Final Results

RNS Number : 1636G

W.H. Ireland Group PLC

02 March 2015

 

WH Ireland Group Plc

("WH Ireland", "the Group" or "the Company")

Final Results

Improvement in earnings quality and recurring revenue

WH Ireland, the financial services group that provides corporate broking and private wealth management services, today announces its final results for its financial year ended 30 November 2014.

Financial overview

·      Group revenue increased to £30.0m (2013: £29.7m)

·      Recurring revenue increased by 12.4% to £10.0m (2013: £8.9m)

·      Adjusted operating profit for the year of £1.45m (2013: £0.9m) excludes ''one off'' charges

·      Reported profit before tax £0.5m (2013: £1.7m)

·      Cash of £7.5m (2013: £6.0m)

·      Basic earnings per share of 1.42p (2013: 4.80p)

·      Proposed final dividend of 2.0p (2013: 1.5p)

Private Wealth Management

·      Total assets under management increased by 8.4% to £2.7bn (2013: £2.5bn)

·      Strong increase in discretionary assets under management of 42.7% to £0.7bn (2013: £0.5bn)

·      Management fee income increased by 25.6% to £4.9m (2013: £3.9m)

·      Commission income increased by 1.8% to £11.3m (2013: £11.1m)

Corporate Broking

·      Further growth in number of retained corporate clients to 93 (2013: 85)

·      Retainer fee income rose by 6.7% to £3.2m (2013: £3.0m)

·      Transaction fees fell by 14.0% to £4.9m (2013: £5.7m)

Richard Killingbeck, Chief Executive Officer, said:

"The new management team has had a busy year in bringing greater focus to both divisions. This year of transition has resulted in some "one-off" charges and by their very definition will not be repeated. Adjusting for these "one-off" charges operating profitability would have increased over the figures reported last year.

"We are well placed to continue to build upon the positive momentum achieved during the past year. In the Corporate Broking division the focus will remain on the continued growth in the number of corporate clients and the successful execution of corporate transactions whilst the Private Wealth Management division will continue to focus upon the growth of fee paying discretionary and advisory assets.

"Both divisions have contributed to this growth which encourages me immensely and reinforces my positive outlook for WH Ireland in the year ahead."

For further information please contact:

WH Ireland Group plc	www.wh-ireland.co.uk
Richard Killingbeck, Chief Executive Officer Miles Nolan, Head of Communications	[phone]
SPARK Advisory Partners Limited
Mark Brady/Miriam Greenwood	[phone]/3550
MHP Communications
Reg Hoare / Jade Neal / Jamie Ricketts	[phone]
	[e-mail]

Notes to editors

WH Ireland Group plc:

WH Ireland is a financial services group offering private wealth management and corporate broking services.  Since 2000, the company has been listed on the London Stock Exchange on AIM (WHI).  The Group has two divisions:

Corporate Broking: The Group provides corporate finance, research, market making and fund raising capabilities to quoted small/mid-cap companies, including a full NOMAD service to the majority of our corporate clients. WH Ireland is ranked 3rd largest Nominated Advisor and corporate broker by number of AIM clients.

Private Wealth Management: The Group provides wealth management and wealth planning services tailored to the individual, corporates, trusts and funds. It has over 140 years' pedigree in private client wealth management. It manages £2.7 billion of assets under management and advice and operates from a network of offices around the United Kingdom and the Isle of Man.

 

Chairman's statement

In my statement last year I referred to the better, albeit very competitive, environment that we were working within and also the greater costs, in particular regulatory, that a small company has to bear. These underlying themes have remained evident throughout the year (as described in note 5) but they have not deterred the new management team from making significant structural change to the business. These changes have laid the foundation for continued growth and efficiencies in both divisions in the years ahead. Reflecting this broader confidence the Board is proposing a final dividend of 2.0p a share, a 33% increase on prior year, subject to shareholder approval.

Management changes

During the year the Board has overseen a significant change of the senior management team.  One of the key changes was Dan Cowland joining the Board as Finance Director. These management changes have resulted in shorter and more effective lines of communication between the team and has brought a greater focus to the management of the business, the benefits of which are already beginning to be demonstrated.

