REG - Premier Miton Group - PREMIER MITON GROUP PLC HALF YEAR RESULTS
30/05/2024 07:00
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RNS Number : 3530Q Premier Miton Group PLC 30 May 2024
PREMIER MITON GROUP PLC
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2024
Premier Miton Group plc ('Premier Miton', 'Company' or 'Group'), the AIM
quoted fund management group, today announces its half year results for the
six months ended 31 March 2024 (the 'Period').
Highlights
· £10.7 billion closing Assets under Management (2) ('AuM') (30
September 2023: £9.8 billion)
· Successful addition of £560 million AuM through the acquisition of
Tellworth Investments LLP and the appointment as investment manager to GVQ
Investment Funds (Dublin) plc
· Improving fund flow environment during the current quarter
· £10.8 billion closing AuM at 24 May 2024
· Net outflows (4) of £46 million in the Period (2023 HY: £32 million
outflows)
· 68% of funds above median investment performance since launch or
tenure (3) (2023 HY: 76%)
· Adjusted profit before tax (1,2) of £5.7 million (2023 HY: £7.9
million)
· Interim dividend of 3.0 pence per share reflecting robust cash
position and confidence in the long-term outlook (2023 interim: 3.0 pence per
share)
Notes
(1) Adjusted profit before tax is calculated before the deduction of
taxation, amortisation, share-based payments, merger related costs and
exceptional items.
(2) These are Alternative Performance Measures ('APMs').
(3) The quartile performance rankings are based on Investment Association
sector classifications where applicable. This covered a total of 38 open-ended
funds since manager inception. Data is sourced from FE Analytics FinXL using
the main representative post-RDR share class, based on a total return, UK
Sterling basis. All data is as at 31 March 2024 and the performance period
relates to when the fund launched or the assumed tenure of the fund
manager(s).
(4) This includes mandates acquired or disposed of in the period.
Mike O'Shea, Chief Executive Officer of Premier Miton Group, commented:
"The Group's AuM ended the Period at £10.7 billion, an increase of 9% on the
opening position for the financial year. It is pleasing to have seen this
improvement continue during the current quarter both in terms of assets under
management but also, more recently, in terms of an improving flow environment.
Additionally, we are encouraged that shorter term investment performance is on
an improving trend as market breadth improves and mid and small cap stocks
recover.
"As previously announced, we successfully completed both the acquisition of
Tellworth Investments LLP and the take on of the investment management
activities of GVQ Investment Funds (Dublin) plc. Both are complementary to our
existing business and align with our strategic objective to diversify our
product range and enhance our presence in both institutional and international
markets.
"The backdrop for active fund sales in the UK retail market has been
challenging over the Period, as it has been since interest rates began to rise
at the end of 2021. We are now at a point where interest rates are likely to
trend lower as we move through 2024 and we believe this will support an
improving environment for fund flows and asset values. Demand for savings
products will remain high as savers and investors need to do more to secure
their individual long term financial futures. Active managers such as Premier
Miton have a role to play in managing these savings. To do so, our funds must
demonstrate that they can add value, over and above the returns from the major
indices, by having robust investment processes; well-researched portfolios,
often with high active shares and high tracking errors; and by delivering
out-performance. That is why it is so important that we continue to
demonstrate significant added value over the long term. At Premier Miton we
have the expertise, experience, and range of products to do just that."
ENDS
For further information, please contact:
Premier Miton Group plc 01483 306 090
Mike O'Shea, Chief Executive Officer
Investec Bank plc (Nominated Adviser and Broker) 020 7597 4000
Bruce Garrow / Ben Griffiths / Virginia Bull
Camarco 07733 124 226 /
Geoffrey Pelham-Lane / Ben Woodford 07990 653 341
www.premiermiton.com (http://www.premiermiton.com)
About Premier Miton
Premier Miton Investors is focused on delivering good investment outcomes for investors through relevant products and active management across its range of investment strategies, which include equity, fixed income, multi-asset and absolute return.
LEI Number: 213800LK2M4CLJ4H2V85
Chair's Statement
I have mentioned in previous reports the changing nature of investment
management markets, both internationally and in the UK. The structural
evolution of our industry continues at pace and is having a deep impact on all
market participants; this is a feature to which we pay close attention. We
also manage Premier Miton Group plc ('the Group' or 'Premier Miton') around
the cyclical issues affecting investment and savings decisions for our
clients, in particular the effect of changing interest rates and market and
regulatory developments in the UK's longer-term savings sector, which is
currently the base for nearly all our assets under management. We fully
support a future government introducing a British ISA, an idea we initiated
last year and which we believe would bring benefits to Premier Miton as well
as the UK corporate and investment sectors. However, we believe that further
and deeper reforms of the UK savings and capital markets are going to be
needed to restore health and wealth to our economy and society. We actively
participate in industry and public-policy discussions on this important topic
including in our engagement with our own shareholders, several of whom have
encouraged us to continue with our efforts in this area.
Strategy
During the period we held our annual strategy review involving the Board and
senior management. We take a clear and informed look at many aspects of
Premier Miton's strategy in the context of the industry overall and our own
business position.
A particular focus was on how our distribution strategy responds to the
changing markets for investment products and makes the most of the progress we
are making on building our product capabilities. The review confirmed our
belief that, despite the near-term challenges, we are on the right track in
key areas of our continued plans for creating a successful, genuinely active
asset manager, focused on investment markets and products that differentiate
us from industry giants.
We are building a balanced range of products across selected and key asset
classes, with the distribution, product structures and management resources to
serve significant and attractive retail, wholesale and institutional markets.
