Interim Results

27 September 2016

Panmure Gordon & Co. plc

Interim results

London, 27 September 2016 - Panmure Gordon & Co. plc ("Panmure Gordon" or "the Group"), a leading independent stockbroker and investment bank, today announces its results for the first half ended 30 June 2016.

Key points

· Growth of 14.0% in total net commission and fee income to £14.9m (H1 2015: £13.1m)

· Profit before non-recurring items and tax £1.7m (H1 2015: profit of £0.2m)

· Pre-tax profit of £0.3m (H1 2015: loss of £0.2m)

· Post-tax profit of £0.2m (H1 2015: loss of £0.2m)

· Earnings per share of 1.08p (H1 2015: loss per share of 1.09p)

· Strategic investment in PrimeXtend, a business focussed on the evolution of agency broker services Continued support and cooperation from Qinvest, including the granting of a £5m funding facility in February of which £3m has been drawn down

Patric Johnson, Chief Executive, commented:

I am pleased to report a positive start to the year particularly bearing in mind the significant volatility in the market leading up to the European Referendum. Business activity in July and August has continued to be encouraging including the first post-referendum technology AIM market IPO in August. However, continued market volatility following the result of the Referendum poses significant challenges for the medium term.

Despite the market volatility however, we executed 29 transactions including nine M&A deals and five IPOs which maintains our position within the top brokers in the AIM space. Together with the realignment of the business along sector lines, we have removed a significant level of annualised costs and we continue to drive efficiencies within our model. Critical to the positive momentum in our business are our relationships with our institutional clients and our ability to distribute quality transactions. We are pleased to report that Panmure Gordon sponsored IPO activity since January 2015 has returned a net gain of just over 30% for such clients.

We remain committed to the longer term strategic realignment of the business with additional investments to diversify our income and continuing to invest in quality people who remain at the heart of our business. We do however remain conservative in our outlook for the remainder of 2016."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Enquiries:

Panmure Gordon

Patric Johnson, Chief Executive

Philip Tansey, Chief Financial Officer 020 7886 2500

Buchanan (Financial PR)

Bobby Morse

Stephanie Watson 020 7466 5000

Grant Thornton UK LLP (Nominated Adviser)

Philip Secrett/Salmaan Khawaja/Jen Clarke 020 7383 5100

Chief Executive's Review

Significant changes made to Panmure Gordon's cost base and the reorganisation around sector teams are starting to bear fruit. The first half of the year witnessed some of the most significant political shocks of recent years during the run-up to, and then following, the June European Referendum vote. Market sentiment and volatility have been severely impacted, though the indications are that some level of stability is returning to the market. With this backdrop, I am therefore even more pleased to see a positive first half of the year. This positive start to the year is despite the significant charge for the restructuring in H1, including redundancy costs of £1.4m.

We have assisted clients raise over £600m across 29 transactions including four successful UK IPOs and one on AIM Italia. Corporate finance and related income rose by 34.4% to £10.1m (H1 2015: £7.5m) in what was a challenging, but busy, six months. Total net commission and fee income has increased by 14.0% in H1 2016 to £14.9m (H1 2015: £13.1m). Total commission and trading for H1 2016 for the core UK business also showed a net increase on a like-for-like basis, with a 5.3% increase in net commission and trading income at £5.1m (H1 2015: £4.8m) despite the trend in declining volumes across the main stock markets on a year-on-year basis continuing in 2016. Overall however, net commission and trading income has shown a net decrease of 9.1% to £5.2m (H1 2015: £5.7m) on account entirely of the closure of our Swiss office.

QInvest

Panmure Gordon continues to enjoy an excellent relationship with its major shareholder, Qinvest, and in March drew down £3m of the £5m financing facility that was made available to assist growth plans for the future whilst providing further liquidity for ongoing business.

PrimeXtend

In continuing our efforts to diversify our income whilst not altering the core DNA of our business and culture we were delighted to announce on 22 September that we exchanged contracts for an exciting strategic investment in a new company, PrimeXtend Limited. We will inject a maximum investment of £2m over a period of ten months, subject to the achievement of certain milestones, for an initial 49% shareholding. PrimeXtend will set up the necessary straight through processing infrastructure and, in close partnership with Panmure Gordon, develop new markets in agency broking of a variety of asset classes to a wide range of institutions that are currently suffering from a lack of liquidity and broker options in the market.

Switzerland

Panmure Gordon has operated in Switzerland since 2007 through a representative office in Nyon. Limited opportunities for growth coupled with the longer-term history of losses led to the decision to cease regulated activity in January and to close the office. The business was sold to a third party who committed to continuing the business with the same staff under their own regulatory licences and we wish them well for the future. The impact of the closure of the office on the results for H1 2016 is a cost of £0.2m.

Singapore

The Singapore office introduced a number of excellent clients that resulted in transactions executed in the London market. However, it was felt that a local presence with the attached costs would not be justified in the future and the decision was taken therefore to close the office and the local legal entity.

