charity road running races in Leicestershire, which attracted over 700 runners in 2016, a new record for the race, which raised over £20,000 of essential funds for a variety of local causes, including LOROS, Rainbows, County Air Ambulance Service, Age UK, Eye Camps and RNLI. 

In 2015 we chose our first national charity, Breast Cancer Now, the UK's largest breast cancer charity dedicated to funding research into this devastating disease.  By tackling the disease in the labs, on the political agenda, through public health information and with the health service, it believes it can transform the outlook for everyone affected by breast cancer.  To date, the Group has raised over £90,000 for the charity. 

Employees across the country have been involved in a number of activities to raise essential funding for this great cause, including a group wide cycling challenge, Tough Mudder in the Midlands, the London and Edinburgh marathons, Glack Attack in Aberdeen and numerous cake sales and challenges. 

We also continue to sponsor wheelchair racer Sammi Kinghorn, who represented Scotland in the 2014 Commonwealth Games in Glasgow and is representing Team GB at the Paralympic games in Rio de Janeiro this month. 

The Mattioli Woods Business Academy ("the Academy") operates in partnership with Gateway College, Leicester.  The Academy has been developed to create opportunities locally for young people and assist the Group in recruiting and developing staff with the right skills, experience and values.  The Academy offers two-year placements to 10 of the brightest students each year, leading to Level 3 qualifications in Business and Finance and a wealth of workplace experience. 

In addition, we continue to expand our Financial Services Development Scheme, aimed at graduates, apprentices and school leavers, with plans to enrol up over 20 new joiners this year. 

Approval

In accordance with Section 414(c) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, the Company has prepared a Strategic Report, which includes information that would have been previously included in the Directors' Report. 

The Strategic Report in its entirety has been approved by the Board of Directors and signed on its behalf by:

Ian Mattioli

Chief Executive

7 September 2016

Consolidated Statement of Comprehensive Income

For the year ended 31 May 2016

	Note	2016 £000	2015 £000
Revenue	4	42,950	34,565
Employee benefits expense		(24,552)	(20,042)
Other administrative expenses		(7,807)	(6,604)
Share based payments		(1,594)	(790)
Amortisation and impairment		(1,816)	(1,279)
Depreciation		(497)	(387)
Loss on disposal of property, plant & equipment		(56)	(44)
Operating profit before financing		6,628	5,419
Finance revenue		122	46
Finance costs		(459)	(175)
Net finance costs		(337)	(129)
Profit before tax		6,291	5,290
Income tax expense		(1,046)	(1,268)
Profit for the year		5,245	4,022
Other comprehensive income for the year, net of tax		-	-
Total comprehensive income for the year, net of tax		5,245	4,022
Attributable to:
Equity holders of the parent		5,245	4,022
Earnings per ordinary share:
Basic (pence)	6	21.1	19.6
Adjusted (pence)		31.0	27.2
Diluted (pence)	6	21.1	19.4
Proposed total dividend per share (pence)	7	12.5	10.5

The operating profit for each period arises from the Group's continuing operations.  The parent company has taken advantage of section 408 of the Companies Act 2006 and has not included its own statement of comprehensive income in these financial statements.  The profit of the Company for the financial year, after taxation, was £5.1m (2015: £2.5m). 

Consolidated and Company Statements of Financial Position          Registered number: 3140521

As at 31 May 2016

		2016		2015
		Group	Company	Group	Company
	Note	£000	£000	£000	£000
Assets
Property, plant and equipment		1,997	1,924	1,430	1,430
Intangible assets	8	43,410	28,973	28,852	28,818
Deferred tax asset		737	731	422	422
Investments		-	15,187	-	17,617
Total non-current assets		46,144	46,815	30,704	48,287
Trade and other receivables		13,495	14,010	12,355	11,922
Investments		79	79	129	129
Cash and short-term deposits	10	29,809	21,381	10,570	8,545
Total current assets		43,383	35,470	23,054	20,596
Total assets		89,527	82,285	53,758	68,883
Equity
Issued capital	11	252	252	204	204
Share premium	11	27,765	27,765	8,689	8,689
Merger reserve	11	8,531	8,531	4,838	4,838
Equity - share based payments	11	1,642	1,642	997	976
Capital redemption reserve	11	2,000	2,000	2,000	2,000
Retained earnings	11	25,391	22,487	22,739	20,048
Total equity attributable to equity holders of the parent		65,581	62,677	39,467	36,755
Non-current liabilities
Deferred tax liability		3,724	2,127	2,339	2,332
Financial liabilities and provisions	12	5,738	5,738	2,393	21,195
Total non-current liabilities		9,462	7,865	4,732	23,527
Current liabilities
Trade and other payables		10,047	8,397	7,979	7,297
Income tax payable		1,083	178	624	348
Financial liabilities and provisions	12	3,354	3,168	956	956
Total current liabilities		14,484	11,743	9,559	8,601
Total liabilities		23,946	19,608	14,291	32,128
Total equities and liabilities		89,527	82,285	53,758	68,883

The financial statements were approved by the Board of directors and authorised for issue on 7 September 2016 and are signed on its behalf by:

Bob Woods                                                                            Nathan Imlach

Executive Chairman                                                                 Finance Director

Consolidated and Company Statements of Changes in Equity

For the year ended 31 May 2016

Group	Issued capital (Note 11) £000	Share premium (Note 11) £000	Merger reserve (Note 11) £000	Equity - share based payments (Note 11) £000	Capital redemption reserve (Note 11) £000	Retained earnings (Note 11) £000	Total equity £000
As at 1 June 2014	200	8,001	4,040	1,046	2,000	20,257	35,544
Profit for the year	-	-	-	-	-	4,022	4,022
Total comprehensive income	-	-	-	-	-	4,022	4,022
Transactions with owners of the Group, recognised directly in equity
Issue of share capital	4	688	798	-	-	-	1,490
Share-based payments	-	-	-	256	-	-	256
Deferred tax taken to equity	-	-	-	2	-	-	2
Current tax taken to equity	-	-	-	34	-	-	34
Dividends paid	-	-	-	-	-	(1,881)	(1,881)
Reserves transfer	-	-	-	(341)	-	341	-
As at 31 May 2015	204	8,689	4,838	997	2,000	22,739	39,467
Profit for the year	-	-	-	-	-	5,245	5,245
Total comprehensive income	-	-	-	-	-	5,245	5,245
Transactions with owners of the Group, recognised directly in equity
Issue of share capital	48	19,076	3,693	-	-	-	22,817
Share-based payments	-	-	-	596	-	-	596
Deferred tax taken to equity	-	-	-	61	-	-	61
Current tax taken to equity	-	-	-	149	-	-	149
Dividends paid	-	-	-	-	-	(2,754)	(2,754)
Reserves transfer	-	-	-	(161)	-	161	-
As at 31 May 2016	252	27,765	8,531	1,642	2,000	25,391	65,581

Consolidated and Company Statements of Changes in Equity

For the year ended 31 May 2016 (continued)

Company	Issued capital (Note 11) £000	Share premium (Note 11) £000	Merger reserve (Note 11) £000	Equity - share based payments (Note 11) £000	Capital redemption reserve (Note 11) £000	Retained earnings (Note 11) £000	Total equity £000
As at 1 June 2014	200	8,001	4,040	1,040	2,000	19,105	34,386
Profit for the year	-	-	-	-	-	2,483	2,483
Total comprehensive income	-	-	-	-	-	2,483	2,483
Transactions with owners of the Company, recognised directly in equity
Issue of share capital	4	688	798	-	-	-	1,490
Share-based payments	-	-	-	241	-	-	241
Deferred tax taken to equity	-	-	-	2	-	-	2
Current tax taken to equity	-	-	-	34	-	-	34
Dividends paid	-	-	-	-	-	(1,881)	(1,881)
Reserves transfer	-	-	-	(341)	-	341	-
As at 31 May 2015	204	8,689	4,838	976	2,000	20,048	36,755
Profit for the year	-	-	-	-	-	5,053	5,053
Total comprehensive income	-	-	-	-	-	5,053	5,053
Transactions with owners of the Company, recognised directly in equity
Issue of share capital	48	19,076	3,693	-	-	-	22,817
Share-based payments	-	-	-	596	-	-	596
Deferred tax taken to equity	-	-	-	61	-	-	61
Current tax taken to equity	-	-	-	149	-	-	149
Dividends paid	-	-	-	-	-	(2,754)	(2,754)
Reserves transfer	-	-	-	(140)	-	140	-
As at 31 May 2016	252	27,765	8,531	1,642	2,000	22,487	62,677

