Final Results

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).

 

WH Ireland Group Plc

 

(“WH Ireland” or the “Company”)

 

Final Results

for the 12 months ended 30 November 2016

 

WH Ireland, the financial services group that provides private wealth management and corporate broking services, today announces its final results for its financial year ended 30 November 2016.

 

Financial Overview

·      Group turnover of £25.4m (2015: £30.9m)

·      Operating loss of £1.3m before exceptional items (2015: profit of £1.1m)

·      Exceptional items of £1.8m (2015: £1.2m)

·      Recurring revenue increased to £12.0m (2015: £11.4m)

·      Cash reserves of £6.7m (Including post year end proceeds of property sale, cash reserves approximately £11m )

·      CET1 capital ratio of 12.14%

 

Private Wealth Management

·      Assets under management increased by 14% to £2,872m (2015: £2,520m)

·      Discretionary assets under management increased by 32% to £1,016m (2015: £767m)

·      Management fee income increased by 17% to £7.6m (2015: £6.5m)

·      Commission income £8.7m (2015: £11.0m)

 

Corporate Broking

·      Retainer fee income of £3.2m

·      AIM NOMAD ranking (based on number of clients) 3^rd

·      Corporate clients 85 (2015: 98 clients)

 

Commenting on the results, Richard Killingbeck, said, “The past year has witnessed considerable progress in the repositioning of WH Ireland as an ambitious, focused and modern financial services company. The Company is in a strong position to focus upon growing both divisions in the year ahead. Our recurring revenue has risen to £12m, or 47% of total revenue, and I and the Board are optimistic for the year ahead.”

 

For further information please contact:

 

WH Ireland Group plc                                                                                      www.whirelandplc.com

Richard Killingbeck, Chief Executive Officer                                                          +44(0) 20 7220 1666

 

SPARK Advisory Partners Limited

Mark Brady/Miriam Greenwood                                                                           +44(0) 20 3368 3551

 

Chairman’s Statement

2016 has been a transformational year for WH Ireland: we reached a settlement with the FCA, we bolstered our capital base, and we welcomed a substantial new shareholder, KEH, to our register after it acquired a 23% stake in the Company.

 

Our revenues were lower overall, with the first six months affected by a slowdown in corporate activity ahead of the European referendum at the end of June. However, the second half has shown an encouraging trend, with rising stock markets, and a strong rebound in corporate confidence which was reflected in the improved levels of activity in our Corporate Broking division. The Corporate division finished the year positively with participation as a Co-Lead Manager in the Sirius Minerals equity placing.

 

The Private Wealth Management division increased overall funds under management to £2.9bn, with the discretionary element increasing to over £1.0bn, thus continuing to improve our levels of fee income. The move to outsource our operational platform to SEI Investments (Europe) Ltd has progressed, with the transfer on target to be effective during the second quarter of 2017: this will provide both a quantum leap in our access to, and maintenance of, state of the art information technology, will help improve our regulatory robustness and enhance the service levels to our clients immensely. All of the committed and quantifiable costs associated with this project as of 30 November 2016 have been taken in the 2016 profit and loss account as an exceptional item. I would expect to witness ongoing cost savings and lower planned spending activity as a result of this transfer to amount to an annualised saving of at least £400k in a full year, beginning in the 2018 financial year.

Board changes

I reported last year on the appointment as a Non-Executive Director of Jonathan Carey, after a distinguished career at Jupiter Asset Management. In addition, we have strengthened the Board with two further appointments, which were announced after the year end. 

 

First, following the 23% shareholding acquired by KEH Group in WH Ireland, their CEO, Humphrey Percy, agreed to join the Board of WH Ireland as a Non-Executive Director. Humphrey was previously CEO of Bank of London and the Middle East plc and Head of Global Financial Markets at WestLB.

 

Secondly, we announced the appointment of Victoria Raffé, as a Non-Executive Director, who has had an extensive career in the City, most recently as Director of the Authorisations Division for the Financial Conduct Authority (‘FCA’).

 

Sale of Manchester office

In my statement last year, I stated that the Board was considering the potential sale of our freehold office in Manchester: we have recently announced the sale of 11 St James’s Square for £5.27m, a premium to the book value of £4.75m. Manchester staff will be moving to a new leased office during the summer of 2017.

 

The net cash from the property sale, coupled with existing cash balances, means that Group cash balances are now in excess of £11.0m, and provides comfort to all as to the resilience of our balance sheet.

