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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Invocas | LSE:INVO | London | Ordinary Share | GB00B0ZGN364 | ORD 0.25P |
| 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 |
TIDMINVO RNS Number : 8810D Invocas Group plc 10 December 2009 ? 10 December 2009 INVOCAS GROUP PLC ('INVOCAS', THE 'COMPANY' OR THE 'GROUP') HALF YEARLY FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009 Invocas, one of the UK's leading debt solutions companies today announces its interim results for the six month period to 30 September 2009. +----------------------------------+---------------+---------------+---------------+ | Highlights | | | | +----------------------------------+---------------+---------------+---------------+ | | Six months | Six months | Year ended | | | ended | ended | 31 March 2009 | | | 30 September | 30 September | (restated**) | | | 2009 | 2008 | | | | | (restated**) | | +----------------------------------+---------------+---------------+---------------+ | | GBP000 | GBP000 | GBP000 | +----------------------------------+---------------+---------------+---------------+ | | | | | +----------------------------------+---------------+---------------+---------------+ | Revenue | 3,809 | 4,405 | 9,318 | +----------------------------------+---------------+---------------+---------------+ | Operating (loss)/profit before | (273) | 598 | 1,270 | | one off costs | | | | +----------------------------------+---------------+---------------+---------------+ | One off costs * | (1,325) | - | - | +----------------------------------+---------------+---------------+---------------+ | Operating (loss)/profit | (1,598) | 598 | 1,270 | +----------------------------------+---------------+---------------+---------------+ | (Loss)/earnings per share | (4.14) | 1.63 | 3.38 | | (pence) | | | | +----------------------------------+---------------+---------------+---------------+ | | | | | +----------------------------------+---------------+---------------+---------------+ | Work won | 3,183 | 2,750 | 6,060 | +----------------------------------+---------------+---------------+---------------+ | | | | | +----------------------------------+---------------+---------------+---------------+ | Cash generated from/(used in) | 965 | (693) | (670) | | operating activities | | | | +----------------------------------+---------------+---------------+---------------+ | Cash balance | 2,123 | 2,337 | 1,605 | +----------------------------------+---------------+---------------+---------------+ | Net Assets | 12,583 | 13,212 | 13,730 | +----------------------------------+---------------+---------------+---------------+ | | | * Non recurring and one off costs (refer note 4) | | ** Restatement for prior period error (refer note 2) | +----------------------------------+---------------+---------------+---------------+ Cash Generation * Operating cash inflow of GBP1.0m after one off costs (6 months to September 2008: outflow GBP0.7m). * Strong cash position with a cash balance of GBP2.1m (31 March 2008: GBP1.6m) plus additional bank overdraft facilities of GBP0.95m. Work won * Work won in the period increased by 16% to GBP3.2m (6 months to 30 September 2008: GBP2.8m). * Broadening of the distribution channels with 64% of work won generated from business to business channels (6 months to 30 September 2008: 54%). Profit * Adjusted operating loss before one off costs of GBP0.3m (6 months to 30 September 2008: profit GBP0.6m) as a result of lower revenue contribution from the back book and lag in the financial impact of successful actions taken during the period to reduce costs. Operating Highlights * Experienced leadership team now in place to deliver the strategy * Group now marketed under a single brand across the UK * Transition from advertising-led customer acquisition to business-to-business distribution progressing well * Geographic diversification starting to show through in new work won with 29% of business now coming from England creating a stronger base for future growth Howard Bell, Chairman, commented: "Given that the new management team was appointed part way through the period, I am delighted with the pace at which the team has got to grips with the issues facing the company. Good progress has been made on cash collection and cost reduction, whilst the value of work won has also grown despite significant steps being taken to shift our customer acquisition model away from advertising, to one built upon a foundation of strong business-to-business relationships. It will take time for management actions to flow through fully to the bottom line, and as a consequence, the business made a loss in the period before one off costs. Market conditions in the personal and corporate markets remain favourable for our business and we expect demand for both our formal and informal personal debt solutions and our corporate insolvency and turnaround services to remain healthy." For further information: +---------------------------------------+------------------------------------+ | Invocas Group plc | Tel: +44(0)131 222 2460 | | Howard Bell, Chairman | Tel: +44(0)131 222 2460 | | David Macmillan, CEO | | | | | +---------------------------------------+------------------------------------+ | Charles Stanley Securities (Nominated | Tel: +44 (0)20 7149 6000 | | Adviser) | | | Philip Davies/ Carl Holmes | | +---------------------------------------+------------------------------------+ Website: www.invocasfinancial.com Notes to editors Established in 1998, and headquartered in Edinburgh, Invocas plc