29th Sep 2010 07:01
Panmure Gordon & Co. plc
Panmure Gordon reports 2010 first half results
London, 29 September, 2010 - Panmure Gordon & Co. plc ("Panmure Gordon" or "the Company") today announces its unaudited results for the first half ended 30 June, 2010.
Newly appointed Chairman, Ed Warner, commented:
"The first half results reflect the tough trading environment, however the Company looks to the second half with confidence as the US business improves, our UK client list continues to grow and our Asia Pacific and emerging markets growth strategy gains traction.
"A strong balance sheet, a respected brand, the backing of QInvest and an improved third quarter in the US, position the Group well for the future."
Financial highlights
Total income was £17.1m in the first half of 2010, versus £28.4m for the same period last year. Adjusted operating loss of £3.2m compared to an adjusted operating profit of £0.5m for the same period last year, reflecting difficult market conditions. Statutory loss of £5.96m, compared to statutory loss of £3.65m for the same period last year.Operational highlights:
Exceptionally difficult market conditions with much reduced levels of commission income and a poor climate for investment banking transactions across the industry. Strong improvement in US business performance in third quarter reflecting the strengthening of our equities, research and investment banking teams, and an improved investment banking performance - with momentum expected to continue for the rest of the year. Encouraging performances in UK Thomson Reuters Extel 2010 survey and Group-wide Starmine survey, and institutional votes, give optimism for growth in commission. UK investment banking pipeline encouraging in spite of market conditions. 13 UK corporate clients won in the past 10 months with an increasing emphasis on companies that have exposure to emerging markets and growing economies. Joint Venture with Ambit Capital for the distribution of research and investment banking transactions. Ambit Capital is a fast-growing Indian investment bank in which QInvest, our largest shareholder, owns 25.1%. Edmond Warner appointed non-executive Chairman.Tim Linacre, Group Chief Executive, commented:
"Given how tough market conditions were in the first half, there were a number of positives. In the UK, losses were contained, and client wins and increasing recognition of the strengths of our institutional equities business position us well for when markets improve.
In the US the first half was particularly difficult, but the strengthening of our institutional equities, research and investment banking teams, and a much improved performance across the firm in recent months, are very encouraging.
Panmure Gordon's reputation for integrity and fair dealing is at the core of our Group and our international development strategy. With the support of QInvest, we see significant opportunities to leverage that reputation in our core markets and in emerging and fast-growing economies."
Enquiries:
| Panmure Gordon & Co | ||||
| Tim Linacre, Chief Executive | +44 (0)20 7459 3600 | |||
| Nathaniel Webb, Group Communications Manager | +44 (0)20 7614 8333 | |||
| Financial Dynamics | ||||
| Ed Gascoigne-Pees | +44 (0)20 7269 7132 | |||
| Billy Clegg | +44 (0)20 7269 7157 | |||
| Grant Thornton Corporate Finance (NOMAD) | ||||
| Gerry Beaney | +44 (0)20 7383 5100 | |||
Chief Executive's review
Introduction
Throughout the first half of 2010 we took a number of steps further to strengthen the business. As expected, the period was exceptionally difficult given the continuing hostile market conditions. Low commission levels on both sides of the Atlantic and a poor climate for investment banking transactions made the first half particularly challenging.
However, we also forecast a bias in revenues towards the second half of the year. Improved revenues from our US business in the third quarter and its strong short and medium-term investment banking pipeline, combined with continuing high quality corporate client wins in the UK, provide grounds for optimism despite the economic outlook remaining uncertain.
Our international development strategy, and our relationship with QInvest, are both beginning to pay dividends and we expect this to intensify over the remainder of the year and into 2011.
Business update
UK business
Panmure Gordon is widely recognised as a leading corporate stockbroker and independent adviser with high levels of integrity. This is reflected in our strong corporate client list and it has been particularly encouraging in the past few months to see a significant number of new clients being won. In the past 10 months, Panmure Gordon has been appointed to 13 new clients and we currently have 65 listed corporate clients. We expect our client list to continue to grow over the remainder of this year.
One of the firm's strengths is the regard in which our independent research is held, so it is pleasing to see the firm move sharply higher in this year's Thomson Reuters Extel Small and Mid cap survey, in which institutional investors vote for the best quality research and sales teams. Two years ago, we were outside the top 15, last year we were 9th, and this year we were ranked 4th overall. We have also been pleased to see excellent Starmine results for several analysts across the Group. Equally, we have seen a marked improvement in institutional votes from our top institutional clients. Given the very low levels of institutional commission across the market, these have not yet translated into revenue though they give grounds for optimism looking forward.
In UK investment banking, despite the very difficult markets, we completed a number of deals for clients, though the transaction sizes were lower than in previous years. The investment banking pipeline is encouraging in spite of market conditions.
US business
In the first half of the year, we saw a sharp drop in US investment banking revenues as transactions were cancelled or deferred into the second half. It is encouraging to see these transactions starting to be executed. There was also much reduced equity trading volumes, leading to lower commission, though again we have earned much improved levels of commission in recent weeks, despite continuing depressed market volumes.
We have begun to broaden ThinkEquity's franchise to include the consumer sector. We have also strengthened significantly the equity sales, sales trading, research and investment banking teams. While it is early days, we are reaping clear benefits from these hires.
Since the end of H1, we have had an increase in the execution and closure of investment banking business, particularly in M&A and private placements. Despite continuing challenging markets, we anticipate a strengthening market for quality growth companies. Third quarter investment banking revenues are considerably higher than those of the first half.
ThinkEquity's wealth management arm grew its fee-paying asset base by 5% for the first half of the year, while maintaining its assets on deposit at $600m, in a very difficult US market. With major indices down 7%, its ThinkTactical asset management product continued to post strong numbers, beating the S&P 500 through to the end of June by over 500 basis points. This return brings the product's 5 ½ year audited track record to a gain of 58.47% versus a loss for the S&P 500 of 4.72%, positioning the firm to increase AUM substantially in the future.