We have the resources, capacity and understanding to do this ambitiously yet
prudently, aligning stakeholder interests, and aiming to grow the scale of
Premier Miton significantly beyond where we now stand.
Results
Our financial performance in the period reflects the market conditions we
operate in with good overall fund performance, some recovery in several
investment markets although with weak industry level net flows from UK retail
and wholesale investors. There are, though, more encouraging signs on the
horizon as interest rates fall and investor confidence returns. Whilst this
has yet to result in significant positive net inflows for us, we are very well
prepared to respond when it does. The operating model we use and the capacity
we have built to manage a range of funds and grow assets under management
('AuM') put us in an excellent position to succeed as markets recover, at the
period end our AuM was £10.7 billion. At 31 March 2024, the Group had a cash
position of £30.7 million and an adjusted profit before tax for the six
months of £5.7 million.
During the period we completed the acquisition of Tellworth, which adds a
highly regarded investment team and new equity products, including alternative
strategies, to our line-up. We also acquired the Dublin business of GVQ, which
provides us with a platform to accelerate and support our ambitions in the
international and institutional markets. We have continued to explore hirings
and team add-ons in interesting product areas, and to consider a range of
tactical and strategic ideas for how we might best extend the scale and reach
of Premier Miton's business. Inorganic growth remains a key part of our
strategy.
The asset management sector is at the centre of many important ESG issues
being debated and we seek to play our part in this through full participation
in initiatives that we believe will make a positive difference; we will do
this while continuing to focus on our core purpose which is primarily to
actively manage our clients' investments to achieve their desired financial
outcomes. In April we published our annual Stewardship Report which sets out
our stewardship principles and how we put these into practice.
Dividend
Recent trading has shown signs of improving market conditions for the Group
and we are positive and optimistic about the longer-range potential for our
business. However, given the difficulties that the industry has faced over the
last couple of years, it is only right that we maintain a balanced view of the
outlook in the short term.
Over time we anticipate returning to our stated dividend policy as the
business improves and our profits recover.
Until then our approach to dividends will be pragmatic to reflect a mix of
factors including balance sheet prudence and maintaining the support and
confidence of our shareholders in our ambition to create an increasingly
valuable business.
Accordingly, we are paying an interim dividend of 3.0p a share, unchanged from
last year's interim and
final dividends. We will of course consider all relevant circumstances when we
decide on the overall level of dividend for this year.
People
Premier Miton is, essentially, a people and performance business. We rely on
the skills, energy and character of our people to achieve our plans and to act
within the culture we set. Our leadership team takes the management of this
seriously and we seek to be a great place for talented people to join and
build their careers in all areas of our business. The recent operating periods
have been amongst the more challenging that our highly experienced team have
known in their careers but they continue to work with purpose, focus and
energy and we are pleased with the way we are making progress in developing
our next generation of leaders.
We are active and attentive managers of Premier Miton, seeking to build and
grow the business for long-term success for the benefit of our clients, our
shareholders and our people. Through this we believe we contribute to the
betterment of society. The challenges are many, and plenty of these are
outside our control, yet we seek to respond with positivity, resilience and
intelligence. Markets are ever-changing and there are now signs that we are
looking at better times ahead. I firmly believe that Premier Miton is strongly
positioned for the recovery in investor confidence and I am confident, based
on our expertise, operating model, and range of funds, that we will perform
particularly well when this happens.
Robert Colthorpe
Chair
29 May 2024
Chief Executive Officer's Statement
The backdrop for active fund sales in the UK retail market has been
challenging over the period, as it has been since interest rates began to rise
at the end of 2021. We are now at a point where interest rates are likely to
trend lower as we move through 2024 and we believe this will support an
improving environment for fund flows and asset values.
It has been another difficult period for fund flows across the active
management industry in the UK. Investment Association ('IA') data suggests
that over £28 billion was redeemed from investment funds during the six
months to the end of March once passive and index fund sales are stripped out.
The UK has been hard hit with a further £8.3 billion of redemptions from UK
equity funds during the last six months. It is estimated that the Investment
Association UK equity sectors have now seen net outflows every year since
2015, totalling more than £50 billion, equivalent to almost a quarter of the
total 2015 assets under management.
We have not been insulated from this difficult backdrop and, although we have
seen outflows across our funds during the period, it is pleasing to note that
the rate of outflow from our equity funds has slowed somewhat during the most
recent quarter. It is also pleasing that we have been able to add further
assets through the acquisition of Tellworth Investments LLP ('Tellworth') and
the take-on of the investment management activities of a Dublin-based UCITS
structure, GVQ Investment Funds (Dublin) plc. The net result is that we closed
the period with Assets under Management ('AuM') of £10.7 billion, which is up
by 9% on the opening position for the year.
AuM and flows
A reconciliation of AuM and flows over the six-month period to 31 March 2024
is below:
Equity Multi-asset Fixed Investment Segregated Total
funds funds income trusts mandates £m
£m £m funds £m £m
£m
AuM at 1 October 2023 4,563 3,068 1,160 448 582 9,821
Net Flows (260) (283) 12 (10) 55 (486)
Fund / mandate acquisitions(1) 368 - - - 192 560
Fund / mandate disposals(2) (42) - - (78) - (120)
Market / investment performance 615 224 48 11 39 937
AuM at 31 March 2024 5,244 3,009 1,220 371 868 10,712
1. Acquisition of Tellworth Investments LLP and appointment as
investment manager to GVQ Investment Funds (Dublin) plc in Q2.
2. Disposal of Premier Miton Worldwide Opportunities Fund and transfer
of MIGO Opportunities Trust plc in Q1.
