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Quayle Munro Hldgs (QYM)

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Thursday 10 March, 2011

Quayle Munro Hldgs

Half Yearly Report

RNS Number : 6559C
Quayle Munro Holdings PLC
10 March 2011
 



Quayle Munro Holdings PLC
Interim Report 2010

for the six months ended 31 December 2010

Chairman's statement

 

Following the changes we made to the business during our last financial year the first half has been a period of relative calm for Quayle Munro as we concentrate on developing and strengthening our advisory business.

 

Results

The group result for the six months to December 2010 was below budget but marginally ahead of the same period last year.

 

Revenues were £5.3m compared with £5.2m. The prior period included revenues contributed by the former US office which was disposed of in March 2010; if these revenues are excluded, like for like advisory business revenues are up 14% on the prior period.

 

The loss on ordinary activities after taxation was £(0.6)m compared with a profit of £3.7m. However, the loss for the current period is stated after £0.9m of IFRS share based bonus costs which relate to the prior year JOE share based bonus and LTIP share option grant, and the prior period profit includes investment gains of £3.5m on the sale of Submersible Technology Services Holdings Limited ("STSH") and on the disposal of listed securities and a further £0.6m of equity accounted STSH profit. After excluding all these items the profit for the period was £0.3m compared with a loss of £(0.4)m for the previous period.

 

Basic earnings per share were negative (14)p compared with 80.2p in the previous period with fully diluted earnings per share of negative (13.6)p compared with 76.2p for the same period last year.

 

Advisory Business

A number of notable transactions were completed in the period particularly in our media practice with the sales of Cartwright Group, Bentek and part of Access Intelligence. The infrastructure group continues to reinforce its position in the higher education and social infrastructure sectors, for example in the Building Schools for the Future programme where Quayle Munro recently advised on the Camden BSF project.

 

The retail, energy and financial institutions sectors have strong pipelines with a number of important ongoing engagements. We have high hopes for our new debt advisory business, where feedback from the marketplace has been positive and we were pleased to be awarded our first mandate recently.

 

We will invest in our franchise by strengthening the sectors we cover and widening the type of transaction on which we advise and to this end we continue to recruit selectively recognising this takes time to achieve and the ensuing benefits time to realise.

 

Investments

Morris Group, in which we hold 22.96%, has traded satisfactorily during the period to 31 December 2010 and this in spite of continuing difficult market conditions. Sales turnover and profit before tax in the calendar year to 31 December 2010 were £123.9m and £6.3m respectively compared with £112.2m and £2.9m in the previous year. Furthermore reservation rates and visitor numbers in the first quarter of 2011 have continued this trend.

 

Morris has operated within its banking covenants and a new three year credit facility is in the process of being agreed with its bankers.

 

Of our other smaller unlisted investments, AMG and Nevis Range have continued to trade profitably in the period. Duncton completed a significant refinancing and capital raise and is now in a position to write new business again after a challenging 12 months. In line with IFRS, we have attributed small increases in our valuation of these companies. A new management team joined Tayside Flow Technologies in November. Despite positive feedback at industry seminars and signs of increasing traction with cardiovascular surgeons, sales remain disappointingly slow and the company will need to raise further funding to maintain its progress. 

 

Net Assets and liquidity

The Group balance sheet as at 31 December 2010 shows net assets of £38.8m which is equivalent to 851p per share, after payment of a special dividend of 100p per share in November 2010. This compares with 1,002p per share as at 30 June 2010.

 

In November 2010 the Company bought in 37,469 'out of the money' share options which have been cancelled. During the period the Employee Benefit Trust purchased 9,079 shares. After payment of the proposed dividend set out below the Group has cash resources of approximately £15m.

 

During November 258,001 shares were issued of which 229,473 were awarded under a Joint Ownership structure with the Employee Benefit Trust.

 

Dividend

The Directors announce an unchanged interim dividend of 10p per share to be paid on 11 April 2011 to shareholders on the register at the close of business on 18 March 2011.

