Consolidated Statement of Cash Flows

for the year ended 31 March 2025

	Notes	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Operating activities
Profit for the year		16,002	12,921
Adjustments:
Income tax expense	10	5,594	3,830
Finance income	8	(1,033)	(640)
Finance costs	9	123	353
Depreciation of property, plant and equipment	17	291	375
Amortisation of intangible assets	16	630	543
Share-based payment expense	25	1,413	1,236
Fair value gains on financial assets at fair value through profit or loss		(27)	-
Post-tax share of loss of joint venture less amortisation and impairment loss	14	148	1,188
Changes in fair value of contingent consideration	7	-	(1,350)
Changes in:
Trade and other receivables		(1,241)	(1,576)
Trade and other payables		2,741	50
Cash generated from operations		24,641	16,930
Income tax paid		(5,889)	(3,740)
Net cash from operating activities		18,752	13,190
Investing activities
Payment for the acquisition of a business combination or joint venture, net of cash acquired		-	(254)
Dividends received from joint venture		-	255
Purchase of financial assets at fair value through profit or loss	22	(1,000)	-
Purchase of intangible assets	16	(437)	(249)
Purchase of property, plant and equipment	17	(68)	(115)
Interest received	8	1,033	640
Payment of contingent consideration	22	(530)	(937)
Net cash used in investing activities		(1,002)	(660)
Financing activities
Interest paid		-	(63)
Dividends paid	12	(10,440)	(10,846)
Proceeds from the issue of shares		135	249
Proceeds from the exercise of options		125	-
Purchase of own shares	24	(50)	(3,278)
Repayment of loan liabilities	21	(23)	(18)
Repayment of lease liabilities	21	(216)	(230)
Net cash used in financing activities		(10,469)	(14,186)
Net increase/(decrease) in cash and cash equivalents		7,281	(1,656)
Cash and cash equivalents at the beginning of the period		24,838	26,494
Cash and cash equivalents at the end of the period		32,119	24,838

 

 

Notes to the Consolidated Financial Statements

1 | General information

Tatton Asset Management plc (the "Company") is a public company limited by shares. The address of the registered office is Paradigm House, Brooke Court, Lower Meadow Road, Wilmslow, SK9 3ND. The registered number is 10634323.

 

The Group comprises the Company and its subsidiaries. The Group's principal activities are discretionary fund management, the provision of compliance and support services to independent financial advisers ("IFAs"), the provision of mortgage adviser support services, and the marketing and promotion of multi-manager funds.

 

News updates, regulatory news, and financial statements can be viewed and downloaded from the Group's website, www.tattonassetmanagement.com. Copies can also be requested from: The Company Secretary, Tatton Asset Management plc, Paradigm House, Brooke Court, Lower Meadow Road, Wilmslow, SK9 3ND.

 

The Company has taken advantage of the exemption in section 408 of the Companies Act 2006 not to present its own income statement.

 

2 | Material accounting policies

The principal accounting policies applied in the presentation of the annual financial statements are set out below. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in the consolidated financial statements.

 

2.1 Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with United Kingdom adopted international accounting standards and International Financial Reporting Interpretations Committee ("IFRIC") interpretations issued by the International Accounting Standards Board ("IASB") and the Companies Act 2006. The financial statements of the Company have been prepared in accordance with UK Generally Accepted Accounting Practice, including Financial Reporting Standard 101 'Reduced Disclosure Framework' ("FRS 101").

 

The consolidated financial statements have been prepared on a going concern basis and prepared on a historical cost basis, except for financial assets and financial liabilities measured at fair value. The consolidated financial statements are presented in sterling and have been rounded to the nearest thousand (£'000). The functional currency of the Company is sterling, as this is the currency of the jurisdiction wherein all of the Group's sales are made.

 

The preparation of financial information in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event, or actions, actual events may ultimately differ from those estimates.

 

2.2 Going concern

The Board has reviewed detailed papers prepared by management that consider the Group's expected future profitability, dividend policy, capital position, and liquidity, both as they are expected to be and also under more stressed conditions. In doing so, the Directors have considered the current economic environment, with its high interest rates, high yet falling inflation, cost of living pressures, and the impact of climate change.

 

Whilst macroeconomic conditions and the impact of climate change may affect the Group, and are considered under the Group's principal risks, these are not considered to impact the going concern basis of the Group - the Board is satisfied that the business can operate successfully in these conditions but will continue to monitor developments in these areas. The Board uses the approved budget as its base case and then applies stress tests to this. In its stress tests, the Board has considered a significant reduction in equity market values, for example, if there was a repeat of the market impacts seen at the outbreak of COVID-19, or sudden and high volumes of outflows from AUM as a result of a reputational, regulatory, or performance issues. This would reduce revenue and profitability; however, the results of these tests show that there are still sufficient resources to continue as a going concern. There are not considered to be any plausible scenarios that would lead to the failure of the Company. The Board closely monitors KPIs and reports from management around investment performance, feedback from IFAs, and key regulatory changes or issues. See more information in the Directors' Report on pages 73 to 76 of the 2025 Annual Report. Accordingly, the Directors continue to adopt the going concern basis when preparing these financial statements.

 

2.3 Basis of consolidation

The Group's financial statements consolidate those of the Company and entities controlled by the Company (its subsidiaries) as at 31 March 2025. The Company controls a subsidiary if it has power over the investee, is exposed to, or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of these three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.

 

All subsidiaries have a reporting date of 31 March, with the exception of Fintegrate Financial Solutions Limited, which has a reporting date of 30 June. In the case of joint ventures, those entities are presented as a single line item in the Consolidated Statement of Total Comprehensive Income and the Consolidated Statement of Financial Position.

 

All transactions between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-Group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

 

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition (when control is obtained), up to the effective date of disposal (when control of the subsidiary ceases), as applicable.

 

2.4 Adoption of new and revised standards

New and amended IFRS Standards that are effective for the current year

·	Amendment to IFRS 16 'Lease Liability in a Sale and Leaseback'
·	Amendment to IAS 1 'Classification of Liabilities as Current or Non-current'
·	Amendments to IAS 1 'Non-current Liabilities with Covenants'
·	Amendments to IAS 7 and IFRS 7 'Supplier Finance Arrangements'

 

The Directors adopted the new or revised Standards listed above, but they have had no material impact on the financial statements of the Group.

Standards in issue but not yet effective

The following IFRS and IFRIC interpretations have been issued but have not been applied by the Group in preparing these financial statements, as they are not yet effective. The Group intends to adopt these Standards and Interpretations when they become effective, rather than adopting them early.

 

Effective date periods beginning 1 January 2025 or later

·	IFRS S1 'General Requirements for Disclosure of Sustainability-related Financial Information' and IFRS S2 'Climate-related Disclosures'
·	Amendments to IAS 21 'Lack of Exchangeability'
·	IFRS 18 'Presentation and Disclosure in Financial Statements'
·	Amendments to the 'Classification and Measurement of Financial Instruments' (Amendments to IFRS 9 'Financial Instruments' and IFRS 7 'Financial Instruments: Disclosures')
·	IFRS19 'Subsidiaries without Public Accountability: Disclosures'
·	IFRS9 and IFRS 7 'Contracts Referencing Nature-dependent Electricity'

 

With the exception of the adoption of IFRS 18, the adoption of the above standards and interpretations is not expected to lead to any changes to the Group's accounting policies, nor to have any other material impact on the financial position or performance of the Group. The impact of IFRS 18 on the Group is currently being assessed and it is not yet practicable to quantify the effect of this standard on these consolidated financial statements; however, there is no impact on presentation for the Group in the current year, given the effective date - this will be applicable for the Group's 2027/28 Annual Report.

 

2.5 Revenue

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT, and other sales-related taxes. Revenue is recognised when control is transferred and the performance obligations are considered to be met.

 

The Group's revenue is made up of the following principal revenue streams:

 

·	Fees for discretionary fund management services in relation to on-platform investment assets under management ("AUM"). Revenue is recognised daily, based on the AUM, on a continuous basis over the period in which the related service is provided.
·	Fees charged to IFAs for compliance consultancy services, which are recognised when performance obligations are met. Membership services include support and software income that is recognised on an over-time basis in line with access to the services. Membership services also includes specific services, such as regulatory visits and learning and development, and revenue is recognised in line with the service to the customer, at the point the service is provided.
·	Fees for providing investment platform services. Revenue is recognised on a daily basis, in line with the satisfaction of performance obligations, on the assets under administration held on the relevant investment platform.
·	Fees for mortgage-related services, including commissions from mortgage and other product providers and referral fees from strategic partners. Commission is recognised at a point in time when commission is approved for payment by the lender, which is the point at which all performance obligations have been met.
·	Fees for marketing services provided to providers of mortgage and investment products, which are recognised in line with the service provided to the customer.

 

Contract assets

A contract asset is initially recognised for revenue earned from services for which the receipt of consideration is conditional on the successful completion of the service and performance obligation. Upon completion of the service, the amount recognised as accrued income is reclassified to trade receivables. Contract assets are stated at amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts and are presented as Accrued income in the notes to the financial statements.

 

Contract liabilities

A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as deferred income until the Group delivers the performance obligations under the contract (i.e., transfers control of the related goods or services to the customer), at which point revenue is recognised in line with the delivery of the performance obligation.

 

2.6 Interest income and interest expense

Finance income is recognised as interest accrued (using the effective interest method) and includes interest receivable on the Group's cash and cash equivalents and on funds invested outside the Group. Interest received is recognised as a cash flow from investing activities in the Consolidated Statement of Cash Flows.

 

Finance expense comprises the unwinding of discounts on contingent consideration and interest incurred on lease liabilities recognised under IFRS 16. Finance costs are recognised in the Consolidated Statement of Total Comprehensive Income using the effective interest rate method. Interest paid is recognised as a cash flow from financing activities in the Consolidated Statement of Cash Flows.

 

2.7 Separately disclosed items

Separately disclosed items may include Exceptional items as detailed below, but may also include other items that meet at least one of the following criteria:

·	It is a significant item, which may cross more than one accounting period;
·	It is a significant non-cash item, including share-based payment charges;
·	It has been directly incurred as a result of either an acquisition or divestiture, including amortisation of acquisition-related intangible assets or fair value changes of contingent consideration;
·	It is unusual in nature, e.g. outside of the normal course of business; or
·	The operating profit/(loss) relating to non-controlling interest is also removed, to reflect the adjusted operating profit attributable to the Company's shareholders.

