17th Mar 2011 07:01
17 March 2011
PANMURE GORDON & CO. PLC
("Panmure Gordon" or the "Group")
Preliminary results for the year ended 31 December 2010
Panmure Gordon & Co. plc today announces preliminary results for the year ended 31 December 2010.
Financial performance
Reported adjusted operating loss for the year of £3.2m was incurred entirely in the first half. Group H2 revenues of £23.3m, up 36% on H1. Statutory loss for the year of £7.4m (2009: £11.1m loss), after provision for exceptional items including restructuring costs, one-off legal provisions and IFRS 2 charges. Adjusted loss per share 2.20p (2009: 1.24p loss). Statutory loss per share 5.10p (2009: 10.63p loss).Operating and business highlights
Group acted on fundraisings which raised more than £980m for clients and M&A teams acted on transactions worth over £900m. Appointed to 19 new corporate clients in the UK, with an increasing emphasis on companies that have exposure to growing economies. In UK, Extel results improved significantly with our smaller company research being top four ranked. Second half investment banking revenue at US subsidiary ThinkEquity was four times greater than first half. Momentum in US investment banking continues. Created Joint Venture with Ambit Capital, one of India's fastest growing investment banks. Panmure Gordon Singapore office to open in first half of 2011, reflecting recent business gains and opportunities.Ed Warner, Chairman, commented:
"After a very difficult first half of the year, it is encouraging to see a marked improvement in the second half of the year. We enter 2011 with a promising pipeline of business, particularly in the US where transactions are being executed despite the continuing challenging markets."
Enquiries:
| Panmure Gordon Nathaniel Webb, Group Communications &Investor Relations Director | 020 7614 8333 | ||
| Financial Dynamics | |||
| Billy Clegg | 020 7831 3113 / 07977 578 153 | ||
| Ed Gascoigne-Pees | 020 7831 3113 / 07884 001 949 | ||
| Oliver Winters | 020 7831 3113 / 07703 329 024 | ||
| Grant Thornton Corporate Finance (NOMAD)Gerry Beaney
| 020 7383 5100 |
Chairman's Statement
I am pleased to present my first Chairman's statement since assuming the role in September. I am delighted to have been appointed Chairman of one of the City's oldest and most respected firms at a time of great change and opportunity.
The Panmure Gordon name has thrived for 135 years in large part because of the firm's strong international presence. From raising funds in the London market for the Chinese Government, American breweries and railroads in the late nineteenth century, to raising funds for a Malaysian palm oil company and listing companies on NASDAQ in 2011, Panmure Gordon's great strength has been its international reach and reputation for integrity.
Although difficult markets over the past few years have obviously required a great deal of hard work and some refinements to our business, our overall vision for the Group remains clear. Our objective is for Panmure Gordon to be the leading independent boutique investment bank and stockbroker for ambitious companies seeking access to UK and US capital markets.
Our strategy for achieving this goal is to deliver excellent service for clients, to be an employer of choice and to capitalise on opportunities in growing markets.
As detailed in the chief executive's review, our colleagues delivered demonstrable progress. They grew our client list, boosted our research ratings, completed ground-work to permit the opening of our first office in Asia, established an Indian joint venture, and ensured that corporate deals were executed.
These successes were achieved against a backdrop of extremely challenging market conditions, both for primary and secondary business. These conditions are reflected in the adjusted loss that the Group posted for the full year, all of which was recorded in the first six months of the year.
Our UK business, in spite of equity markets being subdued and reduced commission levels across the market, was profitable for the year before year-end incentives paid to retain staff. Our investment banking team executed some excellent transactions during the year, including a pioneering debt refinancing for one of our clients. The UK business continued to win new corporate clients throughout 2010 and this has continued into the New Year. It is very pleasing to see corporate clients from a broad range of sectors choosing Panmure Gordon as their adviser. Reflecting our own internationalisation, our client list now includes some very significant companies with operations in sub-Saharan Africa and Asia.
The improvement in business performance in the second half was most marked in the US, where our efforts to strengthen ThinkEquity have resulted in the business winning good mandates in highly competitive markets. The second half provided a slight thawing of markets which were then receptive to those quality mandates. On an adjusted operating profit basis1, excluding year-end incentives paid to retain staff, ThinkEquity was profitable in the second half, providing encouraging momentum into 2011. ThinkEquity is now a much leaner and stronger firm than it was in 2008, and this is being recognised by talented senior individuals who continue to be attracted to the firm. During the year ThinkEquity invested in broadening its research universe to include the consumer sector, where significant growth companies are emerging in the field of e-commerce.