 

Senior Appointments

Two new Managing Directors were appointed during the second half of 2010. Tim Shortland joined us from Thomson Reuters where he ran the corporate development team for the markets division and Stuart Roberts from RBS where he ran the Aberdeen based structured finance business. Tim, based in London, is helping develop our business in the Business to Business financial information and technology sector and Stuart, based in Edinburgh, is leading a new initiative in the debt advisory field.

 

We have also strengthened our staff at more junior levels.

 

Prospects for the year

Although our advisory business remains very busy and the pipeline of new business is strong, it is difficult to predict the outcome of transactions and the timing of fees and it is most unlikely that we will reach the record level of fees earned last year. However we have strong teams both in London and in Edinburgh, our market recognition continues to improve and I remain confident for the longer term.

 

 

Andrew Tuckey

9 March 2011


Group statement of comprehensive income

For the six months ended 31 December 2010

Notes

Six months

31 December

2010

Unaudited

£'000

Six months

31 December 2009

Unaudited

£'000

Year

30 June 2010

Audited

£'000

Continuing operations

Revenue


5,254

5,193

15,662

 

Administrative expenses


(4,597)

(4,710)

(10,564)

 

Impairment of investments held as available-for-sale


-

-

(125)

 

Gain on sale of available-for-sale investments


-

121

2,297

 

Gain on sale of associate

7

-

3,434

4,810

Exceptional expenses

8

(177)

(960)

(1,200)

 

Other operating expenses


 (1,100)

 (273)

 (1,077)






(5,874)

(2,388)

(5,859)





 

Share of profit of associate accounted for using the equity method


-

602

602





 

Group operating (loss)/profit


(620)

3,407

10,405





 

 

Finance income


219

238

563

 

Finance costs


-

(4)

(1)

 

Other finance costs - pensions


(95)

(52)

(12)


124

182

550

 

(Loss)/profit for the year from continuing operations


(496)

3,589

10,955

 

Discontinued operations

Loss for the year from discontinued operations

-

-

(95)

 

(Loss)/profit on ordinary activities before tax


(496)

3,589

10,860






Tax (expense)/credit


(116)

86

(1,606)






 

(Loss)/profit on ordinary activities after tax


(612)

3,675

9,254





 

(Loss)/profit attributable to shareholders of the Company


(612)

3,675

9,254





Other comprehensive income





 

Gain/(loss) on valuation of available-for-sale financial assets


229

232

(58)

 

Actuarial gain/(loss) on defined benefit pension scheme


313

(140)

42






Total comprehensive (loss)/income for the period


(70)

3,767

9,238





 

Basic earnings per share

11

(14.0)p

80.2p

203.1p

 

Diluted earnings per share

11

(13.6)p

76.2p

194.4p

 

Ordinary dividends per share

10

10p

10p

30p

 

Special dividend per share


-

-

100p



Group statement of financial position

As at 31 December 2010

Notes

 

31 December 2010

Unaudited

£'000

 

31 December 2009

Unaudited

£'000

 

30 June 2010

Audited

£'000

 

Non-current assets





 

Property, plant and equipment


808

706

731

 

Intangible assets

5

11,630

11,713

11,630

 

Financial assets

6

9,930

13,533

9,655

 

Defined benefit pension scheme surplus


596

-

265

 

Deferred tax asset


-

392

-






22,964

26,344

22,281






Current assets





 

Trade and other receivables


3,672

4,084

2,300

 

Current tax asset


18

309

12

 

Cash and short-term deposits


14,286

12,064

23,237


17,976

16,457

25,549






Total assets


40,940

42,801

47,830









Current liabilities





 

Trade and other payables


1,867

2,663

3,831

 

Current tax liabilities


71

202

883






1,938

2,865

4,714






Non-current liabilities





 

Financial liabilities


6

136

6

 

Long term creditors


181

-

-

 

Deferred tax liabilities


4

-

4

 

Defined benefit pension scheme obligation


-

30

-


191

166

10

 

Total liabilities


2,129

3,031

4,724







 

Net assets


38,811

39,770

43,106









Capital and reserves





 

Equity share capital


11,144

9,305

9,277

 

Revaluation reserve


7,145

7,494

6,916

 

Other reserves


1,627

2,702

2,734

 

Retained earnings


18,895

20,269

24,179






 

