EXECUTIVE SUMMAR
Annual Report & Financial Statements
31 March 2021
Helping you see the bigger picture
1
Contents
4
5
6
7
8
Company information
Financial highlights
Divisional highlights
Chair’s statement
Chief Executive’s statement
10
Strategic report
18
Directors’ report
23
Corporate governance
31
Remuneration report
35
Statement of Directors’ responsibilities
36
Independent Auditor’s report
43
Consolidated statement of comprehensive income
44
Consolidated and Company statement of financial position
46
Consolidated and Company statement of cash flow
48
Consolidated and Company changes in equity
50
Notes to the financial statements
2
About WH Ireland Group plc
WH Ireland Group plc
WH Ireland Group plc aims to provide a high quality service in both its business areas with the Wealth Management Division providing
investment solutions for individuals, families and charities and with the Capital Markets Division being the leading firm for growth
companies seeking quality corporate advice and investment capital. These two divisions are supported by a central resource that
provides Compliance, HR, Finance and Marketing expertise. Together the two divisions provide a stable and sustainable stream of
revenue that can grow.
Wealth Management
WH Ireland provides independent financial planning advice and discretionary investment management. Our goal is to build long
term, mutually beneficial, working relationships with our clients so that they can make informed and effective choices about their
money and how it can support their lifestyle ambitions. We can trace our history of helping individuals and their families as well as
entrepreneurs, charities and trustees back to 1872. By building a financial plan and investment strategy with us, we believe our clients
are free to focus on the important things, like life.
Capital Markets
Our Capital Markets Division is specifically focused on the public and private growth company marketplace. The team’s significant
experience in this dynamic segment means that we are able to provide a specialist service to each of its respective participants. For
companies, we raise public and private growth capital, as well as providing both day-to-day and strategic corporate advice including
M&A advisory. Our tailored approach means that our teams engage with all of the key investor groups active in our market - High Net
Worth individuals, Family Offices, Wealth Managers and Funds. Our broking, trading and research teams provide the link between
growth companies and this broad investor base.
3
Company information
Directors
P A Wale
P Tansey
S Ford (appointed 6 August 2020)
V G Raffé
S N Lough
P J Shelley
A G Buchanan
H Sinclair (appointed 4 May 2021)
T M Steel (resigned 19 May 2020)
Nominated Adviser
Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
Joint Brokers
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
Auditors
BDO LLP
55 Baker Street London
W1U 7EU
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
4
Financial highlights
Revenue increased 37% to
Profit before tax
£29.6m
(2020 FY: £21.6m)
215% increase in cash
£8.2m
(2020 FY: £2.6m)
£1.0m profit
(2020 FY: £3.3m loss)
Adjusted EBITDA
£3.0m
(2020 FY: £0.9m loss)
Group regulatory capital ratio at
Group AUM 40% increase to
12.6%
(2020 FY: 10.3%)
£2.1bn
(2020 FY: £1.5bn)
The above analysis excludes discontinued operations.
Earnings per Share
(basic from continuing operations)
2.47p
(2020 FY: (loss 7.38p))
5
5
Divisional highlights
Wealth Management
Continued improvement in the quality
of the business over the year, with fee
income now representing
Despite 3 months of the cost of
Harpsden, direct costs have declined by
2%
76% (2020 FY: 72%)
£10.9m
of total wealth management income
(2020 FY: £11.1m)
WM total AUM increased 33% to
Almost doubled discretionary managed
assets
£1.6bn
(2020 FY: £1.2bn)
£1.0bn
(2020 FY: £0.5bn)
The above analysis excludes discontinued operations.
Capital Markets
252% increase in funds raised to
Welcomed 21 new quoted corporate
clients to end year at
£236m
(2020 FY: £67m)
82
(2020 FY: 74)
Top 3
Nomad
Top 5
Corporate Broker
6
Chair’s statement
laid out
Review and Outlook
This financial year saw further progress at WH Ireland, with the
first profit in five years providing clear evidence of the extent of
the change delivered. Perhaps most importantly, the WH Ireland
team now have a robust platform on which to build a much
bigger business, that can deliver sustainable growth. Our
ambition, that we
last October, to grow our
discretionary assets under management to £3bn and our
Capital Markets Division into a business that can grow revenue
to £20m a year, is very much on track. Our discretionary funds
under management have continued to increase, despite the
sale of our IOM business during the year. This has been helped
by the acquisition of Harpsden, by the return of the group to net
inflows and more positive markets. Our Capital Markets
business has made significant progress as the combination of a
growing client base and a successful return to the IPO market
drove increased revenue.
investing
We have continued to make good progress on improving the
in our people and
Group’s efficiency, whilst
capabilities. The changes made in our Wealth Management
business, alongside our first acquisition, have ensured we have
an attractive proposition to help grow our discretionary assets
under management. We believe we have established an
operating structure that allows us to grow assets with very little
additional cost.
We have restructured the way we incentivise our people across
the group. There is now considerable equity ownership across
employees, and there are clear targets that support our overall
long-term strategy. Growth
in discretionary funds under
management with good client outcomes in our wealth business
and growth in profitability in our Capital Markets Division are the
most important drivers of our approach to remuneration.
We are focused on building differentiated propositions for our
customers that take advantage of broader market trends. In
Capital Markets we have strengthened our ability to distribute
public and private equity to high net worth individuals, ultra-
high net worth individuals and family offices as well as hiring
sector expertise in areas that we believe will see significant
capital requirements in both the private and public markets. Our
focus on supporting growth companies as they access capital is
evidenced by our return to the IPO market, and by a resurgence
in our private funding business. Building out our private funding
business will be a priority for the group this year.
Philip Shelley
Chair
In Wealth Management we have strengthened our financial
planning and investment management capabilities as well as
our operational capability. The improvement in profitability and
fund flows is a testament to the detailed and hard work done by
all in the division and we believe this year we will see the benefits
more clearly.
As we grow, become more profitable and increase our balance
sheet and capital strength it has been important to ensure that
we build a strong central expertise to support both divisions.
Our strengthened capabilities in HR, Compliance, and M&A will
be important to our expansion.
It has been particularly pleasing that as a group we have been
able to operate successfully during a period of significant
uncertainty. Our ability to deliver a meaningful profit, whilst
ensuring we build a business that has the right resources to grow
at such a challenging time has only been possible due to the
hard work, professionalism, and determination of our talented
team.
I would like to thank the Board for the huge progress we have
been able to make in such a short time and in such a challenging
environment. In particular I would like to thank Victoria Raffé,
who has been a Non-Executive Director for 4 years, and who
proved to be an invaluable source of expertise over that period,
and Alistair Buchanan, who has been a Non-Executive Director
for 2 years, and who was an important steward during a
challenging time. I wish Victoria and Alistair well for the future. I
would also like to welcome Helen Sinclair, who brings a wealth
of experience
in private markets as well as a strong
understanding of the risks companies face as they grow. Both
these areas will be key to us as we develop our business.
I would
Finally,
like to thank our customers and our
shareholders for their support. We would not have been able to
achieve what we have without their loyalty.
We very much look forward to building on this strong foundation
as we focus on the targets we set in October 2020, of managing
£3bn of Discretionary Funds whilst delivering a 20% margin, and
of achieving revenues of £20m from our Capital Markets Division.
7
Chief Executive’s statement
Overview
WH Ireland has had a significant year of progress despite the
serious challenges posed following the outbreak of the Covid
pandemic. It has been a year of milestones achieved against
targets set and I thank all our employees, clients, customers and
business partners for their support. These targets included the
necessary reduction in costs, the refreshing of the management
team, the building of a robust control framework, a return to
sustainable profits and then to start the process of growing the
business, including acquisitions, back to acceptable levels of
return for our shareholders. However, we still need to remain
focused to ensure that we retain the benefits of those
achievements, especially the retention of our people, our
control framework and the support of our customers as we look
to build on this first profitable year in five years.
The Year 2020/2021
The start of the financial year was unprecedented, following the
market turmoil created by the onset of the Covid-19 pandemic.
Our employees reacted superbly and moved smoothly to a
remote working model, as well as accepting some tough
changes to remuneration. The investment in new people and
teams was successful, as it enabled us to take advantage of a
stronger market to double the Capital Markets Division revenue
to £16.3m (2020: £7.9m). Wealth Management continued its
successful drive to improve quality of earnings with an increase
in the proportion of its assets under discretionary management,
and by making its first acquisition, Harpsden, in December 2020.
Despite the challenging market levels, revenue of £13.3m was
relatively stable (2020: £13.8m). It is now recovering well with
higher market levels and as we complete the integration of
Harpsden. Overall revenue for the Group rose 37% to £29.6m
(2020: £21.6m). Administrative expenses rose 15% to £28.4m
(2020: £24.7m) and within this, fixed costs reduced by £1.5m to
£20.0m (2020: £21.5m). Exceptional items were £0.6m (2020:
£1.0m).
Clients
Our clients are at the heart of everything that we do. Our central
mission is to provide excellent service to our corporate,
institutional and private clients, and this 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.
Phillip Wale
CEO
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
is sufficiently robust to successfully navigate
shown
challenges as significant as Covid-19.
it
Staff
There are excellent people within the Group and we continue to
attract new individuals and teams across both divisions, though
I continue to monitor the head count required by the new,
simplified business. I thank all our members of staff for their
commitment and hard work in the past year as they managed
the uncertainty and challenges of the new working model since
the onset of the Covid-19 pandemic. Group headcount at 158,
has increased from 148 in 2020 due primarily to the acquisition
of Harpsden Wealth Management Ltd with its headcount of 19.
Shareholders
I am delighted with the support, both in terms of capital
investment and guidance,
from our major
shareholders and thank them and the new investors who have
joined and supported WH Ireland in our most recent placing in
December 2020 that made our first acquisition possible.
received
Capital
Last year we were clear that there was no need to raise further
capital to replenish the Group’s capital position and that we
would only do so for growth reasons. We were delighted to see
the level of support received from both existing and new
shareholders in raising £5.3m in December 2020 for the
acquisition of Harpsden. This capital raise combined with the
profits for the year has increased total equity to £15.1m (2020:
£8.5m). Cash at the year-end of £8.2m has increased 215% over
the year (2020: £2.6m). 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 development.
8
Looking forward
The group has faced a unique combination of challenges
throughout the year. The business and our employees have
performed extremely well, and the result is the delivery of our
first profit in five years. Pleasingly, the targets I set over the past
3 years are being met as we enter the growth phase in our plan
to return the Company to sustainable profitability, and over the
next three years to achieve meaningful levels of growth in AUM
and in profitability. The year has started well with the final stages
of the Harpsden integration proceeding better than we had
expected and with the Capital Markets Division continuing the
progress it made last year. We therefore look forward with
confidence to the remainder of the year.
Chief Executive’s statement
Wealth Management (WM)
This has been a pivotal year for WM. Following a year of cost
reduction, legacy system elimination and control framework
improvement, coupled with the rationalisation of non-optimal
teams and offices and the repricing of the WM offerings, the
division was able to grow with the acquisition of Harpsden. The
team at Harpsden have developed an excellent business serving
its local area with professionalism and care. It brought both
£250m of discretionary assets and a profitable business that,
once the integration is complete, will provide clients with better
value products and pricing.
