Interim Results

WH Ireland Group plc

(“WH Ireland” or the “Company”)

Interim Results for the Six Months ended 30 September 2021

“Good strategic progress, maintaining our return to profit and investing significantly in both divisions”

Financial Highlights

§ Revenue increased 38% to £17.5m (H12020: £12.7m^*)

o  Wealth Management division revenue £7.8m (H12020: £6.1m)

o  Capital Markets division revenue £9.7m (H12020: £6.5m)

§ Significant increase in underlying profit before tax to £1.1m (H12020: £0.6m)⁺

§ Statutory profit before tax unchanged at £0.3m (H12020: £0.5m)

§ Underlying basic earnings per share 1.87p (H12020: 1.32p)⁺

§ Group regulatory capital solvency ratio (CET1): 18.4% (H12020: 15.1%)

§ Cash balances at £8.4m (H12020: £5.8m; FY2021 £8.2m)  

Divisional Highlights

§ Wealth Management (including Harpsden):

o  Total group AUM up 41% to £2.4bn (H12020 (excluding IOM sold Oct 2020): £1.7bn)

o  WM AUM held on SEI (UK) platform of £1.6bn (H12020: £1.2bn)

o  Discretionary assets under management rose 67% to £1.2bn (H12020: £0.7bn)

o  Encouraging discretionary net inflows (excluding market performance) of £43m representing 4.1% of opening assets

o  Largely completed the transfer of the Harpsden assets to our SEI (UK) platform with minimal attrition, and developed a more focussed approach to our WM acquisition pipeline

§ Capital Markets:

o  Increase in number of corporate clients to 86 (H12020: 80)

o  20 transactions completed in H1 raising £193m (H12020: £104m) including four IPOs

o  Reinforced our ability to distribute to not only institutional clients but also to high net worth (HNW) clients, a key point of differentiation

o  Re-launched our Investor Forum in September 2021:

§ Enables our HNW clients to participate in our public and private offerings

§ Over 300 HNWs have already signed up to date

Board strengthened

§ New CFO, Simon Jackson appointed in October 2021 bringing significant experience in growing a wealth management business

§ Helen Sinclair and Tom Wood appointed as non-executive directors, both of whom bring recent current experience and valuable expertise in key areas

Current trading and outlook

§ Trading in line with our expectations of a sustainable return to profitability

§ Good second half pipeline in Capital Markets but market dependent

§ Momentum in Wealth Management supported by investment and the recent acquisition of Harpsden  

Commenting, Phillip Wale, Chief Executive Officer said:

“WH Ireland has continued to make progress in the first half, maintaining our return to profit and further improving our financial position, despite the overhang of the Covid pandemic. We have made a cautious return to our offices, whilst further enhancing our control framework and investing in growth opportunities to increase the customer base of both sides of our business.

“Following the good start reported today, we expect to see continued momentum in the business albeit in somewhat more challenging markets.”

WH Ireland is hosting a webcast for analysts and investors at 9.30am today.

Please contact whireland@mhpc.com for further details.

For further information please contact:

he comparative information for the period end 30 September 2020 has been reclassified to reflect the correct loss on discontinued operations, together with a reclassification of investment gains to revenue as laid out in the report and accounts year ending 31 March 2021. See note 1 for further information.

⁺A reconciliation from underlying profits to statutory profits is shown within the Chief Executive’s statement below

Notes to Editors:

About WH Ireland Group plc

Wealth Management Division

WH Ireland provides independent financial planning advice and discretionary investment management.  Our goal is to build long term, mutually beneficial, working relationships with our clients so that they can make informed and effective choices about their money and how it can support their lifestyle ambitions.  We can trace our history of helping individuals and their families as well as entrepreneurs, charities and trustees back to 1872.  By building a financial plan and investment strategy with us, our clients are free to focus on the important things, like life.

