W.H. Ireland Group PLC
Annual Report and Financial Statements
31 March 2020
Registered Number 03870190
Contents
1 Company information
2 Chair’s statement
3 Chief executive statement
5 Strategic report
11 Directors’ report
17 Corporate governance
25 Remuneration report
29 Statement of Directors’ responsibilities
30
Independent Auditors’ report
34 Consolidated statement of comprehensive income
35 Consolidated and Company statement of financial position
37 Consolidated and Company statement of cash flow
39 Consolidated and Company changes in equity
41 Notes to the financial statements
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
Company information
Directors
P A Wale
P Tansey (appointed 21 June 2019)
V G Raffé
S N Lough (appointed 19 August 2019)
P J Shelley (appointed 26 September 2019)
A G Buchanan (appointed 18 December 2019)
T M Steel (resigned 19 May 2020)
R E M Lee (resigned 31 December 2019)
J H D Carey (resigned 13 May 2019)
Nominated Adviser
Spark Advisory Partners Limited
5 St. John’s Lane
London
EC1M 4BH
Broker
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Auditors
BDO LLP
150 Aldersgate Street
London
EC1A 4AB
Bankers
Bank of Scotland plc
2nd Floor, 1 Lochrin Square
92-98 Fountainbridge
Edinburgh
EH3 9QA
Company Secretary
K L Mitchell
Registered Office
24 Martin Lane
London
EC4R 0DR
Company Number
03870190
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
1
Chair’s statement
For the year ended 31 March 2020
I am pleased to be presenting my first report as Chair of WHIreland Group plc for the financial year to 31 March 2020.
REVIEW AND OUTLOOK
This financial year was an important one for WHIreland, with significant change required to return the business to
sustainable profitability and provide a platform for a successful future. The changes needed included significant cost
reductions, the decommissioning of duplicate wealth management platforms and corporate broking trading systems, as
well as the closure of non-performing offices.
Of particular importance has been the introduction of a robust control framework fit for the future with strong
governance to support it. The Board is very clear that this is an essential part of doing business in Wealth Management
and Corporate Broking, and so will remain focused on this as a key priority.
Alongside the rigorous focus on profitability, both our businesses have started to see good momentum. In our Wealth
management business customers have remained loyal, and despite the significant asset volatility this business has
performed well. In our Corporate and Institutional Business we have seen continued client gains as well as increasing
activity levels as we strengthen our top three slot amongst AIM NOMADs.
Much of this change has been achieved ahead of plan and in the face of challenging markets. The reduction in costs
alongside improved efficiency has been impressive, and was required in a year when revenue came under pressure from
a number of external factors. It has left the Group in a strong position. Sustainable profitability is now possible and we
have a robust platform from which to grow and develop the business. The outlook is exciting with a streamlined cost base
and a better-focused business model that has its key people incentivised in a way that is aligned with its owners.
There have clearly already been challenges to work through this year so I am pleased to see the Group expect to generate
a profit for the first quarter ending June 2020. This is the first for a number of years, and is clear evidence of the progress
made by the team and our employees more broadly, and bodes well for the future. There is still much to do, and we must
remain absolutely focused on providing the very best service to our customers and clients - but we now have the
opportunity to grow our business and to start to reward our shareholders.
Our largely new Board and management team are now fully embedded after a busy year, and I would like to thank them
all for the huge progress we have been able to make in such a short time and in such a hostile environment
I would like to thank Tim Steel who joined the Board in 2014. He took on the Chair in 2016, and steered the Group
through some extremely difficult times. I would also like to thank Richard Lee, who has been with the Group first as an
employee and then as a Director for a total of more than 18 years. I wish both Tim and Richard well for the future.
Finally, I want to thank and congratulate Phillip Wale, his Management team and all our employees for working so hard
through what has been a very challenging year. The progress we have made and the strong results so far this year would
not have been possible without the dedication and professionalism of our team, alongside the loyalty and support of our
customers and our owners. We very much look forward to building on this strong start during the rest of the year.
Philip Shelley
Chair
July 2020
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
2
Chief executive statement
For the year ended 31 March 2020
OVERVIEW
I most recently spoke to shareholders and the market with the interim results in November 2019 when I reported the
significant progress made in the half-year to September 2019 and the clear sight of the route to profitability from the
start of the new financial year. That profitability arrived earlier than expected following the post-UK General election led
upturn but, the last two months of the financial year were badly impacted by the Covid-19 market turbulence and we
updated the market accordingly in April 2020. The results presented here are in line with that April update. The more
meaningful outturn however, following further robust action on costs is that WHIreland is expected to deliver a profit for
its first quarter. It is some time since the business has delivered a quarterly profit and it is testament to the dedication,
professionalism and tenacity of our staff that we have been able to make this progress at a time of significant market
disruption.
WH Ireland has been challenged over the year, first by the pre-election Brexit market malaise and then more recently by
the Covid-19 impacted market turbulence. However, the results are generally in line with our expectations for what we
expected to be the critical ‘turn-around’ year, with a reduced loss for the year ended 31 March 2020 of £3.2m (2019:
£11.3m), after exceptional costs of £1.0m and the continued investment in strengthening the control environment across
the Group.
THE YEAR 2019/2020
The reduced market activity in the first nine months of the financial year before the UK general election in December,
impacted commission revenue and activity levels across both the Wealth Management and the Corporate Broking
businesses, leading to an overall decline in revenue for the Group of 4% to £21.6m (2019: £22.4m). However, this
reduction was more than matched by the 23% decline in administrative expenses to £24.7m (2019: £32.1m). Exceptional
items of £1.0m (2019: £4.1m) incurred by the Group have decreased significantly as the decommissioning of legacy
platforms, a scourge for the business that I set out with my new management team to tackle this year, has been
successfully completed. This, together with robust action in response to the impact of Covid-19, has reduced our run rate
administrative costs still further to a level where we can deliver profitability consistently.
BOARD
I believe it is critical for the success of WH Ireland to have a Board that comprises people with appropriate skills and
experience across a number of relevant business and control areas, and which provides effective challenge and support
in equal measure. I echo my Chair’s sentiments in thanking Tim Steel and Richard Lee.
CLIENTS
Our clients are at the heart of everything that we do, and providing excellent service to our corporate, institutional and
private clients remains our priority. I would like to take the opportunity to thank all our clients for their loyalty and
patience as we have worked through the inevitable disruption from the scale and pace of change we have instigated this
year. We now have a platform that is better able to provide the quality of service that will differentiate us in the future
and which has shown it is sufficiently robust to successfully navigate challenges as significant as Covid-19.
STAFF
There are excellent people within the Group; I have continued from last year in making changes to the head count to
reflect the new, simplified business model and will keep the level under close control. I thank all the members of staff for
their commitment and hard work in the past and particularly over the recent challenging few months since the onset of
the Covid-19 pandemic. Group headcount at June 2020 is 148, which has reduced from 159 at June 2019.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
3
Chief executive statement
For the year ended 31 March 2020
SHAREHOLDERS
I am delighted with the support, both in terms of capital investment and guidance, received from our major shareholders
and thank the new investors who joined in our most recent placing in November 2019 for their backing.
CAPITAL
The raising of £2.8m in November 2019, which following on from the £5m raised in March 2019 brings in the
approximately £8m that had been identified as required to replenish regulatory and working capital. Cash at the year-
end date of 31 March 2020 was £3.7m (£2.6m in cash and cash equivalents and £1.1m in assets held for sale) (2019:
£7.7m). The group has no debt. Against the forecasts set out and agreed with the business and approved by the Board,
the Directors believe that these levels are sufficient to take WH Ireland to the next phase of success.
Wealth Management (WM)
Total assets under management declined to £1.8Bn (2019: £2.5Bn) through a combination of some fund outflows in the
first half and through a reduction in market valuations in the last 2 months of the financial year. However, it was pleasing
to see stable fund flows in the final quarter as the business bedded in the significant changes made earlier in the year.
Discretionary managed assets saw a slight increase as a proportion of the total funds under management (2020: 48%,
2019: 46%).
We have progressed the changes identified this time last year to the WM division under Stephen Ford’s direction. Firstly,
to reduce the cost base which has declined significantly over the year from £16.6m to £11.1m (33% decline). Secondly,
to energise the project of retiring our legacy platform systems which was completed in March 2020. And finally, to
simplify and enforce our standard charging structure to improve the quality of earnings which was implemented over the
October – December 2019 period resulting in an impressive improvement in the quality of revenue. The benefit of all of
these initiatives are working through the current financial year with focus now switching to growing assets.
Corporate and Institutional Broking (CIB)
CIB continues to enjoy a solid recurring-revenue client base as it strengthens its position as a top five broker and top
three Nomad by client numbers operating on the AIM market. The year saw good momentum in client wins and our share
of market activity with a number of new hires adding to the platform’s capability. CIB ended the year with a significantly
rebalanced cost structure with a lower fixed base. The benefit of this is flowing through into the current financial year
and positions the business for profitability at current activity levels. The business has continued to build its reputation for
raising growth capital for public and private companies with growing momentum in client wins and share of market
activity.
LOOKING FORWARD
This has been a uniquely challenging year. However, the significant changes that I flagged this time last year as key targets
for the management team have now mainly been achieved and are leading to the building of a good business with good
clients and revenue streams within a robust control framework that is now generating profits on a monthly basis. Despite
the desperately difficult environment we find ourselves in my aim is to do everything possible to continue this excellent
start to the current financial year across everything we do.
The turnaround plan for WHIreland is on track with much of the challenging but necessary cost reduction achieved though
there is more to do and I look forward with cautious optimism to executing the next stages of that plan including building
a robust platform for growth in the coming year.
P Wale
July 2020
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
4
Strategic report
For the year ended 31 March 2020
OVERVIEW
The WH Ireland Group has one principal operating subsidiary, WH Ireland Limited which consists of two business
divisions: Wealth Management, which provides bespoke wealth management solutions and independent financial
advisory services to retail clients; and Corporate and Institutional Broking (CIB) which provides corporate finance,
advisory and broking services to small and mid-cap corporate clients and stockbroking and research services to its
institutional client base. At the year-end date the other subsidiary of WH Ireland Group, WH Ireland (IOM) Limited which
provides wealth management services, was in the process of being sold.
The Group’s income is predominantly derived from activities conducted in the UK with a number of retail, institutional
and corporate clients, which are situated worldwide.
At the year-end, the Group had 154 staff (2019: 180) in the UK.
STRATEGY SUMMARY
The Group’s strategic focus remains on becoming the corporate broker of choice in the small and mid-cap company
segment and a leading advice-driven wealth management service provider to retail clients.
The strategy is focused on strengthening our corporate client list and improving the quality and value of discretionary
assets under management in order to maximise the Group’s recurring revenue through the generation of corporate
retainer income and wealth management fees.
FINANCIAL OVERVIEW
A SUMMARY OF THE GROUP’S PERFORMANCE FOR THE FINANCIAL YEAR IS SET OUT BELOW:
Revenue
Administrative expenses
Expected credit loss
Operating loss
Operating loss before exceptional items
Exceptional items
Operating loss after exceptional items
Other income and charges
Loss before tax
Tax
Loss after tax
Year to
31 Mar 2020
£'000
22,863
(25,819)
(44)
(3,000)
Year to
31 Mar 2019
£'000
23,680
(33,419)
(641)
(10,380)
(2,030)
(970)
(3,000)
(199)
(3,199)
-
(3,199)
(6,267)
(4,113)
(10,380)
230
(10,150)
(1,176)
(11,326)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
5
Strategic report
For the year ended 31 March 2020
A RECONCILIATION OF THE ADJUSTED OPERATING LOSS IS SET OUT BELOW:
Operating loss
Add back one off charges:
Project Discovery*
Restructuring**
Compliance & regulatory projects***
Impairment of goodwill and intangible assets
Adjusted operating loss
Notes:
Year to
31 Mar 2020
£'000
(3,000)
Year to
31 Mar 2019
£'000
(10,380)
268
506
196
-
(2,030)
442
835
230
2,606
(6,267)
*As announced on 2 June 2016, the Group entered into a seven year agreement with SEI Investments (Europe) Ltd, to outsource its Private Wealth Management back office
operations and move to a “Model B” arrangement. On account of a number of unforeseen obstacles, significant cost has been incurred in both internal and external resources
dedicated to this project (“Project Discovery”) as the project moves to conclude the transfer of clients and assets from the prior legacy platforms over to SEI.
**During the period ended 31 March 2020, there were some further personnel restructures and a one off project on cost reduction was undertaken. During the year ending
31 March 2019, there were a number of changes within the senior management team and several external hires were made. The costs of these changes, in respect of both
short term consultancy costs and fixed employment related costs, are considered by the Board to be non-trading and exceptional in nature.
*** During the year ending 31 March 2020 and 31 March 2019, the Group incurred various costs in relation to one off regulatory projects.
FINANCIAL ANALYSIS
The total operating loss, after exceptional items, has decreased in the year-ended 31 March 2020 by £7.4m to £3.0m
(2019: £10.4m).
The changes in the year to 31 March 2020 compared to the results of 2019 were as follows:
Revenue: The CIB division saw an improving retainer fee base in the year coupled with levels of transactional success
fees that were similar to the prior year but commissions were lower by approximately £0.9m. Similarly, commissions
generated by the WM division were lower by £0.6m. Both resulted directly from the impact of increasingly poor market
conditions as witnessed by the declines in volume traded across the London stock exchanges in both trading and in
corporate transactions particularly in the pre-general election period.
Expenses: Operational costs have been aggressively addressed by the new management team in an effort to rid the
Group of its historical excessive cost-base which had been worsened by the additional on-going costs of the multi-year
historic inability to address legacy systems.
Exceptional Items: The costs associated with the retirement of legacy systems declined to the point in March 2020 when
the prime legacy platform in Wealth Management was finally retired. There were a number of other restructuring costs
incurred in reducing headcount and filling the remaining necessary open slots in the management team.
Balance Sheet: Operational losses incurred in the year of £2.2m and Exceptional items, of £1.0m totalled £3.2m. This was
offset by the proceeds of raising fresh equity of £2.8m resulting in the net decline of £0.3m in Total Equity at 31 March
2020 to £8.5m (2019: £8.8m). Whilst the total Equity and Net Assets of £8.5m (2019: £8.8m) have not altered materially,
some components contributing to this total have. The application for the first time of IFRS16 – accounting for leases, has
introduced two new lines; a Right of Use asset representing the future benefit accruing to the Group from its property
lease contracts within non-current assets, £2.5m and a Lease Liability representing the future contractual commitment
in regard to leasehold property contracts within the non-current liabilities: value of £2.3m.
Cash Flows: Cash and cash equivalents have declined by £4.0m to £3.7m (£2.6m in cash and cash equivalents and £1.1m
in assets held for sale) (2019: £7.7m) on account of the losses incurred and the reduction in creditors and payables within
the year including particularly deferred consideration payments satisfied in the year.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
6
Strategic report
For the year ended 31 March 2020
WEALTH MANAGEMENT
The Wealth Management division incorporates both investment management services and advice on Wealth Planning.
These services are offered from offices across the UK including London, Manchester, Cardiff and Poole.
The strategy for the ongoing growth in this division is to focus our efforts on discretionary portfolios. This will be achieved
by continued personal referrals, selective recruitment of individuals and teams with existing client relationships and, in
time, corporate acquisitions of Wealth Management businesses.
CORPORATE & INSTITUTIONAL BROKING
WH Ireland specialises in providing corporate finance and broking services to smaller companies across a wide range of
industry sectors and geographies. It is the third largest Nominated Adviser (NOMAD) for AIM quoted companies and
currently represents 75 corporate companies. It has a highly experienced team drawn from a range of professional
backgrounds that provides strategic, technical and regulatory advice. Areas of specialism for this division include pre-IPO
fundraising, IPOs and secondary issues, mergers and acquisitions, disposals, restructuring and tender offers. It has also
established a track-record for raising capital for private companies.
As an integrated Institutional Stock Broker, WH Ireland also provides award-winning research, Institutional Sales and
Investor Relations and market making.
The division’s focus remains upon providing market leading advice to all of our corporate and institutional clients and
enhancing our retained client list.
KEY PERFORMANCE INDICATORS
The key targets of the directors over the financial year has been to reduce costs and enhance the quality of earnings
despite the very challenging market environment costs have as a percentage of revenue fallen significantly with further
advances put in place for the coming financial year and headcount has reduced by 12% and again, is continuing to fall in
the new year. Discretionary funds under management as a proportion of total funds under management and advice has
continued to move forward.
1. RATIO OF ADJUSTED OPERATING LOSS BEFORE TAX TO TOTAL REVENUE
31 Mar 2020
%
31 Mar 2019
%
Ratio of adjusted operating loss before tax to revenue
(9)
(26)
2. RATIO OF ADMINISTRATIVE EXPENSES TO TOTAL REVENUE
31 Mar 2020
%
31 Mar 2019
%
Ratio of administrative expenses to total revenue
113
141
3. AVERAGE STAFF NUMBERS
31 Mar 2020
31 Mar 2019
159
184
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
7
Strategic report
For the year ended 31 March 2020
4. FUNDS UNDER MANAGEMENT AND ADVICE
Discretionary assets
Advisory assets
Execution only assets
Total
5. RATIO OF DISCRETIONARY TO TOTAL FUNDS
31 Mar 2020
£m
31 Mar 2019
£m
878
338
625
1,841
1,175
556
777
2,508
31 Mar 2020
%
31 Mar 2019
%
Ratio of discretionary to total funds
48
46
6. RECURRING INCOME STREAMS
Value of recurring income
7. CORPORATE BROKING
Number of transactions
Money raised
Retained corporate clients
Year ended
31 Mar 2020
£m
Year ended
31 Mar 2019
£m
13
14
Year ended
31 Mar 2020
Year ended
31 Mar 2019
34
37
£67m
£51m
74
77
DIVIDENDS
The Board does not propose to pay a dividend in respect of the financial year (2019: £nil).
