Half-yearly Report

Impact Holdings (UK) plc ("Impact" or "The Group") Interim Results

Impact (AIM: IHUK), the specialist lender, announces its unaudited interimresults for the six months ended 30 September 2012.

Financial Highlights

- Cash and cash equivalents of £1.09 million (£1.37 million 30 September 2011)

- Net assets of £5.40million (£4.91 million 30 September 2011)

- Debt reduced by 20% year on year to £4.73 million (£5.90 million September2011)

- Share issue raised £320,000 cash

- Profit after tax of £3,726 (£141,024 30 September 2011)

- Earnings per share 0.2p (6.3p 30 September 2011)

Operational Highlights

- Ongoing business re-aligned in line with expectations

- Continued reduction in borrowings from financial institutions

- Reduction in operating expenses

- Growth opportunities for new business lines identified

A copy of the interim results is also available on the Group's website(www.impactholdings.net).

For further information:Impact Holdings (UK) plcPaul Davies, Chief Executive Officer Tel: 01928 793 550Zeus Capital LimitedAndrew Jones, Nick Cowles Tel: 0161 831 1512

CHAIRMAN'S STATEMENT

I am pleased to report our unaudited interim financial results forthe six months ended 30th September 2012. Revenue of £425,104 and pre-taxprofit of £3,726 were in line with expectations, as the management teamcontinued its realignment of the business.

The general economic downturn has continued with a furtherdeterioration in 2012 and a significant lack of confidence in the economy anda shortage of liquidity in the banking markets which has resulted in astrategic decision to continue to reduce our indebtedness to financialinstitutions.

Business Overview

The Board continues to be concerned at the lack of liquidity in thebanking markets and for the overall economic environment in which we trade.The consequence of these concerns and our desired strategy of concentrating onbetter quality covenants has seen a slowing down of our organic growth withinthe solicitor lending business. The Board intends to continue this prudentstrategy until the economic environment returns to a more stable platform.

The business of solicitor lending, in relation to fundingdisbursements on personal injury cases, continues to be our core market albeitwe continue to reduce our exposure.

The Board remains committed to diversifying its product offering,reducing its reliance on speciality funding and re-aligning the business toprovide various ancillary services to the legal and professional sectors. Weare presently well progressed in assessing a number of new initiatives whichwill hopefully come to fruition in 2013 and beyond and generate new incomestreams.

We continue to incur upfront legal expenses in seeking to recoverloans which have been previously provided against by the Group. A number ofmatters have been successfully concluded.

Outlook

The Group remains focussed on providing services to the legal andprofessional sectors and maximising niche funding opportunities where thereturn profiles look highly attractive. In addition, the management teamcontinues to analyse various opportunities that will only be executed upon ifthey meet our exacting standards for profits growth and shareholder returns.

Roger BarlowNon-Executive ChairmanIMPACT HOLDINGS (UK) PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

6 Months 6 Months Year ended ended Ended 30/09/2012 30/09/2011 31/03/2012 £ £ £ Revenue 425,104 848,754 1,186,355Cost of Sales (112,793) (125,206) (241,816)Gross profit 312,311 723,548 944,539 Operating expenses (308,585) (582,524) (630,054) Operating profit 3,726 141,024 314,485Interest receivable - - 260 Profit for the period fromoperations before tax 3,726 141,024 314,745 Tax credit - - (9,721)Profit for the period 3,726 141,024 305,024 Earnings per share(pence)Basic 0.2p 6.3p 13.7p Fully Diluted 0.2p 6.3p 13.4p IMPACT HOLDINGS (UK) PLC

UNAUDITED CONSOLIDATED BALANCE SHEET

As at As at As at 30/09/2012 30/09/2011 31/03/2012 £ £ £ Non-current assets Goodwill 421,766 421,766 421,766Other intangible assets - 23,311 -Property, plant and equipment 886,690 612,954 866,825Deferred taxation 171,892 181,613 171,892 1,480,348 1,239,644 1,460,483Current assets Trade and other receivablesincluding amounts fallingdue after more than one year 7,898,230 8,397,545 7,983,892Cash and cash equivalents 1,095,999 1,374,746 1,076,179 8,994,229 9,772,291 9,060,071 Total assets 10,474,577 11,011,935 10,520,554 Capital and reserves Share capital 6,411,201 6,211,201 6,211,201Share premium account 5,125,291 5,005,288 5,005,288Share based payment reserve - 172,199