Total Group assets under management have increased to
£2.1bn (2020: £1.5bn) including £1.6bn in WM net of outflows in
execution-only assets through a combination of market level
rises amounting to £334m, and the Harpsden acquisition which
added £250m of discretionary managed assets. Discretionary
managed assets increased 81% to £1.0bn (2020: £0.5bn).
Capital Markets Division (CMD)
CMD is a new division and incorporates the Corporate and
Institutional Broking business. CMD is led by Fraser Marshall
who joined in December 2020. CMD strengthened its position as
a top five AIM broker and top three Nomad by client numbers.
During the year CMD welcomed 21 new clients and it increased
its number of retained corporate clients to 82 (2020: 74). Fixed
costs were reduced by changing the remuneration structure at
the start of the year. Base salaries were reduced and a variable
pay structure introduced. Gross transaction fees more than
doubled to £9.6m (2020: £3.3m) as the team completed 42
transactions raising £236m for clients (2020: 24 and £67m
respectively).
The drive to strengthen our capabilities continued into 2021
with selective hires across all departments. This has continued
in the new financial year. The increased number of private
growth capital transactions completed
in the year was
particularly pleasing, and we will continue to invest in this area.
9
Strategic report
Overview
The WH Ireland Group has two principal operating subsidiaries, WH Ireland Limited and Harpsden Wealth Management Limited.
WH Ireland Limited consists of two business divisions: Wealth Management (WM), which provides wealth management solutions and
independent financial advisory services to retail clients and the Capital Markets Division (CMD), which provides public and private
growth capital, day-to-day and strategic corporate advice, broking, trading and equity research to Funds, High Net Worth individuals
and Family Offices.
Total assets managed by the Group are £2.1bn (2020: £1.5bn excluding discontinued businesses). Of this total, £1.6bn is held in the
WM division with a further £0.5bn within CMD’s Ultra High Net Worth business.
Harpsden Wealth Management Limited (Harpsden) was acquired by the Company in December 2020 and provides wealth
management services to retail clients.
The Group’s income is predominantly derived from activities conducted in the UK with a number of retail, high net worth, ultra-high
net worth, family office, institutional and corporate clients.
At the year-end, the Group had 158 staff (2020: 148) in the UK.
Strategy summary
The Group’s strategic focus is on becoming a leading advice-driven wealth management service provider to retail clients and the
leading capital markets business in the growth company market place. Over the next three years we aim to build the discretionary
assets we manage to £3bn and build a Capital Markets business that can sustainably deliver annual revenue of £20m.
In WM the Group aims to improve the value of discretionary assets under management using our enhanced capabilities and
customer proposition as well as through add-on acquisitions. In CMD the strategy is to focus on growing our corporate client list by
investing in new teams and sector capability that build on our already strong distribution in public and private markets. Together
this will grow revenue and profitability significantly as well as maximising the Group’s recurring revenue as wealth management fees
and corporate retainers increase.
Financial Overview
A summary of the Group’s performance (including discontinued business) for the financial year is set out below:
Revenue
Administrative expenses
Expected credit loss
Operating profit / (loss)
Operating profit / (loss) before exceptional items
Exceptional items
Operating profit / (loss) after exceptional items
Other income and charges
(Loss) / profit from discontinued operations
Profit / (loss) before tax
Tax
Profit / (loss) after tax
Excluding discontinued operations:
Profit / (loss) before tax
Profit / (loss) after tax
Year to
31 Mar 2021
£'000
29,559
(28,390)
(28)
1,141
Year to
31 Mar 2020
£'000
21,608
(24,697)
(44)
(3,133)
1,757
(616)
1,141
(94)
(86)
961
192
1,153
1,047
1,239
(2,163)
(970)
(3,133)
(183)
117
(3,199)
-
(3,199)
(3,316)
(3,316)
10
Strategic report
Adjusted EBITDA table is set out below:
Profit / (loss) after tax – continuing operations
(Loss) / profit after tax – discontinued operations
Total
Interest
Tax
Depreciation
Amortisation of intangible assets
Share based payments
EBITDA
Project Discovery*
Restructuring**
Compliance projects***
Acquisition related costs – Harpsden
Adjusted EBITDA including discontinued operations
Year to
31 Mar 2021
£'000
1,239
(86)
1,153
95
(192)
898
218
90
2,262
35
129
18
434
2,878
Year to
31 Mar 2020
£'000
(3,316)
117
(3,199)
149
-
1,044
122
109
(1,775)
268
506
196
-
(805)
Adjusted EBITDA – continuing operations
2,964
(922)
Notes:
*On 2 June 2016, the Group entered into a seven year agreement with SEI Investments (Europe) Ltd, to outsource its WM back office operations onto a “Model B” arrangement. This project
(“Discovery”) incurred cost overruns. The decommissioning of the legacy systems is now complete and this charge in 2021 will be the last.
**During the period ended 31 March 2021, there were some further personnel restructures.
*** These costs relate to one off control framework projects.
11
Strategic report
Financial analysis
The changes in the year to 31 March 2021 compared to the results of 2020 were as follows:
Revenue: At the start of the year, the WM division faced the challenge of significantly lower markets which reduced AUM levels and
therefore management fees. However, this was offset by the move by customers to a discretionary basis of management, a full year
of increased yield on discretionary assets, coupled with the contribution of Harpsden in the last quarter. Management fees increased
£0.1m to £10.1m. This increase in management fees however, was offset by a reduction in commission of £0.58m to £3.1m to leave
WM revenue for the year down 3.6% at £13.3m. (See note 5 and table below). These comparisons exclude any impact of the
discontinued Isle of Man business.
Management fees
Commissions
Other
Total
2021
£’000
10,056
3,110
125
13,291
2020
£’000
9,922
3,688
180
13,790
CMD enjoyed its best ever performance from a strengthened team and higher levels of activity from its increasing number of retained
clients. Transaction fees nearly trebled to £9.6m as more than a third of our clients successfully completed equity transactions during
the year with an average fee per client equity transaction of £163,000. In addition CMD completed two IPOs during the year and also
executed a wide range of Advisory work for its clients. Trading and Commissions revenue more than doubled to £3.3m as client
numbers, average client size and our activity levels increased. Retainer revenue increasing 6% to £3.4m.Total revenue for the division
therefore rose 106% to £16.3m. (2020: £7.9m) as outlined in the table below.
Transaction fees
Retainer fees
Equity Commissions and Trading
Total
Transaction fees are further analysed as follows:
IPOs
Secondary equity issues
Other revenue incl. advisory and M&A
Total
2021
£’000
9,614
3,353
3,318
16,285
2021
£’000
2,946
3,891
2,777
9,614
2020
£’000
3,260
3,151
1,449
7,860
2020
£’000
435
1,741
1,084
3,260
Secondary equity issues include £585,000 in regard to corporates who were not pre-existing clients. (2020: £257,000)
12
Strategic report
Expenses: Operational costs continue to be managed and this was assisted to some extent by the employees working for a large part
of the year from home leading to a reduction in travel and other general costs. Total expenses of £28.5m (2020: £24.9m) comprise
administrative expenses of £28.4m, net financing costs of £0.09m and credit loss provisions of £0.03m as set out in page 43 and
detailed below:
Cost of sales – third party commissions
Fixed non-people costs
Fixed people costs
Variable people costs
Total
2021
£’000
4,301
8,991
10,988
4,232
28,512
2020
£’000
2,273
9,593
11,900
1,115
24,881
Direct costs in the business dropped as base level salaries were reduced and replaced by a variable basis of remuneration leading
to a reduction in fixed costs of £1.5m to £20.0m (2020: £21.5m) and an increase in variable people costs of £3.1m to £4.2m (2020:
£1.1m).
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. This is the final year of costs associated with the
correction of legacy issues. Also included is the acquisition costs relating to Harpsden Wealth Management Ltd of £434K.
Discontinued Operations: For the period from 1 April 2020 to the date of sale of the entire shareholding of the Company in WHIreland
(IoM) losses of £86k (2020: £117k profit (for the entire period of 2020)) was generated.
Balance Sheet: Total Equity at 31 March 2021 of £15.1m (2020: £8.5m) saw a significant increase as the group benefitted from the
profit for the year of £1.0m and the acquisition of Harpsden which was satisfied primarily by an issue of new share capital and fund-
raise of £5.3m.
Cash Flows: Cash increased by £5.6m to £8.2m (2020: £2.6m) on account of profits for the year and favourable movements in the
level of net assets. During the year, the Company issued new share capital to raise £5.3m in order to satisfy the cost of acquisition of
Harpsden.
Wealth Management
The Wealth Management division incorporates both investment management services and advice on financial planning. These
services are offered from offices across the UK including London, Manchester, Cardiff, Poole and Henley.
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, as illustrated by
the successful acquisition in December 2020 of Harpsden, further corporate acquisitions of quality Wealth Management businesses.
Total Group AUM at 31 March 2021 was £2.1bn (2020: £1.5bn, excluding discontinued IoM business). This comprised £1,274m on our
custody platform SEI with a further £292m managed on a discretionary basis by Harpsden which will largely migrate to SEI in July
2021, the two of these totalling £1.566bn. See table below. This total is further supplemented by £41m positioned for WM clients on
external providers (2020: £123m) and, £521m (2020: £312m) managed by the Ultra High Net Worth desk within CMD.
A key priority in the year has been on growing our Discretionary AUM which has almost doubled to £1.0bn (2020: £0.5bn). The
acquisition of Harpsden added £250m of assets, whilst our efforts to transfer advisory clients to discretionary delivered further gains.
Net flows were broadly flat during the year, although it was particularly pleasing to see net inflows in the second half of the year as
our continuing work on improving our proposition paid off.
13
Strategic report
WM funds flow table for the year:
As at 1 April 2020
Inflows
Outflows
Harpsden Acquisition
Service switches
Market Performance
SEI at 31 March 2021
External platforms
Total WM AUM at 31 March 2021
Discretionary
£m
529.1
82.9
(67.2)
250.0
37.5
126.9
959.3
-
959.3
Advisory
£m
210.4
6.2
(112.0)
-
(52.0)
79.2
131.8
41.0
172.8
Execution
Only
£m
Custody*
£m
241.3
64.4
(54.7)
-
14.5
96.2
361.7
-
361.7
104.3
24.7
(47.9)
-
-
31.9
113.0
-
113.0
Total
£m
1,085.1
178.3
(281.8)
250.0
-
334.2
1,565.8
41.0
1,606.8
*Custody represents discretionary managed assets held on our SEI platform by New Horizons LLP a company with whom revenues are shared
(2020: £96.8m discretionary). Note that underlying growth in discretionary assets under management is represented by the sum of net inflows, net
service switches and market performance.
Capital Markets
Our Capital Markets Division is specifically focused on the public and private growth company marketplace. The team’s significant
experience in this dynamic segment means that we are able to provide a specialist service to each of its respective participants. For
companies, we raise public and private growth capital, as well as providing both day-to-day and strategic corporate advice. Our
tailored approach means that our teams engage with all of the key investor groups active in our market - High Net Worth Individuals,
Family Offices, Wealth Managers and Funds. Our broking, trading and research teams provide the link between growth companies
and this broad investor base.
Key Performance Indicators
The key targets of the Directors over the financial year have been to continue the good work from the turnaround period of the last
2 years including the keen focus on cost reduction but also to weather the COVID-19 induced market turbulence whilst moving the
Group into its next stage; growth. The growth of WM by acquisition coupled with the excellent performance from CMD has helped to
dramatically improve the performance and resilience of the business.
