Arden Partners plc

("Arden" or the "Group")

 

Interim results for the six months ended 30 April 2013

 

 

Arden Partners plc (AIM: ARDN.L), the institutional stockbroking company, today announces its unaudited interim results for the six month period ended 30 April 2013.

 

Highlights

 

·        Revenue £5.7m (2012: £5.6m)

·        Profit before tax £1.0m (2012: £0.6m)

·        Basic earnings per share 3.5p (2012: 1.7p)

·        Total funds raised for clients £141m

·        2,301,529 treasury shares cancelled (representing 9.19% of issued share capital as at 15^th April 2013)

·        Proposed interim dividend of 1.25 pence per share (2012: 0.65 pence per share)

 

 

Commenting on the interim results CEO James Reed-Daunter said:

 

" ……. Arden has delivered a solid first half performance and through a strong balance sheet and a consistent high level of service from a stable and experienced team, continues to provide a significant degree of  comfort to our clients in the small and mid cap arena  …."

 

 

Arden Partners plc		0207 614 5900
James Reed-Daunter - Chief Executive Officer
Steve Wassell - Chief Operating Officer
Altium - NOMAD to Arden Partners plc		0207 484 4040
Phil Adams
Sam Fuller

 

 

CHIEF EXECUTIVE'S STATEMENT

 

Financial review

 

I am pleased to report that Arden has made an encouraging start to its financial year, producing an operating profit, for the six months to 30^th April 2013, of £1.0m - an improvement of 67% on H1 2012 (£0.6m).

 

The result, which is stated after employee incentive payments attributable to out-performance in the first half, reflects the outcome of tightly controlling overheads and management continues to focus on reducing the cost base to maximise profit and cash generation.

 

During the six month period ended 30^th April 2013, Arden was involved in placing over £141m for clients and directors, an increase of 100% over the £71m raised for clients in the same period last year.

 

Following this robust financial performance, the Directors propose to pay an interim dividend of 1.25 pence per share (2012: 0.65 pence per share).

 

On 16^th April 2013, the company announced the cancellation of c.2.3million shares held in Treasury, representing approximately 9% of the issued share capital of the company.  Since that date, the Company has taken advantage of the share price at current levels and has purchased further shares into Treasury, with the current holding at 525,459 shares (c.2.4% of the issued share capital).

 

 

Outlook

 

Despite markets being stronger so far in 2013, the headwinds facing the stockbroking sector continue. Commissions are still under significant pressure with no sign of relief, M&A activity is subdued and quoted companies are still cautious of the global economy.

 

Against this background, Arden has managed its cost base tightly, continued to evolve its business model and maintained a strong balance sheet, ensuring clients can have confidence in Arden over the long term, whatever the sector or economy might do, and a continuing high level of service from a stable, experienced team.

 

The pipeline of business remains encouraging for the second half, but is highly market dependent and the sector recovery in the small and mid cap arena has so far been more uncertain than in the global large cap environment.

 

We are appreciative of our growing portfolio of corporate clients for their ongoing support and also take this opportunity to thank our staff for their continued hard work.

 

 

James Reed-Daunter

Chief Executive     

23 July 2013

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the period ended 30 April 2013

		Six months ended 30 April 2013 Unaudited	Six months ended 30 April 2012 Unaudited	Year ended 31 October 2012 Audited
	Note	£'000	£'000	£'000
Revenue	2	5,702	5,629	9,785
Administrative expenses	3	(4,731)	(5,028)	(9,634)
Administrative expenses include:
Share based payments		(30)	(135)	(233)
Reorganisation costs		-	(257)	(559)
Other expenses		(4,701)	(4,636)	(8,842)
Profit from operations		971	601	151
Finance income		34	29	64
Finance cost		(1)	(2)	(4)
Profit before taxation		1,004	628	211
Income tax		(269)	(225)	(70)
Profit after taxation attributable to equity holders of the parent		735	403	141
Other comprehensive income for the period   Decrease in fair value on available for sale financial assets		(4)	-	(10)
Deferred tax taken to equity		3	-	-
Total comprehensive income for the period		734	403	131
Earnings per share
Basic	4	3.5p	1.7p	0.6p
Diluted	4	3.3p	1.6p	0.6p