We have made further strides towards the greater internationalisation of our operations. Our major shareholder, QInvest, has been an excellent partner in this regard. We signed a joint venture with Ambit Capital, one of India's fastest growing independent investment banks, following QInvest's acquisition of a significant stake in that business. We look forward to working with Ambit's investment banking, research and sales teams to service both institutional and corporate clients.
I wish to thank Simon Heale, for his interim chairmanship until September last year and his continued commitment as Senior Independent Director to the success of Panmure Gordon. During 2010, Rommie Bhutani, a QInvest-appointed Director, departed the board and we thank him for his contribution in bringing our two firms together.
After an extensive executive search programme, the board is close to confirming a new Chief Financial Officer / Chief Operating Officer and expects to make an announcement soon.
On behalf of the board I thank the employees of the firm who have worked on behalf of the Group's clients and shareholders. We enter 2011 with a strong team in place, a promising pipeline of business, and the determination that Panmure Gordon will continue to deliver integrity in investment banking as it has done for so many years.
| Ed Warner |
| Chairman |
| 16 March, 2011 |
1 Adjustments include redundancy, restructuring and share-based payments charges, depreciation, amortisation of intangibles and inter-company financial expense.
Group Chief Executive's review
2010 was very much a year of two halves. In the first six months of the year we struggled with continuing difficult markets and, as reported in September 2010, recorded a disappointing financial performance, particularly in the US.
The second half of the year however showed a marked improvement. ThinkEquity's investment banking revenue was some four times that recorded in the first half of the year and it is encouraging to see this momentum continue. . We have made a conscious decision to invest in and retain the team we have built over the last two years. As the US markets continue to improve and be receptive to equity capital market deals we expect the much improved performance to continue.
In the UK we completed a sizeable number of investment banking transactions towards the year end and again showed progress half-year on half-year.
In subdued equity markets, the Group acted on fundraisings which raised more than £980m for our clients and our M&A teams acted on 17 transactions worth over £900m. ThinkEquity acted on three IPOs and seven follow-on transactions. Panmure Gordon also acted on its first UK debt private placement for a client which successfully raised £100m.
It was encouraging to record 19 new UK corporate clients in 2010, and I thank those clients for choosing Panmure Gordon as their corporate broker. In January of this year, Hemscott recognised Panmure Gordon as scoring the most gains in number of nominated adviser appointments in the final quarter of the reporting period. Our new clients represent a wide range of sectors - mining, consumer, healthcare and agribusiness. Included within these were a sizeable number of businesses whose primary geographic activity is in Asia and other growing markets.
As our chairman notes in his statement, we signed a joint venture agreement with Ambit Capital, a fast growing full service Indian investment bank. We have already commenced co-branding and distribution of research on Indian companies to international investors. While these are early days we are encouraged by the initial results. QInvest, our major shareholder, is also a major shareholder in Ambit, reinforcing yet again the strategic importance and depth of our relationship.
Following our success in winning corporate clients whose primary area of operation is in Asia, we will be opening a Singapore office in the first half of this year and look forward to gaining more clients from that region.
Our international activity is a continuation of the firm's heritage. It is also appreciated by our listed clients, for whom throughout the year we were able to leverage our business footprint, experience and contacts to conduct transatlantic investor roadshows.
While investment banking activity showed some return to more normal markets, commission levels across the Group remained impacted by subdued market volumes. .
During the year I was pleased to see that our Extel results improved significantly, with Panmure Gordon's smaller company research being top four ranked in the UK. In addition a number of individual analysts and sales people were recognised for the quality of their work. Our analysts across the Group also scored further accolades during the reporting period from Starmine, for earnings accuracy and stock picking. Earlier this month, Panmure Gordon was further recognised by Starmine as the only independent broker to feature in Starmine's Top 10 UK & Ireland brokers for FTSE250 stock picking and earnings accuracy in 2010.
In the US we made a number of hires across the business and have begun the process of extending Think's coverage into the consumer sector.
Dividend
The board has not recommended a dividend for the year, but the board does intend to pay dividends as the firm returns to sustained profitability.
Outlook
At the time of writing there is uncertainty arising from developments in the Middle East and Japan. Despite this there are positive signs of a continuing improvement in business.
So far this year, our US business has been active on five transactions and although there may be the usual second-half weighting, we do expect a much improved first half compared to the first half of 2010. In the UK, we have undertaken two sizeable fundraisings in the year so far. While the UK pipeline is encouraging, market conditions remain challenging and we anticipate a second half weighting to transactions.