 

The Board exercises judgement as to whether the item should be classified as an adjusting item within Separately disclosed items. Separately disclosed items are shown separately on the face of the Statement of Total Comprehensive Income and included within Administrative expenses or, in the case of amortisation on intangible assets relating to a joint venture, the cost is included within Share of profit/(loss) from joint ventures. Although some of these items may recur from one period to the next, operating profit has been adjusted for these items on a consistent basis to provide additional helpful information and enable an alternative comparison of performance over time. The alternative performance measures ("APMs") disclosed in note 27 are consistent with how the business performance is planned and reported within the internal management reporting to the Board. Some of these measures are also used for the purpose of setting remuneration targets.

 

2.8 Exceptional items

Exceptional items are disclosed and described separately in the financial statements to provide further information on items that are one-off and are material in size or nature and so are shown separately, due to the significance of their nature and amount. This includes items that are incremental to normal operations, such as costs relating to an acquisition, disposal, integration, or impairment losses; these do not reflect the business's trading performance and so are adjusted to ensure consistency between periods.

 

2.9 Goodwill and intangible assets

Goodwill from a business combination is initially recognised and measured as set out in note 2.12. Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units ("CGU") (or groups of CGUs) expected to benefit from the synergies of the combination. CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. On disposal of a CGU, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

 

Following initial recognition, intangible assets are held at cost less any accumulated amortisation and any provision for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows (CGUs).

 

Intangible assets acquired separately are measured on initial recognition at cost. Any computer software licences acquired are capitalised at the cost incurred to bring the software into use, and are amortised on a straight-line basis over their estimated useful lives, which are estimated as being five years. An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following conditions have been demonstrated:

 

·	the technical feasibility of completing the intangible asset so that it will be available for use or sale;
·	the intention to complete the intangible asset and use or sell it;
·	the ability to use or sell the intangible asset;
·	how the intangible asset will generate probable future economic benefits;
·	the availability of adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset; and
·	the ability to measure reliably the expenditure attributable to the intangible asset during its development.

 

The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above.

 

Costs associated with developing or maintaining computer software programs that do not meet the capitalisation criteria under IAS 38 are recognised as an expense as incurred.

 

Intangible assets acquired in a business combination and recognised separately from goodwill are recognised initially at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, the client relationship intangible assets, brand intangible assets, and acquired software have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight-line method over their useful lives, estimated for all asset classes as of 10 years.

Gains and losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying value of the asset. The difference is then recognised in the income statement.

 

An assessment is made at each reporting date as to whether there is any indication that an asset in use may be impaired. If any such indication exists and the carrying values exceed the estimated recoverable amount at that time, the assets are written down to their recoverable amount. The recoverable amount is measured as the greater of fair value less costs to sell and value in use. Non-financial assets that have suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

 

2.10 Impairment

Assets that have an indefinite useful life are not subject to amortisation and are tested for impairment at each Statement of Financial Position date and whenever there is an indication at the end of a reporting period that the asset may be impaired. Assets subject to depreciation and amortisation are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Where the asset does not generate cash flows that are independent of other assets, the Group estimates the recoverable amount of each cash-generating unit ("CGU") to which the asset belongs. Impairment losses on previously revalued assets are recognised against the revaluation reserve as far as this reserve relates to previous revaluations of the same assets. Other impairment losses are recognised in the Statement of Total Comprehensive Income, based on the amount by which the carrying value of an asset or CGU exceeds its recoverable amount. The recoverable amount is the higher of the fair value less the costs to sell and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted. Impairment losses recognised with respect to CGUs are allocated first to reduce the carrying amount of any goodwill allocated to CGUs and then to reduce the carrying amount of other assets in the unit on a pro rata basis.

 

Where an impairment loss on intangible assets, excluding goodwill, subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, in such a way that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or CGU) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss to the extent that it eliminates the impairment loss that has been recognised for the asset in prior years. Any increase in excess of this amount is treated as a revaluation increase.

 

2.11 Property, plant and equipment

Property, plant and equipment assets are stated at cost, net of accumulated depreciation and accumulated provision for impairment. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Principal annual rates are as follows:

 

·	computer, office equipment and motor vehicles - 20-33% straight-line; and
·	fixtures and fittings - 20% straight-line.

 

The estimated useful lives, residual values, and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

 

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or scrappage of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset, and is recognised in the Statement of Total Comprehensive Income.

 

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree, and the equity interest issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in the income statement as incurred.

2.12 Business combinations

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date, except that: deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 'Income Taxes' and IAS 19 'Employee Benefits' respectively; liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 'Share-based payments' at the acquisition date (see below); and assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' are measured in accordance with that standard.

 

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

 

When the consideration transferred by the Group in a business combination includes a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and is included as part of the consideration transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. The payment of contingent consideration will be treated as an investing cash flow of the Group.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Any other contingent consideration is remeasured to fair value at subsequent reporting dates, with changes in fair value recognised in profit or loss. The unwinding of the discount rate where contingent consideration is discounted is recognised as a finance cost in the Statement of Comprehensive Income.

 

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised to reflect new information obtained about the facts and circumstances that existed as at the acquisition date that, if known, would have affected the amounts recognised as of that date.

 

2.13 Joint ventures

Joint ventures are entities in which the Company has an investment where it, along with one or more other shareholders, has contractually agreed to share control of the business and where decisions over the relevant activities require the unanimous consent of the joint partners. The results and assets and liabilities of joint ventures are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5. Under the equity method, the Company initially records the investment in the Consolidated Statement of Financial Position at the fair value of the purchase consideration (cost) and adjusted thereafter to recognise the Company's share of the entity's profit or loss after tax and amortisation of intangible assets.

 

An investment in a joint venture is accounted for using the equity method from the date on which the investee becomes a joint venture. On acquisition of the investment in a joint venture, any excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired. The Statement of Financial Position, therefore, subsequently records the Company's share of the net assets of the entity, plus any goodwill and intangible assets that arose on purchase, less subsequent amortisation. The Statement of Changes in Equity records the Company's share of other equity movements of the entity. At each reporting date, the Company applies judgement to determine whether there is any indication that the carrying value of joint ventures may be impaired.

 

If there is objective evidence that the Group's net investment in a joint venture is impaired, the requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment, in accordance with IAS 36, as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised, in accordance with IAS 36, to the extent that the recoverable amount of the investment subsequently increases. The Group discontinues the use of the equity method from the date when the investment ceases to be a joint venture.

 

2.14 Leases

At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease given in IFRS 16.

 

The Group recognises a right-of-use ("ROU") asset and a lease liability at the commencement date of the lease, with the exception of short-term leases (defined as leases with a lease term of twelve months or less). The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The ROU assets are subsequently depreciated on a straight-line basis over the shorter of the expected life of the asset and the lease term, adjusted for any remeasurements of the lease liability. At the end of each reporting period, the ROU assets are assessed for indicators of impairment in accordance with IAS 36.

 

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Group's incremental borrowing rate. The incremental borrowing rate is determined, where possible, by using recent third party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since the third party financing was received. The incremental borrowing rate depends on the term, country, currency, and security of the lease, and also the start date of the lease.

 

Lease payments included in the measurement of the lease liability comprise the following:

 

·	fixed payments, including in-substance fixed payments;
·	variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
·	amounts expected to be payable under a residual value guarantee; and
·	the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

 

The lease liability is subsequently measured by adjusting the carrying amount to reflect the interest charge, the lease payments made, and any reassessment or lease modifications. The lease liability is remeasured if the Group changes its assessment of whether it will exercise a purchase, extension, or termination option.

 

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recorded in profit or loss if the carrying amount of the ROU asset has been reduced to zero.

 

Where the Group is an intermediate lessor in a sub-lease, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the ROU asset arising from the head lease, not with reference to the underlying asset.

 

2.15 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and short-term deposits held with banks by the Group. Cash equivalents are short-term (generally with an original maturity of three months or less), highly liquid investments that are readily convertible to a known amount of cash and that are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

 

Bank overdrafts that are repayable on demand and that form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose only of the Consolidated Statement of Cash Flows. At 31 March 2025, there were no balances drawn down on bank overdrafts (2024: nil).

 

2.16 Financial instruments

Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

 

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 

All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract with terms that require delivery of the financial asset within a 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.

 

Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and bank balances, and trade and other payables.

 

Financial investments

Financial investments are classified as fair value through profit or loss ("FVTPL") if they do not meet the criteria of fair value through other comprehensive income ("FVOCI") or amortised cost. They are also classified as FVTPL if they are either held for trading or specifically designated in this category on initial recognition. Assets in this category are initially recognised at fair value and subsequently remeasured, with gains or losses arising from changes in fair value being recognised in the Statement of Comprehensive Income.

 

The Group's financial investments include investments in a regulated open-ended investment company that is managed and evaluated on a fair value basis in line with the market value. These financial assets do not meet the criteria of FVOCI or amortised cost as the asset is not held to collect contractual cash flows and/or selling financial assets, and the asset's contractual cash flows do not represent solely payments of principal and interest ("SPPI").

 

Trade receivables

Trade receivables do not carry interest and are stated at amortised cost, as reduced by appropriate allowances for estimated irrecoverable amounts. They are recognised when the Group's right to consideration is only conditional on the passage of time. The financial assets are held in order to collect the contractual cash flows and those cash flows are payments of interest and principal only.

 

Impairment of financial assets

The Group applies the IFRS 9 simplified approach to measuring expected credit losses that uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due.

 

The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the same types of contracts. The Group has, therefore, concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.

 

The expected loss rates are based on the payment profiles of sales over a period of twelve months before 31 March 2025 and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. No impairment has been recognised in the year (2024: £nil).

 

The Group applies the IFRS 9 standard approach to measuring expected credit losses for other receivables. To measure the lifetime expected credit losses, the group has considered the probability of default, level of exposure, the age of the asset, collateral, and the wider macroenvironment. No impairment has been recognised in the year (2024: £nil).

 

Trade and other payables

Trade and other payables, except for those which are financial liabilities at FVTPL, are recognised initially at fair value and are subsequently measured at amortised cost using the effective interest method, where applicable or required. These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period, which are unpaid.

 

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (iii) designated as at FVTPL. Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognised in profit or loss.

 

2.17 Taxation

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes those items of income or expense that are taxable or deductible in other years, and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the Statement of Financial Position date.

 

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

 

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary difference and they are expected to reverse in the foreseeable future.

