IMPACT HOLDINGS (UK) PLC
Press Release 30th September 2014
Impact Holdings (UK) plc
("Impact" or "The Group")
Preliminary results for the year ended 31st March 2014
Impact Holdings (UK) plc. (AIM: IHUK), the specialist lender,
announces its preliminary results for the year ended 31st March 2014.
Financial Highlights
- Group's pre-tax profit of £97,088 (2013: Restated profit £45,340)
- Earnings per share 3.7p (2013: Restated 1.8p)
- Further reduced exposure to external debt providers
- Cash and cash equivalents of £0.7 million (2013: £0.7 million)
- Net assets of £5.58 million (2013: Restated £5.44 million)
Commenting on the results Paul Davies, the Chief Executive, said
"Trading results remain suppressed whilst the group's lending subsidiary
companies continue to pursue complex litigation against errant borrowers and
professional advisors. Following on from recent successful recoveries and
cases concluded in our favour the directors anticipate that the litigation
process is likely to be successfully concluded within the next two years."
For further information:
Impact Holdings (UK) plc.
Paul Davies Chief Executive Officer Tel: +44 (0)1928 793 550
www.impactholdings.net
Zeus Capital
Nick Cowles/Andrew Jones Tel +44 (0)161 831 1512
Notes to the Editor:
Impact Holdings (UK) plc through its individual subsidiaries
provides financial outsourcing and ancillary services to the legal profession.
In addition Impact will fund other opportunities where debt
instruments or debentures provide the primary security and there are
opportunities for short term bespoke funding where serviceability precludes
larger lenders from entering this area.
Impact is regulated by the Office of Fair Trading through which it
is licensed to lend under the Consumer Credit Act 1974.
The financial information detailed below has been extracted from the Annual
Report and Accounts for the year ended 31st March 2014, which are available
from Zeus Capital, 82 King Street, Manchester, M2 4WQ and on the Company's
website (www.impactholdings.net).
CHAIRMAN'S STATEMENT
We have previously advised that as a consequence of the ongoing credit crisis
and new economic environment in which we operate it has been necessary to seek
out additional revenue streams for the group.
As previously advised the Board and management team continues to spend considerable
effort in looking at the strategic direction the business is taking following the
lack of liquidity in the banking market. This has culminated in the decision to
diversify the Company's product offering and reduce the group's exposure to
financial institutions.
PRIOR PERIOD ADJUSTMENT
The 2013 financial statements have been restated as a consequence of a prior
period adjustment details of which are shown in note 4
BUSINESS REVIEW
Trading results remain suppressed whilst the group's lending
subsidiary companies continue to pursue complex litigation against errant
borrowers and professional advisors. Following on from recent successful
recoveries and cases concluded in our favour the directors anticipate that the
litigation process is likely to be successfully concluded within the next two
years.
CAPITAL STRUCTURE
On 28th March 2014 the High Court confirmed the Board's proposal
that had previously been approved by the shareholders to implement a capital
reduction and increase the distributable reserves of the Group in order to
support the Group's ability to pay dividends, should it be desirable to do so
in the future.
THE BOARD
The Board remains committed to adhering to strong Corporate Governance and
operating within a framework of prudent controls which ensures the future risks
of the business are controlled and managed.
STRATEGY
The development of the strategic direction of the business has continued in
this financial year with a further reduction in our exposure to third party funders.
This peaked at £10.0m in March 2010 and now stands at £1.5m as at 31 March 2014.
OUTLOOK
The group remains focused on providing services to the legal and business sectors.
The Board of Directors is committed to the future growth opportunities earmarked and
continues to develop this strategy which will provide the foundation for controlled
growth, increased profitability over time and enhanced shareholder value.
The dedication and commitment of all staff to re-align the business is a credit as
they have collectively worked with commitment and resilience to deliver this performance.
I should like to place on record my appreciation for the efforts of
the executive, management and staff during the year. I also appreciate the
enthusiasm and support of my fellow directors and thank them for their
continued encouragement and counsel.
