TIDMFKE
RNS Number : 7061L
Fiske PLC
14 September 2021
14 September 2021
FISKE PLC
("Fiske" or the "Company" or the "Group")
Final Results, Posting of Annual Report and Notice of AGM
Fiske ( AIM:FKE ) is pleased to announce its final audited
financial results for the year ended 31 May 2021.
Highlights
2021 2020
GBP'000 GBP'000 Reported
----------------------------- --------- --------- --------
Total Revenue 6,098 5,383 +13%
Profit / (loss) on ordinary
activities before taxation 610 (127)
Profit / (loss) per ordinary
share 4.8p (1.1p)
James Harrison, CEO, commenting on the results said:
"We are pleased to report another good year of organic growth
with revenues up 13% and a solid return to profit in the second
half of the year. To have delivered this result despite the impact
of the restrictions imposed due to the Covid-19 pandemic is
testament to the resilience of our systems, our close relationships
with our clients and the tireless efforts of our staff."
In light of the recent lifting of most restrictions relating to
Covid-19, the forthcoming AGM, which is to be held on Friday 22
October 2021 at 12.30pm, will be run as a physical meeting at our
offices in Salisbury House.
Copies of the 2021 Annual Report and Accounts, including the
Notice of AGM and Proxy Voting form will be posted to shareholders
shortly and in accordance with rule 26 of the AIM Rules for
Companies, this information is also available under the Investor
Relations section of the Company's website, www.fiskeplc.com .
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information, please contact:
Fiske PLC
James Harrison (CEO) Tel: +44 (0) 20 8448 4700
Salisbury House London Wall
London
EC2M 5QS
Grant Thornton UK LLP (Nominated Adviser) Tel: +44 (0) 20 7383
5100
Samantha Harrison / Harrison Clarke
Chairman's Statement
Trading
After the Covid-19 lock-down induced fall in market values in
March 2020, a hesitant recovery promptly began but only really took
hold in October 2020. Overall, portfolio values took until the
latter part of our trading year to recover past their late 2019
values which was an impediment to our management fee income.
Nevertheless, both commissions on trading and management fees each
increased, even after a strong performance last year. We continue
to attract new clients and to migrate clients from advisory to
discretionary services.
Overall, full year revenues rose by 13% to GBP6.1m (2020:
GBP5.4m).
Costs
Over the last five years we have invested heavily: in new
back-office systems, in the acquisition of Fieldings, in
strengthening operational capacity and in compliance. We have also
engaged external resources where appropriate to minimise long term
increases in staff levels, and such consultancy pushed up the
short-term operating expenses. Whilst we have every intention of
continuing to invest in growth, we can say that we have got past
the surge in such costs.
Operating expenses level pegged at GBP5.7m in the year to 31 May
2021 (2020: GBP5.7m).
Outturn
After reporting a pre-tax loss of GBP27,000 in the first
half-year, we have made a profit of GBP637,000 in the second half
which has resulted in a full year pre-tax profit of GBP610,000
(2020: loss GBP127,000). The second half of the year benefitted
from increased commission revenues and increases in management fees
as markets rose.
The cash flow arising from this is greater by some GBP160,000
that is set aside annually for amortisation or impairment of
goodwill or customer bases arising from past acquisitions.
Ocean UK Equity
In May 2021 our unit trust, Ocean UK Equity, passed its third
anniversary. With a total return of 24.6%, being 7.6% annualised,
the fund is in the top quartile over those three years. The fund
has outperformed its benchmark (CBOE UK All Companies) and sector
(IA UK All Companies) by a significant margin. As at the end of May
2021 the fund was valued at GBP9.8m (2020: GBP7.6m).
Euroclear
During the year, we took advantage of an unsolicited offer to
acquire some of our shares in Euroclear by releasing 28% of our
holding. Euroclear has been a very profitable investment for Fiske:
we have now realised a profit of GBP1.2m and we still retain
GBP3.6m worth of Euroclear shares. The realisation of this profit
has further strengthened our balance sheet and capital adequacy
position, providing an extra GBP1.4m of cash.
Euroclear's business income margin increased from 28% in 2019 to
33% in the year to December 2020 as a result of positive operating
leverage achieved during the year, whilst their operating margin
decreased from 43% to 40% in 2020. Net earnings per share increased
to EUR137.2 in 2020 compared to EUR136.9 in 2019.
Taking into account recent transaction prices in Euroclear
shares, we have marked the carrying value of our investment to
EUR1,600 per share being GBP3.6m in total. This represents a
significant store of value on our balance sheet and an asset that
continues to pay dividends.
