Impact Holdings (UK) PLC Preliminary Results

 
TIDMIHUK 
 
Press Release                                                  27th September 
2013 
 
Impact Holdings (UK) plc 
 
                           ("Impact" or "The Group") 
 
            Preliminary results for the year ended 31st March 2013 
 
Impact Holdings (UK) plc. (AIM: IHUK), the specialist lender, announces its 
preliminary results for the year ended 31st March 2013. 
 
Financial Highlights 
 
  * Group's pre-tax profit of GBP250,071 (2012: GBP314,745) 
 
  * Earnings per share 10.1p (2012: 13.7p) 
 
  * Reduced exposure to external debt providers from GBP5.2m to GBP1.6m 
 
  * Results ahead of management expectations 
 
  * Reduced gearing down to 28% from 102% 
 
  * Cash and cash equivalents of GBP0.7 million (2012: GBP1.1 million) 
 
  * Net assets of GBP5.6 million (2012: GBP5.1 million) 
 
Commenting on the results Paul Davies, the Chief Executive, said "The group 
continues to see ongoing progress with expenses under control, a marked 
reduction in external finance and it continues to actively look for alternative 
income streams to enhance its profitability." 
 
For further information: 
 
Impact Holdings (UK) plc. 
Paul Davies Chief Executive Officer        Tel: [phone] 
                                           www.impactholdings.net 
 
Zeus Capital 
Nick Cowles/Andrew Jones                   Tel: [phone] 
 
 
The financial information detailed below has been extracted from the Annual 
Report and Accounts for the year ended 31st March 2013, which are available 
from Zeus Capital, 3 Ralli Courts 
West Riverside, Manchester, M3 5FT and on the Company's website 
(www.impactholdings.net). 
 
CHAIRMAN'S STATEMENT 
 
INTRODUCTION 
 
We have previously advised that as a consequence of the ongoing credit crisis 
and new economic environment in which we operate it has been necessary to seek 
out additional revenue streams for the group. 
 
THE BOARD 
 
The Board remains committed to adhering to strong Corporate Governance and 
operating within a framework of prudent controls which ensures the future risks 
of the business are controlled and managed. 
 
STRATEGY 
 
The development of the strategic direction of the business has continued in 
this financial year with a marked reduction in our exposure to third party 
funders and a withdrawal from new exposures in the specialty funding market. 
 
The establishment of Midas Marketing Management Limited in September 2012 which 
provides specialist marketing and business development services to both law 
firms and individual business owners is seen as a marked growth area operating 
within a highly compliant framework. This initiative will continue to be 
invested in over the forthcoming period as we develop our product offering, 
increase our revenue streams and diversify our product range. Enhanced income 
streams from this operation will hopefully come to fruition in 2013/14 and 
beyond albeit we still continue to incur initial set up costs. 
 
DIVIDEND 
 
No dividend will be declared for the year. 
 
OUTLOOK 
 
The group remains focused on providing services to the legal and professional 
sectors. The Board of Directors is committed to the future growth opportunities 
earmarked and continues to develop this strategy which will provide the 
foundation for controlled growth, improved profitability over time and enhanced 
shareholder value. 
 
I should like to place on record my appreciation for the efforts of the 
executive, management and staff during the year. I also appreciate the 
enthusiasm and support of my fellow directors and thank them for their 
continued encouragement and counsel. 
 
Roger Barlow 
 
Non-executive Chairman 
 
CHIEF EXECUTIVE'S REVIEW 
 
INTRODUCTION 
 
As previously advised the Board and management team have spent considerable 
effort in looking at the strategic direction the business is taking following 
the lack of liquidity in the banking market. This has culminated in the 
decision to diversify the Company's product offering and reduce the group's 
exposure to financial institutions and re-align the business to provide various 
ancillary services to the legal and professional sectors. 
 
The dedication and commitment of all staff to re-align the business is a credit 
as they have collectively worked with commitment and resilience to deliver this 
performance. 
 
TRADING 
 
Commentary on the group's performance is contained within the Chairman's 
Statement; however the group continues to see ongoing progress with expenses 
under control, a marked reduction in external finance and it continues to 
actively look for alternative income streams to enhance its profitability. 
 
RISK MANAGEMENT 
 
The risk management of the business continues to be strengthened with all new 
and existing counterparty risks regularly assessed by an independent risk 
committee. 
 
Credit and fraud risk 
 
The group is exposed to the risk that clients owing the group money will not 
fulfil their obligations. The group regularly reviews credit exposure for every 
client, including the level of security available in the event of default. 
Nevertheless, credit default risk may arise from events or circumstances that 
are difficult to detect and handle, such as fraud. 
 
Inadequate security 
 
The group is exposed to the risk that security and undertakings upon which its 
loan advances are made may reduce in value, so that the group may not recover 
some or all of its loan advances in an event of default. This risk is mitigated 
by the spread of loans and clients involved, along with a detailed assessment 
of the value of the security and undertakings at the time the loans are made 
and appropriate ongoing monitoring. 
 
Funding and treasury 
 
The group relies on a mix of equity funding and uncommitted debt finance from 
Mercantile Investment Company Limited and Yorkshire Bank in order to maintain 
an adequate level of working capital and to fund loan advances to the group's 
clients. 
 
STRATEGIC AND FINANCIAL OBJECTIVES 
 
Our objective remains for a cautious, controlled, profitable growth with the 
group concentrating on actively looking for additional income enhancing 
opportunities. We continue to look for economies of scale and enhance the 
controls in order to allow us to minimise the risks to the business. 
 
