TIDMCBP

RNS Number : 1927L

Curtis Banks Group PLC

09 September 2021

9 September 2021

Curtis Banks Group plc

Interim Results for the 6 Months to 30 June 2021

Curtis Banks Group PLC (AIM: CBP) ("Curtis Banks" or the "Group"), one of the UK's leading SIPP providers, announces its interim results for the 6 months to 30 June 2021.

Financial Highlights

-- Revenue increased by 29.4% to GBP31.7m (2020: GBP24.5m), through acquisitive and organic growth

-- Fee income from pension administration has increased 9.3% from GBP18.0m to GBP19.7m on a like-for-like basis; total fee income of GBP22.3m including Talbot and Muir represents a total increase of 23.7%

   --    Adjusted profit before tax [1] 6 remained at GBP6.3m (2020: GBP6.3m) 

-- Adjusted operating margin [2] 6 of 21.3% (2020: 26.4%), largely reflecting reduced reliance on interest income

   --    Statutory profit before tax increased by 13% to GBP4.5m (2020: GBP4.0m) 
   --    Adjusted diluted EPS6 7.6p (2020: 9.2p5) 
   --    Statutory diluted EPS 5.5p (2020: 5.3p) 
   --    Interim dividend of 2.5p per share (2020: 2.5p) 

Operational Highlights

   --    Annualised gross organic growth in own Mid and Full SIPP numbers of 8.6% (2020: 7.7%) 
   --    Attrition rate on own Mid and Full SIPPs 6.3% (2020: 5.2%) 
   --    Total SIPPs, including third party administered, now 80,997 (June 2020: 76,306) 
   --    Assets under Administration ("AuA") increased by 26% to GBP36.0bn (June 2020: GBP28.6bn) 

-- Reduced sensitivity to interest rates following increase in annual SIPP administration fees in February

-- The launch of Imago Administration for SSAS Schemes evidences progress made on the integration of Talbot and Muir and Dunstan Thomas as they strengthen the Group's offering

-- Market-leading product, Your Future SIPP, continues to provide growth and enhanced relationships

-- CB Labs is prototyping a bank of technical concepts, including the adoption of machine learning and integration of capabilities directly on IFA platforms

-- Solid progress made on the Group's five-year system strategy and on track to a fully aligned target operating model

Highlights and Key Performance Indicators:

 
                                 Unaudited six month  Unaudited six month      Audited year 
                                   period ended 30      period ended 30      ended 31 December 
                                      June 2021            June 2020               2020 
 Financial 
 Revenue                              GBP31.7m             GBP24.5m              GBP53.9m 
 Adjusted profit before                GBP6.3m              GBP6.3m              GBP13.4m 
  tax1 6 
 Profit before tax                     GBP4.5m              GBP4.0m              GBP7.6m4 
 Adjusted operating margin2 
  6                                     21.3%                26.4%                26.0% 
 Diluted EPS                            5.5p                 5.3p                 9.7p4 
 Adjusted diluted EPS6                  7.6p                 9.2p5                17.9p 
 Operational Highlights 
 Number of SIPPs Administered          80,997               76,306                82,224 
 Assets under Administration          GBP36.0bn            GBP28.6bn            GBP32.4bn 
 Total organic new own 
  SIPPs in period                       2,485                2,107                4,113 
 Attrition rates (Mid 
  & Full SIPP)                          6.3%3                5.2%3                 4.6% 
 Number of properties 
  administered                          9,131                6,480                8,905 
 

Will Self, Chief Executive Officer of Curtis Banks, commented: "We have reached the half year point in very good shape. We have a robust operating model, we are on a growth trajectory, and the integration process of Talbot and Muir and Dunstan Thomas is going extremely well. I would like to give thanks once again to all our employees for their efforts during this testing time. Not only have we minimised the effect of COVID-19 on the Group, we are also making tremendous progress on our strategic priorities.

"The second half of the year is gearing up to be a busy period. As part of our effort to reach new areas of an ever-increasing addressable market, Curtis Banks is evolving from a primarily focused SIPP administrator to a more holistic retirement group which provides technology and complementary services to the advised retirement market. I look forward to updating you all at the full year as we continue to evidence good progress on our long-term plans for growth and diversification."

Analyst Presentation

An analyst briefing is being held today, 9 September at 09:30 BST via an online video conference facility. To register your attendance, please contact curtisbanks@instinctif.com.

For more information, please contact:

 
 Curtis Banks Group plc                   via Instinctif Partners 
 Will Self - Chief Executive Officer 
 Dan Cowland - Chief Financial Officer 
 
 Peel Hunt LLP (Nominated Adviser & 
  Joint Broker)                           +44 (0) 20 7418 8900 
 James Britton 
 Rishi Shah 
 
 Singer Capital Markets Limited (Joint 
  Broker)                                 +44 (0) 20 7496 3000 
 Mark Taylor 
 Rachel Hayes 
 
 Instinctif Partners (Financial PR)       curtisbanks@instinctif.com / +44 
                                           (0) 20 7457 2020 
 Mark Walter 
 Ross Gillam 
 

Chief Executive Officer's Review

Curtis Banks has made a promising start to the year. Strategic initiatives undertaken to develop the business into a more diversified and holistic retirement group combined with our fixed, recurring fee model is providing a platform for continued growth. This has contributed greatly to our success during the last twelve months despite a challenging economic backdrop over the past 18 months during which we have made progress on integrating our most recent acquisitions.

Our financial performance remains robust with revenue up 29% year-on-year to GBP31.7m and a proactive change to our SIPP fee model earlier this year has seen fee revenues increase by 9% against the 2020 comparative. Once the contribution from Talbot and Muir is included, fee revenue across the Group saw a 24% year on year increase and is an improvement in the quality of the Group's earnings as it diversifies and shifts away from its reliance on interest income. Interest income as a proportion of total revenue fell from 27% in H1 2020 to 13% in H1 2021.

Adjusted profit before tax remained at GBP6.3m for the half year and our adjusted operating margin reduced to 21.3%, primarily due to planned reduction in reliance on interest income. We continue to make good progress on our five-year systems strategy as we pursue our target operating margin of 30%. We are also pleased to have been able to maintain our dividend at 2.5p per share which, despite the challenging environment of the past 18 months, remains well covered by earnings, as well as improving cash held on balance sheet.

We saw continued growth in our core product offering, Your Future SIPP, during the period and this market leading product continues to have a positive impact on the Group's organic growth and with our relationships with advisers and introducers. Most importantly, this success means that we are well placed to further increase our organic growth in the number of new Full and Mid SIPPs over the coming years.

The total number of properties now administered by the Group has increased to 9,131 (H1 2020: 6,480) and we expect this upward trend to continue following a strong pipeline of enquiries within both the Curtis Banks and Talbot and Muir businesses.

Innovation and the integration of key acquisitions

The acquisitions we completed during 2020 are having a very positive impact on the business. Both Dunstan Thomas and Talbot and Muir form a critical part of our strategy to scale up, diversify and transition into a more holistic retirement group, providing multiple complementary solutions, including FinTech, legal and property services for the advised retirement market.

Critical to this enhanced offering is the greater diversity of products and services that both businesses bring to the Group, coupled with the innovation and operational efficiency to which they contribute. Talbot and Muir is proving to be a seamless bolt-on acquisition that provides greater volumes at a very attractive operating margin. Meanwhile, Dunstan Thomas has become particularly effective in broadening our client base by introducing Fintech solutions for wealth managers helping the Group to reach a wider target market and pursue natural cross-sell opportunities to our existing SIPP administration offering.

During its first twelve months in the Group, Dunstan Thomas has already shown the critical role it will play in the development of Curtis Banks Group's technological future. During the first half year, the business launched Imago Administration for Small Self-Administered Schemes ("SSAS") pensions and we are already looking at how the Imago system and administration platform can be combined with Curtis Banks Trustee Services.

It is also worth highlighting Dunstan Thomas's contribution to CB Labs, our innovation hub and collaboration centre, which is also helping to drive integration. Great strides are being made at CB Labs to bring our bank of ideas and technical concepts to life, with many now moving to prototyping. This includes machine learning to lessen Curtis Banks advisers' and customers' dependence on telephony and we are also developing a solution that will enable our SIPP application and quote process to be easily added directly into IFA platforms. This has the potential to grow market share and expand our target market. CB Labs is also developing adviser tools to further support advisers and their customers.

Despite the obvious operational challenges presented by Covid-19 over the past 18 months, our five-year systems strategy is also progressing according to plan. A key component of this activity is to have a fully aligned operating model, which many of the innovations supported by Dunstan Thomas and CB Labs are successfully driving as part of their integration. The centralisation of our commercial property administration is now complete, a new telephony system has been installed to support our customers and their advisers and the rationalisation of our product portfolio is progressing well.

The addition of Talbot and Muir to the Group has further strengthened our levels of recurring revenues and continued to dilute the contribution of interest income across the organisation. Talbot and Muir have also added a number of valuable adviser relationships further reinforcing the Group's position as the SIPP provider of choice across the industry. Whilst new business within Talbot and Muir has been positive, one key new distribution partner has been materially delayed leading to a modest variance in associated revenues.

We are therefore delighted with progress made on innovation and the integration of Dunstan Thomas and Talbot and Muir. Both transactions are critical to the execution of our strategy to add greater scale, additional and diversified revenue streams and enhanced profitability to the Curtis Banks Group.