Consolidated and Company Statements of Cash Flows

For the year ended 31 May 2016

		Group 2016	Company 2016	Group 2015	Company 2015
	Note	£000	£000	£000	£000
Operating activities
Profit for the year Adjustments for:		5,245	5,053	4,022	2,486
Depreciation		497	482	387	339
Amortisation and impairment	8	1,816	1,411	1,279	2,775
Gain on bargain purchase		(105)	(105)	(92)	(92)
Investment income		(122)	(93)	(46)	(23)
Interest expense		459	785	175	411
Loss on disposal of property, plant and equipment		56	56	44	44
Equity-settled share-based payments		838	838	466	451
Cash-settled share-based payments		756	756	324	324
Dividend income		-	(2,497)	-	(1,750)
Income tax expense		1,046	625	1,268	927
Cash flows from operating activities before changes in working capital and provisions		10,486	7,311	7,827	5,892
Increase in trade and other receivables		(509)	(2,058)	(1,699)	(1,010)
Increase in trade and other payables		1,619	1,035	1,442	1,176
Increase in provisions		192	192	10	30
Cash generated from operations		11,788	6,480	7,580	6,088
Interest paid		-	-	(1)	(1)
Income taxes paid		(1,714)	(1,343)	(1,441)	(1,096)
Net cash flows from operating activities		10,074	5,137	6,138	4,991
Investing activities
Proceeds from sale of property, plant and equipment		75	75	69	69
Purchase of property, plant and equipment		(1,115)	(1,107)	(603)	(579)
Purchase of software	8	(597)	(590)	(374)	(374)
Consideration paid on acquisition of subsidiaries	3	(6,911)	(6,911)	(2,383)	(2,383)
Consideration paid on acquisition of business	3	(735)	(735)	(363)	-
Cash transferred on hive up of group companies		-	-	-	3,373
Cash received on acquisition of subsidiaries	3	3,217	-	32	-
Other investments		(16)	(16)	(90)	(90)
Loans advanced to property syndicates		(2,188)	(2,188)	-	-
Loan repayments from property syndicates		2,158	2,158	-	-
Interest received		122	93	46	23
Dividends received		-	800	-	1,750
Net cash flows from investing activities		(5,990)	(8,421)	(3,666)	1,789
Financing activities
Proceeds from the issue of share capital		19,568	19,568	467	467
Payment of costs of share issue		(693)	(693)	-	-
Repayment of borrowings acquired in business combinations		(965)	-	-	-
Repayment of Directors' loans		(1)	(1)	(2)	(2)
Dividends paid	7	(2,754)	(2,754)	(1,881)	(1,881)
Net cash flows from financing activities		15,155	16,120	(1,416)	(1,416)
Net increase in cash and cash equivalents		19,239	12,836	1,056	5,364
Cash and cash equivalents at start year	10	10,570	8,545	9,514	3,181
Cash and cash equivalents at end of year	10	29,809	21,381	10,570	8,545

Notes to the financial statements

1       Corporate information

Mattioli Woods plc ("the Company") is a public limited company incorporated and domiciled in England and Wales, whose shares are publicly traded on the AIM market of the London Stock Exchange plc.  The nature of the Group's operations and its principal activities are set out in the Chief Executive's Review. 

2       Basis of preparation and accounting policies

2.1    Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and in accordance with the requirements of the Companies Act applicable to companies reporting under IFRS. 

The financial statements comprise the financial statements of Mattioli Woods plc and its subsidiaries ("the Group") as at 31 May each year.  The financial statements have been prepared on the historical cost basis, except for certain financial instruments that are measured at fair value, and are presented in pounds, with all values rounded to the nearest thousand pounds (£000) except when otherwise indicated. 

The principal accounting policies adopted are set out in this note and, unless otherwise stated, have been applied consistently to all periods presented in the financial statements.  The financial statements were authorised for issue in accordance with a resolution of the Directors on 7 September 2016. 

2.2    Developments in reporting standards and interpretations

Standards affecting the financial statements

There have been no new or revised standards and interpretations that have been adopted in the current year and have affected the amounts reported in these financial statements. 

Standards not affecting the financial statements

The following new and revised standards and interpretations have been adopted in the current year:

Standard or interpretation		Periods commencing on or after
IFRS 2             (amended)	Share-based Payment	1 July 2014
IFRS 3             (amended)	Business Combinations	1 July 2014
IFRS 8             (amended)	Operating Segments	1 July 2014
IFRS 13 (amended)	Fair Value Measurement	1 July 2014
IAS 16 (amended)	Property, Plant and Equipment	1 July 2014
IAS 24 (amended)	Related Party Disclosures	1 July 2014
IAS 38 (amended)	Intangible Assets	1 July 2014

Their adoption has not had any significant impact on the amounts reported in these financial statements but may impact the accounting for future transactions and arrangements, or give rise to additional disclosures. 

Future new standards and interpretations

A number of new standards and amendments to standards and interpretations will be effective for future annual periods commencing after 1 June 2015 and, therefore, have not been applied in preparing these consolidated financial statements.  At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective:

Standard or interpretation			Periods commencing on or after
IAS 1	Presentation of financial statements		1 January 2016
IAS 16 (amended)	Property, Plant and Equipment		1 January 2016
IAS 27 (revised)	Separate Financial Statements		1 January 2016
IAS 28 (amended)	Investments in Associates and Joint Ventures		1 January 2016
IAS 38 (amended)	Intangible Assets		1 January 2016
IFRS 9	Financial Instruments		1 January 2018
IFRS 10 (amended)	Consolidated Financial Statements		1 January 2016
IFRS 11 (amended)	Joint Arrangements		1 January 2016
IFRS 12 (amended)	Disclosures of Interests in Other Entities		1 January 2016
IFRS 15	Revenue from Contracts with Customers		1 January 2018
IFRS 16	Leases		1 January 2019

IFRS 9 'Financial Instruments', IFRS 15 'Revenue from Contracts with Customers' and IFRS 16 'Leases' are expected to have the most significant effect on the consolidated financial statements of the Group. 

IFRS 9 'Financial Instruments' and IFRS 15 'Revenue from Contracts with Customers' are not expected to become mandatory for periods commencing before 1 January 2018.  IFRS 16 ' Leases' is not expected to become mandatory for periods commencing before 1 January 2019.  These standards have not yet been adopted by the EU and the Group does not plan to adopt these standards early.  IFRS 9 'Financial Instruments' could change the classification and measurement of financial assets and the timing and extent of credit provisioning.  IFRS 15 'Revenue from Contracts with Customers' could change how and when revenue is recognised from contracts with customers.  The extent of their impact has not yet been fully determined. 

IFRS 16 'Leases' eliminates the classification of leases as either operating leases or finance leases.  The Group will be required to recognise all leases with a term of more than 12 months as a lease asset in its statement of financial position, together with a financial liability representing its obligation to make future lease payments.  The extent of its impact has not yet been fully determined. 

Other than to expand certain disclosures within the financial statements, the Directors do not expect the adoption of the other standards and interpretations listed above will have a material impact on the financial statements of the Group in the future periods.  

2.3       Principal accounting policies

Basis of consolidation

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.  The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.  All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full. 

Business combinations

Business combinations are accounted for using the purchase accounting method.  This involves assessing whether any assets acquired meet the criteria for recognition as separately identifiable intangible assets.  Intangible assets are measured on initial recognition at their fair value at the date of acquisition.  Client portfolios are valued by discounting their expected future cash flows over their expected useful lives, based on the Group's historic experience.  Expected future cash flows are estimated based on the historic revenues and costs associated with the operation of that client portfolio.  The discount rates used estimate the cost of capital, adjusted for risk. 

Group re-organisation

During the year ended 31 May 2015 the trade and assets of City Pensions Limited, Thoroughbred Wealth Management Limited, Atkinson Bolton Consulting Limited and Kudos Financial Services Limited were transferred to the Company.  The net asset and results for the transferred businesses are reflected in the parent company financial statements at the same values as they would have been reflected in the Group accounts had the transfer not taken place.  Each transfer of trade and assets resulted in any goodwill, client portfolios recognised as intangible assets and associated deferred tax balances that arose on consolidation, being recognised in the parent company statement of financial position.  The trade and assets were exchanged for loan notes attracting annual interest on the outstanding principal at a rate of 3% above the Bank of England base rate.  On 30 November 2015 the loan notes were waived and the capital and reserves in City Pensions Limited, Thoroughbred Wealth Management Limited, Atkinson Bolton Consulting Limited and Kudos Financial Services Limited were reduced to £1. 

2.3       Key sources of judgements and estimation uncertainty

Impairment of client portfolios

The Group reviews whether acquired client portfolios are impaired at least on an annual basis.  This comprises an estimation of the fair value less cost to sell and the value in use of the acquired client portfolios.  In assessing value in use, the estimated future cash flows expected to arise from each client portfolio are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to that asset.  

The key assumptions used in respect of value in use calculations are those regarding growth rates and anticipated changes to revenues and costs during the period covered by the calculations.  Changes to revenue and costs are based upon management's expectation.  The Group prepares its annual budget and five-year cash flow forecasts derived therefrom, thereafter extrapolating these cash flows using a terminal growth rate of 2.5% (2015: 2.5%), which management considers conservative against industry average long-term growth rates. 

The key assumption used in arriving at a fair value less cost of sale are those around valuations based on earnings multiples and values based on assets under management.  These have been determined by looking at valuations of similar businesses and the consideration paid in comparable transactions.  Management has used a range of multiples resulting in an average of 7.5x EBITDA to arrive at a fair value. 

