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ANX Anexo Group Plc

65.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Anexo Group Plc LSE:ANX London Ordinary Share GB00BF2G3L29 ORD 0.05P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 65.00 64.00 66.00 0.00 07:45:25
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Business Services, Nec 138.33M 19.48M 0.1651 3.94 76.7M

Anexo Group PLC Interim Results (7269L)

10/09/2019 7:00am

UK Regulatory


TIDMANX

RNS Number : 7269L

Anexo Group PLC

10 September 2019

 
 For immediate release   10 September 2019 
 

Anexo Group plc

('Anexo' or the 'Group')

Interim Results

'Successful investment in Legal Services driving case settlement and cash collection'

Anexo Group plc (AIM: ANX), the specialist integrated credit hire and legal services provider, is pleased to report its Interim Results for the six months ended 30 June 2019 ('H1 2019' or the 'period'). The Board is pleased to report another successful six months of strong growth with management confident in meeting current market expectations for FY 2019.

Financial Highlights

 
                                    H1 2019            H1 2018   Movement 
 Revenue                    GBP36.7 million    GBP23.6 million     +55.5% 
 Adjusted operating 
  profit(1)                 GBP11.8 million     GBP7.3 million     +61.6% 
 Adjusted profit before 
  tax(1)                    GBP11.0 million     GBP6.8 million     +62.6% 
 Net assets                 GBP82.9 million    GBP68.6 million     +20.8% 
 Cash collection            GBP36.6 million    GBP28.2 million     +29.8% 
 Basic EPS                        7.6 pence          4.1 pence     +85.4% 
 
 
 --   Adjusted(1) operating profit margin increased to 32.2% 
       (H1 2018: 30.9%) 
 --   Net cash outflow from operating activities(2) to fund 
       growth of GBP3.3 million (H1 2018: net cash inflow GBP0.5 
       million) 
 --   Proposed interim dividend of 1 penny per share (H1 2018: 
       Nil) 
 --   Net debt balance at 30 June 2019 stood at GBP23.4 million 
       (30 June 2018: net debt post listing of GBP2.4 million) 
 --   Post period end, Anexo successfully renegotiated its working 
       capital facilities, securing considerable improvements 
       in its financing arrangements, and agreed new terms with 
       fleet insurance providers to deliver enhanced savings 
       in remainder of FY 2019 and in 2020 
 --   Anexo on track to meet FY 2019 market expectations of 
       adjusted profit before tax of GBP23.0 million 
 

(1) Adjusted results exclude certain expenses incurred as part of the AIM listing, share based payments and the transition to IFRS 16 - Leases.

(2) Cash flows from operations exclude movements in directors' loans and the impact of IFRS 16.

Operational Highlights

 
 --   Fully stand-alone new legal office in Bolton achieved 
       break even point within four months. The Bolton office 
       increased headcount to 63 by 30 June 2019, of which 28 
       were experienced litigators, increasing the Group's ability 
       to settle cases and generate cash. As at 30 June 2019, 
       a further 10 experienced litigators had accepted positions 
       and not yet started 
 --   Following a period of significant growth across the Group, 
       the expansion of the vehicle fleet has been more measured 
       as the Group seeks to optimise margin and cash collections, 
       thus underpinning an improvement in financial performance 
 
 
 KPIs                              H1 2019   H1 2018   Movement 
 Number of vehicles on hire at 
  the period end                     1,571     1,240     +26.7% 
 Average number of vehicles on 
  hire for the period                1,496       912     +64.0% 
 Number of hire cases settled        2,066     1,730     +19.4% 
 Cash collections from settled 
  cases (GBP'000s)                  36,628    28,230     +29.7% 
 Number of new cases funded          3,392     2,588     +31.1% 
 Legal staff employed at period 
  end                                  344       215     +60.0% 
 Number of senior fee earners 
  at period end                        109        74     +47.3% 
 Average number of senior fee 
  earners                               98        71     +38.0% 
 

Commenting on the Interim Results, Alan Sellers, Executive Chairman of Anexo Group plc, said:

"We are pleased to report another strong set of results, with all key financial metrics and KPIs ahead of the comparative period last year. At the time of our AIM IPO in June 2018, we outlined a number of key objectives such as expanding the vehicle fleet, opening a regional office and further legal recruitment and I am delighted to report that a year later we have made excellent progress on these objectives which is reflected in these half year results.

Anexo remains extremely well positioned to grow its market share and take advantage of the opportunities available to it. The Board views the current financial year and beyond with considerable optimism."