SIPP Numbers

As at 30 June 2021, the total number of SIPPs administered increased by 6% to 80,997 (H1 2020: 76,306), thanks to a combination of organic growth as well as the contribution of Talbot and Muir which has contributed 6,082 SIPPs to this total.

The gross number of new own SIPPs, which are administered directly by the Group increased by 2,485 organically (H1 2020: 2,107), representing a gross annualised organic growth rate of 6.6% (H1 2020: 6.1%). In our two core areas of strategic focus, the Full SIPP saw a slightly higher level of gross annualised organic growth than last year at 3.6% (H1 2020: 2.9%) and our Mid SIPP gross organic growth rate increased to 12.1% (H1 2020: 11.2%). Our total own SIPP annualised attrition rate increased to 8.9% during the year (H1 2020: 5.8%) although this rate was much lower (6.3%) for our core Full and Mid SIPP products.

Target Operating Model

During the first half of 2021, we achieved adjusted profit before tax of GBP6.3m, which is comparable to the previous interim reporting period (2020: GBP6.3m), generating an adjusted operating margin of 21.3% (H1 2020: 26.4%). This lower expected adjusted operating margin is due to the significant reduction in interest revenue generated for the first half of the year, representing GBP4.2m of revenue versus GBP6.5m in H1 2020 and a reduction of 5.3% in operating margin, although this was not unexpected as the Group looks to increase the quality of its earnings through recurring annual fees.

During the period we successfully completed the centralisation of the Group's commercial property administration. In addition to this, the strategy to transition the Group to a single administration system remains on target and within budget. As at 30 June 2021, we are progressing our systems strategy and development work continues and is on track for completion in accordance with the original project plan.

Industry context and outlook

The pension market has been a continued focus of the regulator during the first half of the year. Our business model is clear and we only work with regulated financial advisers and do not give any advice or provide the investments held within our SIPPs. Our fee structures also remain fair, transparent and competitive for our target market and remains well positioned to withstand any industry pressure on fee levels.

Non-standard investments continue to receive a large amount of media coverage. While these are a significant issue for the wider industry, we do not consider them to be a material risk to our business. The Group continues to carry out robust due diligence on non-standard investments both at outset and throughout the life of the investment and all new Curtis Banks products have a clear Schedule of Allowable Investments.

Our organisation remains resilient from both a regulatory perspective but also in weathering the current expected medium-term economic impact of the COVID-19 pandemic. Though there remains significant uncertainty over what government measures will be maintained or introduced, the Group continually reviews guidance from the UK government and the NHS and ensures that all staff are kept regularly updated and fully informed in order to reduce the risk of spreading the virus and minimise the economic impact. We continue to explore ways to further diversify our revenue generation and reduce our sensitivity to market conditions, and we continue to retain capital and liquidity well in excess of the minimum regulatory requirements.

People, Culture and ESG update

As part of integrating ESG into our corporate strategy, we are undertaking a materiality assessment of our business to ensure we move forward with a strong purpose-led ESG policy that will help guide the business for the next three to five years. To that end, we will be talking to key stakeholders in the coming weeks to test and evolve this policy before publishing it and we will be allocating responsibility for the oversight of this policy to a member of the Board of Directors.

Curtis Banks has always demonstrated a strong commitment to its corporate and social responsibility activities, acknowledging the role we play in the communities around us.

We have therefore reached the half year point in very good shape. We have a robust operating model, the Group is on a growth trajectory, and the integration process of Talbot and Muir and Dunstan Thomas is going extremely well. I would like to give thanks once again to all our employees for their efforts during this testing time. Not only have we minimised the effect of COVID-19 on the Group, we are also making tremendous progress on our strategic priorities. The second half of the year is gearing up to be a busy period and I look forward to updating you all at the full year.

Summary and outlook

Despite the continued uncertainty and challenges that the pandemic has generated over the past six months, the Group has once again demonstrated its financial robustness and that is not sensitive to market movements, upon which our core SIPP administration business model is based. The strong operating performance reported within these statements is testament to this and we remain hopeful that the staged lifting of restrictions will provide a more conducive environment in which to do business, particularly sales related activities across all Group entities.

Strategically, the Board remains confident in the Group's continued ability to make progress on, and achieve, its stated objectives through diversification of our service offering, organic growth across all parts of the Group, highly selective acquisitions and continued operational efficiencies.

Will Self

Chief Executive Officer

8 September 2021

Chief Financial Officer's Review

Results

Group financial performance for the six month period to 30 June 2021 resulted in an adjusted profit before tax of GBP6.3m which was unchanged compared to the previous interim reporting period (2020: GBP6.3m), generating an adjusted operating margin of 21.3% (H1 2020: 26.4%).

Profit before tax, which includes amortisation and non-recurring costs, improved 13% to GBP4.5m (H1 2020: GBP4.0m). Adjusted diluted EPS reduced to 7.6p (H1 2020: 9.2p), while diluted EPS on a statutory basis increased by 4% to 5.5p (H1 2020: 5.3p).

The encouraging performance of the first six months of 2021 was achieved despite the challenging economic and social conditions, with interest income impacted materially as expected in an unprecedented low-rate environment. Organic sales have remained robust in the face of these challenges and our stated strategy to deliver a Target Operating Model remains on track, H1 2021 seeing the conclusion of the centralisation of commercial property administration within one office location. The centralisation of the commercial property administration brings with it non-recurring redundancy and restructuring costs associated with the transition of work between office locations and this is described in more detail below.

Revenues

Revenues of GBP31.7m in the six months ended 30 June 2021 were significantly higher than the comparable period (H1 2020: GBP24.5m), largely as a result of the inclusion of both Dunstan Thomas and Talbot and Muir for the first time in our interim statements.

Fee revenue from SIPPs and SSASs remains the predominant source of income for the Group with a strong emphasis on recurring annual fee income. In the six months ended 30 June 2021 fee income represented 70% of the total income and 87% of this fee income is recurring (H1 2020: 84%). The increase in the levels of recurring income has achieved a dilution of the contribution made through interest income and this improvement in the overall quality of earnings has been supported by a GBP2.6m contribution from Talbot and Muir.

SIPP fees are based on a recurring fixed monetary annual fee and a menu of additional fixed fees depending on the services provided to the SIPP. The annual fees for the Curtis Banks Mid and Full SIPP products were amended as at 1(st) February 2021 and at the same time we made a clear commitment to our clients as to how we will share interest revenue with them and therefore remove any discretion. All of the fees that are applied to our SIPP products are subject to contractual annual inflationary rises linked to the measurement of Average Weekly Earnings ("AWE").

Fees are not dependent on movements in the value of underlying assets within SIPPs and as a result the recurring fee income of the Group is not directly affected by the volatility in financial markets. This is a key differential that sets us apart from most of our competitors and provides an attractive product in terms of competitive fees for higher value SIPPs. As the value of a SIPP increases our product becomes increasingly affordable.

As expected, interest income reduced to GBP4.2m for the period, compared to GBP6.5m for H1 2020, although this was anticipated given the unprecedented low interest rate environment prevailing since the reduction in the Bank of England Bank Rate to 0.1% in March 2020. As at 30 June 2021, the Group held GBP1.052bn of client deposits across a range of UK, PRA regulated banking counterparties and managed the cash in line with its Treasury Framework.

Included for the first time are GBP5.8m of revenues generated by Dunstan Thomas, separately classified within these statements as Fintech income. Following a challenging sales environment due to the on-going COVID-19 pandemic we haven't achieved the growth that we anticipated in Dunstan Thomas and revenue is broadly in line with 2020. This has resulted in a reduction of GBP0.6m to the total related contingent consideration expected to be payable over the earn out period and a corresponding credit to the consolidated statement of comprehensive income.

Expenses

The period ended 30 June 2021 saw administrative expenses increase to GBP25.0m (H1 2020: GBP18.1m).

Staff costs for the period increased by 55% to GBP17.7m (2020: GBP11.4m) and again these figures have been heavily influenced by the addition of staff from Dunstan Thomas and Talbot Muir to the Group which represented 47% of this increase. In addition to the impact from acquisitions, headcount increased within the standalone Curtis Banks business following recruitment inactivity in the first half of 2020 due to the impact of the pandemic. Staff costs in the period were impacted by further share based payment awards under the Group's Long Term Incentive Plan and Save As You Earn ("SAYE") option schemes, as well as the annual pay review. The share incentive schemes have been extended to both Dunstan Thomas and Talbot Muir and the commitment to all of these awards demonstrates the Group's continuing commitment to improving levels of key staff retention and morale, which in turn provide the required service levels to all of our clients and introducers of business.

Overall headcount stood at 823 as at 30 June 2021 compared to 639 as at 30 June 2020 and 821 as at 31 December 2020. Of the headcount at 30 June 2021, members of staff at Dunstan Thomas and Talbot and Muir accounted for 152.

Non-staff costs in aggregate grew to GBP7.3m from GBP6.7m in H1 2020 although, if the costs relating to Dunstan Thomas and Talbot and Muir of GBP0.7m are excluded, non-staff costs actually saw a reduction on a like for like comparison basis of GBP0.1m.

The Group continues to take steps to improve its adjusted operating margin through a combination of revenue enhancements, cost saving measures and operational improvements. The Board remains confident that an improved operating margin is achievable in the medium term through both our planned internal strategic activities, centred on our systems strategy, organic growth and the revenue opportunities being developed with Dunstan Thomas.

