28th May 2009 07:00
Accuma Group plc
('Accuma' or 'the Group')
Final results for the year ended 31 December 2008
Chairman's statement
In the interim statement released on 18 September 2008, the Board reported to the market that the level of new IVA cases in the financial period ended 30 June 2008 was significantly lower than numbers achieved in prior periods, partly due to the general market conditions affecting the numbers of IVAs approved by lenders and partly due to the streamlining by Accuma of its IVA division. However, as such, following a thorough strategic review, and recognising the fact that the IVA books have remained well run and profitable businesses, the Board concluded that it should divest the IVA books as the public equity markets were not ascribing a fair value to these businesses.
As announced on 1 May 2009, Accuma's insolvency division, comprising Wilson Phillips Limited and Accuma Insolvency Practitioners Limited entered into conditional agreements in relation to the sale of their business and certain of their assets for an aggregate consideration of £5.6m. As a result of this proposed disposal, and in accordance with IFRS, these businesses are shown as discontinued operations in the financial statements. Revenue for the year for these two subsidiaries on this basis was approximately £5m with EBITDA of £1m. The General Meeting to approve the disposal takes place on 1 June 2009, as detailed in the circular to shareholders dated 14 May 2009.
In accordance with IFRS, continuing operations in the Group's accounts comprise Byrom & Keeley Financial Services Limited, Thomas Charles & Co Limited and also include the Group's overheads. Revenue and gross profit, on this basis, for the year is £3.72m and £1.12m respectively, giving a gross profit margin of approximately 30 per cent.
The EBITDA loss for the period was £0.87m comprising £1.09 million profit in Byrom & Keeley Financial Services Limited, head office overheads of £1.25 million and a £0.73m loss in Thomas Charles & Co. Ltd.
Cash inflow from operations for the year to 31 December 2008, was £2.78m. (5 months 31 December 2007: £0.45m). However as a result of deferred consideration paid earlier in the year to the vendors of Loan Line (Holdings) Limited (£2.8m) and Byrom & Keeley Financial Services Limited(£1.45m), there was an overall net outflow of £1.79m. The cash balance at the year end was £1.58m (31 December 2007: £3.37m). As the profit threshold (as stipulated by the Byrom & Keeley Financial Services Limited acquisition agreement) of £1.35m was not achieved, and accordingly the final earn-out payment did not become payable.There are no further earn-out payments due within the Group.
Following a review of the carrying value of intangible assets, the Board has written down the carrying value of the goodwill relating to Byrom & Keeley Financial Services Limited in the Group's balance sheet to £3.5m and as a result the Group has incurred an impairment charge of £6.58m in its results for the year ended 31 December 2008. This has resulted in a loss after tax for the year of £7.49m.
Operational review
Following the disposal of the IVA businesses the Group, the existing operations in the Groups accounts in accordance with IFRS accounting, will comprise Byrom & Keeley Financial Services Limited, Thomas Charles & Co Limited and also includes the Group's overheads.
Insolvency Division
We have previously commented in detail on the impact of significant changes to the IVA sector over the past eighteen months. Thomas Charles & Co Limited, as part of our IVA division was impacted by those changes as its primary income was received from marketing services and set-up costs of new IVAs. In line with Group strategy to reduce direct marketing expenditure Thomas Charles & Co Limited ceased to trade in the first quarter of 2009, thus stemming any continuing losses in this division
Debt management division
Byrom & Keeley Financial Services Limited, the informal debt management solutions business, produced an EBITDA of £1.09m (5 months 31 December 2007: £0.59m).
Strategic changes that were made within the Insolvency business have impacted on this division, primarily as a result of the material reduction in direct marketing expenditure from which Byrom & Keeley Financial Services Limited had historically derived considerable benefit. In addition, following a deterioration in the number of enquiries generated from a major lead supplier towards the end of 2008, alternative lead suppliers were engaged. This led to a reduction in new debt management cases signed on a monthly basis from an historic average of 301 in the first half of 2008 to 181 in the second half of 2008. The average, on a monthly basis, of new management cases for the first quarter 2009 was 145.
Loan broking division
As a result of the difficulties faced by the sub-prime market caused by the banking crisis, the loan broking division, Loan Line (Holdings) Limited, was placed into liquidation on 14 October 2008. The impact in the financial statements, as shown in discontinuing operations is a loss of £0.63m.
