TIDMFEN
RNS Number : 2699K
Frenkel Topping Group PLC
21 April 2020
LEI 213800I5L3K7AT7A4R20
Frenkel Topping Group plc
("Frenkel Topping" or "the Company" or "the Group")
Results for the 12 months ended 31 December 2019
Strong revenue and profit growth through the successful
execution of our strategy
Frenkel Topping Group (AIM: FEN), a specialist independent
financial advisor and wealth manager focused on asset protection
for clients, announces its final results for the 12 months ended 31
December 2019. The announcement follows on from a strong
performance in the second half of 2019 and the Board is pleased to
report a solid set of results which are in line with management's
expectations.
Financial Summary
FY 2019 FY 2018 % change
Revenue GBP8.6m GBP7.7m +12%
---------------- ---------------- ---------
Recurring revenue GBP6.7m GBP6.0m +12%
---------------- ---------------- ---------
Gross profit GBP5.0m GBP4.7m +6%
---------------- ---------------- ---------
Underlying profit from
operations GBP2.5m GBP2.4m +4%
---------------- ---------------- ---------
Pre-tax profit GBP1.2m GBP1.1m +9%
---------------- ---------------- ---------
Basic EPS 1.25p 1.11p +13%
---------------- ---------------- ---------
Cash generated from
operating activities GBP1.3m GBP1.1m +18%
---------------- ---------------- ---------
Net cash and marketable
securities GBP2.1m GBP2.0m +5%
---------------- ---------------- ---------
Total dividends (paid
and proposed) 1.35p per share 1.29p per share +5%
---------------- ---------------- ---------
Total assets GBP13.7m GBP13.1m +5%
---------------- ---------------- ---------
Business Highlights
-- Eleventh consecutive year of high client retention (99%) for investment management services
-- Assets under management ("AUM") up 15% to GBP898m (as at 31 December 2018: GBP779m)
-- Ascencia - Assets on a discretionary mandate up 32% to
GBP399m (as at 31 December 2018: GBP302m)
-- Strong balance sheet maintained with net cash and marketable securities of GBP2.1m
-- Frenkel Topping Academy first cohort successfully completing
the scheme and taking up full-time roles across the business
A Strong Start to the New Financial Year
-- First three months of trading has been robust - substantial
AUM mandates won, outperforming internal targets for the first
quarter of the new financial year
-- Strong momentum in new expert witness instructions with high levels of new business wins
-- Ascencia established joint venture with Truly Independent to
broaden DFM distribution to a wider IFA marketplace
-- IFA business established joint venture with Horwich Cohen
Coghlan Ltd, a law firm, to develop new and innovative investment
products for the personal injury market
-- IFA business established joint venture with Hudgell
Solicitors, a law firm specialising in personal injury, medical
negligence, travel litigation, civil liberties and abuse
-- Appointment of Elaine Cullen-Grant, formerly the Group's financial controller, as CFO
-- Frenkel Topping Academy apprentice won 'Overall Apprentice of
the Year' and 'Financial and Accountant Apprentice of the Year' at
the Salford City College Annual Apprenticeship Awards in Q1
2020
-- Current trading is line with management expectations
Richard Fraser, CEO of Frenkel Topping, said:
" Our strong performance provides a clear example of the
positive outcomes achieved when commercial astuteness is anchored
by a strong moral obligation to do the right thing by customers,
employees and the wider society. Despite the uncertain
geo-political and macroeconomic backdrop, we have achieved an
increase of 15% in AUM, 12% in revenue and 9% in pre-tax profit.
Our client retention rate remained high at an impressive 99% which
reflects our clients' trust and confidence in us to manage their
money conservatively and generate returns.
