TIDMINCE
RNS Number : 5337G
Ince Group PLC (The)
27 July 2021
The Ince Group plc
("Ince" or the "Group")
Audited results for the year ended 31 March 2021
Highlights
Steady results in face of Covid-19
The Ince Group plc (AIM: INCE), the international legal and
professional services company, today announces its results for the
year ended 31 March 2021.
For the year ended 31 March (GBPm) 2021 2020 % Growth
(restated*)
---------------------------------------- ------ ------------- ---------------
Revenue from continuing activities 100.2 96.3 +4.0%
Operating profit before non-underlying
items 9.2 9.2 0.0%
Operating profit 3.1 7.6 (59.2)%
Adjusted diluted earnings per share
(p)** 8.1p 14.9p (45.6)%
Diluted earnings per share (p) 0.5p 11.4p (95.6)%
Dividend per share (p) - - n/a
Net debt*** 6.6 6.9 4.3% reduction
---------------------------------------- ------ ------------- ---------------
* The comparative results for the twelve months ended 31 March
2020 have been restated for the re-presentation of Partners'
remuneration and non-controlling interests and the removal of
discontinued activities. Partners' remuneration and other
non-controlling interests are now treated as an expense of the
business and are recognised in production staff costs in the
consolidated statement of comprehensive income. The non-controlling
interest liability is now presented as a current liability on the
statement of financial position as amounts due to partners. See
also note 7 to the financial statements
** Adjusted earnings per share is computed from operating profit
before non-underlying items and after deducting taxation as more
fully explained in note 11 to the financial statements.
Non-underlying items of GBP6.0m were charged, being principally
impairment of right of use assets following the decision not to
re-occupy part of Aldgate Tower and settlements with a number of
former partners of Ince & Co who did not join (2020: GBP1.7m
being principally acquisition and on-boarding costs)
*** Net debt for 2020 as previously reported was GBP9.0m and
included a GBP2.1m one off in-year operating cost loan in respect
of certain insurances. The renewal date for that insurance has
changed to 1 April and so the equivalent 2021 figure is nil and
this presentation gives a fairer comparison of the Group's net debt
movement.
Highlights
-- Operational stability despite Covid-19
-- Further strategic progress:
o New offices in Cyprus and Abu Dhabi
o Two collaborations established with leading specialists in
marine cyber security and real estate KYC
o Investment in further team and individual lateral fee-earner
hires
-- Further operational progress
o Wholly-owned multi-office, multi-currency practice management
system successfully installed in all offices (apart from Asia -
expected for late 2021)
o Successful transition to new working practices
o Decision to move to agile working resulted in reduced space
need at main London office
-- Key account management programme fully operational with encouraging initial results
-- New partner recruitment maintained with more than 10 new
partners recruited since March 2020
-- Board strengthened as announced separately today
Financial highlights
-- Revenue GBP100.2m (2020: GBP96.3m) +4%
o Strong double digit growth in EMEA and Asia
o UK weaker particularly in disputes as some insolvency laws
suspended and access to Courts restricted
o International now 41% up from 36% last year
-- Results slowed by Covid-19 constraints in the short term
-- Operating profit before non-underlying items GBP9.2m (2020: GBP9.2m) unchanged
-- Operating profit GBP3.1m (2020: GBP7.6m) - 59%
-- Diluted earnings per share before non-underlying items 8.1p
(2020: 14.9p) -46%, reflecting January 2020 share issue
-- No dividend for the year but commitment to declare a dividend
with the announcement of results to 30 September 2021
-- Improved cash generation despite higher lock up
o Net cash generated by operating activities GBP21.7m (2020:
GBP0.8m absorbed)
o Lock up 118 days (2020: 96 days) as UK collections slowed and
Asian lock up built
-- Net free cash flow GBP4.4m (2020: outflow GBP16.9)
-- Net debt reduced to GBP6.6m while facilities re-banked and increased
-- Available cash and facilities GBP10.8m (2020: GBP5.3m)
-- Deferred consideration remaining reduced to GBP24.5m (2020: GBP35.7m)
-- Total comprehensive income for the year GBP0.3m (2020:
GBP5.0m), diluted earnings per share 0.5p (2020: 11.4p), after
non-underlying items such as the costs of permanently closing one
floor of Aldgate Tower
Outlook
-- First quarter of the year has started positively
-- Reinstatement of guidance (focused on medium term targets) with the following targets
o Revenue growth
o Lockup in the UK targeted at 100 days and overseas to reduce
over time to this level
o Operating profit before non-underlying costs targeted at
10%
-- Practice management system rollout in Asia expected to be completed by the end of the year
-- Positive outlook for our disputes business as courts resume
-- Dividend to resume in 2022 financial year
The Board considers that the Group has the strength, flexibility
and commitment to prosper and grow for the benefit of shareholders
and colleagues over the coming years.
Commenting on the results, Adrian Biles, Chief Executive of Ince
said:
"I am pleased with these results and the progress being made,
despite the impact of COVID.
"Our new offices and our Asian and EMEA offices have all
achieved significant growth in the period. The UK has been held
back but as the restrictions ease and the Courts resume normal
service, the UK will return to growth.
"I would like to take this opportunity to thank our wonderful
team for their hard work and support during this particularly
challenging period. This is a people business and they have been
magnificent.
"The Group is now soundly financed and I am confident of a
return to dividends in 2022."
Results presentations
Adrian Biles, Chief Executive, and Simon Oakes, CFO, are
streaming a presentation of results via webcast at 11.00 a m today
followed by a Q&A session for analysts and investors.
You can register to watch the webcast at
https://brrmedia.news/INCE_FY21
An open presentation and Q&A for all investors will also be
held via the Investor Meet Company platform at 5.00 p.m. today.
Investors can register for the event via:
https://www.investormeetcompany.com/ince-group-plc-the/register-investor
Enquiries:
The Ince Group plc
Adrian Biles, Group Chief Executive investorrelations@incegd.com
Simon Oakes, Chief Financial
Officer
Arden Partners plc +44 (0) 20 7614 5900
Nominated Advisor and Broker
to the Company
John Llewellyn-Lloyd, Corporate
Finance
Oscair McGrath, Corporate Finance
Simon Johnson, Equity Sales
Williams Nicolson +44 (0) 7767 345 563
Media enquiries ince@williamsnicolson.com
Steffan Williams
Fraser Schurer-Lewis
About The Ince Group PLC
The Ince Group is a dynamic international legal and professional
services business with offices in nine countries across Europe,
Asia and the Middle East. With over 700 people, The Ince Group
delivers legal advice, strategic guidance and business solutions to
clients ranging from the world's oldest and biggest businesses
operating across numerous industries to ultra-high net worth
individuals. Through its entrepreneurial culture and "one firm"
approach, the business offers its clients over 150 years of
experience, insight and relationships. The Group is driven by a
unique team of passionate people whose broad expertise and deep
sector specialisms provide their clients with solutions to all
their complex legal and strategic needs.
Chairman's statement
The financial year has been both interesting and challenging.
The group has navigated well the impact of Covid-19 and the diverse
restrictions imposed by the various governments on our global
advisory business. As normal working conditions are returning, we
continue now to be focussed on developing our world class advisory
business, covering more than pure legal services, and adding
profitable lateral hired partners to generate greater revenue while
ensuring our international business generates the revenue it is
capable of as constraints on international travel ease.
The Board is mindful of the importance of dividends to
shareholders and has reviewed its previous approach to dividends.
It has decided to adopt a medium term policy of distributing 20% of
post-tax earnings to shareholders each year subject to the Group's
overall forecast cash requirements. We believe that this should
enable shareholders to earn a good income return on their
investment while enabling the Group to retain sufficient cash to
support a growing business to generate capital value. In respect of
the year just ended, while the balance sheet is now robust with
adequate facilities available, there are still a number of
liabilities which will unwind over the coming months. Growth will
also require funding and, while the Group has an adequate capital
base for its current plans without recourse to issuing further
shares, the Board has concluded that it would not be prudent to
declare a dividend in respect of the year just ended. The Board
intends to declare a dividend with the interim results to be
announced later this year.
I am pleased to announce that we have agreed the appointment of
two further non-executive directors, Laurence Milsted and Carol
Ashton to the Board. Laurence has recently retired as Global CFO of
Freshfields, a "Magic Circle" law firm, and brings tremendous
relevant experience to support and challenge our finance team.
Carol is an independent executive coach and HR consultant and was
between 2008 and 2017 International HR Director of DLA Piper,
another leading law firm. Carol will provide insights into the
recruitment and retention of our people - who are our key asset -
which will prove invaluable. Peter Rogan, who has had a long and
successful career with the former Ince business and has been a
non-executive director of the Company since we acquired the UK
business of the former Ince, has stepped down from the Board and I
thank him for the support and help he has provided to the Group
over the last two and a half years. I believe that these changes
deliver, as we planned, a Board which is balanced, diverse and
inclusive in terms of area of relevant expertise, background and
culture.
The Group now has a firmly established global business advisory
presence with a very strong brand which we are continuing to build
upon through lateral team hires. The last year has been a difficult
one, but with the imminent re-opening of all of our main offices,
the new financing arrangements announced in March and the new Board
appointments described above, I firmly believe the Group is in a
great place to continue its growth. Accordingly, I have decided
that the Annual General Meeting to be held in September is an
appropriate moment for me to step down. Simon Howard, my
co-director since 2017, has agreed to become Chair.
Finally, our colleagues are the Group's most valuable asset and
we have worked hard with them to instigate initiatives to increase
wellness particularly through this unusual year and improve our
diversity and inclusion. I would like to place on record the
Board's thanks to all our colleagues across the Group around the
world for their continuing dedication to providing the best service
to our clients, particularly this year in often abnormal working
conditions.
David Furst,
Chair
26 July 2021
Group Chief Executive's Report
I first want to thank my colleagues around the world for their
hard work and flexibility which has enabled this year's results to
be achieved despite the disruption caused by Covid-19 throughout
the year. Their working conditions have often been unavoidably much
less than ideal and that these robust results have been produced is
a testament to their dedication.
The year has been another one of steady progress for the Group
with work patterns for our clients and for my colleagues
periodically severely disrupted by the Covid-19 pandemic and
governmental restrictions. Notwithstanding this, we have achieved a
small increase in revenues to over GBP100 million, with growth at
the international offices making up for the UK which suffered the
greater disruption.
Our business is genuinely international now and is increasingly
and pleasingly focussing on international disputes and
transactions. In the last year and the short term, this valuable
and rare focus has been prevented from achieving its full potential
by the governmental restrictions on, and discouragement of,
international travel. The easing of international travel which is
slowly beginning to happen will enable more of this potential to be
realised in this and future periods.
During the year when Covid-19 reduced activity levels, we
consciously retained nearly all of the fee-earner base to enable
client service to be maintained as activity rebuilds.
In the UK, all of our offices have been completely closed for a
number of periods of the year and in particular our main London
office has proved impractical to open for working. This has
undoubtedly hindered the development of the business in acquiring
new clients and freely interacting with existing clients. It has
also hindered the interactions between colleagues from which
business ideas and opportunities arise and the very important
development of our trainee and junior lawyers. In the rest of the
UK and around the world, our offices are all now open for
relatively normal working.
We will welcome a return to full normal office working but
expect that, particularly in London, there will be a greater degree
of working from home for at least the medium term. This will mean
that our need for properties from which to work will reduce and to
this end we have decided not to re-open one of the two floors we
occupy in Aldgate Tower. Unless we can sub-let that space in the
meantime, we will exercise our tenant's break to terminate the
lease on that floor in October 2022.
Our strategy
Our strategy has been and continues to be to grow and acquire
revenue through organic growth, lateral hires and, where
appropriate, acquisition and to administer that revenue through a
single efficient administrative operation in a low-cost
environment.
We have the ambition to develop a highly profitable and fast
growing international legal and professional services group and
have the structure and teams in place to achieve this as
circumstances allow.
Key achievements
-- During the year, we continued to drive growth by pursuing this strategy:
o New maritime business in Cyprus : We have established a new
businesses in Cyprus with a team from an established local business
led by George Zambartas, offering legal services in the maritime
sector with core expertise including shipping funds and yachting
transactions.
o New asset finance business in the Middle East: We have
established a Middle East consultancy business as a specialist
asset finance provider. The business is offering our clients expert
consulting services, working closely with our ship and corporate
finance teams in the UK, Germany, Dubai and Asia. It will initially
focus on the shipping and aviation sectors and is regulated by the
Abu Dhabi Global Market's Financial Services Regulation Authority
(FSRA).
o Two new collaborations: We have established two collaborations
with well-established international experts to provide new services
to our existing and new clients. The joint ventures are in an
integrated cyber security solution for the maritime sector with
Mission Secure and an integrated technology and legal advisory KYC
solution for the real estate sector. We believe that the joint
ventures will lead to additional business and clients for the Group
as well as assisting our existing clients.
o Investment in further lateral hires: As well as internal
partner promotions, we have continued to make lateral hires to
extend the capabilities of the international offices and also
underpinning our top level marine offering. These investments to
achieve future growth reduce margin in the short term and typically
take up to a year to break even in cash terms and a little longer
in current circumstances.
o Integrating private client offerings: We have started to
integrate our private client offerings under the leadership of one
of our senior lateral hires, Nick Rucker. This will pull together
the legal services offerings in the private client and family
sectors with our wealth management and employee benefits
businesses. We have also achieved an extension of our regulatory
permissions which enables us to offer professional trustee services
and fund administration in Gibraltar which is an important
capability in the private wealth offering.
o Chinese strategic cooperation: We entered a strategic
cooperation agreement with W&H Law Firm, one of the largest
Chinese law firms with over 25 offices and over 2,000 lawyers, in
late 2020. Ince already works closely with W&H on cross border
transactions and disputes and we are actively considering various
options to deepen the relationship, in particular as travel becomes
easier, including the possibility of forming a joint operation in
the Free Trade Zone in Shanghai, China.
o Full control of corporate finance business: In October, we
took full control of James Stocks & Co Limited, an FCA
regulated corporate finance advisory business, and that team are
already working closely with the ship financing businesses of the
Group as well as continuing its traditional client base in the real
estate and SME sectors in the UK and Gibraltar.
o Disposal of White & Black business: In October, having
integrated elements of the White & Black specialism and client
base into the wider group, we concluded no further integration
could be achieved and disposed of the whole of the share capital
the White & Black Limited entity to its management team.
o Further operational efficiencies: Operationally, by the end of
this month, we will have rolled out our proprietary practice
management system to all our international offices except those in
Asia and, subject to international travel being possible, the
remaining offices will be transitioned by the end of 2021. This
common platform will significantly improve the operating
efficiencies of the Group.
o Expanding use of strong Ince brand: We believe that the Ince
brand is very valuable to us as confirmed by the GBP17m valuation
of the purchased brand which was included in the financial
statements last year. A valuation of the Ince brand as at this year
end was undertaken and this showed a significantly higher value
(which has not been incorporated in the accounts). We are therefore
extending the use of the Ince name to all of our legal services
businesses. We expect to extend this further during the year to
other parts of our business.
o Investment in our people: The mental and physical health of
our colleagues is very important and, particularly when movements
and personal contact are restricted. We are placing great emphasis
on supporting the team through making appropriate classes available
on line and providing equipment to ensure an adequate working
environment as well as encouraging alternative communication
channels between colleagues.
Financial performance
The financial performance of the Group has been satisfactory in
the circumstances the Group has faced in the last year and greater
detail is set out in the Chief Financial Officer's report. I will
restrict my comments to revenue.
The analysis of revenue below shows that the overseas offices
have made good progress as the addition of partners over the last
eighteen months has started to build revenue in all of the overseas
offices. This progress continues and there will be further growth
internationally. The UK business has suffered to a greater extent
with Covid-19 restrictions. Transactional mandates (whether in real
estate - particularly in the first half - or corporate areas) have
seen reduced activity at times during the year. In addition, the
restrictions on activities in the English Courts, and particularly
for insolvencies, have limited our dispute resolution and family
business in the period. These trends are starting to ease.
An analysis of the revenues for continuing activities for the
year ended 31 March 2021 by service line is set out below. As I
mention later in my report, the categories in this analysis are
expected to evolve over future periods to better reflect how we are
managing the business.
2021 2020
Year to 31 March GBPm GBPm
Shipping & trade 60.5 55.7
Dispute resolution 13.9 17.0
Corporate & tax 9.3 9.6
Real estate 6.7 5.7
Family & private client 3.7 3.9
Other 6.1 4.4
------ ------
100.2 96.3
------ ------
Geographically, the revenue for the year ended 31 March 2020
analysed by regions:
2021 2020
Year to 31 March GBPm GBPm
UK 58.7 61.7
Asia 25.3 21.3
EMEA 16.2 13.3
100.2 96.3
------ ------
Operational performance
We have continued to integrate all aspects of our operations
onto a single administrative platform which can serve all our
offices on a basis which enables appropriate regional and
departmental management control. Operations are managed across all
service lines to enable sensible operational decisions at global
and local levels as appropriate.
The Group's proprietary practice management system which is one
of, if not the only, independent multi-office, multi-currency
practice management systems available to UK based businesses which
is not associated with a major data supplier has been developed and
tested to the point where it has been installed in all the Group's
UK and the last of the EMEA legal services operations will be
migrated at the end of this month. Plans are in place to complete
the installation into the Asian offices by the end of the year
provided the practicalities of international travel do not make the
ideally required local support during transition impossible. We
believe that this will not only increase efficiency and reduce
overheads but also enable us to consider whether the system can be
profitably sold to other potential users.
Our core remuneration model continues to be a magnet for
partners in other firms to join us. It focuses on professional
practitioners being rewarded both for the billable work they do and
for the income generated from their clients. We are undertaking an
exercise to refine this model and potentially extend it to a wider
group of fee earners as a tool to ensure the retention of
non-partners. The refinement will continue to focus on hard work
and the generation of fees from clients, the recovery of the full
value of the work undertaken and the generation of gross margin
from which to cover overheads and to generate profits for
shareholders.
