Final Results, Annual Report and Notice of AGM

Fiske (AIM:FKE) is pleased to announce its final audited financial results for the year ended 30 June 2024.

Highlights

James Harrison, CEO, commenting on the results said:

"We are pleased to report a marked increase in our revenues and operating profits for the full year to 30 June 2024. Our revenues increased by 25% to £7.4m (2023: £5.9m) whilst our operating profit rose more than 4-fold to £557k (2023: £128k). Revenue increases across the board were driven by a range of factors including higher asset prices, increased levels of trading, improving service mix (more clients opting for advisory and discretionary services), changes to fee tariffs and an increase in interest income."

Our Annual General Meeting will be held on Thursday 12 December 2024 at 12.30pm at our offices at 100 Wood Street, London EC2V 7AN.

The Board has resolved to recommend a final dividend of 0.75p per share for the year to 30 June 2024 (2023: nil). If approved by shareholders at our Annual General Meeting in December, then when added to the interim dividend of 0.25p per share paid to shareholders in March 2024 the total dividend for the year to 30 June 2024 will be 1.0p per share (2023: nil). The final dividend will be payable on 13 December 2024 to shareholders on the register on 29 November 2024. The shares will be marked ex-dividend on 28 November 2024.

We are pleased to report a marked increase in our revenues and operating profits for the full year to 30 June 2024. Our revenues increased by 25% to £7.4m (2023: £5.9m) whilst our operating profit rose more than 4-fold to £557k (2023: £128k). Revenue increases across the board were driven by a range of factors including higher asset prices, increased levels of trading, improving service mix (more clients opting for advisory and discretionary services), changes to fee tariffs and an increase in interest income.

Assets under Management & Administration

Our total client assets under management and administration have risen by 8.8% to £878m at 30 June 2024 (2023: £807m). Of the total client assets 70% are now fee paying and either managed on a discretionary or advisory managed basis.

Costs

Costs have risen by 19% to £6.9m in the year to June 2024 (June 2023: £5.8m). This increase principally relates to two factors: increased staff costs linked to improved revenues and an acceleration in the amortisation of legacy intangible assets represented by previously acquired client books.

Outturn

Profit on ordinary activities after taxation was £821k for the year to June 2024 (June 2023: £253k). The cash flow arising from this is rather better following a decision taken during the year to accelerate the write down of past goodwill on acquisitions. This action was taken after careful consideration of the length of time since acquisition and the resultant value still being carried relating to these acquisitions. Meanwhile, the £253k dividend income receipt from our holding in Euroclear was a positive addition to our own cash balance.

Net assets

Our shareholder's funds amount to some £9.8m (2023: £8.3m) which is an increase of 18% over the year. Within this we hold some £4.9m (2023: £3.3m) of cash which is an increase of 48% over the year. Our net asset value has risen to 82p per share.

Earnings per share

Earnings per share for the year to 30 June 2024 were 6.9p which represents a more than 3-fold increase from 2.1p in the year to 30 June 2023.

Euroclear

Euroclear's underlying operating income increased from €1,955m in December 2022 to €2,771m in December 2023 (after deducting the Russian sanctions impact) and its underlying net profit increased by 63% from €603m in 2022 to €982m in 2023. Net earnings per share increased 63% to €312.1 in 2023 compared to €191.7 in 2022.

In February 2024 the company declared a gross dividend for the year to December 2023 of €210 per share. In July 2024 we received the net amount of €395,871 after subtraction of 30% Belgian withholding tax. We expect to reclaim this withholding tax during the remainder of the financial year.

As in previous years there were several private transactions in Euroclear shares during our financial year and these have helped us to update the appropriate carrying value of our holding in our financial statements. Considering recent transaction prices in Euroclear shares, we have marked the carrying value of our investment up to £5.4m (2023: £4.3m). Our markup follows an assessment of the company's current operating results and a reflection of recent trades that have taken place. Our holding continues to represent a significant store of value on our balance sheet.

Dividend

The Board has resolved to recommend a final dividend of 0.75p per share for the year to 30 June 2024 (2023: nil). If approved by shareholders at our Annual General Meeting in December, then when added to the interim dividend of 0.25p per share paid to shareholders in March 2024 the total dividend for the year to 30 June 2024 will be 1.0p per share (2023: nil).

Staff

We would like to thank all members of our dedicated staff for their continued commitment and hard work. As a company we have continued to evolve, adapt and improve our operations throughout the year.

Strategy

Our strategy for providing wealth management services includes continuous improvement in our use of technology. During the past year we have successfully refreshed the automation of our fees processes, and we are now engaging in upgrading our client data and CRM software systems. The intention is that we will be able to further improve our client servicing capabilities whilst at the same time driving more efficiencies within our operations.