STATEMENT OF FINANCIAL POSITION AND CAPITAL STRUCTURE
Maintaining a strong and liquid statement of financial position remains a key objective for the Board, alongside its
regulatory capital requirements. Total net assets were £8.5m (2019: £8.8m) and net current assets £6.4m (2019: £6.9m).
Cash balances at year-end were £3.7m (2019: £7.7m).
RISKS AND UNCERTAINTIES
Risk appetite is established, reviewed and monitored by the Board. The Group, through the operation of its Committee
structure, considers all relevant risks and advises the Board as necessary. The Group maintains a comprehensive risk
register as part of its risk management framework encouraging a risk-based approach to the internal controls and
management of the Group. The Group operates an Internal Audit coordinated by the Finance department. Internal Audit
reports directly to the Audit Committee.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
8
Strategic report
For the year ended 31 March 2020
Liquidity and capital risk
As noted in the Chief Executive’s Report, the Group’s focus is on managing the costs of its business and returning it to
profitability whilst increasing the proportion of recurring revenue including the building of its discretionary fee paying
client base to better fit the regulatory environment in which it operates.
The Group has historically had a predominantly fixed cost base which in recent years has been allowed to increase leading
to the recorded losses but decisive action has been taken in reducing costs to achieve operational efficiencies and to aid
the return to profitability.
To mitigate risk, the Board continues to focus on ensuring that the financial position remains robust and suitably liquid
with sufficient regulatory capital being maintained over the minimum common equity tier 1 capital requirements.
Regulatory capital and liquid assets are monitored on a daily basis.
Operational risk
Operational risk is the risk of loss to the Group resulting from inadequate or failed internal processes, people and systems,
or from external events.
Business continuity risk is the risk that serious damage or disruption may be caused as a result of a breakdown or
interruption, from either internal or external sources, of the business of the Group. This risk is mitigated in part by the
number of branches across the UK and the Group having business continuity and disaster recovery arrangements
including business interruption insurance.
The Group seeks to ensure that its risk management framework and control environment is continuously evolving which
Compliance and Risk monitor on an ongoing basis.
Credit risk
The Board takes active steps to minimise credit losses including formal new business approval, and the close supervision
of credit limits and exposures and the proactive management of any overdue accounts. Additionally, risk assessments
are performed on an ongoing basis on all deposit taking banks and custodians and our outsourced relationships.
Regulatory risk
The Company operates in a highly regulated environment both in the UK and in the Isle of Man. The Group has Internal
Audit and Compliance and Risk functions resourced with appropriately qualified and experienced individuals. The
Directors monitor changes and developments in the regulatory environment and ensure that sufficient resources are
available for the Group to implement any required changes. The impact of the regulatory environment on the Group’s
management of its capital is discussed in note 25 of the financial statements.
SECTION 172 STATEMENT
Broader Stakeholder Interests
Directors of the Group must consider Section 172 of the Companies Act 2006 which requires them to act in the way that
would most likely promote the success of the Group for the benefit of all its stakeholders. The Board and its committees
consider who its key stakeholders are, the potential impact of decisions made on them taking into account a wider range
of factors, including the impact on the Company’s operations and the likely consequences of decisions made in the long
term. The Group’s key stakeholders, material issues and how the Board and the Group have engaged with them during
the year is set out below.
Employees
The CEO and his management team on behalf of the Board engage with employees through a variety of methods including
periodic sometimes weekly all staff notifications of updates, information and points of interest, staff forums, group
meetings and Town Hall meetings. The majority of reductions in headcount over the year has been achieved by natural
means such as leavers not being replaced as we became more efficient and in general this reduction has not impacted
morale.
Shareholders
Our shareholders have been pivotal in supporting the Group and its new management team and Board in their plan to
turnaround the Group and return it to a far healthier state. The Board recognise and frequently discuss the importance
of good, open and constructive relationships with both new potential as well as existing shareholders and is committed
to this communication. The way in which this has been achieved during the year has been by our Chief Executive Officer,
supported by the management team, maintaining regular contact and meetings with individual and institutional
shareholders, both existing and potential new ones, and communicating and discussing shareholders’ views with the
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
9
Strategic report
For the year ended 31 March 2020
Board. The support from existing shareholders and the investment made in the Company by new shareholders is
indicative of their support of the overall plan and its progress over the year. Further actions such as the disposal of the
Isle of Man subsidiary have been welcomed as further signs of simplifying the offering and focusing on that plan. A
number of Board members and employees also hold the Group’s shares and regular communications are provided. The
Group’s strategy and results are presented to shareholders through meetings following announcements of the final and
interim results. Shareholders are also requested to meet the Board and management team, all of whom attend, the
Annual General Meeting. For this year, on account of the current pandemic challenges, shareholders are however
requested not to attend. The annual report and accounts for the year ended 31 March 2020 along with all past accounts,
at
regulatory
https://www.whirelandplc.com/investor-relations.
Group’s website
other material
communications
and
out
the
set
on
is
Regulators
The Board recognises the past history of the Group in this regard and is absolute in its insistence on continuous and open
communication with our regulators at the Financial Conduct Authority (“FCA”) as well as with the London Stock Exchange
AIM Regulation team. Regular ongoing dialogue has continued through the CEO and CFO with the FCA who received
regular Management information. The FCA have met and approved the appointments of each member of the new
Management team and the Board members.
Clients
Our clients’ are utterly fundamental to the business of the Group and the Board recognise that their interests are of
paramount importance. On both the PWM as well as the CIB side of the business management closely engage with clients
to understand their objectives so that the service provided by the business is the most appropriate. In PWM the clients
profile and the suitability of the investment strategy provided is frequently challenged by the professional investment
managers and this is supplemented by a second line of review from management and our compliance team. It is
recognised that the status of our clients can and does change in line with the environment and this has been particularly
challenging this year with the pandemic and its influence on the investment markets. Vulnerable clients in particular are
identified and discussed at length at Board and at Committee level to ensure that they are provided with the best possible
advice.
On the CIB side of the business the Group’s objective is also to achieve the best outcome and this applies equally to
Institutional clients as well as corporate ones. Regular contact is maintained with them across all departments including
corporate broking, corporate finance, trading and research. Our investor relations team arrange meetings with investors,
undertake site visits and organise events for a wide range of the clients’ teams such as their own Board directors.
Community and Suppliers
The Board through its executive directors is keenly focused on its key supplier relationships especially those of an
outsourced variety and constantly challenges and reviews its arrangements. The Group openly encourages its branches
and employees to engage in local charitable, community groups and other causes.
Each of the Board members consider that they have acted together, in good faith in a way most likely to promote the
success of the Group for the benefit of its broader range of stakeholders as a whole taking into account section 172 (1)
(a-f) of the Companies Act 2006.
By Order of the Board
P Tansey
Finance Director
9 July 2020
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
10
Directors’ report
For the year ended 31 March 2020
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Independent Auditors’ Report, for the year ended 31 March 2020.
Going concern
The financial statements of the Group have been prepared on a going concern basis. In making this assessment, the
Directors have prepared detailed financial forecasts for the period to September 2021 which considers the funding and
capital position of the Group. Those forecasts make assumptions in respect of future trading conditions, notably the
economic environment and its impact on the Group’s revenues and costs. In addition to this, the nature of the Group’s
business is such that there can be considerable variation in the timing of cash inflows. The forecasts take into account
foreseeable downside risks, based on the information that is available to the Directors at the time of the approval of
these financial statements.
The Directors have conducted full and thorough assessments of the Group’s business and the past financial year has
provided a thorough test of those assessments and the resilience of the business. The first half of the financial year in the
run-up to the December 2019 UK election was negatively impacted by the continuing uncertainty over the Brexit process
resulting in low levels of market activity. Action was taken in regard to cost reductions and the raising of further capital
in November 2019 to ensure that the plan to turnaround the business was not deflected and to provide robust levels of
capital. Market conditions improved following the election leading to a significant upturn for the Group’s business only
to be struck by the market turbulence resulting from the Covid-19 crisis which negatively impacted the last two months
of the financial year.
Covid-19, recognised as a pandemic by the World Health Organization (WHO) in March 2020, led to world-wide actions
being taken that have severely reduced economic activity and impacted the health of the financial markets. The Directors
responded to Covid-19 promptly by implementing a thorough remote working capability that has and continues to work
well ensuring the wellbeing of our staff whilst continuing to service our clients and other key stakeholders including our
shareholders and our regulators.
There remains uncertainty over what the future impact on the economy, the Group and its business will be. However,
since the pandemic was declared, our CIB business has been appointed by several new clients and completed a number
of transactions. The resulting performance in the first period of the new financial year has been significantly above our
stressed-scenario planning which informed the going concern basis of accounting decision noted. What the future plans
of our corporate clients are, and what the future levels of stock market indices will be that determine the level of assets
managed and the resulting PWM fees, is not possible to quantify with total certainty. If the future impact of Covid-19
were to lead to a period of market inactivity this could result in a reduction in CIB fees and a decline in the values of
securities that could impact both the CIB and the PWM businesses. The impact of the Covid-19 pandemic on the financial
markets and the Group is continuously monitored.
Decisive and radical actions were taken on costs including the replacement of a significant section of people related fixed
costs with a profit-linked variable basis of compensation. Although material uncertainty remains, particularly around the
effect that the lifting of Covid-19 restrictions will have on the economy, we have seen a significant performance upturn
in the first 3 months of the new financial year that is significantly above our own stressed forecasts which informed the
aforementioned cost decisions taken earlier. We are currently working on several transactions for our clients in CIB which
together with a lower cost base across both CIB and PWM places the business in a much better position to meet the
challenges ahead over the coming financial year.
Certain activities of the Group are regulated by the Financial Conduct Authority which is the statutory regulator for
financial services business in the UK and has responsibility for policy, monitoring and discipline for the financial services
industry. The FCA requires the Group’s capital resources to be adequate; that is sufficient in terms of quantity, quality
and availability, in relation to its regulated activities. The Directors monitor the Group’s regulatory capital resources on a
daily basis and they have developed appropriate scenario tests and corrective management plans which they are
prepared to implement to address any potential deficit as required. Further actions open to the Directors include
incremental cost reductions, regulatory capital optimisation programmes or further capital raising.
An analysis of the potential downside impacts was conducted as part of the going concern assessment to assess the
potential impact on revenue, asset values with a particular focus on the more variable component parts of our overall
revenue, corporate finance fees and commission. Furthermore, reverse stress tests were modelled to assess what level
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
11
Directors’ report
For the year ended 31 March 2020
the Group’s business would need to be driven down to before resulting in a liquidity crisis or a breach of regulatory
capital.
Whilst the Directors consider it unlikely, particularly given the profitable performance of the Group since the period end,
the long term impact of Covid-19 on the economy and in turn the Group’s variable transactional based revenue is
unknown. In the event that these revenues are 30% below forecast a material uncertainty exists which may cast
significant doubt on the Group's ability to continue as a going concern without taking remedial action that could include
cost reduction programmes, assets sales and the raising of further capital in order to ensure that regulatory capital
requirements are maintained. The financial statements do not include the adjustments that would result if the company
was unable to continue as a going concern.
Based on all the aforementioned, the Directors believe that regulatory capital requirements will continue to be met and
that the Group has sufficient liquidity to meet its liabilities for the next twelve months and that the preparation of the
financial statements on a going concern basis remains appropriate.
Likely future developments
The initial stages of turning around the Group focussed on the reduction of costs to not only a lower absolute level but
further, to reduce the proportion of total costs represented by fixed costs burdening the business. Whilst the cost
reduction over the year is significant, further reductions have been identified. Management are resolute in their
commitment to act on these further reductions. The elimination of legacy systems in both divisions has resulted in simpler
and less risky business that is now well positioned to support a growing business, as stated in the chief executive’s
statement, the next stages include building a robust platform and growing the business in the coming year.
Financial instruments and risk management
Details of risks and risk management arising from the Group’s financial instruments are set out in note 25 of the financial
statements.
Dividends
The Directors do not propose to pay a dividend for 2020 (2019: £nil) (note 11).
Directors
The Directors who held office during the year and their interest in the shares of the Company were as follows:
P A Wale
P Tansey (appointed 21 June 2019)
V G Raffé
S N Lough (appointed 19 August 2019)
P J Shelley (appointed 26 September 2019)
A G Buchanan (appointed 18 December 2019)
T M Steel (resigned 19 May 2020)
R E M Lee (resigned 31 December 2019 )
J H D Carey (resigned 13 May 2019)
Year ended
31 Mar 2020
Year ended
31 Mar 2019
Number of shares Number of shares
75,000
18,000
33,333
319,167
760,411
208,333
25,000
30,267
-
32,500
-
-
30,267
-
-
25,000
30,267
-
Further details of Directors’ service contracts, remuneration, share interests and interests in options over the Company’s
shares can be found in the Remuneration Report on page 25.
No Directors holding office at the end of the financial year had any disclosable interest in the shares of other Group
companies.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
12
Directors’ report
For the year ended 31 March 2020
MAJOR SHAREHOLDINGS
At the date of publication of this report, the Company had been notified of the following shareholdings (other than those
of the Directors) of 3% or more of the share capital:
Polygon Global Partners LLP*
Oceanwood Capital Management LLP
M & G Investments Limited
M Lawson
*including 1,210,278 held by way of Contracts for Difference
Ordinary shares
14,543,522
7,699,094
7,301,333
1,500,000
%
29.86
15.80
14.99
3.08
In addition, the Company’s Employee Share Ownership Trust, which is operated by Sanne Trust Company Limited, holds
720,000 shares as trustees. All rights to receive dividends in respect of these shares have been waived. Further details
are in notes 28 and 29 of the Financial Statements.
POLITICAL CONTRIBUTIONS
The Group and Company did not make any political donations or incur any political expenditure during the year (2019:
nil).
QUALIFYING THIRD PARTY INDEMNITY PROVISIONS
The Company has arranged qualifying third party indemnity for all of its directors.
EMPLOYEES
Our employees are vital to the success of the Group. The Group and its employees are committed to delivering a quality
service which meets our own expectations, those of the FCA and those of our clients wherever possible.
Employees are kept informed of, and consulted regularly on, key issues affecting them and the Group by the intranet and
through regular communication between management and staff.
The Company policy is to give full and fair consideration to all disabled people who apply for employment, seeks to
develop the skills and potential of disabled people, affords them access to training and promotion opportunities and
makes every effort to retain in suitable employment those staff who have the misfortune of becoming disabled whilst in
the employment of the Group.
EVENTS AFTER THE REPORTING PERIOD
On 29 June 2020 the Group announced its intention to sell its subsidiary WH Ireland (IOM) Limited. Therefore, in the
Financial Statements the assets and liabilities of WH Ireland (IOM) Limited are presented as single lines in assets and
liabilities held for sale, respectively and the results for the year are presented as discontinued operations with
comparatives restated.
ANNUAL GENERAL MEETING (AGM)
The resolutions being proposed at the AGM include usual resolutions dealing with the ordinary business of the AGM
together with certain additional special business. A description of all the resolutions is set out at the end of the Notice of
AGM.
AUDITORS
The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company’s auditors are unaware; and each Director has taken all the
steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to
establish that the Company’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies
Act 2006.
In accordance with the Companies Act 2006, a resolution for the re-appointment of BDO LLP as auditors of the Company
is to be proposed at the forthcoming AGM.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
13
Directors’ report
For the year ended 31 March 2020
DIRECTORS’ BIOGRAPHIES
Phillip Wale, Chief Executive Officer
Phillip began his career in UK Gilt Edged & convertible bonds, spending ten years at Goldman Sachs in New York and then
London, as co-head of pan-European equities. He managed the equity businesses at Commerzbank and then at Knight
Securities, where he was appointed European CEO. In 2004 he moved into fund management as CIO of a multi-strategy
hedge fund, returning to the sell-side in 2007 with Collins Stewart working closely with the expansion of the wealth
management product. Phillip joined Seymour Pierce, the corporate & institutional broker and wealth manager, in 2010
and was appointed its Chief Executive Officer in 2011. Between 2012 and 2016 he was Chief Executive Officer of Panmure
Gordon & Co. Prior to joining WHIreland in August 2018, Phillip was Head of Fixed Income (Europe) at Cantor Fitzgerald
Europe.
Philip Tansey, Chief Finance Officer
Between 2011 and 2017, Philip, a Chartered Accountant, was Chief Financial Officer of Panmure Gordon and before that,
from 2008, was Managing Director of the NASDAQ quoted US inter-dealer Broker, BGC Partners Inc. During his career he
has also worked at Deutsche Bank, CSFB, CIBC Wood Gundy, Salomon Brothers and BDO Stoy Hayward.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
14
Directors’ report
For the year ended 31 March 2020
Victoria Raffé, Non-Executive Director
Victoria Raffé has had an extensive City career, latterly as a Regulator with positions as Director of the Authorisations
Division and Executive Committee member at the Financial Conduct Authority (“FCA”). Previously she held various senior
level roles with the Financial Services Authority (“FSA”) and before that had roles at KPMG, Prudential and Fidelity. She
currently holds non-executive directorships with Starling Bank, Growth Street and Inbotiqa, and sits on the Public Interest
Body of PwC. Victoria was appointed to the Board of WHIreland in January 2017.
Simon Lough, Non-Executive Director
After graduating from Oxford University, Simon joined Kleinwort Benson in 1984, moving to work in their Tokyo office in
1986. In 1991, he joined Banca della Svizzera Italiana, working in Tokyo and then their London office. In 1996, Simon left
investment banking, joining, and co-investing, in the forerunner of the Heartwood wealth management business. His
managerial role initially entailed establishing a London office for the growing business. He subsequently headed both the
client and investment teams, before becoming Chief Executive in November 2008. In May 2013, Heartwood became a
wholly owned subsidiary of Handelsbanken and Simon continued as Chief Executive until July 2014 and subsequently left
on the third anniversary of its acquisition.
