Share : press release

shareplc:

Press Release

Parent of the leading independent retail stockbroker, which operates The Share Centre

Half year results for the six months to 30 June 2017

l Results ahead of original management expectations - driven by buoyant trading volumes and new partnership agreements

l Outperformance against peer group1 - market share (excluding interest) at a new high of 12% (H1 2016: 9.77%)

l Total revenues up 23% to £8.9m (H1 2016: £7.2m), a record six month high. Excluding interest income, revenues up 27% to £8.5m (H1 2016: £6.7m)

l Underlying2 profit before tax increased to £310,000 (H1 2016: £110,000) and statutory profit before tax of £75,000 (H1 2016: £190,000 which included a £628,000 gain from sale of London Stock Exchange Group plc shares)

l Underlying2 earnings per share of 0.2p (H1 2016: 0.1p) and statutory earnings per share of 0.0p (2016: 0.1p)

l Assets under administration increased by 26% to a record £4.3bn (H1 2016: £3.4bn)

l Balance sheet remains strong with shareholders' funds at £17.7m (H1 2016: £17.6m)

l Services for Computershare launched in Q2 - will continue to benefit revenues and profits materially

l Continued investment in Digital Transformation Programme - innovations being delivered

l "Best Stockbroker" in the 2017 Investment Trends UK Online Broking Report, with the highest overall investor satisfaction rating among share investors, for the fourth consecutive year

- Net Promoter Score of +49 in independent research conducted by Investment Trends - a market-leading result

l Ongoing delivery of the Digital Transformation Programme will enhance the Group's market position and long term prospects

Note 1 - as measured by Compeer Limited.

Note 2 - excludes the impact of some items, in particular any large non-recurring items and share based payment charges as defined in note 7. Basic earnings per share was 0.0p and diluted earnings per share was 0.0p (2016: 0.1p and 0.1p respectively).

"These encouraging results are ahead of our original expectations and reflect both strong trading volumes and the benefits of the partnership agreements signed in 2016, including the launch of services for Computershare. Significantly half the growth in the period was organic, achieved through our core business which trades as The Share Centre, and through share.com. The Group delivered record first half revenues of £8.9m and assets under administration also rose to their highest level to date at £4.3bn. I am also delighted to report that Share outperformed its peer group across key measures, including market share of revenues excluding interest. This hit a new peak of 12%.

"While affecting profitability in the short term, the major investment programme we started in 2016 has helped to support these results.

Our Digital Transformation Programme, which forms the major part of our investment, is ongoing and enabled us to deliver new functionality over the first half and will position the Group better for long term profitable growth.

"The customer experience remains at the heart of what we do and therefore the retention of Investment Trends' prestigious award of

"Best Stockbroker", with the highest overall investor satisfaction rating among share investors for the fourth consecutive year, was a particular highlight in the first half. Alongside that, The Share Centre won four other industry awards for outstanding customer service levels.

"Trading in the second half of the year to date has been ahead of the comparable period last year as we continue to benefit from the new partnerships and customer accounts we acquired in 2016. If this continues, we expect to report strong year-on-year growth for 2017. Meanwhile, we continue to invest with confidence in the business."

This document is not intended to constitute an offer or agreement to buy or sell investments and does not constitute a personal recommendation. The investments and services referred to in this document may not be suitable for every investor and if in doubt independent financial advice should be sought. No liability is accepted whatsoever for any loss howsoever arising from any information in this document subject to the rules of the Financial Conduct Authority or the Financial Services and Markets Act 2000. Share prices, values and income can go down as well as up and investors may get back less than their initial investment. The Share Centre is a member of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority under reference 146768.

Share plc is the parent holding company of The Share Centre Limited and its shares are traded on AIM. The Share Centre started trading in 1991 and provides a range of account-based services to enable personal investors to share in the wealth of the stock market. Retail services include Share Accounts, ISAs, Junior ISAs and SIPPs, all with the benefit of investment advice, and dealing in a wide range of investments. Services available to corporate clients include Enterprise Investment Scheme administration and 'white-label' dealing platforms.

www.shareplc.com or www.share.com.

Chairman's statement

Share has made strong progress in the first half, helped by favourable market conditions as well as the benefits of the major new partnership agreements signed in 2016 coming through, including the launch of services for Computershare. The Company's financial performance, including profitability, was significantly ahead of our original expectations and revenues at £8.9m reached a new six month high. Customer assets also hit a record £4.3bn at the end of June, a rise of 14% over the six month period. This compares to 3.3% growth in the FTSE All Share index over the same period. Over £1bn of customer assets are now held in funds, up 59% since 30 June 2016, reflecting the attraction of our fixed-rate account administration fee against the more widespread model of fees based on the value of

customer holdings.

I am also pleased to report that Share has continued to outperform against its peer group*, with the Group's market share (excluding interest) in the first half rising to 12%, the highest in the Company's history. A fuller review of Share's performance against its peer group is included in the report.

