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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| City Of London Group Plc | LSE:CIN | London | Ordinary Share | GB00BD9GS058 | ORD 2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 10.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCIN
RNS Number : 6322S
City Of London Group PLC
22 December 2016
22 December 2016
City of London Group plc
("COLG" or "the Company" and, together with its subsidiaries and associates, "the Group")
Results for the six month period ended 30 September 2016
The Company announces its unaudited interim results for the six month period ended 30 September 2016.
Financial Results
-- Loss before tax GBP0.7m (2015/16 first half profit before tax GBP0.8m) -- Underlying loss GBP0.4m * (2015/16 first half underlying loss GBP0.4m **)
-- CAML operating profit before shareholder charges GBP23k (2015/16 operating loss before shareholder charges GBP95k)
-- Consolidated NAV per share attributable to shareholders 4p (31 March 2016 6p)
Business developments
-- Wider strategic options for CAML to help it achieve scale continue to be examined and may result in the sale of the business
-- CAML increased its 'own book' portfolio from GBP13.7m to GBP14.6m over the half year although new business volumes were constrained by the capital available in the latter part of the period.
-- Continuing efforts to reduce overhead costs.
* Underlying loss in 2015/16 is before the GBP0.2m cost of strategic review and GBP0.1m executive termination costs.
** Underlying loss in 2015/16 is before the GBP1.4m profit on disposal of Therium and before GBP0.1m of costs directly associated with the fund raise.
For further information:
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City of London Group plc 9811
----------------------------------- ---------------
Paul Milner (Chairman)
----------------------------------- ---------------
Peel Hunt LLP (Nominated Adviser
and Broker)
James Britton +44 (0)20 7418
Guy Wiehahn 8900
----------------------------------- ---------------
Notes to Editors:
City of London Group plc is quoted on AIM (TIDM: CIN) and is an investment company focused on providing finance to the SME sector, including professional services firms. It does this through investments in companies providing lease finance and loan finance.
www.cityoflondongroup.com
Chairman's review
Business review
The Group is focusing on maximising recoveries on its remaining investments, particularly in relation to Credit Asset Management Limited ('CAML') where the Group's strategic options continue to be examined. The objective is to enable CAML to achieve the scale of activity required to provide a financially stable platform that can underpin future business expansion. The options could involve the addition of potential investors or a sale of the business and/or loan book.
As reported in the 2016 Annual Report, Trade Finance Partners Limited ('TFPL') has, for some months, restricted its activities to maximising the recovery of advances previously made. It is now clear that no amounts are expected to be available for equity and loan note holders or other unsecured creditors or to its preference shareholders. As TFPL operated as a stand-alone business with no cross-guarantees or other financial obligations from either COLG or CAML, the Group continues to be insulated from TFPL. Full provision has been made against all amounts owed to the Group by TFPL.
COLG itself has continued to keep a tight control on its underlying cost base. The half year included one-off costs of GBP168k for the strategic review carried out by FCFM Group Limited and GBP148k for executive termination costs which arose in April. We are continuing to tidy up the few remaining non-core investments on our balance sheet.
Credit Asset Management Limited ("CAML") and Professions Funding Limited ("PFL")
Over the half year, CAML grew its 'own book' portfolio from GBP13.7m to GBP14.6m. As the joint venture fund between COLG and British Business Bank Investments Ltd entered its amortisation phase from 1 April 2016 when it stopped accepting new business, the size of the fund reduced from GBP7.5m to GBP4.8m over the six month period. New business volumes were strong in the first months of the year with a peak of GBP2.6m in April, but subsequently declined to less than GBP1m per month in August and September. Yields also held up particularly for loans, with continuing pressure on lease yields. The results for the business are set out in the following table.
6 months 6 months Year
GBP'000 to to to
30/09/16 30/09/15 31/03/16
----------------------------- ---------- ---------- ----------
Revenue 1,265 757 1,820
Operating profit/(loss)
before shareholder capital
charges 23 (95) (217)
Loss before tax (153) (244) (541)
----------------------------- ---------- ---------- ----------
CAML had a significant increase in revenue over the period and showed an operating profit of GBP23k against a loss of GBP95k for the same period last year. The improvement is due to the increase in the 'own book' portfolio together with the strict control of costs in the six month period.