Non-recurring costs

Non-recurring costs for the six months ended 30 June 2021 are net income of GBP0.2m (2020: costs of GBP1.4m) and comprise principally of internal restructuring costs and some of the external costs associated with the acquisitions of Dunstan Thomas and Talbot and Muir but are offset by a credit of GBP0.6m in respect of a revision to the fair value of deferred contingent consideration payable on their acquisitions.

As referenced earlier, the centralisation of commercial property administration within one office was completed during the first six months, resulting in a non-recurring cost of GBP0.2m being recognised during the period.

Accounting Policies

There have been no changes in accounting policies during the period although the audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. This follows a reassessment of the fair value of assets and liabilities acquired assisted by third party valuation experts to provide a more accurate estimate and a reassessment of the relevant discount factor that ought to be applied to future expectations of cash flows arising on intangible assets and contingent consideration payable on each of the acquisitions made in 2020. Further details can be found in note 2.4 to these statements.

Cash flows

Shareholder cash balances at period end were GBP32.2m compared to GBP24.9m at the end of June 2020.

Net cash inflows from shareholder operating activities for the period were GBP7.2m (H1 2020: GBP0.4m net cash inflow), the increase in cash generation attributable to the additional working capital introduced from Dunstan Thomas and Talbot and Muir, a reduction of tax paid in the period and an increase in profit before tax for the period.

Suffolk Life Annuities Limited

Part of the Group, Suffolk Life Annuities Limited, is an insurance company that writes SIPP products as insurance contracts. These are all non-participating insurance policy contracts and so the Group does not bear any insurance risk. As the policies are non-participating contracts, the client related assets and liabilities in Suffolk Life Annuities Limited match. In addition, the revenues, expenses and investment returns of the non-participating insurance policy contracts are shown in the consolidated statement of comprehensive income. Again, these income, expense items and investment returns due to the policyholders are completely matched. An illustrative balance sheet as at 30 June 2020 showing the financial position of the Group excluding the policyholder assets and liabilities is included as supplementary information after the notes to the financial statements. An illustrative cash flow on the same basis has also been provided.

Systems Development

As reported in our financial statements for the year ended 31 December 2019, the decision was taken to improve our IT infrastructure by both upgrading the existing operating systems within Curtis Banks and to move all the back office systems onto one of our incumbent systems (Navision).

Costs associated with these upgrades and operating system changes where appropriate will be capitalised and amortised in accordance with their useful economic life. Amortisation will commence once the upgrades are completed and fully operational. Upon completion in 2024, the Group expects to crystallise savings of GBP1.2m per annum.

Employee Benefit Trust

The Group operates an independent Employee Benefit Trust ("EBT") to acquire shares in the Company in the market to satisfy future option and long term incentive awards. The financial statements of the EBT are consolidated within the overall Group financial statements and these shares are shown on the balance sheet of the Group as Treasury Shares and are included within total equity.

Capital requirements

The Group's regulated subsidiary companies submit regular returns to the FCA and the PRA relating to their capital resources. At 30 June 2021 the total regulatory capital requirement across the Group was GBP15.1m (30 June 2020: GBP14.7m) and the Group had an aggregate surplus above this of GBP15.7m (30 June 2020: GBP15.4m) across all regulated entities. In addition to this it is Group internal policy for regulated companies within the Group to hold at least 130% of their required regulatory capital and this has been maintained throughout the period.

Financial Position

The statement of Financial Position as at 30 June 2021 shows a strong position with shareholder net assets increasing from GBP54.4m at 30 June 2020 to GBP80.2m as at 30 June 2021.

As at 30 June 2021 the Group had net shareholder cash (after debt)* of GBP10.4m (30 June 2020: GBP15.1m).

Dan Cowland

Chief Financial Officer

8 September 2021

* In addition to statutory IFRS performance measures, the Group has presented a number of non-statutory alternative performance measures ("APMs"). The Board believes that the APMs used give a more representative view of the underlying performance of the Group and enhance comparability of information between reporting periods. APMs are identified in the definitions at the end of this announcement.

Condensed consolidated statement of comprehensive income

 
                                       Unaudited 6 month period                    Unaudited 6 month period                  Audited year ended 31 December 
                                           ended 30 June 2021                          ended 30 June 2020                          2020 - As restated* 
                                      Before                                      Before                                      Before 
                                amortisation    Amortisation                amortisation    Amortisation                amortisation    Amortisation 
                                         and             and                         and             and                         and             and 
                               non-recurring   non-recurring               non-recurring   non-recurring               non-recurring   non-recurring 
                                       costs           costs       Total           costs           costs       Total           costs           costs        Total 
                       Notes         GBP'000         GBP'000     GBP'000         GBP'000         GBP'000     GBP'000         GBP'000         GBP'000      GBP'000 
 
 Revenue                              31,718               -      31,718          24,529               -      24,529          53,871               -       53,871 
 
 Administrative 
  expenses                          (24,959)         (1,250)    (26,209)        (18,061)         (1,978)    (20,039)        (39,885)         (5,057)     (44,942) 
 Impairment on 
  client 
  portfolios                               -               -           -               -           (344)       (344)               -           (344)        (344) 
 Policyholder 
  investment 
  returns                            216,954                     216,954       (113,907)               -   (113,907)         125,231               -    125,231 
 Non-participating 
  investment 
  contract expenses                 (17,090)               -    (17,090)        (17,531)               -    (17,531)        (35,343)               -   (35,343) 
 Changes in 
  provisions: 
  Non-participating 
  investment 
  contract 
  liabilities                      (199,864)               -   (199,864)         131,438               -     131,438        (89,888)               -   (89,888) 
                              --------------  --------------  ----------  --------------  --------------  ----------  --------------  --------------  --------- 
 Policyholder total                        -               -           -               -               -           -               -               -            - 
 
 Operating profit                      6,759         (1,250)       5,509           6,468         (2,322)       4,146          13,986         (5,401)        8,585 
 
 Finance income                            9               -           9              53               -          53              83               -           83 
 Finance costs                         (452)           (580)     (1,032)           (240)               -       (240)           (697)           (342)      (1,039) 
                              --------------  --------------  ----------  --------------  --------------  ----------  --------------  --------------  ----------- 
 Profit before tax                     6,316         (1,830)       4,486           6,281         (2,322)       3,959          13,372         (5,743)        7,629 
 
 Tax                                 (1,171)             348       (823)         (1,496)             441     (1,055)         (2,823)           1,091      (1,732) 
                              --------------  --------------  ----------  --------------  --------------  ----------  --------------  --------------  ----------- 
 Total comprehensive 
  income 
  for the period                       5,145         (1,482)       3,663           4,785         (1,881)       2,904          10,549         (4,652)        5,897 
                              ==============  ==============  ==========  ==============  ==============  ==========  ==============  ==============  =========== 
 
 Attributable to: 
 Equity holders of 
  the 
  company                                                          3,669                                       2,904                                        5,897 
 Non-controlling                                                     (6)                                           -                                            - 
 interests 
                                                              ----------                                  ----------                                  ----------- 
                                                                   3,663                                       2,904                                        5,897 
                                                              ==========                                  ==========                                  =========== 
 Earnings per 
 ordinary 
 share on net 
 profit 
 Basic (pence)           5                                           5.5                                         5.4                                          9.9 
 Diluted (pence)         5                                           5.5                                         5.3                                          9.7 
 

*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The changes impact amortisation, non-recurring costs and tax only. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit.

Condensed consolidated statement of changes in equity

 
                                        Equity 
                                         share 
                   Issued     Share      based   Treasury    Retained             Non-controlling     Total 
                  capital   premium   payments     shares   earnings*    Total*          interest   Equity* 
                  GBP'000   GBP'000    GBP'000    GBP'000     GBP'000   GBP'000           GBP'000   GBP'000 
 
 As at 1 
  January 2020 
  - audited           271    33,659      2,313      (534)      19,730    55,439                14    55,453 
 
 Comprehensive 
  income 
  for the 
  period                -         -          -          -       2,904     2,904                 -     2,904 
 Share based 
  payments              -         -        410          -           -       410                 -       410 
 Ordinary 
  shares bought 
  and sold by 
  EBT                   -         -          -      (590)           -     (590)                 -     (590) 
 Deferred tax 
  on share 
  based 
  payments              -         -          -          -       (312)     (312)                 -     (312) 
 Ordinary 
  dividends 
  paid                  -         -          -          -     (3,507)   (3,507)                 -   (3,507) 
                                                --------- 
 
 As at 30 June 
  2020 - 
  unaudited           271    33,659      2,723    (1,124)      18,815    54,344                14    54,358 
 
 Comprehensive 
  income 
  for the 
  period*               -         -          -          -       2,994     2,994                 -     2,994 
 Share based 
  payments              -         -         24          -           -        24                 -        24 
 Deferred tax 
  on share 
  based 
  payments              -         -          -          -        (33)      (33)                 -      (33) 
 Ordinary 
  shares issued        59    24,140          -          -           -    24,199                 -    24,199 
 Ordinary 
  shares bought 
  and sold by 
  EBT                   -         -          -        383           -       383                 -       383 
 Ordinary 
  dividends 
  paid                  -         -          -          -     (1,642)   (1,642)                 -   (1,642) 
                                                --------- 
 
 As at 31 
  December 2020 
  - audited - 
  restated*           330    57,799      2,747      (741)      20,134    80,269                14    80,283 
 
 Comprehensive 
  income 
  for the 
  period                -         -          -          -       3,669     3,669               (6)     3,663 
 Share based 
  payments              -         -         92          -           -        92                 -        92 
 Ordinary 
  shares bought 
  and sold by 
  EBT                   -         -          -        301           -       301                 -       301 
 Ordinary 
  shares issued         2       288          -          -           -       290                 -       290 
 Deferred tax 
  on share 
  based 
  payments              -         -          -          -        (99)      (99)                 -      (99) 
 Ordinary 
  dividends 
  paid                  -         -          -          -     (4,338)   (4,338)                 -   (4,338) 
 
 As at 30 June 
  2021 - 
  unaudited           332    58,087      2,839      (440)      19,366    80,184                 8    80,192 
                 ========  ========  =========  =========  ==========  ========  ================  ======== 
 

*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit.