The carrying amount of client portfolios at 31 May 2016 was £25.4m (2015: £16.9m).  No impairments have been made during the year (2015: £nil) based upon the Directors' review. 

Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis.  This requires an estimation of the value in use of the cash-generating units to which the goodwill has been allocated.  In assessing value in use, the estimated future cash flows expected to arise from the cash-generating unit are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to that asset.  

The key assumptions used in respect of value in use calculations are those regarding growth rates and anticipated changes to revenues and costs during the period covered by the calculations, based upon management's expectation.  The carrying amount of goodwill at 31 May 2016 was £16.4m (2015: £10.8m).  No impairments have been made during the year (2015: £nil) based upon the Directors' review. 

Internally generated capitalised software

The costs of internal software developments are capitalised where they are judged to have an economic value that will extend into the future and meet the recognition criteria in IAS38.  Internally generated software is then amortised over an estimated useful life, assessed by taking into consideration the useful life of comparable software packages.  The carrying amount of internally generated capitalised software at 31 May 2016 was £1.1m (2015: £0.8m). 

Deferred tax assets

Deferred tax assets include temporary differences related to employee benefits settled via the issue of share options.  Recognition of the deferred tax assets assumes share options will have a positive value at the date of vesting, which is greater than the exercise price.  The carrying amount of deferred tax assets at 31 May 2016 was £0.7m (2015: £0.4m). 

Recoverability of accrued time costs and disbursements

The Group recognises accrued income in respect of time costs and disbursements incurred on clients' affairs during the accounting period, which have not been invoiced at the reporting date.  This requires an estimation of the recoverability of the time costs and disbursements incurred but not invoiced to clients.  The carrying amount of accrued time costs and disbursements at 31 May 2016 was £4.6m (2015: £4.5m). 

Accrued income

Accrued income is recognised in respect of fees, adviser charges and commissions due to the Group on investments and bank deposits placed during the accounting period which have not been received at the reporting date.  This requires an estimation of the amount of income that will be received subsequent to the reporting date in respect of the accounting period, which is based on the value of historic receipts and investments placed by clients under management and advice.  The carrying amount of accrued income at 31 May 2016 was £2.5m (2015: £2.2m). 

Acquisitions and business combinations

When an acquisition arises the Group is required under IFRS to calculate the Purchase Price Allocation ("PPA").  The PPA requires companies to report the fair value of assets and liabilities acquired and it establishes useful lives for identified assets.  The identification and the valuation of the assets and liabilities acquired involves estimation and judgement when determining whether the recognition criteria are met.  The classification of consideration payable as either purchase consideration or remuneration is an area of judgement and estimate. 

Subjectivity is also involved in PPA with the estimation of the future value of brands, technology, customer relationships and goodwill. 

Contingent consideration payable on acquisitions

The Group has entered into certain acquisition agreements that provide for a contingent consideration to be paid.  A financial instrument is recognised for all amounts management anticipates will be paid under the relevant acquisition agreement.  This requires management to make an estimate of the expected future cash flows from the acquired business and determine a suitable discount rate for the calculation of the present value of any deferred contingent consideration payments.  The carrying amount of contingent consideration provided for at 31 May 2016 was £5.8m (2015: £1.5m). 

Provisions

The Group recognises provisions for client claims, contingent consideration payable on acquisitions, commission clawbacks, cash-settled share based payment awards and other obligations which exist at the reporting date.  These provisions are estimates and the actual amount and timing of future cash flows are dependent on future events.  Management reviews these provisions at each reporting date to ensure they are measured at the current best estimate of the expenditure required to settle the obligation.  Any difference between the amounts previously recognised and the current estimate is recognised immediately in the statement of comprehensive income. 

3. Business combinations

The Group completed five acquisitions during the year.  Transaction costs incurred during the course of each acquisition have been expensed and are included in administrative expenses in the consolidated statement of comprehensive income and operating cash flows in the consolidated statement of cash flows in the period in which they were incurred. 

Acquisition of Boyd Coughlan Limited

On 23 June 2015, Mattioli Woods acquired 100% of the voting equity interests of Boyd Coughlan Limited ("Boyd Coughlan"), an employee benefits and wealth management business based in Buckingham.  Boyd Coughlan provides advice to both high net worth individuals and companies on all aspects of financial planning. 

The acquisition has been accounted for using the acquisition method.  The fair value of the identifiable assets and liabilities of Boyd Coughlan as the date of acquisition was:

	Fair value recognised on acquisition £000	Fair value adjustments £000	Previous carrying value £000
Property, plant and equipment	7	(26)	33
Client portfolio	4,270	4,270	-
Cash at bank	2,656	-	2,656
Trade and other receivables	144	-	144
Deferred tax	1	-	1
Assets	7,078	4,244	2,834
Trade and other payables	(73)	-	(73)
Accruals and deferred income	(58)	(20)	(38)
Other taxation and social security	(40)	-	(40)
Income tax	(121)	-	(121)
Provisions	(38)	(38)	-
Deferred tax liability	(854)	(854)	-
Liabilities	(1,184)	(912)	(272)
Total identifiable net assets at fair value	5,894
Goodwill	1,493
Total acquisition cost	7,387
Analysed as follows:
Initial cash consideration	3,300
Adjustment to initial consideration	561
New shares in Mattioli Woods	1,200
Deferred contingent consideration	2,500
Discounting of deferred contingent consideration	(174)
Total acquisition cost	7,387
Cash outflow on acquisition	£000
Cash paid	3,861
Cash acquired	(2,656)
Acquisition costs	131
Net cash outflow	1,336

Boyd Coughlan is an excellent cultural and strategic fit with Mattioli Woods, providing advice to both corporate and personal clients, and generating strong margins and recurring revenues.  The acquisition has provided a wider audience for the Group's products and services, extending its employee benefits proposition at a time when the drive towards total reward and flexible benefits is creating new business opportunities in the corporate market. 

Synergies include the ability to promote additional services to existing and prospective clients of each business.  In addition, the acquisition added further specialist expertise to the Group and its experienced management team has been retained by Mattioli Woods.  The goodwill recognised above is attributed to the expected benefits from combining the assets and activities of Boyd Coughlan with those of the Group.  The primary components of this residual goodwill comprise:

·     Revenue synergies expected to be available to Mattioli Woods as a result of the transaction;

·     The workforce;

·     The knowledge and know-how resident in Boyd Coughlan's modus operandi; and

·     New opportunities available to the combined business, as a result of both Boyd Coughlan and the existing business becoming part of a more sizeable listed company. 

None of the recognised goodwill is expected to be deductible for income tax purposes.  The client portfolio is being amortised on a straight-line basis over an estimated useful life based on the Group's historic experience. 

From the date of acquisition Boyd Coughlan has contributed £2.5m to revenue and £0.7m to the Group profit for the period.  If the combination had taken place at the beginning of the period, Group revenue from continuing operations would have been £43.1m and the profit for the period would have been £5.3m. 

Acquisition of Taylor Patterson Group Limited

On 8 September 2015, Mattioli Woods acquired 100% of the voting equity interests of Taylor Patterson Group Limited and its subsidiaries (together "Taylor Patterson"), a financial advisory firm based in Preston.  Taylor Patterson provides wealth management, strategic financial planning, employee benefits and pension services to businesses and individuals. 

The acquisition has been accounted for using the acquisition method.  The fair value of the identifiable assets and liabilities of Taylor Patterson as the date of acquisition was:

	Fair value recognised on acquisition £000	Fair value adjustments £000	Previous carrying value £000
Property, plant and equipment	72	(3)	75
Client portfolio	4,941	4,941	-
Cash at bank	561	-	561
Trade and other receivables	458	-	458
Assets	6,032	4,938	1,094
Trade and other payables	(110)	-	(110)
Accruals and deferred income	(100)	-	(100)
Income tax	(262)	-	(262)
Provisions	(147)	(116)	(31)
Deferred tax liability	(999)	(999)	-
Loans	(965)	-	(965)
Liabilities	(2,583)	(1,115)	(1,468)
Total identifiable net assets at fair value	3,449
Goodwill	4,098
Total acquisition cost	7,547
Analysed as follows:
Initial cash consideration	2,500
Adjustment to initial consideration	(396)
New shares in Mattioli Woods	2,500
Deferred contingent consideration	3,300
Discounting of contingent consideration	(357)
Total acquisition cost	7,547
Cash outflow on acquisition	£000
Cash paid	2,104
Cash acquired	(561)
Acquisition costs	124
Net cash outflow	1,667

Taylor Patterson has been another excellent cultural and strategic acquisition, which extended the Group's geographic footprint into the North-West of England and has delivered the opportunity to offer discretionary investment management to Taylor Patterson's clients. 

The business has brought further specialist expertise into the Group's wealth management and employee benefits operations and its experienced management team has been retained by Mattioli Woods.  The goodwill recognised above is attributed to the expected benefits from combining the assets and activities Taylor Patterson with those of the Group.  The primary components of this residual goodwill comprise:

·     Revenue synergies expected to be available to Mattioli Woods as a result of the transaction;

·     The workforce;

·     The knowledge and know-how resident in Taylor Patterson's modus operandi; and

·     New opportunities available to the combined business, as a result of both Taylor Patterson and the existing business becoming part of a more sizeable listed company. 