Other investments
COLG's 'available for sale' investments in natural resources and other equities were valued at GBP164k at the period end. The remaining investments in litigation funds managed by Therium total GBP132k.
A further GBP127k has been received since the period end in respect of the deferred consideration payable for the sale of Therium, leaving a balance of GBP1m which will be receivable within the period to 29 April 2017.
COLG overhead costs
COLG overhead costs in the period included GBP168k for the strategic review carried out by FCFM Group Limited and GBP148k for executive termination costs.
Risks
The principal risks of the Group are reviewed by the Board, which reviews and agrees policies for managing these risks. The summary of key risks set out in the Strategic Report in the 2016 Annual Report are still appropriate. The 2016 Annual Report also included information on financial risk management in Notes 31 and 32 of the financial statements.
Liquidity and going concern
The directors have reviewed the cash flow forecast for the period to 31 March 2018 and are satisfied the Company will have adequate working capital at that date.
The debt facilities of the Company currently comprise:
(i) GBP4.4m loan facility of which GBP1.0m is drawn down. This facility expires on 30 September 2017; and
(ii) loan from City of London SME Leasing Ltd of GBP1.45m.
The key assumptions around the cash flow are that all amounts drawn by the Company under its current debt facilities will be repaid by March 2018 from funds received on repayment of existing loans, including receipt of the balance of the deferred consideration for Therium, and proceeds from the realisation in full or part of its interest in CAML.
Other key assumptions include the disposal of the remaining share portfolio at a 10% discount to current prices.
The legal case investments held by the Company of GBP132k are assumed to be repaid at book value during the year.
It has also been assumed the Company will not be required to provide any further working capital to CAML and that there will be no recovery of amounts invested in TFPL.
The main risk factors around the cash flow forecast are:
-- the realisation of all or part of the Company's interest in CAML is not achieved, -- the non-repayment of loans outstanding and the legal case investments
-- the inability to dispose of the share portfolio at the assumed prices. A discount of 10% has been assumed.
After consideration of the above cash flow risk factors and the projected position in March 2018 together with possible mitigations, including the realisation of CAML's existing loan and lease books, the directors are satisfied that the Company has and will maintain sufficient financial resources to enable it to continue operating for the foreseeable future and therefore continue to adopt the going concern basis in preparing the interim financial statements.
Outlook
The Group will continue its present focus on maximising recoveries on its remaining investments, while recognising the impact of on-going parent company costs. The Group's strategic options for CAML, which could involve the addition of potential investors or a sale of the business and/or loan book, continue to be examined.
Paul Milner
Chairman
This half-yearly report may contain certain statements about the future outlook for COLG and its subsidiaries and associates. Although the directors believe their expectations are based on reasonable assumptions, any statements about the future outlook may be influenced by factors that could cause actual outcomes to be materially different. Such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward looking statements.
This half-yearly report has been drawn up and presented with the purpose of complying with English law. Any liability arising out of or in connection with the half-yearly report for the six months to 30 September 2016 will be determined in accordance with English law. The half-yearly results for 2016 and 2015 have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.