"The year has begun robustly. We have won significant AUM
mandates together with new business from our expert witness work,
the latter a key pipeline for future AUM growth. It is particularly
encouraging that the defensive nature of our investment philosophy
limited negative market movement to 7.6%, which reduced AUM by 4.1%
to GBP849m as at 31 March. Our conservative approach to investments
and customer centric ethos has demonstrated, thus far, that we are
resilient and we are currently trading in line with management's
expectations; however, the impact of the effects of COVID-19 is
difficult to quantify at this stage and we continue to monitor the
situation carefully. Our priority is the safety and wellbeing of
all our stakeholders. Our team is successfully working remotely and
making use of technology to ensure that they are continuing to
support each other and their clients.
"The outbreak of COVID-19 is tragic and has already impacted so
many lives and indeed businesses across the world and I do want to
take this opportunity to express my heartfelt thanks to the
nation's frontline workers whose courage and commitment to the
nation's safety and wellness is truly humbling and an inspiration
to us all."
For further information:
Frenkel Topping Group plc www.frenkeltopping.co.uk
Richard Fraser, Chief Executive Tel: 0161 886 8000
Officer
finnCap Ltd Tel: 020 7220 0500
Carl Holmes/James Thompson
(Corporate Finance)
Tim Redfern / Richard Chambers
(ECM)
frenkeltopping@tbcardew.com
TB Cardew
Tom Allison
Shan Shan Willenbrock
Olivia Rosser 0207 930 0777
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
About Frenkel Topping Group: www.frenkeltopping.co.uk
The financial services firm consists of Frenkel Topping Limited,
Ascencia Investment Management, Obiter Wealth Management and
Equatas Accountants.
The group of companies specialises in providing financial advice
and asset protection services to clients at times of financial
vulnerability, with particular expertise in the field of personal
injury and clinical negligence.
With more than 30 years' experience in the industry, Frenkel
Topping Group has earned a reputation for commercial astuteness
underpinned by a strong moral obligation to its clients, employees
and wider society, with a continued focus on its Environmental,
Social and Governance (ESG) impact.
Through its core business, Frenkel Topping Limited, the firm
supports litigators pre-settlement in achieving maximum damages, by
providing expert witness services, and post-settlement to achieve
the best long-term financial outcomes for clients after injury. It
boasts a client retention rate of 99%.
The Group's discretionary fund manager, Ascencia, provides
bespoke financial portfolios for clients in unique circumstances.
In recent years Ascencia has diversified its portfolios to include
a Sharia-law-compliant portfolio and a number of ESG portfolios in
response to increased interest in socially responsible investing
(SRI).
Obiter provides a generalist wealth management service -
including advice on Savings; Tax planning; Life Insurance; Critical
Illness and Income protection; Endowment advice and Keyman
Insurance, with a particular specialism in financial advice on
pensions and pension sharing orders for the clients of divorce and
family lawyers. Obiter applies the same core principles of honesty,
transparency, responsibility and reliability to individuals,
regardless of background or situation.
In 2019, Frenkel Topping launched its accountancy arm, Equatas ,
to assist clients with tax planning and move closer to providing a
full end-to-end service under the Group brand, improving the
experience for clients and maintaining the Group's standards
throughout the client journey.
Chairman's Statement
Overview
On behalf of Frenkel Topping's Board of Directors, I am pleased
to report that the Group has had a robust year in 2019, in which we
continued to deliver excellent results for our shareholders and in
line with the Board's expectations. Last year, we made investing in
the future of the business a key pillar of our strategy, which
formed part of our objective of mitigating risk. It is pleasing to
see that this investment and the continued implementation of our
strategy has delivered substantial improvement both financially and
operationally.
The results and achievements outlined in the Chief Executive
Officer's Statement and Strategic Report are testament to the
commitment of the Group's talented and passionate people. The
business is led by an experienced leadership team who deserve the
credit for steering the Group through a year of challenging
macroeconomic and geo-political events which impacted global
financial markets. It is pleasing to note that the hard work has
delivered strong growth across all of our key performance
indicators. Our client retention rate is at an impressive 99% for
the eleventh consecutive year. This is possible because of our
ability to conservatively manage money and our commitment to
integrity and care provided to all clients.