We have placed a lot of emphasis since the Ince acquisition on
the development of a culture for the Group. This culture aims to
provide an environment of trust for partners and colleagues which
is open and transparent and in which everyone can perform to the
best of their abilities. The stability of partners and other
colleagues is, we believe, vital in delivering the continuing
satisfaction of clients and we are, therefore, unsurprised by our
clients being open to using the other strengths of the Group where
appropriate.
Technology has always been a key feature of the Group's business
model and the impact of the pandemic has emphasised how successful
our programme has been as remote working has moved from a sometimes
used facility to a natural way to work. That this was achieved a
year ago when it became critical is a testament to out IT team.
This has involved a financial commitment as well and we have spent
ahead of budget to ensure the necessary functionality. It will
however be key to our success and the minimisation of risk of
disruption that we keep up with technological developments and this
will involve further spend but not, we believe, at the rate of the
last year.
The Key Account Management programme which was started during
the year with a small number of our larger clients focussed on
developing and broadening our relationships with key clients. This
is a long-term programme and the benefits will accrue progressively
rather than immediately, but the initial results are very
encouraging and have led us to increase the number of clients in
the programme.
The current year and the future
Very recently, the lift constraints in Aldgate Tower, our London
head office, have been removed and we have re-opened our 15(th)
floor offices there, It is clear that agile working is going to be
a significant feature of our future operations, particularly in
London, and we have concluded that we will not re-open one of the
two floors we lease in Aldgate Tower.
Our immediate expansion focus is on steady progress through
further lateral hires, continuing focus on driving collaboration
between offices and business lines to increase the revenue
processed through the established base and ensuring we address the
range of our clients' needs with excellent service.
As the enlarged Group has settled and our focus on providing a
broad range of professional services to our clients continues, we
are refining the management structure of the Group to eliminate the
separate management of legal and consulting services. Thus our
Private Wealth division headed by Nick Rucker will coordinate
private client law with our private wealth offerings. This
structure is evolving and we expect that the sectoral analysis of
revenue will be refined to follow the management structure as it is
refined.
Our established platform easily absorbs additional partners and
we believe that the financing we now have in place enables us to
absorb new partners with the time it takes for them to become fully
functioning and cash generating. We are as always in discussions
with a number of senior lawyers and teams about joining the Group
and expect to continue to steadily add partners to the business,
with 6 new partners recruited since 31 March 2021.
We continue to develop the collaborative growth of the business
from adding service lines supplied by new recruits in an office and
from the ability to service additional needs of existing clients.
This requires significant trust to be built up between partners and
other colleagues across service lines and geographies. This is not
an immediate given but we continue to work hard to establish and
develop trust between partners and to communicate the specialisms
of each individual partner notwithstanding the current lack of
face-to-face meetings.
I must place on the record my thanks to David for his support
over the eight years we have worked together and for his
contribution during the not always easy periods through the
flotation, the acquisition, and more particularly the integration,
of the Ince businesses and the disruption from Covid-19. I am also
grateful for his work with Simon Howard in identifying and
recruiting our new non-executive directors. I am pleased that Simon
Howard, with whom I have been a director for some four years, has
agreed to become Chair of the Company in David's place from the
Annual General Meeting to be held in September and wish David well
for the future.
We have a fantastic business filled with fantastic people and I
am totally committed to the success of the business. We will
continue to succeed further and drive value for our shareholders by
continuing to provide relevant and expert advice to our clients
from understanding their business as a whole or their individual
circumstances (rather than the particular legal issue they might
expect to consult us on), therefore providing real value to our
client.
Adrian Biles
26 July 2021
Chief Financial Officer's Report
Year to 31 March 2021 2020 % Movement
(Restated)
GBPm GBPm
---------------------------------------- ------ ------------------------- -----------
Revenue 100.2 96.3 +0.4%
Operating profit before non-underlying
costs * 9.2 9.2 (40)%
% margin 9.2% 9.6% (421)bps
Profit for the period 0.3 5.0 (93)%
Diluted earnings before non-underlying
costs (p) ** 8.1 14.9 (35)%
Diluted earnings per share (p) 0.5 11.4 (96)%
Free cash flow *** 4.4 (16.9) 126%
Net debt (1) 6.6 6.9
---------------------------------------- ------ ------------------------- -----------
(1) Net debt in 2020 is presented excluding a one off in-year
recurring annual operating cost loan in respect of certain
insurances in 2020, which due to timing differences was recognised
at 31 March 2020 but, since then, has been recognised and unwound
within the relevant financial year.
Presentation of financials and alternative performance
measures
During this financial year, we have continued to refine and
improve our financial reporting. Our focus in doing this is on
presenting a clear and easily understandable picture of the Group's
performance and the drivers behind this performance.
Partners' costs are now presented as a production cost in the
Consolidated Statement of Comprehensive Income. This change in
accounting policy is to better present the true profit impact of
partner remuneration, taking into account the contractual nature of
agreements, and the board believes the updated presentation gives
more relevant information to shareholders. Previously these costs
were disclosed as non-controlling interests and presentation was
clarified through "Adjusted profits before tax". As a consequence
of this changed treatment, amounts due to partners are now shown as
a current liability in the Statements of Financial Position (having
previously been shown as non-controlling interests in capital and
reserves).
Prior year financial information is therefore presented on a
restated basis for the above change and for the exclusion of the
discontinued White & Black business, which was disposed of in
October 2020 (as described in note 2.2 to the accounts).
The Group presents three Alternative Performance Measures
("APMs"). These APMs include adjustments for specific items in
order to provide a balanced view of the underlying performance of
the Group's operations:
*Operating profit before non-underlying costs is calculated as
operating profit after adding back costs which are identified as
outside of or related to events outside of the normal scope of
operation of the Group's business which are discussed below. This
measure appears in the Consolidated Statement of Comprehensive
Income and it replaces Adjusted profit before tax as a profit
measure (the difference between the two measures being financing
costs as shown in note 11 to the accounts).
**Diluted earnings per share before non-underlying costs is
calculated by adjusting profit for the period to add back
non-recurring costs and dividing by the weighted average number of
shares in issue for the period, on a diluted basis.
*** Free cash flow represents the cash flows of the Group
excluding draw downs and repayments of external funding facilities,
dividends paid to equity holders and proceeds from the issuance of
shares and non-recurring acquisition / disposal cashflows.
Management uses it as a key measure in assessing the cash
performance of the Group, while it continues to unwind the cash
costs of the acquisitions made over recent years.
Key Performance Indicators (KPIs)
To achieve profits for shareholders, we focus the business on a
small number of KPIs which we consider essential business drivers
of profit growth. The Group is now in a position that its operating
cost base is sufficient to support significant top line growth
without any increase. We therefore concentrate on growing revenues
profitably, constraining (and, where appropriate, reducing)
overheads and converting work done into cash.
In simple terms, delivering on these metrics will deliver
sustainable profits for shareholders (as measured by operating
profit before non-underlying costs) and we therefore monitor the
progress of the business through four essential KPIs:
o Revenue (measured net of disbursements and VAT)
o Gross margin percentage
o Overheads as a percentage of revenue
o Lockup
Year to 31 March 2021 2020
) Restated
)
GBPm GBPm )
)
100.2
Revenue ) 96.3 )
Production costs - fee earner / partner
costs (49.9) (48.1)
Production costs - other (5.9) (3.8)
------- ----------
Gross profit 44.3 44.4
Gross margin % 44.3% 46.1%
Administrative salaries and non-productive
profit shares (14.8) (14.7)
Other overheads (20.4) (20.4)
Total overheads as % of revenue 35.1% 36.5%
------- ----------
Operating profit before non-underlying
costs 9.2 ) 9.2 )
------- ----------
* - this includes amortisation of client portfolio intangibles
of acquired businesses, recognised in in line with relevant fee
billings / cash collections
Revenue growth year on year was GBP3.9m (4%). The Group
successfully achieved an uptick in trading in the second half of
the year again, which represented 52% of total revenues for the
year, and delivered an increase of revenue per fee earner year on
year of 5.5%. Further details of the sector / territorial drivers
of the Group's revenue profile and growth are set out in the Group
Chief Executive's report above.
Production costs are the profit shares of the equity partners
and the employment costs of the other fee earners together with
their direct costs (such as travel and marketing) and direct
support costs (such as dedicated secretaries) and provision for
doubtful and bad debts (where we provide for all unsecured debts
over six months old). This also includes the amortisation of client
portfolios.
Gross margin is the fees charged to clients less direct
production costs and is expressed as a percentage of revenue. Gross
margin is in the control of the heads of each department or
business unit and these individuals are rewarded with a
participation in gross margin achieved in excess of 45%. In the
current year gross margin of 44.2% is slightly below this target
and behind the prior year (46.1% restated). This is attributed
to:
- An increase in partner costs from hires made in the latter
part of the last financial year, who have not yet been able to
market to their client network as effectively as in normal
circumstances, in the face of the travel restrictions and social
distancing rules in particular for UK partner hires where their
practices and clients are based internationally; and
- An increase in lock up levels and accordingly the formulaic
doubtful and bad debt charge which rose to 4.1% in the year (prior
year of 2.1%) and is the primary driver of increases in Production
costs - other. Our policy remains to provide in full for all
debtors over 180 days old, even though many of these debtors are
likely to be ultimately recoverable.
As market conditions improve with the lifting of restrictions,
in particular, in the UK we expect these trends to be reversed and
accordingly, margin to improve.
Overheads represent the business support staff costs of the
Group and all the other costs of running the business - premises,
insurance, computing and telephones etc. In the year, overheads as
a percentage of fees charged to clients were 35.1% (2020:
36.4%).
As noted below, in the year, business support services staff
costs included grant income under a number of localised job
retention schemes. The cost benefits of this income will be in part
replaced by ongoing business efficiencies (reduced heads, floor
space and greater centralisation of the Group's operations).
Additional cost reductions achieved through a supplier
rationalisation review undertaken during the year were, in part,
offset by increased IT infrastructure expenditure, which was
required to support our switch to working from home at the
beginning of the financial year.
Our target is to reduce these costs to 30% over the medium term.
This can be achieved through revenue growth and further synergies -
for example in reducing our premises footprint, where there are
break clauses in the majority of our UK offices over the next 18-24
months and from the roll out of the Group's practice management
system to the remaining offices.
Other profit & loss items
The Group incurred non-underlying costs in the year of GBP6.0
million (2020: GBP1.7 million), primarily in relation to future
costs items. The most significant of these is the recognition of
costs in relation to the abandonment of part of or UK office at
Aldgate Tower of GBP3.2 million and details of this and the other
non-underlying costs are set out in note 7 to the accounts.
Finance income and expense primarily relates to the interest
costs of the Group's financing facilities and a charge levied in
applying IFRS 16 on the right-of-use assets it holds for the
property and other lease contracts it has entered.
(Loss)/profit from discontinued operations of GBP(0.9) million
(2020: GBP0.3 million) relates to the results and disposal costs of
White and Black limited (including GBP0.6 million of eliminated
goodwill, described below).
Covid-19 response
In response to the Covid-19 pandemic, the Group took a number of
proactive steps to minimise the risk of disruption to business
operations:
- Discretionary expenditure across all locations was cancelled
or deferred, unless an immediate, business critical requirement was
identified.
- As noted above, the Group took advantage of the UK
Government's Coronavirus Jobs Retention Scheme and similar schemes
in Singapore and Hong Kong where staff members were unable to
effectively work other than in the Group's offices, although this
was gradually reduced from October onwards and ceased in full as at
31 March 2021. Grant income received for this totalled GBP2.1
million in the year (of which GBP1.5 million related to the UK
scheme). The Group also removed 47 roles during the year, with an
associated annual cost saving of GBP1.2 million.
- All Board and a number of UK colleagues' salaries were reduced
on a temporary basis (in a number of instances for the duration of
the financial year) and partners' drawings have been reduced and
profit distributions deferred.
Lock up
Lock up is defined for our KPI as the value of trade debtors and
work in progress compared with fees charged to clients, in each
case excluding disbursements and VAT. Lock up days, which
represents the time taken from the point work is performed by fee
earners to the point the related cash is received, is the key
measure of working capital performance of the Group. This measure
is under the control of the lead partner (or Matter Partner) for
each client and they are guided and assisted in this by our revenue
management team.
Lock up as at 31 March 2021 was 118 days (96 days at 31 March
2020). The increased level of lock up days is a result of: (i)
pressures on collections across the Group in the wake of the
pandemic, as clients have attempted to minimise cash outflows while
there has been considerable market uncertainty across the sectors /
locations in which the Group operates; and (ii) the skew in revenue
towards parts of the Group with structurally higher lock up days,
in particular in Asia.
This lock up remains significantly better than typical industry
levels but it remains a focus of management to reduce lock up in
the UK-based elements of the business below 100 days, although we
recognise overseas office lock up may remain above this level due
to the above mentioned structural differences in collection
patterns. Some of the recent increase is temporary and will reverse
as market conditions continue to improve and, additionally, once
travel restrictions ease and we can complete the roll out of the
proprietary practice management software across the remain
locations of the Group (including our practices in Asia).
External facilities and net debt
On 26 March 2021 the Group entered a financing facility of
GBP17m with Investec plc, comprising a 3 year GBP9.0 million term
loan and GBP8.0 million revolving credit facility, under the UK
government's Coronavirus Large Business Interruption Loan ("CLBIL")
scheme. Accordingly, the remaining Barclays Bank plc term loan and
revolving credit facility (previously entered into by the Group in
December 2018) were repaid in full.
The new facility increases the available funds for the Group
while it continues to experience the temporary effects of Covid-19
upon its trading activity and continues to grow revenues (currently
GBP2.5 million of the revolving credit facility is undrawn). The
facility is also designed to be a facility for the full Group and
will allow Management to more easily implement integrated treasury
management across each of its entities and locations.
Furthermore, despite the increased size of facility now
available to the Group, net debt did not increase through the year
and was only GBP6.6 million at March 2021 (GBP9.0 million at March
2020, or GBP6.9 million excluding a one off in-year operating cost
loan as discussed earlier).
Cash flow
The Group's cash balance increased by GBP3.1 million during the
financial year to GBP8.3 million at 31 March 2021 (2020: GBP5.2
million). It had available cash and undrawn facilities at 31 March
2021 of GBP10.8 million (2020: GBP5.3 million). Free cash flow
conversion (measured relative to operating profit before
non-underlying costs) was 48%:
Year to 31 March 2021 2020
) Restated
GBPm
GBPm
)
23.0
Cash generated by operations ) 1.1 )
(5.6) (3.3)
Lease costs ) )
(10.0) (10.1)
Payment of contingent and deferred consideration ) )
(1.9) (3.1)
Purchase of PPE & intangible assets ) )
(0.8) (0.7)
Net interest received/(paid) ) )
(0.3) (0.9)
Tax paid ) )
(16.9)
Free cash 4.4 ) )
------------ -----------------
As both the recent build-up of lock up (described above) and
legacy liabilities from acquisitions and actions taken to respond
to Covid-19 unwind, this free cash flow will significantly improve
in the medium term.
Balance sheet
The acquisition of Ince gave rise to intangible assets which
have been recognised in three ways - as goodwill, as client
portfolio and as trademark, associated to the value of the Ince
brand. An external third party valuation of the Ince brand has
again been taken this year and the calculated valuation range is
significantly in excess of the balance sheet asset value of GBP17
million, indicating post-acquisition investment efforts in
developing the brand and its widening use within the Group is
beginning to gain traction. An annual impairment review of goodwill
has also been undertaken with no impairment identified (and
significant headroom in the relevant CGU valuations), although
GBP0.6 million of goodwill was eliminated with the disposal of
White & Black Limited (the method for determining the
elimination value is detailed in note 4.(i) to the accounts). The
client portfolio value continues to be amortised in line with
revenue generated over the three years of the Ince acquisition deal
during which the deferred consideration is being earned by the
former Ince partners (until December 2021), at an annual charge of
some GBP2 million.
In the year, the Group has impaired the Right of Use asset for a
floor of our main London office in Aldgate Tower and recognised a
provision for future costs, for the remainder of the lease up to
its next break date (in October 2022), with a total impact of
GBP3.2 million taken to the profit and loss as a non-underlying
cost (as detailed in note 7 to the accounts). Whilst the free cash
benefits of exiting this lease will not be seen until the break
date, no further costs will be incurred for this lease.
Additionally, in order to manage cash flow challenges in the
first half of the year, the Group deferred certain liabilities with
relevant third party suppliers including rental costs, rates and
balances with HMRC. Repayment of these balances began in the second
half of the year and will continue during the next financial year,
with the outstanding balance totalling c. GBP5.8 million at 31
March 2021.
The effective rate of tax this year is 44.9% (2020: 21.9%
restated) which, partly as a result of the disallowance of the
amortisation of client portfolios as an expense, is higher than the
standard UK rate. As this amortisation reduces over the next
financial year, this rate is expected to reduce down closer to that
standard rate.
Future
We have been pleased with the ongoing level of engagement and
support we have received from colleagues and partners as well as
our supplier network since Covid-19 first impacted the Group. We
continue to monitor and follow the various national institutes'
policies and advice. Our infrastructure investments over the past
year allow us the flexibility to continue our operations in the
best and safest way possible for all our stakeholders without
jeopardising anyone's health whether that be through remote working
or office-based working.
In the immediate future management are focused on working
capital management as built up liabilities from the last year are
unwound to cash whilst activity levels and collections begin to
recover.
Q1 of the new financial year has already seen this unwind begin,
whilst collection levels are still to fully recover. Therefore cash
at the end of June 2021 was GBP4.7m and GBP2.5m of undrawn RCF
remains available to the Group to assist manage short term working
capital needs (available funds of GBP7.2m). Additionally,
restrictions on commercial litigation activity (in relation to the
suspension of elements of the Insolvency Act) in the UK have not
reversed and travel restrictions continue to limit our ability to
engage with our international clients. Despite this, there are
early signs of activity levels starting to improve and Q1 revenue
of GBP25.0m was 5% ahead of the prior year, in particular after a
strong billing month in June 2021.