1. RATIO OF ADJUSTED EBITDA TO TOTAL REVENUE
Ratio of adjusted EBITDA to revenue
2. EXPENSES
Ratio of expenses to total revenue
Cost of sales – third party commissions
Fixed non people costs
Fixed people costs
Variable people costs
This does not include discontinued operations
31 Mar 2021
%
31 Mar 2020
%
10
(4)
31 Mar 2021
%
31 Mar 2020
%
97
£4.3m
£9.0m
£11.0m
£4.2m
115
£2.3m
£9.6m
£11.9m
£1.1m
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Strategic report
3. STAFF NUMBERS
Average staff numbers over the year excluding Harpsden and IoM
Total staff at year end date including Harpsden excluding IoM
Comprising:
CMD
WM
Board and support
Harpsden
4. ASSETS UNDER MANAGEMENT AND ADVICE
Discretionary assets
Advisory assets
Execution only assets
Custody and external assets
Total WM
CMD
Total
The table above includes Harpsden but excludes IoM
5. RATIO OF DISCRETIONARY TO TOTAL FUNDS
31 Mar 2021
31 Mar 2020
136
158
40
66
33
19
159
148
38
76
34
-
31 Mar 2021
£m
31 Mar 2020
£m
959
132
362
154
1,607
521
2,128
529
210
241
228
1,208
312
1,520
31 Mar 2021
%
31 Mar 2020
%
Ratio of discretionary to total funds (excludes Custody, External and CMD assets)
66
54
6. RECURRING INCOME STREAMS
Value of recurring income represented by management fees and retainers
% of revenue recurring
7. CAPITAL MARKETS
Number of equity transactions
WHI corporate client funds raised
Proportion of retained corporate clients transacting
Average fee per client equity transaction incl. IPO
Retained corporate clients
Average retainer fee
Average market capitalisation per client
Year ended
31 Mar 2021
£m
13
45
Year ended
31 Mar 2021
42
£236m
30%
£163,000
82
£42,993
£81m
Year ended
31 Mar 2020
£m
13
61
Year ended
31 Mar 2020
24
£67m
22%
£91,000
74
£41,737
£58m
15
Strategic report
Dividends
The Board does not propose to pay a dividend in respect of the financial year (2020: £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. The Group regulatory capital ratio was 12.6% (2020: 10.3%). Total net assets were £15.1m (2020: £8.5m) and net
current assets £5.8m (2020: £6.5m). Cash balances at year-end were £8.2m (2020: £2.6m).
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.
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 in the UK and until August 2020, 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 28 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
16
Strategic report
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
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 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 invited 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 recommended not to attend. The annual
report and accounts for the year ended 31 March 2021 along with all past accounts, regulatory communications and other material
is set out on the Group’s website at https://www.whirelandplc.com/investor-relations.
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. Regular
ongoing dialogue has continued through the CEO and CFO with the FCA who receive regular Management information. The FCA have
approved the appointments of each member of the new Management team and the Board members where required.
Clients
Our clients are fundamental to the business of the Group and the Board recognise that their interests are of paramount importance.
Management of the WM division and CMD closely engage with clients to understand their objectives so that the service provided by
the business is the most appropriate. In WM 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 Board and at Committee level to ensure that they are provided with the best possible
advice.
On the CM 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 our clients’ teams.
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
15 July 2021
17
Directors’ report
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 2021.
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 2022 which consider 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 significant market turbulence following the start of the
Covid-19 crisis and the subsequent ‘lock-down’ presented a range of challenges to the business and its support groups. Fundamental
changes were made by management to the cost structure including placing a number of staff on furlough leave and accessing
government grants, totalling £180,000, for part of the financial year. No staff remained on furlough from 30 June 2021. The business
reacted well and with increasing levels of recurring revenue supplementing a buoyant performance by CM returned twelve
consecutive months of profit.
Whilst there always remains uncertainty over what the future impact will be on the economy, the business has been successful in
increasing its resilience. Firstly, by executing it first acquisition in WM that has increased the total value of Assets Under Management
and importantly the proportion of that total represented by discretionary managed assets and secondly, the CM business has been
appointed by several new clients and completed a record number of transactions.
Certain activities of the Group are regulated by the Financial Conduct Authority, 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.
The Directors are aware of the new UK Investment Firm Prudential Regime coming into effect in January 2022. Initial calculations
currently indicate a lower capital requirement.
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 the Group’s business would need to be driven
down to before resulting in a liquidity crisis or a breach of regulatory capital. That modelling concluded that transactional, non-
contractual revenue would need to decline by more than 60% from management’s forecasts to create such a crisis situation within
eighteen months’ time.
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 a simpler and less risky business model that is well positioned to
support a growing business, as stated in the chief executive’s statement, the next stages include continuing to grow the business in
the coming year.
18
Directors’ report
Financial instruments and risk management
Details of risks and risk management arising from the Group’s financial instruments are set out in note 27 of the financial
statements.
Dividends
The Directors do not propose to pay a dividend for 2021 (2020: £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
S Ford (appointed 6 August 2020)
V G Raffé
S N Lough
P J Shelley
A G Buchanan
T M Steel (resigned 19 May 2020)
Year ended
31 Mar 2021
Year ended
31 Mar 2020
Number of shares Number of shares
75,000
18,000
314,765
33,333
319,167
130,000
18,000
479,217
54,165
464,999
1,458,409
218,749
25,000
760,411
208,333
25,000
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 31.
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*
M & G Investments Limited
Oceanwood Capital Management LLP
Hargreave Hale Limited
M Lawson
Sanne Fiduciary Services Limited (as trustee for the WHI ESOT)
*including 1,310,278 held by way of Contracts for Difference
Ordinary shares
18,576,022
9,240,000
6,869,097
3,789,583
2,835,646
2,189,500
%
29.95
14.90
11.08
6.11
4.57
3.50
As set out above, the Company’s Employee Share Ownership Trust (ESOT), the trustee for which is Sanne Fiduciary Services Limited,
holds 2,189,500 shares. All rights to receive dividends in respect of these shares have been waived. Further details are in notes 30 and
31 of the Financial Statements. On 18 May 2021 the ESOT, for which Sanne is the trustee, entered into an ESOT Share Purchase Plan
(The Plan) to acquire ordinary shares of 5p in the capital of the Company. It is the Company’s and the ESOT’s intention that any
ordinary shares acquired will be used to satisfy the awards made to employees of the Company or the Group. Purchases will be
limited to a maximum of 50,000 shares or a maximum value of £40,000 each month and the Plan, unless renewed, will terminate on
1st May 2023.
Political Contributions
The Group and Company did not make any political donations or incur any political expenditure during the year (2020: nil).
Qualifying Third Party Indemnity Provisions
The Company has arranged qualifying third party indemnity for all of its directors.
19
Directors’ report
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 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 and 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 18 May 2021 the ESOT, for which Sanne is the trustee, entered into an ESOT Share Purchase Plan (The Plan) to acquire ordinary
shares of 5p in the capital of the Company. It is the Company’s and the ESOT’s intention that any ordinary shares acquired will be
used to satisfy the awards made to employees of the Company or the Group. Purchases will be limited to a maximum of 50,000
shares or a maximum value of £40,000 each month and the Plan, unless renewed, will terminate on 1st May 2023.
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 within the Notice of AGM document.
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.
After 10 years of service it was agreed that BDO LLP would retire following the completion of this year’s audit. A panel of Directors
was charged with the responsibility of selecting new replacement auditors and a selection process was run in early 2021. The result
of this process is, and in accordance with the Companies Act 2006, a resolution for the appointment of RSM UK Audit LLP as auditors
of the Company to be proposed at the forthcoming AGM.
20
Directors’ report
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 WH Ireland in August 2018, Phillip was Head of Fixed Income
(Europe) at Cantor Fitzgerald Europe.
Philip Tansey
Chief Financial 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.
Stephen Ford
Executive Director, Head of Wealth Management
Stephen Ford is an experienced PLC and company director in the wealth and investment management
sector who joined WH Ireland in February 2019 as Head of Wealth Management. Stephen was
previously Executive Director of City Asset Management for two years up until December 2018. Prior to
that, he spent 16 years at Brewin Dolphin, where between 2013 and 2016 he was Head of Wealth &
Investment Management. Stephen is a Chartered Wealth Manager and a Chartered Alternative
Investment Analyst.
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 WH Ireland in January 2017.
Helen Sinclair
Non-Executive Director
Helen is a highly experienced non-executive director having served on a number of audit, remuneration
and investment committees. Prior to her focus on non-executive director roles, Helen co-founded and
ran Matrix Private Equity (now Mobeus Equity Partners LLP); a successful private equity firm, with a
focus on SMEs. Helen has a thirty-year track record as an investor, board member and board observer
in a range of sectors, including early stage technology/digital media, retail and consumer and financial
services with considerable expertise in alternative asset management. Helen was appointed to the
Board of WH Ireland in May 2021.
21
Directors’ report
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.
Philip 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 15 July 2021 and signed on its behalf by:
P Tansey
Director
22
Corporate governance
The Directors of the Company have always endeavoured to apply the highest level of Corporate Governance, and have 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 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
promotes
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.
Page 10 of the Company’s Annual Report for the
period ended 31 March 2021 sets out its Strategy
summary, which is to focus on continuing to grow
the business across the two business divisions of
Wealth Management and Capital Markets, with the
ultimate objective of becoming the corporate broker
of choice in the small and mid-cap company
leading advice-driven wealth
segment and a
management service provider to retail clients.
The risks that attach to this strategy and how such
risks are mitigated are set out at page 16 of WHI’s
annual report for the period ended 31 March 2021.
2. Seek to understand
and meet shareholder
needs and expectations
a
develop
good
Directors must
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
its
The Board is committed to regular shareholder
dialogue with both
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 in normal
circumstances.
The Company also has a dedicated email address
which investors can use to contact the Company
(enquiries@whirelandplc.com).
is
reviewing all communications
for
responsible
CEO
The
23
Corporate governance
QCA Code Principle How it should be applied
How the company applies it
3. Take
into account
wider stakeholder and
social
responsibilities
and their implications for
long-term success
internal
Long-term success relies upon good relations
with a range of different stakeholder groups
both
(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
4. Embed effective risk
management,
considering
both
and
opportunities
threats, throughout the
organisation
that
to ensure
the
The board needs
company’s risk management
framework
identifies and addresses all relevant risks in
to execute and deliver strategy;
order
companies need to consider their extended
business, including the company’s supply
chain, from key suppliers to end-customer.
received from shareholders 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 pages 19 to 20 of WHI’s
annual report for the period ended 31 March 2021.
in addition to
the main stakeholders of
its employees,
its clients,
its
The Directors believe that,
the
shareholders,
Company are
the
communities in which it operates and its two
regulators (the London Stock Exchange and the
FCA).
time
The Company dedicates significant
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. At the same
time the Company is endeavouring to adopt an
Environmental, Social and Governance (“ESG”)
framework within
twelve months
incorporating objectives to minimise the Company’s
environmental impact; to engage staff and suppliers
and to build on the CSR initiatives the Company is
already working on to more broadly support the
communities in which we operate.
the next
Pages 75 to 80 of the Company’s Annual Report for
the period ended 31 March 2021 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.
24
Corporate governance
QCA Code Principle How it should be applied
How the company applies it
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).