22 December 2016
Unaudited interim results
Condensed consolidated income statement
6 months 6 months Year to
to 30/09/16 to 30/09/15 31/03/16
GBP'000 GBP'000 GBP'000
Revenue 1,326 1,127 2,534
Cost of sales (27) (25) (51)
--------------------------- ------------- ------------- ----------
Gross profit 1,299 1,102 2,483
Administrative expenses (1,492) (1,162) (2,512)
(Loss)/profit on sale
of investments (1) - 2
Provision for impairment
of investments - - (51)
Profit on the disposal
of assets classified
as held for sale (note
4) - 1,398 1,398
Share of profits and
losses of associates 73 (59) (898)
Provision for the
impairment of the
investment in and
amounts owed by TFPL - - (6,260)
Other income 55 160 326
--------------------------- ------------- ------------- ----------
(Loss)/profit from
operations (66) 1,439 (5.512)
Finance expense (669) (599) (1,252)
--------------------------- ------------- ------------- ----------
(Loss)/profit before
tax (735) 840 (6,764)
Corporation tax - - -
--------------------------- ------------- ------------- ----------
(Loss)/profit for
the period (735) 840 (6,764)
--------------------------- ------------- ------------- ----------
(Loss)/profit for
the period attributable
to:
Equity holders of
the parent (712) 915 (6,646)
Non-controlling interests (23) (75) (118)
--------------------------- ------------- ------------- ----------
(735) 840 (6,764)
(Loss)/profit for
the period (735) 840 (6,764)
--------------------------- ------------- ------------- ----------
Earnings per share
attributable to equity
holders of the parent
--------------------------- ------------- ------------- ----------
Basic earnings per
share (1.96)p 4.62p (24.36)p
--------------------------- ------------- ------------- ----------
Diluted earnings per
share (1.96)p 4.58p (24.36)p
--------------------------- ------------- ------------- ----------
All the operations in both the six months to 30 September 2016 and the year to 31 March 2016 are continuing.
Unaudited interim results
Condensed consolidated statement of comprehensive income
6 months 6 months Year
to 30/09/16 to 30/09/15 to 31/03/16
GBP'000 GBP'000 GBP'000
(Loss)/profit from continuing
operations (735) 840 (6,764)
Other comprehensive (expense)/income
from continuing operations
Items that will or may be
reclassified to profit or
loss
'Available-for-sale' financial
assets
- Valuation gains/(losses)
taken on equity investments 12 (14) (20)
- Provision for impairment
transferred to income statement - - 51
- Loss on sale transferred
to income statement 1 - (2)
Other comprehensive (expense)/income
from continuing operations 13 (14) 29
-------------------------------------- -------------- -------------- -------------
Total other comprehensive
(expense)/income 13 (14) 29
-------------------------------------- -------------- -------------- -------------
Total comprehensive (expense)/income
from continuing operations (722) 826 (6,735)
Total comprehensive (expense)/income
from discontinued operations - - -
-------------------------------------- -------------- -------------- -------------
Total comprehensive (expense)/income (722) 826 (6,735)
-------------------------------------- -------------- -------------- -------------
Total comprehensive (expense)/income
attributable to:
Equity holders of the parent (699) 901 (6,617)
Non-controlling interests (23) (75) (118)
-------------------------------------- -------------- -------------- -------------
(722) 826 (6,735)
-------------------------------------- -------------- -------------- -------------
Unaudited interim results
Condensed consolidated balance sheet
Notes 30/09/16 31/03/16 30/09/15
GBP'000 GBP'000 GBP'000
(audited)
-------------------------------- ------ --------- ---------- ---------
Assets
Non-current assets
Property, plant and
equipment 20 27 34
'Available-for-sale'
financial assets 164 151 163
Interests in associates 218 146 1,024
Legal case Investments 132 138 219
Loans 7,205 9,005 15,861
Finance leases 3,255 2,477 1,191
-------------------------------- ------ --------- ---------- ---------
Total non-current assets 10,994 11,944 18,492
-------------------------------- ------ --------- ---------- ---------
Current assets
Loans 4,559 5,446 1,760
Finance leases 2,214 1,635 1,873
Trade and other receivables 925 810 1,271
Cash and cash equivalents 910 2,497 993
-------------------------------- ------ --------- ---------- ---------
Total current assets 8,608 10,388 5,897
-------------------------------- ------ --------- ---------- ---------
Total assets 19,602 22,332 24,389
-------------------------------- ------ --------- ---------- ---------
Current liabilities
Borrowings (5,226) (3,935) (2,303)
Trade and other payables (1,603) (3,051) (1,545)