Strategy
Long-term investment performance remains relatively strong with 68% of funds
in the first or second quartile of their respective sectors since launch or
fund manager tenure. It has also been encouraging to see shorter-term
performance on an improving trend as market breadth improves and mid and small
cap stocks recover.
However, the sharp rises in interest rates we have seen since the end of 2021
have definitely contributed to the poor environment for retail fund sales.
Investors in the UK have adjusted to a world where cash has a yield and debt
has a real cost. The former has reduced demand for fund sales as investors can
achieve what appears to be an attractive return by leaving cash on deposit.
The latter has driven an increase in fund redemptions as investors have sold
their investments to reduce debt or support them through cost-of-living
challenges.
Our strategic response to this environment is twofold: firstly is to manage
our business effectively to ensure that costs are appropriately aligned with
our revenues; secondly, we have looked for ways that we can bring our products
to the institutional and international markets as a way of diversifying our
client base. As already mentioned, during the period we successfully completed
both the acquisition of Tellworth and the take-on of the
investment management activities of GVQ Investment Funds (Dublin) plc. Both
are complementary to our existing business and align with the strategic
objective of diversifying our product range and enhancing our presence in both
institutional and international markets. At the same time, our distribution
team has been expanding its reach internationally to markets where our funds
can be marketed and where we believe they will be attractive to a wider group
of clients.
Outlook
Looking forwards, it seems logical to us that the demand for savings will
continue to grow as investors have to fend
for themselves. Active managers such as Premier Miton will definitely have a
role to play in managing these savings. To do so, our funds will need to
demonstrate that they can add value, over and above the returns from the major
indices, by having robust investment processes; well-researched portfolios,
often with high active shares and high tracking errors; and by delivering
out-performance. That is why it is so important that we continue to
demonstrate significant added value over the long term. At Premier Miton we
have the expertise, experience, and range of products to do just that.
Mike O'Shea
Chief Executive Officer
29 May 2024
Financial Review
Financial performance
Profit before tax decreased to £0.6 million (2023 HY: £2.4 million).
Adjusted profit before tax*, which is after adjusting for amortisation,
share-based payments, merger related costs and exceptional costs was £5.7
million (2023 HY: £7.9 million).
Adjusted profit and profit before tax
Unaudited six months to 31 March 2024 Unaudited six months to 31 March 2023 %
£m £m Change
Net revenue 30.1 35.0
Administrative expenses (24.8) (27.1)
Finance income 0.4 -
Adjusted profit before tax* 5.7 7.9 (28)
Amortisation (2.5) (2.4)
Share-based payments (2.1) (2.6)
Merger related costs - -
Exceptional costs (0.5) (0.5)
Profit before tax 0.6 2.4 (75)
* Indicates Alternative Performance Measures ('APMs').
Assets under Management * ('AuM')
Net outflows for the period of £486 million were offset by positive market
and investment performance totalling £937 million and net inflows from fund
acquisitions and disposals totalling £440 million. The AuM ended the period
at £10,712 million, representing an increase of 9% on the opening position
for the period of £9,821 million. The Average AuM for the year decreased by
10% to £10,034 million (2023 HY: £11,194 million).
Net revenue
Unaudited six months to 31 March 2024 Unaudited six months to 31 March 2023 %
£m £m Change
Management fees 32.8 38.8
Fees and commission expenses (3.1) (3.9)
Net management fees (1 *) 29.7 34.9 (15)
Other income 0.4 0.1 -
Net revenue 30.1 35.0 (14)
Average AuM (2) 10,034 11,194 (10)
Net management fee margin (bps) (3) 59.3 62.5 (5)
1 Being management fee income less trail/rebate expenses and the
cost of capping any OCFs, and direct research costs.
2 Average AuM for the period is calculated using the daily AuM,
adjusted for the monthly closing AuM invested in other funds managed by the
Group.
3 Net management fee margin represents net management fees divided
by the average AuM.
The Group's revenue represents management fees generated on the assets being
managed by the Group.
Net management fees decreased by 15% to £29.7 million (2023 HY: £34.9
million). As noted in previous
periods, the decline reflects both the decrease in the Group's average AuM and
the net management fee margin achieved.
The Group's net management fee margin was 59.3bps (2023 FY: 61.7bps). The
decrease results primarily from the change in the Group's business mix.
Administration expenses
Administration expenses (excluding share-based payments) totalled £24.8
million (2023 HY: £27.1million),
a decrease of 8%.
Staff costs continue to be the largest component of administration expenses;
these consist of both fixed and variable elements.
The fixed staff costs, which include salaries and associated National
Insurance, employers' pension contributions and other indirect costs of
employment were flat at £10.8 million (2023 HY: £10.9 million).
At the period-end the Group had 163 full-time staff including Non- Executive
Directors (2023 HY: 167); this includes the headcount added from the
acquisition of Tellworth Investments LLP which completed on 30 January 2024.
Variable staff costs totalled £4.1 million (2023 HY: £6.6 million). These
costs move with the net revenues of the Group and the adjusted profit before
tax, hence the decrease against the comparative period.
Included within this are general discretionary bonuses, sales bonuses and
bonuses in respect of the fund management teams, plus associated employers'
National Insurance.
Overheads and other costs were consistent with the previous period at £9.5
million (2023 HY: £9.1 million).
The Group continues to manage the cost base whilst ensuring the platform
remains positioned for growth when sentiment returns.