Succession planning remains a key consideration for our recruitment strategy, both for Investment Managers and for our Support and Operations teams.

Consumer Duty

We have passed the first-year anniversary of the implementation of the Consumer Duty which came into effect on 1 August 2023. Considerable time and effort were spent implementing the changes required within our business to ensure the new regulations were embedded in our policies and processes. Our Consumer Duty Champion, who is also one of our non-executive directors, continues to assist the management team in ensuring that appropriate oversight is maintained as we operate under these new rules.

Markets

In our interim report to shareholders, we drew attention to the major macro issues affecting the direction of markets which remained centred around inflation and interest rates. The news has since been positive on both fronts. Aided by a drop in energy and food prices, inflation rates have fallen back towards central bank targets which has allowed interest rates to be reduced in the US, Europe and the UK. With signs that the US economy is beginning to slow down from the exceptional pace of the second half of last year, the Federal Reserve Bank made its first cut in September.

Economic growth rates generally remain gently benign. Interest rate differentials have helped Sterling strengthen against the US dollar and Euro. The Japanese yen has also been stronger on the unwinding of the hitherto popular carry trade of selling yen to buy higher yielding assets.

Geopolitical issues continue to cause unease as potential new trouble spots could flare up. Ukraine has been on the front foot with incursions into Russia but hitherto has been unable to resist modest Russian advances into its own territory whilst the conflict in Gaza seems no closer to a resolution. There is little give or take on either side and when some helpful solution is proposed one side or the other has found the terms unacceptable.

Despite the political and geopolitical uncertainties around the world, equity markets have performed well and many of the world's leading market indices have touched new all-time highs during the year.

In the UK, the FTSE 100 Share Index reached a new high in May. As anticipated, corporate activity has also picked-up in recognition of the excellent value on offer in the UK equity market. A change of government following the recent UK Election removes the impasse in policy decision making. Time will tell whether the government's expansionary plans for the UK economy will be successful. Fiscal restraints may later curb some of this enthusiasm as much as a well flagged austere autumn budget statement.

Internationally, the story has been pretty much "repeat". The super-sized technology stocks, in America, have made most of the running with Nvidia's seemingly unstoppable rise seeing its value, briefly, surpass that of Apple and Microsoft to make it the most highly valued company in the world. European markets now appear to have fully discounted the ECB's interest rate cut while, after a strong performance at the beginning of the year, Japan has fallen back from recent highs.

In India, the market suffered a brief wobble after the election result but returned to record levels by the end of the June quarter. The Chinese market has been more challenged as economic numbers have failed to impress. This led to the recent monetary and fiscal stimulus packages which has spurred a sharp recovery in the Chinese stock markets. Time will tell whether the economy will successfully respond to this government led action.

Outlook

The financial industry has weathered the recent global economic challenges posed by inflationary pressures and geopolitical uncertainties relatively well. However, we are yet to see the impact of the new government in the UK, and we now have confirmation of Trump's return to the Oval office for a second term as US President. In the Middle East the recent movement of Israeli troops into Lebanon further raises geopolitical tensions and the Iranian aerial bombardment of Israel has led to an expected retaliation. The question remains as to what Iran does next. The sharp upwards spike in the oil price in recent weeks is beginning to show the markets are concerned.

Whilst we are used to navigating such geopolitical events, as sadly they never seem far away, we appreciate the concerns investors and shareholders might feel. We continue to focus our efforts on maintaining high levels of service for our clients whilst seeking to adapt to the evolving regulatory and industry landscape.

Annual General Meeting

Shareholders are invited to attend the Annual General Meeting to be held at our offices at 100 Wood Street, London EC2V 7AN at 12.30 pm on Thursday, 12 December 2024. We would like the opportunity to meet you and for you to meet the management of the Company in which you are invested.

The Board encourages shareholders to submit their votes via the CREST system. Shareholders may also submit questions in advance of the AGM to the Company Secretary via email to info@fiskeplc.com or by post to the Company Secretary at the address set out above.

Consolidated Statement of Total Comprehensive Income

For Year ended 30 June 2024

Other comprehensive income / (expense)

Items that may subsequently be reclassified to profit or loss

All results are from continuing operations.

Consolidated Statement of Financial Position

At 30 June 2024

These financial statements were approved by the Board of Directors and authorised for issue on 15 November 2024.

Group Statement of Changes in Equity

For Year ended 30 June 2024

Notes to the Accounts

For the Year ended 30 June 2024

Basis of preparation

The financial statements have been prepared in accordance with the requirements of IFRS implemented by the Group for the Year ended 30 June 2024 as adopted by the International Financial Reporting Interpretations Committee and in conformity with the Companies Act 2006. The Group financial statements have been prepared under the historical cost convention, with the exception of financial instruments, which are stated in accordance with IFRS 9 Financial Instruments: recognition and measurement.