5. Maintain the board as a
well-functioning,
balanced team led by the
chair
legal obligation
The board members have a collective
to
responsibility and
promote the interests of the company, and
for defining
are collectively responsible
corporate
arrangements.
Ultimate responsibility for the quality of, and
approach to, corporate governance lies with
the chair of the board.
governance
The board (and any committees) should be
provided with high quality information in a
timely manner
proper
to
assessment of the matters requiring a
decision or insight.
facilitate
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 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 is reviewed in Board and/or the Risk
Committee 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.
All strategic decisions are decided by the Board
acting collectively.
The Board consists of four Non-Executive Directors
(with a fifth Non-Executive Director appointed post
period end) and three Executive Directors. It is
considered that Victoria Raffé, Philip Shelley, Simon
Lough, Helen Sinclair 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 approximately 12 times a year. The
attendance record of each director is set out on the
Company’s website.
25
Corporate governance
QCA Code Principle How it should be applied
How the company applies it
supported by
should be
The board
committees
remuneration,
(e.g. audit,
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.
of
qualities
personal
The board must have an appropriate balance
of sector, financial and public markets skills
and experience, as well as an appropriate
balance
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.
6. Ensure that between
them the directors have
the necessary up-to-date
experience,
skills and
capabilities
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 board should regularly review the
effectiveness of its performance as a unit, as
well as that of its committees and the
individual directors.
Evaluate
7.
board
performance based on
clear
relevant
seeking
objectives,
continuous improvement
and
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 Company has eight directors being Phillip Wale,
Philip Tansey, Stephen Ford, Victoria Raffé, Philip
Shelley, Simon Lough, Alistair Buchanan and Helen
Sinclair, who was appointed post the period end.
Details of these Directors and their relevant
experience, skills and personal qualities are set out
at pages 21 to 22 of the Company’s Annual Report for
the period ended 31 March 2021.
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 Capital Markets
division of the Group. The Board also engages
external
legal advisers 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
annually on
Directors who
performance by the Chair.
assessed
are
26
Corporate governance
QCA Code Principle How it should be applied
How the company applies it
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
Succession
planning is a vital task for boards. No member
of the board should become indispensable
refreshed.
8. Promote a corporate
culture that is based on
ethical
and
behaviours
values
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.
including
the business,
The culture should be visible in every aspect
of
recruitment,
nominations, training and engagement. The
performance and reward system should
endorse the desired ethical behaviours
across all levels of the company.
should
culture
corporate
The
be
recognisable throughout the disclosures in
the annual report, website and any other
statements issued by the Company.
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
conducted, and
appointments are made, on merit, against objective
criteria and with due regard for the benefits of
diversity on the Board.
candidates
for
is
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
for new
employees and each employee is also assessed on
their adherence to these values in their annual
appraisal which influences promotion and reward.
induction process
9. Maintain governance
structures and processes
that are fit for purpose
and
good
support
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,
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 in this Corporate Governance section.
This detail also
roles and
includes
responsibilities of each of the Directors, with all of
the
27
Corporate governance
QCA Code Principle How it should be applied
How the company applies it
strategy and business model to reflect the
development of the company.
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,
and
approving
guiding
corporate strategy, major plans of action,
risk appetite and policies, annual budgets
and business plans; setting performance
objectives; monitoring,
implementation
and
corporate
and
overseeing major capital expenditures,
acquisitions and disposals;
performance;
• Monitoring
• 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
in
its Committees are effected
or
accordance with
appropriate
governance process;
the
of
process
and managing potential
conflicts of interest of management, Board
members, shareholders, external advisors
and other service providers,
including
related party transactions; and overseeing
the
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
or
reputational
consequences.
implications
disclosure
•
•
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.
10. Communicate how
the company is governed
and
is performing by
maintaining a dialogue
with shareholders and
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.
its stakeholders. The CEO
The Company is committed to open dialogue with
all
liaises with the
Company’s principal shareholders, regulators and,
where appropriate, clients and relays their views to
the wider Board.
28
Corporate governance
QCA Code Principle How it should be applied
How the company applies it
other
stakeholders
relevant
reporting
In particular, appropriate communication
and
should exist
structures
between the board and all constituent parts
of its shareholder base. This will assist:
•
•
the
of
communication
shareholders’ views to the board;
and
the shareholders’ understanding of
the unique circumstances and
constraints faced by the company.
On the Company’s website shareholders can find all
historical
Interim
regulatory announcements,
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.
be
should
It
these
communication practices are described
(annual report or website).
clear where
At this stage the Board does not publish an Audit
Committee Report, but will look to do so in the near
future.
Following the Company’s AGM the results of all votes
will be made available on the Company’s website.
The Board and its Committees
At the date of this report the Group Board consists of three Executive and five Non-Executive Directors (with the fifth non-executive
director appointed post period end). 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 all the
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 31).
Other Executive Directors and Risk Committee members may be invited to attend the meetings and the committee has access to
advice from the Head of HR.
Audit Committee
The committee is made up of all the 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 and internal requirements and it gives consideration
29
Corporate governance
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 all the 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 all the Non-Executive Directors with Philip Shelley 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.
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
15 July 2021
30
Remuneration report
The Directors present the Directors’ Remuneration Report (the “Remuneration Report”) for the financial
year ended 31 March 2021.
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 all the 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 five different share ownership plans for employees; CSOP, SAYE, JOE scheme,
the 2020 EMI option scheme and an unapproved share option scheme. In addition, to facilitate some of the option exercises, the
Company has an ESOT.
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. 2,189,500
shares are held by Sanne Fiduciary Services Limited as trustee of 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.
31
Remuneration report
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 of 90% 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.
Unapproved Share Option Scheme
Under the terms of the Unapproved share option scheme, 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, 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.
JOE Scheme
Under the terms of the Joint Share Option Plan, each option holder holds shares jointly with the ESOT. These shares vest subject to
the satisfaction of certain performance criteria agreed between the Company, the ESOT, and the option holder.
2020 EMI Option scheme
During the year an Enterprise Management Incentive (EMI) share option scheme was designed and registered with HMRC as an
approved EMI scheme. EMI options are a tax efficient way of granting options to employees. The value of options granted is by
reference to the current market value (CMV) of the Company’s share price at the date of grant and the maximum aggregate value of
granted but un-exercised options outstanding at any one time is £3.0m with an individual maximum allowance at any one time to
an employee of £250,000.
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. Under certain change in control circumstances the notice period can be subject to extension to twelve months. 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.
32
Remuneration report
Contracts of employment for Senior Executives are all on a rolling basis subject to notice periods ranging from three to twelve months
with certain additional provisions triggered in the event of changes in control of the Company.
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.
Non-Executive Directors
All Non-Executive Directors have a letter of appointment 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
The remuneration of each Director as listed on page 4, Company Information, excluding share options and awards, during the year
ended 31 March 2021 is set out in the table below:
Total
year
ended
31-Mar
2021
£
Total
Pension
year contribution
year ended
31-Mar
2021
£
ended
31-Mar
2020
£
Pension
contribution
year ended
31-Mar
2020
£
354,831
202,176
261,316
371,145
250,559
-
26,667
10,000
-
25,000
10,000
-
Salary
£
Benefits
£
266,667
200,000
200,000
13,164
2,176
11,316
Bonus
£
75,000
-
50,000
35,833
35,833
65,833
43,750
10,000
857,916
-
-
-
-
-
-
-
-
35,833
35,833
65,833
43,750
-
26,656
-
125,000
10,000
1,009,572
40,000
40,000
27,744
24,718
60,000
814,166
-
-
-
-
-
-
-
-
-
36,667
-
35,000
Executive
P Wale
P Tansey
S Ford1
Non-
Executive
VG Raffé
SN Lough
PJ Shelley
AG Buchanan
TM Steel 2
Notes:
1 Appointed 6 August2020
2 Resigned 19 May 2020
33
Remuneration report
Further to the announcement of 6 November 2019, the Non-Executive Directors received ordinary shares in the Company in lieu of
25% of the fees that would otherwise be due to be paid to them by the Company.
The highest paid Director for 2021 was P Wale receiving emoluments of £354,831 (2020: P Wale £371,145).
Directors’ Interests in Share Options
Director
P Wale
P Tansey
S Ford
Unapproved
Options
500,000
200,000
400,000
EMI 2020
Options
350,000
350,000
350,000
Total at 31
March 2021
850,000
550,000
750,000
Total at 31
March 2020
500,000
200,000
400,000
At 31 March 2021 the market price of the Company’s shares was 51.0p.
The highest daily closing price during the year was 51.0p and the lowest daily closing price was 35.0p.
34
Statement of Directors’ responsibilities
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 accounting standards in
conformity with the requirements of the Companies Act 2006. 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.
35
Independent Auditor’s report to the members of WH Ireland Group plc
Opinion on the financial statements
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 2021 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;
the Parent Company financial statements have been properly prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 and as applied in accordance with the provisions
of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
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 2021 which comprise the consolidated statement of comprehensive income, the consolidated and company
statement of financial position, the consolidated and company statement of cash flows, the 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 their preparation is applicable law and international accounting standards in
conformity with the requirements of the Companies Act 2006 and, as regards the Parent Company financial statements, as applied
in accordance with the provisions 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. We have highlighted going concern as a key audit matter based on our
assessment of risk and the effect on our audit strategy.
Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue to adopt the going concern
basis of accounting and in response to the key audit matter included:
• Obtaining the Directors’ assessment of the going concern assumption applied in the financial statements. Assessing this in
light of our understanding of the forecasts, regulatory capital requirements, and current assessment of the impact of Covid-
19.
Assessing the forecast through to September 2022 that has been used to support the going concern assessment, for
arithmetical accuracy, challenging management’s estimates applied within the forecasts, with reference to historic
performance and assessing the consistency of the forecasts with our understanding of the business.
•
• Reviewing the sensitivity and breakeven analysis of the forecasts, including reverse stress testing, that have been prepared
by management, and considering the related impacts on regulatory capital requirements.
• Considering the likelihood of the stress scenarios prepared by management and assessing management’s ability to
•
mitigate the impact of these scenarios, should they occur.
Analysing and challenging conclusions on going concern thorough discussions with management and the Audit
committee.
• Reviewing the disclosures for completeness and accuracy of how management have assessed and concluded on going
concern.
36
Independent Auditor’s report to the members of WH Ireland Group plc
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and Parent Company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of
this report.
Overview
Coverage
100% (2020: 100%) of Group profit before tax
100% (2020: 100%) of Group revenue
100% (2020: 100%) of Group total assets
Key audit matters
Going Concern
Business Combination
2021
Y
Y
2020
Y
N
Materiality
Group financial statements as a whole
£427k (2020: £343k) based on 1.5% (2020: 1.6%) of Group revenue
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of
internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
We tailored our audit to ensure we have performed sufficient work to be able to give an opinion 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, which includes the main trading entity, WH Ireland
Limited, which was considered to be a significant component, as well as other components. The Group audit engagement team
carried out full scope audits for the Parent Company and the other significant component. For one non-significant component, the
group audit engagement team engaged with a non-BDO member firm to perform specific audit procedures. Other non-significant
components represent dormant entities or those with very limited transactions and balances, with the only material balances in
these companies being inter-company balances. Specific audit procedures were performed by the Group audit engagement team
to cover these balances.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude
whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial statements as a
whole. Our involvement with component auditors included the following:
• Directing and supervising the work performed by the component auditors, including providing them with detailed group
instructions and an appropriate materiality level to use in relation to group materiality;
• Obtaining group reporting memos from the component auditors which summarised their overall approach and their
findings in the key risk areas as determined by the group engagement team;
• Meeting with and reviewing the working papers of the component auditors and assessing the reasonableness and impact
of their conclusions in key risk areas on the group financial statements.