People
Post-period end, Elaine Cullen-Grant, formerly the Group's
Financial Controller was appointed Chief Financial Officer
following Stephen Bentley's retirement. On behalf of everyone at
Frenkel Topping, I would like to express our heartfelt thanks to
Stephen for his contribution and commitment to the business. The
Board strongly believes it is important to have the right balance
of skills, experience and background to support the growth of the
business.
Our growth would not have been achieved without the great
efforts of the entire team at Frenkel Topping and I would like to
take this opportunity to say thank you to everyone.
Outlook
The first three months of trading has been strong and the Group
has won substantial AUM mandates, outperforming internal targets
for the first quarter of the new financial year. Expert witness
instructions experienced strong momentum and new business wins will
support this key pipeline for future AUM growth. However, we are
mindful of the effects of COVID-19 which is impacting many people
and businesses globally. Notwithstanding the potential impact from
the effects of COVID-19, which the Board is monitoring closely and
at this stage are difficult to quantify, Frenkel Topping is
strongly positioned to grow, underpinned by our proven strategy
which has generated impressive and record levels of new business
wins since 2010. We are trading in line with management's
expectations and therefore remain confident about the future.
Dividend
Reflecting the Board's confidence in the Group, total dividends
(paid and proposed) are up 4.7% to 1.35p per share (FY 2018:
1.29p).
Future dividends will take account of our ambitions to grow the
business through acquisitions over the next few years.
Chief Executive Officer's Statement
Overview
I am proud to report this has been another a year of strong
delivery against our strategy which we outlined in our 2018 report.
We have also made excellent progress to develop our position as a
leading and responsible employer of choice which is key to
retaining and attracting talent.
The performance during 2019 reflects the Board's commitment
to:
-- improving Frenkel Topping's ability to manage increased
assets under management (AUM), including those
on a discretionary basis with Ascencia Investment Management Limited ("Ascencia")
-- improving the customer journey to maintain our strong client retention
-- laying the foundations for future years' profitability
Revenue for the year increased to GBP8.6m (2018: GBP7.7m) up
12%, of which GBP6.7m or 77.9% (2018: GBP6.0m or 78.5%) related to
recurring revenues. The balance in each year was from new business
which was 12% higher than the comparative period in 2018.
Gross profit was up 6% to GBP5.0m (2018: GBP4.7m) and underlying
profit from operations (as defined in our Accounting Policies) was
GBP2.5m (2018: GBP2.4m). Pre-tax profit increased by 9% to GBP1.2m
(2018: GBP1.1m). The Group has a strong Statement of Financial
Position with total assets of GBP13.7m (2018 GBP13.1m) and as at 31
December 2019, net cash and marketable securities stood at GBP2.1m
(2018 GBP2.0m). Cash generated from operating activities was up 18%
to GBP1.3m (2018: GBP1.1m).
Our client retention rate remains exceptionally high at 99%
reflecting positive performance from our portfolios and our focus
on excellent customer service.
The net assets added in 2019 (GBP53m) and market movements
(GBP66m) resulted in AUM increasing by 15% to GBP898m. Similarly,
Ascencia's AUM on a discretionary mandate grew strongly by 32% to
GBP399m (2018: GBP302m).
Strategic Progress
I am pleased to report that the Group made excellent progress
against its strategic objectives which provides a guide to what we
are capable of in future years.
1. Growing our core business, Frenkel Topping Limited (FTL) -
independent financial advice for personal injury and clinical
negligence awards.
We have made significant progress growing FTL and delivered good
organic growth in the period under review. Our advisers have worked
hard to maintain excellent client relationships and win AUM and to
continue to do so, we have to ensure our services and solutions
remain market leading. Our key areas of focus are:
-- Digitisation - as an IFA, client interaction is an important
element to our business, however, digital innovation is vital to
ensure clients have instant access to their investments. During the
year, we launched LUCI, our own platform where clients will be able
to view their investment portfolio in one place, trade and make
withdrawals and importantly assess performance and risk levels to
ensure they meet their long-term investment goals.