None of the recognised goodwill is expected to be deductible for income tax purposes.  The client portfolio is gbe amortised on a straight-line basis over an estimated useful life based on the Group's historic experience. 

From the date of acquisition Taylor Patterson has contributed £2.4m to revenue and £0.7m to the Group profit for the period.  If the combination had taken place at the beginning of the period, Group revenue from continuing operations would have been £43.8m and the profit for the period would have been £5.5m. 

Acquisition of Lindley Trustees

On 5 October 2015 the Group acquired the pension administration business of Lindley Group and 100% of the voting equity interests of Lindley Trustees Limited (together "Lindley Trustees"), which provides trustee and administration services to over 130 small self-administered pension ("SSAS") schemes. 

The acquisition has been accounted for using the acquisition method.  The fair value of the identifiable assets and liabilities of Lindley Trustees as the date of acquisition was:

	Fair value recognised on acquisition £000	Fair value adjustments £000	Previous carrying value £000
Client portfolio	271	271	-
Assets	271	271	-
Provisions	(18)	(18)	-
Deferred tax liability	(54)	(54)	-
Liabilities	(72)	(72)	-
Total identifiable net assets at fair value	199
Total acquisition cost	199
Analysed as follows:
Cash consideration	199
Total acquisition cost	199
Cash outflow on acquisition	£000
Cash paid	199
Acquisition costs	36
Cash outflow	235

The acquisition delivered synergies from combining the activities of Lindley Trustees with those of Mattioli Woods, extending those existing relationships the Group had with intermediaries like the Lindley Group.  The goodwill recognised above is attributed to the expected benefits from combining the assets and activities of Lindley Trustees with those of the Group.  The primary components of this residual goodwill comprise:

·     Operational synergies expected to be realised as a result of combining the activities of Lindley Trustees onto the same pension administration platform that is used by Mattioli Woods;

·     The workforce; and

·     The knowledge and know-how resident in Lindley Trustees' modus operandi. 

The client portfolio is being amortised on a straight-line basis over an estimated useful life based on the Group's historic experience. 

From the date of acquisition Lindley Trustees has contributed £0.2m to revenue and £0.1m to the Group profit for the period.  If the combination had taken place at the beginning of the period, Group revenue from continuing operations would have been £43.1m and the profit for the period would have been £5.3m. 

Acquisition of Maclean Marshall Healthcare

On 22 January 2016 the Group acquired the business and assets of Maclean Marshall Healthcare ("MMH") for a cash consideration of £0.225m.  Based in Aberdeen, MMH provides advice to personal and corporate clients on all aspects of private medical insurance. 

The acquisition has been accounted for using the acquisition method.  The fair value of the identifiable assets and liabilities of MMH as the date of acquisition was:

	Fair value recognised on acquisition £000	Fair value adjustments £000	Previous carrying value £000
Client portfolio	278	278	-
Assets	278	278	-
Deferred tax liability	(53)	(53)	-
Liabilities	(53)	(53)	-
Total identifiable net assets at fair value	225
Total acquisition cost	225
Analysed as follows:
Cash consideration	225
Total acquisition cost	225
Cash outflow on acquisition	£000
Cash paid	(225)
Acquisition costs	(5)
Net cash outflow	(230)

The acquisition introduced an experienced manager and over 130 new corporate and personal clients to the Group, adding further scale to its employee benefits business.  The client portfolio is being amortised on a straight-line basis over an estimated useful life based on the Group's historic experience. 

From the date of acquisition MMH has contributed £0.03m to revenue and £0.01m to the Group profit for the period.  If the combination had taken place at the beginning of the period, Group revenue from continuing operations would have been £43.0m and the profit for the period would have been £5.3m. 

Acquisition of Stadia Trustees

Following a variation of permission in 2013, Stadia Trustees Limited was forced to cease accepting new business by the FCA.  Stadia Trustees Limited was one of eight small SIPP operators inspected by the FCA (when it was the Financial Services Authority) in 2011, as part of the regulator's efforts to tackle the risks posed by small firms and unregulated collective investment schemes. 

Mattioli Woods worked closely with Stadia Trustees Limited and the FCA to complete its acquisition of Stadia Trustees' business ("Stadia Trustees") on 15 February 2016, with a mandate to administer the wind-up of the Stadia SIPP, Noisnep SIPP, Essential SIPP, Essex Community Foundation SIPP, Hero SIPP, Investor Club SIPP, Ipswich SIPP, Liberator SIPP and Munro SIPP ("the Schemes") and transfer members' assets to new pension arrangements, including a default arrangement provided by Mattioli Woods. 

The acquisition has been accounted for using the acquisition method.  The fair value of the identifiable assets and liabilities of Stadia Trustees as the date of acquisition was:

	Fair value recognised on acquisition £000	Fair value adjustments £000	Previous carrying value £000
Client portfolio	359	359	-
Assets	359	359	-
Deferred income	(66)	(66)	-
Deferred tax liability	(68)	(68)	-
Liabilities	(134)	(134)	-
Total identifiable net assets at fair value	225
Gain on bargain purchase recognised in administrative expenses in the statement of comprehensive income	(105)
Total acquisition cost	120
Analysed as follows:
Cash consideration	120
Total acquisition cost	120
Cash outflow on acquisition	£000
Cash paid	120
Acquisition costs	10
Cash outflow	130

The acquisition gives Mattioli Woods the opportunity to secure new business, having proven to be a sound strategic partner with the expertise, scale and systems to give quality SIPP administration, delivering an enhanced service and long-term security for clients.  Stadia Trustees was acquired for a consideration of £0.12m, as the regulator and seller recognised the Group's ability to deal with the complexities associated with the winding up of the SIPPs operated by Stadia Trustees Limited and transfer of their members to alternative pension arrangements.  This resulted in a gain on bargain purchase of £0.11m being recognised in the statement of comprehensive income. 

From the date of acquisition Stadia Trustees has contributed £0.09m to revenue and £0.05m to the Group profit for the period.  If the combination had taken place at the beginning of the period, Group revenue from continuing operations would have been £43.2m and the profit for the period would have been £5.4m. 

Contingent consideration

The Group has entered into certain acquisition agreements that provide for contingent consideration to be paid.  These agreements and the basis of calculation of the net present value of the contingent consideration are summarised below.  While it is not possible to determine the exact amount of contingent consideration (as this will depend on the performance of the acquired businesses during the period), the Group estimates the fair value of contingent consideration payable within the next 12 months is £2.3m (2015: £0.1m). 

On 8 September 2015 the Group acquired Taylor Patterson for an initial consideration comprising cash of £2.1m (excluding cash acquired with the business) and 419,888 shares in Mattioli Woods, plus contingent consideration of £3.3m payable in cash in the three years following completion if certain revenue and profit targets are met.  The Group estimates the fair value of the remaining contingent consideration at 31 May 2016 to be £3.1m using cash flows approved by the Board covering the contingent consideration period and expects the maximum contingent consideration will be payable. 

On 23 June 2015 the Group acquired Boyd Coughlan for initial consideration comprising cash of £3.9m (excluding cash acquired with the business) and 235,742 shares in Mattioli Woods, plus contingent consideration of £2.5m payable in cash in the two years following completion if certain profit targets are met.  The Group estimates the fair value of the remaining contingent consideration at 31 May 2016 to be £2.4m using cash flows approved by the Board covering the contingent consideration period and expects the maximum contingent consideration will be payable. 

On 11 August 2014 the Group acquired UKWM Pensions for initial cash consideration of £0.28m (excluding cash acquired with the business) plus contingent consideration of £0.08m payable in cash in the two years following completion if certain revenue targets are met.  The Group estimates the net present value of the remaining contingent consideration at 31 May 2016 to be £0.04m using cash flows approved by the Board covering the contingent consideration period and expects the remaining contingent consideration will be payable. 

On 29 July 2013, Mattioli Woods acquired 100% of the voting equity interests of TWM and its subsidiary Atkinson Bolton Consulting Limited (together "Atkinson Bolton").  The share purchase agreement ("the Agreement") stated contingent deferred consideration of up to £2.75m was payable in cash in the four years following completion if certain financial targets were met.  To facilitate the earlier integration of Atkinson Bolton into the Group's wealth management and employee benefits divisions, the parties agreed to vary the Agreement on 26 August 2014 such that: 

·     £1.6m of contingent consideration was paid in September 2014 as £0.8m in cash and £0.8m through the allotment and issue of new ordinary shares in Mattioli Woods, following the achievement of certain financial targets based on growth in the EBITDA generated by Atkinson Bolton in the year from 1 August 2013 to 31 July 2014; and

·     Up to £1.15m of contingent consideration was to be payable in cash if certain financial targets are met based on compound annual growth in the EBITDA generated by Mattioli Woods in the three years from 1 August 2014 to 31 July 2017. 

