12th Jul 2006 10:48
Park Group PLC12 July 2006 12 July 2006 PARK GROUP PLC Preliminary Results for the Year Ended 31 March 2006 Summary 2006 2005Revenue £233.4m £215.1m Profit/(loss) before taxation - continuing operations pre Imagine Finance £4.9m £3.9m - Imagine Finance £(2.9)m - - discontinued operations £(15.4)m £(5.3)m -------------------------- £(13.4)m £(1.4)m ========================== Loss for the period £(17.5)m £(1.0)m Loss per share (10.64)p (0.63)p Final dividend per share (proposed) 0.74p 0.74p Total dividend per share 1.10p 1.10p • Core business increases pre tax profit by 27% • Group disposes of Home Collected Credit loan book • Acquisition of Family Hampers from its Administrators in February 2006 • Dividend maintained at 1.1p Peter Johnson, Chairman, commented: 'This year has seen our cash savingsbusiness go from strength to strength, demonstrating pleasing sales and profitgrowth. However, our cash lending business has continued to under deliver inwhat has been an increasingly challenging market. The disappointing performancegenerated by that business has resulted in our decision to exit the homecollected credit industry. The Christmas 2006 recruitment campaign was one of our most successful to dateand we have recruited 32,000 new agents. Our current order book for Christmas2006 is 26% higher than at the same date last year.' Enquiries: Park Group plc - 0151 653 1700 Peter Johnson, Executive Chairman Chris Houghton, Group Managing Director Tavistock Communications - 020 7920 3150 Jeremy Carey Christian Taylor-Wilkinson Chairman's Statement This year has seen our cash savings business go from strength to strength,demonstrating pleasing sales and profit growth. However, our cash lendingbusiness has continued to under deliver in what has been an increasinglychallenging market. The disappointing performance generated by that business hasresulted in our decision to exit the home collected credit industry. Thisdecision to withdraw, with the disposal announced today of the Park DirectCredit loan book to CL Finance Ltd for an estimated cash consideration of £8.0million will remove a cash drain from the Group and release funds and managementtime to enable us to develop the cash savings and loan broking businesses whichcontinue to show growth potential. The disposal is conditional upon the approvalof the Park Group plc shareholders. The notice convening an ExtraordinaryGeneral Meeting of the Company recommending approval for the disposal will bedespatched to shareholders shortly. The Group's revenue from continuing operations has increased by 8.5% to £233.4m,whilst profit before tax from continuing operations fell to £2.0m from £3.9m.This reduction in profitability was entirely due to losses sustained by our 2005acquisition, Imagine Finance. Disregarding the distorting effect of these startup costs, it is pleasing to note profit before tax for our retained corebusinesses increased by 27% to £4.9m. The directors are recommending a final dividend of 0.74p per share payable on 2October 2006 to shareholders on the register at the close of business on 1September 2006, making a total distribution of 1.1p per share, in line with lastyear. On 17 February 2006 we acquired the customer list of Family Hampers from theadministrators of FHSC Limited for a cash consideration of £1 and assumedliabilities estimated at fair value to be £2.8m. These agents and the customersthey support have now been fully integrated into our business. The Family brandnow joins the highly successful Park and Country brands operated by the Group. Cash Savings The Cash Savings division experienced another year of substantial growth withmore and more consumers switching to saving for Christmas rather than fallinginto the "debt trap" with loans or large credit card bills in January. Totaldivisional revenue increased by 7.3% to £230.2m and profit before tax increasedby 15.6% to £5.4m. Retail agency sales, via our Park and Country brands, were £164.5m up 4.8% onthe previous year. Another excellent recruitment campaign and solid retentionrates saw agent numbers swell to 86,447, up on the previous year by 12%.Customer numbers also increased to 517,794 from 507,423. High Street Gift Vouchers Impressive sales growth within our corporate voucher business has been achievedwith sales rising by 10% to £61.2m. Within that figure, sales for the incentiveand reward sector which we targeted with last year's launch of our 'Love2'range, have grown by an impressive 25%. In particular, our corporate clients areseeing 'Love2travel' as an attractive reward for their staff and their clients. AIM Listing As we have previously stated, it is our intention