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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Davenham | LSE:DAV | London | Ordinary Share | GB00B0P32071 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.95 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jun 2019 to Jun 2024
TIDMDAV
RNS Number : 9021D
Davenham Group PLC
30 March 2011
For immediate release 30 March 2011
Davenham Group plc
Interim Results
For the six months ended 31 December 2010
Davenham Group plc ("Davenham", "the Group") today announces its interim results for the six months ended 31 December 2010.
Financial performance summary:
-- Revenue was GBP11.6m (2009: GBP17.4m)
-- Finance costs were GBP4.3m (2009: GBP7.4m)
-- Impairment charge of GBP4.7m (GBP12.7m inclusive of gross up)* (2009: GBP1.8m (GBP11.7m inclusive of gross up)) of which c.92% is in relation to the impairment of the property portfolio
-- Pre-tax loss GBP10.7m (2009: pre-tax loss of GBP8.0m)**
-- Diluted loss per share 51.6p (2009: loss per share of 34.1p)
-- Net liabilities of GBP36.8m (2009 net assets : GBP3.0m)
* Gross up is defined as interest income which continues to be recognised on impaired loans, and is included within the Group's revenues, for which a corresponding loan loss charge is made
** After exceptional items including a profit on the de-designation of interest rate-swaps of GBP1.7million (2009: GBP1.4 million), redundancy and refinancing costs of GBP2.7 million (2009: GBP0.4 million) and deferred banking fees of GBPnil (2009: GBP1.3 million).
Run-off update:
-- Continued progress in collecting out the portfolio:
o Loan portfolio reduced to GBP65.1m at 31 December 2010 (2009: GBP144.2m)
o Cost base reduced substantially
-- Administrative expenses reduced to GBP5.2m (2009: GBP6.2m)
-- Annualised cost savings of GBP1.8m realised from redundancies during the period
-- Level of provisioning slowed; GBP4.9m of additional provisions (2009: GBP7.9m)
For further information, please contact:
Davenham Group plc 0161 832 8484 Paul Burke, Group Managing Director www.davenham.co.uk Hawkpoint Partners Limited (Nominated Adviser) Lawrence Guthrie / Shaun Holmes 020 7665 4500 MHPC Katie Hunt 020 3128 8100
Chairman's and Group Managing Director's Statement
Overview
On 30 June 2010, Davenham announced the completion of the strategic review (undertaken in conjunction with Hawkpoint Partners Limited, the Group's NOMAD and financial adviser), which concluded that Davenham should cease to write new business and that, with the support of its banking syndicate, Davenham would collect in its loan books in a prudent and orderly manner.
Following the announcement of the conclusion of the strategic review, the detailed parameters of the run-off were finalised with the banking syndicate, securing a stable platform during the run-off period and enabling the Group to access the required levels of working capital to meet its day to day liabilities as they fall due.
During the first half of the current financial year, the Group has made continued progress in reducing the size of the Group's loan portfolio and operating cost base.
On 23 February 2011, Davenham announced that it entered into an exclusivity and standstill agreement (the "Exclusivity Agreement") with Davenham's largest shareholder Kingswood Property Finance Limited Partnership ("Kingswood"), Moor Park Capital Partners LLP ("Moor Park Capital") and the members of the Group's Banking Syndicate (the "Banking Syndicate") which ceases on 31 March 2011, in order to permit more detailed discussions to take place in relation to the potential reconstruction of the Group to enable one or more of its divisions to recommence writing new business.
The Board wishes to reiterate its view that, even if Kingswood, Moor Park Capital and the Banking Syndicate reach agreement on a potential restructuring of the Group, it is likely that there will be no value for shareholders' current shareholdings in Davenham.
Financial review
As stated in the Group's final results, announced on 24 November 2010, the Board do not consider it appropriate to prepare the Group's financial statements on a going concern basis. The results for the half year ended 31 December 2010 have, therefore, been prepared on a break-up basis, as defined in the Group's accounting policies.
The results for the six months ended 31 December 2010 reflect a continuation of the challenging trading conditions for our loan books. The property loan book has been particularly impacted, with the Group continuing to face challenges due to the ongoing difficulties experienced within the UK property market. The vast majority of the property loan portfolio is non-performing, resulting in reduced income and continued operating losses.
Revenue for the six months to 31 December 2010 was GBP11.6 million (2009: GBP17.4 million), Finance costs were reduced to GBP4.3 million (2009: GBP7.4 million), reflecting the continued reduction in the levels of Bank debt. The focused run-off has seen the cost base continue to contract with administrative expenses reduced to GBP5.2 million (2009: GBP6.2 million).