Total equity


38,811

39,770

43,106






 

These interim financial statements were approved for issue by the Board of Directors and signed on their behalf by:

 

Andrew Tuckey,  

Chairman, 9 March 2011



Group statement of changes in equity

For the six months ended 31 December 2010

 

 

 

Equity

share

capital

£'000

Revaluation

reserve

£'000

Capital

redemption

reserve

£'000

Merger

reserve

£'000

Share option expense reserve
£'000

Treasury share reserve
£'000

Total

other

reserves

£'000

Retained

earnings

£'000

Total equity and

reserves

£'000

Balance at 30 June 2009 (Audited)

9,305

7,262

127

1,229

1,151

-

2,507

17,639

36,713











Profit for the period

-

-

-

-

-

-

-

3,675

3,675

Realised on sale of investments

-

(6)

-

-

-

-

-

-

(6)

Gain on revaluation of investments

-

238

-

-

-

-

-

-

238

Share-based payments

-

-

-

-

195

-

195

-

195

Actuarial loss on defined benefit
pension scheme

-

-

-

-

-

-

-

(140)

(140)

Other

-

-

-

-

-

-

-

(1)

(1)

Equity dividends paid

-

-

-

-

-

-

-

(904)

(904)

Balance at 31 December 2009
(Unaudited)

 

9,305

 

7,494

 

127

 

1,229

 

1,346

 

-

 

2,702

 

20,269

 

39,770











Profit for the period

-

-

-

-

-

-

-

5,579

5,579

Realised on sale of investments

-

(407)

-

-

-

-

-

-

(407)

Loss on revaluation of investments

-

(296)

-

-

-

-

-

-

(296)

Impairment of investments

-

125

-

-

-

-

-

-

125

Share-based payments

-

-

-

-

734

-

734

-

734

Purchase of shares by Employee
Benefit Trust

-

-

-

-

-

(730)

(730)

-

(730)

Actuarial gain on defined benefit
pension scheme

-

-

-

-

-

-

-

182

182

Cancelled shares

(28)

-

28

-

-

-

28

(1,400)

(1,400)

Other

-

-

-

-

-

-

-

1

1

Equity dividends paid

-

-

-

-

-

-

-

(452)

(452)

Balance at 30 June 2010 (Audited)

9,277

6,916

155

1,229

2,080

(730)

2,734

24,179

43,106











Loss for the period

-

-

-

-

-

-

-

(612)

(612)

Gain on revaluation of investments

-

229

-

-

-

-

-

-

229

Share-based payments

-

-

-

-

832

-

832

-

832

Actuarial gain on defined benefit
pension scheme

-

-

-

-

-

-

-

312

312

Issue of shares

1,867

-

-

-

-

-

-

-

1,867

Purchase of shares by Employee
Benefit Trust

-

-

-

-

-

(1,939)

(1,939)

-

(1,939)

Equity dividends paid

-

-

-

-

-

-

-

(4,984)

(4,984)

Balance at 31 December 2010             (Unaudited)

11,144

7,145

155

1,229

2,912

(2,669)

1,627

18,895

38,811



Group statement of cash flows

For the six months ended 31 December 2010

 


Six months
31 December 2010
Unaudited
£'000

Six months
31 December 2009
Unaudited
£'000

Year
30 June 2010

Audited
£'000

Operating activities




(Loss)/profit before tax

(496)

3,589

10,860





Adjustments to reconcile (loss)/profit before tax
to net cash flow from operating activities




Finance income

(219)

(238)

(563)

Finance expense

-

4

1

Depreciation

87

78

151

Share of profit of associate

-

(602)

(602)

Share-based payments

1,013

195

929

Gains on disposal of fixed assets

(5)

-

-

Gains on disposals of financial assets

-

(3,555)

(7,107)

Impairment of financial assets

-

-

125

Movement in pensions

(6)

(10)

(52)

(Increase)/decrease in assets

(1,373)

(487)

1,215

(Decrease)/increase in liabilities

(1,964)

1,274

2,441

Cash (absorbed by)/generated from operations

(2,963)

248

7,398

Tax paid

(935)

(716)