Divisional update

The Corporate Broking division has continued to build out its corporate client list, a key strategic objective for this division as it focuses upon generating recurring revenues. As of the date of this report, we are now advising 97 corporate clients across a diverse breadth of market sectors. This division has been able to continue the process of selective recruitment throughout the year as senior individuals have acknowledged both the growth and stability to our model. We have launched a number of initiatives in this division during the year including the establishment of an International desk (incorporating the Australian team) and developing further our offering to our clients. Our Research team received deserved recognition at the 2014 AIM awards with the "Best Research Award". This is testament to the significant effort of the analysts and the quality of their product.

The Private Wealth Management division has undergone significant restructuring during the year. A number of smaller uneconomic offices have been closed and the assets transferred to larger offices; we have focused our offering by ceasing to provide a number of peripheral services to non-core clients; and we have begun to witness a considerable shift towards fee paying assets (both discretionary and advisory) as we look to improve the earnings quality of this division. We have also made a number of significant investments in this division during the year, primarily in teams of asset managers recruited from some of our larger competitors.

Board and Staff

There have been two Board appointments during the year. As stated above, Dan Cowland joined the Board in March 2014 as Finance Director having previously held a senior finance role at Shore Capital. In addition, Tim Steel joined the Board as a non-executive director at last year's AGM. Tim has had a long and distinguished career at Robert Fleming and at Cazenove and Co.

Roger Lane-Smith has retired from the Board, after many years' service as a Non-Executive Director. I would like to thank Roger for his valuable contribution and insight towards the progression of the Company during his long tenure as a Board member.

I would also like to take this opportunity to thank all the members of staff. There has been significant change in the Company during the past 12 months and this has resulted in extra pressure across the Company to achieve our objectives in a timely and orderly manner. Without the greater flexibility and willingness of the staff to rise to these challenges the progress to date would not have been achieved.

Outlook

Markets are difficult at the moment as a number of factors are affecting sentiment, including the impending UK election. Despite this, your Board believes that the Company is well positioned to continue to achieve the twin strategic objectives of continuing to build the corporate client base alongside a growth in assets under management. This growth, accompanied by continued focus on our cost base, should result in the benefits of the structural changes of the past year beginning to impact positively on profitability in this, and future years.

The current financial year has begun satisfactorily with continued growth in our corporate client base, an improving pipeline of corporate transactions and further asset growth in our Private Wealth Management business. We look forward to the year ahead with cautious optimism.

Rupert Lowe

Chairman

Chief Executive Officer's report

Overview

The new management team referred to in the Chairman`s statement has had a busy year in bringing greater focus to both divisions. This year of transition has resulted in some "one-off" charges which we identify later in the business report and by their very definition will not be repeated. Adjusting for these "one-off" charges operating profitability would have increased over the figures reported for 2013/14.

The following changes have either been implemented, or are in the process of being implemented, across the Company: the closure of Private Wealth Management offices in Malvern, Saffron Walden, Norwich and Colchester, and the withdrawal from our authorised representative arrangement in Colwyn Bay. In addition, we have sought to bring greater clarity to the Private Client service offering and in so doing have ceased to offer a traded option service and a corporate share dealing service. We have previously communicated that we are withdrawing from the provision of third party administration and this exit is nearing completion. The resultant loss of assets as a result of the above actions is approximately £220m, yet at a gross margin of approximately 0.1% these changes will have little impact on either revenues or future profits.

Corporate Broking

The Corporate Broking division has had a mixed year. Growth was recorded in the number of corporate clients, and in the recurring retainer income that these generate and in secondary commissions. Market making revenue was down on the year as trading activity, in particular in the second half, witnessed a slowdown. Transaction income was significantly below expectations reflecting a number of postponed or cancelled fund raisings and postponed M&A activity. Despite this frustrating outcome much progress has been made in this division and our strategy of focusing upon delivering a full broking service to a growing list of corporate clients remains at the core of our growth plans.

Private Wealth Management

This division has undergone significant change during the past year and has continued to grow assets against a background of strong investment performance. During the year Assets Under Management and Advice (AUMA) rose by 8.4%, compared with an index return of 1.3% (FTSE ALL Share, Capital only).