Against the momentum in investment banking we are managing the business with an expectation that commission levels will remain subdued.
The last few years have been very difficult and I would like to pass on my thanks to colleagues for their efforts. As markets begin to improve, we are taking steps to ensure we retain key employees across the Group.
There are significant opportunities for the Group in 2011 and beyond. We have a much improved business, a broad geographic spread, a supportive major shareholder and an excellent growing client list. While the threat of exogenous economic and political shocks to the global economy remain, we see 2011 as a year to further strengthen the business and establish the platform for significant shareholder value creation.
| Tim Linacre |
| Group Chief Executive |
| 16 March, 2011 |
| Operating review |
| Adjusted financial results |
| 2010 | 2009 | |||||||||||||||
| £'000 | £'000 | |||||||||||||||
| Net revenue | 40,455 | 50,858 | ||||||||||||||
| Net gain/(loss) on available for sale investments | 446 | (894 | ) | |||||||||||||
| Administrative expenses (including bonuses) | (45,071 | ) | (52,967 | ) | ||||||||||||
| Adjusted operating loss | (4,170 | ) | (3,003 | ) | ||||||||||||
| Interest payable and similar items | (91 | ) | (76 | ) | ||||||||||||
| Adjusted loss before tax | (4,261 | ) | (3,079 | ) | ||||||||||||
| Taxation | 1,057 | 1,781 | ||||||||||||||
| Adjusted loss | (3,204 | ) | (1,298 | ) | ||||||||||||
| Adjusted loss per share | (2.20 | )p | (1.24 | )p | ||||||||||||
| Adjusted loss removing gain/(loss) on available for sale investments | (2.42 | )p | (0.63 | )p | ||||||||||||
| Weighted average number of shares in issue | 145,759,376 | 104,584,370 | ||||||||||||||
| The full statutory income statement is set out below. | ||||||||||||||||
| The adjusted earnings reconcile to the loss on ordinary activities after taxation contained in theconsolidated income statement as follows: | ||||||||||||||||
| 2010 | 2009 | |||||||||||||||
| £'000 | £'000 | |||||||||||||||
| Adjusted loss | (3,204 | ) | (1,298 | ) | ||||||||||||
| Add/(less) | ||||||||||||||||
| Goodwill write down | - | - | ||||||||||||||
| IFRS 2 share-based payments | (437 | ) | (4,087 | ) | ||||||||||||
| Amortisation of intangible assets | (141 | ) | (140 | ) | ||||||||||||
| Deferred tax not recognised on US losses1 | (1,854 | ) | (3,121 | ) | ||||||||||||
| Redundancy and restructuring charges net of corporation tax | (1,147 | ) | (2,998 | ) | ||||||||||||
| Prior year under provision of tax | (49 | ) | (47 | ) | ||||||||||||
| Tax relief provided by exercise of share options2 | 168 | 181 | ||||||||||||||
| Deferred tax (charge)/credit from the future exercise of share options2 | (619 | ) | 542 | |||||||||||||
| Deferred tax liability relating to goodwill | (148 | ) | (147 | ) | ||||||||||||
| Loss for the period | (7,431 | ) | (11,115 | ) | ||||||||||||
| Loss per ordinary share | (5.10 | )p | (10.63 | )p | ||||||||||||
1 Management expects that these losses will provide a tax benefit in future years, although in the statutory income statement, given the uncertainty over the extent and timing of their recoverability, no credit has been taken for the potential future tax benefit provided by these losses.
2 Since IFRS 2 share-based payment charges are ignored in calculating adjusted earnings, so are the tax impacts of share options.
Operations
The board examines a number of key performance indicators in evaluating business performance, the key ones being:
| UK Operations | US Operations | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
| Revenue per employee (£'000) | 195 | 246 | 182 | 195 | ||||||||||||||
| Ratio of employee compensation1 to turnover | 68% | 45% | 69% | 70% | ||||||||||||||
| Fixed non compensation costs per employee (£'000) | 60 | 59 | 77 | 78 | ||||||||||||||
| Average daily institutional revenue (£'000) | 35 | 48 | 43 | 57 | ||||||||||||||