Capital Markets Division

Our Capital Markets Division is specifically focused on the public and private growth company marketplace. The team’s significant experience in this exciting segment means that we are able to provide a specialist service to each of its respective participants. For companies, we raise public and private growth capital, as well as providing both day-to-day and strategic corporate advice. Our tailored approach means that our teams engage with all of the key investor groups active in our market – High Net Worth Individuals, Family Offices, Wealth Managers and Funds. Our broking, trading and research teams provide the link between growth companies and this broad investor base. In our latest financial period, we successfully completed the IPOs of ITIM, Northcoders, Mailbox REIT and Orcadian Energy, we raised capital for companies such as Jubilee Metals and i3 Energy; while welcoming nine new quoted companies to our corporate client roster.

Chairman’s Statement

Review and Outlook

The first half of the financial year has seen WH Ireland continue to grow, improve the quality of its business and invest to ensure that momentum continues. A year on year increase in underlying profitability has been achieved despite the costs of the continuing integration of Harpsden and further investment in people. The 23% organic growth in Discretionary Funds Under Management is also pleasing. Net inflows (excluding market performance) were £43.4m, which is encouraging, especially as we believe the continued integration of Harpsden will allow Wealth Management to further develop and improve its proposition to its customers into the future.

We have now largely completed the transfer of the Harpsden assets to our wealth management platform (SEI) with minimal attrition. The expertise we have gained from this complex process prepares us well for further acquisitions. We have also established a systematic approach to our wealth management acquisition pipeline, with support from our Capital Markets division, to ensure we are well placed for our target market. Whilst larger acquisitions have continued to attract significant interest from a range of market participants, the smaller opportunities remain attractive, particularly for us given the potential for synergies as we transfer assets onto our platform. However, we remain patient to ensure we generate significant value from each acquisition.

Our Capital Markets division has shown real progress across a number of fronts, all of which point to the improvement in quality we are seeking. The number of companies who rely on us for advice and distribution has continued to grow and has now reached 86 from just 80 a year ago. We successfully completed four IPOs making us one of the leading AIM IPO advisers and we completed one of our largest ever placings in September 2021. We re-launched our Investor Forum in September 2021 which allows our high net worth clients (“HNW”) to participate in our Public and Private offerings, and over 300 HNWs have already signed up. This further reinforces, what we believe is a key point of differentiation, namely our ability to distribute to HNW and Ultra HNW individuals.

I am also delighted that we have attracted significant talent in the first half. This has included two new Board members, Helen Sinclair and Tom Wood, both of whom bring experience and valuable expertise in areas very important to WH Ireland. Our new CFO, Simon Jackson, is already making good progress in a number of areas as we continue to drive efficiencies as we grow. His experience, gained as Brooks Macdonald grew to its current size, is already very evident. The arrival of a new Head of Wealth Planning, Steve Pennington, will allow us to pursue our stated aim of greater penetration of financial planning through the whole business as we strive to lead our proposition with the very best wealth planning capability whilst providing independent financial advice and product selection.

There remains much work to do in order for us to achieve our collective ambitions for both businesses, but we have made progress towards the £3bn Discretionary Funds under Management target. We are now very focused on seeing the benefits of this increased scale fall through to the margin. We have also made good progress towards the £20m revenue target from our Capital Markets division while improving the overall quality of that revenue.

Phil Shelley

6 December 2021

Chief Executive Officer’s Report

Overview

WH Ireland has continued to make progress in the first half of this financial year despite the ongoing issues of the Covid pandemic. We have made a cautious return to our offices and again I thank all our employees, clients, customers, and business partners for their support. During this period we have invested in the business and enhanced our control framework, while maintaining a return to profitability. Investment in our Capital Markets division has been made in Healthcare, Climate Aligned Capital, HNW & Family Office distribution and Private Growth Capital segments as well as in Wealth Planning. We remain focused to ensure that we retain the benefits of last year’s first profitable year in five years, especially the retention of our people; and pursuing opportunities to grow both sides of our business and grow our customer base.

