Arden Partners plc
("Arden" or the "Group")
Interim results for the six months ended 30 April 2014
Arden Partners plc (AIM: ARDN.L), the institutional stockbroking company, today announces its unaudited interim results for the six month period ended 30 April 2014.
Highlights
· Revenue £3.5m (2013: £5.7m)
· (Loss)/Profit before tax (£0.5m) (2013: Profit £1.0m)
· Basic (Loss)/Earnings per share (1.8p) (2013: Earnings 3.5p)
· Costs control maintained
· Number of retained corporate clients increased to 46
Commenting on the interim results CEO James Reed-Daunter said:
"After a frustrating first 6 months, I am pleased to report an encouraging start to the second half, with improved equity and corporate transaction revenues so far"
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Arden Partners plc |
0207 614 5900 |
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James Reed-Daunter - Chief Executive Officer |
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Steve Wassell - Chief Operating Officer |
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Altium - NOMAD to Arden Partners plc |
0207 484 4040 |
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Phil Adams |
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Sam Fuller |
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CHIEF EXECUTIVE'S STATEMENT
Financial review
The first half saw specific issues with 2 corporate transactions, one where the client pulled back from the transaction at the point of delivery, after Arden had completed the work, costing c£0.5m and the other was hit by the change in IPO market sentiment which resulted in lost fees of a further £0.5m.
Certain long term investments also saw a decline in mark to market book accounting values during the first half and whilst these are non-cash items, they did impact the overall performance by c£0.3m.
Revenue was down as a result of the above, against a strong comparative period - particularly in the equities division - in 2013, and has led us therefore to report a loss of £0.5m in the first six months of our financial year, against a profit in H1 2013 of £1.0m.
During the half year we have proactively recruited into key areas of the business and have made a number of significant hires, into both senior and entry level roles, the result of which will be to enhance our corporate offering and improve still further the service level we provide to all clients.
The balance sheet remains strong and we are pleased to report that the retained corporate client list has risen to 46.
The Directors are not proposing to pay an interim dividend. (2013: 1.25p)
Outlook
The second half pipeline is strong, with delivery, as ever, dependent on market conditions, and the executive team is confident of a satisfactory outcome for the full year.
James Reed-Daunter
Chief Executive
31 July 2014
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 April 2014
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Six months ended 30 April 2014 Unaudited |
Six months ended 30 April 2013 Unaudited |
Year ended 31 October 2013 Audited |
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Note |
£'000 |
£'000 |
£'000 |
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Revenue |
2 |
3,487 |
5,702 |
10,103 |
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Administrative expenses |
3 |
(3,983) |
(4,731) |
(8,829) |
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Administrative expenses include: |
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Share based payments |
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(53) |
(30) |
(70) |
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Other expenses |
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(3,930) |
(4,701) |
(8,759) |
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(Loss)/Profit from operations |
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(496) |
971 |
1,274 |
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Finance income |
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24 |
34 |
71 |
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Finance cost |
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(2) |
(1) |
(4) |
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(Loss)/Profit before taxation |
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(474) |
1,004 |
1,341 |
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Income tax |
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107 |
(269) |
(351) |
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(Loss)/Profit after taxation attributable to equity holders of the parent |
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(367) |
735 |
990 |
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Other comprehensive income for the period: Items that may be reclassified subsequently to profit or loss: Decrease in fair value on available for sale financial assets |
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(6) |
(4) |
(11) |
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Deferred tax taken to equity |
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- |
3 |
- |
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Total comprehensive income for the period |
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(373) |
734 |
979 |
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(Loss)/Earnings per share |
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Basic |
4 |
(1.8)p |
3.5p |
4.7p |
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Diluted |
4 |
(1.8)p |
3.3p |
4.5p |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 April 2014
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At 30 April 2014 Unaudited |
At 30 April 2013 Unaudited |
At 31 October 2013 Audited |
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£'000 |
£'000 |
£'000 |
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Assets |
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Non-current assets |
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Plant, property and equipment |
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68 |
131 |
92 |
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Deferred tax |
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127 |
124 |
83 |
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Total non-current assets |
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195 |
255 |
175 |
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Current assets |
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Trading investments |
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3,927 |
5,005 |
6,756 |
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Available for sale financial assets |
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473 |
486 |
479 |
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Trade and other receivables |
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8,927 |
20,670 |
18,578 |
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Stock borrowing collateral |
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- |
231 |
1,098 |
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Cash and cash equivalents |
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5,439 |
5,598 |
3,733 |
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Total current assets |
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18,766 |
31,990 |
30,644 |
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Total assets |
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18,961 |
32,245 |
30,819 |
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Current liabilities |
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Trade and other payables |
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(7,056) |
(20,798) |
(19,071) |
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Bank overdraft |
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(1,013) |
- |
- |
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Corporation tax liability |
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(202) |
(386) |
(315) |
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Total current liabilities |
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(8,271) |
(21,184) |
(19,386) |
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Total liabilities |
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(8,271) |
(21,184) |
(19,386) |
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Net assets |
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10,690 |
11,061 |
11,433 |
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Shareholder Equity: |