1 Employee compensation is defined as salaries and bonuses only.
• Difficult market conditions impacted revenue per employee
• Effective cost control measures have ensured a constant fixed cost base per employee
| Consolidated income statement | ||||||
| For the year ended 31 December 2010 | ||||||
|
| 2010 | 2009 | ||||
| £'000 | £'000 | |||||
| Commission and trading income | 21,929 | 28,842 | ||||
| Commission and trading expense | (3,568 | ) | (3,446 | ) | ||
| Net commission and trading income | 18,361 | 25,396 | ||||
| Corporate finance and other fee income | 22,094 | 25,462 | ||||
| Net commission and fee income | 40,455 | 50,858 | ||||
| Net gain/(loss) on available for sale investments | 446 | (894 | ) | |||
| Administrative expenses1 | (46,254 | ) | (53,107 | ) | ||
| Redundancy, restructuring and other non-recurring charges1 | (1,252 | ) | (2,832 | ) | ||
| Operating loss before share-based payments and goodwill impairment | (6,605 | ) | (5,975 | ) | ||
| Share-based payments1 | (437 | ) | (4,087 | ) | ||
| Operating loss | (7,042 | ) | (10,062 | ) | ||
| Financial income | 111 | 139 | ||||
| Financial expenses | (202 | ) | (215 | ) | ||
| Net financial expense | (91 | ) | (76 | ) | ||
| Loss before tax | (7,133 | ) | (10,138 | ) | ||
| Income tax | (298 | ) | (977 | ) | ||
| Loss for the period attributable to the owners of the Company | (7,431 | ) | (11,115 | ) | ||
| Basic loss per share | (5.10 | )p | (10.63 | )p | ||
| Diluted loss per share | (5.10 | )p | (10.63 | )p | ||
| 1 These are all part of administrative expenses which total £47.9m (2009: £60.0m) that have been presented separately owing to their natureand size. | ||||||
| Consolidated statement of comprehensive income & expense | ||||||
| For the year ended 31 December 2010 | ||||||
| 2010 | 2009 | |||||
| £'000 | £'000 | |||||
| Loss for the period attributable to the owners of the Company | (7,431 | ) | (11,115 | ) | ||
| Other comprehensive (loss)/income | ||||||
| Foreign exchange translation differences | 369 | (2,879 | ) | |||
| Unrealised gain on available for sale investments | - | 569 | ||||
| Available for sale gains transferred to the income statement | (569 | ) | - | |||
| Total other comprehensive loss for the period net of tax | (200 | ) | (2,310 | ) | ||
| Total comprehensive loss for the period attributable to the owners of the Company | (7,631 | ) | (13,425 | ) | ||
| Consolidated statement of financial position | ||||||
| As at 31 December 2010 | ||||||
|
| 2010 | 2009 | ||||
| £'000 | £'000 | |||||
| Assets | ||||||
| Intangibles | 30,168 | 29,558 | ||||
| Plant and equipment | 1,999 | 2,536 | ||||
| Available for sale investments | 2,640 | 3,771 | ||||
| Deferred tax asset | 4,490 | 4,958 | ||||
| Other receivables | 2,458 | - | ||||
| Total non-current assets | 41,755 | 40,823 | ||||
| Securities held for trading | 5,082 | 3,916 | ||||
| Trade and other receivables | 29,172 | 23,141 | ||||
| Cash and cash equivalents | 26,166 | 38,903 | ||||
| Total current assets | 60,420 | 65,960 | ||||
| Current liabilities | ||||||
| Trade payables | (21,252 | ) | (11,774 | ) | ||
| Tax and social security | (663 | ) | (977 | ) | ||
| Other payables | (8,808 | ) | (15,595 | ) | ||
| Held for trading liabilities | (693 | ) | (570 | ) | ||
| Interest bearing loans and borrowings | (3,000 | ) | - | |||
| Total current liabilities | (34,416 | ) | (28,916 | ) | ||
| Net current assets | 26,004 | 37,044 | ||||
| Interest bearing loans and borrowings | - | (3,000 | ) | |||
| Deferred tax liability | (856 | ) | (739 | ) | ||
| Total non-current liabilities | (856 | ) | (3,739 | ) | ||
| Net assets | 66,903 | 74,128 | ||||
| Equity | ||||||
| Issued share capital | 5,914 | 5,874 | ||||
