![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Invocas | LSE:INVO | London | Ordinary Share | GB00B0ZGN364 | ORD 0.25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number : 4576X Invocas Group plc 25 June 2008 25 June 2008 INVOCAS GROUP PLC ("Invocas" or the "Group") PRELIMINARY RESULTS FOR THE 52 WEEK PERIOD TO 31 MARCH 2008 Invocas, one of the UK's leading providers of personal debt solutions, today announces its preliminary results for the 52 week period to 31 March 2008 (the comparative figures for 2007 are based on a 54 week period). FINANCIAL HIGHLIGHTS Year ended 54 week period ended 31 March 31 March 2007 2008 £m £m Revenue 9.88 8.54 Underlying profit before taxation* 3.43 3.36 Underlying earnings per share (pence)* 8.46p 8.01p Profit before taxation 3.18 3.36 Earnings per share (pence) 7.85p 8.01p Dividend per share (pence) 2.50p - Bank balances 4.27 3.41 * Revenue increased by 16% to £9.88m (2007: £8.54m) * Underlying pre tax profit increased by 2% to £3.43m (2007: £3.36m)* * Underlying EPS increased by 6% to 8.46p (2007: 8.01p)* * Strong balance sheet with net cash of £4.27m (2007: £3.41m), providing significant headroom for further growth * The value of shareholders' equity at 31 March 2008 increased by 21.2% to £13.41m (2007: £11.06m), including £4.53m (2007: £2.29m) of retained profit * Proposed maiden dividend payment to shareholders of 2.5 pence per share * pre one-off charges of £0.25m (see Note 4) OPERATIONAL HIGHLIGHTS * Total caseload of formal personal insolvency cases up to 5,402 (2007: 5,153) including Trust Deeds, Individual Voluntary Arrangements (IVAs) and Sequestrations - providing cash generation and highly visible future income stream * Successful launch of The Insolvency Exchange (TIX) compliant IVAs and informal debt management service lines * Substantial moves forward in re-engineering our lead acquisition model with improving trend in revenue opportunities and good progress in replacing referrers of Trust Deeds lost last year: * now producing 300 opportunities a month, double the number produced per month in summer 2007 * just over 70% of leads currently coming through marketing subsidiary, Newtomorrow (2007: approximately 20%) * since the year end, launch of Newtomorrow Broker Services, web-based offering to Independent Financial Adviser (IFA) networks, packagers and distributors across the UK. User agreements signed with nine groups representing over 2,000 firms of IFAs * since the year end, we acquired a small personal debt advisory team that will grow to cover England and Wales, enabling us to offer a personal counselling service to clients at their preferred location - we now have 346 IVA cases under management * Confident of achieving a significant increase in volume of IVAs and Debt Management Plans (DMPs) in the coming year * Invocas continues to enjoy industry-leading low creditor objections and failure rates * The weakening macro economic environment leads the Group to predict a significant increase in the demand for our services in the second half of 2008 and beyond Commenting on the results, Chairman, Howard Bell, said: "With Invocas' skill set and infrastructure geared to the delivery of personal insolvency and related services, we intend to reduce our reliance on Trust Deed services and to develop considerably our IVA and debt management offering in the year ahead. We believe that there are significant opportunities for us to leverage our unique caring and professional ethos and approach into the English market. The weakening macro economic environment leads us to expect demand for both our formal and informal personal debt solutions and our corporate insolvency services to increase significantly during the second half of 2008 and into 2009. Invocas benefits from a strong financial position, a long and successful track record, excellent relationships with creditors and a clear marketing strategy that is already bearing fruit. In addition, Invocas' broadening service range and increasing numbers of revenue opportunities leaves me confident that the Group will continue to build upon improving trends and is well placed for growth in the year ahead." For further information: Invocas Group plc Tel: +44(0)131 222 2460 Howard Bell, Chairman Stephen Lightley, CEO Gavin Anderson (Financial PR Adviser) Tel: +44(0)20 7554 1400 Ken Cronin / Michael Turner / Anthony Hughes Email: invocas@gavinanderson. co.uk Charles Stanley Securities (Nominated Adviser) Tel: +44 (0)20 7149 6000 Philip Davies / Carl Holmes Website: www.invocas.com Notes to editors Invocas is one of the UK's leading providers of personal debt solutions. Its Personal Insolvency Division is firmly established as a leading provider of Protected Trust Deeds (the Scottish equivalent of IVAs). Invocas applies stringent minimum case acceptance criteria to Trust Deeds and IVAs. It will only accept a case if it is likely to progress smoothly to completion and result in a successful outcome which balances the interests of both the indebted individual and their creditors. The Group's Newtomorrow service aims to provide indebted individuals with the right advice, first time, every time. This is achieved in a caring and professional manner by a team of highly experienced debt advisors delivering front line advice. Further information on Newtomorrow can be found at www.newtomorrow.com INVOCAS GROUP PLC Preliminary results for the financial year to 31 March 2008 (the comparative figures for 2007 are based on a 54 week period). CHAIRMAN'S STATEMENT In what has been a challenging year for our sector, I am delighted to be able to report a strong set of financial results for the Group and a positive outlook for the coming year. We are pleased with the improving trends in our levels of trading since the year end and are confident that we are now emerging from the difficult times of last year. Revenue for the period increased 15.8% to £9.88m (2007: £8.54m). The underlying profit before tax increased to £3.43m (2007: £3.36m). The underlying basic earnings per share increased to 8.46p (2007: 8.01p). However, as the result of one-off charges of £0.25m, profit before tax was £3.18m (2007: £3.36m) with basic earnings per share of 7.85p (2007: 8.01p). The value of shareholders' equity at 31 March 2008 increased by 21.2% to £13.41m (2007: £11.06m), including £4.53m (2007: £2.29m) of retained profit. The cash inflow from operations, after investment in working capital of £1.22m (2007: £1.31m), was £2.01m (2007: £2.08m) before tax payments of £1.1m (2007: £nil). Closing cash balances stood at £4.27m (2007: £3.41m). Our balance sheet is, therefore, in good shape providing a solid platform for future expansion and investment. In light of the strong financial performance and the cash balances held, I am delighted to report that the Directors have proposed the payment of a maiden final dividend of 2.5p per share aggregating to a cost of some £714,000 based on 28,566,585 ordinary shares. This final dividend is to be proposed on 31 July at the Annual General Meeting. The ex-dividend date is 9 July, with a record date of 11 July and an intended payment date of 8 August 2008. The dividend will be charged to equity in the 2008/09 financial year. Strategy The current turmoil in the personal debt sector has not affected Invocas to the extent that it has impacted many of our comparator businesses based in England and our significant cumulative case load means that we have been able to maintain a strong financial performance. However, along with others, we saw the number of leads coming into the Group and the level of new Trust Deed cases signed decrease significantly in the second half of 2007. We accelerated the re-engineering of our lead generation model to make us more self reliant. We invested in our internet capability and entered the lead purchase market in a limited and controlled way via our call centre and marketing subsidiary, Newtomorrow. In the final quarter of the year, we began a series of TV advertising campaigns across Scotland consistent with a style that we consider appropriate to our core professional services-based values. We are now seeing the benefits of these changes and our total revenue opportunity streams, covering the full range of our services, increased substantially towards the end of the year. They are currently running at approximately 300 per month, double what they were last summer. Newtomorrow is now our biggest source of revenue opportunities on a month to month basis, providing just over 70% of our current total revenue opportunities as compared to approximately 20% a year ago. Newtomorrow now accounts for almost 50% of our Trust Deed opportunities compared to less than 20% a year ago. We have also made good progress in replacing the referrers of Trust Deeds that were lost last year. The current credit crunch provides further opportunities for referrals from businesses within the financial services sector, particularly those advising on mortgages, that previously did not see debt solutions as a priority and we look forward to providing further updates on progress in this area in the coming year. Latterly, we have made significant appointments to our sales and marketing team to drive the promotion of our services to new business referrers in the financial services sector. As announced to the market on 1 May 2008, Brian Ferguson has been appointed as Director of Sales, having formerly been Head of Distribution and Strategy at Standard Life Bank and Bob Ollason has joined the Group as a Corporate Account Director. Bob was Vice Chairman of the Council of Mortgage Lenders in Scotland. We are in no doubt that the addition of their experience within the financial services sector will help drive forward the success of the Group. We have made significant progress in the year towards our strategy of offering a full range of personal debt solutions in house and, in September, we opened a new office in Altrincham which houses our TIX compliant Individual Voluntary Arrangements and debt management operations. We will also continue to explore acquisition opportunities which meet our criteria and, with a strong cash position, we believe that we are in an excellent position to take advantage of the opportunities which are likely to arise in the sector. To help grow our new IVA business, we have, to date, acquired four IVA portfolios, representing 317 cases with potential revenue in future years of approximately £1.0m. With Invocas' skill set and infrastructure geared to the delivery of personal insolvency and related services, we intend to reduce our reliance on Trust Deed services and to develop considerably our IVA and DMP offering in the year ahead. We believe that there are significant opportunities for us to leverage our unique caring and professional ethos and approach into the English market. Our objective remains to provide a high quality personal and professional service to indebted individuals across the UK and to generate a return that is acceptable to their creditors. The Market The numbers of Protected Trust Deeds (PTDs) and IVAs approved across the UK in the year ended 31 March 2008 fell by 9.6% and 18.8% respectively from the levels in the year ended 31 March 2007 (Source: Insolvency Service). These decreases do not reflect a reduction in the number of indebted persons needing these solutions but, rather, increased levels of objections by lenders reluctant to see further increases in the numbers of personal insolvencies. We understand the reasons for their concerns which stemmed, not unreasonably, from a wish to see higher standards within the insolvency industry and more consistency in the fee level and structure. After negotiations during the past year, we welcome the agreement that has now been reached between the insolvency industry and the British Bankers Association (BBA) on the key criteria required for approval of IVAs. Provided that these criteria are met, this should now lead to higher numbers of IVAs being approved. The weakening macro economic environment leads us to predict a significant increase in the demand for our services in the second half of 2008 and beyond, on the back of unprecedented levels of secured and unsecured personal debt and a reduction in available credit to indebted individuals as a result of the credit crunch. Developments