TIDMMGR

RNS Number : 3130A

Miton Group Plc

28 September 2015

28 September 2015

MITON GROUP PLC

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2015

Miton Group plc ('Miton' or 'the Group'; ticker: MGR), the AIM quoted fund management group, today announces its half year results for the six months ended 30 June 2015.

Financial Highlights

-- Renewed momentum with net inflows in Q2 following outflows in Q1. Over six months to 30 June, AUM increased from GBP2,050m to GBP2,225m.

-- Average AUM over the six month period was GBP2,140m (H1 2014 - GBP2,953m(1) ). This reduction included the impact of the disposal of the Liverpool business.

   --     Net revenue margin increased to 66.6bp (H1 2014 - 65.0bp). 
   --     H1 costs maintained at GBP5.7m(2) (H1 2014 - GBP5.8m). 
   --     Adjusted Profit before Tax reduced to GBP0.8m (H1 2014 GBP3.4m). 

-- Total cash balances as at 30 June 2015 were GBP13.6m (31 December 2014: GBP15.2m) after payment of year-end bonuses and the dividend.

Good progress since the half year end

   --     Trading is currently in line with the Board's expectations for the year as a whole. 

-- The positive net flows experienced in Q2 have continued. AUM rose to GBP2,364m as at 31 August 2015.

-- CF Miton UK Value Opportunities fund(3) increased AUM to GBP498m as at 31 August 2015 (30 June 2015: GBP378m; 30 June 2014: GBP86m).

   --     Funds rebranded: 

o Miton's Cautious and Defensive multi asset funds(4) were repositioned in Q1 and moved to more appropriate sector groupings. They have generated first quartile performance since the change of manager in June 2014.

o Proposed change of the PFS Darwin Multi Asset fund to an income mandate. It will be renamed the PFS Miton Cautious Monthly Income Fund in October.(5)

-- Miton UK MicroCap Trust plc was launched in April raising GBP50m. Since launch a further GBP5m has been raised.

-- Following appointment of Carlos Moreno in August, we intend to launch a new European equities fund in Q4.

Notes

(1) GBP2,953m includes GBP438m of AUM relating to the Liverpool business which was sold on 31 March 2014.

(2) After adjusting for the write-back of a VAT provision of GBP185,000.

(3) CF Miton UK Value Opportunities fund AUM includes FP Miton Undervalued Assets fund AUM. It is intended to merge the two funds in

Q1 2016.

(4) CF Miton Cautious Multi Asset fund and CF Miton Defensive Multi Asset fund.

(5) Subject to unitholder vote on 30 September 2015.

Ian Dighé, Executive Chairman of Miton Group, commented:

"The fall in Miton Group's half year profits reflected the operational gearing of the business following the reduction in funds under management compared to last year. Despite this, the Group remained profitable and ended the period with renewed momentum in terms of inflows into our funds.

"The second half of the year has got off to a strong start, with continuing momentum in net inflows into our funds. As a result, AUM rose to GBP2,364m as at 31 August, in spite of unsettled markets. As AUM rises we anticipate benefiting from the operational gearing of the business."

For further information, please contact:

Miton Group plc

Ian Dighé (Executive Chairman) 07785 703261

Gervais Williams (Managing Director) 07811 331824

MHP Communications miton@mhpc.com

Reg Hoare / Charlie Barker 020 3182 8100

   Peel Hunt (Nominated adviser and Broker)                                             020 7418 8893 

Guy Wiehahn

www.mitongroup.com

Note to Editors:

Miton Group plc is a multi-asset and equity fund management specialist based in London. The Group manages GBP2.4 billion of assets including nine OEICs, four unit trusts and four investment trusts under the Miton brand. Members of the fund management team invest in their own funds and are significant shareholders in the Company.

Chairman's Statement

The first six months of this year were challenging. In spite of the unsettled markets many of the Miton funds continued to generate decent absolute gains for clients. Encouragingly, fund flows in Q2 were positive and redemptions in multi assets tapered significantly.

The fall in Miton's half year profits reflects the operational gearing in the business following the reduction in funds under management compared to last year. We continue to focus on growing AUM and the positive net flows we are experiencing give us cause for optimism. The continuing performance of the majority of Miton's funds and their distinctive market position allows the sales team to market a truly differentiated product.

