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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Impact Holdings | LSE:IHUK | London | Ordinary Share | GB00B3DFYL18 | ORD 50P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 45.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Impact Holdings (UK) plc
("Impact" or "The Group")
Interim Results
Impact (AIM: IHUK), the specialist lender, announces its unaudited interim results for the six months ended 30 September 2012.
Financial Highlights
- Cash and cash equivalents of £1.09 million (£1.37 million 30 September 2011)
- Net assets of £5.40million (£4.91 million 30 September 2011)
- Debt reduced by 20% year on year to £4.73 million (£5.90 million September 2011)
- Share issue raised £320,000 cash
- Profit after tax of £3,726 (£141,024 30 September 2011)
- Earnings per share 0.2p (6.3p 30 September 2011)
Operational Highlights
- Ongoing business re-aligned in line with expectations
- Continued reduction in borrowings from financial institutions
- Reduction in operating expenses
- Growth opportunities for new business lines identified
A copy of the interim results is also available on the Group's website (www.impactholdings.net).
For further information: Impact Holdings (UK) plc Paul Davies, Chief Executive Officer Tel: 01928 793 550 Zeus Capital Limited Andrew Jones, Nick Cowles Tel: 0161 831 1512
CHAIRMAN'S STATEMENT
I am pleased to report our unaudited interim financial results for the six months ended 30th September 2012. Revenue of £425,104 and pre-tax profit of £3,726 were in line with expectations, as the management team continued its realignment of the business.
The general economic downturn has continued with a further deterioration in 2012 and a significant lack of confidence in the economy and a shortage of liquidity in the banking markets which has resulted in a strategic decision to continue to reduce our indebtedness to financial institutions.
Business Overview
The Board continues to be concerned at the lack of liquidity in the banking markets and for the overall economic environment in which we trade. The consequence of these concerns and our desired strategy of concentrating on better quality covenants has seen a slowing down of our organic growth within the solicitor lending business. The Board intends to continue this prudent strategy until the economic environment returns to a more stable platform.
The business of solicitor lending, in relation to funding disbursements on personal injury cases, continues to be our core market albeit we continue to reduce our exposure.
The Board remains committed to diversifying its product offering, reducing its reliance on speciality funding and re-aligning the business to provide various ancillary services to the legal and professional sectors. We are presently well progressed in assessing a number of new initiatives which will hopefully come to fruition in 2013 and beyond and generate new income streams.
We continue to incur upfront legal expenses in seeking to recover loans which have been previously provided against by the Group. A number of matters have been successfully concluded.
Outlook
The Group remains focussed on providing services to the legal and professional sectors and maximising niche funding opportunities where the return profiles look highly attractive. In addition, the management team continues to analyse various opportunities that will only be executed upon if they meet our exacting standards for profits growth and shareholder returns.
Roger Barlow Non-Executive Chairman IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 Months 6 Months Year
ended ended Ended
30/09/2012 30/09/2011 31/03/2012
£ £ £
Revenue 425,104 848,754 1,186,355
Cost of Sales (112,793) (125,206) (241,816)
Gross profit 312,311 723,548 944,539
Operating expenses (308,585) (582,524) (630,054)
Operating profit 3,726 141,024 314,485
Interest receivable - - 260
Profit for the period from
operations before tax 3,726 141,024 314,745
Tax credit - - (9,721)
Profit for the period 3,726 141,024 305,024
Earnings per share(pence)
Basic 0.2p 6.3p 13.7p
Fully Diluted 0.2p 6.3p 13.4p
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
As at As at As at
30/09/2012 30/09/2011 31/03/2012
£ £ £
Non-current assets
Goodwill 421,766 421,766 421,766
Other intangible assets - 23,311 -
Property, plant and equipment 886,690 612,954 866,825
Deferred taxation 171,892 181,613 171,892
1,480,348 1,239,644 1,460,483
Current assets
Trade and other receivables
including amounts falling
due after more than one year 7,898,230 8,397,545 7,983,892
Cash and cash equivalents 1,095,999 1,374,746 1,076,179
8,994,229 9,772,291 9,060,071
Total assets 10,474,577 11,011,935 10,520,554
Capital and reserves
Share capital 6,411,201 6,211,201 6,211,201
Share premium account 5,125,291 5,005,288 5,005,288
Share based payment reserve - 172,199
-
Shares held by Employee Benefit Trust (45,070) (45,070) (45,070) Retained earnings (6,091,000) (6,430,925) (6,094,726) Equity Attributable to equity shareholders of the parent 5,400,422 4,912,693 5,076,693 Trade and other payables due after more than one year 548,958 395,955
570,391
Trade and other payables due in less
than one year 4,525,197 5,703,287 4,873,470
10,474,577 11,011,935 10,520,554
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD
6 Months 6 Months Year
ended ended Ended
30/09/2012 30/09/2011 31/03/2012
£ £ £
Operating activities
Cash generated from operations 174,014
1,108,068 1,805,382
Income taxes paid - - - Net cash generated by operating activities 174,014
1,108,068 1,805,382
Investing activities