 

The carrying amount of deferred tax assets is reviewed at each Statement of Financial Position date and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the Statement of Financial Position date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

 

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off the current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

 

Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively.

 

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

 

2.18 Retirement benefit costs

The Group pays into personal pension plans for which the amount charged to income with respect to pension costs and other post-retirement benefits is the amount of the contributions payable in the year. Payments to defined contribution retirement benefit scheme are recognised as an expense when employees have rendered service entitling them to the contributions. Differences between contributions payable and paid are accrued or prepaid. The assets of the plans are invested and managed independently of the finances of the Group.

 

2.19 Equity, reserves and dividend payments

Share capital represents the nominal value of shares that have been issued. Retained earnings include all current and prior periods' retained profits or losses.

 

Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been approved at a general meeting prior to the reporting date.

 

2.20 Employee Benefit Trust

The Company provides finance to the EBT to purchase the Company's shares on the open market, in order to meet its obligation to provide shares when an employee exercises awards made under the Group's share-based payment schemes. Administration costs connected with the EBT are charged to the Statement of Comprehensive Income.

 

The cost of shares purchased and held by the EBT is deducted from equity in the Company and the Group. The assets held by the EBT are consolidated into the Group's financial statements. Any consideration paid or received for the purchase or sale of these shares is shown as a reduction in the reconciliation of movements in shareholders' funds. No gain or loss is recognised in the Statement of Other Comprehensive Income on the purchase, sale, issue, or cancellation of these shares.

2.21 Share-based payments

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions.

 

The impact of the revision of the original estimates, if any, is recognised in profit or loss ,such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to reserves. Fair value is measured by use of the Black-Scholes model or Monte Carlo model, as appropriate.

 

2.22 Climate change

The Group is continually developing its assessment of the impact that climate change has on the assets and liabilities recognised and presented in its financial statements. The potential impact of climate change on the Group's AUM and future net operating revenue generation is considered in the Principal Risks section of this Annual Report and Accounts. These
considerations did not have a material impact on the financial reporting judgements and estimates in the current year. This reflects the conclusion that climate change is not expected to have a significant impact on the Group's short-term cash flows, including those considered in the going concern and viability assessments.

 

2.23 Operating segments

The Board is considered to be the chief operating decision maker ("CODM"). The Group comprises two operating segments, which are defined by trading activity:

 

·	Tatton - investment management services
·	Paradigm - the provision of compliance and support services to IFAs and mortgage advisers

Some centrally incurred overhead costs are allocated to the Tatton and Paradigm divisions on an appropriate pro rata basis. There remain central overhead costs within the Operating Group that have not been allocated to the Tatton and Paradigm divisions, which are classified as 'Unallocated' within note 4.

 

2.24 Critical accounting judgements and key sources of estimation uncertainty

In the process of applying the Group's accounting policies, which are described above, management have made judgements and estimations about the future that have an effect on the amounts recognised in the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Changes for accounting estimates would be accounted for prospectively under IAS 8.

Investments in joint ventures

Estimation uncertainty

Impairment of investments in joint ventures

Impairment exists when there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the net investment (a 'loss event') and where that loss event (or events) has an impact on the estimated future cash flows from the net investment that can be reliably estimated. The entire carrying amount of the investment is tested for impairment, in accordance with IAS 36, as a single asset, by comparing its recoverable amount (the higher of value in use and fair value less costs of disposal) with its carrying amount.

 

For the purposes of impairment testing, the recoverable amount of the investment in the joint venture, 8AM, has been determined based on value in use calculations using a discounted cash flow model that requires the use of assumptions. The pre-tax discount rate applied to the cash flow forecasts is derived from a weighted average cost of capital model, the inputs for which are externally available. The pre-tax discount rate used to calculate value is 16.9% (2024: 16.3%). The model assesses sensitivity to operating margins, discount rates, and AUM growth rates. The results of the calculation indicate no impairment. In the previous year, an impairment charge of £1,250,000 was been recognised in the Statement of Total Comprehensive Income in the financial year.

 

The Group has conducted an analysis of the sensitivity to changes in the key assumptions used to determine amount and timing of cash flows, including:

 

·	a reduction in growth rate;
·	a reduction in the terminal growth rate; and
·	an increase in the discount rate.

 

Reducing forecast growth rates for the five year forecast period reduces headroom above the threshold for impairment by c.£475,000 for every 5% reduction in growth. Reducing the terminal growth rate to 0% would reduce headroom above the threshold for impairment by c.£355,000. Increasing the discount rate would reduce headroom above the threshold for impairment by c.£520,000 for every 1% increase in discount rate.

 

Business combinations

Critical judgement

Client relationships, brand, and software intangibles purchased through corporate transactions

When the Group purchases client relationships, brands, and software through transactions with other corporate entities, a judgement is made as to the identification of the intangible asset and whether the transaction should be accounted for as a business combination or as a separate purchase of intangible assets. In making this judgement, the Group assesses the assets, liabilities, operations, and processes that were the subject of the transaction against the definition of a business combination in IFRS 3. For a business combination, it is determined whether all elements of a business in IFRS 3 have been met; in particular, consideration is given to the inputs, processes, and outputs, and that there is, at least, an input and a substantive process that together significantly contribute to the ability to create output. It has also been considered whether the integrated set of activities is capable of being conducted and managed as a business by a market participant, and a judgement made as to whether the acquired process is substantive. If the acquisition is not deemed to be a business, it is treated as an acquisition of an asset or a group of assets.

 

There are no other judgements or assumptions made about the future, or about any other major sources of estimation uncertainty at the end of the reporting period, which have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

 

2.25 Other estimates

Estimation uncertainty

Share-based payments

Given the significance of share-based payments as a form of employee remuneration for the Group, management are providing additional information on the estimates involved in the accounting for share-based payments. This is not considered to be a key source of estimation uncertainty, given the materiality of the impact that changes in estimates have and as a result of the changes in estimates not impacting the carrying amount of an asset or liability in the balance sheet. The principal estimations relate to:

 

·	forfeitures (where awardees leave the Group as 'bad' leavers and, therefore, forfeit unvested awards); and
·	the satisfaction of performance obligations attached to certain awards.

 

These estimates are reviewed regularly and the charge to the Statement of Total Comprehensive Income is adjusted accordingly (at the end of the relevant scheme as a minimum). Based on the current forecasts of the Group, the charge for the year is based on 100% of the options in various scheme years vesting for the element relating to non-market-based performance conditions. A decrease of 10% in the vesting assumptions would reduce the charge in the next financial year by £159,000.

 

In considering the level of satisfaction of performance obligations, the Group's forecast has been reviewed and updated for the expected impact of the various market scenarios and management actions. This forecast has been used to estimate the relevant vesting assumptions for the Enterprise Management Incentive ("EMI") schemes in place.

 

2.26 Alternative performance measures

In reporting financial information, the Group presents alternative performance measures ("APMs") that are not defined or specified under the requirements of IFRSs. The Group believes that these APMs provide users with additional helpful information on the performance of the business. The APMs are consistent with how the business performance is planned and reported within the internal management reporting to the Board. Some of these measures are also used for the purpose of setting remuneration targets. The APMs used by the Group are set out in note 27, including explanations of how they are calculated and how they can be reconciled to a statutory measure where relevant. There is also further information on separately disclosed items in note 7.

 

3 | Capital management

The components of the Group's capital are detailed on the Consolidated Statement of Financial Position and as at the reporting date the Group had capital of £50,552,000 (2024: £43,334,000). Capital generated from the business is both reinvested in the business to generate future growth and returned to shareholders, principally in the form of dividends.

 

The Group's objectives when managing capital are (i) to safeguard the Group's ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; (ii) to maintain a strong capital base and utilise it efficiently to support the development of its business; and (iii) to comply with the regulatory capital requirements set by the FCA. Capital adequacy and the use of regulatory capital are monitored by the Group's management and Board. There is one active regulated entity in the Group: Tatton Investment Management Limited, regulated by the FCA.

 

Regulatory capital is determined in accordance with the requirements of the FCA's Investment Firms Prudential Regime and the Capital Requirements Directive IV prescribed in the UK by the FCA. The Directive requires continual assessment of the Group's risks that is underpinned by the Group's Internal capital adequacy and risk assessment ("ICARA"). The ICARA considers the relevant current and future risks to the business and the capital that is considered necessary to support these risks.

 

The Group actively monitors its capital base to ensure that it maintains sufficient and appropriate capital resources to cover the relevant risks to the business and to meet consolidated and individual regulated entity regulations and liquidity requirements. The Group assesses the adequacy of its own funds on a consolidated and legal entity basis on a frequent basis. This includes continuous monitoring of 'K-factor' variables, which captures the variable nature of risk involved in the Group's business activities. A regulatory capital update is additionally provided to senior management on a monthly basis. In addition to this, the Group has implemented a number of 'Key risk indicators', which act as early warning signs, with the aim of notifying senior management if the Group's own funds misalign with the Group's risk appetite and internal thresholds.

 

The FCA requires the Group to hold more regulatory capital resources than the total capital resource requirement. The total capital requirement for the Group is the higher of the Group's own funds requirement (based on 25% of fixed overheads), its own harm requirement (based on the Group's requirement for harms from ongoing activities as calculated in the ICARA) and wind-down requirement (capital requirement should the firm wind down). The total capital requirement for the Group is £4.56m (unaudited), which is based on the Group's own funds requirement. As at 31 March 2025, the Group has regulatory capital resources of £13.12m (unaudited), which is significantly in excess of the Group's total capital requirement. During the period, the Group and its regulated subsidiary entities complied with all regulatory capital requirements.

 

4 | Segment reporting

Information reported to the Board of Directors as the CODM for the purposes of resource allocation and assessment of segmental performance is focused on the type of revenue. The principal types of revenue are discretionary fund management and the marketing and promotion of the funds run by the companies under Tatton Capital Limited ("Tatton") and the provision of compliance and support services to IFAs and mortgage advisers ("Paradigm").

 

The Group's reportable segments under IFRS 8 are, therefore, Tatton and Paradigm, with centrally incurred overhead costs applicable to the segments being allocated to the Tatton and Paradigm divisions on an appropriate pro rata basis. Unallocated central overhead costs of the Operating Group are classified as 'Unallocated' in the table below to provide a reconciliation of the segment information to the financial statements. Unallocated costs include general corporate expenses, head office salaries, and other administrative costs that are not directly attributable to the operating segments. These costs are managed at the corporate level and are not allocated to the segments for performance evaluation.