Administration expenses
Unaudited six months to 31 March 2024 Unaudited six months to 31 March 2023 %
£m £m Change
Fixed staff costs 10.8 10.9 (1)
Variable staff costs 4.1 6.6 (38)
Overheads and other costs 9.5 9.1 4
Depreciation - fixed assets 0.1 0.2 (50)
Depreciation - leases 0.3 0.3 -
Administration expenses 24.8 27.1 (8)
Exceptional costs
During the period the Group incurred exceptional costs for professional fees
associated with the acquisitions and subsequent restructuring completed in the
period of £0.5 million (2023 HY: £0.5 million relating to restructuring of
the Group's distribution activities and the cessation of the Group's online
portal 'Connect').
Share-based payments
The share-based payment charge for the period was £2.1 million (2023 HY:
£2.6 million). Of this charge, £1.7
million related to nil cost contingent share rights ('NCCSR') (2023 HY: £2.2
million).
On 14 December 2023, the Group granted 3,717,669 long-term incentive plan
('LTIP') awards (2023 HY: 2,651,034). The costs of the awards is the estimated
fair value at the date of grant of the estimated entitlement to ordinary
shares. At each reporting date the estimated number of ordinary shares that
may be ultimately issued is assessed.
At 31 March 2024 the Group's Employee Benefit Trusts ('EBTs') held 7,429,544
ordinary shares representing 4.6% of the issued ordinary share capital (2023
HY: 11,469,161 shares).
See note 12 for further details.
Balance sheet, capital management and dividends
Total shareholders' equity as at 31 March 2024 was £120.7 million (2023 HY:
£121.4 million).
At the period-end the cash balances of the Group totalled £30.7 million (2023
HY: £31.5 million).
The Group has no external bank debt.
Dividends totalling £4.4 million were paid in the period (2023 HY: £9.1
million). See note 3 for further details.
The Board is recommending an interim dividend payment of 3.0p per share (2023
HY: 3.0p).
The dividend will be paid on 2 August 2024 to shareholders on the register at
the close of business on 5 July 2024.
The Group's long term dividend policy remains to target an annual ordinary
dividend pay-out of approximately 50 to 65% of profit after tax, adjusted for
exceptional costs, share-based payments and amortisation.
Piers Harrison
Chief Financial Officer
29 May 2024
Alternative Performance Measures ('APMs')
APM Unit Definition Purpose
Adjusted profit before tax £ Profit before taxation, amortisation, share-based payments, merger related Except for the noted costs, this encompasses all operating expenses in the
costs and exceptional costs. business, including fixed and variable staff cash costs, except those incurred
on a non-cash, non-business-as-usual basis Provides a proxy for cash
generated and is the key measure of profitability for management
decision-making.
Cash generated from operations £ Profit before taxation adjusted for the effects of transaction of a non-cash Provides a measure in demonstrating the amount of cash generated from the
nature, any deferrals or accruals and items of income or expense associated Group's ongoing regular business operations.
with investing or financing cash flows.
AuM £ The value of external assets that are managed by the Group. Management fee income is calculated based on the level of AuM managed. The
AuM managed by the Group is used to measure the Group's size relative relative
to the industry peer group.
Net management fee £ The net management fee revenue of the Group. Calculated as gross management Provides a consistent measure of the profitability of the Group and its
fee income, less the cost of external Authorised Corporate Directors ('ACD'), ability to grow and retain clients, after removing amounts paid to third
OCF caps, direct research costs and any enhanced fee arrangements. parties.
Net management fee margin bps Net management fees divided by average AuM. A measure used to demonstrate the blended fee rate earned from the AuM managed
by the Group. A basis point ('bps') represents one hundredth of a percent.
This measure is used within the asset management sector and provides
comparability of the Group's net revenue generation.
Forward looking statements
The interim unaudited Condensed Consolidated Financial Statements are made by
the Directors in good faith based on information available to them at the time
of their approval of the accounts. Forward looking statements
should be treated with caution due to the inherent uncertainties, including
economic, regulatory and business risk factors underlying any such statement.
The Directors undertake no obligation to update any forward looking statement
whether as a result of new information, future events or otherwise. The
interim unaudited Condensed
Consolidated Financial Statements have been prepared to provide information to
the Group's shareholders and
should not be relied upon by any other party or for any other purpose.
Unaudited Condensed Consolidated Statement of Comprehensive Income
for the six months ended 31 March 2024
Notes Unaudited Unaudited Audited
six months to six months to year to
31 March 31 March 30 September
2024 2023 2023
£000 £000 £000
Revenue 4 33,188 38,838 74,550
Fees and commission expenses (3,038) (3,868) (7,612)
Net revenue 30,150 34,970 66,938
Administration expenses (24,773) (27,067) (51,357)
Share-based payment expense 12 (2,135) (2,581) (4,721)
Amortisation of intangible assets 8 (2,487) (2,424) (4,861)
Merger related costs 5 (25) (25) (51)
Exceptional items 5 (483) (462) (250)
Operating profit 247 2,411 5,698
Finance income 366 5 168
Profit for the period before taxation 613 2,416 5,866
Taxation 6 (556) (776) (2,190)
Profit for the period after taxation attributable to equity holders of the 57 1,640 3,676
parent
pence pence pence
Basic earnings per share 7(a) 0.04 1.12 2.50
Diluted basic earnings per share 7(a) 0.04 1.05 2.35
No other comprehensive income was recognised during 2024 or 2023. Therefore,
the profit for the period is also the total comprehensive income.
All of the amounts relate to continuing operations.