The greatest inflows during the first half were into the UK Value Opportunities fund (AUM of GBP378m as at 30 June 2015), the UK Multi Cap Income fund (AUM of GBP440m as at 30 June 2015) and via the flotation of Miton UK MicroCap Trust plc which raised GBP50m in April.

Our multi asset investment team who joined in June 2014 have continued to deliver first quartile returns, which has helped stem the outflows seen at the start of the year. The two Miton multi asset funds have been renamed CF Miton Cautious Multi Asset fund and CF Miton Defensive Multi Asset fund, which reflects their new fund peer group.

We continue to focus on growing AUM:

-- Carlos Moreno joined Miton in August to manage a new European equities fund which we plan to launch later this year. To capitalise on this particular opportunity our plans were brought forward from 2016. There will therefore be up to GBP400,000 of additional costs in 2015.

   --    Miton UK MicroCap Trust plc has already grown with an additional GBP5m raised since launch. 

-- The strong performance of the Miton multi asset funds means we can develop our offering. Therefore the PFS Darwin Multi Asset fund will, subject to unitholder approval, be renamed as PFS Miton Cautious Monthly Income fund with a mandate to provide investors with an income-oriented multi asset investment opportunity from October.

Comprehensive compliance and an appreciation of the sources of risk are naturally a high priority in our business. Nevertheless we are continuing to focus on cost control through increasingly automated fund management operations. Overall costs have been contained at a slightly lower level than the same period last year. We are continuing to drive efficiencies further by working closely with our fund administration partners.

Board changes following the half year end

On 11 September 2015, we announced that Ian Chimes and Piers Harrison were joining the Board with immediate effect as Sales & Marketing Director and Chief Operating Officer, respectively.

Ian Chimes joined Miton as Head of Sales and Marketing in July 2013. Piers Harrison joined Miton in July 2013 as Director of Operations and Risk Management.

At the same time we announced that Robert Clarke will be resigning from the Board with effect from 28 September. Bart Edgar will become Director of Finance, reporting to Piers Harrison, following Robert's departure. The Board thanks Robert for his diligence and hard work.

Outlook

The second half of the year has started strongly with the momentum of positive net flows in Q2 continuing into Q3. As at 31 August 2015 assets under management were GBP2,364m in spite of unsettled markets. As AUM rises we anticipate benefiting from the operational gearing of the business.

Ian Dighé

Executive Chairman

25 September 2015

Financial Review

Assets under Management

On 30 June 2015 Assets under Management (AUM) were GBP2,225m (30 June 2014: GBP2,643m; 31 December 2014: GBP2,050m). During the first half of 2015 fund performance and market movements accounted for the increase in value. Net outflows in the first three months of GBP54m were transformed into net inflows of GBP64m in the second quarter. This trend has continued since 30 June with net inflows of GBP134m in July and August.

Average AUM over the first half was GBP2,140m down from GBP2,953m in the corresponding period last year which included GBP438m of AUM relating to the Liverpool business which was sold on 31 March 2014.The following summary shows the movements during the six months ended 30 June 2015:

Fund Flows Summary

 
                    Audited                                               Unaudited 
                    Opening                                                 Closing 
                        AUM                                       Other         AUM 
                  1 January                           Net    (including     30 June 
                       2015   Inflows   Outflows    flows       market)        2015 
                       GBPm      GBPm       GBPm     GBPm          GBPm        GBPm 
                -----------  --------  ---------  -------  ------------  ---------- 
 Equity funds         1,080       276      (187)       89           104       1,273 
 Multi asset 
  funds                 603        28      (156)    (128)            29         504 
 Total funds          1,683       304      (343)     (39)           133       1,777 
 Investment 
  trusts                367        49          -       49            32         448 
 Total                2,050       353      (343)       10           165       2,225 
                -----------  --------  ---------  -------  ------------  ---------- 
 

Revenue and Margins

With the 28% reduction in average AUM referred to above, net revenue reduced to GBP7.1m from GBP9.6m in H1 2014. The average net revenue margin for the first half was 66.6bp compared with 65.0bp in 2014 due to the loss of some lower margin funds and maintained margins elsewhere.

