Interim Results

JELF GROUP PLC

("Jelf" or the "Company")

Interim results for the 6 months ended 31 March 2015

Jelf, an independent full service UK based brokerage that supports businesses and individuals, announces its interim results.

Financial highlights

Strong financial performance continues:

· Revenues 11.0% ahead of last year at £43.7m (2014: £39.3m)

· EBITDAE pre-share costs increased by 24.6% to £8.1m (2014: £6.5m)

· EBITDAE margin pre-share costs increased by 12.3% to 18.5% (2014: 16.4%)

· Fully diluted Earnings per Share increased by 12.8% to 1.67p (2014: 1.48p)

· Interim maiden dividend of 0.8p

The business continues to be cash generative and £2.5m of debt has been repaid early:

· Net debt is £27.6m (excluding deferred consideration net debt is £15.2m) compared to net debt of £13.1m (excluding deferred consideration net debt is £8.9m) at 31 March 2014 reflecting the acquisition of The Beaumonts Insurance Group in December 2014.

Operating highlights

· Organic growth achieved of 4.2% (excluding the impact of acquisitions)

· The Insurance business EBITDAE has increased by 18.2% to £5.3m (2014: £4.4m)

· Employee Benefits EBITDAE has increased by 27.2% to £1.7m (2014: £1.4m)

· Financial Planning EBITDAE has increased by 167% to £299k (2014: £112k)

· Margins continue to improve whilst at the same time investment continues to be made in both sales capability and infrastructure

· Jelf Insurance Partnership delivered £5.2m of revenues (2014: £4.7m) and £762k of EBITDAE (2014: £550k). It is on track with expectations and capturing the expected synergies of the acquisition

· The Beaumonts Insurance Group, acquired in December 2014, is trading strongly and capturing the acquisition synergies ahead of expectations

· Awarded Investor in Customers highest '3 Star' accolade for client service for the third year running

Alex Alway, Group Chief Executive said:

"I am pleased that all our businesses are trading strongly and outperforming last year and we expect to continue this trend in the second half of the year. Our acquisitions are integrating well into the Jelf business and delivering positive benefits."

Enquiries

Jelf Group plc 01454 272727

Alex Alway Group Chief Executive

John Harding Group Finance & Operations Director

finnCap Nomad & Broker 0207 220 0500

Matt Goode Corporate Finance

Grant Bergman Corporate Finance

Stephen Norcross Corporate Banking

Further information is available about Jelf at the Group's website: www.jelfgroup.com

Financial Performance

Revenue

EBITDAE pre-share costs

Interim Dividend

As part of the Group's progressive dividend policy, I am pleased to announce that the Board has approved the payment of a maiden interim dividend for the year-ended 30 September 2015 of 0.8p per share. In normal circumstances the Board would expect the interim dividend to constitute approximately one third of the total to be paid out in a full year. We would anticipate paying an interim and final dividend annually in the future taking account of our earnings growth and other calls on our cash resources.

Net Debt

Net debt has increased to £27.6m (2014: £13.1m) of which £12.4m (2014: £4.2m) relates to deferred consideration payments which are only payable on meeting pre-agreed targets. Net debt continues to remain well within our risk appetite.

Vision and Strategy

During this period we have launched a new set of goals and priorities to all staff via a series of roadshows. We continue to maintain our focus on our service to clients and development of our staff. This focus, allied to organic initiatives and selected acquisitions will drive value for shareholders. Our vision is simply to be recognised as the leading Trusted Adviser in our chosen markets and look to exceed our clients' expectations at every opportunity.

Acquisitions

We acquired the Beaumonts Insurance Group in December 2014 and Hamilton Bond in March 2015 and I would like to take the opportunity to welcome all the staff of these businesses to Jelf.

Beaumonts is a regional Broker with 105 staff based largely in Bradford and Leeds. It has a strong focus on mid-size corporate businesses plus a Risk Management Advisory subsidiary that will enhance our technical support to our clients.

Hamilton Bond is a Claims consultancy and Chartered Loss Adjustor which provides specialist support to insured parties in preparing claims documentation and quantifying claims values. They have 10 staff and will operate out of our Worcester office helping to strengthen our claims service expertise we provide to our clients.

The integration of The Insurance Partnership which joined Jelf in June 2013 continues to go well and to generate the expected synergies. This business delivered £5.2m of revenues (2014: £4.7m) and EBITDAE of £762k (2014: £550k) during the period.