 

Dividend

Last year the Board felt it prudent to omit paying a dividend. The Board continues regularly to assess this position but it is not the intention of the Board to recommend a dividend payment to Shareholders for the year under review.

 

Outlook

Despite the uncertainties regarding the UK’s progress towards Brexit and the unpredictability of newly elected President Trump, markets are close to all-time highs, which is a positive environment both for the pipeline in our Corporate Broking division and for the ad valorem fee paying discretionary mandates in our Private Wealth Management division. Against this background of renewed investor confidence, the Board remains cautiously optimistic about the year ahead.

 

Finally, I would like to thank all our staff across all of our office locations for their individual hard work and efforts during the many challenges of 2016.

 

Tim Steel

Chairman

 

Chief Executive Officer’s Report

The past year has witnessed considerable progress in the repositioning of WH Ireland as an ambitious, focussed and modern financial services company. Change does not come easily within any company, but when you have a long history of legacy issues to resolve, progress becomes even more challenging.

 

I am pleased to be able to report that change at WH Ireland is not only successfully happening but is gaining momentum as key elements of the process fall into place. Whether it be the progression on moving our operational platform to an outsourced solution with our partner, SEI Investments (Europe) Ltd, the successful sale of the freehold property in Manchester or whether it is our increasing ability to attract senior industry professionals to the Company, the momentum of positive change is accelerating.

 

Within the Private Wealth Management division we have continued to focus our investment proposition upon the provision of fee paying services, whether they be discretionary or advisory relationships. It is pleasing to be able to report continued growth in these assets. During the year we merged our Lymington office into our Poole office which will give us greater credibility within the south coast marketplace.

 

Our Corporate Broking division finished the year on a positive note. This marked the closing of a year which demonstrated the resilience of our corporate client model, the loyalty of our corporate client base and the skill and dedication of our small, but very focussed team. During the year, primarily due to de-listings, our total number of corporate clients declined. The majority of these losses were smaller clients resulting in an increase in the average size of our client base as measured by market capitalisation. We remain as one of the leading small and mid-cap corporate brokers in the City with a demonstrable commitment to enhance our offering via the further recruitment of key individuals in the year ahead, including Adam Pollock who is joining us as Head of the division in March.

 

Private Wealth Management

The project to transfer assets to our new platform partner, SEI Investments (Europe) Ltd, has progressed significantly since we communicated at the half year the Board’s decision to change our operating  model. The benefits that this will bring to every facet of our private wealth offering are significant whether they be regulatory, information technology or client driven. Once this move has been completed it will allow for this division to compete across all distribution channels and will give us the ability better to service clients across all communication media. In addition, once the first phase is completed, during the second quarter,  the senior management team will be able to focus more time upon growing this division by acquisition. If acquisitions are able to be achieved, the scalability of the new business model will become evident very quickly.

 

Corporate Broking

Markets during the first half of the year were not conducive to capital raisings but the second half witnessed a demonstrable change in the market’s willingness to consider and participate in fundraisings. As a consequence, the second half of the year witnessed a strong rebound in activity. Our corporate client list gives us a considerable revenue flow in the form of NOMAD fees and our model remains focussed upon building this list both in number and in the size of new clients.   

 

Other transactional revenue (secondary commissions and market making) was lower during the year but our low cost base meant that even at these lower levels a positive contribution was made from these areas. Following a mid-year period of review, we are now looking actively to expand our capabilities within this division and selective recruitment will be undertaken to help strengthen our proposition.

 

Outlook

The Company is in a strong position to concentrate upon growing both divisions in the year ahead. Our recurring revenue (management fee income and corporate client’s retainer income) has risen to £12m, or 47% of total revenue. Opportunities for acquisitive growth need to be identified and executed but we will focus significantly more activity in this area than in previous years. Our new shareholder also offers the potential for supplemental business growth for the Company both from, and to, the Middle East. Taking a medium term view, this could be very exciting for the development and progression of both divisions.

 

Thus I look out to the next year in a pragmatic, yet positive manner. We still have a lot of work to undertake, a very competitive commercial environment and a changing regulatory environment, but we have recognised and tried to anticipate these changes by our actions and decisions of last year. As these get implemented, so WH Ireland will become comparatively stronger and this is one of the key reasons for my and the Board’s continued optimistic outlook.