Since the year end, we have launched Newtomorrow Broker Services, a web based offering to IFA networks, packagers and distributors across the UK. In addition, in order to assist our expansion in England, we have acquired a small personal debt advisory team that we will grow to cover England and Wales, thereby enabling us to offer a personal counselling service to clients at their preferred location. We are confident that these initiatives will enable us to achieve a significant increase in the volume of IVAs and DMPs in the coming year and beyond. People We could not have achieved the financial results for the year and strengthened our platform for the future without the hard work and professionalism of the entire Invocas team. I would like to extend the thanks of the Board and shareholders to all our staff and management for their skill, enthusiasm and commitment. We were delighted that David Macmillan agreed to join our Board as Non-executive Director in November and he has already made a significant contribution to the development of our marketing strategy. I would also like to thank John Hall personally for his significant contribution as Chief Executive of the Group and I am pleased that we will continue to benefit from his skills in his new role as Non-executive Director. We are also very pleased that, since the year end, on 1 May, Stephen Lightley has been appointed as Chief Executive Officer. Stephen and Ian Wright, our Managing Director, have played a significant role in building Invocas into the market leading business that it is today and will be responsible for the future development and implementation of the Group's business strategy. Together, they form a strong team to take the Group forward. The search for a new Finance Director is underway, to enhance the composition of the Executive Board, and a further announcement in this regard will be made in due course. In the meantime, Stephen will continue to oversee the finance function, supported by the Group Financial Controller. Outlook We expect demand for both our formal and informal personal debt solutions and our corporate insolvency services to increase significantly during the second half of 2008 and into 2009. The trend of increasing levels of new work, together with the significant potential opportunity that we have developed with Newtomorrrow Broker Services, gives us considerable optimism for the future. Consolidation is already happening within the debt industry sector and we intend to play a full part in this process as opportunities arise. Invocas benefits from a strong financial position, a long and successful track record, excellent relationships with creditors and a clear marketing strategy that is already bearing fruit. In addition, Invocas' broadening service range and increasing numbers of revenue opportunities leaves me confident that the Group will continue to build upon improving trends and is well placed for growth in the year ahead. Howard Bell, Non-executive Chairman 25 June 2008 INVOCAS GROUP PLC Preliminary results for the financial year to 31 March 2008 (the comparative figures for 2007 are based on a 54 week period). OPERATING REVIEW The Business Invocas has made significant progress with our chosen strategy of becoming a full service provider of both personal and corporate debt solutions throughout the UK. We have diversified our range of services significantly by opening an office in Altrincham to deliver TIX compliant IVAs and informal Debt Management Plans and have now acquired four IVA portfolios, representing 317 cases under management. We expect this office to grow significantly in the coming year. Since the year end, we have launched Newtomorrow Broker Services, our web based offering to IFA networks, packagers and distributors across the UK, and have made good progress in replacing referrers of Trust Deeds. We have grown substantially our total revenue streams and we expect the need for our services to increase significantly during 2008 and beyond. At a time when new leads coming into the Group from traditional sources decreased significantly, our large cumulative case load has enabled us to maintain a strong financial performance, with levels of revenue and profits for the year broadly in line with market expectations. These are good figures, especially when account is taken of the initial set up costs of the new office in Altrincham which have amounted to some £0.15m and which have been charged in this period. The core activity of the business in the year has been the provision of personal insolvency services in Scotland. Approximately 85% of our turnover for the year ended 31 March 2008 was derived from PTDs (2007: 80%), 10% from Sequestrations (the Scottish term for bankruptcies) and other personal insolvency services (2007: 11%), 4% from formal and informal corporate insolvency services (2007: 9%) and 1% from IVAs (2007: nil%). The total number of formal personal insolvency cases under management grew to 5,402 (2007: 5,153). Our portfolio of PTD cases represents 14.6% of the total number of PTDs extant at 31 March 2008. As a consequence of the stringent acceptance criteria that we apply to all cases, we continue to enjoy industry leading low creditor objections and failure rates. Our failure rates for Trust Deed proposals that do not progress to protection are approximately 5% for the year ended 31 March 2008 (2007: 7%). We understand from TIX that their overall objection rates have now stabilised at between 20% and 25% of all Trust Deed proposals. We are emphasising this clear market leading position to creditors with a view to differentiating Invocas as the provider of choice, delivering optimal returns to creditors. More importantly, almost all of our Trust Deed proposals that do not proceed subsequently result in sequestrations where Invocas provides the nominated insolvency practitioner. These generate an income stream which, due to the nature of the process, is higher than would have been earned from a PTD. Only 1% (2007: 2%) of our Trust Deed proposals do not progress to a formal insolvency solution. Our Approach Our approach to both customer service and delivery