 

The principal activity of Tatton is that of discretionary fund management ("DFM") of investments on-platform and the provision of investment wrap services.

The principal activity of Paradigm is that of the provision of support services to IFAs and mortgage advisers. For management purposes, the Group uses the same measurement policies as are used in its financial statements. The Paradigm division includes the trading subsidiaries of Paradigm Partners Limited and Paradigm Mortgages Services LLP, which operate as one operating segment as they have the same economic characteristics, they are run and managed by the same management team, and the methods used to distribute the products to customers are the same. The information presented in this note is consistent with the presentation for internal reporting. Total assets and liabilities for each operating segment are not regularly provided to the CODM.

 

The following is an analysis of the Group's revenue and results by reportable segment:

 

Year ended 31 March 2025	Tatton (£'000)	Paradigm (£'000)	Unallocated (£'000)	Group (£'000)
Revenue	38,987	6,322	-	45,309
Share of post-tax loss from joint ventures	(148)	-	-	(148)
Administrative expenses	(14,974)	(4,779)	(4,722)	(24,475)
Operating profit/(loss)	23,865	1,543	(4,722)	20,686
Share-based payments	397	157	949	1,503
Gain arising on changes in fair value of contingent consideration	-	-	-	-
Exceptional items	-	-	-	-
Amortisation of acquisition-related intangible assets	621	36	-	657
Non-controlling interest	-	100	-	100
Adjusted operating profit/(loss)1	24,883	1,836	(3,773)	22,946

 

Year ended 31 March 2025	Tatton (£'000)	Paradigm (£'000)	Unallocated (£'000)	Group (£'000)
Statutory operating costs included the following:
Depreciation	64	58	169	291
Amortisation	782	53	2	837

 

 

Year ended 31 March 2024	Tatton (£'000)	Paradigm (£'000)	Unallocated (£'000)	Group (£'000)
Revenue	30,864	5,943	-	36,807
Share of post-tax loss from joint ventures	(1,188)	-	-	(1,188)
Administrative expenses	(11,092)	(4,421)	(3,642)	(19,155)
Operating profit/(loss)	18,584	1,522	(3,642)	16,464
Share-based payments	340	186	932	1,458
Gain arising on changes in fair value of contingent consideration	(1,350)	-	-	(1,350)
Exceptional items	1,250	-	-	1,250
Amortisation of acquisition-related intangible assets	621	12	-	633
Non-controlling interest	-	59	-	59
Adjusted operating profit/(loss)1	19,445	1,779	(2,710)	18,514

 

Year ended 31 March 2024	Tatton (£'000)	Paradigm (£'000)	Unallocated (£'000)	Group (£'000)
Statutory operating costs included the following:
Depreciation	249	112	14	375
Amortisation	734	16	-	750

All turnover arose in the United Kingdom. The key decision makers use the KPIs as detailed on pages 20 to 22 of the 2025 Annual Report.

 

1.   Alternative performance measures are detailed in note 27.

 

5 | Revenue

The disaggregation of consolidated revenue is as follows:

Operating segment	Major product/service lines	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Tatton	Investment management fees	38,987	30,864
Paradigm	IFA consulting and support services income	2,342	2,221
Paradigm	Mortgage-related services income	3,200	2,990
Paradigm	Marketing income	780	732
		45,309	36,807

The disclosure of revenue by product line is consistent with the revenue information that is disclosed for each reportable segment under IFRS 8 'Operating segments' (see note 4). All the revenue relates to trading undertaken in the UK.

 

Investment management fees are recurring charges derived from the market value of retail customer assets, based on asset mix and portfolio size, and are, therefore, subject to market and economic risks. The rate charged is variable and is dependent on the product. Although most ongoing revenue is based on the value of underlying benefits, these are not considered to constitute variable income in which significant judgement or estimation is involved. The calculations are based on short timelines or point-in-time calculations that represent the end of a quantifiable period, in accordance with the contract. These are charged to and paid by the client on the same value, constituting the transaction price for the specified period. At any time during the period, a client may choose to remove their assets from a service and no further revenue is received.

 

All obligations to the customer are satisfied at the end of the period in which the service is provided for ongoing revenue, with payment being due immediately.

 

IFA consulting and support services income and marketing income are fixed based on the service provided. The rate charged for mortgage-related services income is variable and is dependent on the product. See note 2.5 for details of when revenue is recognised for the Paradigm product lines, including compliance consultancy services, mortgage-related services, and marketing services.

 

There are no elements of revenue that relate to contracts with an expected duration of over one year; therefore, the Group has applied the practical expedient for contracts of less than one year.

 

6 | Operating profit

The operating profit and the profit before taxation are stated after charging/(crediting):

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Amortisation of software (note 16)	180	117
Amortisation of acquisition-related intangibles (note 7)	657	633
Depreciation of property, plant and equipment (note 17)	96	159
Depreciation of right-of-use assets (note 17)	195	216
Impairment of investment in joint venture (note 7)	-	1,250
(Gain)/loss arising on financial assets designated as FVTPL	(27)	2
Employee benefit expense (note 13)	14,868	12,448
Gain arising on changes in fair value of contingent consideration (note 7)	-	(1,350)
Services provided by the Group's auditor:
Audit of the statutory consolidated and Company financial statements of
Tatton Asset Management plc	149	130
Audit of subsidiaries	91	79
Other fees payable to the auditor:
Non-audit services	10	9

 

Total audit fees were £240,000 (2024: £209,000). Total non-audit fees payable to the auditor were £10,000 (2024: £9,000).

'Amortisation of software' in the table above excludes £36,000 (2024: £12,000) of amortisation relating to the software acquired on acquisition of Fintegrate, which is included in the £657,000 (2024: £633,000) of amortisation of acquisition-related intangibles.

 

7 | Separately disclosed items

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Gain arising on changes in fair value of contingent consideration	-	(1,350)
Exceptional costs	-	1,250
Share-based payment charges	1,503	1,458
Operating loss relating to non-controlling interest	100	59
Amortisation of acquisition-related intangible assets	657	633
Total separately disclosed items	2,260	2,050

 

Separately disclosed items that are shown separately on the face of the Statement of Total Comprehensive Income represent costs and income that do not reflect the Group's trading performance and may be considered material (individually or in aggregate if of a similar type) due to their size or frequency, and are adjusted to present Adjusted operating profit so as to ensure consistency between periods. The costs or income above are all included within Administrative expenses, except for the Exceptional costs in FY24 of £1,250,000, which was recognised within the Share of loss of joint ventures.

 

Although some of these items may recur from one period to the next, operating profit has been adjusted for these items to give better clarity regarding the underlying performance of the Group. The alternative performance measures ("APMs") are consistent with how the business performance is planned and reported within the internal management reporting to the Board. Some of these measures are also used for the purpose of setting remuneration targets.

Gain arising on changes in fair value of acquisition-related items

During the prior year, the Group revalued its financial liability at fair value through profit or loss relating to the contingent consideration on the acquisition of the Verbatim funds business and 8AM Global Limited. This resulted in a credit of £1,350,000 being recognised in the prior year. No such revaluation was required in the financial year ending 31 March 2025.

 

Exceptional items

During the prior year, the Group reviewed the investment in the 8AM joint venture for impairment and recognised an impairment loss in the year of £1,250,000. As the impairment of the investment was a non-cash item, there were no cash flows from exceptional items included on the Consolidated Statement of Cash Flows. No such impairment was identified in financial year to 31 March 2025.

 

Share-based payment charges

Share-based payments is a recurring item, although the value will change depending on the estimation of the satisfaction of performance obligations attached to certain awards. It is an adjustment to operating profit since it is a significant non-cash item. Adjusted operating profit represents largely cash-based earnings and more directly relates to the trading performance of the financial reporting period.

 

Operating loss due to non-controlling interest

The Group's operating profit includes £100,000 of losses relating to the non-controlling interest in Fintegrate Financial Solutions Limited (2024: £59,000). This has been excluded from the Group's adjusted operating profit to reflect the adjusted operating profit attributable to the shareholders of the Company.

 

Amortisation of acquisition-related intangible assets

Payments made for the introduction of client relationships and brands that are deemed to be intangible assets are capitalised and amortised over their useful life, which has been assessed to be ten years. This includes £207,000 of amortisation of the intangibles recognised on the acquisition of 8AM, where the amortisation charge is included within the Share of profit/(loss) from joint ventures in the Consolidated Statement of Total Comprehensive Income (2024: £207,000). This amortisation charge is recurring over the life of the intangible asset, although it is an adjustment to operating profit since it is a significant non-cash item. Adjusted operating profit represents largely cash-based earnings and more directly relates to the trading performance of the financial reporting period.

 

8 | Finance income

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Bank interest income	1,025	640
Other interest	8	-
Total finance income	1,033	640

9 | Finance costs

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Bank interest payable	(10)	-
Unwinding of the discount on contingent consideration	(47)	(201)
Interest expense on lease liabilities	(66)	(6)
Interest payable in the servicing of banking facilities	-	(146)
Total finance costs	(123)	(353)

10 | Taxation charge

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Current tax expense
Current tax on profits for the period	5,792	4,798
Adjustment for over-provision in prior periods	(37)	(290)
	5,755	4,508
Deferred tax credit
Current year credit	(164)	(173)
Adjustment with respect to previous years	3	(505)
	(161)	(678)
Total tax expense	5,594	3,830

 

The deferred tax credit includes £52,000 relating to the release of the deferred tax liability on the investment in 8AM Global Limited, which is recognised within the Investment in joint ventures balance on the Consolidated Statement of Financial Position (2024: £33,000).

 

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to profit for the year are as follows:

 

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Profit before taxation	21,596	16,751
Tax at UK corporation tax rate of 25%	5,399	4,188
Expenses not deductible for tax purposes	60	462
Income not taxable	(14)	(443)
Adjustments with respect to previous years	(45)	(795)
Capital allowances in excess of depreciation	5	6
Deferred tax asset not recognised	157	142
Share-based payments	32	270
Total tax expense	5,594	3,830

11 | Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares during the year.

 

Number of shares

	31-Mar 2025	31-Mar 2024
Basic
Weighted average number of shares in issue1	61,623,021	61,064,870
Effect of own shares held by an EBT	(562,061)	(358,196)
	61,060,960	60,706,674
Diluted
Effect of weighted average number of options outstanding for the year	531,198	1,075,124
Weighted average number of shares (diluted)2	61,592,158	61,781,798
Fully diluted
Effect of full dilution of employee share options that are contingently issuable or have future attributable service costs	1,109,396	1,096,621
Adjusted diluted weighted average number of options and shares for the year3	62,701,554	62,878,419

1.      The weighted average number of shares in issue includes contingently issuable shares where performance obligations have been met and there will be little to no cash consideration, but the share options have yet to be exercised.

