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ANNUAL REPORT 2014

THE OTHER PRINCIPAL ENTITIES IN THE GROUP

Share Nominees Limited and Stock Academy Nominees Limited The non-trading ‘bare trustee’ companies which act as custodians of our customers’ individual share-

holdings, keeping them separate from the Group’s own resources

Sharesecure Limited The corporate trustee for participants in Share Incentive Plans

Sharefunds Limited Our fund administration business

The Share Centre (Administration Services) Limited Through which systems and special projects

are operated

Share plc is the AIM quoted parent company of a Group whose principal business is

The Share Centre Limited

WHO WE ARE

Over 38,000 customer

shareholders

251,000 customer accounts

£2.6bn of assets under

administration

149 employees based in Aylesbury

80% of customers’ transactions

undertaken online

97% of revenues in 2014 were derived from the Group’s

retail stockbroking services through The Share Centre

annual report 2013 | www.shareplc.com 3

CONTENTS

Chairman’s statement 5

Strategic report 9

- Strategy 9

- Business model 10

- 2014 review 14

- Key performance indicators 18

- Prospects 22

- Principal risks and uncertainties 26

- The wider community 28

Directors’ report 31

Corporate governance 34

Directors’ remuneration report 36

Independent auditor’s report 41

Consolidated income statement 42

Consolidated and Company statements of comprehensive income 42

Consolidated and Company balance sheets 43

Consolidated and Company statements of changes in equity 44

Consolidated and Company cash flow statements 45

Notes to the financial statements 46

Information for shareholders 71

Highest Overall Client Satisfaction INVESTMENT TRENDS 2014 UK ONLINE BROKING REPORT

By providing customers with outstanding support over the phone, Customer Service Adviser, Jess Reeves contributed towards the massive team effort required to beat all our rival UK stockbrokers to this prestigious award, based on the views of over 13,000 investors.

HIGHEST OVERALLCLIENT SATISFACTION

4 annual report 2014 | www.shareplc.com


e remain focused on delivering against the three elements of our strategy – Putting Customers

First, Focus on our Core Business and Strategic Partnerships or Acquisitions. In 2014, we have delivered against each of these as set out in our Strategic Report.

The quieter second half of the year, seen across the market, took the ‘wind out of the sails’ from our strong first half performance. Reduced activity was driven by personal investors’ response to increased economic and political uncertainty. The Group cannot be immune from such dynamics. Nevertheless, we increased our market share of revenues (as measured by ComPeer) year on year to a record 7.66% (2013: 7.16%) demonstrating a good performance relative to our peers*.

We have delivered flat revenues compared to 2013 at £15.0m (2013: £15.0m), below the long term growth rate the Board is targeting and believes the Group can achieve. Headline profits were further affected by some significant one-off costs, particularly associated with the senior level changes that we have undertaken. Underlying earnings were down year on year at £1.5m (2013: £1.8m).

The value of the Group’s investments in the London Stock Exchange plc and Euroclear plc has increased substantially during the year and the overall value of Shareholders’ Funds rose to £20.7m (2013: £19.4m) at the year end. These

Shareholders’ Funds, which represented 14.4 pence per share in issue as at the year end (2013: 13.5 pence), comprise cash and some high quality investments, with the rest of the Group’s working capital being minimal.

DIVIDENDThe Board proposes an increased final (and total) dividend for the year of 0.62 pence per share. This represents a rise of 19% on the prior year (2013: 0.52p per share) and the final dividend, should shareholders so approve, will be paid on 17 June 2015 to shareholders on the register on 15 May 2015. This is the fifth consecutive year we have increased the dividend at a rate of c.20% per annum.

The policy to grow the dividend at 20% per annum will only continue for so long as the Group’s performance supports such growth. This year’s performance does not warrant such growth, but the Board noted that the dividend is still 1.7 times covered by underlying earnings and that the balance sheet remains strong, as demonstrated by Shareholders’ Funds increasing by £1.3m year on year. Both these facts support increasing the return to shareholders again this year. Performance in the future will obviously have to improve to maintain this policy. Nonetheless, the Board is confident of future prospects and continues to believe the Group can deliver significant growth in revenues, margins and earnings.

chairman’s statementPROGRESS IN A TOUGH MARKETShare plc has made good progress this year positioning itself for future growth.

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OPERATIONAL OVERVIEWOur Strategic Report sets out in detail how we have delivered against our strategy in 2014, and the Group’s financial performance. I would highlight three points of particular note.

We have seen a substantial shift in transfer activity from other brokers to The Share

Centre since changing our tariff in July 2013. Specifically we have moved to a position where significantly more accounts are now being transferred to us. This demonstrates the value customers see in our pricing proposition and the relative attractiveness of our proposition in the market.

We have made a number of significant senior management changes. Jeremy Helliwell,

The Share Centre’s Director of Investor Services and Technology, retired in October and Guy Knight, The Share Centre’s Sales and Marketing Director, left the Group in December.

chairman’s statement

2

1

Founder of The Share Centre, having previously established Barclayshare (now Barclays Stockbrokers) for Barclays Bank, Gavin plays an active role in business affairs and is a regular contributor to radio and TV. He received the Editor’s award for services to private investors from the FT/Investors Chronicle in 2013. In 2005 he founded The Share Foundation and in 2014 founded Share Radio Limited; he is managing director of both those organisations. Gavin is also an elective lay member of the General Synod.

Gavin Oldham, 65 Executive Chairman

We have been able to recruit some highly experienced and talented individuals to the Group, including Darren Cornish, The Share Centre’s Director of Customer Experience and John Sargeant, The Share Centre’s IT Director. Darren and John join Mike Birkett who joined the Group as Finance Director in February 2014.

We have also recruited a new Non-Executive Director, Gareth Thomas, who joined us in December. I am pleased to welcome Mike, Darren, John and Gareth to the Team.

These appointments have a number of key aspects:

- Demonstrating the importance that we place on our systems, both to delivering a first class customer experience (on and offline) and in scaling the Business, we have now appointed a dedicated specialist IT Director.

- We have been able to draw together the whole customer experience, from attracting new customers to serving existing customers. We are already seeing benefits from these activities being more closely aligned.

- All of our new colleagues have first rate retail backgrounds from large blue chip organisations – John Lewis, Tesco, E.ON and Thomas Cook. They have some financial services experience, but predominantly they have a deep understanding of the customer and customer service, highlighting the strong importance we attach to that. Focusing on the needs of our customers, seeing investing from our customers’ perspective and providing them with a simple and easy to understand way to access and


manage investments regardless of their wealth or experience will be what differentiates the Group from its peers.

Finally, we have announced that we have signed a contract with Barclays Stockbrokers to provide

Certificated Dealing Services to customers introduced by Barclays. We believe that this represents a significant opportunity, in that it is hoped that the contract will add c.5% to our revenues in 2015 and also have a material impact on the Group’s profits. The contract also demonstrates our ability to deliver against the strategic partnership aspect of our strategy for growth. Again, this is testament to the excellent customer service that we offer and we look forward to delivering that high standard of service to customers introduced to us by Barclays.

STAFF2014 has seen the quality of the Group’s services recognised in many different forums and with numerous awards. We could not, of course, deliver any of our achievements without the excellent and committed staff who work for the Group. On behalf of the Board I would like to extend our thanks and appreciation to all our staff for their hard work in 2014. The future promises to be exciting as we seek to grow the Business more rapidly, and everyone at the Group is committed to delivering our vision.

OUTLOOKInvestor activity has undoubtedly been subdued largely as a result of political and economic uncertainty. In addition to renewed concerns over the future

of the Eurozone, personal investor attention is inevitably turning to the UK general election. An uncertain outcome based on latest polling typically makes investors hesitant and this is reflected in near term dealing volumes. This is a market wide phenomenon. However, the Board continues to view the Group’s prospects positively and continues to believe the Group is well positioned relative to its peers.

In 2014 we demonstrated our ability to deliver against the three strands of our strategy, and this should start to have a positive impact on our financial results this year. History would suggest that the sharp fall in oil prices will be good for global growth and corporate earnings. Against a backdrop of ongoing loose monetary policy and low interest rates this should, in our view, be positive for equity markets and ultimately for investor sentiment. We therefore look forward to the years ahead with confidence and an unstinting focus on continuing to serve personal investors to the very best of our ability.

Gavin Oldham Chairman 12 March 2015

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* The peer group comprises: Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing (HBoS), HSBC Stockbrokers, Saga Personal Finance, Selftrade and TD Direct Investing

Best Stockbroker for Customer ServiceINVESTMENT AND WEALTH MANAGEMENT AWARDS 2014

Voted for by readers of the Financial Times and Investors Chronicle, this coveted award was secured by the hard work and focus of our Customer Services Advisers, such as Michael Jamieson.



strategic reportSTRATEGYOur overall purpose is to enable more people to enjoy straightforward investing.

his drives a passion to serve the personal investor regardless of their wealth or experience

and supports a vision to become the consumers’ first choice for investment knowledge, guidance, dealing efficiency and fair value, maintaining our independence, now and in the future. In financial terms, we believe that the Group can grow to be an independent retail financial services provider with market share, revenues and profits significantly greater than it enjoys today.

Underpinning what we offer is the commitment to deliver consistently high quality services to our customers. We want to continue to build the business to the benefit of all our customers, employees and shareholders and have a clearly defined strategy to deliver our vision, supported by our core values and brand. Most importantly, we wish to build our relationships with our customers based on trustworthiness and credibility.

The Group’s growth strategy comprises three key elements, as shown below.

Our core values of enterprise, respect for others, empowerment and responsibility, clarity, and long-term stability support our growth strategy. They describe what we stand for as a business and underpin

everything we do. They reflect the way we behave within our organisation as well as when interacting with our customers.

Our strategy, particularly in terms of growing the customer base, is supported by The Share Centre’s brand. We are here to provide our customers with sound guidance and practical tools to make investing simply easier. This means that we seek to empower our customers, regardless of their wealth or experience, on their investment journey so that they can invest with confidence. Whether our customers are experienced traders or new to investing we seek to provide them with everything they need to get started and go further. For new investors this may involve education and familiarisation with the market; for existing investors it means providing straightforward and easy-to-use routes to market; and for regular traders we aim to provide more value added content in terms of research and trading tools.

We will measure the success of the delivery of our strategy through metrics related to customer service, growth of market share, financial performance and regulatory compliance. These are expanded on further in the Key Performance Indicators section of the Strategic Report.

T

PUTTING CUSTOMERS FIRST We will fit our services to our customers’ needs, ambitions, knowledge and experience by providing the tools and guidance that are right for them.

FOCUS ON OUR CORE BRAND: THE SHARE CENTRE - WWW.SHARE.COM We will keep building brand awareness and earning our customers’ loyalty. This encourages our customers to act as advocates, helping to support further growth. In particular, we aim to share our expertise to empower customers’ decision making: walking alongside our customers.

STRATEGIC PARTNERSHIPS OR ACQUISITIONS We will use partners’ brands to reach more customers, providing our services under a partner’s brand, and we will keep an eye on our competitors for acquisition opportunities.


strategic reportBUSINESS MODELA simple business model driven by the number of customers we serve.

he Group’s principal business – from which 97% of revenues are derived – is The Share

Centre Limited, predominantly trading through its website www.share.com. The Share Centre provides services to personal investors on a self-select basis – i.e. personal investors make their own investment decisions. There are four main account types personal investors can choose from:

Share Accounts – simple, easy-to-use dealing accounts capable of holding a full range of equities, funds, exchange traded funds, bonds and investment trusts.

Individual Savings Account (ISA) – the same simple and easy-to-use functionality but within the tax efficient savings wrapper of an ISA. This caps annual contributions to the account at just over £15,000 at present.

TSelf Invested Personal Pension (SIPP) – offered in conjunction with our preferred pensions administrator Curtis Banks (under the Pointon York brand), the SIPP offers a tax efficient route through which to save in order to provide a pension in retirement.

Child Trust Fund (CTF) / Junior ISA – The Share Centre is a major CTF and Junior ISA provider. The Government ended its contributions to CTFs, although family and friends can still contribute. It then introduced the Junior ISA which can be opened by parents and guardians on an unfunded self-select basis. Voluntary transfer from CTFs to Junior ISAs will be permitted from April 2015.

REVENUESThere are three specific and distinct revenue streams:

Dealing commission: The Share Centre charges a commission for each trade executed on behalf of its customers. This is collected as the trade is settled. The key determinants for dealing commission revenues are the volume of transactions and the average commission per trade. These variables include automated trades (e.g. automatic reinvestment of dividend income) as well as customer initiated trades and reduced commission rates for certain trades (e.g. regular investing). The volume of transactions is largely driven by the number of customers, the level of engagement with those customers and overall investor sentiment with the market.

Fees: The relationship with our customer is at the core of The Share Centre’s activities. The value of that is crystallised

Richard’s responsibilities include all aspects of oversight, including the Group’s strategy for growth, and encompass the control and management of the Group’s business. A qualified Chartered Accountant, he joined Share plc in April 2006, from his previous role as a Director of Huntswood - an outsourcing business serving the financial services sector. His earlier investment market experience as an equity research analyst with the US investment bank, Robertson Stephens, included involvement in a number of initial public offerings across Europe. Prior to 2014 Richard was Group Finance Director and Chief Operating Officer.

Richard Stone, 41 Chief Executive


through the charging of an account administration fee. Account fees have always therefore been a prominent part of revenues giving a more balanced revenue mix than many of the Company’s peers. The principal variables driving account fees are the number of accounts and the tariff for each account. The tariff was reviewed and changed during 2013: this reduced the link between market values and fees, with fees being largely flat fixed rate charges. In addition to account fees the company charges a number of other fees including those for some of its other business streams (e.g. management fees for its funds of funds).

A key principle of the Group’s business model with regard to fees is that we do not vary our fees according to the investment type held by the customer – i.e. we do not charge different custody charges for equities, funds etc. We levy a single simple fixed account administration charge leaving the investor free to choose and change their investments without then being concerned about the impact such decisions will have on the fees they have to pay. Similarly we do not vary our dealing commission charges according to the means by which a customer interacts with us – we charge the same to deal online, by telephone or by post.

Interest income: Customer accounts are not intended as cash accounts. However, with a large and diverse customer base, at any one time there is inevitably a sizeable amount of cash in aggregate across those accounts. The security of customer’s assets is paramount, but having found suitable places to deposit the funds that are also permitted from a regulatory perspective, The Share Centre earns interest income on that cash. The key variables for this revenue stream are therefore the value of customer cash held and the interest rate earned.

COSTSThe cost base of the Group is again driven by The Share Centre. Approximately half of the Group’s costs are related to the staff employed. In particular salaries and related costs, as well as profit share – with every member of staff receiving a bonus directly linked to the profits of the business.

Of the remaining cost, the Group invests heavily in marketing activity. This accounted for 16% of total costs in 2014 (2013: 15%). This is principally spent on promoting the activities of The Share Centre, its brand, products and website. This is the principal means of increasing brand awareness, raising the Group’s profile, engaging with existing and potential customers and generating new customer accounts.

Finally, the Group spends money on rent, rates and similar operational costs, as well as incurring irrecoverable value-added tax (VAT) given that not all the Group’s revenues attract VAT. In recent years, charges from the financial regulator (the Financial Conduct Authority (FCA) and in particular levies from the Financial Services Compensation Scheme (FSCS)) have also grown to be material.

SCALABILITYWe believe the Group’s business model is very scalable. No core functionality is outsourced. This means the Group has effectively built ‘the engine’ and the principal challenge is attracting increased levels of activity to pass through that engine. As a result, the increase in costs when taking on new accounts and new activity is not commensurate with the increase in revenues that those accounts generate. Should activity fall though, as the Group has a relatively fixed cost base, any reduction in revenue will impact profitability.

As a result of this scalability, the Group believes it can see margins expand


in future as the customer base and revenues grow. This will be particularly true if interest rates begin to increase and interest income therefore recovers to more normal historic levels (up to 3.5%) as interest income has little in the way of associated costs.

BALANCE SHEETThe balance sheet of the Group is very straightforward. The majority of shareholder funds are held in cash and investments. The principal investments of value are shares in the London Stock Exchange plc, Euroclear plc and WAY Group Limited. The London Stock Exchange plc shares are liquid and should be readily realisable, while Euroclear’s 2013 and 2014 share buy-backs demonstrate its strong shareholder value.

Working capital is limited as debtor and creditor balances mainly comprise open positions with the market and customers. When The Share Centre enters into a trade on behalf of a customer, acting as the customer’s agent, a debtor and creditor balance exist until such time as the trade settles – one side being the open trade amount due to or from the market, and the opposite side being the amount due from or to the customer. Customers’ assets are segregated from the assets of the business and do not appear on the Group’s balance sheet.

The Group has historically had a relatively modest dividend payment policy with dividends well covered by underlying earnings and cash generated. This has resulted in cash balances and shareholder funds growing over time.

CAPITAL OF THE BUSINESS AND SHAREHOLDER PERKThe Group was founded on the basis that democratic capitalism works best where there is a considerable overlap between consumers, employees and shareholders. To this end we encourage employee participation

in our shares through the company’s Share Incentive Plan (SIP) and we offer our customers a valuable shareholder perk. Customers who own 500 shares in Share plc enjoy a 30% discount off their online dealing commission. This is a significant reduction in transaction costs alongside an investment in the business. This shareholder perk encourages a significant number of our customers to own a part of our business and enables them to share in our success.