to transfer the Company'sstock exchange listing from the London Stock Exchange Main Market to theAlternative Investment Market (AIM), which the Board considers to be more suitedto a Company of Park Group's size. A resolution to approve the transfer will beproposed at our AGM and a circular to shareholders is expected be posted withthe Annual Report in August 2006. Prospects The Christmas 2006 recruitment campaign was one of our most successful to dateand we have recruited 32,000 new agents. Our current order book for the Park andCountry Christmas business is 9.1% higher than at the same date last year. Inaddition, we expect the acquisition of the Family Hamper agents in February willincrease volume and improve capacity utilisation. Total orders are now 26% abovelast year and customer numbers are approaching 630,000. Our corporate voucherbusiness has also made considerable progress and orders continue to exceed thatachieved last year. As a result, we are confident of a satisfactory outcome forthe current year. The Staff This has been a challenging year for Park, in particular with the uncertaintyover the future of the cash lending business. What we have achieved in terms ofthe reshaping of the Group would not have been possible without the continuedhard work and dedication of the staff. On behalf of the Board I would like tothank them. Peter JohnsonChairman12 July 2006 Operational Review 2006 During the year we have been faced with the distraction of a CompetitionCommission market investigation into the home collected credit market as well asa potential acquisition of the Group. We have continued to focus on developingour businesses and refining our strategy to deliver shareholder value. The conclusion of our strategic review of the business, finalised in February2006, was that, in the light of the recent disappointing performance of ParkDirect Credit and changes in the home collected credit market, we took thedecision to close the home collected credit operation. On 17 February 2006 we acquired the customer list and Christmas 2006 orders ofFamily Hampers from the administrators of FHSC Ltd. This acquisition has added28,000 agents and 93,000 customers to our Cash Savings Division. Our Cash Savings businesses have performed consistently well over the past 5years increasing revenue by 66% from £138.8m to £230.2m and profits before taxincreasing by 54% from £3.5m to £5.4m during that period. For the year, revenuefrom this division increased by 7.3% to £230.2m and profit before tax increasedby 15.6% to £5.4m. Our Park and High Street Gift Voucher brands are clearleaders in their markets and both are delivering growth. The development of newproducts and the use of technology, such as the Internet, is allowing us todevelop new markets in a cost effective way and broaden the awareness andacceptance of our proposition. Our business model has strong cash flow which isevidenced by the increase in our cash balances which peaked at almost £100m inNovember and at the year end were 115% higher than the previous year at £10.1m. Cash Savings In last year's report it was noted that prospects for the cash savings businessin 2005/6 looked encouraging and it is pleasing to report that our optimismproved well founded. Following a successful marketing campaign for Christmas2005 and the further development of our High Street Gift Voucher business,divisional revenue increased by £15.7m to £230.2m and pre tax profit increasedby £0.7m to £5.4m. We have continued to increase our routes to market and continually test newmethods of customer recruitment and retention. Customer service is a key tosuccess and we have focused on using technology to improve the way wecommunicate with our customers. Sales via our Park and Country brands achieved another year of growth increasingby 4.8% compared to the previous year. 517,000 customers used our products tospread the cost of Christmas by purchasing either vouchers, enabling them topurchase products from leading retailers, or by purchasing a Christmas hamper orother seasonal gifts from us. We also sell our Love2travel voucher on the same instalment basis as ourChristmas range, which enables our customers to budget and spread the cost oftheir annual holiday. Average agent order value has declined slightly due to an increase in the numberof 'solus' agents within the base, who only order products for their own use.However, the average customer order value increased from £315 to £324 indicatinga demand for the proposition and an acceptance of new product ranges. The increase in the number of solus agents is partly due to a planned marketingstrategy which is allowing us to penetrate into geographical