37
Independent Auditor’s report to the members of WH Ireland Group plc
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, 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) that 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. In addition
to the matter described in the conclusions related to going concern section of our report, we have determined the matter below to
be the key audit matter to be communicated in our report.
38
Independent Auditor’s report to the members of WH Ireland Group plc
Key audit matter
Business combination
The Directors have set out the
relevant accounting policies on
page 50, with detail about
judgements in applying those
accounting policies and critical
accounting estimates on page
56.
During the year, the Parent Company
acquired a subsidiary, Harpsden Wealth
Management Limited. The Parent Company
paid cash consideration of £5,385k for the
acquisition, with the estimated fair value of
further contingent consideration of £1,911k
as at the date of acquisition. Intangible
assets of £4,225k and goodwill upon
consolidation of £3,539k have been
recognised in the consolidated statement
of financial position in respect of this
acquisition. The Parent Company incurred
costs of acquisition of £571k in the year, of
which £435k were expensed to the profit
and loss, and £136k were capitalised.
Business combinations are accounted for
under IFRS 3 using the purchase method.
for
that
that
risk
is not accounted
the business
is a
There
combination
in
accordance with the requirements of IFRS 3
inappropriate estimates or
and
judgements may be applied in determining
the valuation of the identifiable net assets
at acquisition or the consideration due,
resulting in the incorrect net assets and
goodwill being recognised in the financial
statements.
risk of
is also a
incomplete
There
disclosures.
Further there is a risk that acquisition costs
the
are capitalised without meeting
requirements of IFRS 3 for capitalisation.
How the scope of our audit addressed
the key audit matter
We assessed the business combinations policy
adopted by the Group for compliance with the
requirements of IFRS 3.
We assessed management’s accounting
papers and workings by agreeing these to
documentation,
underlying
including purchase documents
the
for
consideration paid and identification of the
acquirer.
supporting
for
the
thresholds
We assessed the fair value of the consideration
including a review the likelihood of meeting the
revenue
deferred
consideration. We also obtained the workings
for the identifiable net assets at acquisition
date and, where needed, engaged BDO
valuation specialists
the
assessment of the fair values. We engaged with
the component auditors to gain assurance over
the net assets acquired by performing an
analytical review of the acquisition trial
balance and recalculated the goodwill to be
recognised.
to assist with
including whether
We challenged management on the costs
these were
incurred,
capitalised or expensed in compliance with the
requirements of IFRS 3, by understanding the
cost incurred and agreeing these back to
supporting documents, which
included
invoices and explanations for the accruals
recognised.
We reconciled our workings to the trial balance
and the financial statements and then checked
the
compliance of
requirements of IFRS 3.
the disclosures with
Key observations:
is recognised,
The business combination
measured and disclosed in accordance with
the requirements of IFRS 3 and the Companies
Act 2006.
39
Independent Auditor’s report to the members of WH Ireland Group plc
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality
level, performance materiality, to determine the extent of testing needed. 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 as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Materiality
Basis for determining
materiality
Rationale for the
benchmark applied
Group financial statements
2020
£’000
343
2021
£’000
427
1.6% of Group
Revenue
1.5% of Group
Revenue
Considered to be the most appropriate
measure of the Group’s performance by
users of
financial statements as
historically the group has been loss making
and is yet to establish a track record of profit
making.
the
Parent company financial statements
2021
£’000
218
51% of Group
materiality
Capped at 51% of
Group materiality given
the assessment of the
components’
aggregation risk.
2020
£’000
325
95% of Group
materiality
Capped at 95% of
Group materiality given
the assessment of the
components’
aggregation risk.
Performance materiality
Basis for determining
performance materiality
298
257
152
244
70% (2020:75%) of materiality due to the impact of carried forward adjustments from the prior
year audit, the number and size of anticipated adjustments this year, management’s attitude
towards adjustments and the number of accounts subject to estimation.
Component Materiality
We set materiality for each component of the Group based on a percentage of between 44% and 95% of Group materiality dependent
on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from £186k
to £408k. In the audit of each component, we further applied performance materiality levels of 70% of the component materiality to
our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting Threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £17k (2020: £17k) for
the Group and £9k (2020: £17k) for the Parent Company. We also agreed to report differences below these thresholds that, in our
view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report and financial statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
40
Independent Auditor’s report to the members of WH Ireland Group plc
Other Companies Act 2006 Reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
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.
Strategic report and
Directors’ report
•
Matters on which we
are
to
required
report by exception
In the light of the knowledge and understanding of the Group and 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.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
We have obtained an understanding of the legal and regulatory frameworks applicable to the Group and the industry in which it
operates, and considered the risk of acts by the Group, contrary to applicable laws and regulations including fraud. We considered
the significant laws and regulations to be the Companies Act 2006, the accounting standards and the Financial Conduct Authority’s
regulations.
41
Independent Auditor’s report to the members of WH Ireland Group plc
We also communicated the Group-level fraud risks to the component auditor during the planning process to ensure they could
allocate sufficient resources to the areas susceptible to fraud. We ensured the component auditor’s testing approach for the
significant risk areas was appropriately tailored and sufficiently addressed the risks.
We assessed the susceptibility of the financial statements to material misstatement, including fraud and considered the following
to be risk areas of potential fraudulent financial reporting, in addition to the risk of fraud through management override of controls,
given the high level of judgement and estimation involved: impairment of non-current assets and deferred tax.
Our procedures in response to the above included:
• Reviewing the minutes of board and committee meetings throughout the year, including those held at Group level and for
each significant component.
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud, at both Group level and for each significant component.
• Completing a disclosure checklist on the financial statements to check compliance with the requirements of the accounting
framework and the Companies Act 2006 and agreeing the disclosures to underlying supporting documentation.
• Reviewing correspondence the Group has had with regulators, including the Financial Conduct Authority, to identify
whether there have been any instances of non-compliance with laws or regulations.
• Reviewing the basis for management’s conclusions on indicators of impairment of non-current assets and determining
whether they are reasonable and take into account all relevant available information.
• Reviewing management’s assessment of deferred tax and checking the basis is consistent with the cash flow forecasts used
•
to support the going concern assumption.
In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries
and other adjustments in the general ledger, focused on significant judgements made by management and evaluated
whether there was any evidence of bias represented a risk of material misstatement due to fraud.
• We communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and
discussed how and where these might occur and remained alert to any indications of fraud and non-compliance with laws
and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the
risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations
in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available 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 Parent 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 Parent 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 Parent Company and the Parent 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: 15 July 2021
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
42
Consolidated statement of comprehensive income
Year ended
31 March 2021
£'000
Year ended
31 March 2020
£'000
Note
Continuing operations
Revenue
Administrative expenses
Expected credit loss
Operating profit / (loss)
Operating profit / (loss) before exceptional items:
Exceptional items
Operating profit / (loss) after exceptional items
Realised losses
Finance income
Finance expense
Profit / (loss) before tax
Tax income
Profit / (loss) from continuing operations
Profit / (loss) from discontinued operations
Profit / (loss) and total comprehensive income for the year
Earnings per share
From continuing operations
Basic
Diluted
From discontinued operations
Basic
Diluted
Total
Basic
Diluted
3&5
6
6
6
8
8
9
10
12
29,559
(28,390)
(28)
1,141
1,757
(616)
1,141
-
2
(96)
1,047
192
1,239
(86)
1,153
2.47p
2.07p
(0.17p)
(0.14p)
2.30p
1.93p
Notes on pages 50 to 85 are an integral part of these financial statements.
There were no items of other comprehensive income for the current year or prior period.
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
(7.12p)
(7.12p)
43
Consolidated and Company statement of financial position
Group
Company
31 March
2021
£'000
31 March
2020
£'000
31 March
2021
£'000
31 March
2020
£'000
Note
ASSETS
Non-current assets
Intangible assets
Goodwill
Investment in subsidiaries
Property, plant and equipment
Investments
Right of use asset
Deferred tax asset
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
Deferred tax liability
Liabilities classified as held for sale
Non-current liabilities
Lease liability
Deferred consideration
Total liabilities
Total net assets
Capital and reserves
Share capital
Share premium
Other reserves
Retained earnings
Treasury shares
Shareholders’ funds
16
15
17
13
18
19
21
29
22
23
20
24
10
25
19
26
21
10
19
26
29
4,764
3,539
-
511
1,099
1,603
190
-
11,706
5,156
2,490
-
8,211
-
15,857
27,563
(7,623)
(552)
(1,087)
(799)
-
(10,061)
(1,506)
(909)
(2,415)
(12,476)
15,087
3,001
19,083
981
(7,334)
(644)
15,087
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
-
-
26,448
-
-
-
-
644
27,092
56
-
-
1,246
-
1,302
28,394
(2,960)
-
(1,087)
-
-
(4,047)
-
(909)
(909)
(4,956)
23,438
3,001
19,083
228
1,126
-
23,438
-
-
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
44
Consolidated and Company statement of financial position
The notes on pages 50 to 85 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 £5,347k (2020: £45k).
These financial statements were approved by the Board of Directors on 15 July 2021 and were signed on its behalf by:
P Tansey
Director
45
Consolidated and Company statement of cash flows
Notes
13, 15,
18
8, 10
8, 10
9
7
22
9
1
8, 10
16
25
13
8
Operating activities:
Profit / (loss) for the year:
Continuing operations
Discontinuing operations
Adjustments for:
Depreciation, amortisation and impairment
Finance income
Finance expense
Tax
Losses in investments
Non-cash adjustment for share option charge
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in current asset investments
Net cash generated from/(used in) operations
Income taxes received/(paid)
Net cash inflows from operating activities
Investing activities:
Cost on disposal of subsidiary undertaking
Interest received
Investment in subsidiary
Repayment of deferred consideration
Acquisition of property, plant and equipment
Net cash (used in)/generated from investing
activities
Finance activities:
Proceeds from issue of share capital
Proceeds from repayment of subordinated loan
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
Group
Company
Year ended
31 Mar
2021
£'000
Year ended
31 Mar
2020
£'000
Year ended
31 Mar
2021
£'000
Year ended
31 Mar
2020
£'000
1,239
(86)
1,153
1,242
(3)
96
(196)
-
90
1,815
2,602
(1,706)
5,094
-
5,094
(90)
3
(4,765)
-
(201)
(3,316)
117
(3,199)
1,225
(12)
166
-
43
109
(1,586)
(1,304)
(55)
(4,613)
-
(4,613)
-
12
-
(1,194)
(214)
(5,347)
-
(5,347)
-
-
-
-
283
90
2,533
2,804
-
363
-
363
-
-
(5,437)
-
-
(45)
-
(45)
-
-
-
-
-
109
(128)
61
-
(3)
(3)
-
-
(2,797)
-
-
(5,053)
(1,396)
(5,437)
(2,797)
5,335
-
(898)
(1)
2,797
-
(754)
(2)
5,335
985
-
-
2,797
-
-
-
4,436
2,041
6,320
2,797
4,477
3,734
8,211
(3,968)
7,702
3,734
1,246
-
1,246
(3)
3
-
46
Consolidated and Company statement of cash flows
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
Group
Cash and cash equivalents from continuing operations
Cash and cash equivalents from discontinuing operations
Cash and cash equivalents at end of year
Year ended
31 Mar 2021
£'000
8,211
-
8,211
Year ended
31 Mar 2020
£'000
2,580
1,154
3,734
Reconciliation of Group and Company liabilities arising from financing activities in the year:
Group
Lease liability
As at
1 April 2020
£'000
3,223
3,223
Correction of
calculation
£'000
(369)
(369)
Cash flows
£'000
(898)
(898)
Non-cash
changes
£'000
102
102
As at
31 Mar 2021
£'000
2,058
2,058
Reconciliation of Group and Company liabilities arising from financing activities in the prior year:
Group
Lease liability
As at
1 April 2019
£'000
-
-
Transition
to IFRS 16
£'000
3,811
3,811
Cash flows
£'000
(754)
(754)
Non-cash
changes
£'000
166
166
As at
31 Mar 2020
£'000
3,223
3,223
There are no Company liabilities arising from financing activities.