The operating loss before taxation and exceptional items was GBP9.7 million (2009: GBP7.7 million), after an impairment charge for the period of GBP12.7 million (2009: GBP11.7 million).
Exceptional items comprised mainly of redundancy and refinancing costs of GBP2.7 million (2009: GBP0.4 million) which were partially offset by a profit on the de-designated interest rate swaps of GBP1.7 million (2009 1.4 million). As a result of the redundancies made during the period, Davenham will realise annualised cost savings of GBP1.8m.
After exceptional items, the operating loss before taxation was GBP10.7 million (2009: GBP8.0 million). Fully diluted losses per share for the period were 51.55p (2009: 34.06p).
The net liabilities of the Group were GBP36.8 million as at 31 December 2010 (as at 31 December 2009 net assets: GBP3.0 million), primarily reflecting impairment in the property portfolio and the impact of continuing trading losses.
The work to realise cash from the loan book has resulted in a net reduction in borrowings of GBP31.2 million in the period (2009: GBP32.7 million). Net cash at the period end was GBP4.1 million (2009: GBP6.9 million).
Loan portfolio, loss provisioning and recoveries:
Overall the net loan book has reduced from GBP144.2 million at 31 December 2009 to GBP65.1 million at 31 December 2010.
The net property loan portfolio represented GBP38.8 million at 31 December 2010 (2009: GBP81.0 million), the net trade loan portfolio represented GBP7.7 million (2009: GBP20.1 million) and the net asset loan portfolio represented GBP18.6 million (2009: GBP43.0 million).
Loan loss provisions stood at GBP46.2 million at 31 December 2010 (2009: GBP44.0 million), representing GBP39.2 million in the property book (2009: GBP37.5 million), GBP3.5 million in the trade book (2009: GBP2.4 million), and GBP3.5 million in the asset book (2009: GBP4.1 million).
Since 30 June 2010, the Group has continued to make progress with the run-off of the book including the transfer of Manor Credit operations to Davenham's head office and the closure of its office. As at 30 March 2011, the key financial indicators for the Group were as follows:
-- Loan portfolio reduced to c.GBP46.0m
-- Bank facility reduced to GBP86.3m
In the absence of a successful conclusion to the discussions with Kingswood and Moor Park Capital, further reductions to the cost base/ headcount are expected as the Group continues to run-off its loan portfolios.
Funding
As announced on 28 March 2011 the current facility, which was negotiated in March 2009 has been extended until 30 September 2011. The facility remains on demand.
Dividend
Davenham is not in a position to pay a dividend during the current financial period.
People
We would like to take this opportunity to thank all of our staff for their continued hard work and commitment to the Group during the run-off of the business.
Summary
Davenham continues to collect in its loan book with the support of the banking syndicate.
James Kerr-Muir Paul Burke
Chairman Group Managing Director
30 March 2011
Consolidated Income Statement
For the six months ended 31 December 2010
Hot Features
Premium
6 months 6 months
ended 31 ended 31 Year ended
December December 30 June
Notes 2010 2009 2010
GBP'000* GBP'000* GBP'000*
Revenue 4 11,619 17,423 31,973
Finance costs (4,335) (7,444) (13,940)
Gross profit 7,284 9,979 18,033
Administrative expenses (5,248) (6,204) (17,877)
Loan loss impairment 7 (12,695) (11,726) (29,944)
--------------------------------- ------ ---------- ---------- -----------
Operating loss before taxation (10,659) (7,951) (29,788)
Operating loss before
exceptional items (9,709) (7,719) (23,315)
Exceptional costs relating to
Profit/(loss) on de-designated
interest rate swaps 1,705 1,449 (1,080)
Redundancy & refinancing (2,655) (372) (2,001)
Deferred banking fees - (1,309) (1,889)
Impairment of goodwill - - (1,909)
Release of share based payment
reserve - - 406
--------------------------------- ------ ---------- ---------- -----------
Operating loss before taxation (10,659) (7,951) (29,788)
--------------------------------- ------ ---------- ---------- -----------
Taxation 5 (2,105) (484) (9,610)
--------------------------------- ------ ---------- ---------- -----------
Loss for the period (12,764) (8,435) (39,398)
--------------------------------- ------ ---------- ---------- -----------
Loss per share 6
- Basic (51.55p) (34.06p) (159.11)p
- Diluted (51.55p) (34.06p) (159.11)p
Dividends per share
- Paid during the period Nil Nil Nil
- Proposed Nil Nil Nil
--------------------------------- ------ ---------- ---------- -----------
*The figures contained within the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated statement of cashflow and related notes for the six months ended 31 December 2010 have been reviewed by the auditors and are unaudited. The figures contained in the same statements in respect of the six months to 31 December 2009 are unaudited. Those in respect of the year ended 30 June 2010 have been extracted from the Group's audited consolidated financial statements.
Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2010
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Loss for the period (12,764) (8,435) (39,398)
Other comprehensive income:
Effective portion of changes in fair
value of interest rate cashflow
hedges
- Fair value adjustment - 524 -
- Tax on fair value adjustment - (147) -
Total comprehensive income for the
period (12,764) (8,058) (39,398)
------------------------------------- ------------- ------------- ---------
Consolidated Balance Sheet
As at 31 December 2010
31 30
December 31 December June
Notes 2010 2009 2010
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill - 1,909 -
Other intangible assets - 324 -
Property, plant & equipment 128 800 771
Loans & advances to customers 7 10,331 52,421 40,583
Deferred taxation asset 2,808 13,892 4,913
Derivative financial instruments 710 224 718
--------------------------------- ------ ---------- ------------ ---------
13,977 69,570 46,985
Current assets
Loans & advances to customers 7 54,800 91,744 66,728
Other receivables, prepayments
& accrued income 518 326 591
Derivative financial instruments 129 34 120
Cash and cash equivalents 4,146 6,926 5,470
--------------------------------- ------ ---------- ------------ ---------
59,593 99,030 72,909
Total assets 73,570 168,600 119,894
--------------------------------- ------ ---------- ------------ ---------
LIABILITIES
Current liabilities
Borrowings 8 98,189 148,891 129,407
Current tax liabilities 2,898 2,898 2,898
Derivative financial instruments 2,157 4,825 3,151
Trade and other payables 4,123 5,719 4,753
--------------------------------- ------ ---------- ------------ ---------
107,367 162,333 140,209
Non-current liabilities
Derivative financial instruments 2,967 3,253 3,685
--------------------------------- ------ ---------- ------------ ---------
Total liabilities 110,334 165,586 143,894
--------------------------------- ------ ---------- ------------ ---------
Net Assets (liabilities)/assets (36,764) 3,014 (24,000)
--------------------------------- ------ ---------- ------------ ---------
SHAREHOLDERS' EQUITY
Share capital 261 261 261
Share premium 26,528 26,528 26,528
Own shares held reserve (1,507) (1,507) (1,507)
Retained earnings (62,046) (18,319) (49,282)
Share based payment reserve - 556 -
Hedging reserve - (4,505) -
--------------------------------- ------ ---------- ------------ ---------
Total Shareholders' equity (36,764) 3,014 (24,000)
--------------------------------- ------ ---------- ------------ ---------
Consolidated Statement of Changes in Equity
For the six months ended 31 December 2010
Called Own Profit Share
up Share shares and based
Group 6 months share premium held loss payment Hedging Total
to 31 December capital account reserve account reserve Reserve equity
2010 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At beginning
of the
period 261 26,528 (1,507) (49,282) - - (24,000)
Comprehensive
Income
Loss for the
financial
period - - - (12,764) - - (12,764)
Total
comprehensive
income - - - (12,764) - - (12,764)
--------------- -------- -------- -------- --------- -------- -------- ---------
Closing
shareholders'
equity at 31
December
2010 261 26,528 (1,507) (62,046) - - (36,764)
--------------- -------- -------- -------- --------- -------- -------- ---------
Called Own Profit Share
up Share shares and based
share premium held loss payment Hedging Total
Group capital account reserve account reserve Reserve equity
6 months to 31
December 2009 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At beginning of
the period 261 26,528 (1,507) (9,884) 406 (4,882) 10,922
Comprehensive
Income
Loss for the
financial
period - - - (8,435) - - (8,435)
Other
comprehensive
income
Fair value
gains on cash
flow hedges - - - - - 524 524
Tax on fair
value gains on
cash flow
hedges - - - - - (147) (147)
---------------- -------- -------- -------- --------- -------- -------- ---------
Total
comprehensive
income - - - (8,435) - 377 (8,058)
---------------- -------- -------- -------- --------- -------- -------- ---------
Increase in
Share Based
Payment
Reserve - - - - 150 - 150
Closing
shareholders'
equity at 31
December 2009 261 26,528 (1,507) (18,319) 556 (4,505) 3,014
---------------- -------- -------- -------- --------- -------- -------- ---------
Called Own Profit Share
up Share shares and based
share premium held loss payment Hedging Total
Group capital account reserve account reserve Reserve Equity
Year ended 30
June 2010 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At beginning of
the year 261 26,528 (1,507) (9,884) 406 (4,882) 10,922
Comprehensive
Income
Loss for the
financial