Unaudited Condensed Consolidated Statement of Changes in Equity
for the six months ended 31 March 2024
Notes Share Share Merger reserve Employee Capital redemption reserve Retained Total
capital premium £000 Benefit Trust £000 earnings £000
£000 £000 £000 £000
At 1 October 2023 60 - 94,312 (12,668) 4,532 34,827 121,063
Profit for the period - - - - - 57 57
Issue of share capital 8, 11 1 2,639 - - - - 2,640
Purchase of own shares held by EBTs 12(d) - - - (760) - - (760)
Exercise of options - - - 4,697 - (4,697) -
Share-based payment expense 12 - - - - - 2,135 2,135
Other amounts direct to equity - - - - - (60) (60)
Equity dividends paid 3 - - - - - (4,413) (4,413)
At 31 March 2024 (Unaudited half year) 61 2,639 94,312 (8,731) 4,532 27,849 120,662
At 1 October 2022 60 - 94,312 (16,744) 4,532 44,604 126,764
Profit for the period - - - - - 1,640 1,640
Purchase of own shares held by EBTs 12(d) - - - (381) - - (381)
Exercise of options - - - 1,617 - (1,617) -
Share-based payment expense 12 - - - - - 2,581 2,581
Other amounts direct to equity - - - - - (17) (17)
Deferred tax direct to equity - - - - - (9) (9)
Equity dividends paid 3 - - - - - (9,147) (9,147)
At 31 March 2023 (Unaudited half year) 60 - 94,312 (15,508) 4,532 38,035 121,431
At 1 October 2022 60 - 94,312 (16,744) 4,532 44,604 126,764
Profit for the year - - - - - 3,676 3,676
Purchase of own shares held by EBTs - - - (381) - - (381)
Exercise of options - - - 4,457 - (4,457) -
Share-based payment expense - - - - - 4,721 4,721
Other amounts direct to equity - - - - - (78) (78)
Deferred tax direct to equity - - - - - (38) (38)
Equity dividends paid - - - - - (13,601) (13,601)
At 30 September 2023 (Audited) 60 - 94,312 (12,668) 4,532 34,827 121,063
Unaudited Condensed Consolidated Statement of Financial Position
as at 31 March 2024
Notes Unaudited Unaudited Audited
31 March 31 March 30 September
2024 2023 2023
£000 £000 £000
Non-current assets
Goodwill 8 73,331 70,688 70,688
Intangible assets 8 17,689 20,092 17,655
Other investments 100 100 100
Property and equipment 690 488 518
Right-of-use assets 2,364 646 2,724
Deferred tax asset 522 1,757 1,147
Finance lease receivables - 1 -
Trade and other receivables 235 563 482
94,931 94,335 93,314
Current assets
Financial assets at fair value through profit and loss 13 26 1,171 1,207
Finance lease receivables - 176 77
Trade and other receivables 137,417 167,513 124,467
Cash and cash equivalents 9 30,689 31,520 37,942
168,132 200,380 163,693
Total assets 263,063 294,715 257,007
Current liabilities
Trade and other payables (135,354) (167,250) (128,553)
Lease liabilities (203) (651) (265)
(135,557) (167,901) (128,818)
Non-current liabilities
Provisions 10 (374) (374) (374)
Deferred tax liability (4,348) (4,950) (4,414)
Lease liabilities (2,122) (59) (2,338)
Total liabilities (142,401) (173,284) (135,944)
Net assets 120,662 121,431 121,063
Equity
Share capital 11 61 60 60
Share premium 8,11 2,639 - -
Merger reserve 94,312 94,312 94,312
Own shares held by Employee Benefit Trusts 12(d) (8,731) (15,508) (12,668)
Capital redemption reserve 4,532 4,532 4,532
Retained earnings 27,849 38,035 34,827
Total equity shareholders' funds 120,662 121,431 121,063
Unaudited Condensed Consolidated Statement of Cash Flows
for the six months ended 31 March 2024
Notes Unaudited Unaudited Audited
six months to six months to year to
31 March 31 March 30 September
2024 2023 2023
£000 £000 £000
Cash flows from operating activities:
Profit after taxation 57 1,640 3,676
Adjustments to reconcile profit to net cash flow from operating activities:
- Tax on continuing operations 6 556 776 2,190
- Finance income (366) (5) (168)
- Interest payable on leases 35 18 27
- Depreciation - fixed assets 120 220 335
- Depreciation - leases 258 263 525
- Gain on revaluation of financial assets at fair value through profit (37) (98) (82)
and loss
- Loss on disposal of property and equipment - 500 250
- Amortisation of intangible assets 8 2,487 2,424 4,861
- Share-based payment expense 12 2,135 2,581 4,721
-(Increase)/decrease in trade and other receivables (10,452) (30,650) 11,807
- Increase/(decrease) in trade and other payables 5,035 18,430 (20,267)
Cash (used) / generated from operations (172) (3,901) 7,875
Income tax paid (1,353) (1,363) (2,043)
Net cash flow from operating activities (1,525) (5,264) 5,832
Cash flows from investing activities:
Interest received 388 5 188
Purchase of Tellworth Investments LLP net of cash acquired 8 (1,666) - -
Acquisition of assets at fair value through profit and loss - - (140)
Proceeds from disposal of assets at fair value through profit and loss 1,218 1,016 1,104
Purchase of property and equipment (283) (16) (160)
Proceeds from disposal of property and equipment - - 250
Net cash flow from investing activities (343) 1,005 1,242
Cash flows from financing activities:
Lease payments (212) (457) (914)
Purchase of own shares held by EBTs 12(d) (760) (381) (381)
Equity dividends paid 3 (4,413) (9,147) (13,601)
Net cash flow from financing activities (5,385) (9,985) (14,896)
Decrease in cash and cash equivalents (7,253) (14,244) (7,822)
Opening cash and cash equivalents 37,942 45,764 45,764
Closing cash and cash equivalents 9 30,689 31,520 37,942
Notes to the Unaudited Condensed Consolidated Financial Statements
for the six months ended 31 March 2024
1. Basis of accounting
The interim unaudited Condensed Consolidated Financial Statements do not
constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. They have been prepared on the basis of the accounting
policies as set out in the Group's Annual Report for the year ended 30
September 2023. They do not include all the information and disclosures
required in annual financial statements and therefore should be read in
accordance with the Group's Annual Report for the year ended 30 September 2023
The interim unaudited Condensed Consolidated Financial Statements to 31 March
2024 have been prepared in accordance with
UK-adopted International Accounting Standard 34 'Interim Financial Reporting'
and the Listing Rules of the Financial Conduct Authority.