is a leading insolvency and debt solutions company operating throughout the UK. INVOCAS GROUP PLC Half yearly financial results for the six months ended 30 September 2009 OPERATING REVIEW Background Having only been in the role for a couple of weeks prior to our results presentation in June 2009, I announced at that time my intention to conduct a thorough review of the Group, its strategy and operations, and to take whatever measures were required in the short-term to stabilise a situation characterised by growing shareholder concerns about cash, costs, and profits. Since June we have done a great deal of work to review our strategy and operational capabilities. The conclusions reached by this exercise have led directly to a series of management actions to address shareholder concerns. The review also provided the catalyst for the creation of a new strategic vision for the Group which has already begun to inform our decision-making. Key review conclusions The Group has proven strengths and a set of core capabilities that can be utilised to create value going forward. Our technical reputation, service expertise and history of building strong relationships with work providers, feature heavily in our new strategic direction. However, the Group has suffered in recent years from a lack of proven expertise in operations, change management and marketing leadership. As the Group expanded from 2006 increased pressure was exerted on the management fabric of the company, exacerbating these weaknesses and contributing to poor decision-making. This came to a head with the introduction of 'fixed fee' charging on Trust Deed cases in 2007. The move to 'fixed fee' charging had a significant impact on the underlying business model but the consequences of this decision were not well enough understood. The business model did not adjust properly to absorb the change, and the internal mind-set failed to shift appropriately, causing a disconnect between revenues and costs. At the same time as beginning to absorb the reduced value of new cases and with weaker than anticipated levels of new work won in 2007/08, the decision was taken to acquire future business through direct advertising. The year 2008/9 was, therefore, characterised by strong new business growth but significant cost growth, declining cash balances and stagnant revenues. With the value per case of new business falling and fewer old-style cases on the back book the Group ran very hard to stand still. The eventual full-year profit figure for 2008/9 benefited from work done on old-style cases and was not a good indicator of the ongoing underlying profitability of the business. Operating performance The review resulted in a clear set of management actions for the second quarter to address shareholder concerns about cash, costs and profits. During the second quarter the focus has been on improving the cash position; starting to align our cost model to the new fixed fee reality; and working to sustain the value of new work won whilst making the transition to a more profitable and diversified business mix acquired through B2B partnerships. The cash management process has been significantly over-hauled with critical improvements made to the under-pinning management information systems. Good progress has been made on reducing costs and building a detailed process understanding which is essential to delivering future efficiency improvements and service innovation. In terms of revenue generation, we have started to make better use of our existing assets: namely our established work providers; in-house B2B sales experience; Scottish corporate recovery team and English IVA operation. Although this process has only just begun we can already see signs of diversification coming through in work won during the period, as defined by type of solution, market segment, geographic territory and channel. Steady progress has also been made on shifting our customer acquisition model from one built upon television advertising, lead purchase contracts and a call centre advice operation, to one built around the capture of quality customers, from a network of strong business-to-business relationships, supported by a small team of professional relationship managers. In order to signal this change both internally and externally we have also taken the opportunity to re-define our brand positioning. We now operate under a single brand, 'Invocas Financial', throughout the UK under the banner of 'Turning Debt Around'. Our message to existing and potential business partners is quite clear: we aim to win their business and drive profitable growth, through delivering service excellence on the back of process innovation. The second quarter has been a time of significant change within the business. We have over-hauled the management team and removed a number of positions across the business. Cost reduction and efficiency improvements are ongoing and people now recognise that we operate in a highly competitive market-place. We have been acutely conscious of the need to retain good people and provide everyone within the company with clear direction and support. The reaction of our people has been superb and I am delighted by the commitment, creativity and energy being exhibited throughout the business. We see a future defined by low costs, technology deployment, service quality, and regulatory compliance. We anticipate a 'flight to quality' and consequently significant industry consolidation. We are directing our resources accordingly. Financial Performance Cash Generation Operating cash inflow was