year - - - (39,398) - - (39,398)
Other
comprehensive
income
Impairment of
Share Based
Payment
Reserve - - - - (406) - (406)
Fair value
gains on cash
flow hedges - - - - - 913 913
Tax on fair
value losses
on cash flow
hedges - - - - - (257) (257)
Transfer of
hedging
reserve on
de-designation - - - - - 4,226 4,226
---------------- -------- -------- -------- --------- -------- -------- ---------
Closing
shareholders'
equity at 30
June 2010 261 26,528 (1,507) (49,282) - - (24,000)
---------------- -------- -------- -------- --------- -------- -------- ---------
Consolidated Statement of Cashflow
For the six months ended 31 December 2010
6 months 6 months Year
ended 31 ended 31 ended 30
December December June
2010 2009 2010
GBP'000 GBP'000 GBP'000
------------------------------------------ ---------- ---------- ----------
Cash flows from operating activities
Cash (used in)/generated from operations (4,773) 5,816 4,291
Tax repaid - 429 429
------------------------------------------ ---------- ---------- ----------
Net cash (outflow)/inflow from
operating activities (4,773) 6,245 4,720
Cash flows from investing activities
Purchase of property, plant and
equipment - (7) (20)
Purchase of intangible assets - - (5)
Proceeds from sale of property,
plant and equipment 605 5 21
Net cash outflow from investing
activities 605 (2) (4)
Net (decrease)/increase in cash
and cash equivalents (4,168) 6,243 4,716
Cash and cash equivalents at the
beginning of the period 5,399 683 683
------------------------------------------ ---------- ---------- ----------
Cash and cash equivalents at the
end of the period 1,231 6,926 5,399
------------------------------------------ ---------- ---------- ----------
For the purposes of the cash flow statement, cash and cash equivalents
comprise:
Cash at bank and in hand 4,146 6,926 5,470
Bank overdrafts included within
current borrowings (2,915) - (71)
Total 1,231 6,926 5,399
------------------------------------------ ---------- ---------- ----------
Notes to the Interim Report
For the six months ended 31 December 2010
1. Basis of preparation
The interim report has been prepared in accordance with the Alternative Investment Market (AIM) Rule 18 and the accounting policies described below.
The Group is required to prepare its annual consolidated financial statements and its interim report in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union.
The financial information included in this interim report for the six months ended 31 December 2010 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and is unaudited, but subject to a review opinion. The comparative figures for the six months ended 31 December 2009 were also subject to a review opinion. The comparative figures for the year to 30 June 2010 have been extracted from the Group's consolidated financial statements, on which the auditors gave an unqualified opinion and did not make a statement under section 498 of the Companies Act 2006 and which were approved by the Board on 24 November 2010 and delivered to the Registrar of Companies.
Going Concern
Company Law requires the Directors to prepare financial statements that give a true and fair view of the state of the affairs of the Group and of the profit or loss of the Group for the period under review. Fundamental to this requirement is that the Directors consider whether it is appropriate to prepare the financial statements on a going concern basis.
As noted within the Annual Report and Accounts for the year ended 30 June 2010, following detailed discussions held with the Group's lenders, the banking syndicate agreed on 31 July 2010 to certain amendments to the Group's Revolving Credit Facility ('RCF') whereby previous facility step-downs were removed and the facility became of a repayable on demand type nature. The contractual maturity of the facility has been extended to 30 September 2011 (albeit that it remains repayable on demand).
The Group has ceased writing new business and is in the process of collecting in its outstanding loan books.
As the Directors still consider the Group to no longer be a going concern, the financial statements have been prepared on a break-up basis and all assets and liabilities stated at their recoverable value.
Break-up Basis
The accounting policies have been applied to derive the recoverable amounts of the Group's assets and liabilities. The assets and liabilities have not been prepared using fair values, except where stated, but based upon expected cashflows following an orderly collect out of outstanding loans. No provision has been made for future operating losses in accordance with IAS 37 requirements.
