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RNS

Final Results for the year ended 31 December 2017

Released 07:00 20-Mar-2018

RNS Number : 2130I
Mortgage Advice Bureau(Holdings)PLC
20 March 2018
 

MORTGAGE ADVICE BUREAU (HOLDINGS) PLC

("MAB" or "the Group")

20 March 2018

Final Results for the year ended 31 December 2017

Mortgage Advice Bureau (Holdings) PLC (AIM: MAB1.L) is pleased to announce its final results for the year ended 31 December 2017.

Financial highlights

Ninth consecutive year of strong revenue and profit growth

Revenue up 17% to £108.8m (2016: £92.8m)

Gross profit up 17% to £25.9m (2016: £22.1m)

Gross margin maintained at 23.8% (2016: 23.9%)

Overheads ratio of 10.9% (2016: 11.1%)

Reported profit before tax of £14.5m (2016: £15.2m1)

Profit before exceptional gain and tax up 16% to £14.5m (2016: £12.5m2)

Profit margin before exceptional gain and tax maintained at 13.4% (2016: 13.5%2)

Basic EPS of 23.8p (2016: 25.6p1)

Adjusted EPS up 17% to 23.8p (2016: 20.3p2)

Continued high operating profit to headline cash conversion3 of 120% (2016: 128%)

Continued high operating profit to adjusted cash conversion4 of 109% (2016: 111%)

Proposed final dividend of 11.9p making proposed total ordinary dividends for the year of 21.4p (2016: 18.3p), up 17% (payout ratio of 90%)

Strong financial position with significant surplus on regulatory capital requirement

Total cash balances of £22.6m (31 Dec 2016: £18.7m)

Unrestricted cash balances of £13.2m (31 Dec 2016: £10.8m)

Operational highlights

Average number of Advisers in 2017 up 14% to 1,008 (2016: 888)

Adviser numbers up 13% to 1,078 at 31 December 2017 (2016: 950)

Revenue per Adviser up 3%5

Market share up 13% to 4.6% (2016: 4.1%)

Gross mortgage completions up 18.5% to £11.9bn (2016: £10.0bn)

Post period end

Adviser numbers have increased to 1,096 at 16 March 2018

Stephen Smith joins MAB Board as a Non-Executive Director

MAB receives 'Best Mortgage Broker' award at Mortgage Strategy 2018 Awards

 

 


2017

2016

Change





Revenue

£108.8m

£92.8m

+17%

Gross profit

£25.9m

£22.1m

+17%

Gross profit margin

23.8%

23.9%


Profit before tax

£14.5m

£15.2m1


Profit before exceptional gain and tax

£14.5m

£12.5m2

+16%

PBT margin

13.4%

13.5%2


Adjusted EPS

23.8p

20.3p2

+17%

Basic EPS

23.8p

25.6p1


Proposed final dividend per share

11.9p

10.5p

+13%

Proposed total ordinary dividends per share

21.4p

18.3p

+17%

Operating profit to headline cash conversion2

120%

128%


Operating profit to adjusted cash conversion3

109%

111%


1 Includes exceptional gain of £2.7m profit on disposal of 49% stake in Capital Private Finance Limited in 2016.

2  Excludes exceptional gain of £2.7m profit on disposal of 49% stake in Capital Private Finance Limited in 2016.

Headline cash conversion is cash generated from operating activities adjusted for movements in non-trading items including loans to Appointed Representative firms ("ARs") and loans to associates totalling £0.7m in 2017 (2016: £0.4m) as a percentage of operating profit. 

4 Adjusted cash conversion is headline cash conversion adjusted for increases in restricted cash balances of £1.5m in 2017 (2016: £2.1m) and additional cash balances (2017: £nil; 2016: £nil) held due to the timing of the weekly AR commission payment in relation to the period end, as a percentage of operating profit.

5 Based on Average number of Advisers

Peter Brodnicki, Chief Executive commented: 

"I am delighted to report another set of excellent results.  Strong growth in revenue, up 17% to £108.8m has translated into strong growth in adjusted EPS up 17% to 23.8p.  Accordingly, the Board is pleased to propose the payment of an increased final dividend of 11.9p per share, making total proposed ordinary dividends for the year of 21.4p, up 17% on the prior year.

 "MAB continues to deliver on its strategy in all market conditions whilst maintaining a strong financial position.  Our mortgage completions increased by 18.5% and our market share increased by 13%. Achievements across the business continue to be recognised by a number of industry awards, including being named Best Mortgage Broker at the 2018 Mortgage Strategy Awards.

"We are focused on delivering sustainable long-term growth and providing the best possible solutions and outcomes for our customers.  We plan to continue growing our market share and mortgage completions, whilst leading the evolution of intermediary distribution that we expect to see over the next five years."

Outlook

UK Finance's estimate for gross mortgage lending in 2017 of £258bn, implies market growth of 5% since 2016.  UK Finance recently increased its estimate for gross mortgage lending in 2018 to £260bn, as well as publishing a first estimate for 2019 of £271bn.  Gross mortgage lending is therefore expected to be relatively flat for 2018 and show a 4% increase for 2019. 

Adviser numbers have increased since the year end to 1,096 at 16 March 2018. We remain confident about our planned growth in adviser numbers in 2018 and beyond, both organically and from new ARs. 

We are confident that our strategy, driven by our customers and their changing expectations, will continue to drive growth in MAB's market share year on year and deliver attractive returns to investors.  The Board's expectations for the year remain unchanged.

For further information please contact:

Mortgage Advice Bureau (Holdings) Plc

                        Tel: +44 (0) 1332 525007

Peter Brodnicki  - Chief Executive


David Preece  - Chief Operating Officer


Lucy Tilley -  Finance Director


Zeus Capital                                                                                Tel:  +44 (0)20 3829 5000

Martin Green

Nicholas How

Pippa Underwood

 

Canaccord Genuity                                                                       Tel: +44 (0)20 7523 8350

 

Andrew Buchanan

Richard Andrews

Media Enquiries:

investorrelations@mab.org.uk







Analyst presentation

There will be an analyst presentation to discuss the results at 08:30am today at Canaccord Genuity Limited, 88 Wood Street, London, EC2V 7QR. 

Those analysts wishing to attend are asked to contact investorrelations@mab.org.uk

Copies of this final results announcement are available at investor.mortgageadvicebureau.com 

Chief Executive's Review

I am delighted to report another period of strong revenue and profit growth, with our market share increasing by 13% to 4.6% (2016: 4.1%) and our mortgage completions increasing by 18.5% to £11.9bn. Our fintech developments are progressing well and serve to enhance our high-quality business model.  Our strategy remains focused on securing further growth through technology, lead generation and specialisation which will increase our market share and the number of mortgage completions in all market conditions, enabling us to continue to deliver strong returns to our investors.

We are just over a year into our three-year plan that is focused on building solutions for the future; this will ensure MAB is able to maintain and build upon its leading position in the intermediary sector. We continue to invest in our core business model with our plans for 2020 and beyond designed to secure sustainable long-term growth whilst continuing to deliver strong results in the meantime.

Market environment

Activity overall in the housing market has remained steady over the last year and was not noticeably affected by the general election in early June.  The current house purchase market remains predominantly comprised of those moving home due to non-discretionary lifestyle factors, first time buyers and serious investors.  The residential remortgage market has seen 14% growth by loan value on 2016, mostly ahead of the widely anticipated increase in the Bank of England base rate and with strong competition amongst lenders for new business.

Despite increases in first time buyer transactions, housing transaction volumes overall have remained relatively flat as the number of amateur landlords has reduced.  Mortgage transactions by both volume and value have increased by 4% and 5% respectively in 2017 driven by both remortgages and first time buyers.  UK Finance predicts a relatively flat market for gross mortgage lending for 2018, with a 4% increase for 2019 as the Government continues to manage the UK's exit from the EU. UK Finance also predict that housing transactions will remain flat over the next two years.  Intermediary market share1 has remained broadly stable at just over 70%.  MAB and its ARs growth is not directly reliant on increasing housing transactions, property prices, or intermediary market share as our continued year on year growth demonstrates.

Intermediaries previously had limited access to the product switching market, where customers change products with their existing lender. However, the vast majority of lenders now provide intermediaries with full access to their switching products. The UK Finance industry data on gross mortgage lending currently excludes product switches with the same lender, but we expect UK Finance to confirm the size of the product switching market later on this year.  Whilst it is still relatively early to assess the impact of this increased access to product switches, we expect product switches will typically deliver lower overall income per transaction compared to a remortgage, with this mostly offset by switches having a much lower dropout to completion.  In addition, we expect product switches to deliver banked income in a shorter timeframe.

Looking ahead, we expect client fees to become increasingly dependent upon the type and complexity of the mortgage transaction, as well as the delivery channel.  This will lead to a broader spread of client fees on mortgage transactions, which, by their nature, are our lowest margin revenue stream.

Recent RICS2 commentary on house prices suggests that on a national level, house prices have resumed a modest growth trajectory.  However, the national figure conceals diverging trends across different parts of the UK, with London and, to a lesser extent, the South East, East Anglia and the North East experiencing pressure on prices, whereas house prices are quite firmly on an upward trend in other areas, including the North West, Northern Ireland and Wales.

1 excluding Buy-To-Let, where intermediaries have a higher market share, and product switches with the same lender 

2 Royal Institution of Chartered Surveyors

Delivering on our strategy

Fintech developments

We continue developing our technology solutions which are at the centre of our plans to further enhance our unique business model.  This will enable us to increase our market share and gross mortgage completions both by delivering what our customers will rightly start to expect and by enabling our AR partners and advisers to continue competing at the highest level.  These fintech developments will play an ever-increasing role in customer acquisition and conversion, as well as retention, by allowing advisers to identify future engagement opportunities with their customers more accurately and efficiently.

We are embracing fintech developments to enhance both face to face advice and our newer fast-growing and highly scalable telephony advice model.  This will enable us to access a wider range of lead sources and provide greater choice to the consumer in how they research, receive advice and transact.  As a result, we believe MAB's proportion of telephone advice is likely to increase, complementing the face to face advice that remains highly valued by consumers. Both these channels will continue to be supported by increasingly streamlined digital processes.

To allow us to capitalise fully upon our fintech developments we will consider investments in selected technology propositions where these can accelerate the development of our customer proposition and lead generation solutions. In addition, we expect our IT capital expenditure and IT costs to increase by a modest amount.

Driving income opportunities

MAB is focused on securing long term sustainable growth and providing the best possible solutions and outcomes to its customers.  Against the backdrop of a changing consumer landscape, we will look to increase the range of services offered to our customers by adopting new developments in technology and working closely with lenders.