DIVIDEND
No dividend will be declared for the year.
Roger Barlow
Non-executive Chairman
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2014
Restated
Year Year
ended Ended
31/03/2014 31/03/2013
£ £
Revenue 1,740,529 1,035,310
Cost of Sales (1,307,442) (413,906)
Gross Profit 433,087 621,404
Exceptional operating expenses (1,904,412) 566,667
Operating expenses (1,513,615) (3,418,027) (1,142,814) (576,147)
Operating (Loss)/profit (2,984,940) 45,257
Exceptional interest receivable and similar income 3,082,028 83
Profit for the year from operations before tax 97,088 45,340
Tax (charge) - (1,697)
Profit for the year attributable to the owners of the parent 97,088 43,643
Earnings per share (pence)
Basic 3.7p 1.8p
Diluted 3.7p 1.8p
Other than as disclosed in the consolidated Income Statement and the
Consolidated Statement of Changes in Equity there are no further gains or
losses. Accordingly, no separate statement of other comprehensive income has
been presented.
All activities are considered to be continuing.
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2014
Restated
2014 2013
£ £
Non-current assets
Goodwill 421,766 421,766
Property, plant and equipment 918,580 921,890
Deferred taxation 170,195 170,195
1,510,541 1,513,851
Current assets
Trade and other receivables including amounts falling due after more than
one year 5,973,186 8,289,589
Cash and cash equivalents 692,685 690,242
6,665,871 8,979,831
Total assets 8,176,412 10,493,682
Equity and liabilities
Share capital 1,311,201 6,411,201
Share premium account - 5,125,291
Shares held by Employee Benefit Trust (45,070) (45,070)
Retained earnings 4,310,645 (6,051,083)
Issued capital and reserves attributable to parent 5,576,776 5,440,339
Trade and other payables due after more than one year 540,335 540,261
Trade and other payables due in less than one year 2,059,301 4,513,082
Total equity and liabilities 8,176,412 10,493,682
These financial statements were approved by the board on 29 September 2014
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2014
Restated
2014 2013
£ £
Operating activities
Cash generated/(absorbed) by operations 456,145 (102,843)
Net cash generated/(absorbed) by operating activities 456,145 (102,843)
Investing activities
Interest received 25 83
Purchases of property, plant and equipment (34,914) (71,248)
Net cash (used) in investing activities (34,889) (71,165)
Financing activities
Issue of equity share capital - 320,003
Loan incepted 500,000 -
Loan repaid (500,000) -
Net decrease in other amounts owed to lending institutions (418,813) (531,932)
Net cash outflow from financing activities (418,813) (211,929)
Net increase/(decrease) in cash and cash equivalents 2,443 (385,937)
Cash and cash equivalents at 1 April 690,242 1,076,179
Cash and cash equivalents at 31 March 692,685 690,242
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2014
Share Share Shares Share Profit and Total
Capital premium held by options loss account
EBT
£ £ £ £ £ £
Balance at 31 March 2012 6,211,201 5,005,288 (45,070) - (6,094,726) 5,076,693
Ordinary shares issued 200,000 - - - - 200,000
Share premium on issued shares - 120,003 - - - 120,003
Net profit for the year - - - - 250,071 250,071
Balance at 31 March 2013 6,411,201 5,125,291 (45,070) - (5,844,655) 5,646,767
Prior period adjustment (note 4) - - - - (206,428) (206,428)
Restated balance at 31 March 2013 6,411,201 5,125,291 (45,070) - (6,051,083) 5,440,339
Net profit for the year - - - - 97,088 97,088
Share premium reduction - (5,125,291) - - 5,125,291 -
Cancellation of ordinary B shares (5,100,000) - - - 5,100,000 -
Share options - - - 39,349 - 39,349
Balance at 31 March 2014 1,311,201 - (45,070) 39,349 4,271,296 5,576,776
Notes
1. The financial information set out in this announcement does not
constitute the group's financial statements (as defined by s434 of the
Companies Act 2006) for the year ended 31st March 2014. The results for the
year ended 31st March 2014 are extracted from the Annual Report of Impact
Holdings (UK) plc, on which the auditors have issued an unqualified report
which includes an emphasis of matter.
