t
Manx Financial Group PLC reported unaudited interim results for the six months to 30 June 2024, showing a 16% increase in Profit Before Tax to £3.5 million, with basic earnings per share of 2.07 pence and diluted earnings per share of 1.59 pence. The Group also completed the acquisition of the remaining 49.9% shareholding in Payment Assist Limited for a £5 million consideration, as announced on 16 September 2024. Additionally, Lynsey Elliott was appointed as an independent non-executive director to Conister Bank's board, and on 11 July 2024, the Group accepted requests to exercise 1,920,000 Restricted Stock Units at nil cost.
| Date | 24 Sept 2024 |
| Time | 07:00:04 |
| Category | Results |
| ID | 3095F |
FOR IMMEDIATE RELEASE
24 September 2024
Manx Financial Group PLC (the 'Company' or the 'Group')
Unaudited Interim Results for the 6 months to 30 June 2024
Manx Financial Group PLC (LSE: MFX), the financial services group which includes Conister Bank Limited, Conister Finance & Leasing Ltd, MFX Limited, Payment Assist Limited, Blue Star Business Solutions Limited, Edgewater Associates Limited, Ninkasi Rentals & Finance Limited and The Business Lending Exchange Limited, presents the Interim results for the six months ended 30 June 2024.
Jim Mellon, Executive Chair, commented: "I am pleased to report another set of record results with a 16% increase in Profit Before Tax to £3.5 million."
Copies of the Interim Report will shortly be available on our website www.mfg.im.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU No. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
For further information, please contact:
|
Manx Financial Group PLC Denham Eke, Executive Vice Chair Tel +44 (0)1624 694694 |
Beaumont Cornish Limited Roland Cornish/James Biddle Tel +44 (0) 20 7628 3396 |
Greentarget Limited Jamie Brownlee Tel +44 (0) 203 307 5726 |
Dear Shareholders
Introduction
We are lucky that, as an Isle of Man centric company, we are somewhat shielded from the UK Government-inspired gloom that currently characterises the UK economy, or at least we are for the time being. An annual report on the Isle of Man's financial standing has assessed its economic growth to be 'stronger than in most of Europe'. International credit ratings agency Moody's expects growth to climb from an estimated 1.5% in 2023 to 3% by 2025, rating the Island's economic strength as 'a3' which reflects "a robust record of economic growth and high income levels." However, while Moody's analysis of the fiscal positions of different jurisdictions puts the Island's overall credit rating on par with the UK, as 'Aa3 stable', it also notes the 'substantial' linkages between the two countries.
As I reported previously, inflationary pressure in the UK would remain stubbornly above the Bank of England's 2% target for longer than certain economists were forecasting. Whilst the transitionary element of double-digit inflation has abated, there remains a permanent wage related element which will now be exacerbated by the new Government's recently announced public sector pay rises, setting a precedent which is significantly above inflation.
This, along with the UK Prime Minister's recent comments on the difficult financial decisions that rest with his Chancellor, leaves businesses and individuals in little doubt that tax rises will be the main focus of the autumn budget. The UK Government is treading a thin line if they are seeking growth to cure the country's financial woes whilst paradoxically applying constraints to that growth through increased taxation.
How much of the effect of the UK's attempts at deficit remediation and income rebalancing will spill over to the Island remains open to question. But there is no doubt that the timing of large expenditure items by consumers and businesses alike will reduce the need for larger credit facilities until greater certainty returns to the market. The next nine to twelve months will prove more challenging for both of the jurisdictions in which we operate.
Despite the difficult conditions that lie ahead, it is pleasing to announce another record half year with a 16% increase in our Profit Before Tax to £3.5 million (30 June 2023: £3.0 million). Our basic and diluted Earnings Per Share for the period increased to 2.07 pence (30 June 2023: 1.67 pence), and 1.59 pence (30 June 2023: 1.34 pence) respectively. Disappointingly, despite these impressive results, the Group is still trading at a 45% discount to Net Asset Value as at 19 September 2024
Acquisition of the outstanding shareholding in Payment Assist Limited
As recently announced on 16 September 2024, the Group is pleased to have brought forward the acquisition of the remaining shareholding (49.9%) in Payment Assist Limited ("PAL") for a £5 million consideration. The economic environment will continue to bring opportunities for a well-regulated business that supplies short-term credit for essential products, such as those relied upon by PAL's customers. PAL's market position, together with our long-term vision for the company, were among the reasons the Board brought forward its option to acquire the remaining shares in this business. The Board anticipates that this transaction will reduce the cost of acquiring the remaining shareholding under the original Option by up to £4 million, principally derived by the savings in any future dividends previously due to the sellers.
Strategy update
We continue to make satisfactory progress against our strategic priorities by taking decisive action to grow and simplify our business and to manage our liquidity, capital and costs more efficiently in compliance with our regulatory and ESG requirements.
In this regard, we will:
§ commence taking retail deposits in the UK in the autumn. This will provide Conister Bank with a source of alternative liquidity to alleviate the reliance on our loyal Isle of Man retail and commercial deposit customers;
§ further simplify the Group's structure to deliver cost efficiencies through supplier reviews and technological enhancements;
§ continue to enhance our customers' experience through the deployment of technology where it really adds value, by taking a digital first approach. This will include introducing self-service functionality for our lending and deposit customers and introducing a digital deposit taking system;
§ expand our product offering in markets that have shown resilience in recent years and seek to increase our market share in these markets through accretive acquisitions;
§ withdraw from markets that do not deliver the credit experience we require, or where price is the only differentiator;
§ deploy our capital in the most sustainable markets, and in products that produce the best outcomes for our customers; and
§ develop and use technology to reduce our carbon footprint and encourage the Group, and its stakeholders, to better understand the consequence of their actions or inactions.
Financial review
The Group's results for the period continued to be negatively impacted by the Bank of England's fight to reduce inflation as our Net Interest Income ("NII") reduced by 13.43% to 66.4% (30 June 2023: 79.7%). Notwithstanding, this result was more favourable than our internal expectations. Our margin erosion was partly offset by net loan book growth of £29.5 million which was supported by an improved net yield of 12.6% (30 June 2023: 10.7%) as we strived to offset the expected reduction in our NII. It is also encouraging that, as both our lending and deposits are almost exclusively at fixed rates, and the deposit book matures more quickly than the lending book, we will experience an improvement in our NII as deposit rates start to decrease. We are already experiencing this uplift at the beginning of the second half.
Whilst the NII reduced as a percentage, in income terms it actually increased by £0.9 million to £17.3 million (30 June 2023: £16.4 million). Year-on-year, this improvement helped increase Operating Income by £1.3 million to £17.6 million (30 June 2023: £16.3 million).
With Employment expenses reducing slightly year-on-year, and all costs other than Administration expenses remaining constant, the Group's Profit before Tax increased by 16% to £3.5 million (30 June 2023: £3.0 million), leading to the Profit attributable to the Group's owners increasing by 25.1% to £2.4 million (30 June 2023: £1.9 million).