The notes on pages 50 to 85 are an integral part of these financial statements.
47
Consolidated and Company changes in equity
Group
Balance at 1 April 2019
Loss and total comprehensive income
for the year
Employee share option scheme
New share capital issued
Other movements
Balance at 31 March 2020
Profit and total comprehensive income
for the year
Employee share option scheme
New share capital issued
Other movements
Balance at 31 March 2021
Share
capital
£'000
2,044
Share
premium
£'000
11,908
Other
reserves
£'000
981
Retained
earnings
£'000
(5,524)
Treasury
shares
£'000
(644)
Total
equity
£'000
8,765
-
-
-
(3,199)
-
(3,199)
-
291
-
2,335
-
-
666
-
3,001
-
2,506
-
14,414
-
-
4,669
-
19,083
-
-
-
981
-
-
-
-
981
109
-
34
(8,580)
1,153
90
-
3
(7,334)
-
-
-
(644)
109
2,797
34
8,506
-
1,153
-
-
-
(644)
90
5,335
3
15,087
The notes on pages 50 to 85 are an integral part of these financial statements.
Retained earnings include £10k ESOT reserve.
At 31 March 2021 the total number of issued ordinary shares is 62.02 million shares of 5p each (2020: 48.70 million shares of 5p each).
13.32 million shares were issued during the period (2020: 5.80 million).
48
Consolidated and Company changes in equity
Company
Balance at 1 April 2019
Loss and total comprehensive income for
the year
Employee share option scheme
New share capital issued
Other movements
Balance at 31 March 2020
Loss after tax
Employee share option scheme
Deferred tax on employee share options
New share capital issued
Other movements
Balance at 31 March 2021
Share
capital
£'000
2,044
Share
premium
£'000
11,908
Other
reserves
£'000
228
Retained
earnings
£'000
6,319
Treasury
shares
£'000
-
-
-
291
-
2,335
-
-
-
666
-
3,001
-
-
2,506
-
14,414
-
-
-
4,669
-
19,083
(45)
109
-
2
6,385
(5,347)
90
-
-
(2)
1,126
-
-
-
228
-
-
-
-
-
228
-
-
-
-
-
-
-
-
-
-
Total
equity
£'000
20,499
(45)
109
2,797
2
23,362
(5,347)
90
-
5,335
(2)
23,438
The notes on pages 50 to 85 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 (2020: £753k) and a (consolidated) capital redemption reserve of
£228k (2020: £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.
49
Notes to the financial statements
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 British Pounds (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 accounting standards in conformity with the requirements of the Companies Act 2006.
Despite the uncertainty created by Brexit and Covid-19, the performance over the financial year has been significantly above our
stressed scenario analysis. Decisive actions around cost reductions combined with a strong CMD performance ensured that the
Group was not just able to meet its regulatory capital requirement but build its surplus during the year. 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. The results of these stress tests provide comfort to the Directors that the business is sufficiently robust and resilient.
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
There have been no new standards which have been adopted during the year.
3. Significant accounting policies
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 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.
50
Notes to the financial statements
3. Significant accounting policies (continued)
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.
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. The combination of corporate placing commissions and corporate
finance advisory fees are referred to as corporate success fees.
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.
51
Notes to the financial statements
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.
52
Notes to the financial statements
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 21).
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. A deferred tax asset has been recognised, £190k
(2020: £nil).
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, excluding goodwill, 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.
53
Notes to the financial statements
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.
54
Notes to the financial statements
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.
55
Notes to the financial statements
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.
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 16).
Goodwill is subject to an annual impairment review which is done by comparing the balance value with the recoverable amount of
the asset or its CGU. The recoverable amount is the higher of the value in use and fair value to sell less costs.
Acquisitions
When an acquisition arises, it is the Group’s policy to allocate the consideration to the fair value of identifiable assets and liabilities
with any surplus representing goodwill. The determination of fair value of assets and liabilities requires significant accounting
judgements and estimates. In determining the intangible assets, WH Ireland Group plc have outsourced this exercise to Smith &
Williamson. The determination of the fair values is therefore based upon both a combination of Smith and Williamson’s expertise
and management’s estimates. The calculation of the intangible assets is based mainly on customer relationships and brand. A MEEM
approach has been used to estimate the fair value of the customer relationships and a relief from royalty approach has been adopted
to estimate the fair value of the brand. In arriving at their estimates, the following assumptions were made: revenue growth of 2%,
attrition rate of 3% for larger clients and 10% for smaller clients, discount rate of 13.5%.
The Multi period excess earnings method (MEEM) is a variant of the discounted cash flow technique. Under the MEEM, the fair value
of the intangible asset reflects the present value of the projected stream of cash flows that will be generated by the asset (e.g.
contracts/ relationships) over its life.
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 2021 was £26.4m (see note 17).
Going Concern
Management has used its judgement and knowledge of the business in preparing detailed financial forecasts for the period to
September 2022 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).
The level of cash and regulatory capital is continuously monitored by the Group and the stressed forecast prepared to September
2022 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.
56
Notes to the financial statements
5. Segment information
The Group has two principal operating segments, Wealth Management (WM) and Capital Markets Division (CMD) 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 CMD provides corporate finance and corporate broking
advice and services to companies and acts as Nominated Adviser (Nomad) to clients traded 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. 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” for the period of the year up until the sale of the IoM entity in August 2020.
The following tables represent revenue and cost information for the Group’s business segments:
Year to 31 March 2021
Revenue
Direct costs
Contribution
Indirect costs
WM
£'000
CMD
£'000
Head
Office
£'000
Harpsden
Other Group
Companies
£'000
£'000
Less
Discontinued
Operations
£'000
Group
£'000
12,509
16,285
-
782
467
30,043
(484)
Continuing
Operations
£'000
29,559
(10,266)
(11,503)
-
(649)
(1,328)
(23,746)
427
(23,319)
2,243
4,782
- 133
(861)
6,297
(57)
-
-
(3,708)
-
-
(3,708)
-
6,240
(3,708)
Segment results
2,243
4,782
(3,708)
133
(861)
2,589
(57)
2,532
Executive board cost
93
93
(855)
-
-
(669)
-
(669)
Investment losses
-
-
-
-
(137)
-
-
-
(503)
(1)
(6)
-
(218)
-
-
(137)
(510)
(218)
137
-
6
(504)
-
-
1
1
-
-
2
-
(73)
(22)
-
(1)
-
(96)
-
Depreciation
Amortisation
Finance income
Finance expense
Profit / (loss) before tax
2,263
4,854
(5,283)
131
(1,004)
Tax
6
-
190
(4)
-
961
192
86
-
Profit / (loss) for the year
(5,093)
* Other Group companies include WH Ireland (IOM) Limited, WH Ireland Group plc. Discontinued operations are included in other Group companies.
(1,004)
127
2,269
86
1,153
4,854
(218)
2
(96)
1,047
192
1,239
57
Notes to the financial statements
5. Segment information (continued)
Year to
31 March 2020
Revenue
Direct costs
Contribution
Indirect costs
Segment result
Executive board cost
Investment losses
Depreciation
Amortisation
Finance income
Finance expense
Profit / (loss) before tax
Tax
Profit / (loss) for the year
Other
Group
Companies
Head
Office
Less
Discontinued
Operations
Continuing
Operations
Group
WM
CMD
£'000
£'000
£'000
£'000
£'000
£'000
£'000
13,790
(11,085)
2,705
7,860
(7,674)
186
2,705
125
-
-
-
-
(65)
2,765
-
2,765
186
125
(43)
-
-
-
(28)
240
-
240
-
-
-
(4,501)
(4,501)
(1,162)
-
(482)
(122)
11
(58)
(6,314)
-
(6,314)
1,213
(1,070)
143
-
143
-
-
(17)
-
1
(17)
110
-
110
22,863
(19,829)
3,034
(4,501)
(1,467)
(912)
(43)
(499)
(122)
12
(168)
(3,199)
-
(3,199)
(1,255)
1,105
(150)
-
(150)
-
-
17
-
(1)
17
(117)
-
(117)
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 and WH Ireland Group plc. 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 44. 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.
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 2021
Point in time
Over time
Total
Year to
31 March 2020
Point in time
Over time
Total
WM
£'000
3,358
9,151
12,509
CMD
£'000
12,604
3,681
16,285
WM
£'000
4,034
9,756
13,790
CMD
£'000
4,571
3,289
7,860
Head
Office
£'000
-
-
-
Head
Office
£'000
-
-
-
Other
Group
Companies
£'000
35
431
466
Less
Discontinued
Operations
£'000
(53)
(431)
(484)
Group
£'000
16,059
13,984
30,042
Harpsden
£’000
61
721
782
Continuing
Operations
£'000
16,006
13,553
29,559
Other Group
Companies
£'000
77
1,136
1,213
Group
£'000
8,682
14,181
22,863
Less
Discontinued
Operations
£'000
(119)
(1,136)
(1,255)
Continuing
Operations
£'000
8,563
13,045
21,608
58
Notes to the financial statements
6. Operating profit/(loss)
Group
Operating profit / (loss) is stated after charging/(crediting):
Depreciation of property, plant and equipment
Amortisation of intangibles
Operating lease rentals – property
IFRS 16 depreciation (note 19)
Impairment of intangibles
Employee benefit expense (note 7)
Exceptional 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 22)
Total
Year ended
31 Mar 2021
£'000
Year ended
31 Mar 2020
£'000
504
218
-
393
-
19,260
616
7,224
482
122
-
562
-
14,365
970
8,071
52
25
106
17
28,390
28
28,418
78
22
24,697
44
24,741
Other administrative expenses are incurred in the ordinary course of the business and do not include any non-recurring items.
Exceptional items totalling £616,000 (2020: £970,000) are shown below:
Project Discovery*
Restructuring**
Compliance projects***
Acquisition of Harpsden Wealth Management Ltd
Total
Notes:
Year to
31 Mar 2021
£'000
35
129
18
434
616
Year to
31 Mar 2020
£'000
268
506
196
-
970
*As announced on 2 June 2016, the Group entered into a seven year agreement with SEI Investments (Europe) Ltd, to outsource its 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 year ending 31 March 2021, there were some further personnel restructures. During the year ended 31 March 2020, there were some personnel restructures and a one off project
on cost reduction was undertaken. 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 2021 and 31 March 2020, the Group incurred various costs in relation to one off control framework enhancements.
