5th Apr 2005 07:01
IFG Group PLC05 April 2005 PRESS ANNOUNCEMENT FOR RELEASE 7.00 AM 5 APRIL 2005 PRELIMINARY RESULTSFOR THE YEAR ENDED 31 DECEMBER 2004 Continuing Continuing Activities Activities Total Total 2004 2003 2004 2003 restated restated •'000 •'000 Notes •'000 •'000Turnover 93,345 86,350 96,132 91,711 Operating profit/(loss) 12,143 12,929 1 (1,907) 1,261 Profit/(loss) before 8,440 8,707 1 (6,717) 1,572taxation Adjusted earnings perordinary 10.24 11.46 2 n/a n/ashare - in cent Basic (loss)/earnings perordinary share - in cent n/a n/a (10.44) 0.07 Recurring income 23,859 23,324 Dividend per ordinaryshare - in 2.40 2.30cent Equity shareholders' funds 24,829 31,800Annual General Meeting - 28 June 2005Notes: 1. Continuing activity figures are stated before goodwill amortisation andexceptional items. 2. Adjusted earnings per share are calculated before goodwillamortisation and exceptional items. Commenting on the results, Richard Hayes, chief executive, said: "We intend to invest further in people and markets in those areas where we seematerial long term potential. This should give rise to significant growth overthe next three to four years. In that time span, on current planning, net debtwill have been eliminated. The combination of profits growth and interestreduction will drive earnings per share" For further information please contact : RICHARD HAYESCHIEF EXECUTIVEIFG GROUP PLC TELEPHONE DUBLIN (353-1) 2752800e-mail : richard.hayes@ifg.iewww.ifggroup.com 2004 saw a steady performance in the Irish business and UK core operations, bothin the Bristol based Actuarial and Pensioneer Trustees and the City of Londonbased IFA businesses. There was also strong growth in the Internationalbusiness. These results were marred by poor performances in the Pension Releasebusiness (leading to closure at the end of 2004), regional IFA businesses andManchester based Actuarial business. Profits on continuing activities before tax, goodwill amortisation andexceptional items were €8.4 million on revenues of €93.3 million (total lossbefore tax and revenues of €6.7 million and €96.1 million respectively). Thiscompares with €8.7 million and €86.4 million respectively in the previous year(total profit before tax and revenues of €1.6 million and €91.7 millionrespectively). Continuing results for the year as reflected are before: (i) Provision for closure of the Pension Release business of €1.6 million(including redundancy and other closure costs);(ii) Funding of senior directors' pension of €0.6 million;(iii) Proceeds from the sale of Irish businesses of €0.5 million;(iv) Additional revenue of €0.8 million in the U.K. Pension administrationbusiness arising from improved revenue recognition practices;(v) Write down of investment of €0.1 million;(vi) An exceptional payment to the directors of the Irish Pension Business inlieu of an earnout in future years of €0.4 million. The net effect of these items is a loss before tax of €1.4 million and, inaddition, goodwill of €7.4 million has been written off in relation to theclosure of the Pension Release business. Adjusted earnings per share were 10.24 cent (2003: (restated) 11.46 cent). On atotal basis, basic losses per share were 10.44 cent (2003: (restated) earningsof 0.07 cent). Group FinancingGroup Banking and deferred consideration commitments are summarised and comparedto the previous year end below. As at 31 December As at 31 December 2004 2003 Core Investment Total Core Investment Total ------ -------------- ------- ----------- ------------- ------- •'m •'m •'m •'m •'m •'mNet debt perbalance sheet 30.2 3.8 34.0 22.2 5.2 27.4Bankguaranteeddeferredconsideration - - - 19.6 - 19.6 ------ -------- ------ ------ -------- -------Total bankcommitment 30.2 3.8 34.0 41.8 5.2 47.0Deferredconsideration 2.7 10.5 ------ -------- ------ ------ -------- -------Totalcommitment 36.7 57.5 ------ -------- ------ ------ -------- ------- Of the €20.8 million reduction in commitments, €9.3 million was accounted for byproceeds from the sale of 50% of the Group's interest in its mortgagedistribution business, €12.9 million