Curtis Banks : Annual Report and Financial Statements 2020

Curtis Banks Group PLC

Company Registration No. 07934492 (England and Wales)

Curtis Banks Group PLC

Annual Report and Consolidated Financial Statements

For the year ended 31 December 2020

Curtis Banks Group PLC

	Page
Strategic Report
Operational, Financial Highlights and Key Performance Indicators	1
Our services and history	2
Chairman's statement	3 - 4
Chief Executive Officer's review	5 - 8
Chief Financial Officer's review	9 - 14
Principal risks and uncertainties	15 - 20
Corporate and social responsibility	21 - 27
Governance
Board of Directors	28	- 29
Directors' report	30	- 35
Statement of Directors' responsibilities	34
Chairman's corporate governance report	36 - 40
Corporate governance	41	- 46
Directors' remuneration report	47	- 49
Financial Statements
Independent auditors' report	50	- 57
Consolidated statement of comprehensive income	58
Consolidated statement of financial position	59
Company statement of financial position	60
Consolidated statement of changes in equity	61
Company statement of changes in equity	62
Consolidated statement of cash flows	63
Company statement of cash flows	64
Notes to the financial statements	65	- 122
Company information	123
Supplementary unaudited information	124 - 125

Curtis Banks Group PLC

Strategic Report

Operational, Financial Highlights and Key Performance Indicators

Curtis Banks Group PLC is pleased to announce its final results for the 12 months to 31 December 2020. These results represent the full 12 month period including the fundraising and refinancing activities in July 2020; 5 months contribution from Dunstan Thomas and 2 months contribution from Talbot and Muir.

• Operating revenue increased by 10% to £53.9m (2019: £48.9m)
• Adjusted profit before tax1 remained stable at £13.4m (2019: £13.4m)
• Adjusted operating margin2 decreased to 26.0% (2019: 28.1%)
• Profit before tax decreased by 32% to £7.4m (2019: £10.9m)
• Adjusted diluted EPS decreased by 8% to 17.9p (2019: 19.4p) 3
• Gross organic growth in own Mid and Full SIPP numbers of 7.8% (2019: 7.5%) with total SIPPs,
  including third party administered, now 82,224 (2019: 76,541)
• Attrition rate on own Mid and Full SIPPs decreased to 4.6% (2019: 5.7%)
• Assets under Administration ("AuA") increased by 11% to £32.4bn (2019: £29.1bn)
• Proposed final dividend of 6.5p (2019: 6.5p) making a full year payment of 9.0p (2019: 9.0p)

Highlights and key performance indicators for the year include:
	2020	2019
Financial
Operating revenue	£53.9m	£48.9m
Adjusted profit before tax1	£13.4m	£13.4m
Profit before tax	£7.4m	£10.9m
Adjusted operating margin2	26.0%	28.1%
Diluted EPS3	9.5p	15.9p
Adjusted diluted EPS 3	17.9p	19.4p
Operational Highlights
Number of SIPPs administered	82,224	76,541
Assets under Administration	£32.4bn	£29.1bn
Total organic new own SIPPs in year	4,113	4,567
Attrition rates (Mid & Full SIPP)	4.6%	5.7%
Number of properties administered	8,905	6,352

1. Profit before tax, amortisation and non- recurring costs
2. The ratio of operating profit before net finance costs, amortisation and non-recurring costs to operating revenues. See note 6 to the financial statements for further detail
3. Adjusted to reflect impact of bonus factor within shares issued during the year ended 31 December 2020. See note

1. to the financial statements for further detail

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Curtis Banks Group PLC

Strategic Report

Our services and history

Curtis Banks Group PLC ("Curtis Banks" or "the Group") has a clear vision for long-term growth. The Group commenced trading in 2009 and has successfully developed, through a combination of organic growth and acquisitions, into one of the largest UK providers of self-invested pension products. At 31 December 2020 the Group administered circa £32.4bn (2019: £29.1bn) of pension assets on behalf of over 82,000 (2019: 76,000) active clients.

In May 2015 the shares of Curtis Banks (LON: CBP) were admitted and listed on the London Alternative Investment Market ("AIM").