-------------------------------- ------ --------- ---------- ---------
Total current liabilities (6,829) (6,986) (3,848)
-------------------------------- ------ --------- ---------- ---------
Non-current liabilities
Borrowings (11,386) (13,237) (15,371)
-------------------------------- ------ --------- ---------- ---------
Total non-current liabilities (11,386) (13,237) (15,371)
-------------------------------- ------ --------- ---------- ---------
Total liabilities (18,215) (20,223) (19,219)
Net assets 1,387 2,109 5,170
-------------------------------- ------ --------- ---------- ---------
Equity
Share capital 3,685 3,685 2,021
Share premium 14,332 14,332 11,497
Accumulated losses (16,444) (15,732) (8,172)
Fair value reserve (63) (76) (119)
-------------------------------- ------ --------- ---------- ---------
Equity attributable
to owners of the
parent 1,510 2,209 5,227
Non-controlling interests 8 (123) (100) (57)
-------------------------------- ------ --------- ---------- ---------
Total equity 1,387 2,109 5,170
-------------------------------- ------ --------- ---------- ---------
Unaudited interim results
Condensed consolidated statement of changes in equity
Attributable to owners
of the parent company
------------------------------------------------------ -------------------- ---------
Fair Attributable
value Retained Share Share to non-controlling Total
reserve earnings premium capital Total interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- ---------- --------- --------- --------- -------------------- ---------
At 31 March 2016 (76) (15,732) 14,332 3,685 2,209 (100) 2,109
'Available-for-sale'
investments
- Valuation gains
taken to equity 12 - - - 12 - 12 - Loss on sale transferred to income statement 1 - - - 1 - 1 ----------------------- --------- ---------- --------- --------- --------- -------------------- --------- Net income recognised directly in equity 13 - - - 13 - 13 Loss for the period -continuing operations - (712) - - (712) (23) (735) Total comprehensive income 13 (712) - - (699) (23) (722) At 30 September 2016 (63) (16,444) 14,332 3,685 1,510 (123) 1,387 ----------------------- --------- ---------- --------- --------- --------- -------------------- ---------
(i) The fair value reserve shows the movement in the fair value of the 'available-for-sale' financial assets.
Unaudited interim results
Condensed consolidated statement of changes in equity continued
Attributable to owners
of the parent company
------------------------------------------------------ -------------------- ---------
Fair Attributable
value Retained Share Share to non-controlling Total
reserve earnings premium capital Total interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- ---------- --------- --------- --------- -------------------- ---------
At 31 March 2015 (105) (7,888) 11,497 2,021 5,525 (1,154) 4,371
'Available-for-sale'
investments
- Valuation losses
taken to equity (14) - - - (14) - (14)
- Loss on sale
transferred to
income statement - - - - - - -
----------------------------- --------- ---------- --------- --------- --------- -------------------- ---------
Net income recognised
directly in equity (14) - - - (14) - (14)
Profit for the
period -continuing
operations - 915 - - 915 (75) 840
Total comprehensive
income (14) 915 - - 901 (75) 826
Contributions
by and distributions
to owners
Value of employee
services - 19 - - 19 - 19
----------------------------- --------- ---------- --------- --------- --------- -------------------- ---------
- 19 - - 19 - 19
Reduction in non-controlling
interests (note
8) - (1,218) - - (1,218) 1,172 (46)
At 30 September
2015 (119) (8,172) 11,497 2,021 5,227 (57) 5,170
'Available-for-sale'
investments
- Valuation losses
taken to equity (6) - - - (6) - (6)
- Provision for
impairment transferred
to income statement 51 - - - 51 - 51
- Profit on sale
transferred to
income statement (2) - - - (2) - (2)
----------------------------- --------- ---------- --------- --------- --------- -------------------- ---------
Net income recognised
directly in equity 43 - - - 43 - 43
Loss for the period
-continuing operations - (7,561) - - (7,561) (43) (7,604)
Total comprehensive
income 43 (7,561) - - (7,518) (43) (7,561)
Contributions
by and distributions
to owners
Value of employee
services - 1 - - 1 - 1
Issue of shares - - 2,835 1,664 4,499 - 4,499
----------------------------- --------- ---------- --------- --------- --------- -------------------- ---------
- 1 2,835 1,664 4,500 - 4,500
At 31 March 2016 (76) (15,732) 14,332 3,685 2,209 (100) 2,109
----------------------------- --------- ---------- --------- --------- --------- -------------------- ---------
(i) The fair value reserve shows the movement in the fair value of the 'available-for-sale' financial assets.