Costs

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H1 administrative expenses of GBP5.7m (after adjusting for a VAT provision write-back) were reduced marginally from the GBP5.8m in H1 2014.

Adjusted Profit before Tax

Adjusted Profit before Tax of GBP0.8m for the period reduced significantly compared to H1 2014 as a result of the operational gearing in the business acting on the reduced revenue base. This sensitivity emphasises the opportunity for increased future profitability as a result of increasing AUM.

Reconciliation of Adjusted Profit before Tax

 
                                Six months   Six months       Year to 
                                to 30 June   to 30 June   31 December 
                                      2015         2014          2014 
                                      GBPm         GBPm          GBPm 
 ---------------------------   -----------  -----------  ------------ 
 Net revenue                           7.1          9.6          17.2 
 Administrative expenses(1)          (5.7)        (5.8)        (11.1) 
 Share-based payment 
  charge                             (0.6)        (0.4)         (0.9) 
 Net finance revenue                     -            -           0.1 
 Adjusted Profit before 
  Tax(2)                               0.8          3.4           5.3 
 Amortisation                        (0.4)        (0.9)         (1.2) 
 Write-back / (creation) 
  of VAT provision(1)                  0.2            -         (0.2) 
 Exceptional non-recurring 
  items                                  -       (12.5)         (9.4) 
 Profit/(Loss) before 
  Tax                                  0.6       (10.0)         (5.5) 
 ----------------------------  -----------  -----------  ------------ 
 
 

Notes

(1) The VAT provision of GBP185,000 created in 2014 has been written back since it is no longer required. The impact of the provision has been excluded from administrative expenses in this table in order to calculate Adjusted Profit before Tax on a consistent basis.

(2) Adjusted Profit before Tax represents profit before amortisation, exceptionals and taxation.

Earnings per share

 
                              Six months   Six months       Year to 
                              to 30 June   to 30 June   31 December 
                                    2015         2014          2014 
                                   pence        pence         pence 
--------------------------   -----------  -----------  ------------ 
Adjusted earnings per 
 share                              0.43         1.68          2.78 
Diluted adjusted earnings 
 per share                          0.37         1.64          2.53 
Basic earnings / (loss) 
 per share                          0.28       (6.20)        (3.27) 
Diluted earnings per 
 share                              0.24            -             - 
---------------------------  -----------  -----------  ------------ 
 

The dilution of 14% arises largely as a result of the estimate of the Miton Group plc ordinary shares which would be issued if all the Growth Share Plan shares with an accrued value at 30 June 2015 had vested and had been exchanged for Miton Group plc ordinary shares at that date.

Cash

At 30 June 2015 cash balances amounted to GBP13.6m compared with GBP15.2m at the start of the year. After making deductions for regulatory capital requirements, the creditors reserve and other provisions, the Group's free cash as at 30 June 2015 was GBP4.7m. The creditors reserve of GBP2.9m arose from the capital reduction in 2013 and will no longer need to be held on the balance sheet after 2015.

Growth Share Plan

As at 30 June 2015 the total accrued value of the growth shares in issue estimated according to the Plan rules was GBP6.6m (31.12.14: GBP2.7m). This equates to 14.6% (8.2%) of Miton Group plc ordinary shares in issue at the date of approval of the Plan in 2013. This disclosure is required in accordance with accounting standards. The actual dilution experienced in future will depend on a number of factors including:

-- the value of assets under management (AUM) within each Fund Management Unit (FMU) and within the Group

as a whole at the end of the reporting period

   --      average AUM over a reporting period 
   --      the profitability of specific FMUs and of the Miton Group 
   --      the share price of Miton Group plc 
   --      the proportion of an FMU's value in relation to that of the Group 

-- the timing and extent of the exchange of growth shares into Miton shares by participants: growth shares

currently   in issue are due to vest proportionately over the period 2016 to 2018. 

The Company will consider when appropriate the use of Group cash balances to finance the buying back of Miton Group plc ordinary shares.

