20th Jul 2012 07:00
Press Release 20 July 2011
Not for release, publication or distribution in, or into, The United States,
Canada, Australia or Japan Impact Holdings (UK) plc ("Impact" or "The Group") Preliminary results for the year ended 31st March 2012
Impact Holdings (UK) plc. (AIM: IHUK), the specialist lender, announces its preliminary results for the year ended 31st March 2012.
Financial Highlights
* Results in line with management expectations * Group's pre-tax profit of £314,745, up 4% year on year * Earnings per share 13.7p (2011: 13.4p) * Reduced exposure to external debt providers from £7.5m to £5.2m * Bank facilities successfully extended * Cash and cash equivalents of £1.1 million * Net assets of £5.1 million
Commenting on the results Paul Davies, the Chief Executive, said "The Board and management team have spent considerable effort reshaping the strategic direction of the business following the lack of liquidity in the banking market. We will be cautiously and energetically repositioning the business over a period of time, away from being purely a lender and thereby exposing ourselves to balance sheet risk to one of a lower risk, higher return service provider."
For further information:Impact Holdings (UK) plc.Paul Davies Chief Executive Officer Tel: +44 (0)1928 793 550 www.impactholdings.netZeus CapitalTom Rowley / Andrew Jones Tel +44 (0)161 831 1512Tel: +44 (0) 161 831 1512
The financial information detailed below has been extracted from the Annual Report and Accounts for the year ended 31st March 2012, which are available from Zeus Capital, 3 Ralli Courts West Riverside, Manchester, M3 5FT and on the Company's website ( www.impactholdings.net).
CHAIRMAN'S STATEMENTINTRODUCTION
As stated in previous reports the global economy and the financial markets continue to see unprecedented turmoil and this is expected to continue for the foreseeable future with the Banks still failing to stimulate growth as they continue to reduce their exposure to small and medium sized businesses. This situation has contributed to a continual lack of liquidity for many businesses and consequently stifled growth. Financial Institutions globally continue to increase their margins, review their lending criteria and implement more rigorous credit processes, which has reduced the availability of credit.
The Impact group has not been immune to lenders restricting credit lines and increasing margins with the consequent effect on the management's ability to grow the business.
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 business of solicitor disbursement funding has historically been our core market albeit we have adopted a more conservative approach given the lack of liquidity in the financial markets as a whole. This lack of liquidity has constrained our ability to lend with the consequently negative implications for growth, so moving forward, it is intended that our core market of short term niche funding solutions will be supplemented by ancillary services as new initiatives are pursued. The management team is in the process of developing the business into one of a provider of services to the legal profession and continues to develop other revenue streams in this arena both by organic growth and by acquisition. The ability to do this is highlighted by the new Alternative Business Structure regime allowing external ownership of law firms which the management team is pursuing.
DIVIDEND
No dividend will be declared for the year.
OUTLOOK
I believe the Group is well positioned to capitalise on opportunities presented by the new Alternative Business Structures regime and will evaluate potential acquisitions in order to consolidate its position as a provider of funding and other services to the legal profession.
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 support and counsel.
Roger BarlowNon-executive ChairmanCHIEF EXECUTIVE'S REVIEWINTRODUCTION
The Board and management team have spent considerable effort reshaping the strategic direction of the business following the lack of liquidity in the banking market. We will be cautiously and energetically repositioning the business over a period of time, away from being purely a lender and thereby exposing ourselves to balance sheet risk to one of a lower risk, higher return service provider.
TRADING
Commentary on the Group's performance is contained within the Chairman's Statement however the group continues to see ongoing progress with expenses under control and is actively looking for alternative income streams to enhance its profitability.
RISK MANAGEMENT
The risk management of the business continues to be strengthened with all new and existing counterparty risks regularly assessed by an independent risk committee. This committee consists of the key executives within the group who between them have over 60 years experience in risk management, operational and financial analysis.
Credit and fraud risk
The Group is exposed to the risk that clients owing the Group money will not fulfil their obligations. The Group regularly reviews credit exposure for every client, including the level of security available in the event of default. Nevertheless, credit default risk may arise from events or circumstances that are difficult to detect and handle, such as fraud.
Inadequate security
The Group is exposed to the risk that security and undertakings upon which its loan advances are made may reduce in value, so that the Group may not recover some or all of its loan advances in an event of default. This risk is mitigated by the spread of loans and clients involved, along with a detailed assessment of the value of the security and undertakings at the time the loans are made and appropriate ongoing monitoring.