2.      The weighted average number of shares is diluted due to the effect of potentially dilutive contingent issuable shares from share option schemes.

3.      The dilutive shares used for this measure differ from that used for statutory dilutive earnings per share; the future value of service costs attributable to employee share options is ignored and contingently issuable shares for long-term incentive plan options are assumed to fully vest.

 

Own shares held by an EBT represents the Company's own shares purchased and held by the Employee Benefit Trust ("EBT"), shown at cost. In the year ended 31 March 2025, the EBT purchased 7,664 (2024: 1,005,696) of the Company's own shares. The Company utilised 193,660 (2024: 346,896) of the shares during the year to satisfy the exercise of employee share options. At March 2025, there remained 472,804 of the Company's own shares being held by the EBT (2024: 658,800).

 

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Earnings attributable to ordinary shareholders
Basic and diluted profit for the period	16,141	12,986
Share-based payments - IFRS 2 option charges	1,503	1,458
Amortisation of acquisition-related intangible assets	657	633
Exceptional costs (note 7)	-	1,250
Gain arising on changes in fair value of contingent consideration (note 7)	-	(1,350)
Unwinding of discount on contingent consideration (note 9)	47	201
Tax impact of adjustments	(382)	(770)
Adjusted basic and diluted profits for the period and attributable earnings	17,966	14,408
Earnings per share (pence) - Basic	26.43	21.39
Earnings per share (pence) - Diluted	26.21	21.02
Adjusted earnings per share (pence) - Basic1	29.42	23.73
Adjusted earnings per share (pence) - Diluted1	29.17	23.32
Adjusted earnings per share (pence) - Fully Diluted1	28.65	22.91

1.      Alternative performance measures are detailed in note 27.

12 | Dividends

The Directors consider the Group's capital structure and dividend policy at least twice a year ahead of announcing results and do so in the context of its ability to continue as a going concern, to execute its strategy and to invest in opportunities to grow the business and enhance shareholder value. The Company's dividend policy is described in the Directors' Report on page 73 of the 2025 Annual Report. As at 31 March 2025, the Company's distributable reserves were £9,074,000 (2024: £7,761,000).

 

During the year, Tatton Asset Management plc paid the final dividend related to the year ended 31 March 2024 of £4,740,000, representing a payment of 8.0p per share. During FY24 £6,006,000 was paid as the final dividend related to the year ended 31 March 2023, representing 10.0p per share. In addition, the Company paid an interim dividend of £5,700,000 (2024: £4,841,000) to its equity shareholders. This represents a payment of 9.5p per share (2024: 8.0p per share).

 

The Directors are proposing a final dividend with respect to the financial year ended 31 March 2025 of 9.5p (2024: 8.0p) per share, which will absorb £5,701,000 (2024: £4,841,000) of shareholders' funds. It will be paid on 31 July 2025 to shareholders who are on the register of members on 20 June 2025.

 

13 | Staff costs

The staff costs, including Executive Directors, were as follows:

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Wages, salaries and bonuses	11,304	9,468
Social security costs	1,616	1,161
Pension costs	445	361
Share-based payments	1,503	1,458
Total employee benefit expense	14,868	12,448

 

The average monthly number of employees (including Executive Directors) during the year was as follows:

	31-Mar 2025	31-Mar 2024
Administration	110	101
Key management	3	3
	113	104

 

Key management compensation

The remuneration of the statutory Directors who are the key management of the Group is set out below in aggregate for each of the key categories specified in IAS 24 'Related Party Disclosures'.

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Short-term employee benefits	3,118	2,058
Post-employment benefits	10	10
Share-based payments	552	571
	3,680	2,639

 

The table above shows the remuneration for both Executive Directors and Non-Executive Directors.

 

The Group incurred social security costs of £419,000 (2024: £293,000) on the remuneration of the Directors and Non-Executive Directors. Retirement benefits are accruing to one Director (2024: one) under a defined contribution pension scheme. Within the figures above is £10,000 of company contributions paid to a pension scheme in respect of this Director's qualifying services (2024: £10,000).

 

Dividends totalling £1,883,000 (2024: £2,026,000) were paid in the year with respect to ordinary shares held by the Company's Directors. The aggregate gains made by the Directors on the exercise of share options during the year were £304,600 (2024: £248,250).

 

The remuneration of individual Directors is provided in the Remuneration Committee Report on pages 68 to 72 of the 2025 Annual Report. These disclosures form part of these financial statements.

 

The remuneration of the highest paid Director was:

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Total remuneration and benefits in kind	1,233	695

 

The highest paid Director exercised nil share options in the period (2024: nil). There were 110,887 share options granted to the highest paid Director in the year (2024: 20,000). There was £nil (2024: £nil) of money or net assets (other than share options) paid to or receivable by the highest paid Director under long-term incentive schemes in respect of qualifying services. The highest paid Director received £1,599,000 (2024: £1,740,000) in dividends in the year with respect to ordinary shares held by the Director and connected parties. No contributions were made to a defined contribution scheme with respect to the highest paid Director in the period.

 

14 | Investments in joint ventures

	(£'000)
At 1 April 2024	5,352
Profit for the year after tax	59
Amortisation of intangible assets relating to joint ventures	(207)
Deferred tax credit on amortisation of intangible assets relating to joint ventures	52
Impairment loss	-
Distributions of profit	-
At 31 March 2025	5,256

 

8AM belongs to the Tatton operating segment as disclosed within note 4.

 

Name of joint venture	Nature of business	Principal place of business	Class of share	Percentage owned by the group
8AM Global Limited	Investment Management	United Kingdom	Ordinary Shares	50.0%
Niche Investment Management Limited	Investment Management	United Kingdom	Ordinary Shares	50.0%
Becketts Wealth Limited	Investment Management	United Kingdom	Ordinary Shares	50.0%

 

All of the above joint ventures are accounted for using the equity method in these consolidated financial statements, as set out in the Group's accounting policies in note 2.

 

Summarised financial information in respect of the Group's only material joint venture, 8AM, is set out below.

 

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Non-current assets	24	29
Current assets	735	645
Current liabilities	(161)	(178)
Total equity	598	496
Group's share of net assets	297	238
Goodwill and intangible assets	5,344	5,551
Deferred tax liability	(385)	(437)
Carrying value held by the Group	5,256	5,352

 

Current assets above include £502,000 of cash and cash equivalents (2024: £345,000). There are no current or non-current financial liabilities excluding trade and other payables and provisions included in current liabilities and non-current liabilities.

 

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Revenue	1,473	1,732
Profit for the year	117	539
Dividends received	-	255
The above profit includes the following:
Depreciation and amortisation	5	7
Interest income	10	6
Income tax	43	282

There is no interest expense in the year (2024:£nil).

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Joint venture's profit for the year	117	539
Group's share profit for the year before adjustments	59	269
Amortisation of customer relationship intangible assets	(207)	(207)
Impairment loss	-	(1,250)
Group's share of loss for the year	(148)	(1,188)

 

8AM Global Limited has a reporting date of 30 June. The net asset position shown in the table above is as at 31 March, to align with the Group's own reporting.

 

Niche Investment Management Limited and Becketts Wealth Limited both have a reporting date of 31 March, in line with the Group. The Group's interest in all individually immaterial joint ventures accounted for using the equity method is £nil (2024: £nil). The Group's share of profit for the year for these joint ventures is £nil (2024: £nil).

 

15 | Goodwill

	Goodwill (£'000)
Cost and carrying value at 1 April 2023	9,337
Recognised as part of a business combination	459
Cost and carrying value at 31 March 2024 and 31 March 2025	9,796

 

The carrying value of goodwill includes £9.4m allocated to the Tatton operating segment and CGU. This is made up of £2.5m arising from the acquisition in 2014 of an interest in Tatton Oak Limited by Tatton Capital Limited, consisting of the future synergies and forecast profits of the Tatton Oak business, £2.0m arising from the acquisition in 2017 of an interest in Tatton Capital Group Limited, £1.4m of goodwill generated on the acquisition of Sinfonia, £3.0m of goodwill generated on the acquisition of the Verbatim funds business, and £0.5m of goodwill generated on the acquisition of 56.49% of Fintegrate Financial Solutions Limited in the previous financial year.

 

The carrying value of goodwill also includes £0.4m allocated to the Paradigm operating segment and CGU relating to the acquisition of Paradigm Mortgage Services LLP.

Goodwill relating to 8AM Global Limited is shown within the Investments in joint ventures (see note 14).

 

None of the goodwill is expected to be deductible for income tax purposes.

Impairment loss and subsequent reversal

Goodwill is subject to an annual impairment review based on an assessment of the recoverable amount from future trading. Where, in the opinion of the Directors, the recoverable amount from future trading does not support the carrying value of the goodwill relating to a subsidiary company, then an impairment charge is made. Such an impairment is charged to the Statement of Total Comprehensive Income.

 

Impairment testing

For the purpose of impairment testing, goodwill is allocated to the Group's operating companies that represent the lowest level within the Group at which the goodwill is monitored for internal management accounts purposes. Goodwill acquired in a business combination is allocated, at acquisition, to the CGUs or group of units that are expected to benefit from that business combination. The Directors test goodwill annually for impairment, or more frequently if there are indicators that goodwill might be impaired. The Directors have reviewed the carrying value of goodwill at 31 March 2025 and do not consider it to be impaired.

 

Growth rates

The value in use is calculated from cash flow projections based on the Group's forecasts for the next five years, ending 31 March 2030. The Group's latest financial forecasts, which cover a five-year period, are reviewed by the Board. A terminal growth rate of 3.5% (2024: 5%) for the Tatton CGU has been applied to year five cash flows. The terminal growth rate is prudent, given the historical growth seen by the Group, and does not exceed the long-term industry average growth rate. A terminal growth rate of 0% has been applied to the Paradigm Mortgage Services LLP CGU that reflects the outer year budget revenue.

 

Discount rates

The pre-tax discount rate applied to the cash flow forecasts is derived from a weighted average cost of capital model, the inputs for which are externally available. The pre-tax discount rate used to calculate value is 16.9% (2024: 14.4%) and has been used for all CGUs.