Outlook

We have recorded an encouraging start in the first six months of the year with the new sector based structure, designed to maximise the high standard of service to our clients, beginning to yield results. We have started to see the benefit from the operational efficiencies put in place and this will become more impactful as the year moves into the second half. We will continue to invest on a selective basis in both people and opportunities to further our client-centric business model, as well as seek other business prospects whilst remaining focussed on optimising the cost base within this evolving environment.

Markets are still digesting the full impact of the June European Referendum and as the eventual outcome becomes clearer so we should see further moves to a stabilising economy. We have begun the second half on a positive note with the first AIM market post-referendum technology IPO as well as a number of significant fund raises and advisory transactions already completed. Our pipeline of corporate transaction activity appears robust though, as ever, remains to be executed. We have a strong and supportive major shareholder in QInvest and a clear sector-focused team structure filled with excellent people that provide us with some reassurance when set against the continuing uncertainties of the second half. We remain conservative in our outlook for the remainder of the year.

Patric Johnson

Chief Executive

Condensed consolidated interim statement of profit or loss and other comprehensive income (unaudited)

For the half year to 30 June 2016

1 Administrative expenses which total £14.6m (6 months 30 June 2015: £13.3m, 12 months 31 December 2015: £41.9m) have been presented separately here owing to their individual nature and size

The following notes form part of these financial statements.

.

Condensed consolidated interim statement of financial position (unaudited)

At 30 June 2016

The following notes form part of these financial statements.

Condensed consolidated interim statement of cash flows (unaudited)

Condensed consolidated interim statement of changes in equity for the half year to 30 June 2016

Condensed consolidated interim statement of changes in equity for the half year to 30 June 2015

Consolidated statement of changes in equity for the year ended 31 December 2015

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 One New Change, London, EC4M 9AF. The consolidated interim financial statements of the Company for the 6 months ended 30 June 2016 relate to 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 2015, 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 2015 annual financial statements. During the period ended 30 June 2016, 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 Directors note that the business was profitable during the period and loss making during the previous financial year and the Group had cash resources of £4.6m at 30 June 2016 (2015: £4.3m) and short term borrowings of £3m (2015: nil). The Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing 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 2015 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 note 1.1 within the Report and Financial Statements 2015.  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

v) Intangible assets

2 Segmental analysis

The Group reports 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 geographical division is made between the UK and Swiss operations only. In the segmental table below, the results of the Swiss office appear in the 'Other' column. It was decided to cease regulated activity in January and to close the office. The impact of the closure of the office on the results for H1 2016 is a cost of £0.2m

 There are no major customers that regularly account for more than 10% of revenue.

Segmental analysis for the 6 months to 30 June 2016, the 6 months to 30 June 2015 and the 12 months to 31 December 2015, reconciled to the income statement

1The Swiss business operated as a representative office of the UK business and therefore shared assets with the UK business

3 Taxation

The current tax charge for the period is different from the standard rate of corporation tax in the UK of 20.00% (2015: 20.25%).

At 30 June 2016 the Group has recognised a deferred tax asset relating to UK losses carried forward.

4 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.

Total Group

5 Share capital and reserves

The Company issued no new shares during the six months to 30 June 2016.

As at 30 June 2016, the number of shares in issue was 15,545,473 ordinary shares at a par value of 4p (30 June 2015: 15,545,473 ordinary shares at a par value of 4p). The fully diluted number of ordinary shares was 16,771,419 (30 June 2015: 16,434,444).

The 'other reserve' includes the nominal value of share capital owned by the Panmure Gordon & Co. plc No. 2 Employee Benefit Trust (the "Trust") in respect of the 2005 Employee Share Option Plan and the cost of shares purchased in the market. At 30 June 2016 the Trust held 1,093,836 ordinary shares (December 2015: 1,272,354 ordinary shares).

6 Trade and other receivables

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. Within non-current assets, other receivables represent loans made to employees under the Group's Matching Share Plan.

7 Trade and other payables

The level of market payables at a period end is dependent on the level of agency and trading activity in the preceding days.

Litigation

In the normal course of business there may be various litigation claims and contingencies pending against the Group which, in the opinion of management, will be resolved with no material impact on the Group's financial position or results of operations.

8 Financial Instruments

The group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements. The different levels have been defined as follows:

§ Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

§ Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

§ Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The table below analyses financial instruments carried at fair value by valuation method.

There have been no transfers of assets between the levels noted above in the period under review.

9 Investment

On 22 September 2016 Panmure Gordon exchanged contracts to make an all-cash investment in a new company, PrimeXtend Limited, of up to a maximum of £2m over a period of ten months, subject to the satisfaction of certain performance milestones, for an initial 49% shareholding with the balance retained by Xtend Group Limited. PrimeXtend Limited will operate under Panmure Gordon's name.

10 General

The interim report was approved by the Board of Directors on 26 September 2016.

On account of the reducing level of complexity of the business and the increased simplicity of the associated accounting the Board considered it unnecessary to engage KPMG, auditors to the Group, to conduct a review of the financial statements in this half-yearly report for the six months ended 30 June 2016.

This report will be made available to the public, upon request, at the registered office of Panmure Gordon & Co. plc, One New Change, London EC4M 9AF or from the Company's website www.panmure.com.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.