REGULATORY COMPLIANCEThe Group complies with all the FCA’s relevant rules and regulations. A strong compliance culture is maintained throughout the organisation and all staff receive regular training on matters such as Anti-Money Laundering, Bribery and Fraud. The Group also engages actively with the FCA on issues where the FCA is seeking consultation with the industry.

Client assets, their safeguarding and protection, rightly continue to be a high priority area for the FCA. The Group takes its responsibilities in this regard very seriously and it was particularly pleasing again that the statement which received the highest level of agreement in the annual staff survey across all our staff was that “the Group treats the safety of customer assets and the security of their data as paramount”.

SHAREFUNDSThe Group continues to operate a regulated subsidiary – Sharefunds Limited – which acts as Authorised Corporate Director (ACD) for five funds managed by third party fund managers and three of the Group’s own Funds of Funds which are managed in house. Those three funds of funds are used to provide customers of The Share Centre with a simple, easy to navigate entry point into funds investing based on their risk appetite. The funds have grown significantly during the year and should benefit from a more stable global growth recovery.

business model

Customer Service AwardINVESTMENT TRENDS 2014 UK ONLINE BROKING REPORT

Customer Service Team Leader, Majid Syal, is proud that we have once again been recognised for doing all that we can in order to provide a premium customer experience.



strategic report2014 REVIEWThe delivery of the Group strategy is based on three key elements.

he three key elements of our strategy are; Putting Customers First, Focusing on our Core

Business (The Share Centre) and Strategic Partnerships or acquisitions. In 2014 we have continued to deliver against these. In particular:

PUTTING CUSTOMERS FIRSTWe continually strive to ensure that customers are at the forefront of all that we do. The pricing changes we introduced in July 2013 really started to have an impact on customer behaviour in 2014 as other firms announced their pricing and more firms opted to maintain the value-related charging structures which penalise investors’ investment diligence and success. Our simple flat fee structure looks increasingly competitive in that context and this has had a measurable impact on the rate of transfers-in relative to transfers-out.

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Mike joined The Share Centre in February 2014 and has responsibility for the finance, settlement and other account administration functions, in addition to Human Resources. Mike is a Chartered Accountant and a Chartered Fellow of the CISI. Previous to this, Mike was Finance Director at Thomas Cook Online, the e-commerce centre of excellence within Thomas Cook Group Plc. Prior to that he worked for eight years with Betfair Group plc, initially as Head of Financial Planning and Analysis and then as Finance Director of Betfair Group plc’s financial trading exchange, LMAX.

Mike Birkett, 43 Finance Director

As noted in the Chairman’s statement we have recruited a number of new directors in 2014 and in each case we have deliberately sought values-driven individuals from retail backgrounds with a strong understanding of the customer and customer service.

We are always listening to our customers and looking at ways of improving the service we deliver to them. For example, we constantly review the information and services available on our website. In 2014, we introduced functionality to enable customers to make withdrawals from their accounts online and we have also added more content and videos to help investors make the right decisions for them, helping them navigate the market and our services. For example, we agreed a partnership with research firm Edison to make available to our customers the research that they write on companies.

In 2014 and again as we have entered 2015, we have been acting as an intermediary in a number of Initial Public Offerings (IPOs) enabling our customers to invest in those companies as they come to the stock market. Finally, during the 2015 ISA-season, we have looked at ways we can extend our services and will extend our opening hours during the week, as well as adding weekend opening in the run-up to the end of the tax year helping ensure that we are there to support our customers when they need us.

Our success in ‘Putting Customers First’ is measurable through customer testimony, such as that which we are


now receiving on Trustpilot – a review site for customers – where our average score is 8.8 out of 10. It is also evident in awards we won in 2014 including the Investors Chronicle and Financial Times award for Best Customer Service and the fact that we came top for Overall Client Satisfaction and for Customer Service in the Investment Trends research in 2014 which incorporated the views of over 13,000 personal investors.

FOCUS ON CORE BUSINESSIn recent years we have disposed of our Sharemark business and scaled back our Sharefunds operations. We continue to be focused on our core business of retail stockbroking – providing custody and transactional services to personal investors either in our own brand or through the brands of other organisations.

We continue to promote our business and brand through our advertising and public relations activities. Towards the end of 2014 we started a brand advertising campaign for the first time, and we have also been more active on social media.

Our success in ‘Focusing on our Core Business’ is demonstrable through growing the customer base and not taking on peripheral services or diverting our attentions beyond the core capabilities which we know we can deliver successfully and which our customers expect of us.

STRATEGIC PARTNERSHIPS OR ACQUISITIONSWe have had little material to report in this area in recent years. It is therefore particularly pleasing to be able to report the successful conclusion of a contract with Barclays to offer certificated dealing services to customers introduced by Barclays. We hope this will be a very successful partnership which can grow, as well as being a precursor to other similar relationships. Our focus is on developing relationships with large retail brands, whose customers would value an investment service, or elements thereof, as an extension of our partners’ service offering.

This contract demonstrates our ability to win in competitive tendering situations and we will look to repeat that success as we identify other prospects. Although no acquisition opportunities materialised during 2014, we continue to look for any suitable opportunities.

FINANCIAL PERFORMANCEThe Group’s performance in 2014 was distinctly a year of ‘two halves’, with strong revenue growth in the first half but reduced trading activity in the second half against a backdrop of weaker market sentiment. Nevertheless, our revenue growth was stronger than our peer group, helped by our more balanced revenue model which generates predictable recurring revenue. The key elements are set out in more detail below.

REVENUEOverall revenue at £15.0m grew by 0.2% (2013: £15.0m). As can be seen from the Key Performance Indicators, this performance was ahead of the market as a whole enabling the Group to grow its market share further.

Revenue from fees increased by 6.3% from £6.2m to £6.6m, highlighting the strength of the core business, together with the growth of our Enterprise Investment Scheme (EIS) administration, where we provide custody and dealing services to EIS fund managers. Fees also provide an ‘insulating’ effect in periods of reduced trading activity.

Commission reduced slightly by 0.8% to £6.6m (2013: £6.7m). 2013 was also a strong comparative with the Royal Mail IPO and AIM shares being allowed into ISAs and whilst 2014 saw further public offerings (such as TSB, Saga and Pets at Home), these had relatively less retail interest.

Interest income reduced by 14.5% to £1.8m (2013: £2.1m) for two reasons. Firstly, client money term deposits that were historically placed at higher rates, matured into a lower interest rate environment. Secondly, with the changes to the Client Asset rules, firms such as ours are now unable to use term deposits. Excluding interest income,

PERFORMANCE RELATIVE TO PEERS

Commission Fees Revenue (excluding interest)

Peer group Share plc

-15

-10

-5

0

5

10


revenue grew by 2.6%. As a result, the revenue mix between commission, fees and interest shifted to 44%, 44% and 12% respectively in 2014 from 44%, 41% and 15% respectively in 2013.

The Group has always placed a high degree of importance on the quality of revenue and the level of recurring revenue represented by fees and interest, which in 2014 increased to £8.4m (2013: £8.3m) and covered 58% of the Group’s costs (2013: 61%).

COSTSOverall costs for the year increased by 7.4% to £14.6m (2013: £13.6m), for four reasons. Firstly, staff costs rose by 3.2% to £7.0m (2013: £6.8m), due to some staff increases in our customer-facing teams. In addition, there were one-off fees and charges of £0.2m, relating to our senior management changes, representing restructuring costs and recruitment fees.

The second largest cost incurred by the Group is marketing. These costs increased by 15% to £2.3m (2013: £2.0m), in order to capitalise on the opportunities offered by the usual ISA season and the increase in the ISA allowance in July 2014 to £15,000. Of this total, £1.3m (2013: £1.1m) was spent directly on promotional advertising online and in printed media.

Share-based payment charges for long term equity incentives were higher at £0.5m (2013: £0.2m). The share-based charge is recorded as a cost and then credited back to reserves as it does not impact the financial resources of the business.

Total staff costs and marketing spend together totalled £10.0m (2013: £9.1m) being 69% (2013: 67%) of total administrative costs. Other expenditure relates to premises, IT systems and professional fees. With the reduction in

2014 reviewactivity in the second half, these costs were reviewed and savings identified.

Finally the Group incurs regulatory fees and levies and irrecoverable VAT. In 2014, our costs in respect of the Financial Services Compensation Scheme (FSCS) were lower at £342,000 (2013: £481,000) as in 2013 an interim levy was raised. The basis of allocation for the FSCS levy is based on revenues rather than taking into account the risk profile of firms and the amount of capital that they hold. We continue to campaign against the basis of this allocation but it remains a material cost for the Group and beyond our control.

PROFITABILITYThe profits of the Group fell in the year as a function of the reduction in interest income and the increase in costs discussed above. As a result, overall operating profit was £0.4m (2013: £1.4m) a decrease year-on-year of 70%.The overall operating profit margin decreased to 2.8% (2013: 9.4%), well below the levels the Board believes the Group can achieve in the long run with additional scale and limited cost investment.

The Board believes that underlying earnings per share which strip out one-off costs and also the FSCS levies and non-cash share-based payment charges, better reflect the performance of the business. On this basis, earnings decreased to 1.0p (2013: 1.3p). At a headline level, earnings per share were 0.5p (2013: 0.9p).

During 2014, we sold 14,384 of our 42,164 shares in Asset Match Limited (reducing our holding to 27,780 shares) at a price of £4.20 per share realising just over £60,000. These shares were valued at £nil at the end of 2013. We continued to hold the rest of the shares at £nil at the end of 2014 given the lack of visibility

REVENUE COMPOSITION

2014

2013

44%

41%

15%

44%

44%

12%

Commission

Fees

Interest


of value or exit, no liquidity, and no expectation that such a sale opportunity will re-occur in the foreseeable future.

DIVIDENDSThe Group has a stated dividend policy of seeking to increase dividends by 20% per annum for so long as the profitability and potential of the Group supports such growth. This has now been in place for a number of years with this year’s proposed dividend meaning the dividend paid will have increased 107% since 2010. In that context, the Board of Directors are proposing a final dividend of 0.62 pence per share (2013: 0.52 pence), which represents growth of 19% on the prior year dividend. This payment is covered by underlying earnings (1.7 times covered) and the strength of our balance sheet. Subject to approval at the Annual General Meeting, the proposed dividend will be paid on 17 June 2015 to shareholders on the register on 15 May 2015.

BALANCE SHEETThe Group’s balance sheet remains very strong with no debt but significant cash balances of £12.7m (2013: £13.6m). In addition, the Group’s financial position is further strengthened by available-for sale investments of £9.0m (2013: £6.4m), primarily in the London Stock Exchange plc and Euroclear plc, the largest international central securities depository in the world. The dividends from these investments totalled £199,000 (2013: £180,000), which is substantially in excess of the interest return on Group cash.

During 2014, the Group took up its rights in the London Stock Exchange recent rights issue, subscribing for the full 47,727 shares at £12.95 each, a total subscription cost of £618,000. This took the Group’s holding to 222,727 shares, valuing the Group’s holding at 31 December 2014 at £4.9m (2013: £3.0m).

Darren joined The Share Centre in January 2015 and has responsibility for the customer experience, from customer acquisition through to customer engagement and service delivery. Darren was previously UK Head of Residential Operations and In-House Sales at E.ON, responsible for servicing the Company’s 5.2 million UK customers. Before joining E.ON, Darren worked for Aviva plc, the multinational insurer, for 16 years, ultimately assuming the position of Director of Customer Experience.

Darren Cornish, 44 Director of Customer Experience


As the Group’s cash flow statement shows, this contributed to a reduction in cash and cash equivalents in 2014 of £1.0m. The increase in the carrying value of our shares in Euroclear plc to £3.7m (2013: £3.0m), reflects the weighted average price at which shares were recently bought back by that Company. The only other investment the Group holds to which it attributes a carrying value is WAY Group Limited, valued at £0.5m as in 2013.

Overall shareholder funds as at 31 December 2014 were £20.7m (2013: £19.4m). This represents 14.4 pence per share in issue (2013: 13.5 pence). The value of the investments plus the cash held largely equate to the total shareholder funds. The remaining working capital balances on the balance sheet principally reflect the open customer positions with the Group and the market, i.e. unsettled customer sales and purchases, which all effectively net to zero as each side has both an asset and a liability with the Group as agent in the middle. Finally the remaining balances net to a small liability largely in respect of non-current deferred tax.


strategic reportKEY PERFORMANCE INDICATORSThe Group uses a number of key performance indicators to monitor and measure its progress through the year.

hese are both quantitative and qualitative, and relate to activity levels as well as financial

metrics. The key performance indicators discussed below are consistent with those disclosed in previous Annual Reports.

BUSINESS PERFORMANCE

Market share The principal key performance indicator, on which the Group reports quarterly, is the market share of benchmarked revenues. This is measured using a peer group of eight other retail stockbrokers and serves to identify whether our performance is exceeding that of our peers irrespective of underlying market trends which affect the industry as a whole. The data for the measurement of this indicator is drawn from ComPeer, an independent company which gathers and provides data and analysis to the wealth management community.

The fourth quarter data showed a market share of 7.61% (Q4 2013: 7.20%). For the year as a whole, our market share increased to 7.66% (2013: 7.16%). ComPeer’s data also allows us to calculate the Group’s market share of peer group revenues excluding interest, which is higher than when including interest. Excluding interest, for the fourth quarter, our share also showed growth to 8.51% (Q4 2013: 7.67%) and 8.69% for 2014 (2013: 7.64%).

It is worth noting that the Group has a more balanced business model than its peers, with a greater proportion of revenues derived from fees and interest as opposed to dealing commission. For example, in 2014, 56% (2013: 56%) of the Group’s revenues were fees or interest as compared to 30% (2013: 25%) of our peer group’s revenues. The impact of the Retail Distribution Review could explain this increase for the peer group, as it has forced companies to review their charging structure and move to a more transparent fee-based environment. The Share Centre already changed its prices in July 2013 and charges a low fixed rate administration fee for having an account.

This data also shows that the Group has outperformed its peers during the year in terms of revenue growth. Overall revenues for the Group increased by 0.2% compared to the collective peer group which experienced a decrease of 6.4%. Excluding interest, revenue for the Group increased by 2.6% and decreased by 10.4% for the peer group. We believe that the key difference in performance was driven by commission, which fell by 13.2% for the peer group, in contrast to a 0.8% fall for the Group, indicating that the impact of the industry trend of lower trading volumes was less pronounced for the Group. Fee revenue for the Group increased by 6.3% compared to 3.2% for the peer group.

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Best StockbrokerONLINE PERSONAL WEALTH AWARDS 2014

Behind the scenes, colleagues such as Senior Cash Processing Administrator, Sharon Burns, handle customers’ money quickly and efficiently, ensuring that investing with The Share Centre is simply easier.



Customer interaction We measure the levels of interactions with customers and prospective customers through a range of metrics. These include the level of enquiries, accounts opened (including transfers-in from other brokers) and website traffic. This year we have seen an increase in the number of transfers-in from other brokers, underlining the relative competitiveness of our flat fee approach, which as well as being simple, does not penalise customers by taking higher fees as account values increase.

Our website continues to attract high numbers of visitors and remains the predominant route through which new accounts are opened. In 2014, the average monthly number of unique visitors grew to over 160,000 (2013: 140,000). At the end of 2014, there were 251,000 accounts which contained assets (2013: 247,000).

We also closely measure the level of customer satisfaction. In 2014, we received 2.86 complaints per 1,000 customers. This was a significant

key performance indicators

John joined The Share Centre in November 2014 and has responsibility for all of the Group’s systems architecture, development and infrastructure. John was previously Head of IT at One Stop, the retail convenience subsidiary of Tesco plc with over 750 stores across England and Wales. Prior to his seven years with One Stop, John was Business Systems Manager with Signet Jewellers Limited, the largest speciality jewellery retailer in the US, UK and Canada, whose brands include H Samuel and Ernest Jones.

John Sargeant, 44 IT Director


decrease on the levels we experienced in 2013 (4.59 per 1,000), which was impacted by complaints from customers regarding the changes to our prices. We continue to have very low levels of complaints referred to the Financial Ombudsman, with just eight in 2014 (2013: seven), with none upheld against us (2013: none).

Headcount The high levels of customer satisfaction we aspire to are only achievable with the dedication and commitment of our high quality employees. We are very proud of the people we employ who are all critical to our customer proposition.

We monitor levels of headcount and staff costs on a monthly basis, reviewing the actual levels (149, including part-time staff at 31 December 2014 (2013: 142)), as well as assessing staff turnover rates and our success in attracting and recruiting new staff. Our staff turnover rate in 2014 was 15% (2013: 10%), partly due to a number of retiring staff. The ratio of male to female employees has remained constant at approximately 3:4.

Our core values, in particular Respect for Others, underpin the way we interact with our customers but also with each other. We offer our employees a range of benefits including the contribution of 8% of base salary into a pension of their choice, participation by all employees in the Group’s profit share arrangements which pays a profit related bonus, and a Share Incentive Plan with 2:1 matching of employee contributions. This latter benefit means a significant proportion of our employees are shareholders, with over 110 employees making regular monthly contributions into the scheme.


