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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Culver Hldgs | LSE:CVE | London | Ordinary Share | GB00B0CQFY41 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 75.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Culver Holdings PLC
29 August 2008
Culver Holdings plc
Half-yearly financial report for the period to 30 June 2008
INTERIM MANAGEMENT STATEMENT
Chairman's statement
The results for the six months to 30 June 2008 are attached and reflect a period of considerable change for the Group with the
acquisition of the Lloyd's insurance broker LPH Pitman Limited and 81% of the specialist aviation broker AMS Corporate Risks in February and
the disposal of Culver Insurance Brokers Limited, the Group's retail insurance broking subsidiary announced in June. These transactions have
been detailed in previous announcements, a circular to shareholders and the Group's Report and Financial Statements for 2007.
The results show a profit for the period of £604,000 (2007: £20,000) on turnover of £606,000 (2007 - restated: £353,000). The
restatement is a result of the disposal of Culver Insurance Brokers Limited as required by IFRS 5 and means that the turnover of that
business is excluded for both the current period and for the comparatives and its results are reflected by a single line entry of
"discontinued activities" which, for the current period, includes the gain on disposal of £1,448,000.
TRADING SUMMARY - CONTINUING ACTIVITIES
The continuing activities of the Group are now insurance broking, which comprises Lloyd's, wholesale and speciality insurance broking,
and employee benefits.
Insurance Broking
The business comprises the professional indemnity and trade credit specialist teams which were recruited in the second half of last year
and the specialist aviation team and wholesale broking teams added through the acquisition of AMS Corporate Risks Limited and LPH Pitman
Limited in February 2008. Fees and commissions in the insurance broking segment's continuing activities were £212,000 (2007: Nil - restated)
and the activities showed a loss of £258,000 (2007: Nil - restated).
As previously referred to, the development of the business of the teams recruited last year was initially hampered by the delay in
direct access to the Lloyd's market and as I stated in the circular to shareholders dated 11 July 2008, the development of income in these
businesses has been slower than anticipated. The business of AMS has continued at more or less the levels of last year in US dollar terms,
but has disappointed as a result of the weakness of the US dollar relative to Sterling.
Over the last three months, management has taken a number of actions to bring the costs of these businesses more into line with likely
revenues.
A number of initiatives are also being pursued to increase the volume of business transacted. As a result of these, the Group has
started supplying a travel insurance product underwritten in the London market to a distributor in Kuwait. It is now investigating the
possibilities of supplying that product to other distributors in the Middle East region and of supplying other products underwritten in the
London market to the region.
The board is monitoring the development of this segment closely and anticipates a better result for the second half of the year.
Employee Benefits
The turnover of the employee benefits segment in the period increased slightly to £394,000 (2007: £353,000) and showed a slightly
increased loss of £25,000 (2007: 14,000).
The market for the products and advice offered by the Group has weakened over the first half of the year and, against this background,
it is perhaps understandable that the quite ambitious targets set have not been achieved. An additional factor in restricting the income
growth in the current year has been the decision made by management to accept lower initial commissions where clients wish to have an
on-going service for which the Group will earn commissions in subsequent years.
A number of additional advisers were recruited in the latter months of 2007 and, following the completion of training and induction have
begun to generate revenue and are now generally approaching acceptable monthly income levels. Management has re-emphasised to advisers the
relationship between the Group's remuneration and theirs.
The Group has a considerable list of clients who are not currently active with the Group and are not being serviced. Following the
installation of the new management information system and the establishment of the funds under influence, management considers that there is
a good base for continued revenue growth and, as recurring income from the Group's service proposition develops, an increase in its
visibility.
DISCONTINUED ACTIVITIES
Discontinued activities comprise the retail insurance broking business of Culver Insurance Brokers Limited which has been sold as
described in the circular dated 11 July 2008. The sale arose from an unsolicited approach by Cullum Capital Ventures Limited, a so-called
"consolidator" in the retail insurance broking sector and was completed at a price of £4 million together with a payment to be received in
respect of the net assets sold. The net assets payment as calculated for the purposes of the sale agreement is, subject to final agreement,
£312,000 although, pending resolution of the claim referred to in Note 15 of the condensed financial statements, £150,000 of this will be
paid into an escrow account.
