1 1 AGM – 10 June 2014
8 8 AGM – 10 June 2014
10 10 AGM – 10 June 2014
AGENDA The business – a one page summary Delivering our strategy 2013 performance Future growth drivers 11 11 AGM – 10 June 2014
THE BUSINESS CASE – A ONE PAGE SUMMARY • Parent company of The Share Centre • Over £2.4bn of assets under Limited and Sharefunds Limited administration • Principal business (98% of revenues) – • Over 80% of transactions undertaken retail execution-only stockbroking online • Largest independent publicly quoted • Revenue model split between dealing retail execution-only stockbroker commission, fees and interest income • The Share Centre founded in 1990 • Gaining market share of revenues relative to peers* • Over 40,000 customer shareholders • Profitable since 1996, and throughout • Circa 270,000 accounts for 228,000 the last two bear markets customers * The peer group comprises: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing (HBoS), HSBC Stockbrokers, NatWest Stockbrokers (RBS), Saga Personal Finance, Selftrade and TD Direct Investing 12 12 AGM – 10 June 2014
DELIVERING OUR STRATEGY 13 13 AGM – 10 June 2014
KEY DEVELOPMENTS IN 2013 • Introduction of a revised tariff • Conversion of fund holdings to clean share classes • Return of large scale retail initial public offerings (IPOs) • New website launch • New partners • Management succession 14 14 AGM – 10 June 2014
INTRODUCTION OF REVISED TARIFF • First major change in tariff for over 10 years • Detailed market research • Simple, low-cost fixed fee • Empowering customers not penalising their success • Clear and distinct market positioning • Generally well received – low level of complaints 15 15 AGM – 10 June 2014
COMPETITOR PRICING The contrast in custody fees for holding £50,000 worth of funds in a dealing account is now stark Service from: Annual Cost (exc VAT) £18 Share plc (via The Share Centre) (no fund-specific charge) Charles Stanley (0.25%) £125 £150 NatWest Stockbrokers (0.3%) £150 T D Direct Investing (0.3%) Fidelity (0.35%) £175 £175 Barclays Stockbrokers (0.35%) £225 Hargreaves Lansdown (0.45%) 16 16 AGM – 10 June 2014
CONVERSION TO CLEAN SHARE CLASSES • Proactive approach in customers’ interest • Only clean share classes available on our website • Conversion on ex-dividend date • Combined with fixed fee tariff – customers experience reduced costs even compared to ‘super clean’ classes eg Neil Woodford’s new fund – generally available at 0.75% Annual Management Charge Available through Hargreaves Lansdown with 0.6% AMC … but they also charge 0.45% fee for holding funds on their platform = overall cost of 1.05% per annum The Share Centre cost is 0.75% AMC plus the fixed monthly administration charge £20,000 invested via a share account will cost: £210 per annum with Hargreaves Lansdown and £171.60 per annum with The Share Centre 17 17 AGM – 10 June 2014
RETURN OF LARGE SCALE RETAIL IPOS The logos are registered trademarks of the respective businesses and are reproduced with their kind permission 18 18 AGM – 10 June 2014
NEW WEBSITE 19 19 AGM – 10 June 2014
NEW PARTNERS • Launch of a branded service for First Shares and Red Hot Penny Shares • Continued growth in EIS administration 20 20 AGM – 10 June 2014
MANAGEMENT SUCCESSION • Gavin Oldham – Chief Executive to Executive Chairman • Richard Stone – Finance Director to Chief Executive • Recruitment of Mike Birkett as Finance Director • Recruitment of a new Director of Customer Experience for The Share Centre Limited • Smooth transition process • Continuity of strategy and stability of ownership 21 21 AGM – 10 June 2014
DELIVERING OUR STRATEGY – 2013 putting focus on partnerships customers first core brand & acquisitions New website Sharefunds refocus New white labels New tariff New tariff AIM dealing offer (Oct 13) Retail IPOs Management Voted Online Stockbroker of the Year & Execution Only Stockbroker of the Year by succession readers of the FT & Investors Chronicle 22 22 AGM – 10 June 2014
23 23 AGM – 10 June 2014