-- Innovation and expanding our client base - to ensure we
continue to remain market leaders, we have to innovate to provide
better solutions to our clients and expand our network of clients.
Post-period end, we established joint ventures with:
o Horwich Cohen Coghlan Ltd, a law firm with a 25-year track
record specialising in personal injuries. The joint venture named
HCC Investment Solutions will develop new and innovative investment
products for the personal injury market. The joint venture will
also support Ascencia to create bespoke investment solutions and
support future AUM growth.
o Hudgell Solicitors ("Hudgell"), a leading law firm
specialising in personal injury , medical negligence , travel
litigation , civil liberties and abuse . The joint venture will be
named Hudgells Financial Management Services. FTL will become
Hudgell's preferred partner for clients who require investment
advice post settlement. The Company is expected to benefit from new
client referrals and lead to future AUM growth.
-- Recruiting talent - over the last two years, we have made
significant investments in the Frenkel Topping Academy which has
proven to be very successful. We launched the Academy in 2017 and
since then we have graduated five graduates all of whom are working
full-time within the business. These home-grown talents are winning
new business, adding to AUM and, importantly, maintaining existing
client relationships.
2. To increase the strength of Ascencia and broaden its distribution
Ascencia has made excellent progress:
-- Generated positive returns - our model portfolios in the
investment management business achieved positive returns, each
posting growth of between 7.5% and 18.5% according to the risk
criteria set for the fund, despite the geopolitical backdrop. The
confidence shown in Ascencia has led AUM to grow by 32% to
GBP399m.
-- Environmental, Social and Governance (ESG) - Ascencia's ESG
strategy was launched early in 2018 in response to growing client
interest in socially responsible investing (SRI).
o In 2019, Ascencia's ESG investment strategies, across all risk
levels, outperformed their respective benchmarks and 'non-ESG'
equivalents by 2-3% as a result of investing in future-proof themes
and avoiding sectors with social and environmental legacy
concerns.
o Ascencia has delivered robust risk-adjusted performance for
clients from the outset of the coronavirus (COVID-19) market
dislocation:
-- Ascencia ESG Portfolio Risk Level 3 returned -4.48% for the
period 01/01/20-31/03/20 compared to -23.84% for the FTSE 100 and
-20.10% for MSCIWorld over the same period. Ascencia ESG Portfolio
Risk Level 4 returned -7.73% over the same period.
-- Diversified portfolio - we launched the Ascencia Islamic
Portfolio, a Sharia Law compliant investment portfolio which was
developed to support the needs of our Muslim clients. The Ascencia
Islamic Portfolio is essentially multi-asset and consists of a
blend of Shariah compliant equity focused exchange traded funds,
managed fixed income solutions, together with an element of
physically backed gold exposure. The new portfolio complements our
existing SRI Portfolios as there are number of synergies between
the two.
-- Broadened distribution - post period-end, Ascencia
established a 50:50 joint venture with Truly Independent Ltd
("Truly"). Ascencia will provide DFM services to Truly's 50
Registered Individuals and thereby, for the first time, will
broaden its DFM distribution to external IFAs. The Company expects
this partnership will support the growth of its future AUM.
3. To grow the business through selective acquisitions to widen our market reach
-- Acquisitions - we continue to seek strategic acquisitions
which would be of value to the Group and particularly complement
Obiter. We are reviewing a number of opportunities, but we have a
strict acquisition policy and will not make any acquisitions unless
they meet our criteria. Our aim in the medium to long term is to
grow Obiter, our generalist wealth management brand which was first
developed through market demand from the legal sector and incumbent
client relationships. In a market which has been criticised for
fees which lack transparency, Obiter charges sensible fees and
delivers a blended approach through a combination of passive and
active funds, which further strengthens the positioning in the
market, and builds trust and confidence.