Extending our geographic reach
Panmure Gordon has always been an international business. When the firm was founded in 1876 its first major client was the Imperial Government of China.
We acquired ThinkEquity to take advantage of the internationalisation of markets and last year we welcomed QInvest, Qatar's largest investment bank, as a major shareholder. Our relationship with QInvest has already resulted in further commission from clients that it has introduced to us and we expect to see this continue.
Of our corporate client list, a significant number are based outside the UK with companies domiciled in Australasia, Asia, Africa, North America, the Middle East and Europe. We have been looking to build on this. During the reporting period, we entered into a joint venture arrangement with Ambit Group, a leading Indian investment bank, for mutual distribution of research and co-operation on investment banking transactions.
The Joint Venture with Ambit arose as a result of our relationship with QInvest, which took a 25% stake in Ambit at the start of the year. It is yet another benefit of having a strong, internationally focused shareholder as a strategic investor in our Company. In addition, QInvest continues to work towards a Middle East-based brokerage which will open new doors for our Company.
Our approach to international expansion is prudent: we are engaging with new markets in partnership with highly experienced in-market operators.
Business outlook
Market conditions remain tough. In the UK we have yet to see the full effect of the Government's efforts to deal with the fiscal deficit. In the US, our expectations are for only modest economic growth.
However, we are beginning to see momentum build across the Group. The US investment banking business has had an improved third quarter and we expect this momentum to be maintained. We are mandated on a wide range of transactions for quality growth companies.
In the UK, the investment banking pipeline remains strong in spite of difficult market conditions.
We have a strong balance sheet and are well capitalised, with capital resources well in excess of regulatory capital requirements. We are once again winning high quality corporate clients and our increased focus on emerging markets, working in conjunction with QInvest, provides a strong platform for growth.
Board change
As announced separately today, Edmond Warner has been appointed as non-executive Chairman of the Board. Ed brings both industry knowledge and focus, and I am looking forward to working with him to drive the business over the coming years.
I am delighted that Simon Heale, who kindly assumed the role of interim Chairman last year, has agreed to remain on the Board as our first Senior Independent Director.
Tim Linacre
Group Chief Executive
29 September, 2010
Operating review
Results
| 2010 H1 £'000 | 2009 H1 £'000 | |||
| Net revenue | 17,119 | 28,365 | ||
| Gain/(loss) on available for sale investments | 269 | (796) | ||
| Administrative expenses | (22,515) | (27,199) | ||
| Adjusted operating (loss)/profit | (5,127) | 370 | ||
| Net interest payable | (41) | (57) | ||
| Adjusted (loss)/profit before tax | (5,168) | 313 | ||
| Taxation | 1,960 | 232 | ||
| Adjusted earnings | (3,208) | 545 | ||
| Adjusted earnings per share | (2.20)p | 0.70p | ||
| Net revenue has decreased by 39.6% in sterling terms compared to the first half of 2009.
Adjusted loss before tax was £5.2m compared to a profit of £0.3m in the first half of 2009. Adjusted earnings were a loss of £3.2m (2009: profit of £0.5m); see table below.
This compares to the statutory loss before tax set out in the income statement of £6.1m (2009: loss of £3.5m).
Analysis of adjusted earnings | ||||
| 6 months | 6 months | |||
| 30 June | 30 June | |||
| 2010 | 2009 | |||
| £'000 | £'000 | |||
| Loss on ordinary activities after taxation (PAT) | (5,961) | (3,650) | ||
| Share-based payment charges | 491 | 1,475 | ||
| Tax relief from exercise of options | (377) | (95) | ||
| Deferred tax from the future exercise of share options | 390 | (525) | ||
| Deferred tax relating to goodwill | 74 | 74 | ||
| Redundancy and restructuring net of tax | 624 | 1,871 | ||
| Foreign exchange (gain)/loss | (269) | 424 | ||
| Deferred tax credit not recognised on US losses | 1,820 | 971 | ||
| Adjusted (loss)/profit after tax (adj PAT) | (3,208) | 545 | ||
| Adjusted earnings per share (based on adj PAT) | (2.20)p | 0.70p | ||
| Adjusted diluted earnings per share (based on adj PAT) | (2.20)p | 0.70p | ||
| We set out below an analysis of the revenue streams.
Institutional equities
UK institutional equities | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Commission | 4,415 | 5,042 | ||
| Trading | (447) | 1,586 | ||
| Settlement costs | (719) | (642) | ||
| 3,249 | 5,986 | |||
| UK commission levels have continued to hold up reasonably well given lower market levels and lower volumes in H1 2010. The markets have remained difficult during 2010 and our continued focus on facilitating client business has led to a small current loss on the trading book.
US institutional equities | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Commission | 5,971 | 8,000 | ||
| Trading | (368) | (364) | ||
| Settlement costs | (1,000) | (900) | ||
| 4,603 | 6,736 | |||
| US commission levels have been affected by much lower volumes in H1 2010. We have made a number of new commission based hires for H2 in sales and sales trading in the US. The loss ratio has increased on our trading book, but remains low.
Swiss institutional equities | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Commission | 1,147 | 1,205 | ||
| Settlement costs | (170) | (129) | ||
| 977 | 1,076 | |||
| Despite a tough market environment the Swiss revenues have held up well.
Investment banking
UK investment banking | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Retainers | 1,237 | 1,478 | ||
| Transaction related income | 4,331 | 6,824 | ||
| 5,568 | 8,302 | |||
| The decrease in our investment banking revenue is a result of poor market conditions.
US investment banking | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Transaction related income | 1,655 | 5,327 | ||
| As in the UK, US banking fees are a reflection of the market environment.
US wealth advisory | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Fee and commission income | 1,001 | 928 | ||
| A modest growth in fee and commission income has been encouraging despite the markets in the first half of 2010.