Unaudited interim results
Condensed consolidated statement of cash flows
6 months 6 months Year
to 30/09/16 to 30/09/15 to 31/03/16
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
(Loss)/profit before taxation (735) 840 (6,764)
Adjustments for:
Depreciation 7 26 36
Share-based payments - 19 20
Impairment of 'available-for-sale'
financial assets - - 51
(Profit)/loss on disposal
of 'available-for-sale'
investments 1 - (2)
Share of profits and losses
of associates (73) 59 898
Provision for impairment
of the investment in and
amounts owed by TFPL - - 6,260
Profit on the disposal
of assets classified as
held for sale - - (1,398)
Interest payable 669 599 1,252
Changes in working capital:
(Increase) in trade and
other receivables (115) (374) (724)
(Decrease)/increase in
trade and other payables (1,409) (339) 1,334
Proceeds from sale of 'available-for-sale'
financial assets - - 5
Leases advanced (2,688) (2,132) (4,118)
Leases repaid 1,331 700 1,702
Loans advanced (6,383) (7,307) (15,875)
Loans advanced to related
parties - (322) -
Loans repaid 6,898 4,123 8,958
Loans repaid by related
parties 2,125 - 300
-------------------------------------------- ------------- ------------- -------------
Cash used in operations (372) (4,108) (8,065)
-------------------------------------------- ------------- ------------- -------------
Corporation tax paid - - -
-------------------------------------------- ------------- ------------- -------------
Net cash used in operating
activities (372) (4,108) (8,065)
-------------------------------------------- ------------- ------------- -------------
Cash flow from investing
activities
Disposal of assets classified
as held for sale, including
part repayment of deferred
consideration 47 - 2,216
Return of seed capital
in legal case investments 6 13 94
Distribution of profits
from related parties - - 39
Acquisition of interest
in associate - (193) -
Purchase of property, plant
and equipment - (20) (23)
Purchase of preference
shares in subsidiary - - (2,010)
Purchase of additional
shares in related company - - (193)
-------------------------------------------- ------------- ------------- -------------
Net cash used in investing
activities 53 (200) 123
-------------------------------------------- ------------- ------------- -------------
Cash flow from financing activities Proceeds from the issue of ordinary shares - - 4,499 Proceeds from the issue of preference shares by subsidiary - 5,000 5,000 Loans drawn down 6,010 8,084 17,888 Repayment of loans (6,570) (8,557) (16,863) Interest paid (708) (447) (1,306) Net cash from financing activities (1,268) 4,080 9,218 -------------------------------------------- ------------- ------------- -------------
Unaudited interim results
Condensed consolidated statement of cash flows continued
Net (decrease)/ increase in cash and cash equivalents (1,587) (228) 1,276 ------------------------------- -------- ------ ------ Cash and cash equivalents brought forward 2,497 1,221 1,221 ------------------------------- -------- ------ ------ Net cash and cash equivalents 910 993 2,497 ------------------------------- -------- ------ ------ Cash and cash equivalents 910 993 2,497 Bank overdraft - - - ------------------------------- -------- ------ ------ Net cash and cash equivalents 910 993 2,497 ------------------------------- -------- ------ ------
Notes to condensed financial statements
1 Basis of preparation
1.1 These interim financial results do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006 and have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. Statutory accounts for the year ended 31 March 2016 were approved by the directors on 23 September 2016 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement within the meaning of section 498 of the Companies Act 2006.
1.2 Accounting policies
These condensed consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union. The condensed consolidated financial statements do not include all the information required for full annual financial statements and should be read in conjunction with the annual financial statements for the year ended 31 March 2016, which were prepared in accordance with IFRS as adopted by the European Union. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed consolidated financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 March 2016.
1.3 Adoption of new standards and interpretations
The following amendments to existing standards became effective for the first time for the financial statements for the year ended 31 March 2016:
IFRS 8 - (Annual improvements) - Operating Segments; and
IFRS 13 - (Annual improvements) - Fair Value Measurement
Neither had a material effect on the disclosures or presentation of information in the financial statements.