Turning to the Balance Sheet, the loan book growth of £10.1 million to £372.8 million since the year-end (31 December 2023: £362.7 million) was supported by an increase in deposits of £18.9 million to £409.3 million (31 December 2023: £390.4 million). This gain in deposits allowed the Group to improve its liquidity, which it holds as cash or UK Government Treasury Bills, by £7.7 million to £95.9 million (31 December 2023: £88.2 million). Total Equity attributable to shareholders of the parent increased by £2.2 million to £37.1 million since the year-end (31 December 2023: £34.9 million).
I reported at the end of 2023 that Conister Bank's exposure and potential liability following the UK FCA's review of discretionary commission arrangements in the motor finance sector was expected to be minimal. The UK FCA was due to publish its findings in September 2024, which would have given clarity on the position, but it has delayed its final announcement until 2025. Pending the announcement, the Board continues to be of the view that there is no present need for any provision, and Conister Bank continues to consider a range of possible outcomes.
Business review
Conister Bank Limited ("The Bank") remains the Group's principal profit driver and continues to perform admirably through these turbulent times. With net loan book growth of £10.3 million to £370.4 million (31 December 2023: £360.1 million) supported by a greater increase in deposits to £409.3 million (31 December 2023: £390.4 million) the Bank's Loan to Deposit ratio eased to 90.5%.
Excess liquidity, which will support future lending, is currently generating a positive return in short-term UK Government Treasury Bills. We are in an exceptionally good liquidity position. Turning to regulatory capital, the Bank continues to enjoy a robust CET1 of 12.0% (31 December 2023: 10.9%) and will continue to evolve its liquidity and capital deployment to ensure it optimises its return to all stakeholders. Part of its redeployment of capital strategy enabled the Bank to withdraw from the UK Credit Broker market as returns were volatile. Access to the markets that were being introduced to the Bank can be better served either a) directly, or b) more securely through our Structured Finance products. Accessing these markets utilising either of these two methods will reduce the Bank's credit risk.
I am pleased to welcome Lynsey Elliott as an independent non-executive director to the Bank's board and also a member of the Audit, Risk and Compliance Committee. Lynsey has spent 25 years working in the Isle of Man's finance sector and is a Fellow of the Association of Chartered Certified Accountants.
As anticipated, PAL has had a difficult start to this year, despite recording a profit of £1.9 million (30 June 2023: £1.5 million), but we have every confidence that our remedial actions will be successful, leading to a renewal of profitability in 2025. Despite this, I fully expect this business to still have a major positive impact on the Group's full year results.
Our foreign exchange advisory business, MFX, continues to thrive during these turbulent times and has a recorded a profit of £0.5 million (30 June 2023: £0.4 million), significantly ahead of last year. Equally pleasingly, our Isle of Man Independent Financial Advisor, Edgewater Associates Limited, recorded aa profit of £0.3 million (30 June 2023: £0.1 million). Our UK based sub-prime lender, The British Lending Exchange Limited recorded a profit of £0.4 million (30 June 2023: £0.3 million). All other operating subsidiaries are trading admirably and contributed, on a consolidated basis, a further £0.5 million to the Interim results.
Outlook
Whilst we do not know the exact content of the UK Chancellor's autumn budget statement on 30 October, I do believe the ground has been adequately prepared to ensure the UK public are not surprised by the scale and breadth of the increase in tax burden the country is being asked to accept. This can only lead to a deferment of investment and expenditure as people and businesses alike will prudently take stock of their financial position. Whilst Bank of England interest rate reductions will provide some level of stimulus, the overall position will be less positive than that experienced in the first half of the year, and we expect that will be reflected in our full year financial performance.
Notwithstanding, we have businesses in the Group which thrive on volatility and there will be credit markets that will also be attractive to the Bank and our other lending subsidiaries. However, we will continue to position the Group for the longer term, whilst seeking opportunities as and when they arise.
Presentation and webcast for analysts and investors
A conference call with management, including an opportunity to ask questions, will commence at 2:00 pm (BST) on 1 October 2024. A copy of the presentation will be available in the Investor Relations section of www.mfg.im from 4:00 pm (BST) that day. To access the webcast, please register your interest by writing to [email protected], together with any advanced questions you may have by 5:00 pm (BST) on 27 September 2024.
Thank you
These results have been achieved despite a difficult operating environment and are a testament to our loyal customer base, our staff, and your Board.
Jim Mellon
Executive Chair
23 September 2024
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
|
|
Notes |
|
For the six months ended 30 June 2024 £'000 (unaudited) |
|
For the six months ended 30 June 2023 £'000 (unaudited) |
|
For the year ended 31 December 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue calculated using the effective interest method |
6 |
|
27,243 |
|
21,458 |
|
45,356 |
|
|
Other interest income |
6 |
|
766 |
|
713 |
|
1,535 |
|
|
Interest expense |
|
|
(10,684) |
|
(5,787) |
|
(14,530) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
17,325 |
|
16,384 |
|
32,361 |
|
|
|
|
|
|
|
|
|
|
|
|
Fee and commission income |
|
|
2,178 |
|
2,248 |
|
3,997 |
|
|
Fee and commission expense |
|
|
(3,851) |
|
(3,046) |
|
(7,327) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net trading income |
|
|
15,652 |
|
15,586 |
|
29,031 |
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income |
|
|
275 |
|
62 |
|
364 |
|
|
Gain on financial instruments |
|
|
- |
|
- |
|
195 |
|
|
Realised gain on debt securities |
9 |
|
1,671 |
|
664 |
|
1,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
17,598 |
|
16,312 |
|
31,483 |
|
|
|
|
|
|
|
|
|
|
|
|
Employment expenses |
|
|
(6,211) |
|
(6,236) |
|
(12,170) |
|
|
Administration expenses |
|
|
(3,938) |
|
(3,031) |
|
(6,627) |
|
|
Provision for impairment on loans and advances to customers |
|
|
(3,304) |
|
(3,294) |
|
(4,135) |
|
|
Depreciation |
|
|
(444) |
|
(407) |
|
(825) |
|
|
Amortisation and impairment of intangibles |
|
|
(217) |
|
(312) |
|
(683) |
|
|
Share of profit of equity accounted investees, net of tax |
|
|
37 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax payable |
|
|
3,521 |
|
3,032 |
|
7,043 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(739) |
|
(493) |
|
(903) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period / year |
|
|
2,782 |
|
2,539 |
|
6,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes form an integral part of these condensed consolidated interim financial statements.