2. Accounting Policies
The accounting policies applied are consistent with those set out in the 2010 Annual Report and Accounts on pages 23 to 28.
3. Risks and uncertainties
The Group is exposed to a number of risks arising from the nature of its business and the environment in which it operates. The Group operates in an environment that potentially exposes it to higher risks than other mainstream business to business asset secured finance providers, this being especially true of the Group's exposure to the property sector.
The principal risk categories facing the Group are outlined on pages 6 to 9 of our 2010 Annual Report and Accounts. These risks remain relevant for the foreseeable future and comprise primarily of Credit and Treasury Risk, including Counterparty Risk. In addition, risks associated with the funding position of the Group are set out in Note 1 above "Basis of Preparation".
The Group's current goals and its expectations in relation to the future run-off of the Group's portfolio involve risks and uncertainties which are dependent on future events and circumstances which may be beyond its control. These include, among others, UK economic and business conditions and market related risks (such as fluctuations in interest rates) and any decision by the Group's banking syndicate to call in the facility (or not to extend it beyond its expiry on 30 September 2011).
4. Segmental Information
A business segment is a distinguishable component of the Group that provides products that are subject to risks and returns that are different from those of other business segments. Management has determined the operating segments based on the reports reviewed by the Directors that are used to make strategic decisions. The reportable operating segments derive their revenue primarily from the granting of credit to businesses including loans, hire purchase, finance lease arrangements and working capital facilities. The three operating segments are Property Finance, Trade Finance and Asset Finance.
Property Trade Asset
finance finance finance Central Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Revenue 7,872 1,492 2,255 - 11,619
Finance costs (2,519) (448) (1,169) (199) (4,335)
---------
Gross profit/(loss) 5,353 1,044 1,086 (199) 7,284
--------------------- --------- -------- -------- -------- ---------
Result
Segment result (7,840) (257) (314) (1,298) (9,709)
Exceptional
items (950)
Taxation (2,105)
---------
Loss for the period (12,764)
---------------------------------------------------- -------- ---------
The segmental income and results for the six months ended 31 December 2009 were as follows:
Property Trade Asset
finance finance finance Central Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Revenue 9,932 2,995 4,490 6 17,423
Finance costs (5,294) (427) (1,232) (491) (7,444)
--------
Gross profit/(loss) 4,638 2,568 3,258 (485) 9,979
--------------------- --------- -------- -------- -------- --------
Result
Segment result (5,625) 252 179 (2,525) (7,719)
Exceptional
items (232)
Taxation (484)
--------
Loss for the period (8,435)
---------------------------------------------------- -------- --------
The segmental income and results for the year ended 30 June 2010 were as follows:
Property Trade Asset
finance finance finance Central Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Revenue 19,048 4,941 7,984 - 31,973
Finance costs (10,115) (801) (2,233) (791) (13,940)
---------
Gross profit/(loss) 8,933 4,140 5,751 (791) (18,033)
--------------------- --------- -------- -------- -------- ---------
Result
Segment result (23,315)
Exceptional
items (16,904) (281) (1,485) (4,645) (6,473)
Taxation (9,610)
---------
Loss for the year (39,398)
---------------------------------------------------- -------- ---------
5. Taxation
The Group has continued to maintain its position of only recognising deferred tax assets in respect of temporary differences in relation to IFRS portfolio adjustments and derivatives because it is probable that these assets will be recovered. Any deferred tax arising on unclaimed capital allowances and losses carried forward have not been recognised as the Group is unlikely to make any future taxable profits against which to offset these. The tax charge period to date of GBP2,105k reflects the positive movement of the IFRS portfolio adjustments and derivatives.
A deferred tax asset of GBP10.6m in respect of losses carried forward has not been recognised as the directors do not consider there will be any future taxable profits available against which to offset these losses.
6. Earnings per share
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
------------------------------------ ------------- ------------- ----------
Loss attributable to all equity
shareholders (12,764) (8,435) (39,398)
Weighted average number of shares: '000 '000 '000
Ordinary shares 24,762 24,762 24,762
Basic EPS (51.55p) (34.06p) (159.11p)
------------------------------------ ------------- ------------- ----------
Dilutive impact of share options: '000 '000 '000
Ordinary shares 24,762 24,762 24,762
Diluted EPS (51.55p) (34.06p) (159.11p)
------------------------------------ ------------- ------------- ----------
7. Loans and receivables
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Property Finance 38,764 81,043 58,899
Trade Finance 7,700 20,096 17,711
Asset Finance 18,667 43,026 30,701
----------------------------- ------------ ------------ --------
Total loans and receivables 65,131 144,165 107,311
----------------------------- ------------ ------------ --------
Comprising :
Current assets 54,800 91,744 66,728
Non-current assets 10,331 52,421 40,583
----------------------------- ------------ ------------ --------
65,131 144,165 107,311
----------------------------- ------------ ------------ --------
Loan loss provision
The following tables provide an analysis of the movement of the Group's loan loss provision and charge during 2010 and 2009:
Property Trade Asset
Group Finance Finance Finance Total
Six months ended 31 December
2010 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2010 39,329 3,336 3,639 46,304
Utilised (4,501) - (497) (4,998)
Recoveries of amounts previously
written off 109 - 132 241
Charged to the income statement:
Additional provisions created 4,394 207 307 4,908
Recoveries of amounts previously
written off (109) - (132) (241)
---------------------------------- --------- -------- -------- --------
4,285 207 175 4,667
At 31 December 2010 39,222 3,543 3,449 46,214
---------------------------------- --------- -------- -------- --------
Loan loss charge before gross-up
adjustment 4,285 207 175 4,667
Gross-up adjustment 7,486 263 279 8,028
Loan loss impairment charge 11,771 470 454 12,695
---------------------------------- --------- -------- -------- --------
Property Trade Asset
Group Finance Finance Finance Total
Six months ended 31 December
2009 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- -------- -------- ---------
At 1 July 2009 39,798 2,917 5,408 48,123
Utilised (5,008) (2,143) (4,881) (12,032)
Recoveries of amounts previously
written off 2,561 1,173 2,438 6,172
Charged to the income statement:
Additional provisions created 2,735 1,671 3,527 7,933
Recoveries of amounts previously
written off (2,561) (1,173) (2,438) (6,172)
---------------------------------- --------- -------- -------- ---------
174 498 1,089 1,761
At 31 December 2009 37,525 2,445 4,054 44,024
---------------------------------- --------- -------- -------- ---------
Loan loss charge before gross-up
adjustment 174 498 1,089 1,761
Gross-up adjustment 8,740 404 821 9,965
Loan loss impairment charge 8,914 902 1,910 11,726
---------------------------------- --------- -------- -------- ---------
Property Trade Asset
Group Finance Finance Finance Total
Year ended 30 June 2010 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- -------- -------- ---------
At 1 July 2009 39,798 2,917 5,408 48,123
Utilised (6,781) (966) (5,211) (12,958)
Recoveries of amounts previously
written off 53 - 418 471
Charged to the income statement:
Additional provisions created 6,312 1,385 3,442 11,139
Recoveries of amounts previously
written off (53) - (418) (471)
---------------------------------- --------- -------- -------- ---------
6,259 1,385 3,024 10,668
At 30 June 2010 39,329 3,336 3,639 46,304
---------------------------------- --------- -------- -------- ---------
Loan loss charge before gross-up
adjustment 6,259 1,385 3,024 10,668
Gross-up adjustment 17,106 683 1,487 19,276
Loan loss impairment charge 23,365 2,068 4,511 29,944
---------------------------------- --------- -------- -------- ---------
8. Borrowings
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Current
Secured bank overdraft 2,915 - 71
Secured bank loan 95,274 148,891 129,336
------------------------ ------------ ------------ ---------
Total borrowings 98,189 148,891 129,407
------------------------ ------------ ------------ ---------
The interest rate on the secured bank loan is 300bps over Libor and the loan is repayable on 30 September 2011.
The loan is secured on the Group's undertaking and assets including by way of fixed and floating charge.
Independent review report to Davenham Group plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2010, which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flow and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the basis of preparation set out in note 1.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the AIM Rules for Companies and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2010 is not prepared, in all material respects, in accordance with the basis set out in note 1 and the AIM Rules for Companies.
Emphasis of Matter - Going concern and Basis of preparation
In forming our review conclusion, which is not modified, we have considered the adequacy of the disclosures in note 1 to the condensed set of financial statements which explain that the Group has ceased writing new business and will now collect in the existing loan portfolios. As a result, the Directors concluded that preparing the financial statements on a going concern basis was no longer appropriate, and therefore the condensed set of financial statements has been prepared on a break-up basis. The condensed set of financial statements includes the necessary adjustments in accordance with this basis of preparation.
PricewaterhouseCoopers LLP
Chartered Accountants Manchester
30 March 2011
This information is provided by RNS
The company news service from the London Stock Exchange
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