- Ends -

Analyst meeting

A meeting for analysts will be held at 09.30am today, 10 September 2019, at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. A copy of the Interim Results presentation is available at the Company's website www.anexo-group.com

An audio webcast of the analysts meeting will be available after 12pm today: https://webcasting.buchanan.uk.com/broadcast/5d381ed948a6d52f84f6b009

For further enquiries:

 
 Anexo Group plc                                +44 (0) 151 227 3008 
                                                 www.anexo-group.com 
 Alan Sellers, Executive Chairman 
  Mark Bringloe, Chief Financial Officer 
  Nick Dashwood Brown, Head of Investor 
  Relations 
 
   Arden Partners plc 
   (Nominated Adviser and Broker) 
 John Llewellyn-Lloyd / Benjamin Cryer          +44 (0) 20 7614 5900 
  (Corporate)                               www.arden-partners.co.uk 
  Fraser Marshall (Equity Sales) 
 
   Buchanan 
   (Financial Communications) 
 Henry Harrison-Topham / Steph Watson           +44 (0) 20 7466 5000 
  / Hannah Ratcliff                            Anexo@buchanan.uk.com 
 

Notes to Editors:

Anexo is a specialist integrated credit hire and legal services provider. The Group has created a unique business model by combining a direct capture Credit Hire business with a wholly owned Legal Services firm. The integrated business targets the impecunious not at fault motorist, referring to those who do not have the financial means or access to a replacement vehicle.

Through its dedicated Credit Hire sales team and network of over 1,100 active referrers around the UK, Anexo provides customers with an end-to-end service including the provision of Credit Hire vehicles, assistance with repair and recovery, and claims management services. The Group's Legal Services division, Bond Turner, provides the legal support to maximise the recovery of costs through settlement or court action as well as the processing of any associated personal injury claim.

The Group was admitted to trading on AIM in June 2018 with the ticker ANX.

For additional information please visit: www.anexo-group.com. To subscribe to our investor alert service and receive all press releases, financial results and other key shareholder messages as soon as they become available, please visit: https://www.anexo-group.com/content/investors/alert.asp.

Executive Chairman's Statement

On behalf of the Board, I am pleased to introduce Anexo's results for the six month period ended 30 June 2019, a period during which the Board has concentrated firmly on moving the Group towards the inflexion point which achieves net cash generation. Anexo's strategy in the period has been to target a more measured growth in credit hire in order to focus on the Group's continued success in the recruitment of high quality litigators, thereby increasing its ability to settle cases and improve cash generation. Anexo has performed strongly in H1 2019, with significant growth in both divisions compared to H1 2018. The solid platform which has been established since the Group's AIM IPO in June 2018 provides the Board with considerable confidence in the strong prospects for the Group for the remainder of FY 2019 and beyond.

The Group has adopted IFRS 16 (effective 1 January 2019) in these interim results (for further detail see Note 7 in the Notes to the Interim Statements).

H1 2019 Group performance

Anexo delivered a strong performance across all key Group financial metrics and KPIs in its first financial year on AIM, and this has continued into H1 2019. Group revenues in H1 2019 increased by 55.5% to GBP36.7 million (H1 2018: GBP23.6 million) and adjusted profit before tax for the period increased by 62.6% to GBP11.0 million (H1 2018: GBP6.8 million).

As announced on 6 August 2019, Anexo successfully renegotiated its working capital facilities and secured favourable financing arrangements from both new and existing providers.

Credit Hire division

As previously reported, Anexo deployed an element of the funds raised at IPO to expand its fleet. The average number of vehicles on the road reached 1,496 in H1 2019 (H1 2018: 912), a 64.0% increase on the prior year. The Board has not sought to further increase the number of vehicles on hire in the last six months, in order to allow the Group to concentrate on the development of the litigation division and increasing the Group's rate of cash collections. However, the like for like increase in vehicles on the road has resulted in growth in Credit Hire revenue of 80.3%, rising from GBP12.9 million in H1 2018 to GBP23.2 million in H1 2019. Profit before tax in the Credit Hire division rose by 152% to GBP8.3 million in H1 2019 (H1 2018: GBP3.3 million).

In particular, the Group has witnessed considerable growth in its motorcycle business, facilitated by the Board's strategic investment in the fleet. We have also sought to target the most valuable claims for the Group, the effect of which has been to improve individual claim performance and thus further drive growth in revenues and profitability over and above the number of vehicles on the road.

As announced on 6 August 2019, the Group agreed new terms with its existing fleet insurance provider which will continue to deliver enhanced savings against original forecasts for the remainder of FY 2019 and throughout FY 2020.

Legal Services division

A significant portion of the IPO funds was targeted at increasing capacity within Bond Turner, the Group's legal services business. This was to facilitate increased cash generation, which continues to improve month on month. Cash collections increased by GBP8.4 million or 29.7% between H1 2018 and H1 2019, rising to GBP36.6 million from GBP28.2 million. This strong trend continued post period end with cash collections in July 2019 going on to be a monthly record for the Group.

Revenues for the Legal Services division, which strongly converts to cash, showed an increase of 26.2%, reaching GBP13.5 million in H1 2019 (H1 2018: GBP10.7 million). Profit before taxation declined to GBP2.3 million (H1 2018: GBP3.8 million), reflecting the significant investment in the new Bolton office and associated staff recruitment costs. Within the working capital cycle of a typical case and the timeline for settlement inherent in the court process, an experienced litigator will not reach capacity from a settlement and cash collection position for at least nine to twelve months. Consequently, the considerable benefits to cash collections from the Group's investment in recruitment are expected to be realised in late FY 2019 and into FY 2020.