Outlook
The economic climate continues to favour debt management businesses as a more viable option for creditors and debtors alike, and recent further agreements for the supply of clients will increase our average monthly new client signings. We remain confident of the prospects for this division.
The Group remains debt-free and at the end of April had a cash position of £1.9m, which is expected to increase to approximately £6m following completion of the disposal of the insolvency division.
The funds realised from the disposals will be retained by the Group whilst the Board considers its strategic options, and the best way of delivering value to shareholders.
Charles Taylor
28 May 2009
For further information please contact:
|
Accuma Group plc Charles Howson, Chief Executive |
+44 (0)161 751 6787 |
||
|
FinnCap (Nominated Adviser and Broker) Marc Young / Geoff Nash |
+44 (0)20 7600 1658 |
||
|
Bankside Consultants Simon Rothschild/Oliver Winters |
+44 (0) 207 367 8888 |
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 DECEMBER 2008
|
Year ended |
5 months ended |
||||
|
31 December 2008 |
31 December 2007 |
||||
|
£ |
£ |
||||
|
REVENUE |
|||||
|
Existing operations |
|
3,720,888 |
1,695,352 |
||
|
Cost of sales |
(2,605,766) |
(986,698) |
|||
|
Gross profit |
1,115,122 |
708,654 |
|||
|
Administrative expenses |
(1,988,975) |
(1,614,041) |
|||
|
EARNINGS BEFORE INTEREST, TAX, DEPreciation, AMORTISATION AND |
|||||
|
IMPAIRMENT LOSSES |
|
(873,853) |
(905,387) |
||
|
Depreciation |
(92,662) |
(53,500) |
|||
|
Amortisation |
(11,985) |
(4,963) |
|||
|
Provision for impairment losses |
(6,580,289) |
(11,774,764) |
|||
|
OPERATING LOSS |
(7,558,789) |
(12,738,614) |
|||
|
Finance income |
57,454 |
92,371 |
|||
|
Finance costs |
(27,624) |
(60,913) |
|||
|
LOSS BEFORE TAX |
(7,528,959) |
(12,707,156) |
|||
|
TAXATION |
199,170 |
253,186 |
|||
|
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS |
(7,329,789) |
(12,453,970) |
|||
|
Discontinued operations and non-current assets held for sale |
(164,429) |
(2,076,130)) |
|||
|
LOSS FOR THE YEAR |
(7,494,218) |
(14,530,100) |
|||
|
LOSS PER SHARE - basic and diluted |
|||||
|
From continuing operations |
(22.42)p |
(38.09)p |
|||
|
From discontinued operations |
(0.50)p |
(6.34)p
|
|||
|
From continuing and discontinued operations |
(22.92)p |
(44.43)p |
|||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2008
|
Share capital |
Share premium |
Other reserve |
Share option reserve |
Accumulated Losses |
Total |
||
|
£ |
£ |
£ |
£ |
£ |
£ |
||
|
Balance at 31 July 2007 |
3,269,673 |
28,407,877 |
(1,262,595) |
367,251 |
2,118,316 |
32,900,522 |
|
|
Prior period adjustment |
- |
- |
- |
- |
(123,939) |
(123,939) |
|
|
At 31 July 2007 as restated |
3,269,673 |
28,407,877 |
(1,262,595) |
367,521 |
1,994,377 |
32,776,583 |
|
|
Changes in equity for five month period ended 31 December 2007 |
|||||||
|
Loss for the period |
- |
- |
- |
- |
(14,530,100) |
(14,530,100) |
|
|
Share option charge |
- |
- |
- |
28,977 |
- |
28,977 |
|
|
At 1 January 2008 as restated |
3,269,673 |
28,407,877 |
(1,262,595) |
396,228 |
(12,535,723) |
18,275,460 |
|
|
Changes in equity for year ended 31 December 2008 |
|||||||
|
Loss for the year |
- |
- |
- |
- |
(7,494,218) |
(7,494,218) |
|
|
Share option charge |
- |
- |
- |
21,666 |
- |
21,666 |
|
|
Balance at 31 December 2008 |
3,269,673 |
28,407,877 |
(1,262,595) |
417,894 |
(20,029,941) |
10,802,908 |
|
Other Reserve
The other reserve at 31 December 2008 is a merger reserve created on the establishment of Accuma Insolvency Practitioners Ltd as a subsidiary of Accuma Group PLC.