In addition, an amount of deferred consideration may become receivable dependent on the income of the business sold over the 12 months
following completion, although the board, as they have no control over the business now, are not anticipating any amount of this sort.
The board continues to be convinced that CIB was more valuable to CCV than it was to the Group.
The turnover of this business represented over three quarters of the Group's turnover last year and its result for the first six months
of the year, which is amalgamated with the gain on disposal in the income statement, were close to the board's expectations in a tough
environment.
PROSPECTS
The significant changes in the Group's business during 2008 are still being absorbed and the outturn for the full year is not clear
although the performance of each of the business segments is capable of delivering improvement through the second half and 2009. The
principal risks and uncertainties facing the Group's businesses in the second six months of 2008 are detailed below this statement.
The key driver of Group profitability is sales and the challenge into the future is, as it has always been, to increase both revenue per
producer and the number of production staff in both segments.
The Group as a whole has reduced its overheads significantly from the levels of last year and the first half of 2008 but, with the
obligations of the Company's shares being listed on the London Stock Exchange, it is unlikely that trading in the second half will support
that overhead without the recruitment of further productive personnel and/or the creation of new business streams.
Once more, while I remain confident that in due course the benefits of our current strategy will be realised to the benefit of
shareholders, it is probable that there is still some pain to bear in the short term.
RMH Read
Chairman
29 August 2008
PRINCIPAL RISKS AND UNCERTAINTIES
New business risk
The Group's development in the employee benefit segment and in the areas of the insurance broking segment started in the second half of
2007 is dependent on winning new business. With the weakening of economies seen over the last year, the Group has already observed greater
difficulty in achieving new business and this may adversely impact on results in the second half. In addition, the ability to win new
business is dependent on the abilities of a relatively small number of staff, some of whom are only recently employed. The achievement of
new business is also therefore dependent on the retention of key established members of staff and upon newly recruited staff producing in
line with management's expectations. Additional development will require the recruitment of further suitable production personnel and this
is inevitably an uncertainty.
Foreign exchange rates
The Group's aviation specialist business transacts most of its business and earns most of its income in US dollars. A weakening of the
US dollar against sterling would adversely impact the Group's revenue but not reduce the cost base of this business. A strengthening would
have a converse effect.
Liquid resources
The Group is continuing to invest in the development of its businesses. The group has no borrowings or facilities at the current time
and, if the Group is unable to arrange a facility on acceptable terms, this may constrain the group's ability to develop.
Regulatory risk
The Group is subject to financial services laws, regulations, administrative actions and policies in the UK. Changes during the second
half of 2008 in the regulatory and supervisory framework in the UK could materially affect the Group's business.
Litigation risk
The outcome of existing and future legal actions, claims against and by the Group and arbitrations could affect the financial
performance of the Group in the second half of 2008. CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
Condensed unaudited consolidated interim income statement
Note Six months ended 30 June
2008 2007
(restated)
£'000 £'000
Fees and commissions 606 353
Direct broking expenses (466) (104)
Administrative expenses (882) (348)
Operating loss (742) (99)
Finance costs - net 8 (102) (69)
Loss on ongoing activities before income tax (844) (168)
Income tax expense - -
Loss for the period on ongoing activities
(844) (168)
Gain on discontinued activities 1,448 188
Profit for the period 604 20
Attributable to:-
Equity holders of the Company
606 20
Minority interests (2) -
Total recognised income and expense for the 604 20
period
(Loss)/Earnings per share for profit
attributable to the equity holders of the
Company during the period expressed in pence
per share
- Basic from continuing operations 9(a) (362.9) (73.4)
- Basic from continuing and discontinued 9(c) 261.2 8.7
operations
- Diluted from continuing operations 9(d) (362.9) (73.4)
- Diluted from continuing and discontinued 9(f) 98.4 7.3
operations
The attached notes are an integral part of these consolidated interim financial statements.