One of our key objectives is to maximise protection opportunities by achieving even higher levels and consistency of protection advice.  To help facilitate this we were delighted to appoint Andy Walton to the new role of Proposition Director, Protection last year.

Our plans for direct-to-consumer marketing are progressing well, and we expect to be in a controlled testing phase during Q2 2018. Whilst MAB will use a range of media to target as many channels as possible, we expect to see the degree of digital content grow in line with the increasingly digital solutions that will be bought to all stages of the client journey.  

We invested a further £0.2m in on-line conveyancing business, Sort Group Limited, towards the end of 2017, increasing our ownership from 33.25% to 43.25%.  Every mortgage requires conveyancing and this further investment reflects the importance we place on technology in delivering a seamless and fully integrated end-to-end service for MAB's customers across their entire purchase and remortgage processes.  Our plans with Sort Group Limited include developing a far closer association between conveyancing and mortgages to provide a more seamless service for consumers as well as enhancing lead generation. Sort Group Limited has two main trading subsidiaries, Sort Limited and Sort Legal Limited.  Whilst Sort Limited had a record year and continues to grow strongly, Sort Legal Limited is a major new initiative that brings ownership of legal services into Sort Group Limited, considerably increasing its distribution and capacity. As a result of this, Sort Limited results were offset by the start-up costs in Sort Legal Limited during 2017.

Our joint venture in Australia, MAB Broker Services, is trading in line with our expectations.  We continue to review progress and are in the early stages of implementation of a structure similar to our UK network partner initiative in Australia, having identified potential key partners.

MAB continually looks for where the biggest growth sectors may be for intermediaries in the future.   We believe that lending into retirement represents one of the clear growth opportunities and, as such, are in the early stages of building the foundations of solutions for this market; equity release being one of these solutions, a market which is currently dominated by specialist intermediaries. 

Summary

We are just over a year into our three-year plan that is focused on building solutions for the future; this will ensure MAB is able to maintain and build upon its leading position in the intermediary sector. We continue to invest in our core business model with our plans for 2020 and beyond designed to secure sustainable long-term growth whilst continuing to deliver strong results in the meantime.  From a resource and technology perspective we have been focussed on being ready for GDPR for quite some time, and consider ourselves to be well positioned and prepared for GDPR.

As technology allows us to have more consistent and targeted interaction with our customers and when artificial intelligence/machine learning allows us to identify how different consumer groups behave and the services they require, this will give us opportunities in the medium and long term to identify future new revenue sources and ensure continued and diversified growth.

Having made a number of key strategic investments, MAB continues to consider further investments where there is a close alignment with our strategic objectives.  Whilst our investments to date have been relatively modest in size, we will consider making larger investments to help accelerate the development of our customer proposition, lead generation and distribution.  However, given our strong financial position and prospects for growth, we do not expect any such investment to adversely affect our payout ratio or the future growth in dividends. 

Our plans for the future also include broadening the Executive Board due to the growth and widening range of opportunities for MAB.

Business Review of the year

I am pleased to report further strong growth in revenue of 17% to £108.8m with profit before tax (and exceptional gain in 2016) rising by 16% to £14.5m.  MAB's gross mortgage lending increased by 18.5% to £11.9bn in 2017 (2016: £10.0bn) with the average number of Advisers increasing by 14%.  MAB's overall share of UK new mortgage lending increased by 13% to 4.6% (2016: 4.1%).

Industry data and trends

Mortgage lending activity in 2017 grew by 5% to £258bn (2016: £246bn). UK Finance recently increased its estimate for gross mortgage lending for 2018 to £260bn, as well as publishing a first estimate for 2019 of £271bn; gross mortgage lending growth is therefore expected to be relatively flat for 2018 and show a 4% increase for 2019.  We are confident that our strategy, driven by our customer's future direction of travel, will continue to drive growth in our market share and mortgage completions year on year and deliver attractive returns to investors. 

UK property transactions by volume for 2017 were c. 1% lower than in 2016.  The spike in buy-to-let ("BTL") transactions ahead of the stamp duty changes in April 2016 is evident in the graph below.

 

http://www.rns-pdf.londonstockexchange.com/rns/2130I_2-2018-3-19.pdf

 

Source: HM Revenue and Customs

UK property inflation of 4.8%(1) and an increase in remortgage volumes of 11% and first time buyer transactions of 8% more than offset the slight reduction in UK property transactions and the 10% reduction in BTL transactions, leading to an increase in UK mortgage lending of 5% overall, as illustrated in the graph below.

(1) Land Registry House Price Index

http://www.rns-pdf.londonstockexchange.com/rns/2130I_1-2018-3-19.pdf

 

Source: UK Finance Regulated Mortgage Survey (excludes product transfers with the same lender), Bank of England, UK Finance BTL data (used for further analysis)

UK gross mortgage lending in 2017 for home-owner purchases (including first time buyers) and remortgages grew by 9% and 14% respectively.  UK gross mortgage lending in 2017 for BTL purchases and BTL remortgages reduced by 28% and 4% respectively.

Just over 70% of UK mortgage transactions (excluding BTL, where intermediaries have a higher market share, and product switches with the same lender) were via an intermediary in 2017, which is broadly stable compared to 2016 and MAB expects intermediary market share to remain broadly stable going forward.

Financial review

We measure the development, performance and position of our business against a number of key indicators.

http://www.rns-pdf.londonstockexchange.com/rns/2130I_-2018-3-19.pdf

Revenue

Revenue increased by 17% to £108.8m (2016: £92.8m). A key driver of revenue is the average number of Advisers during the period.  Our business model continues to attract forward thinking ARs who are seeking to expand and grow their own market share. Average adviser numbers increased by 14% to 1,008 (2016: 888) due to a combination of expansion by existing ARs and the recruitment of new ARs.

The Group generates revenue from three core areas, summarised as follows:

Income source

2017

2016

Increase


£m

£m


Mortgage procuration fees

46.8

39.4

19%

Protection and General Insurance Commission

42.8

36.4

18%

Client Fees

17.5

15.6

12%

Other Income

1.7

1.4

22%

Total

108.8

92.8

17%

MAB's revenue, in terms of proportion, is split as follows:

Income source

2017

2016




Mortgage procuration fees

43%

42%

Protection and General Insurance Commission

39%

39%

Client Fees

16%

17%

Other Income

2%

2%

Total

100%

100%

 

All income sources continued to grow strongly with the average number of Advisers in the year increasing by 14%. We have seen an increase in average revenue per adviser of 3%, demonstrating the anticipated return to growth in productivity following the lull in activity in the housing and mortgage markets surrounding the EU referendum in 2016

With MAB's gross mortgage completions increasing by 18.5% in 2017, mortgage procuration fees increased by 19%; and protection and general insurance commission grew by 18%.  Client fees, which are not linked to the mortgage value, grew by 12%, reflecting an increase in remortgaging and product switching where fees are generally lower.  Looking ahead, we expect to see a broader spread of client fees on mortgage transactions, which, by their nature, are our lowest margin revenue stream.

Gross profit margin

Gross profit margin was broadly maintained at 23.8% (2016: 23.9%).  The Group typically receives a slightly reduced margin as its existing ARs grow their revenue organically through increasing their Adviser numbers.  In addition, larger new ARs typically join the Group on lower than average margins due to their existing scale, which therefore impacts upon the Group's gross margin. 

Going forward, we expect to see some further erosion of gross profit margin due to the continued growth of our existing ARs and the addition of new larger ARs.  

Overheads

Overheads as a percentage of revenue were 10.9% (2016: 11.1%).   This reduction in underlying overheads as a percentage of revenue demonstrates the scalable nature of the cost base.  Certain costs, primarily those relating to compliance, which represent approximately 40% of our cost base, are closely correlated to the growth in the number of Advisers, due to the high standards we demand and the requirement to maintain regulatory spans of control.  The remainder of MAB's costs typically rise at a slower rate than revenue which will, in part, counter the expected erosion of gross margin as the business continues to grow. 

As a result of MAB's IT plans, we expect our amortisation on IT capital expenditure and IT costs to increase by a modest amount.

Profit before tax and margin thereon

Profit before tax rose by 16% to £14.5m (2016: £12.5m, excluding an exceptional £2.7m profit on disposal of 49% stake in Capital Private Finance Limited) with the margin thereon being 13.4% (2016: 13.5%). 

Net finance revenue 

Net finance revenues of £0.04m (2016: £0.07m) reflect continued low interest rates. 

Taxation

The effective rate of tax fell to 17.2% (2016: 18.4%), principally due to the tax deduction arising following the exercise of the first tranche of employee share options since IPO.  Going forward we expect our effective tax rate to be marginally below the prevailing UK corporation tax rate subject to the continued availability of tax credits for MAB's research and development expenditure on our continued development of MIDAS Pro, MAB's proprietary software, and further tax deductions arising from the exercise of share options.

Earnings per share and dividend

Adjusted earnings per share rose by 17% to 23.8 pence (2016: 20.3 pence1).

The Board is pleased to propose a final dividend for the year ended 31 December 2017 of 11.9 pence per share (2016: 10.5 pence per share), amounting to a cash cost of £6.0m.  Following payment of the dividend, the Group will continue to maintain significant surplus regulatory reserves. This proposed final dividend represents circa 90% of the Group's post-tax profits for H2 2017 and reflects our ongoing intention to distribute excess capital.  MAB requires circa 10% of its profit after tax to fund increased regulatory capital and other regular capital expenditure.

The record date for the final dividend is 27 April 2018 and the payment date is 22 May 2018. The ex-dividend date will be 26 April 2018.

Cash flow and cash conversion

The Group's operations produce positive cash flow.  This is reflected in the net cash inflow from operating activities of £14.5m (2016: £13.4m).

Headline cash conversion (1) was:

2017

120%

2016

128%

Adjusted cash conversion (2) was:

2017 

109%

2016

111%

The Group's operations are capital light with our most significant ongoing capital investment being in computer equipment.  Only £0.1m of capital expenditure on office and computer equipment was required during the period (2016: £0.3m).  Group policy is not to provide company cars, and, other than on IT as indicated above, no significant capital expenditure is foreseen in the coming year. All development work on MIDAS Pro is treated as revenue expenditure.

The Group had no bank borrowings at 31 December 2017 (2016: £nil) with unrestricted bank balances of £13.2m (31 December 2016: £10.8m).

The Group has a regulatory capital requirement amounting to 2.5% of regulated revenue. At 31 December 2017 this regulatory capital requirement was £2.5m (31 December 2016: £2.1m), with the Group having a surplus of £9.5m.