In 2014, we repeated the annual staff survey first conducted in 2011. This again showed increased levels of satisfaction amongst our employees with 90% (2013: 80%) of staff agreeing with the assertion “I believe that this is a great place to work” and over 90% (2013: 85%) of staff agreeing that they “would recommend The Share Centre as a good employer”.

FINANCIAL

Revenue We monitor the absolute levels of revenue and the mix between the different revenue streams. Data for these metrics is given in the ‘Review of 2014’ section of the Strategic Report above.

Operating margin We monitor the level of operating margins as noted on page 16 where the data for 2014 is given. As a result of the changes to the Client Asset rules, the potential for generating interest income and growing operating margins is reduced but as revenues expand further, and interest rates return to historically more normal levels, we would expect to see this margin increase significantly.

Assets under administration The level of assets under administration measures the collective value of the investments and cash held by our customers. We look at this in both absolute terms and at the rate of change relative to overall market levels. At the end of the year this value was £2.55bn (2013: £2.34bn), an increase of 9%, which shows significant growth compared to a decrease in the FTSE All Share index over the same period of 2%. A rate of increase greater than the market as a whole indicates the Group’s ability to attract new accounts and additional investment from existing customers. As a proxy, assuming our customers performed in line with the FTSE All Share index this would imply a net inflow of funds of c.£260m during 2014 (2013: £186m).

Cash flow The Group’s full cash flow statement is presented below. We monitor cash flows on a monthly basis and in particular review the Group’s ability to translate post-tax profits into cash. In 2014, the overall cash balances held on the Group’s own account, i.e. excluding amounts held in trust for clients to complete settlement of transactions, decreased to £11.7m from £13.0m. Excluding the impact of the Group’s participation in the London Stock Exchange rights issue (£618k), cash balances would have been £12.3m at 31 December 2014.

Financial resources Two of the entities within the Group are regulated by the FCA (The Share Centre Limited (FCA registration number: 146768) and Sharefunds Limited (FCA registration number: 227807)). This means that the Group has to hold a certain amount of regulatory capital. The Group has a stated policy to maintain at least twice the amount of regulated capital required. In recent years as profits and cash generated have been retained the level of capital has increased relative to the minimum required. As at 31 December 2014, the Group was holding 6.4 times the capital required by the FCA for 2014 (2013: 6.2 times).

In summary, the Pillar II requirement (being the amount the group has to hold as it is in excess of the Pillar I requirement) is £3.1m for 2014 (2013: £2.9m). The Group has in place an Internal Capital Adequacy Assessment Process (ICAAP) which was reviewed by the FCA (then FSA) in 2009. Full details of our capital requirements are required to be disclosed under Pillar III of the Capital Requirements Directive and can be found on our website – www.shareplc.com.


strategic reportPROSPECTSA positive outlook for the future.

e believe the prospects for the Group are very positive with a number of factors coming

together which will help us to deliver our strategic objective to become consumers’ first choice for investment knowledge, guidance, dealing efficiency and fair value.

We would highlight three particular trends that we believe will support our growth.

CONTINUING LOW INTEREST RATESRecent improvements in the overall economic climate have turned the discussion of interest rate rises from ‘if’ to ‘when’. However, we believe that even if rates start to rise in 2016, as the market currently expects, those increases will be modest and historically low interest rates will be with us for some considerable time.

WThere are a number of reasons for believing that interest rates will remain low. The output gap – in other words the latent productivity of the UK labour force – has grown significantly in recent periods. This is compounded by the continuing shift to online and digital consumption increasing supply scaleability within the economy. The UK economy remains heavily burdened – corporately, individually and at state level – by debt. Reducing the annual deficit is a start but until that deficit is eliminated and a surplus is being run each year the overall debt owing continues to increase

Finally, with the UK recovery needing exports to contribute significantly, that recovery remains susceptible to global economic shocks whether through slowing growth in China, political instability, issues in emerging economies or a recurrence of issues in the Eurozone where unemployment (and youth unemployment in particular) appears to be storing up social problems which have yet to play out.

The Governor of the Bank of England has already made his view clear that interest rates, even when they begin to rise, will stay at historically low levels for a prolonged period – and indeed the ‘normal’ interest rate associated with a growing economy may now be materially lower than it has been in the past.

In short, we are optimistic for the fortunes of the UK economy, but believing that the recovery will be steady, we believe that the future path of UK interest rates will remain low.

Continuing low interest rates will be positive for the Group in helping drive personal investor activity. Investors will continue to look to the market for income

Francesca has a background in consumer-led organisations, with particular expertise in online sales, marketing and service delivery. Francesca was most recently the Global Business Development Director at Cheapflights Media, and prior to that Managing Director, International, at STA Travel Group, the world’s largest student travel company. Francesca also uses this expertise to play a leading role as Publications Officer within the Women in Advertising and Communications London (WACL) organisation – a not-for-profit group of influential women working in marketing and communications. She is also a Non-Executive Director of Good Energy Group plc and Foreign and Colonial Investment Trust.

Francesca Ecsery, 51 Non-Executive Director


in the absence of attractive rates on cash. This is of particular assistance in generating new investors into ISAs and into the Group’s own funds of funds as these act as a relatively easy entry point into the market for personal investors making the move away from cash for the first time. Continued low interest rates against a backdrop of a recovering economy should also help to support market values. Finally, although the failure of rates to rise to 3.5% and above will mean the Group continues to earn subdued levels of interest, there is considerable latent earnings potential which may be unleashed when interest rates rise. A 0.5% increase in the interest rate earned on client money balances would increase revenues and profits by c.£800,000 per annum.

IMPROVING ECONOMY AND MARKETSAs noted above, we are optimistic about the outlook for the UK economy over the next few years. This should lead to improving corporate earnings, which should be reflected in market values. A rising market helps improve personal investors’ sentiment as well as their asset values. This in turn helps to underpin dealing volumes. The overall improvement in the economic situation

in the UK has also led to a return to growth in real wages. Personal investors have suffered a number of years of pressure on their spending and savings as price growth has outstripped earnings growth. With this change becoming more pronounced in 2015 personal investors are likely to feel better off and be in a better position to make provision for their futures through increased savings.

As a result of the improved economic climate and the continuing demand from institutional and retail investors we have seen an increase in the number of IPOs. Not all IPOs have an element for the retail investor and we continue to campaign for increased access to such offerings for personal investors. However, increasingly corporate financiers are realising the benefit of including personal investors especially where the business itself has a significant retail customer base.

REGULATORY CHANGESThe Retail Distribution Review (“RDR”) which we fully supported was designed to improve the quality of advice customers receive and the transparency of the charges they pay to investment firms. The second element of this came into effect in April 2014 with the outlawing of commission paid by fund providers to brokers who sell their funds.

Gareth joined the Group as Non-Executive Director in December 2014. Gareth was an executive Board director of John Lewis plc (“John Lewis”), the UK retailer, for ten years until his retirement in 2010, having begun his career at the retailer in 1979 as a graduate trainee. At John Lewis, he established a track record for delivering strong growth and financial results, and is a passionate believer in the importance of customer service and brand. Since leaving John Lewis, Gareth has continued to provide consultancy advice to retailers and is a Director of NaturePaint Ltd, the manufacturer of natural paints. He is also Non-Executive Director and Trustee of TATE, one of the world’s leading art galleries.

Gareth Thomas, 57 Non-Executive Director


We believe this continues to represent a significant opportunity for The Share Centre. We have always held true to our belief that the customer relationship is at the core of our activity. We seek to put the customer first in all that we do and believe we can evidence this in the decisions we have taken around RDR pricing. The changes have forced many of our competitors who have based their business models on the trail commission paid to them by fund providers to introduce new transparent charges. These have typically been set as a percentage of the value of the customers fund or overall investments and range from 0.25% to 0.45% per annum.

The Share Centre will continue to charge a single low flat-rate fee for each account and we are then neutral to the customer’s choice of investment within that account. With our low flat-rate account administration charge, as we work hard to help our customers build their savings and investments over time, they will not be penalised for their success through higher absolute charges.

Just by way of illustration, a 0.35% fee on a £20,000 portfolio may appear modest at £70 per annum, but if that £20,000 doubles so does the fee – to £140 per annum – and yet the investor receives the same service from the provider charging that value-related fee. For this reason, as already demonstrated by the number of accounts being transferred to us, we believe that over time, as investors see the new charges appearing on statements, so they will look to move to providers such as The Share Centre and away from providers charging value-related fees.

At a strategic level, The Share Centre has always been seen as an advocate for personal investors investing in equities. This is reflected by the fact that 80% of our customer’s assets are invested in equities. Meanwhile, our offering for investors looking to invest in funds, often earlier in their investment journey,

may have appeared uncompetitive as compared to those providers who have appeared to charge no account fees and advertise attractive loyalty bonuses all paid for out of the trail commission they received. We are now highly competitive in the area of funds and will seek to address the challenge of ensuring investors know that The Share Centre is a provider who can meet all their investment needs across a range of investment types and wrappers (e.g. ISAs, SIPPs).

Finally, a further impact of RDR related to the initial stages of the process, was to reduce the availability of financial advisors. The so called ‘advice gap’ may not have seen as many independent financial advisors (“IFAs”) close their businesses as was perhaps anticipated but increasingly high limits (£100,000+) are being placed on customers assets before IFAs or other wealth managers will be prepared to offer them a service. As a result personal investors with more modest portfolios or investment capacity are being forced to look at self-select routes. This again helps drive interest in businesses such as The Share Centre and we will continually look at ways we can enhance our service to offer those personal investors the support and guidance they need whilst making their investment journey simply easier when faced with the usual jargon and complexities associated with investing.

OVERALL OUTLOOKGiven the trends identified above, we look forward positively to the future. With a focused proposition, more compelling pricing now that the business models of our peers have been made transparent, a loyal and growing customer base, and our first class customer service, we believe that the Group is well positioned to take advantage of those trends and deliver our key financial objectives of increased revenues, profits and returns for all stakeholders.

prospects

Best ISA ProviderSHARES MAGAZINE AWARDS 2014

By providing ISA customers with personalised investment advice over the phone (for no extra charge), Investment Research Analyst, Helal Miah, helped us beat Santander and M&S Bank, as well as rival stockbrokers.



strategic reportPRINCIPAL RISKS AND UNCERTAINTIESThe Directors have identified and continually monitor the principal risks and uncertainties facing the Group.

hese may change over time as new risks emerge and others cease to be of concern. The

principal risks to the Group are detailed below. The Directors believe that the identified risks have been addressed and where possible, and within the Group’s control, mitigating actions have been taken to ensure processes and procedures are in place and followed to limit any impact which could arise.

REGULATORY RISKThe Group contains regulated entities. As such it is essential that it abides by the rules and requirements of the FCA. Failure to do so, especially with regard to the treatment of customers and the handling of customer assets, could lead to sanctions and fines on entities within the Group.

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Richard started his career with five years at HM Treasury, and then went on to spend 24 years as an investment banker with advisory and management experience gained in senior corporate finance and executive roles with Morgan Grenfell, HSBC and Macquarie Bank. He is retained as an independent expert witness on banking and corporate finance in litigation and arbitration and is the Chairman of the trustees of Stoke Mandeville Spinal Research.

Richard Tolkien, 60 Non-Executive Director

A significant amount of the regulations which impact the Group originate from Europe and include directives such as the Capital Requirements Directive (CRD) and the Markets in Financial Instruments Directive (MiFID). The Treasury and FCA are looking to consult on changes in respect of MiFIDII in 2015, the outcome of which could impact the business.

The Group is also subject to the decisions of the Financial Ombudsman Service (FOS) and Financial Services Compensation Scheme (FSCS). In respect of the latter, the Group, through The Share Centre Limited and Sharefunds Limited, is liable for any fees levied by the FSCS to cover compensation costs incurred in respect of the customers of failed firms in our industry. These charges currently are, and may continue to be, material. The Group continues to campaign for an overhaul of the way these levies are calculated such that the burden of those levies more closely reflects the risks businesses are running.

SYSTEMS RISKThe operations of the Group are highly dependent on technology. A failure in the Group’s core systems or customer interfaces could pose a significant risk to the business. Were it to affect the ability to reconcile accounts or maintain records, this could also have regulatory implications. This would also be the case were any of the Group’s systems or processes in respect of data security to fail.


REPUTATIONAL RISKThe Group is continuing to spend significant sums of money on marketing and building The Share Centre’s brand to attract new customers. Were the brand to be affected in any way through bad publicity or negative associations, this could impact customer confidence in that brand and damage the prospects of the business.

INVESTOR SENTIMENTThe Group has a diversified customer base and is not subject to any significant concentration risk in its retail stockbroking business. However, most revenues are derived from personal investors and were investor confidence in the stock market to be adversely affected, or were there to be a very deep, prolonged recession with very high unemployment which reduced the ability of personal investors to undertake savings and investment activity, this could impact the performance of the Group.

STOCK MARKET VOLATILITYChanges in the value of the stock market directly impact the level of any value related fees and therefore revenues. The changes to the Group’s prices in 2013 significantly reduced this risk by moving fees more directly to flat rate charges. Sharp changes in valuations can also damage investor confidence and therefore damage the prospects of the Group more widely. The Group’s business model and split of revenues across commission, fees and interest help mitigate exposure to any one factor. However, a combination of falling stock values and sharply reduced investor activity could have a significant impact on the performance of the Group.

COMPETITION RISKThe Group faces competition from a number of other brokers and larger

financial institutions offering similar services. The Group has successfully differentiated itself by targeting investors at an earlier stage than many brokers, by offering a clear and easy-to-use service, through its high quality customer service and low prices. However, the Group is always susceptible to the impact of short-term, cut-price offers from competitors who, in the case of the large financial institutions, may have substantial financial resources to support such initiatives.

FUND ADMINISTRATION SPECIFIC RISKSThe Group acts as Authorised Corporate Director (ACD) for some funds, including its own funds of funds. Although some activities such as fund accounting are outsourced to BNP Paribas, regulatory responsibility continues to rest with Sharefunds and therefore aspects of the risk associated with this part of the Group’s business. A failure in any of these areas could have a material impact on the Group’s performance.

FRAUD RISKSDue to the nature of our business, the Group is at risk from external and internal fraud. Robust controls are maintained to mitigate these risks such as strict segregation of duties, customer verification and identification procedures and penetration testing. Insurance cover is also in place, with an excess of £40,000.

BALANCE SHEET RISKSThe Group’s Shareholders’ Funds are comprised principally of cash and investments. The cash is held with a number of banking counterparties. Each counterparty is subject to regular reviews and a number of counterparties are used to diversify risk, however, the failure of any of those counterparties would have a material effect on the Group’s assets.

The Group also holds investments in the London Stock Exchange plc, Euroclear plc and WAY Group Limited. The London Stock Exchange plc investment is relatively liquid and could be readily realised. The market value is subject to fluctuation and a significant decline in value would have a material impact on the Group’s balance sheet. Euroclear plc shares are not traded on a market but the company has completed two share buybacks from shareholders in the last two years which have demonstrated an ability to realise value. The valuation of this investment would be materially affected by any significant decline in the business, asset value or prospects of Euroclear, or of the Euro as the investment is denominated in Euros.

WAY Group Limited shares are not publicly traded and in the absence of any other objective evidence the shares are held at cost. The company is loss making and there is no current prospect of being able to realise this investment. Ultimately this investment may be worth materially less than cost if the business cannot reach profitability or an exit for shareholders does not materialise.

OTHER RISKSThe Group is impacted by fluctuations in economic sentiment amongst investors. This may increase or decrease trading dependent on investors’ confidence and availability of funds to invest. The Group is not exposed to currency risk or specific country risk other than through its interactions with counterparties who themselves may suffer from such exposures. For example, whilst everything the Group does is in pounds sterling, the counterparties, and in particular, the banking institutions with which it deals, will have exposure to foreign currencies and other countries which could affect their stability and in turn have an impact on the Group.


strategic reportTHE WIDER COMMUNITYThe principal objective of the Group’s corporate and social responsibility policy is to ensure a long-term sustainable future for Share plc, all its stakeholders and the communities in which it operates.

he directors of Share plc believe the Group has an important role to play in the local community

and more broadly. The active role the Group plays includes:

FINANCIAL EDUCATIONGavin Oldham is the founder and chair of trustees of The Share Foundation, a registered charity which establishes and administers Junior ISAs for young people in care throughout the United Kingdom on behalf of the Department for Education. The Share Centre also operates Shares4Schools (www.shares4schools.org), a real investment competition for Year 12 students.

CHARITABLE ACTIVITIESStaff at The Share Centre regularly organise a variety of fundraising events and participate in the monthly ‘dress down’ day for charity. In 2014, we focused these activities on one local charity - The Florence Nightingale Hospice and raised, by way of staff and company contribution, £2,000 (2013: £2,400).

THE ENVIRONMENTAs an office-based business our impact on the environment is relatively light by the nature of our services. One impact is the effect of staff driving to work which is in part mitigated through working with our

landlord to provide more bicycle parking, through encouraging some flexible working patterns to enable staff to avoid peak travel times, and through being based in a relatively residential location.

Further environmental impacts arise from the energy we use and through the level of paper we consume, both of which we try to mitigate through increased staff awareness. In addition, we are continually seeking to increase the extensive use of electronic communications in delivering our services which provides opportunities not only to improve customer facilities but also to minimise our carbon ‘footprint’.