areas such as theSouth East which, historically, have not been receptive to our agencyproposition. Internet usage by our customers and prospective customers is increasing withmore and more of them wishing to transact and run their accounts on-line. Lastyear we successfully completed a major project integrating the Park and Countrywebsites into our core systems allowing agents real time management andvisibility of their accounts. During the year we have strengthened our corporate voucher proposition followingthe launch of our 'Love2' range. This now incorporates three of our highlypopular vouchers, High Street Gift Voucher, Love2travel voucher and Love2playvoucher. Each voucher is targeted at specific markets and enables customers toshop, book holidays, eat at restaurants or use other leisure activities. Therange provides an effective method for our corporate customers to incentivisetheir customers and staff. Corporate voucher sales increased by 10% year on year to £61.2m. It isparticularly pleasing that we have continued to increase volume in the incentiveand reward sector with the addition of new customers which has seen revenue growby 25% year on year. As this business develops we will add additional products and services forcorporate clients and voucher customers utilising the Internet, as well as newredemption methods and partners to provide the ultimate voucher solution foreach of our markets. As part of our planned expansion into Internet marketing and trading, we "softlaunched" highstreetvouchers.com early last year, a website selling vouchersdirect to the public. With little or no promotion, sales of almost £500,000 wereachieved proving beyond a doubt that the appeal of the product and demand isstrong. The site is currently being upgraded and, as with the Park and Countrysites, integrated into our core systems. Once completed, a marketing campaignusing search engine optimisation technology to promote the site will commence. Cash Lending We announce, today, that we have agreed to dispose of the home collected creditloan book to CL Finance Ltd for an estimated cash consideration of £8.0m. Thenet book value of the assets sold amounts to £4.9m and the transaction will beconditional upon shareholder approval. The disposal could result in potentiallyup to 150 redundancies across the Group's 35 sites. Our strategic review of the Group's businesses concluded that the home collectedcredit market is faced with increasing regulation and adverse political activitywhich we have determined is having a detrimental impact on the business. TheCompetition Commission investigation into the home collected credit market hasimposed significant pressure on management and has had an adverse impact onrecent performance. Having reviewed current market conditions and performanceissues within the business it is clear that the Group would not be able togenerate a return for shareholders in the medium term. The decision to withdrawfrom the home collected credit market will remove a cash drain from the Groupand release funds to develop other parts of the business. The results for the Home Collected Credit business have been included as adiscontinued operation. Revenue for the year was £23.8m (2005 £28.7m) and thepre tax loss, after reducing the assets to their fair value, amounted to £15.4m(2005 £4.5m). As a result of deteriorating performance action was taken toimprove loan book quality with the introduction of stricter credit controls andthe closure of certain loss making branches, reducing the network to 34. Park Financial Services Park Financial Services is regulated by the FSA and trades under the followingbrands: Imagine Finance, The Loan Processing Centre and Park Direct InsuranceServices. Both Imagine Finance and the Loan Processing Centre were acquired fromtheir administrator in March 2005. Imagine is a mortgage and secured loan brokerwhich services consumers directly, whilst The Loan Processing Centre provides apackaging service for other brokers. Park Direct Insurance Services is a generalinsurance broker. The Company places mortgage and secured loan business with a panel of leadinglenders typically for customers with impaired credit histories. Revenue for the year amounted to £2.4m and the business incurred a pre tax lossof £2.9m. During the year 984 loans were brokered with a total value of £22.4m. Park Financial Services operates from a site in Barnet, Hertfordshire and fromthe Group Head Office in Birkenhead. Our first year in this business proved more difficult than expected. A slow downin the housing market and strong competition meant our customer acquisitioncosts increased to unacceptable levels, and