Purchase of property, plant and equipment (19,865) (15,669) (288,246) Interest received - - 260 Net cash (used in)/ generated by investing activities (19,865)
(15,669) (287,986) Financing Activities Decrease in amount owed to lending institutions (454,332) (1,611,718) (2,335,282) Issue of shares 320,003 - - Net cash used in financing activities (134,329) (1,611,718) (2,335,282) Net (decrease)/increase in cash and cash equivalents 19,820 (519,319) (817,886)
Opening cash and cash equivalent 1,076,179
1,894,065 1,894,065
Closing cash and cash equivalents 1,095,999
1,374,746 1,076,179 IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
based Shares Profit and
Share Share payment held by loss
capital premium reserve EBT account Total
£ £ £ £ £ £
Balance as at 31 March 2011 6,211,201 5,005,288 172,199 (45,070) (6,571,949) 4,771,699
Lapse of share options - - (172,199) - 172,199 -
Net profit for the year - - - - 305,024 305,024
Balance as at 31 March 2012 6,211,201 5,005,288 - (45,070) (6,094,726) 5,076,693
Shares issued 200,000 120,003 - - - 320,003
Net profit for the period - - - -
3,726 3,726 Balance as at 30 September 2012 6,411,201 5,125,291 - (45,070) (6,091,000) 5,400,422
Notes to the Interim Financial Statements
1. Accounting policies
The financial statements have been prepared in accordance with International Financial Reporting Standards as endorsed by the EU ("IFRS").
The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments. The principal accounting policies adopted are set out below.
The financial statements have been prepared on a going concern basis.
New and revised accounting standards
The effect of changes on the group's financial statements as a result of new standards issued since the last reference date is not significant. The group has elected not to adopt any other standards earlier than the proposed effective dates.
Further detail in relation to the above International Accounting Standards is available from the IASB's website, www.iasb.org.
Basis of consolidation
The consolidated financial statements of the Group incorporate the financial statements of Impact Holdings (UK) plc (the "Company") and enterprises controlled by the Company (its subsidiaries) made up to the balance sheet date. Control is achieved where the company has the power to govern the financial and operating policies of an investee enterprise so as to obtain economic benefit from its activities. Subsidiaries are fully consolidated from the effective date of acquisition or up to the effective date of disposal, as appropriate.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date irrespective of the extent of any minority interest. The excess of cost of acquisition over the fair values of the Group's share of identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair value of identifiable net assets acquired (i.e. discount on acquisition) is recognised directly in the income statement.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
All intra-group transactions, balances, and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill on acquisition of subsidiaries is separately disclosed. Goodwill is recognised as an asset and reviewed for impairment semi-annually or on such other occasions that events or changes in circumstances indicate that it might be impaired. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Goodwill is allocated to cash generating units for the purpose of impairment testing.
Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment.
Intangible assets The cost of developing or acquiring computer software including own labour costs incurred directly in connection with software development, is capitalised as an intangible asset where the related expenditure is separately identifiable and where there is reasonable expectation that future economic benefits will arise from the development. Software costs are amortised using the straight line method over 3 years. The amortisation charge is included within operating expenses.
Interest income and expense
Revenue shown in the profit and loss account represents interest, commission and arrangement fees receivable on loans made to third parties. Interest income and expense are recognised in the profit and loss account for all financial assets and liabilities using the effective interest method, being the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Group includes all establishment and arrangement fees, commissions and administrative fees paid or received between parties to the contract that are an integral part of the effective interest rate.
Interest on legal disbursement funding is added to the principal, is calculated on a daily basis and is repaid to the Group at the end of the term of the agreement.
Amounts received in respect of interest on property bridging loans relating to future periods are held on the balance sheet as deferred income within trade and other payables.
Financial assets and liabilities
Financial assets and liabilities used by the Group include loans made to third parties and debt finance received by the Group. Financial assets are recognised initially at fair value and measured subsequently at amortised cost using the effective interest method, less provision for impairment. Financial liabilities are recognised initially at fair value and measured subsequently at amortised cost.
Bad and doubtful debts
Specific provision is made against all advances considered to be impaired. When there is reasonable doubt over recovery, provision is made against the outstanding debt including interest and further interest is suspended until the directors are satisfied as to the recoverability of the total amount due.