Six Months to 30 September 2021

The start of the financial year was very different from that faced in 2020. Given our hybrid working model, a market still in turmoil created by the Covid-19 pandemic and UK markets that have underperformed those of the US and Asia in recovery terms, I still believe we are performing well. Our employees once again showed great flexibility and maintained a seamless service to all our clients. The investment in new people and teams within Capital Markets, has continued, despite tougher market conditions than the second half of last year. Wealth Management continued its successful drive to improve quality of earnings with an increase in the proportion of its assets under discretionary management, and by fully integrating its first acquisition, Harpsden Wealth Management Limited. Overall revenue for the Group rose 38% to £17.5m (2020 H1 restated: £12.7m) and our underlying profit before tax increased to £1.1m (2020: £0.6m) whilst our statutory profit for the period was £0.3m (2020 H1 restated: £0.5m).

Underlying profit before tax is considered by the Board to be a more accurate reflection of the Group’s performance when compared to the statutory results as this excludes income and expense categories, which are deemed of a non-recurring nature or a non-cash operating item. Reporting at an underlying basis is also considered more appropriate for external analyst coverage and peer group benchmarking, allowing a more accurate like-for-like comparison. A reconciliation between underlying and statutory profit before tax for the six months ended 30 September 2021, with comparatives is shown in the following table:

Clients

Our clients are at the heart of everything that we do. Our central mission is to provide excellent service to our corporate, institutional, and private clients, and this remains our priority. I would like to take the opportunity to thank all our clients for their loyalty and patience as we have worked through the inevitable disruption from the scale and pace of change we have instigated this year.

It was pleasing to see from our annual client satisfaction survey that our discretionary managed clients have awarded us higher ratings this year, with marked progress amongst our wealthiest clients, brand perception and the transparency of our services and costs.

Further efficiencies within our infrastructure has given WH Ireland a platform that we believe is able to provide the quality of service that will differentiate us in the future, and which has shown it is sufficiently robust to successfully navigate challenges and embrace growth within the business.

Staff

We continue to encourage excellence within the Group, and we continue to attract new individuals and teams across both divisions. I thank all our members of staff for their commitment and hard work in the past year as they managed the uncertainty and challenges of the ever-changing working model while maintaining client service as a priority. Group headcount, excluding non-executive directors is now 142, increased from 124 in September 2020, which includes the 17 additional staff that joined with the Harpsden acquisition.

We have also strengthened our Wealth Management division with the appointment of Steve Pennington. Steve joined WH Ireland in November 2021 as Director, Head of Wealth Planning. His previous role was at Arbuthnot Latham & Co. Limited where he led the transformation and integration of their Wealth Planning proposition. He is a Chartered Financial Planner, Fellow of the Personal Finance Society and Chartered FCSI.

Shareholders

I am delighted with the support, both in terms of capital investment and guidance, received from our major shareholders and thank them and the new investors who have joined and supported WH Ireland in this period.

Capital

The first half of this year has seen total equity increase to £15.7m (H1 2020: £8.6m). Cash at the period end was £8.4m which has increased 45% over the year (H1 2020: £5.8m). The Group has no debt.

Wealth Management (WM)

This has been a pivotal year for the Wealth Management division. Following a year of cost reduction, legacy system elimination and control framework improvement, coupled with the rationalisation of non-optimal teams and offices and the repricing of the WM offerings, the division was able to grow AUM with the acquisition of Harpsden Wealth Management Limited (“Harpsden”). The team at Harpsden has developed, what we believe is an excellent business with professionalism and care. It brought both £250m of discretionary assets and a profitable  business that, once the integration is complete, we believe will provide clients with even better value products and pricing.

Total Group assets under management have increased to £2.4bn (H1 2020: £1.7bn) including £1.6bn in WM. Discretionary managed assets increased by £460m including £250m from the Harpsden acquisition, a rise over the year of 67% to £1.2bn (H1 2020: £0.7bn).