Unaudited Consolidated Statement of Comprehensive Income

For the period ended 30 June 2015

 
                                                          Unaudited    Unaudited       Audited 
                                                         Six months   Six months          Year 
                                                                 to           to            to 
                                                            30 June      30 June   31 December 
                                                               2015         2014          2014 
                                                 Notes       GBP000       GBP000        GBP000 
-----------------------------------------------  -----  -----------  -----------  ------------ 
Revenue                                                      10,372       15,253        26,952 
Fees and commission expenses                                (3,242)      (5,655)       (9,732) 
-----------------------------------------------  -----  -----------  -----------  ------------ 
Net revenue                                                   7,130        9,598        17,220 
Administration expenses                                     (5,505)      (5,804)      (11,297) 
Share-based payment charge                          10        (588)        (392)         (905) 
Amortisation of intangible assets                             (414)        (895)       (1,218) 
Exceptional operating expenses                       4            -     (12,540)       (9,364) 
Operating profit/(loss)                                         623     (10,033)       (5,564) 
Finance revenue                                                  10           22            58 
-----------------------------------------------  -----  -----------  -----------  ------------ 
Profit/(Loss) for the period before 
 taxation                                                       633     (10,011)       (5,506) 
Taxation                                             5        (205)          979           679 
-----------------------------------------------  -----  -----------  -----------  ------------ 
Profit/(Loss) for the period after taxation 
 and profit/(loss) for the period attributable 
 to equity holders of the parent                                428      (9,032)       (4,827) 
-----------------------------------------------  -----  -----------  -----------  ------------ 
 
                                                              pence        pence         pence 
Basic earnings/(loss) per share                      6         0.28       (6.20)        (3.27) 
 Diluted earnings per share                          6         0.24            -             - 
-----------------------------------------------  -----  -----------  -----------  ------------ 
 

No other comprehensive income was recognised during 2015 or 2014, therefore the profit/(loss) for the period is equal to the total comprehensive income.

Unaudited Consolidated Statement of Changes in Equity

For the period ended 30 June 2015

 
                                            Employee 
                           Share     Share   Benefit  Treasury  Creditors   Retained 
                         Capital   Premium     Trust    Shares    Reserve   Earnings    Total 
                          GBP000    GBP000    GBP000    GBP000     GBP000     GBP000   GBP000 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
At 1 January 
 2015                        171     2,661   (6,294)      (26)      3,057     57,171   56,740 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
Profit for the 
 period                        -         -         -         -          -        428      428 
Release of Treasury 
 shares                        -         -         -        43          -          -       43 
Purchase of Treasury 
 shares                        -         -         -      (17)          -          -     (17) 
Share-based payment 
 charge                        -         -         -         -          -        588      588 
Release from 
 Creditors Reserve             -         -         -         -      (146)        146        - 
Dividend                       -         -         -         -          -      (910)    (910) 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
At 30 June 2015 
 (unaudited)                 171     2,661   (6,294)         -      2,911     57,423   56,872 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
 
At 1 January 
 2014                        164         -   (6,924)         -      3,799     62,464   60,133 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
(Loss) for the 
 period                        -         -         -         -          -    (9,032)  (9,032) 
Shares issued 
 on exercise of 
 options                       2       651         -         -          -      (322)      331 
Share-based payment 
 charge                        -         -         -         -          -        392      392 
Deferred tax 
 direct to equity              -         -         -         -          -      (922)    (922) 
Reduction in 

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 Creditors Reserve             -         -         -         -      (404)        404        - 
Dividend                       -         -         -         -          -      (782)    (782) 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
At 30 June 2014 
 (unaudited)                 166       651   (6,294)         -      3,395     52,202   50,120 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
 