A significant amount of management time has been spent on restructuring this division from both an office location and a client proposition perspective. There remains more work to be done this year in regard to the operating platform and utilising IT better in order to achieve both cost efficiencies and to improve the overall client proposition. We have recruited key investment professionals who can bring with them existing, and generate new, client relationships. Individuals or teams have joined us from Charles Stanley, Canaccord Genuity and Barclays Wealth Management. In addition Robert Race has joined us from Brewin Dolphin. Robert has assumed the role of Head of Manchester Private Clients. We have also opened two new offices; Milton Keynes and our International office on the Isle of Man. A clear objective of opening new offices is that over the medium term assets managed out of these offices need to have the ability to reach at least £200m. After less than a year of being opened each of our new offices are on track to achieve this figure. The full benefit of all of these new recruits will become evident as the year progresses, helping us to achieve our asset growth targets and maintain the strong momentum in the growth of management fee income.

Outlook

Both divisions of the Company are well placed to continue to build upon the positive momentum achieved during the past year. In the Corporate Broking division the focus will remain on the continued growth in the number of corporate clients and the successful execution of corporate transactions whilst the Private Wealth Management division will continue to focus upon the growth of fee paying discretionary and advisory assets.

As well as thanking existing loyal staff for their hard work during the year I would also like to welcome the significant number of highly experienced and talented new colleagues who have joined us this year and who will also contribute to the future growth and success of the firm.

Finally, but very importantly, in 2014 we grew our recurring revenue as a percentage of total revenue to 33%. Our target remains 50% but this year's performance marks the third year of improvement in this key measure of earnings quality. Both divisions have contributed to this growth which encourages me immensely and reinforces my positive outlook for WH Ireland in the year ahead.

Richard Killingbeck

Chief Executive Officer

Overview

The WH Ireland Group has two principal operating subsidiaries, WH Ireland Limited and WH Ireland (IOM) Limited. WH Ireland Limited consists of two business divisions: Private Wealth Management, which provides bespoke wealth management solutions and independent financial advisory services to retail clients; and Corporate Broking which provides corporate finance, advisory and broking services to small and mid-cap corporate clients, and stockbroking and research services to its institutional client base. WH Ireland (IOM) Limited has been established to expand WH Ireland's private wealth management business by way of an international offering and the entity received its regulatory permissions in February 2014.

Although the Group's income is predominantly derived from activities conducted in the UK and the Isle of Man, a number of retail, institutional and corporate clients are situated worldwide.

At the year end, the Group had 241 staff (2013: 239) in the United Kingdom and 4 (2013: nil) in the Isle of Man.

Strategy

The Group's strategic focus remains on continuing to grow our business across the two divisions, with the ultimate objective of becoming the broker of choice in the small and mid-cap company segment and a leading wealth management service provider to retail clients.

The strategy is focused on strengthening our corporate client list and increasing the assets under management in order to achieve the Group's target of 50% recurring revenue through the generation of wealth management fees and corporate retainer income.

Private Wealth Management

The Private Wealth Management division of WH Ireland incorporates both investment management services and advice on wealth planning. We offer these services from a number of offices across the UK, including; London, Manchester, Cardiff, Bristol, Birmingham, Poole, Lymington and Milton Keynes. Our international clients are serviced from our Isle of Man office.

We are strong advocates of a personal, bespoke service to all of our clients on the basis that no one private client has exactly the same requirements as another. As the complexity of financial markets and advice increases we are also able to offer specific wealth planning expertise in areas such as pensions and inheritance planning;  we also work closely with third party advisors in helping our mutual clients achieve their financial goals.

WH Ireland is one of the few wealth managers to offer three service investment propositions, namely discretionary, advisory and execution only. Increasingly new clients are joining us under a discretionary mandate but we still have substantial assets in both the advisory and the execution only propositions.

The strategy for the ongoing growth in this division is to focus our efforts on building our management fee based assets. This will be achieved by continued personal referrals, selective recruitment of individuals and teams with existing client relationships, and corporate acquisitions of Private Wealth Management businesses. In addition, we are reviewing an investment in our own dedicated business development capability which will complement the sources of funds flow above.