continues to differentiate us from much of our peer group. We always seek to balance the interests of the lenders and the borrowers and we continue to apply stringent minimum acceptance criteria to Trust Deeds and IVAs with a view to delivering truly sustainable solutions and optimum returns to creditors, both of which are even more imperative in today's climate. We undertake face to face interviews with debtors to obtain comfort as to their commitment to the process they are about to commence and to confirm the completeness and accuracy of their financial position. Lenders recognise the benefits of our high quality service and optimum returns and debtors consider us to be professional, trustworthy and caring. We believe this balanced approach leaves us well positioned to play an increasing role in the future of the sector. We continue to enjoy a good relationship with TIX, who act for a number of major creditors, including HBOS and The Royal Bank of Scotland. The Personal Market The sector saw a fall in IVA and Trust Deed acceptances in 2007 due to the raising of hurdle rates by consumer lenders who have started to appreciate the extent of their potential exposure to over-indebted consumers. The reduction in overall PTD and IVA appointments in the year ended 31 March 2008 reflected, in part, the reluctance of creditors to accept the significantly increasing trend in formal appointments that was seen in the year ended 31 March 2007, preferring, instead, the informal solution provided by DMPs. In Scotland, the overall number of Trust Deeds achieving protection fell by some 9.6% to 7,509 for the year ended 31 March 2008 (2007: 8,302) with a 4.4% reduction in the quarter to 31 March 2008 compared to the corresponding quarter of 2007 (Source: Insolvency Service). The number of IVAs approved in the year ended 31 March 2008 fell by some 18.8% to 39,451 from 48,601 in the year ended 31 March 2007, with a 22% reduction in the quarter to 31 March 2008 compared to the corresponding quarter of 2007 (Source: Insolvency Service). Statistics on DMPs are difficult to obtain but The Debt Exchange Group estimate that the number of DMPs taken out in 2007 was 160,000 and that this will double to 320,000 in 2008 (Source: Credit Action). We have also seen a strong demand for DMP services from debtors since we launched our new service at the end of 2007. DMPs are appropriate for debtors facing a temporary period of financial difficulty until a more favourable change of circumstances can be anticipated in the relative short term. However, one in four DMPs are forecast to fail within 12 months (Source: Credit Action), suggesting that a formal solution will ultimately be required in many of these cases. Following resolution between the insolvency industry and the BBA as to the criteria to be met for approval of IVAs, it seems likely that higher numbers of IVA proposals should now be approved. This will restore to the indebted person the opportunity for a voluntary solution to his problems which has traditionally been at the cornerstone of debt legislation, at the same time as offering the lender a potentially higher real level of return. We firmly believe that the underlying macro economic conditions point to a huge embedded consumer debt problem which is likely to become much worse. The pressures on consumers are well documented. The increase in the retail price index is greater than the increase in average earnings and domestic energy, car fuel and food prices continue to increase steadily as the oil price remains high or increases further. The elderly face additional pressures, typically having under-provided for pensions in days gone by. The turmoil in the credit markets continues to cause upward pressure on mortgage repayments and leads us to expect that a significant number of borrowers will face substantial increases in their monthly repayments, and possibly the requirement to find deposits, when existing fixed and discounted rate mortgage deals come to an end. Approximately 1.4 million fixed-rate mortgages will come to the end of their fixed-rate term over the next 12 months (Source: Credit Action). Anyone with a less than perfect credit history is likely to find it both harder and substantially more expensive to obtain a re-mortgage, as lenders re-price risk, severely hampering the ability of consumers to release equity to consolidate unsecured debts. With house prices now falling across the UK, unemployment increasing towards a nine year high, the threat of increasing business failures and redundancies, the demand for our range of formal and informal personal debt solutions is likely to be significant. UK personal debt at the end of April exceeded £1,436 billion. This represents an annual growth rate of 8.4%. Secured lending on homes amounted to £1,207 billion, an annual growth rate of 8.7%. Consumer credit lending amounted to £230 billion, an increase of 6.5% over the last 12 months. Total credit card debt was £54.9 billion (Source: Credit Action). The Corporate Market There is usually a time lag before any downturn in consumer spending flows through into signs of financial distress in the corporate market and, in Scotland, there was a decrease in the number of formal insolvencies during the year of 9.9% from 700 to 631. Our new formal corporate appointments were 44 (2007: 39) representing 7.0% of the formal appointments in Scotland (2007: 6.7%). The last two months of the year saw an upturn in the number of corporate referrals coming into the Group but, as yet, we have not seen a sustained uplift in activity. However, we do expect to see an increase in formal appointments later in 2008, particularly in the property, construction, retail, transport and leisure sectors, in all of which we have significant experience. New Work in the Personal Market During the year the Group's number of new PTD appointments was 871 (2007: 1,391). Our market share was 11.6% (2007: 16.8%). The number of Trust Deeds signed by Invocas in the year ended 31 March 2008 was 780 (2007: 1,521). Our total revenue opportunities are currently running at approximately 300 per month, twice what they were last summer. Typically, our