OUR CUSTOMERSWe are committed to providing all of our customers, and those of our corporate clients with whom we deal, with outstanding customer service. We have embraced the concept of Treating Customers Fairly and through training and company culture have embedded this throughout our organisation.

We are committed to fulfilling our customers’ investment needs and this includes investing in new services and technologies to enable customer interaction and a proactive approach to customer contact, resolving issues which may arise at the earliest opportunity.

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OUR EMPLOYEESWe invest in the development of all our staff and believe they should share in the success of the business. We have adopted best practice with regard to legislation where applicable.

We support our employees’ personal and professional needs and seek to stay ahead of corporate best practice in many areas. This includes making significant contributions to employees’ personal pension plans (8% per annum with no contribution required from the employee), sick pay in excess of statutory minimums, sabbatical leave opportunities and flexible working where appropriate.

We also aim to provide a safe and supportive environment in which to work, and all staff receive appropriate training and workstation assessments to ensure health and safety issues are addressed and risks mitigated. We also provide all staff with the ability to join the Group’s private medical scheme covering them and their dependants, and provide access to regular preventative health screening for all managers.

ETHICALShare plc is committed to the highest standards of corporate behaviour from its directors and employees, and expects all staff to perform their duties with

efficiency and diligence, treating others with care and courtesy. The Group has a strict conflict of interest policy and rules on the acceptance of any gifts, which requires any material gifts to be recorded on a central register maintained by the compliance department. All personal share dealing by staff is also monitored to ensure conflicts are avoided and regulatory obligations are met.

The Group pays bonuses to directors and staff based on a profit share. In 2014 this profit share element was 4.9% of base salaries (2013: 8.8%), reflecting the lower absolute levels of profit achieved in 2014. No member of staff is rewarded on the basis of sales or commissions in respect of transactions undertaken by individual customers.


Best Online StockbrokerTHE PERSONAL FINANCE AWARDS 2014/15

Winning this award for the third year in a row would not have been possible without the dedication of our IT professionals, such as Senior Technical Support Engineer, Stephen Close, who helps keep our website and systems running smoothly.

WINNERBest Online Stockbroker



DIRECTORS’ REPORT

The directors submit their report and the audited accounts for the year ended 31 December 2014.

RESULTS FOR THE YEARThe results for the year ended December 2014 and the financial position at that date are set out in the financial statements. The profit after taxation of the Group amounted to £668,000 (2013: £1,331,000).

DIVIDENDS AND TRANSFERS TO RESERVESDuring 2014 a final dividend of £747,000 in respect of 2013 was paid (0.52 pence per share). A final dividend in respect of 2014 has been proposed by the Board of 0.62 pence per share. This would amount to a total gross final dividend payment of £891,000 given the current number of shares in issue.

The retained profit after tax of £668,000 (2013: £1,331,000) has been transferred to reserves.

DIRECTORS AND THEIR INTERESTSThe directors who were in office during the year and their interests in the 0.5p ordinary shares of the Company were as follows:

2014 2013

G D R Oldham (including related parties detailed below) 109,317,816 109,337,442

R I Tolkien 131,643 117,207

F E Ecsery 10,122 -

M D Birkett 8,531 -

R W Stone 159,046 118,875

Details of the directors’ share options are included in the directors’ remuneration report and none of the directors had an interest in any shares of any other Group company. The Company maintains a liability insurance cover on behalf of directors and officers of the Company and its subsidiary undertakings.

SHARE CAPITAL As at 31 December 2014 the following persons or entities held an interest of three percent or more in the issued share capital of the Company. In accordance with the requirements of Rule 26 of the AIM Rules this information is also available on the Group’s website www.shareplc.com:

SHAREHOLDER HOLDING ISSUED SHARE CAPITAL

Gavin Oldham controlled Trusts* 71,736,144 49.9%

Gavin Oldham* 17,583,366 12.2%

Virginia Oldham (including Trust)* 12,363,561 8.6%

*These are related parties

Share Nominees Limited, the non-trading bare trustee for The Share Centre Limited’s customers, holds 38,867,614 shares (27.1%), including some of the shareholdings detailed above.

DIRECTORS’ RESPONSIBILITIES STATEMENTThe directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period.


In preparing these financial statements, International Accounting Standard 1 requires that directors:

l Properly select and apply accounting policies

l Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information

l Provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance

l Make an assessment of the Group’s ability to continue as a going concern

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

EMPLOYMENT POLICIESThe Group allows employees to participate in its success through performance-based bonus arrangements and through its use of share-based incentive arrangements among its senior employees. To further encourage equity participation the Company offers a Share Incentive Plan, which from 6 April 2014 following Government increases in annual limits, allows every employee to purchase up to £1,800 (previously £1,500) worth of the Company’s shares per annum on a tax-efficient basis. These are purchased on a monthly basis and held in trust and the shares acquired by the employee are supplemented by the Company on the basis of two matching shares for each share purchased by the employee.

Employees are kept informed of the Group’s progress, including the key performance indicator (benchmarked revenue share), by quarterly presentations alongside information issued by way of press releases.

It is the Group’s policy that no employee, or applicant for employment, receives less favourable treatment (including training and development, recruitment and promotion) by the Group or any other employee, on the grounds of disability, sex, age, race or religion nor be disadvantaged by conditions, management attitudes, behaviour or requirements that cannot be justified.

FINANCIAL RISK MANAGEMENTThe Group, overall, has a risk-averse attitude. In terms of specific risks, with the exception of strategic holdings in the London Stock Exchange plc, Euroclear plc and WAY Group Limited, the Group does not take equity positions on its own account so is not exposed to equity security price risk, and it has no credit concentration or relationships with customers which expose it to any significant credit risk. The level of debtors and creditors in the balance sheet predominantly represents customers’ open positions with the market. The Group has no borrowings and has significant cash resources which are held on short-term deposit – these two factors limited any exposure to interest rate or liquidity risk in 2014. The Sharefunds business division is exposed to different risks to the rest of the Group as the majority of its revenues derives from its role as Authorised Corporate Director and a Fund Manager.

Further information on financial assets and risks is contained within the Strategic Report and Note 20 to the Financial Statements.

GOING CONCERNThe Group’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Chairman’s Statement and Strategic Report on pages 5 to 29. This also includes a discussion of the Group’s cash flows and liquidity position as well as details of how the Group manages risk. The notes to the Financial Statements include a discussion of credit and liquidity risk.

The Group has considerable financial resources and no external debt. With a diversified customer base and core recurring revenue streams along with large elements of discretionary spending in the Group’s cost base, the directors believe that the Group is well placed to manage its business risks successfully. Therefore, after making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis has continued to be used in the preparation of the Annual Report and Financial Statements.


INDEPENDENT AUDITOREach of the persons who is a director at the date of approval of this annual report confirms that:

l So far as the director is aware, there is no relevant audit information of which the Company’s auditor is unaware

l The director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

Deloitte LLP has expressed its willingness to continue in office as auditor and a resolution to reappoint it will be proposed at the forthcoming Annual General Meeting.

On behalf of the Board

Gavin Oldham Chairman 12 March 2015


CORPORATE GOVERNANCE STATEMENT

The directors acknowledge the importance of the UK Corporate Governance Code and have regard to its requirements so far as is appropriate to a Group of the size and nature of Share plc. Although not always required to do so, the directors have consistently provided corporate governance disclosures comparable with those that are voluntarily provided by AIM-quoted companies.

BOARDThe Board consists of three executive directors and three non-executive directors whose biographies are set out within the Strategic Report. These biographies demonstrate a range of experience and calibre to bring independent judgment on issues of strategy and performance which is vital to the success of the Group. The Board is responsible to shareholders for the proper management of the Group. A statement of directors’ responsibilities in respect of the financial statements is set out on page 31 and a statement of going concern is set out on page 32.

The structure of the Board and its sub-committees is regularly reviewed and these committees are as follows:

MEETING ATTENDEES CHAIRMAN MINIMUM FREQUENCY PURPOSE

Board Board Directors Chairman Quarterly Group strategy and regulatory control

Executive Executive Directors Chief Executive Fortnightly Operational management of the Group

Audit and Risk Non-Executive Directors, Senior Non-Executive Biannually Review of internal control, Chairman, Director compliance, effectiveness and Chief Executive costs of audit

Risk Sub-committee Chief Executive, Chief Executive Quarterly Monitoring of Group risk Finance Director, IT Director, Non-Executive Director, Head of Compliance

Remuneration and Nomination Non-Executive Directors, Chairman Biannually Structure of Board remuneration Chairman and the Board’s composition

POLICY ON NON-AUDIT SERVICES PROVIDED BY THE AUDITORTo safeguard the independence of the audit process, non-audit services provided by the auditor are usually limited to defined audit-related work and tax services that fall within specific categories. The auditor’s remuneration for taxation services principally relates to advice in connection with the completion of the current and prior year tax computations for the Group.

RISK MANAGEMENT AND INTERNAL CONTROLThe Board has overall responsibility for risk management and internal controls. The schedule of matters reserved for the Board ensures that the directors maintain full and effective control over all significant strategic, financial, organisational and compliance issues. The Audit and Risk Committee has considered the absence of a formal internal audit function in the context of the Group’s compliance procedures and other controls, and has concluded this is appropriate.

The directors have delegated to executive management the establishment and implementation of a system of internal controls appropriate to the regulatory and business environment in which it operates. This system of control has been developed and refined over time to meet the Group’s current and future needs and the risks and opportunities to which it is exposed.


These controls include but are not limited to:

l Strategic planning and the related annual planning and quarterly re-forecasting process including the ongoing review by the Board of the Group’s strategies

l The definition of the organisational structure and appropriate delegation of authorities to operational management

l The internal financial reporting and review of financial results and other key performance criteria

l Accounting and financial reporting policies to ensure the consistency, integrity and accuracy of the Group’s financial records

l Regulatory control, compliance and application of the FCA rulebook

l Client asset control and reconciliation

l Internal control and compliance reviews providing formal monitoring, risk assessment and reporting of weaknesses in departmental processes

RELATIONS WITH SHAREHOLDERSThe Board recognises the importance of communications with shareholders. The Chairman’s statement and the Strategic Report in this Annual Report include a detailed consideration of the business, its strategy, operations and future prospects.

The Board uses the Annual General Meeting to communicate with investors and welcomes their participation. All directors are available at Annual General Meetings to answer questions. The proxy votes cast on each resolution proposed at general meetings are disclosed at those meetings. Regular press announcements are also provided to inform shareholders and potential investors and are posted on the Group’s website, www.shareplc.com, as well as through the London Stock Exchange news service.


DIRECTORS’ REMUNERATION REPORT

As stated in the Corporate Governance Statement on pages 34 and 35, the Company acknowledges the importance of the UK Corporate Governance Code and has regard to its requirements so far as is appropriate to a Group of the size and nature of Share plc. The directors’ remuneration report is made in accordance with the requirements of AIM Rule 19. It complies with the requirements of AIM Rule 19 and describes how the Board has applied the principles of good governance relating to directors’ remuneration.

The auditor reports to the Company’s members on the “auditable part” of the directors’ remuneration report and states whether in its opinion that part of the report has been properly prepared in accordance with the Companies Act 2006. The report has therefore been divided into separate sections for audited and unaudited information.

UNAUDITED INFORMATION

REMUNERATION AND NOMINATION COMMITTEEThe Remuneration and Nomination Committee has responsibility for making recommendations to the Board on the Group’s general policy on remuneration and for specific packages for individual executive directors.

The membership of the Committee is:

G D R Oldham (Chairman) R I Tolkien F E Ecsery

No director plays any part in any discussions about their own remuneration.

REMUNERATION POLICYThe Company’s policy is to provide remuneration packages to attract, motivate and retain directors of the right calibre who will make a significant contribution to the performance of the Company. The Board’s policy for executive remuneration is designed to:

l Ensure the directors’ rewards are competitive when compared to similar companies in terms of size and/or industry

l Give executive directors the opportunity to increase their earnings by achieving and exceeding key performance objectives

As part of its ongoing business the Committee undertakes periodic reviews of market levels of pay amongst similar companies. In conducting these reviews of directors’ remuneration, the pay and conditions of all staff within the Group are considered including the level of any general increases awarded.

BASE SALARY AND BENEFITS IN KINDAn executive director’s basic salary is set by the Remuneration and Nomination Committee to reflect the director’s responsibility, experience and market conditions. The basic salary is reviewed annually with effect from 9 April.

The benefits-in-kind provided include medical cover, life assurance and car allowance.

PROFIT SHAREThe Company operates a profit-sharing arrangement for its executive directors, who do not receive sales commission, thereby ensuring that the interests of shareholders and executives in sustaining increased profits are closely aligned and risks and rewards are shared. This arrangement operates through the creation of a pool based on a percentage of operating profits, operating profit growth and revenue growth, which is then distributed on the basis of salary.

PENSIONSExecutive directors are responsible for their own pension arrangements and are eligible to receive an additional 8% of their annual salary payable into their personal money purchase pension scheme. This is the same rate as applied to all staff throughout the Group.


SHARE OPTIONSDirectors are eligible to participate in the Company’s share option schemes. Details of the schemes are provided in Notes 29 and 30 to the financial statements. The Committee ensures that awards are made within the overall limits authorised by the shareholders and at an appropriate level for an individual, taking into account their role, contribution to the business, previous option grants and market practice.

SHARE INCENTIVE SCHEMEThe Company operates a Share Incentive Plan which is open to all employees. The executive directors, with the exception of G D R Oldham, are eligible to participate in the plan and their interests in the shares of the Company are as set out in the Directors’ Report.

G D R Oldham holds a controlling interest in the Company and is not eligible to participate in the scheme. He therefore receives an additional remuneration payment equivalent to the value of the contribution that the Company would have made had he been entitled to participate in the scheme, and uses the net payment to purchase shares in the Company.

SERVICE CONTRACTSThe Company has entered into the following non fixed term service contracts with its directors:

DATE OF SERVICE AGREEMENT NOTICE PERIOD (MONTHS)

G D R Oldham 1 January 2014 12

R I Tolkien 5 August 2009 1

F E Ecsery 4 July 2011 1

R W Stone 1 January 2014 6

M D Birkett 3 February 2014 6

G V Thomas 21 November 2014 1

In the event of termination of employment of any of the directors, compensation amounting to that falling due under the notice period would be payable.

NON-EXECUTIVE DIRECTORSThe Board determines the level of non-executive remuneration after considering fee levels in comparable businesses. A basic fee is set for normal duties and supplementary fees are paid for additional duties.

Whilst the UK Corporate Governance Code suggests that to retain their independence, non-executive directors should not be able to participate in the Company’s share option schemes, the Company believes that the size of the share options granted to its non-executive directors in the past has not affected their independence.

TOTAL SHAREHOLDER RETURN PERFORMANCE GRAPH

Share plcFTSE All share Index

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60

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120

140

160

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200

Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15Jan 09


AUDITED INFORMATION

DIRECTORS’ EMOLUMENTS

SALARY/FEES BENEFITS OTHER1 PROFIT SHARE 2014 TOTAL 2014 PENSION 2013 TOTAL 2013 PENSION CONTRIBUTION CONTRIBUTION £ £ £ £ £ £ £ £

G D R Oldham 149,692 8,788 9,392 60,553 228,425 11,975 187,566 11,333

R W Stone 149,076 88,846 - 58,089 296,011 11,926 171,154 10,903

M Birkett 110,796 6,392 - 7,169 124,357 6,303 - -

R I Tolkien 28,667 - - - 28,667 - 27,908 -

F E Ecsery 26,042 - - - 26,042 - 25,365 -

464,273 104,026 9,392 125,811 703,502 30,204 411,993 22,236

1 This additional remuneration payment for G D R Oldham is equivalent to the value of the contribution that the Company would have made had he been entitled to participate in the Company’s Share Incentive Plan.