From 2013-16, he was also a member of the Financial Conduct Authority’s Smaller Business Practitioner Panel, nominated
by the Wealth Management Association (now called PIMFA – Personal Investment Management & Financial Advice
Association) to represent the wealth management sector.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
15
Directors’ report
For the year ended 31 March 2020
Phillip Shelley, Non-Executive Director, Chair
After graduation from Edinburgh University, where he read Civil Engineering, Phil served in the Armed Forces as an Officer
in the Royal Green Jackets. He joined UBS in 1995 where he worked in Corporate Broking and Equity Capital markets for
15 years, culminating as Head of Corporate Broking. He joined Goldman Sachs in 2010 where he ran the Corporate Broking
and Equity Capital Markets team before joining Barclays as Vice Chairman of the Investment Bank. In September last year
he set up Arlington Capital Markets Ltd. The firm advises both listed FTSE companies, private companies preparing for
listing or sale and companies planning to IPO.
During his career of nearly 25 years Phil has advised many UK and European companies on equity, debt and mergers and
acquisitions.
Alistair Buchanan, Non-Executive Director
Alistair was formerly CEO of Ofgem, the UK’s gas and electricity markets’ regulator, for ten years and a partner at KPMG,
where he was also UK Chairman of Power & Utilities. He trained as a Chartered Accountant at KPMG before becoming
an award-winning energy sector analyst and head of research for banks in London and New York.
Alistair is currently a NED at Thames Water (where he Chairs the Strategy Committee and is a member of audit
committee), and a NED at Electricity North West Limited (where he sits on the Valuation committee). In the past he has
served on the Boards of Durham University and Scottish Water, and also currently serves on the board of Atlas Holdings
Corp. He was awarded the CBE in 2008.
The Directors’ report is approved by the Board on 9 July 2020 and signed on its behalf by:
P Tansey
Director
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
16
Corporate governance
For the year ended 31 March 2020
The Directors of the Company have always endeavoured to apply the highest level of Corporate Governance, and has
done so by seeking to comply with the QCA Corporate Governance Code for Smaller Companies. On 8 March 2018, the
London Stock Exchange issued revised rules for AIM-quoted companies, within which there is a requirement for AIM
quoted companies to apply a recognised corporate governance code from September 2018 and incorporate details of
how it complies with that Code in both its Annual Report and on its website.
The Company has chosen to apply the QCA Corporate Governance Code published in April 2018 (the “QCA Code”) and
this Corporate Governance report is based upon the QCA Code.
The principal means of communicating the Company’s application of the QCA Code are this Annual Report (pages 17 –
23) and the Corporate Governance section on the Company’s website (www.whirelandplc.com).
This statement has been collectively prepared by the Board of Directors of the Company (the “Board”). The Board refers
to the QCA Corporate Governance Code as a useful guide to assist in articulating how the Company approaches and
applies good corporate governance.
This report sets out the Company’s application of the Code, by the Board, and where appropriate, cross references other
sections of the Annual Report. Where the Company’s practices depart from the expectations of the Code, the Board has
given an explanation as to why.
The QCA Code is constructed around ten broad principles and a set of disclosures which notes appropriate arrangements
for growing companies and requires companies who have adopted the QCA Code to provide an explanation about how
they are meeting those principles through the prescribed disclosures. In the table below, the Board explains how it has
applied them.
QCA Code Principle:
How it should be applied:
How the Company applies it:
1
Establish a strategy
and business model
which promote long-
term value for
shareholders
The board must be able to express a shared
view of the company’s purpose, business
model and strategy. It should go beyond
the simple description of products and
corporate structures and set out how the
company intends to deliver shareholder
value in the medium to long-term. It
should demonstrate that the delivery of
long-term growth is underpinned by a clear
set of values aimed at protecting the
company from unnecessary risk and
securing its long-term future.
is to
Page 5 of the Company’s Annual Report for the
period ended 31 March 2020 sets out its
principal strategy, which
focus on
continuing to grow the business across the two
business divisions of Wealth Management and
Corporate and Institutional Broking, with the
ultimate objective of becoming the corporate
broker of choice in the small and mid-cap
company segment and a leading advice-driven
wealth management service provider to retail
clients.
2
Seek to understand
and meet
shareholder needs
and expectations
Directors must develop a good
understanding of the needs and
expectations of all elements of the
company’s shareholder base.
The board must manage shareholders’
expectations and should seek to
understand the motivations behind
shareholder voting decisions
The risks that attach to this strategy and how
such risks are mitigated are set out at pages (67
to 72) of WHI’s annual report for the period
ended 31 March 2020.
The Board is committed to regular shareholder
dialogue with both its institutional and retail
shareholders.
The principal opportunity for the Board to meet
shareholders is at the Company’s AGM, to
which shareholders are encouraged to attend.
The Company also has a dedicated email
address which investors can use to contact the
Company. The CEO is responsible for reviewing
all communications received from shareholders
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
17
Corporate governance
For the year ended 31 March 2020
3.
Take into account
wider stakeholder
and social
responsibilities and
their implications for
long-term success
Long-term success relies upon good
relations with a range of different
stakeholder groups both internal
(workforce) and external (suppliers,
customers, regulators and others). The
board needs to identify the company’s
stakeholders and understand their needs,
interests and expectations.
Where matters that relate to the
company’s impact on society, the
communities within which it operates or
the environment have the potential to
affect the company’s ability to deliver
shareholder value over the medium to
long-term, then those matters must be
integrated into the company’s strategy and
business model.
Feedback is an essential part of all control
mechanisms. Systems need to be in place
to solicit, consider and act on feedback
from all stakeholder groups
and determining the most appropriate
response.
To date, all responses from shareholders as to
the procedures in place for dialogue have been
positive.
The Company’s assessment of its key resources
and relationships is set out on page 13 of WHI’s
annual report for the period ended 31 March
2020.
The Directors believe that, in addition to its
shareholders, the main stakeholders of the
Company are its clients, its employees, the
communities in which it operates and its three
regulatory bodies (the London Stock Exchange,
the FCA and the Isle of Man’s FSA).
The Company dedicates significant time to
understanding and acting on the needs and
requirements of each of these Groups by way
of meetings dedicated to obtained feedback.
The Company is also a member of certain
organisations, such as the Quoted Companies
Alliance, which encourages and facilitates
active dialogue with some of the Company’s
key stakeholders.
Linked to this, the Company endeavours to
build relationships with those local
communities in which it operates and some of
those initiatives it has invested in, in recent
years, are set out in the Company’s CSR section
of its website.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
18
Corporate governance
For the year ended 31 March 2020
4.
Embed effective risk
management,
considering both
opportunities and
threats, throughout
the organisation
The board needs to ensure that the
company’s risk management framework
identifies and addresses all relevant risks in
order to execute and deliver strategy;
companies need to consider their extended
business, including the company’s supply
chain, from key suppliers to end-customer.
Setting strategy includes determining the
extent of exposure to the identified risks
that the company is able to bear and willing
to take (risk tolerance and risk appetite).
Pages 67 to 72 of the Company’s Annual Report
for the period ended 31 March 2020 set out the
risks to the Company’s business and outlook,
and how such risks are minimised.
Given the areas in which the Company
operates, risk is a particular focus.
The Company employs a Head of Compliance
and Risk, which is a full time position within the
Company and who is tasked with risk
identification, assessment, management and
the measurement of risk and threats to, the
business. These risks are recorded within the
Company’s risk register and cover all categories
including human capital risk, regulatory risk,
conduct (client) risk, competition, financial risk,
IT and operational resilience risk and legal risk.
Each risk is ranked on impact and likelihood
and mitigating strategies are identified.
In addition, the Executive Committee which is
formed of the Executive Directors, the Heads of
the business divisions, a representative from
HR and the Head of Compliance and Risk meet
to assess and monitor these risks; and discuss
any new emerging risks arising in the day to day
business.
The risk register and minutes from the
Executive Committee are reviewed in Board
meetings. The Directors receive progress
reports from the Head of Compliance and Risk
directly, to enable them to assess the
effectiveness of the systems in place. These
risks and systems are also tested by the
Company’s external auditors on an annual
basis.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
19
Corporate governance
For the year ended 31 March 2020
5. Maintain the board
as a well-
functioning,
balanced team led
by the chair
6
Ensure that between
them the directors
have the necessary
up-to-date
experience, skills
and capabilities
The board members have a collective
responsibility and legal obligation to
promote the interests of the company, and
are collectively responsible for defining
corporate governance arrangements.
Ultimate responsibility for the quality of,
and approach to, corporate governance lies
with the chair of the board.
The board (and any committees) should be
provided with high quality information in a
timely manner to facilitate proper
assessment of the matters requiring a
decision or insight.
The board should have an appropriate
balance between executive and non-
executive directors and should have at least
two independent non- executive directors.
Independence is a board judgement.
The board should be supported by
committees (e.g. audit, remuneration,
nomination) that have the necessary skills
and knowledge to discharge their duties
and responsibilities effectively.
Directors must commit the time necessary
to fulfil their roles.
All strategic decisions are decided by the Board
acting collectively.
The Board consists of four Non-Executive
Directors and two Executive Directors (with a
third Executive Director, Stephen Ford,
appointed subject to FCA approval). It is
considered that Victoria Raffé, Philip Shelley,
Simon Lough and Alistair Buchanan are
independent Non-Executive Directors.
All Executive Directors are full time Directors of
the Company and the Non-Executive Directors
are expected to commit at least one day a
month to the Company in addition to their
attendance at board meetings.
The Board meets at least 12 times a year. The
attendance record of each director is set out on
the Company’s website.
Board minutes and related papers are
circulated to Directors in good time ahead of
the relevant Board meeting(s).
The Board has established audit, remuneration,
risk, nomination and executive committees
which meet regularly in accordance with their
terms of reference. The details of these
committees, including their terms of reference
and composition, are set out below, in this
Corporate Governance Report.
The board must have an appropriate
balance of sector, financial and public
markets skills and experience, as well as an
appropriate balance of personal qualities
and capabilities. The board should
understand and challenge its own diversity,
including gender balance, as part of its
composition.
The board should not be dominated by one
person or a group of people. Strong
personal bonds can be important but can
also divide a board.
As companies evolve, the mix of skills and
experience required on the board will
change, and board composition will need to
evolve to reflect this change
The Company has six directors being Phillip
Wale, Philip Tansey, Victoria Raffé, Philip
Shelley, Simon Lough and Alistair Buchanan.
Details of these Directors and their relevant
experience, skills and personal qualities are set
out at pages 14 to 16 of the Company’s Annual
Report for the period ended 31 March 2020.
The Company periodically holds briefings for
the Directors covering regulations that are
relevant to their role as Directors of an AIM-
quoted company.
The Company also has a dedicated Human
Resources and Compliance departments and
also uses the services of a number of external
training providers. The Directors therefore
have access to certain in-house seminars and
external training courses to assist the Directors
in keeping their skills are kept up to date.
The Board is supported by Katy Mitchell as
Company Secretary and Head of Legal. Katy is a
qualified corporate lawyer, a member of ICSA
and a senior Qualified Executive within the
Corporate Broking department of the Group.
The Board also engages external legal advisers
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
20
Corporate governance
For the year ended 31 March 2020
7.
Evaluate board
performance based
on clear and
relevant objectives,
seeking continuous
improvement
The board should regularly review the
effectiveness of its performance as a unit,
as well as that of its committees and the
individual directors.
The board performance review may be
carried out internally or, ideally, externally
facilitated from time to time.
The review should identify development or
mentoring needs of individual directors or
the wider senior management team.
It is healthy for membership of the board to
be periodically refreshed. Succession
planning is a vital task for boards. No
member of the board should become
indispensable
8.
Promote a corporate
culture that is based
on ethical values
and behaviours
The board should embody and promote a
corporate culture that is based on sound
ethical values and behaviours and use it as
an asset and a source of competitive
advantage.
The policy set by the board should be
visible in the actions and decisions of the
chief executive and the rest of the
management team. Corporate values
should guide the objectives and strategy of
the company.
The culture should be visible in every
aspect of the business, including
recruitment, nominations, training and
engagement. The performance and reward
system should endorse the desired ethical
behaviours across all levels of the company.
The corporate culture should be
recognisable throughout the disclosures in
the annual report, website and any other
statements issued by the company
to advise them, where appropriate and
necessary on the legal aspects of any ongoing
regulatory queries.
Evaluation of the performance of the
Company’s Board has historically been
implemented in an informal manner, with the
exception of the Executive Directors who are
assessed annually on performance by the
Chair.
At this stage a formalised process has not been
adopted. It is intended that the process will be
formalised in due course, and details of the
process and its results and recommendations
will be published at a future date.
The Nomination Committee is required to give
recommendations to the Directors where there
are vacancies or where it is felt that additional
directors should be appointed. For new
appointments the search for candidates is
conducted, and appointments are made, on
merit, against objective criteria and with due
regard for the benefits of diversity on the
Board.
The Company’s website sets out the Company’s
approach to corporate responsibility and the
Company’s values relating to corporate culture.
The Company’s CSR section of the website sets
out the Company’s approach to corporate
responsibility, the Group’s people, its social
impact and the impact upon the environment
in which it operates.
The Board seeks to ensure that all of its
employees are aware of the Company’s ethical
values which embodies seven core values.
These are covered in the mandatory induction
process for new employees and each employee
is also assessed on their adherence to these
values in their annual appraisal which
influences promotion and reward.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
21
Corporate governance
For the year ended 31 March 2020
9. Maintain
governance
structures and
processes that are fit
for purpose and
support good
decision-making by
the board
The company should maintain governance
structures and processes in line with its
corporate culture and appropriate to its:
• size and complexity; and
• capacity, appetite and tolerance for risk.
The governance structures should evolve
over time in parallel with its objectives,
strategy and business model to reflect the
development of the company.
The Board has an established Audit,
Remuneration, Risk, Nomination and Executive
Committees which meet regularly in
accordance with their terms of reference. The
details of these committees, including their
terms of reference and composition, are set
out in this Corporate Governance section. This
detail also includes the roles and
responsibilities of each of the Directors, with all
of the Non-Executive Directors sitting on each
of the sub-committees of the Board.
The matters reserved for the Board, are set out
in the Board Terms of Reference, and can be
summarised as follows:
-
Reviewing, approving and guiding
corporate strategy, major plans of
action, risk appetite and policies,
annual budgets and business plans;
setting performance objectives;
monitoring, implementation and
corporate performance; and
overseeing major capital expenditures,
acquisitions and disposals;
- Monitoring the effectiveness of the
Company’s governance arrangements
and practices, making changes as
needed to ensure the alignment of the
Company’s governance framework
with current best practices;
Ensuring that appointments to the
Board or its Committees are effected
in accordance with the appropriate
governance process;
-
- Monitoring and managing potential
conflicts of interest of management,
Board members, shareholders,
external advisors and other service
providers, including related party
transactions; and overseeing the
process of disclosure and
communications.
The Board is also responsible for all
other matters of such importance as
to be of significance to the Group as a
whole because of their strategic,
financial or reputational implications
or consequences.
-
At this stage the Board believes that the
governance framework is appropriate for a
Company of its size but it continues to keep this
under review.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
22
Corporate governance
For the year ended 31 March 2020
10. Communicate how
the company is
governed and is
performing by
maintaining a
dialogue with
shareholders and
other relevant
stakeholders
A healthy dialogue should exist between
the board and all of its stakeholders,
including shareholders, to enable all
interested parties to come to informed
decisions about the company.
In particular, appropriate communication
and reporting structures should exist
between the board and all constituent
parts of its shareholder base. This will
assist:
• the communication of shareholders’
views to the board; and
• the shareholders’ understanding of the
unique circumstances and constraints faced
by the company.
It should be clear where these
communication practices are described
(annual report or website).
The Company is committed to open dialogue
with all its stakeholders. The CEO liaises with
the Company’s principal shareholders,
regulators and, where appropriate, clients and
relays their views to the wider Board.
On the Company’s website shareholders can
find all historical regulatory announcements,
Interim Reports and Annual Reports. Annual
Reports and Annual General Meeting Circulars
are posted directly to all registered
shareholders or nominees and results of
Annual General Meeting votes are also
published on the Company’s website. As
described earlier, the Company also maintains
email and phone contacts which shareholders
can use to make enquiries or requests.
At the stage the Board does not publish an
Audit Committee Report, but following the
appointment of new Chair of the Audit
Committee it will look to adopt such a report in
the coming year.
Following the Company’s AGM the results of all
votes will be made available on the website.
THE BOARD AND ITS COMMITTEES
At the date of this report the Group Board consists of two Executive and four Non-Executive Directors (with a third
Executive Director appointed subject to FCA approval). The Board is responsible for the overall direction and strategy of
the Group and meets regularly throughout the year. Under the Company’s Articles of Association at every AGM, any
Directors:
who have been appointed by the Directors since the last AGM; or
who were not appointed or reappointed at one of the preceding two AGMs,
must retire from office and may offer themselves for reappointment by the members.
The Board has formally established a number of committees and agreed their terms of reference, as follows:
Remuneration Committee
The principal function is to determine the policy on Executive appointments and remuneration. The committee consists
of the four Non-Executive Directors with Simon Lough as Chair. It is the aim of the committee to attract, retain and
motivate high calibre individuals with a competitive remuneration package.
Remuneration for Executives normally comprises basic salary, bonus, benefits in kind and options. Details of the current
Directors’ remuneration are given in the Remuneration Report (page 27).
Other Executive Directors and Risk Committee members may be invited to attend the meetings.
Audit Committee
The committee is made up of the four Non-Executive Directors with Alistair Buchanan as Chair. It is responsible for
reviewing the Company’s arrangements with its external and internal auditors, including the cost effectiveness of the
audit and the independence and objectivity of the auditors. It also reviews the application and appropriateness of the
Company’s accounting policies, including any changes to financial reporting requirements brought about by both external
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
23
Corporate governance
For the year ended 31 March 2020
and internal requirements and it gives consideration to all major financial announcements made by the Company
including its interim and preliminary announcements and annual report and accounts.
The external auditors, internal auditors and other Executive Directors may be invited to attend the meetings.
Risk Committee
The committee is made up of the four Non-Executive Directors with Victoria Raffé as Chair. It is responsible for advising
the Board on risk appetite, tolerance and strategy, taking into account the current and prospective regulatory and market
environment.