The financial information included in this News Release does not constitute statutory accounts of the Group for the Year ended 30 June 2024 or the Year ended 30 June 2023 but is derived from those accounts. Statutory accounts for the Year ended 30 June 2023 have been reported on by the Group's auditor and delivered to the Registrar of Companies. Statutory accounts for the Year ended 30 June 2024 have been audited and will be delivered to the Registrar of Companies. The report of the auditors for both years was (i) unqualified and (ii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

Copies of the Annual Report will be sent on 19 November 2024 to shareholders and will also be available on our website at www.fiskeplc.com

New and revised IFRSs in issue but not yet effective

A number of amendments to existing standards have also been effective for periods beginning on or after 1 January 2024 but they do not have a material effect on the Group financial statements. There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early. The following amendments are effective for future periods:

The Group do not expect these amendments to have a significant impact on the financial statements.

There were no new standards adopted in the current financial period.

Total revenue and segmental analysis

Substantially all revenue in the current period and prior year is generated in the UK and derives solely from the provision of financial intermediation.

Tax

Analysis of tax on ordinary activities:

Factors affecting the tax charge for the year

The deferred tax liability has been calculated using the expected on-going corporation tax rate of 25% (2023: 25%).

The charge/(credit) for the year can be reconciled to the profit per the Statement of Comprehensive Income as follows:

Earnings per share

Basic earnings per share has been calculated by dividing the profit on ordinary activities after taxation by the weighted average number of shares in issue during the year. Diluted earnings per share is basic earnings per share adjusted for the effect of conversion into fully paid shares of the weighted average number of share options during the period.

Goodwill arising through business combinations is allocated to individual cash-generating units ('CGUs') being acquired subsidiaries, reflecting the lowest level at which the Group monitors and test goodwill for impairment purposes. The CGUs to which goodwill is attributed are as follows:

The impairment charge arises from a prudent assessment that customer relationships and goodwill change over time and are not of indefinite life. Based on analyses of the relevant customer base segments, a determination was made as to the expected income streams arising over the next 6 years. The recoverable amounts of the goodwill in Ionian Group Limited and in Vor Financial Strategy Limited are determined based on value-in-use calculations. These calculations use projections of marginal profit contributions over the expected remaining stream of attributable value. The key assumptions used for value-in-use calculations are as follows:

Had the discount rate used gone up / down by 1%, impairment would have been £3,000 higher/lower and the carrying amount commensurately adjusted. Management determined margin contribution and growth rates based on past performance of those units, together with current market conditions and its expectations of development of those CGUs. The discount rate used is pre-tax and reflects specific risks relating to the relevant CGU.

Right-of-use assets

Property

The Company occupies office premises at 100 Wood Street on a lease to 21 February 2025. The Group has used the following practical expedients when applying IFRS16 to leases previously classified as operating leases under IAS17.

• Applied a single discount rate to a portfolio of leases with similar characteristics;
• Other intangible assets

Systems licence

• Investments held at Fair Value Through Other Comprehensive Income

The investments included above are represented by holdings of equity securities. These shares are not held for trading.

Trade and other receivables

Trade receivables

Counterparty receivables

Included in the Group's counterparty receivables balance are debtors with a carrying amount of £208,000 (2023: £230,000) which are past due but not considered impaired.

Ageing of counterparty receivables:

†The lease liability is retired over time by the contrasting interest expense and lease payments.

Deferred taxation

Deferred tax assets and liabilities are recognised at a rate which is substantively enacted at the balance sheet date. The rate to be taken in this case is 25%, being the anticipated rate of taxation applicable to the Group and Company in the following year.

Called up share capital

Included within the allotted and fully paid share capital were 9,490 ordinary shares of 25p each (2023: 9,490 ordinary shares of 25p each) held for the benefit of employees.

At 30 June 2024 there were 125,000 (2023: 125,000) outstanding options to subscribe for ordinary shares at a weighted average exercise price of 70p (2023: 70p) and a weighted average remaining contractual life of 6 months. (2023: 1 year, 6 months). Ordinary shares are entitled to all distributions of capital and income.

Financial commitments

Lease - classified as an IFRS 16 lease

In September 2021 the Company entered into a lease over our premises at Wood Street for a period of some 3 years to 21 February 2025.

Clients' money

At 30 June 2024 amounts held by the Company on behalf of clients in accordance with the Client Money Rules of the Financial Conduct Authority amounted to £42,002,035 (2023: £52,686,945). The Company has no beneficial interest in these amounts and accordingly they are not included in the consolidated statement of financial position.