The Board's focus in 2019 has been to expand capacity at Bond Turner, with the opening of the Bolton office being key to this strategy. Both in number and quality of litigators targeted for recruitment, Bolton has out-performed management's expectations. At 30 June 2019, the number of highly skilled and experienced litigators has increased within the Group from 74 at 30 June 2018 to 89 at 31 December 2018, and to 109 by the end of H1 2019, an increase of 38% from that seen at 30 June 2018.

With further investment planned for the remainder of FY 2019, these additional staff are expected to continue to drive an increase in the number of cases settled and ultimately the level of cash recovered from Bond Turner's considerable portfolio of cases.

As previously outlined at the time of the Group's AIM IPO, Bond Turner also operates an in-house advocacy and specialist litigation team which handles complex professional and clinical negligence claims. Many of these constitute high value and high profile cases, some of which have been ongoing for many years; one example is the class action concerning historic abuse at Aston Hall psychiatric hospital. The Board intends to expand this specialist team in H2 2019 and FY 2020 and is exploring opportunities to secure new business in professional and compensation claims through both targeted recruitment and digital marketing and direct capture.

Dividends

The Board stated at the time of the Group's AIM IPO that its intention was to adopt a progressive dividend policy and commenced this with the payment of final dividend of 1.5 pence per share for the period from Admission to 31 December 2018. The Board is therefore pleased to propose an interim dividend of 1 penny per share which will be paid on 23 October 2019 to those shareholders on the register at the close of business on 20 September 2019. The shares will become ex-dividend on 19 September 2019.

Trading Outlook

The outlook for the remainder of FY 2019 is positive and the Board remains confident that the decision to hold steady the number of vehicles on the road within the Credit Hire division, as the Group continues to expand its Legal Services division, will allow Anexo to demonstrate its ability to generate yet further cash from its significant case portfolio.

Recruitment continues to progress better than anticipated within the Legal Services division and the Group has recently finalised the terms of a lease for a further floor in Bolton, doubling the office space to 19,490 sq.ft. The Board is also considering additional locations for a further regional office and will make a separate announcement as and when appropriate. The additional capacity secured to date has already positively impacted cash collections and settlement numbers and rates. The Board will continue to review this strategy to ensure that Anexo continues to leverage its case book and consequently realises the potential of the investment as a significant cash generating asset.

Anexo remains extremely well positioned to grow its market share and take advantage of the opportunities available to it. The Board views the current financial year and beyond with considerable optimism.

Alan Sellers

Executive Chairman

10 September 2019

Consolidated Statement of Comprehensive Income

For the unaudited period ended 30 June 2019

 
                                                Unaudited   Unaudited      Audited 
                                                Half year   Half year 
                                                    ended       ended   Year ended 
                                                   Jun-19      Jun-18       Dec-18 
                                        Note     GBP'000s    GBP'000s     GBP'000s 
 
 Revenue                                           36,717      23,588       56,505 
 Cost of sales                                    (7,225)     (6,880)     (16,168) 
                                               ----------  ----------  ----------- 
 Gross profit                                      29,492      16,708       40,337 
 
 Depreciation                                     (1,192)       (606)      (1,574) 
 Depreciation on right of use 
  assets                                          (2,849)           -            - 
 Administrative expenses                         (13,638)     (8,801)     (21,594) 
 Operating profit before exceptional 
  items                                            11,813       7,301       17,169 
                                               ----------  ----------  ----------- 
 
 Share based payment charges                        (329)           -        (384) 
 Non-recurring administrative 
  expenses                                              -     (1,438)      (1,411) 
 Operating profit                                  11,484       5,863       15,374 
                                               ----------  ----------  ----------- 
 
 Finance costs                                      (762)       (525)      (1,090) 
 Lease finance costs                                (292)           -            - 
 Total finance costs                              (1,054)       (525)      (1,090) 
 
 Profit before tax                                 10,430       5,338       14,284 
 Taxation                                         (2,045)       (790)      (2,879) 
 Profit and total comprehensive 
  income for the year attributable 
  to the owners of the company                      8,385       4,548       11,405 
                                               ----------  ----------  ----------- 
 
 Earnings per share 
 Basic earnings per share (pence)                     7.6         4.1         10.4 
                                               ----------  ----------  ----------- 
 
 Diluted earnings per share (pence)                   7.4         4.1         10.2 
                                               ----------  ----------  ----------- 
 

The above results were derived from continuing operations.