monthly Trust Deed opportunities are approaching 120. A year ago, they were higher at 140 per month but the current trend is encouraging as the monthly number had fallen to 80 per month in the autumn of 2007. There has been a marked increase in DMP opportunities which have run at 120 per month in the quarter to March 2008, whereas, a year ago, the monthly number was less than 20. Whilst the overall reduction in new Trust Deeds is disappointing, there was an improving trend towards the end of the year as our new marketing strategy began to take effect. During the period from June to December 2007, the number of cases signed was running at less than 50% of the numbers signed in the equivalent quarters in the previous year. However, in the quarter to 31 March 2008, the numbers have climbed to 52% of the numbers signed in the equivalent quarter a year ago and this improving trend is carrying forward beyond the year end into the current period. We anticipate that, in June, we will achieve a level of new Trust Deed cases signed that is greater than that achieved in June last year. This will be the first month for over a year in which this has been achieved. The reasons for our relative fall in market share are threefold: * there was a marked reduction in the levels of referrals from a number of our traditional providers which we attribute to the impact of commercial pressures throughout the UK which resulted in a general withdrawal from the advertising of formal insolvency solutions; * a small number of English based work introducers recruited Scottish insolvency practitioners to provide Trust Deed services in house. One of these was a significant provider to Invocas; and * we also understand that higher referral fees are being paid to work providers that, in our experience, may not be commercially sustainable. Principally as a result of the lower numbers of Trust Deed cases signed, the overall value of new work won in the year ended 31 March 2008 from all sources was £4.30m (2007: £7.14m). Alongside our new work won, in order to grow our new IVA business, we acquired three IVA portfolios during the year, the two principal acquisitions arising during the final quarter, representing 132 cases with potential revenue in future years of approximately £0.5m. Since the year end, we have completed the acquisition of a further portfolio of 185 IVA cases with potential future revenue of a further £0.5m. We now have 346 IVA cases under management. In respect of our DMP business, we won 92 cases, principally in the final quarter of the year. We also anticipate that the number of DMP cases signed in June will be one of the highest achieved by us to date. The increasing trend in the level of new work, together with the significant potential opportunity that we now have developed with Newtomorrow Broker Services, gives us considerable optimism for the future. The Opportunities We have always believed that our caring and professional approach was unique and that, when the timing was right, we were well placed to bring this approach to the IVA market and DMP market in England and Wales. The sector has seen some fall out and, with the upsurge in demand which is anticipated in the second half of 2008, we believe that Invocas is well placed to build a strong IVA and DMP presence. We remain convinced that it is possible to deliver a quality service and make good returns. Our model assumes relatively modest costs of acquisition as we do not intend to incur significant expenditure on advertising and promotion. We will spend selectively on the purchase of quality leads and we will build a base of business referrers who are rewarded on the successful conversion of leads. We will target the higher earning cases where realisations are higher and we will not take on cases for the sake of merely achieving higher numbers. Internally, we will continue to operate on lean staff levels, utilising the expertise of our staff in Scotland, and we will continue to develop and refine our IT platform to drive efficiencies and improve the processing of PTDs, IVAs and DMPs. We anticipate that the volume of IVAs will start to grow. This will be driven by: * a realisation among creditors that the ultimate returns from IVAs do typically exceed those from DMPs; * an increasing number of bankruptcies into which debtors will be forced, if a voluntary solution is denied to them, and which will be seen to offer no meaningful return to creditors; * the increasing debt mountain in England and Wales; and * the reduction in available credit. Further, the reduction in the number of competitors in the sector should assist in achieving volume savings for those providers continuing to offer IVA services. The credit crunch provides fresh opportunities for referrals from businesses within the financial services sector that previously did not see debt solutions as a priority. These opportunities are significant and we will target these with our new web based service, Newtomorrow Broker Services. We have invested in key senior sales and marketing staff with expertise and a firm background in the financial services industry to lead the promotion of our services in this sector. Our new offering is available to IFA networks, packagers, distributors and individual IFA firms across the UK advising on mortgages and provides brokers with easy access to advice for their indebted clients who are struggling to find a refinancing solution to their problems. The initial response to our new service, which we only launched in June, has been very promising. Nine groupings, representing over 2,000 firms of IFAs, have already signed user agreements with us and we are in talks with a number of others that will increase the coverage considerably. Since the year end, and in order to assist our expansion into England, we have acquired a small personal debt advisory team that we will grow to cover England and Wales, thereby enabling us to offer a personal counselling service to clients at their preferred location. This is consistent with the approach we have traditionally taken in Scotland as we have always believed in the importance of face to face meetings in order to