Condensed unaudited consolidated interim balance sheet
31 December
30 June 2008 30 June 2007 2007
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 52 82 91
Goodwill 519 2,115 2,115
Financial receivables 7 7 7
578 2,204 2,213
Current assets
Trade and other receivables 10 4,321 2,454 2,022
Cash and cash equivalents 11 220 1,502 789
4,541 3,956 2,811
Total assets 5,119 6,160 5,024
EQUITY
Capital and reserves
attributable to equity holders
Share capital 12 2,862 2,859 2,859
Share premium 4,415 4,403 4,403
Other reserves 48 48 48
Retained earnings (7,842) (7,790) (8,448)
(517) (480) (1,138)
Minority interests 19 - 21
Total equity (498) (480) (1,117)
LIABILITIES
Non-current liabilities
Non-current borrowings 737 690 757
Retirement benefit obligations - 27 -
Non-current provisions 14 107 8 -
844 725 757
Current liabilities
Trade and other payables 13 2,416 4,806 4,316
Current borrowings 2,142 881 789
Current portion of non-current 78 151 236
borrowings
Current income tax liabilities 3 6 9
Current provisions 14 134 71 34
4,773 5,915 5,384
Total liabilities 5,617 6,640 6,141
Total equity and liabilities 5,119 6,160 5,024
The attached notes are an integral part of these consolidated interim financial statements.
Condensed unaudited consolidated interim statement of changes in shareholders' equity
Attributable to equity holders of the Company
Share Share Other Retained Minority Total
Capital Premium Reserves earnings Interest Equity
£*000 £*000 £*000 £*000 £*000 £*000
Balance at 1 January 2007 2,859 4,403 48 (7,810) - (500)
Profitfor the period - - - 20 - 20
Balance at 30 June 2007 2,859 4,403 48 (7,790) - (480)
Balance at 1 July 2007 2,859 4,403 48 (7,790) - (480)
Lossfor the period - - - (658) 21 (637)
Balance at 31 December 2007 2,859 4,403 48 (8,448) 21 (1,117)
Balance at 1 January 2008 2,859 4,403 48 (8,448) 21 (1,117)
Conversion of loan stock 3 12 - - - 15
Profitfor the period - - - 606 (2) 604
Balance at 30 June 2008 2,862 4,415 48 (7,842) 19 (498)
The attached notes form an integral part of this Condensed unaudited consolidated interim financial information.
Condensed unaudited consolidated interim cash flow statement
Six months ended 30 June
Note 2008 2007
Continuing Discontinued Continuing Discontinued
Activities Activities Activities Activities
£'000 £'000 £'000 £'000
Cash flows from operating
activities
Cash (absorbed by)/generated 16 (882) (185)
from operations (278) 652
Interest paid (42) (29) (37) (15)
Taxation paid - (7) - -
Net cash (absorbed (924) (221) (315) 637
by)/generated from operating
activities
Cash flows from investing
activities
Acquisitions (net of cash 61 - - -
acquired)
Purchases of property, plant (8) (2) (3) (52)
and equipment (PPE)
Proceeds from sale of 38 - - -
investments
Interest received 3 20 - 30
Net cash generated from/(used 94 18 (3) (22)
in) investing activities
Cash flows from financing
activities
Decrease/(increase) in group (256) 256 454 (454)
loans
Proceeds from borrowings 894 600 - 40
Repayments of borrowings (58) (156) (20) (149)
Cash in companies leaving the - (1,279) - -
group
Net cash flows from financing 580 (579) 434 (563)
activities
Net (decrease)/increase in (250) (782) 116 52
cash and cash equivalents
Cash and cash equivalents at (745) 782 (879) 1,451
beginning of period
Cash and cash equivalents at 11 (995) - (763) 1,503
end of period
Group cash and cash equivalents in continuing activities include amounts of £195,000 (2007 - £Nil in continuing, £954,000 in
discontinued) in respect of balances held in trust which are not available for use by the Group.
Selected notes to the Condensed unaudited consolidated interim financial information
1. General information
Culver Holdings plc (the Company) and its subsidiaries (together 'Culver Holdings' or 'the Group') provide a full range of insurance
broking and employee benefits and independent financial advisory services to businesses and high net worth individuals in the UK and other
parts of the world.
The Company is a limited liability company incorporated and domiciled in the UK. The address of its registered office is Llanmaes, St
Fagans, Cardiff CF5 6DU.
The Company has its primary listing on the London Stock Exchange.
This Condensed unaudited consolidated interim financial information was approved for issue on 29 August 2008.
2. Basis of preparation
This Condensed unaudited interim financial information for the half year ended 30 June 2008 has been prepared in accordance with IAS 34,
'Interim financial reporting'. The interim Condensed unaudited financial report should be read in conjunction with the annual financial
statements for the year ended 31 December 2007. The comparative figures in the income statement have been restated to reflect activities
that have been discontinued.
The comparative figures for the financial year ended 31 December 2007 are not the company's statutory accounts for that year. Those
accounts have been reported on by the company's auditors and delivered to the registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not contain a reference to any matters to which the auditors drew attention by emphasis of matter without qualifying
their report, and (iii) did not contain any statement under Section 237 of the Companies Act 1985.
3. Accounting policies
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2007, as
described in the annual financial statements for the year ended 31 December 2007.
4. Insurance broking assets and liabilities
Subsidiaries of the Company act as agents in broking the insurable risks of their clients and are generally not liable as principal for
premiums due to underwriters or for claims payable to clients. Notwithstanding the legal relationship with clients and underwriters and
since, in practice, premium and claim monies are usually accounted for by insurance intermediaries, the Group has followed generally
accepted accounting practice by showing cash, debtors and creditors relating to insurance business as gross assets and liabilities of the
Group itself.
Separate balances are maintained and are included in the respective trade receivables and payables balances where the Group transacts
business with a party in more than one capacity.
5. Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the
balance sheet.
Cash and cash equivalents includes cash received from insurance-broking clients and insurers referred to in note 4 above and held within
a number of non-statutory trusts for the benefit of the clients and insurers so entitled.
6. Provisions
Provisions for pensions review, unpaid salaries and other claims are recognised when: the Group has a present legal or constructive
obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation;
and the amount has been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item
included in the same class of obligations may be small.
Provisions are measured at management's best estimate of the expenditure required to settle the obligation at the balance sheet date.
Amounts of consideration which are or may become payable at a date after the balance sheet date in respect of business acquisitions
prior to the balance sheet date are recognised at their maximum contractual amount (or, where there is no maximum, management's best
estimate thereof at the time of the acquisition).
7. Segment information
At 30 June 2008, the Group is organised into two main business segments, insurance broking; and employee benefits including the
provision of independent financial advice.
There is no secondary reporting format for the Group. All Group income arose in the United Kingdom.
The segment results for the six months ended 30 June 2008 are as follows:
Continuing activities Discontinued
Insurance Employee Unallocated Group Insurance broking
broking benefits
£'000 £'000 £'000 £'000 £'000
Fees and commissions 212 394 - 606 779
Direct broking expenses (289) (177) - (466) (367)
Administrative expenses (184) (237) (461) (882) (397)
Operating (loss)/ profit (261) (20) (461) (742) 15
Finance costs - net 3 (5) (100) (102) (9)
(Loss)/profit (258) (25) (561) (844) 6
Gain on discontinued - - - 1,448 -
activities (note 15)
(Loss)/profit before tax (258) (25) (561) 604 6
Depreciation of tangible fixed 3 2 12 8
assets 7
Capital expenditure - 1 7 8 2
Segment assets 1,735 454 2,930 5,119
Segment liabilities (2,145) (934) (2,538) (5,617)
Net (liabilities)/assets (410) (480) 392 (498)
The segment results for the six months ended 30 June 2007 were as follows:
Continuing activities Discontinued
Employee Insurance Total
benefits Group broking
Unallocated
£'000 £'000 £'000 £'000 £'000
Fees and commissions 353 - 353 1,514 1,867
-
Direct broking expenses (104) - (104) (419) (523)
Administrative expenses (256) (92) (348) (923) (1,271)
Operating (loss)/profit (7) (92) (99) 172 73
Finance costs - net (7) (62) (69) 16 (53)
(Loss)/Profit before income (14) (168) 188 20
tax (154)
Depreciation of tangible fixed 2 2 12 14
assets -
Capital expenditure 4 - 4 52 56
Segment assets 91 1,526 1,617 4,543 6,160
Segment liabilities (426) (1,758) (2,184) (4,456) (6,640)
Net (liabilities)/assets (335) (232) (567) 87 (480)
Unallocated costs represent corporate expenses together with investment income and finance costs.
Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be available
to unrelated third parties.
There were no continuing insurance broking activities during the six month period ended 30 June 2007.
8. Finance costs - net
Six months ended 30 June
2008 2007
£'000 £'000
Interest expense:-
Bank borrowings (39) (33)
Hire purchase (1) -
Other loans (34) (5)
Loan stock (28) (28)
Unwinding of interest on Loan Stock (5) (3)
(107) (69)
Interest income:-
Bank deposits 5 -
Finance costs - net (102) (69)
9. Earnings per share
(a) Basic from continuing operations
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the period.
30 June
2008 2007
£'000 £'000
Continuing
Loss on continuing operations (844) (168)
Attributable to minority interests 2 -
Loss attributable to equity holders of the Company on (842) (168)
continuing operations
Weighted average number of ordinary shares in issue 232 229
(thousands)
Loss per share on continuing operations (pence per share) (362.9) (73.4)
(b) Basic from discontinued operations
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the period.
30 June
2008 2007
£'000 £'000
Discontinued
Profit attributable to equity holders of the Company on 1,448 188
discontinued operations
Weighted average number of ordinary shares in issue (thousands) 232 229
Earnings per share on discontinued operations (pence per share) 624.1 82.1
(c) Basic from continuing and discontinued operations
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the period.
30 June
2008 2007
£'000 £'000
Continuing and discontinued
Profit for the period 604 20
Attributable to minority interests 2 -
Profit attributable to equity holders of the Company 606 20
Weighted average number of ordinary shares in issue 232 229
(thousands)
Earnings per share on discontinued operations (pence per 261.2 8.7
share)
(d) Diluted from continuing operations
Diluted earnings per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of
all dilutive potential ordinary shares. The Company has four categories of dilutive potential ordinary shares:
(i) Warrants
(ii) Share options
(iii) Convertible Loan Stock 2009
(iv) Convertible Loan Stock 2011
The exercise of the share options and certain of the warrants is conditional and any dilutive effect has been ignored. Any conversion of
the remaining warrants or the convertible loan stock 2009 would have an anti-dilutive effect on earnings per share.
The calculation is performed for the convertible loan stock 2011 to determine the number of shares that could have been acquired based
on the conversion rights attached to that stock. The number of shares calculated as above is compared with the number of shares that would
have been issued assuming the conversion of the Loan Stock.
30 June
Continuing
2008 2007
£'000 £'000
Loss on continuing operations (844) (168)
Attributable to minority interests 2 -
Effect of conversion of loan stock 26 26
Profit attributable to equity holders of the Company (142)
(diluted) (816)
Weighted average number of ordinary shares in issue 229
(thousands) 232
Effect of conversion of loan stock (thousands) 410 405
Weighted average number of ordinary shares for diluted 634
earnings per share (thousands) 642
Diluted earnings per share (pence per share) (127.1) (22.4)
* The Basic earnings per share is shown as the calculation would reduce the loss per share.
(e) Diluted from discontinued operations
30 June
Discontinued
Note 2008 2007
£'000 £'000
Profit attributable to equity holders of the Company on 1,448 188
discontinued operations
Effect of conversion of loan stock 26 26
Profit attributable to equity holders of the Company 214
(diluted) 1,474
Weighted average number of ordinary shares in issue 229
(thousands) 232
Effect of conversion of loan stock (thousands) 410 405
Weighted average number of ordinary shares for diluted 634
earnings per share (thousands) 642
Diluted earnings per share (pence per share) 229.6 33.8
(f) Diluted from continuing and discontinued operations
30 June
Continuing and discontinued
2008 2007
£'000 £'000
Profit for the period 604 20
Attributable to minority interests 2 -
Effect of conversion of loan stock 26 26
Profit attributable to equity holders of the Company 46
(diluted) 632
Weighted average number of ordinary shares in issue 229
(thousands) 232
Effect of conversion of loan stock (thousands) 410 405
Weighted average number of ordinary shares for diluted 634
earnings per share (thousands) 642
Diluted earnings per share (pence per share) 98.4 7.3
10. Trade and other receivables
Note 2008 2007
£'000 £'000
Insurance receivables 4 1,453 2,122
Allowance for credit losses on trade receivables (63) (25)
Purchase consideration 2,576 -
Other receivables 224 201
Prepayments 131 156
Total 4,321 2,454
11. Cash and cash equivalents
Notes 2008 2007
£'000 £'000
Cash held in trust accounts 4, 5 195 954
Other cash balances 25 548
Total 220 1,502
Cash and cash equivalents include the following for the purposes of the cash flow statement.
Cash as above 220 1,502
Bank overdrafts (1,215) (762)
Total (995) 740
12. Share capital
2008 2007 2008 2007
Number Number £'000 £'000
Authorised
Ordinary shares of 25p each 5,590,863 5,590,863 1,398 1,398
Deferred ordinary shares of 25p each 11,209,137 11,209,137 2,802 2,802
4,200 4,200
Allotted, called up and fully paid
Ordinary shares of 25p each 240,921 228,757 60 57
Deferred ordinary shares of 25p each 11,209,137 11,209,137 2,802 2,802
2,862 2,859
During the period £15,509 Convertible loan stock 2011 was converted into 12,164 Ordinary shares.
The deferred shares bear no right to dividends, to notice of meetings (or to attendance or to voting thereat) or to participate in
surplus assets of the Company on a winding up of the Company until ordinary shareholders have received £100,000 per share. The Company also
has the right to repurchase the entire issued class of the deferred shares for a nominal consideration without seeking holders' consent.
13. Trade and other payables
Note 2008 2007
£'000 £'000
Insurance payables 4 1,441 3,152
Other payables 332 859
Accruals 643 795
Total 2,416 4,806
14. Provisions and other liabilities
Other Salaries Deferred
Redress and Purchase
Claims Benefits Consideration Total
£'000 £'000 £'000 £'000
Balance at 1 January 59 23 - 82
2007
Movements in period (3) - - (3)
Balance at 30 June 2007 56 23 - 79
Movements in period (45) - - (45)
Balance at 31 December 2007 11 23 - 34
Movements in period (7) - 214 207
Current 4 23 107 134
Non-current - - 107 107
Balance at 30 June 2008 4 23 214 241
Provisions categorised as current liabilities represent provisions for liabilities which are expected to be settled within one year.
In common with other intermediaries and life offices in the United Kingdom which have written pension transfer, pension opt out and
endowment business, the Group has followed the Financial Services Authority ("FSA") guidelines, to review and secure redress for
policyholders wrongly sold such business. The directors believe that all liabilities which might arise in respect of pensions transfer
business have now been settled.
The calculation of the provision for the remaining cases has been based on the proportion of reviewable cases where rectification will
be due and the average cost of rectification and review which has been based on experience to date. The provision is made on a gross basis
and the related recovery under the Group's professional indemnity insurance of £25,000 (2007: £25,000) is dealt with separately in the
accounts within receivables.
While the directors consider that the provision is a reasonable estimate of the ultimate cost, given the assumptions that must be made,
there remain a number of areas of uncertainty which may result in the ultimate cost being different. Claims continue to be made.
The provision for unpaid salaries and consultancy fees at the period end is £23,000 (2007: £23,000).
Deferred purchase consideration represents the maximum consideration that may be payable to the vendors of the share capitals of AMS
Corporate Risks Limited and Culver London Limited (formerly LPH Pitman Limited) acquired during the period see (note 15).
15. Acquisitions and disposals
In February 2008 the group acquired 100% of the ordinary share capital of Culver London Limited and 89% of the ordinary share capital of
AMS Corporate Risks Limited.