Premier Miton Group plc (the 'Group') is the Parent Company of a group of
companies which provide a range of investment management services in the
United Kingdom and Ireland.
The Group's 2023 Annual Report is prepared in accordance with UK-adopted
international Accounting Standards, and is available on the Premier Miton
Group plc website (www.premiermiton.com).
The interim unaudited Condensed Consolidated Financial Statements were
approved and authorised for issue by the Board acting through a duly
authorised committee of the Board of Directors on 29 May 2024.
The full-year accounts to 30 September 2023 were approved by the Board of
Directors on 4 December 2023 and have been delivered to the Registrar of
Companies. The report of the auditor on those accounts was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006. The figures for the six months
ended 31 March 2024 and the six months ended 31 March 2023 have not been
audited.
The interim unaudited Condensed Consolidated Financial Statements are
presented in Sterling and all values are rounded to the nearest thousand
pounds (£000) except where otherwise indicated.
Going concern
The Group has considerable financial resources and ongoing investment
management contracts. As a consequence, the Directors believe that the Group
demonstrates the financial resilience required to manage its business risks
successfully. The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for a period of 12
months after the date the interim financial statements are signed. Thus, the
Directors continue to adopt the going concern basis of accounting in preparing
the interim unaudited Condensed Consolidated Financial Statements. The
Directors note that the Group has no external borrowings and maintains
significant levels of cash reserves. The Group has conducted financial
modelling at materially lower levels of AuM with the business remaining cash
generative. The Directors have also reviewed and examined the financial stress
testing inherent in the Internal Capital Adequacy and Risk Assessment
('ICARA').
2. Segmental reporting
The Group has only one business operating segment, asset management for
reporting and control purposes.
IFRS 8 'Operating Segments' requires disclosures to reflect the information
which the Group's management uses for evaluating performance and the
allocation of resources. The Group is managed as a single asset management
business and as such, there are no additional operating segments to disclose.
Under IFRS 8, the Group is also required to make disclosures by geographical
segments. As Group operations are solely in the UK and Ireland, there are no
additional geographical segments to disclose.
3. Dividend
The final dividend for the year ended 30 September 2023 of 3.0p per share was
paid on 16 February 2024 resulting in a distribution of £4,413,155. This is
reflected in the unaudited Condensed Consolidated Statement of Changes in
Equity (2023 HY: £9,147,109).
4. Revenue
Revenue recognised in the unaudited Condensed Consolidated Statement of
Comprehensive Income is analysed as follows:
Unaudited Unaudited Audited
six months
six months to 31 March
year to
2023
30 September
to 31 March
2023
2024 £000
£000
£000
Management fees 32,812 38,737 74,450
Commissions 2 2 3
Other income 374 99 97
Total revenue 33,188 38,838 74,550
All revenue is derived from the United Kingdom and Ireland.
5. Exceptional items and merger related costs
Recognised in arriving at operating profit from continuing operations:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2024 2023 2023
£000 £000 £000
Acquisition and restructuring costs 483 212 -
Closure of connect - 250 250
Total exceptional costs 483 462 250
Merger related costs 25 25 51
Total merger related costs 25 25 51
Exceptional items are those items of income or expenditure that are considered
significant in size and/or nature to merit separate disclosure and which are
non-recurring.
Exceptional items totalling £483,000 related to professional fees associated
with the acquisitions and subsequent restructuring completed in the period
(2023: exceptional costs net of associated income were incurred in relation to
the cessation of the development of the Group's online portal 'Connect'. This
resulted in net expenditure of £250,000).
Merger related costs in both the current and comparative periods were for
legal and professional services.
6. Taxation
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2024 2023 2023
£000 £000 £000
Corporation tax charge 552 1,150 2,519
Deferred tax charge / (credit) 4 (374) (329)
Tax charge reported in the unaudited Condensed Consolidated Statement of 556 776 2,190
Comprehensive Income
In the Spring Budget 2021, the Government announced that from 1 April 2023 the
corporation tax rate will increase to 25% from
19%. This was subsequently enacted on 24 May 2021. The deferred tax balances
included within the unaudited Condensed Consolidated Financial Statements
have been calculated with reference to the rate of 25% to the relevant
balances from 1 April 2023.
7. Earnings per share
Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary equity shareholders of the Parent Company by the weighted average number of ordinary shares outstanding during the period.
The weighted average of issued ordinary share capital of the Parent Company is reduced by the weighted average number of shares held by the Group's Employee Benefit Trusts ('EBTs'). Dividend waivers are in place over shares held in the Group's EBTs.
In calculating diluted earnings per share, IAS 33 'Earnings Per Share' requires that the profit is divided 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 conversion of all the dilutive potential ordinary shares into ordinary shares during the period arising from the Group's share option schemes.