 

Corporate Broking

WH Ireland is one of the largest Nominated Advisers (NOMADs) and Brokers for AIM quoted companies in London. We provide corporate advisory and broking services to 97 Corporate companies, including capital raisings, all aspects of market regulation, acquisition strategy, as well as numerous other general corporate activities. Importantly, the team also benefits from many years of experience in bringing new companies to the public market.

WH Ireland's award-winning Research team provides coverage of our corporate clients, ensuring the investment case is clearly and accurately articulated to the wider investment community. We maintain close contact with both institutional and private client fund managers via our Institutional Sales and Investor Relations teams and help to ensure liquidity in the shares of our corporate clients by offering a market making service. In addition to our London office, we also provide our corporate broking service from offices in Leeds and Bristol.

Our corporate client base is spread across the spectrum of industry sectors, including Technology, Consumer, Support Services, Healthcare, Oil & Gas, Mining and Industrials to name a few. Whilst we have continued to focus upon the development and growth of our client base, we have ensured that this is not to the detriment of client service levels. Recurring retainer income is one of the key financial drivers of this division, which helps us mitigate the volatility of transaction income and ensures that we have a stable team in place from which we can continue to build over the coming years. Our success on this metric is demonstrated by the fact that retainer income has risen by 6.7% over the past two years.

Given the well-publicised structural changes taking place in the wider market, the division has developed a robust and sustainable platform from which to build. The business is demonstrating strong momentum and we will continue to focus on providing a first class service to all of our clients. As the business grows, we will maintain a selective recruitment policy of hiring experienced individuals to ensure that these high levels of service are maintained. We would anticipate our corporate client list continuing to grow as we attract further quality companies given our differentiated proposition relative to some of our larger competitors.

Key Performance Indicators (KPIs)

The Group uses a number of KPIs to monitor its performance against its financial objectives:

1.     Ratio of profit before tax to total revenue

		30 November 2014	30 November 2013
		%	%
Ratio of profit before tax to revenue		1.52	5.57

2.     Funds under management and advice

		30 November 2014	30 November 2013
		£m	£m
Discretionary assets		722	506
Advisory assets		952	931
Execution only assets		1,018	1,046
Total		2,692	2,483
Less assets relating to discontinued activities:
Third party client administration		(90)	(155)
Appointed Representative assets		(102)	(84)
Other assets		(25)	-
Total		2,475	2,244

This is used as a measure of the potential for revenue generation by type of client assets held in our nominee control.

3.     Recurring income streams

		30 November 2014	30 November 2013
		£m	£m
Value of Group recurring income		10.0	8.9

This key indicator of business activity includes fee and other ongoing income from retail and corporate clients for the management of their relationship with the Group. This represents an increase of 12.36%, largely influenced by an increase in the number of clients in our Corporate Broking division and an increase in our Private Wealth Management division of the number of clients and value of their assets who pay a fee for our services.

4.     Corporate Broking performance

		30 November 2014	30 November 2013
Number of transactions		29	21
Money raised		£56m	£102m
Retained corporate clients		93	87

A reconciliation of the adjusted operating profit is set out below:

	30 November 2014
	£'000
Operating profit	690
Add back of one off charges:
Restructuring costs	620
Non-recurring legal and regulatory costs	138
Adjusted operating profit	1,448

A summary of the income statement for the financial year is set out below:

		30 November 2014	30 November 2013
		£'000	£'000
Revenue		30,043	29,653
Administrative expenses		(29,353)	(28,734)
Operating profit		690	919
Other income and charges		(234)	733
Profit before tax		456	1,652
Tax expense		(119)	(516)
Profit after tax		337	1,136

Future Outlook

The Board is pleased with the recent changes made across the business which are intended to provide the Group with greater focus to achieve our strategic goals. The recent, and impending, closure of Private Wealth offices and the cessation of peripheral non-core services will bring greater clarity to the service offering and the business will continue to look to grow both organically and through value enhancing acquisition from a more solid foundation.

Dividend

The Board is pleased to announce the Company's intention to pay a dividend of 2.0p per share at a cost of approximately £477k. Subject to shareholder approval at the upcoming Annual General Meeting, the dividend will be paid on or before 10 April 2015 to those shareholders on the register at the close of business on 13 March 2015.  The ex-dividend date will be 12 March 2015.

