Q3 Trading update & market share results

AIM: SHRE

Share plc

("Share" or "the Group")

Trading Update including Market Share Results for Q3

Share (AIM: SHRE), which operates The Share Centre Limited, a leading independent UK stockbroker, today provides an update on trading for the third quarter of 2014, including its Q3 performance against its peers (*) which shows an increase in Share's market share to 7.62% from 7.33% in the same period last year. This peer group analysis is measured independently by Compeer Limited. Share is also delighted to announce that it has won two awards, for highest "Overall Client Satisfaction" and best "Customer Service", in the 2014 Investment Trends UK Online Broking Report.

Trading Update

Reflecting reduced trading activity against a backdrop of weaker market sentiment (with the FTSE All Share index falling by nearly 2% in Q3, compared to a rise in the previous year of 5%) and economic and political uncertainty both in the UK and internationally, Share's total revenues for the third quarter of 2014 were 2.3% lower than the comparable period last year. This nonetheless represented a stronger performance than Share's peer group, which experienced a collective 6.4% decrease. Analysis of Share's revenues in Q3 shows:

- dealing commission reduced by 4% relative to Q3 2013.

- fee income increased by 2% relative to Q3 2013. It should be noted that Share's fee income typically generates over 40% of total revenues and so provides an 'insulating' effect in periods of reduced dealing activity;

- interest income decreased by 12% compared to Q3 2013. This reflected the lower rates available and the changes to the Financial Conduct Authority's ("FCA") Client Asset rules which came into effect on 1 July 2014, and which mean that the Group is unable to use term deposits (that typically attract more favourable rates).

Activity levels have since picked up but investor appetite remains subdued against the prior year. This is in part a function of the fact that, in 2013, the market received a boost from AIM shares being allowed into ISAs (August 2013) together with the Royal Mail and other IPOs in Q4 2013. Interest income will also continue to be affected by the current low interest rates.

Performance against Peer Group in Q3

Share's market share of peer group revenues for the third quarter was 7.62%, up from 7.33% in Q3 2013. This headline measure (as shown below) includes the Group's commission, fees and interest. Share's dealing commission reduction of 4% in Q3 compared to a decrease across the peer group collectively of 15%. The fee income rise of 2% compared to a collective increase across the peer group of 8%. The revenue mix of the peers is relatively more dependent upon dealing commission than fees (fees being only 14% of total revenues as compared to Share's 45%). Share's interest income reduction of 12% compared to an increase of 33% across the peers. We believe that peers may have taken a more aggressive approach to placing client money than us ahead of the FCA's new Client Assets rules coming into force in July 2014.

Compeer's data also allows us to calculate the Group's market share of peer group revenues excluding interest. For the third quarter, the Group's share at 8.69% was higher than the same period last year (Q3 2013: 7.84%).

Quarterly market share data: Source - Compeer Limited

It is worth noting in the context of the above that we believe peers were more dependent on trail commission from fund sales. The Retail Distribution Review ("RDR") has forced firms to change their charging structures and move to a more transparent fee based environment. We believe this is part of the reason why commission is falling more rapidly amongst peers and fees rising as they seek to replace trail commission with percentage fees charged directly to the customer. The Share Centre changed its prices in July 2013 and charges a low fixed rate administration fee for having an account.

Awards and Staff

In October, The Share Centre won the Investment Trends 2014 award for highest 'Overall Client Satisfaction', ranking ahead of all other UK online brokers. The Company also won the Investment Trends 2014 award for best 'Customer Service'. Investment Trends is a well-respected independent financial services research provider, which conducts annual surveys of UK retail investors. The 2014 survey included data and responses from over 13,000 individual personal investors, making it the largest annual survey of retail investor opinion undertaken in the UK.

During Q3, we completed our annual staff survey, with over 90% of staff participating. The statement which gained the highest level of agreement was "The Share Centre treats the safety of customer assets and the security of their data as paramount". In addition, we are very pleased to report that over 90% of staff agreed with the statements, "I am proud to work for The Share Centre" and "I would recommend The Share Centre as a good employer".

Shareholding in the London Stock Exchange Group plc

During the quarter, Share increased its holding in London Stock Exchange Group plc ("LSE") to 222,727 shares from 175,000 shares, following the take up of its rights under the terms of the LSE's rights issue completed in August 2014. The cost of this was £618,000.

Richard Stone, Chief Executive of Share plc, commenting on Share's Q3 performance, market share data and awards successes, said,

"In a more challenging market environment, Share's performance in the third quarter held up well especially against our peer group and I am very encouraged to see the Group's market share rise to 7.62% from 7.33% in the same period last year.

Our more robust performance is helped by our flat fee model which generates predictable recurring income.

I am also delighted that The Share Centre was voted best online broker for both Overall Client Satisfaction and Customer Service in Investment Trends' 2014 UK Online Broking Report. Focusing on the needs of personal investors is core to our approach and these awards are testament to our delivery - demonstrating that 'Putting customers first' is at the forefront of all that we do. Our objective remains to become consumers' first choice for investment knowledge, guidance, dealing efficiency and fair value."

(*) Benchmarked revenue peer group includes: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing, HSBC Stockbrokers, NatWest Stockbrokers, SAGA Personal Finance, Selftrade and TD Direct Investing.

(**) Details available at http://www.investmenttrends.com.au/about/home/awards

Contacts

Gavin Oldham - Chairman 01296 439 100 / 07767 337 696

Richard Stone - Chief Executive 01296 439 270 / 07919 220 599

Mike Birkett - Finance Director 01296 439 479

Stephanie Reynolds - PR Manager 01296 439 256

Cenkos Securities plc (Nominated Adviser)

Stephen Keys / Ivonne Cantu / Mark Connelly 020 7397 8900

KTZ Communications (Financial Public Relations)

Katie Tzouliadis/ Deborah Walter 020 3178 6378 

Risk Warning

This document is not intended to constitute an offer or agreement to buy or sell investments and does not constitute a personal recommendation. The investments and services referred to in this document may not be suitable for every investor and if in doubt independent financial advice should be sought. No liability is accepted whatsoever for any loss howsoever arising from any information in this document subject to the rules of the Financial Conduct Authority or the Financial Services and Markets Act 2000. Share prices, values and income can go down as well as up and investors may get back less than their initial investment. The Share Centre is a member of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority under reference 146768.

Notes for Editors:

Share plc is the parent holding company of The Share Centre Limited and Sharefunds Limited and its shares are traded on AIM and also on Asset Match. The Share Centre started trading in 1991 and provides a range of account-based services to enable investors to share in the wealth of the stock market. These include Share Accounts, ISAs, CTF accounts and SIPPs, all with the benefit of investment advice, and dealing in a wide range of investments. Services available to corporate clients include share plan administration and 'white-label' dealing platforms.

For more details contact 0800 800 008, or visit www.shareplc.com or www.share.com.