|
|
Notes |
|
For the six months ended 30 June 2024 £'000 (unaudited) |
|
For the six months ended 30 June 2023 £'000 (unaudited) |
|
For the year ended 31 December 2023 £'000 (audited) |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Profit for the period / year |
|
|
2,782 |
|
2,539 |
|
6,140 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Other comprehensive income: |
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Items that will be reclassified to profit or loss |
|
|
|
|
|
|
|
||||||
|
Net unrealised gain on debt securities |
|
|
- |
|
62 |
|
324 |
||||||
|
Related tax |
|
|
- |
|
- |
|
(32) |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Items that will never be reclassified to profit or loss |
|
|
|
|
|
|
|
||||||
|
Actuarial gain on defined benefit pension scheme taken to equity |
|
|
- |
|
- |
|
29 |
||||||
|
Related tax |
|
|
- |
|
- |
|
(3) |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Other comprehensive income, net of tax |
|
|
- |
|
62 |
|
318 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Total comprehensive income for the period / year |
|
|
2,782 |
|
2,601 |
|
6,458 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Profit attributable to: |
|
|
|
|
|
|
|
||||||
|
Owners of the Company |
|
|
2,410 |
|
1,927 |
|
5,288 |
||||||
|
Non-controlling interest |
|
|
372 |
|
612 |
|
852 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
2,782 |
|
2,539 |
|
6,140 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
||||||
|
Owners of the Company |
|
|
2,410 |
|
1,989 |
|
5,606 |
||||||
|
Non-controlling interest |
|
|
372 |
|
612 |
|
852 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
2,782 |
|
2,601 |
|
6,458 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Earnings per share - profit for the period / year |
|
|
|
|
|
|
|
||||||
|
Basic earnings per share (pence) |
8 |
|
2.07 |
|
1.67 |
|
4.59 |
||||||
|
Diluted earnings per share (pence) |
8 |
|
1.59 |
|
1.30 |
|
3.51 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Earnings per share - total comprehensive income for the period / year |
|
|
|
|
|
|
|
||||||
|
Basic earnings per share (pence) |
8 |
|
2.07 |
|
1.73 |
|
4.86 |
||||||
|
Diluted earnings per share (pence) |
8 |
|
1.59 |
|
1.34 |
|
3.71 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||
The notes form an integral part of these condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
As at |
Notes |
|
30 June 2024 £'000 (unaudited) |
|
30 June 2023 £'000 (unaudited) |
|
31 December 2023 £'000 (audited) |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
18,651 |
|
17,267 |
|
12,107 |
|
Debt securities |
9 |
|
77,257 |
|
31,371 |
|
76,129 |
|
Equity held at Fair Value Through Profit or Loss |
|
|
138 |
|
122 |
|
138 |
|
Loans and advances to customers |
5,10 |
|
372,775 |
|
343,244 |
|
362,653 |
|
Trade and other receivables |
11 |
|
11,623 |
|
7,227 |
|
8,227 |
|
Property, plant and equipment |
|
|
6,072 |
|
6,665 |
|
6,410 |
|
Intangible assets |
|
|
4,905 |
|
3,028 |
|
4,268 |
|
Investment in associates |
|
|
233 |
|
197 |
|
197 |
|
Goodwill |
12 |
|
10,576 |
|
10,576 |
|
10,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
502,230 |
|
419,697 |
|
480,705 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Deposits from customers |
|
|
409,284 |
|
332,510 |
|
390,421 |
|
Creditors and accrued charges |
13 |
|
14,357 |
|
14,857 |
|
14,409 |
|
Deferred consideration |
16 |
|
5 |
|
216 |
|
20 |
|
Loan notes |
14 |
|
41,407 |
|
39,492 |
|
39,317 |
|
Pension liability |
|
|
105 |
|
240 |
|
162 |
|
Deferred tax liability |
|
|
377 |
|
353 |
|
392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
465,535 |
|
387,668 |
|
444,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
Called up share capital |
15 |
|
19,626 |
|
19,286 |
|
19,384 |
|
Profit and loss account |
|
|
17,425 |
|
11,927 |
|
15,544 |
|
Revaluation reserve |
|
|
15 |
|
15 |
|
15 |
|
Non-controlling interest |
|
|
(371) |
|
801 |
|
1,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
36,695 |
|
32,029 |
|
35,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
502,230 |
|
419,697 |
|
480,705 |
|
|
|
|
|
|
|
|
|
The notes form an integral part of these condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
|
Attributable to owners of the Company |
|
|||||||||||||||||
|
For the six months ended 30 June 2024 |
Share capital £'000 |
|
Profit and loss account £'000 |
|
Revaluati-on reserve £'000 |
|
Total £'000 |
|
Non-controlling interest £'000 |
|
Total equity £'000 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at 1 January 2023 |
19,195 |
|
10,371 |
|
15 |
|
29,581 |
|
189 |
|
29,770 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total comprehensive income for the period: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Profit for the period |
- |
|
1,927 |
|
- |
|
1,927 |
|
612 |
|
2,539 |
||||||||
|
Other comprehensive income |
- |
|
62 |
|
- |
|
62 |
|
- |
|
62 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
- |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total comprehensive income for the period |
- |
|
1,989 |
|
- |
|
1,989 |
|
612 |
|
2,601 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Changes in ownership interests: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Dividend declared (see Note 15) |
91 |
|
(433) |
|
- |
|
(342) |
|
- |
|
(342) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total changes in ownership interests |
91 |
|
(433) |
|
- |
|
(342) |
|
- |
|
(342) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at 30 June 2023 |
19,286 |
|
11,927 |
|
15 |
|
31,228 |
|
801 |
|
32,029 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at 1 July 2023 |
19,286 |
|
11,927 |
|
15 |
|
31,228 |
|
801 |
|
32,029 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total comprehensive income for the period: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Profit for the period |
- |
|
3,361 |
|
- |
|
3,361 |
|
240 |
|
3,601 |
||||||||
|
Other comprehensive income |
- |
|
256 |
|
- |
|
256 |
|
- |
|
256 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total comprehensive income for the period |
- |
|
3,617 |
|
- |
|
3,617 |
|
240 |
|
3,857 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Changes in ownership interests: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Share issue (see Note 15) |
98 |
|
- |
|
- |
|
98 |
|
- |
|
98 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total changes in ownership interests |
98 |
|
- |
|
- |
|
98 |
|
- |
|
98 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at 31 December 2023 |
19,384 |
|
15,544 |
|
15 |
|
34,943 |
|
1,041 |
|
35,984 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at 1 January 2024 |
19,384 |
|
15,544 |
|
15 |
|
34,943 |
|
1,041 |
|
35,984 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total comprehensive income for the period: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Profit for the period |
- |
|
2,410 |
|
- |
|
2,410 |
|
372 |
|
2,782 |
||||||||
|
Other comprehensive income |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total comprehensive income for the period |
- |
|
2,410 |
|
- |
|
2,410 |
|
372 |
|
2,782 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Changes in ownership interests: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Dividend declared (see Note 15) |
193 |
|
(529) |
|
- |
|
(336) |
|
(1,784) |
|
(2,120) |
||||||||
|
Share issue (see Note 15) |
49 |
|
- |
|
- |
|
49 |
|
- |
|
49 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total changes in ownership interests |
242 |
|
(529) |
|
- |
|
(287) |
|
(1,784) |
|
(2,071) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at 30 June 2024 |
19,626 |
|
17,425 |
|
15 |
|
37,066 |
|
(371) |
|
36,695 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
The notes form an integral part of these condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
Notes |
|
For the six months ended 30 June 2024 £'000 (unaudited) |
|
For the six months ended 30 June 2023 £'000 (unaudited) |
|
For the year ended 31 December 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF PROFIT BEFORE TAXATION TO OPERATING CASH FLOWS
|
|
|
|
|
|
|
|
|
Profit before tax |
|
|
3,521 |
|
3,032 |
|
7,043 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
444 |
|
407 |
|
825 |
|
Amortisation of intangibles |
|
|
217 |
|
312 |
|
683 |
|
Impairment of loans and advances to customers |
|
|
3,304 |
|
3,294 |
|
4,135 |
|
Net interest income |
|
|
(18,646) |
|
(17,500) |
|
(34,726) |
|
Realised gains on debt securities |
|
|
(1,671) |
|
(664) |
|
(1,893) |
|
Share of profit of equity accounted investees |
|
|
(37) |
|
- |
|
- |
|
Contingent consideration interest expense |
|
|
- |
|
4 |
|
4 |
|
Pension charge included in employment expenses |
|
|
- |
|
3 |
|
11 |
|
Gain on financial instruments |
|
|
- |
|
- |
|
(195) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,868) |
|
(11,112) |
|
(24,113) |
|
Changes in: |
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
(3,396) |
|
(3,016) |
|
(4,016) |
|
Creditors and accrued charges |
|
|
(379) |
|
1,283 |
|
1,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in trading activities |
|
|
(16,643) |
|
(12,845) |
|
(26,176) |
|
Changes in: |
|
|
|
|
|
|
|
|
Loans and advances to customers |
|
|
(13,748) |
|
(52,852) |
|
(75,590) |
|
Deposits from customers |
|
|
19,838 |
|
28,974 |
|
88,116 |
|
Pension contribution |
|
|
(57) |
|
- |
|
(57) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used in operating activities |
|
|
(10,610) |
|
(36,723) |
|
(13,707) |
|
|
|
|
|
|
|
|
|
The notes form an integral part of these condensed consolidated interim financial statements.