Balance Sheet and Capital Structure

Maintaining a strong and liquid balance sheet remains a key business objective for the Board, alongside its regulatory capital requirements. Net assets amounted to £13.4m (2013: £13.1m) and net current assets to £8.0m (2013: £7.8m). The balance sheet is underpinned by the holding of the Group's freehold building in the Manchester city centre and by the substantial cash balances held to facilitate both the day to day business and growth opportunities.

Risks and Uncertainties

Risk appetite is established by the Board and this is consistently reviewed and monitored by the Board and senior management. The Group, through the operation of its Risk Committee, considers all of the relevant risk management issues and advise the Board as necessary on such matters. The Group maintains a comprehensive risk register, within its agreed risk management framework, which encourages a risk-based approach to the internal controls and management of the Group. In addition to an independent Internal Audit function, the Group hired a new Head of Risk during the year to lead a dedicated Risk function. The Internal Audit and Risk functions coordinate their programme of work with both the Compliance department. The Internal Audit function reports directly to the Group's Audit Committee.

Liquidity and Capital Risk

Whilst a significant element of the Group's revenue continues to be transaction driven, the Group's focus, as outlined above, remains on increasing the recurring element of client driven revenues. The Group continues to look to build its discretionary fee paying client base to better fit the regulatory landscape in which the Group is operating and to reduce the proportion of its income that is linked to transactions.

Whilst the Group has a predominantly fixed cost base, a significant element of which are employment costs that are insensitive to business volumes, the Group has continued to focus on achieving operational efficiencies and reducing the variable costs of the business to maximise profitability and provide operational gearing. A broad range of cost savings have been initiated during the year, the full benefit of which will become evident in the 2014/5 financial year.

In order to mitigate risk and absorb any volatility in its operating results, the Board has continued to ensure that the balance sheet remains robust and suitably liquid, and that sufficient regulatory capital is maintained to allow for a healthy surplus over the regulatory minimum capital requirements. The Group calculates and monitors its regulatory capital requirements on a daily basis.

Operational Risk

Operational risk is the risk of loss to the Group resulting from inadequate or failed internal processes, people and systems, or from external events.

Business continuity risk is the risk that serious damage or disruption may be caused to the business as a result of a breakdown or interruption, from either internal or external sources, in the operating infrastructure of the Group. This risk is mitigated in part by the number of branches across the UK from which the Group operates, and the Group having business continuity and disaster recovery arrangements. These arrangements include business interruption insurance.

The Group seeks to ensure that its risk management framework and control environment is continuously evolving and the Board delegates the day to day monitoring of this to the Risk Committee, chaired by the Head of Risk.

Credit Risk

The Board takes active steps to minimise the incidence of credit losses. This includes formal credit management procedures and the close supervision of credit limits and exposures. Formal credit procedures include the approval of significant client limits, approval of material trades, collateral requirements for trading clients and the proactive management of any overdue accounts.  Additionally, risk assessments are performed on an ongoing basis during the year on all deposit taking banks and custodians.

Regulatory Risk

The Group operates in a highly regulated environment both in the UK and the Isle of Man. The Group has independent Risk, Internal Audit and Compliance departments, resourced with appropriately qualified and experienced individuals. The Directors monitor changes and developments in the regulatory environment and ensure that sufficient resources are made available for the Group to implement any required changes. The impact of the regulatory environment on the Group's management of its capital is discussed in note 26 of the financial statements.

Resources and Relationships

The Group's most valuable resource remains its staff and the Group remains committed to retaining and recruiting quality staff that share our culture and vision. Staff at all levels of the business are heavily focused on delivering a quality service to our clients. The Board continues to strive to deliver a service throughout the Group which is in compliance with both the letter and the spirit of the principles of the Financial Conduct Authority.

The Board collates management information to assist in monitoring its non-financial objectives, which include items such as risk appetite monitoring, staff turnover, thematic reviews and client complaints.