Whilst uncertainty temporarily persists we are cautiously
optimistic for this current financial year, in particular for the
expected opening up of a number of our UK markets in Q2, which is
anticipated to reverse the above-mentioned freeze on commercial
litigation activity in the UK, and the easing of international
travel restrictions to allow us to travel between our offices (in
particular in Asia) and therefore increase our active client
engagement and collaboration across locations. Therefore we are
reintroducing guidance at this stage .
The Group has the revenue generating capacity, external
financing structure and sustainable, scalable support function in
place to achieve these aims and targets and, in so doing, focus on
building and delivering value for shareholders.
Simon Oakes
26 July 2021
Consolidated Statement of Comprehensive Income
Restated
)
Year ended Year ended
) )
31-Mar-21 31-Mar-20
) )
GBP'000 GBP'000
Note ) )
------------------------------------------------ ----- ----------- -----------
Continuing operations
100,202 96,330
Fees and commissions 5 ) )
------------------------------------------------ ----- ----------- -----------
Production staff and partner costs 6 (49,939) (48,113)
Other production costs (5,920) (3,841)
------------------------------------------------ ----- ----------- -----------
44,343 44,376
Gross Profit ) )
------------------------------------------------ ----- ----------- -----------
Administrative staff and partner costs 6 (14,768) (14,742)
Other operating expenses (14,960) (14,666)
Depreciation of property, plant and
equipment (1,422) (1,473)
Depreciation of right-of-use assets (4,179) (4,556)
Amortisation (290) (83)
Other operating income 445 ) 354 )
------------------------------------------------ ----- ----------- -----------
Operating profit before non-underlying
costs 9,169 ) 9,210 )
Non-underlying costs 7 (6,036) (1,657)
------------------------------------------------ ----- ----------- -----------
Operating profit 8 3,133 ) 7,553 )
------------------------------------------------ ----- ----------- -----------
Finance income 9 410 ) 351 )
Finance expense - right of-use assets 9 (515) (483)
Finance expense - other 9 (1,090) (1,057)
Share of profit/(loss) of associates 18 c (140)
------------------------------------------------ ----- ----------- -----------
Profit before income tax 1,956 ) 6,224 )
Income tax expense 10 (690) (1,530)
------------------------------------------------ ----- ----------- -----------
Profit from continuing operations 1,266 ) 4,694 )
(Loss)/profit from discontinued operations 16 (919) 268 )
------------------------------------------------ ----- ----------- -----------
Profit for the period 347 ) 4,962 )
------------------------------------------------ ----- ----------- -----------
Attributable to: -
Equity holders of the Company 326 ) 4,952 )
Non-controlling interests 21 ) 10 )
------------------------------------------------ ----- ----------- -----------
Profit for the period 347 ) 4,962 )
------------------------------------------------ ----- ----------- -----------
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Translation of foreign operations (67) 35 )
------------------------------------------------ ----- ----------- -----------
Other comprehensive income for the
period (67) 35 )
------------------------------------------------ ----- ----------- -----------
Total comprehensive income for the
period 280 ) 4,997 )
------------------------------------------------ ----- ----------- -----------
Attributable to: -
Equity holders of the Company 259 ) 4,987 )
Non-controlling interests 21 ) 10 )
------------------------------------------------ ----- ----------- -----------
Total comprehensive income for the
period 280 ) 4,997 )
Earnings per share
Basic earnings per share (pence) 11 0.48 ) 11.78 )
Basic earnings per share before non-underlying
costs (pence) 11 8.36 ) 15.35 )
Diluted earnings per share
Diluted earnings per share (pence) 11 0.46 ) 11.42 )
Diluted earnings per share before
non-underlying costs (pence) 11 8.11 ) 14.88 )
There is no tax on any component of other comprehensive income
or expense. The attached notes are an integral part of these
consolidated financial statements.
Statements of Financial Position
The Ince Group plc (Registered number: 03744673)
Restated
)
Group Group
) ) Company Company
31-Mar-21 31-Mar-20
) ) 31-Mar-21 31-Mar-20
GBP'000 GBP'000
Note ) ) GBP'000 GBP'000
ASSETS
Non-current assets
2,813 3,761
Property, plant and equipment 13 ) ) 52 90
10,562 17,441
Right-of-use assets 14 ) ) 496 696
79,612 80,825
Intangible assets 15 ) ) - -
Investments 16 - ) 470 ) 47,607 47,607
92,987 102,497
) ) 48,155 48,393
---------- ---------- ---------- ----------
Current assets
46,131 44,412
Trade and other receivables 17 ) ) 36,264 38,886
Corporation tax - ) - ) - -
8,307 5,250
Cash in hand and at bank 18 ) ) 1 3
54,438 49,662
) ) 36,265 38,889
---------- ---------- ---------- ----------
147,425 152,159
Total assets ) ) 84,420 87,282
---------- ---------- ---------- ----------
EQUITY
Capital and reserves attributable
the Company's equity holders
Share capital 19 686 ) 686 ) 686 686
24,126 24,126
Share premium 20 ) ) 24,126 24,126
Reverse acquisition reserve 20 (24,724) (24,724) - -
Foreign exchange translation
reserve 20 (32) 35 ) - -
Other reserves 20 785 ) 634 ) 3,611 3,460
41,853 41,527
Distributable reserves 20 ) ) 12,570 18,894
---------- ---------- ---------- ----------
42,694 42,284
) ) 40,993 47,166
Non-controlling interest 50 ) 29 ) - -
---------- ---------- ---------- ----------
42,744 42,313
Total equity ) ) 40,993 47,166
---------- ---------- ---------- ----------
LIABILITIES
Non-current liabilities
14,536 22,453
Trade and other payables 21 ) ) - -
13,092 10,400
Borrowings 22 ) ) 13,045 10,400
2,377 2,189
Provisions 23 ) ) 40 -
7,774 13,284
Lease liabilities 14 ) ) 151 370
---------- ---------- ---------- ----------
37,779 48,326
) ) 13,236 10,770
Current liabilities
41,664 39,325
Trade and other payables 21 ) ) 28,316 27,756
1,787 1,372
Corporation tax ) ) 295 -
1,804 3,829
Borrowings 22 ) ) 1,200 1,200
2,838 2,407
Provisions 23 ) ) - -
4,863 5,552
Lease liabilities 14 ) ) 380 390
13,946 9,035
Amounts due to partners ) ) - -
---------- ---------- ---------- ----------
66,902 61,520
) ) 30,191 29,346
---------- ---------- ---------- ----------
104,681 109,846
Total liabilities ) ) 43,427 40,116
---------- ---------- ---------- ----------
147,425 152,159
Total equity and liabilities ) ) 84,420 87,282
---------- ---------- ---------- ----------
The Company has taken advantage of the exemption contained in
S408 Companies Act 2006 and has not presented a separate income
statement for the Company. The Company recorded a loss of
GBP6,324,000 for the 12-month period ending 31 March 2021.
The financial statements were approved and authorised for issue
by the Board of Directors and were signed on its behalf on 26 July
2021 by S. Oakes - Director. The attached notes are an integral
part of these consolidated financial statements.
Consolidated Statement of Cash Flows
Restated
)
Group Company Company
Group ) ) ) )
12 months 12 months 12 months 12 months
to ) to ) to ) to )
31-Mar-21 31-Mar-20 31-Mar-21 31-Mar-20
) ) ) )
GBP'000 GBP'000 GBP'000 GBP'000
) ) ) )
Cash flows from operating activities
Profits before tax from continuing
operations 1,956 ) 6,224 ) (5,966) (9,269)
(Loss)/profits before tax from
discontinued operations (978) 281 ) - ) - )
Adjustments for:
Finance income (410) (352) (56) - )
Finance expense 1, 619 ) 1,571 ) 292 ) - )
Non-underlying costs 6,036 ) 1,657 ) - ) 391 )
Depreciation, amortisation and
impairment 9,070 ) 8,279 ) 367 ) 294 )
Share options expense 151 ) 172 ) 151 ) 172 )
Loss/(gain) on sale of discontinued
operations 757 ) (51) - ) - )
Share of (loss)/ profit of associates (18) 140 ) - ) - )
Net exchange differences 266 ) (323) - ) - )
Changes in operating assets
and liabilities (net of acquisitions):
(Increase)/decrease in trade
and other receivables (717) (9,616) 12 ) (731)
(Decrease)/increase in trade
and other payables 6,522 ) (466) 348 ) 292 )
(Decrease)/increase in provisions (1,254) (6,380) 40 ) - )
Cash generated by operations 23,000 ) 1,136 ) (4,812) (8,851)
Interest and other finance costs ( 1,082
paid ) (1,054) (272) (370)
Tax paid (257) (896) (63) - )
Net cash generated/(absorbed)
by operating activities 21,661 ) (814) (5,147) (9,221)
---------- ---------- ---------- ----------
Cash flows from investing activities
Cash paid on acquisitions (net
of cash acquired) 449 ) 2,078 ) - ) - )
Payment of contingent and deferred
consideration (9,985) (10,126) - ) - )
Payment of acquisition related
costs (2,250) (1,657) - ) - )
Purchase of PPE (825) (1,436) - ) (116)
Proceeds from disposal of PPE - ) 2 ) - ) - )
Purchase of intangible assets (1,123) (1,627) - ) - )
Disposal of a subsidiary, net
of cash disposed of (127) (191) - ) - )
Interest received 238 ) 352 ) 56 ) - )
Net cash absorbed by investing
activities (13,623) (12,605) 56 ) (116)
---------- ---------- ---------- ----------
Cash flows from financing activities
14,500
Proceeds from new borrowings 14,886 ) 9,630 ) ) 6,500 )
Repayment of borrowings (13,975) (3,497) (11,855) (900)
(Advances to)/repayments by
subsidiaries - ) - ) 2,822 ) (8,073)
14,046 14,048
Proceeds from issuance of shares - ) ) - ) )
Transaction costs relating to
issue of shares - ) (800) - ) (800)
Dividends paid - ) (2,197) - ) (2,197)
Direct cost of leases (30) (24) - ) (17)
Payment of lease liabilities (5,534) (3,268) (378) (208)
Net cash absorbed from financing ( 4,653 13,890
activities ) ) 5,089 ) 8,353 )
---------- ---------- ---------- ----------
Net increase/(decrease) in cash
and cash equivalents 3,385 ) 471 ) (2) (984)
Cash and cash equivalents at
beginning of period 5,191 ) 4,720 ) 3 ) 987 )
Effects of exchange rate changes
on cash (271) - ) - ) - )
---------- ---------- ---------- ----------
Cash and cash equivalents at
end of period (note 18) 8,305 ) 5,191 ) 1 ) 3 )
The attached notes are an integral part of these consolidated
financial statements.
Consolidated Statement of Changes in Equity
Foreign
)
Reverse exchange
) ) Non-
Share Share acquisition translation Other Distributable Total
) ) ) ) ) ) Controlling )
capital premium reserve reserve reserves reserves equity
) ) ) ) ) ) Interest )
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
) ) ) ) ) ) ) )
Balance at 1
April 2019 370 11,192 25,692
(restated) ) ) (24,724) - ) 48 ) 38,787 ) 19 ) )
Profit for the 4,962
period - ) - ) - ) - ) - ) 4,952 ) 10 ) )
Other
comprehensive
income - ) - ) - ) 35 ) - ) - ) - ) 35 )
Dividend paid - ) - ) - ) - ) - ) (2,212) - ) (2,212)
Shares issued 316 13,734 14,464
in period ) ) - ) - ) 414 ) - ) - ) )
Credit to equity
for
equity-settled
share-based
payments - ) - ) - ) - ) 172 ) - ) - ) 172 )
Share issue
transactions
costs - ) (800) - ) - ) - ) - ) - ) (800)
Balance at
31 March 2020 686 24,126 634 41,527 42,313
(restated) ) ) (24,724) 35 ) ) ) 29 ) )
-------- -------- ------------ ------------ --------- -------------- ------------ --------
Balance at 1 686 24,126 42,313
April 2020 ) ) (24,724) 35 ) 634 ) 41,527 ) 29 ) )
Profit for the
period - ) - ) - ) - ) - ) 326 ) 21 ) 347 )
Other
comprehensive
income - ) - ) - ) (67) - ) - ) - ) (67)
Credit to equity
for
equity-settled
share-based
payments - ) - ) - ) - ) 151 ) - ) - ) 151 )
Balance at 31 686 24,126 785 41,853 42,744
March 2021 ) ) (24,724) (32) ) ) 50 ) )
-------- -------- ------------ ------------ --------- -------------- ------------ --------
The attached notes are an integral part of these consolidated
financial statements.
Company Statement of Changes in Equity
Share Share Other Distributable Total
) ) ) ) )
capital premium reserves reserves equity
) ) ) ) )
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
) ) ) ) )
Balance at 1 April 11,192 2,874 44,979
2019 370 ) ) ) 30,543 ) )
Profit/(loss) and total
comprehensive income/(expense)
for the period - ) - ) - )) (9,437) (9,437)
Dividend paid - ) - ) - )) (2,212) (2,212)
13,734 14,464
Shares issued in period 316 ) ) 414 )) - ) )
Credit to equity for
equity-settled share-based
payments - ) - ) 172 )) - ) 172 )
Share issue transactions
costs (800) - )) - ) (800)
Balance at 31 March 24,126 3,460 18,894 47,166
2020 686 ) ) )) ) )
-------- -------- --------- -------------- --------
Balance at 1 April 24,126 3,460 47,166
2020 686 ) ) )) 18,894 ) )
Profit/(loss) and total
comprehensive income/(expense)
for the period - ) - ) - )) (6,324) (6,324)
Credit to equity for
equity-settled share-based
payments - ) - ) 151 )) - ) 151 )
Balance at 31 March 24,126 3,611 12,570 40,993
2021 686 ) ) )) ) )
-------- -------- --------- -------------- --------
The attached notes are an integral part of these consolidated
financial statements.
Notes to the Financial Statements
1. General information
The Ince Group plc (the Company) and its subsidiaries (together
'The Ince Group' or 'the Group') provide legal & professional
services and independent financial advisory services to businesses
and high net worth individuals.
The Company is a public limited company incorporated and
domiciled in the UK. The address of its registered office is
Aldgate Tower, 2 Leman Street, London E1 8QN.
These consolidated financial statements have been approved for
issue by the Board of Directors on 26 July 2021.
2. Summary of significant accounting policies
2.1 Basis of preparation
These consolidated financial statements of The Ince Group plc
are for the 12-month period to 31 March 2021. The financial
statements have been prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006.
The financial statements have been prepared on the going concern
basis. In deciding this, the directors have considered the detailed
budgets for the current financial year and high-level budgets for
the succeeding two years including in both cases cash flows. The
Group secured new funding in March 2021 which are considered to be
sufficient for the Group's purposes based on current projections.
Financial forecasts project the Group to be fully compliant with
the covenants associated with these facilities.
They have also considered the impact of adverse changes
resulting from the major risks and uncertainties they consider
apply to the Group. At the date of this report, the Group continues
to take the Covid-19 threat to its clients, vendors, staff and
overall business very seriously. The Group is taking proactive
action and has activated business continuity plans, where required
across the jurisdictions in which the Group operates, to minimise
the risk of disruption to business operations. In doing this, the
Group has taken account of government advice in the jurisdictions
in which it operates and the need to safeguard the health of our
clients. We will continue to follow the various locations' national
policies and advice and in parallel will do our upmost to continue
our operations in the best and safest way possible without
jeopardising anyone's health.
Consequently, the Board of Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the next 12 months.
The financial statements have been prepared in accordance with
those IFRS standards and IFRIC interpretations issued and effective
or issued and early adopted as at the time of preparing these
statements. The policies set out below have been consistently
applied to all the periods presented.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of
applying the group's accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the consolidated financial
statements are disclosed in note 4.
2.2 Restatement of prior year
Previously remuneration under partner profit share arrangements
was classified as non-controlling interests and excluded as a cost
item in the Consolidated Statement of Comprehensive Income and
classified within Equity in the Statements of Financial Position.
Remuneration earned under these arrangements represents a
contractual cost of operation of the Group and, in this year's
financial statements these costs have been presented in the
Consolidated Statement of Comprehensive Income (included within
Production staff and partner costs and Administrative staff and
partner costs) and as a liability in the Statements of Financial
Position (included within Current liabilities under the heading
Amounts due to partners) with an according restatement of the prior
year comparatives for this reclassification.
Prior year comparatives have also been re-stated for the impact
of discontinued operations (note 16.3).
Notes to the Financial Statements (continued)
The affected financial statement line items for the prior period
have been restated as follows:
Consolidated Statement of Comprehensive Income extract:
Partner
)
remuneration Discontinued Restated
) ) )
Group presentation Operation Group
) ) ) )
Reclassification change
2020 ) ) ) Restatement* 2020 )
GBP'000 GBP'000 GBP'000 GBP'000
) GBP'000 ) ) ) )
------------------------------ --------- ----------------- ------------- ------------- ---------
98,478 96,330
Fees and commissions ) - ) - ) (2,148) )
Production staff and
partner costs - ) (31,536) (17,493) 916 ) (48,113)
Other production costs - ) (4,180) - ) 339 ) (3,841)
Administrative staff
and partner costs - ) (13,617) (1,387) 262 ) (14,742)
Staff costs (45,153) 45,153 - ) - ) - )
Other operating expenses (19,182) 4,180 - ) 336 ) (14,666)
Depreciation of property,
plant and equipment (1,487) - ) - ) 14 ) (1,473)
Depreciation of right-of-use
assets (4,663) - ) - ) 107 ) (4,556)
Amortisation (2,129) - ) 2,046 ) - ) (83)
Other operating income 354 ) - ) - ) - ) 354 )
------------------------------ --------- ----------------- ------------- ------------- ---------
Operating profit before 26,218 9,210
non-underlying costs ) - ) (16,834) (174) )
Non-underlying costs - ) (1,657) - ) - ) (1,657)
------------------------------ --------- ----------------- ------------- ------------- ---------
26,218 7,553
Operating profit ) (1,657) (16,834) (174) )
Finance income 352 ) - ) - ) (1) 351 )
Finance expense -
right of-use assets (514) - ) - ) 31 ) (483)
Finance expense -
other (1,057) - ) - ) - ) (1,057)
Non-recurring costs (1,657) 1,657 ) - ) - ) - )
Share of loss of associates (140) - ) - ) - ) (140)
------------------------------ --------- ----------------- ------------- ------------- ---------
Profit before income 23,202 6,224
tax ) - ) (16,834) (144) )
Income tax expense (1,543) - ) - ) 13 ) (1,530)
------------------------------ --------- ----------------- ------------- ------------- ---------
Profit from continuing 21,659 4,694
operations ) - ) (16,834) (131) )
Profit from discontinued
operations 137 ) - ) - ) 131 ) 268 )
------------------------------ --------- ----------------- ------------- ------------- ---------
21,796 4,962
Profit for the period ) - ) (16,834) - ) )
------------------------------ --------- ----------------- ------------- ------------- ---------
Attributable to: -
Equity holders of 4,952 4,952
the Company ) - ) - ) - ) )
16,844
Non-controlling interests ) - ) (16,834) - ) 10 )
------------------------------ --------- ----------------- ------------- ------------- ---------
21,796 4,962
Profit for the period ) - ) (16,834) - ) )
------------------------------ --------- ----------------- ------------- ------------- ---------
Basic earnings per 11.78 11.78
share (pence) ) - ) - ) - ) )
Diluted earnings per 11.42 11.42
share (pence) ) - ) - ) - ) )
Details of the change in Alternative Performance Measures are
included in note 11.