Total revenue has increased to £7.8m (H1 2020: £6.2m) with management fees of £6.7m (H1 2020: £4.6m) representing 86% of revenue (H1 2020: 75%)

Capital Markets (CM)

The Capital Markets division strengthened its position as a top five broker and top three Nominated Adviser to AIM companies, by client numbers. Good progress in client numbers reflects the focus placed on our target of advising 100 corporate clients by March 2024. This will be an important step in delivering a business that can consistently deliver revenue of over £20m a year. During the first half of the year this division welcomed 9 new clients, increasing its number of retained corporate clients to 86 (H1 2020: 80) increasing retained revenue to £1.8m (H12020: £1.6m). Gross transaction fees grew to £6.7m (H1 2020: £3.5m) as the team completed 20 transactions raising £193m for clients (H1 2020: 32 and £104m respectively). This included four successful IPO transactions in the period. Commission income fell slightly over the period to £1.2m (H1 2020: £1.4m)

Looking forward

The year has started well with the final stages of the Harpsden integration proceeding better than we had expected and with the Capital Markets division continuing the progress it made last year despite a more challenging trading environment.

Following the good start reported today, we expect to see continued momentum in the business albeit in somewhat more challenging markets.

Phillip Wale

6 December 2021

Consolidated Statement of Comprehensive Income

UNAUDITED FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2021

Consolidated Statement of Financial Position

UNAUDITED AS AT 30 SEPTEMBER 2021

Signed on behalf of the board

P A Wale

6 December 2021

Consolidated Statement of Cash Flows

UNAUDITED FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2021

*Comparative figures have been reclassified to reflect the correct loss on discontinued operations and to reflect the reclassification of realised gains to revenue for the six months to 30 September 2020.

Consolidated Statement of Changes in Equity

UNAUDITED FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2021

Notes to the Consolidated Statements

(UNAUDITED)

1. General information

WH Ireland Group plc is a public company incorporated in the United Kingdom. The shares of the Company are traded on AIM, a market operated by the London Stock Exchange Group plc. The address of its registered office is 24 Martin Lane, London, EC4R 0DR.

Basis of preparation

The condensed financial statements in this interim report for the six months to 30 September 2021 has been prepared in accordance with IAS 34 Interim Financial Reporting. This report has been prepared on a going concern basis and should be read together with the Group’s annual consolidated financial statements as at and prepared to 31 March 2021 in accordance with International Accounting Standards in accordance with the requirements of the Companies Act 2006.

The accounting policies, presentation and methods of computation adopted by the Group in the preparation of its 2021 interim report are those which the Group currently expects to adopt in its annual financial statements for the year ending 31 March 2022 which will be prepared in accordance with United Kingdom Adopted International Financial Reporting Standards and are consistent with those adopted in the audited annual Report and Accounts for the period ended 31 March 2021.

The financial information in this report does not constitute the Company’s statutory accounts. The statutory accounts for the period ended 31 March 2021 have been delivered to the Registrar of Companies in England and Wales. The auditor has reported on those accounts. Its report was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006. The financial information for the six months to 30 September 2021 are unaudited (six months to 30 September 2020: unaudited).

At the time of approving this interim report, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Therefore the directors continue to adopt the going concern basis of accounting in preparing this report.

Exceptional costs

These are considered by the Board to be non-trading and exceptional in nature. This includes costs relating to the transfer of assets from Harpsden and other one-off costs

Finance expense

Included within finance expenses is the fair value measurement arising on deferred consideration payments from the acquisition of Harpsden together with the associated net finance costs.

Comparative period reclassification

As reported in the Annual Report and Accounts for the year ended 31 March 2021 the loss from discontinued operations relating to the sale of WH Ireland (IOM) Limited was £86k. Therefore the profit of £51k from discontinued operations included in the six months to 30 September 2020 has been reclassified. As a result continued operations were understated by £137k for the six months ended 30 September 2020. The consolidated statement of comprehensive income has been reclassified to reflect the correct treatment. There was no impact to total comprehensive income and retained earnings. The reclassification has impacted the consolidated statement of comprehensive income, the consolidated statement of cash flow, the segment table for the six months to 30 September 2020 in note 2 and the earnings per share on continuing and discontinued operations for the six months to 30 September 2020 in note 7. As also reported in the Annual Report and Accounts for the year ended 31 March 2021 realised investment gains were included in revenue. The realised investment gains of £366k have therefore been moved to revenue for the six months to 30 September 2020. There was no impact to total comprehensive income and retained earnings. The reclassification has impacted the consolidated statement of comprehensive income, the consolidated statement of cash flow, the segment table for the six months to 30 September 2020 in note 2 and the earnings per share on continuing and discontinued operations for the six months to 30 September 2020 in note 7.

