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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Champion | LSE:CMP | London | Ordinary Share | GB0033634329 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:5017K
Champion PLC
21 December 2007
Champion PLC
Announcements of results for the year ended 30 June 2007
In my first year as Chairman of Champion Plc I am delighted to announce that the
business continues to make good progress. The Group completed the acquisition of
an accountancy practice based in Preston in March 2007 and the acquisition of an
accountancy practice based in Blackpool in August 2007. As a result of these
acquisitions the number of fee earners within the Group has risen to 129 from
117 at the same time last year.
FINANCIAL PERFORMANCE
The Group experienced a reduction in revenue during the year. Overhead costs
have been reduced and the Group has maintained its level of profit from the
previous year. The measures of growth in financial performance are Revenue and
Profit before tax. Group revenue has decreased by 12.42% to £5.14 million and
Group profit before tax and interest was £0.4 million resulting in an operating
margin before interest and tax of 7.9%.
The basic earnings per share is 0.5948 pence.
The Consolidated Balance Sheet at the year end showed net assets of £3.74m.
The Directors do not recommend the payment of a dividend.
The trading results and the Group's financial position at the year end are
detailed in the financial statements that follow.
DEVELOPMENT OF THE BUSINESS
During the year, the Group's revenue reduced by £0.72m. This was mainly as a
result of changes to tax legislation and the approach adopted by the revenue
authorities, and the consequential slow down in the tax mitigation market place.
We are now seeing alternative opportunities for the development of tax
mitigation.
Also during the year seven subsidiary directors left the group following a
re-structure of two offices. Some of those directors took a limited number of
clients with them which also contributed to the reduction in revenue.
Recurring fees for the group have, however, increased during the year both from
internal growth and acquisition.
In March the Company acquired Stokes Dickinson an accountancy practice based in
Preston. The consideration was £300 which was settled by the issue of shares in
Champion Stokes Limited, a company established for the purpose of the
transaction. At the same time the Preston part of Champion Business Solutions
Limited was transferred to Champion Stokes Limited, there was no gain or loss on
the merger of the offices. Champion Business Solutions Limited retained it's
interest in the merged entity. Stokes Dickinson's revenue was £0.31m for the
year ended 31 July 2005. The office was merged with the existing Champion office
in Preston increasing the annual revenue of the combined office to approximately
£0.8m. The merger has gone well and the office is achieving its budgeted
figures.
During the year the group acquired a further 24% of the issued share capital of
Champion Allwoods Limited taking its total share holding to 75%. The group also
acquired a further 14.5% of the issued share capital of Champion Business
Solutions Limited taking its total share holding to 65%.
During the year we employed an average of 133 people and have consistently
recruited the right quality people resulting in a strong motivated team with the
ability to deliver a quality service to our clients. We successfully maintain a
high ratio of fee earners to administrative staff and I would like to place on
record my sincere thanks to the whole team for their hard work, dedication and
commitment to client service.
THE FUTURE
Since the year end the Group acquired the goodwill and business assets of
Haworth Moore, an accountancy practice based in Blackpool. The business will be
carried on through Champion Haworth Moore Limited a subsidiary company
established for the purpose of the transaction. The consideration of £0.49m
was settled by an initial cash payment of £0.17m with the remainder being
deferred to be paid over a two year period. Haworth Moore's revenue for the year
to 31 March 2007 was £800,667. The office has settled well in to the Group
structure and is achieving budgeted figures.
We will continue to grow organically and we actively seek further acquisitions
of the required quality. We will continue to recruit quality team members and
train existing team members to enable us to continue to deliver the service
which will enable our clients' businesses across the North West to grow whilst
creating wealth for their owners. We continue to regard prospects for the Group
positively.
Kevin Philbin
Chairman
Consolidated Income Statement
Year Ended 30 June 2007
Notes 2007 2006
£ £
Revenue 2 5,138,989 5,867,616
Staff costs 4 (3,214,361) (3,748,843)
Depreciation and Impairments (74,177) (82,022)
Other operating expenses (1,444,838) (1,622,000)
PROFIT FROM OPERATIONS 3 405,613 414,751
Finance costs 6 (133,324) (100,278)
Share of profit/(loss) from associate 360 (396)
PROFIT BEFORE TAX 272,649 314,077
Taxation 7 (86,826) (98,688)
PROFIT FOR THE YEAR 185,823 215,389
Attributable to:
Equity holders of the parent 185,823 146,676
Minority interests - 68,713
185,823 215,389
Basic earnings per share (pence) for profit attributable to the 8 0.5948 0.4695
equity holders of the parent
The results for the year are derived solely from continuing operations.