Segmental reporting
No separate segmental reporting information is provided as in the directors' opinion there are no material segments other than the provision of short term niche funding solutions.
Leasing
Rentals payable under operating leases are charged to income on a straight line basis over the term of the lease.
Retirement benefits costs
Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.
Taxation
The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
Property, plant and equipment
Fixtures and equipment are stated at cost less accumulated depreciation. Depreciation is charged so as to write off the cost or valuation of assets over their useful economics lives, using the straight line method on the following basis:-
Leasehold improvements - unexpired length of lease
Plant and machinery - 3 years
Fixtures, fittings & equipment - 3 years
The directors consider that the freehold property is maintained in such a state of repair that its residual value is at least equal to its carrying value. Accordingly, no depreciation is charged on the grounds of immateriality. Annual impairment reviews are undertaken and provisions made at the end of each reporting period where necessary.
Non -depreciation of freehold property is a departure from the Companies Act 2006 and is considered necessary by the directors to ensure that the financial statements give a true and fair view.
Equity Instruments
Equity instruments, which are contracts that evidence a residual interest in the assets of the Group after deducting all of its liabilities, are recorded at the proceeds received, net of direct issue costs.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reliably estimated.
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. Fair value is measured by use of a binomial model. The expected life used in the model has been adjusted, based on management's best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations. At each balance sheet date, the Group revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the income statement and a corresponding adjustment to reserves over the remaining vesting period. Costs are recognised in the income statement with a corresponding credit to
a share based payment reserve. Financial Risk Management Interest rate risk
The interest rate risks are limited to the revolving credit facilities which the Group has in place.
The Group has no exposure arising from trading overseas.
Liquidity risk
The Group has to monitor closely its access to bank and other funds and its ongoing loans and overdrafts to ensure that there are sufficient funds to meet its obligations.
The Board receives regular debt management forecasts which estimate the cash inflows and outflows over the next eighteen months, so that management can ensure that sufficient financing is in place as it is required.
Credit Risk
The Group is exposed to the risk that any counterparty to which the Group lends money will be unable to repay the amounts when they fall due. These risks are managed by ensuring that exposures to individual counterparties and particular market sectors or loans exhibiting particular attributes are minimized wherever possible. The Board and Risk Committee monitor such exposures on a regular basis, with figures being regularly reviewed. In respect of property bridging loans the Group enforces repossession of property where necessary with a view to holding the asset for resale in order to extinguish the debt. In addition, impairment provisions are made when it becomes evident that the Group may incur losses at the balance sheet date.
2. Earnings per Ordinary A share
6 Months 6 Months Year
ended ended Ended
30/09/2012 30/09/2011 31/03/2012
Profit for the period (£) 3,726 141,024 305,024
Average number of shares -
basic and diluted 2,330,094 2,222,402 2,222,402
EPS - basic (pence) 0.2p 6.3p 13.7p
EPS - diluted (pence) 0.2p 6.3p 13.4p
3. Trade and other receivables
30/09/2012 30/09/2011 31/03/2012
£ £ £
Trade receivables
-Disbursement funding loans 5,998,563 6,899,274 6,544,387
- Property bridging loans 917,547 1,174,297 1,026,832
- Other trade debtors 586,478 86,202 302,914
Prepayments and accrued income 395,642 237,772
109,759
7,898,230 8,397,545
7,983,892
4. Trade and other payables amounts falling due within one year
30/09/2012 30/09/2011 31/03/2012
£ £ £
Trade and other payables falling due within one year
Trade payables 51,893 54,245 56,086 Bank loans and overdrafts - Disbursement funding loans 3,818,637 5,038,692 4,218,159 -Property Bridging Loans 334,000 474,000 384,000 -Mortgages 29,156 - 12,533
Other taxation and social security 18,258
17,591 58,569
Accruals and deferred income 273,253 118,759 144,123
4,525,197 5,703,287 4,873,470
Trade and other payables falling due after more than one year
Mortgage 548,958 395,955 570,391
The disbursement funding loans for Sutherland Professional Funding Limited are financed by committed revolving credit facilities secured by fixed and floating charges over the assets of the company supported by a parent company guarantee.
The facility represents individual funding loans, repayable when the related disbursement loan is collected.
The property bridging loans are uncommitted revolving credit facilities secured by secondary charges over all properties, where bank funding has been provided. In addition, there are fixed and floating charges over all properties and assets, present and future, of Impact Bridging Solutions Limited supported by a parent company guarantee.
The mortgages are provided by two lenders both of whom have first charges over the properties concerned.
5. The Board of Directors approved the interim report on 28 December 2012.
Copyright r 20 PR Newswire
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