Net assets
Shareholder's funds amount to some GBP8.1m and within this we
now hold some GBP3.5m of cash.
Share capital
In November 2020, the company made a deferred consideration
payment due to the vendors of Fieldings Investment Management, of
GBP198,000. Part of this was settled by the allotment of 61,069
Ordinary Shares. This was the third and final such payment and thus
there will be no further such share issues to the vendors of
Fieldings. The Company's share capital now comprises 11,754,859
ordinary shares.
Dividend
The Board has resolved not to pay a dividend for the year to 31
May 2021 (2020: GBPnil).
Chairman's and Chief Executive's Report (continued)
Impact of Covid-19
Last year the transition to remote working was swiftly executed
and working with lockdown and other restrictions has become normal.
Indeed, if anything, we enjoyed the benefit of increased
productivity in certain areas of the business as a result of
working-from-home. For those members of staff with young families,
working-from-home has been a challenge and the lifting of
restrictions and a move to mixed office and home-based working will
be welcomed.
Staff
We would like to thank all members of staff for their unswerving
commitment and perseverance during the last year as the pandemic
ran its course. As a Company we have worked very effectively in
both an entirely remote manner as well as adapting quickly to a
hybrid model when we were able to access our offices again.
Strategy
We continue to implement our ongoing strategy to welcome new
investment managers with established client relationships to
increase our assets under management and advice. We believe that
with our traditional values, modern systems and up to date
regulatory framework we provide an attractive place to work for
aspiring, independently minded private client investment
managers.
As part of our strategy, we are redeveloping our website this
year to show case our services more clearly whilst also continuing
our focus on migrating clients to our fee-paying services.
Markets
Global equity markets advanced strongly during the year led
higher by the U.S with the technology heavy NASDAQ up 45%.
Improving macroeconomic conditions, continued rollout of the
vaccine program, a strong corporate earnings recovery, synchronised
global growth expectations, continued monetary and fiscal support
and pent-up demand/build up in excess savings by consumers are all
factors which helped to drive markets higher. Sterling was also
strong against the US Dollar moving from a depressed post Brexit
level of US$1.23 to US$1.42.
Many investors and strategists are now asking how far equity
markets can run on given their impressive gains from the post
pandemic lows recorded in March 2020. Caution might be warranted
given that there are plenty of uncertainties to ponder;
policymakers could scale back fiscal and monetary support, taxes
will have to rise at some stage to help pay for the extraordinary
level of government spending during the pandemic and investors
remain fixated on whether the recent uptick in inflation is
transitory or not. On the latter, if inflation becomes more
entrenched, Central Banks may have to raise interest rates sooner
and faster than they are currently forecasting. Despite these
uncertainties, markets remain incredibly sanguine with the
volatility index, the 'Vix', continuing to trend down.
UK equity markets were encouraged by signs of a rebound in the
UK economy with the FTSE 100 closing above 7,000 in April for the
first time in 14 months and the FTSE 250 hitting all-time highs.
Macroeconomic data being released was exceeding expectations and
this led the Organisation for Economic Co-Operation and Development
(OECD) to raise its GDP growth forecast for the UK to 7.2% in 2021,
up from its March projection of 5.1%. Some of this optimism was
overshadowed by rising inflation and an increase in covid cases
linked to the variant first detected in India. This led the
government to delay the reopening of the economy on June 21. UK
markets have been stuck in a sideways trading range in May and June
and we have seen some rotation back into more 'growth' orientated
and 'quality' stocks away from 'early cycle' and 'recovery' or
'value' ones.
The UK market is trading at a discount to its international
peers and UK plc continues to attract interest from private equity
firms. Morrisons, the food retailer, is the latest acquisition
target with a GBP6.3 billion bid from a Fortress led consortium.
The UK market still offers value relative to bonds, from a yield
perspective, with the FTSE 100 offering a prospective dividend
yield of c. 3.9% versus c. 0.7% on offer from UK 10-year gilts. We
have recently witnessed a flattening in the UK gilt yield curve as
yields at the long end of the curve have gently retreated.
Internationally, the first half of calendar 2021 has seen growth
rates accelerating as corporate sales and profits recover and
economies open up from lockdown and are combined with Central Bank
stimulus in nearly all markets. But by the latter part of the year
Central Banks will slow their money creation and begin to tighten.
Announcements to this effect have already been given by the
European Central Bank and by the Bank of Canada. It seems likely
the US Federal Reserve will soon follow suit. Only Japan continues
with its programme of buying equities using exchange traded funds.