|
|
Notes |
|
For the six months ended 30 June 2024 £'000 (unaudited) |
|
For the six months ended 30 June 2023 £'000 (unaudited) |
|
For the year ended 31 December 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
CASH FLOW STATEMENT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from operating activities |
|
|
|
|
|
|
|
|
Cash outflow from operating activities |
|
|
(10,610) |
|
(36,723) |
|
(13,707) |
|
Interest received |
|
|
28,331 |
|
20,888 |
|
47,168 |
|
Interest paid |
|
|
(10,338) |
|
(5,599) |
|
(14,059) |
|
Income taxes paid |
|
|
(91) |
|
(331) |
|
(1,337) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from / (used) from operating activities |
|
|
7,292 |
|
(21,765) |
|
18,065 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(106) |
|
(356) |
|
(1,280) |
|
Purchase of intangible assets |
|
|
(853) |
|
(638) |
|
(2,248) |
|
Sale of property, plant and equipment |
|
|
- |
|
- |
|
759 |
|
Net sale of debt securities |
9 |
|
543 |
|
9,366 |
|
(33,237) |
|
Contingent consideration |
16 |
|
(15) |
|
(50) |
|
(67) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) / from investing activities |
|
|
(431) |
|
8,322 |
|
(36,073) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Receipt of loan notes |
14 |
|
2,090 |
|
8,159 |
|
7,985 |
|
Payment of lease liabilities (capital) |
|
|
(336) |
|
(79) |
|
(256) |
|
Dividend paid |
|
|
(2,120) |
|
- |
|
(342) |
|
Share issue |
|
|
49 |
|
- |
|
98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) / from financing activities |
|
|
(317) |
|
8,080 |
|
7,485 |
|
|
|
|
|
|
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
|
|
6,544 |
|
(5,363) |
|
(10,523) |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - opening |
|
|
12,107 |
|
22,630 |
|
22,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - closing |
|
|
18,651 |
|
17,267 |
|
12,107 |
|
|
|
|
|
|
|
|
|
NOTES
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Manx Financial Group PLC (the "Company" or "MFG") is a company incorporated in the Isle of Man. These condensed consolidated interim financial statements ("interim financial statements") are as at and for the six months ended 30 June 2024 and comprise the Company and its subsidiaries ("Group").
These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the last annual consolidated financial statements as at and for the year ended 31 December 2023 ("Annual Financial Statements 2023"). They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.
These financial statements are presented in pounds sterling, which is the parent entity's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated. All subsidiaries of the Group have pounds sterling as their functional currency.
In preparing these interim financial statements, management 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.
The significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty are the same as those described in the last annual financial statements.
All Company financial assets and liabilities carrying amounts are deemed to be reasonable approximation of fair value.
A summary of the Group's current policies and practices for the management of credit risk is set out in Note 7 - Financial risk review and Note 42 - Financial risk management on pages 64 and 96 respectively of the Annual Financial Statements 2023.
An explanation of the terms Stage 1, Stage 2 and Stage 3 is included in Note 44 (G)(vi) on page 106 of the Annual Financial Statements 2023.
|
|
2024 |
|
2023 |
||||||
|
30 June (unaudited) |
Stage 1 £'000 |
Stage 2 £'000 |
Stage 3 £'000 |
Total £'000 |
|
Stage 1 £'000 |
Stage 2 £'000 |
Stage 3 £'000 |
Total £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
Grade A |
352,431 |
- |
- |
352,431 |
|
324,303 |
- |
- |
324,303 |
|
Grade B |
- |
9,251 |
4,538 |
13,789 |
|
- |
2,557 |
8,483 |
11,040 |
|
Grade C |
- |
5 |
28,732 |
28,737 |
|
5,280 |
306 |
20,179 |
25,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross value |
352,431 |
9,256 |
33,270 |
394,957 |
|
329,583 |
2,863 |
28,662 |
361,108 |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for impairment |
(279) |
(8) |
(21,895) |
(22,182) |
|
(3,529) |
(119) |
(14,216) |
(17,864) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value |
352,152 |
9,248 |
11,375 |
372,775 |
|
326,054 |
2,744 |
14,446 |
343,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
||||||
|
31 December (audited) |
Stage 1 £'000 |
Stage 2 £'000 |
Stage 3 £'000 |
Total £'000 |
|
Stage 1 £'000 |
Stage 2 £'000 |
Stage 3 £'000 |
Total £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
Grade A |
341,953 |
- |
- |
341,953 |
|
273,332 |
- |
- |
273,332 |
|
Grade B |
- |
7,822 |
3,700 |
11,522 |
|
- |
5,006 |
9,347 |
14,353 |
|
Grade C |
- |
2 |
28,791 |
28,793 |
|
391 |
- |
19,576 |
19,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross value |
341,953 |
7,824 |
32,491 |
382,268 |
|
273,723 |
5,006 |
28,923 |
307,652 |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for impairment |
(184) |
(6) |
(19,425) |
(19,615) |
|
(303) |
(3) |
(15,871) |
(16,177) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value |
341,769 |
7,818 |
13,066 |
362,653 |
|
273,420 |
5,003 |
13,052 |
291,475 |
|
|
|
|
|
|
|
|
|
|
|
Loans are graded A to C depending on the level of risk. Grade C relates to agreements with the highest of risk, Grade B with medium risk and Grade A relates to agreements with the lowest risk.