At 1 January 
 2014                        164         -   (6,294)         -      3,799     62,464   60,133 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
(Loss) for the 
 year                          -         -         -         -          -    (4,827)  (4,827) 
Shares issued 
 re acquisition 
 of PSigma Asset 
 Management Holdings           3     1,254         -         -          -          -    1,257 
Shares issued 
 on acquisition 
 of Darwin Investment 
 Managers                      2       700         -         -          -          -      702 
Purchase of Treasury 
 shares                        -         -         -      (26)          -          -     (26) 
Shares issued 
 on exercise of 
 options                       2       707         -         -          -      (377)      332 
Share-based payment 
 charge                        -         -         -         -          -        905      905 
Deferred tax 
 direct to equity              -         -         -         -          -      (953)    (953) 
Release from 
 Creditors Reserve             -         -         -         -      (742)        742        - 
Dividend                       -         -         -         -          -      (783)    (783) 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
At 31 December 
 2014 (audited)              171     2,661   (6,294)      (26)      3,057     57,171   56,740 
----------------------  --------  --------  --------  --------  ---------  ---------  ------- 
 

Unaudited Consolidated Statement of Financial Position

As at 30 June 2015

 
 
                                          Unaudited  Unaudited        Audited 
                                            30 June    30 June    31 December 
                                               2015       2014           2014 
                                   Notes     GBP000     GBP000         GBP000 
---------------------------------  -----  ---------  ---------  ------------- 
Non-current assets 
Goodwill                                     41,070     39,385         41,070 
Intangible assets                             1,361        798          1,575 
Property and equipment                          201        273            216 
---------------------------------  -----  ---------  ---------  ------------- 
                                             42,632     40,456         42,861 
---------------------------------  -----  ---------  ---------  ------------- 
Current assets 
Trade and other receivables                   4,014      4,385          2,871 
Deferred tax asset                               90          -            109 
Cash and cash equivalents              7     13,605     16,153         15,192 
---------------------------------  -----  ---------  ---------  ------------- 
                                             17,709     20,538         18,172 
---------------------------------  -----  ---------  ---------  ------------- 
Total assets                                 60,341     60,994         61,033 
---------------------------------  -----  ---------  ---------  ------------- 
 
Current liabilities 
Trade and other payables                      2,650      6,284          3,690 
Other payables                                  550        734              - 
Provisions                             8          -        106            260 
---------------------------------  -----  ---------  ---------  ------------- 
                                              3,200      7,124          3,950 
Non-current liabilities 
Other payables                                    -      3,750              - 
Deferred tax liability                          244          -            343 
Provisions                             8         25          -              - 
---------------------------------  -----  ---------  ---------  ------------- 
                                                269      3,750            343 
---------------------------------  -----  ---------  ---------  ------------- 
Total liabilities                             3,469     10,874          4,293 
---------------------------------  -----  ---------  ---------  ------------- 
Net assets                                   56,872     50,120         56,740 
---------------------------------  -----  ---------  ---------  ------------- 
 
Equity 
Share capital                          9        171        166            171 
Share premium                                 2,661        651          2,661 
Employee Benefit Trust                      (6,294)    (6,294)        (6,294) 
Treasury shares                                   -          -           (26) 
Creditors Reserve                             2,911      3,395          3,057 
Retained earnings                            57,423     52,202         57,171 
---------------------------------  -----  ---------  ---------  ------------- 
Total equity shareholders' funds             56,872     50,120         56,740 
---------------------------------  -----  ---------  ---------  ------------- 
 