If inflation rises faster than expected or fails to fall back from
expected levels, a rise in interest rates should follow. Similarly,
in emerging markets the tightening is already more advanced with
China and eastern Europe raising rates, and with South American
nations and Turkey now recording very high inflation rates.
In summary, as world economies rebound from the very worst
effects of Covid, a combination of supply chain disruption,
shortages of materials and labour together with a strong recovery
in demand is causing prices to rise. The spectre of inflation is
naturally of concern to investors. It is too early to tell if this
will prove to be transitory, as most Central Banks are guiding us,
or more long-lasting. Whilst US, UK and European indices are
gradually pushing to new post Covid highs the main laggard is China
which has witnessed sharp falls following the crack down by the
regulatory authorities. China's speculative market remains a
serious concern with scope to further unsettle global markets.
Outlook
We have had a good start to our new financial year. Whilst the
first few months have seen trading volumes soften a little, in line
with more traditional summer levels, portfolio values are rising
with markets which will enhance our fee revenues.
We look forward to another positive year although with a degree
of caution due to the likely impact of tightening monetary policy
and the probable volatility that may ensue in global markets.
AGM
Shareholders' views are important, and the Board encourages
shareholders to submit their votes via the CREST system.
Shareholders may also submit questions in advance of the AGM to the
Company Secretary via email to info@fiskeplc.com or by post to the
Company Secretary at the address set out on page 53 of this
report.
In light of the recent lifting of most restrictions relating to
Covid-19, the forthcoming AGM, which is to be held on Friday 22
October 2021 at 12.30pm, will be run as a physical meeting at our
offices in Salisbury House.
Consolidated Statement of Total Comprehensive Income
For the year ended 31 May 2021
Notes 2021 2020
GBP'000 GBP'000
---------------------------------------------------- ----- --------- ---------
Continuing Operations
Fee and commission income 6,018 5,347
Other income 80 36
Total Revenue 2 6,098 5,383
---------------------------------------------------- ----- --------- ---------
Operating expenses (5,716) (5,743)
Operating profit / (loss) 382 (360)
Investment revenue 237 143
Finance income - 148
Finance costs (9) (58)
Profit / (loss) on ordinary activities before
taxation 610 (127)
Taxation 3 (43) -
---------------------------------------------------- ----- --------- ---------
Profit / (loss) on ordinary activities after
taxation 567 (127)
---------------------------------------------------- ----- --------- ---------
Other comprehensive income
Items that may subsequently be reclassified
to profit or loss
Movement in unrealised appreciation of investments 75 (793)
Deferred tax on movement in unrealised appreciation
of investments (12) 187
---------------------------------------------------- ----- --------- ---------
Net other comprehensive income (63) (606)
---------------------------------------------------- ----- --------- ---------
Total comprehensive income /(loss)attributable
to equity shareholders 630 (733)
---------------------------------------------------- ----- --------- ---------
Loss per ordinary share
Basic 4 4.8p (1.1p)
Diluted 4 4.8p (1.1p)
---------------------------------------------------- ----- --------- ---------
All results are from continuing operations.
Consolidated Statement of Financial Position
31 May 2021
Notes As at 31 As at 31
May May
2021 2020
GBP'000 GBP'000
--------------------------------------- ----- --------- ---------
Non-current Assets
Intangible assets 5 1,129 1,289
Other intangible assets 6 32 65
Right-of-use assets 7 - 101
Property, plant and equipment 8 24 53
Investments held at Fair Value Through
Other Comprehensive Income 9 3,604 4,962
Total non-current assets 4,789 6,470
--------------------------------------- ----- --------- ---------
Current Assets
Trade and other receivables 10 2,514 2,398
Cash and cash equivalents 3,498 2,239
--------------------------------------- ----- --------- ---------
Total current assets 6,012 4,637
--------------------------------------- ----- --------- ---------
Current liabilities
Trade and other payables 11 2,049 2,924
Short-term lease liabilities 12 - 124
Current tax liabilities 43 -
Total current liabilities 2,092 3,048
--------------------------------------- ----- --------- ---------
Net current assets 3,920 1,589
--------------------------------------- ----- --------- ---------
Non-current liabilities
Deferred tax liabilities 13 573 611
--------------------------------------- ----- --------- ---------
Total non-current liabilities 573 611
--------------------------------------- ----- --------- ---------
Net Assets 8,136 7,448
--------------------------------------- ----- --------- ---------
Equity
Share capital 14 2,939 2,923
Share premium 2,082 2,057
Revaluation reserve 2,553 3,597
Retained earnings/(losses) 562 (1,129)
--------------------------------------- ----- --------- ---------
Shareholders' equity 8,136 7,448
--------------------------------------- ----- --------- ---------
These financial statements were approved by the Board of
Directors and authorised for issue on 13 September 2021.
