BR report 2018

33 32 The company develops and sells business software, and provides installation and related support services in Europe and the United States. The company offers Spend Control and eProcurement solutions that help organisations to improve operational and financial performance by enhancing the way they buy various goods and services. The company came to AIM in June 2006 and its current market cap is £176.06m. 29 Preliminary Results for the year to 31 July 2017 published in October 2017 reported strong revenue growth – up 31% to £25.4m, underlying organic growth of 9%, a 28% increase in annualised contracted revenue to £22.6m, strong cash balances of £4.3m (up from £3.6m in 2016) and adjusted earnings per share up by 25% to 9.0p. 30 The company researches and develops innovative photonics technology from prototypes to volume manufacturing in the aerospace & defence, industrial, life sciences and scientific research (big science) sectors. The work is done in the USA and UK, includes crystal growth, optical materials processing, acousto-optics and electro- optics, fiber optics, DFB laser modules, precision optics, as well as light measurement and calibration solutions. The company came to AIM in December 1997 and its current market cap is £337.91m. In February 2018, the company reported that its order book at the end of January stood at £89.7m, a record level, and up 48% on the same time in 2017. 31 Revenue has almost doubled from £63.25m in September 2013 to £112.02 in September 2017 and pre- tax profit in 2017 was at £12.2m, up from £10.10m in 2016. 32 PROACTIS HOLDINGS PLC 5 YEAR PERFORMANCE GOOCH & HOUSEGO PLC 5 YEAR PERFORMANCE SOURCE: HARGREAVES LANSDOWN, 21 MARCH 2018 SOURCE: LONDON STOCK EXCHANGE, 21 MARCH 2018 The group has been on the acquisition trail in five of the last three years. In February 2018 it announced that it would more than double its annual revenue and earnings, as expected, following the acquisition of Perfect commerce. While the company deals in software, its services are essentially based on accountancy systems, so again, not the most exciting underlying trades. But growth through a phase of integrating external businesses signals sound strategic and operational management. This is a technology firm heavily involved in R&D, developing cutting edge technologies and applications, to create new products enabling it to move up the value chain. Investment in R&D in 2017 was up 16.2%, 22 new products were introduced and seven new patents granted. 33 Although it is not a young company, it has recently consolidated its ten manufacturing sites into three manufacturing centres, as part of its drive to create a more scalable organisational model for its future growth. At the same time, one of its goals is further diversifying the business, showing a marriage of innovation and sensible commercial planning. THE UK’S AGEING POPULATION WHAT IT MEANS FOR BR SUITABILITY Like many Western countries, the UK’s population is rapidly ageing. Later life planning has become a far more significant concern for advisers and their clients. The challenge comes in the balance between passing on the estate to the next generation (and in turn, attempting to mitigate IHT liability), and having sufficient funds to live on in old age. Perhaps one of the most frictionless estate planning solutions is to gift money directly to children or grandchildren. This requires seven years for the capital to become completely free of IHT liability, but it is also worth considering that the capital is no longer part of the individual’s estate. Many people may be considering a large gift to their children when they are in their 60s or 70s. However, it’s still important to consider how much money may be required to sustain a particular lifestyle if you are to live well into your 90s. COST OF CARE STATISTICS Cost of caremust come into consideration when looking at later life planning. In 2016-17, the average weekly cost of a room in a residential home in the UK was £600, and a room in a nursing home cost £841. However, these are only average figures. You could be looking at considerably higher or lower figures depending on where you live. 34 Nursing care costs in Greater London were, on average, £949 per week in 2016-17. “Investors shouldn’t compromise their estate planning by just focusing on the tax efficiency of their solutions, and not looking at the diversity and performance of their investment choices – Due diligence is key.” — BELINDA THOMAS, HEAD OF SALES AND INVESTOR RELATIONS, TRIPLE POINT NUMBER OF BABIES ESTIMATED TO LIVE TO 100, UK, 2016 0 20 40 60 80 100 120 140 GIRLS BOYS NURSING CARE RESIDENTIAL CARE EAST MIDLANDS £725 £578 EAST OF ENGLAND £986 £673 GREATER LONDON £949 £741 NORTH EAST £666 £563 NORTH WEST £766 £511 NORTHERN IRELAND £670 £516 SCOTLAND £852 £639 SOUTH EAST £1,041 £702 SOUTH WEST £927 £655 WALES £769 £566 WEST MIDLANDS £837 £573 YORKSHIRE & HUMBER £755 £546 The UK’s elderly population is only set to rise. One in three people born today are set to live to 100. In 2016 there were estimated to be 783,000 babies under one year old, and the latest ONS projection suggests that 248,000 of these will live to see their 100th birthday. 35 The increased life expectancy is due to improvements in healthcare, and changes in lifestyle – such as a decline in the number of smokers and a greater emphasis on healthy eating and fitness. Women are also more likely to reach 100 than men. There has been speculation over the reasons for this, including men historically smoking and drinking more alcohol than women. There has also been speculation over the negative effects of testosterone and the positive effects of oestrogen. 36 “In 2016-17, the average weekly cost of a room in a nursing home was £841.” COST OF NURSING CARE VS. COST OF RESIDENTIAL CARE (PER WEEK) SOURCE: WHICH MAR 2013 0 50 100 150 GBP JUN 2014 SEP 2015 DEC 2016 MAR 2018 JAN 2014 JAN 2015 JAN 2016 JAN 2017 JAN 2018 208.20 474.36 740.52 1,006.68 1,272.84 1,539.00 SOURCE: ONS