Press Release 27th September
2013
Impact Holdings (UK) plc
("Impact" or "The Group")
Preliminary results for the year ended 31st March 2013
Impact Holdings (UK) plc. (AIM: IHUK), the specialist lender, announces its
preliminary results for the year ended 31st March 2013.
Financial Highlights
* Group's pre-tax profit of £250,071 (2012: £314,745)
* Earnings per share 10.1p (2012: 13.7p)
* Reduced exposure to external debt providers from £5.2m to £1.6m
* Results ahead of management expectations
* Reduced gearing down to 28% from 102%
* Cash and cash equivalents of £0.7 million (2012: £1.1 million)
* Net assets of £5.6 million (2012: £5.1 million)
Commenting on the results Paul Davies, the Chief Executive, said "The group
continues to see ongoing progress with expenses under control, a marked
reduction in external finance and it continues to actively look for alternative
income streams to enhance its profitability."
For further information:
Impact Holdings (UK) plc.
Paul Davies Chief Executive Officer Tel: +44 (0)1928 793 550
www.impactholdings.net
Zeus Capital
Nick Cowles/Andrew Jones Tel: +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 2013, 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 STATEMENT
INTRODUCTION
We have previously advised that as a consequence of the ongoing credit crisis
and new economic environment in which we operate it has been necessary to seek
out additional revenue streams for the group.
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 development of the strategic direction of the business has continued in
this financial year with a marked reduction in our exposure to third party
funders and a withdrawal from new exposures in the specialty funding market.
The establishment of Midas Marketing Management Limited in September 2012 which
provides specialist marketing and business development services to both law
firms and individual business owners is seen as a marked growth area operating
within a highly compliant framework. This initiative will continue to be
invested in over the forthcoming period as we develop our product offering,
increase our revenue streams and diversify our product range. Enhanced income
streams from this operation will hopefully come to fruition in 2013/14 and
beyond albeit we still continue to incur initial set up costs.
DIVIDEND
No dividend will be declared for the year.
OUTLOOK
The group remains focused on providing services to the legal and professional
sectors. The Board of Directors is committed to the future growth opportunities
earmarked and continues to develop this strategy which will provide the
foundation for controlled growth, improved profitability over time and enhanced
shareholder value.
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 encouragement and counsel.
Roger Barlow
Non-executive Chairman
CHIEF EXECUTIVE'S REVIEW
INTRODUCTION
As previously advised the Board and management team have spent considerable
effort in looking at the strategic direction the business is taking following
the lack of liquidity in the banking market. This has culminated in the
decision to diversify the Company's product offering and reduce the group's
exposure to financial institutions and re-align the business to provide various
ancillary services to the legal and professional sectors.
The dedication and commitment of all staff to re-align the business is a credit
as they have collectively worked with commitment and resilience to deliver this
performance.
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, a marked reduction in external finance and it continues to
actively look 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.
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 uncommitted debt finance from
Mercantile Investment Company Limited 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 a cautious, controlled, profitable growth with the
group concentrating on actively looking for additional income enhancing
opportunities. We continue to look for economies of scale and enhance the
controls in order to allow us to minimise the risks to the business.
Paul Davies
Chief Executive
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2013
Year Year
Ended Ended
31/03/13 31/03/12
£ £
Revenue 1,309,927 1,186,355
Cost of Sales (430,666) (241,816)
Gross Profit 879,261 944,539
Other operating expenses (629,273) (630,054)
Operating Profit 249,988 314,485
Interest 83 260
receivable
Profit for the year from operations 250,071 314,745
before tax
Tax (charge)/ - (9,721)
credit
Profit for the 250,071 305,024
year
Earnings per share
(pence)
Basic 10.1p 13.7p
Fully diluted 10.1p 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.
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2013
2013 2012
£ £
Non-current assets
Goodwill 421,766 421,766
Property, plant and equipment 921,890 866,825
Deferred taxation 171,892 171,892
1,515,548 1,460,483
Current assets
Trade and other receivables including amounts 6,284,896 7,983,892
falling due after more than one year
Cash and cash equivalents 688,413 1,076,179
Total current assets 6,973,309 9,060,071
Total assets 8,488,857 10,520,554
Equity and Liabilities
Share capital 6,411,201 6,211,201
Share premium Account 5,125,291 5,005,288
Shares held by employee benefit trust (45,070) (45,070)
Retained earnings (5,844,655) (6,094,726)
Issued capital and reserves attributable to 5,646,767 5,076,693
Equity holders of the parent
Trade and other payables due after more than 540,261 570,391
one year
Trade and other payables due in less than one 2,301,829 4,873,470
year
Total Equity and Liabilities 8,488,857 10,520,554
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2013
31/3/13 31/3/12
£ £
Operating activities
Cash generated by operations (302,839) 1,805,382
Net cash generated by operating (302,839) 1,805,382
activities
Investing activities
Interest received 83 260
Purchases of property, plant and (71,248) (288,246)
equipment
Net cash applied/(used) in investing (71,165) (287,986)
activities
Financing activities
Issue of equity share capital 320,003 -
Net decrease in amounts owed to lending (333,765) (2,335,282)
institutions
Net cash outflow from financing (13,762) (2,335,282)
activities
Net decrease in cash and cash (387,766) (817,886)
equivalents
Cash and cash equivalents at 1 April 1,076,179 1,894,065
Cash and cash equivalents at end of 31 688,413 1,076,179
March
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2013
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 (45,070) (6,571,949) 4,771,669
March 2011
Lapse of Share (172,199) 172,199 -
Options
Net Profit for the - - - - 305,024 305,024
year
Balance as at 31 6,211,201 5,005,288 - (45,070) (6,094,726) 5,076,693
March 2012
Ordinary Shares 200,000 - - - - 200,000
Issued
Share Premium on - 120,003 - - - 120,003
Issued Shares
Net Profit for the - - - - 250,071 250,071
Year
Balance as at 31 6,411,201 5,125,291 - (45,070) (5,844,655) 5,646,767
March 2013
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 2013. The results for the year ended 31st March 2013
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 1st October 2013. 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 27th November 2013 at
8.45am.
Notes to the Editor:
Impact Holdings (UK) plc through its individual subsidiaries provides
financial; 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.