Group Statement of Changes in Equity
For the year ended 31 May 2021
Share Share Revaluation Retained
capital premium reserve losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ --------- --------- ------------ --------- --------
Balance at 31 May 2019 2,904 2,029 4,203 (956) 8,180
Adoption of IFRS 16 - - - (48) (48)
------------------------------------ --------- --------- ------------ --------- --------
Balance at 1 June 2019 2,904 2,029 4,203 (1,004) 8,132
Loss for the financial
year - - - (127) (127)
Movement in unrealised
appreciation of investments - - (793) - (793)
Deferred tax on movement
in unrealised appreciation
of investments - - 187 - 187
------------------------------------ --------- --------- ------------ --------- --------
Total comprehensive income
/ (expense) for the year - - (606) (127) (733)
------------------------------------ --------- --------- ------------ --------- --------
Share based payment transactions - - - 2 2
Issue of ordinary share
capital 19 28 - - 47
------------------------------------ --------- --------- ------------ --------- --------
Total transactions with
owners, recognised directly
in equity 19 28 - 2 49
------------------------------------ --------- --------- ------------ --------- --------
Balance at 1 June 2020 2,923 2,057 3,597 (1,129) 7,448
Profit for the financial
year - - - 567 567
Movement in unrealised
appreciation of investments - - 75 - 75
Deferred tax on movement
in unrealised appreciation
of investments - - (12) - (12)
Realised disposal of Fair
value through other comprehensive
income investments - - (1,107) 1,122 15
------------------------------------ --------- --------- ------------ --------- --------
Total comprehensive income
/ (expense) for the year - - (1,044) 1,689 645
------------------------------------ --------- --------- ------------ --------- --------
Share based payment transactions - - - 2 2
Issue of ordinary share
capital 16 25 - - 41
------------------------------------ --------- --------- ------------ --------- --------
Total transactions with
owners, recognised directly
in equity 16 25 - 2 43
------------------------------------ --------- --------- ------------ --------- --------
Balance at 31 May 2021 2,939 2,082 2,553 562 8,136
------------------------------------ --------- --------- ------------ --------- --------
Group and Parent Company Statement of Cash Flows
For the year ended 31 May 2021
Notes 2021 2021 2020 2020
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ------ --------- --------- --------- ---------
Operating profit/(loss) 382 348 (360) (170)
Amortisation of intangible assets
arising on consolidation 160 161 156 24
Amortisation of other intangible
assets 33 33 32 32
Depreciation of right-of-use
assets 101 101 173 173
Depreciation of property, plant
and equipment 33 33 39 39
Expenses settled by the issue
of shares 2 2 2 2
(Increase) / decrease in receivables (119) (583) (11) 323
Increase / (decrease) in payables (873) (744) 75 24
---------------------------------------------- --------- --------- --------- ---------
Cash generated from/(used) in
operations (281) (649) 106 447
Tax (paid) - - - -
-------------------------------------- ------ --------- --------- --------- ---------
Net cash generated from/(used
in) operating activities (281) (649) 106 447
Investing activities
Investment income received 237 237 143 143
Interest received - - 148 148
Proceeds on disposal of investments
held at FVTOCI 1,400 1,400 5 5
Purchases of property, plant
and equipment (4) (4) (62) (62)
Net cash generated from investing
activities 1,633 1,633 234 234
---------------------------------------------- --------- --------- --------- ---------
Financing activities
Interest paid (9) (9) (24) (24)
Proceeds from issue of ordinary
share capital 40 40 47 47
Repayment of lease liabilities (124) (124) (197) (197)
---------------------------------------------- --------- --------- --------- ---------
Net cash used in financing activities (93) (93) (174) (174)
---------------------------------------------- --------- --------- --------- ---------
Net increase/(decrease) in cash
and cash equivalents 1,259 891 166 507
Cash and cash equivalents at
beginning of year 2,239 1,898 2,073 1,391
Cash and cash equivalents at
end of year 3,498 2,789 2,239 1,898
---------------------------------------------- --------- --------- --------- ---------
Notes to the Accounts
For the year ended 31 May 2021
1. Basis of preparation
These financial statements have been prepared in accordance with
the requirements of IFRS implemented by the Group for the year
ended 31 May 2021 as adopted by the International Financial
Reporting Interpretations Committee and in conformity with the
Companies Act 2006 The Group financial statements have been
prepared under the historical cost convention, with the exception
of financial instruments, which are stated in accordance with IFRS
9 Financial Instruments: recognition and measurement.
The financial information included in this News Release does not
constitute statutory accounts of the Group for the years ended 31
May 2021 and 2020, but is derived from those accounts. Statutory
accounts for the year ended 31 May 2020 have been reported on by
the Group's auditor and delivered to the Registrar of Companies.