Consolidated Statement of Changes in Equity
Year Ended 30 June 2007
Share Share Available for Retained Total Minority Total equity
capital premium sale reserves earnings interest
£ £ £ £ £ £ £
Balance at 1 156,187 2,937,027 27,500 327,192 3,447,906 132,031 3,579,937
July 2006
Changes to
equity
Investments - - (27,500) - (27,500) - (27,500)
Profit for the - - - 185,823 185,823 - 185,823
year
Total - - (27,500) 185,823 158,323 - 158,323
recognised
income and
expense for
the year
Balance at 30 156,187 2,937,027 - 513,015 3,606,229 132,031 3,738,260
June 2007
Share Share Available for Retained Total Minority Total equity
capital premium sale reserves earnings interest
£ £ £ £ £ £ £
Balance at 1 156,187 2,937,027 265,000 180,516 3,538,730 63,318 3,602,048
July 2005
Changes to
equity
Investments - - (237,500) - (237,500) - (237,500)
Profit for the - - - 146,676 146,676 68,713 215,389
year
Total - - (237,500) 146,676 (90,824) 68,713 (22,111)
recognised
income and
expense for
the year
Balance at 30 156,187 2,937,027 27,500 327,192 3,447,906 132,031 3,579,937
June 2006
Consolidated Balance Sheet
As at 30 June 2007
Notes 2007 2006
£ £
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 9 191,134 237,912
Intangible assets 10 4,278,571 3,939,853
Other investments 12 10,050 50,050
4,479,755 4,227,815
CURRENT ASSETS
Inventories 13 12,400 6,400
Trade and other receivables 14 2,712,177 2,506,335
Cash and cash equivalents 17 307,497 174,228
3,032,074 2,686,963
LIABILITIES
CURRENT LIABILITIES
Interest bearing borrowings 20 1,476,230 1,271,327
Current tax liabilities 202,556 130,553
Trade and other payables 22 1,291,011 1,094,968
2,969,797 2,496,848
NET CURRENT ASSETS 62,277 190,115
NON CURRENT LIABILITIES
Deferred tax liabilities 21 3,772 11,993
Interest bearing borrowings 20 800,000 826,000
803,772 837,993
NET ASSETS 3,738,260 3,579,937
CAPITAL AND RESERVES ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE COMPANY
Ordinary shares 18 156,187 156,187
Share premium 19 2,937,027 2,937,027
Available for sale reserve 19 - 27,500
Retained profits 19 513,015 327,192
3,606,229 3,447,906
Minority interest 132,031 132,031
TOTAL EQUITY 3,738,260 3,579,937
Consolidated Cash Flow Statement
Year Ended 30 June 2007
2007 2006
£ £
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 272,649 314,077
NON-CASH ADJUSTMENTS
Depreciation 61,677 82,022
Impairment of investments 12,500 -
NON-CASH ADJUSTMENTS 74,177 82,022
CASH FLOWS BEFORE CHANGES IN WORKING CAPITAL 346,826 396,099
Increase in inventories (6,000) (3,070)
Increase in trade and other receivables (205,842) (55,503)
Increase / (Decrease) in trade and other payables 201,738 (290,934)
DECREASE IN WORKING CAPITAL (10,104) (349,507)
CASH GENERATED FROM OPERATIONS 336,722 46,592
Income taxes paid (23,044) (80,227)
NET CASH FLOWS FROM / (USED IN) OPERATING
ACTIVITIES 313,678 (33,635)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire property, plant and equipment (14,899) (51,935)
Payments to acquire intangible assets (338,718) -
Payments to acquire available-for-sale investments - (17,500)
NET CASH FLOWS USED IN INVESTING ACTIVITIES (353,617) (69,435)
NET DECREASE IN CASH AND CASH EQUIVALENTS (39,939) (103,070)
Cash and cash equivalents as at 1 July 2006 (1,067,610) (964,540)
CASH AND CASH EQUIVALENTS AS AT 30 JUNE 2007 (1,107,549) (1,067,610)
1.ACCOUNTING POLICIES
Basis of preparation
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to all
years presented, unless otherwise stated.