Current Trading
We have entered 2020 with a renewed vigour to continue to build
on our solid, 40-year legacy and strong 2019. A continued focus on
innovation and on attracting and retaining the best talent will see
us maintain the group's position as a driving force in its
field.
Our 2019 results demonstrate the cumulative impact of
clearly-defined commercial goals coupled with a sense of duty to
deliver the best outcomes for clients.
The first three months of trading has been robust and the Group
is performing resiliently in comparison to the rest of the market
which is, in part, a result of its conservative approach to
managing money. The Board remains confident in its market-leading
position, rooted in principles of integrity and good judgement.
With the outbreak of COVID-19, the Company has implemented its
Business Continuity Plan and is following Government advice. The
number one priority is the safety and wellbeing of all our
stakeholders. The Frenkel Topping team is successfully working
remotely and making use of technology to ensure that they are
continuing to support each other and their clients. The Group's
Statement of Financial Position is robust and the Board's
expectations for FY2020 remain strong, however, the potential
impact from the effects of COVID-19 are difficult to quantify at
this stage and the Board is monitoring the situation carefully,
particularly in light of any potential temporary reduction in
recurring income as a result of movements in global stock
markets.
group STATEMENT of comprehensive income
for the year ended 31 December 2019
2019 2018
Notes GBP GBP
REVENUE 1 8,558,325 7,660,551
Direct staff costs (3,516,465) (2,942,534)
_______ _______
GROSS PROFIT 5,041,860 4,718,017
ADMINISTRATIVE EXPENSES
Share based compensation (393,876) (386,243)
Further adjustments to underlying profit
from operations (954,020) (865,702)
Other administrative expenses (2,534,566) (2,309,319)
_______ _______
TOTAL ADMINISTRATIVE EXPENSES (3,882,462) (3,561,264)
Underlying profit from operations: 2,507,294 2,408,698
- share based compensation (393,876) (386,243)
- reorganisation costs - (164,717)
- investment in developing business (733,163) (700,985)
- contract write off (63,978) -
- acquisitions strategy (156,879) -
------------------------------------------------- ----- ----------- -------------
_______ _______
profit from operations 1,159,398 1,156,753
Fair value gain /(losses) on investments 75,944 (12,579)
Finance costs (4,880) -
_______ _______
profit BEFORE TAX 1,230,462 1,144,174
Income tax expense 2 (270,382) (348,750)
________ ________
PROFIT FOR THE YEAR 960,080 795,424
ITEMS THAT WILL NOT BE SUBSEQUENTLY RECLASSIFIED
TO PROFIT OR LOSS:
Gains on property revaluation arising net
of tax 24,000 26,776
_______ _______
TOTAL COMPREHENSIVE INCOME FOR YEAR 984,080 822,200
_______ _______
profit ATTRIBUTABLE TO:
Owners of the parent undertaking 861,540 766,735
Non-controlling interests 98,540 28,689
_______ _______
total comprehensive INCOME ATTRIBUTABLE
TO:
Owners of the parent undertaking 885,540 793,511
Non-controlling interests 98,540 28,689
_______ _______
Earnings per ordinary share - basic
and diluted (pence) 3 1.25p 1.11p
_______ _______
group statement of FINANCIAL POSITION
as at 31 December 2019 Group Group
2019 2018
GBP GBP
assets
NON CURRENT ASSETS
Goodwill 7,020,287 7,020,287
Property, plant and equipment 1,639,159 1,423,837
Investments - -
Loans receivable 100,000 -
Deferred taxation 56,992 10,290
_______ _______
8,816,438 8,454,414
CURRENT ASSETS
Accrued income 924,773 981,558
Trade receivables 1,580,774 1,535,537
Other receivables 321,064 160,127
Investments 774,158 1,136,222
Cash and cash equivalents 1,329,220 848,391
_______ _______
4,929,989 4,661,835
_______ _______
total assets 13,746,427 13,116,249
_______ _______
equity and liabilities
equity
Share capital 393,287 393,287
Share premium 400,194 400,194
Merger reserve 5,314,702 5,314,702
Revaluation reserve 202,103 178,103
Other reserve (341,174) (341,174)
Own shares reserve (4,578,549) (4,566,926)