Statutory accounts for the year ended 31 May 2021 have been audited
and will be delivered to the Registrar of Companies. The report of
the auditors for both years was (i) unqualified and (ii) did not
contain a statement under Section 498 (2) or (3) of the Companies
Act 2006.
Copies of the Annual Report will be sent on 14 September 2021 to
shareholders and will also be available on our website at
www.fiskeplc.com
New and revised IFRSs in issue but not yet effective
A number of amendments to existing standards have been effective
from 1 June 2020 but they do not have a material effect on the
Group financial statements. There are a number of standards,
amendments to standards, and interpretations which have been issued
by the IASB that are effective in future accounting periods that
the Group has decided not to adopt early. The following amendments
are effective for future periods:
IFRS/Std Description Issued Effective
IAS 1 Presentation Amendments regarding February Annual periods
of Financial Statements the disclosure of 2021 beginning on or
accounting policies after 1 January
2023
IAS 8 Accounting Amendments regarding February Annual periods
Policies, Changes the definition of 2021 beginning on or
in Accounting Estimates accounting estimates after 1 January
and Errors 2023
IFRS 3 Business Amendments updating May 2020 Annual periods
Combinations a reference to the beginning on or
Conceptual Framework after 1 January
2022
The Group do not expect these amendments to have a significant
impact on the financial statements.
There were no new standards adopted in the current year.
2. Total revenue and segmental analysis
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by management to allocate resources to the
segments and to assess their performance. Following the acquisition
of Fieldings Investment Management Limited in August 2017, their
staff and operations have been integrated into the management team
of Fiske plc. Pursuant to this, the Group continues to identify a
single reportable segment, being UK-based financial intermediation.
Within this single reportable segment, total revenue comprises:
2021 2020
GBP'000 GBP'000
---------------------------------------------- ------- -------
Commission receivable 2,854 2,732
Investment management fees 3,164 2,615
---------------------------------------------- ------- -------
6,018 5,347
Profit / (loss) on investments held at FVTOCI - -
Other income / (loss) 80 36
---------------------------------------------- ------- -------
6,098 5,383
---------------------------------------------- ------- -------
Substantially all revenue in the current and prior year is
generated in the UK and derives solely from the provision of
financial intermediation.
3. Tax
Analysis of tax on ordinary activities:
2021 2020
GBP'000 GBP'000
----------------------------------------------- ------- -------
Current tax
Current year 43 -
Prior year adjustment - -
----------------------------------------------- ------- -------
43 -
Deferred tax
Current year - -
Prior year adjustment - -
----------------------------------------------- ------- -------
Total tax charge to Statement of Comprehensive
Income 43 -
----------------------------------------------- ------- -------
Factors affecting the tax charge for the year
The standard rate of tax for the year, based on the United
Kingdom standard rate of corporation tax, is 19.00% (2020: 19.00%).
This is also expected to be the rate applicable in the next
financial year.
Changes to the UK corporation tax rate were substantively
enacted on 24 May 2021. From 1 April 2023 the main corporation tax
rate will increase to 25% from 19%. If this enacted rate had been
applied this would have resulted in a further deferred tax
liability of GBP181,000.
The charge/(credit) for the year can be reconciled to the profit
per the Statement of Comprehensive Income as follows:
2021 2020
GBP'000 GBP'000
------------------------------------------------- ------- -------
Profit/(loss) before tax 608 (127)
------------------------------------------------- ------- -------
Charge/(credit) on profit on ordinary activities
at standard rate 116 (24)
Effect of:
Expenses not deductible in determining taxable
profit 3 6
Non-taxable income (45) (27)
Carry back tax relief (31) -
Tax losses not recognised - 45
43 -
------------------------------------------------- ------- -------
4. Earnings per share
Basic earnings per share has been calculated by dividing the
profit on ordinary activities after taxation by the weighted
average number of shares in issue during the year. Diluted earnings
per share is basic earnings per share adjusted for the effect of
conversion into fully paid shares of the weighted average number of
share options during the year.