OUR PERFORMANCE - 2013 2012 • Revenue market share* at record level – up 5% to 7.16% 6.80% • Revenue increased by 7.8% to £15.0m £13.9m • Operating profit increased by 51% to £1.4m £0.9m • Profit before tax increased by 157% to £1.7m £0.7m • Underlying basic and diluted earnings per share increased to 1.3p 0.9p • Final (and total) dividend proposed of 0.52p per share up 21% 0.43p • Strong balance sheet – net cash increased 12% to £13.6m £12.2m * the peer group comprises: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing (HBoS), HSBC Stockbrokers, NatWest Stockbrokers (RBS), Saga Personal Finance, Selftrade and TD Direct Investing 24 24 AGM – 10 June 2014
OUR PERFORMANCE – 2013 – REVENUES 25 25 AGM – 10 June 2014
REVENUE PERFORMANCE RELATIVE TO PEER GROUP 2013 v 2012 1.4% % 7.8% 26 26 AGM – 10 June 2014
OUR PERFORMANCE – MARKET SHARE Revenues: market share 7.5% a record high 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 2007 2008 2009 2010 2011 2012 2013 • the peer group comprises: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing (HBoS), HSBC Stockbrokers, NatWest Stockbrokers (RBS), Saga Personal Finance, Selftrade and TD Direct Investing 27 27 AGM – 10 June 2014
OUR PERFORMANCE - PROFITABILITY 3.5 16 3 15 2.5 Operating profit £m 14 Revenues £m 2 13 1.5 12 1 11 0.5 0 10 2007 2008 2009 2010 2011 2012 2013 Revenues Operating Profit 28 28 AGM – 10 June 2014
2013 FINANCIAL RESULTS Dividend 0.5 Continued pattern of c.20% growth 0.4 pence per share per annum 0.3 0.2 0.1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 29 29 AGM – 10 June 2014
2013 FINANCIAL RESULTS Balance sheet strength Increase of over £1m in cash balances held Increase in value of investments 30 30 AGM – 10 June 2014
PERFORMANCE – Q1 2104 • Revenues 6.3% higher than same period last year • Stronger performance than our peer group • Assets under management at £2.4bn • Record ISA season, with net transfers in for the first time • Budget changes from July 2014 31 31 AGM – 10 June 2014
32 32 AGM – 10 June 2014
MARKET OVERVIEW Low interest rates Improving FCA Costs & opportunity Seeking guidance 33 33 AGM – 10 June 2014
THE REGULATORY ENVIRONMENT • Increased transparency of charges • Desire to support online guidance • New client money rules • European regulation 34 34 AGM – 10 June 2014
FUTURE GROWTH DRIVERS putting focus on partnerships customers first core brand & acquisitions Value and regulation Service development, Corporate gateways eg website Increased need to save and Scalable business make own arrangements AIM share trading model Customer service and Ongoing marketing Infrastructure already independence spend established and proven Fund conversions/ transfers 35 35 AGM – 10 June 2014
SUMMARY & OUTLOOK • Business strategy is clearly defined • Delivered against strategy in 2013 • Financial performance improved in 2013 • Increased market visibility • Growth drivers supporting long term revenue growth • Scalability of business can deliver margin expansion • Positive start to 2014 36 36 AGM – 10 June 2014
37 37 AGM – 10 June 2014
AGM RESOLUTIONS 1. Report & financial statements for y/e 31 December 2013 2. Directors’ remuneration report for y/e 31 December 2013 3. Final dividend for y/e 31 December 2013 4. Re-elect Gavin David Redvers Oldham as director 5. Re-elect Richard Ian Tolkien as director 6. Elect Michael David Birkett as director 7. Re-appoint Deloitte LLP as auditors 8. Authorise directors to allot shares (section 551) 9. Disapply section 561 Companies Act 2006 38 38 AGM – 10 June 2014
This presentation does not constitute investment advice and should not be relied upon for investment decisions. The information in this presentation is not an invitation, inducement or other solicitation for the purchase or sale of any investment. It was obtained from sources believed to be reliable but its accuracy or completeness cannot be guaranteed. Any opinions expressed are given in good faith but are subject to change without notice. 39 39 AGM – 10 June 2014
40 40 AGM – 10 June 2014
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