 

Richard Killingbeck

Chief Executive Officer

 

Strategic Report

Overview

The WH Ireland Group has two principal operating subsidiaries, WH Ireland Limited and WH Ireland (IOM) Limited. WH Ireland Limited consists of two business divisions: Private Wealth Management, which provides bespoke wealth management solutions and independent financial advisory services to retail clients; and Corporate Broking which provides corporate finance, advisory and broking services to small and mid-cap corporate clients, and stockbroking and research services to its institutional client base.

 

Although the Group’s income is predominantly derived from activities conducted in the UK and the Isle of Man, a number of retail, institutional and corporate clients are situated worldwide.

 

At the year end, the Group had 213 staff (2015: 226) in the United Kingdom and 7 (2015: 5) in the Isle of Man.

 

Strategy

The Group’s strategic focus remains on continuing to grow our business across the two divisions, with the ultimate objective of becoming the corporate broker of choice in the small and mid-cap company segment and a leading wealth management service provider to retail clients.

 

The strategy is focused on strengthening our corporate client list and increasing the discretionary and advisory assets under management in order to achieve the Group’s target of 50% recurring revenue through the generation of corporate retainer income and wealth management fees.

 

Financial Overview

A summary of the statement of comprehensive income for the financial year is set out below:

 

	30 November 2016	30 November 2015
	£’000	£’000
Revenue	25,421	30,884
Administrative expenses	(28,454)	(30,936)
Operating loss	(3,033)	(52)
Operating (loss)/profit before exceptional items	(1,253)	1,148
Exceptional items	(1,780)	(1,200)
Operating loss after exceptional items	(3,033)	(52)
Other income and charges	(171)	(294)
Loss before tax	(3,204)	(346)
Tax	460	(335)
Loss after tax	(2,744)	(681)

 

A reconciliation of the adjusted operating profit is set out below:

 

	30 November 2016	30 November 2015
	£’000	£‘000
Operating loss	(3,033)	(52)
Add back of one off charges:
Project Discovery*	593	–
Restructuring**	994	–
Regulatory fine***	–	1,200
Regulatory fine related costs***	193	–
Adjusted operating (loss)/profit	(1,253)	1,148

Notes:

*As announced on 2 June 2016, the Group has entered into a seven year agreement with SEI Investments (Europe) Ltd, to outsource its Private Wealth Management back office operations and move to a “Model B” arrangement.  This function is currently performed out of the Group’s Manchester office.  Significant investment has been made in both internal and external resources which have been dedicated to this project (“Project Discovery”) and a provision has been made for the resultant reduction in headcount, which together have had a negative impact on the Group’s results for the year.

**During the year ended 30 November 2016 there were a number of changes within the senior management team and several external hires were made. The costs of these changes, in respect of both short term consultancy costs and fixed employment related costs, are considered by the Board to be non-trading and exceptional in nature.

***As previously disclosed, the Group incurred a fine from its main regulator, the FCA, in February 2016.  This was provided for in the year to 30 November 2015.  In the year to 30 November 2016, the Group has incurred additional costs which relate to the resolution of this matter and subsequent structural changes, both of which the Board consider to be non-trading and exceptional in nature.

 

 

 

 

 

 

 

 

Divisional Performance can be summarised as follows:

 

	Private Wealth Management	Corporate Broking	Head Office	Other Group Companies	Group
Year ended 30 November 2016	£’000	£’000	£’000	£’000	£’000
Revenue	17,091	7,581	–	749	25,421
Direct costs	(13,001)	(6,066)	(819)	(578)	(20,464)
Contribution	4,090	1,515	(819)	171	4,957
Indirect costs	(5,731)	(2,259)	–	–	(7,990)
Segment result	(1,641)	(744)	(819)	171	(3,033)
Executive Board cost	300	300	(725)	125	–
Investment gains/(losses)	29	(8)	–	–	21
Fair value losses on investments	–	(155)	–	–	(155)
Finance income	8	—	–	2	10
Finance expense	(21)	(8)	–	(18)	(47)
Profit/(loss) before tax	(1,325)	(615)	(1,544)	280	(3,204)
Tax expense	218	122	109	11	460
Profit/(loss) for the year	(1,107)	(493)	(1,435)	291	(2,744)

 

 

