Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Secure Trust Bank Plc | LSE:STB | London | Ordinary Share | GB00B6TKHP66 | ORD 40P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2.00 | 0.34% | 596.00 | 596.00 | 598.00 | 610.00 | 586.00 | 586.00 | 110,380 | 16:25:38 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Commercial Banks, Nec | 205.1M | 19.7M | 1.0330 | 5.77 | 113.28M |
From Apr 2020 to Apr 2025
TIDMARBB TIDMSTB
RNS Number : 5625J
Arbuthnot Banking Group PLC
18 July 2013
18 July 2013
For immediate release
ARBUTHNOT BANKING GROUP ("Arbuthnot", "the Group" or "ABG")
Results for the six months to 30 June 2013
"Sustained growth"
Arbuthnot Banking Group has seen good growth in all of its businesses in the first half of 2013. The retail bank has completed the acquisition of V12 Retail Finance Group and the business of Debt Managers Ltd and the private bank is opening an office in Dubai.
Arbuthnot Banking Group PLC is the holding company for Arbuthnot Latham & Co., Limited and Secure Trust Bank PLC.
FINANCIAL HIGHLIGHTS
-- Underlying profit before tax GBP7.2m (see footnote) -- Underlying profit growth 64% -- Reported profit before tax GBP2.0m (H1 2012: GBP10.8m) -- Customer loans GBP673m (H1 2012: GBP543m) -- Customer deposits GBP840m (H1 2012: GBP704m) -- Interim dividend per share 11p (H1 2012: 11p)
OPERATIONAL HIGHLIGHTS
Retail Banking - Secure Trust Bank
-- Profit before tax GBP6.2m (H1 2012: GBP12.5m) -- Underlying profit growth 37% -- Customer loans GBP366m (H1 2012: GBP260m) -- Customer deposits GBP387m (H1 2012: GBP298m) -- Successful integration of recent acquisitions
-- New loan referral programme agreed with a significant retail bank and scheduled to commence shortly
Private Banking - Arbuthnot Latham
-- Profit before tax GBP1m (H1 2012: GBP1.4m) -- Customer loans GBP307m (H1 2012: GBP283m) -- Customer deposits GBP453m (H1 2012: GBP406m) -- Launching wealth management advisory business in Dubai
Commenting on the results, Henry Angest, Chairman and Chief Executive of Arbuthnot, said: "The Group has made good progress so far this year and continues to exploit the many varied opportunities that currently exist in the markets in which we operate."
The interim results and presentation are available at http://www.arbuthnotgroup.com.
Secure Trust Bank PLC is today releasing its interim statement and it should be read in conjunction with these results.
Footnote - Underlying Profit before tax, adjusted for Group Executive share option scheme costs of GBP1m, Secure Trust Bank share option scheme costs of GBP1m and acquisition accounting adjustments of GBP3.2m.
ENQUIRIES:
Arbuthnot Banking Group 020 7012 2400
Henry Angest, Chairman and Chief Executive
Andrew Salmon, Group Chief Operating Officer
James Cobb, Group Finance Director
David Marshall, Director of Communications
Canaccord Genuity Ltd (Nominated Advisor) 020 7665 4500
Lawrence Guthrie
Sunil Duggal
Numis Securities Ltd (Broker) 020 7260 1000
Chris Wilkinson
Mark Lander
Pelham Bell Pottinger (Financial PR) 020 7861 3917
Ben Woodford
Dan de Belder
Chairman's Statement
Arbuthnot Banking Group PLC
I am pleased to report that Arbuthnot Banking Group continued its sustained growth in the first half of 2013. The Group has reported a pre-tax profit of GBP2.0m (H1 2012: GBP10.8m) with an underlying profit of GBP7.2m, which is adjusted for GBP2.0m in option scheme costs both at the Group level and Secure Trust Bank and GBP3.2m, being the amortisation of acquired intangibles and other accounting adjustments required as a result of the recent acquisitions.
Both of our banks are increasing the number of customers who they serve, and continue to broaden their distribution channels. I am delighted that Arbuthnot Latham has rekindled our ambitions to operate overseas by launching a wealth management advisory service in Dubai.
I also expect that both banks will finally be able to draw funds under the Funding for Lending Scheme (FLS) during the second half of 2013, as they have either completed or are in the final stages of completing the necessary documentation with the Bank of England.
The Board is maintaining the interim dividend at 11p (gross), which will be paid on 4 October 2013 to shareholders on the register at 6 September 2013.
Private banking subsidiary - Arbuthnot Latham & Co., Limited
Arbuthnot Latham's reported profit before tax is GBP1.0m (H1 2012: GBP1.4m) which is consistent with the second half of 2012, where the business took the opportunity to invest in the future by hiring a number of well qualified senior bankers. These favourable hiring conditions continued in the first half and a further three senior executives joined the bank.
The bank continues to see a good flow of attractive lending propositions being presented to it and has grown the loan portfolio by 8% to GBP307m.