to compound the situation, theconversion of customers to loans were also below target. As a result we quicklyre-examined and re-engineered our marketing and customer acquisition strategiesand in the first few months of this financial year results have shown a markedimprovement. We now believe we are in a position to increase the volume ofquality leads and convert them at an acceptable rate. We also believe thatcontinued progress in this area should see this business generate a contributiongoing forward. In summary, overall performance will improve as we build relationships with newlead providers (by enhancing the quality of leads and reducing the pricestructure), establish a greater presence on the web (developing affiliates,website enhancements, diversifying Internet campaigns) and by strengthening ourmanagement team (ensuring senior vacancies are filled by competent industryexperienced individuals). Prospects The 2006 recruitment campaign for our Park and Country brands has achievedanother record year. All forms of media have performed well and in total 207,837enquiries were received, beating last year's record of 186,392 by 11.5%. Demandfor our vouchers remains strong and corporate sales are currently above lastyear's level. All indications at this moment in time suggest further increases in both revenueand agent numbers for the current financial year. In addition, the day to day running of the Family Hampers operation, acquired inFebruary this year, has been successfully integrated into our Head Office siteand will add significantly to revenue, agent and customer numbers furthercementing our position as the clear leader and dominant force in the Christmassavings and multi retailer voucher markets. Our new business development team is currently working on a number of new andexciting projects including a possible launch into international markets andgreater use of new technology all of which we believe bodes well for the future. Financial Review International Financial Reporting Standards ('IFRS') These results are the first to be prepared in accordance with InternationalFinancial Reporting Standards ('IFRS'). Reconciliations to previously reportedUK Generally Accepted Accounting Practice ('UKGAAP') numbers were published atthe time of our interim results and are available on our web sitewww.parkgroup.co.uk . Profit from Continuing Operations The Group's continuing operations comprise Cash Savings Division and CashLending Division. The Cash Lending Division, following the closure of our homecollected credit business, consists of our unsecured monthly direct debit loanbook and our insurance and loan broking business, trading under the name ImagineFinance. Profit before taxation from continuing operations is detailed below: 2005/6 2004/5 Change £'000 £'000 £'000 Cash Savings 5,439 4,705 734Cash Lending (3,469) (844) (2,625) --------------------------------------Profit before taxation 1,970 3,861 (1,891) ====================================== Closure of Home Collected Credit (HCC) The trading results and closure costs for HCC have been included in the resultsas a discontinued operation. The trading loss after tax of £19.1m includesimpairment charges of £9.3m, comprising £2.0m in respect of goodwill and £7.3min respect of the loan book. A tax charge of £3.7m has been included in theresults for the year. Imagine Finance The business of Imagine Finance was acquired on 31 March 2005 and consequentlyno trading was reflected in the 2005 results. The results for this business havebeen separately disclosed in the results to assist in identifying theperformance of the Group on a like-for-like basis, when compared to last year. Taxation The effective tax rate for the year on continuing operations was 16.1% (2005 -32.1%) of profit before tax. In respect of continuing operations, a tax charge of £0.3m has been included inthe results. This represents 16.1% of the profits from continuing activities forthe year. The reason for the lower tax charge is due to a difference in thetreatment of deferred tax on properties under IFRS. For discontinued operationsa tax charge has been included of £3.7m, this has arisen due to the write off ofa deferred tax asset as a result of the decision to sell the home colletedcredit loan book and the restricted ability of the Group to relieve fully lossesin the near term. Earnings per Share Earnings per share from continuing operations decreased from 1.60p to 1.01p. Dividends The Board has recommended a final dividend of 0.74p in line with last year. Uponapproval of the final dividend at the AGM, the total dividend for 2006 will be1.1p. This represents a dividend yield of 6.9% based on