Expenditure
UK expenditure | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Employment expenditure | 6,787 | 7,698 | ||
| Other operating expenditure | 3,493 | 3,309 | ||
| 10,280 | 11,007 | |||
| Whilst overall UK expenditure is down, we have continued to hire quality staff, the costs of which have been offset by a reduction of variable compensation costs in line with reduction in business performance and volumes.
US expenditure | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Employment expenditure | 6,960 | 9,959 | ||
| Other operating expenditure | 4,320 | 5,193 | ||
| 11,280 | 15,152 | |||
| Our continued focus on costs in the US can be seen clearly when comparing H1 2010 with the same period for last year. Variable employment costs have fallen as a result of lower commission and volume levels during the period. Other operating expenditure continued to fall compared with the same period last year. This is as expected as the benefits of the cost reduction measures implemented last year are realised.
Swiss expenditure | ||||
| 6 months | 6 months | |||
| to Jun 10 | to Jun 09 | |||
| (£'000) | (£'000) | |||
| Employment expenditure | 586 | 653 | ||
| Other operating expenditure | 369 | 387 | ||
| 955 | 1,040 | |||
| Whilst the operation in Geneva is small in terms of the overall group, the costs have been maintained at a low level. There has been some impact on employment costs as variable employment costs have reduced in line with the reduction of revenues. | ||||
Condensed consolidated interim income statement (unaudited)
For the half year to 30 June 2010
|
£'000 |
Notes |
| 6 months 30 June 2010 | 6 months 30 June 2009 | 12 months 31 December 2009 | ||
| Commission and trading income | 10,718 | 15,469 | 28,842 | ||||
| Commission and trading expense | (1,889) | (1,671) | (3,446) | ||||
| Net commission and trading income | 8,829 | 13,798 | 25,396 | ||||
| Corporate finance and other income | 8,290 | 14,567 | 25,462 | ||||
| Net commission and fee income | 17,119 | 28,365 | 50,858 | ||||
| Net gain/(loss) on available for sale investments | 269 | (796) | (894) | ||||
| Administrative expenses1 | (22,246) | (27,689) | (53,107) | ||||
| Redundancy, restructuring and other non-recurring charges1 | 8 | (663) | (1,827) | (2,832) | |||
| Operating loss before share-based payments | (5,521) | (1,947) | (5,975) | ||||
| Share-based payments1 | 3 | (491) | (1,475) | (4,087) | |||
| Operating loss | (6,012) | (3,422) | (10,062) | ||||
| Financial income | 60 | 61 | 139 | ||||
| Financial expense | (101) | (118) | (215) | ||||
| Net financial expense | (41) | (57) | (76) | ||||
| Loss before tax | (6,053) | (3,479) | (10,138) | ||||
| Income tax | 4 | 92 | (171) | (977) | |||
| Loss for the period attributable to the owners of the Company | (5,961) | (3,650) | (11,115) | ||||
| Basic loss per share | 5 | (4.10)p | (4.71)p | (10.63)p | |||
| Diluted loss per share | 5 | (4.10)p | (4.71)p | (10.63)p | |||
|
The notes below form part of these financial statements.
1 These are part of administrative expenses which total £23.4m (6 months 30 June 2009: £31.0m, 12 months 31 December 2009: £60.0m) which have been presented separately owing to their nature and size
Condensed consolidated interim statement of comprehensive income (unaudited)
For the half year to 30 June 2010 | |||||||
| £'000 | 6 months 30 June 2010 | 6 months 30 June 2009 | 12 months 31 December 2009 | ||||
| Loss for the period attributable to the owners of the Company | (5,961) | (3,650) | (11,115) | ||||
| Other comprehensive income/(loss) | |||||||
| Foreign exchange translation differences | 581 | (2,695) | (2,879) | ||||
| Unrealised gain on available for sale investments | - | - | 569 | ||||
| Available for sale gain transferred to the income statement | (569) | - | - | ||||
| Total other comprehensive income/(loss) for the period net of tax | 12 | (2,695) | (2,310) | ||||
| Total comprehensive loss for the period attributable to the owners of the Company | (5,949) | (6,345) | (13,425) | ||||
| Condensed consolidated interim statement of financial position (unaudited)
At 30 June 2010 | |||||||
| £'000 |
Notes | As at 30 June 2010 | As at 30 June 2009 | As at 31 December 2009 | |||
| Assets | |||||||
| Intangibles | 31,025 | 29,742 | 29,558 | ||||
| Plant and equipment | 2,336 | 2,175 | 2,536 | ||||
| Available for sale investments | 2,815 | 3,258 | 3,771 | ||||
| Deferred tax asset | 4,449 | 5,023 | 4,958 | ||||
| Other receivables | 9 | 2,149 | - | - | |||
| Total non-current assets | 42,774 | 40,198 | 40,823 | ||||
| Securities held for trading | 6,116 | 2,788 | 3,916 | ||||
| Trade and other receivables | 9 | 40,405 | 61,091 | 23,141 | |||
| Cash and cash equivalents | 25,651 | 20,683 | 38,903 | ||||
| Total current assets | 72,172 | 84,562 | 65,960 | ||||
| Current liabilities | |||||||
| Trade payables | 10 | (31,186) | (49,877) | (11,774) | |||
| Tax and social security | (725) | (897) | (977) | ||||
| Other payables | 10 | (9,743) | (11,867) | (15,595) | |||
| Held for trading liabilities | (781) | (1,677) | (570) | ||||
| Total current liabilities | (42,435) | (64,318) | (28,916) | ||||
| Net current assets | 29,737 | 20,244 | 37,044 | ||||
| Interest bearing loans and borrowings | (3,000) | (3,000) | (3,000) | ||||
| Provisions | - | (312) | - | ||||
| Deferred tax liability | (814) | (667) | (739) | ||||
| Total non-current liabilities | (3,814) | (3,979) | (3,739) | ||||
| Net assets | 68,697 | 56,463 | 74,128 | ||||
| Equity | |||||||
| Issued share capital | 6 | 5,914 | 3,173 | 5,874 | |||
| Shares to be issued (including share premium) | 6 | 129 | 326 | 298 | |||
| Share premium | 36,084 | 16,337 | 35,879 | ||||
| Merger reserve | 21,810 | 21,200 | 21,810 | ||||
| Special reserve | 9,595 | 9,595 | 9,595 | ||||
| Fair value reserve | - | - | 569 | ||||
| Other reserve | (1,969) | (525) | (776) | ||||
| Foreign currency translation reserve | 3,552 | 3,155 | 2,971 | ||||
| Treasury shares | (4,047) | (5,187) | (5,013) | ||||
| Retained earnings | (2,371) | 8,389 | 2,921 | ||||
| Total equity | 68,697 | 56,463 | 74,128 | ||||
| The notes below form part of these financial statements.