DIRECTORS’ SHARE OPTIONSUnder the Company’s executive share option scheme, enterprise management incentive scheme, co-ownership equity incentive plan and company ownership plan, as at 31 December 2014 options and interests in shares were held by directors over ordinary 0.5p shares as follows:

AT 1 JAN GRANTED EXERCISED AT 31 DEC EXERCISE DATE OF DATE FIRST EXPIRY 2014 IN YEAR IN YEAR 2014 PRICE GRANT EXERCISABLE

Richard Stone E 50,000 - (50,000) 0 0.2 10/07/2006 10/07/2012 09/07/2016

Richard Stone E 50,000 - (50,000) 0 0.15 19/03/2007 19/03/2013 19/03/2017

Richard Stone E 18,973 - (18,973) 0 0.3 22/12/2007 22/12/2010 22/12/2017

Richard Stone E 27,930 - (27,930) 0 0.27 15/05/2008 15/05/2011 15/05/2018

Richard Stone U 19,470 - - 19,470 0.245 22/12/2008 22/12/2011 22/12/2018

Richard Stone C 9,947 - - 9,947 0.36 25/06/2009 25/06/2012 25/06/2019

Richard Stone C 9,947 - - 9,947 0.33 23/12/2009 23/12/2012 23/12/2019

Richard Stone E 9,894 - - 9,894 0.285 22/12/2010 22/12/2013 22/12/2020

Richard Stone C 86,068 - - 86,068 0.32 29/06/2010 29/06/2013 29/06/2020

Gavin Oldham U 162,707 - - 162,707 0.25 22/06/2011 22/06/2014 22/06/2021

Gavin Oldham U 11,145 - - 11,145 0.225 22/12/2011 22/12/2014 22/12/2021

Richard Stone E 40,931 - - 40,931 0.25 22/06/2011 22/06/2014 22/06/2021

Richard Stone U 103,074 - - 103,074 0.25 22/06/2011 22/06/2014 22/06/2021

Richard Stone U 9,863 - - 9,863 0.225 22/12/2011 22/12/2014 22/12/2021

Gavin Oldham U 11,176 - - 11,176 0.23 22/06/2012 22/06/2015 22/06/2022

Richard Stone E 9,934 - - 9,934 0.23 22/06/2012 22/06/2015 22/06/2022

Gavin Oldham U 10,958 - - 10,958 0.245 22/12/2012 22/12/2015 22/12/2022

Richard Stone E 10,714 - - 10,714 0.245 22/12/2012 22/12/2015 22/12/2022

Richard Stone E 10,645 - - 10,645 0.24 22/06/2013 22/06/2016 22/06/2023

Gavin Oldham U 10,887 - - 10,887 0.24 22/12/2013 22/12/2016 22/12/2023

Richard Stone U - 1,063,750 - 1,063,750 0.01 01/05/2014 01/05/2017 01/05/2024

Richard Stone U - 1,063,750 - 1,063,750 0.01 01/05/2014 01/05/2018 01/05/2024

Richard Stone U - 1,063,750 - 1,063,750 0.01 01/05/2014 01/05/2019 01/05/2024

Richard Stone U - 1,063,750 - 1,063,750 0.01 01/05/2014 01/05/2020 01/05/2024

Richard Stone CS - 66,666 - 66,666 0.45 01/05/2014 01/05/2017 01/05/2024

Mike Birkett CS - 66,666 - 66,666 0.45 01/05/2014 01/05/2017 01/05/2024

Mike Birkett U - 390,000 - 390,000 0.45 01/05/2014 01/05/2017 01/05/2024

Gavin Oldham U - 65,433 - 65,433 0.45 01/05/2014 01/05/2017 01/05/2024

Richard Stone U - 65,433 - 65,433 0.45 01/05/2014 01/05/2017 01/05/2024

Mike Birkett U - 390,000 - 390,000 0.45 01/05/2014 01/05/2018 01/05/2024

Mike Birkett U - 390,000 - 390,000 0.45 01/05/2014 01/05/2019 01/05/2024

Gavin Oldham U - 10,899 - 10,899 0.39 01/11/2014 01/11/2017 01/11/2024

Richard Stone U - 10,899 - 10,899 0.39 01/11/2014 01/11/2017 01/11/2024

Mike Birkett U - 9,446 - 9,446 0.39 01/11/2014 01/11/2017 01/11/2024

TOTAL 674,263 5,720,442 (146,903) 6,247,802


Following the appointment of Richard Stone as Chief Executive on 1 January 2014 the Board Remuneration and Nomination Committee awarded 2,000,000 shares through Employee Shareholder Shares and options vesting on the third, fourth, fifth and sixth anniversaries of his appointment. Those shares were awarded net of taxation and therefore the number of options granted was higher so as to take into account the tax payable on exercise. Where those shares were awarded using options, those options will only vest on approval by the Board Remuneration and Nomination Committee that Richard Stone’s performance continues to meet expectations. In addition, the Board Remuneration and Nomination Committee agreed to grant Mike Birkett share options over 600,000 shares at market value. Those options will vest on the third, fourth and fifth anniversaries of grant and were granted on completion of three months service. Again, those shares were awarded net of taxation and the number of options granted was higher to take into account the tax payable on exercise.

RESOLUTION A resolution to shareholders to adopt the directors’ remuneration report will be put forward at the Annual General Meeting.

Approved by the Board and signed on its behalf

Gavin Oldham Board Remuneration and Nomination Committee Chairman 12 March 2015


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SHARE PLC

We have audited the financial statements of Share plc for the year ended 31 December 2014 which comprise the Group Income Statement, the Group Statement of Comprehensive Income, the Group and Parent Company Balance Sheets, the Group and Parent Company Cash Flow Statements, the Group and Parent Company Statements of Changes in Equity and the related Notes 1 to 31. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORAs explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and the parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

OPINION ON FINANCIAL STATEMENTSIn our opinion:

l The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2014 and of the group’s profit for the year then ended;

l The group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union

l The parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006

l The financial statements have been prepared in accordance with the requirements of the Companies Act 2006

OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

l Adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us

l The parent company financial statements are not in agreement with the accounting records and returns

l Certain disclosures of directors’ remuneration specified by law are not made

l We have not received all the information and explanations we require for our audit

Elanor Gill FCA (Senior Statutory Auditor), for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditor, Reading, United Kingdom, 12 March 2015


CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER NOTES 2014 2013 £’000 £’000

Revenue 5 15,020 14,996

Administrative expenses (14,596) (13,591)

Operating profit 7 424 1,405

Investment revenues 10 308 311

Other gains 11 60 -

Profit before taxation 792 1,716

Taxation 12 (124) (385)

Profit for the year 668 1,331

Basic earnings per share* 14 0.5p 0.9p

Diluted earnings per share* 14 0.5p 0.9p

All results are in respect of continuing operations.

* The directors consider that the underlying earnings per share as presented in Note 14 represent a more consistent measure of the underlying performance of the business as this measure excludes the impact of some items, including any large non-recurring items.

CONSOLIDATED AND COMPANY STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014 2013 £’000 £’000

Profit for the year 668 1,331

Items that may be classified subsequently to profit or loss:

Gains on revaluation of available-for-sale investments taken to equity 2,150 2,590

Deferred tax on gains on revaluation of available-for-sale investments taken to equity (430) (598)

Exchange (losses) / gains on available-for-sale investments taken directly to equity (205) 1

Deferred tax on exchange (losses) / gains on available-for-sale investments taken directly to equity 41 -

Deferred tax impact of change in tax rates - 173

Net gain recognised directly in equity 1,556 2,166

Total comprehensive income for the year 2,224 3,497

Attributable to equity shareholders 2,224 3,497

The Company had no items to report in its statement of comprehensive income and Share plc corporate entity incurred a profit of £883,000 (2013: £786,000) as the Company does not have any revenue income other than interest on cash held and dividend income from its subsidiary companies.


CONSOLIDATED AND COMPANY BALANCE SHEETS

AT 31 DECEMBER GROUP COMPANY NOTES 2014 2013 2014 2013 £’000 £’000 £’000 £’000

Non-current assets

Intangible assets 15 64 18 - -

Property, plant and equipment 16 248 227 - -

Available-for-sale investments 17 9,010 6,447 473 473

Investment in subsidiaries 18 - - 264 264

Deferred tax assets 21 83 29 - -

9,405 6,721 737 737

Current assets

Trade and other receivables 19 8,398 14,641 165 156

Cash and cash equivalents 19 12,655 13,626 378 126

Current tax asset 226 - - -

21,279 28,267 543 282

Total assets 30,684 34,988 1,280 1,019

Current liabilities

Trade and other payables 22 (8,352) (14,386) (402) (277)

Current tax liabilities - (8) - -

(8,352) (14,394) (402) (277)

Net current assets 12,927 13,873 141 5

Non-current liabilities

Deferred tax liabilities 21 (1,594) (1,187) - -

Total liabilities (9,946) (15,581) (402) (277)

Net assets 20,738 19,407 878 742

Equity share capital 23 718 718 718 718

Capital redemption reserve 25 104 104 104 104

Share premium account 24 1,064 1,064 1,064 1,064

Employee benefit reserve 25 (805) (561) - -

Retained earnings 25 13,551 13,696 (1,008) (1,144)

Revaluation reserve 25 6,106 4,386 - -

Equity shareholders’ funds 20,738 19,407 878 742

The financial statements for Share plc (company registration number 02966283) were approved by the Board and authorised for issue on 12 March 2015.

Signed on behalf of the Board

Gavin Oldham Chairman


CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY SHARE CAPITAL SHARE EMPLOYEE RETAINED REVALUATION ATTRIBUTABLE CAPITAL REDEMPTION PREMIUM BENEFIT EARNINGS RESERVE TO EQUITY RESERVE ACCOUNT RESERVE HOLDERS OF THE COMPANY £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 January 2013 719 104 1,098 (649) 12,977 2,230 16,479

Total comprehensive income for the period - - - - 1,340 2,156 3,496

Adjustments to previous share buy-back (1) - (34) - - - (35)

Dividends - - - - (606) - (606)

Purchase of Employee Share Ownership Plan (ESOP) shares - - - (290) - - (290)

Sales of ESOP shares - - - 176 - - 176

Cost of matching & free shares in the Share Incentive Plan - - - 172 (172) - -

Profit on sale of ESOP shares and dividends received - - - 30 (56) - (26)

Share-based payment credit - - - - 208 - 208

Deferred tax on share-based payment - - - - (4) - (4)

Share-based payment current year taxation - - - - 9 - 9

Balance at 31 December 2013 718 104 1,064 (561) 13,696 4,386 19,407

Total comprehensive income for the period - - - - 504 1,720 2,224

Dividends - - - - (736) - (736)

Purchase of ESOP shares - - - (1,642) - - (1,642)

Sales of ESOP shares - - - 878 - - 878

Cost of matching & free shares in the Share Incentive Plan - - - 230 (230) - -

Profit on sale of ESOP shares and dividends received - - - 290 (258) - 32

Share-based payment credit - - - - 477 - 477

Deferred tax on share-based payment - - - - 18 - 18

Share-based payment current year taxation - - - - 80 - 80

Balance at 31 December 2014 718 104 1,064 (805) 13,551 6,106 20,738

Company

Balance at 1 January 2013 719 104 1,098 - (962) - 959

Total comprehensive income for the period - - - - 786 - 786

Adjustments to previous share buy back (1) - (34) - - - (35)Dividends - - - - (618) - (618)

Contribution to Sharefunds Limited - - - - (350) - (350)

Balance at 31 December 2013 718 104 1,064 - (1,144) - 742

Total comprehensive income for the period - - - - 883 - 883

Dividends - - - - (747) - (747)

Balance at 31 December 2014 718 104 1,064 - (1,008) - 878


CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER GROUP COMPANY NOTES 2014 2013 2014 2013 £’000 £’000 £’000 £’000

Net cash received from / (used in) operating activities 27 199 1,878 (407) (670)

Investing activities

Interest received 110 131 1 3

Dividend received from investments 198 180 - -

Purchase of property, plant and equipment (125) (143) - -

Purchase of available-for-sale investments (618) - - -

Proceeds of disposal of available-for-sale investments 60 - - -

Purchase of intangible investments (59) - - -

Net cash (used in) / received from investing activities (434) 168 1 3

Financing activities

Equity dividends received - - 1,405 1,145

Equity dividends paid 13 (736) (606) (747) (618)

Capital contribution to subsidiary company - - - (350)

Net cash (used in) / received financing activities (736) (606) 658 177

Net (decrease) / increase in cash and cash equivalents (971) 1,440 252 (490)

Cash and cash equivalents at the beginning of the year 13,626 12,186 126 616

Cash and cash equivalents at the end of the year 12,655 13,626 378 126


NOTES TO THE FINANCIAL STATEMENTS

1 GENERAL INFORMATION

Share plc is a company incorporated in the United Kingdom under the Companies Act. The address of the registered office is Oxford House, Oxford Road, Aylesbury, Buckinghamshire, HP21 8SZ. The nature of the Group’s operations and its principal activities are set out in Strategic Report on pages 9 to 29.

The financial statements are presented in pounds Sterling which is the currency of the primary economic environment in which the Group operates.

2 BASIS OF PREPARATION

The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB) and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB (together “IFRS”) as endorsed by the European Union.

The Company’s financial statements have been prepared on the same basis and as permitted by Section 408 of the Companies Act 2006; no income statement is presented for the Company. Of the consolidated profit for the financial year, a profit of £883,000 (2013: £786,000) before the payment of dividend distributions, has been dealt with in the financial statements of the Company.

In the current year, the following new and revised Standards and Interpretations have been adopted and have had no impact on these financial statements:

– Amendments to IAS 1 ‘Presentation of items of other comprehensive income’

– Amendments to IAS 19 ‘Employee benefits’

– Amendments to IFRS 7 and IAS 32 ‘Offsetting financial assets and financial liabilities’

– IFRS 10 Consolidated Financial Statements

– IFRS 11 ‘Joint arrangements’

– IFRS 12 Disclosure of Interests in Other Entities

– Amendments to IAS 36

– Amendments to IAS 39

At the date of authorisation of these financial statements, the following Standards and Interpretations which have not yet been applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

– Amendments to IAS 12 “Deferred Tax: Recovery of Underlying Assets”

– IFRS 9 ‘Financial Instruments’

– IFRS 15 ‘Revenue from Contracts with Customers’

– IAS 27 ‘Separate financial statements’

– IAS 28 ‘Investments in associates and joint ventures’

– IFRIC 21 ‘Levies’

– Improvements 2012 - Annual Improvements to IFRSs: 2010-2012 Cycle

– Improvements 2013 – Annual Improvements to IFRSs: 2011-2013 Cycle

– Improvements 2014 – Annual Improvements to IFRSs: 2012-2014 Cycle

– Amendments to IFRS 11 - Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)

– Amendments to IAS 16 & 38 - Clarification of Acceptable Methods of Depreciation and Amortisation

– Amendments to IFRS 15 - Revenue from Contracts with Customers

– Amendments to IAS 27 - Equity Method in Separate Financial Statements (Amendments to IAS 27)

– IFRS 14 “Regulatory Deferral Accounts”

Other than to expand certain disclosures within the financial statements, the directors do not expect that the adoption of the standards and interpretations listed above will have a material impact on the financial statements of the Group in future periods.


The Group accounts consolidate the financial statements of the Company and its subsidiaries, The Share Centre Limited, The Share Centre (Administration Services) Limited, The Shareholder Limited, and Sharefunds Limited, which all make up their annual financial statements to 31 December. Other subsidiaries are not included in the Share plc consolidation as they are not trading and not material to the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The Group has considerable financial resources and no external debt. With a diversified customer base and core recurring revenue streams along with large elements of discretionary spending in the Group’s cost base, the directors believe that the Group is well placed to manage its business risks successfully despite the uncertain economic outlook. Therefore, after making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis has continued to be used in the preparation of these financial statements.

3 ACCOUNTING POLICIES

BASIS OF CONSOLIDATIONThe Group accounts consolidate the financial statements of the Company and its subsidiaries. The accounting policies used have been consistently applied for many years.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

REVENUE RECOGNITIONRevenue 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 any other sales related taxes.

Revenue is recognised on an accruals basis and primarily comprises dealing commissions, fees earned in the provision of broking and custodian services and interest income on client money. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.

Dividend income from investments is recognised when the shareholders’ right to receive payment has been established, typically on cash receipt.

LEASINGThe Group has no finance leases; all leases are classified as operating leases without any substantial transfer of the risks and rewards of ownership to the lessee.

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Any benefits received or receivable as an incentive to enter into an operating lease, such as rent free periods, are also spread on a straight-line basis over the lease term.

FOREIGN CURRENCIESThe consolidated and individual financial statements of each Group company are presented in pounds Sterling, which is the currency of the primary economic environment in which they operate. The Group has no material foreign currency cash balances at the balance sheet date. Any exchange differences arising on the incidental foreign currency balances the Group does periodically hold are recognised in profit or loss in the period in which they arise.

OPERATING PROFITOperating profit is stated before investment income and any other gains or losses which arise in respect of the available-for-sale investments held by the Group.

TAXATIONThe tax expense represents the sum of the tax currently payable and deferred 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 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 balance sheet date.


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 or liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying value of deferred tax assets is reviewed at each balance sheet date and 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. In calculating deferred tax in 2014 the rate used was 20% (2013: 20%). Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off 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.

PROPERTY, PLANT AND EQUIPMENTFixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, on the following bases:

Motor vehicles, computer hardware, fixtures and equipment: 25%

The gain or loss arising from the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

INTANGIBLE FIXED ASSETSInternally-generated intangible assets The Group’s activities do not typically give rise to internally generated intangible fixed assets. An internally-generated intangible asset is recognised only if all of the following conditions are met:

l An asset is created that can be identified;

l It is probable that the asset created will generate future economic benefits

l The development cost of the asset can be measured reliably

In so far as any internally generated intangible assets are recognised, these would be amortised over their useful economic lives.

Other intangible assets The Group’s investment in the share.com domain name is stated at cost and is amortised over ten years on a straight-line basis from the year of completion of the transaction purchase. The intangible asset arising from the acquisition of the Wills & Co customer base was calculated based on the cost of that acquisition and is being amortised over five years on a straight-line basis from the year of completion of the transaction. The Group’s purchased software is stated at cost and is amortised over their useful economic life, typically over five years on a straight-line basis.

INVESTMENTS IN SUBSIDIARIESFixed asset investments in subsidiaries are shown at cost less provision for any impairment.

IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILLAt each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Any intangible assets with an indefinite useful life are tested for impairment annually and whenever there is an indication that the asset may be impaired.

If there is objective evidence that the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.


Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so 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 in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

FINANCIAL INSTRUMENTSFinancial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets Investments are recognised and derecognised on a trade date where the purchase or sale of an investment is under a contract the terms of which require delivery of the investment within the 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, which are initially measured at fair value.