 

The following table demonstrates how cash generated from operations was applied:


£m

Unrestricted bank balances at the beginning of the year

10.8

Cash generated from operating activities excluding movements in restricted balances and dividends received from associates

14.8

Issue of shares

0.5

Dividends received from associates

0.4

Dividends paid

(10.7)

Tax paid

(2.2)

Capital expenditure (including new website)

(0.2)

Investments in associates

(0.2)

Unrestricted bank balances at the end of the period

13.2

 

 

 

 

The Group's treasury strategy is to reduce risk by spreading deposits over a number of institutions rather than to seek marginal improvements in returns.

Excludes the exceptional gain of £2.7m profit on disposal of 49% stake in Capital Private Finance Limited in 2016.

2 Headline cash conversion is cash generated from operating activities adjusted for movements in non-trading items including loans to Appointed Representative firms ("ARs") and loans to associates totalling £0.7m in 2017 (2016: £0.4m) as a percentage of operating profit. 

3Adjusted cash conversion is headline cash conversion adjusted for increases in restricted cash balances of £1.5m in 2017 (2016: £2.1m) and additional cash balances (2017: £nil; 2016: £nil) held due to the timing of the weekly AR commission payment in relation to the period end, as a percentage of operating profit.

Outlook

UK Finance's estimate for gross mortgage lending in 2017 of £258bn, implies market growth of 5% since 2016.  UK Finance recently increased its estimate for gross mortgage lending in 2018 to £260bn, as well as publishing a first estimate for 2019 of £271bn.  Gross mortgage lending is therefore expected to be relatively flat for 2018 and show a 4% increase for 2019. 

Adviser numbers have increased since the year end to 1,096 at 16 March 2018. We remain confident about our planned growth in adviser numbers in 2018 and beyond, both organically and from new ARs. 

We are confident that our strategy, driven by our customers and their changing expectations, will continue to drive growth in MAB's market share year on year and deliver attractive returns to investors.  The Board's expectations for the year remain unchanged.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MORTGAGE ADVICE BUREAU (HOLDINGS) PLC

 

Opinion

We have audited the financial statements of Mortgage Advice Bureau (Holdings) plc (the "parent company") and its subsidiaries (the 'group') for the year ended 31 December 2017 which comprise the consolidated statement of comprehensive income, the consolidated statement of financial position and the company statement of financial position, the consolidated statement of changes in equity and the company statement of changes in equity, the consolidated statement of cash flows and the notes to the financial statements, including a summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard in the United Kingdom and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion:

•     the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2017 and of the group's profit for the year then ended;

•     the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

•     the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

 

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.



 

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters

 

Key audit matters

Key audit matter description

Audit response

Revenue recognition (Note 3)

 

Revenue comprises of commissions, client fees and other income.

Revenue is processed in the operating system upon receipt of third party reports once transactions have been exchanged or completed and is then accounted for when it is matched with cash received in the bank on a monthly basis.

Revenue recognition is considered to be a significant audit risk as it is a key driver of return to investors and there is a risk that there could be misstatement or omission of amounts recorded in the system.

We responded to this risk by performing the following procedures:

•     We have checked the effectiveness of the reconciliation between revenue and cash banked.

•     We have checked on a sample basis that the third party reports have been properly accounted for in order to verify the completeness of revenue.

•     Using third party reports, we have recalculated the majority of the mortgage related fees independently.

•     We have performed cut-off tests by verifying back to third party reports.


No material misstatements were detected as a result of our testing.

 

 

 



 

Key audit matters

Key audit matter description

Audit response

Clawback provision (Note 19)

 

The clawback provision relates to the estimated value of repaying commission received up front on life assurance policies that may lapse in a period of up to four years following inception of the policies.

The clawback provision is considered to be a significant audit risk due to the management judgement and estimation applied in calculating the provision. The provision is determined using a model which uses a number of factors including the total unearned commission at the point of calculation, the age profile of the commission received, the group's share of any clawback, likely future lapse rates, lapse rate history, and the success of the in-house team that focuses on preventing lapses and/or generating new income at the point of a lapse.

•     We have reviewed the methodology applied by management in determining the claw back provision.

•     Lapse rates, recoveries and unearned indemnity commission values used in calculating the claw back provision have been agreed to system reports, third party data and historical data.

•     Where management applied judgements, we have performed a sensitivity analysis.

 

No material misstatements were detected as a result of our testing.

 

 

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

Based on our professional judgement, we determined materiality for the group to be £700,000 (2016: £790,000) which represents 5% of profit before tax. We have used profit before tax as a benchmark given the importance of profit as a measure for shareholders in assessing the performance of the Group. We have then set the performance materiality at 75% (2016:75%) due to few identified misstatements in the past.

We determined materiality for the parent to be £192,000 (2016: £165,000) which represents 5% of net assets. We have used net assets as the parent acts as a holding company only. We have then set the performance materiality at 75% (2016:75%) due no identified misstatements in the past.

We agreed with the audit committee that we would report to the committee all individual audit differences identified during the course of our audit in excess of £14,000 (2016: £16,000) for the group and £4,000 (2016: £3,000) for the parent. We also agreed to report differences below these thresholds that, in our view warranted reporting on qualitative grounds

An overview of the scope of our audit

Our audit approach was scoped by obtaining an understanding of the group's activities, the key functions undertaken by the Board and the overall control environment. Based on this understanding we assessed those aspects of the group's transactions and balances which were most likely to give rise to a material misstatement at a group level.

 

The audit of the group was conducted by BDO LLP directly at group level as the group's accounting system records all transactions as a group with each transaction marked with a company code to enable financial statements to be produced for each subsidiary when required.


The audit of the parent company was conducted by BDO LLP after its financial statements were deconsolidated from the group accounting system,

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

 


Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.  Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's 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 and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.


Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

 

 

Leigh Treacy (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London

19 March 2018

 

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

 

 

 

 

 

Consolidated statement of comprehensive income
for the year ended 31 December 2017

 


Note

 



 



2017

£'000

2016

£'000

Revenue

3

108,847

92,848

Cost of sales

4

(82,945)

(70,700)

Gross profit


25,902

22,148

Administrative expenses


(11,909)

(10,296)

Share of profit of associates

13

500

611

Operating profit


14,493

12,463

Finance income

7

42

73

Exceptional profit on disposal of asset held for sale

13

-

2,690

Profit before tax 


14,535

15,226

Tax expense

8

(2,494)

(2,307)

Profit for the year attributable to equity holders of parent company


12,041

12,919





Other comprehensive income




Other comprehensive income to be reclassified to profit or loss in subsequent periods (net of tax):



 

 

Net gain on asset held for sale


-

2,152

Transfer to realised profit


-

(2,152)

Net other comprehensive income to be reclassified to profit and loss in subsequent periods net of tax


-

-

Other comprehensive income


-

-

Total comprehensive income attributable to equity holders of parent company


 

12,041

12,919

 




Earnings per share attributable to the owners of the parent company


Basic

9

23.8p

25.6p

Diluted

9

23.2p

25.2p

 

 

The notes that follow form part of these financial statements.


Consolidated statement of financial position
as at 31 December 2017



Note

2017
£'000

2016
£'000

Assets




Non-current assets




Property, plant and equipment

11

2,648

2,720

Goodwill

12

4,114

4,114

Other intangible assets

12

98

9

Investments

13

1,339

1,008

Deferred tax asset

20

925

72

Total non-current assets


9,124

7,923

Current assets




Trade and other receivables

15

4,426

3,256

Cash and cash equivalents

16

22,551

18,711

Total current assets


26,977

21,967

Total assets


36,101

29,890

Equity and liabilities




Equity attributable to owners of the parent company



Share capital

21

51

51

Share premium


3,574

3,042

Capital redemption reserve


20

20

Share option reserve


1,450

380

Retained earnings


13,071

11,680

Total equity


18,166

15,173

Liabilities




Non-current liabilities




Contingent consideration

13

-

50

Provisions

19

1,496

1,219

Deferred tax liability

20

51

40

Total non-current liabilities


1,547

1,309

Current liabilities
               




Trade and other payables

17

14,999

12,405

Corporation tax liability


1,389

1,003

Total current liabilities


16,388

13,408

Total liabilities


17,935

14,717

Total equity and liabilities


36,101

29,890


The notes that follow form part of these financial statements.


 

The financial statements were approved by the Board of Directors on

 

P Brodnicki

Director

L Tilley

Director

 

Consolidated statement of changes in equity
for the year ended 31 December 2017


 

Share

capital
£'000

 

Share premium
£'000

Capital redemption reserve
£'000

Share option reserve
£'000

 

Retained earnings
£'000

 

Total Equity
£'000

Balance at 1 January 2016

51

3,042

20

157

9,635

12,905

Profit for the year

-

-

-

-

12,919

12,919

Total comprehensive income

-

-

-


12,919

12,919

Transactions with owners







Share based payment transactions

-

-

-

223

-

223

Dividends paid

-

-

-

-

(10,874)

(10,874)

Transactions with owners

-

-

-

223

(10,874)

(10,651)

Balance at 31 December 2016 and 1 January 2017

51

3,042

20

380

11,680

15,173

Profit for the year

-

-

-

-

12,041

12,041

Total comprehensive income

-

-

-

-

12,041

12,041

Transactions with owners







Issue of shares

-

532

-

-

-

532

Share based payment transactions

-

-

-

333

-

333

Deferred tax asset recognised in equity

-

-

-

799

-

799

Reserve transfer

-

-

-

(62)

62

-

Dividends paid

-

-

-

-

(10,712)

(10,712)

Transactions with owners

-

532

-

1,070

(10,650)

(9,048)

Balance at 31 December 2017

51

3,574

20

1,450

13,071

18,166

 

The notes that follow form part of these financial statements.