The Committee maintains a constant review of both the Group’s overall risk assessment processes and the effectiveness
of the Group’s internal controls and risk management systems. It advises the Board on proposed strategic transactions
that may impact the risk profile of the Group.
The Head of Compliance and Risk and the Executive Directors may be invited to attend the meetings.
Nomination Committee
The committee consists of the four Non-Executive Directors with Simon Lough as chair. It is the aim of the committee to
identify and nominate potential candidates to fill Board vacancies; to consider succession planning and to consider
appropriate training for the Board.
Executive Committee
The committee is made up of the senior management of the Group and is chaired by the CEO. The committee is
responsible for oversight of all delegated functions by the Board and the day-to-day operational business. In addition, it
is responsible for ensuring the strategy of the Board is implemented and any issues that need to be communicated to the
Board are recorded as such. The committee is also responsible for ensuring timely identification and resolution of
regulatory and compliance issues, ensuring senior management are aware of significant regulatory matters and to act as
a forum to update the Head of Compliance and Risk about organisational change and new business. The Corporate and
Institutional Broking Executive Committee and the Wealth Management Executive Committee escalates issues and
actions to the committee as appropriate.
Internal control
The Board has overall responsibility for the framework of internal control established by the Group and places critical
importance on maintaining a strong control environment. This framework of internal control is designed to manage
rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute
assurance against material misstatement or loss.
Detailed internal control procedures exist throughout the Group’s operations and compliance is monitored by
management and through the Group’s Compliance Department, Internal Audit and the Executive Committees of both
business divisions.
By order of the Board.
Katy Mitchell
Company Secretary
9 July 2020
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
24
Remuneration report
For the year ended 31 March 2020
The Directors present the Directors’ Remuneration Report (the “Remuneration Report”) for the financial year ended 31
March 2020.
COMPOSITION AND ROLE OF THE REMUNERATION COMMITTEE
As detailed within the Corporate Governance report, the Board has established a Remuneration Committee which
currently consists of the four Non-Executive Directors, chaired by Simon Lough.
The committee determines and agrees with the Board the framework and policy of Executive remuneration and the
associated costs to the Group and is responsible for the implementation of that policy. The committee determines the
specific remuneration packages for each of the Executive Directors and no Director or Senior Executive is involved in any
decisions as to their own remuneration. The committee has access to information and advice provided by the CEO and
the CFO and has access to independent advice where it considers it appropriate.
This report explains how the Group has applied its policy on remuneration paid to Executive Directors.
FRAMEWORK AND POLICY ON EXECUTIVE DIRECTORS’ REMUNERATION
The Group’s remuneration policy is designed to provide competitive rewards for its Executive Directors and other Senior
Executives, taking into account the performance of the Group and the individual Executives, together with comparisons
to pay conditions throughout the markets in which the Group operates. It is the aim of the committee to attract, retain
and motivate high calibre individuals with a competitive remuneration package. It is common practice in the industry for
total remuneration to be significantly influenced by bonuses.
The remuneration packages are constructed to provide a balance between fixed and variable rewards. Therefore
remuneration packages for Executive Directors and Senior Executives normally include basic salary, bonuses, benefits in
kind and options. In agreeing the level of basic salaries and annual bonuses the committee takes into consideration the
total remuneration that Executives could receive.
BASIC SALARY
Basic salaries are reviewed on an annual basis or following a significant change in responsibilities. The committee seeks
to establish a basic salary for each Executive determined by individual responsibilities and performance, taking into
account comparable salaries for similar positions in companies of a similar size in the same market.
INCENTIVE ARRANGEMENTS
Bonuses
These are designed to reflect the Group’s performance, taking into account the performance of its peers, the market in
which the Group operates and the Executive’s contribution to that performance.
Performance related contractual incentive scheme
These are designed to reward performance by employees across the Group.
Share options
As referred to in the Directors’ Report, the Group has four different share ownership plans for employees; the ESOT,
CSOP, SAYE and LTIP scheme.
ESOT
The WH Ireland Group plc Employee Share Ownership Trust (ESOT) was established on 19 October 2011, for the purpose
of holding and distributing shares in the Company for the benefit of employees. All costs of the ESOT are borne by Group
Companies. 720,000 shares are held by the ESOT. Joint ownership arrangements have been put in place in relation to
certain of these shares between the trustees of the ESOT and a number of employees, including some Directors. The
shares carry dividend and voting rights, although these are normally waived by all parties to such arrangements. The joint
ownership arrangements create options for the employees to acquire the interest that the trustees of the ESOT has in
the jointly owned shares, which lapses when an employee is deemed to be a bad leaver.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
25
Remuneration report
For the year ended 31 March 2020
CSOP
Under the terms of the Company Share Option plan, options over the Company’s shares may be granted on a
discretionary basis to employees of the Group (including Directors) at a price which is not less than the market value of
the shares at the date of grant. Performance conditions may be imposed at the discretion of the Board.
In the event of an option holder ceasing to be an employee of the Group, options granted under the CSOP shall lapse (a)
on the first anniversary of an option holder’s death, (b) on the expiry of 6 months from the date on which an option
holder ceases to be an employee of the Group due to injury, disability, retirement or redundancy or (c) immediately on
an option holder ceasing to be an employee of the Group for any reason other than those referred to in (a) and (b),
unless, and to the extent, the Board exercises its discretion to allow the options to be exercised for a period after the
option holder ceases to be an employee of the Group.
SAYE
Under the terms of the Save As You Earn scheme, employees of the Group (including Directors) may be invited to apply
for an option to be granted to them at a price which is not less than 80% of the market value of the shares at the date of
grant. Employees enter into a savings contract under which they agree to save a certain amount of salary each month for
a specified period, typically 3 years, with a view to using those savings to buy shares under the terms of the option.
In the event of an employee leaving before the end of the 3 years contract because of redundancy, injury, disability or
retirement, the employee will be able to continue saving privately and buy a reduced number of shares (in line with the
amount saved) within 6 months of leaving using the savings accrued. If the employee leaves before the end of the 3 years
due to resignation, dismissal on grounds of misconduct or not returning after maternity leave, they would not be able to
buy any shares and would have their funds returned to them. In the event of death prior to the scheme maturing, the
deceased’s personal representative(s) would be able to buy a reduced number of shares within 12 months of the death.
As at the date of this report there were no SAYE schemes open.
LTIP
Under the terms of the LTIP, options over the Company’s shares may be granted on a discretionary basis to employees
and consultants of the Group (including Directors) at a price to be agreed between the Company and the relevant option
holder. Under the terms of the options granted under the current LTIP, such options vest on the third anniversary of the
award dates; are exercisable at the market price at the time the option was issued and are exercisable for ten years after
the vesting date.
OTHER EMPLOYEE BENEFITS
Depending on the terms of their contract certain Executive Directors and Senior Executives are entitled to a range of
benefits, including contributions to individual personal pension plans, private medical insurance and life assurance.
SERVICE CONTRACTS AND NOTICE PERIODS
The Executive Directors are employed on rolling contracts subject to six months’ notice from either the Executive or the
Group, given at any time. The service contracts of the current Executive Directors are available for inspection by any
person from the Human Resources department at the Group’s administrative office during normal office hours on any
day except weekends and bank holidays and at the AGM from 9am on the day of the Meeting until the conclusion of the
Meeting.
Contracts of employment for Senior Executives are all on a rolling basis subject to notice periods ranging from three to
twelve months.
Service contracts do not provide explicitly for termination payments or damages but the Group may make payments in
lieu of notice. For this purpose pay in lieu of notice would consist of basic salary and other relevant emoluments for the
relevant notice period excluding any bonus.
EXTERNAL APPOINTMENTS UNDERTAKEN BY EXECUTIVE DIRECTORS
In the committee’s opinion, experience of other companies’ practices and challenges is valuable for the personal
development of the Group’s Executive Directors and for the Company. It is therefore the Group’s policy to allow Executive
Directors to accept Non-Executive Directorships at other companies, provided the time commitment does not interfere
with the Executive Directors’ responsibilities within the Group. Fees are retained by the individual Executive Director.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
26
Remuneration report
For the year ended 31 March 2020
NON-EXECUTIVE DIRECTORS
All Non-Executive Directors have a remuneration agreement for an initial period of twelve months and thereafter on a
rolling basis subject to three months’ notice by either the Non-Executive Director or the Group, given at any time.
In the event of termination of their appointment they are not entitled to any compensation. The terms and conditions of
appointment of Non-Executive Directors are available for inspection by any person from the Human Resources
department at the Group’s administrative office during normal working hours on any day except weekends or bank
holidays and at the AGM from 9am on the day of the Meeting until the conclusion of the Meeting.
Non-Executive Directors’ fees are determined by the Executive Directors having regard to the need to attract high calibre
individuals with the right experience, the time and responsibilities entailed and comparative fees paid in the market in
which the Group operates. They are not eligible for pensions.
DIRECTORS’ EMOLUMENTS (AUDITED)
The remuneration of each Director as listed on page 1 Company Information, excluding share options and awards, during
the year ended 31 March 2020 is detailed in the table below:
Executive
P Wale
P Tansey 1
Non-Executive
VG Raffé
SN Lough 2
PJ Shelley 3
AG Buchanan 4
TM Steel 5
REM Lee 6
JHD Carey 7
Salary
£
Benefits
£
Bonus
£
250,000
200,000
390 120,755*
47,170*
3,389
40,000
40,000
27,744
24,718
60,000
30,000
3,538
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
year
ended
31-Mar
2020
£
371,145
250,559
-
40,000
40,000
27,744
24,718
60,000
30,000
3,538
Total
year
ended
31-Mar
2019
£
Pension
contribution
year ended
31-Mar
2020
£
Pension
contribution
year ended
31-Mar
2019
£
216,086
67,359
25,000
10,000
16,667
2,000
30,000
-
-
-
60,000
30,000
30,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,779
*payments made in April 2019 in lieu of foregone rewards and subject to claw-back provisions.
847,704
167,925
676,000
433,445
35,000
18,667
Notes:
1 Appointed 21 June 2019
2 Appointed 19 August 2019
3 Appointed 26 September 2019
4 Appointed 18 December 2019
5 Resigned 19 May 2020
6 Resigned 31 December 2019
7 Resigned 13 May 2019
The highest paid Director for 2020 was P Wale receiving emoluments of £371,145 (2019: RW Killingbeck receiving
emoluments of £376,883)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
27
Remuneration report
For the year ended 31 March 2020
DIRECTORS’ INTERESTS IN SHARE OPTIONS (AUDITED)
There were no unexercised options over ordinary shares in the Company held by Executive and Non-Executive Directors
at 31 March 2020.
At 31 March 2020 the market price of the Company’s shares was 41.0p.
The highest daily closing price during the year was 57.0p and the lowest daily closing price was 38.5p.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
28
Statement of Directors’ responsibilities
For the year ended 31 March 2020
IN RESPECT OF THE DIRECTORS’ REPORT AND THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
have elected to prepare the Group and Company financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and
Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial
statements in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative
Investment Market.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to
any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
WEBSITE PUBLICATION
The Directors are responsible for ensuring the annual report and the financial statements are made available on a
website. Financial statements are published on the Company’s website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the financial statements contained therein.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
29
Independent Auditors’ report to the members of WH Ireland Group PLC
For the year ended 31 March 2020
OPINION
We have audited the financial statements of WH Ireland Group Plc (the ‘Parent Company’) and its subsidiaries (the
‘Group’) for the year ended 31 March 2020 which comprise Consolidated statement of comprehensive income,
Consolidated and Company statement of financial position, Consolidated and Company statement of cash flows,
Consolidated and Company statement of changes in equity and the notes to the financial statements, including a summary
of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the Parent
Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs
as at 31 March 2020 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by
the European Union; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
We draw attention to note 1 to the financial statements, which indicates the directors’ considerations over going concern
including the potential impacts of COVID-19 and that the Group would be required to take remedial action ranging from
cost reductions to raising additional capital in the event that revenues fall 30% from forecast scenarios. As stated in
note 1, these conditions, indicate that a material uncertainty exists that may cast significant doubt on the company’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Given the conditions and uncertainties noted above, we considered going concern to be a key audit matter. We
performed the following work as part of our audit:
Obtained management’s assessment of the going concern assumption applied in the financial statements.
Assessed this in light of our understanding of the group’s long-term strategy, forecasts, regulatory capital
requirements, and current assessment of the impact of Covid-19.
We have assessed the forecast, through to September 2021, used to support the Going Concern assessment for
arithmetical accuracy, challenged managements estimates applied within the forecasts, and assessed the
consistency of the forecasts with our understanding of the business.
We assessed the forecast in terms of post year-end performance, as well as historical performance.
We requested that management perform further sensitivity and breakeven analysis of the forecasts, where they
considered reverse stress testing, downturn and stress in the revenues, and the related impacts on regulatory
capital requirements. We then analysed and challenged thorough discussions with management and the Audit
committee. We also assessed management’s sensitivities and stress applied within the forecast and
independently stressed the forecasts to note the impact on regulatory capital based on the stress applied.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
30
Independent Auditors’ report to the members of WH Ireland Group PLC
For the year ended 31 March 2020
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Besides going concern, as noted above, there were no other matters that were considered key audit matters.
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. For planning, we consider materiality to be the magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
Importantly, misstatements below this level will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on
the financial statements.
Based on our professional judgement, we determined materiality for the Group financial statements as a whole to be
£343k (2019: £360k), which represents 1.6% (2019: 1.5%) of the Group revenue for the year. We used revenue as the
most important benchmark as the Group is loss-making and given the importance of revenue as a measure for
shareholders in assessing the performance of the Group. The Parent Company's materiality was determined at £325k
(2019: £324k) which represents 1.75% (2019: 2%) of total assets as it is a holding company focused on managing its
investments.
Our audit work on each component of the Group was executed at levels of materiality applicable to the individual entity,
all of which were lower than Group materiality, ranging from £325k to £18k for the two significant components.
Performance materiality is the application of materiality at the individual account or balance level set at an amount to
reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality. On the basis of our risk assessment together with our assessment of the Group’s overall control
environment, our judgment was that overall performance materiality for the Group should be 75% (2019: 75%) of
materiality, namely £257k (2019: £270k). The parent company’s performance materiality was set at 75% (2019: 75%)
which totalled £244k (2019: £243k).
We agreed with the Audit Committee that we would report to them all audit differences in excess of £17k (2019: £18k)
and £17k (2019: £16k) for the Parent Company, as well as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
We tailored our audit to ensure we have performed sufficient work to be able to give an onion on the financial statements
as a whole taking into account the structure of the Group and its accounting processes and controls.
The Group manages its operations through subsidiaries of the Parent Company, the main trading entity, WH Ireland
Limited, as well as other components. The Group audit engagement team carried out full scope audits for the Parent
Company and the other significant components. Non-significant components represent dormant entities, with the only
material balances in these companies being inter-company balances. These were substantively audited by the Group audit
engagement team.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
31
Independent Auditors’ report to the members of WH Ireland Group PLC
For the year ended 31 March 2020
OTHER INFORMATION
The other information comprises the information included in the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us
to report to you if, in our opinion:
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
•
the Parent Company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
32
Independent Auditors’ report to the members of WH Ireland Group PLC
For the year ended 31 March 2020
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Daniel Taylor (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
Date: 9 July 2020
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
33
Consolidated statement of comprehensive income
For the year ended 31 March 2020
Continuing operations
Revenue
Administrative expenses
Expected credit loss
Operating loss
Operating loss before exceptional items:
Exceptional items
Operating (loss)/profit after exceptional items
Realised gains/ (losses)
Finance income
Finance expense
Loss before tax
Tax income/(charge)
Loss from continuing operations
Profit/(loss) from discontinued operations
Loss and total comprehensive income for the year
Earnings per share
From continuing operations
Basic
Diluted
From discontinued operations
Basic
Diluted
Total
Basic
Diluted
Year ended
31 March 2020
£'000
Year ended
31 March 2019
£'000
Note
3&5
6
6
6
8
8
9
10
12
21,608
(24,697)
(44)
(3,133)
(2,163)
(970)
(3,133)
(43)
11
(151)
(3,316)
-
(3,316)
117
(3,199)
(7.38p)
(7.38p)
0.26p
0.26p
(7.11p)
(7.11p)
22,434
(32,135)
(641)
(10,342)
(6,229)
(4,113)
(10,342)
234
12
(17)
(10,113)
(1,176)
(11,289)
(37)
(11,326)
(35.33p)
(35.33p)
(0.12p)
(0.12p)
(35.44p)
(35.44p)
Notes on pages 41 to 77 are an integral part of these financial statements.
There were no items of other comprehensive income for the current year or prior period.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
34
Consolidated and Company statement of financial position
For the year ended 31 March 2020
Group
Company
31 March
2020
£'000
31 March
2019
£'000
31 March
2020
£'000
31 March
2019
£'000
Note
ASSETS
Non-current assets
Intangible assets
Investment in subsidiaries
Property, plant and equipment
Investments
Right of use asset
Subordinated Loan
Loan receivable
Current assets
Trade and other receivables
Other investments
Subordinated Loan
Cash and cash equivalents
Assets held for sale
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Lease liability
Deferred consideration
Liabilities classified as held for sale
Non-current liabilities
Lease liability
Accruals and deferred income
Total liabilities
Total net assets
Capital and reserves
Share capital
Share premium
Other reserves
Retained earnings
Treasury shares
Shareholders’ funds
14
15
13
16
17
18
27
20
21
18
22
10
23
17
24
10
17
27
758
-
831
278
2,474
-
-
4,341
5,944
1,223
-
2,580
2,128
11,875
16,216
(4,103)
(629)
-
(704)
(5,436)
(2,274)
-
(2,274)
(7,710)
8,506
2,335
14,414
981
(8,580)
(644)
8,506
880
-
1,162
229
-
-
-
2,271
5,698
1,168
-
7,702
-
14,568
16,839
(6,468)
-
(1,194)
-
(7,662)
-
(412)
(412)
(8,074)
8,765
2,044
11,908
981
(5,524)
(644)
8,765
-
19,298
-
-
-
-
644
19,942
2,589
-
985
-
-
3,574
23,516
(156)
-
-
-
(156)
-
-
-
(156)
23,360
2,335
14,414
228
6,383
-
23,360
-
16,501
-
-
985
644
18,130
2,461
-
-
3
-
2,464
20,594
(95)
-
-
-
(95)
-
-
-
(95)
20,499
2,044
11,908
228
6,319
-
20,499
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
35
Consolidated and Company statement of financial position
For the year ended 31 March 2020
The notes on pages 41 to 77 are an integral part of these financial statements.