(1,057)

Net cash flow from operating activities

(3,898)

(468)

6,341





Investing activities




Finance income received

210

223

548

Proceeds from sales of available-for-sale financial assets

-

9,086

16,010

Proceeds from sales of plant and equipment

93

-

47

Payments to acquire plant and equipment

(250)

(34)

(178)

Payments to acquire available-for-sale financial assets

(47)

(3,046)

(3,046)

Net cash flow from investing activities

6

6,229

13,381





Financing activities




Dividends paid to equity shareholders of the parent

(4,984)

(904)

(1,356)

Own shares purchased

(75)

-

(2,182)

Repayment of borrowings

-

(369)

(499)

Finance expense paid

-

-

(14)

Net cash flow from financing activities

(5,059)

(1,273)

(4,051)





(Decrease)/increase in cash and cash equivalents

(8,951)

4,488

15,671

Effect of exchange rates on cash and cash equivalents

-

10

-

Cash and cash equivalents at the beginning of the period

23,237

7,566

7,566

Cash and cash equivalents at the end of the period

14,286

12,064

23,237



Notes

 

 

1. Basis of preparation

 

Quayle Munro Holdings PLC ("the Company") is registered in Scotland. This interim report contains the condensed financial information of the Company and its subsidiaries (together "the Group") for the six month period ended 31 December 2010.

 

The annual consolidated financial statements are prepared in accordance with all relevant International Financial Reporting Standards ("IFRS") adopted for use in the European Union. The interim condensed financial information complies with the requirements of IAS 34 "Interim Financial Reporting".

 

The Group has adopted the following new and amended IFRS as of 1 January 2010.

 

New standards

 

International Accounting Standards

Effective date

IFRS 2

Amendment Group cash-settled share-based payment arrangements

1 January 2010

   

The adoption of this standard has had no material impact on these financial statements.

 

The Directors consider that seasonality does not affect the business' results or operations.

 

The Group has considerable financial resources and no external debt and the Directors therefore consider it appropriate to continue to use the going concern basis of preparation.

 

 

2. Accounting policies

 

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 30 June 2010.

 

Available-for-sale financial assets

If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its fair value is transferred from equity to the profit and loss account. Reversals in respect of equity instruments classified as available-for-sale are not recognised in the profit and loss account.

 

 

3. Segment information

 

Management has determined the operating segments based on the reports reviewed by the executive management team and the Board (the Chief Operating Decision Maker) that are used to make strategic decisions. The Group is managed primarily by class of business and presents the segmental analysis on that basis. The Group's activities are organised in three primary divisions: Advisory Business, Fund Management and Other (investment management and Head Office).

 



 

The following tables present revenue, expenditure and certain asset information regarding the Group's business segments for the period ended 31 December 2010 and the period ended 31 December 2009.

 

 


Advisory Business

£'000

Fund Management £'000

Other
£'000

Total
£'000

Period ended 31 December 2010





Revenue

5,190

64

-

5,254






Overheads

(5,605)

(80)

(189)

(5,874)

Operating loss

(415)

(16)

(189)

(620)

Finance income

-

-

219

219

Finance costs

-

-

(95)

(95)






Group loss before tax

(415)

(16)

(65)

(496)






Total assets

5,441

-

35,499

40,940






Total liabilities

(2,023)

-

(106)

(2,129)

Total assets includes:

 





Additions to non-current assets

 

250

 

-

 

47

 

297

 






 

Period ended 31 December 2009





Revenue

5,101

92

-

5,193






Overheads

(5,172)

(620)

(151)

(5,943)

Operating loss

(71)

(528)

(151)

(750)

Gain on sale of investments

-

-

121

121

Gain on sale of associate

-

-

3,434

3,434

Share of profits of associate

-

-

602

602

Finance income

-

-

238

238

Finance costs

-

-

(56)

(56)






Group (loss)/profit before tax

(71)

(528)

4,188

3,589






Total assets

7,335

-

35,466

42,801






Total liabilities

 

(2,166)

 

-

 

(865)

 

(3,031)

 

Total assets includes:

 





Additions to non-current assets

 

34

 

-

 

3,046

 

3,080

 

 



 

4. Principal financial risks

 

Interest rate risk

The Group's cash balances are held in accounts that bear interest directly related to bank base rate.