was from business performance and €1.4million adverse was from movements related to currency translation. Group investment related debt at year end 2004 was €3.8 million (2003 €5.2million) in total which was offset by ring-fenced assets as follows: 2004 2003 •'m •'mDebtors for sale and surrender of policies - 1.4Remaining assets valued at year end 4.6 4.7 ------ ------ 4.6 6.1 ------ ------Group PerformanceThe performance of the Group in the twelve months split between its mainactivities was as follows: Continuing Continuing Activities Activities Total Total Operating Operating Operating Operating Profit/(loss) Profit/(loss) Profit/(loss) Profit/(loss) 2004 2003 2004 2003 restated restated •'000 •'000 •'000 •'000InternationalInternationalTrustee &CorporateServices 5,338 4,150 5,338 4,150 UKActuarial andPensioneerTrustee 2,540 2,896 3,299 2,896FinancialServices 636 1,918 636 1,717PensionRelease andDiscountBrokerage (13) 564 (2,131) (4,521) IrelandMortgageBusinessSolutions 1,820 2,084 1,820 2,084FinancialServicesincludingCentralOverhead 1,822 1,317 1,403 1,245InvestmentDivision(Discontinued) - - - (798)Exceptionallosses - - (667) (828) -------- -------- -------- -------- Operatingprofit beforegoodwillamortisation 12,143 12,929 9,698 5,945 -------- -------- -------- --------Goodwillamortisation (4,231) (4,684) (11,605) (4,684) -------- -------- -------- -------- Operatingprofit/(loss) 7,912 8,245 (1,907) 1,261 ======== ======== ======== ======== Note: Continuing activities operating profit is stated before exceptional items Review of the Principal Trading BusinessesInternational Trustee and Corporate Services This division operates in two main areas: - Provision of corporate and trustee services in the Isle of Man,Jersey, Geneva, London, B.V.I. and Cyprus;- Provision of specialist trustee and back office services to theleisure industry in Europe and the U.S. through FNTC. Profits of this division grew by 29% during the period from €4.2 million to €5.3million. This continued the record over the past six years of achieving compoundannual growth in the business in excess of 20%. During the year the clients of Mutual Trust Management, a former competitor,were successfully integrated into the division. Activity levels in the businesswere at a high with revenues up by 18% to €18 million. The record of this division speaks for itself and it is encouraging to note thatsignificant opportunities continue to arise to grow the business through serviceand product development to existing clients as well as new client acquisitions. UK Business The overall results of both the Actuarial and Pensioneer Trustee business andthe Financial Services business were unsatisfactory with profits falling from€2.9 million to €2.5 million and €1.9 million to €0.6 million respectively. These figures mask a good performance by the Bristol and London based activitiesbut, as previously noted, reflect a very poor result from the Manchesteroperation. The City of London fee based IFA, produced a good result. The last two to three years have given us many challenges in the UK. The bearmarket, coupled with an ever increasing regulatory burden and complaints inrelation to historical business, has continued to impact profitability. Consequently a number of remedial actions in the UK have been undertaken.• Appointed a new CEO;Mark Bogard, an investment banker with a strong track record in the IFA sector,now leads the UK businesses.• The closure and discontinuance of the Pension Release business;During the year it became apparent that it was not possible to service pensionrelease clients in an economic manner due to the heightened regulatory burden.Accordingly the pension release business was closed to new business. (This willnot affect the completion of a review into past business. It is worth notingthat there is, at this point, no indication that the provision made at year end2003 in relation to this review will be insufficient and significant renewalincome on business previously written continues to arise.)