	Private Wealth Management	Corporate Broking	Head Office	Other Group Companies	Group
Year ended 30 November 2015	£’000	£’000	£’000	£’000	£’000
Revenue	20,594	9,936	–	354	30,884
Direct costs	(14,642)	(7,467)	(1,200)	(65)	(23,374)
Contribution	5,952	2,469	(1,200)	289	7,510
Indirect costs	(5,507)	(2,055)	–	–	(7,562)
Segment result	445	414	(1,200)	289	(52)
Executive Board cost	286	286	(786)	214	–
Investment (losses)/gains	(8)	(82)	–	1	(89)
Fair value losses on investments	(12)	(173)	–	–	(185)
Finance income	19	–	–	2	21
Finance expense	(13)	(6)	–	(22)	(41)
Profit/(loss) before tax	717	439	(1,986)	484	(346)
Tax (expense)/income	(175)	(107)	–	(53)	(335)
Profit/(loss) for the year	542	332	(1,986)	431	(681)

 

 

 

 

 

 

 

Private Wealth Management

The Private Wealth Management division of WH Ireland incorporates both investment management services and advice on wealth planning. We offer these services from a number of offices across the UK, including; London, Manchester, Cardiff, Bristol, Poole and Milton Keynes. Our international clients are serviced from our Isle of Man office.

We are strong advocates of a personal, bespoke service to all of our clients on the basis that no one private client has exactly the same requirements as another. As the complexity of financial markets and advice increases we are also able to offer specific wealth planning expertise in areas such as pensions and inheritance planning; we also work closely with third party advisors in helping our mutual clients achieve their financial goals.

 

WH Ireland is one of the few wealth managers to offer three service investment propositions, namely discretionary, advisory and execution only. Increasingly new clients are joining us under a discretionary mandate but we still have substantial assets in both the advisory and the execution only propositions.

 

The strategy for the ongoing growth in this division is to focus our efforts on building our management fee based assets. This will be achieved by continued personal referrals, selective recruitment of individuals and teams with existing client relationships, and corporate acquisitions of Private Wealth Management businesses. In addition, we are in the process of enhancing our marketing capability which will complement the sources of funds flow above.

 

Corporate Broking

WH Ireland is one of the largest Nominated Advisers (NOMADs) and Brokers for AIM quoted companies in London and currently represents 85 corporate companies. We specialise in providing corporate finance and broking services to smaller companies across a wide range of industry sectors and geographies. We have a highly experienced team from a range of professional backgrounds who are well placed to provide strategic, technical and regulatory advice to our clients. Areas of specialism include pre-IPO fundraising, IPOs and secondary issues, mergers and acquisitions, disposals, restructuring and tender offers.

 

WH Ireland’s award winning Research team provides coverage of our corporate clients, ensuring the investment case is clearly and accurately articulated to the wider investment community. We maintain close contact with both institutional and private client fund managers via our Institutional Sales and Investor Relations teams and help to ensure liquidity in the shares of our corporate clients by offering a market making service. In addition to our London office, we also provide our corporate broking service from offices in Leeds and Bristol.

 

Our corporate client base is spread across the spectrum of industry sectors, including Technology, Consumer, Support Services, Healthcare, Natural Resources and Industrials. Whilst we have continued to focus upon the development and growth of our client base, we have ensured that this is not to the detriment of client service levels. Recurring retainer income is one of the key financial drivers of this division, which helps us mitigate the volatility of transaction income and ensures that we have a stable team in place from which we can continue to build over the coming years.

 

Given the well-publicised structural changes taking place in the wider market, the division has developed a robust and sustainable platform from which to build. The business has demonstrated this strength despite this structural shift, challenging market conditions and the impact of the FCA sanction during the period and we continue to focus on providing a first class service to all of our clients. We continue to exercise a selective recruitment policy of hiring experienced individuals to ensure that these high levels of service are maintained as our business grows. This has been demonstrated in the recent appointment of Adam Pollock as Head of the Division. We anticipate attracting further quality individuals which will enhance our differentiated proposition relative to some of our larger competitors.

 

Key Performance Indicators (KPIs)

The Group uses a number of KPIs to monitor its performance against its financial objectives:

 

Ratio of adjusted operating profit before tax to total revenue

 

	30 November 2016	30 November 2015
	%	%
Ratio of adjusted operating (loss)/profit before tax to revenue	(5.60)	2.77

 

 

 

Funds under management and advice

 

	30 November 2016	30 November 2015
	£m	£m
Discretionary assets	1,016	767
Advisory assets	783	892
Execution only assets	1,073	861
Total	2,872	2,520

 

This is used as a measure of the potential for revenue generation by type of client assets held in our nominee control.