Retained earnings 10,875,372 10,552,643
_______ _______
Equity attributable to owners of
the parent company 12,265,935 11,930,829
Non-controlling interests 141,417 42,877
_______ _______
TOTAL EQUITY 12,407,352 11,973,706
_______ _______
CURRENT LIABILITIES
Current taxation 197,656 216,413
Trade and other payables 1,085,732 926,130
_______ _______
1,283,388 1,142,543
LONG TERM LIABILITIES 55,687 -
_______ _______
TOTAL EQUITY AND LIABILITIES 13,746,427 13,116,249
_______ _______
group statement of CHANGES IN EQUITY
For the year ended 31 December 2019
Total Non-controlling
Share Share Merger Other Own shares Retained Revaluation controlling interests
Capital Premium reserve Reserve Reserve Earnings reserve interest Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance 1
January 2018 393,287 400,194 5,314,702 (341,174) (4,448,906) 10,252,775 151,327 11,722,205 - 11,722,205
Purchase of
own shares - - - - (118,020) - - (118,020) - (118,020)
Share based
payments
(note 4) - - - - - 404,402 - 404,402 - 404,402
Tax credit
relating
to share
option scheme - - - - - (10,936) - (10,936) - (10,936)
Dividend paid - - - - - (860,333) - (860,333) - (860,333)
Acquisition of
a subsidiary - - - - - - - - 14,188 14,188
_______ _______ _______ _______ _______ _______ _______ _______ _______- _______
Total
transactions
with
owners
recognised in
equity - - - - (118,020) (466,867) - (584,887) 14,188 (570,699)
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______
Profit for
year - - - - - 766,735 - 766,735 28,689 795,424
Other
comprehensive
income - - - - - - 26,776 26,776 - 26,776
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______
Total
comprehensive
income - - - - - 766,735 26,776 793,511 28,689 822,200
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______
Balance at 1
January
2019 393,287 400,194 5,314,702 (341,174) (4,566,926) 10,552,643 178,103 11,930,829 42,877 11,973,706
Purchase of
own shares - - - - (11,623) - - (11,623) - (11,623)
Share based
payments
(note 4) - - - - - 350,066 - 350,066 - 350,066
Tax credit
relating
to share
option scheme - - - - - (21) - (21) - (21)
Dividend paid - - - - - (888,856) - (888,856) - (888,856)
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______
Total
transactions
with
owners
recognised in
equity - - - - (11,623) (538,811) - (550,434) - (550,434)
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______
Profit for
year - - - - - 861,540 - 861,540 98,540 960,080
Other
comprehensive
income - - - - - - 24,000 24,000 - 24,000
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______
Total
comprehensive
income - - - - - 861,540 24,000 885,540 98,540 984,080
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______
Balance at 31
December
2019 393,287 400,194 5,314,702 (341,174) (4,578,549) 10,875,372 202,103 12,265,935 141,417 12,407,352
_______ _______ _______ _______ _______ _______ _______ _______ _______ _______
The share capital represents the number of shares issued at
nominal price.
The merger reserve represents the cost of the shares issued to
purchase the non-controlling interest at market value at the date
of the acquisition and the excess of fair value over nominal value
of shares issued to acquire Ascencia Investment Management Limited
(formerly Frenkel Topping Investment Management Limited).
The share premium represents the amount paid over the nominal
value for new shares issued.
The other reserve represents the excess paid for the
non-controlling interest over the book value at the date of the
acquisition. This transaction occurred in 2013.
The revaluation reserve reflects the cumulative surplus arising
on the revaluation of freehold property to market value, net of
deferred tax.
The own shares reserve represents the cost of the 3,105,708
shares (2018: 3,067,576) held by the Company and the 6,648,016
(2018: 6,648,016) shares held by the Frenkel Topping Group Employee
Benefit Trust. The open market value of the shares held at 31
December 2019 was GBP3,599,124 (2018: GBP2,826,222).
