AGM 2012 cultivating stability & growth
AGM 2012 Sir Martin Jacomb Chairman 2 AGM – 19 June 2012
business presentation Gavin Oldham Chief Executive Richard Stone Finance Director 3 AGM – 19 June 2012
agenda • The business – a one page summary • The business foundations • The business model • The market & its impact • 2011 financial performance • Future growth drivers 4 AGM – 19 June 2012
the business – a one page summary • Share plc traded on AIM (SHRE) • c. £1.5bn of assets under administration • Parent company of The Share Centre • 150 employees – IIP accredited Limited, Sharefunds Limited and • Over 80% of transactions undertaken Sharemark online – one low-cost physical location • Principal business (93% of revenues) – • Revenue model split between dealing retail execution-only stockbroking commission, fees and interest income • Largest independent publicly quoted • Gaining market share of revenues execution-only stockbroker relative to peers* • The Share Centre founded in 1990 • Profitable throughout the last two bear • Over 48,000 customer shareholders markets • c. 275,000 accounts for c. 220,000 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 Waterhouse Investor Services Europe 5 AGM – 19 June 2012
the business foundations Individual aspiration should include nurturing a Founding Society is better served by a close interaction store of wealth in order to provide personal principles between consumer, employee and shareholder economic freedom for one’s own, and future, generations Purpose To enable more people to enjoy straightforward investing To be an independent retail financial services provider of a size to Vision merit inclusion in the FTSE 350 Respect for Long term Values Empowerment Enterprise Clarity others stability 6 AGM – 19 June 2012
the business model - award winning service • Highest overall client satisfaction award – Investment Trends • Best Online Stockbroker – Financial Times and Investors Chronicle • Best Online ISA Provider – MoneyAM • Best Small Cap Broker – Shares Magazine (3 rd year running) All in 2011 7 AGM – 19 June 2012
the market and its impact Online XO Trades FTSE 100 14 7000 12 6000 10 5000 8 4000 millions 6 3000 4 2000 2 1000 0 0 2006 2007 2008 2009 2010 2011 Source: ComPeer 8 AGM – 19 June 2012
industry overview: trades XO Trades in 2011 by Instrument Type 440,367 2,291,162 UK Cash Market CFDs 1,449,283 Spreadbets Collectives Overseas Exchanges 597,441 11,436,685 Source: ComPeer 9 AGM – 19 June 2012
industry overview: assets 90,000 80,000 XO Assets (£m) 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 XO Assets - Actual XO Assets - Following Growth of FTSE APCIMS Balanced Index Source: ComPeer 10 AGM – 19 June 2012
industry overview: accounts XO Nominee Accounts 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Source: ComPeer 11 AGM – 19 June 2012
industry overview: revenue 211 119 91 12 43 2011 222 106 71 9 39 2010 223 78 84 35 2009 166 62 113 44 2008 176 60 89 41 2007 172 49 72 33 2006 0 100 200 300 400 500 XO Revenue (£m) Commission & Brokerage Custody & Admin Fees Net Interest FX Margin Other Revenue * Prior to 2010, FX Margin is included within Net Interest Source: ComPeer 12 AGM – 19 June 2012
2011 financial performance Richard Stone Finance Director 13 AGM – 19 June 2012
2011 highlights • Underlying revenues grew 7% to £14.3m • Underlying operating profit grew 43% to £1.6m • Earnings per share 0.9 pence • Final dividend proposed increased 20% to 0.36 pence • Net assets £16.1m – 11 pence per share • Capital adequacy – 6x requirements and no debt • 2011 Group comparatives will be amended to reflect £208,000 FSCS Interim Levy 14 AGM – 19 June 2012
2011 key messages • Two contrasting half years – H1: high volumes – H2: weaker volumes, increasing market uncertainty • First year without IRFP (ended 1 November 2010) • Continued growth in market share 15 AGM – 19 June 2012
2011 financial results Revenues Commission 14% 23% 40% 40% Fees 46% Interest 37% 2010 2011 16 AGM – 19 June 2012