 

Recurring income streams

 

	30 November 2016	30 November 2015
	£m	£m
Value of Group recurring income	12.0	11.4

 

This key indicator of business activity includes fee and other ongoing income from retail and corporate clients for the management of their relationship with the Group.  This represents an increase of 5.26% (2015: 14.01% increase), largely influenced by an increase in our Private Wealth Management division of the number of clients and value of their assets who pay a fee for our services.

 

Corporate Broking performance

 

	30 November 2016	30 November 2015
Number of transactions	51	53
Money raised	£69m	£75m
Retained corporate clients	85	98

 

The Board is satisfied that the changes which have continued to be made across the business throughout 2016, and the conclusion of the historic FCA investigation in February 2016, will enable the Group to focus on achieving our strategic goals. These developments will enable the Group to grow both organically, and through value enhancing acquisitions from opportunities which the Board hopes to identify in the coming year.

 

Dividend

The Board does not propose to pay a dividend in respect of the financial year.

 

Statement of Financial Position and Capital Structure

Maintaining a strong and liquid statement of financial position remains a key business objective for the Board, alongside its regulatory capital requirements. Net assets amounted to £11.7m (2015: £12.9m) and net current assets to £9.4m (2015: £7.3m). The statement of financial position is underpinned by the holding of the substantial cash balances (£6.7m 2015: £8.2m) held to facilitate both the day to day business and growth opportunities and this was further enhanced by the sale of the Group’s freehold property in the Manchester city centre in January 2017 which raised in excess of £4m net of borrowings and sale expenses.

 

In addition, the Group raised £1.1m on 23 February 2016 and £1.6m on 6 December 2016 by way of two placings to existing shareholders, for general corporate purposes.

 

Risks and Uncertainties

Risk appetite is established by the Board and this is consistently reviewed and monitored by the Board and senior management.  The Group, through the operation of its Executive and Operations Committee, considers all of the relevant risk management issues and advises the Board as necessary on such matters.  The Group maintains a comprehensive risk register, within its agreed risk management framework, which encourages a risk-based approach to the internal controls and management of the Group.  In addition to an independent Internal Audit function, the Group operates a dedicated Risk function.  The Internal Audit and Risk functions coordinate their programme of work with the Compliance department.  The Internal Audit function reports directly to the Group’s Audit Committee.

 

Liquidity and Capital Risk

Whilst a significant element of the Group’s revenue continues to be transaction driven, the Group’s focus, as outlined above, remains on increasing the recurring element of client driven revenues. The Group continues to look to build its discretionary fee paying client base to better fit the regulatory landscape in which the Group is operating and to reduce the proportion of its income that is linked to transactions.

 

Whilst the Group has a predominantly fixed cost base, a significant element of which are employment costs that are insensitive to business volumes, the Group has continued to focus on achieving operational efficiencies and reducing the variable costs of the business to maximise profitability and provide operational gearing. The delivery of the partnered solution with SEI Corporation is a key continuation of this process.

 

In order to mitigate risk and absorb any volatility in its operating results, the Board has continued to ensure that the statement of financial position remains robust and suitably liquid, and that sufficient regulatory capital is maintained to allow for a healthy surplus over the regulatory minimum capital requirements. The Group calculates and monitors its regulatory capital requirements on a daily basis.

 

Operational Risk

Operational risk is the risk of loss to the Group resulting from inadequate or failed internal processes, people and systems, or from external events.

 

Business continuity risk is the risk that serious damage or disruption may be caused to the business as a result of a breakdown or interruption, from either internal or external sources, in the operating infrastructure of the Group. This risk is mitigated in part by the number of branches across the UK from which the Group operates, and the Group having business continuity and disaster recovery arrangements. These arrangements include business interruption insurance.

 

The Group seeks to ensure that its risk management framework and control environment is continuously evolving and the Board delegates the day to day monitoring of this to the Group Head of Risk, who sits on the Operations Committee.

 

Credit Risk

The Board takes active steps to minimise the incidence of credit losses. This includes formal credit management procedures and the close supervision of credit limits and exposures. Formal credit procedures include the approval of significant client limits, approval of material trades, collateral requirements for trading clients and the proactive management of any overdue accounts.  Additionally, risk assessments are performed on an ongoing basis during the year on all deposit taking banks and custodians.