| Shares to be issued (including share premium) | 129 | 298 | ||||
| Share premium account | 36,084 | 35,879 | ||||
| Merger reserve | 21,810 | 21,810 | ||||
| Special reserve | 9,595 | 9,595 | ||||
| Fair value reserve | - | 569 | ||||
| Other reserve | (2,725 | ) | (776 | ) | ||
| Foreign currency translation reserve | 3,340 | 2,971 | ||||
| Treasury shares | (3,454 | ) | (5,013 | ) | ||
| Retained earnings | (3,790 | ) | 2,921 | |||
| Total equity | 66,903 | 74,128 | ||||
| Approved by the board on 16 March 2011 and signed on its behalf by: | ||||||
| Tim LinacreChief Executive | ||||||
| Consolidated statement of cash flow | ||||||
| Year ended 31 December 2010 | Year ended 31 December 2009 | |||||
| £'000 | £'000 | |||||
| Cash flows from operating activities | ||||||
| Loss before tax | (7,133 | ) | (10,138 | ) | ||
| Net financial expense | 91 | 76 | ||||
| Depreciation and amortisation | 956 | 1,297 | ||||
| Net (gain)/loss on available for sale investments | (367 | ) | 894 | |||
| Loss on disposal of fixed assets | 9 | 95 | ||||
| Movement in securities held for trading | (1,043 | ) | (425 | ) | ||
| Decrease/(increase) in net amounts owed by market counterparties | 1,559 | (908 | ) | |||
| Increase in trade and other receivables | (295 | ) | (1,041 | ) | ||
| (Decrease)/increase in trade payables and provisions | (7,154 | ) | 3,348 | |||
| IFRS 2 share-based payment charges | 720 | 3,842 | ||||
| Net cash outflow from operating activities | (12,657 | ) | (2,960 | ) | ||
| Income taxes paid | (201 | ) | (106 | ) | ||
| Net cash from operating activities | (12,858 | ) | (3,066 | ) | ||
| Cash flows from investing activities | ||||||
| Financial income received | 111 | 139 | ||||
| Acquisition of plant and equipment | (190 | ) | (951 | ) | ||
| Proceeds from disposal of investments | 1,030 | - | ||||
| Net cash from investing activities | 951 | (812 | ) | |||
| Cash flows from financing activities | ||||||
| Proceeds from the issue of share capital | 76 | 22,954 | ||||
| Expenses of share issue | - | (739 | ) | |||
| Purchase of own shares for treasury | (148 | ) | - | |||
| Purchase of own shares for EBT | (385 | ) | (125 | ) | ||
| Financial expense | (202 | ) | (215 | ) | ||
| Repayment of EBT loan | 143 | 89 | ||||
| Net cash from financing activities | (516 | ) | 21,964 | |||
| Net (decrease)/increase in cash and cash equivalents | (12,423 | ) | 18,086 | |||
| Cash and cash equivalents at 1 January | 38,903 | 21,106 | ||||
| Effect of exchange rate fluctuations | (314 | ) | (289 | ) | ||
| Cash and cash equivalents at 31 December | 26,166 | 38,903 | ||||
| Consolidated statement of changes in equity for the year ended 31 December 2010 | |||||||||||||||||||||||||||||||
| £'000 | Issuedsharecapital | Shares tobe issued | Sharepremium | Mergerreserve | Specialreserve | Fair valuereserve | Otherreserve | Foreigncurrencytranslationreserve | Treasuryshares | Retainedearnings | Totalequity | ||||||||||||||||||||
| At 1 January 2010 | 5,874 | 298 | 35,879 | 21,810 | 9,595 | 569 | (776 | ) | 2,971 | (5,013 | ) | 2,921 | 74,128 | ||||||||||||||||||
| Total comprehensive income for the period | |||||||||||||||||||||||||||||||
| Loss for the year | - | - | - | - | - | - | - | - | - | (7,431 | ) | (7,431 | ) | ||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||
| Foreign currency translation differences | - | - | - | - | - | - | - | 369 | - | - | 369 | ||||||||||||||||||||
| Available for sale gain recycled | - | - | - | - | - | (569 | ) | - | - | - | - | (569 | ) | ||||||||||||||||||
| Other items recorded directly in equity | |||||||||||||||||||||||||||||||
| Share-based payments | - | - | - | - | - | - | - | - | - | 720 | 720 | ||||||||||||||||||||
| Shares issued under employee share plans | 40 | (169 | ) | 205 | - | - | - | - | - | - | - | 76 | |||||||||||||||||||