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the
Company statement of comprehensive income. The loss after tax of the Company for the year was £45k (2019: £113k).
These financial statements were approved by the Board of Directors on 9 July 2020 and were signed on its behalf by:
P Tansey
Director
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
36
Consolidated and Company statement of cash flows
For the year ended 31 March 2020
Group
Company
Year ended
31 Mar
2020
£'000
Year ended Year ended
31 Mar
2020
£'000
31 Mar
2019
£'000
Year ended
31 Mar
2019
£'000
Notes
Operating activities:
(Loss)/profit for the year:
Continuing operations
Discontinuing operations
Adjustments for:
Depreciation, amortisation and impairment
Finance income
Finance expense
Tax
Losses/(gains) in investments
Non-cash adjustment for share option charge
Decrease/(increase) in trade and other
receivables
(Decrease)/increase in trade and other payables
Decrease/(increase) in loan receivable
(Decrease)/increase in provisions
(Decrease)/increase in deferred consideration
Decrease/(increase) in current asset
investments
Net cash (used in)/generated from operations
Income taxes received/(paid)
Net cash inflows from operating activities
Investing activities:
Proceeds from sale of investments
Interest received
Investment in subsidiary
Repayment of deferred consideration
Acquisition of property, plant and equipment
Acquisition of investments
Net cash (used in)/generated from investing
activities
Finance activities:
Proceeds from issue of share capital
Lease liability payments
Interest paid
Net cash (used in)/generated from financing
activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(3,316)
117
(3,199)
(11,289)
(37)
(11,326)
1,225
(12)
166
-
43
109
(1,586)
(1,304)
-
-
-
(55)
(4,613)
-
(4,613)
-
12
-
(1,194)
(214)
-
3,295
(13)
17
1,176
(234)
153
1,253
852
-
(68)
108
(476)
(5,263)
247
(5,016)
642
13
-
(1,216)
(380)
(275)
(45)
-
(45)
-
-
-
-
-
109
(128)
61
-
-
-
-
(3)
(3)
-
-
(113)
-
(113)
2
-
-
60
-
153
(103)
(98)
102
-
-
-
3
-
3
-
-
(2,797)
-
-
-
(6,951)
-
-
-
13,
14, 17
8, 10
8, 10
9
7
21
9
1
8, 10
15
24
13
(1,396)
(1,216)
(2,797)
(6,951)
2,797
(754)
(2)
6,956
(282)
(17)
2,797
-
-
6,956
-
-
8
2,041
6,657
2,797
6,956
(3,968)
7,702
3,734
425
7,277
7,702
(3)
3
-
8
(5)
3
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
37
Consolidated and Company statement of cash flows
For the year ended 31 March 2020
Notes to the Statement of Cash Flows (Direct Method and Indirect Method)
Reconciliation of Group cash and cash equivalents at the end of the year:
Group
Cash and cash equivalents from continuing operations
Cash and cash equivalents from discontinuing operations
Cash and cash equivalents at end of year
Reconciliation of Group and Company liabilities arising from financing activities in the year:
Group
Lease liability
As at
Transition
Cash flows
Non-cash
1 April 2019
£'000
-
-
to IFRS 16
£'000
3,811
3,811
£'000
(754)
(754)
changes
£'000
166
166
Reconciliation of Group and Company liabilities arising from financing activities in the prior year:
Year ended
31 Mar 2020
£'000
2,580
1,154
3,734
As at
31 March
2020
£'000
3,223
3,223
Group
Lease liability
As at
1 April 2018
£'000
282
282
Cash flows
£'000
(282)
(282)
Non-cash
changes
£'000
-
-
As at
31 March 2019
£'000
-
-
There are no Company liabilities arising from financing activities.
The notes on pages 41 to 77 are an integral part of these financial statements.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
38
Consolidated and Company changes in equity
For the year ended 31 March 2020
Group
Balance at 1 April 2018
Loss and total comprehensive income
for the year
Employee share option scheme
Deferred tax on employee share
options
New share capital issued
Transfer of available-for-sale reserves
to retained earnings
Other movements
Share options exercised
Dividends
Balance at 31 March 2019
Loss and total comprehensive income
for the year
Employee share option scheme
Deferred tax on employee share
options
New share capital issued
Other movements
Share options exercised
Dividends
Balance at 31 March 2020
Share
Share
capital premium
£'000
5,503
£'000
1,493
Available
for-sale
reserves
£'000
7
-
-
-
-
-
-
551
6,405
-
-
-
-
-
-
(7)
-
-
-
2,044
-
-
-
11,908
-
-
-
-
-
-
291
-
-
-
2,335
2,506
-
-
-
14,414
-
-
-
-
-
-
-
-
-
-
-
Other Retained Treasury
shares
earnings
£'000
£'000
(746)
5,633
reserves
£'000
982
-
-
-
-
-
(1)
-
-
981
-
-
-
-
-
-
-
981
(11,326)
153
(21)
-
7
30
-
-
(5,524)
(3,199)
109
-
-
34
-
-
(8,580)
-
-
-
-
-
102
-
-
(644)
-
-
-
-
-
-
-
(644)
Total
equity
£'000
12,872
(11,326)
153
(21)
6,956
131
-
-
8,765
(3,199)
109
-
2,797
34
-
-
8,506
The notes on pages 41 to 77 are an integral part of these financial statements.
Retained earnings include £10k ESOT reserve.
At 31 March 2020 the total number of issued ordinary shares is 48.70 million shares of 5p each (2019: 42.87 million shares
of 5p each). 5.80 million shares were issued during the period (2019: 13.00 million).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
39
Consolidated and Company changes in equity
For the year ended 31 March 2020
Company
Balance at 1 April 2018
Loss and total comprehensive income for
the year
Employee share option scheme
Deferred tax on employee share options
New share capital issued
Other movements
Share options exercised
Dividends
Balance at 31 March 2019
Profit/(loss) after tax
Employee share option scheme
Deferred tax on employee share options
New share capital issued
Other movements
Share options exercised
Dividends
Balance at 31 March 2020
Share
capital
£'000
1,493
Share
premium
£'000
5,503
Other Retained
earnings
£'000
6,298
reserves
£'000
229
Treasury
shares
£'000
-
-
-
-
551
-
-
-
2,044
-
-
-
291
-
-
-
2,335
-
-
-
6,405
-
-
-
11,908
-
-
-
2,506
-
-
-
14,414
(113)
153
(21)
-
2
-
-
6,319
(45)
109
-
-
-
-
-
6,383
-
-
-
(1)
-
-
228
-
-
-
-
-
-
-
228
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
equity
£'000
13,523
(113)
153
(21)
6,956
1
-
-
20,499
(45)
109
-
2,797
-
-
-
23,360
The notes on pages 41 to 77 are an integral part of these financial statements.
The nature and purpose of each reserve, whether Consolidated or Company only, is summarised below:
Share premium
The share premium is the amount raised on the issue of shares that is in excess of the nominal value of those shares and
is recorded less any direct costs of issue.
Other reserves
Other reserves comprise a (consolidated) merger reserve of £753k (2019: £753k) and a (consolidated) capital redemption
reserve of £228k (2019: £228k).
Retained earnings
Retained earnings reflect accumulated income, expenses, gains and losses, recognised in the statement of comprehensive
income and the statement of recognised income and expense and is net of dividends paid to shareholders. It includes
£10k of ESOT reserve.
Treasury shares
Purchases of the Company’s own shares in the market are presented as a deduction from equity, at the amount paid,
including transaction costs. That is, shares are shown as a separate class of shareholders’ equity with a debit balance.
This includes shares in the company held by the EBT or ESOT, both of which are consolidated within the consolidated
figures.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
40
Notes to the financial statements
For the year ended 31 March 2020
1. GENERAL INFORMATION
WH Ireland Group plc is a public company incorporated in the United Kingdom. The shares of the Company are traded
on the Alternative Investment Market (AIM), a market operated by the London Stock Exchange Group plc. The address
of its registered office is 24 Martin Lane, London, EC4R 0DR.
BASIS OF PREPARATION
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out in note
3. The policies have been consistently applied to all the years presented, unless otherwise stated.
The consolidated financial statements are presented in GBP, which is also the Group’s functional currency. Amounts are
rounded to the nearest thousand, unless otherwise stated. These financial statements have been prepared in accordance
with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively
IFRSs) as adopted by the EU.
Despite the uncertainty around Brexit and Covid-19, the performance in the first period of the new financial year has
been significantly above our stressed scenario analysis. Decisive actions around cost reductions have already taken place
and this has ensured that the Group is able to meet its regulatory capital requirement. An analysis of potential negative
scenarios were conducted as part of the going concern review to assess the potential impact on revenue, asset values
with a particular focus on the more variable component parts of our overall revenue, corporate finance fees and
commission. Furthermore, reverse stress tests were modelled to determine when a liquidity crisis or a breach of
regulatory capital in the Group would occur.
Whilst the Directors consider it unlikely, particularly given the profitable performance of the Group since the period end,
the long term impact of Covid-19 on the economy and in turn the Group’s variable transactional based revenue is
unknown. In the event that these revenues are 30% below forecast a material uncertainty exists which may cast
significant doubt on the Group's ability to continue as a going concern without taking remedial action that could include
cost reduction programmes, assets sales and the raising of further capital in order to ensure that regulatory capital
requirements are maintained. The financial statements do not include the adjustments that would result if the company
was unable to continue as a going concern
Based on the above, the Group continues to adopt the going concern basis in preparing the financial statements. This is
discussed in more detail in the Directors’ Report.
2. ADOPTION OF NEW AND REVISED STANDARDS
New standards, amendments and interpretations adopted
This is the first set of the Group’s annual financial statements in which IFRS 16 Leases has been applied, the impact of
which is described below.
IFRS 16 Leases
The standard has been adopted from 1 April 2019 using the modified retrospective approach. Adoption of IFRS 16 has
resulted in the group recognising right of use assets and lease liabilities for all contracts that are, or contain, a lease. On
transition, the Group has recognised a right of use asset of £3.4m and lease liabilities of £3.8m. The Right of use asset
was measured at an amount equal to the lease liability adjusted for deferred rent balance at 31 March 2019 of £0.4m
Lease liabilities are measured at the present value of the remaining lease payments discounted using an incremental
borrowing rate as at 1 April 2019. The weighted average incremental borrowing rate applied was 5%.
Right of use assets are initially measured at the amount of the lease liabilities and adjusted by the amount of any prepaid
or accrued lease payments as at 31 March 2019.
As permitted under IFRS 16, all leases are accounted for by recognising a right of use asset and a lease liability except for:
- Leases with a term of 12 months or less remaining at 1 April 2019
- Leases of low value assets
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
41
Notes to the financial statements
For the year ended 31 March 2020
2. ADOPTION OF NEW AND REVISED STANDARDS (CONTINUED)
IFRS 16 Leases (continued)
Lease liabilities are subsequently increased by the interest charge using the incremental borrowing rate and reduced by
the contractual payments. Right of use assets are amortised on a straight line basis over the remaining term of the lease.
The reconciliation between the operating lease commitment as at 31 March 2019 and the lease liability as at 1 April 2019
is as follows:
Operating lease commitment at 31 March 2019
Effect of applying the Group's incremental borrowing rate
Effect of extending lease term
Lease liability recognised as at 1 April 2019
3. SIGNIFICANT ACCOUNTING POLICIES
£'000
4,192
(583)
202
3,811
Basis of consolidation
Where the company has control over an investee, it is classified as a subsidiary. The company controls an investee if all
three of the following elements are present: power over the investee, exposure to variable returns from the investee and
the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the company and its subsidiaries (“the Group”) as if they
formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in
full. The consolidated financial statements incorporate the results of business combinations using the acquisition method.
In the statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially
recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained until the date on which control ceased.
In the Company’s accounts, investments in subsidiary undertakings and associates are stated at cost less any provision
for impairment.
Business combinations
All business combinations are accounted for by applying the purchase method. The purchase method involves
recognition, at fair value, of all identifiable assets and liabilities, including contingent liabilities, of the subsidiary at the
acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to
acquisition. The cost of business combinations is measured based on the fair value of the equity or debt instruments
issued and cash or other consideration paid, plus any directly attributable costs. Any directly attributable costs relating
to business combinations before or after the acquisition date are charged to the statement of comprehensive income in
the period in which they are incurred.
Goodwill arising on a business combination represents the excess of cost over the fair value of the Group’s share of the
identifiable net assets acquired and is stated at cost less any accumulated impairment losses. Goodwill is tested annually
for impairment. Any impairment is recognised immediately in the statement of comprehensive income and is not
subsequently reversed. On disposal of a subsidiary the attributable amount of goodwill that has not been subject to
impairment is included in the determination of the profit or loss on disposal.
Discontinued operations
The Group present its results from its discontinued operations separately from its continuing operations. In line with IFRS
5, an operation is classed as discontinued if it has been or in the process of being disposed, represents either a separate
major line of business or a geographical area of operations or is part of a single co-ordinated plan to dispose of a separate
major line of business or geographical area of operation
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
42
Notes to the financial statements
For the year ended 31 March 2020
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assets and liabilities held for sale
An asset or liability is classified as held for sale if it’s carrying value is intended to be recovered through its sale rather
than its continuing use, management is committed to a plan to sell, the asset is available for immediate sale, an active
programme to locate a buyer has been initiated, the sale is highly probable within 12 months of classification as held for
sale and the actions required to complete the transaction indicate it is unlikely it will be significantly changed or
withdrawn. Assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Any
impairment losses is recognised through the consolidated comprehensive income.
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will
flow into the Group. It is measured based on the consideration specified in a contract with a customer.
Revenue comprises: brokerage commission, investment management fees, corporate finance fees, commission and fees
earned from the provision of independent financial advice.
Brokerage commission is recognised when receivable in accordance with the date of the underlying transaction.
It is a variable fee based on a percentage of the transaction and therefore performance obligation is satisfied at
the date of the underlying transaction to which the brokerage relates.
Investment management fees are recognised in the period in which the related service is provided. It is a variable
fee based on the average daily market value of assets under management and is invoiced on a calendar quarter
basis in arrears. The performance obligation is satisfied over time as the contractual obligations are on ongoing
throughout the period under contract. The revenue accrued but not yet invoiced is recognised as a contract
asset.
Corporate finance advisory fees are fixed fees agreed on a deal by deal basis and might include non-cash
consideration received in the form of shares, loan notes, warrants or other financial instruments recognised at
the fair value on the date of receipt and therefore the performance obligation is satisfied at a point in time when
the Group has fully completed the performance obligations per the contract.
Retainer fees are recognised over the length of time of the agreement. Fees are fixed and invoiced quarterly in
advance based on the agreed engagement letter. The performance obligation is satisfied over time as the
contractual obligations are on ongoing throughout the period under contract. The deferred revenue is
recognised as a contract liability.
Corporate placing commissions are variable fees agreed on a deal by deal basis based on a percentage of the
funds raised as part of a transaction. This includes non-cash consideration received in the form of shares, loan
notes, warrants or other financial instruments recognised at the fair value on the date of receipt. Given that fees
related to this work are success based, there is a significant risk of reversal of the variable revenue and therefore
the performance obligation is satisfied at a point in time when the transaction is completed.
Employee benefits
The Group contributes to employees’ individual money purchase personal pension schemes. The assets of the schemes
are held separately from those of the Group in independently administered funds. The amount charged to the statement
of comprehensive income represents the contributions payable to the schemes in respect of the period to which they
relate.
Short term employee benefits are those that fall due for payment within twelve months of the end of the period in which
employees render the related service. The cost of short term benefits is not discounted and is recognised in the period
in which the related service is rendered. Short term employee benefits include cash-based incentive schemes and annual
bonuses.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
43
Notes to the financial statements
For the year ended 31 March 2020
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Share-based payments
The share option programmes allows Group employees to receive remuneration in the form of equity-settled share-
based payments granted by the Company.
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted. The fair value of the options granted is measured using an option valuation model. The cost of equity-
settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance or service conditions are fulfilled (the vesting period), ending on the date on which the relevant employees
become fully entitled to the award (the vesting date). The cumulative expense recognised for equity settled transactions,
at each reporting date until the vesting date, reflects the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately vest. The statement of comprehensive income
charge or credit for a period represents the movement in cumulative expense recognised at the beginning and end of
that period.
Where the terms of an equity-settled award are modified, an incremental value is calculated as the difference between
the fair value of the repriced option and the fair value of the original option at the date of re-pricing. This incremental
value is then recognised as an expense over the remaining vesting period in addition to the amount recognised in respect
of the original option grant.
Where an equity-settled award is cancelled or settled (that is, cancelled with some form of compensation) it is treated as
if it had vested on the date of cancellation and any expense not yet recognised for the award is recognised immediately
However, if a new award is substituted for the cancelled award and is designated as a replacement award on the date
that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as
described in the previous paragraph. Any compensation paid up to the fair value of the award is accounted for as a
deduction from equity. Where an award is cancelled by forfeiture, when the vesting conditions are not satisfied, any costs
already recognised are reversed (subject to exceptions for market conditions).
In all instances, the charge/credit is taken to the statement of comprehensive income of the Group or Company by which
the individual concerned is employed.
Employee Benefit Trust (EBT)
The cost of purchasing own shares held by the EBT are shown as a deduction against equity. The proceeds from the sale
of own shares held increase equity. Neither the purchase nor sale of own shares leads to a gain or loss being recognised
in the consolidated statement of comprehensive income.