Details of non-recurring costs and non-underlying costs are
included in note 7.
Notes to the Financial Statements (continued)
Statement of Financial Position extract:
Partner
)
remuneration Discontinued Restated
) ) )
presentation Operation
Group ) ) ) Group )
change
2020 ) ) Restatement* 2020 )
GBP'000 GBP'000 GBP'000 GBP'000
) ) ) )
-------------------------- -------- ------------- ------------- ---------
Non-controlling interest 9,064 ) (9,035) - ) 29 )
Amounts due to partners - ) 9,035 ) - ) 9,035 )
-------------------------- -------- ------------- ------------- ---------
Total 9,064 ) - ) - ) 9,064 )
-------------------------- -------- ------------- ------------- ---------
Consolidated Statement of Cash Flows extract:
Partner
)
remuneration Discontinued Restated
) ) )
presentation Operation
Group ) ) ) Group )
change
2020 ) ) Restatement* 2020 )
GBP'000 GBP'000 GBP'000 GBP'000
) ) ) )
-------------------------------------- --------- ------------- ------------- ---------
Profits before tax from continuing 23,202
operations ) (16,834) (144) 6,224 )
Profits before tax from discontinued
operations 137 ) - ) 144 ) 281 )
(Decrease)/increase in trade
and other payables (1,787) 1,321 ) - ) (466)
Transactions with non-controlling 15,513
interests (15,513) ) - ) - )
-------------------------------------- --------- ------------- ------------- ---------
Total 6,039 ) - ) - ) 6,039 )
-------------------------------------- --------- ------------- ------------- ---------
Consolidated Statement of Changes in Equity extract:
Partner
)
remuneration Discontinued Restated
) ) )
presentation Operation
Group ) ) ) Group )
change
2020 ) ) Restatement* 2020 )
GBP'000 GBP'000 GBP'000 GBP'000
) ) ) )
--------------------------- --------- ------------- ------------- ---------
Total equity - balance at 31,480 25,692
1 April 2019 ) (5,788) - ) )
21,796
Profit for the period ) (16,834) - ) 4,962 )
13,587
Transferred to members (13,587) ) - ) - )
Total equity - balance at 51,348 42,313
31 March 2020 ) (9,035) - ) )
--------------------------- --------- ------------- ------------- ---------
*As noted above, further details of this change are included in
note 16.3
Notes to the Financial Statements (continued)
2.3 Adoption of new and revised standards
During the financial year, the Group has adopted the following
new IFRSs (including amendments thereto) and IFRIC interpretations,
that became effective for the first time.
Standard Effective date,
annual period
beginning on
or after
Conceptual Framework and Amendments to References 1 January 2020
to the Conceptual Framework in IFRS Standards
----------------
Amendments to IFRS 3 Business Combinations 1 January 2020
----------------
Amendments to IAS 1 and IAS 8: Definition 1 January 2020
of Material
----------------
Interest Rate Benchmark Reform: amendments 1 January 2020
to IFRS 9, IAS 39 and IFRS 7
----------------
Their adoption has not had any material impact on the
disclosures or amounts reported in the financial statements.
2.4 Standards issued but not yet effective
The Group has not adopted any standards or interpretations in
advance of the required implementation dates.
At the date of authorisation of these financial statements, the
following standards and interpretations relevant to the Group and
which have not been applied in these financial statements, were in
issue but were not yet effective. In some cases, these standards
and guidance have not been endorsed for use in the European
Union.
Standard Effective date,
annual period
beginning on
or after
Interest Rate Benchmark Reform - Phase 2 1 January 2021
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS
4 and IFRS 16)
----------------
Covid 19-Related Rent Concessions (Amendment 1 April 2021
to IFRS 16 Leases) (previously 1
June 2020)
----------------
Updating a Reference to the Conceptual Framework 1 January 2022
(Amendments to IFRS 3 Business Combinations)
----------------
Property, Plant and Equipment: Proceeds before 1 January 2022
Intended Use (Amendments to IAS 16)
----------------
Onerous Contracts - Cost of Fulfilling a 1 January 2022
Contract (Amendments to IAS 37 Provisions,
Contingent Liabilities and Contingent Assets)
----------------
Annual improvements 2018-2020 cycle 1 January 2022
----------------
Classification of Liabilities as Current 1 January 2023
or Non-Current: amendments to IAS 1
----------------
IFRS 17 - Insurance Contracts 1 January 2023
----------------
Notes to the Financial Statements (continued)
2.5 Consolidation
Subsidiaries are entities controlled by the Company. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences to the date that control ceases.
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an
acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at
the date of exchange. Costs directly attributable to the
acquisition are expensed in the period. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at
the acquisition date, irrespective of the extent of any
non-controlling interest. The excess of the cost of acquisition
over the fair value of the Group's share of the identifiable net
assets and contingent liabilities acquired is recorded as goodwill.
If the cost of acquisition is less than the fair value of the net
assets of the subsidiary acquired, the difference is recognised
directly in the statement of comprehensive income. Inter-company
transactions, balances and unrealised gains on transactions between
Group companies are eliminated. Unrealised losses are also
eliminated but considered an impairment indicator of the asset
transferred. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by
the Group.
The Company's accounting period date 31 March is in line with
its subsidiaries.
2.6 Investments in subsidiaries
Investments in subsidiaries are included at cost less provision
for impairment in value.
2.7 Investments in associates
Associates are those entities over which the Group has
significant influence, but neither control nor joint control over
the financial and operating policies. Associates are accounted for
using the equity method and are initially recognised at cost. The
financial statements include the Group's share of total
comprehensive income and equity movements of associates from the
date when significant influence commences to the date the
significant influence ceases.
2.8 Business combinations
The Group applies the acquisition method of accounting to
account for business combinations in accordance with IFRS 3 (R),
'Business Combinations'. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred and the equity interests
issued by the Group. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The excess of the consideration transferred over
the fair value of the Group's share of the identifiable net assets
acquired is recorded as goodwill. All transaction related costs are
expensed in the period they are incurred. If the consideration is
lower than the fair value of the net assets of the subsidiary
acquired, the difference is recognised in the statement of
comprehensive income.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IFRS 9 in the statement of comprehensive income.
2.9 Intangible assets
Intangible assets include the cost of acquiring client
portfolios and the Ince brand.
Client portfolios are carried at cost less accumulated
amortisation losses and impairment losses. Amortisation of the cost
is being provided for in line with the fees billed and cash
collections being generated by the client portfolio acquired.
The Ince brand is carried based on an independent external
valuation which applied a discounted cash flow model under the
relief from royalty method. The brand has existed for 150 years and
it has been confirmed as part of the independent valuation that it
has an indefinite useful economic life.
Notes to the Financial Statements (continued)
Intangible assets also include internally generated software and
intellectual property, which are held at cost less subsequent
amortisation and impairment. These intangible assets are amortised
at rates in order to write off the assets on a straight-line basis
over their estimated useful lives of between 3 and 10 years.
Internally generated software is amortised at the point from which
the software is considered fully functional.
The remaining amortisation period of these assets varies from 1
year - 5.5 years.
2.10 Goodwill
Goodwill arising in a business combination is recognised as an
asset at the date that control is acquired (the acquisition date).
Goodwill is initially measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling
interest in the acquired entity and the fair value of the
acquirer's previously held equity interest (if any) in the entity
over the net of the acquisition date amounts of the identifiable
assets acquired and the liabilities assumed.
The company tests annually whether goodwill has suffered any
impairment. The carrying value of the goodwill is dependent on the
future income stream from that asset.
Goodwill recognised in a business combination does not generate
cash flows independently of other assets or groups of assets. As a
result, the recoverable amount, being the value in use, is
determined at a cash generating unit (CGU) level.
The determination of a CGU is judgemental. The identification of
CGU's involves an assessment of whether the asset or group of
assets generate independent cash flows.
Where goodwill can be allocated to a single CGU, impairment is
tested at the CGU level. Otherwise, goodwill is allocated across a
group of CGUs and tested for impairment in aggregate. This was
carried out at 31 March 2021. The carrying value of goodwill and
the key assumptions used in performing the annual impairment
assessment are disclosed in note 15.
2.11 Impairment of assets
Assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment and whenever
events or changes in circumstance indicate that the carrying amount
may not be recoverable.
Assets that are subject to amortisation are tested for
impairment whenever events or changes in circumstance indicate that
the carrying amount may not be recoverable. An impairment loss is
recognised where the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset's fair value less costs to sell and the value in
use.
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
flows (cash-generating units).
Critical estimates and assumptions made
In assessing the value in use of each CGU, our calculations
required estimates in relation to uncertain items, including
management's expectations of future growth, operating costs, profit
margins, operating cash flow and the discount rate for each
CGU.
Future cash flows used in the value in use calculations, are
based on the latest approved financial plans extrapolated for
future periods expected to benefit from the goodwill for each CGU.
The future cash flows are discounted using a post-tax discount that
reflects current market assessments of the time value of money.
Notes to the Financial Statements (continued)
2.12 Financial instruments
The group classifies financial instruments, or their component
parts, on initial recognition as a financial asset, a financial
liability or an equity instrument in accordance with the substance
of the contractual arrangement. Financial instruments are
recognised on trade date when the group becomes a party to the
contractual provisions of the instrument. Financial instruments are
recognised initially at fair value plus, in the case of a financial
instrument not at fair value through profit and loss, transaction
costs that are directly attributable to the acquisition or issue of
the financial instrument. Financial instruments are derecognised on
trade date when the group is no longer a party to the contractual
provisions of the instrument.
Financial assets are included on the statement of financial
position as trade and other receivables and cash and cash
equivalents.
Financial liabilities are included on the statement of financial
position as trade and other payables and borrowings.
(a) Trade receivables
Trade receivables are stated at their original invoiced value,
as the interest that would be recognised from discounting future
cash receipts over the short credit period is not considered to be
material. The Group recognises a provision against receivables
being an estimate based on prior experience of credit losses for
irrecoverable amounts adjusted for known foreseeable estimated
losses.
(b) Trade payables
Trade payables are stated at their original invoiced value, as
the interest that would be recognised from discounting future cash
payments over the short payment period is not considered to be
material.
(c) Interest-bearing borrowings
Interest-bearing borrowings are stated at amortised cost using
the effective interest method. The effective interest method is a
method of calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the
financial liability.
2.13 Foreign currency translation
(a) Functional and presentation currency
The consolidated financial statements are presented in pounds
sterling, which is the Company's functional and presentation
currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
period-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the statement
of comprehensive income.
(c) Subsidiary accounts denominated in foreign currency
On consolidation, assets and liabilities of non-sterling
entities are translated to sterling at year-end rates of exchange,
while their statements of income, other comprehensive income and
cash flows are translated at monthly average rates. The resulting
translation differences are recognised as currency translation
differences within other comprehensive income.
Notes to the Financial Statements (continued)
2.14 Property, plant and equipment
Property, plant and equipment ("PPE") is shown at cost less
subsequent depreciation and impairment. Cost includes expenditure
that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the
statement of comprehensive income during the financial period in
which they are incurred.
Depreciation on assets is calculated using the straight-line
method to allocate the cost of each asset less its residual value
over its estimated useful life, as follows:
Computer equipment 3-10 years
Office equipment and fixtures
and fittings 3-5 years
Leasehold improvements 3-5 years
Indefinite useful
Land and freehold buildings life
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each statement of financial position
date.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. Write downs and gains and losses on
disposals are included in the statement of comprehensive
income.
2.15 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities
on the statement of financial position.
2.16 Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
statement of comprehensive income over the period of the borrowings
using the effective interest method.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the statement of financial
position date.
2.17 Deferred income tax
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated and company financial statements. The deferred income
tax is not accounted for if it arises from initial recognition of
an asset or liability in a transaction, other than a business
combination, that at the time of the transaction affects neither
accounting nor taxable profit/loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or
substantially enacted by the statement of financial position date
and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising
on investments in subsidiaries, joint ventures and associates,
except where the timing of the reversal of the temporary difference
is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future employee
benefits.
Notes to the Financial Statements (continued)
2.18 Pension obligations
The Group operates a pension scheme which is a defined
contribution plan. A defined contribution plan is a pension plan
under which the Group pays fixed contributions into a separate
entity.
The Group has no legal or constructive obligations to pay
further contributions if the fund does not hold sufficient assets
to pay all employees the benefits relating to employee service in
the current and prior periods.
The Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or
voluntary basis. The Group has no further payment obligations once
the contributions have been paid. The contributions are recognised
as employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
2.19 Profit-sharing and bonus plans
The Group recognises a liability and an expense for bonuses and
profit-sharing, based on a formula that takes into consideration
the profit attributable to that part of the Group for which the
employee is profit responsible. The Group recognises a provision
where contractually obliged or where there is a past practice that
has created a constructive obligation. This includes amounts due to
partners in respect of their remuneration model.
2.20 Provisions
Provisions for clawback of indemnity commission, pensions
review, unpaid salaries and other claims are recognised when the
Group has a present legal or constructive obligation as a result of
past events; it is more likely than not that an outflow of
resources will be required to settle the obligation; and the amount
has been reliably estimated.
Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be
small.
Provisions are measured at management's best estimate of the
expenditure required to settle the obligation at the statement of
financial position date.
2.21 Revenue recognition
Revenue comprises the fair value of the sale of services, net of
value-added tax, rebates and discounts and after eliminating sales
within the Group.
Revenue from the sale of professional services is recognised as
follows:
(a) Legal & professional services
Revenue from the provision of legal and professional services is
recognised over time in the accounting period in which services are
rendered. Contracts for the provision of legal and professional
services may include fixed fee arrangements, variable fee
arrangements based on time and materials or contingent fee
arrangements. For fixed fee arrangements, revenue is recognised
based on the actual services provided to the end of the reporting
period as a proportion of the total services to be provided. For
variable fee contracts based on time and materials, revenue is
recognised at the amount of fees that the Group has a right to
invoice for services provided, based on the fee rates agreed with
the client. For conditional fee arrangements, fees are billed on
completion depending on the outcome of the matter (e.g. Personal
Injury or Clinical Negligence cases on a 'no win, no fee' basis).
Revenue in respect of contingent fee assignments, over and above
any agreed minimum fee, is included in revenue only to the extent
that it is highly probable that the amount will not be subject to
significant reversal when the uncertainty is resolved. This is
generally when the matter is resolved and the outcome is known.
Contingent fee income includes revenue earned as a result of
dispute resolution activity undertaken in the turnaround of
businesses acquired out administration, including debt
collection.
A receivable is recognised when a bill has been invoiced as this
is the point in time that the consideration is considered
unconditional because only the passage of time is required before
payment is due. Where income has not been billed at the reporting
date, it is included in Accrued Income.
No element of financing is deemed to exist as payment is
typically due within one year of the service being performed.
Notes to the Financial Statements (continued)
(b) Employee benefits and financial advisory
Revenue relating to the employee benefits and financial advisory
business represents fees and life and pension commission and is
recognised at a point in time. Fees are recognised when invoiced
and commissions are recognised when confirmation is received from
the underwriters that payment is being made to the Group. A
provision is made for clawback of commission which is deducted from
revenue.
(c) Interest income
Interest income is recognised on a time-proportion basis using
the effective interest method.
(d) Government grants
During the year, the Group has received Government support. A
Government grant is recognised in the statement of financial
position within other receivables when there is a reasonable
assurance that it will be received and that the Group will comply
with the conditions attached to it. Grants are netted off against
the related costs in the income statement at a point in time to
match the timing of the recognition of the related expenses for
which they are intended to compensate.
2.22 Leases
Leases are recognised as a right-of-use asset and a
corresponding liability at the date at which the lease asset is
available for use by the group.
Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
re-measurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Right-of-use
assets are depreciated over the shorter of the asset's useful life
and the lease term on a straight-line basis.
Lease liabilities are initially measured at the net present
value of lease payments to be made over the lease term. The lease
payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to
be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain
to be exercised by the Group and payments of penalties for
terminating a lease, if the lease term reflects the Group
exercising the option to terminate.
In calculating the present value of lease payments, the Group
uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is re-measured if there is a
modification, a change in the lease term, a change in the
in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
Extension and termination options are included in a number of
the property leases across the group. The Group determines the
lease term as the non-cancellable term of the lease, together with
any periods covered by an option to extend the lease if it is
reasonably certain to be exercised, or any period covered by an
option to terminate the lease, if it is reasonably certain not to
be exercised. The Group applies judgement in evaluating whether it
is reasonably certain to exercise an option to renew or terminate a
lease. Management considers all facts and circumstances that create
an economic incentive to exercise an extension option, or not
exercise a termination option. After the commencement date, the
Group reassesses the lease term if there is a significant event or
change in circumstances that is within its control and affects its
ability to exercise, or not to exercise, the option to renew or
terminate the contract. If a lease modification either increases
the given lease's scope by adding the right to use of an asset then
this modification is treated as a new lease.