provide best advice and the right solution for both debtors and creditors. Our objective remains to provide a high quality personal and professional service to indebted individuals across the UK and to generate a return that is acceptable to their creditors. Regulatory Changes Scotland 1 April 2008 saw the introduction of the Bankruptcy and Diligence etc (Scotland) Act 2007 (BAD Act) and the Protected Trust Deeds (Scotland) Regulations 2008 (PTD Regulations 2008). BAD Act This introduced wholesale procedural changes to the bankruptcy process in Scotland. The headline change for debtors is the reduction in the bankruptcy term from three years to one year. Anecdotal evidence from England suggests that the volume of appointments will increase. Another aim of the BAD Act was to make it easier for debtors to access bankruptcy. Typically this applies to debtors who have insufficient assets to cover the costs of bankruptcy meaning that hitherto an insolvency practitioner was unable to accept such an appointment. In addition it was often the case that creditors had not taken formal action against the debtor meaning that the debtor had no grounds to petition the Court for his sequestration. This left the debtor in a difficult situation where creditors could still pursue the debtor who had no opportunity to find a solution to his financial problems. These "Low Income Low Assets" debtors can now simply submit an application form to the Accountant in Bankruptcy who will, in most cases, grant the application without verification work. It is anticipated that this will result in a large increase in bankruptcies but, due to the circumstances of the individuals concerned, it is unlikely to change the size of the market that Invocas targets. The most significant potential impact to our business comes from the abolition of the residency requirement. From 1 April 2008, insolvency practitioners from throughout the EU will be able to act in Scottish insolvencies. Previously an insolvency practitioner had to be resident within the Jurisdiction of the Court of Session, i.e. within Scotland. In practice, the differences in Scottish legislation will represent a significant barrier to entry and it is not envisaged that this will have a significant impact on the market or on Invocas as a number of key competitors already have a presence in the market, having acquired practices in Scotland in the course of the last year. PTD Regulations 2008 The introduction of these regulations followed an extended period of uncertainty surrounding the Trust Deed market and various changes which were included in the consultation process which could have had major effects on our business have not, in the end, been implemented. Instead, the PTD Regulations 2008 have made subtle procedural changes and, while the Accountant in Bankruptcy has a greater supervisory role to play, the Trust Deed remains the same flexible debt resolution tool that it was before, offering a positive solution to debtors and creditors alike. The emphasis is on correct advice being given at the outset and, with the advisory model used by Newtomorrow, Invocas remains well placed. Future changes in Scotland The Accountant in Bankruptcy has announced that the Agency scheme in Scotland (whereby in excess of 100 nominated insolvency practitioners currently carry out administration of sequestration cases on the Accountant's behalf) will be put out to tender towards the end of 2008, with a view to reducing significantly the number of agents who, as a result, will each potentially handle a much larger volume of cases. Suppliers with a network of offices throughout Scotland are likely to be favoured, putting Invocas in a strong position to be one of the successful bidders. England and Wales In England and Wales, we have seen agreement reached between the BBA and the industry as to the requirements to be met for an IVA proposal to be approved. This should, in time, reduce the need for creditor modifications but initial experience suggests that modifications continue to be raised on compliant IVA proposals. TIX has now issued a standard modification requiring quarterly distributions. This is potentially an onerous requirement that may drive other providers out of the market. Invocas has recently invested in an advanced IT platform that enables such distributions to be made efficiently. There have been no further announcements as to the timescale for implementation of the Simplified Individual Voluntary Arrangement (SIVA). People As our business expands, we continue to invest in additional staff. We have grown our headcount in the year to 31 March 2008 to 140 full time staff (2007: 101). Key to the success of our growth plans is the number of licensed insolvency practitioners employed by the Group. Excluding John Hall, who is now a Non-executive Director, we have increased the number in the Group during the period to seven (2007: six) and we have a further senior manager who has passed the insolvency exams and is awaiting grant of his permit. We therefore continue to have considerable case handling capacity which allows for significant growth in case numbers and for these cases to be managed efficiently and professionally. I would like to extend the thanks of the Board to all our staff for their commitment and professionalism. Infrastructure We continue to invest in our infrastructure and IT processes across the Group to underpin our growth strategy. During the year, in addition to opening the Altrincham office, we have relocated our Edinburgh and Aberdeen offices to substantially bigger and more appropriate premises and have taken additional office space in Glasgow. Since the year end, we have committed to software investment of approximately £300,000 that will provide an integrated full case management system linking all aspects of the business including the advice centre, cashiering, IVA, DMP and PTD services, delivering automated documentation, improved standard workflows and decision trees which will lead to a simplification of work practices and processing efficiencies across the business. This will facilitate the expansion of our IVA and DMP services. Acquisitions