Interim Results

Lighthouse Group plc

("Lighthouse" or "the Group")

Interim Results

Lighthouse Group plc (AIM: LGT) today announces its interim results for the six months ended 30 June 2014.

Highlights

*Earnings before interest, tax, depreciation, and amortisation

Commenting on the results, Richard Last, Chairman of Lighthouse Group plc, said:

"The Board is pleased to announce a satisfactory performance in the six months to 30 June 2014. Higher average revenue production from advisers and a £1 million reduction in operating costs have resulted in an EBITDA of £436,000 and a pre-tax profit of £88,000, both achieved after expensing further investment costs of £0.6 million in our national LFA division. The Group is on schedule to meet market expectations for 2014 and the Board is pleased to announce a return to the dividend list and an interim dividend of 0.06 pence per share, payable on 31 October 2014. With a strong balance sheet and net cash balances of some £6 million the Group is well placed to take advantage of the strategic opportunities available in what remains a fast developing market."

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Chairman's statement for the six months ended 30 June 2014

Trading highlights

* Earnings before interest, tax, depreciation and amortisation.

Financial performance

I am pleased to report a positive trading performance in the first six months of 2014. Whilst revenues remained broadly flat in comparison with the same period in 2013, average annualised revenues produced per adviser rose by 3 per cent. to £83,000 in comparison with the comparative period in 2013 (£80,000). This demonstrates the resilience of the Group and its advisers in addressing the revised methods of trading following the implementation of the Retail Distribution Review ("RDR") on 1 January 2013.

Although gross margins reduced from 32 per cent. (£7.5 million) to 29 per cent. (£6.9 million), as a result of variations in divisional sales mix, EBITDA increased by £385,000 to £436,000 (2013: £51,000) due to a reduction in operating costs of £1.04 million or 14 per cent. This reduction was due in large part to the restructuring referred to in the 2013 Annual Report which was achieved whilst continuing to invest in the Group's affinity-based national division, Lighthouse Financial Advice ("LFA"), where training and adviser development costs amounted to £0.6 million (2013: £0.6 million).

After deduction of depreciation and amortisation and net interest charges, the Group recorded a profit before taxation of £88,000 (2013: loss before taxation of £232,000).

As noted in the 2013 Annual Report, the Group continues to make progress in dealing with industry-wide redress and regulatory issues that have arisen in recent years. The Board considers that the provisioning established as at 30 June 2014 is adequate and appropriate, based on information currently available.

Financial position and cash flow

The Group continues to maintain a strong balance sheet with net cash reserves, which are in excess of regulatory capital requirements, amounting to £5.8 million as at 30 June 2014 (2013: £8.3 million). The net cash balance is stated after deduction of the unsecured loan notes and property mortgage taken out in 2013 amounting to £1.9 million as at 30 June 2014 (2013: £0.8 million). The decrease in net cash of £2.5 million from 30 June 2013 was as a result of the purchase of the Group's premises in Woodingdean in October 2013 for £1.1 million, the defrayal of £0.9 million in respect of restructuring costs previously provided against, which should be recouped through lower operating costs in the second half of 2014 and beyond, and by general working capital movements.

Business relationships and developments

The Group continues to develop its affinity relationships and on 1 September 2014 announced the renewal of its contract with the CSMA (Civil Service Motoring Association) Club for a further three years to 2017, adding to the new contractual relationship with Parliament Hill Limited announced on 20 March 2014. Affinity relationships are at the heart of the LFA offering and provide an ever-increasing source of new leads for that division's advisers. Total revenues generated through affinity connections in the six months ended 30 June 2014 amounted to £2.2 million (2013: £1.6 million).

LFA continues to make progress despite recruitment having been slower than initially anticipated as a result of the contracting number of active financial advisers in the UK and the stringent criteria applied during the recruitment process. Focus is also being placed on enabling LFA advisers to increase their revenue production by taking full advantage of the Group's unique affinity-based offering and the new product areas and services being developed.

LighthouseCarrwood and LighthouseWealth, which both focus on higher net worth customers' requirements, continue to develop satisfactorily. The Group continues to support its network members in addressing their trading and technology requirements in the post-RDR environment whilst minimising risk.

