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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Orchard Funding Group Plc | LSE:ORCH | London | Ordinary Share | GB00BYZFM569 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 29.00 | 28.00 | 30.00 | 29.50 | 29.00 | 29.00 | 15 | 08:00:06 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security Brokers & Dealers | 7.86M | 1.71M | 0.0802 | 3.62 | 6.19M |
From Apr 2019 to Apr 2024
TIDMORCH
RNS Number : 9459A
Orchard Funding Group PLC
30 March 2017
Orchard Funding Group PLC
("Orchard Funding Group" or the "Company" or the "Group")
Half Yearly Results
For the 6 months ended 31 January 2017
Orchard Funding Group, the finance group which specialises in insurance premium finance and the professions funding market, is pleased to announce its unaudited results for the six months ended 31 January 2017.
Highlights
-- The Group lent GBP31.1 million for the six months to 31 January 2017; on a like for like basis, an extra GBP7.5 million of lending and a 31.7% improvement on the six months to 31 January 2016;
-- Group turnover has increased by 29.2% from GBP1.6 million in the six months to January 2016 to GBP2.1 million in the six months to 31 January 2017;
-- Group profit before tax was GBP0.8 million, up by 15.5% on the six months to 31 January 2016;
-- Barclays Bank plc has increased the amount of funding available to the Group from GBP10 million to GBP15 million during the period since 31 January 2016.
-- The Board is recommending an interim dividend of 1 pence per share. This reflects its decision to adopt a policy of giving greater weight to the final dividend.
Ravi Takhar, Chief Executive Officer of the Company, stated:
"The benefits of raising capital from our flotation are just starting to show in our numbers. We are lending more and making more profits for the benefit of all our stakeholders. Our improved capital base has also enabled us to increase our leverage, which is still at very conservative levels. We are confident that we will continue to increase our lending going forward and will be able to fund that growth with our existing capital base and existing leverage. Our capital base and historic track record has also significantly improved our ability to raise further leverage in the future. It's a great time to be in our business and we are all very excited about the future."
For further information, please contact:
Orchard Funding Group PLC +44 (0)1582 635 507
Ravi Takhar, Chief Executive Officer
finnCap Limited (Nomad and Broker) +44 (0)20 7220 0579
Jonny Franklin-Adams (Corporate Finance)
Emily Watts (Corporate Finance)
For Investor Relations please go to: www.orchardfundinggroupplc.com
Chairman's statement
This has proved a very satisfactory period for Orchard Funding Group, posting an increase in revenue of 29.2% and an increase in profit before tax of 15.5%, all the while keeping operational costs well under control. Overall lending continues to be strong and our new business pipeline remains robust and healthy.
The insurance premium finance market is expected to grow from around GBP8.5bn annually currently to circa GBP11.6bn by 2019. Orchard has but a very small proportion of this market and therefore has considerable scope to grow, as evidenced by the growth in lending in the period under review of 31.7% compared to the same period last year. Currently, we have over 100 partnerships with insurance brokers and it is our intention to increase this further over the coming years, but always in a measured and controlled fashion.
Lending to the professions continues to grow, and more and more professional businesses are seeking our help with their working capital requirements. We have relationships with about 450 professional firms and lending in this area has grown over 7.7% compared to the same period last year.
During the second half of 2016, I am happy to say we successfully launched Orchard Lending Club, the first peer-to-peer lender in the insurance premium finance market.
There remains stiff competition, especially in the professions finance market, but we continue to grow and develop whilst maintaining healthy margins on the business we write.
Investment in staff and software continues and we have recently moved to larger premises in Luton more suited to our needs and providing ample scope for the foreseeable future.
Our debt line from Barclays has been increased to GBP15m and the Board continues to examine other potentially suitable sources of finance for the Group.
The Board is pleased with the progress made by the group in the period under review, and feels confident that the business will continue to expand the number and quality of loans written while delivering results satisfying all stakeholders in the business.
David A Clark
Chairman
29 March 2017
Chief Financial Officer's summary
The figures for the six month period ended 31 January 2017 indicate that we have continued to grow from the baseline laid down in our first full year as a plc group. This should lead to sustainable growth in revenues and profitability and therefore shareholder value.
Gross revenue is 29.2% up compared with the equivalent six month period in 2016 and this is reflected in a 15.5% increase in profit before tax. The investment made in additional staff, software and associated marketing and other costs, have begun to bear fruit.
The launch of Orchard Lending Club has given the Group supplementary liquidity, albeit still small at this stage. Together with the additional finance which has been made available by Barclays Bank, this has meant that we have been able to grow our lending.