By order of the Board

Dan Cowland

Finance Director

Consolidated statement of comprehensive income

For the year ended 30 November 2014

		Year ended	Year ended
		30 November	30 November
		2014	2013
	Note	£'000	£'000
Revenue		30,043	29,653
Administrative expenses		(29,353)	(28,734)
Operating profit		690	919
Other income		12	25
Realised investment (losses)/gains		(2)	458
Fair value (losses)/gains on investments		(221)	238
Finance income		25	64
Finance expense		(48)	(52)
Profit before tax		456	1,652
Tax expense		(119)	(516)
Profit for the year		337	1,136
Other comprehensive income:
Items that will or may be reclassified to profit and loss:
Valuation gains on available for sale investments		-	370
Transferred to profit or loss on sale of available for sale  investments		-	(581)
Tax relating to components of other comprehensive income		-	48
Total other comprehensive income		-	(163)
Total comprehensive income		337	973
Profit for the year attributable to:
Owners of the parent		337	1,136
Total comprehensive income attributable to:
Owners of the parent		337	973
Earnings per share for profit to the ordinary
equity holders of the parent during the period
Basic		1.42p	4.80p
Diluted		1.34p	4.47p

per

All results for the current and prior year relate to continuing operations

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the Company Income Statement. The loss after taxation of the Company for the year was £222k (2013: Loss £168k).

Consolidated and Company statement of financial position

As at 30 November 2014

		Group			Company
		As at	As at		As at	As at
		30 November	30 November		30 November	30 November
		2014	2013		2014	2013
	Note	£'000	£'000		£'000	£'000
ASSETS
Non-current assets
Property, plant and equipment		5,595	5,640		23	31
Goodwill		258	400		-	-
Intangible assets		463	489		-	-
Subsidiaries		-	-		1,711	1,828
Investments		579	447		-	-
Loan receivable		-	-		763	782
Subordinated Loan		-	-		500	-
Deferred tax asset		360	378		48	24
		7,255	7,354		3,045	2,665
Current assets
Trade and other receivables		38,345	36,692		4,590	5,065
Other investments		890	847		-	-
Cash and cash equivalents		7,490	6,046		-	-
		46,725	43,585		4,590	5,065
Total assets		53,980	50,939		7,635	7,730
LIABILITIES
Current liabilities
Trade and other payables		(37,919)	(34,980)		(504)	(191)
Corporation tax payable		(308)	(131)		-	-
Borrowings		(179)	(181)		(179)	(179)
Finance Leases		(119)	(119)		-	-
Provisions		(189)	(344)		-	-
		(38,714)	(35,755)		(683)	(370)
Non-current liabilities
Borrowings		(1,169)	(1,348)		(1,169)	(1,348)
Finance Leases		(109)	(228)		-	-
Deferred tax liability		(205)	(393)		-	-
Accruals and deferred income		(347)	(128)		-	-
Provisions		(21)	(21)		-	-
		(1,851)	(2,118)		(1,169)	(1,348)
Total liabilities		(40,565)	(37,873)		(1,852)	(1,718)
Total net assets		13,415	13,066		5,783	6,012
EQUITY
Share capital		1,193	1,185		1,193	1,185
Share premium		101	6		101	6
Available-for-sale reserve		7	7		-	-
Other reserves		982	982		229	229
Retained earnings		11,895	11,668		4,260	4,592
Treasury shares		(763)	(782)		-	-
Total equity		13,415	13,066		5,783	6,012