GBP1.0m after one off costs (6 months to September 2008: outflow GBP0.7m). This contributed to a cash balance of GBP2.1m, with available bank overdraft facilities of GBP0.95m at the end of the period. Costs As a result of initiatives taken during the period, annualised employment costs were reduced by GBP0.6m and annualised overhead costs by GBP0.3m. The financial impact of these cost reductions on the results to 30 September 2009 is limited as the actions were taken through the period. Headcount reduced by 13% to 143 at 30 September 2009 (6 months to 30 September 2008: 164). This represents a reduction of 10% on the headcount figure of 159 as at 31 March 2009. Marketing costs were reduced by 11% as steps were taken to cut advertising spend, management positions, call centre roles and agency fees. Work Won Work won in the period increased by 16% to GBP3.2m (6 months to 30 September 2008: GBP2.8m). Cases won in the period increased to 854 (6 months to 30 September 2008: 848). Increased diversification of the product and service offering has created a stronger base for future growth. Revenue Revenue comprised GBP1.6m (41%) from work won in the period and GBP2.2m (59%) from the back book. The contribution from the back book was significantly lower than the same period in 2008 as a result of the impact of fixed fees on Trust Deed cases from April 2007, and the lower work won in 2007/08 compared with 2006/07. Profit As a result of lower revenue contribution from the back book, and the lag in the financial impact of successful actions taken during the period to reduce costs, there was an adjusted operating loss before one off costs of GBP0.3m (6 months to 30 September 2008: profit GBP0.6m). One off costs of GBP1.3m (6 months to 30 September 2008: GBPnil) were incurred as a consequence of restructuring GBP0.7m, terminating contractual relationships GBP0.5m and balance sheet revaluations GBP0.1m (refer note 4) A prior period error has resulted in the restatement of the prior year reducing revenue and profit before tax in the prior year ending 31 March 2009 by GBP0.7m to GBP1.3m, and in the prior six month period ending 30 September 2008 by GBP0.3m to GBP0.6m (refer note 2) Market Outlook We believe that economic conditions will continue to favour the sector. We are anticipating increased levels of corporate insolvencies as a consequence of recessionary pressures on consumer and corporate spending and more aggressive tax recovery tactics by HMRC, and see little prospect of the overall level of personal insolvencies reducing in the foreseeable future. We continue to monitor interest rate developments at a major lender level, as future rate increases will have a significant impact on the levels of personal insolvency work within the sector for several years to come. We are currently monitoring developments in Scotland following the introduction of the Home Owner and Debtor Protection (Scotland) Bill, which is currently at the committee stage. This Bill proposes potentially significant changes to the personal insolvency regime in Scotland which, if the Bill is passed as drafted, would lead to a reduction in the number of Trust Deeds and a corresponding increase in the numbers of Sequestrations. Looking forward The review has heralded the development of a new and exciting direction for the Group, and this strategic framework has driven many of the decisions made in recent months. However, we remain firmly focused on the next half-year period and the implementation of management actions to re-position the business model for profitable growth. Our immediate priorities are cash management, cost reduction, and the transition to a more profitable and diversified business mix acquired pre-dominantly through B2B relationships. A continuous improvement programme is fully up and running, and we can see significant opportunities to further reduce costs through process re-design, waste reduction, and digitisation. We are focused on growing a profitable insolvency services business by exploiting our core areas of capability: advice, administration, insolvency compliance, and business recovery. David Macmillan, Chief Executive Officer 10 December 2009 +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Consolidated statement of financial | | | | | | | | position | | | | | | | +-----------------------------------------+--+-------------+--+-------------+--+------------+ | as at 30 September 2009 | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | As at | | As at | | As at | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | 30 | | 30 | | 31 March | | | | | September | | September | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | 2009 | | 2008 | | 2009 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | Unaudited | | Unaudited | | Audited | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | (restated) | | (restated) | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | GBP'000 | | GBP'000 | | GBP'000 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Assets | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Non-current assets | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Property, plant and equipment | | | 247 | | 341 | | 298 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Intangible assets | | | 4,983 | | 4,477 | | 4,861 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Deferred tax assets | | | 25 | | 64 | | 25 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Total non-current assets | | | 5,255 | | 4,882 | | 5,184 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Current assets | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Inventories | | | 161 | | 225 | | 295 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Trade and other receivables | | | 5,938 | | 7,265 | | 8,160 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Cash and cash equivalents | | | 2,123 | | 2,337 | | 1,605 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Current tax receivable | | | 632 | | - | | - | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Total current assets | | | 8,854 | | 9,827 | | 10,060 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Total assets | | | 14,109 | | 14,709 | | 15,244 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Equity and liabilities | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Equity attributed to equity | | | | | | | | | holders | | | | | | | | | of Parent Company | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Share capital | | | 71 | | 71 | | 71 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Share premium | | | 8,642 | | 8,642 | | 8,642 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Share-based payment reserve | | | 118 | | 216 | | 83 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Retained earnings | | | 3,752 | | 4,283 | | 4,934 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Total equity | | | 12,583 | | 13,212 | | 13,730 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Non-current liabilities | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Deferred tax liabilities | | | 15 | | 3 | | 2 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Finance lease | | | 24 | | - | | 48 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Total non-current liabilities | | | 39 | | 3 | | 50 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Current liabilities | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Trade and other payables | | | 1,439 | | 1,154 | | 1,375 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Finance lease | | | 48 | | 121 | | 48 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Current tax payable | | | - | | 219 | | 41 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Total current liabilities | | | 1,487 | | 1,494 | | 1,464 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Total liabilities | | | 1,526 | | 1,497 | | 1,514 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | Total equity and liabilities | | | 14,109 | | 14,709 | | 15,244 | +----------------------------------+------+--+-------------+--+-------------+--+------------+ | | | | | | | | | +----------------------------------+------+--+-------------+--+-------------+--+------------+ +------------------------+--------+------------+------------+------------+------------+------------+ | Consolidated statement of comprehensive income | | | | +-----------------------------------------------------------+------------+------------+------------+ | for the six month period ended 30 September | | | | | | 2009 | | | | | +----------------------------------------------+------------+------------+------------+------------+ | | | | | | +----------------------------------------------+------------+------------+------------+------------+ | | | Before | One | Total | Total | Total | | | | one off | off | | | | | | | items | items | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | | | Six months | Six months | Six months | Six months | Year | | | | ended | ended | ended | ended | ended | +------------------------+--------+------------+------------+------------+------------+------------+ | | | 30 | 30 | 30 | 30 | 31 | | | | September | September | September | September | March | +------------------------+--------+------------+------------+------------+------------+------------+ | | | 2009 | 2009 | 2009 | 2008 | 2009 | +------------------------+--------+------------+------------+------------+------------+------------+ | | | Unaudited | Unaudited | Unaudited | Unaudited | Audited | +------------------------+--------+------------+------------+------------+------------+------------+ | | | | | | (restated) | (restated) | +------------------------+--------+------------+------------+------------+------------+------------+ | | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +------------------------+--------+------------+------------+------------+------------+------------+ | | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | Revenue | | 3,809 | - | 3,809 | 4,405 | 9,318 | +------------------------+--------+------------+------------+------------+------------+------------+ | Direct costs | | (2,356) | (584) | (2,940) | (2,132) | (4,661) | +------------------------+--------+------------+------------+------------+------------+------------+ | Gross profit | | 1,453 | (584) | 869 | 2,273 | 4,657 | +------------------------+--------+------------+------------+------------+------------+------------+ | | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | Marketing expenses | | (111) | (24) | (135) | (203) | (330) | +------------------------+--------+------------+------------+------------+------------+------------+ | Administrative | | (1,580) | (717) | (2,297) | (1,420) | (2,986) | | expenses | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | Share based payments | | (35) | - | (35) | (52) | (71) | +------------------------+--------+------------+------------+------------+------------+------------+ | | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | Operating | | (273) | (1,325) | (1,598) | 598 | 1,270 | | (loss)/profit | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | Investment Income | | 2 | - | 2 | 76 | 101 | +------------------------+--------+------------+------------+------------+------------+------------+ | (Loss)/profit before | | (271) | (1,325) | (1,596) | 674 | 1,371 | | tax | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | Income tax | 5 | 43 | 371 | 414 | (208) | (406) | | credit/(charge) | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | Loss/(profit) for the | | (228) | (954) | (1,182) | 466 | 965 | | period | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | (Loss)/earnings per | | | | | | | | share | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ | Basic - pence | 6 | (0.80)p | (3.34)p | (4.14)p | 1.63p | 3.38p | +------------------------+--------+------------+------------+------------+------------+------------+ | Diluted - pence | 6 | (0.80)p | (3.34)p | (4.14)p | 1.58p | 3.25p | +------------------------+--------+------------+------------+------------+------------+------------+ | | | | | | | | +------------------------+--------+------------+------------+------------+------------+------------+ The entire profit/(loss) is attributable to the equity holders of the parent company. There were no items of other comprehensive income and as such the (loss)/profit for the period attributable to equity holders of the Parent Company is equivalent to total comprehensive income for all periods. +-----------------------------------+---+---------+------+--+------------+----------+---------+ | Consolidated statement of changes in equity | | | | +--------------------------------------------------------+---------------+----------+---------+ | for the six month period ended 30 September 2009 | | | +------------------------------------------------------------------------+----------+---------+ | | | | | | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | | | Share | Share | Share | Retained | Total | | | | capital | premium | based | earnings | | | | | | | payment | | | | | | | | reserve | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +-----------------------------------+---+---------+---------+------------+----------+---------+ | | | | | | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Balance at 1 April 2008 | | 71 | 8,642 | 164 | 4,531 | 13,408 | +-----------------------------------+---+---------+---------+------------+----------+---------+ | | | | | | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Total comprehensive income (as | | - | - | - | 466 | 466 | | restated) | | | | | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Dividends paid in the period | | - | - | - | (714) | (714) | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Share based payments | | - | - | 52 | - | 52 | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Balance at 30 September 2008 | | 71 | 8,642 | 216 | 4,283 | 13,212 | +-----------------------------------+---+---------+---------+------------+----------+---------+ | | | | | | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Total comprehensive income (as | | - | - | - | 499 | 499 | | restated) | | | | | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Share based payments | | - | - | 19 | - | 19 | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Transfer in respect of expired | | - | - | (152) | 152 | - | | options | | | | | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Balance at 31 March 2009 | | 71 | 8,642 | 83 | 4,934 | 13,730 | +-----------------------------------+---+---------+---------+------------+----------+---------+ | | | | | | | | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Total comprehensive income | | - | - | - | (1,182) | (1,182) | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Share based payments | | - | - | 35 | - | 35 | +-----------------------------------+---+---------+---------+------------+----------+---------+ | Balance at 30 September 2009 | | 71 | 8,642 | 118 | 3,752 | 12,583 | +-----------------------------------+---+---------+---------+------------+----------+---------+ | | | | | | | | +-----------------------------------+---+---------+------+--+------------+----------+---------+ +----------------------------------+--+------------------+--+----------------+--+------------+ | Consolidated statement of cash flow | | | | | | | | | | | | | +-------------------------------------+------------------+--+----------------+--+------------+ | for the six month period ended 30 September 2009 | | | | | +--------------------------------------------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | Six months ended | | Six months | | Year | | | | | | ended | | ended | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | 30 September | | 30 September | | 31 March | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | 2009 | | 2008 | | 2009 | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | Unaudited | | Unaudited | | Audited | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | (restated) | | (restated) | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | GBP'000 | | GBP'000 | | GBP'000 | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Cash flow from operating | | | | | | | | activities | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | (Loss)/profit before tax | | (1,596) | | 674 | | 1,371 | +----------------------------------+--+------------------+--+----------------+--+------------+ | Adjustment for: | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Depreciation of property, plant | | 57 | | 57 | | 118 | | & equipment | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Amortisation of intangibles | | 26 | | 10 | | 22 | +----------------------------------+--+------------------+--+----------------+--+------------+ | Share based payments | | 35 | | 52 | | 71 | +----------------------------------+--+------------------+--+----------------+--+------------+ | Write off of intangible assets | | 25 | | - | | - | +----------------------------------+--+------------------+--+----------------+--+------------+ | Interest received | | (2) | | (76) | | (101) | +----------------------------------+--+------------------+--+----------------+--+------------+ | Operating cash flow before | | (1,455) | | 717 | | 1,481 | | movement in working capital | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Decrease/(increase) in | | 134 | | (150) | | (220) | | inventories | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Increase/(decrease) in trade and | | 63 | | (306) | | (2,539) | | other payables | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Decrease/(increase) in trade and | | 2,223 | | (954) | | 608 | | other receivables | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Movement in working capital | | 2,420 | | (1,410) | | (2,151) | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Cash generated from/(used in) | | 965 | | (693) | | (670) | | operating activities | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Income taxes paid | | (246) | | (429) | | (767) | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Net cash generated from | | 719 | | (1,122) | | (1,437) | | operating activities | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Investing activities | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Purchase of property, plant & | | (6) | | (34) | | (55) | | equipment | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Purchase of intangibles | | (173) | | (67) | | (463) | +----------------------------------+--+------------------+--+----------------+--+------------+ | Purchase of business net of cash | | - | | (43) | | (44) | | acquired | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Interest received | | 2 | | 76 | | 101 | +----------------------------------+--+------------------+--+----------------+--+------------+ | Net cash used in investing | | (177) | | (68) | | (461) | | activities | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Financing activities | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Dividends paid | | - | | (714) | | (714) | +----------------------------------+--+------------------+--+----------------+--+------------+ | Finance leases | | (24) | | (24) | | (48) | +----------------------------------+--+------------------+--+----------------+--+------------+ | Net cash used in financing | | (24) | | (738) | | (762) | | activities | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Net increase/(decrease) in cash | | 518 | | (1,928) | | (2,660) | | and cash equivalents | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Cash and cash equivalents at | | 1,605 | | 4,265 | | 4,265 | | beginning of period | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | Cash and cash equivalents at end | | 2,123 | | 2,337 | | 1,605 | | of period | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ | | | | | | | | +----------------------------------+--+------------------+--+----------------+--+------------+ Notes to the Half Yearly Financial Report 1.Basis of preparation and accounting policies Basis of preparation The Group's interim result consolidates the results of the company and its subsidiary undertakings made up to 30 September 2009. The company is a limited liability company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange. The financial information contained in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. It does not therefore include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 31 March 2009. The financial information for the six months ended 30 September 2009 is also unaudited. The Group's statutory accounts for the year ended 31 March 2009 have been delivered to the Registrar of Companies. The report of the auditors on these accounts was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. Significant accounting policies The accounting policies used in the preparation of the financial information for the six months ended 30 September 2009 are in accordance with the recognition and measurement criteria of International Financial Reporting Standards ('IFRS') as adopted by the European Union and are consistent with those which will be adopted in the annual statutory financial statements for the year ended 31 March 2010. While the financial information included has been prepared in accordance with the recognition and measurement criteria of IFRS, as adopted by the European Union (EU), this announcement does not in itself contain sufficient information to comply with IFRS. 2.Prior period errors The results for the year ended 31 March 2009 have been restated for a prior period error. The prior period error related to the adjustment of unbilled revenue charged to contracts during the transition from time based billing to a fixed fee environment to reflect revenue recoverable in that period. The effect of this prior period error on the statement of comprehensive income for the year ended 31 March 2009 is to reduce revenue, gross profit and operating profit by GBP731,000 (6 months to 30 September 2008: GBP346,000) and reduce tax by GBP205,000 (6 months to 30 September 2008: GBP97,000). The effect on the statement of financial position as at 31 March 2009 is to decrease trade and other receivables by GBP731,000 (30 September 2008: GBP346,000), to decrease current tax payable by GBP205,000 (30 September 2008: GBP97,000 and reduce retained earnings by GBP526,000 (30 September 2008: GBP249,000). 