Condensed consolidated interim statement of cash flows (unaudited) | |||||||
| £'000 | 6 months 30 June 2010 | 6 months 30 June 2009 | 12 months 31 December 2009 | ||||
| Cash flows from operating activities | |||||||
| Loss before tax | (6,053) | (3,479) | (10,138) | ||||
| Net financial expense | 41 | 57 | 76 | ||||
| Depreciation and amortisation | 482 | 715 | 1,297 | ||||
| Net (gain)/loss on available for sale investments | (269) | 796 | 894 | ||||
| Loss on disposal of fixed assets | - | - | 95 | ||||
| Movement in securities held for trading | (1,989) | 1,812 | (425) | ||||
| Increase in amounts owed by market counterparties | (1,596) | (2,649) | (908) | ||||
| Decrease/(increase) in trade and other receivables | 1,744 | 1,073 | (1,041) | ||||
| (Decrease)/increase in trade payables and provisions | (6,467) | 226 | 3,348 | ||||
| IFRS 2 share-based payments and related charges | 669 | 1,235 | 3,842 | ||||
| Net cash flow from operating activities | (13,438) | (214) | (2,960) | ||||
| Income taxes received/(paid) | 19 | - | (106) | ||||
| Net cash from operating activities | (13,419) | (214) | (3,066) | ||||
| Cash flows from investing activities | |||||||
| Financial income received | 60 | 61 | 139 | ||||
| Acquisition of plant and equipment | (283) | (30) | (951) | ||||
| Proceeds from disposal of investments | 911 | 104 | - | ||||
| Net cash from investing activities | 688 | 135 | (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) | - | - | ||||
| Financial expense | (101) | (118) | (215) | ||||
| Repayment of EBT loan | 131 | 41 | 89 | ||||
| Purchase of own shares for EBT | (210) | - | (125) | ||||
| Net cash from financing activities | (252) | (77) | 21,964 | ||||
| Net (decrease)/increase in cash and cash equivalents | (12,983) | (156) | 18,086 | ||||
| Cash and cash equivalents at 1 January | 38,903 | 21,106 | 21,106 | ||||
| Effect of exchange rate fluctuations | (269) | (267) | (289) | ||||
| Cash and cash equivalents at 30 June / 31 December | 25,651 | 20,683 | 38,903 | ||||
| Condensed consolidated interim statement of changes in equity for the half year to 30 June 2010 | |||||||||||
| £'000 | Issued share capital | Shares to be issued | Share premium | Merger reserve | Special reserve | Fair value reserve | Other reserve | Foreign currency translation reserve | Treasury shares | Retained earnings | Total equity |
| 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 period | - | - | - | - | - | - | - | - | - | (5,961) | (5,961) |
| Other comprehensive income | |||||||||||
| Foreign currency translation differences | - | - | - | - | - | - | - | 581 | - | - | 581 |
| Available for sale gain recycled | - | - | - | - | - | (569) | - | - | - | - | (569) |
| Other items recorded directly in equity | |||||||||||
| Share-based payments | - | - | - | - | - | - | - | - | - | 669 | 669 |
| Shares issued under employee share plans | 40 | (169) | 205 | - | - | - | - | - | - | - | 76 |
| Shares transferred under employee share plans | - | - | - | - | - | - | (1,114) | - | 1,114 | - | - |
| Purchase of own shares for EBT | - | - | - | - | - | - | (210) | - | - | - | (210) |
| Decrease in shares held by EBT | - | - | - | - | - | - | 131 | - | - | - | 131 |
| Purchase of shares for treasury | - | - | - | - | - | - | - | - | (148) | - | (148) |
| At 30 June 2010 | 5,914 | 129 | 36,084 | 21,810 | 9,595 | - | (1,969) | 3,552 | (4,047) | (2,371) | 68,697 |
| Condensed consolidated interim statement of changes in equity for the half year to 30 June 2009 | |||||||||||
| £'000 | Issued share capital | Shares to be issued | Share premium | Merger reserve | Special reserve | Fair value reserve | Other reserve | Foreign currency translation reserve | Treasury shares | Retained earnings | Total equity |
| 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 period | - | - | - | - | - | - | - | - | - | (3,650) | (3,650) |
| Other comprehensive income | |||||||||||
| Foreign currency translation differences | - | - | - | - | - | - | - | (2,695) | - | - | (2,695) |
| Other items recorded directly in equity | |||||||||||
| Shares issued under employee share plans | 6 | (285) | 279 | - | - | - | - | - | - | - | - |
| Share-based payments | - | - | - | - | - | - | - | - | - | 1,235 | 1,235 |
| Decrease in shares held by EBT | - | - | - | - | - | - | 41 | - | - | - | 41 |
| At 30 June 2009 | 3,173 | 326 | 16,337 | 21,200 | 9,595 | - | (525) | 3,155 | (5,187) | 8,389 | 56,463 |
| Condensed consolidated statement of changes in equity for the year ended 31 December 2009 | |||||||||||
| £'000 | Issued share capital | Shares to be issued | Share premium | Merger reserve | Special reserve | Fair value reserve | Other reserve | Foreign currency translation reserve | Treasury shares | Retained earnings | Total equity |
| 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 | - | - | - | - | - | - | - | - |
| Shares transferred under employee share plans | - | - | - | - | - | - | (174) | - | 174 | - | - |
| Shares issued | 2,700 | - | 20,254 | - | - | - | - | - | - | - | 22,954 |
| Costs 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 |
Notes to the condensed consolidated interim financial statements (unaudited)
1 Legal status and basis of preparation
1.1 Legal status
Panmure Gordon & Co. plc (the "Company") is a company domiciled in the United Kingdom. The address of the Company's registered office is Moorgate Hall, 155 Moorgate, London, EC2M 6XB. The interim financial statements of the Company for the 6 months ended 30 June 2010 comprise the Company and its subsidiaries (together referred to as the "Group").