Condensed consolidated statement of financial position

 
                                                                        As restated* 
                                              Unaudited     Unaudited        Audited 
                                              30-Jun-21     30-Jun-20      31-Dec-20 
                                    Notes       GBP'000       GBP'000        GBP'000 
 ASSETS 
 Non-current assets 
 Intangible assets                    6          90,475        42,750         91,078 
 Investment property                          1,214,551     1,219,856      1,208,605 
 Property, plant and equipment                    9,395         5,742          7,658 
 Investments                                  2,137,522     1,842,818      2,072,317 
 Deferred tax asset                                   -           435              - 
                                           ------------  ------------  ------------- 
                                              3,451,943     3,111,601      3,379,658 
                                           ------------  ------------  ------------- 
 Current assets 
 Trade and other receivables                     28,863        30,976         26,649 
 Cash and cash equivalents                      401,110       440,790        430,578 
 Current tax asset                                  658           604            581 
                                           ------------  ------------  ------------- 
                                                430,631       472,370        457,808 
                                           ------------  ------------  ------------- 
 
 Total assets                                 3,882,574     3,583,971      3,837,466 
                                           ------------  ------------  ------------- 
 
 LIABILITIES 
 Current liabilities 
 Trade and other payables                        20,915        16,893         18,895 
 Deferred income                                 30,533        26,345         26,995 
 Borrowings                                      42,079        34,486         53,533 
 Lease liabilities                                  837           909            672 
 Provisions                                         453           408            501 
 Contingent consideration                         2,467             -          2,375 
                                                 97,284        79,041        102,971 
                                           ------------  ------------  ------------- 
 Non-current liabilities 
 Borrowings                                      48,202        46,617         53,370 
 Lease liabilities                                7,164         3,377          5,201 
 Provisions                                           7             -              7 
 Contingent consideration                         6,454             -          6,537 
 Non-participating investment 
  contract liabilities                        3,639,582     3,400,578      3,585,307 
 Deferred tax liability                           3,689             -          3,790 
                                              3,705,098     3,450,572      3,654,212 
                                           ------------  ------------  ------------- 
 
 Total liabilities                            3,802,382     3,529,613      3,757,183 
                                           ------------  ------------  ------------- 
 
 Net assets                                      80,192        54,358         80,283 
                                           ------------  ------------  ------------- 
 
 Equity attributable to owners 
  of the parent 
 Issued capital                                     332           271            330 
 Share premium                                   58,087        33,659         57,799 
 Equity share based payments                      2,839         2,723          2,747 
 Treasury shares                                  (440)       (1,124)          (741) 
 Retained earnings                               19,366        18,815         20,134 
                                           ------------  ------------  ------------- 
                                                 80,184        54,344         80,269 
 Non-controlling interest                             8            14             14 
 Total equity                                    80,192        54,358         80,283 
                                           ------------  ------------  ------------- 
 

*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit.

Approved by the Board and authorised for issue on 8 September 2021. Dan Cowland - Chief Financial Officer

Condensed consolidated statement of cash flows

 
                                                       Unaudited       Unaudited   As restated* 
                                                         6 month         6 month        Audited 
                                                    period ended    period ended     year ended 
                                                       30-Jun-21       30-Jun-20      31-Dec-20 
                                                         GBP'000         GBP'000        GBP'000 
 Cash flows from operating 
  activities 
 Profit before tax                                         4,486           3,959          7,629 
 Adjustments for: 
 Depreciation                                                915             694          1,499 
 Amortisation and impairments                              1,445             941          2,088 
 Interest expense                                            452             240            697 
 Share based payment expense                                  92             410            434 
 Fair value losses/(gains) on 
  financial investments                                (143,455)          82,297      (119,957) 
 Additions of financial investments                    (336,457)       (298,196)      (631,200) 
 Disposals of financial investments                      414,708         367,278        673,037 
 Fair value (gains)/losses on 
  investment properties                                 (11,278)          57,664         60,751 
 Increase/(decrease) in liability 
  for investment contracts                                54,278       (171,327)         13,403 
 Changes in working capital: 
 Increase in trade and other 
  receivables                                            (1,797)        (10,460)        (2,737) 
 Increase/(decrease) in trade and 
  other payables                                           5,323             772        (1,105) 
 Taxes paid                                              (1,324)         (2,063)        (2,996) 
 
 Net cash flows from operating 
  activities                                            (12,612)          32,209          1,543 
                                                  --------------  --------------  ------------- 
 
 Cash flows from investing 
  activities 
 Purchase of intangible 
  assets                                                   (842)           (264)          (986) 
 Purchase of property, plant & equipment                   (169)           (241)          (591) 
 Purchase of investment property                        (52,176)        (66,685)      (122,449) 
 Purchase and sale of shares 
  in the Group by the EBT                                    301           (590)          (207) 
 Receipts from sale of investment 
  property                                                57,506          54,948        118,877 
 Net cash flows from acquisitions                              9           (152)       (34,484) 
 
 Net cash flows used in investing 
  activities                                               4,629        (12,984)       (39,840) 
                                                  --------------  --------------  ------------- 
 
 Cash flows from financing activities 
 Equity dividends paid                                   (4,338)         (3,507)        (5,149) 
 Net proceeds from issue of ordinary 
  shares                                                     290               -         24,199 
 Net increase/(decrease) in borrowings                  (16,670)           3,981         29,595 
 Principal elements of lease payments                      (490)           (422)          (934) 
 Interest paid                                             (277)            (34)          (383) 
 
 Net cash flows used in financing 
  activities                                            (21,485)              18         47,328 
                                                  --------------  --------------  ------------- 
 
 Net increase/(decrease) in cash 
  and cash equivalents                                  (29,468)          19,243          9,031 
                                                  --------------  --------------  ------------- 
 
 Cash and cash equivalents at the 
  beginning of the period                                430,578         421,547        421,547 
                                                  ==============  ==============  ============= 
 
 Cash and cash equivalents at the 
  end of the period                                      401,110         440,790        430,578 
                                                  ==============  ==============  ============= 
 
 

*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit.

Notes to the financial statements

1. Corporate information

Curtis Banks Group 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 interim condensed consolidated financial statements were authorised for issue in accordance with a resolution of the Directors on 8 September 2021.

The principal activity of the Group is that of the provision of pension administration services principally for Self-Invested Personal Pension schemes ("SIPPs") and Small Self-Administered Pension schemes ("SSASs"). The Group is staffed by experienced professionals who all have proven track records in this sector.

   2               Basis of preparation and accounting policies 
   2.1            Basis of preparation 

The interim condensed consolidated financial statements comprise the Company and its subsidiaries ("the Group") and have been prepared on a historical cost basis modified by revaluation of financial assets and financial liabilities through profit and loss where held at fair value, and are presented in pounds sterling, with all values rounded to the nearest thousand pounds except when otherwise indicated.

The interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting except for certain requirements in relation to financial instrument disclosure. The board has considered the requirements of IAS 34 in relation to policyholder assets and liabilities and, given the unit-linked nature of these assets and liabilities, has concluded that revaluing certain policyholder financial instruments for the purposes of these interim financial statements would incur expense which is disproportionate to any potential benefits of doing so. Further, the board considers that the omission of updated valuations for these certain policyholder financial instruments will not influence the economic decisions of users of these financial statements, as all revenue and expenditure associated with these policyholder assets and liabilities is due back to the policyholders under non-participating investment contracts and therefore has nil impact on shareholder equity.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's financial statements for the year ended 31 December 2020, which were prepared in accordance with International Financial Reporting Standards adopted by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") of the IASB (together "IFRS") as adopted by the European Union, and in accordance with the requirements of The Companies Act 2006 applicable to companies reporting under IFRS.

The information relating to the six months ended 30 June 2021 and the six months ended 30 June 2020 is unaudited and does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2020 have been reported on by its auditor and delivered to the Registrar of Companies. The report of the auditor was unmodified and did not contain a statement under section 498(2) or (3) of The Companies Act 2006.

The interim condensed consolidated financial statements have been reviewed by the auditor and their report to the Board of Curtis Banks Group PLC is included within this interim report.

   2.2            Basis of consolidation 

The interim condensed consolidated financial statements consolidate the financial statements of the Company and its subsidiaries up to 30 June each year.

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 subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All inter-Group balances, income and expenses and unrealised gains and losses resulting from intra-Group transactions are eliminated in full.

The trading subsidiaries of Curtis Banks Group PLC as at 30 June 2021 were Curtis Banks Limited, Suffolk Life Pensions Limited, Suffolk Life Annuities Limited, Rivergate Legal Limited, Templemead Property Solutions Limited, Dunstan Thomas Group Limited, Digital Keystone Limited, Dunstan Thomas Holdings Limited, Dunstan Thomas Consulting Limited, Platform Action Limited, and Talbot and Muir Limited.