our year-end shareprice. Cash Flows The cash flows between the savings and lending divisions are totally differentin nature. In the cash savings business, customers purchase Christmas gifts onan instalment basis, making payment in advance. Payments are made to supplierson receipt of goods with the exception of vouchers, (our main product), whichare paid for when the voucher is presented for payment by a redeeming retailer,some time later. In the cash lending business, where advances are made directly to customers,this requires Group funding, except when we act as brokers where funding isprovided by 3rd parties. Over the past four years the Group has utilised surpluscash to invest in growing the Cash Lending Division. As illustrated below, cash generated in the cash savings business has grownstrongly from £8.2m in 2005 to £11.4m in 2006. The cash lending business hasutilised £5.0m principally from start up costs associated with the ImagineFinance loan and insurance broking business of £3.8m and funding of the monthlydirect debit loan book of £1.2m. The reduction in lending activity during 2006,in home collected credit, has resulted in a lower cash outflow of £1.0m from thehome collected credit business compared with £7.9m last year. Cash Generated/(Utilised) 2006 2005Continuing activities £'000 £'000Cash generated/(utilised) Savings 11,440 8,206 Lending (5,048) (274) -------------------------Continuing activities 6,392 7,932Discontinued activities (982) (7,878) -------------------------Total 5,410 54 ========================= Cash balances in 2005 peaked at just under £100m and remained positivethroughout the year. In 2006 we are anticipating cash balances peaking at justover £130m. Pensions The Company operates defined benefit plans that pay out pensions at retirementbased on service and final salary. Under IAS19 the Group recognises any actuarial gains or losses in each period inthe Statement of Recognised Income and Expense (SORIE). In the year-ended 31March 2006 the Group recognised a loss in the SORIE of £204,000 net of tax. In response to the pension liability at the previous year-end of £1.6m and afterdiscussions with the scheme actuaries the Company increased its contributions to11% of members' pensionable earnings with employees increasing contributions to5.5%. Scheme assets increased in the year by 24% to £11.6m, however, the presentvalue of obligations increased by 21.8% to £13.4m resulting in an increase inthe overall pension deficit to £1.8m. Park Group plcCONSOLIDATED INCOME STATEMENT FOR THE YEAR TO 31 MARCH Pre Imagine Imagine 2006 Finance Finance Total 2005 £'000 £'000 £'000 £'000Continuing operationsRevenue 231,039 2,376 233,415 215,113 Cost of sales (218,504) (4,160) (222,664) (204,265) ----------------------------------------------Gross profit/(loss) 12,535 (1,784) 10,751 10,848Distribution costs (1,942) - (1,942) (1,696)Administrative expenses (7,623) (1,152) (8,775) (7,314) ----------------------------------------------Operating profit/(loss) 2,970 (2,936) 34 1,838 Finance income 1,948 - 1,948 2,026Finance costs (12) - (12) (3) ----------------------------------------------Profit/(loss) before taxation 4,906 (2,936) 1,970 3,861Taxation (1,153) 836 (317) (1,241) ----------------------------------------------Profit/(loss) from continuing operations 3,753 (2,100) 1,653 2,620 Discontinued operations Loss from discontinued operations (19,141) - (19,141) (3,647) ----------------------------------------------Loss for the period attributable to equity shareholders (15,388) (2,100) (17,488) (1,027) ---------------------------------------------- Cost of dividend 1,810 1,806 Earnings/(loss) per share (see note 3) - basic - continuing operations 1.01p 1.60p- basic - total (10.64)p (0.63)p- diluted - continuing operations 1.00p 1.57p- diluted - total (10.57)p (0.61)p Park Group plcSTATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE YEAR TO 31 MARCH 2006 2005 £'000 £'000 Loss for the period (17,488) (1,027) Actuarial (losses)/gains on defined benefit pension scheme (291) 716 Deferred tax on actuarial (losses)/gains on definedbenefit pension scheme 87 (215) --------------------Net (losses)/gains not recognised in income statement (204) 501 --------------------Total recognised expense for the period (17,692) (526) -------------------- Park Group plcGROUP BALANCE SHEET As at As at 31.03.06 31.03.05 £'000 £'000AssetsNon-current assetsGoodwill 2,222 2,993Intangible assets 2,030 1,098Investments 2 2Investment property - 1,512Property, plant and equipment 5,160 5,752Deferred tax assets 2,649 6,674 -------------------------- 12,063 18,031 -------------------------- Current assetsLoans and receivables 