2. Segment information

The Group has two principal operating segments, Wealth Management (WM) and Capital Markets (CM). The WM division offers investment management advice and services to individuals and contains our Wealth Planning business, giving advice on and acting as intermediary for a range of financial products. The CM division provides corporate finance and corporate broking advice and services to companies and acts as Nominated Adviser (Nomad) to clients traded on AIM and contains our Institutional Sales and Research business, which carries out stockbroking activities on behalf of companies as well as conducting research into markets of interest to its clients.

All divisions are located in the UK. Each reportable segment has a segment manager who is directly accountable to, and maintains regular contact with, the Chief Executive Officer.

No customer represents more than ten percent of the Group’s revenue.

The majority of the Group’s revenue originates within the UK.

The following tables represent revenue and cost information for the Group’s business segments:

* These figures have been reclassified to reflect the correct loss on discontinued operations and to reflect the reclassification of realised gains to revenue for the six     months to 30 September 2020.

** Discontinued operations relate to WH Ireland (IOM) Limited

3. Investments

Quoted and unquoted investments include equity investments other than those in subsidiary undertakings. Warrants may be received during the ordinary course of business; there is no cash consideration associated with the acquisition.

Fair value, in the case of quoted investments, represents the bid price at the reporting date. In the case of unquoted investments, the fair value is estimated by reference to recent arm’s length transactions. The fair value of warrants is estimated using established valuation models. These investments are included in non-current assets.

Investments are measured at fair value, which is determined directly by reference to published prices in an active market where available. Trading investments are included in current assets.

4. Cash, cash equivalents and bank overdrafts

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash in hand and deposits with banks and financial institutions with a maturity of up to three months.

Cash and cash equivalents represent the Group’s money and money held for settlement of outstanding transactions.

Money held on behalf of clients is not included in the statement of financial position. Client money at 30 September 2021 was £0.4m (30 September 2020: £0.4m; 31 March 2021: £0.4m).

5. Deferred Consideration

Deferred consideration relates to the acquisition of Harpsden Wealth Management Limited and the maximum amounts payable over a two year period. The following assumptions were made: revenue growth of 2%, attrition rate of 3% for larger clients and 10% for smaller clients, discount rate of 13.5%. The total cash consideration of £2.5m was recognised at its fair value of £2m on acquisition.

During the six months ended 30 September 2021, the fair value of the estimated deferred consideration for Harpsden Wealth Management Limited was revalued by £98k due to the estimated timing of when the consideration will fall due. During the six months ended 30 September 2021 the Group also recognised a finance expense of £208k on the deferred consideration. The fair value of the Harpsden deferred consideration at 30 September 2021 was £2.3m. The two deferred consideration payments of £1.25m each are payable in December 2021 and December 2022 respectively.

6. Share capital

The total number of ordinary shares in issue is 62.05 million (30 September 2020: 48.70 million; 31 March 2021: 62.02 million).

7. Earnings per share

Basic earnings per share (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 conversion into fully paid shares of the weighted average number of all dilutive employee share options outstanding during the period. At 30 September 2021: 6.48m (30 September 2020: nil; 31 March 2021: 6.48m) options were excluded from the EPS calculation as they were anti-dilutive. In a period when the company presents positive earnings attributable to ordinary shareholders, anti-dilutive options represent options issued where the exercise price is greater than the average market price for the period.

Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below.

*Comparative figures have been reworked as a result of the reclassification of the loss on discontinued operations for the six months to 30 September 2020.

8. Dividends

No interim dividend has been paid or proposed in respect of the current financial period (30 September 2020: nil; 31 March 2021: nil).