Consolidated statement of cash flows
for the year ended 31 December 2017

 


Notes

 2017
£'000

2016
£'000

Cash flows from operating activities




Profit for the year before tax


14,535

15,226

Adjustments for:




Depreciation of property, plant and equipment

11

201

193

Amortisation of intangibles

12

14

18

Profit on disposal of asset held for sale


-

(2,690)

Share based payments


333

223

Share of profit from associates

13

(500)

(611)

Dividends received from associates

13

353

567

Finance income

7

(42)

(73)



14,894

12,853

Changes in working capital




Increase in trade and other receivables


(1,159)

(405)

Increase in trade and other payables


2,594

2,886

Increase in provisions


277

301

Cash generated from operating activities


16,606

15,635

Income taxes paid


(2,151)

(2,278)

Net cash generated from operating activities


14,455

13,357

Cash flows from investing activities




Purchase of property, plant and equipment

11

 

 

(129)

(292)

Purchase of intangibles

12

(103)


Proceeds from sale of associate


-

2,694

Acquisitions of associates and investments

13

(184)

(203)

Deferred consideration on acquisition of associates

13

(50)

-

Net cash used in investing activities


(466)

2,199

Cash flows from financing activities




Interest received

7

31

73

Issue of shares

21

532

-

Dividends paid

10

(10,712)

(10,874)

Net cash used in financing activities


(10,149)

(10,801)

Net increase in cash and cash equivalents


3,840

4,755

Cash and cash equivalents at the beginning of year


18,711

13,956

Cash and cash equivalents at the end of the year


22,551

18,711


The notes that follow form part of these financial statements



Notes to the consolidated financial statements
for the year ended 31 December 2017

1       Accounting policies

Basis of preparation

 

The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below. The policies have been consistently applied to all the years presented.

 

The consolidated financial statements are presented in Great British Pounds, which is also the Group's functional currency. All amounts are rounded to the relevant thousands, unless otherwise stated.

 

These financial statements have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB) as adopted by the European Union (EU) (EU "adopted IFRSs") and with those parts of the Companies Act 2006 that are applicable to companies that prepare financial statements in accordance with IFRSs.

 

The preparation of financial statements in compliance with adopted EU IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies. The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in note 2.

 

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report as set out earlier in this announcement. The financial position of the Group, its cash flows and liquidity position are described in these financial statements.

The Group made an operating profit of £14.5m during 2017 (2016: £12.5 million) and had net current assets of £10.5m at 31 December 2017 (31 December 2016: £8.6m) and equity attributable to owners of the Group of £18.2m (31 December 2016: £15.2m).

After making enquiries, the Directors have a reasonable expectation 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 the annual report and accounts.

Changes in accounting policies

 

New standards, interpretations and amendments effective for the year ended 31 December 2017

 

The following new standards, interpretations and amendments are effective for annual periods beginning on or after 1 January 2017 and have been applied in preparing these financial statements. None of these new standards or interpretations have a significant impact on the annual consolidated financial statements of the Group.

 

 

·           IAS 7 Disclosure Initiative - Amendments to IAS 7. The amendments to IAS 7 Statement of Cash Flows are part of the IASB's Disclosure Initiative and require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 1 January 2017, with early application permitted. Application of the amendments has had no impact on the Group.

 

·           IAS 12 Income Taxes Recognition of Deferred Tax Assets for Unrealised Losses - Amendments to IAS 12. The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference related to unrealised losses. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in the opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact. These amendments are effective for annual periods beginning on or after 1 January 2017 with early application permitted. If an entity applies the amendments for an earlier period, it must disclose that fact.  Application of the amendments has had no impact on the Group.

·           Annual Improvements Cycle - 2014-2016

Amendments to IFRS 12 - Disclosure of interest in other entities. The amendments clarify that the disclosure requirements in IFRS 12, other than those in paragraphs B10-B16, apply to an entity's interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. These amendments did not affect the Group's financial statements.

 

New standards, interpretations and amendments not yet effective

 

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.

 

·           IFRS 9 Financial Instruments.  The group has identified that the adoption of IFRS 9, which replaces IAS 39 Financial Instruments: Recognition and Measurement from 1 January 2018, could impact its consolidated financial statements in one key area:

The Group will need to apply an expected credit loss model when calculating impairment losses on its trade and other receivables and its cash and cash equivalents. This may result in increased impairment provisions and greater judgement due to the need to factor in forward looking information when estimating the appropriate amount of provisions. In applying IFRS 9 the Group must consider the probability of a default occurring over the contractual life of its trade receivables on initial recognition of those assets. Under the new model applied to all trade and other receivables, the amount of impairment losses as at 31 December 2017 is not material, resulting in an immaterial increase in the impairment provision as at 1 January 2018 under IFRS 9 compared to IAS 39.

 

 

·           IFRS 15 Revenue from Contracts with Customers. This was issued by the IASB on 28 May 2014 and applies to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2018. It sets out the requirements for recognising revenue that apply to contracts with customers, except for those covered by standards on leases, insurance contracts and financial instruments. This standard is not expected to have any impact on the Group.

 

·           IFRS 2 Classification and Measurement of Share-based Payment Transactions - Amendments to IFRS 2. The IASB issued amendments to IFRS 2 Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash-settled to equity-settled.

 

On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other criteria are met. The amendments are effective for annual periods beginning on or after 1 January 2018, with early application permitted.  These amendments are not expected to have any impact on the Group.

 

·           IFRS 16 Leases. IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. The standard includes two recognition exemptions for lessees - leases of 'low-value' assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expenses on the lease liability and the depreciation expense on the right-of-use asset.

 

Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g. a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.

 

Lessor accounting under IFRS 16 is substantially unchanged from today's accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases.

 

IFRS 16 also requires lessees and lessors to make more extensive disclosures than IAS 17.

 

IFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard's transition provisions permit certain reliefs. This standard is not expected to have any impact on the Group.

 

 

·           IFRIC Interpretation 23 - Uncertainty over income tax treatments. The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 and does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The interpretation specifically addresses the following:

Whether an entity considers uncertain tax treatments separately

The assumptions an entity makes about the examination of tax treatments by taxation authorities

How an entity determines taxable profit (tax loss), tax basis, unused tax losses, unused tax credits and tax rates

How an entity considers changes in facts and circumstances

 

An entity must determine whether to consider each uncertain tax treatment separately or together with one or more uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The interpretation is effective for annual reporting periods beginning on or after 1 January 2019, but certain transition reliefs are available. The Group will apply this interpretation and it may affect its consolidated financial statements and the required disclosures.

In addition, the Group may need to establish processes and procedures to obtain information that is necessary to apply the Interpretation on a timely basis.

·           IFRS 17 - Insurance contracts. IFRS 17, a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure was issued in May 2017. Once effective, IFRS 17 will replace IFRS 4. IFRS 17 applies to all types of insurance contracts, regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. The objective of IFRS 17 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers.

IFRS 17 is effective for reporting periods beginning on or after 1 January 2021, with comparative figures required. Early application is permitted, provided the entity also applies IFRS 9 and IFRS 15 on or before the date it first applies IFRS 17. This standard is not applicable to the Group.

·           Amendments to IFRS 10 and IAS 28: Sale or contribution of Assets between an Investor and its Associate or Joint Venture. The amendments address the conflict between IFRS 10, Consolidated Financial Statements and IAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3, between an investor and its associate or joint venture, is recognised in full. Any gain or loss resulting from the sale or contribution of assets that do not constitute a business, however, is recognised only to the extent of unrelated investors' interests in the associate or joint venture. The IASB has deferred the effective date of these amendments indefinitely, but an entity that early adopts the amendments must apply them prospectively. The Group will apply these amendments when they become effective.

Current versus non-current classification

 

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:

 

Expected to be realised or intended to be sold or consumed in the normal operating cycle

Held primarily for the purpose of trading

Expected to be realised within twelve months after the reporting date

 

All other assets are classified as non-current.

 

Assets included in current assets which are expected to be realised within twelve months after the reporting date are measured at fair value which is their book value. Fair value for investments in unquoted equity shares is the net proceeds that would be received for the sale of the asset where this can be reasonably determined.


Basis of consolidation

Where the company has control over an investee, it is classified as a subsidiary. The company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

 

The consolidated financial statements present the results of the company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

 

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

Entities that are not subsidiaries but where the Group has significant influence (i.e. the power to participate in the financial and operating policy decisions) are accounted for as associates. The results and assets and liabilities of the associates and joint venture are included in the consolidated accounts using the equity method of accounting.

 

 

Property, plant and equipment

 

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs.

 

Depreciation is provided on all items of property, plant and equipment at rates calculated to write off the cost of each asset on a straight line basis over their expected useful lives, as follows:

 

Freehold land

not depreciated

Freehold buildings

36 years

Fixtures and fittings

20%

Computer equipment

33%

 

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised in the income statement.  The Directors reassess the useful economic life of the assets annually.

 

Goodwill

Goodwill represents the excess of a cost of a business combination over the Group's interest in the fair value of identifiable assets under IFRS 3 Business Combinations.

 

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

 

Other intangible assets

 

Intangible assets other than goodwill acquired by the Group comprise licences and the website and are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to the statement of comprehensive income within administrative expenses on a straight line basis over the period of the licence agreements. Assets are tested annually for impairment or more frequently if events or circumstances indicate potential impairment.

 

Amortisation, which is reviewed annually, is provided on licences at 16.7% per annum and the website at 33.3% per annum, calculated to write off the cost of the asset on a straight line basis over its expected useful life. 

 

Impairment of non-financial assets

 

Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of the asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

 

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows, its cash generating units ('CGUs'). Goodwill is allocated on initial recognition to each of the group's CGUs that are expected to benefit from the synergies of the combination giving rise to the goodwill.

 

Financial assets

 

In the consolidated statement of financial position, the Group classifies its financial assets as loans, trade receivables and cash and cash equivalents. The classification depends on the purpose for which the financial assets were acquired. Loans and trade receivables are non-derivative financial assets with fixed or determinable payments which arise principally through the Group's trading activities. These are recognised at original fair value less appropriate provision for impairment and subsequently measured at amortised cost.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within cost of sales in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

 

Cash and cash equivalents include cash in hand and deposits held at call with banks with an original maturity of three months or less.

 

Trade and other payables

 

Trade and other payables are recognised initially at fair value and subsequently carried at amortised cost.

 

Retirement benefits: Defined contribution schemes

 

Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which they relate.

 

Provisions

A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.

 

Share capital

 

Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Company's ordinary shares are classified as equity instruments. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from the proceeds.

 

 

Revenue

Revenue comprises commissions, client fees and other income. Commissions and client fees are included at the gross amounts receivable by the Group in respect of all services provided. Commissions payable to trading partners in respect of their share of the commissions earned are included in cost of sales.

Commissions and client fees earned are accounted for when received or guaranteed to be received, as until received it is not possible to be certain that the transaction will be completed. In the case of life commissions there is a possibility for a period after the inception of the policy that part of the commission earned may have to be repaid if the policy is cancelled during this period. A provision is made for the expected level of commissions repayable.

Other income comprises income from ancillary services such as survey and conveyancing fees and is credited to the statement of comprehensive income partly on an accruals basis.

Leased assets

 

Rentals under operating leases are charged on a straight line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight line basis over the lease term.

 

Finance income

 

Finance income comprises interest receivable on cash at bank and interest recognised on loans to associates. Interest income is recognised in the statement of comprehensive income as it accrues.

