TIDMARP
RNS Number : 2666M
Ashcourt Rowan PLC
12 August 2011
For immediate release:
Ashcourt Rowan plc
("Ashcourt Rowan", "the Company" or the "Group")
Final Results for the Year Ended 31 March 2011
Ashcourt Rowan plc (AIM: ARP), the wealth management group,
today announces its audited results for the 12 months ended 31
March 2011.
Operational highlights for period:
-- Disposal of non-core assets in the institutional fund
management area;
-- Strategic focus placed exclusively on wealth management;
-- Successful acquisition and integration of the former IFA
network of Co-operative Bank Independent Financial Advisers Limited
("CIFA");
-- Mobilisation of the Group's intermediary channel;
-- Introduction of a performance-based culture;
-- Launch of the new asset management proposition.
Financial highlights for period:
-- Revenues in the Group's core wealth management business
activities increased by 21% from GBP29.1 million in 2010 to GBP35.1
million in 2011;
-- Funds under discretionary or managed advisory mandates within
the wealth management business increased by 6% from GBP1.56 billion
at 31 March 2010 to GBP1.66 billion at 31 March 2011;
-- Funds under influence in the Group's financial planning
business increased to GBP2.32 billion at the year end compared to
GBP1.32 billion last year;
-- Post period end, the momentum in top line growth in the core
ongoing activities continued with revenue for the first quarter up
by 16.6% on the same period last year;
-- Exceptionals, one-offs and impairments of GBP16.8 million
resulting in a total loss for the period of GBP16.8 million;
-- 2010/2011 FSCS levy GBP825,000 compared to GBP71,000 for
2009/10.
Post Period Highlights:
-- Rebranding of the Group as Ashcourt Rowan plc;
-- Appointment of Kenneth "Buzz" West as non executive Interim
Chairman and Jeremy Rance as Group Chief Operating Officer;
-- Successful tender for the partnership relationship with Co-op
Legal Services (CLS), one of the fastest-growing will writing and
probate services in the country, to provide financial advice to
their clients.
Buzz West, non executive Interim Chairman of Ashcourt Rowan,
commented:
"As you will be aware, the period under review was one of
significant transformation for the Group. We are now fully embarked
on a programme of strengthening our Board and widening the
distribution channels through which our services are delivered.
Despite the wider economic uncertainty, we look to the future with
confidence."
-Ends-
For further information please contact:
Ashcourt Rowan plc
Buzz West (Non executive Interim Chairman) Tel: 020 7871
7373
Cenkos Securities plc
Stephen Keys (NOMAD)/Julian Morse (Sales) Tel: 020 7397 8900
GTH Communications
Toby Hall/Christian Pickel Tel: 020 3103 3903/3902
Chairman's Letter
We are pleased to report our audited results for the 12 months
ended 31 March 2011 following the re-branding of the Group as
Ashcourt Rowan plc in May this year.
As you will be aware, the period under review was one of
significant transformation for the Group - most notably in terms of
our management team and the refinement of our strategy.
In terms of the management team, Jonathan Freeman took the
decision in December 2010 to step down from the Board having
completed his work to re-structure the balance sheet and remove the
debt burdens that historically weighed upon it. The Group CEO
position was then transitioned to Mark Cheshire initially on an
interim basis. Post period, we were then delighted to welcome
Jeremy Rance onto the Board as Group COO as part of an on-going
programme to strengthen the Board of Directors. As part of this
transitioning exercise, Peter Dew, a long serving member of the
Board, also reached the decision in July that the timing was now
right to step down from the Board as Chairman. We thank him for his
tireless efforts on behalf of the Company over the last five years
and his role in helping return balance sheet stability to the Group
over the last two years.
Despite the economic uncertainty of recent times, wealth
management remains a highly attractive market in the UK. It is
experiencing growth and is expected to continue doing so. It
remains fragmented providing opportunities for highly focused
operators in the sector to succeed.
Consequently you will have seen the Group complete a series of
initiatives to enable us to concentrate fully on promoting our
expertise in the mass affluent and high net worth wealth management
arena through our Ashcourt Rowan brand and Savoy service. Most
notably this included the disposal of non-core assets in the
institutional fund management area - in particular the sale of the
Zenith and EPIC branded businesses.