Investment

We are committed to investing in the business in order to improve client service and support and ensure our staff are properly equipped to do their jobs within a good working environment. This in itself will improve efficiencies and deliver value to our shareholders.

We have spent the first six months of this period upgrading our IT network. This work is almost complete and has enhanced data capacity and speed to all locations whilst at the same time generating future cost savings. Our Employee Benefits business has invested considerably in replacing its workplace platform which when complete will deliver a single, easy to use portal that is fully personalised to clients' individual requirements. We are also investing in a new sales proposition to develop protection insurance for both businesses and individuals.

Core Business Performance

Insurance Brokers

Insurance broking is the largest element of the Jelf Group, accounting for 70% of total revenue (2014: 68%). Our insurance broking business primarily provides advice on products and services to the UK SME and corporate sectors, and related individual clients.

Revenues increased by 13.5% to £30.5m (2014: £26.8m), of this increase 3.6% was from organic growth. EBITDAE increased by 18.2% to £5.3m (2014: £4.4m). All of the exceptional acquisition costs of £0.6m relate to the insurance business. 

Insurance premiums continue to remain flat in terms of rate but the improving economy is generating increases where businesses are expanding and increasing their covers. The focus on client retention has seen lapse rates fall which, allied with greater new business success, has driven the organic increase in revenues but competition for new client mandates remains strong.

Employee Benefits

Employee Benefits accounts for 22% of Jelf Group total revenue (2014: 23%). The Employee Benefits business comprises a range of services including Healthcare, Group Risk and Corporate Pensions and supplies these services to both the corporate and UK SME sectors. Revenues increased by 6.4% to £9.8m (2014: £9.2m) and all of this growth was organic as there were no acquisitions. EBITDAE increased by 27.2% to £1.7m (2014: £1.4m) the increase being driven by all elements.

The Healthcare part of the Employee Benefits business provides advice on health related benefits such as private medical insurance. It has experienced improved client retention rates in the period which in turn has driven growth. We also have a team providing highly specialist advice in the complex area of International healthcare. This is an expanding area for Jelf experiencing strong organic growth through retaining clients and obtaining new client mandates.

The Pensions and Group Risk part of the business provides advice in respect of employee benefit design, benefit communication and implementation. This area has continued to see strong demand for advice on auto-enrolment plus financial education which will help to offset the impact of the industry switch from commissions to fees.

Financial Planning

Financial Planning accounts for 8% of Jelf Group total revenue (2014: 9%). Jelf Financial Planning provides a full range of financial planning services to owner-managed businesses and other medium/high net worth individuals. Revenues showed a 3.5% increase to £3.4m (2014: £3.3m) but EBITDAE increased 167% to £299k (2014: £112k). We have a total Assets under Advice mandate for over £1bn and of this £632m (2014: £575m) are with our preferred platforms. 'Pension Freedom' will create opportunities as people look to understand the greater flexibility which will increase the need for high quality, professional advice on pre and post-retirement planning.

Our Employees

We currently employ 1,200 people with a Male to Female ratio of 45:55 and offer a comprehensive employee benefits package that allows staff to flex salary against other benefits. We make every effort to communicate to our staff through roadshows, blogs and use of our intranet.

On behalf of the Board, I would like to thank our staff for responding positively to the challenges we have set them and to our clients for their ongoing support and look forward to a positive second half of the year when I believe the business will continue to trade strongly.

Alex Alway

Group Chief Executive

There is no other comprehensive income for the period other than the profit for the period noted above.

There are no discontinued operations during the period.

* Included within cash and cash equivalents is fiduciary cash of £16,494,588 (31 March 2014: £15,158,992; 30 September 2014: £15,228,419)

The notes on pages 8 to 13 form an integral part of the consolidated financial statements. The financial statements were approved by the Board of Directors and authorised for issue on 08 May 2015. They were signed on its behalf by:

Alex Alway John HardingGroup Chief Executive Group Finance and Operations Director

1 Shown within other reserves on the balance sheet

2 The share based payment reserve is distributable to the equity holders of the Company

3 The EBT purchased 751,331 (2014: 175,000) shares in the period

1 Included within cash and cash equivalents is fiduciary cash of £16,494,588 (31 March 2014: £15,158,992; 30 September 2014: £15,228,419)

Notes to the consolidated financial statements

1. General information

Jelf Group plc is an AIM listed company incorporated and domiciled in the United Kingdom under the Companies Act 2006. The address of the registered office is given in note 13.