 

Exceptional items

 

As permitted by IAS 1 'Presentation and disclosure' - certain items are presented separately in the income statement as exceptional where, in the judgement of the Directors, they need to be disclosed by virtue of their nature, size or incidence in order to obtain a clear and consistent presentation of the Group's underlying business performance. Examples of material and non-recurring items which may give rise to disclosure as exceptional items include asset impairments, costs associated with acquiring new businesses and profits on the disposal of investments.

 

Taxation

 

Income tax comprises current and deferred tax. Income tax is recognised in profit or loss other than if it relates to items recognised in other comprehensive income in which case it is recognised in other comprehensive income.

 

Current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantively enacted by the statement of financial position date and any adjustment to tax payable in respect of previous years.

 

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

 

 

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

 

The amount of the asset or liability is determined using tax rates that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.

 

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:

 

·   the same taxable group company, or

 

·   different company entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities are expected to be settled or recovered.

 

Segment Reporting

 

An operating segment is a distinguishable segment of an entity that engages in business activities from which it may earn revenues and incur expenses and whose operating results are reviewed regularly by the entity's chief operating decision maker (CODM). The Board reviews the Group's operations and financial position as a whole and therefore considers that it has only one operating segment, being the provision of financial services operating solely within the UK. The information presented to the CODM directly reflects that presented in the financial statements and they review the performance of the Group by reference to the results of the operating segment against budget.

 

Operating profit is the profit measure, as disclosed on the face of the combined income statement that is reviewed by the CODM.

 

Dividends

 

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when they are paid. In the case of final dividends, this is when they are approved by the shareholders.

 

Where options are granted to persons other than employees, the statement of comprehensive income is charged with the fair value of the options at the date of the grant over the vesting period.


Share-based payments

 

Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of comprehensive income over the vesting period.  Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.  Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted.  As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied.  The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

 

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the statement of comprehensive income over the remaining vesting period.

 

2       Critical Accounting Estimates and Judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The Directors consider that the estimates and judgements that have the most significant effect on the carrying amounts of assets and liabilities within the financial statements are set out below.

 

(a)        Impairment of goodwill

The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows. Actual outcomes may vary. More information including carrying values is included in note 12.

 

(b)        Impairment of trade and other receivables

 

Judgement is required when determining if there is any impairment to the trade and other receivable balances. Trade receivables are reviewed for impairment if they are past due and are not repaid within the terms of the contracts. Other receivables, which include loans, are reviewed for impairment when there are any indications that they may not be recoverable and that security held against the balance may be inadequate to fully cover the amount outstanding. A provision for impairment will be made if following review of the balances, the Group considers it unlikely that any balance will be recovered.  More information is included in note 15.

 

(c)        Clawback Provision

The provision relates to the estimated value of repaying commission received up front on life assurance policies that may lapse in a period of up to four years following inception. The provision is calculated using a model that has been developed over several years. The model uses a number of factors including the total unearned commission at the point of calculation, the age profile of the commission received, the Group's proportion of any clawback, likely future lapse rates, and the success of the Group's team that focuses on preventing lapses and/or generating new income at the point of a lapse.  More information is included in note 19.

 

(d)        Freehold building

The freehold building is depreciated over its useful life. The useful life is based on management's estimate of the period that the asset will generate revenue and will be reviewed annually for continued appropriateness. The carrying value will be tested for impairment when there is an indication that the value of the asset might be impaired. When carrying out an impairment test this would be based on future cash flow forecasts and these forecasts would be based on management judgement.  No such indication of impairment has been noted.

 

 

(e)        Deferred tax assets

Deferred tax assets include temporary differences related to the issue and exercise of share options. Recognition of the deferred tax assets assigns an estimate of proportion of options likely to vest and assumes share options will have a positive value at the date of vesting, which is greater than the exercise price. The carrying amount of deferred tax assets at 31 December 2017 was £0.9m.



 

3           Revenue

The Group operates in one segment being that of the provision of financial services in the UK. Revenue is derived as follows:


2017


2016


£'000


£'000

Mortgage related products

64,289


55,011

Insurance and other protection products

42,854


36,444

Other income

1,704


1,393

 


108,847


92,848


4       Cost of sales

 Costs of sales are as follows:


2017

2016


£'000

£'000

Commissions paid

81,265

69,380

Wages and salary costs

1,680

1,320

 


82,945

70,700

 

 


Wages and salary costs

 2017
£'000

2016
£'000




Gross

1,302

1,015

Employers' National Insurance

151

115

Defined contribution pension costs

48

35

Other Direct Costs

179

155


1,680

1,320

 



 

5       Profit from operations

 

Profit from operations is stated after charging the following:


 2017
£'000

 2016
£'000

Depreciation of property, plant and equipment

201

193

Amortisation of intangibles

14

18

Auditors' remuneration:



Fees payable to the Group's auditors for the audit of the Group's financial statements.

10

10

Fees payable to the Group's auditors for the audit of the Group's subsidiary financial statements.

32

27

 

Other administrative expenses are incurred in the ordinary course of the business and do not include any non-recurring items.

 

Profits from associates are disclosed as part of the operating profit as this is the operational nature of the Group.

 

6       Staff costs

Staff costs, including executive and non-executive directors' remuneration, were as follows:


 2017
£'000

2016
£'000




Wages and salaries

7,271

6,410

Share based payments

670

315

Social security costs

739

712

Defined contribution pension costs

188

150


8,868

7,587




The average number of people employed by the Group during the year was:

Number

Number

Executive Directors

3

3

Compliance

59

52

Sales and marketing

43

40

Operations

52

46

Total

157

141




 

Key management compensation

Key management are those persons having authority and responsibility for planning, directing and controlling the activities of the Group. These are the directors of Mortgage Advice Bureau (Holdings) Plc.

 

 

 

 

 

2017
£'000

2016
£'000

Wages and salaries

1,420

1,568

Share based payments

145

86

Defined contribution pension costs

21

19


1,586

1,673


During the year retirement benefits were accruing to 1 director (2016: 1) in respect of defined contribution pension schemes.

 

The total amount payable to the highest paid director in respect of emoluments was £598,738 (2016: £619,873). The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £nil (2016: £nil).


7       Finance income


 2017
£'000

2016
£'000

Interest income

 

31

73

Interest income accrued on loans to associates

11

--


42

73

 


8       Income Tax


 2017
£'000


2016
£'000

Current tax expense

 




UK corporation tax charge on profit for the year

2,537


2,367

Total current tax

2,537


2,367

Deferred tax expense




Origination and reversal of timing differences

5


(58)

Temporary difference on share based payments

(71)


-

Adjustment to deferred tax charge in respect of prior periods

23


-

Effect of change in tax rate on opening liability

-


(2)

Total Deferred Tax  (see note 20)

(43)


(60)

Total tax expense

2,494


2,307









The reasons for the difference between the actual charge for the year and the standard rate of corporation tax in the United Kingdom of 19.25% (2016: 20%) applied to profit for the year is as follows:

 


 2017
£'000


2016
£'000

Profit for the year before tax

14,535


15,226





Expected tax charge based on corporation tax rate

2,798


3,045

Expenses not deductible for tax purposes

amortisation and impairment

56


62

Adjustment for non-taxable profit on sale of asset held for sale

-


(538)

Research & Development allowances

(135)


(148)

Tax on share options exercised

(163)


-

Adjustment to deferred tax charge in respect of prior periods

23


-

Profits from associates

(96)


(122)

Effect of lower deferred tax rate

11


10

Rate change on deferred tax liability

-


(2)

Total tax expense

2,494


2,307


For the year ended 31 December 2017 the deferred tax, relating to unexercised share options, recognised in equity was £799,387 (2016: £nil).

Changes in the taxation rate

Legislation to reduce the main rate of corporation tax to 19% from 1 April 2017 and to 17% from 1 April 2020 has been enacted and so the deferred tax balance has been calculated at 17% (2016: 17%).

 



 

9       Earnings Per Share

a) Earnings per share

Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.


2017


2016

Basic earnings per share

£'000


£'000

Profit for the year attributable to the owners of the parent

12,041


12,919

Weighted average number of shares in issue 

50,697,207


50,461,600

Basic earnings per share (in pence per share)

23.8p


25.6p

 

For diluted earnings per share, the weighted average number of ordinary shares in existence is adjusted to include potential ordinary shares arising from share options.

 


2017


2016

Diluted earnings per share

£'000


£'000

Profit for the year attributable to the owners of the parent

12,041


12,919

Weighted average number of shares in issue

51,948,051


51,238,503

Basic earnings per share (in pence per share)

23.2p


25.2p


The share data used in the basic and diluted earnings per share computations are as follows:

Weighted average number of ordinary shares

2017


2016

Issued ordinary shares at start of period

50,461,600


50,461,600

Effect of shares issued during period

235,607


-

Basic weighted average number of shares

50,697,207


50,461,600

Potential ordinary shares arising from options

1,250,844


776,903

Diluted weighted average number of shares

51,948,051


51,283,503


b) Adjusted earnings per share


2017


2016


£'000


£'000

Profit for the year attributable to the owners of the parent

12,041


12,919

Adjusted for the following items net of tax:




Profit on disposal of asset held for sale

-


(2,690)

Adjusted earnings net of tax

12,041


10,229

Weighted average number of shares in issue

50,697,207


50,461,600

Adjusted basic earnings per share (in pence per share)

23.8p


20.3p

Adjusted diluted earnings per share (in pence per share)

23.2p


20.0p



 

10     Dividends


    2017

2016


£'000

£'000

Dividends paid and declared during the year:



Final dividend for 2016:10.5p per share (2016: 9.5p)

5,333

4,794

Special dividend: 1.1p per share (2016: 4.25p)

555

2,145

Interim dividend for 2017: 9.5p per share (2016: 7.8p)

4,824

3,935

 


10,712

10,874

 

Equity dividends on ordinary shares:



Further special dividend: 1.1p per share

-

555

Proposed for approval:



Final dividend for 2017: 11.9p per share (2016: 10.5p)

6,044

5,298

 


6,044

5,853

 

The record date for the final dividend is 27 April 2018 and the payment date is 22 May 2018.The ex-dividend date will be 26 April 2018.