We were pleased to receive five industry awards in the first half, including "Best Stockbroker" with the highest overall investor satisfaction rating among share investors, in the 2017 Investment Trends UK Online Broking Report. This is the largest annual survey of retail investor opinions undertaken in the UK and we were delighted to have retained the award for the fourth consecutive year.

As planned, 2017 marks a second year of major investment as we continue with our Digital Transformation Programme. This Programme supports the Group's long term growth ambitions and will help us to innovate and enhance customer service levels and experience.

Our growth strategy has three key elements, 'Putting Customers First', 'Focus on the Core Business' and 'Strategic Partnerships and Acquisitions' and we are pleased to report on continued delivery against all three.

While we are pursuing organic growth, a major component of our growth strategy remains building partnerships and the acquisition of books of customers and we are pleased to see benefits of this approach coming through more strongly. Following the signing of a major partnership agreement in 2016 with Computershare, one of the UK's leading share registrars and the largest registrar globally, we launched a certificated dealing and corporate nominee dealing service for Computershare customers in May 2017, following this with a white label share dealing service in July. In the first half, we also completed the migration of investment trust accounts from Invesco Perpetual, over 95% of which have remained with The Share Centre Limited after their migration.

In April 2017, we completed the transfer of our non-core Authorised Corporate Director role, with the sale of Sharefunds Limited. Whilst we have sold that business, we continue to manage our three 'in-house' fund of funds. Over the first half, the total value of funds under

management increased by 29% to £90m from £70m and, for the year to date, the flow of gross new monies into the three funds of funds is up 37% compared to the same period in 2016. We are now looking at expanding the distribution channels for these funds and, with effect from August, have reduced the ongoing charges figure ('OCF') by at least 25%, which should help to stimulate investor interest. All three funds are ranked in the first quartile of their sectors for the year to date.

A key aspect of our growth strategy is technological transformation to improve our digital proposition which will enable us to enhance the overall customer experience. In March, we launched a new funds research centre within our website, which enables customers to research, select and buy funds more easily. Having launched our first mobile App in 2016, later this month we will deliver a significant upgrade to its functionality to enable customers to trade and fund their accounts from the App. We expect this new functionality will help drive

user numbers. We are also working on transforming our website to optimise its utilisation on different screen sizes including mobile phones and tablets, and providing customers with a better user experience, with enhanced performance analysis.

Chairman's statement (continued)

A core pillar of our IT strategy is our ability to build technology solutions in-house. This helps us to be agile in our response and fast-to-market with product and proposition developments. At the start of the new tax year - as soon as regulation allowed - we were pleased to launch the Lifetime ISA product and were one of only three execution-only brokers to do so. Following our quick delivery of Flexible ISA capability in 2016, we hope to build on our record of making new products available to customers ahead of most of our peers. Along with our Junior ISA and Child Trust Fund, the Lifetime ISA is also important in enabling us to reach a younger set of customers, who have many years of

investment ahead.

We continue to believe that our market leading customer service and flat fee pricing structure are key to differentiating our proposition from our peers. We were therefore delighted to achieve "Best Stockbroker" in the 2017 Investment Trends UK Online Broking Report, with the highest overall investor satisfaction rating among share investors, for the fourth consecutive year. This prestigious award was based on an independent survey of 13,800 individual personal investors, making it the largest annual survey of retail investor opinions undertaken

in the UK.

We also secured four other awards in the first half, "Best Online Stockbroker" and "Best Self-Select Stockbroker", both from ADVFN International Financial Awards, and "Best Stockbroker" and "Best Customer Service" from Online Personal Wealth Awards.

We are now starting to track our Net Promoter and Customer Effort Scores and our initial scores have been very encouraging with the Investment Trends survey recording a Net Promoter Score for The Share Centre of +49, the highest level of client advocacy of any online broker.

Total revenues in the first half increased by 23% to £8.9m (2016: £7.2m) and, excluding interest income, revenues rose by 27% to £8.5m from £6.7m. Even allowing for a weaker comparative last year, which reflected subdued investor activity ahead of the EU Referendum, our performance was particularly strong. Our growth compared very well to the collective peer group where total revenues increased by 3%, and revenue excluding interest income rose by 1%.

A detailed breakdown of revenues is below:

l Dealing commission income

Income from commission increased by 45% year-on-year, driven by buoyant trading volumes in our core business and the launch of Computershare services towards the end of the first half. Trading volumes increased by 17%.

According to Compeer estimates our peer group experienced an increase of 4% over the same period and retail firms (including wealth managers) generally saw on-exchange trades decrease by 17% in H1 2017 compared to H1 2016.

l Fee income

Income from fees increased by 8% year-on-year while our peer group experienced a 9% decrease in fee income in the period.

l Interest income

Notwithstanding the significant increase in client money balances to £359m (31 December 2016: £296m), interest income now accounts for less than 4% of Group revenues and decreased by 33% relative to H1 2016. This reflected lower interest rates and the continuing reluctance of banks to accept client money deposits. Interest income for the peer group increased by 4% (for reasons set out in previous statements) and continued to exceed fee income.