These unaudited consolidated interim financial statements do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006 and should be read in conjunction with consolidated financial statements for the year-ended 30 September 2014. These were prepared under International Financial Reporting Standards (IFRSs) and were authorised for issue by the Board of Directors on 8 December 2014 and delivered to the Registrar of Companies. The Independent Auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditors drew attention by the way of emphasis without qualifying the report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates.

2. Basis of preparation

These consolidated interim financial statements have been prepared using accounting policies consistent with IFRSs as adopted for use in the European Union and the AIM rules as disclosed in the Group's statutory accounts for the year-ended 30 September 2014. These consolidated interim financial statements do not comply with all the requirements of IAS 34 'Interim financial reporting' as the Group is not required to adopt this.

3. Segmental Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Board, which is responsible for allocating resources, assessing performance of the operating segments and making strategic decisions.

All revenue arose within the United Kingdom. No geographical segment information is therefore given. Segment information about these businesses is presented below.

It is not practicable to separately identify the investment revenues, finance costs and income tax charge for each of the segments. Accordingly, consolidated figures have been presented.

The amounts provided to the Board with respect to total assets and liabilities are measured in a manner consistent with that of the financial statements. These assets and liabilities are allocated based on the operations of the segment. Unallocated segment assets relate to cash held in the parent Company.

 4. Exceptional costs

Exceptional costs are those items the Group considers to be one-off or material in nature that should be brought to the reader's attention in understanding the Group's financial performance. These costs are not associated with the ongoing activities of the Group. 2015 exceptional costs relate entirely to the costs of acquiring businesses.

5. Income tax charge

6. Dividends

The final dividend in respect of the year-ended 30 September 2014 of 2.0p per share (2013: 1.5p per share), amounting to a total dividend of £2,151,371 (2013: £1,614,547), was paid on 30 January 2015.

An interim dividend of 0.8p per share (2014: nil) was proposed by the Board of Directors on 8 May 2015. It will be paid on 26 June 2015 to shareholders on the register at 5 June 2015. This interim dividend, amounting to £862,863 (2014: nil), has not been recognised as a liability in this interim financial information. It will be recognised in shareholders' equity in the year-ended 30 September 2015.

7. Earnings per share

8. Borrowings

During the period the Group repaid its existing borrowings and put in place two new borrowing facilities in December 2014.

The main facility comprises of a loan of £20 million repayable by December 2017 in ten quarterly instalments of £1.25 million plus a final instalment of £7.5 million. The first scheduled quarterly instalment of £1.25 million is due in June 2015.

The second borrowing facility is a revolving loan of £5 million fully repayable in December 2017. In December 2014 £5 million was drawn down, with an early repayment of £2.5 million made in March 2015.

The loan facility interest floats at a rate of 2.10% above LIBOR. The loan is secured by an unlimited intercompany composite agreement guarantee over all assets in the trading companies within the Group excluding ring fenced regulatory cash as agreed with the FCA. The facility terms and conditions include cashflow cover, interest cover and leverage covenants.

9. Called up share capital

At 31 March 2015, the Company had authorised share capital of 100,000,000 ordinary shares of 1p each (31 March and 30 September 2014: 100,000,000).

10. Cash generated from operations

11. Net debt

1Borrowings are shown gross of amortised loan costs of £166,465 (31 March 2014: £148,000; 30 September 2014: £110,000). See note 8 for details.

12. Acquisitions

On 2 October 2014 the Group acquired 100% of the share capital of Cronin & Co. Corporate Insurance Brokers Limited, a small independent insurance brokers based in Birmingham.

On 16 December 2014 the Group acquired 100% of the share capital of Beaumonts Insurance Group, an independent insurance brokers primarily based in Bradford and Leeds.

On 3 March 2015 the Group acquired 100% of the share capital of Hamilton Bond Ltd, a loss adjuster based in Worcester.

The opening balances for the acquisitions have been reported in these consolidated interim financial statements on a best estimate basis.

13. Copies of the financial statements

Copies of these consolidated interim financial statements are available on the Group's website (www.jelfgroup.com) or from the Company Secretary at the Company's registered office: Hillside Court, Bowling Hill, Chipping Sodbury, Bristol, BS37 6JX.