Financial assets are classified into the following specified categories: Financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Available-for-sale financial assets Listed and unlisted shares held by the Group are classified as being AFS and are stated at their fair value. Fair value is determined in the manner described in Note 17. Gains and losses arising from changes in fair value are recognised directly in equity in the investments’ revaluation reserve with the exception of impairment losses, interest calculated using the effective interest rate method and foreign exchange gains and losses on monetary assets, which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the investments’ revaluation reserve is included in the profit or loss for the period.

Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the dividends is established.

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the balance sheet date. The change in fair value attributable to translation differences that result from a change in amortised cost of the asset is recognised in profit or loss, and other changes are recognised directly in equity.

Loans and receivables Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Trade receivables Trade receivables are measured at initial recognition at fair value. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. In accordance with market practice, certain balances with clients, Stock Exchange member firms and other counterparties are included as debtors.

Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For shares classified as AFS, a significant or prolonged decline in fair value of the security below its cost is considered to be objective evidence of impairment. For all other financial assets, objective evidence of impairment could include:

l Significant financial difficulty of the issuer or counterparty

l Default or delinquency in interest or principal payments

l It becoming probable that the borrower will enter bankruptcy or financial reorganisation

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered


uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised through profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised directly in equity.

Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Included within cash balances are amounts held on client settlement accounts as shown in Note 19.

Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.

Financial liabilities Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.

The Group has no financial liabilities ‘at FVTPL’. ‘Other financial liabilities’, including borrowings if any, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

Trade payables Trade payables are measured at fair value. In accordance with market practice, certain balances with clients, Stock Exchange member firms and other counterparties are included as creditors.

Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

PROVISIONSProvisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

SHARE-BASED PAYMENTSThe Group has applied the requirements of IFRS 2 Share-based Payments. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested at 1 January 2006.

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) 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 and adjusted for the effect of non-market based vesting conditions. Fair value is measured using the Black-Scholes model. Details of the Group’s share-based payments are disclosed in Note 29 to these financial statements.

PURCHASE OF SHARES FOR EMPLOYEE BENEFIT TRUSTDuring the year, the Group acquired a number of shares in Share plc, which are held by Sharesecure Ltd, a trustee provider, 100% owned by Share plc. The purchases were made to meet potential obligations arising from the issue of share options made to employees. The original cost of investment has been deducted in arriving at shareholders’ funds (the amounts are shown in a separate reserve, called ‘Employee Benefit Reserve’).


PENSION SCHEMEIf requested, the Group contributes 8% of the employee’s gross salary to a defined contribution pension scheme of the employee’s choice. Contributions are charged to the income statement as they become payable. The assets of these schemes are held separately from those of the Group in independently administered funds belonging to the relevant employees.

4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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.

ALLOWANCE FOR BAD DEBTSThe Group makes a provision for the element of fees which it believes will not be recovered from customers. This is based on past experience and detailed analysis of the outstanding fees position particularly with regard to the value of customers’ portfolios relative to the fees owed.

FAIR VALUE OF INVESTMENTSThe Group currently holds investments in the London Stock Exchange plc, Euroclear plc, WAY Group Limited, Professional Partners Administration Limited (demerged from WAY Group Limited during 2014), Consort Capital (formerly Investbx Limited), Asset Match Limited and EiRx Therapeutics plc. These are held as available-for-sale financial assets and are measured at fair value at the balance sheet date. London Stock Exchange plc shares trade in an active market and the fair value is readily determined by market price. The Euroclear plc shares do not trade in an active market, although eligible shareholders were invited to participate in buy-backs. A view of fair value is therefore formed based on the weighted average price following the latest buy-back and the net asset value of the business adjusted for liquidity considerations. WAY Group Limited shares are carried at cost as the shares are not publicly traded and there is no other means of determining a reliable and timely fair value based on the limited publicly available information. The business is currently loss-making and this investment may be worth materially less than cost if the business cannot reach profitability or an exit for shareholders does not materialise. The Consort Capital (formerly Investbx Limited), Professional Partners Administration Limited, Asset Match Limited and EiRx Therapeutic plc shares are carried at nil value given the financial position of the companies and their recent history. Further detail is contained in Note 17.

SHARE-BASED PAYMENTSThe Company’s shares are traded on AIM since May 2008 and ceased trading on Asset Match from 22 December 2014. This provides a market price to help determine the fair value of equity-settled share-based payments but, in addition to this, estimations are made as to price volatility, risk-free interest rate and expected life. These estimations enable the Black-Scholes model to then be used to determine the fair value of these equity-settled share-based payments.

IMPAIRMENTThe assets on the balance sheet are reviewed for any indications of impairment. This is done with reference to the recoverability and market value of the assets concerned but may involve an element of judgement or estimation in determining whether there are any indications of impairment and the extent of any impairment loss.


5 REVENUE

An analysis of the Group’s revenue is as follows:

2014 2013 £’000 £’000

Commission income 6,600 6,654

Fee income 6,592 6,203

Interest income on customer deposits 1,828 2,139

15,020 14,996

6 BUSINESS AND GEOGRAPHICAL SEGMENTS

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance. The reportable segments are therefore represented by the following two business divisions:

The Share Centre – this is the main trading business and provides stockbroking and custodian services to retail investors. Operating wholly in the UK, the great majority of this business is done directly with those retail customers, though in some cases the relationship is through a third party, typically on a white-labelled basis.

Sharefunds – this is the division which operates a fund administration service. The division’s customers are authorised funds for whom a range of administration services may be provided. This can include taking on the role of Authorised Corporate Director. In addition to external third party funds, Sharefunds acts as investment manager to Sharefunds’ three Funds of Funds. During 2014, the Group made changes to its transfer pricing arrangements in order to enhance the visibility of the trading performance of Sharefunds which resulted in higher revenue in the year.

The split of revenues and operating profit are therefore as below.

THE SHARE CENTRE SHAREFUNDS TOTAL 2014 2013 2014 2013 2014 2013 £’000 £’000 £’000 £’000 £’000 £’000

Revenue 14,495 14,715 525 281 15,020 14,996

Operating profit / (loss) 423 1,803 1 (398) 424 1,405

It should be noted that the accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3 and that there were no major customers contributing more than 10% of revenues in the Group as a whole. The assets of the Group are principally used by The Share Centre. The services offered by the Group vary by business division as described above. However, within each business division there is only one principal revenue stream and therefore there is no separate or further segmentation by service offered. Sharefunds has no material assets which would meaningfully be separated from The Share Centre, other than cash of £430,000 (2013: £378,000).


7 OPERATING PROFIT

Operating profit for the year has been arrived at after charging: 2014 2013 £’000 £’000

Depreciation of property, plant and equipment (see Note 16) 104 108

Amortisation of intangible assets (see Note 15) 11 11

Staff costs (see Note 8) 6,964 6,238

Operating lease rentals - property 415 418

Operating lease rentals - other 39 39

AUDITOR’S REMUNERATIONThe analysis of auditor’s remuneration is as follows: 2014 2013 £’000 £’000

Audit fees: Fees payable to the Group’s auditor for the audit of the Group’s annual accounts, those of its subsidiaries and of its three Funds of Funds 80 104

Fees payable to the Group’s auditor for other services to the Group

Tax services 30 28

Other services 12 4

Total non-audit fees 42 32

The fees payable to the Company’s auditor for the audit of the Company’s annual accounts amount to £22,104 (2013: £22,575).

8 GROUP STAFF COSTS

2014 2013 NUMBER NUMBER

The average number of employees of the Group (including executive directors) was

Operating and support functions 112 102

Administrative and systems related functions 38 36

150 138

2014 2013 £’000 £’000

Staff costs during the year (including executive and non-executive directors)

Wages and salaries 5,322 4,777

Profit sharing bonus 217 366

Social security costs 564 534

Pension costs 384 353

Share-based payments 477 208

6,964 6,238

It should be noted that the Company itself does not have any employees (2013: nil).

9 DIRECTORS

Detailed information concerning directors’ emoluments and share options is disclosed in the directors’ remuneration report.


10 INVESTMENT REVENUES

2014 2013 £’000 £’000

Interest on bank deposits 109 130

Interest on overpaid tax 1 1

Dividends from equity investments 198 180

308 311

Investment revenues earned on financial assets, by category of asset, were as follows:

2014 2013 £’000 £’000

Loans and receivables (including cash and bank balances) 110 131

Available-for-sale financial assets 198 180

308 311

11 OTHER GAINS

2014 2013 £’000 £’000

Disposal of available-for-sale investments 60 -

60 -

The Group sold 14,384 Asset Match shares at £4.20 receiving a consideration of £60,413.


12 TAXATION

2014 2013 £’000 £’000

Current tax

Corporation tax charge on the income for the year (142) (363)

Adjustments in respect of prior periods 1 11

Deferred tax

Origination and reversal of timing differences 17 (33)

(124) (385)

The tax assessed for the current year can be reconciled to the profit per the income statement as follows:

2014 2013 £’000 £’000

Profit before taxation 792 1,716

Tax at 21.5% (2013: 23.25%) (170) (399)

Effects of

Items not deductible for tax purposes (2) (1)

Foreign tax suffered (21) (19)

Prior year adjustments - 13

Exempt dividend income 43 42

Rate differences on current tax - 2

Tax payment made on behalf of Employee benefit scheme - (8)

Share-based payments 26 (15)

(124) (385)

In addition to the amount charged to the income statement, deferred tax relating to the revaluation of the Group’s investments amounting to £389,000 (2013: £425,000) has been debited directly to other comprehensive income. A current tax credit of £80,000 (2013: £9,000) and deferred tax credit of £18,000 (2013: charge of £3,500) relating to excess deductions on share-based payments have been taken directly to equity.

In March 2013, the Government announced that the main rate of corporation tax would reduce to 21% with effect from 1 April 2014 and 20% with effect from 1 April 2015. These tax rate reductions had been substantively enacted at the balance sheet date and therefore deferred tax has been recognised at 20%. The current year tax rate used above (21.5%) arises from the reduction in corporation tax rate on 1 April 2014 from 23% to 21%.

13 DIVIDENDS

2014 2013 £’000 £’000

Amounts recognised as distributions to equity holders in the period

2013 final dividend paid of 0.52 pence per ordinary share 747 618

Less amount received on shares held via ESOP (11) (11)

736 607

The directors are proposing a final dividend of 0.62 pence per share in respect of the year to 31 December 2014. This would amount to a gross dividend pay-ment of £891,000 given the current share capital.


14 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.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue assuming conversion of all potential dilutive ordinary shares. The potential ordinary shares consist of those share options and warrants where the exercise price is less than the average price of the Company’s ordinary shares during the year. The calculation results in a difference of only a small fraction of a penny, which is eliminated in roundings.

Underlying basic and diluted earnings per share are calculated as for basic and diluted earnings per share but using an adjusted earnings figure before any one-off gains, losses, income or expense. The directors consider that the underlying earnings per share represent a more consistent measure of the underlying performance of the Group.

2014 2013 £’000 £’000

Earnings

Earnings for the purpose of basic and diluted earnings per share, being net profit attributable to equity holders of the parent company 668 1,331

FSCS levies 342 481


One-off Board changes (recruitment and related costs) 209 -

Profit share impact of the above adjustments (129) (86)

Taxation impact of the above adjustments (90) (91)

Earnings for the purposes of underlying basic and diluted earnings per share 1,477 1,843

NUMBER NUMBER 000s 000s

Number of shares

Weighted average number of ordinary shares 145,594 145,247

Non-vested shares held by employee share ownership trust (2,142) (2,342)

Basic earnings per share denominator 143,452 142,905

Effect of potential dilutive share options 4,456 -

Diluted earnings per share denominator 147,908 142,905

Basic earnings per share (pence) 0.5 0.9

Diluted earnings per share (pence) 0.5 0.9

Underlying basic earnings per share (pence) 1.0 1.3

Underlying diluted earnings per share (pence) 1.0 1.3


15 INTANGIBLE ASSETS

THE GROUP SHARE.COM WILLS & CO PURCHASED TOTAL DOMAIN NAME CUSTOMER LIST SOFTWARE £’000 £’000 £’000 £’000

Cost

At 1 January 2013 164 59 - 223

Additions - - - -

At 31 December 2013 164 59 - 223

Additions - - 59 59

Disposals in the year - (2) - (2)

At 31 December 2014 164 57 59 280

Accumulated amortisation

At 1 January 2013 164 30 - 194

Charge for the year - 11 - 11

At 31 December 2013 164 41 - 205

Charge for the year - 10 1 11

At 31 December 2014 164 51 1 216

Net book value

At 31 December 2014 - 6 58 64

At 31 December 2013 - 18 - 18

During the year the Group purchased electronic document management software.

16 PROPERTY, PLANT AND EQUIPMENT

THE GROUP MOTOR COMPUTER FIXTURES AND TOTAL VEHICLES HARDWARE EQUIPMENT £’000 £’000 £’000 £’000

Cost

At 1 January 2013 12 702 106 820

Additions - 143 - 143

At 31 December 2013 12 845 106 963

Additions - 120 5 125

At 31 December 2014 12 965 111 1,088

Accumulated depreciation

At 1 January 2013 12 522 94 628


At 31 December 2013 12 622 102 736


At 31 December 2014 12 723 105 840

Net book value

At 31 December 2014 - 242 6 248

At 31 December 2013 - 223 4 227


17 AVAILABLE-FOR-SALE INVESTMENTS

THE GROUP 2014 2013 £’000 £’000

Unlisted investments at fair value 4,063 3,407

Listed investment at fair value 4,947 3,040

9,010 6,447

All investments held by the Group have been classified as available-for-sale. These available-for-sale assets have been included at fair value where a fair value can be reliably calculated, with the revaluation gains and losses reflected in the investment revaluation reserve as shown in Note 25, until sale when the cumulative gain or loss is transferred to the income statement.

UNLISTED INVESTMENTSEuroclear plc (“Euroclear”) This represents 6,030 shares in Euroclear plc of one Euro each. These shares have a historical cost of £217,390 representing the investment made in Crest Co. Ltd, which was acquired by Euroclear during 2002. As at 31 December 2014, each share has an estimated fair value of £595 (2013: £487) based on an analysis of Euroclear’s net assets as shown in its latest available financial information for the first half of 2014 and a weighted average price following a buy-back of shares from sixteen shareholders. The fair value represents a 16% discount (2013: 32%) to the net assets per share to reflect illiquidity. Euroclear was profitable in the first half of 2014 and there is no evidence that the value per share has been impaired.

WAY Group Limited and Professional Partners Administration Limited (“PPAL”) The Group holds 150,000 1p ordinary shares in WAY Group Limited, acquired in 2010 at cost of £472,500. These shares are not publicly traded and, unlike Euroclear plc, there is no bulletin board facility to collate expressions of buy and sell interest at a range of prices. In the absence of any evidence of impairment or any other means of determining a reliable and timely alternative fair value based on the limited publicly available information, these shares are held at cost and included in the unlisted investment balance above. During 2014, PPAL demerged from Way Group Limited and consequently the Group now holds 150,000 ordinary shares in PPAL at nil value. The Directors continue to review the fair value of these investments but in the absence of any objective evidence, the investments in WAY Group and PPAL are held at cost and nil value respectively. The business is currently loss-making and this investment may be worth materially less than cost if the business cannot reach profitability or an exit for shareholders does not materialise.

EiRx Therapeutics plc The Share Centre Limited holds a total of 246,996,816 shares in EiRx Therapeutics plc, which represents 2.62% of that company’s issued share capital. This holding arose in 2008 as a result of making good three customers’ accounts which, due to key logging virus software which had affected the customers’ computers, had been compromised by fraudsters. This holding cost £164,000 of which £124,000 was paid by our insurers. The shares have not traded since March 2008 and the company is seeking shareholder approval to place the Company into creditors’ voluntary liquidation on 20 February 2015. Given the net liabilities position of the company’s balance sheet, the value of the shareholding remained at nil as at 31 December 2014.

Asset Match Limited During the year, in response to the request of a new investor of Asset Match Limited, the Group sold 14,384 shares at £4.20 receiving a consideration of £60,413 leaving a holding at the year end of 27,780 shares which represents 1.53%. There is no expectation that such a sale will re-occur in the future. Given the nascent nature of this business and no reliable means of assessing its future prospects or value, the shares are held at nil value on the balance sheet.

Consort Capital Limited (formerly Investbx Limited) The Group holds 1,485 £1 ordinary shares in Consort Capital Limited (a former Sharemark client), representing 5.94% of the company’s total allotted 25,000 £1 ordinary. The above shares were obtained at an ‘effective cost’ of £15,000 (representing foregone fees). There is no material net asset value of these shares based on the company’s financial performance and balance sheet as disclosed in the company’s latest accounts for the year ended 31 March 2014. There is no liquid market for the sale of Consort Capital Limited shares and therefore no readily available traded market price of these shares either. These shares are therefore valued at nil value as at 31 December 2014.

LISTED INVESTMENTSLondon Stock Exchange plc (“LSE”) The Group was the beneficial owner of 222,727 LSE ordinary shares of 5p each (2013: 175,000) which have a fair value of £22.21 each based on the traded market price as at 31 December 2014 (2013: £17.37). The Group took up the 3 for 11 rights issue in September 2014 where the Group’s total holding increased by 47,727 shares to 222,727 shares.