Paul Davies 
 
Chief Executive 
 
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2013 
 
                                                               Year        Year 
 
                                                              Ended       Ended 
 
                                                           31/03/13    31/03/12 
 
                                                                  GBP           GBP 
 
Revenue                                                   1,309,927   1,186,355 
 
Cost of Sales                                             (430,666)   (241,816) 
 
Gross Profit                                                879,261     944,539 
 
Other operating expenses                                  (629,273)   (630,054) 
 
Operating Profit                                            249,988     314,485 
 
Interest                                                         83         260 
receivable 
 
Profit for the year from operations                         250,071     314,745 
before tax 
 
Tax (charge)/                                                     -     (9,721) 
credit 
 
Profit for the                                              250,071     305,024 
year 
 
Earnings per share 
(pence) 
 
Basic                                                         10.1p       13.7p 
 
Fully diluted                                                 10.1p       13.4p 
 
Other than as disclosed in the consolidated Income Statement and the 
Consolidated Statement of Changes in Equity there are no further gains or 
losses. Accordingly, no separate statement of other comprehensive income has 
been presented. 
 
All activities are considered to be continuing. 
 
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2013 
 
                                                                2013        2012 
 
                                                                   GBP           GBP 
 
Non-current assets 
 
Goodwill                                                     421,766     421,766 
 
Property, plant and equipment                                921,890     866,825 
 
Deferred taxation                                            171,892     171,892 
 
                                                           1,515,548   1,460,483 
 
Current assets 
 
Trade and other receivables including amounts              6,284,896   7,983,892 
falling due after more than one year 
 
Cash and cash equivalents                                    688,413   1,076,179 
 
Total current assets                                       6,973,309   9,060,071 
 
Total assets                                               8,488,857  10,520,554 
 
Equity and Liabilities 
 
Share capital                                              6,411,201   6,211,201 
 
Share premium Account                                      5,125,291   5,005,288 
 
Shares held by employee benefit trust                       (45,070)    (45,070) 
 
Retained earnings                                        (5,844,655) (6,094,726) 
 
Issued capital and reserves attributable to                5,646,767   5,076,693 
Equity holders of the parent 
 
Trade and other payables due after more than                 540,261     570,391 
one year 
 
Trade and other payables due in less than one              2,301,829   4,873,470 
year 
 
Total Equity and Liabilities                               8,488,857  10,520,554 
 
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2013 
 
                                                          31/3/13       31/3/12 
 
                                                                GBP             GBP 
 
Operating activities 
 
Cash generated by operations                            (302,839)     1,805,382 
 
Net cash generated by operating                         (302,839)     1,805,382 
activities 
 
Investing activities 
 
Interest received                                              83           260 
 
Purchases of property, plant and                         (71,248)     (288,246) 
equipment 
 
Net cash applied/(used) in investing                     (71,165)     (287,986) 
activities 
 
Financing activities 
 
Issue of equity share capital                             320,003             - 
 
Net decrease in amounts owed to lending                 (333,765)   (2,335,282) 
institutions 
 
Net cash outflow from financing                          (13,762)   (2,335,282) 
activities 
 
Net decrease in cash and cash                           (387,766)     (817,886) 
equivalents 
 
Cash and cash equivalents at 1 April                    1,076,179     1,894,065 
 
Cash and cash equivalents at end of 31                    688,413     1,076,179 
March 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2013 
 
Attributable to the equity holders of parent company 
 
                          Share     Share     Share   Shares  Profit and     Total 
                        capital   premium     based  held by        loss 
                                            payment      EBT     account 
                                            reserve 
 
                              GBP         GBP         GBP        GBP           GBP         GBP 
 
Balance as at 31      6,211,201 5,005,288  172,199  (45,070) (6,571,949) 4,771,669 
March 2011 
 
Lapse of Share                            (172,199)              172,199         - 
Options 
 
Net Profit for the           -         -         -        -      305,024   305,024 
year 
 
Balance as at 31      6,211,201 5,005,288         - (45,070) (6,094,726) 5,076,693 
March 2012 
 
Ordinary Shares         200,000         -         -        -           -   200,000 
Issued 
 
Share Premium on              -   120,003         -        -           -   120,003 
Issued Shares 
 
Net Profit for the            -         -         -        -     250,071   250,071 
Year 
 
Balance as at 31      6,411,201 5,125,291         - (45,070) (5,844,655) 5,646,767 
March 2013 
 
The financial information set out in this announcement does not constitute the 
group's financial statements (as defined by s434 of the Companies Act 2006) for 
the year ended 31st March 2013. The results for the year ended 31st March 2013 
are extracted from the Annual Report of Impact Holdings (UK) plc, on which the 
auditors have issued an unqualified report. 
 
Pursuant to AIM Rule 20 copies of the Annual Report may be downloaded from the 
company's web site www.impactholdings.netand will be posted to shareholders on 
or before 1st October 2013. Further copies will be available from Zeus Capital, 
3 Ralli Courts, West Riverside, Manchester, M3 5FT. 
 
The Annual General Meeting will be held at the Company's registered office, 
7500 Daresbury Park, Daresbury, Warrington WA4 4BS on 27th November 2013 at 
8.45am. 
 
Notes to the Editor: 
 
Impact Holdings (UK) plc through its individual subsidiaries provides 
financial; outsourcing and ancillary services to the legal profession. 
 
In addition Impact will fund other opportunities where debt instruments or 
debentures provide the primary security and there are opportunities for short 
term bespoke funding where serviceability precludes larger lenders from 
entering this area. 
 
Impact is regulated by the Office of Fair Trading through which it is licensed 
to lend under the Consumer Credit Act 1974. 
 
 
 
END