The trading subsidiaries of Curtis Banks Group PLC as at 30 June 2020 were Curtis Banks Limited, Suffolk Life Pensions Limited, Suffolk Life Annuities Limited, Rivergate Legal Limited and Templemead Property Solutions Limited.

Certain trading subsidiaries of Curtis Banks Group PLC hold the entire issued share capital of a number of non-trading trustee companies. All of these companies are nominee companies for the pension products administered by the trading subsidiaries of Curtis Banks Group PLC and have been dormant or non-trading throughout the period and are expected to remain dormant or non-trading.

   2.3            Significant accounting policies 

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2020.

An IFRS 3 measurement period adjustment to finalise the fair values attributed to assets and liabilities acquired from the Dunstan Thomas acquisition that took place on 3 August 2020 has been made during the current period. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit. As a result of this adjustment, changes in the accounting estimate for the useful remaining economic life of certain intangible assets has been made, and an estimate for the new intangible asset category of Brand has been made. The following table sets out revised useful remaining economic lives assigned to each category of intangible asset:

 
 Intangible asset category                        Useful Economic Life 
 Goodwill                      Indefinite - reviewed at least annually 
                                                        for impairment 
 Brand                                                        10 years 
 Client Portfolios                       Between 5.4 years to 20 years 
 Computer Software                               Between 4 and 5 years 
 Internally Generated                                         10 years 
  Software 
 

New standards issued but not yet effective

The IASB and IFRIC have issued standards and interpretations with an effective date for periods starting on or after the date on which these financial statements start. There are no newly issued standards expected to potentially have a material impact on the condensed consolidated interim financial statements and the consolidated financial statements to the Group.

Financial statements for the year ending 31 December 2021

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements will be consistent with those to be followed in the preparation of the Group's annual financial statements for the year ending 31 December 2021.

   2.4            Prior year restatements 

IFRS 3 measurement period adjustment

The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020.

In order to finalise the fair values attributed to assets and liabilities acquired from the Dunstan Thomas acquisition an independent expert valuation was undertaken, the results of which were pending when the 2020 annual report was approved. The valuation helped to better identify and reflect the different components of intangible asset acquired, as principally reflected in the change of cost allocated to each intangible asset category within note 6 to these financial statements as a measurement period adjustment, compared to that reported in the original financial statements for the year ended 31 December 2020.

The results of the independent valuation also helped to inform a more accurate estimate of the relevant discount factor that ought to be applied to future expectations of cash flows arising on intangible assets and contingent consideration payable. Consequently, the fair value attributed to assets and liabilities acquired from the Talbot and Muir acquisition has also been restated as a measurement period adjustment.

The impact of these adjustments on previously reported figures is summarised in the two tables below:

 
                                Originally reported    As restated as    Movement 
                                  as at 31 December    at 31 December     GBP'000 
 Consolidated statement                        2020              2020 
  of financial position                     GBP'000           GBP'000 
 
 Intangible assets                           91,166            91,078        (88) 
 Trade and other receivables                 26,913            26,649       (264) 
 Contingent consideration 
  due <1 year                               (2,516)           (2,375)         141 
 Contingent consideration 
  due >1 year                               (5,657)           (6,537)       (880) 
 Deferred tax liability                     (5,013)           (3,790)       1,223 
 Retained earnings                         (20,002)          (20,134)       (132) 
 
                                                                                - 
                                                                       ========== 
 
 
                                Originally reported     As restated for    Movement 
                                       for the year      the year ended     GBP'000 
                                  ended 31 December    31 December 2020 
 Consolidated statement of                     2020             GBP'000 
  comprehensive income                      GBP'000 
 
 Amortisation                               (2,098)             (1,744)         354 
 Non-recurring finance costs                  (188)               (342)       (154) 
 Tax                                        (1,664)             (1,732)        (68) 
 
 Total comprehensive income 
  for the year                                                                  132 
                                                                         ========== 
 

Adjusted Basic EPS and Adjusted Diluted EPS errors

The unaudited results for the six month period ended 30 June 2020 contained a clerical error in the reported level of adjusted basic earnings per share and the adjusted diluted earnings per share. The values previously reported were 9.7p per share and 9.5p per share respectively, and this has now been restated to correctly reflect 9.4p per share and 9.2p per share.

   2.5            Critical accounting judgements and key sources of estimation uncertainty 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In preparing the financial statements the Group has selected and applied various accounting policies which are described in the notes to the financial statements. In order to apply these accounting policies the Group has made estimates and judgements concerning the future.

There are no critical judgements in the application of accounting policies.

The key sources of estimation uncertainty are disclosed below:

Client portfolios

Client portfolios include books of SIPPs acquired that are amortised over their useful economic life ("UEL") which management estimate to be 20 years. This estimated UEL is based upon management's historical experience of similar portfolios and expectation of the future persistency of the portfolio. The reasonableness of this estimate is assessed annually by comparison to actual lapse rates and consideration of factors that may affect it in the future, for example, changes to products.

Additionally, the Group reviews and judges whether acquired client portfolios show any indicators of impairment at least on an annual basis by considering actual versus forecast lapse rates and comparing the carrying value and recoverable amount. An impairment would exist where the recoverable amount determined is less than the carrying value of the asset.

Assessing recoverable amount through value in use comprises an estimation of future cash flows expected to arise from each client portfolio, 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, together with an estimated rate of attrition for each portfolio. The estimation of future cash flows is derived by taking the current earnings before tax, interest, depreciation and amortisation ("EBITDA") margin of the Group and applying this against forecast revenue from the relevant client portfolio.

One key source of estimation uncertainty is the level of future interest income expected, and in particular the longevity of the current low interest rate environment. Another key source of estimation uncertainty arises from the attrition rates used. The recoverable amount is most sensitive to both of these assumptions.

A 20% increase to the attrition rate assumption would result in a cumulative GBP44,000 decrease in the carrying value of client portfolios. A 40% increase to the attrition rate assumption would result in a cumulative GBP385,000 decrease in the carrying value of client portfolios.

A 2% decrease in the EBITDA margin assumption would result in a cumulative GBP538,000 decrease in the carrying value of client portfolios. A 4% decrease in the EBITDA margin assumption would result in a cumulative GBP1,436,000 decrease in the carrying value of client portfolios.

IFRS 9 impairment

Trade and other receivables are impaired based on the IFRS 9 simplified approach to measure expected credit losses using a lifetime expected loss allowance for all trade receivables. The loss allowances for trade and other receivables are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group's past history of shared credit risk characteristics, days past due, existing market conditions, as well as forward looking estimates at the end of each reporting period.

The loss rates are considered the key source of estimation uncertainty because the impact of a change in these could result in a material change in the expected credit loss. The Group determines its loss rates by reference to the underlying level of liquidity in each of the Group's clients' SIPPs because clients' fees are normally settled directly from their SIPP cash holdings. A lower level of liquidity in the SIPP, or indeed illiquidity, indicates reduced credit quality in the related trade receivable balance.

Changes in macroeconomic factors may impact the Group's clients' use of the SIPP and cause the level of liquidity in the SIPP to increase or decrease. A 10% increase or decrease in loss rates estimated at the period end would have the following impact:

 
                               Increase / (decrease)   Effect on profit 
                                       in percentage         before tax 
 Period ended 30 June 2021                     rates            GBP'000 
 
 Loss rate                                       10%              (807) 
 Loss rate                                     (10)%                430 
 
 

The Group charges fixed fees for its services reducing its exposure to changes in macroeconomic factors such as COVID-19 which may otherwise impact a percentage basis point fee charging model.

The Group continually assesses historical recovery data to help determine how the underlying level of liquidity in the SIPPs fits into each of the credit quality ratings. Future historical data available may lead to changes in the estimated categorisation of trade receivables gross carrying amounts and associated loss allowance.

Where trade and other receivables have been outstanding for more than six years, amounts are deemed to have no reasonable expectation of recovery and are written off.

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 using forecasts that cover the contingent consideration period, and determine a suitable discount rate for the calculation of the present value of any contingent consideration payments.

A material change to the carrying value might occur if the acquired businesses achieve significantly more or less than their target earnings. The key assumption used in determining the value of these provisions is the forecast financial performance as applied in the terms of the contingent consideration arrangement. A 10% increase or reduction in achievement of forecast contingent consideration targets would increase or reduce the value of contingent consideration payable required by GBP0.9m.

Fair value of intangible assets acquired on acquisitions in 2020

An IFRS 3 measurement period adjustment to finalise the fair values attributed to assets and liabilities acquired from the Dunstan Thomas and Talbot and Muir acquisitions that took place in 2020 has been made during the current period. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit. As part of this adjustment, revised estimates have been made for the useful remaining economic life of each intangible asset acquired as follows:

Estimates as reported in the audited financial statements for the year ended 31 December 2020:

 
 Intangible asset category                        Useful Economic Life 
 Goodwill                      Indefinite - reviewed at least annually 
                                                        for impairment 
 Brand                          N/A - not identified as an independent 
                                                                 asset 
 Client Portfolios                                            20 years 
 Internally Generated                           Between 5 to 7.5 years 
  Software 
 

Revised estimates now reported in the unaudited financial statements for the period ended 30 June 2021:

 
 Intangible asset category                        Useful Economic Life 
 Goodwill                      Indefinite - reviewed at least annually 
                                                        for impairment 
 Brand                                                        10 years 
 Client Portfolios                       Between 5.4 years to 20 years 
 Internally Generated                                         10 years 
  Software 
 

In deriving these revised estimates, initial internal assessments were generated based upon historical data and experience. These assessments were then benchmarked against market data to ensure reasonableness.