(a) Reported earnings per share
Reported basic and diluted earnings per share has been calculated as follows:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2024 2023 2023
£000 £000 £000
Profit attributable to ordinary equity shareholders of the Parent Company for 57 1,640 3,676
basic earnings
No.000 No.000 No.000
Issued ordinary shares at 1 October 157,913 157,913 157,913
-Effect of own shares held by an EBT (10,302) (12,111) (10,778)
-Effect of shares issued 1,389 - -
Weighted average shares in issue 149,000 145,802 147,135
-Effect of movement in share options 8,381 10,936 9,606
Weighted average shares in issue - diluted 157,381 156,738 156,741
Basic earnings per share (pence) 0.04 1.12 2.50
Diluted earnings per share (pence) 0.04 1.05 2.35
(b) Adjusted earnings per share
Adjusted earnings per share is based on adjusted profit after tax, where
adjusted profit is stated after charging interest but before share-based
payments, amortisation, merger related costs and exceptional items.
Adjusted profit for calculating adjusted earnings per share:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2024 2023 2023
£000 £000 £000
Profit before taxation 613 2,416 5,866
Add back:
-Share-based payment expense 2,135 2,581 4,721
-Amortisation of intangible assets 2,487 2,424 4,861
-Merger related costs 25 25 51
-Exceptional items 483 462 250
Adjusted profit before tax 5,743 7,908 15,749
Taxation:
-Tax in the unaudited Consolidated Statement of Comprehensive Income (556) (776) (2,190)
-Tax effect of adjustments (410) (697) (610)
Adjusted profit after tax for the calculation of adjusted earnings per share 4,777 6,435 12,949
Adjusted earnings per share was as follows using the number of shares
calculated at note 7(a):
Unaudited Unaudited Audited
six months to
six months to
year to
31 March
31 March
30 September
2024
2023
2023
pence
pence
pence
Adjusted earnings per share 3.21 4.41 8.80
Diluted adjusted earnings per share 3.04 4.11 8.26
8. Goodwill and other intangible assets
Cost, amortisation and net book value of goodwill are as follows:
Goodwill Unaudited Unaudited Audited
six months to
six months to
year to
31 March
31 March
30 September
2024
2023
2023
£000 £000 £000
Cost:
At 1 October 77,927 77,927 77,927
Additions 2,643 - -
At 31 March / 30 September 80,570 77,927 77,927
Amortisation and impairment:
At 1 October 7,239 7,239 7,239
Impairment during the period - - -
At 31 March / 30 September 7,239 7,239 7,239
Carrying amount:
At 31 March / 30 September 73,331 70,688 70,688
Cost, amortisation and net book value of intangible assets are as follows:
Other intangible assets Unaudited Unaudited Audited
six months to
six months to
year to
31 March
31 March
30 September
2024
2023
2023
£000 £000 £000
Cost:
At 1 October 81,025 81,025 81,025
Additions 2,521 - -
At 31 March / 30 September 83,546 81,025 81,025
Accumulated amortisation and impairment:
At 1 October 63,370 58,509 58,509
Amortisation during the period 2,487 2,424 4,861
At 31 March / 30 September 65,857 60,933 63,370
Carrying amount:
At 31 March / 30 September 17,689 20,092 17,655
Other intangible assets relate to the investment management agreements acquired in business combinations between the funds to which they were the investment manager and the value arising from the underlying client relationships.
The additions to goodwill and intangible assets in the period relate primarily to the acquisition of Tellworth Investments LLP ('Tellworth') which completed on 30 January 2024.
At the acquisition date the consideration and net assets acquired from Tellworth were as follows:
£000
Fair value of total consideration 5,719
Intangible assets 2,221
Deferred tax liability on intangible assets acquired (555)
Cash and cash equivalents 1,412
Property, plant and equipment 10
Trade and other receivables 1,715
Trade and other payables (1,727)
Net assets acquired 3,076
Goodwill 2,643
The fair value of the equity consideration of £2,640,131 has been calculated by reference to the number of shares issued on 30 January 2024 and the ten-day Volume-Weighted Average Price ('VWAP') prior to the completion date; when added to the cash consideration of £3,078,786 the total consideration was £5,718,917.
Intangible assets acquired related to the investment management agreements between Tellworth and the funds to which Tellworth was the investment manager and the value arising from the underlying client relationships.
Goodwill arising on the acquisition is mainly attributable to the skills and technical talent of Tellworth's workforce and the expected cash flows from new customers. The Group has determined that it has a single cash-generating unit ('CGU') for the purpose of assessing the carrying value of goodwill. Impairment testing is performed at least annually whereby the recoverable amount is calculated as the higher of value-in-use versus fair value less costs to sell. During the period no impairment was identified.
Additional consideration for Tellworth of up to £3 million may be payable depending on AuM growth between completion and the first anniversary of completion, with the maximum amount payable if AuM at the first anniversary date exceeds £850 million. At 31 March 2024 the threshold was not met for any additional consideration. The fair value of any liability associated with the payment of deferred consideration is considered to be immaterial as at 31 March 2024.
9. Cash and cash equivalents
Unaudited Unaudited Audited
six months to
six months to
year to
31 March
31 March
30 September
2024
2023
2023
£000 £000 £000
Cash at bank and in hand 30,689 31,520 37,942
10. Provisions
£000
At 1 October 2023 374
Additions / (disposals) -
At 31 March 2024 (Unaudited) 374
Current -
Non-current 374
374
At 1 October 2022 374
Additions -
At 31 March 2023 (Unaudited) and 30 September 2023 (Audited) 374
Provisions relate to dilapidations for the offices at 6th Floor, Paternoster House, London. The lease on this property runs to 28 November 2028. This provision is based on prices quoted at the time of the lease being taken on.