Both the parent company financial statements and group financial statements have
been prepared and approved by directors in accordance with International
Financial Reporting Standards as endorsed for use in the EU ("Endorsed IFRSs").
On publishing the parent company financial statements here together with the
group financial statements, the company is taking advantage of the exemption in
s230 of the Companies Act 1985 not to present its individual income statement
and related notes that form a part of these approved financials statements.
The parent company, Champion Plc is a non trading and non income generating
company.
Basis of consolidation
Where the company has the power, either directly or indirectly, to govern the
financial and operating policies of another entity or business so as to obtain
benefits from its activities, it is classified as a subsidiary. The
consolidated financial statements present the results of the non revenue
generating company and its subsidiaries ("the group") as if they formed a single
entity. Inter-company transactions and balances between group companies are
therefore eliminated in full.
Standards, amendments and interpretations to published standards not yet
effective
Certain standards, amendments and interpretations to existing standards have
been published that are mandatory for the group's accounting periods beginning
on or after 1 January 2007 or later periods and which the group has decided not
to adopt early. These are:
- IFRS 7, Financial Instruments: disclosures and a complementary amendment to
IAS 1, Presentation of Financial Statements - Capital Disclosures (effective for
accounting periods beginning on or after 1 January 2007). IFRS 7 introduces new
disclosures to improve the information about financial instruments. It requires
the disclosure of qualitative and quantitative information about exposure to
risks arising from financial instruments, including specified minimum
disclosures about credit risk, liquidity risk and market risk, including
sensitivity analysis to market risk. It replaces IAS 30, Disclosures in the
Financial Statements of Banks and Similar Financial Institutions and the
disclosure requirements in IAS 32, Financial Instruments: Disclosure and
Presentation. It is applicable to all entities that report under IFRS.
The amendment to IAS 1 introduces disclosures about the level of an entity's
capital and how it manages capital. The Group assessed the impact of IFRS 7 and
the amendment to IAS 1 and concluded that the main additional disclosures will
be the sensitivity analysis to market risk and the capital disclosures required
by the amendment of IAS 1. The Group will apply IFRS 7 and the amendment to IAS
1 to the accounts for the period beginning on 1 January 2007.
- IFRS 8, Operating Segments (effective for accounting periods beginning on or
after 1 January 2009). This standard is still to be endorsed by the EU and it
sets out requirements for disclosure of information about an entity's operating
segments and also about the entity's products and services, the geographical
areas in which it operates, and its major customers. It replaces IAS 14,
Segmental Reporting. The Group expects to apply this standard in the accounting
period beginning on 1 January 2009. As this is a disclosure standard it will
not have any impact on the results or net assets of the group.
Associates
Champion Plc has the power to participate in (but not control) the financial and
operating policy decisions of Champion Financial Management Limited, it is
classified as an associate. Associates are initially recognised in the group
balance sheet at cost. The group's share of the post-acquisition profits and
losses are recognised in the consolidated income statement.
Profits and losses arising on transactions between the group and its associate
are recognised only to the extent of unrelated investor's interests in the
associate. The investor's share in the associate's profits and losses resulting
from these transactions is eliminated against the carrying value of the
associate.
Profit from operations
Profit from operations is stated after charging all operating costs including
those separately disclosed by virtue of their size or unusual nature or to
facilitate a more helpful understanding of the group's results. It is stated
before investment income and finance costs.
Business Combinations
In the event of a business combination, fair values are attributed to the net
assets acquired. Goodwill, which represents the difference between the purchase
consideration and the fair value of the net assets acquired, is capitalised and
subject to impairment review annually.
Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the group and the revenue can be reliably measured.
Revenue comprises the fair value for the sale of services, net of value added
tax and in accordance with IAS 18. Unbilled revenue on client services is
included as amounts recoverable on contracts within debtors.
Pension costs
The company operates a defined contribution pension scheme for employees. The
assets of the scheme are held separately from those of the company. The annual
contributions payable are charged to the income statement.