 


11     Property, Plant and Equipment


Freehold land and   building

£'000

 

 Fixtures & fittings
£'000


 

Computer equipment
£'000


 

 

Total
£'000







At 1 January 2017

2,461

435


681


3,577

Additions

-

59


70


129

At 31 December 2017

2,461

494


751


3,706







At 1 January 2017

67

267


523


857

Charge for the year

55

47


99


201

At 31 December 2017

122

314


622


1,058







At 31 December 2017

2,339

180


129


2,648








Freehold land and

building

£'000


 Fixtures & fittings
£'000



Computer equipment
£'000




Total
£'000







At 1 January 2016

2,409

288


588


3,285

Additions

52

147


93


292

At 31 December 2016

2,461

435


681


3,577







At 1 January 2016

13

240


411


664

Charge for the year

54

27


112


193

At 31 December 2016

67

267


523


857







At 31 December 2016

2,394

168


158


2,720








 


12     Intangible Assets

Goodwill



2017
£'000

2016

£'000

Cost





As at 1 January and 31 December



4,267

4,267

Accumulated impairment





At 1 January



153

153

At 31 December



153

153

Net book value





At 31 December



4,114

4,114

 

The goodwill relates to the acquisition of Talk Limited in 2012, and in particular its main operating subsidiary Mortgage Talk Limited.  The goodwill is deemed to have an indefinite useful life. It is currently carried at cost and is reviewed annually for impairment.

 

Under IAS 36, "Impairment of assets", the Group is required to review and test its goodwill annually each year or in the event of a significant change in circumstances. The impairment review conducted at the end of 2017 concluded that there had been no impairment of goodwill.

 

The Board considers that it has only one operating segment and therefore one cash generating unit so accordingly it is necessary to assess the impact of the acquisition of Mortgage Talk Limited to the Group. The value in use of Mortgage Talk Limited has therefore been estimated based on the improvements in net profits which that acquisition continues to bring to the Group. The forecast ongoing profits generated by the acquisition of Mortgage Talk Limited significantly exceed the value of goodwill and therefore no impairment of the goodwill is required.  A discount rate of 10% has been applied to these calculations.  Management has considered forecast profits over a three year period in determining the value in use.  Management believes that any possible changes to any of the key assumptions applied in determining the value in use would not cause the carrying amount of goodwill to exceed the forecast ongoing profits.

Licences and website



Licences

£'000

Website

£'000

Total £'000

Cost






At 1 January 2017



108

-

108

Additions



-

103

103

At 31 December 2017



108

103

211

Accumulated Amortisation






At 1 January 2017



99

-

99

Charge for the year



9

5

14

At 31 December 2017



108

5

113

Net book value






At 31 December 2017



-

98

98

 

 

 


 




Licences
£'000

Website
£'000

Total £'000

Cost






At 1 January 2016 and 31 December 2016



108

-

108

Accumulated Amortisation






At 1 January 2016



81

-

81

Charge for the year



18

-

18

At 31 December 2016



99

-

99

Net book value






At 31 December 2016



9

-

9


13     Investments in Associates and Joint Venture


£'000

Investment in Associates and joint venture

1,339

Other Investments

-

At 31 December 2017

1,339

At 31 December 2016

1,008


Investment in Associates and Joint Venture

The Group holds investments in associates and a joint venture, all of which are accounted for under the equity method, as follows:



Company name



Registered office

Percentage of ordinary shares held



Description

 

CO2 Commercial Limited

 


Profile House, Stores Road, Derby DE21 4BD

 

 

49

 

Property surveyors

MAB Wealth Management Limited

Capital House, Pride Place, Derby DE24 8QR

49

Provision of financial services

Freedom 365 Mortgage Solutions Limited

Gresley House, Ten Pound Walk, Doncaster DN4 5HX

35

Provision of financial services

Sort Group Limited

Burdsall House, London Road, Derby DE24 8UX

 

43.25

Conveyancing services

 

Buildstore Limited

Nsb & Rc Lydiard Fields, Great Western Way, Swindon SN5 8UB

 

25

Provision of financial services

 

Clear Mortgage Solutions Limited

114 Centrum House, Dundas Street, Edinburgh EH3 5DQ

 

25

Provision of financial services

 

Vita Financial Limited

1st Floor Tudor House, 16 Cathedral Road, Cardiff CF11 9LJ

 

20

Provision of financial services

 

MAB Broker Services PTY Limited

Level 7, 68 Alfred Street, Milsons Point, NSW 2061

45

Provision of financial services



 

The reporting date for the Group's associates, as listed in the table above, is 31 December and their country of incorporation is England and Wales.  The reporting date for the Group's joint venture, MAB Broker Services PTY Limited, is 30 June and its country of incorporation is Australia.

The investment in associates and the joint venture at the reporting date is as follows:


2017
£'000

2016
£'000

At 1 January

1,008

715

Additions

184

253

Disposals

-

(4)

Share of profit

500

611

Dividends received

(353)

(567)

At 31 December

1,339

1,008


The Group was entitled to 49% of the results for Capital Private Finance Limited up to 30 June 2016. The Group is also entitled to 49% of the results of CO2 Commercial Limited, and MAB Wealth Management Limited by virtue of its 49% equity stakes. CO2 Commercial Limited is a dormant holding company, and trades through its wholly owned subsidiary, Pinnacle Surveyors (England & Wales) Limited. The Group is entitled to 45% of the results of MAB Broker Services PTY Limited by virtue of its 45% equity stake, 35% of the results of Freedom 365 Mortgage Solutions Limited by virtue of its 35% equity stake, 25% of the results of Buildstore Limited and Clear Mortgage Solutions Limited by virtue of its 25% equity stakes and 20% of the results of Vita Financial Limited by virtue of its 20% equity stake.

On 20 November 2017, the Group acquired a further 10% equity stake in Sort Group Limited. At 31 December 2017 the Group was entitled to 43.25% of the results of Sort Group Limited by virtue of its 43.25% equity stake. Mortgage Advice Bureau Limited's effective holding in Sort Limited and Sort Technology Limited at 31 December 2017 was 30%. Mortgage Advice Bureau Limited's effective holding in Sort Limited at 31 December 2017 was 28%.

The carrying value of the Group's joint venture, MAB Broker Services PTY Limited, at 31 December 2017 is £nil (2016: £nil). In the period ended 30 June 2017, MAB Broker Services PTY reported a loss of AUD0.5m.

Acquisitions and disposals

2017: The Group acquired a further 10% interest in Sort Group Limited on 20 November 2017 at a cost of £183,817.

2016: During the year ended 31 December 2016, the Group acquired a 25% interest in Clear Mortgage Solutions Limited at a cost of £50,000 plus contingent consideration of up to £50,000 which was paid in full in 2017.  Also during 2016 the Group acquired a 20% interest in Vita Financial Limited at a cost of £150,000, a 35% interest in Freedom 365 Mortgage Solutions Limited at a cost of £350 and a 45% interest in MAB Broker Services PTY Limited at a cost of £2,666 (AUD4,500).

On 31 July 2016, the Group disposed of its 49% holding in Capital Private Finance Limited for sale proceeds of £2.7m which resulted in a net profit on sale of £2.69m.

As the associates are private companies published share prices are not available. The aggregate amounts of certain financial information of the associates is summarised as follows:


Pinnacle Surveyors (England & Wales) Limited

£'000

 

 

 

Buildstore Limited

£'000

 

 

Sort Group Limited
£'000

 

 

 

 

Others

£'000

 

 

 

2017

Total

£'000

Non-current assets

30

64

719

109

922

Cash balances

594

444

619

203

1,860

Current assets

410

744

380

373

1,907

Current liabilities

(579)

(860)

(632)

(173)

(2,244)

Non-current liabilities and provisions

(6)

(60)

(2)

(217)

(285)

Revenue

3,901

3,532

3,198

3,803

14,434

Profit before taxation

971

231

32

364

1,598

Total comprehensive income

785

186

25

158

1,154

Profit attributable to Group

385

46

9

60

500

Dividends received from associates

353*

-

-

-

353








Pinnacle Surveyors (England & Wales) Limited

£'000

 



Buildstore Limited

£'000

Sort Group Limited
£'000

 

 

 

 

Others

£'000

 

 

 

2016

Total

£'000

Non-current assets

38

100

808

146

1,092

Cash balances

378

316

631

412

1,737

Current assets

572

247

80

266

1,165

Current liabilities

(592)

(587)

(257)

(800)

(2,236)

Non-current liabilities and provisions

(2)

(10)

(2)

(142)

(156)

Revenue

3,723

3,271

3,921

2,641

13,556

Profit before taxation

1,020

176

455

148

1,799

Total comprehensive income

816

134

337

25

1,312

Profit attributable to Group

400

-

41

170

611

Dividends received from associates

357*

-

-

210

567

 



 

All associates prepare their financial statements in accordance with FRS 102 other MAB Broker Services PTY Limited who prepare their financial statements in accordance with the Australian Accounting Standards. There would be no material difference to the accounts of any of the associates other than Sort Group Limited if these were prepared in accordance with IFRS. For Sort Group Limited amortisation of £86,981 (2016: £86,981) has been charged for the year on goodwill arising on consolidation, no amortisation would be charged under IFRS and goodwill instead be tested for impairment at the balance sheet date.

* These dividends are received from CO2 Commercial Limited, the parent undertaking of Pinnacle Surveyors (England & Wales) Limited. All other information disclosed above relates to Pinnacle Surveyors (England & Wales) Limited.

Other investments

Unlisted investment

The unlisted investment represents a 0.05% shareholding in Twenty7tec Group Limited, a company that licenses certain mortgage sourcing software. The net book value of the investment at 31 December 2017 was £150 (2016: £150).



 

14     Subsidiaries

The subsidiaries of Mortgage Advice Bureau (Holdings) Plc at the reporting date have been included in the consolidated financial statements. The subsidiaries are as follows:

 

Company name

Country of Incorporation

Percentage of ordinary shares held

 

Nature of business


Mortgage Advice Bureau Limited


England and Wales


100

Provision of financial services

 

Mortgage Advice Bureau (Derby) Limited



England and Wales



100

 

Provision of financial services



Capital Protect Limited

 

 

England and Wales

 

 

100

 

Provision of financial services



Mortgage Talk Limited



England and Wales



100


Provision of financial services



Talk Limited



England and Wales



100


Intermediate holding company


Mortgage Advice Bureau Australia (Holdings) PTY Limited



Australia



100


Intermediate holding company


Mortgage Advice Bureau PTY Limited



Australia



100


Holding of intellectual property

 

MABWM Limited

 

England and Wales

 

100

 

Dormant


Mortgage Advice Bureau (UK) Limited



England and Wales



100



Dormant


MAB (Derby) Limited


England and Wales


100


Dormant





L&P 137 Limited

England and Wales

100

Dormant

Mortgage Talk (Partnership) Limited

 

England and Wales

 

100

 

Dormant

 

Financial Talk Limited


England and Wales


100


Dormant

 

Survey Talk Limited


England and Wales


100


Dormant


L&P 134 Limited


England and Wales


100

 

Dormant


Loan Talk Limited


England and Wales


100


Dormant

 

MAB1 Limited

 

England and Wales

 

100

 

Dormant


The registered office for all of the subsidiaries of Mortgage Advice Bureau (Holdings) plc, as listed in the table above, is Capital House, Pride Place, Pride Park, Derby, DE24 8QR, United Kingdom, , other than for the two subsidiaries incorporated in Australia for which the registered office is Norton Rose Fulbright, Level 18, 225 George Street, Sydney, NSW 2000, Australia.