11. Share capital
Allotted, called up and fully paid: Ordinary shares 0.02 pence each Number Deferred shares
Number of shares Number
At 1 October 2023 157,913,035 1
Issued 4,167,532 -
At 31 March 2024 (Unaudited) 162,080,567 1
At 1 October 2022 157,913,035 1
Issued - -
At 31 March 2023 (Unaudited) and 30 September 2023 (Audited) 157,913,035 1
Allotted, called up and fully paid: Ordinary shares Deferred Total
Value of shares 0.02 pence each shares £000
£000 £000
At 1 October 2023 31 29 60
Issued 1 - 1
At 31 March 2024 (Unaudited) 32 29 61
At 1 October 2022 31 29 60
Issued - - -
At 31 March 2023 (Unaudited) and 30 September 2023 (Audited) 31 29 60
On 30 January 2024 the Company completed the acquisition of Tellworth
Investments LLP. As part of the consideration the Company issued 4,167,532 new
ordinary shares of 0.02 pence each ranked pari passu in all respects with the
Company's existing shares in issue.
12. Share-based payment
The total expense recognised for share-based payments in respect of employee
services received during the period to 31 March 2024 was £2,135,071 (2023 HY:
£2,580,666), of which £1,675,512 related to nil cost contingent share rights
(2023 HY: £2,208,196).
(a) Nil cost contingent share rights ('NCCSRs')
During the period, 695,000 (2023 HY: 1,577,500) NCCSRs over ordinary shares of
0.02p in the Company were granted to 22 employees (2023 HY: 19 employees). Of
the total award, nil (2023 HY: nil) NCCSRs were awarded to Executive
Directors. The awards will be satisfied from the Group's EBTs.
The share-based payment expense is calculated in accordance with the fair
value of the NCCSRs on the date of grant. The price per right at the date of
grant was £0.65 on 14 December 2023, resulting in a fair value of £451,750
to be expensed over the relevant vesting period of three years.
The key features of the awards include: automatic vesting at the relevant
anniversary date with the delivery of the shares to the participant within 30
days of the relevant vesting date.
During the period, 3,405,643 NCCSRs over ordinary shares of 0.02p in the
Company were exercised over 43 awards. Of the total, 550,000 were exercised by
Executive Directors.
(b) Long-Term Incentive Plan ('LTIP')
On 14 December 2023 the Group granted 3,717,669 LTIP awards (2023 HY:
2,651,034). Of the total award, 1,385,467 were awarded to Executive Directors
(2023 HY: 811,541).
Vesting of awards is subject to continued employment and performance
conditions based on Total Shareholder Return ('TSR'), Earnings Per Share
('EPS'), fund performance and other operational conditions, all measured over
a three-year performance period.
The cost of the awards is the estimated fair value at the date of grant of the
estimated entitlement to ordinary shares of 0.02p in the Company. At 14
December 2023 the cost was estimated at £623,037 and is to be expensed over
the vesting period of three years. At each reporting date the estimated number
of ordinary shares that may be ultimately issued is assessed.
The fair value of the LTIP awards was estimated using a Monte Carlo Simulation
('MCS') and the prepaid forward share price, adjusting the loss of dividends
over the vesting period. The following table lists the inputs to the model
used for the period ended 31 March 2024.
14 December 2023
Dividend yield (%) 6.7
Nominal risk-free rate (%) 3.9
Expected share price volatility (%) 35.0
Discount for lack of marketability ('DLOM') (%) 12.0
Share price (£) 0.65
Performance period (months) 36
Holding period post-vesting (months) 24
(c) Legacy share incentive schemes
(i) Management Equity Incentive ('MEI')
During the period, MEI awards over 226,395 ordinary 0.02p shares in the
Company lapsed.
(ii) Management Incentive Plan ('MIP')
During the period, the outstanding MIP award over 60,372 ordinary 0.02p shares
in the Company lapsed.
(d) Employee Benefit Trusts ('EBTs')
Premier Miton Group plc established an EBT on 25 July 2016 to purchase
ordinary shares in the Company to satisfy share awards to certain employees.
During the period, 1,382,687 (2023 HY: 364,525) shares were acquired and held
by the Group's EBTs at a cost of £760,478 (2023 HY: £380,804).
At 31 March 2024, 7,429,544 (2023 HY: 11,469,161) shares are held by the
Group's EBTs.
At the period-end, the cost of the shares held by the EBTs of £8,730,410
(2023 HY: £15,508,385) has been disclosed as own shares held by EBTs in the
unaudited Condensed Consolidated Statement of Changes in Equity and the
unaudited Condensed Consolidated Statement of Financial Position.
13. Financial Instruments
Financial assets at fair value through profit and loss
The financial instruments carried at fair value are analysed by valuation
method.
Unaudited Unaudited Audited
six months to six months to year to
31 March 31 March 31 September
2024 2023 2023
£000 £000 £000
Other investments
Quoted - Level 1 26 1,171 1,207
Total 26 1,171 1,207
Quoted investments - Level 1
The Group holds shares and units in a number of funds for which quoted prices
in an active market are available. The
fair value measurement is based on Level 1 in the fair value hierarchy.
14. Subsequent events post-balance sheet
Legacy share incentive schemes
On 11 May 2024, 513,162 MEI awards over ordinary 0.02p shares in the Company
lapsed, of this amount 377,325 had been awarded to Piers Harrison, an
Executive Director. Management assesses this event as a non-adjusting
subsequent event as at the interim reporting date of 31 March 2024.
At 29 May 2024, there were no other subsequent events to report.
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