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 April 2013                                                                                                               

		At 30 April 2013 Unaudited	At 30 April 2012 Unaudited	At 31 October 2012 Audited
		£'000	£'000	£'000
Assets
Non-current assets
Plant, property and equipment		131	294	191
Deferred tax		124	90	134
Total non-current assets		255	384	325
Current assets
Trading investments		5,005	7,957	5,058
Available for sale financial assets		486	-	490
Trade and other receivables		20,670	13,665	9,943
Stock borrowing collateral		231	1,568	107
Cash and cash equivalents		5,598	4,091	4,882
Total current assets		31,990	27,281	20,480
Total assets		32,245	27,665	20,805
Current liabilities
Trade and other payables		(20,798)	(14,751)	(9,068)
Corporation tax liability		(386)	(316)	(130)
Total current liabilities		(21,184)	(15,067)	(9,198)
Net assets		11,061	12,598	11,607
Shareholder Equity:
Called up share capital		2,283	2,738	2,501
Capital redemption reserve		467	-	237
Share premium account		2,933	2,933	2,933
Available for sale reserve		(14)	-	(10)
Profit and loss account		6,924	8,727	7,214
Total equity before deduction of own shares		12,593	14,398	12,875
Employee Benefit Trust reserve		(1,233)	(607)	(607)
Own shares		(299)	(1,193)	(661)
Total equity		11,061	12,598	11,607

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS For the period ended 30 April 2013
	Six months ended 30 April 2013 Unaudited	Six months ended 30 April 2012 Unaudited	Year ended 31 October 2012 Audited
	£'000	£'000	£'000
Operating activities before taxation
Net profit from ordinary activities before tax	1,004	628	211
Adjustments for:
Fair value adjustments in respect of unrealised profits	59	(412)	(548)
Depreciation	77	124	249
Net interest receivable	(33)	(27)	(60)
Share based payments	30	135	233
Operating surplus before changes in working capital	1,137	448	85
(Increase)/decrease in trade and other receivables	(10,727)	10,218	13,941
(Increase)/decrease in trading investments	(8)	(1,625)	1,349
Increase in stock borrowing collateral	(124)	(1,567)	(107)
Increase/(decrease) in trade and other payables	11,731	(8,626)	(14,247)
Purchase of available for sale investment	-	-	(500)
Cash generated from operations	2,009	(1,152)	521
Income taxes paid	-	-	(75)
Cash flows from operating activities	2,009	(1,152)	446
Investing activities
Purchases of property, plant and equipment	(17)	(23)	(46)
Interest received	32	27	60
Net cash from investing activities	15	4	14
Financing activities
Purchase of own shares	(1,321)	-	(661)
Issue of shares	13	38	38
Dividends paid to equity shareholders	-	-	(156)
Net cash from financing activities	(1,308)	38	(779)
Decrease in cash and cash equivalents	716	(1,110)	(319)
Cash and cash equivalents at the beginning of the period	4,882	5,201	5,201
Cash and cash equivalents at the end of the period	5,598	4,091	4,882

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

Unaudited Consolidated Statement of changes in equity for the six months ended 30 April 2013

 

	Share capital	Share Premium account	Capital Redemption Reserve	Own shares	Employee Benefit Trust Reserve	Available  for sale  Reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 October 2012	2,501	2,933	237	(661)	(607)	(10)	7,214	11,607
Profit for the period	-	-	-	-	-	-	735	735
Revaluation of available for sale assets	-	-	-	-	-	(4)	-	(4)
Deferred tax taken to equity	-	-	-	-	-	-	3	3
Total comprehensive income for the period	-	-	-	-	-	(4)	738	734
Share based payments	-	-	-	-	-	-	30	30
Issue of shares	12	-	-	-	-	-	-	12
Purchase of own shares	-	-	-	(696)	-	-	-	(696)
Own shares cancelled	(230)	-	230	1,058	-	-	(1,058)	-
Purchase of shares held by Employee Benefit Trust	-	-	-	-	(626)	-	-	(626)
Balance at 30 April 2013	2,283	2,933	467	(299)	(1,233)	(14)	6,924	11,061