Retained earnings represents the profit generated by the Group
since trading commenced, together with dividends paid, share
premium cancelled and share based payment credits.
The non-controlling interest is in respect of Frenkel Topping
Associates Limited.
The Group has conformed with all capital requirements as imposed
by the FCA.
GROUP CASH FLOW STATEMENT
For the year ended 31 December 2019
Group Group
2019 2018
GBP GBP
Profit before tax 1,230,462 1,144,174
Adjustments to reconcile
profit
before tax to cash
generated from
operating activities:
Finance income (75,944) -
Finance costs - 12,579
IFRS 16 Interest 4,880 -
Share based compensation 350,046 404,402
Depreciation and
amortisation 197,773 95,460
(Increase)/decrease in
accrued
income, trade and other
receivables (266,590) (291,831)
Increase in trade and other
payables 198,207 26,576
_______ _______
Cash generated from
operations 1,638,834 1,391,360
Income tax paid (332,958) (267,550)
_______ _______
Cash generated from
operating activities 1,305,876 1,123,810
Investing activities
Acquisition of property,
plant
and equipment (169,692) (86,771)
Cash acquired on
acquisition
of control in the
subsidiary - 4,655
Investment purchases - (1,765,000)
Investment disposals 438,008 734,115
Loans advanced (100,000) -
Dividend received - -
_______ _______
Cash generated from / (used
in)
investment activities 168,316 (1,113,001)
Financing activities
Shares issued - -
Own shares purchased (11,623) (118,020)
Dividend paid (888,856) (860,333)
Interest element of lease (4,880) -
payments
Principal element of lease (88,004) -
payments
_______ _______
Cash used in financing (993,363) (978,353)
Increase/(decrease) in
cash and
cash equivalents 480,829 (967,544)
Opening cash and cash
equivalents 848,391 1,815,935
_______ _______
Closing cash and cash
equivalents 1,329,220 848,391
========================================= =========================================
Reconciliation of cash and
cash
equivalents
Cash at bank and in hand 1,329,220 848,391
========================================= =========================================
General information
The preliminary financial information does not constitute full
accounts within the meaning of section 434 of the Companies Act
2006 but is derived from accounts for the years ended 31 December
2019 and 31 December 2018. The figures for the year ended 31
December 2019 are audited. The preliminary announcement is prepared
on the same basis as set out in the statutory accounts for the year
ended 31 December 2019. Those accounts upon which the auditors
issued an unqualified opinion, did not include a reference to any
matters to which the auditors drew attention by way of emphasis,
without qualifying their report, and made no statement under
section 498(2) or (3) of the Companies Act 2006, will be delivered
to the Registrar of Companies following the Annual General
Meeting.
Statutory accounts for the year ended 31 December 2018 have been
filed with the registrar of Companies. The auditors report on those
accounts was unqualified did not include a reference to any matters
to which the auditors drew attention by way of emphasis, without
qualifying their report, and made no statement under section 498(2)
or (3) of the Companies Act 2006.
While the financial information included in this preliminary
report has been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standard
(IFRS), as adopted by the European Union (EU), this announcement
does not in itself contain sufficient information to comply with
IFRS.
Frenkel Topping Group Plc is incorporated and domiciled in the
United Kingdom.
1 revenue and SEGMENTAL REPORTING
All of the Group's revenue arises from activities within the UK.
Management considers there to be only one operating segment within
the business based on the way the business is organised and the way
results are reported internally.