We have examined a number of potential acquisition opportunities and remain keen to develop the business further through strategic acquisitions of similar and complementary businesses. However the turbulent conditions in the sector over the last nine months have made it very difficult to evaluate with any degree of certainty the synergies and other benefits which might flow from acquisitions and vendors have not moved their price expectations in line with the sector's overall rating. We continue to explore opportunities and intend to play a full part in consolidation within our sector. Current Trading The percentage of new Trust Deeds signed as compared to the number in the equivalent period last year continues to improve. We anticipate that, in June, we will achieve a level of new Trust Deed cases signed that is greater than that achieved in June last year. This will be the first month for over a year in which this has been achieved. The number of IVA revenue opportunities is increasing and the number of IVA revenue opportunities to date in June is the highest monthly figure that we have ever received We also anticipate that the number of DMP cases signed in June will be one of the highest achieved by us to date. Since the year end, we have completed the acquisition of a further portfolio of 185 IVA cases with potential future revenue of a further £0.5m. This means that we now have 346 IVA cases under management. The increasing trend in the level of new work, together with the significant potential opportunity that we have developed with Newtomorrow Broker Services, gives us considerable optimism for the future. With macro economic factors moving strongly in our favour, a good reputation with lenders, a full range of services, an increasing number of source of leads and a significant cash balance to allow us to take advantage of opportunities for acquisition, we firmly believe that we are very well placed for the future. Stephen Lightley, Chief Executive Officer 25 June 2008 INVOCAS GROUP PLC Group Income Statement for the year ended 31 March 2008 For the year ended For the 54 week period ended 31 March 31 March 2008 2007 (as restated) Notes £'000 £'000 Revenue 2, 3 9,884 8,535 Direct costs ( 3,529) ( 2,609) Gross profit 6,355 5,926 Marketing expenses ( 225) ( 328) Administrative expenses ( 2,764) ( 2,283) Share-based payment ( 104) ( 60) Payment in lieu of notice and 4 (247) - related costs Profit from operations 4 3,015 3,255 Investment income 161 109 Profit before taxation 3,176 3,364 Income tax expense 5 ( 933) ( 1,076) Profit for the year/period 2,243 2,288 attributable to the equity holders of the Parent Company Basic earnings per share 6 7.85p 8.01p Diluted earnings per share 6 7.67p 7.85p INVOCAS GROUP PLC Balance Sheet as at 31 March 2008 Group Group 2008 2007 Notes £'000 £'000 Assets Non-current assets Property, plant and equipment 362 348 Intangible assets 4,180 4,153 Investments - - Deferred tax assets 51 18 Total non-current assets 4,593 4,519 Current assets Inventories 75 68 Trade and other receivables 6,329 5,242 Cash and cash equivalents 4,265 3,405 Total current assets 10,669 8,715 Total assets 15,262 13,234 Equity and liabilities Equity attributable to equity holders of Parent Company Share capital 7 71 71 Share premium 8,642 8,642 Share-based payment reserve 164 60 Retained earnings 4,531 2,288 Total equity 13,408 11,061 Non-current liabilities Deferred tax liabilities 8 19 Total non-current liabilities 8 19 Current liabilities Trade and other payables 883 946 Current tax payable 963 1,208 Total current liabilities 1,846 2,154 Total liabilities 1,854 2,173 Total equity and liabilities 15,262 13,234 INVOCAS GROUP PLC Cash Flow Statement for the year ended 31 March 2008 Group Group 31 March 31 March 2008 2007 Notes £'000 £'000 Operating activities Cash generated from operations 8 2,012 2,077 Income taxes paid (1,104) - Net cash generated from 908 2,077 operating activities Investing activities Purchase of property, plant and equipment (171) (316) Purchase of intangibles (38) (22) Purchase of businesses - (6,656) Interest received 161 109 Net cash (used in) (48) (6,885) investing activities Financing activities Proceeds from the issue of ordinary shares - 9,559 Share issue costs - (846) Repayment of borrowings - (500) Net cash generated from financing - 8,213 activities Net increase in cash and cash equivalents 860 3,405 Cash and cash equivalents at beginning of 3,405 - period Cash and cash equivalents at end of period 4,265 3,405 Group Statement of Changes in Equity for the year ended 31 March 2008 Share capital Share premium Share-based payment Retained earnings Total reserve £'000 £'000 £'000 £'000 £'000 Opening balance - - - - - Shares issued 71 8,642 - - 8,713 Profit for the period - - - 2,288 2,288 Share-based payment - - 60 - 60 Balance at 31 March 2007 71 8,642 60 2,288 11,061 Profit for the year - - - 2,243 2,243 Share-based payment - - - 104 104 Balance at 31 March 2008 8,642 4,531 13,408 71 164 Summary of significant accounting policies The financial statements of the Group and Company have been prepared in accordance with International Financial Reporting Standards (IFRSs), including International Financial Reporting Interpretations Committee (IFRIC) interpretations as adopted for use in the European Union and in accordance with those parts of the Companies Act 1985 applicable to companies reporting under IFRSs. Invocas Group plc is incorporated and domiciled in the United Kingdom. The financial statements have been prepared on the historical cost basis, with the exception of share-based payments. Comparatives Direct costs have been reclassified to include the costs described within the direct costs accounting policy below. The effect of this adjustment on the financial statements has been to reclassify wages and salaries, advertising and case acquisition costs of £962,000 (2007: £383,000) from marketing costs within overheads into direct costs in order to match those costs that are directly attributable with the related revenue. There has been no effect upon the operating profit. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company (its subsidiaries) made up to 31 March each year. 