Employee Share Ownership Trust (ESOT)
The Company has established an ESOT. The assets and liabilities of this trust comprise shares in the Company and loan
balances due to the Company. The Group includes the ESOT within these consolidated Financial Statements and therefore
recognises a Treasury shares reserve in respect of the amounts loaned to the ESOT and used to purchase shares in the
Company. Any cash received by the ESOT on disposal of the shares it holds, will be used to repay the loan to the Company.
Treasury shares
The costs of purchasing Treasury shares are shown as a deduction against equity. The proceeds from the sale of own
shares held increase equity. Neither the purchase nor sale of own shares leads to a gain or loss being recognised in the
consolidated statement of comprehensive income.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
44
Notes to the financial statements
For the year ended 31 March 2020
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income taxes
Income tax on the profit or loss for the periods presented, comprising current tax and deferred tax, is recognised in the
statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using rates enacted or substantively enacted
at the reporting period end date and any adjustment to tax payable in respect of previous years.
•
Deferred tax is provided for temporary differences, at the reporting period end date, between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes. The following temporary
differences are not provided for;
goodwill which is not deductible for tax purposes;
the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and
temporary differences relating to investments in subsidiaries to the extent that they will probably not reverse in
the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount
of assets and liabilities, using tax rates enacted or substantively enacted at the reporting period end date (note 19).
A deferred tax asset is recognised for all deductible temporary differences and unused tax losses only to the extent that
it is probable that future taxable profits will be available against which the assets can be utilised. No deferred tax assets
have been recognised.
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is calculated, using
the straight line method, to write down the cost or revalued amount of plant and equipment over the assets’ expected
useful lives, to their residual values, as follows:
Computers, fixtures and fittings
–
4 to 7 years
Intangible assets
Measurement
Intangible assets with finite useful lives that are acquired separately are measured, on initial recognition at cost. Following
initial recognition, they are carried at cost less accumulated amortisation and any accumulated impairment. The cost of
intangible assets acquired in a business combination is their fair value at the date of acquisition.
Intangible assets other than goodwill are amortised over the expected pattern of their consumption of future economic
benefits, to write down the cost of the intangible assets to their residual values as follows:
Client relationships
–
10 years
The amortisation period and method for an intangible asset are reviewed at least at each financial year end. Changes in
the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset or its
residual value are accounted for by changing the amortisation period or method and treated as changes in accounting.
Impairment
The carrying amounts of the Group’s intangible assets are reviewed when there is an indicator of impairment and the
asset’s recoverable amount is estimated.
The recoverable amount is the higher of the asset’s fair value less costs to sell (or net selling price) and its value-in-use.
Value-in- use is the discounted present value of estimated future cash inflows expected to arise from the continuing use
of the asset and from its disposal at the end of its useful life. Where the recoverable amount of an individual asset cannot
be identified, it is calculated for the smallest cash-generating unit (CGU) to which the asset belongs. A CGU is the smallest
identifiable group of assets that generates cash inflows independently.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
45
Notes to the financial statements
For the year ended 31 March 2020
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Intangible assets (continued)
When the carrying amount of an asset (or CGU) exceeds its recoverable amount, the asset (or CGU) is considered to be
impaired and is written down to its recoverable amount. An impairment loss is immediately recognised as an expense.
Any subsequent reversal of impairment credited to the statement of comprehensive income shall not cause the carrying
amount of the intangible asset to exceed the carrying amount that would have been determined had no impairment
been recognised.
Leased assets
Measurement and recognition of leases as a lessee
For any new lease contracts entered into on or after 1 April 2019, as permitted under IFRS 16, the Group recognises a
right of use asset and a lease liability except for:
- Leases with a term of 12 months or less from the lease commencement date
- Leases of low value assets
Lease liabilities are measured at the present value of the unpaid lease payments discounted using an incremental
borrowing rate.
Right of use assets are initially measured at the amount of the lease liabilities plus initial direct costs, costs associated
with removal and restoration and payments previously made. Right of use assets are amortised on a straight line basis
over the term of the lease.
Lease liabilities are subsequently increased by the interest charge using the incremental borrowing rate and reduced by
the contractual payments.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to
the contractual provisions of the instrument.
Financial assets and liabilities
Investments are recognised and derecognised on the trade date where the purchase or sale of an investment is under a
contract whose terms require delivery of the investment within the timeframe established by the market concerned, and
are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value
through profit or loss, which are initially measured at fair value.
Assets and liabilities are presented net where there is a legal right to offset and an intention to settle in that way.
The three principal classification categories for financial assets are: measured at amortised cost, fair value through other
comprehensive income (FVOCI) and fair value through profit or loss (FVTPL). The classification of financial assets under
IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow
characteristics.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model
for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at
FVTPL:
-
-
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
46
Notes to the financial statements
For the year ended 31 March 2020
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (continued)
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that
otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.
Assets held at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend
income, are recognised in profit or loss.
Financial assets at amortised cost are subsequently measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are
recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective
interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and
losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at OCI are subsequently measured at fair value. Dividends are recognised as income in profit or loss
unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are
recognised in OCI and are never reclassified to profit or loss.
Financial liabilities
Bank loans and loan notes are initially recognised as financial liabilities at the fair value of the consideration received.
Subsequent to initial recognition, bank loans and loan notes are measured at amortised cost using the effective interest
rate method.
Trade payables
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The Directors consider
that the carrying amount of trade payables approximates to their fair value.
Provisions
A provision is recognised when a present legal or constructive obligation has arisen as a result of a past event and it is
probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.
Deferred consideration
Deferred consideration is recognised at the discounted present value of amounts payable. Subsequent to initial
recognition, it is rebased over the period in which the consideration is payable, with the unwinding of the discount being
taken to the statement of comprehensive income.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
47
Notes to the financial statements
For the year ended 31 March 2020
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of financial statements in accordance with IFRS requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
There are no significant accounting judgements relevant to the application of these policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
reasonable expectations of future events. The estimates and judgements 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:
Amortisation and impairment of non-financial assets
As noted above, the Group estimates the useful economic lives of intangible assets, in order to calculate the appropriate
amortisation charge. This is done by the Directors using their knowledge of the markets and business conditions that
generated the asset, together with their judgement of how these will change in the foreseeable future.
Where an indicator of impairment exists, value in use calculations are performed to determine the appropriate carrying
value of the asset. The value in use calculation requires the Directors to estimate the future cash flows expected to arise
for the CGU and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less
than expected, a material impairment loss may arise (see note 14).
Investments in subsidiaries
Where an indicator of impairment exists, management uses its judgement to assess the carrying value of the asset by
determining the fair value by independent assessment of the carrying value of the business units and by comparative
analysis against other similar businesses in the peer group. The carrying value of investments in subsidiaries at 31 March
2020 was £19.3m (see note 15).
Going Concern
Management has used its judgement and knowledge of the business in preparing detailed financial forecasts for the
period to September 2021 which consider the funding and capital position of the Group. The forecasts take into account
foreseeable downside risks, based on the information that is available to the Directors at the time of the approval of
these financial statements (see note 1).
There remains uncertainty over what the future impact on the economy, the Group and its business will be as a result of
Brexit and Covid-19. However, this is being continuously monitored by the Group and the stressed forecast prepared to
September 2021 is being reviewed on a regular basis. This is to ensure that if there is any risk to liquidity and capital
position, decisive actions could be taken immediately.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
48
Notes to the financial statements
For the year ended 31 March 2020
5. SEGMENT INFORMATION
The Group has two principal operating segments, Wealth Management (WM) and Corporate & Investment Broking (CIB)
and a number of minor operating segments that have been aggregated into one operating segment.
The WM division offers investment management advice and services to individuals and contains our Wealth Planning
business, giving advice on and acting as intermediary for a range of financial products. The CIB division provides corporate
finance and corporate broking advice and services to companies and acts as Nominated Adviser (Nomad) to clients listed
on the Alternative Investment Market (‘AIM’) and contains our Institutional Sales and Research business, which carries
out stockbroking activities on behalf of companies as well as conducting research into markets of interest to its clients.
All divisions are located in the UK or the Isle of Man. Each reportable segment has a segment manager who is directly
accountable to, and maintains regular contact with, the Chief Executive Officer.
No customer represents more than ten percent of the Group’s revenue.
The majority of the Group’s revenue originates within the UK with a non-material element originating overseas in the Isle
of Man which has been included in “Other Group companies”.
The following tables represent revenue and cost information for the Group’s business segments:
Year to 31 March 2020
Revenue
Direct costs
Contribution
Indirect costs
Segment result
Executive board cost
Investment gains/(losses)
Depreciation
Amortisation
Finance income
Finance expense
(Loss)/profit before tax
Tax
(Loss)/profit for the year
WM
£'000
13,790
(11,085)
2,705
CIB
£'000
7,860
(7,674)
186
2,705
125
-
-
-
-
(65)
2,765
-
2,765
186
125
(43)
-
-
-
(28)
240
-
240
Head
Office
£'000
-
-
-
(4,501)
(4,501)
(1,162)
-
(482)
(122)
11
(58)
(6,314)
-
(6,314)
Other
Group
Companies
£'000
1,213
(1,070)
143
-
143
-
-
(17)
-
1
(17)
110
-
110
Group
£'000
22,863
(19,829)
3,034
(4,501)
(1,467)
(912)
(43)
(499)
(122)
12
(168)
(3,199)
-
(3,199)
Less
Discontinued
Operations
£'000
(1,255)
1,105
(150)
-
(150)
-
-
17
-
(1)
17
(117)
-
(117)
Continuing
Operations
£'000
21,608
(18,724)
2,884
(4,501)
(1,617)
(912)
(43)
(482)
(122)
11
(151)
(3,316)
-
(3,316)
* Other Group companies include WH Ireland (IOM) Limited, WH Ireland Plc.. Discontinued operations are included in other Group companies.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
49
Notes to the financial statements
For the year ended 31 March 2020
5. SEGMENT INFORMATION (CONTINUED)
Year to 31 March 2019
Revenue
Direct costs
Contribution
Indirect costs
Segment result
Executive board cost
Investment gains/(losses)
Depreciation
Amortisation and
impairment
Finance income
Finance expense
(Loss)/profit before tax
Tax
(Loss)/profit for the year
WM
£'000
14,988
(16,594)
(1,606)
-
(1,606)
71
-
-
CIB
£'000
7,639
(7,457)
182
-
182
71
234
-
Head
Office
£'000
-
(146)
(146)
(4,179)
(4,325)
(1,087)
-
(476)
Other
Group
Companies
£'000
1,052
(1,185)
(133)
(258)
(391)
-
-
(16)
Group
£'000
23,679
(25,382)
(1,703)
(4,437)
(6,140)
(945)
234
(492)
-
-
(2,545)
(258)
(2,803)
-
-
(1,535)
-
(1,535)
-
-
487
-
487
12
(17)
(8,438)
(1,176)
(9,614)
1
-
(664)
-
13
(17)
(10,150)
(1,176)
(664)
(11,326)
Less
Discontinued
Operations
£'000
(1,245)
1,269
24
-
24
-
-
14
(1)
-
37
-
37
Continuing
Operations
£'000
22,434
(24,113)
(1,679)
(4,437)
(6,116)
(945)
234
(478)
(2,803)
12
(17)
(10,113)
(1,176)
(11,289)
*Other Group companies include WH Ireland (IOM) Limited, WH Ireland Plc and Stockholm Investments Ltd. Discontinued operations are included in
other Group companies.
Segment assets and segment liabilities are reviewed by the Chief Executive Officer in a consolidated statement of financial
position. Accordingly this information is replicated in the Group Consolidated statement of financial position on page 35.
As no measure of assets or liabilities for individual segments is reviewed regularly by the Chief Executive Officer, no
disclosure of total assets or liabilities has been made.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
50
Notes to the financial statements
For the year ended 31 March 2020
5. SEGMENT INFORMATION (CONTINUED)
The accounting policies of the operating segments are the same as those described in the summary of significant
accounting policies.
Revenue disaggregated by division and timing of recognition below:
Year to 31 March 2020
Point in time
Over time
Total
Year to 31 March 2019
Point in time
Over time
Total
CIB
£'000
4,571
3,289
7,860
CIB
£'000
4,340
3,299
7,639
Head
Office
£'000
-
-
-
Head
Office
£'000
-
-
-
Other
Group
Companies
£'000
77
1,136
1,213
Other
Group
Companies
£'000
131
921
1,052
Less
Discontinued
Operations
£'000
(119)
(1,136)
(1,255)
Less
Discontinued
Operations
£'000
(323)
(922)
(1,245)
Group
£'000
8,682
14,181
22,863
Group
£'000
10,146
13,533
23,679
Continuing
Operations
£'000
8,563
13,045
21,608
Continuing
Operations
£'000
9,823
12,611
22,434
WM
£'000
4,034
9,756
13,790
WM
£'000
5,675
9,313
14,988
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
51
Notes to the financial statements
For the year ended 31 March 2020
6. OPERATING (LOSS)/PROFIT
Group
Operating (loss)/profit is stated after charging/(crediting):
Depreciation of property, plant and equipment
Amortisation of intangibles
Operating lease rentals – property
IFRS 16 depreciation (note 17)
Impairment of intangibles
Employee benefit expense (note 7)
Restructuring and non-recurring legal and regulatory costs
Other administrative expenses
Auditors' remuneration:
Audit of these financial statements
Amounts payable to the principal auditors and their associates in respect of:
- audit of financial statements of subsidiaries pursuant to legislation
- audit related assurance services
Expected credit loss (note 20)
Total
Year ended
31 Mar 2020
£'000
Year ended
31 Mar 2019
£'000
482
122
-
562
-
14,365
970
8,071
478
197
516
-
2,606
18,022
1,507
8,698
25
25
78
22
24,697
44
24,741
54
32
32,135
641
32,776
Other administrative expenses are incurred in the ordinary course of the business and do not include any non-recurring
items.
Exceptional items totalling £970,000 (2019: £4,113,000) is shown below:
Project Discovery*
Restructuring**
Compliance & regulatory projects***
Impairment of goodwill and intangible assets
Total
Notes:
Year to
31 Mar 2020
£'000
268
506
196
-
970
Year to
31 Mar 2019
£'000
442
835
230
2,606
4,113
*As announced on 2 June 2016, the Group entered into a seven year agreement with SEI Investments (Europe) Ltd, to outsource its Private Wealth Management back office
operations and move to a “Model B” arrangement. On account of a number of unforeseen obstacles, significant cost has been incurred in both internal and external resources
dedicated to this project (“Project Discovery”) as the project moves to conclude the transfer of clients and assets from the prior legacy platforms over to SEI.
**During the period ended 31 March 2020, there were some further personnel restructures and a one off project on cost reduction was undertaken. During the year ending
31 March 2019, there were a number of changes within the senior management team and several external hires were made. The costs of these changes, in respect of both
short term consultancy costs and fixed employment related costs, are considered by the Board to be non-trading and exceptional in nature.
*** During the year ending 31 March 2020 and 31 March 2019, the Group incurred various costs in relation to one off regulatory projects.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
52
Notes to the financial statements
For the year ended 31 March 2020
7. EMPLOYEE BENEFIT EXPENSE
Group
Wages and salaries
Bonuses
Social security costs
Other pension costs
Non salaried staff
Other administrative expenses
Charge for share options granted to employees (note 29)
Less amounts included within Restructuring and non-recurring costs
Non-salaried staff are commission-only brokers and therefore do not receive a salary.
Company
Wages and salaries
Bonuses
The average number of persons (including Directors) employed during the year was:
Group
Executive and senior management
Corporate Broking
Wealth Management
Support staff
Salaried staff
Non salaried staff
Total
Company
Executive and senior management
Year ended
31 Mar 2020
£'000
10,690
432
1,583
442
Year ended
31 Mar 2019
£'000
11,938
2,663
1,908
506
13,147
1,315
14,462
109
(206)
14,365
17,015
1,728
18,743
214
(835)
18,122
Year ended
31 Mar 2020
Year ended
31 Mar 2019
£'000
£'000
226
-
226
138
15
153
Year ended
31 Mar 2020
7
34
59
50
150
9
Year ended
31 Mar 2019
7
33
72
62
174
10
159
184
Year ended
31 Mar 2020
5
5
Year ended
31 Mar 2019
4
4
The total amount paid to Directors in the period, including social security costs was £1.0m (2019: £1.2m). Full details of
Directors’ remuneration, including that of the highest paid Director, are disclosed in the Remuneration Report on pages
25-28 of these financial statements.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
53
Notes to the financial statements
For the year ended 31 March 2020
8. FINANCE INCOME AND EXPENSE
Group
Bank interest receivable
Other interest
Finance income
Interest payable on lease liability
Other interest
Finance expense
9. TAX EXPENSE
Group
Current tax expense:
United Kingdom corporation tax at 19% (2019: 19%)
Adjustment in respect of prior years
Total current tax
Deferred tax expense (note 19):
Current year
Effect of change in tax rate
Adjustment in respect of prior years
Total deferred tax
Total tax in the statement of comprehensive income
Equity items:
Deferred tax current year credit/ charge
Total tax in the statement of equity
Year ended
31 Mar 2020
£'000
Year ended
31 Mar 2019
£'000
11
-
11
149
2
151
12
-
12
-
17
-
17
Year ended
31 Mar 2020
£'000
Year ended
31 Mar 2019
£'000
-
-
-
-
-
-
-
-
-
-
-
-
-
1,304
(137)
9
1,176
1,176
(21)
(21)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
54
Notes to the financial statements
For the year ended 31 March 2020
9. TAX EXPENSE (CONTINUED)
The tax expense for the year and the amount calculated by applying the standard United Kingdom corporation tax rate
of 19% (2019: 19%) to profit before tax can be reconciled as follows:
Group
(Loss) before tax
Tax expense using the United Kingdom corporation tax rate of 19% (2019:
19%)
Other expenses not tax deductible
Income not chargeable to tax
Impact of share options
Movement in unrecognised deferred tax
Adjustments in respect of prior years
Difference in overseas tax rates
Effect of other tax rates/credits
Total tax credit in the statement of comprehensive income
Year ended
31 Mar 2020
Year ended
31 Mar 2019
£'000
(3,316)
(630)
71
-
21
568
-
(30)
-
-
£'000
(10,113)
(1,921)
97
(45)
67
3,130
9
(24)
(137)
1,176
10. DISCONTINUED OPERATIONS AND ASSETS & LIABILITIES HELD FOR SALE
The Group announced its intention to sell its subsidiary WH Ireland (IOM) Limited on 29 June 2020. In accordance with
IFRS 5 non-current assets held for sale and discontinued operations, the results for WH Ireland (IOM) Limited are included
in discontinued operations in both the current and prior period; its assets and liabilities have been classified as held for
sale and recorded at the lower of the carrying value and fair value less costs to sell. The associated assets and liability
were therefore presented as held for sale in this year’s financial statements.