Fair values derived are based on financial forecasts and balance sheet data available at the time of acquisition, and use generally accepted valuation methodologies in arriving at fair value estimates.

Brand has been valued using a relief from royalty approach with a royalty rate of 2%. Client portfolios have been valued using variations of discounted cash flow analysis. Internally generated software has been valued using a relief from royalty approach with a royalty rate of 15%.

In assessing an appropriate base for the discount rate to be used against estimated future cash flows, both the internal rate of return and the weighted average cost of capital were considered. A discount factor of 13% has been applied to all estimated future cash flows based upon this analysis.

   3             Operating segment reporting 

The Group acquired FinTech provider Dunstan Thomas on 3 August 2020. Prior to this acquisition, all results were viewed as one operating segment for the purposes of management decisions as all operations were conducted within the UK and all material operations were of the same nature and shared the same economic characteristics including a similar customer base and nature of product and services (i.e. pensions administration).

Following the acquisition of Dunstan Thomas during the year ended 31 December 2020, the Group is now considered to have two operating segments. Dunstan Thomas provides IT software development, licences and consultancy services and, collectively, these services are described in the Group's financial statements as FinTech.

The following tables present revenue and profit information regarding the Group's operating segments for the six month periods ended 30 June 2021 and 30 June 2020, and the year ended 31 December 2020.

 
  Unaudited                  Pension Administration     FinTech   Consolidation    Consolidated 
   Period ended 30 June                     GBP'000     GBP'000     adjustments         GBP'000 
   2021                                                                 GBP'000 
 
 Revenue 
 External customers                          26,504       5,214               -          31,718 
 Internal customers                               -         573           (573)               - 
                            -----------------------  ----------  --------------  -------------- 
                                             26,504       5,787           (573)          31,718 
                            -----------------------  ----------  --------------  -------------- 
 
 Administrative expenses 
 External customers                          20,700       4,259               -          24,959 
 Internal customers                             367         206           (573)               - 
                            -----------------------  ----------  --------------  -------------- 
                                             21,067       4,465           (573)          24,959 
                            -----------------------  ----------  --------------  -------------- 
 
 Adjusted operating 
  profit                                      5,437       1,322               -           6,759 
 
 Adjusted operating 
  profit margin                               20.5%       22.8%                           21.3% 
 
 
  Unaudited                        Pension Administration    Consolidated 
   Period ended 30 June                           GBP'000         GBP'000 
   2020 
 
 Revenue 
 External customers                                24,529          24,529 
                                                   24,529          24,529 
                                  -----------------------  -------------- 
 
 Administrative expenses 
 External customers                                18,061          18,061 
                                                   18,061          18,061 
                                  -----------------------  -------------- 
 
 Adjusted operating profit                          6,468           6,468 
 
 Adjusted operating profit 
  margin                                            26.4%           26.4% 
 
 
  Audited                     Pension Administration     FinTech   Consolidation    Consolidated 
   Year ended 31 December                    GBP'000     GBP'000     adjustments         GBP'000 
   2020                                                                  GBP'000 
 
 Revenue 
 External customers                           49,078       4,793               -          53,871 
 Internal customers                                -         485           (485)               - 
                             -----------------------  ----------  --------------  -------------- 
                                              49,078       5,278           (485)          53,871 
                             -----------------------  ----------  --------------  -------------- 
 
 Administrative expenses 
 External customers                           36,830       3,055               -          39,885 
 Internal customers                                -         485           (485)               - 
                             -----------------------  ----------  --------------  -------------- 
                                              36,830       3,540           (485)          39,885 
                             -----------------------  ----------  --------------  -------------- 
 
 Adjusted operating 
  profit                                      12,248       1,738               -          13,986 
 
 Adjusted operating 
  profit margin                                25.0%       32.9%                           26.0% 
 

Corporate costs

The Group's operating segments are managed together as one business. Accordingly, certain corporate costs such as finance income and expenses, non-recurring costs, 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. Segment adjusted operating profit or loss reflects the measure of segment performance reviewed by the Board of Directors (the Chief Operating Decision Maker).

The following table reconciles the total segments adjusted operating profit to statutory profit before tax:

 
 
                                            Unaudited        Unaudited   As restated* 
                                         Period ended     Period ended        Audited 
                                         30 June 2021     30 June 2020     Year ended 
                                              GBP'000          GBP'000    31 December 
                                                                                 2020 
                                                                              GBP'000 
 
 Total segments adjusted operating 
  profit                                        6,759            6,468         13,986 
 Amortisation and impairments                 (1,418)            (941)        (2,088) 
 Non-recurring administrative 
  expenses                                        168          (1,381)        (3,313) 
 Finance income                                     9               53             83 
 Finance costs                                (1,032)            (240)        (1,039) 
 
 Profit before tax                              4,486            3,959          7,629 
                                      ===============  ===============  ============= 
 

*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit.

The following tables present a split of assets and liabilities of the Group's operating segments as at 30 June 2021 and 31 December 2020. As at 30 June 2020 the Group had only one operating segment, being Pension Administration, and consequently comparative information is as disclosed in the Consolidated Statement of Financial Position.

 
 Unaudited             Pension Administration 
  As at 30                            GBP'000    FinTech   Corporate   Policyholder   Consolidated 
  June 2021                                      GBP'000     GBP'000        GBP'000        GBP'000 
 
 Total assets                          69,670      9,429      69,008      3,734,467      3,882,574 
 
 Total liabilities                     32,711      3,537      31,667      3,734,467      3,802,382 
 
 
 As restated*           Pension Administration 
  Audited                              GBP'000 
  As at 31                                        FinTech   Corporate   Policyholder   Consolidated 
  December 2020                                   GBP'000     GBP'000        GBP'000        GBP'000 
 
 Total assets                           64,420      8,079      73,511      3,691,456      3,837,466 
 
 Total liabilities                      27,799      3,798      34,130      3,691,456      3,757,183 
 

*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit.

Corporate assets and liabilities are not allocated to individual operating segments as they are managed on a group basis. Policyholder assets and liabilities are not allocated to individual operating segments as all investment returns associated with these are due back to policyholders under non-participating investment contracts, alongside non-participating investment contract expenses and changes in provisions for non-participating investment contract liabilities, such that the impact on shareholder assets and liabilities, and profit or loss, is nil.

   4               Non-recurring costs 

Non-recurring costs comprise the following items:

 
                                                    Unaudited       Unaudited 
                                               6 month period         6 month       Audited 
                                                        ended    period ended    year ended 
                                                    30-Jun-21       30-Jun-20     31-Dec-20 
                                                      GBP'000         GBP'000       GBP'000 
 
 Dunstan Thomas acquisition costs                          15             195           769 
 Talbot and Muir acquisition costs                         62             220           561 
 Contingent consideration on acquisitions               (571)               -             - 
 Other acquisition related costs                         (33)             152           151 
 Redundancy & restructuring costs                         185             814         1,091 
 In-specie contributions                                   51               -           402 
 Centralisation of pension administration                 123               -             - 
  systems 
 Treasury solution implementation                           -               -           286 
 Data cleansing provision                                   -               -            53 
 
                                                        (168)           1,381         3,313 
                                             ================  ==============  ============ 
 

Acquisition costs - Dunstan Thomas and Talbot and Muir

Two acquisitions were completed during the year ended 31 December 2020: FinTech provider Dunstan Thomas on 3 August 2020, and fellow SIPP provider Talbot and Muir on 30 October 2020. The Group has incurred legal and professional fees in connection with these transactions and, in accordance with IFRS 3 Business Combinations, these have been expensed and treated as non-recurring costs. The Group expects that further costs may be recognised for these acquisitions over the next three financial years in relation to fair value changes to the amount of contingent consideration payable.

Contingent consideration on acquisitions

As at 30 June 2021, the Group updated its estimate of the amount of contingent consideration payable on the acquisitions of Dunstan Thomas and Talbot and Muir and this resulted in a reduction in the liability held on the consolidated statement of financial position.

Other acquisition related costs

During the year, the Group recovered some cost in relation to the acquisition of European Pension Management Ltd.

Redundancy & restructuring costs

During the reported periods above, the Group progressed its strategy to deliver its Target Operating Model and centralise commercial property administration within one office location. Redundancy costs associated with this decision as well as costs associated with duplicated staff efforts while work is transferred between offices have been included within non-recurring costs.

In-specie contributions

As previously reported, the Group has been in correspondence with HMRC regarding processes and documentation in respect of in-specie contributions. HMRC has alleged that incorrect procedures were followed and is seeking to reclaim tax reliefs granted and interest thereon. This is an industry wide issue affecting other SIPP operators and has been challenged by the sector as a whole. Following a favourable ruling for HMRC in a case affecting another SIPP operator, and having taken further legal advice, the Directors now consider it more likely than not that some cost associated with this issue will be incurred by the Group and this has been provided for.

Centralisation of pension administration systems

During the period ended 30 June 2021, the Group progressed its IT strategy to consolidate and centralise pension administration systems used. The investment is intended to lead to licence cost savings and allow for further progression of the Group's Target Operating Model in future years. Costs associated with this investment that did not meet the criteria for capitalisation have been treated as non-recurring cost.

