b'Annual Report & Accounts 2022 Mercia Asset Management PLC 37Strategic reportFor the year as a whole therefore, theIf approved by shareholders, the final Group exceeded the first of its three- dividend will be paid on 11 October year Mercia 20:20 average annual pre- 2022 to shareholders on the register at tax profit target of 20.0million, withclose of business on 23 September 2022, pre-tax profits of 27.4million. with the total dividend payable being Proposed final dividend 2,201,000 (2021: 1,320,000).The Board adopted Mercias progressive dividend policy in December 2020,Adjusted operating profit and since then has announced interim alternative performance dividends of 0.1 pence per share inmeasure (APM)December 2020 and 0.3 pence per shareThe Directors believe that thein December 2021. Shareholders alsoreporting of adjusted operating profit approved a maiden final dividend of 0.3assists in providing a consistent pence per share in September 2021. measure of operating performanceGiven the Groups twin sources ofand is an important APM of interestprofitability and cash inflow, the Groupsto shareholders.dividend policy does not need to beAdjusted operating profit is defined as anchored to one or other earningsoperating profit before performance source, hence the Boards intention tofees net of variable compensation, grow total dividends year on year. realised gains on disposal of The continuing strong Groupinvestments, fair value movements in performance coupled with its positiveinvestments, share-based payments future prospects, now enables Merciascharge, depreciation, amortisation Board to recommend a proposed finalof intangible assets, movement in dividend of 0.5 pence per share. Iffair value of deferred consideration approved by shareholders at Septemberand exceptional items. It includes net 2022s Annual General Meeting (AGM),finance income.the total dividend for the year will be Results reported on an APM basis are 0.8 pence per share (2021: 0.4 pence denoted by 1throughout this review.per share).Year ended Year ended31 March 31 March2022 2021000 000Revenue 1 20,576 19,186Administrative expenses 1 (16,618) (15,897)Net finance income 4,437 48Adjusted operating profit 8,395 3,337Performance fees 2,607 4,224Variable compensation attributable to performance fees (1,015) (445)Net performance fees 1,592 3,779Adjusted operating profit including net performance fees 9,987 7,116Depreciation (224) (212)Net finance income (4,437) (48)Realised gain on disposal of investment 9,878 20,251Fair value movements in investments 11,385 10,088Share-based payments charge (1,109) (543)Amortisation of intangible assets (2,033) (2,317)Movement in fair value of deferred consideration (522) (365)Operating profit22,925 33,970Net finance income 4,437 48Profit before taxation 27,362 34,018Taxation (1,262) 440Profit and total comprehensive income for the year 26,100 34,458'