18 SUBSIDIARIES

THE COMPANY 2014 2013 £’000 £’000

Shares in subsidiaries 264 264

The Company has investments in the following subsidiary undertakings:

SUBSIDIARY UNDERTAKING PRINCIPAL ACTIVITY PROPORTION OF ORDINARY SHARES HELD BY THE COMPANY

The Share Centre Limited Retail stock broking 100%

The Share Centre (Administration Services) Limited Administration services 100%

Sharefunds Limited OEIC Authorised Corporate Director 100%

The Shareholder Limited Dormant1 100%

Personal Retirement Account Limited Dormant2 100%

Share Nominees Limited Bare trustee nominee2 100%3

Stock Academy Nominees Limited Bare trustee nominee2 100%3

Sharesecure Limited Bare trustee2 100%

All the above companies are registered and incorporated in England and Wales.

1 The Shareholder Limited became dormant in December 2014, its principal activity was publishing/mail order.

2 Subsidiaries not included in consolidation other than at cost in investments as the companies are not trading and are not material to the Group

3 Ordinary shares held by The Share Centre Limited

19 OTHER FINANCIAL ASSETS

TRADE AND OTHER RECEIVABLES GROUP COMPANY 2014 2013 2014 2013 £’000 £’000 £’000 £’000

Gross amounts receivable 6,736 12,814 - -

Allowance for doubtful debts (301) (222) - -

6,435 12,592 - -

Amounts owed by Group undertakings:

By subsidiaries due in over one year - - 150 150

Other debtors 317 476 - -

Prepayments and accrued income 1,646 1,573 15 6

8,398 14,641 165 156

Trade receivables are measured at initial recognition at fair value. These principally represent unsettled customer trades with our market counterparties of £5.6m (2013: £11.8m). No provision is considered necessary in respect of amounts outstanding from market counterparties. In respect of non-counterparty amounts included within trade receivables, appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the value of the asset is impaired.

Included in the Group’s trade receivable balance are debtors with a carrying amount of £683,000 (2013: £838,000) which are past due date at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The largest element of these balances is in respect of fees due from customers and those customers have sufficient asset values on their accounts to cover the fees due.


AGEING OF PAST DUE BUT NOT IMPAIRED TRADE RECEIVABLES 2014 2013 £’000 £’000

0-90 days 382 470

90-180 days 122 254

180+ days 179 114

Balance at the end of the period 683 838

MOVEMENT IN THE ALLOWANCE FOR DOUBTFUL DEBTS 2014 2013 £’000 £’000

Balance at the beginning of the year 222 171

Impairment losses recognised 129 90

Amount written off as uncollectable (35) (14)

Impairment losses reversed (15) (25)

Balance at the end of the year 301 222

In determining the recoverability of trade receivables the Group considers any changes in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. In respect of balances due from customers, the principal consideration is the customers’ asset holdings relative to any fees owed. The concentration of credit risk in respect of customer balances is limited due to the customer base being large and unrelated. The credit risk related to market counterparties is limited due to the regulated nature of those counterparties and the stock held against the balances due in respect of unsettled sales. Accordingly, the directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.

AGEING OF IMPAIRED TRADE RECEIVABLES 2014 2013 £’000 £’000

0-90 days 43 42

90-180 days 32 38

180+ days 226 142

Balance at the end of the period 301 222

CASH AND CASH EQUIVALENTS GROUP COMPANY 2014 2013 2014 2013 £’000 £’000 £’000 £’000

Cash and cash equivalents 11,671 13,027 378 126

Cash held on trust for clients* 984 599 - -

12,655 13,626 378 126

Cash and cash equivalents comprise cash held by the Group with financial institutions with instant or short-term notice access.

* This amount is held by The Share Centre Limited in trust on behalf of clients but may be used to complete settlement of outstanding bargains and dividends due.

At 31 December 2014 segregated deposit amounts held by the Group on behalf of clients in accordance with the client money rules of the Financial Conduct Authority amounted to £168,700,000 (2013: £139,556,000). The Group has no beneficial interest in these deposits and accordingly they are not included in the balance sheet.


20 FINANCIAL INSTRUMENTS

FINANCIAL RISK MANAGEMENTThe Group maintains a risk averse attitude and the principal assets of the Group are cash balances held with major banks and investments in the London Stock Exchange plc and Euroclear plc. The Group conducts regular reviews of capital adequacy, cash flow and general financial performance as part of its ongoing risk management framework and as part of meeting its regulatory obligations in particular under the Capital Requirements Directive (CRD) and FCA rules.

With regard to the maturity of non-derivative financial assets, the non-derivative financial assets held by the Group amount to trade receivables as detailed in Note 19, cash and cash equivalents as detailed in Note 19 and equity investments in London Stock Exchange plc, Euroclear plc, WAY Group Limited, Professional Partners Administration Limited (demerged from WAY Group Limited during 2014), Consort Capital (formerly Investbx Limited), Asset Match Limited and EiRx Therapeutics plc shares. The equity investments are classified as available-for-sale and will be realised when economic conditions are appropriate and the directors consider it to be in the best interests of the Group.

SIGNIFICANT ACCOUNTING POLICIESDetails of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measurement and the bases for recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in Note 3.

CATEGORIES OF FINANCIAL INSTRUMENTSThe carrying amount for each category of financial instrument as required under IAS 39 is disclosed on the face of the balance sheet. There have been no reclassifications between categories during the course of the year.

FOREIGN CURRENCY RISK MANAGEMENTThe Group’s principal trading entity, The Share Centre Limited, trades investments in equities and funds on behalf of its customers. The Company operates such that all those investments are Sterling-denominated and all fees and amounts receivable are denominated and payable in Sterling. The Group only operates in the UK and all suppliers are UK-based with amounts payable in Sterling. As such the Group has no trading exposure to foreign currency risk.

The Group holds 6,030 shares in Euroclear plc. These shares are denominated in Euros and as such the Group is exposed to an element of foreign exchange risk in respect of the impact of currency movement on the value of this investment. Dividend income received in respect of this investment in Euros and is translated into and recognised the financial statements in sterling on receipt of the dividend payment. The Group has no plans to dispose of these shares and does not hedge any of the exposure in respect of this investment.

FOREIGN CURRENCY SENSITIVITY ANALYSISThe Group only has an exposure to movements in Sterling relative to the Euro in respect of the investment in Euroclear plc which is Euro denominated. If there were a 10% move in the value of Sterling against the Euro then the value of this investment would move by 10% or c.£359,000 based on the year-end valuation.

INTEREST RATE RISKThe Group has no external borrowings and is not exposed to interest rate or refinancing risk in this regard. The Group does hold client money balances (cash held on behalf of customers) and earns interest on those balances which forms part of the Group’s revenues. The interest paid to customers is typically the base rate less 3.5%. As such, the Group’s revenue in this regard is effectively fixed at a minimum of 3.5% of the client money balances as it is unaffected by movements in interest rates unless rates fall below 3.5% (as they are at present).

At the year-end these monies were split between six institutions – Bank of Scotland (part of the Lloyds Banking Group), Royal Bank of Scotland, Barclays Bank, Scottish Widows, Melton Mowbray Building Society and Manchester Building Society – and all client monies are maintained in customer trust status accounts separate from the Group’s own funds in accordance with the FCA’s client money rules. The Group has a mixture of current accounts and term deposits for all its own cash and its client money. Following the new FCA rules on fixed term deposit on 1 July 2014, the Group no longers hold client money in notice accounts where the notice period is longer than 30 days and no new fixed term deposits are being placed. Whilst no new deposits are being placed, there is still a proportion of the deposits (15%) held with Melton Mowbray Building Society and Manchester Building Society that are still to mature. The Group has charges over mortgage assets to at least 150% of the deposit value to ensure the security of the deposit held with Melton Mowbray Building Society and Manchester Building Society.


The Group is also subject to interest rate risk in respect of its own principal cash balances. These balances earn interest at the prevailing rate and the income is disclosed in the income statement under investment revenues.

The direct link between the bank base rate and the interest rate paid to customers means that the Group’s interest income from client money balances is not generally sensitive to interest rate movements either up or down. However, with base rates below 3.5%, the Group could expect to see some improvement to interest income as rates increase until they reach 3.5% and interest starts to be paid to customers again. Given the cash balances held at the year-end, a 0.5% point increase in base rates (provided rates continue below 3.5%) would increase the Group’s interest income on client deposits by c.£844,000 per annum.

The interest income on the Group’s own principal balances is affected by changes in interest rates. Given the cash balances at the year-end a 0.5% movement in interest rates would impact investment income by c.£63,000 per annum. This impact, after taking into account the corresponding increase/decrease in the Group’s tax charge, would lead to a change in retained profit for the year.

LIQUIDITY RISKThe Group actively maintains cash balances in instant access accounts and on short-term deposit such that it has sufficient funds available for operations. In terms of its own funds, the investments the Group has on its balance sheet are in London Stock Exchange plc, Euroclear plc, WAY Group Limited, Professional Partners Administration Limited (demerged from WAY Group Limited during 2014), Consort Capital Limited (formerly Investbx Limited), Asset Match Limited and EiRx Therapeutics plc shares. London Stock Exchange plc shares are actively traded and relatively liquid. Given the overall levels and mix of cash and investments, the Group is not exposed to any significant liquidity risk. All financial liabilities are undiscounted.

CREDIT RISKThe Group has a large and diverse customer base such that there is no concentration of credit risk. Customers can only trade with available funds or stock in their account and this limits any exposure to credit risk in this regard. An allowance is made against amounts owed to the Group where there is insufficient value of stock within a customer account to cover any fees due. Amounts shown on the balance sheet are net of this allowance.

The majority (66% (2013: 81%)) of trade and other receivables are funds due from other financial institutions and customers in settlement of trades. The credit risk in this respect is therefore considered to be limited. Credit risk within the Group’s business is further minimised by the collateral held within the Group’s nominee company.

At the year-end, the Group’s own cash was predominantly held with Bank of Scotland (part of the Lloyds Banking Group), Royal Bank of Scotland, and Metro Bank, all within the UK. The Board has only sanctioned use of institutions which meet the necessary due diligence requirements which includes an assessment of each institution’s balance sheet and ownership structures. The Group regularly reviews the institutions it uses. The same approach is taken in respect of depositing client monies and in line with the FCA’s guidance on client money the diversification of deposits is also considered in this process.

EQUITY PRICE RISKThe Group is exposed to equity security price risk in respect of the investments it holds on its balance sheet at more than nil value – namely London Stock Exchange plc, Euroclear plc and WAY Group Limited shares.

A proportion (15.2% (2013: 16.9%)) of the Group’s revenue is derived from fees which are charged to customers based on the value of their holdings. Through this fee charging structure the Group is also exposed to an element of security price risk on the investments held by customers. More generally a significant reduction in equity values and a consequent or concurrent reduction in investor dealing activity would have a potentially significant impact on the Group’s financial performance. This risk is partly mitigated through the introduction of a fixed fees structure since 6 July 2013 for the majority of the Group’s ISA accounts and share accounts.

EQUITY PRICE SENSITIVITY ANALYSISIf equity prices had been 10% higher/lower during 2014 then the net profit after tax of the Group would have been c.£179,000 (2013: c.£195,000) higher/lower as a result of the impact of those higher/lower equity prices on customer portfolio valuations and therefore on ad valorem fees charged by the Group.

In addition, the fair value of the Group’s investments may have been similarly affected although such changes would have impacted shareholders’ funds through the revaluation reserve rather than the income statement.


FAIR VALUE OF FINANCIAL INSTRUMENTSThe directors consider that the carrying amounts of all financial assets and financial liabilities recorded at amortised cost in the financial statements approximate to their fair values.

Market values have been used to determine the fair values of available-for-sale financial assets. For those equity investments which do not have a quoted market price in an active market, fair value has been determined by reference to cost, or to the last available traded price and a comparison with the net asset value per share and other similar metrics, making allowances where appropriate for any uncertainties or illiquidity.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1: Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); the Group does not hold any financial instrument under this level; and

Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

THE GROUP 2014 2013 LEVEL 1 LEVEL 3 TOTAL LEVEL 1 LEVEL 3 TOTAL £’000 £’000 £’000 £’000 £’000 £’000

Available-for-sale financial assets

Quoted securities 4,947 - 4,947 3,040 - 3,040

Unquoted securities - 4,063 4,063 - 3,407 3,407

Total 4,947 4,063 9,010 3,040 3,407 6,447

There were no transfers between any of the levels during the year.

Reconciliation of Level 3 fair value measurements of financial assets 2014 2013 £’000s £’000

Available-for-sale unquoted securities

Balance as at 1 January 3,407 1,915

Total gain in other comprehensive income 656 1,492

Balance as at 31 December 4,063 3,407

All gains and losses included in other comprehensive income relate to securities held at the balance sheet date and are reported as changes of “Revaluation Reserve” (see Note 25).

Cash and cash equivalents are not included in the disclosures above as they are held at cost.


21 DEFERRED TAX

The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the current and prior period.

SHARE-BASED ACCELERATED REVALUATION OF TOTAL PAYMENTS TAX DEPRECIATION FINANCIAL ASSETS £’000 £’000 £’000 £’000

As at 1 January 2013 (2) 17 (709) (694)

Charge to income (15) (20) - (35)

Credit to other comprehensive income - - (425) (425)

Charge to equity (4) - - (4)

As at 1 January 2014 (21) (3) (1,134) (1,158)

Credit / (charge) to income 29 (11) - (18)

Charge to other comprehensive income - - (389) (389)

Credit to equity 18 - - 18

As at 31 December 2014 26 (14) (1,523) (1,511)

22 TRADE AND OTHER PAYABLES

GROUP COMPANY 2014 2013 2014 2013 £’000 £’000 £’000 £’000

Trade creditors 6367 12,533 - -

Amount owed to Group companies - - 355 233

Other taxation and social security 472 433 - -

Accruals and deferred income 1,120 1,140 47 44

Other creditors 393 280 - -

8,352 14,386 402 277

23 CALLED UP SHARE CAPITAL

THE GROUP AND COMPANY 2014 2013 NUMBER £’000 NUMBER £’000

Ordinary shares of 0.5p each

Authorised 296,175,000 1,481 296,175,000 1,481

Allotted, called up and fully paid 143,652,334 718 143,652,334 718

24 SHARE PREMIUM ACCOUNT

THE GROUP AND COMPANY 2014 2013 £’000 £’000

Balance at 1 January 1,064 1,098

Adjustments to previous share buy back - (34)

Balance at 31 December 1,064 1,064


25 RESERVES

The Group has a number of reserves included within its Shareholders’ Funds. The nature and purpose of these reserves is described below and the movement in each of these reserves is shown on the face of the primary statement – Consolidated statement of changes in equity – as shown on page 44.

CAPITAL REDEMPTION RESERVE This reserve relates to balances arising on the repurchase of the Company’s own shares.

EMPLOYEE BENEFIT RESERVEAs explained in Note 3, the employee benefit reserve represents shares held in Share plc having been purchased by Sharesecure Limited. Sharesecure Limited is a trustee of two employee benefit trusts which are used to purchase shares to meet potential obligations arising from the issue of share options made to directors and employees, and to meet requirements arising from the issue of matching and partnership shares under the Share Incentive Plan. In addition Sharesecure Limited is the other party to shares awarded to directors and employees under the Co-ownership Equity Incentive plan. The individual recipients of those awards cannot exercise any benefits of ownership until three years after the grant date and therefore ownership is considered to rest with Sharesecure Limited. The total number of shares held at year-end in respect of all the above arrangements was as follows:

2014 2013 NUMBER AVERAGE NUMBER AVERAGE PURCHASE PURCHASE PRICE (P) PRICE (P)

Ordinary shares of 0.5p each 2,142,193 38.95 2,342,275 22.40

During the year the employee benefit trusts purchased or received back from leaving employees a total of 1,295,518 Ordinary 0.5p shares. 1,080,562 shares were sold by the employee benefit trusts or allocated to employees by way of matching shares or free shares. The shares purchased had a total consideration of £505,000 (2013: £223,000).

REVALUATION RESERVEThis reserve represents the cumulative fair value position in respect of assets held by the Group which are revalued based on their fair value at the balance sheet date.

RETAINED EARNINGS This reserve represents the cumulative retained profits of the Group.

The detailed movements on the revaluation reserve and the retained earnings reserve are shown on the face of the Consolidated statement of changes in equity. However, the movements shown in the Consolidated statement of comprehensive income are shown as a single line. This may be broken out between the two reserves as follows:

2014 2013 REVALUATION RETAINED TOTAL REVALUATION RETAINED TOTAL RESERVE EARNINGS RESERVE EARNINGS £’000 £’000 £’000 £’000 £’000 £’000

Retained profit for the period - 668 668 - 1,331 1,331

Increase in fair value of available-for-sale investments 2,150 - 2,150 2,590 - 2,590

Deferred tax effect of movement in fair value of available-for-sale investments (430) - (430) (598) - (598)

Exchange (losses)/gains on available-for-sale investments - (205) (205) - 1 1

Deferred tax on exchange (losses)/gains on available-for-sale investments taken directly to equity - 41 41 - - -

Deferred tax impact of change in tax rate - - - 164 9 173

Movement in the year 1,720 504 2,224 2,156 1,341 3,497


26 CAPITAL MANAGEMENT

The Group’s disclosures as required under Pillar III are set out in a separate document available on the Group’s website, www.shareplc.com. That Pillar III document shows that the Group had Tier 1 capital of £14.8 million (2013: £14.3 million) and Tier 2 capital of £6.1 million (2013: £4.4 million) as at 31 December 2014. The total capital of £20.1 million (2013: £18.1 million) demonstrates a significant surplus of £17.0 million over the current capital requirement for 2015 of £3.1 million.