                                

 

Acquisitions

 

On 8 December 2016 the Group acquired a 100% interest in Mortgage Advice Bureau Australia (Holdings) PTY Limited which was a newly incorporated entity. Mortgage Advice Bureau Australia (Holdings) PTY Limited has a 100% equity stake in Mortgage Advice Bureau PTY Limited and also a 45% equity stake in MAB Broker Services PTY Limited.

 

Mortgage Advice Bureau (Holdings) Plc holds 100% of the ordinary share capital of Mortgage Advice Bureau Limited and Talk Limited.

 

Mortgage Advice Bureau Limited holds 100% of the ordinary share capital of Mortgage Advice Bureau (Derby) Limited, Capital Protect Limited, MABWM Limited and Mortgage Advice Bureau Australia (Holdings) PTY Limited.

 

Talk Limited holds 100% of the ordinary share capital of Mortgage Talk Limited, L&P 137 Limited, Mortgage Talk (Partnership) Limited, Financial Talk Limited and Survey Talk Limited.

 

Mortgage Talk Limited holds 100% of the ordinary share capital of Loan Talk Limited.

 

L&P 137 Limited holds 100% of the ordinary share capital of L&P 134 Limited.

 

There are no restrictions regarding the utilisation of cash or other resources held by any subsidiary.

15     Trade and Other Receivables


2017


2016


£'000


£'000

Trade receivables not past due

1,144


757

Trade receivables past due but not impaired

13


55

Trade receivables past due but impaired

273


481

Trade receivables

1,430


1,293

Less provision for impairment of trade receivables

(273)


(481)

Trade receivables - net

1,157


812

Amounts due from associates

719


318

Prepayments and accrued income

2,550


2,126


4,426


3,256

 

Trade and other receivables are all current and the book value is the same as their fair value.  Trade receivables are reviewed for impairment if they are past due and are not repaid within the terms of the contracts.

 

Trade receivables include advances granted to Appointed Representatives, which have contractual repayment terms.  These advances are considered to be past due when there is a delinquency in interest or principal payments.

 

Also included in trade receivables are amounts due from Appointed Representatives relating to commissions that are refundable to the Group when policy lapses or other reclaims exceed new business.  As these balances have no credit terms, the Board of Directors consider these to be past due if they are not received within seven days.  In the management of these balances, the Directors can recover them from subsequent new business entered into with the Appointed Representative or utilise payables that are owed to the same counterparties and included within payables as the Group has the legally enforceable right of set off in such circumstances.  These payables are considered sufficient by the Directors to recover receivable balances should they default, and, accordingly, credit risk in this respect is minimal.

 

In light of the above, the Directors do not consider that disclosure of an aging analysis of past due but not impaired receivables would provide useful additional information.  The Group has not recognised a provision for impairment of these balances because there is no objective evidence that they are impaired.  Further information on the credit quality of financial assets is set out in note 18.


A summary of the movement in the provision for the impairment of receivables is as follows:


2017


2016


£'000


£'000

At 1 January

481


459

Impairment losses recognised

-


25

Impairment provisions no longer required 

(208)


(3)

At 31 December

273


481


The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above less collateral held as security. Details of security held are given in note 18.

No other balances are past due or impaired.

16     Cash and cash equivalents



2017
£'000


2016
£'000


Unrestricted cash and bank balances

13,170


10,811


Bank balances held in relation to retained commissions

9,381


7,900


Cash and cash equivalents

22,551


18,711










 

Bank balances held in relation to retained commissions earned on an indemnity basis in relation to life policies are held to cover potential future lapses in Appointed Representatives commissions.  Operationally the Group does not treat these balances as available funds.  An equal and opposite liability is shown within Trade Payables (note 17).

 

17     Trade and Other Payables



2017
£'000


2016
£'000


Appointed Representatives retained commission

9,381


7,900


Other trade payables

3,526


2,655


Trade payables

12,907


10,555


Social security and other taxes

315


240


Other payables

40


20


Accruals

1,737


1,590



14,999


12,405










 

Should a life policy be cancelled within four years of inception, a proportion of the original commission will be clawed back by the insurance provider.  The majority of any such repayment is payable by the Appointed Representative.  It is the Group's policy to retain a proportion of commission payable to the Appointed Representative to cover such potential future lapses; these sums remain a liability of the Group.  This commission is held in a separate ring fenced bank account as described in note 16.

As at 31 December 2017 and 31 December 2016, the book value of trade and other payables approximates their fair value given that they are short term in nature.

Appointed Representatives retained commission is expected to be payable after more than one year.  Other trade payables normally fall due within 30 to 60 days.


18     Financial Instruments - risk management

The Group is exposed through its operations to the following financial risks:

 

Credit risk

Liquidity risk

Interest rate risk

 

                                                 

 

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments.  This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them.  Further quantitative information in respect of these risks is presented throughout these financial statements.

 

Principal financial instruments

 

Trade and other receivables    

Cash and cash equivalents  

Trade and other payables     

 

The Group does not issue or use financial instruments of a speculative nature.  A summary of financial instruments held by category is provided below:

Financial assets

2017

2016


£'000

£'000

Cash and cash equivalents

22,551

18,711

Trade and other receivables

1,876

1,130

Total financial assets

24,427

19,841

 

 

Financial liabilities

2017

2016


£'000

£'000

Trade and other payables

14,684

12,165

Total financial liabilities

14,684

12,165




General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies and designs and operates processes that ensure the effective implementation of the objectives and policies to the Group's finance function.  The Board sets guidelines to the finance team and monitors adherence to its guidelines on a monthly basis.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility.  Further details regarding these policies are set out below.

Credit risk

Credit risk is the risk of financial loss to the Group if a trading partner or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from loans to its trading partners. It is Group policy to assess the credit risk of trading partners before advancing loans or other credit facilities. Assessment of credit risk utilises external credit rating agencies. Personal guarantees are generally obtained from the directors of its trading partners.

 

Quantitative disclosures of the credit risk exposure in relation to financial assets are set out below. Further disclosures regarding trade and other receivables are given in note 15.

 

Financial assets - maximum exposure

2017


2016


£'000


£'000

Cash and cash equivalents

22,551


18,711

Trade and other receivables

1,876


1,130

Total financial assets

24,427


19,841


The carrying amounts stated above represent the Group's maximum exposure to credit risk for trade and other receivables. An element of this risk is mitigated by collateral held by the Group for amounts due to them.

Trade receivables consist of a large number of unrelated trading partners and therefore credit risk is limited. Due to the large volume of trading partners the Group does not consider that there is any significant credit risk as a result of the impact of external market factors on their trading partners. Additionally, within trade payables are amounts due to the same trading partners that are included in trade receivables; this collateral of £520,789 (2016: £509,169) significantly reduces the credit risk.

The Group's credit risk on cash and cash equivalents is limited because the Group places funds on deposit with several UK banks all of whom are A or BBB+ rated where applicable.

 



 

 

Interest rate risks

The Group's interest rate risk arises from cash on deposit. The Group aims to maximise its return on cash on deposit whilst ensuring that cash is available to meet liabilities as they fall due. Current market deposit interest rates are minimal and therefore any fall in these rates is unlikely to have a significant impact on the results of the Group.

Foreign exchange risk

As the Group does not operate outside of the United Kingdom and has only one investment outside the UK, it is not exposed to any material foreign exchange risk.

Liquidity risk

Liquidity risk arises from the Group's management of working capital.  It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The Group's trade and other payables are repayable within one year from the reporting date and the contractual undiscounted cash flow analysis for the Group's trade and other payables is the same as their carrying value.

The Board receives annual 12 month cash flow projections based on working capital modelling as well as information regarding cash balances monthly.  At the end of the financial year, these projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances. Additionally the Group has financial resource requirements set by its regulator, the Financial Conduct Authority. The Board has set a policy to ensure that adequate capital is maintained to ensure that these externally set financial resource requirements are exceeded at all times. Quarterly reports are made to the Financial Conduct Authority and submission is authorised by the Finance Director, at which time capital adequacy is re-assessed.

Capital management

The Group monitors its capital which consists of all components of equity (i.e. share capital, share premium, capital redemption reserve, share option reserve and retained earnings).

The Group's objectives when maintaining capital are  

To safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

To ensure that capital is maintained at all times to ensure that financial resource requirements set by its regulator, the Financial Conduct Authority, are exceeded at all times.

To ensure the Group has the cash available to develop the services provided by the Group to provide an adequate return to shareholders.

 



 

19     Provisions

Clawback provision

2017

£'000

2016

£'000

At 1 January

1,219

918

Charged to the statement of comprehensive income

277

301

At 31 December

1,496

1,219


The provision relates to the estimated cost of repaying commission income received upfront on life assurance policies that may lapse in the four years following issue. Provisions are held in the financial statements of two of the group's subsidiaries: Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited. The exact timing of any clawbacks is uncertain and the provision was based on the Directors' best estimate, using industry data where available, of the probability of clawbacks to be made.

20     Deferred Tax

Deferred tax is calculated in full on temporary differences using a tax rate of 17% (2016: 17%). The reduction in the main rate of corporation tax as set out in note 8 has been applied to deferred tax balances which are expected to reverse in the future.

The movement in deferred tax is shown below:


2017
£'000

2016
£'000

Deferred tax asset/(liability) - opening balance

32

(28)

Recognised in the statement of comprehensive income

43

60

Deferred tax movement recognised in equity

799

-

Deferred tax asset - closing balance

874

32


The deferred tax balance is made up as follows:


2017
£'000


2016
£'000

Accelerated capital allowances

(51)


(40)

Share-based payment

925


72

Net deferred tax asset

874


32

 

Reflected in the statement of financial position as follows:

2017
£'000


2016
£'000

Deferred tax liability

(51)


(40)

Deferred tax asset

925


72

Deferred tax asset net

874


32


Deferred tax liabilities have arisen due to capital allowances which have been received ahead of the depreciation charged in the accounts.


