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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cleardebt Grp | LSE:CLEA | London | Ordinary Share | GB0003083390 | ORD 0.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMCLEA
RNS Number : 4097Z
Cleardebt Group PLC
07 March 2013
ClearDebt Group plc
("ClearDebt" or "the Group")
Unaudited Interim Results for the six months ended 31 December 2012
ClearDebt, the AIM quoted personal debt resolution adviser, announces its Interim Results for the six months ended 31 December 2012.
We have experienced difficult trading conditions and the expected growth has not materialised during this half-year period notwithstanding the on-going high levels of personal debt in the UK. Steps are being taken to reduce our cost base for the foreseeable future and whilst new income streams have opened up the potential for an ultimate increase in future profitability, the low level of new IVAs has curbed current growth and profitability.
Financial Highlights:
Ø Revenues increased by 2% to GBP4,660,098 (2011: GBP4,551,314)
Ø EBITDA down by 32% to GBP974,119 (2011: GBP1,443,107)
Ø Profit before tax decreased by 73% to GBP123,232(2011: GBP451,648)
Operational Highlights:
Ø Decrease in number of IVAs passed to 689 (2011: 833)
Ø Now managing 7,115 IVAs and PTDs (2011: 6,111)
Ø Abacus, the Group's debt management arm, now has 7,543 (2011: 7,130) debt management plans under management.
Ø Use of ClearCash, the Group's prepaid MasterCard continues progress in attracting new clients with its new enhanced functionality and individual sort code and account number.
Outlook:
Ø Slowdown in new IVA acquisition. Actively seeking to expand referral base and reduce costs elsewhere in the business.
Ø New debt management protocol welcomed although on its introduction there may be short term pressure on income as set up fees are set to be spread over a six month period.
Ø Existing pipeline of new business indicates a slow rate of growth through to the year-end offset by the benefit of additional IVA income from payment protection mis-selling receipts expected into our IVAs as claims are processed over the coming months.
David Mond, CEO of ClearDebt commented:
"This was a disappointing and difficult half-year borne out by a continuation of the general trend of falling personal insolvency numbers in the UK over recent quarters. We have felt the effect of this with poor volumes of new IVAs passed in the period although we have increased the numbers of clients under debt management. We are however expecting increased fee income derived from mis-sold payment protection insurance claims as claims for our clients in an IVA are submitted and proceeds are received into the IVAs.
ClearCash is making progress on its new platform with its enhanced product offering proving more attractive to consumers".
7 March 2013
For further information, please contact:
Hot Features
Premium
ClearDebt Group plc David Mond, Chief Executive
Officer
Tel No: 0161 968 6806
Seymour Pierce Guy Peters, David Banks or
(Broker and Nominated Katie Ratner
Adviser) Tel No: 020 7107 8000
Chairman's Statement
I present our Interim results for the 6 months ended 31 December 2012.
The Group recorded a disappointing profit before taxation of only GBP123,232 as compared to GBP451,648 in the equivalent period last year. This was after reduced amortisation costs of GBP469,675 (2011: GBP624,330) and slightly higher interest charges of GBP303,503 (2011: GBP296,592). Earnings before interest, tax, depreciation and amortisation ("EBITDA") were also down to GBP974,119 (2011: GBP1,443,107) reflecting a difficult trading period. Despite a 2% increase in turnover to GBP4,660,098 (2011: GBP4,551,314) gross margins were reduced substantially to 41% (2011: 53%) reflecting increased marketing costs and high sales focused payroll costs spread over poor levels of new business in the period.
Although profitability has suffered in the period, cash flow has been good, with cash at 31 December 2012 standing at GBP1,406,333 as compared to GBP462,459 at 30 June 2012 as we build our reserves to repay the GBP2.3m convertible loan in April 2013.
ClearDebt - IVAs
Revenues in the division decreased by 12% to GBP2,882,478 (2011: GBP3,263,833) although EBITDA decreased by only 7% to GBP1,017,617 (2011: GBP1,092,643) due in part to continued income from consultancy services related to the IVA business. Overall profit before tax for the division fell to GBP242,793 (2011: GBP350,518).