Key Performance Indicators (KPIs)
KPIs for the Group revolve around good quality lending, evidenced by a sound underwriting process and multiple layers of credit protection. Income and profits flow from this. There are two core areas - insurance premium funding and funding for professionals. Insurance premium funding is subdivided between broker finance companies and direct lending. At present the level of direct lending (although growing) does not warrant it being treated as a core area. The Board does, however, continue to monitor activity in direct lending.
Hot Features
Premium
31 January 2017 31 January 2016
GBP000s % GBP000s %
Lending
Broker finance
companies 20,598 66.2% 16,455 69.6%
Direct insurance 3,693 11.9% 845 3.6%
Professions funding 6,822 21.9% 6,329 26.8%
Total lending 31,113 100.0% 23,629 100.0%
Loan book
Broker finance
companies 16,049 61.8% 13,458 66.8%
Direct insurance 3,167 12.2% 756 3.8%
Professions funding 6,773 26.0% 5,921 29.4%
Total loan book 25,989 100.0% 20,135 100.0%
Group income
Broker finance
companies 1,429 67.4% 1,062 64.8%
Direct insurance 197 9.3% 87 5.3%
Professions funding 493 23.3% 491 29.9%
Total income 2,119 100.0% 1,640 100.0%
Costs have also risen over the period, again in line with expectations and our increased income.
31 January 2017 31 January 2016
GBP000s % GBP000s %
Group costs
Broker finance companies 725 55.5% 492 52.6%
Professions funding 319 24.4% 200 21.4%
Central costs 263 20.1% 244 26.0%
Total costs 1,307 100.0% 936 100.0%
Group contribution to parent
overheads*
Broker finance
companies 705 65.6% 569 60.1%
Direct insurance 196 18.2% 87 9.2%
Professions funding 174 16.2% 291 30.7%
Total contribution
to parent overheads 1,075 100.0% 947 100.0%
* This consists of subsidiaries' profits and excludes the parent company costs.
66.2% of the Group's lending is to broker finance companies. It is still the largest part of the business so, as might be expected, broker finance companies account for the largest proportion of income and profits.
Direct insurance lending has risen substantially. We see this as becoming a larger part of the business in future.
We currently have a facility with Barclays Bank plc of GBP15 million of which approximately 79% was in use at 31 January 2017 (GBP10 million and 87% respectively at 31 January 2016). With this additional availability of bank funding, together with our own net current assets of GBP12.63 million at 31 January 2017 (GBP12.18 million - 31 January 2016), the Group is well set for continued growth.
The Board is pleased to declare an interim dividend of 1 pence per share to be paid on 30 June 2017 to shareholders on the register on 23 June 2017.
Liam McShane
Chief Financial Officer
29 March 2017
Consolidated income statement
6 months 6 months
ended ended
31 January 31 January
2017 2016
Year
ended
31 July
2016
Notes GBP GBP GBP
--------------------------------- ------ ------------ ------------ ------------
Continuing operations
Revenue 2 2,119,449 1,639,910 3,468,864
Finance costs 2 (146,990) (110,183) (238,079)
Other operational costs 2 (38,775) (38,350) (76,025)
---------------------------------- ------ ------------ ------------ ------------
Gross profit 1,933,684 1,491,377 3,154,760
Administrative expenses 2 (1,121,100) (788,068) (1,884,030)
----------------------------------- ------ ------------ ------------ ------------
Operating profit before income
tax 812,584 703,309 1,270,730
Income tax expense 3 (172,450) (137,150) (266,653)
---------------------------------- ------ ------------ ------------ ------------
Profit for the period 640,134 566,159 1,004,077
Other comprehensive income - - -
----------------------------------- ------ ------------ ------------ ------------
Total comprehensive income
for the period
attributable to the
owners of the parent 640,134 566,159 1,004,077
------
Earnings per share attributable
to the owners of the parent
during the period (pence)
Basic and diluted 4 3.00 2.65 4.70
----------------------------------- ------
Consolidated statement of financial position
At 31 At 31 At 31
January January July
2017 2016 2016
GBP GBP GBP
------------------------------------- ----------- ----------- -----------
Assets
Non-current assets
Property, plant and equipment 85,055 23,731 95,058
Intangible assets 39,226 - 43,873
--------------------------------------
124,281 23,731 138,931
------------------------------------
Current assets
Trade and other receivables 26,192,653 20,237,991 22,003,868
Tax receivable - - -
Cash and cash equivalents:
Bank balances and cash in hand 1,439,981 2,282,929 1,390,098
Bank overdrafts - (18,162) -
------------------------------------
27,632,634 22,502,758 23,393,966
Total assets 27,756,915 22,526,489 23,532,897
--------------------------------------
Equity and liabilities
Equity attributable to the owners
of the parent
Called up share capital 213,542 213,542 213,542
Share premium 8,691,910 8,691,910 8,691,910
Merger reserve 890,725 890,725 890,725