Unaudited Consolidated Statement of Cash Flows

For the period ended 30 June 2015

 
                                                     Unaudited    Unaudited       Audited 
                                                    Six months   Six months       Year to 
                                                    to 30 June   to 30 June   31 December 
                                                          2015         2014          2014 
                                            Notes       GBP000       GBP000        GBP000 
------------------------------------------  -----  -----------  -----------  ------------ 
Operating activities 
Profit/(loss) for the year after 
 taxation                                                  428      (9,032)       (4,827) 
Adjustments to reconcile profit/(loss) 
 to net cash flow from operating 
 activities: 
Tax on continuing operations                               205        (979)         (679) 
Net finance revenue                                       (10)         (22)          (58) 
Depreciation                                                44           47            99 
Loss on disposal of fixed assets                             2            -            10 
Amortisation of intangible assets                          414          895         1,218 
Share-based payment charge                                 588          392           905 
Loss on disposal of Miton Capital 
 Partners Limited (MCPL)                                     -            -        11,990 
Intangible assets written off on 
 disposal of MCPL                                            -       16,029             - 
Consideration receivable on disposal 
 of MCPL                                                     -      (4,150)             - 
Change in fair value of deferred 
 contingent consideration payable                            -            -       (3,410) 
(Increase) in trade and other receivables                (295)        (920)          (83) 
(Decrease)/increase in trade and 
 other payables                                          (262)           52         (737) 
(Decrease) in provisions                                 (235)        (412)         (258) 
Cash generated from operations                             879        1,900         4,170 
Income tax paid                                        (1,141)        (445)       (1,245) 
------------------------------------------  -----  -----------  -----------  ------------ 
Net cash flow from operating activities                  (262)        1,455         2,925 
------------------------------------------  -----  -----------  -----------  ------------ 
Investing activities: 
Interest received                                           10           22            58 
Purchase of property and equipment                        (31)         (81)          (72) 
Acquisition of PSigma Asset Management 
 Holdings Limited                                            -            -       (1,672) 
Acquisition of Darwin Investment 
 Managers Limited                                        (420)            -         (645) 
Consideration received on disposal 
 of MCPL                                                     -        4,000         4,614 
Purchase of Matterley management 
 contract                                                    -            -         (750) 
Net cash flow from investing activities                  (441)        3,941         1,533 
------------------------------------------  -----  -----------  -----------  ------------ 
Financing activities: 
Net release/(purchase) of Treasury 
 shares                                                     26            -          (26) 
Proceeds from share issue                                    -          328           332 
Dividend paid                                   3        (910)        (782)         (783) 
------------------------------------------  -----  -----------  -----------  ------------ 
Net cash flow from financing activities                  (884)        (454)         (477) 
------------------------------------------  -----  -----------  -----------  ------------ 
(Decrease)/increase in cash and 
 cash equivalents                                      (1,587)        4,942         3,981 
Cash and cash equivalents at the 
 beginning of the period                                15,192       11,211        11,211 
------------------------------------------  -----  -----------  -----------  ------------ 

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Cash and cash equivalents at the 
 end of the period                              7       13,605       16,153        15,192 
------------------------------------------  -----  -----------  -----------  ------------ 
 

Notes to the Consolidated Financial Statements

For the period ended 30 June 2015

1. Basis of accounting

These interim condensed and consolidated financial statements do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. They have been prepared on the basis of the accounting policies as set out in the Group's Annual Report for the year ended 31 December 2014.

The interim report has been prepared in accordance with IAS 34 'Interim Financial Reporting' and the Listing Rules of the Financial Conduct Authority.

The accounting policies applied in these interim financial statements are consistent with those applied in the Group's

most recent annual financial statements.

The Group has sufficient financial resources and contracts with a number of customers and suppliers such that the directors believe that the Group is well placed to manage its business risks successfully despite the continued uncertain economic outlook.

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim report.

The Group's 2014 Annual Report is prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and is available on the Miton Group plc website (www.mitongroup.com).

These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 25 September 2015.

The full year accounts to 31 December 2014 were approved by the Board of Directors on 27 March 2015 and have been delivered to the Registrar of Companies. The report of the Auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006. The figures for the six months ended 30 June 2015 and the six months ended 30 June 2014 have not been audited.

2. Segmental information

The Group operates as one business segment, Fund Management, which offers a number of fund management products through a variety of distribution channels, and therefore does not provide information on different segments.

3. Dividend

The dividend for the year ended 31 December 2014 was paid on 7 May 2015, being 0.60p per share. The trustees of the Employee Benefit Trust waived their rights to part of this dividend, leading to a total distribution of GBP910,000, which is reflected in the Consolidated Statement of Changes in Equity.