1.2 Basis of preparation and statement of compliance with International Financial Reporting Standards
The interim consolidated financial statements of the Group have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board ('IASB') and as endorsed by the EU. They do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2009, which were prepared in accordance with International Financial Reporting Standards ('IFRSs') as issued by the IASB and as endorsed by the EU. EU-endorsed IFRSs may differ from IFRSs as issued by the IASB if, at any point in time, new or amended IFRSs have not been endorsed by the EU.
The accounting policies are consistent with those applied by the Group in its 2009 annual financial statements. During the period ended 30 June 2010, the Group adopted a number of amendments to standards and interpretations which did not have a significant effect on the consolidated financial statements of the Group.
The Group incurred a loss during the period ended 30 June 2010 and has a negative retained earnings position. However, the directors note that the Group had cash resources of £25.7m at 30 June 2010 (2009: £20.7m) and no short term borrowings. Consequently the directors believe that the Group has adequate resources, both in terms of liquidity and regulatory capital, to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these interim results.
1.3 Comparative information
These interim consolidated financial statements include comparative information as required by IAS 34 and the AIM rules for Companies.
The comparative figures for the financial year ended 31 December 2009 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
1.4 Use of estimates and assumptions
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. Judgements made by management in the application of adopted IFRSs that have a significant effect on the financial statements and estimates with a significant risk of material adjustment are discussed in pages 30 to 34 and in note 26 within the Report and Financial Statements 2009. The areas highlighted in the year end financial statements include:
i) Goodwill and investment in subsidiaries
ii) Deferred tax
iii) Provisions
iv) Share-based payments
Whilst the economic environment continues to be challenging, management does not believe there has been an impairment trigger which would require a full impairment review of goodwill to be undertaken. In accordance with the Group's policy, a full impairment review will be undertaken at the year end.
2 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.
The Group compromises the following operating segments:
UK business US business Swiss businessSegmental analysis for the 6 months to 30 June 2010 and the 6 months to 30 June 2009, reconciled to the income statement
| UK | US Restated 1 | Swiss Restated 1 | Consolidated | ||||||||||||
| 6 months 30 June 2010 | 6 months 30 June 2009 | 6 months 30 June 2010 | 6 months 30 June 2009 | 6 months 30 June 2010 | 6 months 30 June 2009 | 6 months 30 June 2010 | 6 months 30 June 2009 | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Net commission and trading income | 3,249 | 5,986 | 4,603 | 6,736 | 977 | 1,076 | 8,829 | 13,798 | |||||||
| Corporate finance fee income | 5,568 | 8,302 | 1,655 | 5,327 | - | 10 | 7,223 | 13,639 | |||||||
| Wealth management and other income | 66 | - | 1,001 | 928 | - | - | 1,067 | 928 | |||||||
| Net gain/(loss) on AFS investments | 296 | (901) | (27) | 105 | - | - | 269 | (796) | |||||||
| Ongoing administration costs | (10,280) | (11,007) | (11,280) | (15,152) | (955) | (1,040) | (22,515) | (27,199) | |||||||
| Segmental operating (loss)/profit | (1,101) | 2,380 | (4,048) | (2,056) | 22 | 46 | (5,127) | 370 | |||||||
| Redundancy and restructuring charges | (172) | (590) | (491) | (1,237) | - | - | (663) | (1,827) | |||||||
| Foreign exchange gain/(loss) | - | - | 269 | (490) | - | - | 269 | (490) | |||||||
| Share-based payment charges | (491) | (1,326) | - | (149) | - | - | (491) | (1,475) | |||||||
| Operating (loss)/profit | (1,764) | 464 | (4,270) | (3,932) | 22 | 46 | (6,012) | (3,422) | |||||||
| Net financial income/(expense) | 461 | 361 | (502) | (418) | - | - | (41) | (57) | |||||||
| (Loss)/profit before tax | (1,303) | 825 | (4,772) | (4,350) | 22 | 46 | (6,053) | (3,479) | |||||||
| Income tax | 92 | (171) | - | - | - | - | 92 | (171) | |||||||
| (Loss)/profit for period attributable to the owners of the Company | (1,211) | 654 | (4,772) | (4,350) | 22 | 46 | (5,961) | (3,650) | |||||||
| 1 The US and Swiss operations were combined in segmental disclosures included within the 2009 Interim Financial Statements. These have now been restated to conform with the presentation adopted within the Report and Financial Statements 2009.
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 | ||||||||||||
| As at 30 June 2010 | As at 30 June 2009 | As at 30 June 2010 | As at 30 June 2009 | As at 30 June 2010 | As at 30 June 2009 | As at 30 June 2010 | As at 30 June 2009 | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Non-current assets (inc goodwill) | 15,471 | 14,987 | 27,303 | 25,211 | - | - | 42,774 | 40,198 | |||||||
| Current assets | 61,588 | 73,162 | 10,584 | 11,400 | - | - | 72,172 | 84,562 | |||||||
| Current liabilities2 | (35,739) | (58,320) | (6,696) | (5,998) | - | - | (42,435) | (64,318) | |||||||
| Non-current liabilities | (3,814) | (3,979) | - | - | - | - | (3,814) | (3,979) | |||||||
| Capital expenditure | (60) | - | (75) | - | - | - | (135) | - | |||||||
| 1 The Swiss business operated as a representative office of the US business until June 2009 after which it became a representative office of the UK business and therefore shares all assets with the UK. 2 The amounts disclosed as non-current excludes intra-group balances payable to the UK business.