Consolidated Statement of Financial Position

Unaudited at 30 June 2019

 
                                       Unaudited   Unaudited      Audited 
                                       Half Year   Half Year 
                                           Ended       ended   Year Ended 
                                          Jun-19      Jun-18       Dec-18 
 Assets                                 GBP'000s    GBP'000s     GBP'000s 
 Non-current assets 
 Property, plant and equipment             3,233       1,918        3,270 
 Right-of-use assets                       9,815           -            - 
                                      ----------  ----------  ----------- 
                                          13,048       1,918        3,270 
                                      ----------  ----------  ----------- 
 Current assets 
 Trade and other receivables             116,841      81,174      101,445 
 Cash and cash equivalents                   491      11,121        5,532 
                                         117,332      92,295      106,977 
                                      ----------  ----------  ----------- 
 
 Total assets                            130,380      94,213      110,247 
                                      ----------  ----------  ----------- 
 
 Equity and liabilities 
 Equity 
 Share capital                                55          55           55 
 Share premium                             9,235       9,310        9,235 
 Share based payment reserve                 713           -          384 
 Retained earnings                        72,862      59,191       66,127 
                                      ----------  ----------  ----------- 
 Equity attributable to the owners 
  of the Group                            82,865      68,556       75,801 
                                      ----------  ----------  ----------- 
 
 Non-current liabilities 
 Other interest-bearing loans 
  and borrowings                               -       5,566          870 
 Lease liabilities                         5,150           -            - 
 Deferred tax liabilities                     20          20            - 
                                           5,170       5,586          870 
                                      ----------  ----------  ----------- 
 
 Current liabilities 
 Bank overdraft                           14,532       5,080       12,536 
 Other interest-bearing loans 
  and borrowings                           9,382       2,835        9,402 
 Lease liabilities                         4,927           -            - 
 Trade and other payables                  9,118       6,439        7,223 
 Corporation tax liability                 4,386       5,717        4,415 
                                          42,345      20,071       33,576 
                                      ----------  ----------  ----------- 
 
 Total liabilities                        47,515      25,657       34,446 
                                      ----------  ----------  ----------- 
 
 Total equity and liabilities            130,380      94,213      110,247 
                                      ----------  ----------  ----------- 
 
 

Consolidated Statement of Changes in Equity

For the unaudited period ended 30 June 2019

 
                                                              Share 
                                                              based 
                                    Share        Share      payment    Retained 
                                  capital      premium      reserve    earnings      Total 
                                 GBP'000s     GBP'000s     GBP'000s    GBP'000s   GBP'000s 
 
 At 1 January 2019                     55        9,235          384      66,127     75,801 
 Profit for the year 
  and total comprehensive 
  income                                -            -            -       8,385      8,385 
 Share based payments                   -            -          329           -        329 
 Dividends                              -            -            -     (1,650)    (1,650) 
 
 At 30 June 2019                       55        9,235          713      72,862     82,865 
                                ---------  -----------  -----------  ----------  --------- 
 
 At 1 January 2018                     50           40            -      55,542     55,632 
 Profit for the year 
  and total comprehensive 
  income                                -            -            -       4,548      4,548 
 Issue of share 
  capital                               5            -            -           -          5 
 Increase in share premium              -        9,270            -           -      9,270 
 Adjustment                             -            -            -        (79)       (79) 
 Dividends                              -            -            -       (820)      (820) 
 
 At 30 June 2018                       55        9,310            -      59,191     68,556 
 Profit for the year 
  and total comprehensive 
  income                                -            -            -       6,857      6,857 
 Movement in share premium              -         (75)            -           -       (75) 
 Creation of share 
  based payments 
  reserve                               -            -          384           -        384 
 Adjustment                             -            -            -          79         79 
 
 At 31 December 
  2018                                 55        9,235          384      66,127     75,801 
                                ---------  -----------  -----------  ----------  --------- 
 
 
 

Anexo Group Plc

Consolidated Statement of Cash Flows

For the unaudited period ended 30 June 2019

 
                                     Unaudited   Unaudited 
                                     Half year   Half year       Audited 
                                         ended       ended    Year ended 
                                        Jun-19      Jun-18        Dec-18 
                                      GBP'000s    GBP'000s      GBP'000s 
 Cash flows from operating 
  activities 
 Profit for the year                     8,385       4,548        11,405 
 Adjustments for: 
 Depreciation and amortisation           4,041         606         1,574 
 Financial expense                       1,054         525         1,090 
 Taxation                                2,045         795         2,879 
                                    ----------  ----------  ------------ 
                                        15,525       6,474        16,948 
 Working capital adjustments 
 Increase in trade and other 
  receivables                         (15,211)     (1,012)      (20,524) 
 Increase in trade and other 
  payables                               2,225       1,581         1,466 
                                    ----------  ----------  ------------ 
 Cash generated from operations          2,539       7,043       (2,110) 
 
 Interest paid                           (762)       (525)       (1,090) 
 Tax paid                              (2,240)     (1,013)       (4,738) 
 Net cash from operating 
  activities                             (463)       5,505       (7,938) 
                                    ----------  ----------  ------------ 
 
 Cash flows from investing 
  activities 
 Proceeds from sale of property, 
  plant and equipment                      195         104           170 
 Acquisition of property, plant 
  and equipment                        (1,349)     (1,107)       (3,493) 
 Net cash from investing 
  activities                           (1,154)     (1,003)       (3,323) 
                                    ----------  ----------  ------------ 
 