 
4. Exceptional operating                                              Year to 
 expenses                          Six months to  Six months to   31 December 
                                    30 June 2015   30 June 2014          2014 
                                          GBP000         GBP000        GBP000 
Loss on disposal of Miton 
 Capital Partners Limited                      -         12,000        11,990 
Growth Share Plan implementation 
 costs                                         -            343           309 
Changes to multi-asset fund 
 management team and Darwin 
 acquisition                                   -            197             - 
Movement in fair value of 
 deferred contingent 
 consideration                                 -              -       (3,210) 
Acquisition costs                              -              -           275 
                                   -------------  -------------  ------------ 
Total exceptional operating 
 costs                                         -         12,540         9,364 
                                   -------------  -------------  ------------ 
 

5. Taxation

 
                             Six months                      Year to 
                                     to  Six months to   31 December 
                           30 June 2015   30 June 2014          2014 
                                 GBP000         GBP000        GBP000 
-----------------------  --------------  -------------  ------------ 
Corporation tax charge              288            844           920 
Deferred tax credit                (83)          (139)       (1,599) 
Deferred tax credit on 
 goodwill write-off                   -        (1,684)             - 
------------------------  -------------  -------------  ------------ 
Tax charge/(credit)                 205          (979)         (679) 
------------------------  -------------  -------------  ------------ 
 

6. Earnings per share

Basic earnings per share is calculated by dividing the profit/(loss) for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period.

In calculating diluted earnings per share, IAS 33 Earnings Per Share requires that the profit/(loss) be divided by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of any potential dilutive ordinary shares that would be issued on their conversion to ordinary shares during the period.

(a) Reported earnings per share

Reported basic profit/(loss) per share has been calculated as follows:

 
                                             Six months          Six months       Year to 
                                             to 30 June          to 30 June   31 December 
                                                   2015                2014          2014 
----------------------------------  -------------------  ------------------  ------------ 
 
   Net profit/(loss) attributable 
   to ordinary equity 
 
   holders of the parent for 
   basic earnings (GBP000)                          428             (9,032)       (4,827) 
 Weighted average shares 
  in issue (No. 000)                            151,841             145,712       147,702 
 Weighted average shares 
  in issue - diluted (No. 
  000)                                          175,923                   -             - 
 Basic EPS (pence)                                 0.28              (6.20)        (3.27) 
 Diluted EPS (pence)                               0.24                  -*            -* 
----------------------------------  -------------------  ------------------  ------------ 
 

*No diluted EPS is disclosed for 2014 as the Company reported a basic loss per share in the year.

6. (b) Adjusted earnings per share ("Adjusted EPS")

Adjusted EPS is based on Adjusted Profit after tax, where Adjusted Profit is stated after charging interest and share-based payments but before amortisation and exceptional items.

 
                                 Six months   Six months       Year to 
                                 to 30 June   to 30 June   31 December 
                                       2015         2014          2014 
                                     GBP000       GBP000        GBP000 
------------------------------  -----------  -----------  ------------ 
Profit/(Loss) before taxation 
 for the period                         633     (10,011)       (5,506) 
Adjust: 
   Exceptional operating 
    expenses                              -       12,540         9,364 
Amortisation                            414          895         1,218 
   (Write-back) / creation 
    of VAT provision                  (185)            -           185 
------------------------------  -----------  -----------  ------------ 
Adjusted Profit before 
 Tax                                    862        3,424         5,261 
------------------------------  -----------  -----------  ------------ 
Taxation: 
Tax in the Consolidated 
 Statement of 
 Comprehensive Income                 (205)          979           679 
Tax effect of adjustments               (3)      (1,948)       (1,829) 
------------------------------  -----------  -----------  ------------ 
Adjusted Profit after tax 
 for the calculation of 
 Adjusted earnings per share            654        2,455         4,111 
------------------------------  -----------  -----------  ------------ 
 

Adjusted earnings per share and diluted adjusted earnings per share

were as follows:

 
                               Six months   Six months       Year to 
                               to 30 June   to 30 June   31 December 
                                     2015         2014          2014 
                                    pence        pence         pence 
----------------------------  -----------  -----------  ------------ 
Adjusted earnings per share          0.43         1.68          2.78 
----------------------------  -----------  -----------  ------------ 
Diluted adjusted earnings 
 per share                           0.37         1.64          2.53 
----------------------------  -----------  -----------  ------------ 
 

The above dilution arises largely as a result of the requirement to include an estimate of the Miton Group plc shares which would be issued if all the Growth Share Plan shares with an accrued value at 30 June 2015, which will not fully vest until 2018, had vested and had been exchanged into Miton Group plc ordinary shares at that date.

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