Treasury solution implementation

During the year ended 31 December 2020, the Group invested in a new strategic treasury solution with a global provider of back office operational cash management software. The investment is designed to innovate and improve the Group's treasury management function through provision of a system that provides a multibank facility. Costs associated with this investment that did not meet the criteria for capitalisation have been treated as non-recurring cost.

Data cleansing provision

As part of the consolidation and integration exercise undertaken during the year ended 31 December 2018 management initiated a review of data records relating to commercial properties held within SIPPs administered by the Group. A small amount of further cost, over and above amounts previously provided, associated with this process arose during the year ended 31 December 2020.

   5               Earnings per ordinary share 

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

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period 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.

Changes in income or expense that would result from the conversion of the dilutive potential ordinary shares are deemed to be trivial, and therefore no separate diluted net profit is presented. The following reflects the income and share data used in the basic and diluted earnings per share computations:

 
                                               Unaudited       Unaudited   As restated** 
                                                 6 month         6 month         Audited 
                                            period ended    period ended      year ended 
                                               30-Jun-21       30-Jun-20       31-Dec-20 
                                                 GBP'000         GBP'000         GBP'000 
 
 Net profit available to equity holders 
  of the Group                                     3,669           2,904           5,897 
                                          ==============  ==============  ============== 
 Net profit before tax, non-recurring 
  costs (note 3) and amortisation 
  (note 5) available to equity holders 
  of the Group                                     6,316           6,281          13,372 
 
                                                  Number          Number          Number 
 Weighted average number of ordinary 
  shares: 
 Issued ordinary shares at start 
  of period                                   66,414,312      54,142,346      54,142,346 
 Effect of shares issued during the 
  year                                           197,818               -       5,859,094 
 Effect of shares held by Employee 
  Benefit Trust                                (155,401)       (211,890)       (296,835) 
 Basic weighted average number of 
  shares                                      66,456,729      53,930,456      59,704,605 
 
 Effect of dilutive options                      720,135       1,187,876         886,707 
 
 Diluted weighted average number 
  of shares                                   67,176,864      55,118,332      60,591,312 
                                          ==============  ==============  ============== 
 
                                                   Pence           Pence           Pence 
 Earnings per share: 
 Basic                                               5.5             5.4             9.9 
 Diluted                                             5.5             5.3             9.7 
 
 Earnings per share on profit before 
  non-recurring costs and amortisation, 
  less an effective tax rate***: 
 Basic                                               7.7            9.4*            18.1 
 Diluted                                             7.6            9.2*            17.9 
 

*As detailed in note 2.4, adjusted earnings per share on profit before non-recurring costs and amortisation, less an effective tax rate, for the unaudited six month period ended 30 June 2020 have been restated due to identification of an error.

**The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit.

***The effective tax rate used is the current tax rate applicable to the accounting year. The current tax rate applicable for the year ending 31 December 2021 is 19.00% (2020: 19.00%).

   6               Intangible assets 
 
                                                                        Internally 
                                                   Client    Computer    Generated 
                       Goodwill      Brand     portfolios    software     Software       Total 
                        GBP'000    GBP'000        GBP'000     GBP'000      GBP'000     GBP'000 
 Cost 
 At 1 January 
  2020                   28,903          -         18,866       2,177            -      49,946 
 Additions                    -          -              -         264            -         264 
                                 ---------                             ----------- 
 
 At 30 June 
  2020                   28,903          -         18,866       2,441            -      50,210 
 Arising on 
  acquisitions*          26,829      1,595         14,939           -        5,390      48,753 
 Additions                    -          -              -         342          380         722 
                                 ---------                             ----------- 
 
 At 31 December 
  2020                   55,732      1,595         33,805       2,783        5,770      99,685 
 Additions                    -          -              -         309          533         842 
 
 At 30 June 
  2021                   55,732      1,595         33,805       3,092        6,303     100,527 
                    -----------  ---------  -------------  ----------  -----------  ---------- 
 
 Amortisation 
  and impairments 
 At 1 January 
  2020                        -          -          5,320       1,199            -       6,519 
 Charge for 
  the period                  -          -            473         124            -         597 
 Impairment                   -          -            344           -            -         344 
                                 ---------                             ----------- 
 
 At 30 June 
  2020                        -          -          6,137       1,323            -       7,460 
 Charge for 
  the period*                 -         66            717         124          240       1,147 
                                 ---------                             ----------- 
 
 At 31 December 
  2020                        -         66          6,854       1,447          240       8,607 
 Charge for 
  the period                  -         80            938         130          297       1,445 
 
 At 30 June 
  2021                        -        146          7,792       1,577          537      10,052 
                    -----------  ---------  -------------  ----------  -----------  ---------- 
 
 Net book value 
 At 31 December 
  2019                   28,903          -         13,546         978            -      43,427 
                    ===========  =========  =============  ==========  ===========  ========== 
 At 30 June 
  2020                   28,903          -         12,729       1,118            -      42,750 
                    ===========  =========  =============  ==========  ===========  ========== 
 At 31 December 
  2020*                  55,732      1,529         26,951       1,336        5,530      91,078 
                    ===========  =========  =============  ==========  ===========  ========== 
 At 30 June 
  2021                   55,732      1,449         26,013       1,515        5,766      90,475 
                    ===========  =========  =============  ==========  ===========  ========== 
 

*As restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.4, have not been subject to audit.

   7               Dividends paid 
 
                                  Unaudited         Unaudited 
                             6 month period    6 month period       Audited 
                                      ended             ended    year ended 
                                  30-Jun-21         30-Jun-20     31-Dec-20 
                                    GBP'000           GBP'000       GBP'000 
 
 Ordinary dividends paid              4,338             3,507         5,149 
 
                                      4,338             3,507         5,149 
                           ================  ================  ============ 
 
 

A final dividend of 6.5p per ordinary share in respect of the year ended 31 December 2019 was paid on 8 June 2020.

An interim dividend of 2.5p per ordinary share in respect of the year ended 31 December 2020 was paid on 13 November 2020.

A final dividend of 6.5p per ordinary share in respect of the year ended 31 December 2020 was paid on 4 June 2021.

   8               Income tax 

Tax is charged at 19% for the six months ended 30 June 2021 (30 June 2020: 19%) representing the best estimate of the average annual effective tax rate expected to apply for the full year, applied to the pre-tax income of the six month period.

Current tax for current and prior periods is classified as a current liability to the extent that it is unpaid. Any amounts paid in excess of amounts owed are classified as a current asset.

   9               Contingent liabilities 

Data cleansing

During the year ended 31 December 2018 management initiated a review of data records related to properties held within SIPPs administered by the Group.

This review required a case by case assessment of each of the properties within the population in order to assess whether any remedial action was required by the Group in respect of that property or the associated SIPP.

The Directors' best estimate of this contingent liability is GBP1.3m (30 June 2020: GBP1.8m). The decrease in estimate has arisen following satisfactory resolution of a number of cases and an overall reduction in the value of remaining cases and uncertainty remaining.

There remain inherent uncertainties in the estimate due to the potential for variations in the assumed action required to rectify individual positions. This estimate continues to be reviewed regularly, and any changes or refinements will be reported as appropriate. The Directors currently expect that, with COVID-19 related working limitations and also additional forbearance having been permitted in connection with the COVID-19 pandemic, any potential material follow up actions will be completed during 2022.

10 Illustrative condensed consolidated statement of financial position as at 30 June 2021 split between insurance policyholders and the Group's shareholders

 
                                    30-Jun-21      30-Jun-21     30-Jun-21     30-Jun-20 
                                      GBP'000        GBP'000       GBP'000       GBP'000 
 ASSETS                           Group Total   Policyholder   Shareholder   Shareholder 
 Non-current assets 
 Intangible assets                     90,475              -        90,475        42,750 
 Investment property                1,214,551      1,214,551             -            42 
 Property, plant and 
  equipment                             9,395              -         9,395         5,742 
 Investments                        2,137,522      2,137,522             -             - 
 Deferred tax asset                         -              -             -           435 
                                 ------------  -------------  ------------  ------------ 
                                    3,451,943      3,352,073        99,870        48,969 
                                 ------------  -------------  ------------  ------------ 
 Current assets 
 Trade and other receivables           28,863         13,324        15,539        13,786 
 Cash and cash equivalents            401,110        368,947        32,163        24,868 
 Current tax asset                        658            123           535           432 
                                 ------------  -------------  ------------  ------------ 
                                      430,631        382,394        48,237        39,086 
                                 ------------  -------------  ------------  ------------ 
 
 Total assets                       3,882,574      3,734,467       148,107        88,055 
                                 ------------  -------------  ------------  ------------ 
 
 LIABILITIES 
 Current liabilities 
 Trade and other payables              20,915         12,225         8,690         6,678 
 Deferred income                       30,533         14,183        16,350        12,569 
 Borrowings                            42,079         38,016         4,063         1,456 
 Lease Liabilities                        837              -           837           909 
 Provisions                               453              -           453           408 
 Contingent consideration               2,467              -         2,467             - 
                                       97,284         64,424        32,860        22,020 
                                 ------------  -------------  ------------  ------------ 
 Non-current liabilities 
 Borrowings                            48,202         30,461        17,741         8,300 
 Lease Liabilities                      7,164              -         7,164         3,377 
 Provisions                                 7              -             7             - 
 Contingent consideration               6,454              -         6,454             - 
 Non-participating investment 
  contract liabilities              3,639,582      3,639,582             -             - 
 Deferred tax liability                 3,689              -         3,689             - 
                                 ------------  -------------  ------------  ------------ 
                                    3,705,098      3,670,043        35,055        11,677 
                                 ------------  -------------  ------------  ------------ 
 