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2008
|
31 December 2008 |
31 December 2007 |
|||||||
|
(restated) |
||||||||
|
ASSETS |
£ |
£ |
£ |
£ |
||||
|
NON-CURRENT ASSETS |
||||||||
|
Intangible assets |
8,627,251 |
15,829,001 |
||||||
|
Property, plant and equipment |
443,956 |
789,630 |
||||||
|
Deferred tax asset |
561,847 |
309,807 |
||||||
|
Total non-current assets |
9,633,054 |
16,928,438 |
||||||
|
CURRENT ASSETS |
||||||||
|
Trade and other receivables |
788,164 |
6,805,148 |
||||||
|
Cash and cash equivalents |
1,577,135 |
3,367,340 |
||||||
|
Current assets held for resale |
1,387,550 |
- |
||||||
|
Total current assets |
3,752,849 |
10,172,488 |
||||||
|
TOTAL ASSETS |
13,385,903 |
27,100,926 |
||||||
|
EQUITY AND LIABILITIES |
||||||||
|
CURRENT LIABILITIES |
||||||||
|
Trade and other payables |
1,605,090 |
2,831,596 |
||||||
|
Financial liabilities |
89,215 |
2,259,027 |
||||||
|
Provision for onerous lease commitment |
750,000 |
510,687 |
||||||
|
Current tax liabilities |
111,965 |
246,709 |
||||||
|
Total current liabilities |
2,556,270 |
5,848,019 |
||||||
|
NON-current liabilities |
||||||||
|
Contingent consideration |
- |
2,898,536 |
||||||
|
Financial liabilities |
26,725 |
78,911 |
||||||
|
Total non-current liabilities |
26,725 |
2,977,447 |
||||||
|
Total liabilities |
2,582,995 |
8,825,466 |
||||||
|
CAPITAL AND RESERVES - EQUITY |
||||||||
|
Share capital |
3,269,673 |
3,269,673 |
||||||
|
Share premium account |
28,407,877 |
28,407,877 |
||||||
|
Share option reserve |
417,894 |
396,228 |
||||||
|
Accumulated losses |
(20,029,941) |
(12,535,723) |
||||||
|
Other reserve |
(1,262,595) |
(1,262,595) |
||||||
|
Total Equity |
10,802,908 |
18,275,460 |
||||||
|
TOTAL EQUITY AND LIABILITIES |
13,385,903 |
27,100,926 |
||||||
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2008
|
Year ended |
5 months ended |
||||
|
31 December 2008 |
31 December 2007 |
||||
|
(restated) |
|||||
|
OPERATING ACTIVITIES |
£ |
£ |
|||
|
Loss from continuing operations |
(7,558,789) |
(12,738,614) |
|||
|
Loss from discontinued operations |
(164,429) |
(2,076,130) |
|||
|
Impairment provision |
|
6,580,289 |
11,774,764 |
||
|
Depreciation |
585,182 |
202,016 |
|||
|
Amortisation |
11,985 |
4,963 |
|||
|
Decrease in trade and other receivables |
4,582,319 |
1,901,165 |
|||
|
(Decrease)/Increase in trade and other payables |
(1,281,103) |
1,351,339 |
|||
|
Provision for share options |
21,666 |
28,977 |
|||
|
Cash inflow from operations |
2,777,120 |
448,480 |
|||
|
Interest paid |
(26,387) |
(55,857) |
|||
|
Income taxes paid |
- |
(110,000) |
|||
|
Interest element of finance leases |
(1,237) |
(5,056) |
|||
|
Net cash inflow from operating activities |
2,749,496 |
277,567 |
|||
|
Payments to acquire property plant and equipment |
|
(201,946) |
(136,100) |