-

Shares held by Employee Benefit Trust (45,070) (45,070) (45,070)Retained earnings (6,091,000) (6,430,925) (6,094,726) Equity Attributable to equityshareholders of the parent 5,400,422 4,912,693 5,076,693 Trade and other payables due after morethan one year 548,958 395,955

570,391

Trade and other payables due in lessthan one year 4,525,197 5,703,287 4,873,470 10,474,577 11,011,935 10,520,554IMPACT HOLDINGS (UK) PLC

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD

6 Months 6 Months Year ended ended Ended 30/09/2012 30/09/2011 31/03/2012 £ £ £ Operating activities Cash generated from operations 174,014

1,108,068 1,805,382

Income taxes paid - - -Net cash generated by operating activities 174,014

1,108,068 1,805,382

Investing activities

Purchase of property, plant and equipment (19,865) (15,669) (288,246)Interest received - - 260Net cash (used in)/ generated by investing activities (19,865) (15,669) (287,986) Financing Activities Decrease in amount owed to lending institutions (454,332) (1,611,718) (2,335,282) Issue of shares 320,003 - - Net cash used in financing activities (134,329) (1,611,718) (2,335,282) Net (decrease)/increase incash and cash equivalents 19,820 (519,319) (817,886) Opening cash and cash equivalent 1,076,179

1,894,065 1,894,065

Closing cash and cash equivalents 1,095,999 1,374,746 1,076,179 IMPACT HOLDINGS (UK) PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Share based Shares Profit and Share Share payment held by loss capital premium reserve EBT account Total £ £ £ £ £ £Balance as at 31 March 2011 6,211,201 5,005,288 172,199 (45,070) (6,571,949) 4,771,699Lapse of share options - - (172,199) - 172,199 -Net profit for the year - - - - 305,024 305,024Balance as at 31 March 2012 6,211,201 5,005,288 - (45,070) (6,094,726) 5,076,693Shares issued 200,000 120,003 - - - 320,003Net profit for the period - - - -

3,726 3,726Balance as at 30 September 2012 6,411,201 5,125,291 - (45,070) (6,091,000) 5,400,422

Notes to the Interim Financial Statements

1. Accounting policies

The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards as endorsed by the EU ("IFRS").

The financial statements have been prepared on the historical cost basis,except for the revaluation of certain financial instruments. The principalaccounting policies adopted are set out below.

The financial statements have been prepared on a going concern basis.

New and revised accounting standards

The effect of changes on the group's financial statements as aresult of new standards issued since the last reference date is notsignificant. The group has elected not to adopt any other standards earlierthan the proposed effective dates.

Further detail in relation to the above International AccountingStandards is available from the IASB's website, www.iasb.org.

Basis of consolidation

The consolidated financial statements of the Group incorporate thefinancial statements of Impact Holdings (UK) plc (the "Company") andenterprises controlled by the Company (its subsidiaries) made up to thebalance sheet date. Control is achieved where the company has the power togovern the financial and operating policies of an investee enterprise so as toobtain economic benefit from its activities. Subsidiaries are fullyconsolidated from the effective date of acquisition or up to the effectivedate of disposal, as appropriate.

The acquisition method of accounting is used to account for theacquisition of subsidiaries by the Group. The cost of an acquisition ismeasured as the fair value of the assets given, equity instruments issued andliabilities incurred or assumed at the date of exchange, plus costs directlyattributable to the acquisition. Identifiable assets acquired and liabilitiesand contingent liabilities assumed in a business combination are initiallymeasured at fair value at the acquisition date irrespective of the extent ofany minority interest.The excess of cost of acquisition over the fair values of theGroup's share of identifiable net assets acquired is recognised as goodwill.Any deficiency of the cost of acquisition below the fair value of identifiablenet assets acquired (i.e. discount on acquisition) is recognised directly inthe income statement.

Where necessary, adjustments are made to the financial statementsof subsidiaries to bring the accounting policies used into line with thoseused by other members of the Group.

All intra-group transactions, balances, and unrealised gains ontransactions between Group companies are eliminated on consolidation.Unrealised losses are also eliminated unless the transaction provides evidenceof an impairment of the asset transferred.