• An in-depth study of all operations by independent complianceconsultants was commissioned;Compliance Consultants Limited conducted an in-depth study of Group operations.As a result of this report a 'continuous improvement' approach to compliance hasbeen adopted. IrelandMortgages, Title Insurance, Financial Services In 2004, cheques issued by lenders to clients of the Group amounted to €1,157million (2003: €858 million) an increase of 35% representing, it is believed,some 7% of the total market. Despite the increase in cheque issues the profitwas negatively impacted by poor life insurance penetration and a time lag onrenewal income recognition. The joint venture agreement with GE CapitalWoodchester to develop the non-conforming lending business in Ireland wascompleted at the end of February 2004. As part of this joint venture, in 2003,50% of the mortgage distribution business was disposed of. The non-conforminglending business has been slow to develop but it is expected grow substantiallyin the coming years. Through the use of title insurance the Group has become an integrated low costremortgage processor on behalf of clients. The number of cases processedincreased substantially in the year necessitating considerable investment intraining and technology which has put the Group in a good position to benefit asthis market continues to grow. The individual and corporate pensions business and credit insurance businessesall performed well.Dividends Your Board is recommending a final dividend of 1.64 cent per share which whenadded to the interim dividend already paid, makes a total of 2.40 cent, anincrease of 4.3% on the previous year. Subject to shareholder approval, thefinal dividend will be paid on 22 July 2005 to shareholders on the Register on 8July 2005. Consolidated Profit and Loss AccountYear Ended 31 December 2004 2004 2003 Continuing Discontinued Exceptional Continuing Discontinued Exceptional Activities Activities Items Total Activities Activities Items Total restated restated restated restated Notes •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000Turnover Continuingactivities 3(i) 93,090 - 759 93,849 81,722 - - 81,722Acquisitions 255 - - 255 4,628 - - 4,628Discontinuedactivities - 2,028 - 2,028 - 5,361 - 5,361------------ ---- ------- ---------- -------- -------- -------- -------- -------- -------- 2 93,345 2,028 759 96,132 86,350 5,361 - 91,711Cost of sales (15,692) (3,534) - (19,226) (18,319) (5,534) - (23,853)------------ ---- ------- ---------- -------- -------- -------- -------- -------- --------Grossprofit/(loss) 77,653 (1,506) 759 76,906 68,031 (173) - 67,858Operating expensesContinuing activities: Goodwillamortisation (4,231) - - (4,231) (4,684) - - (4,684)Other costs 3(ii) (65,510) - (989) (66,499) (55,102) - (570) (55,672)Exceptionalimpairment ofinvestments 3(iii) - - (97) (97) - - (258) (258)Discontinuedactivities:Exceptionalgoodwillimpairment 3(iv) - - (7,374) (7,374) - - - -Exceptionalitem - pensionrelease - - - - - - (4,369) (4,369)Other costs - (612) - (612) - (1,614) - (1,614)------------ ---- ------- ---------- -------- -------- -------- -------- -------- -------- (69,741) (612) (8,460) (78,813) (59,786) (1,614) (5,197) (66,597)------------ ---- ------- ---------- -------- -------- -------- -------- -------- --------Operating profit/(loss)Continuingactivities 7,853 - (327) 7,526 7,492 - (828) 6,664 Associates 116 - - 116 83 - - 83Acquisitions (57) - - (57) 670 - - 670Discontinuedactivities - (2,118) (7,374) (9,492) - (1,787) (4,369) (6,156)------------ ---- ------- ---------- -------- -------- -------- -------- -------- -------- 2 7,912 (2,118) (7,701) (1,907) 8,245 (1,787) (5,197) 1,261Exceptional itemsContinuingactivities -Restructuringcharge - - - - - - (750) (750)Continuingactivities -Disposal ofIrishbusinesses 3(v) - - 483 483 - - 6,236 6,236Discontinuedactivities -Termination ofendowmenttrading forinvestmentpurposes - - - - - - (329) (329)Discontinuedactivities -Disposal ofpropertyinvestment - - - - - - 104 104Discontinuedactivities -Pensionreleaseclosure 3(vi) - - (1,590) (1,590) - - - -Discontinuedactivities -Disposal ofUK business - - - - - - (172) (172)------------ ---- ------- ---------- -------- -------- -------- -------- -------- -------- - - (1,107) (1,107) - - 5,089 5,089 Profit/(loss)on ordinaryactivitiesbeforeinterest 7,912 (2,118) (8,808) (3,014) 8,245 (1,787) (108) 6,350Net interestand otherincome (3,703) - - (3,703) (4,222) ( 556) - (4,778)------------ ---- ------- ---------- -------- -------- -------- -------- -------- --------Profit/(loss)on ordinaryactivitiesbeforetaxation 4,209 (2,118) (8,808) (6,717) 4,023 (2,343) (108) 1,572Tax on profiton ordinaryactivities 4 (1,122) - 1,702 580 (1,240) 25 (289) (1,504)------------ ---- ------- ---------- -------- -------- -------- -------- -------- --------Profit/(loss)on ordinaryactivitiesafter taxation 3,087 (2,118) (7,106) (6,137) 2,783 (2,318) (397) 68 Equityminorityinterest (658) - - (658) (26) - - (26)------------ ---- ------- ---------- -------- -------- -------- -------- -------- --------Profit/(loss)for thefinancial year 2,429 (2,118) (7,106) (6,795) 2,757 (2,318) (397) 42Dividends paid (494) - - (496) (476) - - (476)Dividendsproposed (1,070) - - (1,068) (1,020) - - (1,020)------------ ---- ------- ---------- -------- -------- -------- -------- -------- -------- (1,564) - - (1,564) (1,496) - - (1,496)Retainedprofit/(loss)for thefinancial yearattributableto equityshareholders 865 (2,118) (7,106) (8,359) 1,261 (2,318) (397) (1,454)------------ ---- ------- ---------- -------- -------- -------- -------- -------- --------Adjustedearnings perordinary share- cent * 5 10.24 n/a n/a n/a 11.46 n/a n/a n/a------------ ---- ------- ---------- -------- -------- -------- -------- -------- --------Basic earningsper ordinaryshare - cent 5 n/a n/a n/a (10.44) n/a n/a n/a 0.07------------ ---- ------- ---------- -------- -------- -------- -------- -------- --------Dilutedearnings perordinary share- cent 5 n/a n/a n/a (10.44) n/a n/a n/a 0.07------------ ---- ------- ---------- -------- -------- -------- -------- -------- -------- * before goodwill amortisation and exceptional items. Other Statements Year Ended 31 December 2004 2004 2003 •'000 •'000 restatedMovements in Profit and Loss Account Retained loss as previously stated (21,418) (19,320)Prior year adjustment (100) - ------- -------Retained loss as restated (21,518) (19,320)Loss retained for the year (8,359) (1,454)Exchange movements (17) (992)Revaluation reserve realised on sale of property - 248Subsidiary reserves previously not consolidated (228) - ------- -------Retained loss at end of year (30,122) (21,518) ======= ======= 2004 2003 •'000 •'000 restatedStatement of Total Recognised Gains and Losses(Loss)/profit for the financial year (6,795) 42Exchange movements (17) (992)Cost of senior unsecured notes issued - (16)Revaluation of investment in associate 1,570 -Movement in revaluation reserve - 273 ------- -------Total recognised losses for the financial year (5,242) (693)Prior year adjustment 173 - ------- -------Total recognised losses since last annual report (5,069) (693) ======= ======= There is no difference between the profit on ordinary activities before tax andthe retained profit for the year ona historical cost basis and the corresponding amounts in the profit and lossaccount. 2004 2003 •'000 •'000 restatedReconciliation of Movements in Shareholders' Funds(Loss)/profit for the financial year (6,795) 42Dividends (1,564) (1,496) ------- ------ (8,359) (1,454)Other recognised gains/(losses) for the year:Exchange movements (17) (992)Net increase in share capital 27 15Increase in share premium (net of issue expenses) 36 42Revaluation of investment in associate 1,570 -Movement in revaluation reserve - 273Subsidiary reserves previously not consolidated (228) - ------- ------Net decrease to equity shareholders' funds (6,971) (2,116) Opening equity shareholders' funds 31,800 33,916 ------- ------(Originally €31,627,000 restated for prior year adjustmentof €173,000)Closing equity shareholders' funds 24,829 31,800 ======= ====== Consolidated Balance Sheet As at 31 December 2004 2004 2003 •'000 •'000 restatedFixed assetsIntangible assets 52,569 62,538Tangible assets 