 

Regulatory Risk

The Group operates in a highly regulated environment both in the UK and the Isle of Man. The Group has independent Risk, Internal Audit and Compliance functions, resourced with appropriately qualified and experienced individuals. The Directors monitor changes and developments in the regulatory environment and ensure that sufficient resources are made available for the Group to implement any required changes. The impact of the regulatory environment on the Group’s management of its capital is discussed in note 27 of the financial statements.

 

Resources and Relationships

The Group’s most valuable resource remains its staff and the Group remains committed to retaining and recruiting quality staff that share our culture and vision. Staff at all levels of the business are heavily focused on delivering a quality service to our clients. The Board continues to strive to deliver a service throughout the Group which is in compliance with both the letter and the spirit of the principles of the Financial Conduct Authority.

 

The Board collates management information to assist in monitoring its non-financial objectives, which include items such as risk appetite monitoring, staff turnover, thematic reviews and client complaints.

 

By order of the Board.

Dan Cowland

Finance Director

 

 

 

 

Consolidated statement of comprehensive income

For the year ended 30 November 2016

 

	Year ended 30 Nov 2016	Year ended 30 Nov 2015
	£’000	£’000
Revenue	25,421	30,884
Administrative expenses	(28,454)	(30,936)
Operating loss	(3,033)	(52)
Operating (loss)/profit before exceptional items:	(1,253)	1,148
Exceptional items	(1,780)	(1,200)
Operating loss after exceptional items	(3,033)	(52)
Realised investment gains	21	(89)
Fair value losses on investments	(155)	(185)
Finance income	10	21
Finance expense	(47)	(41)
Loss before tax	(3,204)	(346)
Tax expense	460	(335)
Loss for the year	(2,744)	(681)
Total other comprehensive income	–	–
Total comprehensive income	(2,744)	(681)
Earnings per share
Basic	(10.72)p	(2.81)p
Diluted	(10.72)p	(2.81)p

 

All results for the current and prior year relate to continuing operations. There were no items of other comprehensive income for the current or prior year.

 

 

 

 

Consolidated and Company statement of financial position

As at 30 November 2016

 

	Group		Company
	As at 30 Nov 2016	As at 30 Nov 2015	As at 30 Nov 2016	As at 30 Nov 2015
	£’000	£’000	£’000	£’000
ASSETS
Non-current assets
Goodwill	258	258	–	–
Intangible assets	3,582	3,586	–	–
Investment in subsidiaries	–	–	5,035	1,711
Property, plant and equipment	1,207	5,361	10	16
Investments	118	360	–	–
Loan receivable	–	–	731	731
Subordinated Loan	–	–	960	850
Deferred tax asset	807	298	141	73
	5,972	9,863	6,877	3,381
Current assets
Trade and other receivables	18,985	23,312	4,720	4,712
Other investments	530	1,932	–	–
Asset held for sale	4,750	–	–	–
Cash and cash equivalents	6,657	8,176	–	–
	30,922	33,420	4,720	4,712
Total assets	36,894	43,283	11,597	8,093
LIABILITIES
Current liabilities
Trade and other payables	(19,848)	(24,059)	(1,936)	(1,040)
Corporation tax payable	(52)	(262)	–	–
Borrowings	(187)	(179)	(187)	(179)
Finance Leases	(282)	(119)	–	–
Deferred Consideration	(1,130)	(262)	–	–
Provisions	(28)	(1,200)	–	–
	(21,527)	(26,081)	(2,123)	(1,219)
Non-current liabilities
Borrowings	(807)	(994)	(807)	(994)
Finance Leases	(352)	–	–	–
Deferred tax liability	(92)	(126)	–	–
Accruals and deferred income	(282)	(330)	–	–
Deferred Consideration	(2,101)	(2,863)	–	–
Provisions	(21)	(21)	–	–
	(3,655)	(4,334)	(807)	(994)
Total liabilities	(25,182)	(30,415)	(2,930)	(2,213)
Total net assets	11,712	12,868	8,667	5,880
EQUITY
Share capital	1,309	1,225	1,309	1,225
Share premium	1,621	379	1,621	379
Available-for-sale reserve	7	7	–	–
Other reserves	982	982	229	229
Retained earnings	8,524	11,006	5,508	4,047
Treasury shares	(731)	(731)	–	–
Total equity	11,712	12,868	8,667	5,880

 

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the Company Statement of Comprehensive Income. The profit after tax of the Company for the year was £1,199k (2015: Loss £5k).