|
|
2024 |
|
2023 |
||||||
|
30 June (unaudited) |
Stage 1 £000 |
Stage 2 £000 |
Stage 3 £000 |
Total £000 |
|
Stage 1 £000 |
Stage 2 £000 |
Stage 3 £000 |
Total £000 |
|
|
|
|
|
|
|
|
|
|
|
|
Current |
340,658 |
- |
- |
340,658 |
|
323,949 |
- |
- |
323,949 |
|
Overdue < 30 days |
11,773 |
- |
- |
11,773 |
|
5,634 |
- |
- |
5,634 |
|
Overdue > 30 days |
- |
9,256 |
33,270 |
42,526 |
|
- |
2,863 |
28,662 |
31,525 |
|
|
352,431 |
9,256 |
33,270 |
394,957 |
|
329,583 |
2,863 |
28,662 |
361,108 |
|
|
2023 |
|
2022 |
||||||
|
31 December (audited) |
Stage 1 £000 |
Stage 2 £000 |
Stage 3 £000 |
Total £000 |
|
Stage 1 £000 |
Stage 2 £000 |
Stage 3 £000 |
Total £000 |
|
|
|
|
|
|
|
|
|
|
|
|
Current |
333,740 |
- |
- |
333,740 |
|
269,130 |
- |
- |
269,130 |
|
Overdue < 30 days |
8,213 |
- |
- |
8,213 |
|
4,593 |
604 |
- |
5,197 |
|
Overdue > 30 days |
- |
7,825 |
32,490 |
40,315 |
|
- |
4,402 |
28,923 |
33,325 |
|
|
341,953 |
7,825 |
32,490 |
382,268 |
|
273,723 |
5,006 |
28,923 |
307,652 |
Interest revenue and other interest income represents charges and interest on finance and leasing agreements attributable to the period or year after adjusting for early settlements and interest on bank balances.
Segmental information is presented in respect of the Group's business segments. The Directors consider that the Group currently operates in one geographic segment comprising of the Isle of Man, UK and Channel Islands. The primary format for business segments is based on the Group's management and internal reporting structure. The Directors consider that the Group operates in three (2023: three) product orientated segments in addition to its financial activities to allocate the Group's capital (investing activities): (i) Asset and Personal Finance (including provision of HP contracts, finance leases, personal loans, commercial loans, block discounting, vehicle stocking plans and wholesale funding agreements); (ii) Edgewater Associates Limited (provision of financial advice), and (iii) MFX Limited (provision of foreign currency transaction services).
|
For the 6 months ended 30 June 2024 (unaudited) |
Asset and Personal Finance £000 |
|
Edgewater Associates £000 |
|
MFX Limited £000 |
|
Investing Activities £000 |
|
Total £000 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue calculated using the effective interest method |
27,243 |
|
- |
|
- |
|
- |
|
27,243 |
|
Other interest income |
766 |
|
- |
|
- |
|
- |
|
766 |
|
Interest expense |
(10,684) |
|
- |
|
- |
|
- |
|
(10,684) |
|
Net interest income |
17,325 |
|
- |
|
- |
|
- |
|
17,325 |
|
Components of Net trading income |
(3,405) |
|
1,077 |
|
655 |
|
- |
|
(1,673) |
|
Net trading income |
13,920 |
|
1,077 |
|
655 |
|
- |
|
15,652 |
|
Components of Operating income |
1,927 |
|
- |
|
1 |
|
18 |
|
1,946 |
|
Operating income |
15,847 |
|
1,077 |
|
656 |
|
18 |
|
17,598 |
|
Depreciation |
(371) |
|
(12) |
|
(1) |
|
(60) |
|
(444) |
|
Amortisation and impairment of intangibles |
(89) |
|
(39) |
|
(2) |
|
(87) |
|
(217) |
|
All other expenses |
(12,435) |
|
(732) |
|
(148) |
|
(138) |
|
(13,453) |
|
Share of profit of equity accounted investees, net of tax |
37 |
|
- |
|
- |
|
- |
|
37 |
|
Profit / (loss) before tax payable |
2,989 |
|
294 |
|
505 |
|
(267) |
|
3,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
959 |
|
- |
|
- |
|
- |
|
959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
457,023 |
|
1,890 |
|
419 |
|
42,898 |
|
502,230 |
|
Total liabilities |
437,350 |
|
297 |
|
7 |
|
27,881 |
|
465,535 |
|
|
|
|
|
|
|
|
|
|
|
|
For the 6 months ended 30 June 2023 (unaudited) |
Asset and Personal Finance £000 |
|
Edgewater Associates £000 |
|
MFX Limited £000 |
|
Investing Activities £000 |
|
Total £000 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue calculated using the effective interest method |
21,458 |
|
- |
|
- |
|
- |
|
21,458 |
|
Other interest income |
713 |
|
- |
|
- |
|
- |
|
713 |
|
Interest expense |
(4,660) |
|
- |
|
- |
|
(1,127) |
|
(5,787) |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
17,511 |
|
- |
|
- |
|
(1,127) |
|
16,384 |
|
Components of Net trading income |
(2,603) |
|
1,200 |
|
605 |
|
- |
|
(798) |
|
Net trading income |
14,908 |
|
1,200 |
|
605 |
|
(1,127) |
|
15,586 |
|
Components of Operating income |
726 |
|
- |
|
- |
|
- |
|
726 |
|
Operating income |
15,634 |
|
1,200 |
|
605 |
|
(1,127) |
|
16,312 |
|
Depreciation |
(364) |
|
(10) |
|
(1) |
|
(32) |
|
(407) |
|
Amortisation and impairment of intangibles |
(271) |
|
(37) |
|
(2) |
|
(2) |
|
(312) |
|
All other expenses |
(10,995) |
|
(1,009) |
|
(168) |
|
(389) |
|
(12,561) |
|
Share of profit of equity accounted investees, net of tax |
- |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss) before tax payable |
4,004 |
|
144 |
|
434 |
|
(1,550) |
|
3,032 |
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
994 |
|
- |
|
- |
|
- |
|
994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
365,236 |
|
1,499 |
|
271 |
|
52,691 |
|
419,697 |
|
Total liabilities |
347,391 |
|
21 |
|
8 |
|
40,247 |
|
387,667 |
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended 31 December 2023 (audited) |
Asset and Personal Finance £000 |
|
Edgewater Associates £000 |
|
MFX Limited £000 |