6,115 5,779Financial assets- investments in associates 2,041 343- other investments 630 727 -------- -------- 61,355 69,387 -------- --------Current assetsStocks 1,124 1,220Debtors 37,704 43,648Cash at bank and in hand 17,944 20,753 -------- -------- 56,772 65,621 Creditors (amounts falling due within one year) (47,967) (57,147) -------- -------- Net current assets 8,805 8,474 -------- -------- Total assets less current liabilities 70,160 77,861 Creditors (amounts falling due after more than oneyear) (40,276) (38,116) Provisions for liabilities and charges (3,682) (6,575) -------- -------- 26,202 33,170 ======== ======== Capital and reservesCalled up share capital 7,827 7,800Share premium account 44,867 44,831Capital conversion reserve fund 414 414Revaluation reserve 1,843 273Profit and loss account (30,122) (21,518) -------- --------Group equity shareholders' funds 24,829 31,800Equity minority interests 1,373 1,370 -------- --------Total shareholders' funds 26,202 33,170 ======== ======== Consolidated Cash Flow Statement Year Ended 31 December 2004 2004 2003 Notes •'000 •'000Net cash inflow from operating activities 6 (ii) 23,258 22,704 -------- --------Returns on investment and servicing of financeInterest received 383 394Interest paid (3,786) (3,658)Finance lease interest paid (33) (50)Dividends received - 12Dividends paid to minority interests (606) -Cost of senior unsecured notes issued - (22) -------- -------- (4,042) (3,324) -------- --------Taxation payments (825) (1,237) -------- --------Capital expenditure and financial investmentPurchase of tangible fixed assets (2,011) (979)Sale of tangible fixed assets 110 58Exceptional item - disposal of property investments - 943 -------- -------- (1,901) 22 -------- --------Acquisitions and Disposals Purchase of subsidiary undertakings (492) 177Deferred consideration on prior year acquisitions (29,136) (8,724)Interest on loan notes issued on acquisitions (75) (170)Sale of investments - 635Sale of interest in subsidiary undertaking 8,381 1,885 -------- -------- (21,322) (6,197) -------- --------Equity dividends paid (1,444) (1,431) -------- --------Cash (outflow)/inflow before management ofliquid resources and financing (6,276) 10,537 -------- --------Management of liquid resources - - -------- --------FinancingIssue of share capital 63 63Repayment of debt (245) (1,022)Exceptional item - repayment of debt related todiscontinuedendowment business (1,494) (13,293)New loans in year 20,897 -Senior unsecured notes repaid (13,408) -Capital element of finance lease rentals (294) (212) -------- -------- Net cash inflow/(outflow) from financing 5,519 (14,464) -------- --------Movement in cash 6(i) (757) (3,927) ======== ======== Notes 1 Extract from accounting policies Basis of Preparation The financial statements are prepared in Euro, denoted by the symbol • and areprepared in accordance with accounting standards generally accepted in Irelandand Irish statute comprising the Companies Acts, 1963 to 2003, and the EuropeanCommunities (Companies: Group Accounts) Regulations, 1992. Accounting standardsgenerally accepted in Ireland in preparing financial statements giving a trueand fair view are those published by the Institute of Chartered Accountants inIreland and issued by the Accounting Standards Board. Comparative figures Comparative figures in the consolidated Profit and Loss account for the yearended 31 December 2003 have been restated to reflect results of discontinuedactivities separately from results of continuing activities, consistent with2004 presentation. Changes in accounting policy and in presentation Buildings included in Land and Buildings category are carried at valuation.Previously they were carried at cost. The accounting policy has been changedbecause the directors consider the new accounting policy is more appropriate andindicative of the true value of the assets to the Group. As a result, comparative figures for the year ended 31 December 2003 have beenadjusted as follows: Loss for the year after dividends Net Assets •'000 •'000As previously reported (1,354) 32,997 