Financial
· | Revenues up 9% to £11.1m (H1 2018: £10.2m), reflecting the benefits of prior acquisitions of customer accounts
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· | Group returned to profitability: | |
– | Earnings before interest, tax, depreciation and amortisation (‘EBITDA’) of £0.8m (H1 2018: loss of £0.2m) | |
– | Operating profit of £0.1m, including £0.2m of one-off costs (H1 2018: loss of £0.5m) | |
– | Statutory profit before tax of £0.2m (H1 2018: loss of £0.3m); statutory earnings per share increased to 0.1p (H1 2018: loss of 0.2p)
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· | Underlying1 profit after tax increased to £0.5m (H1 2018: £0.1m); Underlying1 earnings per share increased to 0.3p (H1 2018: 0.0p)
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· | Assets under administration at record level, up 5% to £5.3bn (H1 2018: £5.0bn)
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· | Significant improvement in operating cash flows, with an inflow of £1.9m (H1 2018: £0.4m outflow)
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· | Strong balance sheet, with shareholders’ funds up 10% to £19.8m (H1 2018: £17.9m) | |
Operational
· | The final stages of the Group’s digital transformation programme have now completed, following the release of additional functionality and enhancements to the new website
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· | Our app continues to gain traction with customers, executing 16% of their trades at the end of June 2019 (December 2018: 8%)
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· | Up to 20,000 J.P. Morgan customer accounts with assets of c.£750m are due to transfer in September 2019 |
Outlook
· | The Board expects the Group’s financial performance to continue to improve in line with market expectations, despite the continuing challenging trading conditions, principally caused by the uncertainty over Brexit. A recent customer survey showed that 40% favoured leaving on 31st October without a deal in place while recognising the likely negative impacts on markets and investments. We anticipate trading volumes will recover as the political position is resolved and personal investors re-position their portfolios |
1 Excludes the impact of some items, in particular any large non-recurring items and share based payment charges as defined in note 5.
Richard Stone, Chief Executive, commented:
“I am pleased to report that the Group returned to profitability in the first half as expected, despite weaker trading conditions. Subdued investor sentiment has resulted in a significant drop in trading volumes across the market from which Share is not immune. However, the engine of our growth has been the acquisition of customer accounts, coupled with our attractive flat-fee structure and high service levels, and this is set to continue. This was the Group’s first H1 operating profit since 2014 and it is worth noting that had trading in the first half of 2019 been at the levels seen in the same period in 2018, operating profit would have been £0.4m higher at £0.5m.
“The first half also saw the substantial completion of our digital transformation programme. This three year project has transformed our digital proposition and will continue to support our growth ambitions.
“While political and economic uncertainty is likely to continue to adversely affect investor sentiment in the short term, we believe that Share remains in a strong position to continue its momentum over the second half. We look forward to welcoming the new customers who will transfer from J.P. Morgan in September. We therefore remain well-positioned to continue to build on the good progress that we are making.”
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