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Called up share capital |
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2,296 |
2,283 |
2,296 |
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Capital redemption reserve |
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467 |
467 |
467 |
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Share premium account |
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2,933 |
2,933 |
2,933 |
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Available for sale reserve |
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(27) |
(14) |
(21) |
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Profit and loss account |
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6,139 |
6,924 |
6,804 |
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Total equity before deduction of own shares |
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11,808 |
12,593 |
12,875 |
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Employee Benefit Trust reserve |
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(849) |
(1,233) |
(1,046) |
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Own shares |
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(269) |
(299) |
- |
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Total equity |
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10,690 |
11,061 |
11,607 |
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 30 April 2014
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Six months ended 30 April 2014 Unaudited |
Six months ended 30 April 2013 Unaudited |
Year ended 31 October 2013 Audited |
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£'000 |
£'000 |
£'000 |
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Operating activities before taxation |
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Net (loss)/profit from ordinary activities before tax |
(474) |
1,004 |
1,341 |
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Adjustments for: |
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Fair value adjustments in respect of unrealised profits |
319 |
59 |
193 |
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Depreciation |
49 |
77 |
123 |
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Net interest receivable |
(22) |
(33) |
(67) |
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Share based payments |
53 |
30 |
76 |
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Operating (deficit)/surplus before changes in working capital |
(75) |
1,137 |
1,666 |
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Decrease/(increase) in trade and other receivables |
9,651 |
(10,727) |
(8,635) |
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Decrease/(increase) in trading investments |
2,511 |
(8) |
(1,888) |
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Decrease/(increase) in stock borrowing collateral |
1,098 |
(124) |
(991) |
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(Decrease)/increase in trade and other payables |
(12,018) |
11,731 |
10,001 |
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Cash generated from operations |
1,167 |
2,009 |
153 |
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Income taxes paid |
- |
- |
(116) |
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Cash flows from operating activities |
1,167 |
2,009 |
37 |
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Investing activities |
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Purchases of property, plant and equipment |
(25) |
(17) |
(24) |
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Interest received |
22 |
32 |
67 |
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Net cash from investing activities |
(3) |
15 |
43 |
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Financing activities |
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Proceeds from the sale of own shares |
217 |
- |
332 |
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Purchase of own shares |
(322) |
(1,321) |
(1,322) |
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Issue of shares |
- |
13 |
25 |
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Dividends paid to equity shareholders |
(366) |
- |
(264) |
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Net cash from financing activities |
(471) |
(1,308) |
(1,229) |
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Increase in cash and cash equivalents |
693 |
716 |
(1,149) |
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Cash and cash equivalents at the beginning of the period |
3,733 |
4,882 |
4,882 |
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Net cash and cash equivalents at the end of the period |
4,426 |
5,598 |
3,733 |
Cash and cash equivalents included in the Statement of Cash Flows compromise the following amounts in the Statement of Financial Position:
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30 April 2014 |
30 April 2013 |
31 October 2013 |
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£'000 |
£'000 |
£'000 |
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Cash on hand and balances with banks |
5,439 |
5,598 |
3,733 |
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Bank overdraft |
(1,013) |
- |
- |
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Net cash from financing activities |
4,426 |
5,598 |
3,733 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 April 2014
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Share capital |
Share Premium account |
Capital Redemption Reserve |
Own shares |
Employee Benefit Trust Reserve |
Available for sale Reserve |
Retained earnings |
Total |
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£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
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Balance at 31 October 2012 |
2,501 |
2,933 |
237 |
(661) |
(607) |
(10) |
7,214 |
11,607 |
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Profit for year |
- |
- |
- |
- |
- |
- |
990 |
990 |
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Revaluation of available for sale assets |
- |
- |
- |
- |
- |
(11) |
- |
(11) |
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Total comprehensive income for the year |
- |
- |
- |
- |
- |
(11) |
990 |
979 |
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Share based payments |
- |
- |
- |
- |
- |
- |
76 |
76 |
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Issue of shares |
25 |
- |
- |
- |
- |
- |
- |
25 |
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Purchase of own shares |
- |
- |
- |
(696) |
(626) |
- |
- |
(1,322) |
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Sale of own shares |
- |
- |
- |
299 |
- |
- |
- |
299 |
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Own shares cancelled |
(230) |
- |
230 |
1,058 |
- |
- |
(1,058) |
- |
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Sale of shares by Employee Benefit Trust to satisfy employee share schemes |
- |
- |
- |
- |
187 |
- |
(154) |
33 |
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Dividends paid to equity shareholders |
- |
- |
- |
- |
- |
- |
(264) |
(264) |
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Balance at 31 October 2013 |
2,296 |
2,933 |
467 |
- |
(1,046) |
(21) |
6,804 |
11,433 |
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Loss for period |
- |
- |
- |
- |
- |
- |
(367) |
(367) |
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Revaluation of available for sale assets |
- |
- |
- |
- |
- |
(6) |
- |
(6) |
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Total comprehensive income for the year |
- |
- |
- |
- |
- |
(6) |
(367) |
(373) |
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Share based payments |
- |
- |
- |
- |
- |
- |
53 |
53 |
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Deferred tax taken to equity |
- |
- |
- |
- |
- |
- |
48 |
48 |
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Purchase of own shares |
- |
- |
- |
(322) |
- |
- |
- |
(322) |
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Sale of own shares |
- |
- |
- |
53 |
- |
- |
- |
53 |
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Sale of shares by Employee Benefit Trust to satisfy employee share schemes |
- |
- |
- |
- |
197 |
- |
(33) |
164 |
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Dividends paid to equity shareholders |
- |
- |
- |
- |
- |
- |
(366) |
(366) |
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Balance at 30 April 2014 |
2,296 |
2,933 |
467 |
(269) |
(849) |
(27) |
6,139 |
10,690 |
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 2014.