Payments associated with short-term leases and leases of
low-value assets (with a value of less than GBP10,000) are
recognised on a straight-line basis as an expense in the statement
of comprehensive income. Short-term leases are leases with a lease
term of 12 months or less.
Notes to the Financial Statements (continued)
2.23 Dividend distribution
Dividend distribution to the Company's shareholders is
recognised as a liability in the Group's financial statements in
the period in which the dividends are approved by the Company's
shareholders. Interim dividends are recognised when paid.
2.24 Share-based payments
The fair value at the date of grant of the equity instrument is
recognised as an expense, spread over the vesting period of the
instrument. The total amount to be expensed is determined by
reference to the fair value of the awards, excluding the impact of
any non-market vesting conditions. At each statement of financial
position date, the Group revises its estimate of the number of
equity instruments which are expected to become exercisable. It
recognises the impact of the revision of original estimates, if
any, in the statement of comprehensive income and a corresponding
adjustment is made to equity. On vesting or exercise, the
difference between the expense charged to the statement of
comprehensive income and the actual cost to the Group is
transferred to retained earnings. Where new shares are issued, the
proceeds received are credited to share capital and share
premium.
3. Financial risk management
3.1 Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk (including foreign exchange risk and price
risk), credit risk, liquidity risk, cash flow risk and fair value
interest-rate risk. The Group's overall risk management programme
focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the Group's financial
performance. Further details are set out in notes 27 to 32.
Risk management is carried out by the Board of Directors. The
Board identifies, evaluates and hedges financial risks in close
co-operation with the Group's operating units. The Board provides
written principles for overall risk management, as well as written
policies covering specific areas, such as foreign exchange risk,
interest-rate risk, credit risk, use of Convertible loan stock and
non-Convertible loan stock, and investing excess liquidity.
(a) Credit risk
Because the Group has a wide range of clients, in different
market sectors, it has no significant concentrations of credit
risk. It has policies in place to ensure that if customers do not
settle their accounts within the agreed terms then the transaction
is cancelled minimising the credit exposure.
(b) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities, and the availability of funding
through an adequate amount of committed credit facilities. The
Group aims to maintain flexibility in funding by keeping committed
credit lines available.
(c) Cash flow and fair value interest rate risk
The Group's income and operating cash flows are substantially
independent of changes in market interest rates. The interest rates
of finance leases to which the Group is lessee are fixed at
inception of the lease. These leases expose the Group to fair value
interest rate risk.
The Group's cash flow interest rate risk arises from borrowings.
Borrowings issued at variable rates expose the Group to cash flow
interest rate risk. Borrowings issued at fixed rates expose the
Group to fair value interest rate risk. The Group aims to maintain
the majority of its borrowings in variable rate instruments. At
March 2021, 97 per cent of borrowings were at variable rates and 3
per cent were at fixed rates.
4. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are discussed below.
Notes to the Financial Statements (continued)
(a) Estimated impairment of goodwill
Determining whether goodwill is impaired requires an estimation
of the value in use of the cash generating units to which goodwill
has been allocated and a key judgement is the determination of the
associated allocation of goodwill to these cash generating units.
The value in use calculation requires the entity to estimate the
future cash flows expected to arise from the cash generating unit
and a suitable discount rate. Further details are included in note
15.
(b) Accrued income
Accrued income represents unbilled amounts for client work and
are measured initially at fair value and held at amortised cost
less provisions for foreseeable losses that are estimated based
upon current observable data and historical trend. Further details
are included in note 17.
(c) Impairment of receivables
Receivables are held at cost less provisions for impairment.
Provisions for impairment represent an allowance for doubtful debts
that is estimated, based upon current observable data and
historical trend. Details of receivables are included in note
17.
(d) Valuation of intangible assets
Business combinations are accounted for at fair value. The
valuation of goodwill and acquired intangibles is calculated
separately on each individual acquisition. In attributing value to
intangible assets arising on acquisition, management has made
certain judgements in relation to expected growth rates,
profitability, length of key customer relationships and the
appropriate discount rate. Intangible assets relating to brands and
trademarks, which the Group has acquired, are assessed for
impairment on annual basis. The value of intangible assets at 31
March 2021 was GBP76,612,000 (2020: GBP80,825,000).
(e) Brand valuation
The valuation of the Ince Brand is a key estimate due to
judgement involved in the assumptions used to value the asset.
Further details can be found in note 15.
(f) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that the Group will be required to settle that
obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are measured using management's best
estimate of the expenditure required to settle the obligation at
the reporting date and are discontinued to present value where the
effect is material. The value of provisions at 31 March 2021 was
GBP5,215,000 (2020: GBP4,596,000). Further details can be found in
note 23.
(g) Amortisation of intangible assets other than goodwill
The useful life used to amortise intangible assets relates to
the expected future performance of the assets acquired and
management's judgement of the period over which economic benefit
will be derived from the asset. Further details are included in
note 15.
(h) Classification of non-controlling interests
As described in note 2.2, non-controlling interests related to
partner profit share arrangements have been presented as a cost
within the Consolidated Statement of Comprehensive Income and as a
liability within the Statements of Financial Position to better
represent the commercial nature of these arrangements.
(i) Goodwill valuation of discontinued operation
During the year the Group disposed of White & Black Limited,
an operation within the Legal & Business Services CGU group.
Management considered the retained value of the business of ongoing
technical expertise, integrated services and clients and concluded
that goodwill could not be non-arbitrarily allocated to White &
Black Limited. In assessing the impact of the disposal Management
considered the relative value of the operation against the value of
the remaining CGUs, using judgment in identifying appropriate
valuations, and allocated goodwill to the disposal in line with
these valuations (as disclosed in note 16.3).
Notes to the Financial Statements (continued)
5. Segmental reporting
Group
The Board of Directors, as the chief operating decision-making
body, reviews financial information for and makes decisions about
the Group's overall business and has identified a single operating
segment, that of legal and professional services.
The legal and professional services business operates through a
number of different service lines and in different locations.
However, management effort is consistently directed to the firm
operating as a single segment. No segmental reporting disclosure is
therefore provided as all revenue is derived from this single
segment.
Revenue by Region
In the following table, revenue from contracts with customers is
disaggregated by primary geographical market:
Restated
) )
2021 ) 2020 )
GBP'000 GBP'000
) )
------------------------------ -------- ---------
58,734 61,712
UK ) )
16,189 13,328
Europe, Middle East & Africa ) )
25,279 21,290
Asia ) )
------------------------------ -------- ---------
100,202 96,330
Total Revenue ) )
------------------------------ -------- ---------
Non-current assets other than financial instruments and deferred
tax assets by geographical areas are not presented as this
information is not provided to the chief operating decision maker
of the group.
Notes to the Financial Statements (continued)
6. Staff and partner costs
Group
The average number of persons employed by the Group (including
Directors) during the period, analysed by category, was as
follows:
No. of employees
Restated
)
2021 ) 2020 )
---------------------- ------------ ---------------
Fee earners 349 ) 333 )
Direct support staff 114 ) 134 )
Support staff 238 ) 251 )
Total 701 ) 718 )
---------------------- ------------ ---------------
The aggregate employment costs of these persons were as
follows:
Restated
)
2021 ) 2020 )
GBP'000 GBP'000
) )
------------------------------------ -------- ---------
35,349 37,266
Wages and salaries ) )
Social security costs 3,409 ) 3,368 )
Employee benefits costs 2,643 ) 2,088 )
Pension costs 1,323 ) 1,253 )
Redundancy costs 216 ) - )
42,940 43,975
Total staff costs ) )
20,334 16,834
Partner remuneration ) )
Deferred consideration revaluation (1,472) - )
Amortisation - relating to
partner payments 3,121 ) 2,046 )
------------------------------------ -------- ---------
Total s taff and partner 64, 923 62,855
costs ) )
------------------------------------ -------- ---------
Wages and salaries include a material credit of GBP2,106,000
(2020: GBPNil) in connection with the UK Coronavirus Job Retention
Scheme Government grants and other similar grants in Singapore and
Hong Kong received in the period .
Company
The Company has no employees (excluding Directors) (2020: none);
all personnel are employed by subsidiary entities.
Directors' remuneration
Total Directors' remuneration was as follows:
2021 ) 2020 )
GBP'000 GBP'000
) )
----------------------------- -------- --------
Salaries, fees, bonuses and
benefits in kind 1,271 ) 1,000 )
Pension costs 6 ) - )
----------------------------- -------- --------
1,277 ) 1,000 )
----------------------------- -------- --------
The number of Directors to whom benefits are accruing under
money purchase pension schemes is 2 (2020: none).
Further details of the remuneration of and transactions with
directors are included in the Directors' Remuneration Report
accompanying these financial statements.
Key management personnel comprise of the Board of Directors.
Notes to the Financial Statements (continued)
7. Non-underlying costs
Group ) Group )
2021 ) 2020 )
GBP'000 GBP'000
) )
---------------------------- -------- --------
Property abandonment costs 3,197 ) - )
Litigation 1,560 ) 95 )
Restructuring 485 ) - )
Acquisition / onboarding
costs 440 ) 1,437 )
Re-financing costs 354 ) - )
Equity fund raise - ) 125 )
-------- --------
Total non-underlying costs 6,036 ) 1,657 )
---------------------------- -------- --------
Costs and income are assessed by Management as non-underlying
where they are considered outside of or related to events outside
of the normal scope of operation of the Group's business,
non-recurring in nature in the financial period:
- Property abandonment costs relate to costs for the lease of
one floor of Aldgate Tower (the Group's head office), which as a
result of restrictions resulting from the Covid-19 has not been
usable since March 2020. This floor is not planned for re-use
before the next break clause in its lease which is in October 2022
(note: the other floor in that premises, separately leased by the
Group, is expected to be re-opened as restrictions ease during this
financial year). As a result of this restriction on access, the
right of use asset for the lease is identified as impaired and
accordingly associated rate and service charge costs to the break
clause date have been provided in full.
- Litigation relates to the final settlement (and associated
legal fees) of disputes with former partners of the Ince & Co
Singapore LLP and Herring Parry Khan Giomelakis Le-Du Law Office
(the Group's Greek entity), who did not join the Group as part of
the Ince acquisition.
- In the year, Covid-19 caused significant disruption to the
Group's business. As a result, various non-recurring restructuring
costs were incurred, including a redundancy programme undertaken
across September to November 2020 which reduced UK head count by 47
- and additional costs for the back-office support to the old Ince
practice management system which were incurred as travel to
overseas offices was restricted, delaying the planned overseas
rollout of the Group's proprietary practice management system.
- Acquisition / onboarding costs include principally certain
costs relating to the merger of Ince & Co Singapore LLP and
Incisive Law LLC (Singapore), which took place in May 2020.
- Re-financing costs relate to various advisory and other costs
incurred as part of the Group's refinancing with Investec Bank Plc
(undertaken in March 2021).
Items set out above for the prior financial year were classified
as non-recurring costs and disclosed in a different position on the
Consolidated Statement of Comprehensive Income. These items all
meet the criteria set out above for inclusion as non-underlying
costs (in line with changes in presentation of Alternative
Presentation Measures for profits, outlined in note 11). Note 2.2
shows the impact of this reclassification.
Notes to the Financial Statements (continued)
8. Operating profit
Operating profit is stated after charging/ (crediting):
Group
Group ) )
2021 ) 2020 )
GBP'000 GBP'000
) )
-------------------------------- ---------- --------
Fees payable to the company's
auditor for the audit of
the company's annual accounts 75 ) 70 )
Fees payable to the company's
auditor and its associates
for other services:
- audit of the accounts
of subsidiaries 201 ) 241 )
- audit fees in respect
of the prior year 95 ) - )
- audit-related assurance
services 99 ) 47 )
- other assurance services - ) 33 )
Depreciation of tangible
fixed assets
1,473
- continuing operations 1,422 ) )
- discontinued operations 5 ) 14 )
Depreciation of right-of-use
assets
4,556
- continuing operations 4,179 ) )
- discontinued operations 53 ) 107 )
Amortisation / impairment
of intangible assets:
2,046
- turnover related 3,121 ) )
- other 290 ) 83 )
2,041
Bad debt expense 4,116 ) )
Hire of plant and equipment 102 ) 94 )
42,940 43,975
Employee benefits (note 6) ) )
Share based payment expense 151 ) 172 )
-------------------------------- ---------- --------
Fees payable to the company's auditor for audit-related
assurance services includes non-underlying costs of GBP82,000
(2020: GBP54,000).
9. Finance income and expense
Restated
) )
Group ) Group )
2021 ) 2020 )
GBP'000 GBP'000
) )
------------------------------------ -------- ---------
Finance income
Bank interest receivable 25 ) 346 )
Net change in fair value of
contingent deferred consideration
liabilities 172 ) - )
Other finance income 213 ) 5 )
-------- ---------
410 ) 351 )
------------------------------------ -------- ---------
Finance expense
Bank interest payable (2) (11)
Hire purchase (1) (3)
Finance charge on leases (515) (483)
Loan interest (393) (519)
Other interest (43) (8)
Unwind of discounting on financial
liabilities (539) (516)
Other finance expense (112) - )
(1,605) (1,540)
------------------------------------ -------- ---------
(1,195
Net finance income/(expense) ) (1,189)
------------------------------------ -------- ---------
Notes to the Financial Statements (continued)
10. Taxation
i. Analysis of charge in the period
Restated
)
Group ) Group )
2021 ) 2020 )
GBP'000 GBP'000
) )
------------------------------------ -------- ---------
The charge for taxation comprises:
Taxation charge for the current
period 879 ) ) 1,362 )
Adjustment in respect of prior
periods (189) ) 168 )
690 ) ) 1,530 )
------------------------------------ -------- ---------
ii. Factors affecting the tax charge for the period:
Restated
)
Group ) Group )
2021 ) 2020 )
GBP'000 GBP'000
) )
-------------------------------- -------- ---------
Profit on ordinary activities
before taxation 1,956 ) 6,224 )
Less: (profit)/loss arising
in partnerships, on which
tax is payable by the members
personally (111) 807 )
--------------------------------
Profit on ordinary activities
of corporate entities before
taxation 1,845 ) 7,031 )
-------------------------------- -------- ---------
Profit on ordinary activities
multiplied by the standard
rate of corporation tax of
19% (2020: 19%) 351 ) 1,336 )
Effects of:
Impact of tax-exempt items 470 ) (98)
Losses (utilised) / carried
forward 8 ) - )
Difference in overseas tax
rates 50 ) 124 )
-------------------------------- -------- ---------
Total taxation charge for
the current period 879 ) 1,362 )
-------------------------------- -------- ---------
Notes to the Financial Statements (continued)
11. Earnings per share
Earnings per share are based on the weighted average number of
shares of the Company in issue or issued as consideration for the
entities whose results are reported in the period. The number of
shares and periods are as follows:
1 April 2019 36,976,730 Being the Company's issued shares at that
date
27 November 37,326,730 Being the Company's issued shares following
2019 new shares issued as consideration on acquisition
of Ince Compliance Solutions Limited
3 February 68,540,912 Being the Company's issued shares following
2020 new shares issued as part of an equity
placing exercise
The calculation of the basic and diluted earnings per share is
based on the following data:
Restated
)
Group
) Group )
2021 ) 2020 )
GBP'000 GBP'000
) )
---------------------------------------------- ----------- -----------
Earnings from continuing operations
for the purpose of basic and diluted 1,245
earnings per share ) 4,684 ,
Earnings from discontinued operations
for the purpose of basic and diluted
earnings per share (919) 268 ,
---------------------------------------------- ----------- -----------
Earnings from all operations for the
purpose of basic and diluted earnings
per share 326 ) 4,952 ,
---------------------------------------------- ----------- -----------
Number Number
, ,
---------------------------------------------- ----------- -----------
Weighted average number of ordinary
shares for the purposes of basic earnings 68,540,912 42,043,732
per share , ,
Effect of dilutive potential ordinary
shares:
Future exercise of share awards and 2,143,044 1,335,472
options , ,
---------------------------------------------- ----------- -----------
Weighted average number of ordinary
shares for the purposes of diluted earnings 70,683,956 43,379,204
per share , ,
---------------------------------------------- ----------- -----------
Earnings from continuing operations
per share attributable to the owners
of the parent:
Basic earnings per share (pence) 1.82 ) 11.14 ,
Diluted earnings per share (pence) 1.76 ) 10.80 ,
Earnings from discontinued operations
per share attributable to the owners
of the parent:
Basic earnings per share (pence) (1.34) 0.64 ,
Diluted earnings per share (pence) (1.34) 0.62 ,
Earnings from all operations per share
attributable to the owners of the parent:
Basic earnings per share (pence) 0.48 ) 11.78 ,
Diluted earnings per share (pence) 0.46 ) 11.42 ,
Basic earnings before non-underlying costs is calculated as
follows:
Group
) Group )
2021 ) 2020 )
GBP'000 GBP'000
) )
--------------------------------------- -------- --------
Profit for the period attributable to
equity holders of the Company 326 ) 4,952 ,
Add back: Non-underlying costs (note 6,036
7) ) 1,657 ,
Deduct: tax impact of non-underlying
costs (629) (155)
Basic earnings before non-underlying 5,733
costs ) 6,454 )
--------------------------------------- -------- --------
Notes to the Financial Statements (continued)
Previously the Group disclosed Adjusted profit before tax in
this note. This profit measure is no longer used by Management but
a bridge from Operating profit before non-underlying costs
(disclosed in the Consolidated Statement of Comprehensive Income)
is set out below:
Group
) Group )
2021 ) 2020 )
GBP'000 GBP'000
) )
------------------------------------------------- -------- --------
Operating profit before non-underlying 9,169
costs ) 9,210 ,
Finance income 410 ) 351 ,
Finance expense - right-of-use asset (515) (483)
Finance expense - other (1,090) (1,057)
Share of (loss)/profit of associate 18 ) (140)
Non-controlling interests (21) (10)
------------------------------------------------- --------
7,971
Adjusted profit before tax ) 7,871 )
------------------------------------------------- -------- --------
White & Black discontinued items 144 )
------------------------------------------------- -------- --------
Adjusted profit before tax per prior
year financial statements (before restatement) 8,015 )
------------------------------------------------- -------- --------
Accordingly Adjusted basic earnings per share (15.39p) and
Adjusted diluted earnings per share (14.92p) reported in the prior
year, which were calculated with reference to the above figure, are
superceded respectively in presentation by Basic earnings per share
before non-underlying costs (15.35p) and Diluted earnings per share
before non-underlying costs (14.88p) disclosed below the
Consolidated Statement of Comprehensive Income.