Retained earnings 2,885,557 2,407,557 2,545,449
--------------------------------------
Total equity 12,681,734 12,203,734 12,341,626
-------------------------------------- ----------- ----------- -----------
Liabilities
Non-current liabilities
Borrowings 60,951 - 27,318
Deferred tax 8,925 590 10,078
--------------------------------------
69,876 590 37,396
Current liabilities
Trade and other payables 2,503,625 1,202,763 1,657,030
Borrowings 12,103,712 8,695,845 9,207,927
Tax payable 397,968 423,557 288,918
--------------------------------------
15,005,305 10,322,165 11,153,875
------------------------------------ ----------- ----------- -----------
Total liabilities 15,075,181 10,322,755 11,191,271
-------------------------------------- ----------- ----------- -----------
Total equity and liabilities 27,756,915 22,526,489 23,532,897
-------------------------------------- ----------- ----------- -----------
Consolidated statement of changes in equity
Called
up
Share Retained Share Merger Total
capital earnings premium reserve Equity
GBP GBP GBP GBP GBP
----------------------- --------------- --------------- --------------- --------------- -----------
Balance at 1 August
2015 213,542 1,841,398 8,691,910 890,725 11,637,575
Changes in equity
Total comprehensive
income - 566,159 - - 566,159
Transactions with
owners:
Dividends paid - - - - -
Balance at 31 January
2016 213,542 2,407,557 8,691,910 890,725 12,203,734
------------------------
Changes in equity
Total comprehensive
income - 437,918 - - 437,918
Transactions with
owners:
Dividends paid - (300,026) - - (300,026)
Balance at 31 July
2016 213,542 2,545,449 8,691,910 890,725 12,341,626
------------------------ --------------- --------------- --------------- --------------- -----------
Changes in equity
Total comprehensive
income - 640,134 - - 640,134
Transactions with
owners:
Dividends paid - (300,026) - - (300,026)
------------------------
Balance at 31 January
2017 213,542 2,885,557 8,691,910 890,725 12,681,734
------------------------
The merger reserve arose through the formation of the group on 23 June 2015 using the consolidation method which treats the merged companies as if they had been combined throughout the current and comparative accounting periods. The accounting principles for these combinations gave rise to a merger reserve in the consolidated statement of financial position, being the difference between the nominal value of new shares issued by the Company for the acquisition of the shares of the subsidiaries and each subsidiary's own share capital.
The share premium account arose on the issue of shares on the IPO on 1 July 2015 at a premium of 95p per share. Costs directly attributable to the issue of shares have been deducted from the account.
Consolidated statement of cash flows
6 months 6 months Year
ended ended ended
31 January 31 January 31 July
2017 2016 2016
GBP GBP GBP
-------------------------------------- ------------ ------------
Cash flows from operating
activities:
Profit before income tax 812,584 703,309 1,270,730
Adjustment for depreciation
and amortisation 19,236 4,709 20,520
Hire purchase interest 1,342 - -
----------------------------------------
833,162 708,018 1,291,250
Increase in trade and other
receivables (4,188,785) (2,322,994) (4,088,870)
Increase/(decrease) in trade
and other payables 846,595 (633,145) (178,878)
----------------------------------------
(2,509,028) (2,248,121) (2,976,498)
Income tax (paid)/received (64,552) 1,411 (253,245)
---------------------------------------
Net cash absorbed by operating
activities (2,573,580) (2,246,710) (3,229,743)
----------------------------------------
Cash flows from investing activities
Purchases of property, plant
and equipment (510) (24,014) (61,924)
Expenditure on software development (4,077) - (50,949)
-----------------------------------------
Net cash absorbed by investing
activities (4,587) (24,014) (112,873)
----------------------------------------
Cash flows from financing
activities
Dividends paid (300,026) - (300,026)
Net proceeds from borrowings 2,934,134 1,680,690 2,185,099
Borrowings repaid (6,058) - (7,160)
---------------------------------------- ------------ ------------ ------------
Net cash generated by financing
activities 2,628,050 1,680,690 1,877,913
----------------------------------------
Net increase/(decrease) in
cash and cash equivalents 49,883 (590,034) (1,464,703)
Cash and cash equivalents
at the beginning of the period 1,390,098 2,854,801 2,854,801
----------------------------------------
Cash and cash equivalents
at the end of period 1,439,981 2,264,767 1,390,098
----------------------------------------
Notes to the financial statements
1. General information
Orchard Funding Group PLC ("the Company") and its subsidiaries (together "the group") provide funding and funding support systems to insurance brokers and professional firms through the trading subsidiaries. The group operates in the United Kingdom.