It should be noted that the Group contains two regulated entities, The Share Centre Limited and Sharefunds Limited. In addition to having to satisfy capital requirements on a consolidated Group basis, each of these individual entities must also satisfy their own capital requirements. In particular, with regard to The Share Centre Limited, the Pillar III disclosures indicate that it had total capital resources at 31 December 2014 of £15.7 million (2013: £14.0 million) which is a significant surplus of £12.6 million over the 2015 capital requirement of £3.1 million (2013: £2.9 million). The capital requirements of the subsidiaries, and The Share Centre Limited in particular, could act as a limitation on the ability of those subsidiaries to pay dividends to the parent company and therefore ultimately of the Group to pay dividends out to its shareholders. Given the current capital position of the Group and its subsidiaries and the current dividend policy, this does not present a restriction at present.

27 NOTES TO THE CASH FLOW STATEMENTS

GROUP COMPANY 2014 2013 2014 2013 £’000 £’000 £’000 £’000

Operating profit / (loss) 424 1,405 (523) (362)

Other losses including ESOP (731) (183) - -

Depreciation of property, plant and equipment 104 108 - -

Amortisation of intangible assets 11 11 - -

Share-based payments 477 204 - -

Adjustments to previous share buy back - (34) - (34)

Operating cash flows before movement in working capital 285 1,511 (523) (396)

Decrease / (increase) in receivables 6,243 (4,246) (9) 4

(Decrease) / increase in payables (6,034) 4,817 125 (278)

Cash generated by / (used in) operations 494 2,082 (407) (670)

Income taxes paid (295) (204) - -

Net cash from / (used in) operating activities 199 1,878 (407) (670)

28 OPERATING LEASE ARRANGEMENTS

At the balance sheet date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2014 2013 LAND AND OTHER LAND AND OTHER BUILDINGS BUILDINGS £’000 £’000 £’000 £’000

Within one year 364 39 32 39

One to five years 1,351 56 928 98

Over five years - - - -

Total 1,715 95 960 137

Operating lease payments principally represent rentals payable by the Group for its office premises. The current lease was renegotiated during 2014 for a ten year lease term with a break clause in 2019. Included in the new lease is a nine month rental free period for each of the first and second halves of the lease period. There were no other significant changes to the rental terms from the previous agreement. The commitments above are the minimum non-cancellable payments due. The Company has no commitments under operating leases (2013: none).


29 SHARE-BASED PAYMENTS

The Group implemented a Company Share Ownership Plan (CSOP) during the year replacing the previous Enterprise Management Incentive (EMI) approved share option scheme. The Group continues to grant share options at six-monthly intervals and discretionary grants to senior managers and directors as deemed appropriate by the Board Remuneration and Nomination Committee. In addition, the Group has an Unapproved Share Option Scheme and a Co-ownership Equity Incentive Plan. There are numerous options still outstanding on EMI scheme. All options expire ten years after the date of grant and, with the exception of some options granted under the unapproved share option scheme, the vesting period for options is three years.

In respect of the Co-ownership Equity Incentive Plan, the shares are jointly held with the Employee Benefit Trust. The individual recipients are able to sell the shares concerned between three and ten years after the grant date and benefit from the excess of the sales price at that time over and above the price specified in the Co-ownership agreement. That price is set at a c.20% premium to the market price at the date of grant.

Details of the share options outstanding during the year are as follows:

2014 2013 NUMBER OF WEIGHTED AVERAGE NUMBER OF WEIGHTED AVERAGE SHARE OPTIONS EXERCISE PRICE SHARE OPTIONS EXERCISE PRICE (PENCE) (PENCE)

Outstanding at the beginning of the year 6,281,093 23.3 6,853,274 22.9

Granted during the year 6,475,576 15.8 370,000 24

Exercised during the year (3,134,634) 22.4 (466,718) 14.7

Expired or forfeited during the year (333,819) 32.62 (475,463) 26.6

Outstanding at the end of the year 9,288,216 18.0 6,281,093 23.3

Exercisable at the end of the year 2,047,820 24.4 3,976,362 22.8

The weighted average market share price at the date of exercise for options exercised during 2014 was 41.6 pence (2013: 21.8 pence). The share options outstanding at the end of the year, their exercise prices and contractual lives are as detailed in Note 30.

The Group has applied the requirements of IFRS 2 in respect of share-based payments. During the year ended 31 December 2014, the Group made three equity-settled share-based payments to staff. Payments were made under the Group’s Company Ownership Plan and Unapproved Share Options Scheme. In all cases there are no performance conditions attached to the options. In all cases, except the options granted at a premium under the Unapproved plan in January 2014, all options have been granted with an exercise price equal to market value – being the closing mid-price on the day prior to grant.

A fair value has been determined for each grant made during the year using the Black-Scholes model. The main assumptions are as follows:

GRANT DATE 01/05/14

Share price at date of grant 23p

Exercise price 1p

Risk-free interest rate 0.5%

Dividend yield 1.0%

Volatility 30% (based on historic share price movements)

Average maturity at exercise 5 years

Fair value per option 20.9p

GRANT DATE 01/05/14


Exercise price 45p


Dividend yield 1.0%




GRANT DATE 01/11/14


Exercise price 39p


Dividend yield 1.0%




In addition, the Group operates a Share Incentive Plan (SIP). This scheme is open to all employees and allows them to allocate up to £1,800 per annum (increased from £1,500 on 6 April 2014) of their pre-tax salary to purchase shares in Share plc through a partnership scheme without paying National Insurance contributions or Income Tax. For every share purchased through the partnership scheme, The Share Centre Limited purchases two matching shares. The employee must remain in employment for three years from the date of purchase of the partnership shares in order to qualify for the corresponding matching shares and in order for those shares to be transferred to them tax-free. The employee retains rights over both their own shares and the matching shares, receives dividends and is able to vote at meetings once the shares are purchased.


The fair value for those shares given as matching shares under the arrangements of the SIP has been determined by reference to the market price. The value used is the quarter-up price based on the Daily Official List from the previous business day. This has ranged from 23.63p to 45.38p during 2014. The cost is then applied over three years, being the qualifying period during which the employee must remain in employment with the Group.

In addition, the SIP enables the Group to grant employees free shares with a value of up to £3,600 per eligible employee per annum (increased from £3,000 on 6 April 2014). On 7 November 2014, as part of an all staff reward, the Group granted 19,392 shares to those employees who opted to receive their rewards in shares into their SIP. The cost of these free shares has been treated in the same way as for matching shares with that cost applied over three years, being the qualifying period during which the employee must remain in employment with the Group.

It is Group policy that, where possible, shares to settle the SIP and the share options issued will be purchased in the market rather than issued as new shares.

The total expense for equity-settled share-based payments for the Group in respect of awards made in 2014 was £1,385,000 including one off issue to the directors of £1,057,000 (2013: £220,000). This expense is then applied across the three years to the vesting date. An adjustment is made to this figure in respect of members of staff to whom options and shares have been granted but who have left the Group’s employ during the vesting period. The overall net charge taken in the income statement for 2014 is £477,000 (2013: £208,000).


30 SHARE OPTIONS

At 31 December 2014 the following share options to subscribe for ordinary shares were outstanding:

EXERCISE PERIOD EXERCISE PRICE SHARE OPTION 2014 TOTAL 2014 TOTAL FIRST DATE LAST DATE PENCE SCHEME OR PLAN NUMBER NUMBER

22-Jun-07 22-Jun-14 15 (E) - 71,42622-Dec-07 22-Dec-14 14 (E) - 55,45722-Jun-08 22-Jun-15 14 (E) 29,217 56,17722-Dec-08 22-Dec-15 14 (E) 28,590 74,52322-Jun-09 22-Jun-16 20 (E) 39,326 108,96808-Dec-09 08-Dec-16 16 (E) - 7,96022-Dec-09 22-Dec-16 15 (E) 47,623 89,86419-Mar-10 19-Mar-17 15 (E) - 75,00002-Apr-10 02-Apr-17 14.5 (E) - 80,84622-Jun-10 22-Jun-17 26 (E) 62,825 164,21122-Dec-10 22-Dec-17 30 (E) 60,237 234,14415-May-11 15-May-18 27 (E) - 83,79015-May-11 15-May-18 14.5 (E) 194,477 874,82422-Jun-11 22-Jun-18 30.5 (E) 70,839 229,21622-Dec-11 22-Dec-18 24.5 (E) 81,883 258,78922-Dec-11 22-Dec-18 24.5 (U) 19,470 19,47022-Jun-12 22-Jun-19 30 (E) 91,297 269,26125-Jun-12 25-Jun-19 36 (C) 9,947 9,94710-Jul-12 10-Jul-16 20 (E) - 50,00022-Dec-12 22-Dec-19 27.5 (E) 111,610 276,43023-Dec-12 23-Dec-19 33 (C) 9,947 9,94719-Mar-13 19-Mar-17 15 (E) - 50,00022-Jun-13 22-Jun-20 26.5 (E) 89,899 430,07229-Jun-13 29-Jun-20 32 (C) 86,068 86,06822-Dec-13 22-Dec-20 28.5 (E) 117,625 309,97222-Jun-14 22-Jun-21 25 (E) 195,099 339,97622-Jun-14 22-Jun-21 25 (U) 403,552 542,57022-Dec-14 22-Dec-21 22.5 (E) 267,845 314,43822-Dec-14 22-Dec-21 22.5 (U) 30,444 39,96622-Jun-15 22-Jun-22 0.23 (E) 282,749 318,03322-Jun-15 22-Jun-22 0.23 (U) 11,176 30,13222-Dec-15 22-Dec-22 0.245 (E) 295,229 349,39122-Dec-15 22-Dec-22 0.245 (U) 10,958 10,95822-Jun-16 22-Jun-23 0.24 (E) 294,289 348,38022-Jun-16 22-Jun-23 0.24 (U) 10,887 10,88701-May-17 01-May-24 0.01 (U) 1,063,750 -01-May-17 01-May-24 0.45 (U) 520,866 -01-May-17 01-May-24 0.45 (CS) 437,998 -01-Nov-17 01-Nov-24 0.39 (CS) 310,000 -01-Nov-17 01-Nov-24 0.39 (U) 31,244 -01-May-18 01-May-24 0.01 (U) 1,063,750 -01-May-18 01-May-24 0.45 (U) 390,000 -01-May-19 01-May-24 0.01 (U) 1,063,750 -01-May-19 01-May-24 0.45 (U) 390,000 -01-May-20 01-May-24 0.01 (U) 1,063,750 -

9,288,216 6,281,093

(C) Co-ownership Equity Incentive plan (CS) CSOP (E) EMI Scheme (U) Unapproved share option scheme


31 RELATED PARTY TRANSACTIONS

The principal transactions between the Company and its subsidiaries were the payment to The Share Centre Limited of management fees of £344,000 (2013: £219,000) which primarily relate to the recharging of a proportion of directors’ time. (2013: the company made a capital contribution to Sharefunds Limited of £350,000)

At the year-end the Company had a balance outstanding due to The Share Centre Limited of £356,000 (2013: £233,000) and was owed, by way of a subordinated loan, £150,000 (2013: £150,000) by The Share Centre Limited.

REMUNERATION OF KEY MANAGEMENT PERSONNELThe remuneration of the directors and other members of senior management, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual directors is provided in the ‘Directors’ remuneration report on pages 36 to 37.

YEAR ENDED YEAR ENDED 31 DECEMBER 2014 31 DECEMBER 2013 £’000 £’000

Short-term employee benefits 1,151 873


Defined contribution pension costs 54 48

Gains on exercise of share options 304 21

1,526 958

THE SHARE FOUNDATION (“TSF”)The Share Centre has been independently selected by Kleinwort Benson, Account Allocation Adviser to TSF to be one of the Junior ISA (JISA) providers for children and young people in care. The JISA provided is our standard Ready-made JISA containing either our SF Cautious Fund or our SF Positive Fund. The accounts are funded with a minimum of £200 government funding plus contributions from The Share Foundation as part of its charitable donations programme. Fixed quarterly administration fees ceased to be levied from July 2013 and the Share Centre committed to donate 10% of its revenue from The Share Foundation accounts to The Share Foundation charity during 2014 of £4,125. The founder and chairman of TSF is Gavin Oldham.

SHARE RADIO LIMITED (“SRL”)SRL is an independently established and financed radio station focused on money related issues. It currently broadcasts on the London DAB network and online. SRL was set up in 2014 by Gavin Oldham and is 100% owned and controlled by Gavin Oldham who is also the principal shareholder of Share plc.

Neither Share plc nor any of its subsidiaries has any ownership interest in SRL, however, it is a related party by virtue of Gavin Oldham’s involvement in both organisations. Advertising for The Share Centre is carried on Share Radio predominantly through sponsorship of the weather. In addition, spokespeople from The Share Centre regularly appear on Share Radio alongside other broadcasters and contributors. The Share Centre has charged SRL £35,000 in 2014 for Gavin Oldham’s time and was charged £35,000 by SRL for sponsorship. No sums were outstanding between The Share Centre and SRL at year end.


INFORMATION FOR SHAREHOLDERS

Press releases, half-year results and other information relevant to shareholders are available on our website, www.shareplc.com.

SHARES ISSUED OR COMMITTED AS AT 31 DECEMBER 2014 NUMBER OF NUMBER OF % SHAREHOLDERS SHARES

Oldham family and trusts 10 109,317,816 76.1

Other directors and staff 124 7,852,844 5.5

Customers and other 38,257 21,598,465 15.0

Shareholders on the general register 605 4,883,209 3.4

38,996 143,652,334 100.0

FINANCIAL CALENDAR 201510 June 2015 Annual General Meeting at 11am, One Great George Street, Westminster, London SW1P 3AA

DEALING IN SHARE PLC SHARESShare plc shares are traded on AIM and customers of The Share Centre can place orders via their personal portfolio accessed at www.share.com, by telephone (01296 41 42 43) or in writing, quoting their name, customer reference, portfolio number and the number of shares to buy/sell together with the price limit. You can buy and sell shares in Share plc via most stockbrokers, including The Share Centre.

SHARE PRICE INFORMATIONThe latest indicative and auction prices for shares in Share plc are available through normal media channels for AIM reporting and on www.assetmatch.com, or via the home page at www.shareplc.com.

SHAREHOLDER BENEFITSAll shareholders owning 500 or more Share plc shares in any account with The Share Centre receive a 30% discount on dealing rates at the time of dealing, for all deals done online (i.e. over the internet).

This benefit can reduce the effective cost of dealing to just £5.25 per deal. Details of this are available online at www.shareplc.com.

OPT-IN FOR SHAREHOLDER RIGHTSThe Group succeeded in campaigning to amend the Companies Act 2006 to include provisions for individuals who hold their investments using a nominee to opt-in to receive information (for example, annual reports) directly from companies in which they invest. The Share Centre offers this facility to its customers. If you hold Share plc shares in your account with The Share Centre and wish to receive a copy of the annual report, interim statement and other communication with shareholders please sign in to your account, go to ‘my profile’, and enable the shareholder rights functionality which enables you to choose whether to receive such communications by e-mail or post and to vote on company resolutions online.


ADVISORS

BROKER The Share Centre Limited Oxford House, Oxford Road, Aylesbury, Buckinghamshire, HP21 8SZ

NOMINATED ADVISOR (NOMAD) Cenkos Securities Plc 6.7.8 Tokenhouse Yard, London, EC2R 7AS

INDEPENDENT AUDITOR Deloitte LLP Abbots House, Abbey Street, Reading, RG1 3BD

PRINCIPAL BANKERS Bank of Scotland (part of the Lloyds Banking Group) New Uberior House, 11 Earl Grey Street, Edinburgh, EH3 9BN

REGISTRARS Capita Registrars Northern House, Woodsome Park, Fenay Bridge, Huddersfield, West Yorkshire, HD8 0LA

SOLICITORS Dechert LLP 160 Queen Victoria Street, London, EC4V 4QQ

SOLICITORS Penningtons Manches LLP Apex Plaza, Forbury Road, Reading, RG1 1AX

PUBLIC RELATIONS – THE SHARE CENTRE LIMITED Teamspirit Public Relations 78 Cowcross Street, Farringdon, London, EC1M 6HE

PUBLIC RELATIONS – SHARE PLC KTZ Communications Ltd No.1 Cornhill, London, EC3V 3ND


Best Customer ServiceONLINE PERSONAL WEALTH AWARDS 2014

In order to provide an outstanding level of service, Customer Service Team Leader, Rosie Edwards, encourages her team to constantly look out for ways to improve the customers’ experience.


This document constitutes a financial promotion under the Financial Services and Markets Act 2000 and has been approved by The Share Centre Limited, a member of the London Stock Exchange. The Share Centre Limited is authorised and regulated by the Financial Conduct Authority register number 146768.

Please remember the value of investments and the income from them can go down as well as up, and you may not get back your original investment.

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