1,732 16,435Inventories 974 685Trade and other receivables 7,113 4,898Current tax assets 466 -Cash and cash equivalents 10,104 4,694Assets held for sale 7,492 700 -------------------------- 27,881 27,412 --------------------------Total assets 39,944 45,443 -------------------------- LiabilitiesCurrent liabilitiesTrade and other payables (54,481) (45,419)Current tax liabilities - (853)Provisions (19,336) (13,847) -------------------------- (73,817) (60,119) -------------------------- Non-current liabilitiesRetirement benefit obligation (1,815) (1,623)Deferred tax liability - (24) -------------------------- (1,815) (1,647) -------------------------- --------------------------Total liabilities (75,632) (61,766) -------------------------- --------------------------Net liabilities (35,688) (16,323) -------------------------- Shareholders' equityShare capital 3,291 3,283Share premium account 1,018 969Retained earnings (41,127) (21,773)Other reserves 1,130 1,198 --------------------------Total shareholders' equity (35,688) (16,323) -------------------------- Park Group plcGROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH As at . As at 31.03.06 31.03.05 £'000 £'000Cash flows from operating activitiesCash generated from operations (note 7) 6,834 1,279Interest received 1,951 2,026Interest paid (12) (3)Tax paid (1,281) (944) --------------------------Net cash generated from operating activities 7,492 2,358 -------------------------- Cash flows from investing activitiesAcquisition of subsidiaries (net of cash acquired) - (529)Acquisition of businesses (net of cash acquired) - (409)Proceeds from sale of property, plant and equipment - 817Proceeds from sale of intangible assets - 55Purchase of property plant and equipment (467) (559)Purchase of intangible assets 134 (138) --------------------------Net cash in investing activities (333) (763) -------------------------- Cash flows from financing activitiesNet proceeds from issue of ordinary share capital 57 93Dividends paid to shareholders (1,806) (1,634) --------------------------Net cash used in financing activities (1,749) (1,541) -------------------------- --------------------------Net increase in cash and cash equivalents 5,410 54 -------------------------- --------------------------Cash and cash equivalents at beginning of period 4,694 4,640 -------------------------- --------------------------Cash and cash equivalents at end of period 10,104 4,694 --------------------------Cash and cash equivalents comprise: --------------------------Cash 10,104 4,694 -------------------------- (1) Basis of preparation The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 31 March 2006 or 2005. Statutory accountsfor 2005, which were prepared under UK GAAP, have been delivered to theregistrar of companies. The auditors have reported on the 2005 accounts; theirreport was unqualified and did not contain a statement under section 237(2) or(3) of the Companies Act 1985. The statutory accounts for 2006, which are beingprepared under accounting standards adopted by the EU will be finalized on thebasis of the financial information presented by the directors in thispreliminary announcement and will be delivered to the registrar of companies indue course. The financial information in this preliminary announcement has been prepared inaccordance with the accounting policies described in the Transition Documentwhich detailed the Groups transition from UK GAAP to IFRS. This document waslodged with the London Stock Exchange and can be found on our website atwww.parkgroup.co.uk. Changes to these accounting policies are set out in note 2. The comparative figures have been restated to reflect the revised accountingpolicies. Reconciliations and explanations of the effect of adopting IFRScompliant accounting policies on the Group's equity (net assets) and profits areprovided in the Transition Document. The financial statements have been prepared under the historical costconvention, as modified by the use of revaluations of fixed assets as deemedcost and the accounting for financial instruments at fair value. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Although these estimates are based on management's bestknowledge of the amount, event or actions, actual results ultimately may differfrom those estimates. (2) Accounting policies The financial information in this preliminary announcement has been prepared inaccordance with the accounting policies described in the Transition Documentwhich detailed the Group's transition from UK GAAP to IFRS. The followingaccounting policy has changed since the Transition Document was published. Intangible assets Computer software Acquired software licenses are capitalised as intangible assets and will beamortised on a straight line basis over the expected useful economic life. Costs that are directly associated with the creation of identifiable software,which meet the development asset recognition criteria as laid out in IAS 38'Intangible Assets', are recognised as intangible assets. Direct costs includethe employment costs of internal software developers and external consultancyfees. All other software development and maintenance costs are recognised as anexpense as incurred. Computer software development costs recognised as assets are amortised overtheir estimated useful lives on a systematic straight line basis. (2) Accounting policies (continued) Other intangible assets Other intangible assets are amortised over their useful life of 20 years on areducing balance basis based on the pattern of cash flows expected to begenerated. On an annual basis, management review the expected cash flows to begenerated and adjust the useful lives and the amortisation accordingly. Promotional expenditure in Imagine Finance is recognised as an expense asincurred. Customer lists acquired are included at the lower of cost and fairvalue. (3) Segmental analysis Cash Cash 2006 Cash Cash 2005 Savings Lending Eliminations Total Savings Lending Eliminations Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000ContinuingoperationsRevenueExternalrevenue 230,223 3,192 - 233,415 214,518 595 - 215,113 Inter-segmentrevenue 2,198 - (2,198) - 2,671 19 (2,690) - ------------------------------------------------------------------------------------------Total revenue 232,421 3,192 (2,198) 233,415 217,189 614 (2,690) 215,113 ========================================================================================== Inter-segment sales are entered into under normal arm's length commercial terms and conditions ResultSegment profitbeforetaxation 5,439 (3,469) - 1,970 4,705 (844) - 3,861 ------------------------------------------------------------------------------------------Taxation (317) (1,241) ------ ------- Profit fromcontinuingoperations 1,653 2,620 Discontinuedoperations (19,141) (3,647) Profit for theyearattributableto equityshareholders (17,488) (1,027) ======== ======= (4) Imagine Finance The business of Imagine Finance was acquired on 31 March 2005. The results forthis business have been separately disclosed as an acquisition in the results toassist in identifying the performance of the Group on a like-for-like basis,when compared with last year. There are no results included within the prioryear figures relating to Imagine Finance. (5) Taxation £'000 £'000 Charge for the year - current and deferred 404 1,304Prior year adjustments (87) (63) -------------------------- 317 1,241Tax credit on discontinued operations (1,253) (1,693)Adjustment in respect of elimination ofdeferred taxation asset 4,986 - -------------------------- 4,050 (452) (6) Earnings per share The calculation of basic and diluted earnings per share is based on the profiton ordinary activities after taxation of £1,653,000 (2005 - £2,620,000) inrespect of continuing operations and the loss on ordinary activities aftertaxation of £17,488,000 (2005 - £1,027,000) in respect of total operations, andon the weighted average number of shares, calculated as follows: 2006 2005 Basic eps - weighted average number of shares 164,297,656 163,716,419Diluting effect of employee share options 1,215,143 3,398,958 -----------------------------Diluted eps - weighted average number of shares 165,512,799 167,115,377 ----------------------------- (7) Reconciliation of net loss to net cash inflow from operating activities Year to Year to 31.03.06 31.03.05 £'000 £'000 Net loss (17,488) (1,027)Adjustments for:Tax on continuing operations 317 1,241Tax on discontinued operations 3,733 (1,693)Interest income (1,948) (2,026)Interest expense 12 3Depreciation and amortisation 1,750 1,242Impairment of goodwill 2,194 -Profit on sale of property, plant and equipment - (4)Decrease/(increase) in net loan book 9,385 (3,834)(Increase)/decrease in inventories (289) 776(Increase)/decrease in trade and other receivables (1,902) 20Increase in trade and other payables 11,113 6,493(Decrease)/increase in retirement benefit obligation (99) 40Share-based payments 56 48 -------------------------Net cash inflows from operating activities 6,834 1,279 ------------------------- (8) The annual report will be posted to shareholders on 30 August 2006 and the Annual General Meeting (AGM) of the Company will be held in Birkenhead on Wednesday 27 September 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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