12. Share-based payment arrangements
The Group has established the Ince Group Share Option Plan 2017
("Plan") for the grant of share options to certain eligible
employees to acquire shares in the capital of the Company in order
to reward such eligible employees for their contribution to the
Company's success and to provide an incentive going forward.
As part of the consideration for the acquisition of the members'
interests of Ince & Co LLP, the members of Ince & Co LLP
were collectively granted 2,392,846 ordinary shares of 1p each in
the Group as part of the Plan on 31 December 2018. The options have
a vesting period of 3 years from issue and a contractual life of 10
years.
The fair value of the employee share options has been measured
using the Black-Scholes formula. Service and non-market conditions
attached to the arrangements were not taken in to account measuring
fair value.
At 1 April 2020 the brought forward number of ordinary shares of
1p at an exercise price of 140p was 2,178,562.
During the year, 142,856 ordinary shares of 1p at an exercise
price of 140p were forfeited by resigning members of Ince & Co
LLP.
At 31 March 2021 the carried forward number of ordinary shares
of 1p at an exercise price of 140p was 2,035,706.
The inputs used in measurement of the fair values at grant date
of the shares were as follows:
Fair value 0.24
Share price 1.79
Exercise price 1.40
Risk-free interest rate (based
on government bonds) 0.59%
Expected volatility (weighted
average) 1.14%
Dividend yield 3.35%
Expected life (weighted average) 3 years
---------------------------------- --------
Notes to the Financial Statements (continued)
13. Property, plant and equipment ("PPE")
Group
Furniture
)
Land and fittings Leasehold
) and ) )
buildings equipment Improvements
) ) ) Total )
GBP'000 GBP'000 GBP'000
) ) GBP'000 ) )
--------------------------- ---------- ---------- ------------- --------
Cost
Balance at 1 April 2020 230 ) 4,771 ) 3,439 ) 8,440 )
Acquisition of subsidiary
(note 16.2) - ) 29 ) - ) 29 )
Additions - ) 403 ) 251 ) 654 )
Disposals - ) (174) - ) (174)
Exchange differences - ) (242) (261) (503)
Balance at 31 March 2021 230 ) 4,787 ) 3,429 , 8,446 )
--------------------------- ---------- ---------- ------------- --------
Depreciation
Balance at 1 April 2020 - ) 3,134 ) 1,545 ) 4,679 )
Acquisition of subsidiary
(note 16.2) - ) 29 ) - ) 29 )
Disposals - ) (158) - ) (158)
Exchange differences - ) (218) (126) (344)
Charge for the period - )) 760 ) 667 ) 1,427 )
Balance at 31 March 2021 - ) 3,547 , 2,086 ) 5,633 )
--------------------------- ---------- ---------- ------------- --------
Carrying value
At 31 March 2020 230 ) 1,637 , 1,894 , 3,761 )
At 31 March 2021 230 ) 1,240 , 1,343 , 2,813 )
--------------------------- ---------- ---------- ------------- --------
The figures for the previous period are as follows: -
Furniture
,
Land and fittings Leasehold
) and , )
Buildings equipment Improvements
) , ) Total )
GBP'000 GBP'000 GBP'000
) , GBP'000 ) )
--------------------------- ---------- ---------- ------------- --------
Cost
Balance at 1 April 2019 230 ) 1,137 , - ) 1,367 )
Acquisition of subsidiary - ) 2,960 , 2,488 ) 5,448 )
Additions - ) 572 , 864 ) 1,436 ,
Disposals - ) (57) - ) (57)
Exchange differences - ) 159 , 87 ) 246 ,
Balance at 31 March 2020 230 ) 4,771 , 3,439 ) 8,440 ,
--------------------------- ---------- ---------- ------------- --------
Depreciation
Balance at 1 April 2019 - ) 185 , - ) 185 ,
Acquisition of subsidiary - ) 2,007 , 947 ) 2,954 ,
Disposals - ) (55) - ) (55)
Exchange differences - ) 64 , 44 ) 108 ,
Charge for the period - ) 933 , 554 ) 1,487 ,
Balance at 31 March 2020 - ) 3,134 , 1,545 ) 4,679 ,
--------------------------- ---------- ---------- ------------- --------
Carrying value
At 31 March 2019 230 ) 952 , - ) 1,182 ,
At 31 March 2020 230 ) 1,637 , 1,894 ) 3,761 ,
--------------------------- ---------- ---------- ------------- --------
Notes to the Financial Statements (continued)
Company
Furniture
)
fittings Leasehold
and ) )
equipment Improvements
) ) Total )
GBP'000 GBP'000
) GBP'000 ) )
-------------------------- ---------- ------------- --------
Cost
Balance at 1 April 2020
and 31 March 2021 2 ) 114 ) 116 )
-------------------------- ---------- ------------- --------
Depreciation
Balance at 1 April 2020 1 ) 25 ) 26 )
Charge for the period 1 ) 37 ) 38 )
Balance at 31 March 2021 2 ) 62 ) 64 )
-------------------------- ---------- ------------- --------
Carrying value
At 31 March 2020 1 ) 89 ) 90 )
At 31 March 2021 - ) 52 ) 52 )
-------------------------- ---------- ------------- --------
14. Leases
14.1 Right-of-use assets
Group
Furniture
)
Land and fittings
) and )
Buildings equipment
) ) Total )
GBP'000 GBP'000 GBP'000
) ) )
----------------------------- ---------- ---------- --------
10,241
Balance at 1 April 2019 9,958 ) 283 ) )
Additions 5,734 ) 292 ) 6,026 )
Acquisition of subsidiaries 5,945 ) - ) 5,945 )
Disposals (297) - ) (297)
Exchange differences 189 ) - ) 189 )
Depreciation charge for
the year (4,563) (100) (4,663)
----------------------------- ---------- ---------- --------
16,966 17,441
Balance at 31 March 2020 ) 475 ) )
----------------------------- ---------- ---------- --------
Additions 1,045 ) 129 ) 1,174 )
Revaluation (345) - ) (345)
Disposals (775) - ) (775)
Impairment losses (1,916) - ) (1,916)
Transfer/reclassification (89) - ) (89)
Exchange differences (696) - ) (696)
Depreciation charge for
the year (4,102) (130) (4,232)
----------------------------- ---------- ---------- --------
10,088 10,562
Balance at 31 March 2021 ) 474 ) )
----------------------------- ---------- ---------- --------
Notes to the Financial Statements (continued)
Company
Furniture
)
Land and fittings
) and )
Buildings equipment Total
) ) )
GBP'000 GBP'000
) GBP'000 ) )
-------------------------- ---------- ---------- --------
Balance at 1 April 2019 - , - , - ,
Additions 964 , - , 964 ,
Depreciation charge for
the year (268) - , (268)
Balance at 31 March 2020 696 , - , 696 ,
-------------------------- ---------- ---------- --------
Additions - , 129 , 129 ,
Depreciation charge for
the year (322) (7) (329)
-------------------------- ---------- ---------- --------
Balance at 31 March 2021 374 , 122 , 496 ,
-------------------------- ---------- ---------- --------
14.2 Lease Liabilities
Restated
)
2021 ) 2020 )
GBP'000 GBP'000
) )
--------------------------------------------- -------- --------
Maturity analysis - contractual undiscounted
cash flows
Less than one year 5,200 ) 5,968 )
One to five years 7,827 ) 12,804 )
More than five years 353 ) 1,583 )
Total undiscounted lease liabilities
at 31 March 13,380 ) 20,355 )
Effect of discounting (743) (1,519)
--------------------------------------------- -------- --------
Lease liabilities included in the
statements of financial position at
31 March 12,637 ) 18,836 )
--------------------------------------------- -------- --------
Current 4,863 ) 5,552 )
Non-current 7,774 ) 13,284 )
12,637 ) 18,836 )
--------------------------------------------- -------- --------
14.3 Amounts recognised in profit or loss
2021 ) 2020 )
GBP'000 GBP'000
) )
----------------------------------------- ------- -------
Interest on lease liabilities 515 ) 514 )
Expenses relating to short-term leases 287 ) 336 )
Expenses relating to leases of low-value
assets 102 ) 94 )
----------------------------------------- ------- -------
Total cash outflow for leases in the year was GBP5,564,000.
Termination options are included in a number of property leases
across the Group. As at 31 March 2021, potential future cash
outflows of GBP22,876,000 (2020: GBP24,072,000) (undiscounted) have
not been included in the lease liability because it is not
reasonably certain that the lease will not be terminated.
The impairment recognised during the year relates to the right
of use asset associated to part of Aldgate Tower offices (occupied
under a discrete lease agreement), which as a result of the
Covid-19 pandemic is now deemed not operable for the ongoing
business use of the Group. Impairment of GBP1,916,386 is recognised
in non-underlying costs on the statement of comprehensive
income.
Notes to the Financial Statements (continued)
15. Intangible assets
Group
Internally
Brand
Client & generated Intellectual
Goodwill Portfolio trademarks software Property Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- ---------- ----------- ----------- ------------- --------
Cost
55,047 89,987
At 1 April 2020 , 15,467 17,000 2,284 189 ,
1,698 1,698
Acquisition of subsidiary , - - - - ,
1,123
Additions - , - - 1,123 - ,
Effect of movements
in exchange rates (3) - - - - (3)
Disposal of subsidiary (620) - - - - (620)
56,122 92,185
At 31 March 2021 , 15,467 17,000 3,407 189 ,
--------------------------- --------- ---------- ----------- ----------- ------------- --------
Amortisation and
impairment
9,162
At 1 April 2020 - , 8,864 - 232 66 ,
3,411
Charge for period - , 3,121 - 271 19 ,
12,573
At 31 March 2021 - , 11,985 - 503 85 ,
------------------ ------- ------- ------- ------ ---- -------
Carrying value
55,047 80,825
At 31 March 2020 , 6,603 17,000 2,052 123 ,
------------------ ------- ------- ------- ------ ---- -------
56,122 79,612
At 31 March 2021 , 3,482 17,000 2,904 104 ,
------------------ ------- ------- ------- ------ ---- -------
Client portfolio represents the acquisition of the business and
certain assets from other professional services firms. The client
portfolio intangible asset is carried at cost less accumulated
amortisation. Amortisation is provided for in line with the fees
billed and cash collections generated by the client portfolio
acquired. Amortisation of client portfolio intangibles of
GBP3,121,000 (2020: GBP2,046,000) is recognised in production staff
and partner costs on the statement of comprehensive income.
Brands and trademarks GBP17,000,000 (2020: GBP17,000,000) relate
to the value attributed to the Ince brand that the Group acquired
on 1 January 2019. This was determined on acquisition based on an
external valuation report, as detailed in note 2.9. The carrying
value of the brand is subject to annual impairment reviews on the
reporting date. These reviews are similarly undertaken based on
external valuations.
The above valuations are performed by a third party who use a
discounted cash flow model based on the relief from royalty method.
Assumptions for value calculations of the Ince Brand on this basis
include forecast revenues for Ince to 31 March 2024, forecast
revenues after 31 March 2024 increasing at 1.5% per annum
indefinitely, royalty rate of 2%, corporation tax of initially 19%
then increasing to 25% and a discount rate of 7.3% after tax.
Internally generated software includes development costs
relating to development of software applications. The directors
have considered the carrying value of internally generated software
of GBP2,904,000 (2020: GBP2,052,000) as appropriate as it is
expected to create future economic benefit.
Intellectual property carrying amount includes GBP104,000 (2020:
GBP123,000) of intellectual property acquired on the acquisition of
certain assets and liabilities of Prolegal Limited from its
administrator.
Notes to the Financial Statements (continued)
The intangible assets of the group for the prior year were as
follows: -
Internally
Brand
Client & generated Intellectual
Goodwill portfolio Trademarks software Property Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- --------- ---------- ----------- ----------- ------------- --------
Cost
Balance at 1 April
2019 (restated) 50,820 12,219 17,000 1,248 189 81,476
Acquisition of
subsidiary 4,227 3,248 - - - 7,475
Additions - - - 1,036 - 1,036
Balance at 31
March 2020 55,047 15,467 17,000 2,284 189 89,987
-------------------- --------- ---------- ----------- ----------- ------------- --------
Amortisation and
impairment
Balance at 1 April
2019 - 6,818 - 168 47 7,033
Charge for the
period - 2,046 - 64 19 2,129
Balance at 31
March 2020 - 8,864 - 232 66 9,162
-------------------- --------- ---------- ----------- ----------- ------------- --------
Carrying value
At 31 March 2019 50,820 5,401 17,000 1,080 142 74,443
At 31 March 2020 55,047 6,603 17,000 2,052 123 80,825
-------------------- --------- ---------- ----------- ----------- ------------- --------
Goodwill
Goodwill acquired in a business combination is allocated, at
acquisition, to the cash generating units (CGUs), or group of units
that are expected to benefit from that business combination and is
analysed below.
Legal
& )
Business Total
) )
CW Energy Services Goodwill
) ) )
GBP'000 GBP'000 GBP'000
) ) )
-------------------------- ---------- --------- ---------
Cost
48,583 55,047
At 1 April 2020 6,464 ) ) )
1,698 1,698
Acquisitions - ) ) )
Effect of movements in
exchange rates - ) (3) (3)
Disposal of subsidiary - ) (620) (620)
49,658 56,122
Balance at 31 March 2021 6,464 ) ) )
-------------------------- ---------- --------- ---------
Impairment
At 1 April 2020 and 31
March 2021 - ) - ) - )
-------------------------- ---------- --------- ---------
Carrying value
48,583 55,047
At 31 March 2020 6,464 ) ) )
-------------------------- ---------- --------- ---------
49,658 56,122
At 31 March 2021 6,464 ) ) )
-------------------------- ---------- --------- ---------
The Directors believe that the increasingly inter-connected
nature of the business units means the majority of operations
benefit from the synergies of the various business combinations and
therefore the goodwill now spans the entire group (2020: allocated
over 6 CGUs or groups of CGUs), except in the case of CW Energy
where more operational separability exists. The value in use of
each CGU or group of CGUs is determined using cash flow projections
derived from financial plans. This reflects management's
expectations of future revenue growth, operating costs and cost
reductions due to synergies, profit margins, operating cash flows
based on past performance and future expectations of business
performance. The cash flows have then been extended for five years
or longer where the expected duration of the client relationships
of the CGU supports it.
In respect of the above, income budgets are based on historic
results adjusted for experience and capacity level of fee earning
staff and known changes in circumstances. These are reviewed with
the heads of department for each fee earning area. Average annual
growth rate of 0.09% has been applied as a prudent precaution based
on past performance during the recent pandemic.
Notes to the Financial Statements (continued)
Costs are largely fixed staff and establishment costs and are
forecast based on the current structure of the business, adjusting
for inflationary increases but not reflecting any future
restructurings or cost saving measures.
The future cash flows have been discounted using a post-tax
discount rate of 7.9%.
Company
There are no intangible assets held by the company (2020:
None).
16. Investments
The carrying value of investments held by the group and company
were as follows:
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- -------- -------- --------
Investments in group
undertakings - - 47,607 47,607
Interests in associates - 470 - -
-------------------------
- 470 47,607 47,607
----------------------------------- -------- -------- --------
16.1 Investments in group undertakings
Company
Investments
in group
undertakings
GBP'000
--------------------------- -------------
Cost
Balance at 1 April
2020 51,125
Additions -
Balance at 31 March
2021 51,125
--------------------------- -------------
Impairment and provisions
Balance at 1 April
2020 3,518
Impairment -
Balance at 31 March
2020 3,518
--------------------------- -------------
Carrying value
At 31 March 2020 47,607
At 31 March 2021 47,607
--------------------------- -------------
Notes to the Financial Statements (continued)
On 31 March 2021, The Ince Group plc had control for the
purposes of IFRS 10 of the following subsidiary undertakings which
are included in the consolidated financial statements.