Property, plant and equipment
Items of property, plant and equipment are stated at cost of acquisition or
production cost less accumulated depreciation and impairment losses.
Depreciation is charged so as to write off the cost or valuation of assets over
their estimated useful lives, using the following method:
Plant and equip-ment 33% straight line
Fixtures and fittings 20% reducing balance
Leasehold improve-ments 12 to 15 years straight line
Investments
Available for sale investments are stated at market value with changes in value
being credited to available for sale reserves. Investments in subsidiary
companies are shown at cost less any permanent diminution in value.
Goodwill
Goodwill is recognised as an asset from the acquisition date as the excess of
the cost of acquisition over the fair value of identifiable assets, liabilities
and contingent liabilities of a subsidiary, associate or joint venture.
Goodwill is not amortised but is reviewed for impairment on an annual basis for
events or changes in circumstances that indicate that the carrying value might
be impaired and for subsequent changes in the fair
value of identifiable assets, liabilities and contingent liabilities acquired.
Any impairment is recognised immediately in the income statement and is not
subsequently reversed. Goodwill is stated at cost less accumulated impairment
losses.
Goodwill arising before the date of transition to IFRS has been retained at the
previous UK GAAP amounts subject to being tested for impairment at that date.
Impairment (excluding inventories and deferred tax assets)
The carrying values of assets are reviewed at each balance sheet date to
determine whether there is any indication of impairment. If any such indication
exists, the recoverable amount of the asset is estimated. Where the asset does
not generate cash flows which are independent from other assets, the recoverable
amount of the cash-generating unit to which the asset belongs is estimated.
The recoverable amount of an asset is the higher of its fair value less costs to
sell, and its value in use. Value in use is the present value of the future cash
flows expected to be derived from an asset or cash-generating unit.
An impairment loss is recognised in the income statement whenever the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount.
Goodwill with an indefinite life is tested for impairment annually and whenever
there is an indication that the asset may be impaired.
Inventories
Inventories are valued at the lower of cost and net realisable value, after
making due allowance for obsolete and slow moving items.
Hire purchase agreements
Assets held under hire purchase agreements are capitalised and disclosed under
tangible fixed assets at their fair value. The capital element of the future
payments is treated as a liability and the interest is charged to the income
statement on a straight line basis.
Trade and other receivables
Trade and other receivables are recognised by the group and carried at original
invoice amount less an allowance for any uncollectible or impaired amounts.
An estimate for doubtful debts is made when collection of the full amount is no
longer probable. Bad debts are written off when they are identified as being
bad.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short term
deposits. Short term deposits are defined as deposits with an initial maturity
of three months or less.
Bank overdrafts that are repayable on demand and form an integral part of the
group's cash management are included as a component of cash and cash equivalents
for the purposes of the consolidated cash flow statement.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred.
Borrowings are classified as current and non current liabilities.
Finance costs and interest are released to the profit and loss as incurred.
Deferred tax
Deferred Tax is provided in full, using the balance sheet liability method, on
temporary differences arising between the tax bases of assets and liabilities
and the carrying amounts in the financial statements.
Deferred Tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the initial
recognition (other than as a business combination) or other assets and
liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
Deferred Tax is charged or credited to the consolidated income statement, except
when it relates to items charged or credited directly to equity, in which case
the deferred tax is also dealt with in equity.
Deferred Tax is determined using the tax rates that are expected to apply in the
period when the asset is realised or the liability is settled.
The carrying amount of deferred tax assets is reviewed at each consolidated
balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred Tax assets and liabilities are offset when they relate to income tax
levied by the same taxation authority and the group intends to settle its
current tax assets and liabilities on a net basis.
Trade and other payables
Trade and other payables are initially measured at fair value, and are
subsequently measured at amortised cost, using the effective interest rate
method.
Operating lease commitments
Rentals applicable to operating leases where substantially all of the benefits
and risks of ownership remain with the lessor are charged against profits on a
straight line basis over the period of the lease.
Critical accounting estimates and assumptions
Impairment of goodwill
The group is required to test, on an annual basis, whether goodwill has suffered
any impairment. The recoverable amount is determined based on value in use
calculations. The use of this method requires the estimation of future cash
flows and the choice of a discount rate in order to calculate the present value
of the cash flows. More information including the carrying values is included
in note 10.