Completion accounts have not been agreed with the vendors in respect of the acquisition and the best estimates of those figures have
been used below.
The amounts recognised in respect of each class of assets acquired was as follows:-
Culver London AMS Corporate Risks Limited
Limited
£'000 £'000
Non current assets - 5
Current assets 115 1,226
Non-current liabilities - (100)
Current liabilities (135) (1,190)
Net liabilities acquired (20) (59)
Consideration paid 50 84
Consideration deferred 26 188
Consideration paid recoverable (20) (50)
Total potential consideration 56 222
Costs of acquisition 100 62
Total consideration 156 284
Goodwill arising 176 343
The draft completion accounts of AMS Corporate Risks Limited show a state of affairs materially different from the management accounts
upon which the transaction was negotiated. The directors believe therefore that the consideration paid will be materially less than the
total potential consideration set out above.
If that is the case then the goodwill arising will be reduced accordingly. As a deficiency of net assets was acquired and AMS Corporate
Risks has been loss making since acquisition, no minority interest has been recognised is respect of this acquisition.
In view of the above it is not practicable to include the results of the companies for the six months to 30 June 2008 as required by IAS
34, the results of the companies for the five month period since their acquisition, as set out below, have therefore been included.
Culver London AMS Corporate Risks
Limited Limited
£'000 £'000
For the period 1 February 2008
to 30 June 2008 included in
the Group's results
Revenue 118 94
Loss before and after taxation (208) (50)
In June 2008, the Group disposed of the entire share capital of one of its insurance broking subsidiary, Culver Insurance Brokers
Limited ("CIB"), for £4.3 million. Additional payments may be received in respect of CIB's net brokerage income over the year following
Completion. £4m of the consideration was received in July 2008 and the balance of the initial consideration should be received in September
2008.
Full details of the agreement were set out in a circular to shareholders dated 11 July 2008.
The group has been notified by Aviva plc of its intention to attempt to recover approximately £150,000 paid by it to CIB on a
non-returnable basis in respect of a work transfer agreement. CIB performed the work transfer and the Group has been advised that the claim
is without merit. No provision has been made for any sum which Aviva plc may recover.
The gain on disposal is made up as follows
Assets disposed Note
£'000
Non current assets 32
Goodwill 2,115
Current assets 4,603
Non-current liabilities (805)
Current liabilities (3,460)
Net assets disposed of 2,485
Consideration received 4,000
Consideration due 370
Total consideration 4,370
Costs of disposal (443)
Net consideration 3,927
Surplus 1,442
Profit on activities disposed 7 6
Gain on discontinued activities 7 1,448
16. Cash generated from operations
Six months ended 30 June 2008 Six months ended 30 June 2007
Continuing Discontinued Continuing Discontinued
Activities Activities Activities Activities
£'000 £'000 £'000 £'000
Cash (absorbed by)/generated
from operations
Cash flows from operating
activities
Profit before tax 598 6 (168) 188
Interest receivable (3) (20) (30)
Interest payable 105 29 69 14
Loss on sale of tangible 1 1 - -
assets
Gain on disposal of (1,442) -
discontinued activities* - -
Depreciation of tangible fixed 12 8 2 12
assets
Unwinding of fair value 5 - 3 -
discounting
Decrease in provisions (7) - (1) (2)
(Increase)/decrease in debtors (1,030) 319 (393) 457
Increase/(decrease) in 879 (528) 210 13
creditors
Net cash (outflow)/inflow from (882) (185)
operating activities (278) 652
*The gain on disposal of discontinued activities in the profit and loss account includes the profit on discontinued activities of
£6,000.
STATEMENT OF RESPONSIBILITY
We, RMH Read, AJ Biles, JCM Biles and CJ Yates being the directors of Culver Holdings plc, confirm that to the best of our knowledge:
* the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the
EU;
* this half year financial report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six
months of the current financial year and that have materially affected the financial position or performance of the entity during that
period; and any changes in the related party transactions described in the last Annual Report that could do so.
On behalf of the Board
RMH Read
Chairman
29 August 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFFRTSIAFIT
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