1.4 Consistency
The interim report, including the financial information contained therein is the responsibility of, and was approved by, the directors on 22 December 2016. The AIM Rules require that accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing annual accounts except where any changes, and the reason for them, are disclosed. There have been no changes to the Group's accounting policies for the period ended 30 September 2016.
2 Segmental reporting
A reportable segment is identified based on the nature and size of its business and risk specific to its operations. It is reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, which is responsible for allocating resources and assessing performance of the operating segments, has been identified as the full Board of the Company.
The Group is managed through operating platforms: lease and professions funding and, in prior periods, trade financing and legal case funding. The COLG segment includes the Group's central functions and an investment portfolio.
Notes to condensed financial statements
Continued
2 Segmental reporting continued
Pre-tax profit Share
and loss of profits Profit/(loss)
6 months ended Operating and losses Finance before
30/09/16 Revenue profit/(loss) of associates expense tax
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------------- --------------- --------- --------------
COLG
Intra-Group 81 134 (58) 76
Other 2 (688) (33) (721)
----------------------- --------- --------------- --------------- --------- --------------
83 (554) - (91) (645)
Platforms
Lease and professions
financing
CAML/ PFL 1,225 310 - (463) (153)
Other 99 160 73 (173) 60
Other - 3 - - 3
Intra-Group (81) (58) - 58 -
1,326 (139) 73 (669) (735)
----------------------- --------- --------------- --------------- --------- --------------
The Loss from operations in the Consolidated income statement of GBP66,000 comprises the loss of GBP139,000 less the profit of GBP73,000 as shown above.
Pre-tax profit Profit
and loss on the
6 months ended disposal Share
30/09/15 of assets of profits
classified and Profit/(loss)
Operating as held losses Finance before
Revenue profit/(loss) for sale of associates expense tax
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- --------------- ------------ --------------- --------- --------------
COLG
Intra-Group 380 422 (58) 364
Other 9 (409) (158) (135) (702)
------------------- --------- --------------- ------------ --------------- --------- --------------
389 13 (158) - (193) (338)
Platforms
Trade financing
-TFPL * 229 229 (79) (229) (79)
Lease and
professions
financing
CAML/ PFL 726 62 - (306) (244)
Other 158 216 20 (249) (13)
Legal case
funding 5 - - - -
Other - (32) - (10) (42)
Intra-Group (380) (388) - 388 -
Others
Assets classified
as held for
sale - - 1,556 - - 1,556
1,127 100 1,398 (59) (599) 840
------------------- --------- --------------- ------------ --------------- --------- --------------
* Revenue represents interest earned on loans to Trade Finance Partners Limited.
The Profit from operations in the Consolidated income statement of GBP1,439,000 is the sum of GBP100,000 and GBP1,398,000 less GBP59,000 as shown above.
Notes to condensed financial statements
Continued
2 Segmental reporting continued
Consolidated Net Assets at 30/09/16
Total
GBP'000 GBP'000
----------- --------------------------------- -------- ---------
'Available-for-sale' financial
COLG assets 164
Legal case investments 132
Platforms Lease and professions financing 2,010
Other 150
--------
2,160
Net liabilities (1,040)
--------------------------------------------- -------- ---------
1,416
Other net liabilities of subsidiary
companies (29)
---------------------------------------------- -------- ---------
Consolidated net assets 1,387
---------------------------------------------- -------- ---------
Consolidated Net Assets at 31/03/16
Total
GBP'000 GBP'000
----------- --------------------------------- --------------- ---------
'Available-for-sale' financial
COLG assets 151
Legal case investments 138
Platforms Lease and professions financing 2,010
Other 150
---------------
2,160
Net liabilities (313)
--------------------------------------------- --------------- ---------
2,136
Other net liabilities of subsidiary
companies (27)
---------------------------------------------- --------------- ---------
Consolidated net assets 2,109
---------------------------------------------- --------------- ---------
Consolidated Net Assets at 30/09/15
Total
GBP'000 GBP'000
----------- --------------------------------- -------- ---------
'Available-for-sale' financial
COLG assets 163
Legal case investments 219
Platforms Trade financing 6,668
Lease and professions financing 3,557
Legal case funding 132
Other 150
--------
10,507
Net liabilities (2,960)
--------------------------------------------- -------- ---------
7,929
Other net liabilities of subsidiary
companies (2,759)
---------------------------------------------- -------- ---------
Consolidated net assets 5,170
---------------------------------------------- -------- ---------
The Board reviews the assets and liabilities of the Group on a net basis.