Effect of the change from costto valuation of buildings (100) 173 -------- ------- As restated (1,454) 33,170 -------- ------- Basis of Accounting The financial statements are prepared under the historical cost convention asmodified by the revaluation of land and buildings. TurnoverTurnover comprises fees and commissions from the intermediation of financialservices, the provision of international trustee & corporate services, theprovision of actuarial and pensioneer trustee services and from employeeleasing. Turnover is recognised, when, and to the extent that, the Group hasobtained the right to consideration in exchange for the services it provides. Accordingly, initial commissions from the intermediation of financial servicesare recognised as turnover on the effective inception date of the product orservice, subject to a reduction for expected clawback where commissions areearned on an indemnity basis. Renewal or trail commissions are recognised asturnover when the contingent events which give rise to the right to receivethose commissions, typically renewal or persistency, have occurred. In certaincircumstances, the Group may obtain a right to consideration when some but notall of its contractual obligations have been fulfilled. In these circumstances,the Group recognises revenue to the extent that a right to consideration hasbeen obtained in relation to services provided up to that point. Where the Group receives payment from customers in advance of the performance ofits contractual obligations, a liability equal to the amount received isrecognised. That liability is reduced and the amount of the reduction recognisedas turnover, when and as the Group obtains the right to consideration inexchange for the contracted services it provides. Deferred taxation Deferred tax is provided on all material timing differences that have originatedbut not reversed at the Balance Sheet date where transactions or events thatresult in an obligation to pay more tax in the future or a right to pay less taxin the future have occurred at the Balance Sheet date. Timing differences aretemporary differences between profits/(losses) computed for tax purposes andprofits/(losses) as stated in the financial statements dealt with in differentyears for tax purposes. Deferred tax is measured at the tax rates that areexpected to apply in the years in which the timing differences are expected toreverse based on tax rates and laws that have been enacted or substantivelyenacted by the Balance Sheet date. A net deferred tax asset is regarded as recoverable and therefore recognisedonly when, on the basis of all available evidence, it can be regarded as morelikely than not that there will be suitable taxable profits from which thefuture reversal of the underlying timing differences can be deducted. Deferredtax assets and liabilities are not discounted. Intangible AssetsGoodwill arising on the acquisition of interests in subsidiary and associatedundertakings, being the excess of cost over the fair value of the Group's shareof net assets acquired, has been written off directly against reserves inrespect of acquisitions completed prior to 31 December 1997. As permitted by Financial Reporting Standard 10, Goodwill and Intangible Assets,goodwill arising on such acquisitions remains written off against reserves andhas been transferred to the Profit and Loss account. Following the issuance ofFRS 10, goodwill acquired is capitalised and amortised through the Profit andLoss account. Goodwill is written off over periods of between eight and twentyyears which is an estimate of the average useful economic life of such assets. 