3.Segmental reporting IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The Group's sole reportable segment under IFRS 8 is insolvency services which includes a full range of debt solutions to individuals and businesses as follows: * Trust deeds * Individual Voluntary Arrangements * Sequestration and bankruptcy * Debt Management Plans * Full and final settlement * Corporate business recovery and insolvency solutions 4One off items One off items are items of income and expenditure that are non-recurring and, in the judgement of management, should be disclosed separately on the basis that they are material, either by their nature or their size, to provide a further understanding of the Group's financial performance and enable comparison of financial performance between periods. Items of income or expense that are considered by management for designation as one off are as follows: +------------------------------+----------------+----------------+---------------+ | | | | | +------------------------------+----------------+----------------+---------------+ | | Six months | Six months | Year ended | | | ended 30 | ended 30 | 31 March | | | September | September | | +------------------------------+----------------+----------------+---------------+ | | 2009 | 2008 | 2009 | +------------------------------+----------------+----------------+---------------+ | | Unaudited | Unaudited | Audited | +------------------------------+----------------+----------------+---------------+ | | GBP'000 | GBP'000 | GBP'000 | +------------------------------+----------------+----------------+---------------+ | | | | | +------------------------------+----------------+----------------+---------------+ | Restructuring costs | 689 | - | - | +------------------------------+----------------+----------------+---------------+ | Contract termination costs | 515 | - | - | +------------------------------+----------------+----------------+---------------+ | Balance sheet revaluations | 121 | - | - | +------------------------------+----------------+----------------+---------------+ | | 1,325 | - | - | +------------------------------+----------------+----------------+---------------+ The presentation of these items within the statement of comprehensive income is summarised as follows: +--------------------+---------------+----------------+---------------+--------------+ | | | | | | +--------------------+---------------+----------------+---------------+--------------+ | | Restructuring | Contract | Balance sheet | Total | | | costs | termination | revaluations | | | | | costs | | | +--------------------+---------------+----------------+---------------+--------------+ | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +--------------------+---------------+----------------+---------------+--------------+ | | | | | | +--------------------+---------------+----------------+---------------+--------------+ | Direct costs | - | 496 | 88 | 584 | +--------------------+---------------+----------------+---------------+--------------+ | Marketing expenses | 24 | - | - | 24 | +--------------------+---------------+----------------+---------------+--------------+ | Administration | 665 | 19 | 33 | 717 | | expenses | | | | | +--------------------+---------------+----------------+---------------+--------------+ | | 689 | 515 | 121 | 1,325 | +--------------------+---------------+----------------+---------------+--------------+ 5Tax The tax (credit)/charge is based on the current rate of UK corporation tax applicable to the Group and comprises: +----------------------------+------------------+----------------+-------------+ | | | | | +----------------------------+------------------+----------------+-------------+ | | Six months ended | Six months | Year ended | | | 30 September | ended 30 | 31 March | | | | September | | +----------------------------+------------------+----------------+-------------+ | | 2009 | 2008 | 2009 | +----------------------------+------------------+----------------+-------------+ | | Unaudited | Unaudited | Audited | +----------------------------+------------------+----------------+-------------+ | | | (restated) | (restated) | +----------------------------+------------------+----------------+-------------+ | | GBP'000 | GBP'000 | GBP'000 | +----------------------------+------------------+----------------+-------------+ | Current tax | | | | +----------------------------+------------------+----------------+-------------+ | UK corporation tax | (446) | 226 | 392 | +----------------------------+------------------+----------------+-------------+ | Deferred tax | - | (18) | 23 | +----------------------------+------------------+----------------+-------------+ | | (446) | 208 | 415 | +----------------------------+------------------+----------------+-------------+ | | | | | +----------------------------+------------------+----------------+-------------+ | Prior year adjustments | | | | +----------------------------+------------------+----------------+-------------+ | UK Corporation tax | 19 | - | (6) | +----------------------------+------------------+----------------+-------------+ | Deferred tax | 13 | - | (3) | +----------------------------+------------------+----------------+-------------+ | | 32 | - | (9) | +----------------------------+------------------+----------------+-------------+ | | | | | +----------------------------+------------------+----------------+-------------+ | Tax attributable to the | (414) | 208 | 406 | | Company and its | | | | | subsidiaries | | | | +----------------------------+------------------+----------------+-------------+ Interim period income tax is accrued based on the estimated average annual effective tax rate of 28% (12 months to 30 March 2009: 29%). 