Interest Registered
UK Companies Principal activity held office
----------------------------------------- -------------------------------- ----------- -----------
Ince Wealth Limited Intermediate holding Note 1 (b)
company
Ince Consulting Holdings Limited Intermediate holding Note 1 (b)
company
Culver Financial Management Independent financial Note 1 (b)
Limited advisor
Hanover Financial Management Independent financial Note 1 (b)
Limited advisor
Hanover Employee Benefits Limited Independent financial Note 1 (b)
advisor
Ince Gordon Dadds Services Management services Note 1 (b)
Limited
Hanover Pensions Limited Professional services Note 1 (b)
Ince Gordon Dadds MAP Limited Legal services Note 1 (b)
GDGS (Alen-Buckley) Limited Legal services Note 1 (b)
GDGS (Metcalfes) Limited Legal services Note 1 (b)
e.Legal Technology Solutions IT services Note 2 (b)
Limited
James Stocks & Co Limited Professional services Note 1 (a)
James Stocks & Co (Services) Management services Note 1 (a)
Limited
Ince Gordon Dadds Professional Professional services Note 1 (b)
Services Limited
Ince GD Corporate Services Corporate services Note 1 (a)
Limited
Ince Gordon Dadds Talent Services Professional services Note 1 (b)
Limited
Ince Process Agents Limited Legal services Note 1 (a)
Culver Finance Limited Intermediate holding Note 1 (b)
company
IGD (Cardiff) Limited Legal services Note 1 (b)
Ince Private Office Limited Legal services Note 1 (d)
Ince Compliance Solutions Limited Professional services Note 1 (b)
Interest Registered
UK Limited Liability Partnerships Principal activity held office
----------------------------------------- -------------------------------- ----------- -----------
Ince Gordon Dadds Holdings Intermediate holding Note 3 (b)
LLP LLP
Ince Private Wealth LLP Professional services Note 3 (a)
Ince Gordon Dadds LLP Legal services Note 3 (a)
Ince Gordon Dadds AP LLP Professional services Note 4 (b)
Ince Gordon Dadds CP LLP Professional services Note 4 (b)
CW Energy LLP Professional services Note 3 (b)
IGD International LLP Professional services Note 3 (b)
Interest Registered
Overseas Companies Location Principal activity held office
--------------------------------------- ------------ -------------------- --------- -------------
Ince (Gibraltar) Limited Gibraltar Legal services Note 1 (e)
Professional (f)
IGD (Company) Limited Guernsey services Note 1
Ince Consultancy (Gibraltar) Professional (e)
Limited Gibraltar services Note 1
G. Zambartas LLC Cyprus Legal services Note 1 (k)
Ince Consulting Hong Professional (g)
Kong Limited Hong Kong services Note 1
Incisive Law LLC (Singapore) Singapore Legal services Note 4 (h)
Incisive Limited Hong Kong Management services Note 1 (g)
Ince Consultancy Cyprus Professional (k)
Limited Cyprus services Note 1
Ince Consulting Middle Professional (l)
East Limted Abu Dhabi services Note 1
James Stocks & Co (Holdings) Gibraltar Intermediate Note 1 (c)
Limited holding company
Ince Germany Rechtsanwaltsgesellschaft Germany Legal services Note 4 (m)
mbH
Ince Consultancy UG Germany Professional Note 4 (m)
services
Notes to the Financial Statements (continued)
UK Limited Liability Registered
Partnerships operating Interest office
overseas Location Principal activity held
------------------------------- ---------- ------------------- --------- -----------
Ince & Co Middle East (a)
LLP Dubai Legal services Note 4
Ince & Co Germany LLP Germany Legal services Note 4 (a)
Professional Note 4 (b)
Ince Consultancy LLP Germany services
Interest Registered
Overseas LLPs and Partnerships Location Principal activity held office
------------------------------- ---------- ------------------- --------- -----------
Ince & Co Singapore LLP Singapore Legal services Note 4 (h)
Ince & Co (Hong Kong) Hong Kong Legal services Note 4 (g)
Herring Parry Khan Giomelakis
Le-Du Law Office Greece Legal services Note 4 (i)
Ince & Co Monaco SARL
(Monaco) Monaco Legal services Note 4 (j)
Note The Group holds 100% of ordinary share capital.
1.
Note The Group holds 60% of ordinary share capital.
2.
Note The Group has 100% interest as the sole economic member.
3.
Note Profit sharing and voting control of these entities is
4. held by the local members, directors or shareholders. The
entities are subject to regulation by the regulator in
the jurisdictions in which they operate.
Registered offices of all subsidiaries:
Aldgate Tower, 2 Leman Street, London, United
(a) Kingdom, E1 8QN
Llanmaes, Michaelston Road, St Fagans, Cardiff,
(b) United Kingdom, CF5 6DU
(c) 57/63 Line Wall Rd, PO Box 199, Gibraltar
Leconfield House, Curzon Street, London,
(d) United Kingdom, W1J 5JA
6.20 World Trade Center, 6 Bayside Road,
(e) Gibraltar
P.O. Box 661, St. Peter Port, Guernsey,
(f) GY1 3PW
Suites 4404-10, 44/F, One Island East, 18
(g) Westlands Road, Taikoo Place, Hong Kong
5 Shenton Way #19-01, V on Shenton, Singapore
(h) (068808)
The Livanos Building, 47-49 Akti Miaouli,
(i) Piraeus 18536, Greece
Gildo Pastor Center, 7 Rue du Gabian, 98000
(j) Monaco
82 Spyrou Kyprianou Street, Euro House,
(k) 1(st) Floor, Limassol, 4042, Cyprus
35(th) Floor, Office No. 3252, Al Maqam
(l) Tower, ADGM Square, Abu Dhabi
(m) Grosse Elbstrasse 47, Hamburg, 22767, Germany
16.2 Business combinations and acquisitions
The details set out below provide the information required under
IFRS 3 'Business Combinations' for the acquisitions that occurred
during the year ended 31 March 2021.
The total amount of revenue and associated profit derived from
acquired entities in the year was GBP5,673,000 and GBP1,469,000. An
estimate of the annualised revenue and associated profit/(loss)
(based on pro-rated figures) had the acquisitions occurred at the
start of the year is GBP7,219,000 and GBP1,753,000.
Incisive Law LLC (Singapore)
On 1 June 2020, Incisive Law LLC, a law firm based in Singapore,
became a Group company for the purposes of IFRS 10. Debt
instruments consideration of GBP1,001,000 and goodwill of
GBP1,000,000 was recognised in accounting for the acquisition.
James Stocks & Co
On the 7 October 2020, the Group increased its shareholding in
James Stocks & Co (Holdings) Limited which resulted in a change
of ownership from an associate to a subsidiary.
Debt instruments consideration of GBP249,000 and goodwill of
GBP698,000 was recognised in accounting for the acquisition.
Notes to the Financial Statements (continued)
16.2.1 Identifiable assets acquired and liabilities assumed
The fair values of the identifiable assets and liabilities at
the date of acquisition were as follows:
Incisive James Total )
Stocks Acquisitions
Singapore & Co )
GBP'000 GBP'000 GBP'000
) ) )
------------------------------- ---------- -------- -------------
Trade and other receivables 1,887 , 323 , 2,210 ,
Cash and cash equivalents 49 , 400 , 449 ,
Trade and other payables (1,935) (680) (2,615)
Borrowings - , (25) (25)
-------------------------------
Net identifiable assets
and liabilities 1 , 18 , 19 ,
Goodwill 1,000 , 698 , 1,698 ,
Non-controlling interest
in the recognised amounts
of identifiable assets
and liabilities - , (50) (50)
Fair value of previously
held interest at acquisition
date - , (417) (417)
Total consideration 1,001 , 249 , 1,250 ,
------------------------------- ---------- -------- -------------
Satisfied by:
Debt instruments 1,001 , 249 , 1,250 ,
Total consideration
transferred 1,001 , 249 , 1,250 ,
------------------------------- ---------- -------- -------------
Net cash outflow arising
on acquisition:
Cash consideration - , - , - ,
Less: cash and cash
equivalent balances
acquired (49) (400) (449)
Net cash outflow/(inflow) (49) (400) (449)
------------------------------- ---------- -------- -------------
Notes to the Financial Statements (continued)
16.3 Discontinued operations
On 22 October 2020, the Group sold 100% of its shareholding in
White & Black Limited for consideration of GBP416,000.
Financial information relating to the discontinued operation for
the period to the date of disposal is set out below:
White
& )
Black
)
2021 )
GBP'000
)
--------------------------------------- --------
Results of discontinued operation:
Revenue 595 )
Production staff and partner
costs (366)
Other production costs (83)
Gross profit 146 )
Administrative staff and partner
costs (121)
Operating expenses (174)
Depreciation of property, plant
and equipment (5)
Depreciation of right-of-use
asset (53)
Operating loss (207)
Finance income - )
Finance expense - right-of-use
asset (14)
Loss before tax (221)
Income tax expense 59 )
Loss after tax of discontinued
operation (162)
--------------------------------------- --------
Loss on disposal of the subsidiary
after income tax (757)
Loss from discontinued operation (919)
--------------------------------------- --------
Consideration received or receivable:
Cash 416 )
Total consideration 416 )
Less: carrying amount of net
assets sold (553)
Less: goodwill eliminated on
disposal (620)
Add back: non-controlling interest - )
Loss on disposal of the subsidiary
after income tax (757)
--------------------------------------- --------
Consideration received, satisfied
in cash 416 )
Cash and cash equivalents disposed
of (543)
Net cash outflow (127)
--------------------------------------- --------
Notes to the Financial Statements (continued)
Restated financial information relating to discontinued
operations for the prior period is set out below:
GD ) Total )
White Allium Financial discontinued
& ) ) ) )
Black Law ) Markets operations
) ) )
2020 ) 2020 ) 2020 ) 2020 )
GBP'000 GBP'000 GBP'000 GBP'000
) ) ) )
------------------------------------ -------- -------- ---------- -------------
Results of discontinued operation:
2,148 1,052
Revenue ) - ) ) 3,200 )
Production staff and partner
costs (916) - ) (247) (1,163)
Other production costs (339) - ) (493) (832)
Gross profit 893 ) - ) 312 ) 1,205 )
Administrative staff and partner
costs (262) - ) (129) (391)
Operating expenses (336) - ) (97) (433)
Depreciation of property, plant
and equipment (14) - ) - ) (14)
Depreciation of right-of-use
asset (107) - ) - ) (107)
Operating profit 174 ) - ) 86 ) 260 )
Finance income 1 ) - ) - ) 1 )
Finance expense - right-of-use
asset (31) - ) - ) (31)
Profit before tax 144 ) - ) 86 ) 230 )
Income tax expense (13) - ) - ) (13)
-------- -------- ---------- -------------
Profit/(loss) after tax of
discontinued operation 131 ) - ) 86 ) 217 )
------------------------------------ -------- -------- ---------- -------------
Profit/(loss) on disposal of
the subsidiary after income
tax - ) 84 ) (33) 51 )
------------------------------------ -------- -------- ---------- -------------
Profit from discontinued operation 131 ) 84 ) 53 ) 268 )
------------------------------------ -------- -------- ---------- -------------
16.4 Interests in associates
On the 7 October 2020 The Ince Group plc increased its
shareholding in James Stocks & Co group from 30.0% to 97.2%,
which resulted in a change of ownership from an associate to a
subsidiary. As a result of this, the carrying value of the group's
interest in the associate was disposed of and reacquired as a
subsidiary under IFRS 3. The fair value gain/(loss) impacting the
statement of comprehensive income for this disposal can be seen
below:
Group
2021 ) 2020 )
GBP'000 GBP'000
) )
--------- --------
Cost of investment in associate 549 ) 621 )
Share of post-acquisition
loss net of dividends received (132) (151)
Disposal of interest in
associates during the year (417) - )
Carrying value of interests
in associates - ) 470 )
--------------------------------- ------ ------
Summarised financial information in respect of James Stocks
& Co (Holdings) Limited is set out below:
2021 ) 2020 )
GBP'000 GBP'000
) )
------------------------- ----------- ----------
Net profit/(loss) 50 ) (467)
Net assets 153 ) 192 )
------------------------- ----------- ----------
Fair value gain/loss on disposal of interest
in associate:
GBP'000
)
Fair value of interest held
in JSC Group at disposal 417 )
Less: carrying amount of
interest held in JSC Group
at disposal (417)
-------------------------------- ------
Fair value gain/(loss) charged
to statement of comprehensive
income - )
-------------------------------- ------
Notes to the Financial Statements (continued)
17. Trade and other receivables
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- -------- --------
Trade receivables 26,933 26,870 - -
Accrued income 12,436 5,925 - -
Other receivables 3,208 4,033 546 518
Amounts due from subsidiaries - - 35,367 37,977
Prepayments 3,554 7,584 351 391
46,131 44,412 36,264 38,886
------------------------------- -------- -------- -------- --------
Trade receivables are stated including GBP3,651,000 (2020:
GBP3,481,000) of VAT and GBP3,274,000 (2020: GBP3,412,000) of
disbursements.
18. Cash and cash equivalents
Company Company
Group ) Group ) ) )
2021 ) 2020 ) 2021 ) 2020 )
GBP'000 GBP'000 GBP'000 GBP'000
) ) ) )
--------------------- -------- -------- -------- --------
Cash in hand and at
bank 8,307 ) 5,250 ) 1 ) 3 )
Total 8,307 ) 5,250 ) 1 ) 3 )
--------------------- -------- -------- -------- --------
Cash and cash equivalents include the following:
Cash as above 8,307 ) 5,250 ) 1 ) 3 )
Bank overdrafts (2) (59) - ) - )
Total 8,305 ) 5,191 ) 1 ) 3 )
----------------- -------- -------- ---- ----
19. Share capital
2021 2021 2020
% Number GBP'000 GBP'000
--------------------- ---- ----------- -------- --------
Authorised
Ordinary shares of
1p each 100 68,540,912 686 686
686 686
--------------------- ---- ----------- -------- --------
2020 2020 2020
% Number GBP'000 GBP'000
--------------------- ---- ----------- -------- --------
Allotted, called up
and fully paid
Ordinary shares of
1p each 100 68,540,912 686 686
686 686
--------------------- ---- ----------- -------- --------
Ordinary shares rank equally as regards to dividends, other
distributions and return on capital. Each ordinary share carries
the right to one vote.
2021 2021
Number GBP'000
---------------------- ------------------ -------
Ordinary shares of 1p
each
At 1 April 68,540,912 686
Shares issued during - -
the year
At 31 March 68,540,912 686
----------------------- ------------------ -------
Details of share options issued in the year are set out in note
12.
Notes to the Financial Statements (continued)
20. Reserves
Share premium represents the difference between the amount
received and the par value of shares issued less transaction
costs.
The reverse acquisition reserve has arisen under IFRS3 'Business
Combinations' following the acquisition of The Ince Group.
Other reserves represent the impact of the valuation of share
options issued in the year, details of which are set out in note
12, and the difference between fair value and nominal value of
shares issued in share-for-share exchanges.
Foreign exchange translation reserve includes gains or losses in
translating overseas operations into GBP sterling.
21. Trade and other payables
Restated
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- --------- -------- --------
Current:
Trade payables 13,012 12,263 709 524
Amounts due to subsidiaries - - 27,258 27,046
Other taxes and social
security 8, 925 3,445 118 36
Other payables 2, 553 3,133 1 -
Deferred consideration 11,054 14,608 - -
Unpaid dividends 15 15 15 15
Accruals 6, 105 5,861 215 135
41, 664 39,325 28,316 27,756
----------------------------- -------- --------- -------- --------
Non-current:
Other payables 1,045 1,391 - -
Deferred consideration 13,491 21,062 - -
14,536 22,453 - -
----------------------------- -------- --------- -------- --------
Total 56, 200 61,778 28,316 27,756
----------------------------- -------- --------- -------- --------
Deferred consideration relates to business combinations and the
purchase of client lists and relationships.
Notes to the Financial Statements (continued)
22. Borrowings
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------- -------- -------- --------
Bank overdrafts 2 59 - -
Bank loans 14,460 11,651 14,245 11,600
Other loans 434 2,519 - -
Total borrowings 14,896 14,229 14,245 11,600
------------------ -------- -------- -------- --------
Current 1, 804 3,829 1,200 1,200
Non-current 13,092 10,400 13,045 10,400
Total 14,896 14,229 14,245 11,600
------------------ -------- -------- -------- --------
The Group has a secured bank loan with Investec Bank Plc with a
carrying value of GBP9,000,000 at 31 March 2021. The loan was
entered into on 26 March 2021, has a term of three years (to be
repaid in quarter end instalments which will commence in September
2021) and carries interest at bank base rate + 3.50% per annum. A
GBP8,000,000 revolving credit facility was also entered into with
Investec Bank Plc at 26 March 2021, of which GBP5,500,000 has been
drawn down. The loan and the revolving credit facility are both
secured against certain entities within the Group and are subject
to covenants which are assessed each quarter starting in September
2021 (no current or forecast breaches have been identified).
The Group has a secured bank loan with Commerz Bank with a
carrying value of GBP27,000 at 31 March 2021. The Group acquired
the loan through the acquisition of Ince & Co Germany LLP. The
loan was entered into on 1 October 2016, has a term of 4 years (to
be repaid in monthly instalments which commenced from June 2017)
and carries interest at 1.65% per annum. During the year the loan
term has been extended to 30 November 2021.
The Group has a GBP188,000 credit line with Bank of China, with
a carrying value of GBP188,000 at 31 March 2021. The loan was drawn
down on 8 January 2021 (to be repaid over 18 months in monthly
instalments which commenced from March 2021) and carries interest
at 2.25% per annum .
Other loans of GBP434,000 (2020: GBP2,519,000) are unsecured and
carry interest at between 3.0 per cent and 10 per cent per annum.
Other loans are repayable within 12 months.
Notes to the Financial Statements (continued)
23. Provisions
Group
Onerous
) Legacy )
property acquisition Uninsured
) ) )
related costs & excess on
) ) )
contracts employment potential
& ) ) ) Other )
dilapidations contracts Provisions
) ) claims ) ) Total )
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
) ) ) ) )
---------------------- ------------- ----------- --------- ---------- -------
Balance at 31 March 10,135
2019 423 ) 8,969 ) 723 ) 20 ) )
Provisions made - ) - ) 562 ) - ) 562 )
Subsidiaries joining
the group 325 ) 504 ) - ) - ) 829 )
Unwinding of discount - ) 12 ) - ) - ) 12 )
Utilised during the
year ( 340 ) (3,787) (208) - ) (4,335)
Amounts released - ) (2,494) (113) - ) (2,607)
Balance at 31 March
2020 408 ) 3,204 ) 964 ) 20 ) 4,596 )
2, 436
Provisions made 1,198 ) 1,118 ) 120 ) - ) )
Unwinding of discount - ) 33 ) - ) - ) 33 )
Utilised during the
year ( 16 ) (1,147) (248) - ) (1,411)
Amounts released (72) (291) (93) (4) (460)
FX gains/(losses) 24 ) - ) (3) - ) 21 )
Balance at 31 March
2021 1, 542 ) 2,917 ) 740 ) 16 ) 5,215 )
---------------------- ------------- ----------- --------- ---------- -------
2, 838
Current 486 ) 1,596 ) 740 ) 1 6 ) )
Non-current 1,056 ) 1,321 ) - ) - ) 2,377 )
---------------------- ------------- ----------- --------- ---------- -------
Company
Onerous
)
property
)
related
)
contracts
& )
dilapidations
)
GBP'000
)
-------------------- -------------
Balance at 31 March
2020 - )
Provisions made 40 )
Balance at 31 March
2021 40 )
-------------------- -------------
Current - )
Non-current 40 )
-------------------- -------------
Provisions categorised as current liabilities represent
provisions for liabilities which have the possibility of being
settled within one year.