Consolidated and Company statement of cash flows

For the year ended 30 November 2014

		Group		Company
		Year ended	Year ended	Year ended	Year ended
		30 November	30 November	30 November	30 November
		2014	2013	2014	2013
		£'000	£'000	£'000	£'000
Operating activities:
Profit/(Loss) for the year		337	1,136	(222)	(168)
Adjustments for:
Depreciation, amortisation and impairment		474	394	151	142
Property Revaluation		-	(48)	-	-
Finance income		(25)	(64)	-	-
Finance expense		48	52	25	26
Taxation		119	516	(24)	47
(Gains)/losses in investments		(202)	(570)	-	-
Available for sale investment transfer to employees as remuneration		-	170	-	-
Non-cash adjustment for share option charge		205	(57)	205	(57)
(Increase)/decrease in trade and other receivables		(1,653)	(2,025)	469	(189)
Increase/(decrease) in trade and other payables		3,158	(2,170)	313	108
(Decrease)/increase in provisions		(155)	45	-	-
Increase in current asset investments		(43)	(534)	-	-
Net cash generated (used in)/from operations		2,263	(3,155)	917	(91)
Income taxes paid		(112)	(47)	-	-
Net cash in/(out) flows from operating activities		2,151	(3,202)	917	(91)
Investing activities:
Proceeds from sale of investments		70	695	-	-
Interest received		25	64	-	-
Acquisition of property, plant and equipment		(261)	(402)	(1)	(31)
Acquisition of investments		-	(103)	-	-
Acquisition of Intangibles		-	84	-	-
Net cash (used in)/generated from investing activities		(166)	338	(1)	(31)
Financing activities:
Proceeds from issue of share capital		132	7	113	7
Repayment of borrowings		(181)	(158)	(174)	(170)
Decrease in finance leases		(102)	(102)	-	-
Issue of subordinated loan		-	-	(500)	-
Interest paid		(48)	(52)	(25)	(26)
Interest Paid: Finance Leases		(17)	(17)	-	-
Dividends paid		(325)	(108)	(325)	-
Net cash used in financing activities		(541)	(430)	(911)	(189)
Net increase/(decrease) in cash and cash equivalents		1,444	(3,294)	5	(311)
Cash and cash equivalents at beginning of year		6,046	9,340	(10)	301
Cash and cash equivalents at end of year		7,490	6,046	(5)	(10)
Clients' settlement cash		172	2,188	-	-
Group cash		7,318	3,858	(5)	(10)
Cash and cash equivalents at end of year		7,490	6,046	(5)	(10)

Certain items for the previous year in the consolidated statement of cash flows have been restated to correctly classify non-cash items and dividends paid. The reclassification does not impact the net cash position but has resulted in increase in net cash used in operating activities by £592,000, increase in net cash generated from investing activities by £700,000 and increase in net cash used in financing activities by £108,000. There was no impact on the income statement or balance sheet.

Consolidated statement of changes in equity

For the year ended 30 November 2014

			Available-
	Share	Share	for-sale	Other	Retained	Treasury	Total
	capital	premium	reserve	reserves	earnings	shares	equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 December 2012	1,184	-	170	982	10,697	(782)	12,251
Net losses arising on available-for-sale investments	-	-	(211)	-	-	-	(211)
Deferred taxation	-	-	48	-	-	-	48
Other comprehensive income	-	-	(163)	-	-	-	(163)
Profit after taxation	-	-	-	-	1,136	-	1,136
Total comprehensive income	-	-	-	-	1,136	-	1,136
Transaction with owners
Employee share option scheme	-	-	-	-	(57)	-	(57)
Shares options exercised	1	6	-	-	-	-	7
Dividends	-	-	-	-	(108)	-	(108)
Balance at 30 November 2013	1,185	6	7	982	11,668	(782)	13,066
Deferred taxation	-	-	-	-	-	-	-
Other comprehensive income	-	-	-	-		-	-
Profit after taxation	-	-	-	-	337	-	337
Total comprehensive income	-	-	-	-	337	-	337
Transaction with owners
Employee share option scheme	-	-	-	-	205	-	205
Shares options exercised	8	95	-	-	10	19	132
Dividends	-	-	-	-	(325)	-	(325)
Balance at 30 November 2014	1,193	101	7	982	11,895	(763)	13,415

The total number of authorised ordinary shares is 34.5million shares of 5p each (2013: 34.5 million shares of 5p each). The total number of issued ordinary shares is 23.9 million shares of 5p each (2013: 23.7 million shares of 5p each). 155,977 shares were issued during the year (2013: 14,930), of which no shares (2013: nil) were held as Treasury (note 27).

Notes to the financial statements

For the year ended 30 November 2014

1. General information

WH Ireland Group plc is a public company incorporated in the United Kingdom. The shares of the Company are listed on the Alternative Investment Market (AIM), a market operated by the London Stock Exchange Group plc. The address of its registered office is 24 Martin Lane, London, EC4R 0DR. The Group's principal activities are described in the Strategic Report and in note 5.

2. Adoption of new and revised standards

No new standards, interpretations and amendments effective for the first time from 1 December 2013, have had a material effect on the Group's financial statements.

