31st Dec 2009 07:00
Impact Holdings (UK) plc ("Impact" or "The Group") Interim Results
Impact (AIM: IHUK), the specialist lender, announces its unaudited interim results for the six months ended 30 September 2009.
Financial Highlights
* results in line with management expectations * cash and cash equivalents of 0.4 million * gross profit maintained * overhead costs remain static * earnings per share 12p
Operational Highlights
* successful acquisition of Sutherland Professional Funding Limited completed
on 30th December 2009
* bolstering of the Board with the appointments of Roger Barlow as Chairman,
John Russell as Non-Executive Director and Stuart Burn as Operations Director * increased bank debt facilities to support ongoing trading * structured risk management to support monitoring of existing exposures * further growth opportunities for primary business lines identified For further information:Impact Holdings (UK) plc.Paul Davies Chief Executive Officer Tel: +44 (0)161 437 9499 www.impactholdings.netDaniel Stewart & Company plcSimon Leathers, Corporate Finance Tel: +44 (0)207 776
6550
The financial information for the half year ended 30 September 2009 has beenextracted from the interim results, which is available on the Company's website(www.impactholdings.net).CHAIRMAN'S STATEMENT
I am pleased to report our unaudited interim financial results for the six months ended 30th September 2009. Revenue of 893,606 and pre-tax profit of 137,354 were in line with expectations, as were cash flows and origination levels.
The general economic downturn experienced in 2008 has continued into 2009 with a lack of confidence in the economy and a lack of liquidity in the banking markets.
Business Overview
The lack of liquidity in the banking markets, our concerns for the overalleconomic environment in which we trade and our desired strategy ofconcentrating on better quality covenants have resulted in a slowing down ofour growth in the first six months. We have undertaken a lengthy and detaileddue diligence on the acquisition of Sutherland Professional Funding Limited("Sutherlands") culminating in the transaction being completed on 30th Decemberwith day to day operations having been successfully migrated to our Head Officein Manchester.
This acquisition complements the existing solicitor lending business and brings with it the following benefits:
* the increased scale of the business has brought further funding lines;
* the combined client base will create access to significant cross selling
opportunities;
* the acquisition is being integrated into the infrastructure and operating
platforms of the existing Impact business, creating synergistic gains
through economies of scale.
The business of solicitor lending, in relation to funding disbursements on personal injury cases, continues to be our core market albeit we have adopted a more conservative approach within the credit risk function.
The Group instigated its property bridging business to fund short term propertytransactions in July 2007 but the severe downturn in the property market andthe "credit crunch" have resulted in an unprecedented effect on themarketplace. Banks and Building Societies reduced the availability of mortgagesand as a consequence the refinancing options for bridging loan transactionshave diminished. This lack of liquidity has therefore resulted in a strategicdecision to continue to restrict new exposures to lower loan to values where arefinance is not perceived to be problematic.
Board Appointment
I was appointed Non Executive Chairman on 1st December 2009 and am pleased thatRichard Kilsby has agreed to continue as a Non Executive Director. On 22ndSeptember 2009 Stuart Burn, who has been with the Group since April 2008, wasappointed Operations Director.I am delighted to confirm that John Russell has been appointed to the Board aspart of the Sutherlands acquisition. John is an experienced and successfulbusinessman who has significant experience in the strategic development ofbusinesses. He has been on the board of Sutherlands since 2003 and hisappointment to the Board is an important part of the continuity plan. John haspreviously been President and Treasurer of the Freight Transport Associationand Chairman of the Scottish Business Crime Centre. He is presently a committeemember of the CBI Scotland Council, a director of the Freight TransportAssociation and Chairman of John G. Russell Transport Group.
Outlook
The Group remains focussed on providing services to the legal sector and maximising niche funding opportunities. The acquisition of Sutherlands is the first step in rolling out this strategy and this, coupled with our existing businesses, will provide the foundation for controlled growth, improved profitability and enhanced shareholder value.