On 25 May 2016 the Group completed the purchase of Suffolk Life Group Limited, a long established provider of SIPPs operating through Suffolk Life Pensions Limited and Suffolk Life Annuities Limited. During the year ended 31 December 2020, the Group completed the purchase of Dunstan Thomas, and Talbot and Muir. The Group currently trades under the names Curtis Banks, Suffolk Life, Dunstan Thomas and Talbot and Muir. More than 800 staff are employed across its head office in Bristol and regional offices in Ipswich, Dundee, Portsmouth, Nottingham and Leeds.

Our stated strategic objective of increased diversification saw the acquisition of Dunstan Thomas in August 2020. The acquisition is a further step forward in the Group's evolution from a solely focused SIPP and SSAS administrator to a provider of technology and complementary services for the advised retirement market, including FinTech, legal and property services.

Trading subsidiaries of the Group authorised by the Financial Conduct Authority to provide trust based SIPP products include Curtis Banks Limited, Suffolk Life Pensions Limited, Suffolk Life Annuities Limited and Talbot and Muir Limited. Suffolk Life Annuities Limited is also regulated by the Prudential Regulatory Authority as it provides SIPPs through non-participating individual insurance contracts. As such, it is regarded as an insurance company for the purposes of regulatory and statutory reporting. Due to Suffolk Life Annuities Limited's status as an insurance company, the consolidated results for the whole Group also include Suffolk Life Annuities Limited's insurance policyholder assets, liabilities and returns.

The Executive Directors have proven experience in the retail savings, pensions and wealth markets and have established a business that focuses on a service-driven proposition for the administration of flexible SIPPs. The Group's core pension products are primarily distributed by authorised and regulated financial advisers, targeted towards pension savers who wish to take full advantage of the features and flexibility offered in the UK's modern and changing pension regime. Long standing relationships with key distributors result in high levels of repeat business and demonstrate satisfaction with products and services provided.

The Group is focussed on continuing to deliver value to both customers and shareholders in the years ahead.

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Curtis Banks Group PLC

Strategic Report

Chairman's Statement

I am pleased to report the Curtis Banks Group results for the year ended 31 December 2020. In spite of being impacted by COVID-19 the business showed a very high degree of resilience, completed two excellent acquisitions, executed a successful fund raise and changed its fee model to ensure greater transparency to our clients and a more robust and consistent income. This puts the business in a strong position for future growth.

2020 Review

The highlights of our financial results demonstrated solid revenue growth, although operating profit softened as a result of the impact of the COVID-19 pandemic on the business. Operating revenue increased by 10% from £48.9m to £53.9m, reflecting acquisitive growth and a steady performance in our core business of Full and Mid SIPPs. Adjusted profit before tax remained stable at £13.4m (2019: £13.4m).

The Group was impacted by the COVID-19 pandemic during 2020. Management reacted quickly and effectively to implement its business continuity plan and limit the severity on the business. Our fixed, recurring fee model for our core products insulated the Group from the worst effects of the pandemic and the business has emerged from it in a robust position.

In spite of the obvious headwinds we remained focused on our stated strategy for future growth. In July 2020, the Group announced the acquisition of two high-quality businesses in Talbot and Muir and Dunstan Thomas. Talbot and Muir, a provider of SIPPs and SSAS products, has a strong reputation in the market and reinforces the Group's position as a leading SIPP provider. At the time of acquisition, Talbot and Muir delivered additional scale through 6,600 plans and AuA of approximately £3.6bn.

Dunstan Thomas is a FinTech company which provides technology and business solutions for wealth managers, platforms and providers, with an established client base and track record of repeat and recurring revenue. Dunstan Thomas will not only support the successful delivery of the Group's technology strategy but will also bring diversification by way of a broader product and service offering to other markets. The use of technology in the retirement market has historically been underutilised and we are excited about the role Dunstan Thomas can play in spearheading additional growth and development opportunities across the Group.

In November 2020, we took the decision to achieve a more appropriate balance between fee income and interest income to provide more transparency and greater certainty to our clients. We increased the annual SIPP administration fee paid on Mid and Full SIPPs with effect from 1 February 2021 and at the same time provided the framework to distribute an element of future interest related income to our clients. This change will materially reduce the Group's overall sensitivity to interest rates and reinforce our robust foundation for future growth through improved levels of recurring revenues.

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