6Loss/(earnings) per share The calculation of the basic and diluted (loss)/earnings per share is based on the following data: +----------------------------+------------------+----------------+--------------+ | | | | | +----------------------------+------------------+----------------+--------------+ | | Six months ended | Six months | Year ended | | | 30 September | ended 30 | 31 March | | | | September | | +----------------------------+------------------+----------------+--------------+ | | 2009 | 2008 | 2009 | +----------------------------+------------------+----------------+--------------+ | | Unaudited | Unaudited | Audited | +----------------------------+------------------+----------------+--------------+ | | | (restated) | (restated) | +----------------------------+------------------+----------------+--------------+ | | GBP'000 | GBP'000 | GBP'000 | +----------------------------+------------------+----------------+--------------+ | | | | | +----------------------------+------------------+----------------+--------------+ | (Loss)/profit for the | (1,182) | 466 | 965 | | period | | | | +----------------------------+------------------+----------------+--------------+ | | | | | +----------------------------+------------------+----------------+--------------+ | | No. | No. | No. | +----------------------------+------------------+----------------+--------------+ | Weighted average number of | ('000s) | ('000s) | ('000s) | | shares in issue: | | | | +----------------------------+------------------+----------------+--------------+ | | | | | +----------------------------+------------------+----------------+--------------+ | For basic earnings per | 28,567 | 28,567 | 28,567 | | share | | | | +----------------------------+------------------+----------------+--------------+ | Effect of share options | - | 963 | 1,109 | | issued | | | | +----------------------------+------------------+----------------+--------------+ | For diluted earnings per | 28,567 | 29,530 | 29,676 | | share | | | | +----------------------------+------------------+----------------+--------------+ | | | | | +----------------------------+------------------+----------------+--------------+ | (Loss)/earnings per share: | Pence | Pence | Pence | +----------------------------+------------------+----------------+--------------+ | | | | | +----------------------------+------------------+----------------+--------------+ | Basic | (4.14) | 1.63 | 3.38 | +----------------------------+------------------+----------------+--------------+ | Diluted | (4.14) | 1.58 | 3.25 | +----------------------------+------------------+----------------+--------------+ | | | | | +----------------------------+------------------+----------------+--------------+ The calculation of diluted loss per ordinary share is identical to that used for the basic loss per ordinary share for the six months ended 30 September 2009. This is because the exercise of the options would have the effect of reducing the loss per ordinary share and is, therefore, not dilutive under the terms of IAS 33. 7 Board approval The half yearly financial report was approved for issue by the Board of Directors on 10 December 2009. 8 Further copies of this statement A copy of this half yearly financial report is available from the Company's registered office or by visiting the Company's websiteat
www.invocasfinancial.com. Independent Review Report to Invocas Group plc Introduction We have been engaged by the Company to review the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 September 2009 which comprises the Consolidated Statement of Financial Position, Consolidated Statement of Comprehensive Income, Consolidated Statement of Cash Flows, Consolidated Statement of Changes in Equity and the related explanatory notes. We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report, including the conclusion, has been prepared for and only for the Company for the purpose of meeting the requirements of the AIM Rules for Companies and for no other purpose. We do not, therefore, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Directors' Responsibilities The Half Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing and presenting the Half Yearly Financial Report in accordance with the AIM Rules for Companies. As disclosed in the Accounting Policies, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee ("IFRIC") pronouncements as adopted by the European Union. The condensed set of financial statements included in this Half Yearly Financial Report has been prepared in accordance with the measurement and recognition criteria of International Financial Reporting Standards and IFRIC pronouncements, as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half Yearly Financial Report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 September 2009 is not prepared, in all material respects, in accordance with the measurement and recognition criteria of International Financial Reporting Standards and IFRIC pronouncements as adopted by the European Union, and the AIM Rules for Companies. Baker Tilly UK Audit LLP Chartered Accountants 3 Hardman Street Manchester M3 3HF 10 December 2009 This information is provided by RNS The company news service from the London Stock Exchange END IR VKLFBKLBBFBF
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