 

These financial statements were approved by the Board of Directors on 24 February 2017 and were signed on its behalf by:

Richard Killingbeck                                Dan Cowland
Director                                                 Director

 

Consolidated and Company statement of cash flows

For the year ended 30 November 2016

 

	Group		Company
	Year ended 30 Nov 2016	Year ended 30 Nov 2015	Year ended 30 Nov 2016	Year ended 30 Nov 2015
	£’000	£’000	£’000	£’000
Operating activities:
(Loss)/profit for the year	(2,744)	(681)	1,199	(5)
Adjustments for:
Depreciation, amortisation and impairment	475	310	6	7
Finance income	(10)	(21)	–	–
Finance expense	47	41	18	22
Tax	(517)	335	–	(25)
Losses/(gains) in investments	187	96	–	–
Non-cash adjustment for share option charge	262	211	262	211
Decrease/(increase) in trade and other receivables	4,327	15,033	(76)	(90)
(Decrease)/increase in trade and other payables	(4,259)	(13,877)	896	536
(Decrease)/increase in provisions	(1,172)	1,011	–	–
Decrease/(increase) in current asset investments	1,402	(1,042)	–	–
Net cash (used in)/generated from operations	(2,002)	1,416	2,305	656
Income taxes paid	(236)	(398)	–	–
Net cash inflows from operating activities	(2,238)	1,018	2,305	656
Investing activities:
Proceeds from sale of investments	581	904	–	–
Interest received	10	21	–	–
Investment in subsidiary	–	–	(3,324)
Increase in intangible fixed asset	(189)	–	–	–
Acquisition of property, plant and equipment	(878)	(74)	–	–
Acquisition of investments	(526)	(781)	–	–
Net cash (used in)/generated from investing activities	(1,002)	70	(3,324)	–
Financing activities:
Proceeds from issue of share capital	1,326	360	1,326	328
Repayment of borrowings	(179)	(175)	(179)	(175)
Increase in deferred consideration	106	–	–	–
Capital element of finance leases repaid	515	(109)	–	–
Issue of subordinated loan	–	–	(110)	(350)
Interest paid	(47)	(41)	(18)	(22)
Dividends paid	–	(437)	–	(437)
Net cash generated from/(used in) financing activities	1,721	(402)	1,019	(656)
Net (decrease)/increase in cash and cash equivalents	(1,519)	686	–	–
Cash and cash equivalents at beginning of year	8,176	7,490	–	–
Cash and cash equivalents at end of year	6,657	8,176	–	–

 

Consolidated statement of changes in equity

For the year ended 30 November 2016

 

	Share capital	Share premium	Available-for-sale reserve	Other reserves	Retained earnings	Treasury shares	Total equity
Group	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Balance at 1 December 2014	1,193	101	7	982	11,895	(763)	13,415
Loss after tax	–	–	–	–	(681)	–	(681)
Total comprehensive income	–	–	–	–	(681)	–	(681)
Transaction with owners
Employee share option scheme	–	–	–	–	211	–	211
Shares options exercised	32	278	–	–	18	32	360
Dividends	–	–	–	–	(437)	–	(437)
Balance at 30 November 2015	1,225	379	7	982	11,006	(731)	12,868
Loss after tax	–	–	–	–	(2,744)	–	(2,744)
Total comprehensive income	–	–	–	–	(2,744)	–	(2,744)
Transaction with owners
Employee share option scheme	–	–	–	–	205	–	205
Deferred tax on employee share options	–	–	–	–	57	–	57
New share capital issued	60	1,014	–	–	–	–	1,074
Shares options exercised	24	228	–	–	–	–	252
Dividends	–	–	–	–	–	–	–
Balance at 30 November 2016	1,309	1,621	7	982	8,524	(731)	11,712

Retained earnings include £10k of ESOT reserve.

At 30 November 2016 the total number of authorised ordinary shares is 34.5million shares of 5p each (2015: 34.5 million shares of 5p each). At 30 November 2016 the total number of issued ordinary shares is 26.2 million shares of 5p each (2015: 24.5 million shares of 5p each). 1,673,551 shares were issued during the year (2015: 646,387), of which no shares (2015: nil) were held as Treasury.