To facilitate the exit of one of the vendors, the parties agreed a further variation of the Agreement on 29 April 2016 to accelerate the payment of the remaining contingent consideration for a discounted payment of £0.945m, with the balance of the provision released to the consolidated statement of comprehensive income.  At 31 May 2016 there are no further amounts payable under the Agreement. 

On 23 April 2013, the Group acquired the trade and certain assets of Ashcourt Rowan Administration Limited, 100% of the share capital of Ashcourt Rowan Pension Trustees Limited and 100% of the share capital of Robinson Gear (Management Services) Limited for an initial cash consideration of £0.66m plus contingent consideration of up to £0.625m payable in cash in the five years following completion if certain targets are met based on growth in revenues and client retention during that period.  The Group estimates the net present value of the remaining contingent consideration at 31 May 2016 to be £0.25m using cash flows approved by the Board covering the contingent consideration period. 

4. Revenue

Revenue disclosed in the consolidated statement of comprehensive income is analysed as follows:

	2016 £000	2015 £000
Rendering of services	40,282	28,164
Commission income	2,668	6,401
	42,950	34,565

5. Segment information

The Group's objective is to fully integrate the businesses it acquires, to enable it to deliver holistic solutions across its wide and diverse client base.  During the year ended 31 May 2015, the Group harmonised it's legal and operational structures, transferring the trade and assets of City Pensions Limited, Atkinson Bolton Consulting Limited and Kudos Financial Services Limited into Mattioli Woods.  The Group's operating segments now comprise the following:

·     Pension consultancy and administration - fees earned by Mattioli Woods for setting up and administering pension schemes.  Additional fees are generated from consultancy services provided for special one-off activities and the provision of bespoke scheme banking arrangements.  In prior years, fees earned for setting up and administering pension schemes under an advice‑led model were reported separately for setting up and administering pension schemes under an administration‑only model.  Following the transfer of the trade and assets of City Pensions Limited to Mattioli Woods, these fees are reported as one operating segment;

·     Investment and asset management - income generated from the management and placing of investments on behalf of clients;

·     Property management - income generated where Custodian Capital manages collective property investment vehicles, facilitates direct commercial property investments on behalf of clients or acts as the external discretionary manager for Custodian REIT plc; and

·     Employee benefits - income generated by the Group's employee benefits operations.  

Each segment represents a revenue stream subject to risks and returns that are different to other operating segments, although each operating segment's products and services are offered to broadly the same market.  The Group operates exclusively within the United Kingdom.

Operating segments

The operating segments defined above all utilise the same intangible assets, property, plant and equipment and the segments have been financed as a whole, rather than individually.  The Group's operating segments are managed together as one business.  Accordingly, certain costs are not allocated across the individual operating segments, as they are managed on a group basis.  Segment profit or loss reflects the measure of segment performance reviewed by the Board of Directors (the Chief Operating Decision Maker). 

The following tables present revenue and profit information regarding the Group's operating segments for the two years ended 31 May 2016 and 2015 respectively. 

Year ended 31 May 2016	Pension consultancy and administration £000	Investment and asset management £000	Property management £000	Employee benefits £000	Total segments £000	Corporate costs £000	Consolidated £000
Revenue External client	16,563	17,054	4,066	5,267	42,950	-	42,950
Total revenue	16,563	17,054	4,066	5,267	42,950	-	42,950
Results Segment result	3,279	3,498	814	491	8,082	(1,791)	6,291

Year ended 31 May 2015	Pension consultancy and administration £000	Investment and  asset management £000	Property management £000	Employee benefits £000	Total segments £000	Corporate costs £000	Consolidated £000
Revenue External client	15,545	11,430	2,790	4,800	34,565	-	34,565
Total revenue	15,545	11,430	2,790	4,800	34,565	-	34,565
Results Segment result	3,348	2,221	433	637	6,639	(1,349)	5,290

Segment assets

The following table presents segment assets of the Group's operating segments:

		31 May 2016	31 May 2015
		£000	£000
Pension consultancy and administration		21,977	18,071
Investment and asset management		19,683	11,088
Property management		898	1,196
Employee benefits		11,311	9,061
Total segments		53,869	39,416
Corporate assets		35,658	14,342
Total assets		89,527	53,758

Segment assets exclude property, plant and equipment, certain items of computer software, investments, current and deferred tax balances, and cash balances, as these assets are considered corporate in nature and are not allocated to a specific operating segment.  Acquired intangibles and amortisation thereon relate to a specific transaction and are allocated between individual operating segments based on the headcount or revenue mix of the cash generating units at the time of acquisition.  The subsequent delivery of services to acquired clients may be across a number or all operating segments, comprising different operating segments to those the acquired intangibles have been allocated to. 

Liabilities have not been allocated between individual operating segments, as they cannot be allocated on anything other than an arbitrary basis. 

Corporate costs

Certain administrative expenses including acquisition costs, amortisation of software, depreciation of property, plant and equipment, irrecoverable VAT, legal and professional fees and professional indemnity insurance are not allocated between segments that are managed on a unified basis and utilise the same intangible and tangible assets. 

Finance income and expenses, gains and losses on the disposal of assets, taxes, intangible assets and certain other assets and liabilities are not allocated to individual segments as they are managed on a group basis.  Capital expenditure consists of additions of property, plant and equipment and intangible assets, including assets from the acquisition of subsidiaries.  

		31 May 2016	31 May 2015
Reconciliation of profit		£000	£000
Total segments		8,082	6,639
Acquisition costs		(339)	(272)
Depreciation		(497)	(387)
Amortisation and impairment		(247)	(139)
Loss on disposal of assets		(56)	(44)
Unallocated overheads		(298)	(355)
Bank charges		(17)	(23)
Finance income		122	46
Finance costs		(459)	(175)
Group profit before tax		6,291	5,290

		31 May 2016	31 May 2015
Reconciliation of assets		£000	£000
Segment operating assets		53,869	39,416
Property, plant and equipment		1,997	1,430
Intangible assets		1,608	1,191
Investments		79	129
Deferred tax asset		737	422
Prepayments and other receivables		1,428	600
Cash and short-term deposits		29,809	10,570
Total assets		89,527	53,758

6. Earnings per ordinary share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.  

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. 

The income and share data used in the basic and diluted earnings per share computations is as follows:

	2016 £000	2015 £000
Net profit and diluted net profit attributable to equity holders of the Company	5,245	4,022
Weighted average number of ordinary shares:	000s	000s
Issued ordinary shares at start period	20,372	19,990
Effect of shares issued during the year ended 31 May 2015	-	297
Effect of shares issued during the year ended 31 May 2016	4,430	215
Basic weighted average number of shares	24,802	20,502
Effect of dilutive options at the statement of financial position date	90	237
Diluted weighted average number of shares	24,892	20,739

The Company has granted options under the Share Option Plan, the Consultants' Share Option Plan and the LTIP to certain of its senior managers and directors to acquire (in aggregate) up to 3.33% of its issued share capital.  Under IAS 33 Earnings Per Share, contingently issuable ordinary shares are treated as outstanding and included in the calculation of diluted earnings per share if the conditions (the events triggering the vesting of the option) are satisfied.  At 31 May 2016 the conditions attached to 696,574 options granted under the LTIP were not satisfied (2015: 410,032).  If the conditions had been satisfied, diluted earnings per share would have been 20.5p per share (2015: 19.0p). 

Since the reporting date and the date of completion of these financial statements the following transactions have taken place involving ordinary shares or potential ordinary shares:

·     The issue of 14,000 ordinary shares to satisfy the exercise of options under the Consultants' Share Option Plan; and

·     The issue of 17,636 ordinary shares under the Mattioli Woods plc Share Incentive Plan.