2011 financial results Revenues – compared to the peer group 7% Commission 14% 15% Fees 40% 16% Interest 62% 46% Other Share plc Peer Group* * The peer group comprises: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing (HBoS), HSBC Stockbrokers, NatWest Stockbrokers (RBS), Saga Personal Finance, Selftrade and TD Waterhouse Investor Services Europe 17 AGM – 19 June 2012
2011 financial results Revenues – 10 year track record (excluding interest rate policy) 16 14 8% CAGR 12 £m 10 8 6 4 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 18 AGM – 19 June 2012
2011 financial results Revenue growth £000s Commission Fees Interest 2008 3,194 4,638 4,141 2009 5,440 4,651 4,037 2010 6,109 5,830 3,652 2011 5,671 6,592 1,992 57% growth in 3 years 19 AGM – 19 June 2012
2011 financial results Revenue growth – market share (excluding interest rate policy) 6.50% 6.00% 5.50% 5.00% 4.50% 4.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 20 AGM – 19 June 2012
2011 financial results Costs Other 23% 51% Staff 9% Direct 17% Marketing 21 AGM – 19 June 2012
2011 financial results Operating profit £m Operating Profit IRFP 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2006 2007 2008 2009 2010 2011 22 AGM – 19 June 2012
2011 financial results Dividend 0.4 0.35 0.3 pence per share 0.25 0.2 0.15 0.1 0.05 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 23 AGM – 19 June 2012
2011 financial results Balance sheet 18000 16000 14000 12000 Other 10000 Investments 8000 Cash 6000 4000 2000 £000s 0 2010 2011 24 AGM – 19 June 2012
future growth drivers Gavin Oldham Chief Executive 25 AGM – 19 June 2012
industry overview: revenue 211 119 91 12 43 2011 222 106 71 9 39 2010 223 78 84 35 2009 166 62 113 44 2008 176 60 89 41 2007 172 49 72 33 2006 0 100 200 300 400 500 XO Revenue (£m) Commission & Brokerage Custody & Admin Fees Net Interest FX Margin Other Revenue * Prior to 2010, FX Margin is included within Net Interest Source: ComPeer 26 AGM – 19 June 2012
future growth drivers • Growth market for self-select services for personal investors driven by: – Value and regulation – Increased need to save and make own arrangements – Customer service and independence • Service development – New distribution channels (eg mobile) – Product development (eg flat fee ISA) – Website and corporate gateways • Scalable business model – Revenue growth leading to significant margin expansion – Infrastructure already established and proven 27 AGM – 19 June 2012
new distribution channel: mobile dealing 28 AGM – 19 June 2012
trading in Share plc shares • Markets traded: – AIM: main quotation – Sharemark: operated by The Share Centre • Actively traded since 2000 • Employee share scheme requirements bought in secondary market • Substantial benefit for customer shareholders: 30% rebate on online dealing commissions makes The Share Centre’s effective frequent trader commission just £5.25 per transaction 29 AGM – 19 June 2012
summary and outlook • Independent publicly quoted retail stockbroker • Scalable business model • Award winning customer service • Differentiated from our peers • Experienced management • Robust stockmarket values expected in 2012 • Growth drivers supporting long term revenue growth and margin expansion 30 AGM – 19 June 2012
AGM business Sir Martin Jacomb Chairman 31 AGM – 19 June 2012
AGM resolutions 1. Report & financial statements for y/e 31 December 2011 2. Directors’ remuneration report for y/e 31 December 2011 3. Final dividend for y/e 31 December 2011 4. Re-elect Richard Ian Tolkien as director 5. Re-elect Richard William Stone as director 6. Re-elect Sir Martin Wakefield Jacomb as director 7. Elect Francesca Eva Ecsery as director 8. Re-appoint Deloitte LLP as auditors 9. Authorise directors to allot shares (section 551) 10. Disapply section 561 Companies Act 2006 32 AGM – 19 June 2012
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