	Share capital	Share premium	Available-for-sale reserve	Other reserves	Retained earnings	Treasury shares	Total equity
Company	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Balance at 1 December 2014	1,193	101	–	229	4,260	–	5,783
Loss after tax	–	–	–	–	(5)	–	(5)
Total comprehensive income	–	–	–	–	(5)	–	(5)
Shares options exercised	32	278	–	–	18	–	328
Employee share option scheme	–	–	–	–	211	–	211
Dividends	–	–	–	–	(437)	–	(437)
Balance at 30 November 2015	1,225	379	–	229	4,047	–	5,880
Profit after tax	–	–	–	–	1,199	–	1,199
Total comprehensive income	–	–	–	–	1,199	–	1,199
Employee share option scheme	–	–	–	–	205	–	205
Deferred tax on employee share options	–	–	–	–	57	–	57
New share capital issued	60	1,014	–	–	–	–	1,074
Shares options exercised	24	228	–	–	–	–	252
Dividends	–	–	–	–	–	–	–
Balance at 30 November 2016	1,309	1,621	–	229	5,508	–	8,667

The nature and purpose of each reserve, whether Consolidated or Company only, is summarised below:

Share premium
The share premium is the amount raised on the issue of shares that is in excess of the nominal value of those shares and is recorded less any direct costs of issue.

Available-for-sale reserve
The available-for-sale reserve reflects gains or losses arising from the change in fair value of available-for-sale financial assets except for impairment losses which are recognised in the statement of comprehensive income. When an available-for-sale asset is impaired or derecognised, the cumulative gain or loss previously recognised in the available-for-sale reserve is transferred to the statement of comprehensive income.

Other reserves
Other reserves comprise a (consolidated) merger reserve of £753k (2015: £753k) and a (consolidated) capital redemption reserve of £229k (2015: £229k).

Retained earnings
Retained earnings reflect; accumulated income, expenses, gains and losses, recognised in the statement of comprehensive income and the statement of recognised income and expense and is net of dividends paid to shareholders. It includes £10k of ESOT reserve.

Treasury shares
Purchases of the Company’s own shares in the market are presented as a deduction from equity, at the amount paid, including transaction costs. That is, treasury shares are shown as a separate class of shareholders’ equity with a debit balance.

Notes to the Financial Statements For the Year Ended 30 November 2016

1. General information

WH Ireland Group plc is a public company incorporated in the United Kingdom. The shares of the Company are listed on the Alternative Investment Market (AIM), a market operated by the London Stock Exchange Group plc. The address of its registered office is 24 Martin Lane, London, EC4R 0DR. The Group’s principal activities are described in the Strategic Report.

 

2. Dividends

No dividend is proposed in respect of 2016 (2015: none).

 

3. Earnings per share (EPS)

Basic EPS is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares.

 

Diluted EPS is the basic EPS, adjusted for the effect of the conversion into fully paid shares of the weighted average number of all employee share options outstanding during the year. In a year when the company presents positive earnings attributable to ordinary shareholders, antidilutive options represent options issued where the exercise price is greater than the average market price for the period.

 

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

 

	Year ended 30 Nov 2016	Year ended 30 Nov 2015
Group	£’000	£’000
Weighted average number of shares in issue during the period	25,590	24,287
Effect of dilutive share options	1,042	705
	26,632	24,992
	£’000	£’000
Earnings attributable to ordinary shareholders	(2,744)	(681)
Basic EPS
Continuing operations	(10.72)p	(2.81)p
Diluted EPS
Continuing operations	(10.72)p	(2.81)p

 

4. Events after the reporting period

On 6 December 2016, WH Ireland Group plc placed 1,287,240 ordinary shares from its authorised share capital at an issue price of £1.23.

On 21 December 2016 WH Ireland Group plc subscribed for 50,000 ordinary shares in WH Ireland Limited at an issue price of £31.60.

On 23 January 2017, the Group sold its freehold property in Manchester for £5.27m and on 24 January 2017 repaid the loan that had been secured upon it.

5. Dispatch of Annual Report and Annual General Meeting

The annual report and accounts for the year ended 30 November 2016, including notice of the Company’s annual general meeting to be held at 9.30am on 30 March 2017 at 24 Martin Lane, London EC4R 0DR, will be dispatched to shareholders today. The report will also be available from today on the Company’s website: www.whirelandplc.com