||
|
Interest received |
57,454 |
92,371 |
|||
|
Acquisition of subsidiaries |
(2,133,034) |
- |
|||
|
Net cash used in investing activitites |
(2,277,526) |
(43,729) |
|||
|
Cash flow from financing activities |
|||||
|
Capital element of finance lease agreements |
(107,972) |
(33,040) |
|||
|
Repayment of loan notes |
(2,154,203) |
- |
|||
|
Cash deposit in respect of loan notes issued |
- |
(164,960) |
|||
|
Net cash used in financing activities |
(2,262,175) |
(198,000) |
|||
|
Net change in cash equivalents |
(1,790,205) |
35,838 |
|||
|
Cash and cash equivalents at the beginning of the year |
3,367,340 |
3,331,502 |
|||
|
Cash and cash equivalents at the end of the year |
1,577,135 |
3,367,340 |
|||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2008
1. TAXATION
|
Year ended 31 December 2008 |
5 months ended 31 December 2007 |
||||
|
£ |
£ |
||||
|
Current tax expense |
|||||
|
UK corporation tax credit on income for the year |
- |
(8,739) |
|||
|
Tax charge relating to prior periods |
52,870 |
62,939 |
|||
|
52,870 |
54,200 |
||||
|
Deferred tax credit |
|||||
|
Changes in deferred tax balances arising from: |
|||||
|
Origination or reversal of timing differences |
(231,548) |
(307,386) |
|||
|
Changes in tax rate |
(20,492) |
||||
|
Income tax credit |
(199,170) |
(253,186) |
|||
|
The credit for the year can be reconciled to the loss per the income statement as follows;
|
|||
|
|
Year ended 31 December 2008
|
|
5 months ended 31 December 2007
|
|
|
£
|
|
£
|
|
Loss for the year from continuing operations
|
(7,528,959)
|
|
(12,707,156)
|
|
Loss for the year from discontinued operations
|
(164,429)
|
|
(2,076,130)
|
|
Loss for the year from operations
|
(7,693,388)
|
|
(14,783,286)
|
|
Loss on ordinary activities multiplied by the rate of corporation tax of 28% (2007: 30%)
|
(2,154,149)
|
|
(4,434,986)
|
|
|
|
|
|
|
Adjusted for the effects of;
|
|
|
|
|
Impairment provision
|
1,842,481
|
|
3,532,429
|
|
Expenses not deductible for tax purposes
|
59,628
|
|
383,932
|
|
Losses of overseas operations not available for relief in UK
|
-
|
|
202,500
|
|
Adjustment to prior period tax charge
|
52,870
|
|
62,939
|
|
Current tax credit for the year
|
(199,170)
|
|
(253,186)
|
|
|
|
|
|
2. DISCONTINUED OPERATIONS
In February 2008, a subsidiary undertaking, Assist Financial Solutions Limited, went into creditors voluntary liquidation.
In October 2008 Loan Line (Holdings) Limited and LL Processing (UK) Limited went into creditors voluntary liquidation.
On 30 April 2009 a conditional offer was accepted from Grant Thornton for the IVA books of Wilson Phillips Limited and Accuma Insolvency Practitioners Limited. The IVA books were available for immediate sale in their present condition at the year end and the sale was considered highly probable by the board of directors.