|
Investing Activities £000 |
|
Total £000 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue calculated using the effective interest method |
45,356 |
|
- |
|
- |
|
- |
|
45,356 |
|
Other interest income |
1,535 |
|
- |
|
- |
|
- |
|
1,535 |
|
Interest expense |
(14,538) |
|
- |
|
- |
|
8 |
|
(14,530) |
|
Net interest income |
32,353 |
|
- |
|
- |
|
8 |
|
32,361 |
|
Components of Net trading income |
(6,410) |
|
2,032 |
|
1,048 |
|
- |
|
(3,330) |
|
Net trading income |
25,943 |
|
2,032 |
|
1,048 |
|
8 |
|
29,031 |
|
Components of Operating income |
2,450 |
|
2 |
|
- |
|
- |
|
2,452 |
|
Operating income |
28,393 |
|
2,034 |
|
1,048 |
|
8 |
|
31,483 |
|
Depreciation |
(739) |
|
(22) |
|
(1) |
|
(63) |
|
(825) |
|
Amortisation and impairment of intangibles |
(545) |
|
(76) |
|
(5) |
|
(57) |
|
(683) |
|
All other expenses |
(20,294) |
|
(1,972) |
|
(364) |
|
(302) |
|
(22,932) |
|
Share of profit of equity accounted investees, net of tax |
- |
|
- |
|
- |
|
- |
|
- |
|
Profit / (loss) before tax payable |
6,815 |
|
(36) |
|
678 |
|
(414) |
|
7,043 |
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
2,627 |
|
6 |
|
- |
|
895 |
|
3,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
438,916 |
|
1,578 |
|
267 |
|
39,944 |
|
480,705 |
|
Total liabilities |
418,794 |
|
279 |
|
10 |
|
25,638 |
|
444,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 6 months ended 30 June 2024 (unaudited) |
|
For the 6 months ended 30 June 2023 (unaudited) |
|
For the year ended 31 Dec 2023 (audited) |
|
|
|
|
|
|
|
|
|
Profit for the period / year attributable to owners of the Company |
|
£2,410,000 |
|
£1,927,000 |
|
£5,288,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares in issue (basic) |
|
116,378,211 |
|
115,072,988 |
|
115,330,589 |
|
Basic earnings per share (pence) |
|
2.07 |
|
1.67 |
|
4.59 |
|
Diluted earnings per share (pence) |
|
1.59 |
|
1.30 |
|
3.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period / year attributable to owners of the Company |
|
£2,410,000 |
|
£1,989,000 |
|
£5,606,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares in issue (basic) |
|
116,378,211 |
|
115,072,988 |
|
115,330,589 |
|
Basic earnings per share (pence) |
|
2.07 |
|
1.73 |
|
4.86 |
|
Diluted earnings per share (pence) |
|
1.59 |
|
1.34 |
|
3.71 |
|
|
|
|
|
|
|
|
The basic earnings per share calculation is based upon the profit for the period / year after taxation and the weighted average of the number of shares in issue throughout the period / year.
|
As at |
|
30 June 2024 (unaudited) |
|
30 June 2023 (unaudited) |
|
31 Dec 2023 (audited) |
|
|
|
|
|
|
|
|
|
Reconciliation of weighted average number of ordinary shares in issue between basic and diluted |
|
|
|
|
|
|
|
Weighted average number of ordinary shares (basic) |
|
116,378,211 |
|
115,072,988 |
|
115,330,589 |
|
Number of shares issued if all convertible loan notes were exchanged for equity |
|
37,916,667 |
|
37,916,667 |
|
37,916,667 |
|
Dilutive element of share options if exercised |
|
2,922,088 |
|
2,409,005 |
|
2,460,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares (diluted) |
|
157,216,966 |
|
155,398,660 |
|
155,708,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of profit for the period / year between basic and diluted |
|
|
|
|
|
|
|
Profit for the period / year (basic) |
|
£2,410,000 |
|
£1,927,000 |
|
£5,288,000 |
|
Interest expense saved if all convertible loan notes were exchanged for equity |
|
£97,500 |
|
£97,500 |
|
£171,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period / year (diluted) |
|
£2,507,500 |
|
£2,024,500 |
|
£5,459,415 |
|
|
|
|
|
|
|
|
The diluted earnings per share calculation assumes that all convertible loan notes have been converted / exercised at the beginning of the period in which they are dilutive.
|
As at |
|
30 June 2024 (unaudited) |
|
30 June 2023 (unaudited) |
|
31 Dec 2023 (audited) |
|
|
|
|
|
|
|
|
|
Reconciliation of total comprehensive income for the period / year between basic and diluted |
|
|
|
|
|
|
|
Total comprehensive income for the period / year (basic) |
|
£2,410,000 |
|
£1,989,000 |
|
£5,606,000 |
|
Interest expense saved if all convertible loan notes were exchanged for equity |
|
£97,500 |
|
£97,500 |
|
£171,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period / year (diluted) |
|
£2,507,500 |
|
£2,086,500 |
|
£5,777,415 |
|
|
|
|
|
|
|
|
|
As at |
|
30 June 2024 £'000 (unaudited) |
|
30 June 2023 £'000 (unaudited) |
|
31 Dec 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
Financial assets at fair value through other comprehensive income: |
|
|
|
|
|
|
|
UK Government treasury bills |
|
77,257 |
|
31,371 |
|
76,129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,257 |
|
31,371 |
|
76,129 |
|
|
|
|
|
|
|
|
UK Government Treasury Bills are stated at fair value and unrealised changes in the fair value are reflected in other comprehensive income. Realised gains of £1,671,000 (30 June 2023: £664,000 and 31 December 2023: £1,893,000) were reclassified from other comprehensive income to profit and loss during the period. Net unrealised gains of £nil (30 June 2023: £62,000 and 31 December 2023: £324,000) have been recognised in other comprehensive income during the period.