Critical accounting estimates and assumptions (continued)
Useful lives of intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are amortised and
depreciated over their useful lives.
Useful lives are based on the management's estimates of the period that the
assets will generate revenue, which are periodically reviewed for continued
appropriateness. More details including the carrying values are included in the
notes 9 and 10.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the group and the revenue can be reliably measured.
Unbilled revenue on client services is included as amounts recoverable on
contracts within debtors. The unbilled revenue is adjusted in accordance with
historical recoverability, which is periodically reviewed for continued
appropriateness.
2.REVENUE
Revenue arises from: 2007 2006
£ £
Rendering of services 5,056,355 5,732,302
Commission receivable 82,634 135,314
5,138,989 5,867,616
All revenue arose from one business sector within the UK.
3.PROFIT FROM OPERATIONS
This is arrived at after charging:
2007 2006
£ £
Depreciation of property, plant and equipment 61,677 82,022
Auditors' remuneration
-as auditors 36,645 25,020
Operating lease costs:
-Land and buildings 178,500 234,675
-Plant and equipment 98,098 18,939
4.EMPLOYEE EXPENSES
Staff costs (including directors) comprise: 2007 2006
£ £
Wages and salaries 2,795,854 3,308,354
Social security costs 284,999 333,352
Defined contribution pension cost 133,508 107,137
3,214,361 3,748,843
Champion Plc recharges all employee costs to the subsidiary companies.
The average monthly number of employees during the year was made up as follows:
Group Company
2007 2006 2007 2006
Management staff 4 4 4 4
Fee earners 129 117 - -
133 121 4 4
5. DIRECTORS' BENEFITS
Directors remuneration consists of: 2007 2006
£ £
Salaries 94,552 337,613
The emoluments of directors disclosed above include the following in respect of
the highest paid director:-
2007 2006
£ £
Salaries 27,500 145,000
6. FINANCE COSTS
2007 2006
£ £
Interest payable on bank borrowing 124,572 92,822
Finance charges 4,700 6,063
Other similar charges payable 4,052 1,393
133,324 100,278
7.TAXATION
Components of tax expense
2007 2006
£ £
Current tax expense
Current tax charge 95,047 108,042
Deferred tax expense
Relating to origination and reversal of temporary differences (8,221) (9,354)
Income tax expense reported in income statement 86,826 98,688
Reconciliation of tax charge to accounting profit
2007 2006
£ £
Profit before taxation 272,649 314,077
Tax at the domestic income tax rate of 30% 81,795 94,223
(2006: 30%)
Disallowable expenses 7,365 10,675
Transitional effect on goodwill - 11,344
Marginal rate relief (2,970) (17,554)
Un-provided deferred tax assets 636 -
Total current tax 86,826 98,688
8.EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net profit for the year
attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the year.
The following reflects the income and share data used in the total operations
basic earnings per share computation:
2007 2006
£ £
Net profit attributable to equity shareholders for basic earnings per share 185,823 146,676
2007 2006
Pence Pence
Earnings per ordinary share 0.5948 0.4695
Earnings per share have been calculated on the net basis on the profit on
ordinary activities after taxation and after minority interest of £nil (2006 -
£68,713) using the weighted average number of ordinary shares in issue of
31,237,375 (2006 - 31,237,375).
9. PROPERTY, PLANT AND EQUIPMENT
Group
At 30 June 2007
Leasehold Plant and Fixtures and Total
improve-ments equip-ment fittings
£ £ £ £
Cost
At 1 July 2006 105,937 200,568 264,594 571,099
Additions 3,895 7,898 3,106 14,899
At 30 June 2007 109,832 208,466 267,700 585,998
Depreciation
At 1 July 2006 (8,612) (133,236) (191,339) (333,187)
Charge for the year (8,305) (29,834) (23,538) (61,677)
At 30 June 2007 (16,917) (163,070) (214,877) (394,864)
Net book value
At 30 June 2006 97,325 67,332 73,255 237,912
At 30 June 2007 92,915 45,396 52,823 191,134
Hire purchase agreements
Included within the net book value of £191,134 is £14,439 (2006 - £24,631)
relating to assets held under hire
purchase agreements. The depreciation charged to the financial statements in the
year in respect of such assets
amounted to £10,192 (2006 - £10,192).