New standards, interpretations and amendments not yet effective

The following new standards, not  having been applied in these financial statements, will or may have an effect on the Group's future financial statements:

·      IFRS 9 Financial Instruments:IFRS 9 will eventually replace IAS 39 in its entirety. However, the process has been divided into three main components (classification and measurement, impairment and hedge accounting). This standard becomes effective for accounting periods beginning on or after 1 January 2018.  Its adoption may result in changes to the classification and measurement of the Group's financial instruments, including any impairment thereof.

·      IFRS 12 Disclosure of Interests in Other Entities: IFRS 12 includes the disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities.

The standard will require the Group and Company to disclose information that helps users to assess the nature and financial effects of its relationship with other entities. Specifically, the disclosures are intended to help users:

·      understand the judgements and assumptions made when deciding how to classify its involvement with another entity;

·      understand the interest that non-controlling interests have in consolidated entities; and

·      assess the nature of the risks associated with interests in other entities.

This standard becomes effective for accounting periods beginning on or after 1 January 2014.

·      Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32): This Amendment to IAS 32 seeks to clarify rather than to change the off-setting requirements previously set out in IAS 32. 

 The changes clarify:

·      the meaning of 'currently has a legally enforceable right of set-off'; and

·      that some gross settlement systems may be considered equivalent to net settlement.

The Amendment is effective for periods beginning on or after 1 January 2014 and must be applied retrospectively.  Early adoption is permitted, however, if the Amendment is adopted for period beginning before 1 January 2013, "Disclosures-Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7)" must also be adopted early.

The following new standards have not been applied in these financial statements, and are not expected to have material effect on the Group's or Company's future financial statements:

·      IFRS 10 Consolidated Financial Statements:IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also addresses the issues raised in SIC-12 Consolidation - Special Purpose Entities. 

IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgement to determine  which entities are controlled and therefore are required to be consolidated by a parent, compared with the requirements that were in IAS 27. Based on the preliminary analyses performed, IFRS 10 is not expected to have any impact on the currently held investments of the Group. This standard becomes effective for annual periods beginning on or after 1 January 2014.

3. Dividends

A final dividend of 1.5 per share was paid during the year in respect of 2013, and a final dividend of 2.0p per share is proposed for 2014.

4. Earnings per share (EPS)

Basic EPS is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares (note 27).

Diluted EPS is the basic EPS, adjusted for the effect of the conversion into fully paid shares of the weighted average number of all employee share options outstanding during the year. No options (2013: 89,801) over shares have been excluded from the EPS calculation. Antidilutive options represent options issued where the exercise price is greater than the average market price for the period.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

	Year ended	Year ended
	30 November	30 November
	2014	2013
	000's	000's
Group
Weighted average number of shares in issue during the period	23,763	23,698
Effect of dilutive share options	1,308	1,716
	25,071	25,414
	£'000	£'000
Earnings attributable to ordinary shareholders	337	1,136
Basic EPS
Continuing operations	1.42p	4.80p
Diluted EPS
Continuing operations	1.34p	4.47p

5. Contingent liabilities

In April 2014, the FCA instigated an investigation into WH Ireland Limited, the principal operating subsidiary of WH Ireland Group plc, in respect of its control procedures required by Principle 3 of the FCA Rules of Business. The investigation is in relation to the period between 1st January 2013 until 19th June 2013.

The Directors continue to cooperate fully with the FCA and are in ongoing dialogue in the hope of seeking clarity and timely resolution of the matter. Notwithstanding that there has been no formal notification as to precisely what further action the FCA intends to take in respect of the investigation, in the opinion of the Directors, it is likely that there will be a fine by the FCA and there may be further associated costs but there is insufficient information at the date of these financial statements to allow the Board to make a reliable estimate of the effect on the Group's financial position. The Directors have therefore made no provision in these financial statements in respect of this matter.

6. Events after the balance sheet date

A final dividend of 2.0p (2013: 1.5p) was proposed by the Board, payable on or before 10 April 2015 to shareholders on the Company's register at the close of business on 13 March 2015.

7. Dispatch of Annual Report and Annual General Meeting

The annual report and accounts for the year ended 30 November 2014, including notice of the Company's annual general meeting to be held at 10.00am on 26 March 2015 at 24 Martin Lane, London EC4R 0DR, will be dispatched to shareholders today. The report will also be available from today on the Company's website: www.wh-ireland.co.uk

 

END

 

 

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