Interim Results
March 31 2004 - 2:02AM
UK Regulatory
RNS Number:1394X
Ultimate Finance Group PLC
31 March 2004
Ultimate Finance Group plc ("the Company" or "Ultimate Finance")
Interim results for the six months ended 31 December 2003
Key points:
* Interim results show marked improvement over last year's interim
performance:
* Client turnover increased by #12.9m to #17.5m (2002: #4.6m)
* Turnover increased by 336% to #554,000 (2002: #127,000)
* Loss before and after tax reduced by 62% to #166,000 (2002: #440,000)
* Client base is growing rapidly - 81 at 31 December 2003 with advances of
#3.4 million
* Coverage established throughout England and Wales achieved via recent
appointments:
* Mark Tapping - Director of Sales, Ultimate Finance Ltd. Ex Close Invoice
Finance Ltd
* Simon Maddocks - Regional Director, North. Ex Abbey Cash Flow Finance
* Significant opportunities in factoring market (#8.8 bn advanced at end of
2003 on turnover of #117 bn - source:FDA members)
Brian Sumner, chief executive, commented:
"Since joining AIM in June 2002 the highly experienced board of Ultimate Finance
Group have put in place the key people and systems to offer wide coverage within
therapidly growing UK factoring market. Our focus on delivering excellent
customer services has enabled us to build a strong customer base and grow the
business in line with the overall business objectives set out at the time the
group was established.As factoring continues to increase in popularity and
acceptability the UK market offers huge potential."
Enquiries:
Brian Sumner, Chief Executive Ultimate Finance Group plc 07976 406 474
Richard Pepler, Managing Director Ultimate Finance Group plc 07870 212 180
Shane Dolan / Chris Bradshaw Biddicks 020 7448 1000
Chairman's statement
Results
The results for the period ended 31 December 2003 show a loss before taxation of
#166,000, a marked improvement compared with a #440,000 loss for the six months
to 31 December 2002. In the same period turnover was #554,000 against #127,000
for the six months to 31 December 2002. Client turnover in the period amounted
to #17.4m (31 December 2002: #4.6m).
As at 31 December 2003, the portfolio of clients stood at 81 clients (31
December 2002: 25 clients) with funds advanced of #3.4m (31 December 2002:
#1.1m).
Four clients were removed from the portfolio in the course of the last six
months, two having ceased trading and two we terminated due to increasing levels
of non-factorable debt. In all instances, the current accounts were cleared
without default.
Growth in overheads continues to be limited to that which is required to
maintain our standard of risk management and safeguard the value in the balance
sheet. At 31 December 2003, the company employed 15 staff (31 December 2002: 9
staff).
Working capital facilities
The facilities from Bank of Scotland of #4.5m are due to expire at the end of
May 2004. Our bankers have confirmed that they see no reason why they would not
provide an extension to the current facilities. Any such facilities would be
subject to assessment on normal banking criteria and negotiations are continuing
with a view to securing facilities beyond May 2004.
Of the total funding facility available to us, #2.4m (net) has been utilised.
Risk management
The portfolio continues to offer a good spread of industry sector and
geographical presence. The maximum funds advanced to any one client at the end
of the period constituted less than 7% of the total funds advanced.
A prerequisite of strong risk management is a high standard of underwriting. In
spite of difficult market conditions, we have consistently maintained these
standards and avoided the temptation to take on marginal business.
As new clients come on board so the operations team has been strengthened to
avoid over burdening client managers and credit controllers. As at 31 December
2003, the operations department employed 9 staff including the operations
director (31 December 2002: 3 staff).
Current trading
The first half of 2003/04 has delivered satisfactory progress towards our goal
of profitability.
Outlook
The group continues to see a strong interest in its service and flexible
approach. I firmly believe that the opportunities for success identified at the
outset are still present. With increasing costs of borrowing and the financial
stress this puts on the cash flows of highly geared small to medium sized
businesses Ultimate Finance is well placed to bridge the cash flow gap for our
current and future clients.
The improving trading performance is entirely the result of the ongoing efforts
and dedication of the staff at Ultimate Finance. I would like to thank our Chief
Executive, Brian Sumner and his staff for their efforts and continued commitment
to the success of the group.
Our intention is, and always has been to build sustainable shareholder value. In
this respect, I have confidence in the future of Ultimate Finance Group plc.
Clive R Garston
Chairman
Consolidated profit and loss account
Half year to Half year to Year to
31 Dec 03 31 Dec 02 30 Jun 03
#'000 #'000 #'000
Turnover 554 127 485
Operating Loss (96) (459) (655)
Net Interest (payable) / (70) 19 (8)
receivable
Loss before and after (166) (440) (663)
taxation
Basic and fully diluted
loss per share (1.48)p (3.92)p (5.91)p
There are no recognised gains and losses in the period other than those reported
in the profit and loss account.