Diluted
31 May 2021 Basic Basic
GBP'000 GBP'000
------------------------------------------------ -------- --------
Profit on ordinary activities after taxation 565 565
Adjustment to reflect impact of dilutive share
options - -
------------------------------------------------ -------- --------
Profit 565 565
------------------------------------------------ -------- --------
Weighted average number of shares (000's) 11,724 11,769
------------------------------------------------ -------- --------
Earnings per share (pence) 4.8 4.8
------------------------------------------------ -------- --------
Diluted
31 May 2020 Basic Basic
GBP'000 GBP'000
(restated) (restated)
------------------------------------------------ ------------ ------------
(Loss) on ordinary activities after taxation (127) (127)
Adjustment to reflect impact of dilutive share
options - -
------------------------------------------------ ------------ ------------
(Loss) (127) (127)
------------------------------------------------ ------------ ------------
Weighted average number of shares (000's) 11,673 11,714
------------------------------------------------ ------------ ------------
(Loss) per share (pence) (1.1) (1.1)
------------------------------------------------ ------------ ------------
31 May
31 May 2021 2020
--------------------------------------- ----------- ------
Number of shares (000's):
Weighted average number of shares 11,724 11,673
Dilutive effect of share option scheme 44 41
--------------------------------------- ----------- ------
11,769 11,714
--------------------------------------- ----------- ------
5. Intangible assets arising on consolidation
Customer
relationships Goodwill Total
----------------------------------------
GBP'000 GBP'000 GBP'000
---------------------------------------- --------------- ----------- --------
Cost
At 1 June 2019 1,312 1,311 2,623
Additions - - -
---------------------------------------- --------------- ----------- --------
At 31 May 2020 1,312 1,311 2,623
Additions - - -
---------------------------------------- --------------- ----------- --------
At 31 May 2021 1,312 1,311 2,623
---------------------------------------- --------------- ----------- --------
Accumulated amortisation or impairment
At 1 June 2019 (262) (916) (1,178)
Charge in year (132) (24) (156)
---------------------------------------- --------------- ----------- --------
At 31 May 2020 (394) (940) (1,334)
Charge in year (130) (30) (160)
---------------------------------------- --------------- ----------- --------
At 31 May 2021 (524) (970) (1,494)
---------------------------------------- --------------- ----------- --------
Net book value
At 31 May 2021 788 341 1,129
---------------------------------------- --------------- ----------- --------
At 1 June 2020 918 371 1,289
---------------------------------------- --------------- ----------- --------
Goodwill arising through business combinations is allocated to
individual cash-generating units ('CGUs') being acquired
subsidiaries, reflecting the lowest level at which the Group
monitors and test goodwill for impairment purposes. The CGUs to
which goodwill is attributed are as follows:
2021 2020
CGU GBP'000 GBP'000
-------------------------------- --------- ---------
Ionian Group Limited 176 206
Vor Financial Strategy Limited 165 165
--------------------------------- --------- ---------
Goodwill allocated to CGUs 341 371
--------------------------------- --------- ---------
The impairment charge arises from a prudent assessment that
customer relationships and goodwill change over time and are not of
indefinite life. Based on analyses of the relevant customer base
segments, a determination was made as to the expected income
streams arising over the next 7 years. The recoverable amounts of
the goodwill in Ionian Group Limited and in Vor Financial Strategy
Limited are determined based on value-in-use calculations. These
calculations use projections of marginal profit contributions over
the expected remaining stream of attributable value. The key
assumptions used for value-in-use calculations are as follows:
Direct and indirect costs
as % of revenues 60%
Growth rate 0 %
12.5
Discount rate %
Had the discount rate used gone up / down by 1%, impairment
would have been GBP6,000 higher/lower and the carrying amount
commensurately adjusted. Management determined margin contribution
and growth rates based on past performance of those units, together
with current market conditions and its expectations of development
of those CGUs. The discount rate used is pre-tax, and reflects
specific risks relating to the relevant CGU.