59
Notes to the financial statements
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
Less amounts included within Restructuring and non-recurring costs
Year ended
31 Mar 2021
£'000
Year ended
31 Mar 2020
£'000
9,162
3,801
1,634
401
14,998
4,301
19,299
90
(129)
19,260
10,690
432
1,583
442
13,147
1,315
14,462
109
(206)
14,365
The Group claimed £180,000 of grants during the year from the UK Government through the Coronavirus Job Retention Scheme. No
staff remained on furlough from 30 June 2021.
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
Capital Markets division
Wealth Management
Support staff
Salaried staff
Non salaried staff
Total
Company
Executive and senior management
Year ended
31 Mar 2021
Year ended
31 Mar 2020
£'000
167
-
167
£'000
226
-
226
Year ended
31 Mar 2021
8
35
64
24
131
8
Year ended
31 Mar 2020
7
34
59
50
150
9
139
159
Year ended
31 Mar 2021
5
5
Year ended
31 Mar 2020
5
5
The total amount paid to Directors in the period, including social security costs was £1.0m (2020: £1.0m). Full details of Directors’
remuneration, including that of the highest paid Director, are disclosed in the Remuneration Report on pages 31-34 of these financial
statements.
60
Notes to the financial statements
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% (2020: 19%)
Adjustment in respect of prior years
Total current tax
Deferred tax expense (note 21):
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 movement arising on acquisition
Total tax in the statement of equity
Year ended
31 Mar 2021
£'000
Year ended
31 Mar 2020
£'000
2
-
2
95
1
96
11
-
11
149
2
151
Year ended
31 Mar 2021
£'000
Year ended
31 Mar 2020
£'000
-
-
-
192
-
-
192
192
(799)
(607)
-
-
-
-
-
-
-
-
-
-
61
Notes to the financial statements
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%
(2020: 19%) to profit before tax can be reconciled as follows:
Group
Profit / (loss) before tax
Tax expense using the United Kingdom corporation tax rate of 19% (2020: 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 2021
Year ended
31 Mar 2020
£'000
1,047
199
4,845
(4,753)
-
(522)
-
39
-
(192)
£'000
(3,316)
(630)
71
-
21
568
-
(30)
-
-
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, and the sale subsequently
completed on 21 August 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 the prior year’s financial statements.
Financial performance and cash flow information
Revenue
Administrative expenses
Operating profit
Loss on disposal of discontinued operations
Finance income
Finance expense
Profit before tax
Tax income/(charge)
Profit from discontinued operations
Year ended
31 Mar 2021
£'000
484
(433)
51
Year ended
31 Mar 2020
£'000
1,255
(1,122)
133
(137)
-
-
(86)
-
(86)
-
1
(17)
117
-
117
62
Notes to the financial statements
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
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 2021
£'000
163
1
(997)
(833)
Year ended
31 Mar 2020
£'000
(536)
-
(60)
(596)
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. As at 31
March 2021, these were all nil values as the sale of WH Ireland (IOM) Limited completed on 21 August 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 2021 (2020: none).
Year ended
31 Mar 2020
£'000
46
321
607
1,154
2,128
Year ended
31 Mar 2020
£'000
(385)
(319)
(704)
63
Notes to the financial statements
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
29).
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. 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:
Year ended
31 Mar 2021
Year ended
31 Mar 2020
Group
Weighted average number of shares in issue during the period
Effect of dilutive share options
(thousands)
From continuing operations
Profit / (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
Profit / (Loss) for the year attributable to ordinary shareholders (£'000)
Basic
Diluted
50,249
9,614
59,862
1,239
2.47p
2.07p
(86)
(0.17p)
(0.14p)
1,153
2.30p
1.93p
44,957
-
44,957
(3,316)
(7.38p)
(7.38p)
117
0.26p
0.26p
(3,199)
(7.12p)
(7.12p)
64
Notes to the financial statements
13. Property, plant and equipment
Group
Company
Computers,
Computers,
fixtures and fittings
fixtures and fittings
Cost
At 31 March 2019
Additions
Reclassified as held for sale
Disposals
At 31 March 2020
Additions
Reclassified as held for sale
Disposals
At 31 March 2021
Depreciation and impairment
At 31 March 2019
Charge for the year
Reclassified as held for sale
Adjustment on disposal
At 31 March 2020
Charge for the year
Reclassified as held for sale
Adjustment on disposal
At 31 March 2021
Net book values
At 31 March 2021
At 31 March 2020
At 31 March 2019
£'000
5,310
214
(80)
-
5,444
201
-
-
5,645
4,148
499
(34)
-
4,613
521
-
-
5,134
511
831
1,162
£'000
33
-
-
-
33
-
-
-
33
33
-
-
-
33
-
-
33
-
-
-
65
Notes to the financial statements
14. Business Combinations
Acquisition of Harpsden Wealth Management Limited
On 22 December 2020, WH Ireland Group Plc acquired Harpsden Wealth Management Limited (Harpsden) for a total consideration
of £7.3m.
The fair values of the assets and liabilities of Harpsden as at the date of acquisition are as per the table below:
Book value
£'000
Adjustments
£'000
Fair value
£'000
Net Assets at date of acquisition:
Intangible assets
Tangible assets
Debtors
Cash
Creditors
Deferred tax liability
Net assets acquired
Goodwill arising on acquisition
Total
Discharged by:
Initial cash consideration
Deferred consideration payable
Effect of discounting of deferred consideration
Costs associated with acquisition
Total
15. Goodwill
Group
Beginning of year
Acquisition of subsidiaries
Impairment
End of year
-
13
309
671
(523)
-
470
4,225
-
-
-
-
(803)
3,422
4,225
13
309
671
(523)
(803)
3,892
3,539
7,431
5,300
2,585
(589)
135
7,431
Year ended
31 Mar 2021
£'000
Year ended
31 Mar 2020
£'000
-
3,539
-
3,539
-
-
-
-
66
Notes to the financial statements
16. Intangible assets
Group
Cost
At 31 March 2019
Additions
At 31 March 2020
Additions
At 31 March 2021
Amortisation
At 31 March 2019
Charge for the year
Impairment losses
At 31 March 2020
Charge for the year
At 31 March 2021
Net book values
At 31 March 2021
At 31 March 2020
At 31 March 2019
Client
relationship
s
£'000
4,581
-
4,581
4,225
8,806
3,701
122
-
3,823
219
4,042
4,764
758
880
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.
67
Notes to the financial statements
17. Subsidiaries
Company
Beginning of year
Additions
End of year
Year ended
31 Mar 2021
£'000
19,298
7,150
26,448
Year ended
31 Mar 2020
£'000
16,501
2,797
19,298
Investments in subsidiaries are stated at cost less impairment.
During the financial year, the Group raised £5.3m (2020: £2.80m on 22 November 2019) by way of placings to existing and new
shareholders (30 July 2020; 21 December 2020; and 16 March 2021). The Group used the placings to fund the purchase of Harpsden
Wealth Management Limited.
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*
Harpsden Wealth Management 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
England & Wales
Principal activity
WM and CM
WM
WM
Dormant
No trading activity
No trading activity
Dormant
Dormant
Nominee
Trustee
Nominee
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Proportion
held by
Group
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Proportion
held by
Company
100%
100%
100%
-
100%
100%
-
-
-
-
-
*WH Ireland (IOM) Limited was sold on 21 August 2020, but was included in the consolidated financial statements (see note 10).
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 Harpsden Wealth Management Limited is Newtown House, Newtown Road, Henley-on-Thames, Oxfordshire
RG9 1HG.
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
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
68
Notes to the financial statements
18. Investments
Group
Financial assets at fair value through profit or loss
At 31 March 2019
At 31 March 2020
At 31 March 2021
Other financial assets at fair value through profit or loss
At 31 March 2019
Additions
Fair value loss
Disposals
At 31 March 2020
Additions
Fair value gain / loss
Disposals
At 31 March 2021
Total investments at 31 March 2021
Total investments at 31 March 2020
Quoted
£'000
-
-
-
Quoted
£'000
1
-
-
-
1
-
-
-
1
1
1
Unquoted
£'000
48
48
48
Warrants
£'000
180
60
(11)
-
229
1,260
983
(1,422)
1,050
1,098
277
Total
£'000
48
48
48
Total
£'000
181
60
(11)
-
230
1,260
983
(1,422)
1,051
1,099
278
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 27). The key inputs into this calculation are the share price as at
31 March 2021, exercise price, risk free interest rate and volatility which is based on the share price movements during the period 1
December 2020 to 31 March 2021.
69
Notes to the financial statements
19. 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
Adjustment for deferred rent invoices
Correction of calculation of right of use asset
At 31 March 2021
Depreciation
At 31 March 2019
Charge for the year
Reclassified as held for sale
At 31 March 2020
Charge for the year
At 31 March 2021
Net book values
At 31 March 2021
At 31 March 2020
At 31 March 2019
Leasehold
Properties
£'000
-
3,399
3,399
(363)
3,036
(50)
(319)
2,667
-
604
(42)
562
502
1,064
1,603
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:
Lease liability
2021
2020
Group
Payable within 1
year
£'000
Payable in 2 to 5
years
£'000
Payable after more
than 5 years
£'000
Total contractual
payments
£'000
549
629
1,298
1,905
211
369
2,058
2,903
70
Notes to the financial statements
19. Right of use asset & lease liability (continued)
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
Year ended
31 Mar 2021
£'000
393
95
488
Year ended
31 Mar 2020
£'000
562
149
711
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 2021, 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.
20. Subordinated loan
Company
Beginning of year
Additions
Disposals
End of year
Year ended
31 Mar 2021
£'000
985
-
(985)
-
Year ended
31 Mar 2020
£'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 was repaid on completion, 21 August 2020. Accordingly, the loan was classified as a current asset in the prior
year. 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.
71
Notes to the financial statements
21. 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% (2020: 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.
A net deferred tax liability has been recognised in the year:
Group
Tax losses
Intangibles acquired on business combinations
Other
Deferred tax liability
Year ended
31 Mar 2021
£'000
190
(803)
4
(609)
Year ended
31 Mar 2020
£'000
-
-
-
-
No deferred tax asset or liability has been recognised on the Statement of Financial Position of the Company for the year ended 31 March 2021 (2020: £nil).
The March 2021 Budget announced a further increase to the main rate of corporation tax to 25% from April 2023. This rate has not
been substantively enacted at the balance sheet date. As a result deferred tax balances as at 31 March 2021 continue to be measured
at 19%. If all of the deferred tax was to reverse at the amended rate the effect on the closing deferred tax position would be to increase
the deferred tax liability by £192,000.
The unrecognised tax losses and fixed asset timing differences amount to £16.0m (2020: £19.0m).
22. Trade and other receivables
Trade receivables
Amounts due from Group companies
Other receivables
Accrued income
Prepayments
Group
Company
31 Mar 2021
£'000
1,322
-
1,065
2,139
630
5,156
31 Mar 2020
£'000
1,184
-
2,032
1,995
733
5,944
31 Mar 2021
£'000
-
-
47
-
9
56
31 Mar 2020
£'000
-
2,477
100
-
12
2,589
The carrying value of trade and other receivable balances are denominated fully in British pounds (2020: 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.