 Cash flows from financing 
  activities 
 Net proceeds from the issue 
  of 
  share capital                              -       9,325         9,250 
 Proceeds from new loan                      -         609         4,016 
 Dividends                             (1,650)     (1,015)         (820) 
 Repayment of borrowings                 (210)        (81)       (1,931) 
 Lease payments                        (2,879)           -             - 
 Payment of finance lease 
  liabilities                            (681)       (524)       (1,362) 
 New finance lease arrangements              -         712         2,590 
 Net cash from financing 
  activities                           (5,420)       9,026        11,743 
                                    ----------  ----------  ------------ 
 
 Net increase / (decrease) in 
  cash and cash equivalents            (7,037)      13,528           482 
 Cash and cash equivalents 
  at 1 January                         (7,004)     (7,486)       (7,486) 
 Cash and cash equivalents 
  at period end                       (14,041)       6,042       (7,004) 
                                    ----------  ----------  ------------ 
 
 

Anexo Group Plc

Notes to the Interim Statements

For the unaudited period ended 30 June 2019

   1.         Basis of preparation and significant accounting policies 

The condensed consolidated financial statements are prepared using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard ('IAS') 34, 'Interim Financial Reporting'.

The information for the year ended 31 December 2018 does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on these accounts was not qualified and did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.

The condensed unaudited financial statements for the six months to 30 June 2019 have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

The condensed consolidated financial statements have been prepared under the going concern assumption.

The Directors have assessed the future funding requirement of the Group, and have compared them to the levels of available cash and funding resources. The assessment included a review of current financial projections to December 2020. Having undertaken this work, the Directors are of the opinion that the Group has adequate resources to finance its operations for the foreseeable future and accordingly, continue to adopt the going concern basis in preparing the Interim Report.

New accounting standards

The Group has adopted IFRS 16 (effective 1 January 2019) in these interim financial statements (for further details see Note 7).

The results presented are after the adoption of IFRS 16 - Leases, effective 1 January 2019, which fundamentally altered the classification and measurement of operating leases for lessees, removing the distinction between operating and finance leases. The effect on the Group's reported results is to enhance gross profit as the lease costs associated with the vehicle fleet are effectively removed and replaced by an increase in depreciation and interest costs. The resulting net effect on profit before taxation is modest. A detailed reconciliation of the Group's primary financial statements is provided in Note 7 below.

   2.         Segmental Reporting 

The Group's reportable segments are as follows:

   --      the provision of credit hire vehicles to individuals who have had a non-fault accident, and 

-- associated legal services in the support of the individual provided with a vehicle by the Group and other legal service activities, and

   --      Group and central costs. 

Management monitors the operating results of business segments separately for the purpose of making decisions about resources to be allocated and of assessing performance.

Half year ended 30 June 2019

 
                                                          Group and 
                                                            Central 
                           Credit Hire   Legal Services       Costs     Consolidated 
                              GBP'000s         GBP'000s    GBP'000s         GBP'000s 
 Revenues 
 Third party                    23,197           13,520           -           36,717 
 Total revenues                 23,197           13,520           -           36,717 
                          ------------  ---------------  ----------  --------------- 
 
 Profit before taxation          8,348            2,322       (240)           10,430 
                          ------------  ---------------  ----------  --------------- 
 
 Depreciation                    3,693              348           -            4,041 
                          ------------  ---------------  ----------  --------------- 
 
 Segment assets                 89,785           40,498          97          130,380 
                          ------------  ---------------  ----------  --------------- 
 
 Capital expenditure             1,007              342           -            1,349 
                          ------------  ---------------  ----------  --------------- 
 
 Segment liabilities            31,940           15,295         280           47,515 
                          ------------  ---------------  ----------  --------------- 
 
 
 
 

Half year ended 30 June 2018

 
                                                          Group and 
                                                            Central 
                           Credit Hire   Legal Services       Costs   Consolidated 
                              GBP'000s         GBP'000s    GBP'000s       GBP'000s 
 Revenues 
 Third party                    12,865           10,723           -         23,588 
 Total revenues                 12,865           10,723           -         23,588 
                          ------------  ---------------  ----------  ------------- 
 
 Profit before taxation          3,318            3,830     (1,809)          5,338 
                          ------------  ---------------  ----------  ------------- 
 
 Depreciation                      568               38           -            606 
                          ------------  ---------------  ----------  ------------- 
 
 Segment assets                 52,894           33,750       7,569         94,213 
                          ------------  ---------------  ----------  ------------- 
 
 Capital expenditure               995              112           -          1,107 
                          ------------  ---------------  ----------  ------------- 
 
 Segment liabilities            12,873           12,686          98         25,657 
                          ------------  ---------------  ----------  ------------- 
 
 
 