Financial performance and cash flow information
Revenue
Administrative expenses
Operating profit
Realised gains/ (losses)
Finance income
Finance expense
Profit/(loss) before tax
Tax income/(charge)
Profit/(loss) from discontinued operations
Year ended
31 Mar 2020
£'000
1,255
(1,122)
133
Year ended
31 Mar 2019
£'000
1,245
(1,283)
(38)
-
1
(17)
117
-
117
-
1
-
(37)
-
(37)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
55
Notes to the financial statements
For the year ended 31 March 2020
10. DISCONTINUED OPERATIONS AND ASSETS & LIABILITIES HELD FOR SALE (CONTINUED)
Net cash (used in)/generated from operations
Net cash (used in)/generated from investing activities
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Year ended
31 Mar 2020
£'000
100
1
(60)
41
Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities relating to WH Ireland (IOM) Limited were reclassified as held for sale at 31 March
2020:
Assets classified as held for sale
Property, plant and equipment
Right of use asset
Trade and other receivables
Cash and cash equivalents
Total assets of subsidiary held for sale
Liabilities directly associated with assets classified as held for sale
Trade and other payables
Lease liability
Total liabilities of subsidiary held for sale
11. DIVIDEND
No dividend is proposed in respect of 2020 (2019: none).
Year ended
31 Mar 2020
£'000
46
321
607
1,154
2,128
Year ended
31 Mar 2020
£'000
(385)
(319)
(704)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
56
Notes to the financial statements
For the year ended 31 March 2020
12. EARNINGS PER SHARE
Basic EPS is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as
treasury shares (note 27).
Diluted EPS is the basic EPS, adjusted for the effect of the conversion into fully paid shares of the weighted average
number of all employee share options outstanding during the year. In a year when the Company presents positive
earnings attributable to ordinary shareholders, anti-dilutive options represent options issued where the exercise price is
greater than the average market price for the period.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:
Group
Weighted average number of shares in issue during the period
(thousands)
From continuing operations
Loss for the year attributable to ordinary shareholders (£'000)
Basic
Diluted
From discontinued operations
Profit for the year attributable to ordinary shareholders (£'000)
Basic
Diluted
Total
Loss for the year attributable to ordinary shareholders (£'000)
Basic
Diluted
Share options are anti-dilutive as they reduce the stated loss per share.
Year ended
31 Mar 2020
Year ended
31 Mar 2019
44,957
44,957
(3,316)
(7.38p)
(7.38p)
117
0.26p
0.26p
(3,199)
(7.11p)
(7.11p)
31,955
31,955
(11,289)
(35.33p)
(35.33p)
(37)
(0.12p)
(0.12p)
(11,326)
(35.44p)
(35.44p)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
57
Notes to the financial statements
For the year ended 31 March 2020
13. PROPERTY, PLANT AND EQUIPMENT
Cost
At 31 March 2018
Additions
Disposals
At 31 March 2019
Additions
Reclassified as held for sale
Disposals
At 31 March 2020
Depreciation and impairment
At 31 March 2018
Charge for the year
Adjustment on disposal
At 31 March 2019
Charge for the year
Reclassified as held for sale
Adjustment on disposal
At 31 March 2020
Net book values
At 31 March 2020
At 31 March 2019
At 31 March 2018
Group
Computers,
fixtures and fittings
£'000
4,930
380
-
5,310
214
(80)
-
5,444
3,656
492
-
4,148
499
(34)
-
4,613
831
1,162
1,274
Company
Computers,
fixtures and fittings
£'000
33
-
-
33
-
-
-
33
31
2
-
33
-
-
33
-
-
2
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
58
Notes to the financial statements
For the year ended 31 March 2020
14. INTANGIBLE ASSETS
Group
Cost
At 31 March 2018
Additions
At 31 March 2019
Additions
At 31 March 2020
Amortisation
At 31 March 2018
Charge for the year
Impairment losses
At 31 March 2019
Charge for the year
At 31 March 2020
Net book values
At 31 March 2020
At 31 March 2019
At 31 March 2018
Client
relationships
£'000
4,581
-
4,581
-
4,581
1,156
197
2,348
3,701
122
3,823
758
880
3,425
Client relationships arise when the group acquires a broker business with an existing client base. These individual broker
businesses each represent a cash generating unit. During the year ending 31 March 2019, a number of brokers left the
business and the group was unable to retain the business formerly undertaken by them. As a result, the client
relationships associated with these cash generating units has been fully impaired.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
59
Notes to the financial statements
For the year ended 31 March 2020
15. SUBSIDIARIES
Company
Beginning of year
Additions
End of year
Year ended
31 Mar 2020
£'000
16,501
2,797
19,298
Year ended
31 Mar 2019
£'000
9,550
6,951
16,501
Investments in subsidiaries are stated at cost less impairment.
The Group raised £2.80m on 22 November 2019 by way of placings to existing and new shareholders. The Group
intends to use the placing to create a significant buffer to its minimum regulatory capital position. The additions in the
year relate to additional subscriptions for shares in WH Ireland Limited, a wholly owned subsidiary, in November 2019.
The Company’s subsidiaries, all of which are included in the consolidated financial statements, are presented below:
Subsidiary
WH Ireland Limited
WH Ireland (IOM) Limited
WH Ireland (Financial Services) Limited
Readycount Limited
Stockholm Investments Limited
ARE Business and Professional Limited
SRS Business and Professional Limited
WH Ireland Nominees Limited
WH Ireland Trustee Limited
Fitel Nominees Limited
Country of
incorporation
England & Wales
Isle of Man
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
Principal
activity
Class of
shares
WM and CIB Ordinary
WM Ordinary
Dormant Ordinary
Dormant Ordinary
Dormant Ordinary
Dormant Ordinary
Dormant Ordinary
Nominee Ordinary
Trustee Ordinary
Nominee Ordinary
Proportion
held by
Group
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Proportion
held by
Company
100%
100%
-
100%
100%
-
-
-
-
-
The registered office of WH Ireland (IOM) Limited is St George’s Tower, Hope Street, Douglas, Isle of Man, IM1 1HR.
The registered office of all other companies listed above is 24 Martin Lane, London, EC4R 0DR.
The following dormant subsidiaries are guaranteed by the Company and therefore take advantage of the Companies
Act (2006) in obtaining exemption from an individual audit:
Subsidiary
WH Ireland (Financial Services) Limited
Readycount Limited
Stockholm Investments Limited
ARE Business and Professional Limited
SRS Business and Professional Limited
WH Ireland Nominees Limited
WH Ireland Trustee Limited
Fitel Nominees Limited
Country of
incorporation
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
England & Wales
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
60
Notes to the financial statements
For the year ended 31 March 2020
16. INVESTMENTS
Group
Financial assets at fair value through profit or loss
At 31 March 2018
At 31 March 2019
At 31 March 2020
Other financial assets at fair value through profit or loss
At 31 March 2018
Additions
Fair value loss
Disposals
At 31 March 2019
Additions
Fair value loss
Disposals
At 31 March 2020
Total investments at 31 March 2020
Total investments at 31 March 2019
Quoted
£'000
-
-
-
Quoted
£'000
1
-
-
-
1
-
-
-
1
1
1
Unquoted
£'000
48
48
48
Warrants
£'000
196
-
289
(305)
180
60
(11)
-
229
277
228
Total
£'000
48
48
48
Total
£'000
197
-
289
(305)
181
60
(11)
-
230
278
229
Financial assets at fair value through profit or loss include equity investments other than those in subsidiary undertakings.
These are measured at fair value with fair value gains and losses recognised through profit and loss.
Other investments, in the main, comprise financial assets designated as fair value through profit or loss and include
warrants and equity investments. Financial assets designated as ‘fair value through profit or loss’ are measured at fair
value with fair value gains and losses recognised directly in the statement of comprehensive income.
Warrants may be received during the ordinary course of business and are designated as fair value through profit or loss.
There is no cash consideration associated with the acquisition.
Fair value, in the case of quoted investments, represents the bid price at the reporting period end date. In the case of
unquoted investments, the fair value is estimated by reference to recent arm’s length transactions. The fair value of
warrants is estimated using established valuation models.
The fair value of the warrants was determined using the Black Scholes model and grouped within level 3 with fair value
measurements derived from formal valuation techniques (see note 25). The key inputs into this calculation are the
share price as at 31 March 2020, exercise price, risk free interest rate and volatility which is based on the share price
movements during the period 1 December 2019 to 31 March 2020.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
61
Notes to the financial statements
For the year ended 31 March 2020
17. RIGHT OF USE ASSET & LEASE LIABILITY
Cost
At 31 March 2019
Adjustment for transition to IFRS16
Restated at 1 April 2019
Reclassified as held for sale
At 31 March 2020
Depreciation and impairment
At 31 March 2019
Charge for the year
Reclassified as held for sale
At 31 March 2020
Net book values
At 31 March 2020
At 31 March 2019
Leasehold Properties
£'000
-
3,399
3,399
(363)
3,036
-
604
(42)
562
2,474
-
Maturity of discounted lease payments in relation to non-cancellable leases
The table below represents the minimum lease payments in relation to non-cancellable leases where the group is a
lessee:
Group
Lease liability
31 March 2020
Payable within 1
year
£'000
Payable in 2 to 5
years
£'000
Payable after
more than 5
years
£'000
Total contractual
payments
£'000
629
1,905
369
2,903
The following represents the lease expense in relation to leases which is recognised in the statement of comprehensive
income:
Group
Depreciation of right of use asset
Interest charge
Total charge
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
Year ended
31 Mar 2020
£'000
562
149
711
Year ended
31 Mar 2019
£'000
-
-
-
62
Notes to the financial statements
For the year ended 31 March 2020
17. RIGHT OF USE ASSET & LEASE LIABILITY (CONTINUED)
Nature of leases
The Group leases a number of properties in the jurisdictions it operates.
These leases are usually for a fixed term although the Group sometimes negotiates break clauses in its leases. On a case-
by-case basis, the Group will consider whether the absence of a break clause would exposes the group to excessive risk.
Typically factors considered in deciding to negotiate a break clause include:
- the length of the lease term;
- the economic stability of the environment in which the property is located; and
- whether the location represents a new area of operations for the Group
As at 31 March 2020, the carrying amounts of the lease liabilities are not reduced by the amounts that would not be paid
as a result of exercising the break clauses because the Group does not anticipate to exercise its rights to the break clauses.
18. SUBORDINATED LOAN
Company
Beginning of year
Additions
End of year
Year ended
31 Mar 2020
£'000
985
-
985
Year ended
31 Mar 2019
£'000
985
-
985
This interest-free, subordinated loan was originally issued to WH Ireland (IOM) Limited on 31 March 2014 and has been
increased in line with the needs of the subsidiary. As part of the agreement for the sale of WH Ireland (IOM) Limited,
announced on 29 June 2020, the subordinated loan will be repaid on completion. Accordingly, the loan has been classified
as a current asset. The impact of applying IFRS 9 has been considered and probability of default was assessed and
consequently, it was determined that the expected credit loss is nil.
19. DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax is provided for temporary differences, at the reporting period end date, between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes using a tax rate of 19% (2019: 19%). A deferred tax
asset is recognised for all deductible temporary differences and unutilised tax losses only to the extent that it is probable
that future taxable profits will be available against which the assets can be utilised. Deferred tax assets are reduced to
the extent that it is no longer probable that the related tax benefit will be realised.
No deferred tax asset or liability has been recognised in the year. The balance as at 31 March 2020 is £nil (2019: £nil).
The unrecognised tax losses amount to £19.5m (2019: £16.5m)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
63
Notes to the financial statements
For the year ended 31 March 2020
20. TRADE AND OTHER RECEIVABLES
Trade receivables
Amounts due from Group companies
Other receivables
Accrued income
Prepayments
Group
31 Mar 2020 31 Mar 2019
£'000
2,082
-
637
2,547
432
5,698
£'000
1,184
-
2,032
1,995
733
5,944
Company
31 Mar 2020
£'000
-
2,477
100
-
12
2,589
31 Mar 2019
£'000
-
2,383
75
(1)
4
2,461
The carrying value of trade and other receivable balances are denominated fully in British pounds (2019: 100%).
Accrued income relates to management fee accrual. Management fees are accrued on a monthly basis and reconciled
to fees collected quarterly. Consideration to IFRS 9 has been made and it has been determined that there is a low
probability of default and therefore the expected credit loss is not material.
The impact of applying IFRS 9 to intercompany balances for the Company has been considered and probability of
default was assessed and consequently, it was determined that the expected credit loss is not material.
Fees and charges owed by clients are generally considered to be past due where they remain unpaid five working days
after the relevant billing date. At 31 March 2020, trade receivables (net of provisions for impairment and doubtful debts)
comprised of the following:
Not past due
Up to 5 days due
from 6 to 15 days past due
From 16 to 30 days past due
From 31 to 45 days past due
More than 45 days past due
Group
Company
31 Mar 2020
£'000
362
9
21
170
229
393
1,184
31 Mar 2019
£'000
471
241
27
196
190
957
2,082
31 Mar 2020
£'000
-
-
-
-
-
-
-
31 Mar 2019
£'000
-
-
-
-
-
-
-
Trade receivables are largely amounts due from retainer clients, who are invoiced on a quarterly basis in advance. The
Group’s policy is to allow 30 days for payment. Consequently, these receivables have no significant financing component
and the Group have applied the simplified approach in line with IFRS 9. Calculation of loss allowances are measured at
an amount equal to lifetime expected credit losses (ECLs). The approach taken by the Group in arriving at the expected
credit loss is as follows:
Step 1: The Group have determined the appropriate brackets by grouping each trade receivables based on the ageing
structure.
Step 2: Having determined the appropriate groupings, a historical loss rate (adjusted for forward looking information)
was calculated for each age bracket by reviewing the pattern of payment of trade receivables over the past 12 months.
Step 3: This historical loss rate (adjusted for forward looking information) has been applied to each ageing bracket of
trade receivables as at the balance sheet date to arrive at an expected credit loss for each grouping. All trade receivables
over 365 days have a 100% historical loss rate loss applied to them.
20. TRADE AND OTHER RECEIVABLES (CONTINUED)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
64
Notes to the financial statements
For the year ended 31 March 2020
Based on the above, the group recognised an expected credit loss of £44k (2019: £641k).
The maximum exposure to credit risk, before any collateral held as security, is the carrying value of each class of
receivable set out above.
The Directors consider that the carrying amounts of trade and other receivables approximate their fair value.
Movements in impairment provisions were as follows:
Opening balance
Amount released from provision due to recovery
Amounts written off, previously fully provided
Amount charged to the statement of
comprehensive income
Closing balance
21. OTHER INVESTMENTS
Group
Company
31 Mar 2020
£'000
603
(179)
(10)
31 Mar 2019
£'000
436
(51)
(474)
31 Mar 2020
£'000
-
-
-
31 Mar 2019
£'000
-
-
-
44
458
692
603
-
-
-
-
Group
Company
31 Mar 2020
£'000
31 Mar 2019
£'000
31 Mar 2020
£'000
31 Mar 2019
£'000
Current asset investment
1,223
1,168
-
-
These represent short-term principal positions in the form of listed investments which are held at market value. No tax
was payable at that value.
22. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
Group
Company
31 Mar 2020
£'000
2,580
31 Mar 2019
£'000
7,702
31 Mar 2020
£'000
-
31 Mar 2019
£'000
3
For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and deposits with banks
and financial institutions with a maturity of up to three months.
Cash and cash equivalents represent the Group’s and the Company’s money and money held for settlement of
outstanding transactions.
Money held on behalf of clients is not included in cash and cash equivalents on the statement of financial position. Client
money at 31 March 2020 for the Group was £430k (2019: £469k). There is no client money held in the Company (2019:
£nil).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
65
Notes to the financial statements
For the year ended 31 March 2020
23. TRADE AND OTHER PAYABLES
Trade payables
Amounts due to Group companies
Other payables
Tax and social security
Deferred income
Accruals
Group
Company
31 Mar 2020
£'000
996
-
359
459
394
1,895
4,103
31 Mar 2019
£'000
1,553
-
1,149
373
311
3,082
6,468
31 Mar 2020
£'000
51
-
-
-
-
105
156
31 Mar 2019
£'000
41
-
(12)
(1)
-
67
95
The Directors consider that the carrying amounts of trade and other payables approximate their fair value.
Deferred income relates to retainer fees invoiced in advance and spread over the length of the period, typically
quarterly.
24. DEFERRED CONSIDERATION
Deferred consideration represents the amounts payable over a three year period from September 2016 to October 2019,
for certain client relationships (note 14).
Group
At 1 April 2019
Additions during the year:
Charged to Statement of Comprehensive Income
Paid during the year
At 31 March 2020
Client relationships
£'000
1,194
-
(1,194)
-
Included in current liabilities
Included in non-current liabilities
31 Mar 2020
£'000
-
-
-
31 Mar 2019
£'000
1,194
-
1,194
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
66
Notes to the financial statements
For the year ended 31 March 2020
25. FINANCIAL RISK MANAGEMENT
The fair value of all of the Group’s and the Company’s financial assets and liabilities approximated its carrying value at
the reporting period end date. The carrying amount of non-current financial instruments, including floating interest rate
borrowing, is not significantly different from the fair value of these instruments based on discounted cash flows. The
significant methods and assumptions used in estimating fair values of financial instruments are summarised below:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include equity investments, other than those in subsidiary
undertakings. In the case of listed investments, the fair value represents the quoted bid price at the reporting period end
date. The fair value of unlisted investments is estimated by reference to recent arm’s length transactions.