Funding and treasury
The group relies on a mix of equity funding and both committed and uncommitted debt finance from Barclays Bank and Yorkshire Bank in order to maintain an adequate level of working capital and to fund loan advances to the group's clients.
STRATEGIC AND FINANCIAL OBJECTIVES
Our objective remains for cautious, controlled, profitable growth with the group concentrating on actively looking for additional income enhancing opportunities as evidenced by the recent incorporation of Impact Costs Limited. We continue to look for economies of scale and enhance risk management controls in order to allow us to minimise the risks to the business.
Paul DaviesChief ExecutiveIMPACT HOLDINGS (UK) PLC
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
Year Year Ended Ended 31/03/12 31/03/11 £ £ Revenue 1,186,355 1,554,389 Cost of Sales (241,816) (377,518) Gross Profit 944,539 1,176,871 Other operating expenses (630,054) (877,129) Operating Profit 314,485 299,742 Interest receivable 260 1,477 Profit for the year from operations 314,745 301,219before tax Tax (charge)/credit (9,721) (3,996) Profit for the year 305,024 297,223 Earnings per share (pence) Basic 13.7p 13.4p Fully diluted 13.4p 13.4p
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.
IMPACT HOLDINGS (UK) PLC
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2012
2012 2011 £ £ Non-current assets Goodwill 421,766 421,766 Other intangible assets - 46,263 Property, plant and equipment 866,825 599,820 Deferred taxation 171,892 181,613 1,460,483 1,249,462 Current assets Trade and other receivables including 7,983,892 9,322,186amounts falling due after more than one year Cash and cash equivalents 1,076,179 1,894,065 9,060,071 11,216,446 Total assets 10,520,554 12,465,713 Equity and liabilities Share capital 6,211,201 6,211,201 Share premium account 5,005,288 5,005,288 Share based payment reserve - 172,199 Shares held by Employee Benefit Trust (45,070) (45,070) Retained earnings (6,094,726) (6,571,949)
Issued capital and reserves attributable to 5,076,693 4,771,669
equity holders of the parent Trade and other payables due after more 570,391 395,955than one year Trade and other payables due in less than 4,873,470 7,298,089one year Total equity and liabilities 10,520,554 12,465,713IMPACT HOLDINGS (UK) PLC
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
31/3/12 31/3/11 £ £ Operating activities Cash generated by operations 1,805,382 2,796,555 Income taxes paid - (4,635) Net cash generated by operating 1,805,382 2,791,920activities Investing activities Interest received 260 1,477 Acquisition of own shares by Employee - (45,070)Benefit Trust Purchases of property, plant and (288,246) (583,977)equipment Net cash used in investing activities (287,986) (627,570) Financing activities Net decrease in amounts owed to (2,335,282) (2,483,782)lending institutions Net cash outflow from financing (2,335,282) (2,483,782)activities Net decrease in cash and cash (817,886) (319,432)equivalents Cash and cash equivalents at 1 April 1,894,065 2,213,497 Cash and cash equivalents at end of 31 1,076,179 1,894,065March
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2012
Attributable to the equity holders of parent company
Share Share Share Shares Profit and Total capital premium based held by loss payment EBT account reserve £ £ £ £ £ £ Balance as at 31 6,211,201 5,005,288 172,199 (11,645) (6,869,172) 4,507,871March 2010 Net Profit for the - - - - 297,223 297,223year Movement on shares - - - (33,425) - (33,425)held by EBT Balance as at 31 6,211,201 5,005,288 172,199 (45,070) (6,571,949) 4,771,669March 2011 Lapse of share - - (172,199) - 172,199 -options Net Profit for the - - - - 305,024 305,024year Balance as at 31 6,211,201 5,005,288 - (45,070) (6,094,726) 5,076,693March 2012
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 2012. The results for the year ended 31st March 2012 are extracted from the Annual Report of Impact Holdings (UK) plc, on which the auditors have issued an unqualified report.
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 on or before 31st July 2012. Further copies will be available from Zeus Capital, 3 Ralli Courts, West Riverside, Manchester, M3 5FT.
The Annual General Meeting will be held at the Company's registered office, 7500 Daresbury Park, Daresbury, Warrington WA4 4BS on 28th September 2012 at 8.45am.
Notes to the Editor:
Impact Holdings (UK) plc through its individual subsidiaries provides finance to fund niche lending opportunities including legal disbursements in relation to personal injury cases and other related 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.
Related Shares:
IHUK.L