As detailed in the 2013 Annual Report, the Group launched the Lighthouse Pensions Trust ("LPT") in the period under review. This went live on 11 April 2014 and has been well received in the market place. Over 200 of the Group's advisers have registered to participate in the roll-out process and have been fully trained in the product and related marketing requirements.

It is anticipated that LPT will gather momentum when the main swathe of companies with fewer than 50 employees (the Group's primary target market) are required to establish auto-enrolled schemes during 2015 and beyond. The Group is examining complementary product offerings that could be provided alongside the LPT and thus enhance further the earnings from this exciting development.

Dividends

The Board is pleased to announce a return to the dividend list and the payment of an interim dividend of 0.06p per ordinary share. This will be paid on 31 October 2014 to shareholders on the register as at 3 October 2014.

Regulatory developments

Regulatory change continues to impact the market for retail finance advice in the UK within which the Group operates. The Group and its advisers are working hard to engage with clients that have legacy assets on platforms, with a view to mitigating the impact on both the clients and the advisers as they reposition assets held on platforms to comply with FCA requirements in this area. Whilst this is very much work-in-progress the Board is pleased with the progress made to date and the procedures established for future engagement with clients.

Strategy and Outlook

The Board continues to address market and regulatory change and is implementing strategies for future growth in new product and service areas as well as driving growth in its LFA and wealth advisory businesses, whilst improving the cost efficiency of the Group.

The Board believes that the Group is well placed to take advantage of opportunities within what remains a fast evolving market place and is on schedule to meet market expectations for 2014.

Richard Last

Chairman

22 September 2014

Lighthouse Group plc

Consolidated statement of comprehensive income

for the six months ended 30 June 2014

There was no material difference between basic and fully diluted earnings/(loss) per share in any of the above periods.

Lighthouse Group plc

Consolidated statement of changes in equity

for the six months ended 30 June 2014

Lighthouse Group plc

Consolidated statement of financial position

at 30 June 2014

The interim financial information was approved by the Board of Directors on 22 September 2014 and was signed on its behalf by

Malcolm Streatfield

Chief Executive

Peter Smith

Finance Director

Lighthouse Group plc

Consolidated statement of cash flows

For the six months ended 30 June 2014

Lighthouse Group plc

Notes to the financial information

for the six months ended 30 June 2014

1. The interim financial information, which comprises the consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of financial position and consolidated cashflow statement and the related explanatory notes has been prepared on the basis of the accounting policies set out in the Group accounts for the year ended 31 December 2013. It is unaudited but has been reviewed by the auditor.

This information does not constitute statutory accounts for the purpose of section 435 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 December 2013, prepared under International Financial Reporting Standards has been delivered to the Registrar of Companies and contained an unqualified auditors' report.

2. The calculation of the basic and diluted earnings per share attributable to equity shareholders of the parent company is based on the following data:

As at 30 June 2014, there were 4,707,364 (30 June 2013: 7,907,213; 31 December 2013: 5,002,324) options that existed which could potentially dilute basic earnings per share in the future, but were regarded as being anti-dilutive and therefore were not included in the calculation of dilutive shares, as their exercise price was higher than the average mid-market price of the Company's ordinary shares during the period.

3 A copy of the Interim Statement is being sent to all shareholders and copies are available for collection indefinitely from the Group's Head Office (address: Lighthouse Group plc, 26 Throgmorton Street, London, EC2N 2AN) or at the Group's website (www.lighthousegroup.plc.uk).

INDEPENDENT REVIEW REPORT TO LIGHTHOUSE GROUP PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the interim report for the six months ended 30 June 2014 which comprises the condensed consolidated statement of comprehensive income, the consolidated statement of changes in equity, the condensed consolidated statement of financial position and the consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the interim 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 interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the AIM Rules.

As disclosed in note 1, 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 interim report has been prepared in accordance with the recognition and measurement requirements of IFRSs 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 interim 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 interim report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU and the AIM Rules.

Ravi Lamba for and on behalf of KPMG LLPChartered Accountants15 Canada Square

London

E14 5GL

22 September 2014