The Company is a public Company listed on the Alternative Investment Market of the London Stock Exchange, incorporated and domiciled in the United Kingdom. The address of its registered office is 721 Capability Green, Luton, Bedfordshire LU1 3LU.
The condensed consolidated interim financial information for the six months ended 31 January 2017 has been prepared in accordance with the presentation, recognition and measurement requirements of applicable International Financial Reporting Standards adopted by the European Union ('IFRS') except that the Group has not applied IAS 34, Interim Financial Reporting, which is not mandatory for UK Groups listed on AIM, in the preparation of the condensed consolidated interim financial information.
The financial information does not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended 31 July 2016 which are prepared in accordance with International Financial Reporting Standards and International Reporting Interpretations Committee pronouncements as adopted by the European Union.
The accounting policies used in the preparation of condensed consolidated interim financial information for the six months ended 31 January 2017 are in accordance with the presentation, recognition and measurement criteria of IFRS and are consistent with those which are expected to be adopted in the annual statutory financial statements for the year ending 31 July 2017.
A number of IFRSs and Interpretations have been endorsed by the EU that will apply for the first time in the period to 31 July 2017 and, although they have been adopted by the Group, none of them has had a material impact on the Group's financial statements.
The Group's 2016 annual report provides full details of significant judgements and estimates used in the application of the Group's accounting policies. There have been no significant changes to these judgements and estimates during the period.
The financial information included in this document is unaudited and does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The comparative figures for the financial year ended 31 July 2016 are the Group's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
2. Segmental reporting
The group operates wholly within the United Kingdom, therefore there is no meaningful information that could be given on a geographical basis. It does have, however, two discrete operating segments - insurance premium funding and professional fee funding.
The Board assesses the performance of each sector based on operating profit (before tax and exceptional items, but after interest which is a cost of sale). The relative sales, operating costs and operating profit are shown below.
6 months ended 31 January 2017
Insurance
premium Professional
Total Central funding fee funding
GBP GBP GBP GBP
------------------------- ------------ ---------- ---------- -------------
Sales 2,119,449 - 1,625,958 493,491
-------------------------- ------------ ---------- ---------- -------------
Interest payable (146,990) - (143,091) (3,899)
Other operational
costs (38,775) (38,775) -
Administrative expenses (1,121,100) (262,712) (542,940) (315,448)
-------------------------- ---------- ---------- -------------
Operating profit/(loss)
before tax 812,584 (262,712) 901,152 174,144
------------ ---------- ---------- -------------
6 months ended 31 January 2016
Insurance
premium Professional
Total Central funding fee funding
GBP GBP GBP GBP
------------------------- ---------- ---------- ---------- -------------
Sales 1,639,910 - 1,148,890 491,020
-------------------------- ---------- ---------- ---------- -------------
Interest payable (110,183) - (110,183) -
Other operational
costs (38,350) - (38,350) -
Administrative expenses (788,068) (244,245) (343,853) (199,970)
-------------------------- ---------- ---------- -------------
Operating profit/(loss)
before tax 703,309 (244,245) 656,504 291,050
---------- ---------- ---------- -------------
Year ended 31 July 2016
Insurance
premium Professional
Total Central funding fee funding
GBP GBP GBP GBP
------------------------- ------------ ---------- ---------- -------------
Sales 3,468,864 - 2,259,577 1,209,287
-------------------------- ------------ ---------- ---------- -------------
Interest payable (238,079) - (238,079) -
Operational costs
and administrative
expenses (1,960,055) (514,161) (961,771) (484,123)
-------------------------- ---------- ---------- -------------
Operating profit/(loss)
before tax 1,270,730 (514,161) 1,059,727 725,164
------------ ---------- ---------- -------------
3. Taxation
The tax assessed for the period differs from the main corporation tax rates in the UK (20% for both half years and the full year) because of the effect of items disallowed for tax and accelerated capital allowances.
4. Earnings per share
Earnings per share are based on the total comprehensive income shown above, for each relevant period, and the weighted average number of ordinary shares in issue during each period. For all three periods, this was 21,354,167. There are no options or other factors which would dilute these, therefore the fully diluted earnings per share is identical.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QKLFLDXFEBBX
(END) Dow Jones Newswires
March 30, 2017 02:00 ET (06:00 GMT)
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