 Total liabilities                  3,802,382      3,734,467        67,915        33,697 
                                 ------------  -------------  ------------  ------------ 
 
 Net assets                            80,192              -        80,192        54,358 
                                 ------------  -------------  ------------  ------------ 
 
 Equity attributable to owners 
  of the parent 
 Issued capital                           332              -           332           271 
 Share premium                         58,087              -        58,087        33,659 
 Equity share based payments            2,839              -         2,839         2,723 
 Treasury shares                        (440)              -         (440)       (1,124) 
 Retained earnings                     19,366              -        19,366        18,815 
                                 ------------  -------------  ------------  ------------ 
                                       80,184              -        80,184        54,344 
 
 Non-controlling interest                   8              -             8            14 
 
 Total equity                          80,192              -        80,192        54,358 
                                 ------------  -------------  ------------  ------------ 
 
 

11 Illustrative condensed consolidated statement of cash flows for the six month period ended 30 June 2021 split between insurance policyholders and the Group's shareholders

 
                                         30-Jun-21       30-Jun-21      30-Jun-21      30-Jun-20 
                                           GBP'000         GBP'000        GBP'000        GBP'000 
                                       Group Total    Policyholder    Shareholder    Shareholder 
 Cash flows from operating 
  activities 
 Profit before tax                           4,486               -          4,486          3,959 
 Adjustments for: 
 Depreciation                                  915               -            915            694 
 Amortisation and impairments                1,445               -          1,445            941 
 Interest expense                              452               -            452            240 
 Share based payment expense                    92               -             92            410 
 Fair value gains on financial 
  investments                            (143,455)       (143,455)              -              - 
 Additions of financial 
  investments                            (336,457)       (336,457)              -              - 
 Disposals of financial 
  investments                              414,708         414,708              -              - 
 Fair value gains on investment 
  properties                              (11,278)        (11,278)              -              - 
 Increase in liability for 
  investment contracts                      54,278          54,278              -              - 
 Changes in working capital: 
 Increase in trade and other 
  receivables                              (1,797)           (663)        (1,134)        (4,351) 
 Increase in trade and other 
  payables                                   5,323           3,085          2,238            599 
 Taxes paid                                (1,324)               -        (1,324)        (2,063) 
 
 Net cash flows from operating 
  activities                              (12,612)        (19,782)          7,170            429 
                                     -------------  --------------  -------------  ------------- 
 
 Cash flows from investing 
  activities 
 Purchase of intangible 
  assets                                     (842)               -          (842)          (264) 
 Purchase of property, plant 
  & equipment                                (169)               -          (169)          (241) 
 Purchase of investment property          (52,176)        (52,176)              -              - 
 Purchase and sale of shares 
  in the Group by the EBT                      301               -            301          (590) 
 Receipts from sale of investment 
  property                                  57,506          57,506              -              - 
 Net cash flows from acquisitions                9               -              9          (152) 
 
 Net cash flows from investing 
  activities                                 4,629           5,330          (701)        (1,247) 
                                     -------------  --------------  -------------  ------------- 
 
 Cash flows from financing 
  activities 
 Equity dividends paid                     (4,338)               -        (4,338)        (3,507) 
 Net proceeds from issue 
  of ordinary shares                           290               -            290              - 
 Net decrease in borrowings               (16,670)        (14,670)        (2,000)        (1,579) 
 Principal elements of 
  lease payments                             (490)               -          (490)          (422) 
 Interest paid                               (277)               -          (277)           (34) 
 
 Net cash flows from financing 
  activities                              (21,485)        (14,670)        (6,815)        (5,542) 
                                     -------------  --------------  -------------  ------------- 
 
 Net increase/(decrease) 
  in cash and cash equivalents            (29,468)        (29,122)          (346)        (6,360) 
                                     -------------  --------------  -------------  ------------- 
 
 Cash and cash equivalents 
  at the beginning of the 
  period                                   430,578         398,069         32,509         31,228 
                                     =============  ==============  =============  ============= 
 Cash and cash equivalents 
  at the end of the period                 401,110         368,947         32,163         24,868 
                                     =============  ==============  =============  ============= 
 

12 Illustrative table of SIPP number movements over the six month period ended 30 June 2021

 
                                       Full     Mid SIPPs   eSIPPs    Total own    Third Party     Total 
                                       SIPPs                            SIPPs      Administered 
 As at 30 June 2021                   21,629     33,991     19,220     74,840         6,157       80,997 
                                     --------  ----------  --------  ----------  --------------  -------- 
 As at 31 December 
  2020                                23,013     31,985     20,742     75,740         6,484       82,224 
                                     --------  ----------  --------  ----------  --------------  -------- 
 Annualised gross 
  organic growth rate*                 3.6%       12.1%      1.3%       6.6%          0.5%         6.1% 
                                     --------  ----------  --------  ----------  --------------  -------- 
 SIPPs added organically                411       1,941       133       2,485          17          2,502 
                                     --------  ----------  --------  ----------  --------------  -------- 
 Conversions and reclassifications    (1,046)     1,046        -          -             -            - 
                                     --------  ----------  --------  ----------  --------------  -------- 
 SIPPs lost through 
  attrition                            (749)      (980)     (1,656)    (3,385)        (344)       (3,729) 
                                     --------  ----------  --------  ----------  --------------  -------- 
 Annualised attrition 
  rate *                               6.5%       6.1%       16.0%      8.9%          10.6%        9.1% 
                                     --------  ----------  --------  ----------  --------------  -------- 
 

(*Growth and attrition percentage rates are annualised and are based on the 6 months' worth of SIPPs added organically or lost through attrition to 30 June 2021)

Company information

 
 Directors 
 Will Self - Chief Executive Officer 
 Dan Cowland - Chief Financial Officer 
  Jane Ridgley - Chief Operating Officer 
 Chris Macdonald - Non-Executive Chairman 
 Bill Rattray - Non-Executive Director 
 Jules Hydleman - Non-Executive Director 
 Jill Lucas - Non-Executive Director 
 
 Registered Office 
 3 Temple Quay 
 Temple Back East 
 Bristol 
 BS1 6DZ 
 
 Registered Number 
 07934492 
 
 Nominated Adviser and Broker               Joint Broker 
 Peel Hunt LLP                              Singer Capital Markets 
 Moor House                                 1 Bartholomew Lane 
 120 London Wall                            London 
 London                                     EC2N 2AX 
 EC2Y 5ET 
 
 Independent Auditors 
 PricewaterhouseCoopers LLP 
 7 More London Riverside 
 London 
 SE1 2RT 
 
 Registrars 
 Computershare PLC 
 The Pavilions 
 Bridgewater Road 
 Bristol 
 BS13 8AE 
 
 

Definitions

 
 Adjusted diluted EPS 
 This is calculated by taking adjusted profit before tax for the 
  financial period, deducting an effective tax rate of 19% (2020: 
  19%), and dividing the total by the diluted weighted average number 
  of shares in issue. 
 
 Adjusted operating margin 
 This is calculated by taking operating profit for the financial 
  period and adding back amortisation and non-recurring costs, then 
  dividing this total by revenue for the financial period. 
 
 Adjusted profit before tax 
 This is calculated by taking profit before tax for the financial 
  period and adding back amortisation and non-recurring costs. 
 
 Annualised gross organic growth rate 
 A pro rata calculation of gross organic growth rate. The calculation 
  is derived by taking actual new SIPPs gained from organic growth 
  for the financial period, dividing by the total number of months 
  in the financial period, and multiplying this by 12 to obtain 
  a hypothetical annualised quantity of new SIPPs gained. The annualised 
  quantity is then divided by the brought forward quantity of SIPPs 
  held to derive the annualised gross organic growth rate. 
 
 Annualised attrition rate 
 A pro rata calculation of attrition rate. The calculation is derived 
  by taking actual SIPPs lost during the financial period, dividing 
  by the total number of months in the financial period, and multiplying 
  this by 12 to obtain a hypothetical annualised quantity of SIPPs 
  lost. The annualised quantity is then divided by the brought forward 
  quantity of SIPPs held to derive the annualised attrition rate. 
 
 AUA 
 Assets Under Administration 
 
 Brexit 
 The exit of the United Kingdom from the European Union 
 
 Net shareholder cash (after debt) 
 This is calculated by taking shareholder only amounts as split 
  within the illustrative condensed consolidated statement of financial 
  position in note 10 for cash and cash equivalents, and deducting 
  borrowings. 
 

1 Profit before tax, amortisation and non-recurring costs

2 The ratio of operating profit before amortisation and non-recurring costs to revenue

3 Annualised rates of attrition

4 As further detailed in note 2.4, results for the year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business Combinations. The adjustments have not been subject to audit.

5 As further detailed in note 2.4, adjusted diluted EPS for the six month period ended 30 June 2020 has been restated due to identification of an error.

6 In addition to statutory IFRS performance measures, the Group has presented a number of non-statutory alternative performance measures ("APMs"). The Board believes that the APMs used give a more representative view of the underlying performance of the Group and enhance comparability of information between reporting periods. APMs are identified in the definitions at the end of this announcement.

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September 09, 2021 02:00 ET (06:00 GMT)

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