| Shares transferred under employee share plans | - | - | - | - | - | - | (1,707 | ) | - | 1,707 | - | - | |||||||||||||||||||
| Purchase of own shares for EBT | - | - | - | - | - | - | (385 | ) | - | - | - | (385 | ) | ||||||||||||||||||
| Decrease in shares held by EBT | - | - | - | - | - | - | 143 | - | - | - | 143 | ||||||||||||||||||||
| Purchase of shares for treasury | - | - | - | - | - | - | - | - | (148 | ) | - | (148 | ) | ||||||||||||||||||
| At 31 December 2010 | 5,914 | 129 | 36,084 | 21,810 | 9,595 | - | (2,725 | ) | 3,340 | (3,454 | ) | (3,790 | ) | 66,903 | |||||||||||||||||
| Consolidated statement of changes in equity for the year ended 31 December 2009 | |||||||||||||||||||||||||||||||
| £'000 | Issuedsharecapital | Shares tobe issued | Sharepremium | Mergerreserve | Specialreserve | Fair valuereserve | Otherreserve | Foreigncurrencytranslationreserve | Treasuryshares | Retainedearnings | Totalequity | ||||||||||||||||||||
| At 1 January 2009 | 3,167 | 611 | 16,058 | 21,200 | 9,595 | - | (566 | ) | 5,850 | (5,187 | ) | 10,804 | 61,532 | ||||||||||||||||||
| Total comprehensive income for the period | |||||||||||||||||||||||||||||||
| Loss for the year | - | - | - | - | - | - | - | - | - | (11,115 | ) | (11,115 | ) | ||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||
| Foreign currency translation differences | - | - | - | - | - | - | - | (2,879 | ) | - | - | (2,879 | ) | ||||||||||||||||||
| Unrealised gain on available for sale investments | - | - | - | - | - | 569 | - | - | - | - | 569 | ||||||||||||||||||||
| Other items recorded directly in equity | |||||||||||||||||||||||||||||||
| Share-based payments | - | - | - | - | - | - | - | - | - | 3,842 | 3,842 | ||||||||||||||||||||
| Shares issued under employee share plans | 7 | (313 | ) | 306 | - | - | - | (174 | ) | - | 174 | - | - | ||||||||||||||||||
| Shares issued | 2,700 | - | 20,254 | - | - | - | - | - | - | - | 22,954 | ||||||||||||||||||||
| Cost of share issue | - | - | (739 | ) | - | - | - | - | - | - | - | (739 | ) | ||||||||||||||||||
| Purchase of own shares for EBT | - | - | - | - | - | - | (125 | ) | - | - | - | (125 | ) | ||||||||||||||||||
| Decrease in shares held by EBT | - | - | - | - | - | - | 89 | - | - | - | 89 | ||||||||||||||||||||
| Transfer to merger reserve | - | - | - | 610 | - | - | - | - | - | (610 | ) | - | |||||||||||||||||||
| At 31 December 2009 | 5,874 | 298 | 35,879 | 21,810 | 9,595 | 569 | (776 | ) | 2,971 | (5,013 | ) | 2,921 | 74,128 | ||||||||||||||||||
| 1 Segmental analysis | |||||||||||||||||||||||
| The Group has reported its operating segments according to how the Group's chief operating decision maker ("CODM") allocates resources to each segment and assesses performance. In this respect the Group's CODM has been defined as the Group's CEO. The CODM allocates resources across the Group based on results and performance in each geographic area of operation. This is consistent with the basis of segmentation in the Report and Financial Statements 2009. | |||||||||||||||||||||||
| Segmental analysis for the year ended 31 December 2010 and reconciliation to the statutory income statement | |||||||||||||||||||||||
| UK | US | Swiss | Consolidated | ||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||||||||
| Net commission and trading income | 7,417 | 10,594 | 9,174 | 12,662 | 1,770 | 2,140 | 18,361 | 25,396 | |||||||||||||||
| Corporate finance fee income | 11,828 | 15,830 | 8,067 | 7,839 | - | - | 19,895 | 23,669 | |||||||||||||||
| Wealth management and other income | 112 | - | 2,087 | 1,793 | - | - | 2,199 | 1,793 | |||||||||||||||
| Net gain/(loss) on AFS investments | 471 | (879 | ) | (25 | ) | (15 | ) | - | - | 446 | (894 | ) | |||||||||||