Notes to condensed financial statements
Continued
3 Administrative expenses
6 months 6 months Year
to 30/09/16 to 30/09/15 to 31/03/16
GBP'000 GBP'000 GBP'000
Staff costs
Payroll expenses 578 652 1,338
Termination costs of parent
company executives 148 - 77
Other staff costs 40 46 69
Establishment costs
Property costs 157 101 234
Other 282 198 444
Auditor's remuneration 34 39 89
Legal fees 17 15 17
Consultancy fees 173 51 98
Other professional fees 56 31 108
Depreciation 7 26 36
Foreign exchange loss - 3 2
-------------------------------- ------------- ------------- -------------
Total 1,492 1,162 2,512
-------------------------------- ------------- ------------- -------------
4 Profit on the disposal of assets classified as held for sale
The profit of GBP1,398,000 in the prior period arose from the disposal on 29 April 2015 of the Company's associate Therium, together with its 50% associate Novitas Loans Limited and its subsidiary Novitas Futures Limited, for a total consideration of GBP3,390,000.
As at that date, the carrying value of assets and liabilities comprising the interest in Therium in the Group's consolidated financial statements, which reflected the Group's share of post-acquisition losses included, was GBP1,831,000. The profit of GBP1,398,000 in the consolidated accounts took account of costs associated with the disposal, including a provision for non-recovery of a commercial loan made through Novitas Futures Limited.
5 Taxation
Because the charge for taxation is for a period of less than one year, the provision is based on the best estimate of the effective rate for the full year.
6 Dividends
The directors have not declared an interim dividend for the year ending 31 March 2017 (2015/16: nil). The directors did not recommend payment of a dividend for the year ended 31 March 2016.
Notes to condensed financial statements
Continued
7 Earnings per share
The basic earnings per share is calculated by dividing the (loss)/ profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the period less those held in treasury and in the Employee Benefit Trust.
The basic earnings per share is as follows:
30/09/16 30/09/15 31/03/16
(Loss)/ profit attributable
to equity holders (GBP'000) (712) 915 (6,646)
Weighted average number of
ordinary shares in issue ('000) 36,426 19,780 27,284
Basic earnings per share (1.96)p 4.62p (24.36)p
Diluted earnings per share (1.96)p 4.58p (24.36)p
---------------------------------- --------- --------- ---------
8 Non-controlling interests
30/09/16 31/03/16 30/09/15
GBP'000 GBP'000 GBP'000
At 1 April (100) (1,154) (1,154)
Loss attributable to non-controlling
interests (23) (118) (75)
Transferred to equity on acquisition
of non-controlling interests
(a) - 1,172 1,172
At end of period (123) (100) (57)
-------------------------------------- --------- --------- ---------
(a) The transfer to equity in the prior year arose from the capital restructuring of Credit Asset Management Limited ("CAML") in July 2015 when, as part of the restructuring plan, the Company sold its wholly-owned subsidiary, Professions Funding Limited ("PFL) to CAML in exchange for newly-issued ordinary shares and, in addition, converted the preference shares it held in CAML to ordinary shares. As a consequence, the Company increased its ordinary shareholding in CAML from 51% to 85%, with a corresponding reduction in the percentage of the ordinary shares held by the non-controlling interest.
Under IFRS3, such an increase in a parent's ownership interest in a subsidiary was accounted for as an equity transaction. The difference between the cost of acquiring the additional ownership interest and the increase in the attributable net assets of the subsidiary was written off to equity as a reserve movement. The amount of GBP1,218,000 written off to equity included goodwill of GBP46,000 previously carried in relation to PFL.