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 the identifiable net assets acquired (i.e. discount on acquisition) is recognised directly in the income statement. The purchase 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 results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate; the effective date being the date that control is obtained or transferred to a third party. 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. Notes to the financial statements for the year ended 31 March 2008 1 Presentation of financial statements The financial statements have been prepared in accordance with International Financial Reporting Standards, as adopted by the EU. 2 Revenue An analysis of the Group's revenue is as follows: Year ended 31 March Period ended 31 March 2007 2008 £'000 £'000 Continuing operations: Insolvency services 9,568 8,423 Debt advisory services 280 112 Debt management services 36 - 9,884 8,535 3 Business and geographical segments There are identifiable business segments within the Group but they are not considered significant in terms of IFRS 8, as they are below the 10% threshold and so are not separately reportable. 4 Profit from operations Profit from operations has been arrived at after charging: Year ended Period 31 March ended 2008 31 March £'000 2007 £'000 Depreciation - owned assets 97 58 Amortisation of intangible 11 4 assets Staff costs 4,054 3,188 Auditors' remuneration for 41 33 audit services Payments under operating leases - land and buildings 290 155 - other assets 35 32 Payment in lieu of notice and 247 - related costs 5 Income tax expense Year ended 31 March 2008 Period ended 31 March £'000 2007 £'000 Current tax UK Corporation tax 1,005 1,075 Deferred tax (26) 1 979 1,076 Prior year adjustments UK Corporation tax (28) - Deferred tax (18) - (46) - Tax attributable to the 933 1,076 Company and its subsidiaries UK corporation tax is calculated at 30% of the estimated assessable profit for the year. The charge for the year can be reconciled to the profit per the income statement as follows: Year ended 31 March % Period ended 31 March 2007 % 2008 £'000 £'000 Profit before tax 3,176 3,364 Tax at the domestic income tax 953 1,009 rate 30% Tax effect of expenses that 26 67 are not deductible in determining taxable profit Prior year adjustments (46) - Tax expense and effective tax 933 29 1,076 32 rate for the period 6 Earnings per share The calculation of the basic and diluted earnings per share is based on the following data: Year ended 31 March Period ended 31 March 2008 2007 £'000 £'000 Profit for the year 2,243 2,288 Weighted average no. of shares Number Number in issue: For basic earnings per share 28,566,585 28,566,585 Effect of share options issued 661,283 567,183 For diluted earnings per share 29,227,868 29,133,768 Earnings per share: Pence Pence Basic 7.85 8.01 Diluted 7.67 7.85 Profit for the year has been used for calculating both basic and diluted earnings per share. The basic and diluted earnings per share figures relate to all operations, all of which are continuing. 7 Share Capital Group and Company 2008 Number 2008 £'000 2007 Number 2007 £'000 Ordinary shares of 0.25 pence each Authorised: 39,000,000 97 39,000,000 97 Issued and Fully Paid: 28,566,585 71 28,566,585 71 The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and maintain an optimal capital structure to reduce the cost of capital. Options During the period, options were granted over 110,000 ordinary shares (2007: 666,873). Options over 15,900 shares were forfeited during the year ( 2007: 99,690) and at 31 March 2008 the Company had 661,283 unissued ordinary shares of 0.25p each (2007: 567,183) under the Company's share option scheme, details of which are as follows: Grant date Granted in the Option price (p) Date from which Expiry date period to 31 March exercisable 2007 17 March 2006 420,180 111 17 March 2009 17 March 2016 17 March 2006 75,700 111 17 March 2008 17 March 2016 16 June 2006 27,625 182 16 June 16 June 2016 2009 27 June 2006 27,778 180 27 June 27 June 2016 2009 Grant date Granted in the year Option price (p) Date from which Expiry date to 31 March 2008 exercisable 3 April 2007 85,000 136 3 April 3 April 2010 2017 10 October 2007 25,000 86 10 October 2010 10 October 2017 8 Reconciliation of profit from operations to net cash from operating activities Group 2008 £'000 Group 2007 £'000 Profit from operations before taxation and dividends 3,015 3,255 Adjustments for: Depreciation of plant and equipment 97 58 Amortisation of intangibles 11 4 Loss on disposal of plant and equipment - 6 Share-based payment 104 60 Operating cash flows before movements in working capital 3,227 3,383 (Increase) in inventories (7) (36) (Increase) in trade and other receivables (1,087) (2,135) (Decrease)/increase in trade and other payables (121) 865 Cash generated from operations 2,012 2,077 9 Status of Preliminary Announcement The financial information set out in this Preliminary Announcement, which has been extracted from the audited accounts, does not constitute the Company's statutory accounts for the year ended 31 March 2008. The statutory accounts for the year ended 31 March 2008, which were approved by the Directors on 25 June 2008, will be delivered to the Registrar of Companies, following the Company's Annual General Meeting. The Auditors reported on the accounts for the year ended 31 March 2008; their report was unqualified and did not contain a statement under s237 (2) or (3) of the Companies Act 1985. A copy of the Annual Report and Financial Statements will be sent to all shareholders shortly and will be available from the Company at Capital House, 2 Festival Square, Edinburgh EH3 9SU. While the financial information included in this Preliminary Announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), as adopted by the European Union, this Announcement does not in itself contain sufficient information to comply with IFRS. This information is provided by RNS The company news service from the London Stock Exchange END FR FIMPTMMATBLP
1 Year Invocas Chart |
1 Month Invocas Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions