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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Debtmatters | LSE:DEBT | London | Ordinary Share | GB00B09HB648 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 7.26 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:4513K Debtmatters Group PLC 21 December 2007 DEBT.L DEBTMATTERS GROUP PLC ("the Group") Interim results for The Six Months Ended 30th September 2007 Highlights * Loan broking division performing well and comfortably in line with Board expectations * Disappointing performance from IVA division as a result of sector weakness * Revenues up to £14.3 million (H1 2006: £13.8 million as restated for IFRS) * EBITDA down to £770k (H1 2006: £4.6 million as restated) * Segmental analysis of EBITDA shows Loanmakers Limited achieved £1.63m whilst Debtmatters Limited incurred an EBITDA loss of £861k * 165 approved IVA cases per month on average for the period * Strategic review progressing, announcement expected early in New Year Ges Ratcliffe, Chief Executive of Debtmatters, commented, "2007 has been a disappointing year for the Group. Well publicised difficulties in the IVA sector have resulted in a significant reduction in approved IVA case volumes. Having reached a peak of over 600 a month just one year ago, current monthly IVA run rates are in the region of 100. Debtmatters had built an infrastructure over the previous two years to process these case numbers but the business model relied on direct marketing. Since the start of 2007 our case acquisition costs trebled in a matter of months and this, combined with a reduction in nominees' fees from September 2007 of around 50%, forced the Group to undertake a strategic review of activities. This review is ongoing and a further announcement is anticipated early in the New Year." Enquiries: Ges Ratcliffe CEO, Debtmatters Group plc 01204 845 700 Richard Thompson / Freddy Crossley Charles Stanley Securities 020 7149 6000 Nominated Adviser Shane Dolan / Dan Bradley Biddicks 020 7448 1000 Debtmatters Group plc Interim results for the six months ended 30 September 2007 Chairman's Statement As a Group we have experienced a turbulent period of trading in our core area of activity, IVAs. As a result, the financial performance of our IVA division, Debtmatters Limited, has been disappointing. By contrast, we have seen our loan broking division, Loanmakers Limited ("Loanmakers"), strengthen its market position and increase its market share, performing comfortably in line with expectations. Despite the difficulties of the IVA sector, the Group continues to be profitable, primarily as a result of a successful period of trading by Loanmakers. Loanmakers is recognised amongst its peers as a high quality operator, reinforcing the decision to acquire this business 18 months ago. As previously reported, the Board of directors has, on shareholders' behalf, embarked upon a strategic review during which we have been considering all available strategies for the Group. This process is now nearing an end and we have dealt with a number of interested parties who have expressed an interest in various aspects of the Group. We look forward to updating shareholders on strategy and the results of discussions with interested parties early in the New Year. Noel Guilford BA FCA MSI Non Executive Chairman Debtmatters Group plc Interim results for the six months ended 30 September 2006 Chief Executive's Statement Financial Summary Turnover for the group for the six month period to September increased by 3.8 per cent to £14.31 million (2006: £13.79 million) over the prior year. Turnover from Loanmakers was £9.23 million (2006: £4.31 million for the 3 1/2 month period to 30 September 2006). Turnover from Debtmatters Limited fell by 46 per cent to £5.08 million (2006: £9.48 million). Earnings before interest, tax, depreciation and amortisation (EBITDA) were £0.77 million (2006: £4.57 million). Loanmakers' EBITDA contribution was £1.63m (2006: £0.70 million for a period of 3 1/2 months). Debtmatters Limited incurred a loss of £0.86 million (2006: £3.87 million profit). Operating profit margins as a percentage of revenue decreased to 4.6 per cent (2006: 32.4 per cent) and profit before taxation decreased by 92 per cent to £0.35 million (2006: £4.32 million). However, as an indicator of the improved performance of Loanmakers, EBITDA as a percentage of revenue increased to 17.6 per cent (2006: 16.1 per cent). Basic earnings per share were 0.93 pence (2006: 12.17 pence) representing a decrease of 87 per cent, and fully diluted earnings per share fell by 92 per cent to 0.88 pence (2006: 10.73 pence). We continue to operate in two contrasting markets. Economic uncertainty and negative sentiment continue to depress the debt resolution market, in particular the IVA sector. Our loan broking subsidiary however, whilst operating against the backdrop of the recent "credit crunch," moves from strength to strength. The IVA industry has been beset by problems since the end of 2006. Increased costs of case acquisition and lower fees have combined to create a challenging environment in which to operate. At this stage, the level of fees chargeable on a typical IVA case seems to have stabilised at its new lower level, making it very difficult to source work in high volumes and at acceptable profit margins. By contrast, Loanmakers has continued to grow in line with expectations. Although there has been a great deal of negative comment surrounding the "credit crunch," Loanmakers has thus far been relatively unaffected. Its customers typically have credit ratings nearer to "prime" than many other secured loan brokers and we have therefore been less affected by the tightening of credit criteria and availability of funds than our competitors. Consequently, Loanmakers' results for the period have been excellent and in line with our expectations. Outlook The Board continues its strategic review of Group activities. Once the review is concluded, we will communicate the outcome to shareholders (anticipated early in the New Year). I look forward to updating shareholders in due course. Ges Ratcliffe Chief Executive Debtmatters Group plc Interim results for the six months ended 30 September 2007 Consolidated Income Statement Notes Unaudited Unaudited 6 months ended 6 months ended 30 September 30 September Year ended 31 2007 2006 March 2007 (Restated) (Restated) £ £ £ REVENUE 2,3 14,306,874 13,789,954 29,832,760 Cost of sales (9,112,965) (6,949,365) (15,461,367) -------- -------- -------- Gross Profit 5,193,909 6,840,589 14,371,393 Administrative expenses (4,423,720) (2,269,321) (5,850,009) -------- -------- -------- EBITDA 3 770,189 4,571,268 8,521,384 Amortisation and depreciation (115,609) (104,732) (256,829) Non trading items - - (6,036) -------- -------- -------- PROFIT FROM OPERATIONS 3 654,580 4,466,536 8,258,519 Finance costs (308,535) (146,179) (446,104) -------- -------- -------- PROFIT BEFORE TAXATION 346,045 4,320,357 7,812,415 Taxation 4 (103,814) (1,323,507) (2,561,632) -------- -------- -------- PROFIT AFTER TAXATION 242,231 2,996,850 5,250,783 -------- -------- -------- Earnings per share Basic - pence 5 0.93p 12.17p 21.33p Diluted - pence 5 0.88p 10.73p 18.62p Debtmatters Group plc Interim results for the six months ended 30 September 2007 Consolidated Balance Sheet Notes Unaudited Unaudited 30 September 30 September 31 March 2007 2006 2007 (Restated) (Restated) £ £ £ Non-current assets Intangible assets 13,449,490 11,809,934 17,094,607 Property, plant and equipment 399,825 396,932 394,418 Deferred tax assets 90,510 - 90,510 ---------- --------- --------- 13,939,825 12,206,866 17,579,535 Current assets Work in progress 737,508 321,278 842,066 Trade and other receivables 13,800,165 11,233,661 14,146,199 Cash and cash equivalents 712,104 68,669 665,771 ---------- --------- --------- 15,249,777 11,623,608 15,654,036 ---------- --------- --------- Total assets 29,182,602 23,830,474 33,233,571 ---------- --------- --------- Current liabilities Trade and other payables 2,281,643 1,332,084 4,063,296 Financial liabilities 1,266,270 3,439,036 2,920,255 Current tax liabilities 3,086,499 2,706,604 3,407,876 ---------- --------- --------- 6,634,412 7,477,724 10,391,427 Non-current liabilities Trade and other payables 552,728 2,767,071 1,888,800 Financial liabilities 5,912,500 6,093,748 6,537,500 Deferred tax liabilities - 50,642 - ---------- --------- --------- Total liabilities 13,099,640 16,389,185 18,817,727 ---------- --------- --------- Equity Share capital 6 3,107,150 2,461,539 2,461,539 Contingent share consideration 6 368,486 - 4,662,226 Share premium account 6,959,904 1,956,614 1,956,614 Merger reserve (1,999,996) (1,999,996) (1,999,996) Share based compensation reserve 415,244 280,122 338,518 Retained earnings 7,239,174 4,743,010 6,996,943 ---------- --------- --------- Total equity 16,089,962 7,441,289 14,415,844 ---------- --------- --------- Total liabilities and equity 29,189,602 23,830,474 33,233,571 ---------- --------- --------- Debtmatters Group plc Interim results for the six months ended 30 September 2007 Statement of Changes in Equity Share Share Based Share Premium Merger Compensation Retained Capital account Reserve Reserve Earnings Total (Restated) (Restated) £ £ £ £ £ £ Equity as at 1 April 2006 2,461,539 1,956,614 (1,999,996) 225,132 1,746,160 4,389,449 Share based payments - - - 54,990 - 54,990 Profit for the period - - - - 2,996,850 2,996,850 ----------- ----------- ----------- ----------- ----------- ----------- Equity as at 30 September 2006 2,461,539 1,956,614 (1,999,996) 280,122 4,743,010 7,441,289 ----------- ----------- ----------- ----------- ----------- ----------- Share Share Based Share Premium Merger Compensation Retained Capital account Reserve Reserve Earnings Total (Restated) (Restated) £ £ £ £ £ £ Equity as at 1 April 2007 7,123,765 1,956,614 (1,999,996) 338,518 6,996,943 14,415,844 Shares issued under contingent equity consideration 382,839 2,427,203 - - - 2,810,042 Adjustment to contingent equity consideration (4,293,740) - - - - (4,293,740) Shares issued on AIM placing 262,772 2,706,552 - - - 2,969,324 Share issue costs - (130,465) - - - (130,465) Share based payments - - - 76,726 - 76,726 Profit for the period - - - - 242,231 242,231 ----------- ----------- ----------- ----------- ----------- ----------- Equity as at 30 September 2007 3,475,636 6,959,904 (1,999,996) 415,244 7,239,174 16,089,962 ----------- ----------- ----------- ----------- ----------- ----------- Debtmatters Group plc Interim results for the six months ended 30 September 2007 Consolidated Cash Flow Statement Cash flows from operating Unaudited Unaudited activities 6 months 6 months ended 30 ended 30 Year ended September September 31 March 2007 2006 2007 (Restated) (Restated) £ £ £ Profit from operations 654,580 4,466,536 8,258,519 Share based compensation 76,726 54,990 113,386 Depreciation 70,417 81,484 195,670 Amortisation of IPS licences 45,192 23,248 61,159 Loss on disposal of tangible fixed assets - - 6,036 Decrease / (Increase) in work in progress 104,558 (192,188) (712,976) Decrease / (Increase) in debtors 346,034 (5,208,812) (7,724,880) (Decrease) / Increase in creditors (938,064) 596,999 1,612,277 -------- -------- -------- Cash inflow / (outflow) from operations 359,443 (177,743) 1,809,191 Interest paid (308,535) (151,029) (446,104) Income taxes paid (425,191) (348,587) (1,169,977) -------- -------- -------- Net cash (outflow) / inflow from operating activities (374,283) (677,359) 193,110 -------- -------- -------- Cash flows from investing activities Payments to acquire property, plant and equipment (72,290) (46,219) (191,359) Payments to acquire intangible assets (66,968) (68,984) (119,850) Receipts from sale of property, plant and equipment - - 2,520 Acquisition of subsidiary undertaking - (10,235,633) (10,235,633) Net cash acquired with subsidiary undertaking - 1,524,251 1,524,251 -------- -------- -------- Net cash used in investing activities (139,258 (8,826,585) (9,020,071) -------- -------- -------- Cash flows from financing activities Proceeds on issue of ordinary shares 2,969,324 - - Share issue costs (130,465) - - Net movement in short term borrowings - 1,406,250 1,250,000 Net movement in long term borrowings (625,000) 6,093,750 6,537,500 Capital element of finance lease agreements (14,770) (6,237) (12,178) Interest received - 4,850 - -------- -------- -------- Net cash inflow from financing 2,199,089 7,498,613 7,775,322 -------- -------- -------- Net increase/(decrease) in cash and cash equivalents 1,685,548 (2,005,331) (1,051,639) Cash & cash equivalents at the beginning of the financial period (973,444) 78,195 78,195 -------- -------- -------- Cash & cash equivalents at the end of the financial period 712,104 (1,927,136) (973,444) -------- -------- -------- Debtmatters Group plc Interim results for the six months ended 30 September 2007 Reconciliation of net cash flow to movement in net debt Unaudited Unaudited 6 months 6 months ended ended Year ended 30 September 30 September 31 March 2007 2006 2007 £ £ £ Net increase/(decrease) in cash and cash equivalents 1,685,548 (2,005,331) (1,051,639) Cash outflow/(inflow) from debt financing 625,000 (7,500,000) (7,787,500) -------- -------- -------- Movement in net debt in the period 2,310,548 (9,505,331) (8,839,139) Net (debt)/cash at beginning of the period (8,760,944) 78,195 78,195 -------- -------- -------- Net debt at the end of the period (6,450,396) (9,427,136) (8,760,944) -------- -------- -------- Debtmatters Group plc Interim results for the six months ended 30 September 2007 Notes to the Interim Financial Statements 1. Basis of preparation These financial statements are the unaudited interim consolidated financial statements for the six month period ended 30 September 2007. They have been prepared in accordance with IAS 34 "Interim Financial Reporting" and should be read in conjunction with the Consolidated Financial Statements for the year ended 31 March 2007. The Interim Consolidated Financial Statements have been prepared in accordance with the accounting policies set out in the consolidated financial statements for the year ended 31 March 2007, except for the accounting policy change as detailed in note 7. 2. Revenue Revenue in the Consolidated Income Statement represents amounts billed or to be billed in respect of services performed on behalf of clients. The amounts taken to turnover are calculated as follows: Nominee fees: on approval of a proposal in a formal creditor meeting the full amount of the nominee fee is taken less a provision for cases on which the full fee may not be recoverable. Supervisory fees: on a monthly basis as earned following the creditors' meeting. Loan commissions: on approval of loan applications. 