Year ended 31 December 2018

 
                                                          Group and 
                                                            Central 
                           Credit Hire   Legal Services       Costs   Consolidated 
                              GBP'000s         GBP'000s    GBP'000s       GBP'000s 
 Revenues 
 Third party                    34,042           22,463           -         56,505 
 Total revenues                 34,042           22,463           -         56,505 
                          ------------  ---------------  ----------  ------------- 
 
 Profit before taxation         10,889            4,988     (1,593)         14,284 
                          ------------  ---------------  ----------  ------------- 
 
 Depreciation                    1,489               85           -          1,574 
                          ------------  ---------------  ----------  ------------- 
 
 Segment assets                 73,896           35,164       1,187        110,247 
                          ------------  ---------------  ----------  ------------- 
 
 Capital expenditure             3,005              488           -          3,493 
                          ------------  ---------------  ----------  ------------- 
 
 Segment liabilities            21,346           12,539         561         34,446 
                          ------------  ---------------  ----------  ------------- 
 
 
 
   3.         Property, Plant and Equipment 
 
                                             Fixtures, 
                                              fittings 
                                 Property            &      Motor      Office 
                              improvement    equipment   vehicles   equipment       Total 
                                 GBP'000s     GBP'000s   GBP'000s    GBP'000s    GBP'000s 
 Cost or valuation 
 At 1 January 2018                    341          308      2,234         669       3,552 
 Additions                              -          110        972          25       1,107 
 Disposals                              -            -      (103)           -       (103) 
                             ------------  -----------  ---------  ----------  ---------- 
 At 30 June 2018                      341          418      3,103         694       4,556 
 Additions                              -          376      1,973          37       2,386 
 Disposals                              -            -      (619)           -       (619) 
                             ------------  -----------  ---------  ----------  ---------- 
 At 31 December 
  2018                                341          794      4,457         731       6,323 
 Additions                              -          338        983          28       1,349 
 Disposals                              -            -      (751)        (30)       (781) 
 At 30 June 2019                      341        1,132      4,689         729       6,891 
                             ------------  -----------  ---------  ----------  ---------- 
 
 Depreciation 
 At 1 January 2018                    248          180      1,008         596       2,032 
 Charge for year                        5           28        551          22         606 
 Eliminated on disposal                 -            -          -           -           - 
                             ------------  -----------  ---------  ----------  ---------- 
 At 30 June 2018                      253          208      1,559         618       2,638 
 Charge for the 
  year                                  5           38        901          24         968 
 Eliminated on disposal                 -            -      (553)           -       (553) 
                             ------------  -----------  ---------  ----------  ---------- 
 At 31 December 
  2018                                258          246      1,907         642       3,053 
 Charge for the 
  year                                  5           84      1,086          17       1,192 
 Eliminated on disposal                 -            -      (559)        (28)       (587) 
 At 30 June 2019                      263          330      2,434         631       3,658 
                             ------------  -----------  ---------  ----------  ---------- 
 
 
 Carrying amount 
 At 30 June 2019                       78          802      2,255          98       3,233 
                             ------------  -----------  ---------  ----------  ---------- 
 
 At 31 December 
  2018                                 83          548      2,550          89       3,270 
                             ------------  -----------  ---------  ----------  ---------- 
 
 At 30 June 2018                       88          210      1,544          76       1,918 
                             ------------  -----------  ---------  ----------  ---------- 
 
 
 
   4.         Trade and Other Receivables 
 
                                    Jun-19      Jun-18     Dec-18 
                                  GBP'000s    GBP'000s   GBP'000s 
 
 Trade receivables                 193,971     163,257    165,195 
 Provision for impairment of 
  trade receivables              (104,039)   (101,996)   (89,205) 
                                ----------  ----------  --------- 
 Net trade receivables              89,932      61,261     75,990 
 Prepayments and accrued 
  income                            24,868      18,126     22,989 
 Other debtors                       2,041       1,787      2,466 
 
                                   116,841      81,174    101,445 
                                ----------  ----------  --------- 
 
 

The Group's exposure to credit and market risks, including impairments and allowances for credit losses, relating to trade and other receivables is disclosed in the financial risk management and impairment of financial assets note.

Trade receivables stated above include amounts due at the end of the reporting period for which an allowance for doubtful debts has not been recognised as the amounts are still considered recoverable and there has been no significant change in credit quality.

   5.         Borrowings 
 
 
                                              Jun-19       Jun-18       Dec-18 
                                            GBP'000s     GBP'000s     GBP'000s 
 Non-current loans and borrowings 
 Bank loans and overdrafts                         -        5,000            - 
 Obligations under finance lease 
  and hire purchase contracts                      -          491          851 
 Other borrowings                                  -           75           19 
 Lease Liabilities                             5,150            -            - 
                                               5,150        5,566          870 
                                         -----------  -----------  ----------- 
 
 Current loans and borrowings 
 Bank loans and overdrafts                    14,532        5,080       12,536 
 Revolving credit facility                     5,000            -        5,000 
 Obligations under finance lease 
  and hire purchase contracts                  2,337          997        1,640 
 Other borrowings                              2,045        1,838        2,762 
 Lease Liabilities                             4,927            -            - 
                                              28,841        7,915       21,938 
                                         -----------  -----------  ----------- 
 
 
 

The company uses an invoice discounting facility which is secured on the trade debtors of Direct Accident Management Limited. The revolving credit facility is secured by way of a fixed charge dated 25 January 2017, over all present and future property, assets and rights (including uncalled capital) of Bond Turner Limited. The loan is structured as a revolving credit facility which is committed until July 2020, with no associated repayments due before that date. Interest is charged at 3.75 per cent. over LIBOR.