In addition to the disposals, the key milestones of the year
have therefore been:
-- The successful acquisition and integration of the former IFA
network of Co-operative Bank Independent Financial Advisers Limited
("CIFA") in September 2010 (more of which later);
-- Launching a new asset management proposition;
-- Widening our distribution reach to national coverage;
-- Mobilising the intermediary channel;
-- Strengthening the leadership team;
-- Sharpening our programme to simplify the Group's operating
model and ensure focus on core opportunities;
-- Improved execution disciplines through our strategy and
operational planning process.
As a result of the above initiatives we are now in a position
where we can drive significant organic growth from within the
business without the historic reliance on acquisitions to provide
headline revenue uplift.
During the 12 months under review we are therefore delighted to
report that in our core continuing wealth management business
activities revenues have increased by 21% from GBP29.1 million in
2010 to GBP35.1 million in 2011.
Funds under discretionary or managed advisory mandates within
the wealth management business have likewise increased by 6% from
GBP1.56 billion at 31 March 2010 to GBP1.66 billion at 31 March
2011. Meanwhile funds under influence in our financial planning
business have grown to GBP2.32 billion at the year end compared to
GBP1.32 billion last year due in large to the CIFA acquisition.
Other advisory and execution only funds fell from GBP0.57 million
to GBP0.48 million.
Equally, we have worked hard during the year under review to
provide greater support to Savoy but realise there is more work to
be done in the high net worth arena but by bringing together Savoy
with Ashcourt Rowan, we believe that we can create a centre of
investment excellence that will meet the needs of all of our
clients.
Post period end, the momentum in top line growth in our core
ongoing activities has continued and in July we were pleased to
report that the revenue for the first quarter of the new financial
year had risen by 16.6% on the same period last year. Much of the
growth in revenues has been as a result of the acquisition of the
CIFA business which has helped increase revenues from financial
planning activities by 67.6%, with the Group's flagship Ashcourt
Rowan wealth management division recording a 24.4% increase in
turnover when compared to the same period last year.
Further, as a result of the CIFA acquisition, we have not only
been able to increase the number of IFA's within the Group from 42
to 74 but also strengthen our physical presence in regions of the
country where historically we were less well represented - most
notably, the North West and North East of England as well as across
Wales. Offices in the Group have likewise grown in the year from 17
to 18 with a new office in Newcastle.
As part of the CIFA acquisition, we were also able to tender for
the partnership relationship with Co-op Legal Services (CLS). CLS
is one of the fastest-growing will writing and probate services in
the country and I am delighted to report we have now, post period,
successfully won the contract to provide financial advice to their
clients. Inheritance tax planning and investment advice on receipt
of an inheritance are expected to increase substantially over time
and this relationship positions us well in this market.
Moving forward, we likewise see the IFA community as a key
channel for expanding our client numbers - and in turn funds under
management - over the next 12 months as the Retail Distribution
Review continues to force many IFA groups to adjust their approach
to managing client funds. As a consequence we are currently
expanding our personnel and operations in that area.
However, the re-basing of the Group has inevitably led to a
series of exceptional one-off items - most notably from the Zenith
CI and EPIC disposals (-GBP12.0 million); likewise, the
re-organisation described earlier resulted in of one-off costs of
GBP3.3 million being incurred during the year compared to GBP2.9
million the previous year; as a Group we have also been impacted
like many in the sector by the exceptionally high 2010/11 FSCS levy
(GBP825,000 in total compared to GBP71,000 for 2009/10) resulting
from the collapse of firms in the preceding years.
The Board has also carried out impairment reviews on the
carrying value of other investments and intangible assets on its
books and this has resulted in additional adjustments of GBP1.5
million. As a result, the performance of our core ongoing
operations has been greatly overshadowed by the exceptional
headline loss items which have resulted in the Group recording a
total loss for the period of GBP16.8 million compared to GBP2.1
million loss for 2010.
If all exceptional costs, one-offs and impairments are removed,
the core underlying business generated a profit before interest,
tax depreciation and amortisation of GBP1.0 million for the period
(2010 comparable: GBP2.1 million profit).
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