3. Segmental information The business segment results for the 6 months ended 30 September 2007, together with comparative figures are as follows: Unaudited Unaudited 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2007 2006 2007 (Restated) (Restated) £ £ £ Segment Revenue Insolvency 5,080,466 9,476,616 18,062,550 Secured loans 9,226,408 4,313,338 11,770,210 ----------- ----------- ---------- 14,306,874 13,789,954 29,832,760 ----------- ----------- ---------- EBITDA Insolvency services (860,904) 3,874,265 6,319,098 Secured loans 1,631,093 697,003 2,202,286 ----------- ----------- ---------- 770,189 4,571,268 8,521,384 ----------- ----------- ---------- 4. Taxation Taxation is provided for at an estimated effective rate of 30%. 5. Earnings per share Earnings and the number of shares used in the calculations of earnings per share are set out below: Unaudited 6 Unaudited 6 months ended 30 months ended 30 Year ended 31 September 2007 September 2006 March 2007 (Restated) (Restated) £ £ £ Profit for the period 242,231 2,996,850 5,250,783 Weighted average number of shares in issue: No. No. No. For basic earnings per share 26,015,157 24,615,385 24,615,385 Executive share options 1,295,764 3,311,318 1,281,980 Contingent share consideration 231,752 - 2,297,574 -------- ------- ------- For diluted earnings per share 27,542,673 27,926,703 28,194,939 -------- ------- ------- Earnings per share: Basic 0.93p 12.17p 21.33p Diluted 0.88p 10.73p 18.62p The diluted earnings per share for the period includes 1,295,764 shares arising from the dilutive effect of share options and 231,752 shares arising from the dilutive effect of contingent share consideration. 6. Called up share capital No. £ Authorised Ordinary shares of 10p each 35,200,000 3,520,000 --------- --------- Unaudited Unaudited 30 September 30 September 31 March 2007 2006 2007 No. No. No. Allotted, called up and fully paid Ordinary shares of 10p each 31,071,499 24,615,385 24,615,385 Contingent share consideration 231,752 - 2,932,218 -------- ------- ------- 31,303,251 24,615,385 27,547,603 -------- ------- ------- £ £ £ Allotted, called up and fully paid 24,615,385 Ordinary shares of 10p each 2,461,539 2,461,539 2,461,539 6,456,114 Ordinary shares of 10p each issued during the period 645,611 - - -------- ------- ------- 3,107,150 2,461,539 2,461,539 Contingent share consideration 368,486 - 4,662,226 -------- ------- ------- 3,475,636 2,461,539 7,123,765 -------- ------- ------- Ordinary Shares On 15 June 2006 Debtmatters Group Plc acquired the entire share capital of Loanmakers (Holdings) Limited. The total consideration (including contingent consideration) amounted to £14,981,233. The contingent consideration takes the form of equity and cash. The contingent consideration is provisional based on the performance of Loanmakers Limited. On 19th September 2007, 3,828,394 ordinary shares of 10p each were issued at £0.73 per ordinary share as a part of the contingent consideration discussed above. The equity element of the contingent consideration outstanding amounts to 231,752 ordinary shares at £1.59 per share. On 13th July 2007, 2,627,720 ordinary shares of 10p each were issued at a price of £1.13 per ordinary share. 7. Prior period adjustment Change in accounting policy The company has consistently applied all the relevant accounting standards except for the change in accounting policy detailed below. Advertising costs are now recognised when incurred and are not deferred to match them against the income to which they relate. In the Directors' opinion, this change in accounting treatment of advertising costs more accurately represents the performance of the business in the period. This change in accounting policy is also in line with IFRIC proposed changes as part of the IFRS annual improvements process. The IFRIC indicate that the correct treatment of advertising and promotional costs should be to recognise them as an expense when the advertising is distributed to customers. An analysis of the impact of the change in accounting policy is as follows: Profit and loss account Unaudited Unaudited 6 months 6 months Year ended 30 ended 30 ended 31 September September March 2007 2006 2007 £ £ £ (Loss) / profit before change in accounting policy (419,021) 3,253,680 6,078,401 Impact of change in accounting policy 661,252 (256,830) (827,618) -------- ------- ------- Restated profit after change in accounting policy 242,231 2,996,850 5,250,783 -------- ------- ------- There is a corresponding credit to prepayments. The prior year adjustment and corresponding adjustment to prepayments as at 1st April 2006 amounted to £356,957. This information is provided by RNS The company news service from the London Stock Exchange END IR OKKKPOBDDABB
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