 

 

 

Unaudited Consolidated Statement of changes in equity for the six months ended 30 April 2012

 

	Share capital	Share Premium account	Own shares	Employee Benefit Trust Reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 October 2011	2,700	2,933	(1,193)	(612)	8,189	12,017
Total comprehensive income for the period	-	-	-	-	403	403
Share based payments	-	-	-	-	135	135
Issue of shares	38	-	-	-	-	38
Sale of shares held by Employee Benefit Trust	-	-	-	5	-	5
Balance at 30 April 2012	2,738	2,933	(1,193)	(607)	8,727	12,598

 

 

 

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1)           Basis of preparation

As permitted, IAS 34, 'Interim Financial Reporting' has not been applied in this interim report.

 

The financial information presented in this report has been prepared using accounting policies that are expected to be applied in the preparation of the financial statements for the year ending 31 October 2013.

 

These policies are in accordance with the recognition and measurement principles of International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board as endorsed for use in the European Union, and these principles are disclosed in the Financial Statements for the year ended 31 October 2012.

 

The financial information in this interim report does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006.

 

The Annual Report and Financial Statements for 2012 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2012 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

 

2)          Revenue

 

	Six months ended 30 April 2013 Unaudited	Six months ended 30 April 2012 Unaudited		Year ended 31 October 2012 Audited
	£'000	£'000		£'000
Equities division	2,983	3,534	6,424
Corporate Finance division	2,719	2,095	3,361
Total revenue	5,702	5,629	9,785

 

 

3)          Administrative expenses

 

	Six months ended 30 April 2013 Unaudited	Six months ended 30 April 2012 Unaudited	Year ended 31 October 2012 Audited
	£'000	£'000	£'000
Staff costs including incentive scheme	2,570	2,378	4,423
Other overheads	1,408	1,489	2,904
Staff and overhead costs	3,978	3,867	7,327
Share based payments	30	135	233
Reorganisation costs	-	257	559
Depreciation	77	124	249
Total overhead costs	4,085	4,383	8,368
Variable overheads including settlement costs	646	645	1,266
Total administrative costs	4,731	5,028	9,634

 

 

4)           Earnings per share

 

              The basic earnings per share of 3.5p (2012: 1.7p) is calculated on a profit after tax of £735,000 (2012: £403,000) and 21,185,340 (2012: 23,729,453) being the weighted average number of ordinary shares in issue during the period less shares held in Treasury and by the Arden Partners Employee Benefit Trust.

 

Diluted earnings per share takes account of the weighted average number of outstanding share options being 860,806 (2012: 1,022,480).

 

The underlying basic earnings per share of 3.6p (2012: 3.1p) for the six months ended 30 April 2013 is calculated on a profit after tax of £765,000 (2012: £728,000) being the result after tax, adjusted for the current tax impact of IFRS 2 costs of £30,000 (2012: £135,000) and reorganisation costs of £Nil (2012: £190,000).

                                                                                                                                                                                                                             

 

5)            Dividends

 

 

	Six months ended 30 April 2013 Unaudited	Six months ended 30 April 2012 Unaudited	Year ended 31 October 2012 Audited
	£'000	£'000	£'000
Interim dividend year ended 31 October 2012	-	160	-
Interim dividend period ended 30 April 2013	279	-	-
Distribution to equity shareholders	279	-	-

 

The Directors have proposed an interim dividend of 1.25 pence per share (2012: 0.65 pence per share). This has not been recognised as a liability of the company as at 30 April 2013.

 

The interim dividend will be paid on 6 September 2013 to shareholders on the register at close of business on 9 August 2013, with an ex-dividend date of 7 August 2013.

 

 

 

INDEPENDENT REVIEW REPORT TO ARDEN PARTNERS PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2013 which comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statements of changes in equity and the related explanatory notes that have been reviewed.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors.  The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose.  No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2013 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.

 

 

BDO LLP

Chartered Accountants and Registered Auditors

London

United Kingdom

23^rd July 2013

 

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).