 

Credit risk

There are no significant concentrations of credit risk within the Group. The Group has established procedures to minimise the risk of default by trade debtors including detailed client adoption checks. Historically, these procedures have proved effective in minimising the level of impaired and past due debtors.

 

Liquidity risk

Liquidity risk reflects the risk that the Group will have insufficient resources to meet its financial obligations as they fall due. The Group's strategy to managing liquidity risk is to ensure that the Group has sufficient liquid funds to meet all its potential liabilities as they fall due, including anticipated shareholder distributions. Risk is mitigated by maintaining significant cash balances. The Group did not carry any borrowings at 31 December 2010.

 

Equity price risk

The Group holds a portfolio of unlisted investments. The value of the unlisted investment portfolio could decrease as well as increase.

 

 

5. Intangible assets

 

Intangible assets relate to goodwill arising on the acquisition of New Boathouse Capital Limited in 2007 and The van Tulleken Company Limited in 2008.

 

 

6. Financial assets

 

Available-for-sale financial assets consist of investments in ordinary shares and loan stock which have no fixed maturity date.

 

 

7. Sale of associate

 

In November 2009 the Group sold its 49.9% holding in Submersible Technology Services (Holdings) Limited and received consideration of £10.2m.

 

 

8. Exceptional expenses

 

Exceptional expenses incurred during the prior year totalled £1.2m. These included closure and redundancy costs of £0.9mand the costs of promoting a new specialist PFI Fund totalling £0.3m.

 

The majority of the current year total of £0.2m relates to redundancy costs.

 

 

9. Equity share capital

 

On 5th November 2010, 258,001 new ordinary shares were issued. 229,473 of these were awarded under a Joint Ownership structure with the Employee Benefit Trust.

 

 

10. Interim dividend

 

The interim dividend of 10p per share will be paid on 11 April 2011 to members on the register at 18 March 2011 and will absorb £456,000 of shareholders' funds.

 

 



 

11. Key performance indicators

 

Earnings per share

The calculation of basic earnings per share for the six months to 31 December 2010 is based on losses of £(612,000) (2009 - earnings £3,675,000) and on 4,382,284 ordinary shares, being the weighted average number of shares in issue during the period (2009 - 4,583,814).

 

The calculation of fully diluted earnings per share is based on the weighted average of 4,494,638 ordinary shares (2009 - 4,819,719) and the average share price during the period.

 

Net assets per share

The net assets per share are based on 4,561,763 ordinary shares in issue as at 31 December 2010 (30 June 2010 - 4,303,762),
(31 December 2009 - 4,583,814).

 

 

12. Financial information

 

The financial information contained in this interim statement does not constitute statutory accounts as defined in section 434 of The Companies Act 2006.

   

The results for the six months ended 31 December 2010 and 2009 are unaudited but have been reviewed by PricewaterhouseCoopers LLP. Our auditors, PricewaterhouseCoopers LLP, have audited the annual financial statements for the year ended 30 June 2010 and their report was unqualified and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The Group's consolidated statutory accounts for the year ended 30 June 2010 have been filed with the Registrar of Companies.

 

 

13. Shareholder information

 

This report will be circulated to all shareholders, and copies will be available from the Company Secretary at 102 West Port, Edinburgh EH3 9DN.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For further information:

Andrew Tuckey, Chairman +44 (0)20 7907 4200

Andrew Adams, Executive Director +44 (0)131 222 2600

Rob Cormie, Executive Director +44 (0)20 7907 4200

John Kiely / Gemma Froggatt, Smithfield: +44 (0)20 7360 4900


Independent review report

To the members of Quayle Munro Holdings PLC

 

 

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2010, which comprises the Group statement of comprehensive income, the Group statement of financial position, the Group statement of changes in equity, the Group statement of cash flows and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the company's annual financial statements.

 

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

 

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the AIMRules for Companies and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules for Companies.

 

 

PricewaterhouseCoopers LLP

Chartered Accountants

Edinburgh

9 March 2011

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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