|
As at |
Gross Amount £'000 |
|
Impairment Allowance £'000 |
|
30 June 2024 Carrying Value £'000 (unaudited) |
|
30 June 2023 Carrying Value £'000 (unaudited) |
|
31 Dec 2023 Carrying Value £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
|
|
HP balances |
121,453 |
|
(4,264) |
|
117,189 |
|
98,058 |
|
115,390 |
|
Finance lease balances |
26,220 |
|
(2,930) |
|
23,290 |
|
17,503 |
|
21,828 |
|
Unsecured personal loans |
121,971 |
|
(13,237) |
|
108,734 |
|
66,715 |
|
77,814 |
|
Vehicle stocking plans |
1,537 |
|
- |
|
1,537 |
|
1,904 |
|
1,973 |
|
Wholesale funding arrangements |
11,812 |
|
- |
|
11,812 |
|
25,214 |
|
21,503 |
|
Block discounting |
37,823 |
|
- |
|
37,823 |
|
54,873 |
|
47,520 |
|
Secured commercial loans |
31,613 |
|
(578) |
|
31,035 |
|
12,086 |
|
25,272 |
|
Secured personal loans |
905 |
|
- |
|
905 |
|
964 |
|
1,075 |
|
Government backed loans |
32,042 |
|
(1,173) |
|
30,869 |
|
46,836 |
|
40,210 |
|
Property secured |
9,581 |
|
- |
|
9,581 |
|
19,091 |
|
10,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
394,957 |
|
(22,182) |
|
372,775 |
|
343,244 |
|
362,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
30 June 2024 £'000 (unaudited) |
|
30 June 2023 £'000 (unaudited) |
|
31 Dec 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments |
|
613 |
|
4,495 |
|
497 |
|
Other debtors |
|
11,010 |
|
2,732 |
|
7,730 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,623 |
|
7,227 |
|
8,227 |
|
|
|
|
|
|
|
|
|
As at |
|
30 June 2024 £'000 (unaudited) |
|
30 June 2023 £'000 (unaudited) |
|
31 Dec 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment Assist Limited |
|
4,456 |
|
4,456 |
|
4,456 |
|
Edgewater Associates Limited |
|
1,649 |
|
1,649 |
|
1,649 |
|
British Lending Exchange Limited |
|
1,908 |
|
1,908 |
|
1,908 |
|
Blue Star Business Solutions Limited |
|
1,390 |
|
1,390 |
|
1,390 |
|
Ninkasi Rentals & Finance Limited |
|
678 |
|
678 |
|
678 |
|
Manx Collections Limited |
|
454 |
|
454 |
|
454 |
|
Three Spires Insurance Services Limited |
|
41 |
|
41 |
|
41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,576 |
|
10,576 |
|
10,576 |
|
|
|
|
|
|
|
|
|
As at |
|
30 June 2024 £'000 (unaudited) |
|
30 June 2023 £'000 (unaudited) |
|
31 Dec 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission creditors |
|
171 |
|
726 |
|
174 |
|
Other creditors and accruals |
|
11,809 |
|
11,742 |
|
12,623 |
|
Lease liability |
|
1,022 |
|
1,535 |
|
1,358 |
|
Taxation creditors |
|
1,355 |
|
854 |
|
254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,357 |
|
14,857 |
|
14,409 |
|
|
|
|
|
|
|
|
|
As at |
Notes |
|
30 June 2024 £'000 (unaudited) |
|
30 June 2023 £'000 (unaudited) |
|
31 Dec 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related parties |
|
|
|
|
|
|
|
|
J Mellon |
JM |
|
1,750 |
|
1,750 |
|
1,750 |
|
Burnbrae Limited |
BL |
|
3,200 |
|
3,200 |
|
3,200 |
|
Culminant Reinsurance Ltd |
CR |
|
1,000 |
|
1,000 |
|
1,000 |
|
John Spellman |
JS |
|
400 |
|
- |
|
- |
|
Ian Morley |
IM |
|
250 |
|
- |
|
- |
|
Alan Clarke |
AC |
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,700 |
|
5,950 |
|
5,950 |
|
Unrelated parties |
UP |
|
34,707 |
|
33,542 |
|
33,367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,407 |
|
39,492 |
|
39,317 |
|
|
|
|
|
|
|
|
|
JM - Two loans, one of £1,250,000 maturing on 26 February 2025 with interest payable of 5.4% per annum, convertible to ordinary shares of the Company at a rate of 9.0 pence, one of £500,000 maturing on 31 July 2027, paying interest of 7.5% per annum and convertible to ordinary shares of the Company at a rate of 8.0 pence.
BL - Three loans, one of £1,200,000 maturing on 31 July 2027, paying interest of 7.5% per annum, convertible to ordinary shares of the Company at a rate of 8.0 pence, one of £1,000,000 maturing 25 February 2025, paying interest of 5.4% per annum, and one of £1,000,000 maturing 28 February 2025 paying interest of 6% per annum. Jim Mellon is the beneficial owner of BL and Denham Eke is also a director.
CR - One loan consisting of £1,000,000 maturing on 12 October 2025, paying interest of 6.0% per annum. Greg Bailey, a Director, is the beneficial owner of CR.
JS - One loan consisting of £400,000 maturing on 3 May 2029, paying interest of 8.5% per annum. John Spellman is a Director of the Group.
IM - One loan consisting of £250,000 maturing on 3 June 2026, paying interest of 8.0% per annum. Ian Morley is a Director of the Conister Bank Limited, a subsidiary of the Group.
AC - Two loans of £50,000 each, both maturing on 6 May 2025, paying interest of 7.75% per annum. Alan Clarke is a Director of the Group.
UP - Forty six loans (2023: Forty), the earliest maturity date is 15 July 2024, and the latest maturity is 5 April 2029. The average interest payable is 6.36% (2023: 5.87%). The cause for the increase is due to the rising interest environment increasing the cost of loan notes renewed particularly in the first six months of 2024. With respect to the convertible loans, the interest rate applied was deemed by the Directors to be equivalent to the market rate at the time with no conversion option.
|
Ordinary Shares of no-par value available for issue |
Number |
|
|
At 30 June 2024, 30 June 2023, 31 December 2023 |
200,200,000 |
|
|
Issued and fully paid ordinary Shares of no par value |
Number |
|
£'000 |
|
|
|
|
|
|
Balance at 30 June 2024 |
117,555,757 |
|
19,626 |
|
Balance at 30 June 2023 |
116,191,936 |
|
19,287 |
|
Balance at 31 December 2023 |
115,072,988 |
|
19,384 |
|
|
|
|
|
Dividends
On 25 April, MFG declared a dividend of £529,000 (2023: £433,000) which was calculated as being 10% of the profit after tax available to Shareholders, which could either be taken up in cash or new ordinary shares. On 19 June 2024 1,013,821 new shares (2023: 418,948 new shares) were admitted to the Alternative Investment Market ("AIM") at 19.0 pence per share (2023: 21.8974 pence per share), at a total cost of £193,000 (2023: £91,000). A dividend of £1.784 million was paid to non-controlling interest shareholders during the period.
Convertible loans
There are three convertible loans totalling £2,950,000 (30 June and 31 December 2023: three convertible loans totalling £2,950,000).
Share options and Restricted Stock Units
i. Issued during the financial year ended 31 December 2022 and 2023
On 5 July 2022, 27 October 2022 and 29 November 2023, MFG granted Restricted Stock Units ("RSUs") under its 2022 RSU Plan. The Group issued, in total, RSUs over 4,687,500 ordinary shares representing 4.1% of the issued share capital of the Group, including 2,900,000 to certain Directors and 1,787,500 to certain employees. The RSUs will have a 2-year term and are subject to certain vesting conditions based upon an overall growth in profitability. Any RSUs granted will fall away should the recipient leave employment before the 2-year term expires. Should the individual vesting conditions be satisfied at the end of the term, the stock can be exercised at nil cost.
The Group directors who received RSUs are as follows:
§ Douglas Grant, Group Chief Executive Officer, was issued 1,925,000 RSU's. Including the 1,243,129 Ordinary Shares in the Company he currently owns, he would hold a total of 3,168,129 on a fully diluted basis, being 2.0% of the new issued share capital of the Company; and
§ James Smeed, Group Finance Director, was issued 475,000 RSUs. On the same basis, he would hold 0.3% of the new issued share capital of the Company.