Goodwill

Goodwill arising on consolidation represents the excess of the costof acquisition over the Group's interest in the fair value of the identifiableassets and liabilities of a subsidiary, associate or jointly controlled entityat the date of acquisition. Goodwill on acquisition of subsidiaries isseparately disclosed.Goodwill is recognised as an asset and reviewed for impairmentsemi-annually or on such other occasions that events or changes incircumstances indicate that it might be impaired. Any impairment is recognisedimmediately in the income statement and is not subsequently reversed. Goodwillis allocated to cash generating units for the purpose of impairment testing.

Goodwill arising on acquisitions before the date of transition toIFRS has been retained at the previous UK GAAP amounts subject to being testedfor impairment.

Intangible assetsThe cost of developing or acquiring computer software including ownlabour costs incurred directly in connection with software development, iscapitalised as an intangible asset where the related expenditure is separatelyidentifiable and where there is reasonable expectation that future economicbenefits will arise from the development. Software costs are amortised usingthe straight line method over 3 years. The amortisation charge is includedwithin operating expenses.

Interest income and expense

Revenue shown in the profit and loss account represents interest,commission and arrangement fees receivable on loans made to third parties.Interest income and expense are recognised in the profit and loss account forall financial assets and liabilities using the effective interest method,being the rate that exactly discounts estimated future cash payments orreceipts through the expected life of the financial instrument to the netcarrying amount of the financial asset or financial liability. Whencalculating the effective interest rate, the Group includes all establishmentand arrangement fees, commissions and administrative fees paid or receivedbetween parties to the contract that are an integral part of the effectiveinterest rate.

Interest on legal disbursement funding is added to the principal,is calculated on a daily basis and is repaid to the Group at the end of theterm of the agreement.

Amounts received in respect of interest on property bridging loansrelating to future periods are held on the balance sheet as deferred incomewithin trade and other payables.

Financial assets and liabilities

Financial assets and liabilities used by the Group include loansmade to third parties and debt finance received by the Group. Financial assetsare recognised initially at fair value and measured subsequently at amortisedcost using the effective interest method, less provision for impairment.Financial liabilities are recognised initially at fair value and measuredsubsequently at amortised cost.

Bad and doubtful debts

Specific provision is made against all advances considered to beimpaired. When there is reasonable doubt over recovery, provision is madeagainst the outstanding debt including interest and further interest issuspended until the directors are satisfied as to the recoverability of thetotal amount due.

Segmental reporting

No separate segmental reporting information is provided as in thedirectors' opinion there are no material segments other than the provision ofshort term niche funding solutions.

Leasing

Rentals payable under operating leases are charged to income on astraight line basis over the term of the lease.

Retirement benefits costs

Payments to defined contribution retirement benefit plans arecharged as an expense as they fall due.

Taxation

The tax expense represents the sum of the current tax expense anddeferred tax expense.

The tax currently payable is based on taxable profit or loss forthe year. Taxable profit or loss differs from net profit as reported in theincome statement because it excludes items of income or expense that aretaxable or deductible in other years and it further excludes items that arenever taxable or deductible. The Group's liability for current tax iscalculated by using tax rates that have been enacted or substantively enactedby the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable ondifferences between the carrying amount of assets and liabilities in thefinancial statements and the corresponding tax bases used in the computationof taxable profit, and is accounted for using the balance sheet liabilitymethod. Deferred tax liabilities are recognised for all taxable temporarydifferences and deferred tax assets are recognised to the extent that it isprobable that taxable profits will be available against which deductibletemporary differences can be utilised. Such assets and liabilities are notrecognised if the temporary difference arises from the initial recognition ofgoodwill or from the initial recognition (other than in a businesscombination) of other assets and liabilities in a transaction which affectsneither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporarydifferences arising on investments in subsidiaries and associates, andinterests in joint ventures, except where the Group is able to control thereversal of the temporary difference and it is probable that the temporarydifference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected toapply to the period when the asset is realised or the liability is settledbased upon tax rates that have been enacted or substantively enacted by thebalance sheet date. Deferred tax is charged or credited in the incomestatement, except when it relates to items credited or charged directly toequity, in which case the deferred tax is also dealt with in equity.

Property, plant and equipment

Fixtures and equipment are stated at cost less accumulateddepreciation. Depreciation is charged so as to write off the cost or valuationof assets over their useful economics lives, using the straight line method onthe following basis:-

Leasehold improvements - unexpired length of lease

Plant and machinery - 3 years

Fixtures, fittings & equipment - 3 years

The directors consider that the freehold property is maintained insuch a state of repair that its residual value is at least equal to itscarrying value. Accordingly, no depreciation is charged on the grounds ofimmateriality. Annual impairment reviews are undertaken and provisions made atthe end of each reporting period where necessary.