   6.         Obligations under Lease and Hire Purchase Agreements 

Finance leases

The total future value of minimum lease payments under finance leases and hire purchase contracts are as follows:

 
                                  Jun-19     Jun-18     Dec-18 
                                GBP'000s   GBP'000s   GBP'000s 
 
 Not later than 1 year             7,264        997      1,640 
 Later than 1 and not later 
  than 5 years                     3,905        491        851 
 Over 5 years                      1,245          -          - 
 
                                   2,337      1,488      2,491 
                               ---------  ---------  --------- 
 
 
 
 
   7.         Effect of changes in accounting policies 

IFRS 16 Leases

A new accounting standard has been issued, IFRS 16 Leases, which replaced IAS 17 Leases, effective from 1 January 2019. The new standard fundamentally altered the classification and measurement of operating leases for lessees, removing the distinction between operating and finance leases.

This new standard has had the following impact on the Group's accounts:

-- The Group currently holds two contractual arrangements deemed to satisfy the conditions of a lease, and which do not fall into the exceptions of the standard. These are the contractual arrangements in relation to rental of the vehicle fleet and the rental of various office and other buildings.

-- Previously these leases were accounted for in the income statement on an accruals basis under IAS 17. Under the new standard, these two assets are now held on the balance sheet as "right of use" assets measured at cost (deemed to be the initial measurement of the lease liability plus any set up costs). The lease has initially been measured as the total payments required under the terms of the lease, discounted by the incremental borrowing rate (as per the contract) to account for time value of money.

-- This cost includes the lease element only, excluding any maintenance costs. Maintenance costs remain in the income statement, as under the previous treatment.

-- The payments made under the lease contracts are no longer charged to the income statement; instead they are offset against the liabilities on the balance sheet.

   --       Monthly depreciation of the assets is charged to the income statement. 

-- Interest on the liabilities, calculated at the incremental borrowing rates (vehicle fleet: 7.00%, office and other properties: 3.50%), is charged to the income statement monthly. Upon transition to IFRS 16, the Group applied the modified retrospective approach and will therefore not restate comparative information in the 2019 financial statements.

A reconciliation between the reported results for the half year ended 30 June 2019, having been adjusted for IFRS 16, and before the adjustment is provided below. As the Group has applied the modified retrospective approach there are no adjustments to the results reported for either the half year ended 30 June 2018 or the year ended 31 December 2018.

Impact of IFRS 16 on the Consolidated Statement of Comprehensive Income

Unaudited at 30 June 2019

 
 
                                                 Half year ended 
                                                           Pre IFRS 
                                 Reported      IFRS 16           16                 Year ended 
                                   Jun-19       Jun-19       Jun-19        Jun-18       Dec-18 
                                 GBP'000s     GBP'000s     GBP'000s      GBP'000s     GBP'000s 
 
 Revenue                           36,717            -       36,717        23,588       56,505 
 Cost of sales                    (7,225)      (2,573)      (9,798)       (6,880)     (16,168) 
                                ---------  -----------  -----------  ------------  ----------- 
 Gross profit                      29,492      (2,573)       26,919        16,708       40,337 
 
 Depreciation                     (1,192)            -      (1,192)         (606)      (1,574) 
 Depreciation on right 
  of use assets                   (2,849)        2,849            -             -            - 
 Administrative expenses         (13,638)        (306)     (13,944)       (8,801)     (21,594) 
 Operating profit 
  before exceptional 
  items                            11,813         (30)       11,783         7,301       17,169 
                                ---------  -----------  -----------  ------------  ----------- 
 
 Share based payment 
  charges                           (329)            -        (329)             -        (384) 
 Non-recurring administrative 
  expenses                              -            -            -       (1,438)      (1,411) 
 Operating profit                  11,484         (30)       11,454         5,863       15,374 
                                ---------  -----------  -----------  ------------  ----------- 
 
 Finance costs                      (762)            -        (762)         (525)      (1,090) 
 Lease finance costs                (292)          292            -             -            - 
 Total finance costs              (1,054)          292        (762)         (525)      (1,090) 
 
 Profit before tax                 10,430          262       10,692         5,338       14,284 
 Taxation                         (2,045)            -      (2,045)         (790)      (2,879) 
 Profit after tax                   8,385          262        8,647         4,548       11,405 
                                ---------  -----------  -----------  ------------  ----------- 
 