Notes to condensed financial statements
Continued
9 Related party transactions
Amounts due from associates
30/09/16 31/03/16 30/09/15
GBP'000 GBP'000 GBP'000
Amounts due from associates
are included in:
Non-current assets
Loans 8,140 10,131 10,301
Less: provisions for loans (6,015) (5,881) -
----------------------------- --------- --------- ---------
Loans 2,125 4,250 10,301
----------------------------- --------- --------- ---------
Current assets
Trade and other receivables 568 473 295
Less: provision for trade
and other receivables (525) (399) -
----------------------------- --------- --------- ---------
43 74 295
----------------------------- --------- --------- ---------
Total 2,202 4,324 10,596
----------------------------- --------- --------- ---------
All the provisions relate to amounts due from Trade Finance Partners Limited ("TFPL"). As full provision has been made against amounts arising in the six months to 30 September 2016, the income arising has not been recognised in the consolidated income statement for the period.
10 Commitments
The holder of the GBP3,000,000 7% Redeemable Preference Shares issued by a subsidiary, Credit Asset Management Limited, on 15 July 2015 may require the Company to purchase these shares at their face value and accrued but unpaid dividend if the shares are not redeemed after 7 years or in the event of a change of control in either the Company or Credit Asset Management Limited.
11 Financial risk management
Notes 31 and 32 to the annual financial statements to 31 March 2016 include the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit risk, interest rate risk, price risk, foreign exchange risk and liquidity risk.
The 2016 Annual Report identified the main risk factors around the cash flow forecast in the Strategic Report. The risk factors are broadly unchanged as are the key assumptions made in the cash flow forecast for the period to the end of March 2018 which forecast working capital headroom of cGBP0.22m at that date.
The Company has a revolving credit facility of GBP4.8m with a maturity of 30 September 2017. GBP3.5m of the facility was undrawn at 30 September 2016.
Notes to condensed financial statements
Continued
12 Financial instruments
Price risk
The Group is subject to price risk on its 'available-for-sale' financial assets, including its legal case investments as well as its portfolio of financial assets. There is a concentration risk in the natural resources and technology sectors as the majority of the investment portfolio of GBP164,000 is invested in these sectors. At 30 September 2016, 8% of the Group's portfolio was invested in unlisted equity securities. There is no material sensitivity on the valuation of the 'available-for-sale' financial assets and the legal case investments.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly
Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
The fair value of listed financial assets is established by reference to current bid market prices.
The fair value of unlisted investments is determined using the valuation techniques described in note 3 of the annual financial statements to 31 March 2016.
The fair value of investments in legal funds is taken to be cost because at 30 September 2016 there was not a sufficient track record on which to base a valuation. Due to their short maturity profiles, management is of the opinion that there is no material difference between the fair value and carrying value of trade and other receivables, cash and cash equivalents, and trade and other payables. The directors therefore consider that the carrying value of financial instruments equates to fair value.
The following table presents the Group's assets that are measured at fair value at 30 September 2016:
Level Level
1 3 Total
GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- ---------
'Available-for-sale' financial
assets
Equity securities 151 13 164
Investments in legal cases - 132 132
-------------------------------- --------- --------- ---------
151 145 296
-------------------------------- --------- --------- ---------
The following table presents the Group's assets that are measured at fair value at 31 March 2016:
Level Level
1 3 Total
GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- ---------
'Available-for-sale' financial
assets
Equity securities 138 13 151
Investments in legal cases - 138 138
-------------------------------- --------- --------- ---------
138 151 289
-------------------------------- --------- --------- ---------
Level 1 assets are quoted ordinary shares. There are no Level 2 assets.
Notes to condensed financial statements
Continued
12 Financial instruments continued
The movement on level 3 assets is as follows:
30/09/16 31/03/16 30/09/15
GBP'000 GBP'000 GBP'000
Balance at beginning of
period 151 276 276
Impairment - (29) (6)
Disposals (6) (96) (13)
------------------------- --------- --------- ---------
145 151 257
------------------------- --------- --------- ---------
By order of the Board
Paul Milner
Director
22 December 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLLFLQLFXFBX
(END) Dow Jones Newswires
December 22, 2016 07:44 ET (12:44 GMT)
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