ClearDebt approved a disappointing total of 689 (2011: 833) new IVAs in the period - a fall of 17% on the same period last year. Referrals from OFT compliant lead sources are proving harder to come by as many are increasingly restricted to fewer legitimate data sources driving prices up in some cases but mainly reducing the volumes of referrals. Clients' average monthly disposable income continues to fall as their incomes are static at best and they suffer continued rises in food and energy costs which in turn reduces the IVA fees charged under the protocol.
We continue to seek to expand our compliant referral base and look for new referral sources. As at 31 December 2012 ClearDebt had 7,115 IVA and protected trust deed clients (2011: 6,111).
Abacus - DMPs
The Abacus debt management division and our group sales operations made a loss before tax of GBP119,561 against a profit in 2011 of GBP101,130. Revenues in the half year increased to GBP1,777,620 (2011: GBP1,287,481) mainly due to income from PPI mis-selling, however this was more than offset by high call centre payroll costs and marketing costs which produced disappointing levels of business particularly for IVA but also for DMPs.
After the period end the Insolvency Service announced a Debt Management protocol which we welcome and should enable plans to be more sustainable in the long term and ultimately benefit consumers and creditors alike. Whilst the spreading of set up fees over the first six months of the plan may affect short term profitability we expect that reputable providers, such as ourselves, who offer protocol compliant debt management plans, will see an increased demand as debtors seek such providers out.
As at 31 December 2012 Abacus is managing a total of 7,543DMPs (2011: 7,130).
ClearCash prepaid MasterCard -
The completion of the migration progress for existing ClearCash cardholders to a new provider was successfully completed in the period and although we have incurred one off costs of some GBP32,500 we are already seeing the benefits of the improved functionality that the new card platform provides including the ability to offer direct debits, individual account numbers and sort codes as well as credit building capabilities. This additional functionality gives the ClearCash prepaid MasterCard most of the functionality that is seen of a traditional bank account, on a pay per transaction basis or pay monthly basis, which importantly does not allow cardholders to inadvertently go overdrawn, often saving cardholders from incurring substantial charges from traditional bank accounts.
We have seen a positive effect on new client recruitment since the new platform and functionality was introduced and from the July 2012 launch to 31 December 2012 we have received 7,799 card applications. This compares favourably with a total of 9,679 for the old card from launch in May 2009 until migration in July 2012.
We continue to see the ClearCash offering as an integral service opportunity for our clients, especially for those who have difficulty accessing traditional bank accounts due to their poor credit status.
Outlook
In the absence of any major new lead sources the short term outlook for the rest of the year in terms of new client recruitment, particularly in respect of IVAs, looks poor. This will impact profitability but have little short term impact on cash flow which is largely driven by revenue from the existing back books of clients. Despite this we are confident of achieving a profit for the full year, particularly as we start to see the benefit of additional fees related to the receipts of PPI mis-selling claims which are starting to be received for our IVA clients.
We continue to conserve cash and cut costs wherever possible as we approach April when the convertible loans will be repaid from our cash reserves and additional funding which David Mond has made available should it be required.
As part of the Board's review of costs in the business we have reluctantly come to the conclusion that the not insignificant financial costs of maintaining the Group's AIM listing together with the senior management time involved can no longer be justified and we have today published notice of our intention to cancel our AIM listing. We have been unable to obtain funding from the AIM markets for some time now and we see no prospect of doing so in the near future due to our low market capitalisation and our business sector and continue to rely on funding from our main shareholder in order to make acquisitions and finance the business. We intend to put in place a matched bargain facility for shareholders who wish to buy or sell the Group's shares once we have delisted. We will write to shareholders with details of how the facility will operate once it is finalised.
Gerald Carey FCIB
7 March 2013
ClearDebt Group plc 6 Months 6 Months Year
Consolidated Income Statement ended ended ended
31 December 2012 31 December 2011 30 June 2012
Unaudited Unaudited Audited
Note GBP GBP GBP
Revenue 4 4,660,098 4,551,314 9,203,453
Cost of sales (2,728,576) (2,157,930) (4,525,379)
__________ __________ __________
Gross profit 1,931,522 2,393,384 4,678,074
Administrative expenses (924,331) (910,999) (1,854,384)
Share based payment (33,072) (39,278) (85,723)
__________ __________ __________
Profit before interest, tax,
depreciation and amortisation 974,119 1,443,107 2,737,967
Depreciation (82,390) (71,427) (147,490)
Amortisation (469,675) (624,330) (1,199,481)
Gain on bargain purchase - - 27,089
_________ __________ __________
Profit from operations 422,054 747,350 1,418,085
Finance costs (303,503) (296,592) (585,611)
Finance income 4,681 890 2,284
_________ __________ __________
Profit before taxation 123,232 451,648 834,758
Taxation 6 (36,006) (117,429) (243,501)
_________ __________ __________
Profit after taxation for period 87,226 334,219 591,257 _________ __________ __________
Earnings per ordinary share -
basic (pence) 5 0.03p 0.11p 0.19p
Earnings per ordinary share -
diluted (pence) 5 0.03p 0.11p 0.19p
The results for the period are derived from continuing activities.
ClearDebt Group plc As at As at As at
Consolidated Statement of Financial 31 December 31 December 30 June
Position 2012 2011 2012
Unaudited Unaudited Audited
GBP GBP GBP
Assets
Non-current assets
Intangible assets 5,229,700 6,140,598 5,626,779
Property, plant and equipment 457,668 341,742 375,593
Deferred taxation 72,034 78,188 72,034
------------- -------------- ------------
5,759,402 6,560,528 6,074,406
Current assets
Trade receivables 2,491,540 2,026,641 2,669,662
Other receivables 664,193 294,616 759,216
Cash and cash equivalents 1,406,333 625,324 462,459
------------- -------------- ------------
4,562,066 2,946,581 3,891,337
Total assets 10,321,468 9,507,109 9,965,743
============= ============== ============
Equity and liabilities
Issued capital 6,166,812 6,166,812 6,166,812
Share premium account 279,948 279,948 279,948
Share based compensation 322,107 242,590 289,035
Other reserves 96,495 96,495 96,495
Retained losses (917,502) (1,261,766) (1,004,728)
Total equity 5,947,860 5,524,079 5,827,562
Current liabilities
Trade and other payables 940,569 749,660 912,166
Corporation tax payable 309,159 210,091 263,970
Current financial liabilities 2,768,327 - 2,597,306
------------- -------------- ------------
4,018,055 959,751 3,773,442
Non-current liabilities
Financial liabilities 315,000 2,956,615 315,000
Deferred taxation 40,553 66,664 49,739
------------- -------------- ------------
Total liabilities 4,373,608 3,983,030 4,138,181
------------- -------------- ------------
Total equity and liabilities 10,321,468 9,507,109 9,965,743
============= ============== ============
6 Months 6 Months Year
ClearDebt Group plc ended ended ended
Consolidated Statement of Cash 31 December 31 December 30 June
flows 2012 2011 2012
Unaudited Unaudited Audited
GBP GBP GBP
Cash flow from continuing operating
activities
Profit before taxation 123,232 451,648 834,758
Depreciation of property, plant
and equipment 82,390 71,427 147,490
Amortisation of intangible assets 469,675 624,330 1,199,481
Gain on bargain purchase - - (27,089)
Profit on sale of fixed assets - - (1,739)
Share based payment 33,072 39,278 85,723
Decrease/(increase) in trade and
other receivables 273,142 (139,298) (1,246,980)
Finance costs 303,503 296,592 585,611
Finance income (4,681) (890) (2,284)
Increase in trade and other payables 27,341 50,462 213,973
------------------------- ------------- ------------
Cash generated by operations 1,307,674 1,393,549 1,788,944
Corporation tax payment - - (91,995)
Interest paid loans (131,538) (157,341) (291,614)
--------------------- ------------- ------------
Net cash generated by operating
activities 1,176,136 1,236,208 1,405,335
Investing activities
Acquisition of business and assets - - (267,080)
Acquisition of intangibles (72,596) (288,238) (46,370)
Acquisition of property, plant
and equipment (164,347) (160,172) (270,085)
Finance income 4,681 890 2,284
Sale of property, plant and equipment - - 1,739
-------------------------
Net cash used in investing activities (232,262) (447,520) (579,512)
Financing activities
Repayment of existing loans - (500,000) (700,000)
Cash used in financing activities - (500,000) (700,000)
------------------------- ------------- ------------
Increase in cash and cash equivalents 943,874 288,688 125,823
Opening cash and cash equivalents 462,459 336,636 336,636
------------------------- ------------- ------------
Closing cash and cash equivalents 1,406,333 625,324 462,459
============= ============
ClearDebt Group Share Total
plc Issued premium Share based Other Retained
Consolidated Statement Capital account compensation Reserves losses
of Changes in Equity
GBP GBP GBP GBP GBP GBP
Balance at 1 Jul
2011 6,166,812 279,948 203,312 96,495 (1,595,985) 5,150,582
Share based compensation - - 39,278 - - 39,278
Profit for the period - - - - 334,219 334,219
Balance at 31 Dec
2011 6,166,812 279,948 242,590 96,495 (1,261,766) 5,524,079
Share based compensation - - 46,445 - - 46,445
Profit for the period - - - - 257,038 257,038
As at 1 Jul 2012 6,166,812 279,948 289,035 96,495 (1,004,728) 5,827,562
Share based compensation - - 33,072 - - 33,072
Profit for the period - - - - 87,226 87,226
Balance at 31 Dec
2012 6,166,812 279,948 322,107 96,495 (917,502) 5,947,860
=========== ========= ============== ========== ============= ===========
Notes to the Interim Financial Statements
1. General information
The Group's interim financial information consolidates the results of ClearDebt Group plc and its subsidiary companies made up to 31 December 2012. The Group's functional currency is the GBP Sterling.