21     Share Capital

Issued and fully paid

2017

£'000


2016

£'000

 

Ordinary shares of 0.1p each

51


 

51

Total share capital

51


51

 

During the year 325,745 ordinary shares of £0.001 each were issued following exercise of the first tranche of options issued at the time of the Initial Public Offering of the Company at a premium of £531,980. See also note 26.

 

22     Reserves

The Group's policy is to maintain an appropriate capital base and comply with its externally imposed capital requirements whilst providing maximum shareholder value.

The following describes the nature and purpose of each reserve within equity:

Reserve

Description and purpose



Share premium

Amount subscribed for share capital in excess of nominal value.

 

Capital redemption reserve

 

 

 

Share option reserve

 

The capital redemption reserve represents the cancellation of part of the original share capital premium of the company at par value of any shares repurchased.

 

The fair value of equity instruments granted by the Company in respect of share based payment transactions and deferred tax recognised in equity.

 

Retained earnings

All other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.



There is no restriction on the distribution of retained earnings.

23     Retirement Benefits

The Group operates a defined contribution pension scheme for the benefit of its employees and also makes contributions to a self-invested personal pension ("SIPP"). The assets of the scheme and the SIPP are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions payable by the Group to the SIPP and amounted to £188,279 (2016: £149,400). There were no contributions payable to the fund or the SIPP at the statement of financial position date (2016: £nil).



 

24     Related Party Transactions

The following details provide the total amount of transactions that have been entered into with related parties during the year ended 31 December 2017 and 2016, as well as balances with related parties as at 31 December 2017 and 2016.

At 31 December 2017 there was a loan outstanding from Buildstore Limited, an associated company, of £30,000 (2016: £65,000) included in trade and other receivables. During the period the Group paid commissions of £1,083,970 (2016: £1,499,513) to Buildstore Limited.

During the year the Group received introducer commission from MAB Wealth Management Limited, an associated company of £7,633 (2016: £9,345).  There is no balance outstanding with MAB Wealth Management Limited at 31 December 2017 (2016: £nil).

 

During the year the Group received introducer commission from Sort Limited, a subsidiary of an associated company of £329,798 (2016: £181,105). A loan of £118,288 was made to Sort Group Limited, an associated company during the year (2016: £5,195). There was an amount of £18,288 outstanding with Sort Group Limited at 31 December 2017 (2016: £nil) included in trade and other receivables.

 

During the year the Group paid commission to Clear Mortgage Solutions Limited, an associated company, of £2,484,296 (2016: £877,217).

During the year the Group purchased services from Twenty7tec Group Limited, a company in which the Group holds an investment, of £25,200.

During the year the Group paid commission to Freedom 365 Mortgage Solutions Limited, an associated company, of £567,849 (2016: £5,400). At 31 December 2017 there was a loan outstanding from Freedom 365 Mortgage Solutions Limited of £455,000 included in trade and other receivables (2016: £105,000).

During the year the Group paid commission to Vita Financial Limited, an associated company, of £740,351 (2016: £208,445).

At 31 December 2017 there was a loan outstanding from MAB Broker Services PTY Limited, an associated company, of £204,987 (AUD350,000) included in trade and other receivables (2016: £148,138, AUD250,000).

The Group's related party transactions in the year include the remuneration of the directors' emoluments, pension entitlements and share-based payments disclosed in note 6 of the financial statements.

During the year the Group received dividends from associated companies as follow:


2017

£'000

2016
£'000

CO2 Commercial Limited

353

357

Capital Private Finance Limited

-

210

Total

353

567

 

Capital Private Finance Limited was sold on 31 July 2016 and ceased to be an associated company from that date.

 

 

25     Ultimate Controlling Party

 

There is no ultimate controlling party.


26     Share based payments

Mortgage Advice Bureau Executive Share Option Plan

The Group operates two equity-settled share based remuneration schemes for Executive Directors and certain senior management, one being an approved scheme, the other unapproved, but with similar terms.  Half of the options are subject to a total shareholder return (TSR) performance condition and the remaining half are subject to an earnings per share (EPS) performance condition. The options in both schemes vest or have vested as follows:

For options granted at IPO and on 20 May 2015 and outstanding at 1 January 2017:

25% based on performance to 31 March 2017, exercisable between that date and 11 November 2022,

25% based on performance to 31 March 2018, exercisable between that date and 11 November 2022,

25% based on performance to 31 March 2018, exercisable between 31 March 2019 and 11 November 2022,

25% based on performance to 31 March 2018, exercisable between 31 March 2020 and 11 November 2022,

 

For options granted during 2016 and outstanding at 1 January 2017:

100% based on performance to 31 March 2019, exercisable between that date and 3 May 2024

For options granted during the year:

100% based on performance to 31 March 2020, exercisable between that date and 18 April 2025

 

The number and weighted average exercise prices (WAEP) of, and movements in, share options during the year for the Mortgage Advice Bureau Executive Share Option Plan:


2017

WAEP
£

2017

Number

 

2016

WAEP
£

2016

Number

Outstanding at 1 January

2.32

2,171,822

1.63

1,400,342

Granted during the year

4.31

624,599

3.58

        771,480

Exercised

(1.63)

(325,745)

-

-

Lapsed *

-

(118,658)

-

-

Outstanding at 31 December

2.98

2,352,018

2.32

2,171,822

 

*Due to retirement or leaving the Group.



 

On 19 April 2017, 624,599 options over ordinary shares of 0.1 pence each in the Company were granted to the Executive Directors and senior executives of MAB under the equity-settled Mortgage Advice Bureau Executive Share Option Plan (the "Options"). Exercise of the Options is subject to the achievement of performance conditions based on total shareholder return and earnings per share criteria.  Subject to achievement of the performance conditions, the Options will be exercisable three years from the date of grant.  The exercise price for the Options is 430.83 pence, being equal to the average of the last three business days' closing price for the ordinary shares of the Company prior to the date of grant.

On 10 July 2017, 60,324 options over ordinary shares of 0.1 pence each in the Company were granted to two senior executives of MAB under the equity-settled Mortgage Advice Bureau Executive Share Option Plan. Exercise of these options is subject to the achievement of performance conditions based on total shareholder return and earnings per share criteria.  Subject to achievement of the performance conditions, these options will be exercisable three years from the date of grant.  The exercise price for these options is 414.42 pence, being equal to the average of the last three business days' closing price for the ordinary shares of the Company prior to the date of grant.

Options exercised in April 2017 resulted in 325,745 ordinary shares being issued at an exercise price of £1.60 and £2.19. The price of the ordinary shares at the time of exercise was £4.24 per share.

For the share options outstanding under the Mortgage Advice Bureau Executive Share Option Plan as at 31 December 2017, the weighted average remaining contractual life is 1.6 years (2016 2.0 years).

The following information is relevant in the determination of the fair value of options granted during the year under the equity-settled share based remuneration scheme operated by the Group.


2017

2016

Equity-settled



Option pricing model - EPS

Black-Scholes

Black-Scholes

Option pricing model - TSR

Stochastic

Stochastic

Exercise price

£4.3083

£3.5775

Expected volatility

30%

30%

Expected dividend yield

4.18%

4.0%

Risk free interest rate

0.15%

0.47%


Expected volatility is a measure of an amount by which the share price is expected to fluctuate during a period.  As the Company only listed in November 2014 there is insufficient historical data. We have therefore used a proxy volatility figure based on the median volatilities of dividend paying FTSE AIM 100 companies over each of the expected terms.

Dividends paid on shares reduce the fair value of an award as a participant does not receive the dividend income on these shares.  For the share options granted during the year the historic dividend yield has been used, calculated as dividends announced in the 12 months prior to grant (excluding special dividends) calculated as a percentage of the share price on the date of grant to give a dividend yield of 4.18%.



 

The Options offer participants the opportunity to benefit from increasing per share value without risking the current per share price. The risk-free rate used is the rate of interest obtainable from UK government securities as at the date of grant over the expected terms

The options granted this year have vesting periods of 3.0 years from the date of grant and the calculation of the share based payment is based on these vesting periods.

MAB AR Option Plan

The Group operates an equity-settled share plan, the AR Option Plan, to reward selected ARs of the Group.  The AR Option Plan provides for options which have a nominal exercise price of price of 0.01 pence per Share (or, for any individual AR, not less than £1 on each occasion of exercise) to acquire Ordinary Shares subject to performance conditions.  Certain criteria must be met in order for ARs to be eligible, including using the Mortgage Advice Bureau brand and being party to an AR Agreement which provides for an initial contract term of at least five years at the date of grant. The AR Options will normally become exercisable following the fifth anniversary of grant subject to the satisfaction of performance conditions based on financial and other targets, including quality of consumer outcomes, compliance standards and continued use of the Mortgage Advice Bureau brand.

The number and weighted average exercise prices (WAEP) of, and movements in, share options during the year for the MAB AR Option Plan:


2017

WAEP

2017

Number

 

2016

WAEP

2016

Number

Outstanding at 1 January

0.01p

255,000

0.01p

255,000

Granted during the year

-

-

-

-

Outstanding at 31 December

0.01p

        255,000

0.01p

255,000

 

For the share options outstanding under the MAB AR Option Plan as at 31 December 2017, the weighted average remaining contractual life is 2.4 years (2016: 3.4 years).

 



 

Expected volatility is a measure of an amount by which the share price is expected to fluctuate during a period.  As the Company only listed in November 2014 there is insufficient historical data.  We have therefore used a proxy volatility figure based on the medium volatilities, of dividend paying FTSE AIM 100 companies over each of the expected terms.

Dividends paid on shares reduce the fair value of an award as a participant does not receive the dividend income on these shares.  For the share options granted during 2015 the stub dividend in respect of the period from Admission to 31 December 2014 has been annualised and divided at the share price at date of grant to give a dividend yield of 7.1%.

The options offer participants the opportunity to benefit from increasing per share value without risking the current per share price.  The risk-free rate used is the rate of interest obtainable from UK government securities as at the date of the grant over the expected terms.

The options granted in 2015 have a vesting period of 5 years from the date of grant and calculation of the share-based payment is based on these vesting periods.

Share-based remuneration expense

The share-based remuneration expense of £670,465 (2016: £315,223) includes the charge for the equity-settled schemes of £520,949 (2016: £221,717) and the matching element of the Group's Share Incentive Plan for all employees of £37,200 (2016: £52,506).

The Group did not enter into any share-based payment transactions with parties other than employees during the current or previous period.

27     Contingent Liabilities

The group had no contingent liabilities at 31 December 2017 or 31 December 2016.

28     Events after the reporting date

There are no significant events to report after the reporting date.

 

 


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Final Results for the year ended 31 December 2017 - RNS