 Earnings per share 
  (pence) 
 Basic earnings per 
  share                               7.6          N/A          7.9           4.1         10.4 
                                ---------  -----------  -----------  ------------  ----------- 
 Diluted earnings 
  per share                           7.4          N/A          7.7           4.1         10.2 
                                ---------  -----------  -----------  ------------  ----------- 
 
 

Impact of IFRS 16 on the Consolidated Statement of Financial Position

Unaudited at 30 June 2019

 
                                                                   Pre IFRS 
                                                         IFRS 16         16 
                                       As reported   Adjustments   adoption 
 Assets                                   GBP'000s      GBP'000s   GBP'000s 
 Non-current assets 
 Property, plant and equipment               3,233             -      3,233 
 Right-of-use assets                         9,815       (9,815)          - 
                                      ------------  ------------  --------- 
                                            13,048       (9,815)      3,233 
                                      ------------  ------------  --------- 
 Current assets 
 Trade and other receivables               116,841             -    116,841 
 Cash and cash equivalents                     491             -        491 
                                           117,332             -    117,332 
                                      ------------  ------------  --------- 
 
 Total assets                              130,380       (9,815)    120,565 
                                      ------------  ------------  --------- 
 
 Equity and liabilities 
 Equity 
 Share capital                                  55             -         55 
 Share premium                               9,235             -      9,235 
 Share based payment reserve                   713             -        713 
 Retained earnings                          72,862           262     73,124 
                                      ------------  ------------  --------- 
 Equity attributable to the owners 
  of the Group                              82,865           262     83,127 
                                      ------------  ------------  --------- 
 
 Non-current liabilities 
 Other interest-bearing loans 
  and borrowings                                 -             -          - 
 Lease liabilities                           5,150       (5,150)          - 
 Deferred tax liabilities                       20             -         20 
                                             5,170       (5,150)         20 
                                      ------------  ------------  --------- 
 
 Current liabilities 
 Bank overdraft                             14,532             -     14,532 
 Other interest-bearing loans 
  and borrowings                             9,382             -      9,382 
 Lease liabilities                           4,927       (4,927)          - 
 Trade and other payables                    9,118             -      9,118 
 Corporation tax liability                   4,386             -      4,386 
                                            42,345       (4,927)     37,418 
                                      ------------  ------------  --------- 
 
 Total liabilities                          47,515      (10,077)     37,438 
                                      ------------  ------------  --------- 
 
 Total equity and liabilities              130,380       (9,815)    120,565 
                                      ------------  ------------  --------- 
 
 

Impact of IFRS 16 on the Consolidated Statement of Cash Flows

For the unaudited period ended 30 June 2019

 
 
                                                                        Pre IFRS 
                                                              IFRS 16         16 
                                            As reported   Adjustments   adoption 
                                    Note       GBP'000s      GBP'000s   GBP'000s 
 Cash flows from operating 
  activities 
 Profit for the year                              8,385           262      8,647 
 Adjustments for: 
 Depreciation and amortisation                    4,041       (2,849)      1,192 
 Financial expense                                1,054         (292)        762 
 Taxation                                         2,045             -      2,045 
                                           ------------  ------------  --------- 
                                                 15,525       (2,879)     12,646 
 Working capital adjustments 
 Increase in trade and other 
  receivables                                  (15,211)             -   (15,211) 
 Increase in trade and other 
  payables                                        2,225             -      2,225 
                                           ------------  ------------  --------- 
 Cash generated from operations                   2,539       (2,879)      (340) 
 
 Interest paid                                    (762)             -      (762) 
 Tax paid                                       (2,240)             -    (2,240) 
 Net cash from operating 
  activities                                      (463)       (2,879)    (3,342) 
                                           ------------  ------------  --------- 
 
 Cash flows from investing 
  activities 
 Proceeds from sale of property, 
  plant and equipment                               195             -        195 
 Acquisition of property, plant 
  and equipment                                 (1,349)             -    (1,349) 
 Net cash from investing 
  activities                                    (1,154)             -    (1,154) 
                                           ------------  ------------  --------- 
 
 Cash flows from financing 
  activities 
 Net proceeds from the issue 
  of 
  share capital                                       -             -          - 
 Proceeds from new loan                               -             -          - 
 Dividends                                      (1,650)             -    (1,650) 
 Repayment of borrowings                          (210)             -      (210) 
 Lease payments                                 (2,879)         2,879          - 
 Payment of finance lease 
  liabilities                                     (681)             -      (681) 
 New finance lease arrangements                       -             -          - 
 Net cash from financing 
  activities                                    (5,420)         2,879    (2,541) 
                                           ------------  ------------  --------- 
 
 Net increase / (decrease) in 
  cash and cash equivalents                     (7,037)             -    (7,037) 
 Cash and cash equivalents 
  at 1 January                                  (7,004)             -    (7,004) 
 Cash and cash equivalents 
  at period end                                (14,041)             -   (14,041) 
                                           ------------  ------------  --------- 
 
 

- Ends -

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September 10, 2019 02:00 ET (06:00 GMT)

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