 

Cash flow assumptions

The key assumptions used for the value in use calculations are those regarding discount rate, growth rates, and expected changes in margins. Forecast sales growth rates are based on past experience, which has been adjusted for the strategic direction and near-term investment priorities for each CGU. The Tatton CGU has not budgeted for any market movements and has used an average growth rate of net flows of 12%, which management believe is prudent given the size of the market and historical growth. The Paradigm Mortgage Services LLP CGU has an assumed 9% In year 1, decreasing to 2% growth by year 5.

 

From the assessment performed, no reasonably possible change in a key assumption would cause the recoverable amount of either the Tatton CGU or the Paradigm Mortgage Services LLP CGU to equal its carrying value.

16 | Intangible assets

	Computer software (£'000)	Client relationships (£'000)	Brand (£'000)	Total (£'000)
Cost
Balance at 1 April 2023	1,235	4,034	98	5,367
Additions	249	-	-	249
Acquired as part of a business combination	365	-	-	365
Balance at 31 March 2024	1,849	4,034	98	5,981
Additions	437	-	-	437
Balance at 31 March 2025	2,286	4,034	98	6,418
Accumulated amortisation and impairment
Balance at 1 April 2023	(892)	(845)	(15)	(1,752)
Charge for the period	(129)	(404)	(10)	(543)
Balance at 31 March 2024	(1,021)	(1,249)	(25)	(2,295)
Charge for the period	(216)	(404)	(10)	(630)
Balance at 31 March 2025	(1,237)	(1,653)	(35)	(2,925)
Net book value
As at 1 April 2023	343	3,189	83	3,615
As at 31 March 2024	828	2,785	73	3,686
As at 31 March 2025	1,049	2,381	63	3,493

 

All amortisation charges are included within Administrative expenses in the Statement of Total Comprehensive Income.

 

The Client Relationships and Brand intangibles arose on acquisition of the Sinfonia and Verbatim funds.

 

Computer software relates to the internally generated software within Tatton Investment Management Limited and Fintegrate Financial Solutions Limited.

 

17 | Property, plant and equipment

	Computer, office equipment and motor vehicles (£'000)	fixtures and fittings (£'000)	Right-of-use assets - buildings and motor vehicles (£'000)	Total (£'000)
Cost
Balance at 1 April 2023	354	480	991	1,825
Additions	97	18	622	737
Disposals	(104)	-	(689)	(793)
Balance at 31 March 2024	347	498	924	1,769
Additions	58	10	339	407
Disposals	-	-	(302)	(302)
Balance at 31 March 2025	405	508	961	1,874
Accumulated depreciation and impairment
Balance at 1 April 2023	(234)	(398)	(739)	(1,371)
Charge for the period	(86)	(73)	(216)	(375)
Disposals	104	-	689	793
Balance at 31 March 2024	(216)	(471)	(266)	(953)
Charge for the period	(86)	(10)	(195)	(291)
Disposals	-	-	302	302
Balance at 31 March 2025	(302)	(481)	(159)	(942)
Net book value
As at 1 April 2023	120	82	252	454
As at 31 March 2024	131	27	658	816
As at 31 March 2025	103	27	802	932

 

All depreciation charges are included within Administrative expenses in the Statement of Total Comprehensive Income.

 

The Group leases buildings, motor vehicles, and IT equipment. The Group has applied the practical expedient for short-term leases and so has not recognised IT equipment within ROU assets. The average lease term is five years. One lease expired in the year and a new lease was entered into in its place. The maturity analysis for lease liabilities is shown in note 22. The future lease payments relating to lease liabilities are fixed.

Right-of-use assets

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Amounts recognised in profit and loss
Depreciation on right-of-use assets	(195)	(216)
Interest expense on lease liabilities	(66)	(6)
Expense relating to short-term leases	(67)	(66)
	(328)	(288)

 

At 31 March 2025, the Group is committed to £78,000 for short-term leases (2024: £64,000).

 

The total cash outflow for all leases amounts to £283,000 (2024: £294,000). The cash outflows for the principal portion of lease liabilities and for the interest portion of lease liabilities is shown within financing activities in the Consolidated Statement of Cash Flows. The cash outflows for the payments of short-term leases are shown within Operating activities in the Consolidated Statement of Cash Flows.

18 | Trade and other receivables

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Trade receivables	312	878
Accrued income	3,936	3,427
Prepayments	712	756
Other receivables	1,578	235
	6,538	5,296
Less non-current portion:
Other receivables	-	(188)
Total non-current trade and other receivables	-	(188)
Total current trade and other receivables	6,538	5,108

 

Trade and other receivables, excluding prepayments, are financial assets. The carrying value of these financial assets are considered a fair approximation of their fair value. Accrued income is made up of contract assets, which are balances due from customers that arise when the Group delivers the service. Payment for services is not due from the customer until the services are complete; therefore, a contract asset is recognised over the period in which the services are performed to represent the entity's right to consideration for the services transferred to date. This usually relates to providing one month of investment management service prior to receiving the cash from the customer in the following month.

 

The Group applies the IFRS 9 simplified approach to measuring expected credit losses ("ECLs") for trade receivables and accrued income at an amount equal to lifetime ECLs. In line with the Group's historical experience, and after consideration of current credit exposures, the Group does not expect to incur any credit losses and has not recognised any ECLs in the current year (2024: £nil).

 

Within other receivables are three loans that Tatton has granted in the financial year (2024: £nil). The Group applies the IFRS 9 general approach for these receivables. The loans are secured and interest of 4% is being accrued, and is shown within note 8 as Other interest income. The security equals the carrying amount of the loans and, as such, no ECL is recognised.

Trade receivable amounts are all held in sterling.

 

19 | Trade and other payables

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Trade payables	478	328
Amounts due to related parties	14	-
Accruals	7,163	4,389
Deferred income	122	238
Contingent consideration	420	903
Lease liabilities	848	659
Other payables	2,844	2,608
	11,889	9,125
Less non-current portion:
Contingent consideration	-	(402)
Lease liabilities	(615)	(567)
Other payables	(42)	(47)
Total non-current trade and other payables	(657)	(1,016)
Total current trade and other payables	11,232	8,109

 

Trade payables, amounts due to related parties, accruals, lease liabilities, contingent consideration, and other payables are considered financial liabilities. The Directors consider that the carrying amount of trade payables approximates to their fair value.

 

Within other payables, there is a loan of £33,000 that holds a fixed and floating charge over all present and future property and undertakings of Fintegrate Financial Solutions Limited (2024: £46,000).

 

Trade payable amounts are all held in sterling.

 

20 | Deferred tax assets

	Deferred capital allowances (£'000)	Short-term timing differences (£'000)	Share-based payments (£'000)	Acquisition intangibles (£'000)	Total (£'000)
Asset/(liability) at 1 April 2023	(14)	-	2,069	(797)	1,258
Income statement credit/(charge)	(120)	28	101	636	645
Recognised as part of a business combination	-	-	-	(92)	(92)
Equity credit	-	-	760	-	760
Asset/(liability) at 31 March 2024	(134)	28	2,930	(253)	2,571
Income statement credit/(charge)	(20)	62	28	39	109
Equity credit	-	-	203	-	203
Asset/(liability) at 31 March 2025	(154)	90	3,161	(214)	2,883

 

A deferred tax asset of £248,000 with a temporary timing difference of £993,000 relating to a difference between the carrying value and the tax base of intangibles acquired in Tatton Capital Limited relating to Verbatim has not been recognised, as it is not expected that the temporary difference would reverse in the foreseeable future.

 

21 | Reconciliation of liabilities arising from financing activities

	1 April 2023 (£'000)	Financing cash flows (£'000)	Additions (£'000)	Non-cash changes: interest (£'000)	31 March 2024 (£'000)	Financing cash flows (£'000)	Additions (£'000)	Non-cash changes: interest (£'000)	31 March 2025 (£'000)
Long-term borrowings	-	-	62	-	62	(23)	-	2	41
Short-term borrowings	-	(18)	141	3	126	-	-	8	134
Lease liabilities	261	(230)	622	6	659	(216)	339	66	848
	261	(248)	825	9	847	(239)	339	76	1,023

 

Long-term and short-term borrowings relate to interest-bearing borrowings added on the acquisition of Fintegrate Financial Solutions Limited. These are disclosed within Other payables within note 19.

 

22 | Financial instruments

The Group's treasury activities are designed to provide suitable, flexible funding arrangements to satisfy the Group's requirements. The Group uses financial instruments comprising borrowings, cash, and items such as trade receivables and payables that arise directly from its operations. The main risks arising from the Group's financial instruments are interest rate risks, credit risks, and liquidity risks. The Board reviews policies for managing each of these risks and they are summarised below. The Group finances its operations through a combination of cash resource and other borrowings.

 

Categories of financial instruments

The financial assets and liabilities of the Group are detailed below:

 

	At 31 March 2025				At 31 March 2024
	Amortised cost (£'000)	Financial liabilities (£'000)	FVPL (£'000)	Carrying value (£'000)	Amortised cost (£'000)	Financial liabilities (£'000)	FVPL (£'000)	Carrying value (£'000)
Financial assets
Financial assets at FVPL	-	-	1,133	1,133	-	-	106	106
Trade receivables	312	-	-	312	878	-	-	878
Accrued income	3,936	-	-	3,936	3,427	-	-	3,427
Other receivables	1,578	-	-	1,578	235	-	-	235
Cash and cash equivalents	32,119	-	-	32,119	24,838	-	-	24,838
	37,945	-	1,133	39,078	29,378	-	106	29,484
Financial liabilities
Trade and other payables	-	10,499	-	10,499	-	8,228	-	8,228
Contingent consideration	-	-	420	420	-	-	903	903
Lease liabilities	-	848	-	848	-	659	-	659
	-	11,347	420	11,767	-	8,887	903	9,790

Fair value estimation

IFRS 7 requires the disclosure of fair value measurements of financial instruments according to the level of the following fair value measurement hierarchy:

 

·	quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
·	inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
·	inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

 

All financial assets, except for financial investments, are held at amortised cost and are classified as level 1. The carrying amount of these financial assets at amortised cost approximate to their fair value. Financial investments are categorised as financial assets at fair value through profit or loss and are classified as level 1, and the fair value is determined directly by reference to published prices in an active market.