7. Dividends paid and proposed

	2016 £000	2015 £000
Declared and paid during the year:
Equity dividends on ordinary shares:
- Final dividend for 2015: 7.16p (2014: 6.00p)	1,790	1,202
- Interim dividend for 2016: 3.85p (2015: 3.34p)	964	679
Dividends paid	2,754	1,881
Proposed for approval by shareholders at the AGM:
Final dividend for 2016: 8.65p (2015: 7.16p)	2,184	1,790

8. Intangible assets

Group	Internally generated software £000	Software £000	Client portfolios £000	Goodwill £000	Other £000	Total £000
Gross carrying amount:
At 1 June 2014	809	734	20,956	10,771	35	33,305
Arising on acquisitions	-	-	756	-	-	756
Additions	242	132	-	-	-	374
At 31 May 2015	1,051	866	21,712	10,771	35	34,435
Arising on acquisitions	-	-	10,120	5,590	-	15,710
Additions	383	214	-	-	-	597
At 31 May 2016	1,434	1,080	31,832	16,361	35	50,742
Amortisation and impairment:
At 1 June 2014	155	411	3,716	-	22	4,304
Amortisation during the year	88	72	1,106	-	13	1,279
At 31 May 2015	243	483	4,822	-	35	5,583
Amortisation during the year	106	74	1,569		-	1,749
At 31 May 2016	349	557	6,391	-	35	7,332
Carrying amount:
At 31 May 2016	1,085	523	25,441	16,361	-	43,410
At 31 May 2015	808	383	16,890	10,771	-	28,852
At 31 May 2014	654	323	17,240	10,771	13	29,001

Company	Internally generated software £000	Software £000	Client portfolios £000	Goodwill £000	Total £000
Gross carrying amount:
At 1 June 2014	809	593	7,124	4,335	12,861
Transfer from group companies	-	41	12,340	6,436	18,817
Arising on acquisitions	-	-	194	-	194
Additions	242	132		-	374
At 31 May 2015	1,051	766	19,658	10,771	32,246
Arising on acquisitions	-	-	909	-	909
Additions	383	207	-	-	590
At 31 May 2016	1,434	973	20,567	10,771	33,745
Amortisation and impairment:
At 1 June 2014	155	364	2,150	-	2,669
Amortisation during the year	88	53	618	-	759
At 31 May 2015	243	417	2,768	-	3,428
Amortisation during the year	106	68	1,170	-	1,344
At 31 May 2016	349	485	3,938	-	4,772
Carrying amount:
At 31 May 2016	1,085	488	16,629	10,771	28,973
At 31 May 2015	808	349	16,890	10,771	28,818
At 31 May 2014	654	229	4,974	4,335	10,192

Software

Software is amortised over its useful economic life of four years on a reducing balance basis.  Internally generated software represents the development costs of the Group's bespoke customer relationship management, administration and trading platform.  The directors believe this technology will be the principal technology platform used throughout the Group for the foreseeable future.  Internally generated software is amortised on a straight-line basis over an estimated useful life of 10 years. 

Client portfolios

Client portfolios represent individual client portfolios acquired through business combinations.  Client portfolios are amortised on a straight-line basis over an estimated useful life of between 10 and 25 years, based on the Group's historic experience. 

Goodwill

Goodwill arises where the price paid for an acquisition is greater than the fair value of the net assets acquired.  Goodwill arising on business combinations is subject to annual impairment testing.

Other intangibles

Other intangibles represent external costs incurred in obtaining a licence.  Other intangibles are amortised on a straight-line basis over a useful economic life of three years. 

9. Share based payments

Share Option Plan

The Company operated the Share Option Plan by which certain of the executive directors and other senior executives are able to subscribe for ordinary shares in the Company at an exercise price of £1.32 per share, equal to the placing price of the shares issued on 15 November 2005.  The options vested when profit-based performance conditions were fulfilled.  All options vesting under the Share Option Plan were exercised prior to the option expiry date of 31 October 2015 and hence at 31 May 2016 there were no options outstanding under the Share Option Plan (2015: 52,950). 

Consultants' Share Option Plan

The Company also operates the Consultants' Share Option Plan by which certain senior executives are able to subscribe for ordinary shares in the Company.  Options granted under the Consultants' Share Option Plan are summarised as follows:

Date of grant	Exercise price £	At 1 June 2015 No.	Granted during the year No.	Exercised during the year No.	Lapsed during the year No.	At 31 May 2016 No.
5 September 2006	2.21	122,347	-	(122,347)	-	-
4 September 2007	2.79	142,124	-	(74,011)	-	68,113
8 September 2009	2.16	107,842	-	(32,030)	-	75,812
		372,313	-	(228,388)	-	143,925

The exercise price of the options is equal to the market price of the shares at the close of business on the day immediately preceding the date of grant.  The options vest when the option holders achieve certain individual performance hurdles.  No options vested during the year as a result of the associated performance conditions being fulfilled.  If the performance hurdles, which are linked to individual sales revenues, are not met over the five financial years commencing on 1 June before the date of grant, the options lapse. 

Long‑Term Incentive Plan

During the period, Mattioli Woods granted awards to the Company's executive directors and certain senior employees under the LTIP.  Conditional share awards ("Equity-settled") grant participating employees a conditional right to become entitled to options with an exercise price of 1 pence over ordinary shares in the Company.  Conditional cash awards ("Cash-settled") grant participating employees a conditional right to be paid a cash amount based on the proceeds of the sale of a specified number of Ordinary Shares following the vesting of the award.  Movements in the LTIP scheme during the period were as follows:

LTIP options			31 May 2016 Equity-settled No.	31 May 2016 Cash-settled No.	31 May 2015 Equity-settled No.	31 May 2015 Cash-settled No.
Outstanding as at 1 June			410,032	266,650	217,519	148,149
Granted during the year			292,574	-	235,901	118,501
Exercised during the year			-	-	-	-
Forfeited during the year			(6,032)	-	(43,388)	-
Outstanding at 31 May			696,574	266,650	410,032	266,650
Exercisable at 31 May			-	-	-	-

The LTIP awards are subject to the achievement of corporate profitability targets measured over a three year performance period and will vest following publication of the Group's audited results for the final performance year.  The amounts shown above represent the maximum opportunity for the participants in the LTIP.  

Share Incentive Plan

The Company introduced the Mattioli Woods plc Share Incentive Plan ("the SIP") in July 2008.  Participants in the SIP are entitled to purchase, at market value, up to a prescribed number of new 1p ordinary shares in the Company at the end of each month for which they will receive a like for like matching share.  These ordinary shares rank pari passu with existing issued ordinary shares of the Company.

A total of 99,972 (2015: 110,134) new ordinary shares were issued to the 218 employees who participated in the SIP during the year.  At 31 May 2016 the SIP held 508,218 shares on their behalf. 

Share based payments expense

The expense for share based payments made in respect of employee services under the LTIP is recognised over the expected vesting period of the awards.  The expense recognised during the year ended 31 May 2016 is £1,351,505 (2015: £567,966), of which £595,664 arises from equity-settled share based payment transactions (2015: £243,454) and £755,841 arises from cash-settled share based payment transactions (2015: £324,512). 

The expense for share based payments made in respect of employee services under the Share Option Plan and the Consultants' Share Option Plan is recognised over the expected vesting period of the awards.  The expense recognised during the year ended 31 May 2016 was £nil (2015: £nil), which arises entirely from equity-settled share based payment transactions. 

The expense for share based payments in respect of "Matching shares" issued under the SIP is recognised in the period the shares are granted to the participating employee.  The expense recognised during the year ended 31 May 2016 is £242,913 (2015: £221,857), which arises entirely from equity-settled share based payment transactions. 

Summary of share options

The following table illustrates the number and weighted average exercise prices ("WAEP") of, and movements in, share options during the year.

Share options	2016 No.	2016 WAEP £	2015 No.	2015 WAEP £
Outstanding as at 1 June	835,295	1.17	733,934	2.23
Granted during the year	292,574	0.01	235,901	0.01
Exercised	(281,338)	2.19	(91,152)	1.99
Forfeited during the year	(6,032)	-	(43,388)	-
Outstanding at 31 May	840,499	0.43	835,295	1.17
Exercisable at 31 May	143,925	2.46	425,263	2.28

The weighted average share price at the date of exercise for share options exercised during the year was £5.48.  For the share options outstanding as at 31 May 2016, the weighted average remaining contractual life is 4.0 years (2015: 3.4 years).  The WAEP for options outstanding at the end of the year was £0.43 (2015: £1.17), with the option exercise prices ranging from £0.01 to £2.79. 

The fair value of equity-settled share options granted is estimated as at the date of grant using the Black Scholes Merton model, taking into account the terms and conditions upon which the options were granted.  The share price at 31 May 2016 and movements during the year are set out in the Directors' Remuneration Report.

10. Cash and short-term deposits

For the purpose of the statement of cashflows, cash and cash equivalents comprise the following at 31 May 2016:

	Group 2016 £000	Company 2016 £000	Group 2015 £000	Company 2015 £000
Cash at banks and on hand	29,809	21,381	10,570	8,545
Bank overdrafts	-	-	-	-
Cash and cash equivalents	29,809	21,381	10,570	8,545

Cash at banks earns interest at floating rates based on daily bank deposit rates.  Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.  The fair value of cash and short-term deposits is £29.8m (2015: £10.6m). 

Due to the headroom the Group's current cash balances provide on its projected working capital requirements, the Group has not renewed its overdraft facility.  Management will continue to review the level of bank facilities the Group may require going forward. 