6. Other intangible assets
Systems
licence
Group and Company GBP'000
-------------------------- ---------
Cost
At 1 June 2019 192
Additions -
At 1 June 2020 192
Additions -
-------------------------- ---------
At 31 May 2021 192
---------------------------- ---------
Accumulated amortisation
At 1 June 2019 (95)
Charge for the year (32)
At 1 June 2020 (127)
Charge for the year (33)
---------------------------- ---------
At 31 May 2021 (160)
---------------------------- ---------
Net book value
At 31 May 2021 32
---------------------------- ---------
At 31 May 2020 65
---------------------------- ---------
7. Right-of-use assets
Property
Group and Company GBP'000
-------------------------- ---------
Cost
At 1 June 2019 274
Additions -
At 1 June 2020 274
Additions -
-------------------------- ---------
At 31 May 2021 274
--------------------------- ---------
Accumulated amortisation
At 1 June 2019 -
Charge for the year (173)
At 1 June 2020 (173)
Charge for the year (101)
--------------------------- ---------
At 31 May 2021 (274)
--------------------------- ---------
Net book value
At 31 May 2021 -
-------------------------- ---------
At 31 May 2020 101
--------------------------- ---------
8. Property, plant and equipment
Office furniture Computer
and equipment equipment Office refurbishment Total
Group and Company GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ----------------- ------------ ----------------------- --------
Cost
At 1 June 2019 162 214 175 551
Additions 2 60 - 62
Disposals - - - -
-------------------------- ----------------- ------------ ----------------------- --------
At 1 June 2020 164 274 175 613
Additions - 4 - 4
-------------------------- ----------------- ------------ ----------------------- --------
At 31 May 2021 164 278 175 617
-------------------------- ----------------- ------------ ----------------------- --------
Accumulated depreciation
At 1 June 2019 (149) (197) (175) (521)
Charge for the year (7) (32) - (39)
At 1 June 2020 (156) (229) (175) (560)
Charge for the year (7) (26) - (33)
-------------------------- ----------------- ------------ ----------------------- --------
At 31 May 2021 (163) (255) (175) (593)
-------------------------- ----------------- ------------ ----------------------- --------
Net book value
At 31 May 2021 1 23 - 24
-------------------------- ----------------- ------------ ----------------------- --------
At 31 May 2020 8 45 - 53
-------------------------- ----------------- ------------ ----------------------- --------
A ten-year lease of office premises at London Wall came to an
end at December 2020. Since then the company has continued to rent
those office premises continuing the quarterly rental payments.
The Group used the following practical expedients when applying
IFRS16 to leases previously classified as operating leases under
IAS17.
-- Applied a single discount rate to a portfolio of leases with similar characteristics
-- Excluded initial direct costs from measuring the right-of-use
asset at the date of initial application
-- Used hindsight when determining the lease term if the
contract contains options to extend or terminate the lease. Between
March and June 2020, the company benefited from certain rent
concessions occurring as a direct consequence of the Covid-19
pandemic amounting to GBP46,606 (prior year: GBPnil), the benefit
of which has been recognised in the profit and loss account for the
year as a reduction in costs.
Investments held at Fair Value Through Other Comprehensive
Income
2021 2020
Group and Company GBP'000 GBP'000
--------------------------------------------- ------- -------
Opening valuation 4,962 5,759
Opening fair value gains on investments held (4,303) (5,095)
--------------------------------------------- ------- -------
Cost 659 664
Cost of disposals (182) (5)
--------------------------------------------- ------- -------
Cost 477 659
Gains on investments 3,127 4,303
--------------------------------------------- ------- -------
Closing fair value of investments held 3,604 4,962
--------------------------------------------- ------- -------
being:
Listed - -
Unlisted 3,604 4,962
--------------------------------------------- ------- -------
FVTOCI investments carried at fair value 3,604 4,962
--------------------------------------------- ------- -------
Gains / (losses) on investments 2021 2020
-------------------------------- ------- -------
Group and Company GBP'000 GBP'000
-------------------------------- ------- -------
Realised gains on sales 1,250 -
Increase in fair value 1,877 4,303
-------------------------------- ------- -------
Gains on investments 3,127 4,303
-------------------------------- ------- -------
The investments included above are represented by holdings of
equity securities. These shares are not held for trading.
9. Trade and other receivables
2021 2021 2020 2020
Group Company Group Company
Group and Company GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- -------- -------- -------- --------
Counterparty receivables 1,065 1,065 150 150
Trade receivables - - 1,345 1,345
----------------------------------- -------- -------- -------- --------
1,065 1,065 1,495 1,495
Amount owed by group undertakings - 703 - 85
Other debtors 86 48 56 142
Prepayments and accrued income 1,363 1,050 847 566
----------------------------------- -------- -------- -------- --------
2,514 2,866 2,398 2,288
----------------------------------- -------- -------- -------- --------
Due to the short-term nature of the current receivables, their
carrying amount is considered to be the same as their fair
value.
Trade receivables
Included in the Group's trade receivables are debtors with a
carrying amount of GBPnil (2020: GBPnil) which are past due at the
reporting date for which the Group has not provided.
Counterparty receivables
Included in the Group's counterparty receivables balance are
debtors with a carrying amount of GBP1,065,000 (2020: GBP150,000)
which are past due but not considered impaired.