Roger BarlowNon Executive ChairmanIMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT
6 Months 6 Months Year ended ended ended 30/09/2009 30/09/2008 31/03/2009 GBP GBP GBP Revenue 893,606 1,179,637 2,044,973 Cost of sales (225,760) (498,291) (787,220) Gross profit 667,846 681,346 1,257,753 Total operating expenses (531,159) (549,594) (1,013,915) Operating profit 136,687 131,752 243,838 Interest receivable 667 59,201 46,796 Profit for the period from 137,354 190,953 290,634operations before tax Tax expense - - - Profit for the period 137,354 190,953 290,634 Earnings per share (basic) 12p 17p 26p Earnings per share (fully 12p 17p 26pdiluted) IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
As At As At As At 30/09/2009 30/09/2008 31/03/2009 GBP GBP GBP Non-current assets Goodwill - - - Intangible assets 86,993 55,001 119,628 Property, plant and 42,295 36,369 42,671equipment 129,288 91,370 162,299 Current assets Trade and other receivables including amounts falling due after more than one year 8,832,097 9,427,497 8,832,251 Cash and cash equivalents 406,994 863,504 409,573 9,239,091 10,291,001 9,241,824 Total assets 9,368,379 10,382,371 9,404,123 Equity and liabilities Share capital 5,666,667 5,666,667 5,666,667 Share premium account 4,759,823 4,759,823 4,759,823 Share based payment reserve 373,836 373,836 373,836 Shares held by Employee Benefit (26,646) - (26,646)Trust Retained earnings (7,258,644) (7,495,679) (7,395,998) Issued share capital and 3,515,036 3,304,647 3,377,682reserves attributable to
equity shareholders of the parent
Trade and other payables: 5,853,343 7,077,724 6,026,441
amounts falling due within one year
9,368,379 10,382,371 9,404,123IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
6 Months 6 Months Year ended ended ended 30/09/2009 30/09/2008 31/03/2009 GBP GBP GBP Operating activities Cash generated from/ 311,455 (1,505,337) (1,159,938)(used in) operations Net cash generated from/ 311,455 (1,505,337) (1,159,938)
(absorbed by) operating activities
Investing activities
Receipts from sale of tangible assets - -
5,448 Purchase of other intangible - - (89,173)assets Purchase of property, 152 360 (6,126)plant and equipment Acquisition of own shares - - (26,646)by Employee Benefit Trust Interest received 667 55,384 46,796 Net cash generated by/ 819 55,744 (69,701)
(used in) investing activities
Financing activities (Decrease)/increase in amount (314,853) 1,185,409
511,524
owed to lending institutions
Net cash (used in)/ (314,853) 1,185,409 511,524from financing activities Net decrease in cash (2,579) (264,184) (718,115)and cash equivalents Opening cash and cash equivalents 409,573 1,127,688
1,127,688
Closing cash and cash equivalents 406,994 863,504
409,573
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Share Shares Profit Total Capital Premium Based held by and Payment EBT Loss Reserve Account GBP GBP GBP GBP GBP GBP Balance as at 5,666,667 4,759,823 373,836 - (7,686,632) 3,113,69431 March 2008 Profit for the - - - - 190,953 190,953period Balance as at 5,666,667 4,759,823 373,836 - (7,495,679) 3,304,64730 September 2008 Movement - - - (26,646) 99,681 73,035during the period Balance as at 5,666,667 4,759,823 373,836 (26,646) (7,395,998) 3,377,68231 March 2009 Profit for the - - - - 137,354 137,354period Balance as at 5,666,667 4,759,823 373,836 (26,646) (7,258,644) 3,515,03630 September 2009 For further information:Impact Holdings (UK) plcPaul Davies, Chief Executive Officer Tel: 0161 437
9499Daniel Stewart & Company plcSimon Leathers/Oliver Rigby Tel: 020 7776 6550Notes to Editors:
Impact Holdings (UK) plc through its individual subsidiaries provides short term funding solutions, loans administration and IT support services in two specific sectors:
1. The legal disbursements market;
2. Property based bridging and development market.
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.
vendorRelated Shares:
IHUK.L