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 2013.
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 2013 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2013 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
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Six months ended 30 April 2014 Unaudited |
Six months ended 30 April 2013 Unaudited |
Year ended 31 October 2013 Audited |
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£'000 |
£'000 |
£'000 |
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Equities division |
1,315 |
2,983 |
5,046 |
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Corporate Finance division |
2,172 |
2,719 |
5,057 |
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Total revenue |
3,487 |
5,702 |
10,103 |
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3) Administrative expenses
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Six months ended 30 April 2013 Unaudited |
Six months ended 30 April 2013 Unaudited |
Year ended 31 October 2013 Audited |
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£'000 |
£'000 |
£'000 |
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Staff costs including incentive scheme |
1,911 |
2,570 |
4,677 |
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Other overheads |
1,487 |
1,408 |
2,773 |
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Staff and overhead costs |
3,398 |
3,978 |
7,450 |
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Share based payments |
53 |
30 |
76 |
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Depreciation |
49 |
77 |
124 |
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Total overhead costs |
3,500 |
4,085 |
7,650 |
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Variable overheads including settlement costs |
483 |
646 |
1,179 |
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Total administrative costs |
3,983 |
4,731 |
8,829 |
4) (Loss)/Earnings per share
The basic loss per share of 1.8p (2013: 3.5p earnings) is calculated on a loss after tax of £367,000 (2013: profit £735,000) and 20,660,405 (2013: 21,185,340) 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.
No adjustment has been made to the diluted loss per share of 1.7p as the dilution effect of the weighted average number of outstanding share options of 1,245,801 would be to decrease the loss per share. In the prior period diluted earnings per share takes account of the weighted average number of outstanding share options being 860,806
The underlying basic loss per share of 1.7p (2013: 3.6p earnings) for the six months ended 30 April 2014 is calculated on a loss after tax of £314,000 (2013: profit £765,000) being the loss after tax, adjusted for the current tax impact of IFRS 2 costs of £53,000 (2013: £30,000).
5) Dividends
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Six months ended 30 April 2014 Unaudited |
Six months ended 30 April 2013 Unaudited |
Year ended 31 October 2013 Audited |
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£'000 |
£'000 |
£'000 |
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Interim dividend year ended 31 October 2013 |
- |
264 |
264 |
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Final dividend year ended 31 October 2013 |
366 |
- |
366 |
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Distribution to equity shareholders |
366 |
264 |
530 |
The Directors have not proposed an interim dividend (2013: 1.25 pence per share).
INDEPENDENT REVIEW REPORT TO ARDEN PARTNERS PLC
Introduction
We have been engaged by the company to review the interim set of financial statements in the half-yearly financial report for the six months ended 30 April 2014 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 interim 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 interim set of financial statements in the half-yearly financial report for the six months ended 30 April 2014 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
31 July 2014
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)
CORPORATE INFORMATION
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Company Secretary & Registered Office
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Steve Wassell Arden Partners plc Arden House 17 Highfield Road Edgbaston Birmingham B15 3DU
Direct line : 0121 423 8993
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Directors
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Company Number |
4427253 |
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Company Web Address |
www.arden-partners.com |
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Nominated Advisor |
Altium Capital Limited 30 St James's Square |
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Registrar
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Capita IRG Plc 40 Dukes Place London EC3A 7NH |
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Lawyers
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Eversheds LLP 1 Wood Street London EC2V 7WS |
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Auditors |
BDO LLP 55 Baker Street London W1U 7EU |
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Bankers |
HSBC Bank plc 1st Floor 60 Queen Victoria Street London EC4N 4TR |