Revenue arising from recurring and non-recurring sources is as
follows:
Group Group
2019 2018
GBP GBP
Recurring 6,668,299 6,013,533
Non-recurring 1,890,026 1,647,018
_______ _______
Total revenue 8,558,325 7,660,551
_______ _______
Group Group
2 TAXation 2019 2018
GBP GBP
Analysis of charge in year
Current tax
UK corporation tax 356,253 321,989
Adjustments in respect of previous periods (39,169) 16,681
_______ _______
Total current tax charge 317,084 338,670
_______ _______
Deferred tax
Temporary differences, origination and reversal (46,702) 10,080
_______ _______
Total deferred tax charge (46,702) 10,080
_______ _______
Tax on profit on ordinary activities 270,382 348,750
_______ _______
Factors affecting tax charge for year
The standard rate of tax applied to reported profit on ordinary
activities is 19 per cent (2018: 19 per cent). The corporation tax
rate for the 2020 financial year, commencing 1 April 2020, was
included in the Finance Act 2016 at 17%, and this rate was
substantively enacted on 6 September 2016. However, in the budget
speech on 11 March 2020, the Chancellor announced that the
corporation tax rate would remain at 19%, the rate in force for the
2019 financial year. On 17 March 2020 a resolution having statutory
effect was passed under the Provisional Collection of Taxes Act
1968, setting the rate at 19%.
There is no expiry date on timing differences, unused tax losses
or tax credits.
The charge for the year can be reconciled to the profit per the
income statement as follows:
Group Group
2019 2018
GBP GBP
Profit before taxation 1,230,462 1,144,174
_______ _______
Profit multiplied by main rate of corporation
tax in the UK of 19% (2018: 19%) 233,788 217,393
Effects of:
Expenses not deductible 125,542 96,722
Share based payments (56,331) 73,386
Other charges/(deductions) in period (32,617) (38,751)
_______ _______
Total tax expense for year 270,382 348,750
_______ _______
A total of GBPnil (2018: GBPnil) was recognised in other
comprehensive income in relation to deferred taxation on a
revaluation uplift. The revaluation gain has been shown on a net
basis in other comprehensive income.
In addition, a debit of GBP21 (2018: GBP10,936 debit) deferred
taxation was recognised directly in equity in relation to share
options.
3 EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following data:
Group Group
2019 2018
GBP GBP
Earnings
Earnings for the purposes of basic earnings
per share (net profit for the year attributable
to equity holders of the parent) 861,540 766,735
Earnings for the purposes of diluted earnings
per share 861,540 766,735
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per share
Weighted average shares in issue 78,657,349 78,657,349
Less: own shares held (9,752,507) (9,715,592)
_______ _______
68,904,842 68,941,757
Effect of dilutive potential ordinary shares:
- Share options - -
_______ _______
Weighted average number of ordinary shares
for the purposes of diluted earnings per share 68,904,842 68,941,757
_______ _______
Earnings per ordinary share
- basic (pence) 1.25p 1.11p
Earnings per ordinary share
- diluted (pence) 1.25p 1.11p
_______ _______
4 EVENTS AFTER THE REPORTING DATE
COVID-19
The Global outbreak of COVID-19 has resulted in the Group
swiftly implementing its Business Continuity Plan. Our number one
priority is the safety and wellbeing of all our stakeholders. Our
entire team is successfully using technology to work remotely and
are continuing to support our clients and each other. The Group is
robust, with a strong balance sheet and cash reserves. The first
quarter has seen us add substantial new AUM mandates and a pleasing
level of new business income. The potential impact of COVID - 19 is
difficult to quantify, however management are monitoring the
situation closely, particularly in light of any potential temporary
reduction in recurring income as a result of movements in global
stock markets. Many of our products continue to perform well in
comparison to the market, for example, Ascencia ESG Portfolio Risk
Level 3 returned -4.48% for the period 01/01/20-31/03/20 compared
to -23.84% for the FTSE 100 and -20.10% for MSCIWorld over the same
period. Ascencia ESG Portfolio Risk Level 4 returned -7.73% over
the same period. Forecasts have been produced with a variety of
possible outcomes, the Board have reviewed these and remain
confident of the Group's position.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR KKKBPDBKBBQB
(END) Dow Jones Newswires
April 21, 2020 02:02 ET (06:02 GMT)
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