2 Segmental Analysis Turnover 2004 2003 restated •'000 •'000Business Sector----------------- --- ---Continuing Activities:Financial Services 64,643 61,338International Trustee & Corporate Services 17,970 15,201Employee Leasing 11,491 9,811 ------- ------Total - continuing activities 94,104 86,350 Discontinued Activities:Pension Release 2,028 5,096Financial Services - 265 ------- ------ 96,132 91,711 ======= ====== Geographical analysis-----------------------Republic of Ireland 47,486 44,226United Kingdom and International 48,646 47,485 ------- ------ 96,132 91,711 ======= ====== Operating profit/(loss) 2004 2003 RestatedBusiness Sector •'000 •'000-----------------Continuing Activities:Financial Services 6,428 8,120Investments (97) (258)International Trustee & Corporate Services 5,338 4,150Employee Leasing 147 89 ------- ------- 11,816 12,101 Discontinued Activities:Pension Release (2,118) (5,086)Financial Services - (272)Investment - (798) ------- -------Operating profit before goodwill amortisation 9,698 5,945Goodwill amortisation (11,605) (4,684) ------- -------Operating loss/(profit) after goodwill amortisation (1,907) 1,261 ======= ======= Geographical analysis-----------------------Republic of Ireland 1,940 829United Kingdom and International (3,847) 432 ------- ------- (1,907) 1,261 ======= ======= Net operating assets by business sector and by origin are not provided as thedirectors are of the opinion that such disclosures would be prejudicial to theactivities of the trading companies within the Group. 3 Exceptional Items (i) Continuing activities - Turnover The value of uninvoiced fees in the UK pension administration business, inrelation to small self-administered schemes is now being recognised as turnoverin compliance with FRS 5, Application Note G, 'Revenue Recognition'. The totalamount of turnover which should have been recognised in prior years is €759,000. (ii) Continuing activities - Other costs (a) Pension funding The executive directors received an aggregate payment of €570,000. This paymentwas made as the directors' pensions are currently under-funded. A further awardof approximately €0.5 million is expected in 2005 in order to correct thisunder-funding. (b) Exceptional payments Exceptional bonus payments of €419,000 have been made to employees and directorsof the Irish pension business in lieu of earnout in future years. (iii) Continuing activities - Impairment of investments At year end 2003, the Group held quoted equities at a value of €386,000. Theirmarket value has fallen during the year and the Group considers this investmentto be impaired. The exceptional charge in relation to this diminution in valueis €97,000. (iv) Discontinued activities - Goodwill impairment On 23 November 2004 the Group announced its intention to exit the pensionrelease business carried on by its subsidiary Berkeley Jacobs Financial ServicesLimited. The goodwill being carried at the time of €7,374,000 is deemed to beimpaired and has been written off in full. (v) Continuing activities - Disposal of Irish businesses (a) Disposal of IFG Technology business On 31 December 2001 the Group disposed of 75% of its interest in IFG Technologyand Development Limited, Lawlink Limited and Companies Information DirectLimited. Deferred consideration of €504,000 has been recognised during 2004 asthe final profit from the disposal of these interests. (b) Disposal of Mortgage distribution business A loss of €21,000 arising from a correction of prior year estimate has beenrecognised in the twelve months to 31 December 2004 following the completion ofthe sale of 50% of the Group's share of IFG Investment and Mortgage ServicesLimited and IFG Mortgage and Assurance Services Limited to GE CapitalWoodchester. (vi) Discontinued activities - Pension release closure As noted above, the Group has closed the pension release business. Costsincurred and provisions for future costs as a result of this decision includewrite-off of fixed assets, employee related costs and professional feesamounting to €1,590,000. 