Segmental analysis for the 6 months to 30 June 2010 and 12 months to 31 December 2009, reconciled to the income statement | |||||||||||||||
| UK | US | Swiss | Consolidated | ||||||||||||
| 6 months 30 June 2010 | 12 months 31 Dec 2009 | 6 months 30 June 2010 | 12 months 31 Dec 2009 | 6 months 30 June 2010 | 12 months 31 Dec 2009 | 6 months 30 June 2010 | 12 months 31 Dec 2009 | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Net commission and trading income | 3,249 | 10,594 | 4,603 | 12,662 | 977 | 2,140 | 8,829 | 25,396 | |||||||
| Corporate finance fee income | 5,568 | 15,830 | 1,655 | 7,839 | - | - | 7,223 | 23,669 | |||||||
| Wealth management and other income | 66 | - | 1,001 | 1,793 | - | - | 1,067 | 1,793 | |||||||
| Net gain/(loss) on AFS investments | 296 | (879) | (27) | (15) | - | - | 269 | (894) | |||||||
| Ongoing administration costs | (10,280) | (21,591) | (11,280) | (28,947) | (955) | (2,200) | (22,515) | (52,738) | |||||||
| Segmental operating (loss)/profit | (1,101) | 3,954 | (4,048) | (6,668) | 22 | (60) | (5,127) | (2,774) | |||||||
| Redundancy and restructuring charges | (172) | (7) | (491) | (2,825) | - | - | (663) | (2,832) | |||||||
| Foreign exchange gain/(loss) | - | - | 269 | (369) | - | - | 269 | (369) | |||||||
| Share-based payment charges | (491) | (3,749) | - | (338) | - | - | (491) | (4,087) | |||||||
| Operating (loss)/profit | (1,764) | 198 | (4,270) | (10,200) | 22 | (60) | (6,012) | (10,062) | |||||||
| Net financial income/(expense) | 461 | 730 | (502) | (806) | - | - | (41) | (76) | |||||||
| (Loss)/profit before tax | (1,303) | 928 | (4,772) | (11,006) | 22 | (60) | (6,053) | (10,138) | |||||||
| Income tax | 92 | (977) | - | - | - | - | 92 | (977) | |||||||
| (Loss)/profit for period attributable to the owners of the Company | (1,211) | (49) | (4,772) | (11,006) | 22 | (60) | (5,961) | (11,115) | |||||||
|
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 | ||||||||||||
| As at 30 June 2010 | As at 31 Dec 2009 | As at 30 June 2010 | As at 31 Dec 2009 | As at 30 June 2010 | As at 31 Dec 2009 | As at 30 June 2010 | As at 31 Dec 2009 | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Non-current assets (inc goodwill) | 15,471 | 16,751 | 27,303 | 24,072 | - | - | 42,774 | 40,823 | |||||||
| Current assets | 61,588 | 54,503 | 10,584 | 11,457 | - | - | 72,172 | 65,960 | |||||||
| Current liabilities2 | (35,739) | (20,472) | (6,696) | (8,444) | - | - | (42,435) | (28,916) | |||||||
| Non-current liabilities | (3,814) | (3,739) | - | - | - | - | (3,814) | (3,739) | |||||||
| Capital expenditure | (60) | (217) | (75) | (734) | - | - | (135) | (951) | |||||||
| 1 The Swiss business operated as a representative office of the US business until June 2009 after which it was a representative office of the UK business and therefore shares all assets with the UK. 2 The amounts disclosed as non-current excludes intra-group balances payable to the UK business. | |||||||||||||||
3 IFRS 2 Share-based payments
The Group has two active employee benefit trusts, the Panmure Gordon & Co. plc Employee Benefit Trust (EBT1) and the Panmure Gordon & Co. plc No. 2 Employee Benefit Trust (EBT2). The assets and liabilities of each EBT are consolidated within the Group's financial statements.
On completion of the acquisition by the Group of Panmure Gordon (UK) Limited on 26 April 2005, the Company issued 18,521,295 new ordinary shares at par value to the Trustees of EBT2. The par value of these shares, less exercised shares, is currently shown within the other reserve section of the balance sheet. The Trustees have granted options over some of the shares to employees, including directors, at an exercise price equivalent to the par value of 4 pence per share.
In addition the Company has share options and awards outstanding under the following plans:
The Company Approved Share Option Plan, under which options are granted at market price at date of grant. The Panmure Gordon & Co. plc Matching Share Plan which is in essence a buy one get one free plan, under which, for each ordinary share in Panmure Gordon & Co. plc which is purchased and lodged with the Company, matching shares are issued free of charge after three years, provided the shares have not been disposed of and provided that the employee is still employed by a Group company at the time of vesting. The ThinkEquity Accrued Bonus Plan which was established at the time of the acquisition of ThinkEquity in 2007. One quarter of ThinkEquity's 2006 bonus pool was settled in the form of shares vesting over a three year period. Certain awards which have been forfeited by leavers have been re-allocated; these have been treated as grants of new awards. The Performance Share Plan under which awards are made over shares which are issued free of charge after a vesting period, provided the performance conditions imposed at the time of grant are fulfilled and provided the employee is still employed by a Group company at the time of vesting. The Growth Securities Ownership Plan ("GSOP") which was implemented in 2009 in the UK. Under the terms of the GSOP a participant enters into a financial instrument, the value of which is linked to the earnings per share of the Company. In accordance with IFRS 2, the GSOP is treated as an equity-settled plan as the Company has the option to settle in cash or shares.The Group has adopted the provisions of IFRS 2 as regards share-based payment charges. These provisions require a calculation of the fair value at the date of grant of share options granted to directors and employees. This fair value is then charged to the income statement over the vesting period of the options. Since this charge is neither a cash item nor a diminution in asset value, there is an equal and opposite credit to reserves of the amount of the share-based payment charge.