2. Pursuant to AIM Rule 20 copies of the Annual Report may be
downloaded from the company's web site www.impactholdings.netand will be
posted to shareholders shortly. Further copies will be available from Zeus
Capital, 3 Ralli Courts, West Riverside, Manchester, M3 5FT.
3. The Annual General Meeting will be held at the Company's
registered office, 7500 Daresbury Park, Daresbury, Warrington WA4 4BS on 17th
December 2014 at 8.45am.
4. Prior period adjustment
During preparation of this year's financial statements, the directors became
aware of a material error in the 2013 statements. Shortly after the end of the
previous financial period the lender of one of the group's subsidiary
companies agreed by negotiation, subject to future performance, to grant a
discount on the introduction of a third party lender. On advice from the
previous auditors, which the directors accepted, this transaction was treated
as an adjusting post balance sheet event and included in the 2013 figures
where appropriate. As the agreement was made shortly after the end of the 2013
financial year the transaction should have been treated as an un-adjusting
post balance sheet event.
A review has been undertaken by the directors following the appointment of new
auditors of both the 2014 and 2013 financial results. The directors have re-stated
the 2013 financial statements to remove the transaction, together with the associated
or linked adjustments thereto from the 2013 financial statements and include them
where appropriate in the 2014 statements. The directors have amended the financial
statements to re-state the 2013 figures and disclose the relevant amendments in 2014
as a prior year adjustment.
The removal of the discount and the associated or linked adjustments have had the
following effect on the 2013 financial statements: the removal of the discount has
increased other operating expenses by £2,504,459, reduced cost of sales by £16,760
and increased trade and other payables due in less than one year by £2,487,699; the
removal of a provision against recoverability of trade receivables has reduced other
operating expenses by £2,004,693 and increased trade and other receivables by the
same amount; the removal of legal fees and professional fees relating to the
transaction together with the removal of a bonus provision and other sundry costs
has reduced other operating expenses and trade payables due in less than one year
by £276,446. Bad debts recovered previously stated as revenue of £274,617 has been
offset against bad debts provided in operating expenses. The balance at bank has
been adjusted by £1,829 as part of these adjustments. These adjustments required
the deferred tax charge to be adjusted by £1,697. The net effect of these adjustments
is to reduce profits by £206,428. The above transactions were then reversed when
re-introduced into the 2014 financial statements. Exceptional interest and similar
income in 2014 relates to the discount. Exceptional operational expenses in 2014
relates to provisions against recoverability of trade receivables.
As a result, comparative figures for the year ended 31 March 2013 have been adjusted as follows:
Previously 2013 Restated
Profit for the year stated Adjustment 2013
£ £ £
Revenue 1,309,927 (274,617) 1,035,310
Cost of sales (430,666) 16,760 (413,906)
Gross profit 879,261 (257,857) 621,404
Other operating expenses (629,273) 53,126 (576,147)
Operating profit 249,988 (204,731) 45,257
Interest received 83 2 83
Operating profit after interest 250,071 - (204,731) 45,340
Tax charge - (1,697) (1,697)
Profit for the year after tax 250,071 (206,428) 43,643
Net assets
Trade and other receivables including amounts
falling due after more than one year 6,284,896 2,004,693 8,289,589
Deferred tax 171,892 (1,697) 170,195
Cash and cash equivalents 688,413 1,829 690,242
Trade and other payables due in less
than one year (2,301,829) ( (2,211,253) (4,513,082)
Retained earnings (5,844,655) (206,428) (6,051,083)IMPACT (UK) : Preliminary results for the year ended 31st March 2014
September 30, 2014 at 02:01 am EDT
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