4 Taxation charge/(credit) 2004 2004 2004 2003 Continuing Exceptional Activities Items Total Total •'000 •'000 •'000 •'000The taxation charge/(credit) isbased on profit/(loss) onordinaryactivities for the year andcomprises:Corporation tax - Irish (at 12.5%) - current year 614 (81) 533 191- prior year 3 - 3 (292)- UK (primarily at 30%) and other- current year 978 (249) 729 953- prior year - - - (93) ------- -------- ------ ------ 1,595 (330) 1,265 759Deferred taxation - Irish- current year - (1,372) (1,372) 1,746- UK and other- current year (483) - (483) (1,002)Share of taxation of associates 10 - 10 1 ------- -------- ------ ------ 1,122 (1,702) (580) 1,504 ======= ======== ====== ====== 5 Earnings per Ordinary Share 2004 2003 restatedAdjusted---------- --- ---Profit after taxation and minorityinterest before exceptional items,discontinuedactivities andgoodwillamortisation(•'000) 6,660 7,441 ========= =========Weighted average number of ordinaryshares in issuefor thecalculation ofearnings pershare 65,065,051 64,941,695 ========= =========Adjustedearnings pershare (• cent) 10.24 11.46 ========= =========Basic------- --- ---(Loss)/profitafter taxationand minorityinterest(•'000) (6,795) 42 ========= =========Weighted average number of ordinaryshares in issuefor thecalculation ofearnings pershare 65,065,051 64,941,695 ========= =========Basic(loss)/earnings per share (•cent) (10.44) 0.07 ========= =========Diluted--------- --- ---(Loss)/profitafter taxationand minorityinterest(•'000) (6,795) 42 ========= =========Weighted average number of ordinaryshares in issuefor thecalculation ofearnings pershare 65,065,051 64,941,695Dilutiveeffect ofshare optionsand warrants 38,078 133,685 --------- ---------Weighted average number of ordinaryshares for the calculation ofdilutedearnings pershare 65,103,129 65,075,380 ========= =========Diluted(loss)/earnings per share (•cent) (10.44) 0.07 ========= ========= Reconciliation of adjusted earnings------------------------------------- 2004 2004 2003 2003 Per share Earnings Per share Earnings restated restated Cent •'000 Cent •'000(Loss)/profitfor thefinancial year (10.44) (6,795) 0.07 42Adjustment forgoodwillamortisation 6.50 4,231 7.21 4,684Adjustment forexceptionalitems 10.92 7,106 0.61 397Adjustment fordiscontinuedactivities 3.26 2,118 3.57 2,318 -------- --------- --------- --------Adjustedearningsbeforegoodwillamortisation 10.24 6,660 11.46 7,441 ======== ========= ========= ======== 6 Movements in cash (i) Reconciliation of net cash flow to movements in net debt 2004 2003 restated •'000 •'000Decrease in cash in period (757) (3,927)Cashflow from decrease in debt and lease financing (5,456) 14,549 ---------- --------Change in net debt resulting from cash flows (6,213) 10,622New finance leases (25) (146)Loans and finance leases on acquisition - (26)Amortisation of issue costs (279) (121)Translation difference (93) 2,656 ---------- --------Movement in net debt in the period (6,610) 12,985Net debt at 31 December 2003 (27,408) (40,393) ---------- --------Net debt at 31 December 2004 (34,018) (27,408) ========== ======== (ii) Reconciliation of (loss)/profit before interest and tax to net cash inflowfrom operating activities 2004 2003 restated •'000 •'000(Loss)/profit before interest and tax (3,014) 6,350Exceptional items - provision against investments 7,471 258Depreciation and amortisation 5,920 6,089Profit on sale of fixed assets (11) (2)Exceptional items - disposal of property investments - (104)Currency translation adjustment (439) (1,243)Profit of associated undertakings (116) (83)Unrealised decrease on revaluation of investments - 104Decrease in debtors 1,222 11,419Exceptional items - restructuring charge continuingactivities - 2,807Exceptional items - gain on mortgages transaction - (6,236)Exceptional items - other costs 212 -Exceptional items - pension release closure 823 -Exceptional items - increase in work in progress (759) -Exceptional items - disposal of Irish business (503) -Exceptional items - termination of UK discontinuedactivities - 287Decrease in stocks 161 2,376Loan to associated undertakings (90) (33)Increase in creditors 12,381 543Exceptional item - loss on sale of subsidiary - 172 ---------- -------- 23,258 22,704 ========== ======== 7 Nature of Financial Information The financial information presented above is based on the full accounts of theCompany for the year ended 31 December 2004 on which the auditors have given anunqualified report. The full accounts have not yet been filed with the CompaniesRegistration Office. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Ifg