Ageing of counterparty receivables:
2021 2020
GBP'000 GBP'000
------------- ------- -------
0 - 15 days 1,025 128
16 - 30 days 22 -
31 - 60 days 19 22
------------- ------- -------
1,065 150
------------- ------- -------
10. Trade and other payables
2021 2021 2020 2020
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- -------- -------- --------
Counterparty payables 623 623 1,456 1,456
Trade payables 436 435 - -
------------------------ -------- -------- -------- --------
1,059 1,058 1,456 1,456
Financial liabilities
measured at amortised
cost being deferred
consideration payable - - 218 218
Other sundry creditors
and accruals 990 870 1,250 1,005
------------------------ -------- -------- -------- --------
2,049 1,928 2,924 2,679
------------------------ -------- -------- -------- --------
11. Lease liabilities
2021 2021 2020 2020
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------- --------- -------- --------
Current 124 124
Non-current - - - -
--------------------- --------- --------- -------- --------
- - 124 124
--------- ------------------------------- -------- --------
Maturity analysis:
--------------------- --------- --------- -------- --------
Not later than one
year - - 124 124
Later than one year
and not later than
5 years - - - -
--------------------- --------- --------- -------- --------
- - 124 124
--------- ------------------------------- -------- --------
The cash flow impact is summarised as:
2021 2021 2020 2020
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- -------- -------- --------
Lease liabilities at
end of prior year 124 124 - -
Adoption of IFRS 16
at 1 June 2019 - - 321 321
---------------------- -------- -------- -------- --------
Lease liabilities at
beginning of year 124 124 321 321
Cash flow (124) (124) (197) (197)
---------------------- -------- -------- -------- --------
Lease liabilities at
end of year - - 124 124
---------------------- -------- -------- -------- --------
The lease liability is retired over time by the contrasting
interest expense and lease payments.
12. Deferred taxation
Capital Tax Deferred
allowances Investments Losses tax liability
Group and Company GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- ------------- ------------ --------- ----------------
At 1 June 2020 (1) 706 (94) 611
Charge for the year - 12 94 106
Deferred tax released on sale
of investments - (144) - (144)
Charge to Statement of Comprehensive
Income
* in respect of current year - - - -
At 31 May 2021 (1) 574 - 573
---------------------------------------- ------------- ------------ --------- ----------------
Deferred tax assets and liabilities are recognised at a rate
which is substantively enacted at the balance sheet date. The rate
to be taken in this case is 19%, being the anticipated rate of
taxation applicable to the Group and Company in the following
year.
13. Called up share capital
2021 2020
No. of No. of
shares GBP'000 shares GBP'000
-------------------------- ----------- -------- ------------ --------
Authorised:
Ordinary shares of 25p 12,000,000 3,000 12,000,000 3,000
-------------------------- ----------- -------- ------------ --------
Allotted and fully paid:
Ordinary shares of 25p
Opening balance 11,693,790 2,923 11, 617,597 2,904
Shares issued 61,069 16 76,193 19
-------------------------- ----------- -------- ------------ --------
Closing balance 11,754,859 2,939 11,693,790 2,923
-------------------------- ----------- -------- ------------ --------
Included within the allotted and fully paid share capital were
9,490 ordinary shares of 25p each (2019: 9,490 ordinary shares of
25p each) held for the benefit of employees.
At 31 May 2021 there were 200,000 outstanding options to
subscribe for ordinary shares at a weighted average exercise price
of 55p (2020: 55p) and a weighted average remaining contractual
life of 3 years, 5 months. (2020: 3 years, 9 months). Ordinary
shares are entitled to all distributions of capital and income.
14. Financial commitments
Lease - classified as an IFRS 16 lease
At 31 May 2021 the Group had outstanding commitments for future
minimum lease payments under non-cancellable operating leases which
fall due as follows:
2021 2020
Land and Land and
buildings Other buildings Other
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ------------ -------- ----------- --------
In the next year - 5 191 -
In the second to fifth years
inclusive - - - -
------------------------------ ------------ -------- ----------- --------
Total commitment - 5 191 -
------------------------------ ------------ -------- ----------- --------
In June 2010, the Company entered into a lease over its premises
at London Wall for a period of 10 years, with a five-year break
clause. That lease expired on 31 December 2020.
15. Clients' money
At 31 May 2021 amounts held by the Company on behalf of clients
in accordance with the Client Money Rules of the Financial Conduct
Authority amounted to GBP63,153,533 (2020: GBP56,624,640). The
Company has no beneficial interest in these amounts and accordingly
they are not included in the consolidated statement of financial
position.
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September 14, 2021 04:44 ET (08:44 GMT)
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