ClearDebt Group plc is a limited liability company incorporated and domiciled in England and Wales whose shares have been admitted to trading on AIM, a market operated by the London Stock Exchange.
2. Accounting policies and basis of preparation
This interim financial information does not constitute statutory accounts as defined by 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 30 June 2012, which have been prepared in accordance with IFRSs as adopted by the European Union. The Group's statutory accounts for the year ended 30 June 2012 have been delivered to the Registrar of Companies.
The report of the auditors was modified in relation to revenues of GBP1,307,992 which were reported in the Group financial statements for the year ended 30 June 2012 (2011: GBP361,341) for consultancy services provided to a corporate entity which in the auditors opinion was a related party under the definitions of IAS 24 "Related Party Disclosures". In respect of these revenues, they were not able to obtain sufficient appropriate evidence as to:
1) the substance of the services provided; or
2) whether the amounts recognised have been correctly stated and/or recognised in the correct accounting period, or in accordance with the terms of the contract which, we are informed, governs these revenues.
The Group has not applied IAS 34, Interim Financial Reporting, which is not mandatory for UK Groups, in the preparation of these interim financial statements.
The preparation of the interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors, such as expectations of future events and are believed to be reasonable under the circumstances. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the audited consolidated financial statements for the year ended 30 June 2012.
The interim financial statements have been prepared using the same accounting policies and estimation techniques as will be adopted in the Group financial statements for the year ending 30 June 2013. The Group financial statements for the year ended 30 June 2012 were prepared under International Financial Reporting Standards as adopted by the European Union.
The intangible insolvency assets are being amortised over four years which the directors have selected to approximate as closely as possible to the period over which it is estimated that the vast majority of income will be received.
3. Going Concern
The Group manages its cash requirements through its existing cash resources and operating cash flows. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current resources. The timing of the cash flows in respect of loans provided has been taken into consideration and David Mond has provided the Board with an undertaking of support in the event that the Group should require additional finance.
Consequently, after making enquires, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the interim financial statements.
4. Segmental Information
The Group's total income, profit before taxation and net assets were all derived from its principal activities being the provision of IVA and other financial advice and appropriate solutions to individuals experiencing personal debt problems. All the Group's activities were undertaken wholly in the United Kingdom.