Non -depreciation of freehold property is a departure from theCompanies Act 2006 and is considered necessary by the directors to ensure thatthe financial statements give a true and fair view.

Equity Instruments

Equity instruments, which are contracts that evidence a residualinterest in the assets of the Group after deducting all of its liabilities,are recorded at the proceeds received, net of direct issue costs.

Provisions

Provisions are recognised when the Group has a present obligationas a result of a past event which it is probable will result in an outflow ofeconomic benefits that can be reliably estimated.

Share-based payments

Equity-settled share-based payments are measured at fair value atthe date of grant. The fair value determined at the grant date ofequity-settled share-based payments is expensed on a straight-line basis overthe vesting period, based on the Group's estimate of shares that willeventually vest. Fair value is measured by use of a binomial model. Theexpected life used in the model has been adjusted, based on management's bestestimate, for the effect of non-transferability, exercise restrictions, andbehavioural considerations.At each balance sheet date, the Group revises its estimates of thenumber of options that are expected to become exercisable. It recognises theimpact of the revision of original estimates, if any, in the income statementand a corresponding adjustment to reserves over the remaining vesting period.Costs are recognised in the income statement with a corresponding credit to ashare based payment reserve. Financial Risk ManagementInterest rate risk

The interest rate risks are limited to the revolving creditfacilities which the Group has in place.

The Group has no exposure arising from trading overseas.

Liquidity risk

The Group has to monitor closely its access to bank and other fundsand its ongoing loans and overdrafts to ensure that there are sufficient fundsto meet its obligations.

The Board receives regular debt management forecasts which estimatethe cash inflows and outflows over the next eighteen months, so thatmanagement can ensure that sufficient financing is in place as it is required.

Credit Risk

The Group is exposed to the risk that any counterparty to which theGroup lends money will be unable to repay the amounts when they fall due.These risks are managed by ensuring that exposures to individualcounterparties and particular market sectors or loans exhibiting particularattributes are minimized wherever possible. The Board and Risk Committeemonitor such exposures on a regular basis, with figures being regularlyreviewed. In respect of property bridging loans the Group enforcesrepossession of property where necessary with a view to holding the asset forresale in order to extinguish the debt. In addition, impairment provisions aremade when it becomes evident that the Group may incur losses at the balancesheet date.

2. Earnings per Ordinary A share

6 Months 6 Months Year ended ended Ended 30/09/2012 30/09/2011 31/03/2012 Profit for the period (£) 3,726 141,024 305,024 Average number of shares - basic and diluted 2,330,094 2,222,402 2,222,402 EPS - basic (pence) 0.2p 6.3p 13.7pEPS - diluted (pence) 0.2p 6.3p 13.4p

3. Trade and other receivables

30/09/2012 30/09/2011 31/03/2012 £ £ £Trade receivables-Disbursement funding loans 5,998,563 6,899,274 6,544,387- Property bridging loans 917,547 1,174,297 1,026,832 - Other trade debtors 586,478 86,202 302,914Prepayments and accrued income 395,642 237,772

109,759

7,898,230 8,397,545

7,983,892

4. Trade and other payables amounts falling due within one year

30/09/2012 30/09/2011 31/03/2012 £ £ £

Trade and other payables falling due within one year

Trade payables 51,893 54,245 56,086Bank loans and overdrafts- Disbursement funding loans 3,818,637 5,038,692 4,218,159-Property Bridging Loans 334,000 474,000 384,000-Mortgages 29,156 - 12,533 Other taxation and social security 18,258 17,591 58,569Accruals and deferred income 273,253 118,759 144,123 4,525,197 5,703,287 4,873,470

Trade and other payables falling due after more than one year

Mortgage 548,958 395,955 570,391

The disbursement funding loans for Sutherland Professional FundingLimited are financed by committed revolving credit facilities secured by fixedand floating charges over the assets of the company supported by a parentcompany guarantee.

The facility represents individual funding loans, repayable whenthe related disbursement loan is collected.

The property bridging loans are uncommitted revolving creditfacilities secured by secondary charges over all properties, where bankfunding has been provided. In addition, there are fixed and floating chargesover all properties and assets, present and future, of Impact BridgingSolutions Limited supported by a parent company guarantee.

The mortgages are provided by two lenders both of whom have firstcharges over the properties concerned.

5. The Board of Directors approved the interim report on 28 December 2012.