Other related share-based payment charges refer to payments to employees in compensation for employer's National Insurance Contributions borne by them on the exercise of share options under the 2005 Employee Share Option Plan.
The fair value of options on the date of grant has been estimated using a Black-Scholes valuation model and a Monte Carlo simulation. Where options have been granted with an exercise price of 4p or less, the fair value of options on the date of grant has been estimated at their intrinsic value as this does not give a materially different result to the Black-Scholes model. The significant inputs to the model were:
(a) Share price on the date of grant;
(b) Exercise price;
(c) Expected volatility (40% based on historic volatility) (2009: 40%);
(d) Risk free rate on the date of grant; and
(e) Expected dividend yield (nil).
The weighted average fair value of share-based payments granted during the period was 27.1p.
| 6 months 30 June 2010 | 6 months 30 June 2009 | 12 months 31 December 2009 | |||||||||
| £'000 | £'000 | £'000 | |||||||||
| Share-based payment charges | 669 | 1,235 | 3,842 | ||||||||
| Other related share-based payment charges | (178) | 240 | 245 | ||||||||
| Share-based payment charges | 491 | 1,475 | 4,087 | ||||||||
| 4 Taxation
The current tax charge for the period is different to the standard rate of corporation tax in the UK of 28% (2009: 28%). | |||||||||||
| Tax on profit on ordinary activities: | 6 months 30 June 2010 | 6 months 30 June 2009 | 12 months 31 December 2009 | ||||||||
| £'000 | £'000 | £'000 | |||||||||
| Analysis of tax credit/(charge) in period: | |||||||||||
| UK corporation tax at 28% | |||||||||||
| Prior year adjustments to current tax credit/(charge) | (92) | - | (47) | ||||||||
| Current year tax credit /(charge) | 665 | (631) | (1,272) | ||||||||
| 573 | (631) | (1,319) | |||||||||
| Deferred tax | |||||||||||
| Prior year adjustments to deferred tax credit | 43 | - | - | ||||||||
| Current year deferred tax (charge)/credit | (524) | 460 | 342 | ||||||||
| (481) | 460 | 342 | |||||||||
| Tax credit/(charge) on profits on ordinary activities | 92 | (171) | (977) | ||||||||
| Effective tax rate credit/(charge) | 1.52% | (4.92%) | (9.6%) | ||||||||
| Factors affecting tax credit/(charge): | |||||||||||
| Loss on ordinary activities before taxation | (6,053) | (3,479) | (10,138) | ||||||||
| Profit on ordinary activities multiplied by rate of UK corporation tax at 28% | 1,695 | 974 | 2,839 | ||||||||
| Effects of: | |||||||||||
| Expenses not deductible for tax purposes | 3 | (115) | (174) | ||||||||
| Tax losses not recognised | (1,452) | (1,205) | (3,121) | ||||||||
| Amounts posted to equity | (31) | 249 | (327) | ||||||||
| Goodwill on consolidation | (74) | (74) | (147) | ||||||||
| Adjustment to tax charge in respect of previous periods | (49) | - | (47) | ||||||||
| Total tax credit/(charge) on profits on ordinary activities | 92 | (171) | (977) | ||||||||
| Deferred tax assets on brought forward losses arising in the UK and current trading losses in the US, have not been recognised in the balance sheet due to the uncertainty over the timing and extent of future taxable profits beyond the levels that would support the value of the deferred tax assets already recognised.
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. | |||||||||||
| 6 months | 6 months | 12 months | |||||||||
| 30 June | 30 June | 31 December | |||||||||
| 2010 | 2009 | 2009 | |||||||||
| £'000 | £'000 | £'000 | |||||||||
| Weighted average number of shares in issue | 145,504,837 | 77,513,424 | 104,584,370 | ||||||||
| Fully diluted weighted average number of shares in issue | 147,372,739 | 84,803,552 | 105,957,514 | ||||||||
| Basic earnings per share (based on PAT) | (4.10)p | (4.71)p | (10.63)p | ||||||||
| Diluted earnings per share (based on PAT) | (4.10)p | (4.71)p | (10.63)p | ||||||||
| 6 Reserves
During the six months to 30 June 2010, 872,731 shares were allotted following the exercise of share options under the Company's Performance Share Option Plan and 113,475 shares were allotted to satisfy the vesting of share awards under the Company's Accrued Bonus Plan. The 'shares to be issued' in the condensed consolidated statement of changes in equity represents the resulting reduction in the number of unvested shares within the Accrued Bonus Plan. In addition, 760,611 shares were transferred out of treasury during the period to satisfy the vesting of share awards under the Company's Matching Share Plan.
The Company purchased 346,140 of its own shares during the period. As at 30 June 2010, the number of shares in issue was 147,843,389 (31 December 2009: 146,857,183), of which 2,939,394 (31 December 2009: 3,353,865) were held in treasury. The fully diluted share capital was 151,303,571 (31 December 2009: 151,174,912).
The 'other reserve' includes the nominal value of share capital owned by the Panmure Gordon & Co. plc No. 2 Employee Benefit Trust in respect of the 2005 Employee Share Option Plan and the cost of shares purchased in the market. At 30 June 2010 the Trust held 9,475,755 shares (December 2009: 11,875,949 shares).