Debt
6 months to 31 December Insolvency Management Total
2012
GBP GBP GBP
Revenue 2,882,478 1,777,620 4,660,098
Cost of sales (1,198,146) (1,530,430) (2,728,576)
Gross profit 1,684,332 247,190 1,931,522
Administrative expenses (646,311) (278,020) (924,331)
Share based payment (20,404) (12,668) (33,072)
Profit/(loss) before interest,
tax,
depreciation and amortisation 1,017,617 (43,498) 974,119
Depreciation (67,028) (15,362) (82,390)
Amortisation (469,675) - (469,675)
Profit/(loss) from operations 480,914 (58,860) 422,054
Finance costs (242,802) (60,701) (303,503)
Finance income 4,681 - 4,681
Profit/(loss) before taxation 242,793 (119,561) 123,232
Taxation (70,939) 34,933 (36,006)
Profit/(loss) after taxation
for period 171,854 (84,628) 87,226
4. Segmental Information (continued)
Debt
6 months to 31 December 2011 Insolvency Management Total
GBP GBP GBP
Revenue 3,263,833 1,287,481 4,551,314
Cost of sales (1,527,079) (630,851) (2,157,930)
Gross profit 1,736,754 656,630 2,393,384
Administrative expenses (622,897) (288,102) (910,999)
Share based payment (21,214) (18,064) (39,278)
Profit before interest, tax,
depreciation and amortisation 1,092,643 350,464 1,443,107
Depreciation (47,397) (24,030) (71,427)
Amortisation (492,217) (132,113) (624,330)
Profit from operations 553,029 194,321 747,350
Finance costs (203,401) (93,191) (296,592)
Finance income 890 - 890
Profit before taxation 350,518 101,130 451,648
Taxation (83,095) (34,334) (117,429)
Profit after taxation for
period 267,423 66,796 334,219
4. Segmental Information (continued)
Debt Management
Year ended 30 June 2012 Insolvency Total
GBP GBP GBP
Revenue 6,291,276 2,912,177 9,203,453
Cost of sales (2,796,908) (1,728,471) (4,525,379)
Gross profit 3,494,368 1,183,706 4,678,074
Administrative expenses (1,174,368) (680,016) (1,854,384)
Share based payment (47,310) (38,413) (85,723)
Profit before interest, tax,
depreciation and amortisation 2,272,690 465,277 2,737,967
Depreciation (106,183) (41,307) (147,490)
Amortisation (1,031,677) (167,804) (1,199,481)
Gain on bargain assets 27,089 - 27,089
Profit from operations 1,161,919 256,166 1,418,085
Finance costs (468,489) (117,122) (585,611)
Finance income 2,284 - 2,284
Profit before taxation 695,714 139,044 834,758
Taxation (178,059) (65,442) (243,501)
Profit after taxation for
period 517,655 73,602 591,257
4. Segmental Information (continued)
6 months ended
6 months ended As at Year ended
31 Dec 2012 31 Dec 2011 30 Jun 2012
GBP GBP GBP
Capital expenditure to acquire
intangible assets
Insolvency 72,596 288,238 349,569
Debt management - - -
72,596 288,238 349,569
Capital expenditure to acquire
property, plant and equipment
Insolvency 142,349 146,711 240,240
Debt management 21,998 13,461 29,845
164,347 160,172 270,085
Depreciation of property,
plant and equipment
Insolvency 67,029 47,397 106,183
Debt management 15,361 24,030 41,307
82,390 71,427 147,490
Amortisation of intangible
assets
Insolvency 469,675 492,217 1,031,677
Debt management - 132,113 167,804
469,675 624,330 1,199,481
5. Earnings per ordinary share
6 Months
ended 6 Months ended Year ended
31 December 31 December 30 June
2012 2011 2012
Unaudited Unaudited Audited
GBP GBP GBP
Profit attributable to equity
holders of parent 87,226 334,219 591,257
Weighted average number of
shares in issue - basic 308,340,567 308,340,567 308,340,567
Weighted average number of
shares in issue - diluted 308,340,567 308,340,567 308,340,567
Earnings per share - basic
(pence) 0.03 0.11 0.19
Earnings per share - diluted
(pence) 0.03 0.11 0.19
The weighted average number of ordinary shares for calculating the diluted earnings per share above is identical to those for the basic earnings per share. This is because the outstanding share warrants, share options and potential shares issued under the convertible loan would not be dilutive under the terms of International Accounting Standard ("IAS") 33.
6. Taxation
6 Months ended 6 Months ended Year Ended
31 December 31 December 30 June
2012 2011 2012
GBP GBP GBP
Analysis of current year
Current tax
UK corporation tax due 45,192 117,429 264,637
Over provision from prior
years - - (667)
Deferred tax
Temporary differences, origination
and reversal (9,186) - (20,469)
Tax on profit for the period 36,006 117,429 243,501
7. The Board of Directors approved the interim report on 7 March 2013. A copy of this Interim Statement is being sent to shareholders and copies are available for download by visiting our website at www.cleardebtgroup.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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