Preliminary Results - Year Ended 31 October 2014

Arden Partners plc

("Arden" or the "Group")

Preliminary results for the year ended 31 October 2014

Arden Partners plc (AIM: ARDN), the institutional stockbroking company, today announces preliminary results for the year ended 31 October 2014.

Financial highlights

· Revenue £8.0 million (2013: £10.1 million)

· Profit before tax £0.08 million (2013: £1.3 million)

· Underlying profit before tax* £0.15million (2013: £1.4million)

· Basic earnings per share 0.5p (2013: 4.7p)

· Proposed final dividend per share of 0.75p (2013: 1.75p)

* Profit before tax as adjusted for the effect of share based payments

Operational highlights

· Funds/Debt issuances for clients £457m

· Eighteen corporate transactions during the year

· Retained corporate clients 44

Commenting on the results and Arden's outlook, Peter Moon, Chairman, said:

"……following a slower than expected first half, I am pleased that the second half saw a rebound in revenue, allowing a small profit to be reported for the full year and the scope for the Board to recommend a final dividend. We remain focused on a strategy to develop the range of corporate and research services offered and to develop our corporate client base towards an optimum number..."

Chairman's Statement

After a slower than expected first half, the second half of the financial year saw a rebound in revenue, allowing a small profit to be reported for the full year.

As mentioned previously, the sector is undergoing structural change and commission revenues continue to decline. The Board continues to evolve the Arden business model to reflect these changes and to be more focussed on the range of corporate and research services offered. Proactive recruitment of personnel has been, and is being, undertaken to reflect this.

As was announced at the time, the Company bought back in aggregate 661,087 of its own Ordinary shares in November 2013 and subsequent to this, 200,000 of these shares were re-sold, with the balance being currently held, for the time being, in Treasury. The Board is minded in due course to make further market purchases of its own Ordinary shares into Treasury, with a view, ultimately, to cancelling these shares.

Although the scope for dividend payments, in the Board's view, has been limited during the year, in line with the Board's stated policy to reward stakeholders in the business and shareholders equally, a final dividend of 0.75 pence per share is recommended (interim dividend Nil per share), which if approved will result in a total dividend for the year of 0.75 pence per share (2013: 3.0 pence per share).

Finally, I would like to thank all concerned for their contribution during the year.

Peter Moon

Chairman

Chief Executive's Statement

After a difficult first half of the financial year I am pleased to report an improved performance and a good return to profit in the second half. The profit before tax result of £0.08m for the full year should be read within the context of a first half loss of £0.5m.

The above reflects the structural change happening in the industry, in particular to commission income driven by new top down guidelines and compliance regulations. Over the past 12 months we have been positioning the business to reflect this and will continue to do so in the first half of 2015.

We have invested into those areas of the business at the core of our strategy and believe we have a strong platform to deliver growing and sustainable revenues within the corporate finance division of the business. In support of this, it is encouraging to see our retained client base increasing in number to 44 at the year end (2013: 39).

Whilst the Board expects no significant recovery in commission revenues we do expect a better performance from market making and trading and this remains a cornerstone of our service offering to both institutional and corporate clients.

Financial Review

Revenue in the year ended 31 October 2014 was £8.0m compared to £10.1m in 2013. The underlying profit before tax was £0.15m compared to £1.4m in 2013. The profit before tax which is stated after charging share-based payments was £0.08m and compares to a profit before tax in 2013 of £1.3m.

The basic earnings per share was 0.5p compared to 4.7p in 2013. Arden's capital adequacy at the period end was significantly ahead of regulatory requirements.

At the year end the Company held 461,087 ordinary shares of 10 pence each in Treasury, the total value of which was £0.2m.

Equities Division

The equities division revenue fell from £5.1m in 2013 to £2.6m this year, further reflecting the reduced commission rates in the industry.

Trading Investments

As reported at the interim stage, certain long term investments saw a decline in mark to market book accounting values during the first half and whilst these are non-cash items, they resulted in a loss of £0.4m against a profit of £0.3m in 2013.

Corporate Finance

Corporate Finance fees, including retainers, increased to £5.3m in the year, from £5.1m in 2013.

During the year we were involved in 18 transactions, compared to 11 in 2013. In aggregate we placed £93m (2013: £283m) in equity, in addition to £364m (2013: Nil) of debt issuances, for corporate clients.

Outlook

The current year has started satisfactorily. Arden has completed one IPO to date and is mandated on several other corporate finance transactions which, subject to market conditions, will deliver in the first half.

Further out the corporate finance pipeline of work is very encouraging and although still market dependant, gives confidence for a significantly improved performance for the year.

Finally, I would like to take this opportunity to thank all our staff and clients for their continued support and commitment to the business.

James Reed-Daunter

Chief Executive Officer

Consolidated Statement of Comprehensive Income

For the year ended 31 October 2014

Consolidated Statement of Financial Position

At 31 October 2014

Consolidated Statement of Cash Flows

For the year ended 31 October 2014

Consolidated Statement of Changes in Equity

For the year ended 31 October 2014

Notes

1. The capital redemption reserve represents the nominal value of shares that have been cancelled that were previously held as Own Shares.

2. Own Shares represents shares purchased to be held as treasury shares at historical cost.

3. The Employee Benefit Trust reserve represents shares held in the parent Company by the Arden Partners Employee Benefit Trust which is consolidated in these financial statements in accordance with the accounting policy in note 1. 

During the year 343,168 ordinary shares were issued from the employee benefit trust to satisfy employee share options (2013: 325,000).

NOTES

1) Basis of preparation

The financial information set out in this announcement has been prepared in accordance with the recognition and measurement principles of IFRS as endorsed for use in the European Union.

The financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 31 October 2014 or the year ended 31 October 2013 under the meaning of s434 Companies Act 2006, but is derived from those accounts.

Statutory accounts for the years ended 31 October 2014 and 31 October 2013 have been reported on by the Independent Auditors. 

The Independent Auditors' Report on the Annual Report and Financial Statements for the years ended 31 October 2014 and 31 October 2013 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

Statutory accounts for the year ended 31 October 2013 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 October 2014, prepared under IFRS, will be delivered to the Registrar in due course.

2) Revenue

Revenue is wholly attributable to the principal activity of the Group and arises solely within the United Kingdom.

Included within revenue of the Equities Division is a loss of £538,000 (2013: loss £190,000) relating to the fair value adjustment of derivatives held within assets that are fair valued through profit or loss.

The Directors are of the opinion that there are only two operating segments and while segment revenues are reviewed internally business resources are not allocated to segments for the purposes of deriving either profit or assets. In 2014, none of the Group's customers contributed 10% or more of the Group's revenue.

3) Earnings per Share

In addition to the basic earnings per share, underlying earnings per share has been shown because the Directors consider that this gives a more meaningful indication of the underlying performance of the Group. Where applicable, all adjustments are stated after taking into consideration current tax treatment ignoring deferred tax.

The 1,480,700 (2013: 1,823,868) shares held by the Arden Partners Employee Benefit and the 461,087 (2013: Nil) shares held in Treasury have been excluded from the denominator.

4) Annual Report and Accounts

Copies of the 2014 Report and Accounts will be posted to shareholders in due course. Copies will also be available from the Company's registered office and from the Company's website.

5) Dividend

The final dividend, if approved, will be paid on 27 March 2015 to shareholders on the register at close of business on 27 February 2015, with an ex-dividend date of 26 February 2015.