Consolidated balancesheet
Half year to Half year to Year to
31 Dec 03 31 Dec 02 30 Jun 03
#'000 #'000 #'000
Fixed Assets 30 24 30
Current Assets
Debtors 3,383 1,110 2,818
Cash at bank 580 531 404
Other current assets 56 57 65
4,019 1,698 3,287
Current Liabilities
Amounts due in less than (3,100) (383) (2,202)
one year
Net current assets 919 1,315 1,085
Net assets 949 1,339 1,115
Shareholders' funds
Called up share capital 561 561 561
Share premium account 1,217 1,218 1,217
Profit and loss account (829) (440) (663)
Total shareholders' funds 949 1,339 1,115
Reconciliation of movements in shareholders' funds
Half year to Half year to Year to
31 Dec 03 31 Dec 02 30 Jun 03
#'000 #'000 #'000
Opening shareholders' funds 1,115 - -
New share capital
subscribed (net of - 1,779 1,778
issue costs)
Loss for the period (166) (440) (663)
Closing shareholders' funds 949 1,339 1,115
Consolidated cash flow statement
Half year to Half year to Year to
31 Dec 03 31 Dec 02 30 Jun 03
#'000 #'000 #'000
Net cashfrom operating (616) (1,539) (3,409)
activities
Returns on investments &
servicing of (70) 19 (8)
finance
Capital expenditure (6) (28) (38)
Cash outflow before (692) (1,548) (3,455)
financing
Financing
Issue of shares - 1,779 1,778
Increase in debt 900 300 2,050
Increase in cash 208 531 373
Reconciliation of net cash flow to movement in net funds
Half year to Half year to Year to
31 Dec 03 31 Dec 02 30 Jun 03
#'000 #'000 #'000
Increase in cash 208 531 373
Cash inflow from increase (900) (300) (2,050)
in debt
Movement in net funds in (692) 231 (1,677)
the period
Net debt at the beginning
of the period (1,677) - -
Net (debt) / funds at the
end of the period (2,369) 231 (1,677)
Reconciliation of operating loss to net cash operating cash flows
Half year to Half year to Year to
31 Dec 03 31 Dec 02 30 Jun 03
#'000 #'000 #'000
Operating loss (96) (459) (655)
Depreciation charges 6 4 9
Increase in commitments to (565) (1,110) (2,818)
clients
Decrease / (Increase) in
sundry debtors 10 (57) (66)
Provisions against client 31 10 31
commitments
(Decrease) / Increase in
sundry creditors (2) 73 90
Net cash outflow from
operating activities (616) (1,539) (3,409)
Notes to the interim report
1. The results for the half year to 31 December 2003 andthe comparative six
month trading period to 31 December 2002 are unaudited and have been
prepared using accounting policies consistent with those set out in the
Directors' Report and Consolidated Financial Statements for the period ended
30 June 2003. The figures for the financial period ended 30 June 2003 are
taken from the statutory accounts for that period, which have been delivered
to the Registrar of Companies and upon which an unqualified audit report was
given.
2. The basic loss per share has been calculated from the loss after taxation of
#166,000 and on the 11,223,372 ordinary shares in issue at 31 December 2003.
As the company has made a loss in the period the basic loss per share is the
same as the fully diluted loss per share, therefore, the calculation does
not take into consideration share options granted in the period.
3. These interim financial statements were approved by the board of directors
on 30 March 2004.
4. Accounting policies
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the company's
financial statements.
Basis of preparation
These unaudited financial statements do not constitute statutory accounts.
The financial statements have been prepared in accordance with applicable
accounting standards, and under the historical cost accounting rules.
Fixed assets and depreciation
Depreciation is provided to write-off the cost less the estimated residual
value of tangible fixed assets by equal instalments over their estimated
useful economic lives as follows:
Office equipment incl. network equipment - 5 years
Computer equipment excl. network equipment - 3 years.
Turnover
Turnover represents fees (excluding value added tax) and discount income.
Fees are recognised when service is provided and discount income is
recognised on funds advanced to clients as it becomes due.
Cash and liquid resources
Cash, for the purpose of the cash flow statement, comprises cash in hand and
deposits repayable on demand, less overdrafts payable on demand.
Introducer commissions
Commissions payable to the introducers of business are charged to the profit
and loss account over the minimum period of the service contract. In the
event of early termination, any commission not already charged to the profit
and loss account will be written off in full.
Net client commitments
Amounts due to clients under recourse factoring agreements are offset
against the related trade debtors. The resulting balance represents net
client commitments and is included in debtors.
5. Interim Report
The text of this report will be sent to shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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