| Foreign exchange (loss)/gain | - | - | 314 | (229 | ) | (19 | ) | - | 295 | (229 | ) | ||||||||||||
| Ongoing administration costs | (20,303 | ) | (21,591 | ) | (24,220 | ) | (28,947 | ) | (1,885 | ) | (2,200 | ) | (46,408 | ) | (52,738 | ) | |||||||
| Segmental operating (loss)/profit | (475 | ) | 3,954 | (4,603 | ) | (6,897 | ) | (134 | ) | (60 | ) | (5,212 | ) | (3,003 | ) | ||||||||
| Redundancy and restructuring charges | (561 | ) | (7 | ) | (691 | ) | (2,825 | ) | - | - | (1,252 | ) | (2,832 | ) | |||||||||
| Amortisation of intangibles | - | - | (141 | ) | (140 | ) | - | - | (141 | ) | (140 | ) | |||||||||||
| Share-based payment charges | (58 | ) | (3,749 | ) | (379 | ) | (338 | ) | - | - | (437 | ) | (4,087 | ) | |||||||||
| Operating profit/(loss) | (1,094 | ) | 198 | (5,814 | ) | (10,200 | ) | (134 | ) | (60 | ) | (7,042 | ) | (10,062 | ) | ||||||||
| Net financial income/(expense) | 994 | 730 | (1,085 | ) | (806 | ) | - | - | (91 | ) | (76 | ) | |||||||||||
| Profit/(loss) before tax | (100 | ) | 928 | (6,899 | ) | (11,006 | ) | (134 | ) | (60 | ) | (7,133 | ) | (10,138 | ) | ||||||||
| Income tax | (298 | ) | (977 | ) | - | - | - | - | (298 | ) | (977 | ) | |||||||||||
| (Loss)/profit for period attributable to the owners of the Company | (398 | ) | (49 | ) | (6,899 | ) | (11,006 | ) | (134 | ) | (60 | ) | (7,431 | ) | (11,115 | ) | |||||||
| All revenue is from external customers. The segmental operating profit reconciles to the statutory profit above, which was the basis for segmental disclosure in the Report and Financial Statements 2009. There are no discontinued activities. | |||||||||||||||||||||||
| In respect of assets and non-current assets, the basis of segmentation is the same as in the Report and Financial Statements 2009. There are no regular major customers that account for more than 10% of revenue. | |||||||||||||||||||||||
| UK | US | Swiss1 | Consolidated | ||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||||||||
| Non-current assets (inc goodwill) | 19,610 | 16,751 | 22,145 | 24,072 | - | - | 41,755 | 40,823 | |||||||||||||||
| Current assets | 51,668 | 54,503 | 8,752 | 11,457 | - | - | 60,420 | 65,960 | |||||||||||||||
| Current liabilities | (29,315 | ) | (20,472 | ) | (5,101 | ) | (8,444 | ) | - | - | (34,416 | ) | (28,916 | ) | |||||||||
| Non-current liabilities | (897 | ) | (3,739 | ) | 41 | - | - | - | (856 | ) | (3,739 | ) | |||||||||||
| Capital expenditure | (95 | ) | (217 | ) | (95 | ) | (734 | ) | - | - | (190 | ) | (951 | ) | |||||||||
| 1 The Swiss business operates as a representative office of the UK business and therefore shares assets with the UK business. | |||||||||||||||||||||||
| 2 The amounts disclosed as non-current exclude intragroup balances of £35.4m (2009: £27.4m) payable to the UK business. | |||||||||||||||||||||||
2 Redundancy and restructuring charges
|
| Year ended31 December 2010 | Year ended31 December 2009 | ||||
| £'000 | £'000 | |||||
| Redundancy charges | 374 | 869 | ||||
| Onerous leases | - | (135) | ||||
| Other provision | - | (315) | ||||
| Litigation costs | 878 | 2,413 | ||||
| 1,252 | 2,832 | |||||
| 3 Staff costs | ||||||
| Group | Year ended31 December 2010 | Year ended31 December 2009 | ||||
| £'000 | £'000 | |||||
| Staff costs including directors' emoluments | ||||||
| Wages and salaries | 25,006 | 29,775 | ||||
| Social security costs | 2,214 | 2,576 | ||||
| Pensions (defined contribution scheme) | 1,636 | 1,092 | ||||
| Total | 28,856 | 33,443 | ||||
The Group operates a defined contribution pension scheme. At the balance sheet date the Group had no outstanding pension contribution liabilities. The charge for the period to 31 December 2010 was £1,636,000 (2009: £1,092,000).