Provisions for onerous property related contracts and
dilapidations includes provisions for rates and service charges up
to break clause on the Aldgate Tower 14th floor lease; and
dilapidation reserves for office premises occupied by the Group.
Further details are included in note 7.
Provisions for legacy acquisition costs and employment contracts
relate to contractually agreed payments to third parties, including
vendors, primarily in relation to the Ince acquisition; and the
expected settlement of disputes with former partners of Ince &
Co Singapore LLP and Herring Parry Khan Giomelakis Le-Du Law
Office.
Provisions for uninsured excess on potential claims relates to
potential claims brought against the Group in relation to work
performed for clients. These provisions are quantified based on the
estimated cost of settlement.
Notes to the Financial Statements (continued)
24. Pensions
The Group participates in a defined contribution pension scheme.
The assets of the scheme are held separately from those of the
Group in a fund administered by Options Corporate Pensions UK.
Contributions from employers and employees totalling GBP150,000
(2020: GBP176,000) were payable to the fund at the year end and are
included in payables.
25. Ultimate controlling party
The Ince Group plc is owned by its shareholders and there is no
ultimate controlling party.
26. Related party transactions
Group
In addition to the transactions disclosed in the Directors'
Remuneration Report the Group has entered into the following
transactions with related parties: -
The Group occupies office accommodation at Llanmaes, St Fagans,
Cardiff under arrangements with Juratone Limited, a company of
which A J Biles is a director. Rent and service charges of
GBP221,000 (2020: GBP207,000) were charged during the year under
these arrangements and the Group charged Juratone amounts of
GBP20,000 (2020: GBP23,000). At the statement of financial position
date an amount due to Juratone Limited of GBP15,000 (2020 : GBPNil)
is included in payables and an amount due from Juratone Limited of
GBP127,000 (2020: GBP104,000) is included in receivables.
A J Biles is a designated LLP member of ACR Professional
Services LLP. Professional services of GBP467,000 (2020:
GBP240,000) and reimbursed expenses of GBP9,000 (2020: GBPNil) were
charged from ACR Professional Services LLP to the Group during the
year. Fees and reimbursed expenses of GBP10,000 (2020: GBP20,000)
were charged from the Group to ACR Professional Services LLP during
the year. At the statement of financial position date, the Group
was owed GBP125,000 (2020: GBP291,000) from ACR Professional
Services LLP.
The Group charged Stann Marine Limited, a company in which a
former designated member of Ince Gordon Dadds AP LLP is a Director,
fees under a management agreement totalling GBPNil (2020:
GBP211,000).
The Group charged fees to James Stocks & Co Group of
GBP48,000 (2020: GBP49,000) and were charged fees of GBPNil (2020:
GBPNil) during the year. At the statement of financial position
date, the Group was owed GBP8,000 (2020: GBP119,000) from James
Stocks & Co Group.
Company
In addition to the transactions disclosed in the Directors'
Remuneration Report the Company has entered into the following
transactions with related parties: -
The Company charged reimbursed expenses of GBP439,000 (2020:
GBP692,000) to subsidiary undertakings during the year. At the
statement of financial position date an amount due from subsidiary
undertakings of GBPNil (2020: GBPNil) is included in trade
receivables.
The Company was charged fees and reimbursed expenses of
GBP933,000 (2020: GBP910,000) by subsidiary undertakings during the
year. At the statement of financial position date an amount due to
subsidiary undertakings of GBPNil (2020: GBPNil) is included in
trade payables.
Notes to the Financial Statements (continued)
27. Financial risk management
The company's operations expose it to a number of financial
risks. A risk management programme has been established to protect
the Group and the Company against the potential adverse effects of
these financial risks. There has been no significant change in
these financial risks since the prior year.
Fair value of financial instruments
Financial instruments comprise cash and cash equivalents, trade
and other receivables, including sums due from subsidiaries, bank
and other loans, obligations under lease contracts and trade and
other payables. In the directors' opinion the carrying value of the
financial instruments approximates their fair value.
Restated
) )
Group Group Company Company
) ) ) )
2021 ) 2020 ) 2021 ) 2020 )
GBP'000 GBP'000 GBP'000 GBP'000
Note ) ) ) )
------------------------------ ---- -------- -------- ------- -------
Loans and receivables:
26,933 26,870
Trade receivables 17 ) ) - ) - )
12,436 5,925
Accrued income 17 ) ) - ) - )
8,307 5,250
Cash and cash equivalents 18 ) ) 1 ) 3 )
3, 208 4,033
Other receivables 17 ) ) 546 ) 518 )
35,367 37,977
Amounts due from subsidiaries 17 - ) - ) ) )
50,884 42,078 35,914 38,498
Total financial assets ) ) ) )
------------------------------ ---- -------- -------- ------- -------
Financial liabilities
measured at amortised
cost:
14,896 14,229 14,245 11,600
Borrowings 22 ) ) ) )
12,637 18,836
Lease Liabilities 14 ) ) 531 ) 760 )
13,012 12,263
Trade payables 21 ) ) 709 ) 524 )
3,598 4,524
Other payables 21 ) ) 1 ) - )
6,339 8,494
Deferred consideration 21 ) ) - ) - )
27,258 27,046
Amounts due to subsidiaries 21 - ) - ) ) )
13,946 9,035
Amounts due to partners ) ) - ) - )
------------------------------ ---- -------- -------- ------- -------
64,428 67,381 42,744 39,930
) ) ) )
------------------------------ ---- -------- -------- ------- -------
Financial liabilities
measured at fair value:
18,206 27,176
Deferred consideration 21 ) ) - ) - )
82,634 94,557 42,744 39,930
Total financial liabilities ) ) ) )
------------------------------ ---- -------- -------- ------- -------
( 31,750 ( 52,479
Total financial instruments ) ) (6,830) (1,432)
------------------------------ ---- -------- -------- ------- -------
The aggregate gain on financial instruments held at fair value
in the year was GBP1,644,000 (2020: GBPNil).
Notes to the Financial Statements (continued)
28. Credit risk
Customers are assessed for credit worthiness and credit limits
are also imposed on customers and reviewed regularly. The maximum
exposure to credit risk is the carrying value of its financial
receivables, trade and other receivables and cash and cash
equivalents as disclosed in the notes.
The Group holds no collateral or other credit enhancements. The
receivables' age analysis is also evaluated on a regular basis for
potential doubtful debts. It is management's opinion that no
further provision for doubtful
debts is required.
Cash and cash equivalents are invested with banks with a credit
rating of no less than A-1.4
Analysis of trade receivables:
30 days 31-60 61-90 90-180 Total Bad debt Total Carrying
or less days days days >180 days Gross provision Amount
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----- -------- ------- ------- ------- --------- ------- ---------- --------------
2021 13,605 4,599 3,415 5,314 13,119 40,052 (13,119) 26,933
2020 15,105 5,544 2,836 3,385 9,653 36,523 (9,653) 26,870
2019 10,435 2,889 1,606 668 5,351 20,949 (5,351) 15,598
----- -------- ------- ------- ------- --------- ------- ---------- --------------
The Group allows an average trade receivables payment period of
30 days after invoice date. It is the Group's policy to assess
receivables for recoverability on an individual basis and to make
provision where it is considered necessary. In assessing
recoverability, the Group considers any indicators of impairment up
until the reporting date. The application of this policy generally
results in debts between 31 and 180 days not being provided for
unless individual circumstances indicate that a debt is impaired.
Receivables over 180 days are provided for except in circumstances
where the group has security in respect of the debt or has other
arrangements which satisfy the Group that the debtor is in a
position to pay and is intending to pay but is stopped until an
event occurs (such as the grant of probate).
The directors have considered whether there is an overall change
in the economic environment which changes the expected lifetime
credit loss on its trade receivables and consider that the existing
policy does not need varying at this yearend.
Trade receivables that are neither impaired nor past due are
made up of 1,678 receivables' balances (2020: 2,832). The largest
individual debtor corresponds to 4.3% (2020: 3.8%) of the total
balance. Historically these receivables have always paid balances
when due. The average age of these receivables is 98 days (2020:
100 days). No receivables' balances have been renegotiated during
the year or in the prior year.
The group individually impaired no net balances (2020: GBPNil).
The group does not hold any collateral over any balances.
Notes to the Financial Statements (continued)
29. Interest rate risk
Interest rate risk is the risk that the value of a financial
instrument or cash flows associated with the instrument will
fluctuate due to changes in market interest rates. Interest rate
risk arises from interest bearing financial assets and liabilities
that we use. Interest bearing assets including cash and cash
equivalents are considered to be short-term liquid assets. Our
interest rate liability risk arises primarily from borrowings
issued at floating interest rates which exposes the Group to cash
flow interest rate risk. It is the group's policy to settle trade
payables within the credit terms allowed and the Group does
therefore not incur interest on overdue balances. Borrowings are
sourced from local financial markets, covering short and long-term
funding. The Group manages interest rate risk on borrowings by
ensuring access to diverse sources of funding and reducing risks of
refinancing by establishing and managing borrowings in accordance
with target maturity profiles.
Interest rate exposure and sensitivity analysis:
The following sensitivity analysis has been determined based on
the exposure to interest rates at the end of the reporting period.
For floating rate liabilities, the analysis is prepared assuming
the amount of the liability outstanding at the end of the reporting
period was outstanding for the whole year.
An increase of 50 basis points in interest rates and all other
variables held constant, would result in the Group's profit for the
year ended 31 March 2021 decreasing by GBP72,000 (2020: GBP58,000).
This is attributable to the Group's exposure to interest rates on
its variable rate borrowings. A decrease of 50 basis points in
interest rates would have the equal but opposite effect to the
amounts shown above.
The Group's sensitivity to interest rates has increased during
the current year mainly due to the increase in the borrowings of
the Group.
30. Foreign currency risk
Foreign currency risk refers to the risk that the value of a
financial commitment or recognised asset or liability will
fluctuate due to changes in foreign currency rates. Foreign
exchange risk arises when individual Group entities enter into
transactions denominated in a currency other than their functional
currency.
The Group has overseas operations in Europe, Middle East and
Asia and is therefore exposed to changes in the respective
currencies in these territories. The Group maintains bank balances
in each of the entity's local currency and in other currencies as
required. Cash positions are monitored and are converted to local
currency at appropriate times minimising the exposure to exchange
fluctuations.
Notes to the Financial Statements (continued)
Foreign currency denominated financial assets and liabilities
which expose the Group to currency risk are disclosed below. The
amounts shown are those reported to key management translated into
GBP at the closing rate:
Functional currency of individual entity
GBP EUR HKD
2021 2020 2021 2020 2021 2020
) ) ) ) ) )
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
) ) ) ) ) )
--------------------------------- -------- -------- -------- -------- -------- --------
Net foreign currency
financial assets/(liabilities)
( 115
GBP - ) - ) ) (44) 6 ) (76)
( 20
EUR 127 ) 434 ) - ) - ) ) (2)
AED 216 ) - ) - ) - ) - ) - )
( 30
HKD ) (115) - ) - ) - ) - )
CNY 8 ) 574 ) - ) - ) 15 ) - )
1,901 2,517 3,254
USD 886 ) ) 141 ) 129 ) ) )
Other 145 ) 11 ) (1) (1) 1 ) - )
1,352 2,805 2,519 3,176
) ) 25 ) 84 ) ) )
--------------------------------- -------- -------- -------- -------- -------- --------
CNY AED SGD
2021 2020 2021 2020 2021 2020
) ) ) ) ) )
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
) ) ) ) ) )
--------------------------------- -------- -------- -------- -------- -------- --------
Net foreign currency
financial assets/(liabilities)
( 199
GBP 1 ) (1) ) (23) 552 ) 187 )
EUR 1 3 ) 18 ) 1 ) (5) - ) - )
AED - ) - ) - ) - ) - ) - )
HKD 361 ) 399 ) - ) - ) - ) - )
CNY - ) - ) - ) - ) - ) - )
55 7 1,330
USD ) 647 ) 679 ) 325 ) ) 287 )
( 19
Other 37 ) 18 ) ) (4) 13 ) (9)
1,081 1,895
969 ) ) 462 ) 293 ) ) 465 )
--------------------------------- -------- -------- -------- -------- -------- --------
The following table illustrates the sensitivity of profit and
equity in relating to the Group's financial assets and financial
liabilities to a reasonably possible change in exchange rates, with
all other variables held constant and no further foreign exchange
risk management actions taken.
Increase/(decrease)
in income before Increase/(decrease)
taxation in net assets
Change
in 2021 ) 2020 ) 2021 ) 2020 )
GBP'000 GBP'000 GBP'000 GBP'000
rate ) ) ) )
---------------------- ------- ---------- ---------- ---------- ----------
Appreciation against
GBP of:
EUR 4 % 17 ) 30 ) 75 ) 75 )
HKD 8% ( 3 ) (4) 217 ) 137 )
( 193
CNY 3 % - ) 41 ) ) (92)
AED 8% 3 ) - ) 23 ) - )
SGD 4% (308) - ) 36 ) - )
USD 8% 104 ) 151 ) (5) - )
---------------------- ------- ---------- ---------- ---------- ----------
The above sensitivity information was calculated by reference to
carrying amounts of assets and liabilities at 31 March only. The
effect on income before taxation arises in connection with monetary
balances denominated in currencies other than an entity's
functional currency, the effect on net assets arises principally
from the translation of assets and liabilities that are not
sterling functional.
Notes to the Financial Statements (continued)
31. Liquidity risk
The group seeks to maintain sufficient cash balances.
Management reviews cash flow forecasts on a regular basis to
determine whether the group has sufficient cash reserves to meet
future working capital requirements and to take advantage of
business opportunities. The average creditor payment period is 114
days (2020: 113).
Trade and other payables and amounts due to subsidiaries are due
within 12 months, the maturity of financial liabilities is set out
below.
The following table sets out the Group's remaining contractual
maturity for its non-derivative financial liabilities with agreed
repayment periods. The table has been drawn up based on the
undiscounted cash flows of financial liabilities based on the
earliest date on which the Group can be required to pay.
Between Between Between Total
Less than 3 and 12 1 and 2 and contractual
3 months months 2 years 5 years cash flows
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- -------- -------- ------------
31 March 2021
Variable interest bearing 46 1,321 2,247 10,846 14,460
Fixed interest rate instruments 88 213 118 15 434
Lease liabilities 1,216 3,647 3,998 3,776 12,637
1,350 5,181 6,363 14,637 27,531
-------------------------------- --------- --------- -------- -------- ------------
31 March 2020
Variable interest bearing 300 951 1,200 9,200 11,651
Fixed interest rate instruments 1,061 1,458 - - 2,519
Lease liabilities 1,381 4,140 5,508 7,807 18,836
2,742 6,549 6,708 17,007 33,006
-------------------------------- --------- --------- -------- -------- ------------
Interest bearing financial liabilities carry interest at between
3 per cent and 10 per cent per annum.
The group has also access to financing facilities of
GBP8,250,000 (2020: GBP250,000) as described below.
Unsecured bank overdraft facility (GBP250,000 of which GBPNil
was drawn down at 31 March 2021), reviewed annually and payable at
call, and a revolving credit facility (GBP8,000,000 of which
GBP5,500,000 was drawn down at 31 March 2021), described in note
22.
Group Group Company Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- -------- -------- --------
Amount used 5,500 - - -
Amount unused 2,750 250 - -
8,250 250 - -
--------------- -------- -------- -------- --------
32. Capital management
The company's objectives when managing capital are:
- to safeguard the company's ability to continue as a going
concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and
- to provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
The company sets the amount of capital in proportion to risk.
The company manages the capital structure and adjusts it in the
light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the company may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares, or sell assets to reduce debt.
The company monitors capital on the basis of the
debt-to-adjusted capital ratio. This ratio is calculated as net
debt ÷ adjusted capital. Net debt is calculated as total debt (as
shown in the statement of financial position) less cash and cash
equivalents. Adjusted capital comprises all components of
equity.
Notes to the Financial Statements (continued)
Debt-to-adjusted capital ratios
The debt adjusted capital ratios at 31 March 2021 were as
follows:
Restated
)
Company
Group ) Group ) Company ) )
2021 ) 2020 ) 2021 ) 2020 )
GBP'000 GBP'000 GBP'000
) ) GBP'000 ) )
----------------------------------- -------- -------- --------- -------
11,600
Total debt 14,896 ) 14,229 ) 14,245 ) )
Less: cash and cash equivalents (8,307) (5,250) (1) (3)
11,597
Net debt 6,589 ) 8,979 ) 14,244 ) )
47,166
Total equity 42,744 ) 42,313 ) 40,993 ) )
Add: subordinated debt instruments - ) - ) - ) - )
47,166
Adjusted capital 42,744 ) 42,313 ) 40,993 ) )
1:4.1
Debt-to-adjusted capital 1:6.5 ) 1:4.7 ) 1:2.9 ) )
----------------------------------- -------- -------- --------- -------
33. Reconciliation of liabilities arising from financing activities
Group Group
) Cash ) non-cash changes )
--------------------------------
flows Acquisitions Disposals Other
2020 ) ) ) ) )) 2021 )
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
) ) ) ) )) )
------------------ ------- ------- ------------ --------- ------- -------
14,229 14,896
Borrowings ) 911 ) 25 ) (250) (19) ) )
18,836 12,637
Lease liabilities ) (5,564) - ) (859) 224 )) )
33,065 27,533
) (4,653) 25 ) (1,109) 205 )) )
------------------ ------- ------- ------------ --------- ------- -------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR SESEDMEFSELW
(END) Dow Jones Newswires
July 27, 2021 02:01 ET (06:01 GMT)
Gordon Dadds (LSE:GOR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gordon Dadds (LSE:GOR)
Historical Stock Chart
From Apr 2023 to Apr 2024