Group
At 30 June 2006
Leasehold Plant and Fixtures and Total
improve-ments equip-ment fittings
£ £ £ £
Cost
At 1 July 2005 99,823 166,810 252,531 519,164
Additions 6,114 33,758 12,063 51,935
At 30 June 2006 105,937 200,568 264,594 571,099
Depreciation
At 1 July 2005 (729) (104,547) (145,889) (251,165)
Charge for year (7,883) (28,689) (45,450) (82,022)
At 30 June 2006 (8,612) (133,236) (191,339) (333,187)
Net book value
At 1 July 2005 99,094 62,263 106,642 267,999
At 30 June 2006 97,325 67,332 73,255 237,912
10. INTANGIBLE ASSETS
Goodwill
£
Cost
At 1 July 2006 4,082,170
338,718
Additions
At 30 June 2007 4,420,888
Amortisation
At 1 July 2006 and 30 June 2007 (142,317)
Carrying value
At 30 June 2006 3,939,853
At 30 June 2007 4,278,571
Goodwill relates to Champion Holdings Limited, Champion Allwoods Limited,
Champion Stokes Limited and Champion Consulting Limited and is tested for
impairment at the balance sheet date. The recoverable amount of goodwill at 30
June 2007 was assessed on the basis of value in use. As this exceeded carrying
value no impairment loss was recognised.
Included within the additions is an increase in the shareholding of Champion
Allwoods and Champion Business Solutions.
The key assumptions in the calculation are the future revenue and the ability to
generate future cashflows. In assessing value in use, the most recent financial
results and initial budgets for the next year were used and extrapolated for 5
further years with no subsequent growth assumed and discounted at 10%.
11.INVESTMENTS IN SUBSIDIARIES
Group
companies
£
Cost at 1 July 2006 and 30 June 2007 2,476,600
Country of Principal activity Class and
Registration percentage of
Name shares held
Champion Holdings Limited UK Holding Company 100% ordinary
shares
Champion Consulting Limited* UK Auditors and Accountants 100% ordinary
shares
Champion Vehicle Solutions Limited* UK Dormant 100% ordinary
shares
Champion Marketing Services Limited* UK Marketing Services 70% ordinary
shares
Champion Business Solutions Limited* UK Auditors and Accountants 65.5% ordinary
shares
Champion Allwoods Services Limited* UK Auditors and Accountants 75.5% ordinary
shares
Champion Stokes Limited* UK Auditors and Accountants 43.4% ordinary
shares
*Investments held indirectly via Champion Holdings Limited.
12. OTHER INVESTMENTS
Group
Shares in associated Investments Total
undertakings
Cost £ £ £
At 1 July 2006 50 50,000 50,050
50 50,000 50,050
Decrease in fair value during the year - (40,000) (40,000)
Fair Value
At 30 June 2007 50 10,000 10,050
At 30 June 2006 50 50,000 50,050
Associated Undertaking
Country of Principal activity Class and
Registration percentage of
shares held
Name
Champion Financial Management Limited UK Financial Advisors 50% ordinary
shares
The directors of Champion Plc consider they have the power to exercise
significant influence and have treated their interests in Champion Financial
Management as an associate.
Aggregate amounts relating to associates are as follows:
2007 2006
£ £
Total assets 26,260 17,016
Total liabilities 20,223 1,699
Revenues 1,704 402,046
Profit / (Loss) 720 (791)
13. INVENTORIES
Group Company
2007 2006 2007 2006
£ £ £ £
Raw materials and consumables 12,400 6,400 - -
14. TRADE AND OTHER RECEIVABLES
Group Company
2007 2006 2007 2006
£ £ £ £
Receivable from trade customers 1,548,385 1,318,253 - -
Receivable from related parties - - 305,150 452,883
Prepayments 97,586 130,226 3,401 3,672
Other receivables 1,066,206 1,057,856 1,354 -
2,712,177 2,506,335 309,905 456,555
15. FINANCIAL INSTRUMENTS
Group
2007 2006
£ £
Financial assets
Trade and other receivables 2,712,177 2,506,335
Financial liabilities
Cash and cash equivalents (1,107,549) (1,067,610)
Trade and other payables (1,291,011) (1,094,968)
Finance leases - (490)
Floating rate borrowings (861,184) (855,000)
Company
2007 2006
Financial assets £ £
Cash and cash equivalents 271,527 133,279
Trade and other receivables 309,905 456,555
Financial liabilities
Trade and other payables (44,818) (53,220)
The carrying amounts are equal to the fair value therefore no impairment is
required.