Financial assets at fair value through profit or loss (level 1)

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Financial investments in regulated funds or model portfolios	1,133	106

 

The Group launched a new range of passive funds during the financial year and invested £1,000,000 in these funds, which is shown on the Consolidated Statement of Cash Flows. This investment, along with the Group's other investments in regulated funds or model portfolios, are revalued, with changes in fair value being recognised in the Consolidated Statement of Total Comprehensive Income.

 

All financial liabilities, except for contingent consideration, are categorised as financial liabilities measured at amortised cost and are also classified as level 1. The only financial liabilities measured subsequently at fair value on level 3 fair value measurement represent contingent consideration relating to a business combination.

 

Contingent consideration has been valued using a discounted cash flow method that was used to capture the present value arising from the contingent consideration.

The unobservable inputs are:

 

·	the risk-adjusted discount rate of 8.7%; and
·	the probability-adjusted level of assets under management, which have a range of £283,000,000 to £353,000,000.

 

 

Financial liabilities at fair value through profit or loss (level 3)

Contingent consideration	£'000
Balance at 1 April 2023	2,989
Recognition of contingent consideration as part of a business combination	(937)
Unwinding of discount rate	201
Changes in fair value of contingent consideration	(1,350)
Balance at 31 March 2024	903
Contingent consideration paid	(530)
Unwinding of discount rate	47
Balance at 31 March 2025	420

 

The unwinding of the discount rate and the changes in fair value of contingent consideration have been recognised in the Consolidated Statement of Total Comprehensive Income.

 

During the year, a payment of £530,000 was made relating to the contingent consideration due for acquisition of the Verbatim funds.

 

The fair value of the remaining contingent consideration for Verbatim was reviewed at 31 March 2025 using a discounted cash flow analysis. The expected cash flows are estimated based on the Group's knowledge of the business and how the current economic environment is likely to impact it.

 

For Verbatim, the expected change in AUM and resulting cash flows are estimated based on the Group's knowledge of the business and how the current economic environment is likely to impact it. The contingent consideration payable is dependent on the total value of AUM at the payment date compared to the value of AUM at acquisition, £650m. The scenarios used to calculate the deferred payments were updated to include AUM movements to date and management's perception of the likelihood of occurrence.

 

The unobservable inputs for the Verbatim contingent consideration include the risk-adjusted discount rate of 8.7% (2024: 8.0%) and future AUM of the funds ranging in value up to £353m. If the discount rate were to change by 1%, this would increase/decrease the fair value of contingent consideration by £14,000. If AUM were to be 10% higher or lower, the fair value of contingent consideration would increase/decrease by £61,000.

 

Interest rate risk

The Group finances its operations through retained profits. The Group's cash and cash equivalents balance of £32,119,000 are the financial instruments subject to variable interest rate risk. The impact of a 1% increase or decrease in interest rate on the post-tax profit is not material to the Group.

Credit risk

Credit risk is the risk that a counterparty will cause a financial loss to the Group by failing to discharge its obligation to the Group. The financial instruments are considered to have a low credit risk, due to the mitigating procedures in place. The Group manages its exposure to this risk by applying Board-approved limits to the amount of credit exposure to any one counterparty, and employs strict minimum creditworthiness criteria as to the choice of counterparty, thereby ensuring that there are no significant concentrations. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The maximum exposure to credit risk for receivables and other financial assets is represented by their carrying amount.

 

The Group's maximum exposure to credit risk is limited to the carrying amount of its financial assets recognised at the year end date.

 

The Group continuously monitors the defaults of customers and other counterparties, identified either individually or by the Group, and incorporates this information into its credit risk controls. The Group's policy is to deal only with credit-worthy counterparties.

The Group's management consider that all of the above financial assets that are not impaired or past due for each of the 31 March reporting dates under review are of good credit quality.

At 31 March, the Group had certain trade receivables that had not been settled by the contractual date but were not considered to be impaired. The amounts at 31 March, analysed by the length of time past due, are:

 

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
Not more than 3 months	256	814
More than 3 months but not more than 6 months	47	42
More than 6 months but not more than 1 year	5	14
More than 1 year	4	8
Total	312	878

 

Trade receivables consist of a large number of customers within the UK. Based on historical information about customer default rates, management consider the credit quality of trade receivables that are not past due or impaired to be good.

 

The Group has rebutted the presumption in paragraph 5.5.11 of IFRS 9 that credit risk increases significantly when contractual payments are more than 30 days past due, where the Group has reasonable and supportable information that demonstrates otherwise.

 

The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with high-quality external credit ratings.

Liquidity risk

Liquidity risk is the risk that companies within the Group will encounter difficulty in meeting the obligations associated with financial liabilities. To counter this risk, the Group operates with a high level of interest cover relative to its net asset value. In addition, it benefits from strong cash flow from its normal trading activities. The Group manages its liquidity needs by monitoring scheduled debt servicing payments for long-term financial liabilities, as well as forecast cash inflows and outflows due in day-to-day business. The data used for analysing these cash flows is consistent with that used in the contractual maturity analysis below.

 

At 31 March 2025, the Group's non-derivative financial liabilities have contractual maturities (including interest payments where applicable) as summarised below:

 

	Current		Non-current
At 31 March 2025	Within 6 months (£'000)	6 to 12 months (£'000)	1 to 5 years (£'000)	later than 5 years (£'000)
Trade and other payables	10,435	22	42	-
Lease liabilities	144	141	721	-
Contingent consideration	440	-	-	-
Total	11,019	163	763	-

 

Lease liabilities above totalling £1,006,000 are the undiscounted values of the total lease liability of £848,000 as shown in note 19. Contingent consideration above totalling £440,000 is the undiscounted liability of the contingent consideration of £420,000 as shown in note 19.

 

This compares with the maturity of the Group's non-derivative financial liabilities in the previous reporting period, as follows:

 

	Current		Non-current
At 31 March 2024	Within 6 months (£'000)	6 to 12 months (£'000)	1 to 5 years (£'000)	later than 5 years (£'000)
Trade and other payables	7,259	4	57	5
Lease liabilities	95	56	644	-
Contingent consideration	521	-	451	-
Total	7,875	60	1,152	5

 

The above amounts reflect the contractual undiscounted cash flows, which may differ from the carrying values of the liabilities at the reporting date.

 

Market risk

The Group has made investments in its own managed funds and portfolios and the value of these investments is subject to equity market risk, this being the risk that changes in equity prices will affect the Group's income or the value of its holdings of financial instruments. If equity prices had been 5% higher/lower, the impact on the Group's Statement of Comprehensive Income would be £57,000 higher/lower, due to changes in the fair value of financial assets at fair value through profit or loss.

 

23 | Share capital

	Number of shares
Authorised, called-up, and fully paid £0.20 ordinary shares
At 1 April 2023	60,055,722
Issue of share capital on exercise of employee share options	455,678
At 31 March 2024	60,511,400
Issue of share capital on exercise of employee share options	37,480
At 31 March 2025	60,548,880

Each share in Tatton Asset Management plc carries one vote and the right to a dividend.

 

24 | Own shares

The following movements in own shares occurred during the year:

	Number of Shares	£'000
At 1 April 2023	-	-
Acquired in the year	658,800	3,278
New share capital issued to EBT	346,896	69
Utilised on exercise of employee share options	(346,896)	(69)
At 31 March 2024	658,800	3,278
Acquired in the year	7,664	50
Utilised on exercise of employee share options	(193,660)	(965)
At 31 March 2025	472,804	2,363

 

Own shares represent the cost of the Company's own shares, either purchased in the market or issued by the Company, which are held by an EBT to satisfy future awards under the Group's share-based payment schemes (note 25).

 

25 | Share-based payments

During the year, a number of share-based payment schemes and share options schemes have been utilised by the Group, described under 25.1 Current schemes.

 

25.1 Current schemes

(i) Tatton Asset Management plc EMI scheme ("TAM EMI scheme")

In July 2017, the Group launched an EMI share option scheme relating to shares in Tatton Asset Management plc, to enable senior management to participate in the equity of the Company. 3,022,733 options with a weighted average exercise price of £1.89 were granted, exercisable in July 2020. There have been 60,000 (2024: nil) options exercised during the year from this scheme.

 

The scheme was extended in August 2018, August 2019, July 2020, July 2021, July 2022 and July 2023 with 1,720,138, 193,000, 1,000,000, 279,858, 204,523 zero-cost options granted in each respective year. All option schemes are exercisable on the third anniversary of the grant date, meaning that the 2017, 2018, 2019, 2020 and 2021 schemes are currently exercisable. There have been 2,845 options exercised in the year relating to the 2019 scheme and 55,808 options exercised relating to the 2020 scheme. There were 1,684 options and 1,778 options relating to the 2022 and 2023 schemes respectively that vested early and were subsequently exercised. The options granted in 2021 vested and became exercisable in July 2024. There have been 69,911 options exercised during the period from this scheme. None of these options lapsed in the year. The weighted average share price at the date of exercise for all option exercised in the year was £6.52.

 

There were 451,346 zero-cost options granted in the current financial year. These options were granted in two tranches, 61,964 options granted in July 2024 and 389,382 options granted in February 2025.

 

A total of 2,822,301 options remain outstanding at 31 March 2025, 1,941,486 of which are currently exercisable. 6,649 options were forfeited in the period (2024: 64,524). The weighted average contractual life for share options outstanding at the end of the period was 5.29 years (2024: 5.55 years).

 

The vesting conditions for the scheme are detailed in the Remuneration Committee report on page 71 of the 2025 Annual Report. The weighted average fair value of the options granted during the year was £6.69. Within the accounts of the Group, the fair value at grant date is estimated using the appropriate models, including both the Black-Scholes and Monte Carlo modelling methodologies. Share price volatility has been estimated using the historical share price volatility of the Company. Key valuation assumptions and the costs recognised in the accounts during the period are noted in 25.2 and 25.3, respectively.

 

	Number of share options granted	Weighted average price (£)
Outstanding at 1 April 2023	2,804,439	0.59
Granted during the period	204,523	-
Exercised during the period	(346,896)	-
Forfeited during the period	(64,524)	-
Lapsed during the period	(27,912)	-
Outstanding at 31 March 2024	2,569,630	0.64
Exercisable at 31 March 2024	1,878,861	0.88
Outstanding at 1 April 2024	2,569,630	0.64
Granted during the period	451,346	-
Exercised during the period	(192,026)	0.59
Forfeited during the period	(6,649)	-
Outstanding at 31 March 2025	2,822,301	0.54
Exercisable at 31 March 2025	1,941,486	0.79

 

(ii) Tatton Asset Management plc Sharesave scheme ("TAM Sharesave scheme")

In July 2020, August 2021, August 2022, August 2023, and August 2024, the Group launched all employee Sharesave schemes for options over shares in Tatton Asset Management plc, with the schemes in the periods 2020 and 2021 being administered by Yorkshire Building Society and the schemes in 2022, 2023, and 2024 being administered by Link Group. Employees are able to save between £10 and £500 per month over the three-year life of each scheme, at which point they each have the option to either acquire shares in the Company or receive the cash saved.

 

The 2021 TAM Sharesave scheme vested in August 2024 and 37,480 share options became exercisable. Over the life of the 2022 TAM Sharesave scheme, it is estimated that, based on current savings rates, 45,046 share options will be exercisable at an exercise price of £3.26. Over the life of the 2023 TAM Sharesave scheme, it is estimated that, based on current savings rates, 85,569 share options will be exercisable at an exercise price of £3.89. Over the life of the 2024 TAM Sharesave scheme, it is estimated that, based on current savings rates, 30,946 share options will be exercisable at an exercise price of £5.62. 37,480 options were exercised in the year at a weighted average share price at the date of exercise of £7.09. The weighted average contractual life for share options outstanding at the end of the period was 1.49 years (2024: 1.54 years).

 

The options granted as part of the scheme launched in 2024 have a weighted average fair value of £5.62. Within the accounts of the Group, the fair value at grant date is estimated using the Black-Scholes methodology for 100% of the options. Share price volatility has been estimated using the historical share price volatility of the Company. Key valuation assumptions and the costs recognised in the accounts during the period are noted in 25.2 and 25.3, respectively.

 

	Number of share options granted	Weighted average price (£)
Outstanding at 1 April 2023	95,095	2.57
Granted during the period	90,473	2.93
Forfeited during the period	(6,810)	3.22
Exercised during the period	(108,781)	2.29
Outstanding at 31 March 2024	69,977	3.53
Exercisable at 31 March 2024	-	-
Outstanding at 1 April 2024	69,977	3.53
Granted during the period	57,372	3.86
Forfeited during the period	(2,710)	3.75
Exercised during the period	(37,480)	3.60
Outstanding at 31 March 2025	87,159	3.71
Exercisable at 31 March 2025	-	-

 

(iii) Fintegrate Financial Solutions Limited Share Option Scheme ("Fintegrate option scheme")

In June 2023 2,250 share options were granted relating to shares in Fintegrate Financial Solutions Limited with an exercise price of £0.00001 and immediately vested. The fair value of the options granted was £26.07, based on comparable share purchase price at the date of vesting.

 

A further 13,912 options were granted in January 2025 with an exercise price of £0.00001. All options vested and were exercisable in January 2025. The fair value of the options granted was £3.39, based on comparable share prices at the date of vesting.

 

All options were exercised in February 2025, and therefore no options outstanding or exercisable at 31 March 2025.

 

There were no vesting conditions associated with the options.

25.2 Valuation assumptions

Assumptions used in the option valuation models to determine the fair value of options at the date of grant were as follows:

 

	EMI scheme 2024 grant 2	2024 grant 1	2023	2022	2021	Sharesave scheme 2024	2023	2022	2021
Share price at grant (£)	6.64	7.04	4.74	4.03	4.60	7.14	4.91	4.25	4.80
Exercise price (£)	-	-	-	-	-	5.62	3.89	3.26	3.60
Expected volatility (%)	33.93	34.49	35.24	34.05	33.76	34.36	35.13	34.05	33.76
Expected life (years)	2.47	3.00	3.00	3.00	3.00	3.00	3.00	3.00	3.00
Risk free rate (%)	3.96	3.98	4.64	1.71	0.24	3.81	4.74	1.71	0.12
Expected dividend yield (%)	2.41	2.27	3.06	3.11	2.39	2.24	2.95	3.11	2.39

25.3 IFRS 2 share-based option costs

	31-Mar 2025 (£'000)	31-Mar 2024 (£'000)
TAM EMI scheme	1,335	1,376
TAM Sharesave scheme	62	82
Fintegrate option scheme	106	-
Total	1,503	1,458

 

The Consolidated Statement of Cash Flows shows an adjustment to Net cash from operating activities relating to share-based payments of £1,413,000 (2024: £1,236,000). This is a charge in the year of £1,503,000 (2024: £1,458,000) adjusted for cash paid relating to National Insurance contributions on the exercise of share options of £90,000 (2024: £222,000). Of the charge of £1,503,000, £1,081,000 is recognised through equity, with the remaining £422,000 relating to the cost of National Insurance contributions that are not accounted for through equity. Within equity, there is also an additional £129,000 relating to the exercise price received on the exercise of share options, which were satisfied through shares held in the EBT rather than through the issue of new shares.

 

26 | Related party transactions

Ultimate controlling party

The Directors consider there to be no ultimate controlling party.

Relationships

Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. The Group has trading relationships with the following entities in which Paul Hogarth, a Director, has a beneficial interest:

 

Entity	Nature of transactions
Suffolk Life Pensions Limited	The Group pays lease rental payments on an office building held in a pension fund by Paul Hogarth.
Hermitage Holdings (Wilmslow) Limited	The Group incurs recharged costs from this entity relating to trading activities.

Related party balances

	Terms and conditions	2025 Value of cost (£'000)	Balance payable (£'000)	2024 Value of cost (£'000)	Balance payable (£'000)
Suffolk Life Pensions Limited	Payable in advance	(61)	(15)	(47)	(15)
Hermitage Holdings (Wilmslow) Limited	Repayment on demand	-	-	(12)	-

 

Balances with related parties are non-interest-bearing.

Key management personnel remuneration

Key management includes Executive and Non-Executive Directors. The compensation paid or payable to key management personnel is as disclosed in note 13.

 

27 | Alternative performance measures

The Group has identified and defined certain measures that it uses to understand and manage its performance. The measures are not defined under IFRS and are not considered to be a substitute for or superior to IFRS measures, but management believe that these Alternative Performance Measures ("APMs") provide stakeholders with additional helpful information and enable an alternative comparison of performance over time. The APMs should not be viewed in isolation, but as supplementary information. APMs may not be comparable with similarly titled measures presented by other companies.

 

The APMs are used by the Board and management to analyse the business and financial performance, track the Group's progress, and help develop long-term strategic plans. Some APMs, where noted in the table, are used as key management incentive metrics. The APMs provide additional information to investors and other external shareholders, to provide additional understanding of the Group's results of operations as supplemental measures of performance.

 

APM	Closest equivalent measure	Reconciling items to their statutory measure	Definition and purpose
Adjusted operating profit	Operating profit	Items in note (a) below	The reconciliation between Operating profit and adjusted operating profit can be seen on the face of the Consolidated Statement of Total Comprehensive Income. See note 7 for the value of the adjusting items. This is a key management incentive metric.
Adjusted operating profit margin	Operating profit margin	Items in note (a) below	Adjusted operating profit divided by revenue to report the margin delivered. Progression in the adjusted operating margin is an indicator of the Group's operating efficiency. See note 7 for the value of the adjusting items.
Cash generated from operations before exceptional items	Cash generated from operations	Cash flows from exceptional items	Cash generated from operations is adjusted to exclude cash flows from exceptional items. The reconciliation between cash generated from operations and Cash generated from operations before exceptional items can be seen on the Statement of Cash Flows, when relevant. This is a measure of the cash generation and working capital efficiency of the Group's operations and is a key management performance measure.
Adjusted earnings per share - Basic	Earnings per share - Basic	Items in note (b) below	Profit after tax attributable to shareholders of the Company is adjusted to exclude separately disclosed items, as detailed in note 11, and is divided by the same denominator as Basic EPS; this being the weighted average number of ordinary shares in issue. Adjusted EPS - Basic is presented to reflect the impact of the separately disclosed items included in adjusted operating profit.
Adjusted earnings per share - Fully Diluted	Earnings per share - Diluted	Items in note (b) below	Profit after tax is adjusted to exclude separately disclosed items, as detailed in note 11, and is divided by the total number of dilutive shares, assuming that all contingently issuable shares will fully vest. The reconciliation and calculation of Adjusted EPS - Diluted is shown in note 11. Adjusted EPS - Fully Diluted is presented to reflect the impact of the separately disclosed items included in Adjusted operating profit and to include all shares that are contingently issuable, assuming that share options fully vest. This is a key management incentive metric.
Tatton - assets under management ("AUM") and net inflows	None	Not applicable	AUM is representative of the customer assets and is a measure of the value of the customer base. Movements in this base are an indication of performance in the year and growth of the business to generate revenue going forward. Net inflows measure the net of inflows and outflows of customer assets in the year. Net inflows are a key management incentive metric.
Tatton - assets under influence ("AUI")	None	Not applicable	AUI is representative of the customer assets that are not directly managed by Tatton but over which we hold influence, due to our shareholding in the company in which they are managed, and is a measure of the value of the customer base. Movements in this base are an indication of our participation in the joint venture and its growth, in order to generate Tatton's share of profits going forward.
Tatton firms	None	Not applicable	Alternative growth measure to revenue; provides an operational view of growth in the Tatton division.
Paradigm - Consulting members, Mortgages lending and member firms	None	Not applicable	Alternative growth measure to revenue; provides an operational view of growth in the Paradigm division, which is supported by two main service lines: Consulting and Mortgages.
Return on capital employed ("ROCE")	None	Not applicable	ROCE is calculated as the annual adjusted operating profit for the last twelve months, as shown on the Consolidated Statement of Total Comprehensive Income, expressed as a percentage of the average total assets less current liabilities. The denominator for 2025 is £47.8m (2024: £44.2m). ROCE measures how effectively we have deployed our resources and how efficiently we apply our capital.

(a)     Reconciling items include: Exceptional items, share-based payments, changes in the fair value of contingent consideration, amortisation of acquisition-related intangibles, and operating loss relating to non-controlling interest.

(b)    Reconciling items include: Exceptional items, share-based payments, changes in the fair value of contingent consideration, amortisation of acquisition-related items, unwinding of discount on contingent consideration, and the tax thereon.

28 | Post balance sheet events

There have been no post balance sheet events.

 

29 | Capital commitments

At 31 March 2025, the Directors confirmed there were no capital commitments (2024: none) for capital improvements.

 

30 | Contingent liabilities

At 31 March 2025, the Directors confirmed there were no contingent liabilities (2024: none).