11. Issued capital and reserves

Share capital	Ordinary shares  of 1p	Ordinary shares of 1p £
Authorised
At 1 June 2014, 31 May 2015 and 31 May 2016	30,000,000	300,000
Issued and fully paid
At 1 June 2014	19,989,872	199,899
Exercise of employee share options	91,152	912
Shares issued under the SIP	110,134	1,101
Shares issued for consideration	181,407	1,814
At 31 May 2015	20,372,565	203,726
Placing	3,795,918	37,959
Exercise of employee share options	281,338	2,813
Shares issued under the SIP	99,972	1,000
Shares issued for consideration	655,630	6,556
At 31 May 2016	25,205,423	252,054

Rights, preferences and restrictions on shares

All ordinary shares carry equal rights and no privileges are attached to any shares in the Company.  All the shares are freely transferable, except as otherwise provided by law.  However:

·     The former shareholders of Thoroughbred Wealth Management Limited ("the TWM Sellers") have entered into a lock-in deed with Mattioli Woods and its nominated adviser and broker, Canaccord Genuity Limited, restricting sales of that part of the consideration comprising 946,256 ordinary shares in Mattioli Woods during the four years ending 29 July 2017;

·     The former shareholders of Boyd Coughlan Limited ("the BCL Sellers") have entered into a lock-in deed with Mattioli Woods and its nominated adviser and broker, Canaccord Genuity Limited, restricting sales of that part of the consideration comprising 235,742 ordinary shares in Mattioli Woods during the two years ending 23 June 2017; and

·     The former shareholders of Taylor Patterson ("the Taylor Patterson Sellers") have entered into a lock-in deed with Mattioli Woods and its nominated adviser and broker, Canaccord Genuity Limited, restricting sales of that part of the consideration comprising 419,888 ordinary shares in Mattioli Woods during the three years ending 8 September 2018. 

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.  All shares rank equally with regard to the Company's residual assets.

Share schemes and share incentive plan

The Company has three share schemes under which options to subscribe for the Company's shares have been granted to certain executives and senior employees.

The Company also operates a share incentive plan.  Participants in the SIP are entitled to purchase up to a prescribed number of new ordinary shares in the Company in any year.  At the Directors' discretion, the Company may also award additional shares to participants in the SIP.  Ordinary shares issued under the SIP rank pari passu with existing issued ordinary shares of the Company.  Dividends paid on shares held within the SIP are used to buy new ordinary shares in the Company of 1p each.

Other reserves

Group	Share premium £000	Merger Reserve £000	Equity - share based payments £000	Capital redemption reserve £000	Retained earnings £000
At 1 June 2014	8,001	4,040	1,046	2,000	20,257
Reserve transfer	-	-	(341)	-	341
Share based payments	-	-	256	-	-
Shares issued under the SIP	508	-	-	-	-
Shares issued as deferred consideration for TWM	-	798	-	-	-
Shares issued on exercise of options	180	-	-	-	-
Deferred tax recognised in equity	-	-	2	-	-
Profit for the financial year	-	-	-	-	4,022
Dividends paid	-	-	-	-	(1,881)
Current tax charge taken to equity	-	-	34	-	-
At 31 May 2015	8,689	4,838	997	2,000	22,739
Reserve transfer	-	-	(161)	-	161
Share based payments	-	-	596	-	-
Shares issued under the SIP	594	-	-	-	-
Shares issued as initial consideration for BCL and TPL	-	3,693	-	-	-
Shares issued on exercise of options	613	-	-	-	-
Costs of issuing new shares	(693)	-	-	-	-
Current tax taken to equity	-	-	149	-	-
Deferred tax taken to equity	-	-	61	-	-
Profit for the financial year	-	-	-	-	5,245
Dividends paid	-	-	-	-	(2,754)
New shares issued	18,562	-	-	-	-
At 31 May 2016	27,765	8,531	1,642	2,000	25,391

Company	Share premium £000	Merger reserve £000	Equity - share based  payments £000	Capital redemption reserve £000	Retained earnings £000
At 1 June 2014	8,001	4,040	1,040	2,000	19,105
Reserve transfer	-	-	(341)	-	341
Share based payments	-	-	241	-	-
Shares issued as deferred consideration for TWM	-	798	-	-	-
Shares issued under the SIP	508	-	-	-	-
Shares issued on exercise of options	180	-	-	-	-
Deferred tax recognised in equity	-	-	2	-	-
Profit for the financial year	-	-	-	-	2,483
Dividends paid	-	-	-	-	(1,881)
Current tax charge taken to equity	-	-	34	-	-
At 31 May 2015	8,689	4,838	976	2,000	20,048
Reserve transfer	-	-	(140)	-	140
Share based payments	-	-	596	-	-
Shares issued as initial consideration for BCL and TPL	-	3,693	-	-	-
Shares issued under the SIP	594	-	-	-	-
Shares issued on exercise of options	613	-	-	-	-
Deferred tax recognised in equity	-	-	61	-	-
Profit for the financial year	-	-	-	-	5,053
Dividends paid	-	-	-	-	(2,754)
Current tax charge taken to equity	-	-	149	-	-
Costs of issuing new shares	(693)	-	-	-	-
New shares issued	18,562	-	-	-	-
At 31 May 2016	27,765	8,531	1,642	2,000	22,487

The company has issued options to subscribe for the Company's shares under three employee share schemes.  The cost of exercised or lapsed share options has been derecognised from equity-share based payments and re-allocated to retained earnings as required by IFRS2 Share-based Payments. 

The following table describes the nature and purpose of each reserve within equity:

Reserve	Description and purpose
Share premium	Amounts subscribed for share capital in excess of nominal value less any associated issue costs that have been capitalised.
Merger reserve	Where shares are issued as consideration for shares in another company, the excess of the fair value of the shares acquired over the nominal value of the shares issued is recognised in the merger reserve.
Capital redemption reserve	Amounts transferred from share capital on redemption of issued shares.
Equity - share based payments	The fair value of equity instruments granted by the Company in respect of share based payment transactions.
Retained earnings	All other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.

12. Financial liabilities and provisions

Group	Contingent consideration £000	Client claims £000	Dilapidations £000	Clawbacks £000	Employers' NIC on share options £000	Onerous contracts £000	LTIP cash liability £000	Other £000	Total £000
At 1 June 2015	1,446	345	285	294	316	61	484	118	3,349
Unwinding of discount	436	-	-	-	-	-	23	-	459
Arising during the year	5,269	375	65	-	308	56	756	-	6,829
Acquisitions (Note 3)	-	75	63	14	-	35	-	18	205
Paid during the year	(1,136)	(263)	-	-	-	-	-	-	(1,399)
Unused amounts reversed	(215)	-	-	-	-	-	-	(136)	(351)
At 31 May 2016	5,800	532	413	308	624	152	1,263	-	9,092
Current 2015	138	345	-	294	-	61	-	118	956
Non-current 2015	1,308	-	285	-	316	-	484	-	2,393
At 31 May 2015	1,446	345	285	294	316	61	484	118	3,349
Current 2016	2,299	532	63	308	-	152	-	-	3,354
Non-current 2016	3,501	-	350	-	624	-	1,263	-	5,738
At 31 May 2016	5,800	532	413	308	624	152	1,263	-	9,092

Company	Loan notes £000	Contingent consideration £000	Client claims £000	Dilapidations £000	Clawbacks £000	Employers' NIC on share options £000	Onerous contracts £000	LTIP cash liability £000	Other £000	Total £000
At 1 June 2015	18,802	1,446	345	285	294	316	61	484	118	22,151
Unwinding of discount	-	436	-	-	-	-	-	23	-	459
Arising during the year	-	5,269	375	65	-	308	57	756	-	6,831
Waiver of loan notes	(18,802)	-	-	-	-	-	-	-	-	(18,802)
Paid during the year	-	(1,136)	(263)	-	-	-	-	-	-	(1,399)
Unused amounts reversed	-	(215)	-	-	-	-	-	-	(118)	(333)
At 31 May 2016	-	5,800	457	350	294	624	118	1,263	-	8,906
Current 2015	-	138	345	-	294	-	61	-	118	956
Non-current 2015	18,802	1,308	-	285	-	316	-	484	-	21,195
At 31 May 2015	18,802	1,446	345	285	294	316	61	484	118	22,151
Current 2016	-	2,299	457	-	294	-	118	-	-	3,168
Non-current 2016	-	3,501	-	350	-	624	-	1,263	-	5,738
At 31 May 2016	-	5,800	457	350	294	624	118	1,263	-	8,906

Loan notes due to subsidiary undertakings

During the prior year the trade and assets of City Pensions Limited, Thoroughbred Wealth Management Limited, Atkinson Bolton Consulting Limited and Kudos Financial Services Limited were transferred to the Company in exchange for loan notes attracting annual interest on the outstanding principal at a rate of 3% above the Bank of England base rate. 

On 30 November 2015 the loan notes were waived and the capital and reserves in City Pensions Limited, Thoroughbred Wealth Management Limited, Atkinson Bolton Consulting Limited and Kudos Financial Services Limited were reduced to £1. 

Contingent consideration

The Group has entered into certain acquisition agreements that provide for contingent consideration to be paid.  Details of these agreements and the basis of calculation of the net present value of the contingent consideration is summarised in Note 3.  The Group estimates the net present value of the financial liability payable within the next 12 months is £2.3m (2015: £0.1m). 

Client claims

A provision is recognised for the estimated potential liability when the Group becomes aware of a possible client claim.  No discount rate is applied to the projected cash flows due to their short term nature.  

Dilapidations

Under the terms of the leases for the Group's premises, the Group has an obligation to return the properties in a specified condition at the end of the lease term.  The Group provides for the estimated net present value of the cost of any dilapidations.  The discount rate applied to the cash flow projections is 5.0%. 