The terms and conditions of the grants are as follows: and will be settled by the physical delivery of shares.
|
Grant date / employees entitled |
Number of Units |
|
Contractual life of options |
|
|
|
|
|
|
|
|
|
|
|
Option grant to key employees at 5 July 2022 |
1,020,000 |
|
2 years |
|
Option grant to Directors at 5 July 2022 |
1,100,000 |
|
2 years |
|
Option grant to key employees at 27 October 2022 |
165,000 |
|
2 years |
|
Option grant to Directors at 27 October 2022 |
150,000 |
|
2 years |
|
Option grant to key employees at 29 November 2023 |
1,150,000 |
|
2 years |
|
Option grant to Directors at 29 November 2023 |
1,102,500 |
|
2 years |
|
|
|
|
|
|
Total share options |
4,687,500 |
|
|
The fair value of employee services received in return for restricted stock units granted is based on the fair value of them measured using the Black-Scholes formula. Service related and non-market performance conditions were not taken into account in measuring fair value. The inputs used in measuring the fair values at the grant of the equity-settled restricted stock unit payment plans were as follows.
|
Fair value of restricted stock units and assumptions |
Grant at 29 November 2023 |
|
Grant at 27 October 2022 |
|
Grant at 5 July 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share price at grant date |
17.5 pence |
|
14.0 pence |
|
8.5 pence |
|
Exercise price |
nil |
|
nil |
|
nil |
|
Expected volatility *^ |
638.12% |
|
107.71% |
|
55.14% |
|
Expected life (weighted average) |
2 years |
|
2 years |
|
2 years |
|
Risk-free interest rate (based on government bonds)*^
|
4.43% |
|
3.15% |
|
1.65% |
|
|
|
|
|
|
|
|
Fair value at grant date |
17.5 pence |
|
14.0 pence |
|
8.5 pence |
|
|
|
|
|
|
|
^ Based on past 3 years
* Annual rates
The expected volatility is based on both historical average share price volatility and implied volatility derived from traded options over the group's ordinary shares of maturity similar to those of the employee options.
The charge for the period for share options granted was £153,000 (30 June 2023: £56,000 and 31 December 2023: £113,000) which is included in employment expenses.
|
|
|
Grant Date |
30 June 2024 £'000 (unaudited) |
30 June 2023 £'000 (unaudited) |
31 Dec 2023 £'000 (audited) |
||
|
Remaining options |
|
5 July 2022 |
27 Oct 2022 |
29 Nov 2022 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted |
|
2,120,000 |
315,000 |
2,252,500 |
4,687,500 |
4,687,500 |
4,687,500 |
|
Lapsed |
|
(200,000) |
(75,000) |
(50,000) |
(325,000) |
- |
(135,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining |
|
1,920,000 |
240,000 |
2,202,500 |
4,362,500 |
4,687,500 |
4,552,500 |
|
|
|
|
|
|
|
|
|
ii. Issued during the financial year ended 31 December 2014
On 23 June 2014, 1,750,000 share options were issued to Executive Directors and senior management within the Group at an exercise price of 14 pence per share. The options vest over three years with a charge based on the fair value of 8 pence per option at the date of grant. The period of grant is for 10 years less 1 day ending 22 June 2024 with the condition of three-years continuous employment being met.
The fair value of services received in return for share options granted is based on the fair value of share options granted, measured using a binomial probability model with the following inputs for each award:
|
|
|
|
|
23 June 2014 |
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
Fair value at date of grant |
|
|
|
£0.08 |
|||
|
Share price at date of grant |
|
|
|
£0.14 |
|||
|
Exercise price |
|
|
|
£0.14 |
|||
|
Expected volatility |
|
|
|
55.0% |
|||
|
Option life |
|
|
|
3 |
|||
|
Risk-free interest rate (based on government bonds) |
|
|
|
0.5% |
|||
|
Forfeiture rate |
|
|
|
33.3% |
|||
|
|
|
|
|
|
|||
On 30 November 2023, Douglas Grant, Chief Executive Officer, exercised options over 700,000 ordinary shares of no par value ("New Ordinary Shares") in the Company (the "Options"), at an exercise price of 14 pence per New Ordinary Share, for an aggregate consideration of £98,000.
On 26 April 2024, the Group received and accepted a request to exercise options over 350,000 ordinary shares of no par value in the Company at an exercise price of 14 pence for an aggregate consideration of £49,000.
Of the 1,750,000 share options issued, £nil (30 June and 31 December 2023:350,000) remain outstanding.
Deferred consideration relates to contingent payments due to the sellers on the acquisition BLX.
On the acquisition of BLX on 11 October 2021, the Group agreed that a further conditional consideration of up to £483,663 is payable to the sellers in addition to the cash consideration paid. The total amount payable is contingent on the recovery of certain loans and advances found to be in default at acquisition. The fair value on acquisition date was determined to be £387,000. The Group made a payment of £15,000 to the sellers during the period.
|
As at |
|
30 June 2024 £'000 (unaudited) |
|
30 June 2023 £'000 (unaudited) |
|
31 Dec 2023 £'000 (audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLX |
|
5 |
|
216 |
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
216 |
|
20 |
|
|
|
|
|
|
|
|
Certain Group subsidiaries are regulated by the Isle of Man Financial Services Authority (FSA) and the United Kingdom Financial Conduct Authority (FCA) as detailed below.
The Bank and EAL are regulated by the FSA under a Class 1(1) - Deposit Taking licence, and a Class 2 - Investment Business licence, respectively. The Bank is also regulated by the UK Bank of England's Prudential Regulatory Authority ("PRA") as a Bank incorporated outside the UK authorised to accept deposits through a branch in the UK, and the UK's Financial Conduct Authority ("FCA") as a Branch (UK) of an Overseas Firm.
The Bank is required to be a member of the Isle of Man Government Depositors' Compensation Scheme which was introduced by the Isle of Man Government under the Banking Business (Compensation of Depositors) Regulations 1991. This creates a liability on the Bank to participate in the compensation of depositors should it be activated.
The possibility of an outflow of resources embodying economic benefits for all other contingent liabilities of the Group are considered remote and thus do not require separate disclosure.
On 11 July 2024, following the satisfaction of vesting criteria, the Group received and accepted requests to exercise RSU's over 1,920,000 ordinary shares of no par value at £nil cost in the Company. These requests relate to the RSU's issued on 5th July 2022. Douglas Grant and James Smeed, both Directors of the Company, have elected to be issued 925,000 and 175,000 New Ordinary Shares of no par value respectively at nil cost. Haseeb Qureshi, a Person Discharging Managerial Responsibilities within the Company has elected to be issued 150,000 New Ordinary Shares of no par value at nil cost.
As announced on 16 September 2024, Manx Ventures Limited ("MVL") brought forward the acquisition the remaining 49.9% of Payment Assist Limited ("PAL") for a consideration of £5 million. MVL now owns 100% of PAL and its results will be fully consolidated from that date onwards. The Group's board believe this acquisition will have a positive material impact on profitability from 2025.
The interim financial statements were approved by the Board on 23 September 2024. The interim report will be available from that date at the Group's website - www.mfg.im and at the Registered Office: Clarendon House, Victoria Street, Douglas, Isle of Man, IM1 2LN. The Group's nominated adviser and broker is Beaumont Cornish Limited, Building 3, 566 Chiswick High Road, London W4 5YA. The interim and annual financial statements along with other supplementary information of interest to shareholders, are included on the Group's website. The website includes investor relations information, including corporate governance observance and contact details.