IMPACT HOLDINGS (UK) PLC - Final Results

Press Release                                                                                                  
1 July 2016

Impact Holdings (UK) plc

("Impact" or "The Group")

Preliminary results for the year ended 31^st March 2016

Impact Holdings (UK) plc (AIM: IHUK), the specialist lender, announces its preliminary results for the year ended 31^st March 2016.

Financial Highlights

• Group’s pre-tax loss of £227,823 (2015: profit £252,669)                              
• Loss per share 8.6p (2015: profit 10.0p)                                               
• Further reduced exposure to external debt providers                                     
• Cash and cash equivalents of £0.3 million (2015: £1.6 million)                       
• Net assets of £5.6 million (2015: £5.8 million)            

Commenting on the results Roger Barlow, non-executive Chairman said “These results reflect the ongoing complex and long running litigation we are engaged in. We continue to de-risk the business and reduce our exposure to external debt providers.”

For further information:

Impact Holdings (UK) plc.

Paul Davies Chief Executive Officer                     Tel: [phone]
                                                                         www.impactholdings.net           

Zeus Capital
Nick Cowles/Andrew Jones                                   Tel [phone] 

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.

The financial information detailed below has been extracted from the Annual Report and Accounts for the year ended 31st March 2016, which are available from Zeus Capital, 82 King Street, Manchester, M2 4WQ and on the Company’s website (www.impactholdings.net).

CHAIRMAN’S STATEMENT     

INTRODUCTION

The recognition of revenue, normally generated from loans to clients of solicitor firms, has (as previously announced) been suspended pending the outcome of a hearing in the Supreme Court that was heard on 30 June 2016. The Directors and their legal team remain confident that the Appeal Court decision handed down in February 2015 will be upheld by the Supreme Court which would result in further recoveries thereafter from a number of professional indemnity insurers of those solicitor firms who have defaulted on the loans advanced.

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 further reduction in our exposure to third party funders. This peaked at £10.0m in March 2010 and now stands at £1.0m as at 31 March 2016.

OUTLOOK

The group remains focused on recovering monies owed to it by third parties. The Board of Directors is committed to the opportunities identified and continues to develop this strategy which is expected to provide, over time, enhanced shareholder value.

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.

I would 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

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2016

						Year		Year
						ended		Ended
						31/03/2016		31/03/2015
						£		£
Revenue						406,547		1,988,087
Cost of sales						(30,818)		(467,606)
Gross profit						375,729		1,520,481
Operating expenses						(603,552)		(1,267,812)
(Loss)/profit for the year from operations before tax						(227,823)		252,669
Tax						22,678		(10,904)
(Loss)/profit for the year attributable to the owners of the parent						(250,501)		263,573
(Loss)/Earnings per share (pence) Basic      Diluted						(8.6p)        (7.2p)		10.0p 8.3p

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 2016

		2016	2015
		£	£
Non-current assets
Goodwill		421,766	421,766
Investments Property, plant and equipment		364 3,257	- 882,397
Deferred taxation		181,074 606,461	181,074 1,485,237
Current assets
Trade and other receivables including amounts falling due after more than one year		5,135,618	4,451,612
Non-current assets classified as held for sale                                       Cash and cash equivalents		990,000 331,005	- 1,604,945
		6,456,623	6,056,557
Total assets		7,063,084	7,541,794

Equity and liabilities

Share capital                                                                                                                  1,311,201        1,311,201

Shares held by Employee Benefit Trust                                                                              (45,070)           (45,070)

Retained earnings                                                                                                          4,346,395        4,574,218

Issued capital and reserves attributable to parent                                       5,612,526         5,840,349

Trade and other payables due after more than one year                                                        450,404           481,782

Trade and other payables due in less than one year                                                          1,000,154         1,219,663

Total equity and liabilities                                                                             7,063,084         7,541,794

These financial statements were approved by the board on 30 June 2016

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2016

			2016	2015
			£	£
Operating activities
Cash generated by operations			(1,009,721)	1,278,528
Net cash generated by operating activities			(1,009,721)	1,278,528
Investing activities
Interest received			-	25
Sale of assets Purchase of investments Revaluation of property Purchases of property, plant and equipment			2,183 (364) (136,469) (3,661)	- - - (783)
Net cash used in investing activities			(138,311)	(758)
Financing activities Net decrease in other amounts owed to lending institutions			(125,908)	(365,510)
Net cash outflow from financing activities			(125,908)	(365,510)
Net (decrease)/increase in cash and cash equivalents			(1,273,940)	912,260
Cash and cash equivalents at 1 April			1,604,945	692,685
Cash and cash equivalents at 31 March			331,005	1,604,945

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2016

			Share capital	Shares held by	Share options	Profit and loss account	Total
				EBT
			£	£	£	£	£
Balance as at 31 March 2014			1,311,201	(45,070)	39,349	4,271,296	5,576,776
Net profit for the year			-	-	-	263,573	263,573
Balance as at 31 March 2015			1,311,201	(45,070)	39,349	4,534,869	5,840,349
Net loss for the year			-	-	-	(227,823)	(227,823)
Balance as at 31 March 2016			1,311,201	(45,070)	39,349	4,307,046	5,612,526

Notes

1.   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 2016. The results for the year ended 31st March 2016 are extracted from the Annual Report of Impact Holdings (UK) plc, on which the auditors have issued an unqualified report which includes an emphasis of matter.

2.   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 shortly. Further copies will be available from Zeus Capital, 82 King Street, Manchester, M2 4WQ.

3.   Two of the group’s subsidiary companies continue to pursue litigation against a number of solicitor practices and professional indemnity insurers. In one of those actions the Appeal Court overturned a lower Court decision in favour of Impact Funding Solutions Limited on 3 February 2015 which resulted in the payment of £986,515 by the defendant’s insurers to that company. The defendant’s insurer made Application for Leave to Appeal to the Supreme Court which was granted on 20 May 2015. The matter was heard by the Supreme Court on 30 June 2016 and we await its decision. Whilst the subsidiary company’s legal team and leading Counsel remain confident that the Appeal Court decision will be upheld, there remains a possibility that the Supreme Court could overturn the Appeal Court decision which would result in the aforementioned monies being returned to the defendant. No provision has been made for this in these financial statements.

4.   The Annual General Meeting will be held at the Company’s registered office, 7500 Daresbury Park, Daresbury, Warrington WA4 4BS on 20 September 2016 at 8.45am.

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