Actual number of persons, including directors, employed by the Group as at 31 December 2010:
| GroupTotal 2010 | UK 2010 | Swiss 2010 | US 2010 | GroupTotal 2009 | |||||||||||||||
| Institutional equities | 115 | 43 | 6 | 66 | 123 | ||||||||||||||
| Corporate finance | 50 | 22 | - | 28 | 54 | ||||||||||||||
| Other | 67 | 41 | 4 | 22 | 60 | ||||||||||||||
| Total | 232 | 106 | 10 | 116 | 237 | ||||||||||||||
| As at 31 December 2010, the average number of persons, including directors, employed by the Group was: | |||||||||||||||||||
| GroupTotal 2010 | UK 2010 | Swiss 2010 | US 2010 | GroupTotal 2009 | |||||||||||||||
| Institutional equities | 116 | 46 | 4 | 66 | 129 | ||||||||||||||
| Corporate finance | 46 | 22 | - | 24 | 57 | ||||||||||||||
| Other | 68 | 42 | 5 | 21 | 62 | ||||||||||||||
| Total | 230 | 110 | 9 | 111 | 248 | ||||||||||||||
4 Income tax expense
The analysis of the total income tax credit/(expense) is as follows:
| Year ended31 December2010 | Year ended31 December2009 | ||||||||
| £'000 | £'000 | ||||||||
| Analysis of tax credit/(charge) in period: | |||||||||
| UK corporation tax at 28% | |||||||||
| Current year tax credit/(charge) | 217 | (1,272 | ) | ||||||
| Prior year adjustment - loss carry back claim | 466 | - | |||||||
| Other prior year adjustments | (254 | ) | (47 | ) | |||||
| 429 | (1,319 | ) | |||||||
| Deferred tax | |||||||||
| Prior year adjustments to deferred tax credit | 43 | - | |||||||
| Current year deferred tax (charge)/credit | (770 | ) | 342 | ||||||
| (727 | ) | 342 | |||||||
| Tax charge on profits on ordinary activities | (298 | ) | (977 | ) | |||||
| Effective tax rate charge | (4.2 | )% | (9.6 | )% | |||||
| Factors affecting tax charge: | |||||||||
| Loss on ordinary activities before tax | (7,133 | ) | (10,138 | ) | |||||
| Profit on ordinary activities multiplied | |||||||||
| by rate of UK corporation tax at 28% (2009: 28%) | 1,997 | 2,839 | |||||||
| Effects of: | |||||||||
| Expenses not deductible for tax purposes | (117 | ) | (321 | ) | |||||
| Tax losses not recognised | (1,854 | ) | (3,121 | ) | |||||
| Differences relating to share schemes | (266 | ) | (327 | ) | |||||
| Change in corporation tax rate | (9 | ) | - | ||||||
| Deemed goodwill amortisation | 148 | 147 | |||||||
| Goodwill on consolidation | (148 | ) | (147 | ) | |||||
| Adjustment to tax charge in respect of previous periods | (49 | ) | (47 | ) | |||||
| Total tax charge on profits on ordinary activities | (298 | ) | (977 | ) | |||||
| 5 Earnings per share | |||||||||
| Earnings per share (EPS) are calculated on a net basis using the profit on ordinary activities after taxation divided by the weighted average number of shares detailed below. | |||||||||
| Year ended | Year ended | ||||||||
| 31 December | 31 December | ||||||||
| 2010 | 2009 | ||||||||
| £'000 | £'000 | ||||||||
| Loss on ordinary activities after taxation (LAT) | (7,431 | ) | (11,115 | ) | |||||
| Add IFRS 2 share-based payment charges | 437 | 4,087 | |||||||
| Tax relief from exercise of options | (168 | ) | (181 | ) | |||||
| Prior year tax under provision | 49 | 47 | |||||||
| Deferred tax from the future exercise of share options | 619 | (542 | ) | ||||||
| Deferred tax relating to goodwill | 148 | 147 | |||||||
| Redundancy and restructuring net of tax | 1,147 | 2,998 | |||||||
| Amortisation of intangibles | 141 | 140 | |||||||
| Deferred tax credit not recognised on US losses | 1,854 | 3,121 | |||||||
| Adjusted loss after taxation (Adj LAT) | (3,204 | ) | (1,298 | ) | |||||
| Weighted average number of shares in issue | 145,759,376 | 104,584,370 | |||||||
| Fully diluted weighted average number of shares in issue | 147,971,186 | 105,957,514 | |||||||
| Basic earnings per share (based on LAT) | (5.10 | )p | (10.63 | )p | |||||
| Diluted earnings per share (based on LAT) | (5.10 | )p | (10.63 | )p | |||||
| Adjusted earnings per share (based on Adj LAT) | (2.20 | )p | (1.24 | )p | |||||
The financial information set out above does not constitute the company's statutory accounts for the year ended 31 December 2010, but is derived from those accounts. The annual report and statutory accounts will be sent to shareholders and will be made available to the public, upon request, at the registered office of Panmure Gordon & Co. plc, Moorgate Hall, 155 Moorgate, London EC2M 6XB or from the Company's website: www.panmure.com.
Copyright Business Wire 2011
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