72
Notes to the financial statements
22. Trade and other receivables (continued)
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 2021, 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 2021
£'000
496
-
42
148
68
568
1,322
31 Mar 2020
£'000
362
9
21
170
229
393
1,184
31 Mar 2021
£'000
-
-
-
-
-
-
-
31 Mar 2020
£'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.
Based on the above, the group recognised an expected credit loss of £28k (2020: £44k expected credit loss).
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
Group
Company
31 Mar 2021
£'000
458
-
(65)
31 Mar 2020
£'000
603
(179)
(10)
31 Mar 2021
£'000
-
-
-
31 Mar 2020
£'000
-
-
-
28
421
44
458
-
-
-
-
73
Notes to the financial statements
23. Other investments
Current asset investment
Restricted cash
Total
Group
Company
31 Mar 2021
£'000
31 Mar 2020
£'000
31 Mar 2021
£'000
31 Mar 2020
£'000
962
1,528
2,490
912
311
1,223
-
-
Current asset investments represent short-term principal positions in the form of listed investments which are held at market
value.
Restricted cash represents monies held by the Group which have some restrictions on their conversion to cash.
24. Cash and cash equivalents
Cash and cash equivalents
8,211
2,580
1,246
-
Group
Company
31 Mar 2021
£'000
31 Mar 2020
£'000
31 Mar 2021
£'000
31 Mar 2020
£'000
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 2021 for the Group was £401k (2020: £430k). There is no client money held in the Company (2020: £nil).
25. Trade and other payables
Trade payables
Amounts due to Group companies
Other payables
Tax and social security
Deferred income
Accruals
Group
Company
31 Mar 2021
£'000
1,897
-
618
662
372
4,074
7,623
31 Mar 2020
£'000
996
-
359
459
394
1,895
4,103
31 Mar 2021
£'000
35
2,824
-
-
1
100
2,960
31 Mar 2020
£'000
51
-
-
-
-
105
156
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.
74
Notes to the financial statements
26. Deferred consideration
Included in current liabilities
Included in non-current liabilities
31 Mar 2021
£'000
1,087
909
1,996
31 Mar 2020
£'000
-
-
-
Deferred consideration relate to the acquisition of Harpsden and the maximum amounts payable over a two year period. The
following assumptions were made: revenue growth of 2%, attrition rate of 3% for larger clients and 10% for smaller clients, discount
rate of 13.5%.
27. 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 2021
Fair value
through profit
or loss
£'000
Amortised
cost
£'000
-
-
4,526
8,211
6,589
2,058
48
3,298
-
-
-
-
Total
£'000
48
3,298
4,526
8,211
6,589
2,058
75
Notes to the financial statements
27. Financial risk management (continued)
Group
Financial assets
Investments
Other investments
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Lease liability
Amortised
cost
£'000
31 March 2020
Fair value through
profit or loss
£'000
-
-
5,211
2,580
3,250
2,903
48
1,453
-
-
-
-
The tables below summarise the Company’s main financial instruments by financial asset type:
Company
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Group balances
Company
Financial assets
Subordinated loan (note 20)
Group balances
Financial liabilities
Trade and other payables
Amortised
cost
£'000
31 March 2021
Fair value through
profit or loss
£'000
47
1,246
135
2,824
-
-
-
-
31 March 2020
Amortised
cost
£'000
Fair value through
profit or loss
£'000
985
2,477
156
-
-
-
Total
£'000
48
1,453
5,211
2,580
3,250
2,903
Total
£'000
47
1,246
135
2,824
Total
£'000
985
2,477
156
76
Notes to the financial statements
27. 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 22. 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.
77
Notes to the financial statements
27. 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
Lease liability
Payable
within 1
year
£'000
6,589
634
7,223
Payable
within 1
year
£'000
3,250
751
4,001
31 March 2021
Payable in 2
to 5 years
£'000
-
1,425
1,425
Payable after
more than 5
years
£'000
-
206
206
Total
contractual
payments
£'000
6,589
2,265
8,854
31 March 2020
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
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
Payable
within 1
year
£'000
135
135
Payable
within 1
year
£'000
156
156
31 March 2021
Payable in 2
to 5 years
£'000
-
-
Payable after
more than 5
years
£'000
-
-
Total
contractual
payments
£'000
135
135
31 March 2020
Payable in 2
to 5 years
£'000
-
-
Payable after
more than 5
years
£'000
-
-
Total
contractual
payments
£'000
156
156
78
Notes to the financial statements
27. 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 £3,346k (2020: £1,501k). See note 18 and 23.
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
-
-
2,490
2,490
31 March 2021
Level 2
£'000
Level 3
£'000
Total
£'000
-
-
-
-
48
48
-
1,051
1,099
-
3,541
3,589
79
Notes to the financial statements
27. 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 2019
Total gains or losses in Statement of Comprehensive Income
Balance at 31 March 2020
Total gains or losses in Statement of Comprehensive Income
Balance at 31 March 2021
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
Unquoted
equities
£'000
48
-
48
-
48
Other investments
£'000
1,349
104
1,453
2,088
3,541
28. Capital management
The capital of the Group comprises share capital, share premium, retained earnings and other reserves. The total capital at 31 March
2021 amounted to £15.1m for the Group (2020: £8.5m) and £23.4m for the Company (2020: £23.4m). 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.
80
Notes to the financial statements
29. Treasury shares
Group
At 31 March
Additions
Disposals
At 31 March
Year ended
31 Mar 2021
£'000
Year ended
31 Mar 2020
£'000
644
-
-
644
644
-
-
644
At 31 March 2021 no shares in the Company were held in Treasury (2020: nil shares). At 31 March 2021 no shares in the Company were
held in the EBT (2020: nil shares) and the ESOT held 2,139,500 shares (2020: 2,139,500), at a nominal value of 5p per share. This
represents 3.45% of the called up share capital (2020: 4.39%).
30. 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 2,139,500 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 29). Due to the nature of these
arrangements, the options contained in the JOE Agreements are accounted for as share-based payments (note 31).
81
Notes to the financial statements
31. 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
30). Details of these schemes can be found in the Remuneration Report on pages 31 to 34. SAYE 3 matured in May 2019.
Under the terms of the Unapproved Options, 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, 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
ESOT
ESOT
Unapproved Options
2020 EMI Option Plan
Options
WAEP
Options
WAEP
Options
WAEP
Options
WAEP
Options
WAEP
31 March 2021
142,002
63.88p
650,000
40.12p
70,000
92.50p
1,800,000
46.00p
-
-
-
-
-
-
-
(15,000)
57.00p
(300,000)
0.00p
(20,000)
92.50p
-
-
-
-
-
-
-
-
-
-
-
-
4,330,719
40.43p
-
-
-
-
127,002
64.69p
350,000
74.50p
50,000
92.50p
1,800,000
45.00p
4,330,719
40.43p
127,002
64.69p
350,000
74.50p
50,000
92.50p
-
45.00p
-
40.43p
Outstanding
at beginning
of year
Granted
Expired /
forfeited
Exercised
Outstanding
at end of
year
Exercisable
at end of
year
WA Life*
0.73 yrs
2.5 yrs
5.01 yrs
9.03 yrs
12.46 yrs
* WA Life represents the weighted average contractual life in years to the expiry date for options outstanding at the end of the year
CSOP
ESOT
Options
WAEP
Options WAEP
SAYE 3
Options WAEP
ESOT
Options WAEP
Unapproved
Options
Options
WAEP
31 March 2020
128,589
66.23p
1,650,000
78.14p
794,564
82.00p
450,000
92.50p
-
-
43,413
-
(30,000)
-
58.00p
-
66.17p
-
-
-
(1,000,000)
-
-
75.00p
-
-
(794,564)
-
-
-
82.00p
-
-
-
-
(380,000)
-
-
-
99.26p
-
1,800,000
-
-
-
46.00p
-
-
-
142,002
63.88p
650,000
40.12p
142,002
63.88p
650,000
40.12p
1.71 yrs
5.19 yrs
-
-
-
-
-
70,000
92.50p
1,800,000
46.00p
70,000
92.50p
-
-
6.01 yrs
10.03 yrs
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
82
Notes to the financial statements
31. 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)
Expected volatility (%)
Expected life (years)
Risk-free rate (%)
CSOP
ESOT
Black Scholes
Monte Carlo
02/11/11-
24/05/12
56.5-83.0
57.0-84.5
32.6332-
33.2130
5
1.2993-.0.7999
28/10/13-
13/4/16
74.5-114.5
0.0-114.5
43.0000-
37.0000
5
0.8000-1.9300
Expected dividend yield (%)
-
0.67-2.19
Pricing Models
ESOT
N/A
30/05/17
125
-
N/A
3
N/A
N/A
Unapproved
Options
N/A
28/06/19 &
28/12/19
45.0 & 49.0
45.0 & 49.0
2020 EMI Option Plan
Black Scholes
01/11/2020 &
11/03/2021
45.0
0.0 & 48.0
50
3
2
N/A
38
12
0.33
N/A
32. Capital commitments
There were no capital commitments for the Group or the Company as at 31 March 2021 (2020: £nil).
33. 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
(2020: £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.
83
Notes to the financial statements
33. 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
2021
2020
2021
2020
-
-
-
-
-
-
-
-
-
-
-
-
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 2021
£'000
1,685
-
-
-
1,685
Year ended
31 Mar 2020
£'000
1,831
-
-
-
1,831
The highest paid Director for 2021 was P Wale receiving emoluments of £354,831 (2020: £371,145).
Company
The Parent Company receives interest from subsidiaries in the normal course of business. Total interest received during the year was
£nil (2020: £nil). In addition, the Parent Company received a management charge of £453k (2020: £479k) from its subsidiary WH
Ireland Limited. WH Ireland Limited also charged the Parent Company £nil (2020: £nil) for broker services.
During the year, the intercompany balances with Stockholm Investments Limited and Readycount Limited were converted into loans
and then released through a deed of release.
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 17, 22 and 25 and in detail in the following table:
Readycount Limited
WH Ireland (IOM) Limited
Stockholm Investments Limited
WH Ireland Limited
WH Ireland Trustee Limited
Amounts owed by related parties
Amounts owed to related parties
2021
£'000
-
-
-
-
-
-
2020
£'000
4,157
110
410
-
-
4,677
2021
£'000
-
-
-
2,807
17
2,824
2020
£'000
-
-
-
2,183
17
2,200
The net amount owed to related parties is £2,824k (2020: £2,477k owed by related parties) (see note 22 and 25).
84
Notes to the financial statements
34. Events after the reporting date
On 18 May 2021 the ESOT, for which Sanne is the trustee, entered into an ESOT Share Purchase Plan (The Plan) to acquire ordinary
shares of 5p in the capital of the Company. It is the Company’s and the ESOT’s intention that any ordinary shares acquired will be
used to satisfy the awards made to employees of the Company or the Group. Purchases will be limited to a maximum of 50,000
shares or a maximum value of £40,000 each month and the Plan, unless renewed, will terminate on 1st May 2023.
85
A lifetime of advice.
T: +44 (0) 20 7220 1666
W: www.whirelandplc.com
E: enquiries@whirelandplc.com
WH Ireland is the trading name of WH Ireland Limited which is a wholly owned subsidiary of WH Ireland Group plc. WH Ireland
Limited is authorised and regulated in the UK by the Financial Conduct Authority, is registered in England & Wales with company
number 02002044 and is a member of the London Stock Exchange. VAT No. 727149034.