The results of the discontinued operations which have been included in the consolidated income statement are as follows:
|
Year ended |
Wilson |
||||
|
31 December 2008 |
AFS |
Loanline |
Phillips |
AIP |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Revenue |
8 |
1,498 |
2,400 |
2,670 |
6,576 |
|
Cost of sales |
(12) |
(1,319) |
(1,442) |
(836) |
(3,609) |
|
Gross profit |
(4) |
179 |
958 |
1,834 |
2,967 |
|
Administrative expenses |
(42) |
(814) |
(508) |
(1,279) |
(2,643) |
|
Depreciation |
- |
- |
(96) |
(391) |
(487) |
|
Interest income |
- |
2 |
16 |
- |
18 |
|
Interest expense |
- |
- |
(7) |
(12) |
(19) |
|
Loss for discontinued operations |
(46) |
(633) |
363 |
152 |
(164) |
|
5 months ended |
Wilson |
||||
|
31 December 2007 |
AFS |
Loanline |
Phillips |
AIP |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Revenue |
66 |
2,025 |
907 |
853 |
3,851 |
|
Cost of sales |
(156) |
(1,744) |
(541) |
(1,175) |
(3,616) |
|
Gross profit |
(90) |
281 |
366 |
(322) |
235 |
|
Administrative expenses |
(166) |
(656) |
(244) |
(1,007) |
( 2,073) |
|
Depreciation |
(1) |
- |
(19) |
(128) |
(148) |
|
Interest income |
- |
6 |
6 |
3 |
15 |
|
Interest expense |
- |
(92) |
(4) |
(9) |
(105) |
|
Loss for discontinued operations |
(257) |
(461) |
105 |
(1,463) |
(2,076) |
Analysis of cash flow movements:
|
Year ended |
Wilson |
||||
|
31 December 2008 |
AFS |
Loanline |
Phillips |
AIP |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Operating |
(13) |
(369) |
316 |
(163) |
(229) |
|
Investing |
- |
2 |
16 |
- |
18 |
|
Financing |
- |
(29) |
(22) |
(87) |
(138) |
|
(13) |
(396) |
310 |
(250) |
(349) |
|
|
5 months ended |
Wilson |
||||
|
31 December 2007 |
AFS |
Loanline |
Phillips |
AIP |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Operating |
(64) |
(359) |
(45) |
25 |
(443) |
|
Investing |
- |
6 |
(10) |
(91) |
(95) |
|
Financing |
- |
- |
(4) |
(9) |
(13) |
|
(64) |
(353) |
(59) |
(75) |
(551) |
|
Analysis of assets and liabilities:
|
Year ended |
Wilson |
|||||||
|
31 December 2008 |
AFS |
Loanline |
Phillips |
AIP |
Total |
|||
|
£000 |
£000 |
£000 |
£000 |
£000 |
||||
|
Property, plant & equipment |
- |
- |
- |
- |
- |
|||
|
Other receivables |
- |
- |
978 |
410 |
1,388 |
|||
|
Cash & cash equivalents |
- |
- |
- |
- |
- |
|||
|
- |
- |
978 |
410 |
1,388 |
||||
|
Other current liabilities |
- |
- |
- |
- |
- |
|||
|
5 months ended |
Wilson |
|||||||
|
31 December 2007 |
AFS |
Loanline |
Phillips |
AIP |
Total |
|||
|
£000 |
£000 |
£000 |
£000 |
£000 |
||||
|
Property, plant & equipment |
4 |
2 |
119 |
650 |
775 |
|||
|
Other receivables |
24 |
806 |
1,412 |
1,975 |
4,217 |
|||
|
Cash & cash equivalents |
14 |
396 |
263 |
305 |
978 |
|||
|
42 |
1,204 |
1,794 |
2,930 |
5,970 |
||||
|
Other current liabilities |
(13) |
(1,226) |
(99) |
(667) |
(2,005) |
|||
3. LOSS PER SHARE
Loss per share statistics disclosed are calculated by dividing the losses attributable to ordinary share holders by the weighted average number of shares in issue during the year.
|
Basic and diluted |
Year ended 31 December 2008 |
5 months ended 31 December 2007 |
|
|
£ |
£ |
||
|
Loss for the year - continuing operations |
(7,329,789) |
(12,453,970) |
|
|
Loss for the year - discontinued operations |
(164,429) |
(2,076,130) |
|
|
Loss for the year - continuing and discontinued operations |
(7,494,218) |
(14,530,100) |
|
|
Weighted average number of shares |
32,696,734 |
32,696,734 |
|
|
Loss per share - continuing operations |
22.42p |
38.09p |
|
|
Loss per share - discontinued operations |
0.50p |
6.34p |
|
|
Loss per share - continuing and discontinued operations |
22.92p |
44.43p |
There are 580,295 potentially issuable shares that have not been included in a diluted EPS calculation as they are anti-dilutive.
4. STATUS OF FINANCIAL INFORMATION
The financial information set out in this report does not constitute the company's statutory accounts for the year ended 31 December 2008 but is derived from those accounts. Statutory accounts for the year ended 31 December 2008 will be delivered to the Registrar of Companies shortly. The auditors have reported on those accounts: their report was unqualified, did not include reference to any matters which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under the Companies Act 2006, s498(2) or (3).
5. The Report and Financial Statements for the year ended 31 December 2008 will be sent to shareholders in due course.
Related Shares:
Acg Metals