Other investments
Other investments include warrants and equity investments, categorised as fair value through profit or loss. In the case
of listed investments, the fair value represents the quoted bid price at the reporting period end date. The fair value of
unlisted investments is estimated by reference to recent arm’s length transactions. In the case of warrants, the fair value
is estimated using established valuation models.
Trade receivables and payables
The carrying value less impairment provision of trade receivables and payables is assumed to approximate their fair values
due to their short-term nature.
Borrowings
Borrowings are measured at amortised cost using the effective interest rate method. The tables below summarise the
Group’s main financial instruments by financial asset type:
Group
Financial assets
Investments
Other investments
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Lease liability
31 March 2020
Fair value
through profit
or loss
£'000
Amortised
cost
£'000
-
-
5,211
2,580
3,250
2,903
48
1,453
-
-
-
-
Total
£'000
48
1,453
5,211
2,580
3,250
2,903
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
67
Notes to the financial statements
For the year ended 31 March 2020
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
Group
Financial assets
Investments
Other investments
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Deferred consideration
Amortised
cost
£'000
31 March 2019
Fair value through
profit or loss
£'000
-
-
5,266
7,702
5,784
1,194
48
1,349
-
-
-
-
*The numbers have been re-presented to be consistent with current year disclosures
The tables below summarise the Company’s main financial instruments by financial asset type:
Company
Financial assets
Subordinated loan (note 18)
Group balances
Financial liabilities
Trade and other payables
Company
Financial assets
Subordinated loan (note 18)
Group balances
Financial liabilities
Trade and other payables
31 March 2020
Fair value
through profit or
loss
£'000
-
-
-
Amortised cost
£'000
985
2,477
156
31 March 2019
Fair value
through profit
or loss
£'000
Amortised
cost
£'000
985
2,383
108
-
-
-
Total
£'000
48
1,349
5,266
7,702
5,784
1,194
Total
£'000
985
2,477
156
Total
£'000
985
2,383
108
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
68
Notes to the financial statements
For the year ended 31 March 2020
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
Risks
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and market risk. Market risk
comprises, interest rate risk and other price risk. The Directors review and agree policies for managing each of these risks
which are summarised below:
Credit risk
Credit risk is the risk that clients or other counterparties to a financial instrument will cause a financial loss by failing to
meet their obligations. Credit risk relates, in the main, to the Group’s trading and investment activities and is the risk that
third parties fail to pay amounts as they fall due. Formal credit procedures include approval of client limits, approval of
material trades, collateral in place for trading clients and chasing of overdue accounts. Additionally, risk assessments are
performed on banks and custodians.
The maximum exposure to credit risk at the end of the reporting period is equal to the statement of financial position
figure. Impairment policy and information on collateral held against trade receivables can be found in note 19. There
were no other past due, impaired or unsecured debtors.
Financial assets that are neither past due nor impaired in respect of trade receivables relate mainly to bonds, equity and
gilt trades quoted on a recognised exchange, are matched in the market, and are either traded on a cash against
documents basis or against a client’s portfolio.
The credit risk on liquid funds, cash and cash equivalents is limited due to deposits being held at the Group’s main bank
with a credit rating of “A”, assigned by Standard and Poor’s.
There has been no change to the Group’s exposure to credit risk or the manner in which it manages and measures the
risk during the period.
The credit risk in the Company principally comes from intercompany balances and subordinated loan. Since these are all
within the Group, the Directors are able to closely monitor the risk of default on a regular basis to minimise any potential
losses.
Liquidity risk
Liquidity risk is the risk that obligations associated with financial liabilities will not be met. The Group monitors its risk to
a shortage of funds by considering the maturity of both its financial investments and financial assets (for example, trade
receivables) and projected cash flows from operations.
The Group’s objective is to maintain the continuity of funding through the use of bank facilities where necessary, which
are reviewed annually with the Group’s Banker, the Bank of Scotland. Items considered are limits in place with
counterparties which the bank are required to guarantee, payment facility limits, as well as the need for any additional
borrowings.
The Directors most recently renewed the Group’s main banking facilities in February 2015. As an evergreen facility there
is no requirement to update the agreement annually, although a formal review of facilities is undertaken at least annually.
This ensures that the group and the company both have sufficient funds/current assets available to meet the liabilities
as they fall due.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
69
Notes to the financial statements
For the year ended 31 March 2020
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted
payments:
Group
Trade and other payables
Lease liability
Group
Trade and other payables
Deferred consideration
31 March 2020
Payable
within 1
year
£'000
3,250
751
4,001
Payable in 2
to 5 years
£'000
-
2,059
2,059
Payable after
more than 5
years
£'000
-
387
387
Total
contractual
payments
£'000
3,250
3,197
6,447
31 March 2019
Payable
within 1
year
£'000
5,784
1,194
6,978
Payable in 2
to 5 years
£'000
-
-
-
Payable after
more than 5
years
£'000
-
-
-
Total
contractual
payments
£'000
5,784
1,194
6,978
*The numbers have been re-presented to be consistent with current year disclosures
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted
payments:
Company
Trade and other payables
Company
Trade and other payables
31 March 2020
Payable
within 1
year
£'000
156
156
Payable in 2
to 5 years
£'000
-
-
Payable after
more than 5
years
£'000
-
-
Total
contractual
payments
£'000
156
156
31 March 2019
Payable
within 1
year
£'000
108
108
Payable in 2
to 5 years
£'000
-
-
Payable after
more than 5
years
£'000
-
-
Total
contractual
payments
£'000
108
108
*The numbers have been re-presented to be consistent with current year disclosures
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
70
Notes to the financial statements
For the year ended 31 March 2020
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
Market Risk
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates to the Group’s amount of interest receivable
on cash deposits. The maximum exposure for interest is not significant.
Other price risk
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices (other than those arising from interest rate risk) whether those changes are caused by factors
specific to the individual financial instrument or its issuer or factors affecting all similar financial instruments traded in
the market. Other investments are recognised at fair value and subject to changes in market prices.
The Group manages other price risk by monitoring the value of its financial instruments on a monthly basis and reporting
these to the Directors and Senior Management. The Group has disposed of a number of its investments during the course
of the year, which has helped mitigate risk. However, the risk of deterioration in prices remains high whilst the market
continues to be volatile.
The risk of future losses is limited to the fair value of investments as at the year-end of £1,501k (2019: £1,397k). See note
16 and 21.
Fair value measurement recognised in the statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
Level 1 at fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets and liabilities;
Level 2 fair value measurements are those derived from inputs other than the quoted price included within Level
1 that are observable for the asset or a liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices); and
Level 3 fair value measurements are those derived from formal valuation techniques that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
Financial assets at fair value through profit or loss
Unquoted equities
Financial instruments designated at fair value
through profit or loss
Quoted equities
Other investments
Total
Level 1
£'000
-
-
1,223
1,223
31 March 2020
Level 2
£'000
Level 3
£'000
Total
£'000
-
-
-
-
48
48
-
230
278
-
1,453
1,501
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
71
Notes to the financial statements
For the year ended 31 March 2020
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
Financial assets at fair value through profit or loss
Unquoted equities
Financial instruments designated at fair value
through profit or loss
Quoted equities
Other investments
Total
There were no transfers between levels in either financial year.
Balance at 31 March 2018
Total gains or losses in Statement of Comprehensive Income
Balance at 31 March 2019
Total gains or losses in Statement of Comprehensive Income
Balance at 31 March 2020
26. CAPITAL MANAGEMENT
Level 1
£'000
-
-
1,168
1,168
31 March 2019
Level 2
£'000
Level 3
£'000
Total
£'000
-
-
-
-
48
48
-
181
229
-
1,349
1,397
Unquoted
equities Other investments
£'000
890
459
1,349
104
1,453
£'000
48
-
48
-
48
The capital of the Group comprises share capital, share premium, retained earnings and other reserves. The total capital
at 31 March 2020 amounted to £8.5m for the Group (2019: £8.8m) and £23.3m for the Company (2019: £20.5m). The
primary objective of the Group’s capital management is to ensure that it maintains a strong capital structure in order to
support the development of its business, to maximise shareholder value and to provide benefits for its other
stakeholders.
These objectives are met by managing the level of debt and setting dividends paid to shareholders at a level appropriate
to the performance of the business.
Certain activities of the Group are regulated by the FCA which is the statutory regulator for financial services business
and has responsibility for policy, monitoring and discipline for the financial services industry. The FCA requires the Group’s
resources to be adequate, that is, sufficient in terms of quantity, quality and availability, in relation to its regulated
activities.
The Group monitors capital on a daily basis by measuring movements in the Group regulatory capital requirement and
through its Internal Capital Adequacy Assessment Process (ICAAP). Compliance with FCA minimum common equity tier 1
regulatory capital requirements was maintained during the year and the Group is satisfied that there is and will be,
sufficient capital to meet these regulatory requirements for the foreseeable future.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
72
Notes to the financial statements
For the year ended 31 March 2020
27. TREASURY SHARES
Group
At 31 March
Additions
Disposals
At 31 March
Year ended
31 Mar 2020
£'000
Year ended
31 Mar 2019
£'000
644
-
-
644
746
-
(102)
644
At 31 March 2020 no shares in the Company were held in Treasury (2019: nil shares). At 31 March 2020 no shares in the
Company were held in the EBT (2019: nil shares) and the ESOT held 720,000 shares (2019: 2,139,500), at a nominal value
of 5p per share. This represents 1.48% of the called up share capital (2019: 4.64%).
28. EMPLOYEE BENEFIT TRUSTS (EBT)
The WH Ireland EBT was established in October 1998 and the WH Ireland Group plc Employee Share Ownership Trust
(ESOT) was established in October 2011, both for the purpose of holding and distributing shares in the Company for the
benefit of the employees. All costs of the EBT and ESOT are borne by the Company or its subsidiary WH Ireland Limited.
Joint Ownership Arrangements (the ‘JOE Agreements’) are in place in relation to 720,000 shares between the trustees of
the ESOT and a number of employees (the ‘Employees’). Under the JOE Agreements, the option for the Employees to
acquire the interest that the trustees of the ESOT has in the jointly owned shares, lapses when an employee is deemed
to be a Bad Leaver. If an Employee ceases to be an employee of the Group, other than in the event of critical illness or
death, the Employee is deemed to be a Bad Leaver.
The shares carry dividend and voting rights though these have been waived by all parties to the JOE Agreements. Due to
the consolidation of the ESOT into the Group accounts, these shares are shown in Treasury (note 27). Due to the nature
of these arrangements, the options contained in the JOE Agreements are accounted for as share-based payments (note
29).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
73
Notes to the financial statements
For the year ended 31 March 2020
29. SHARE-BASED PAYMENTS
The Group had two schemes for the granting of non-transferable options to employees during the reporting period; the
approved Company Share Ownership Plan (CSOP) and a Save as You Earn Schemes (SAYE 3). In addition, options are held
in the ESOT (note 28). Details of these schemes can be found in the Remuneration Report on pages 25 to 26. SAYE 3
matured during the period in May 2019.
Under the terms of the LTIP, options over the Company’s shares may be granted on a discretionary basis to employees
and consultants of the Group (including Directors) at a price to be agreed between the Company and the relevant option
holder. Under the terms of the options granted under the current LTIP, such options vest on the third anniversary of the
award dates; are exercisable at the market price at the time the option was issued and are exercisable for ten years after
the vesting date.
Movements in the number of share options outstanding that were issued post 7 November 2002 and their related
weighted average exercise prices (WAEP) are as follows:
CSOP
Options WAEP
ESOT
Options WAEP
31 March 2020
SAYE 3
Options WAEP
ESOT
Options WAEP
2019 LTIP
Options WAEP
-
66.23p
128,589
450,000 92.50p
794,564 82.00p
1,650,000 78.14p
58.00p
-
66.17p
-
43,413
-
(30,000)
-
-
-
-
(1,000,000) 75.00p
-
-
Outstanding
at beginning
of year
Granted
Expired
Forfeited
Exercised
Outstanding
at end of
year
Exercisable
at end of
year
WA Life*
* WA Life represents the weighted average contractual life in years to the expiry date for options outstanding at the end of the year
1,800,000
-
-
-
-
-
(380,000)
-
-
(794,564)
-
-
-
82.00p
-
-
-
-
99.26p
-
46.00p
-
-
-
650,000 40.12p
650,000 40.12p
70,000 92.50p
70,000 92.50p
1,800,000
10.03 yrs
142,002
142,002
1.71 yrs
5.19 yrs
6.01 yrs
46.00p
63.88p
63.88p
-
-
-
-
-
-
-
-
CSOP
ESOT
Options
WAEP
Options
WAEP
SAYE 3
Options WAEP
ESOT
Options WAEP
31 March 2019
82.00p
78.14p
163,589
794,564
66.23p 1,650,000
5,000
-
(40,000)
-
Outstanding at
beginning of year
Granted
Expired
Forfeited
Exercised
Outstanding at end of
year
Exercisable at end of
year
WA Life*
* WA Life represents the weighted average contractual life in years to the expiry date for options outstanding at the end of the year
-
-
(179,500)
-
66.23p
-
66.23p
-
-
-
92.50p
-
629,500
1,650,000
1,500,000
794,564
450,000
128,589
128,589
92.50p
0.17 yrs
2.72 yrs
7.63 yrs
5.17 yrs
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66.23p
66.23p
92.50p
78.14p
78.14p
82.00p
-
-
-
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
74
Notes to the financial statements
For the year ended 31 March 2020
29. SHARE-BASED PAYMENTS (CONTINUED)
The pricing models used to value these options and their inputs are as follows:
Pricing model
Date of grant
Share price at grant (p)
Exercise price (p)
Pricing Models
CSOP
Black Scholes
ESOT
Monte Carlo
ESOT
N/A
02/11/11-
24/05/12
56.5-83.0
57.0-84.5
28/10/13-
13/4/16
74.5-114.5
0.0-114.5
Expected volatility (%)
32.6332-33.2130 43.0000-37.0000
Expected life (years)
Risk-free rate (%)
5
5
1.2993-.0.7999
0.8000-1.9300
Expected dividend yield (%)
-
0.67-2.19
2019 LTIP
N/A
28/06/19 &
28/12/19
45.0 & 49.0
45.0 & 49.0
50
3
2
N/A
30/05/17
125
-
N/A
3
N/A
N/A
The volatility of the Company’s share price was estimated as the standard deviations of daily historical continuously
compounded returns over a period commensurate with the expected life of the option, back from the date of grant and
annualised by the factor of the square root of 252, assuming 252 trading days per year (2019: 252 trading days). For
options granted in 2004, volatilities were calculated back to the date of the Group’s flotation in July 2000.
30. CAPITAL COMMITMENTS
There were no capital commitments for the Group or the Company as at 31 March 2020 (2019: £nil).
31. RELATED PARTY TRANSACTIONS
Group
Services rendered to related parties were on the Group’s normal trading terms in an arms’ length transaction. Amounts
outstanding are unsecured and will be settled in accordance with normal credit terms. No guarantees have been given
or received. No provision (2019: £nil) has been made for impaired receivables in respect of the amounts owed by related
parties.
Key management personnel include Executive and Non-Executive Directors of WH Ireland Group plc and all its
subsidiaries. They are able to undertake transactions in stocks and shares in the ordinary course of the Group’s business,
for their own account and are charged for this service, as with any other client. The transactions are not material to the
Group in the context of its operations, but may result in cash balances on the Directors’ client accounts owing to or from
the Group at any one point in time. The charges made to these individuals and the cash balances owing from/due to them
are disclosed in the table below. There are no other material contracts between the Group and the Directors.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
75
Notes to the financial statements
For the year ended 31 March 2020
31. RELATED PARTY TRANSACTIONS (CONTINUED)
The following table sets out the transactions which have been entered into during the year together with any amounts
outstanding:
Key management personnel
Other related parties
Services rendered
to related parties
£'000
-
Purchases/services
from relates parties
£'000
-
Amounts owed to
related parties
£'000
-
-
-
-
-
-
-
-
-
-
2020
2019
2020
2019
The total compensation of key management personnel is shown below:
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payment
Year ended
31 Mar 2020
£'000
1,831
-
-
-
1,831
Year ended
31 Mar 2019
£'000
1,564
170
322
-
2,056
The highest paid Director for 2020 was P Wale receiving emoluments of £371,145 (2019: former Director RW Killingbeck
£376,883)
Company
The Parent Company receives interest from subsidiaries in the normal course of business. Total interest received during
the year was £nil (2019: £nil). In addition, the Parent Company received a management charge of £479k (2019: £481k)
from its subsidiary WH Ireland Limited. WH Ireland Limited also charged the Parent Company £nil (2019: £25k) for broker
services.
It has been agreed between WH Ireland Group Plc and WH Ireland (IOM) Limited that they agree the right to set off
certain existing inter-company balances.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation. The captions in the primary statements of the Parent Company include amounts attributable to
subsidiaries. These amounts have been disclosed in aggregate in the notes 15 and 20 and in detail in the following table:
Amounts owed by related parties
Amounts owed to related parties
Readycount Limited
WH Ireland (IOM) Limited
Stockholm Investments Limited
WH Ireland Limited
WH Ireland Trustee Limited
2020
£'000
4,157
110
410
-
-
2019
£'000
4,157
108
410
-
-
The net amount owed by related parties is £2,477k (2019: £2,383k) (see note 20).
4,677
4,675
2020
£'000
-
-
-
2,183
17
2,200
2019
£'000
-
-
-
2,275
17
2,292
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
76
Notes to the financial statements
For the year ended 31 March 2020
32. EVENTS AFTER THE REPORTING DATE
On 29 June 2020 the Group announced its intention to sell its subsidiary WH Ireland (IOM) Limited
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2020
77