7 Analysis of changes in net funds | |||||||||||
| At | At | ||||||||||
| 31 December | 30 June | ||||||||||
| 2009 | Cash flow | 2010 | |||||||||
| £'000 | £'000 | £'000 | |||||||||
| Cash and cash equivalents | 38,903 | (13,252) | 25,651 | ||||||||
| Cash and cash equivalents as per cash flow statement | 38,903 | (13,252) | 25,651 | ||||||||
| Subordinated loans | (3,000) | - | (3,000) | ||||||||
| Net funds | 35,903 | (13,252) | 22,651 | ||||||||
|
8 Redundancy, restructuring and other non-recurring charges | |||||||||||
| 6 months | 6 months | 12 months | |||||||||
| 30 June | 30 June | 31 December | |||||||||
| 2010 | 2009 | 2009 | |||||||||
| £'000 | £'000 | £'000 | |||||||||
| Redundancy costs | 172 | 426 | 869 | ||||||||
| Litigation costs and fund restructuring | 491 | 891 | 2,413 | ||||||||
| Fund raising related costs | - | 510 | - | ||||||||
| Other provision | - | - | (315) | ||||||||
| Onerous leases | - | - | (135) | ||||||||
| Total | 663 | 1,827 | 2,832 | ||||||||
|
9 Trade and other receivables | |||||||||||
| As at | As at | As at | |||||||||
| 30 June | 30 June | 31 December | |||||||||
| 2010 | 2009 | 2009 | |||||||||
| £'000 | £'000 | £'000 | |||||||||
| Non-current assets | |||||||||||
| Other receivables | 2,149 | - | - | ||||||||
| Total | 2,149 | - | - | ||||||||
| Current assets | |||||||||||
| Trade receivables | 770 | 846 | 2,959 | ||||||||
| Stock borrow1 | 178 | 157 | - | ||||||||
| Market receivables | 35,495 | 53,426 | 14,046 | ||||||||
| Corporation tax receivable | 54 | 562 | 34 | ||||||||
| Other receivables | 2,691 | 4,741 | 4,802 | ||||||||
| Prepayments and accrued income | 1,217 | 1,359 | 1,300 | ||||||||
| Total | 40,405 | 61,091 | 23,141 | ||||||||
| 1 Stock borrow reflects collateral placed against the value of stock borrowed.
The level of market receivables at a period end is dependent on the level of agency and trading activity in the preceding days. In the days leading up to the calendar year end, trading levels tend to be light and hence year end market receivables balances are at a cyclical low. The majority of market receivables reside within the UK business segment.
Within non-current assets, other receivables represent loans made to employees under the Group's Matching Share Plan. These loans were included within current assets in prior periods as they were due to be repaid during the current year. However, the directors have agreed to extend these loans for a further period of three years and therefore, these loans have been classified as non-current assets as at 30 June 2010.
10 Trade and other payables | |||||||||||
| As at | Restated1 As at | As at | |||||||||
| 30 June | 30 June | 31 December | |||||||||
| 2010 | 2009 | 2009 | |||||||||
| £'000 | £'000 | £'000 | |||||||||
| Market payables | 30,780 | 48,723 | 10,927 | ||||||||
| Trade payables | 406 | 1,154 | 847 | ||||||||
| Total trade payables | 31,186 | 49,877 | 11,774 | ||||||||
| Other payables | 1,523 | 2,868 | 1,793 | ||||||||
| Provisions | 2,891 | 576 | 2,488 | ||||||||
| Accruals and deferred income | 5,329 | 8,423 | 11,314 | ||||||||
| Total other payables | 9,743 | 11,867 | 15,595 | ||||||||
| 1 Provisions were included with Accruals and deferred income in the 2009 Interim Financial Statements. These have now been separately disclosed.
The level of market payables at a period end is dependent on the level of agency and trading activity in the preceding days. In the days leading up to the calendar year end, trading levels tend to be light and hence year end market payables balances are at a cyclical low. | |||||||||||
| Litigation | Onerous leases | Other | Total | ||||||||
| £'000 | £'000 | £'000 | £'000 | ||||||||
| At 1 January 2010 | 1,758 | 730 | 2,488 | ||||||||
| Utilised during the period | - | (222) | - | (222) | |||||||
| Charged | 491 | - | - | 491 | |||||||
| Foreign exchange | 104 | 30 | - | 134 | |||||||
| Released | - | - | - | - | |||||||
| At 30 June 2010 | 2,353 | 538 | - | 2,891 | |||||||
| Litigation | Onerous leases | Other | Total | ||||||||
| £'000 | £'000 | £'000 | £'000 | ||||||||
| At 1 January 2009 | - | 756 | - | 756 | |||||||
| Utilised during the period | - | - | - | - | |||||||
| Charged | - | - | - | - | |||||||
| Foreign exchange | - | (97) | - | (97) | |||||||
| Released | - | (83) | - | (83) | |||||||
| At 30 June 2009 | - | 576 | - | 576 | |||||||
Litigation
The Group has settled its long standing case with an ex-employee of ThinkEquity LLC. The Group has provided in full in the financial statements against settlement. This amount was paid out in July 2010.
The Company's solicitors have received notification of a potential claim against the Company relating to the failed investment in the Company by Alessandro Benedetti and Bertrand des Pallieres and their investment vehicle, P.G. Holdings S.A., (together the "Benedetti Parties"). At this stage, no proceedings have been served on the Company. The Company and its legal advisers are extremely confident that its conduct in relation to the failed investment was entirely proper and, should the Benedetti Parties choose to issue proceedings, they will be vigorously defended.
11 General
The interim report was approved by the board of directors on 28 September 2010.
This report 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.
INDEPENDENT REVIEW REPORT TO PANMURE GORDON & CO. PLC
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2010 which comprises the condensed consolidated interim income statement, condensed consolidated interim statement of comprehensive income, condensed consolidated interim statement of financial position, condensed consolidated interim statement of cash flows, condensed consolidated interim statement of changes in equity and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.
As disclosed in note 1.2 the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.
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 UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the AIM Rules.
R. Faulkner
for and on behalf of KPMG Audit Plc
Chartered Accountants
8 Salisbury Square
London
28 September 2010
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