16. RELATED PARTY TRANSACTIONS
The company has entered into an agreement with Zeus Partners ("Zeus"), of which
IW Currie is a partner, dated 23 June 2004, by which Zeus has agreed to provide
the services of IW Currie, as non-executive chairman of the company, and
specifically to monitor the performance of the company from a shareholder
perspective. The services are provided on a non-executive "ad-hoc" basis for an
annual fee of £18,000 (2006: £25,500) exclusive of value added tax payable in
twelve equal monthly instalments.
Consultancy payments of £18,000 (2006: £9,000) were paid to K Philbin a
non-executive director of Champion Plc.
Champion Plc also had a balance payable to Zeus Partners at the year end of £nil
(2006: £21,488).
At the year end the group had a balance of £nil (2006: £101,445) owed to
Champion Accountants LLP, formerly Champion and Co Chartered Accountants, a
partnership in which G Cosgrove is a member.
Champion Plc also had a loan account with Champion Consulting Limited, a company
in which G Cosgrove, K Baird, R Ward-Lilley and G Dallimore are directors. The
amount due at the end of the year was £305,150 (2006: £452,883). Champion Plc
also raised a management charge of £209,447 (2006: £454,270) to Champion
Consulting Limited.
G Dallimore was paid consultancy fees during the year amounting to £45,000.
17. CASH AND CASH EQUIVALENTS
Group Company
2007 2006 2007 2006
£ £ £ £
Cash in hand 448 571 - -
Cash at bank 307,049 173,657 271,527 133,279
307,497 174,228 271,527 133,279
18. SHARE CAPITAL
Authorised share capital
2007 2006
£ £
40,108,000 Ordinary shares of £0.005 each 200,540 200,540
49,460 Preference share of £1 each 49,460 49,460
250,000 250,000
Allotted, called up and fully paid:
2007 2006
Ordinary shares fully paid of £0.005 each pence £ pence £
At beginning and end of the year 31,237,375 156,187 31,237,375 156,187
19.RESERVES
Available for Share premium Retained
sale reserve Profits
£ £
As at 1 July 2005 265,000 2,937,027 180,516
Profit for the year - - 146,676
Market value movement (237,500) - -
As at 30 June 2006 27,500 2,937,027 327,192
Profit for the year - - 185,823
Market value movement (27,500) - -
As at 30 June 2007 - 2,937,027 513,015
The available for sales reserve relates to the market value of listed
investments - Healthcare PLC, during the
year Healthcare PLC delisted with a market value of £nil.
Company Share premium Profit and
account loss account
£ £
Balance brought forward and carried forward 2,937,027 (80,000)
20. INTEREST BEARING BORROWINGS
Group Company
2007 2006 2007 2006
£ £ £ £
Non-current
Bank loans 800,000 826,000 - -
800,000 826,000 - -
Current
Bank overdrafts 1,415,046 1,241,837
Finance leases - 490 - -
Bank loans 61,184 29,000 - -
1,476,230 1,271,327 - -
Group Company
2007 2006 2007 2006
£ £ £ £
Bank loans
Floating rate bank loan 861,184 855,000 - -
Less: current instalments due on loans (61,184) (29,000) - -
800,000 826,000 - -
21.DEFERRED TAX
Group Company
2007 2006 2007 2006
£ £ £ £
Provision brought forward 11,993 21,348 - -
Decrease in provision (8,221) (9,355) - -
Provision carried forward 3,772 11,993 - -
The decrease in the provision is in relation to temporary differences
22 .TRADE AND OTHER PAYABLES
Group( Company
2007 2006 2007 2006
£ £ £ £
Payable to trade suppliers 219,294 247,003 3,603 32,956
Other payables 457,650 190,435 - -
Accrued liabilities 49,332 23,323 - 1,500
Amounts due under finance leases 12,613 22,869 - -
Other tax and social security taxes 548,819 599,200 41,215 18,764
Payable to associated parties 3,303 12,138 - -
1,291,011 1,094,968 44,818 53,220
23.OPERATING LEASE COMMITMENTS
Commitments under operating leases as at 30 July 2007 were as follows:
2007 2006
£ £
Less than one year 224,501 276,598
Later than one year but less than five years 800,554 800,554
Later than five years 1,365,550 1,377,300
The group has entered into operating leases in respect of office space and
equipment. These non-cancellable leases have remaining terms greater than 5
years.
24. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The group holds or issues financial instruments in order to achieve three main
objectives, being:
(a) to finance its operations;
(b) to manage its exposure to interest and currency risks arising from its
operations and from its sources of finance; and
(c) for trading purposes.
In addition, various financial instruments (e.g. trade debtors, trade creditors,
accruals and prepayments) arise directly from the group's operations.
Transactions in financial instruments result in the group assuming or
transferring to another party one or more of the financial risks described on
page 28.
Interest rate risk
At 30 June 2007 the group's borrowings comprised of a bank overdraft and a bank
loan.
The net cash balance as at 30 June 2007 amounted to a borrowing of £1,968,733
(2006: £1,923,099).
The following table sets out the carrying amounts by repricing/maturity dates
and effective interest rates (when applicable) of the group's financial
instruments that are exposed to interest rate risk:
Cash and Cash Equivalents
Floating Rate
Current Bank
Sterling Accounts
2007 (1,107,549)
2006 (1,067,610)
Interest Bearing Borrowings
Floating Rate
Sterling Business Loan
2007 (861,184)
2006 (855,000)
Interest rate of all bank borrowings is 2% above Natwest Bank PLC base rate.
The loan is a fixed three year loan, interest only repayments and is payable
after three years and the floating rate current bank account is repayable on
demand.
Credit risk
The group monitors credit risk closely and considers that its current policies
of credit checks meets its objectives of managing exposure to credit risk.
The group has no significant concentrations of credit risk. Amounts shown in the
balance sheet best represent the maximum credit risk exposure in the event other
parties fail to perform their obligations under financial instruments.
Liquidity risk
The group's objective is to maintain a balanced working capital cycle to ensure
that the level of funding required does not exceed that available.
Currency risk
The group has no overseas assets or liabilities.
Fair values of financial assets and liabilities
The book value of financial instruments held or issued to finance the group's
operations are not materially different from the fair value of those
instruments.
Hedging activities
The group did not hedge its financial transactions in the current or preceding
year.
25. CONTINGENT LIABILITIES
The company has entered into cross guarantees with other group companies in
respect of bank loans and overdraft facilities. At the balance sheet date, the
contingent liability amounted to £1,107,549 (2006: £1,067,608).
26.PENSION COMMITMENTS
The group operates a defined contribution pension scheme whose assets are held
separately from those of the group in an independently administered fund. The
pension cost charge represents contributions payable by the group and amounted
to £133,508 (2006: £101,091).
27.ACQUISITIONS DURING THE PERIOD
On 1 February 2007 the subsidiary Champion Business Solutions Limited acquired
57% of the voting equity in Champion Stokes Limited, a company whose principal
activity is audit and accountancy. Champion Plc has an effective interest of
43.4%.
Fair value of the consideration is equal to 300 £1 ordinary shares issued on
acquisition. No assets or liabilities were purchased on acquisition, therefore
the deemed valuation is £300 £1 ordinary shares.
The Preston part of Champion Business Solutions Limited was transferred in to
Champion Stokes Limited; there was no gain or loss on the transfer as the net
assets equated to nil.
Since the acquisition date, Champion Stokes Limited has contributed £357,000 to
the group's revenue. There has been no profit or loss for the period, therefore
if the acquisition had occurred on 01 July 2006 there would be no effect on the
group profit for the period.
28.POST BALANCE SHEET EVENTS
The company purchased Champion Haworth Moore Limited on 1 February 2007, an
accountancy practice based in Blackpool. The consideration of £0.49m was
settled by an initial cash payment of £0.17m with the remainder being deferred
to be paid over a two year period.
Copies of these accounts have been sent to the shareholders today and copies are
available free of charge from the companies registered office, 1 Worsley Court,
High Street, Worsley, Manchester, M28 3NJ, and the companies website
www.champion-accountnats.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
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