Clawbacks

The Group receives certain initial commissions on indemnity terms and hence the Group provides for the expected level of clawback, based on past experience.  No discount rate is applied to the projected cash flows due to their short term nature. 

Onerous contracts

The Group acquired onerous contracts for the provision of certain IT systems on the acquisition of Ashcourt Rowan's pension business and on the acquisition of UKWM Pensions.  Management has assessed the expected benefits and costs associated with these contracts and concluded that the costs of the obligation exceed the benefits to the extent that it is appropriate to provide against these contracts in full.  

LTIP cash liability

The Group has granted cash settled options to certain Executive Directors.  The amount of any cash entitlement on vesting of an award will be directly linked to the value of a specified number of the Company's shares at the vesting date. 

Other

Prior to the Group's acquisitions of Ashcourt Rowan's pension business and UKWM Pensions, employees of the businesses to be acquired had been notified that the businesses were to be restructured, creating a potential liability for certain employee-related costs.  Post-acquisition the Group became liable for those employee-related costs relating to each restructuring, which have now been paid in full. 

13. Commitments and contingencies

Operating lease agreements - Group as lessee

Mattioli Woods plc has entered into three commercial leases for its premises at Grove Park, Enderby.  The lease for the Head Office, MW House, has a duration of 20 years, from 10 June 2005.  The amount of annual rental is to be reviewed at three-yearly intervals.  The first lease for part of the ground floor of Gateway House (an office building adjacent to MW House) has a duration of ten years from 1 February 2008.  A second lease for part of the ground floor of Gateway House has a duration of ten years from 1 December 2009.  For both leases, the amount of annual rental is to be reviewed at the end of the fifth year. 

Mattioli Woods plc has also entered into commercial leases for its premises at:

·     8 Queens Terrace, Aberdeen, which expires 31 May 2023.  The annual rental is £147,000;

·     Cheveley House, Fordham Road, Newmarket, which expires on 24 December 2023, with next break clause of 24 December 2018.  The annual rental is £115,500;

·     Lanson House, Winckley Gardens, Mount Street, Preston, which expires on 31 July 2022.  The annual rental is £62,000; and

·     Investment House, 22-26 Celtic Court, Ballmoor, Buckingham, which expires on 11 April 2017.  The annual rental is £20,000.

As part of certain acquisitions, the Group acquired operating lease obligations for office equipment.  No restrictions were placed upon the Group by entering into these leases.  Future minimum rentals payable under non-cancellable operating leases as at 31 May are as follows:

	Office equipment		Land and buildings
Group	2016 £000	2015 £000	2016 £000	2016 £000
Not later than one year	2	7	706	634
After one year but not more than five years	2	8	1,724	1,635
More than five years	-	-	1,130	1,390
	4	15	3,560	3,659

	Office equipment		Land and buildings
Company	2016 £000	2015 £000	2016 £000	2015 £000
Not later than one year	2	7	627	634
After one year but not more than five years	2	8	1,476	1,635
More than five years	-	-	1,057	1,390
	4	15	3,160	3,659

Group operating lease charges during the year were £797,604 (2015: £820,939) for land and buildings and £5,685 (2015: £14,632) for office equipment. 

Capital commitments

At 31 May 2016 the Group had capital commitments amounting to £14.0m (2015: £0.1m).  In August 2015, Mattioli Woods (New Walk) Limited ("MW New Walk") entered into a development agreement with Ingleby (1245) Limited ("Ingleby"), a company owned and controlled by Sowden Group Limited ("Sowden") to build a new 50,000 square foot office on the site of the former Leicester City Council ("LCC") headquarters at New Walk, Leicester.  

The expected expenditure for the development is circa £15.0m including fit out costs and irrecoverable VAT, which will be funded through a combination of existing cash resources, bank funding and future operating cashflows.  Construction commenced in May 2016, with construction scheduled to complete in late 2017 for occupancy in 2018. 

Initial development costs are expected to reduce budgeted profit after tax by circa £0.10m in the current financial year, with further reductions of circa £0.40m and £0.20m in the following two years respectively. 

Client claims

The Group operates in a legal and regulatory environment that exposes it to certain litigation risks.  As a result, the Group occasionally receives claims in respect of products and services provided and which arise in the ordinary course of business.  The Group provides for potential losses that may arise out of contingencies (Note 12). 

FSCS levy

The arrangements put in place by the Financial Services Compensation Scheme ("FSCS") to protect depositors and investors from loss in the event of failure of financial institutions has resulted in significant levies on the industry in recent years.  

There is uncertainty over the level of future FSCS levies as they depend on the ultimate cost to the FSCS of industry failures. The group contributes to the investment intermediation levy class and accrues levy costs for future levy years when the obligation arises.  No provision has been made in these financial statements for any FSCS interim levy in the year ended 31 May 2016. 

14. Events after the reporting date

Taxation

The UK Government has announced tax changes which will have a significant effect on the Group's future tax position.  The rate of corporation tax reduced from 21% to 20% from 1 April 2015 and the summer budget of 8 July 2015 announced further reductions to 19% in April 2017 and then 18% from April 2020.  These rate changes will affect the amount of future cash tax payments to be made by the Group and will also reduce the size of deferred tax assets and liabilities in the Group's statement of financial position. 

Group re-organisation

On 31 August 2016 the trade and assets of the Taylor Patterson Group Limited and its subsidiaries Taylor Patterson Financial Planning Limited and Taylor Patterson Associates Limited (together "the Business") were transferred to the Company.  The trade and assets were exchanged for loan notes equal to the book value of the assets and assumed liabilities of the Business as at 31 August 2016, attracting annual interest on the outstanding principal at a rate of 3% above the Bank of England base rate. 

Acquisition of MC Trustees

On 7 September 2016, Mattioli Woods plc acquired the entire issued share capital of Old Station Road Holdings Limited and its subsidiaries (together "MC Trustees") from its shareholder ("the Seller") for a total consideration of up to £2.2m. 

MC Trustees was founded in 1986 and provides pension administration and trustee services to over 1,500 SIPP and SSAS clients with over £400m of assets under administration.  Based in Hampton-in-Arden in the West Midlands and employing 26 staff, the business specialises in the provision of personal service and strong technical advice.  MC Trustees' experienced management team will be retained by Mattioli Woods following the acquisition, which is expected to be earnings enhancing in the first full year of ownership. 

In the year ended 31 December 2015, MC Trustees generated a profit before taxation of £0.4m on revenues of £1.6m.  At 31 December 2015 MC Trustees' net assets were £0.3m. 

The total consideration comprises:

·     An initial consideration of £1.2m (subject to adjustment for the value of net assets acquired), comprising £0.95m in cash plus 38,081 new ordinary shares of 1 pence each in Mattioli Woods ("the Consideration Shares"), which are valued at £0.25m based on the closing price of a Mattioli Woods share on 7 September 2016; and

·     Deferred consideration of up to £1.0m payable in cash in the two years following completion, subject to certain financial targets being met based on growth in earnings before interest, tax, depreciation and amortisation generated during that period. 

Payment of the initial cash consideration, deal costs and estimated net asset adjustment resulted in a cash outflow at completion of £1.38m. 

Application has been made to AIM for the admission of the Consideration Shares to trading ("Admission").  Admission of the Consideration Shares, which will rank parri passu in all respects with Mattioli Woods' existing shares in issue, is expected to become effective on 14 September 2016. 

The Seller has entered into a lock-in deed with Mattioli Woods and its nominated adviser and broker, Canaccord Genuity Limited, restricting sales of the Consideration Shares during the two years following completion. 

In addition to the acquisition of MC Trustees, the Company has reached agreement in principle, subject to contract, to acquire MC Holdings (Malta) Limited and its subsidiary (together "MC Malta") for a total consideration of up to £0.6m payable partly in cash and partly through the issue of new Ordinary Shares.  MC Malta operates Qualifying Recognised Overseas Pension Schemes ("QROPS"), providing pension arrangements suitable for expatriates from the UK or people who have earned a pension in the UK and now live abroad. 

The acquisition of MC Malta is subject to agreement of legally binding documentation and will be conditional upon approval of the proposed transaction by the Malta Financial Services Authority. 

Due to the proximity of the date of acquisition of MC Trustees to the date of announcement of the Group's final results for the year ended 31 May 2016, the Directors are unable to provide the disclosure requirements of IFRS3 relating to acquisitions after the end of the reporting period but before the financial statements are authorised for issue. 

15. Distribution of the annual report and accounts to members

The announcement set out above does not constitute a full financial statement of the Group's affairs for the year ended 31 May 2015 or 2016.  The Group's auditors have reported on the full accounts of each year and have accompanied them with an unqualified report.  The accounts have yet to be delivered to the Registrar of Companies. 

The annual report and accounts will be posted to shareholders in due course, and will be available on our website (www.mattioliwoods.com) and for inspection by the public at the Group's head office address: MW House, 1 Penman Way, Grove Park, Enderby, Leicester LE19 1SY during normal business hours on any weekday.  Further copies will be available on request.

The Company's annual general meeting will take place on 25 October 2016 at the Group's head office. 

 

END

 

 

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