The deposit book has grown by 12% over the past twelve months to GBP453m. As expected, a large proportion of higher yielding retail deposits have matured. These have been replaced by less expensive deposits. This change in mix is expected to continue during the second half of 2013 as more deposits mature and as the bank is able to access the FLS.
The advisory side of the business has seen a positive reaction to the introduction of the Retail Distribution Review (RDR), with discretionary assets under management increasing by 28% to GBP430m.
Gilliat Financial Solutions, our provider of structured products, increased its sales volumes by 25% to GBP74m.
Finally, as part of celebrating its 180th year, Arbuthnot Latham hosted a gala dinner at the Guildhall in May and at the same time published a book that provides a comprehensive record of the bank's history with an entertaining foreword penned by the Mayor of London, Boris Johnson.
Retail banking subsidiary - Secure Trust Bank PLC
Secure Trust Bank has reported a profit before tax of GBP6.2m (H1 2012: GBP12.5m). However, the prior year results included the one off bargain purchase gain arising on the acquisition of Everyday Loans. Also, the current year results have been reduced by the subsequent amortisation of intangibles. Once these adjustments are made the business has grown its underlying profit by 37%.
As the bank continues to develop the breadth of its distribution channels, the number of customers that the business now serves has grown to 325,052, which is 64% higher than the previous year. This should be further enhanced by the recent completion of a loan referral agreement with a significant retail bank.
The bank has continued to see strong demand for its loan products with the overall loan book closing at GBP366m, which is 41% higher than the prior year. The level of loan impairments remains well controlled and is currently below rates that were expected when the loans were originated.
The deposit book increased to GBP387m, which is a year on year growth of 30%. The strength of the bank's funding base has been further enhanced as the bank accessed the FLS early in the second half of 2013.
A year has now passed since the completion of the acquisition of Everyday Loans and the business has performed well. The integration has been completed and it is now embarking on its own growth strategy. In the first half of 2013, Everyday Loans has opened new branches in Belfast and Ipswich, with further expansion planned in the second half, including a new branch in Edinburgh.
The other acquisitions made earlier in the year have also been smoothly integrated. The combination of V12 Retail Finance Group and the existing retail finance within Secure Trust Bank means that the bank is now the largest provider of finance for cycles and musical instruments in the UK.
Furthermore, Secure Trust Bank is planning to extend its capabilities by entering into SME lending and providing finance to enable sports fans to spread the cost of buying their season tickets.
Outlook
Both businesses have traded as expected in the first half of 2013. We anticipate that a higher profitability run rate will emerge in the second half. This is due to the fact that net margins are improving, with the reduced cost of funding together with the increasing lending volumes. It is for these reasons that we are confident about the prospects for the rest of the year.
Consolidated Statement of Comprehensive Income
Hot Features
Premium
Six months Six months
ended ended
30 June 30 June
2013 2012
Note GBP000 GBP000
----------------------------------------------------- ----- ----------- -----------
Interest income 40,931 22,438
Interest expense (10,868) (6,840)
----------------------------------------------------- ----- ----------- -----------
Net interest income 30,063 15,598
----------------------------------------------------- ----- ----------- -----------
Fee and commission income 14,062 10,857
Fee and commission expense (927) (254)
----------------------------------------------------- ----- ----------- -----------
Net fee and commission income 13,135 10,603
----------------------------------------------------- ----- ----------- -----------
Gains less losses from dealing in securities - (314)
----------------------------------------------------- ----- ----------- -----------
Operating income 43,198 25,887
----------------------------------------------------- ----- ----------- -----------
Net impairment loss on financial assets (8,150) (3,679)
Other income 2 842 9,947
Operating expenses 3 (33,853) (21,387)
----------------------------------------------------- ----- ----------- -----------
Profit before income tax from continuing operations 2,037 10,768
Income tax expense (633) (133)
----------------------------------------------------- ----- ----------- -----------
Profit after income tax from continuing operations 1,404 10,635
Loss from discontinued operations after tax - (210)
----------------------------------------------------- ----- ----------- -----------
Profit for the period 1,404 10,425
----------------------------------------------------- ----- ----------- -----------
Foreign currency translation reserve - 570
Revaluation reserve
Cash flow hedging reserve
- Effective portion of changes in fair value 7 (97)
Other comprehensive income for the period, net of
income tax 7 473
----------------------------------------------------- ----- ----------- -----------
Total comprehensive income for the period 1,411 10,898
----------------------------------------------------- ----- ----------- -----------
Profit attributable to:
Equity holders of the Company 5 7,783
Non-controlling interests 1,399 2,642
----------------------------------------------------- ----- ----------- -----------
1,404 10,425
----------------------------------------------------- ----- ----------- -----------
Total comprehensive income attributable to:
Equity holders of the Company 12 8,256
Non-controlling interests 1,399 2,642
----------------------------------------------------- ----- ----------- -----------
1,411 10,898
----------------------------------------------------- ----- ----------- -----------
Earnings per share for profit attributable to the
equity holders of the Company during the period
(expressed in pence per share):
- basic and fully diluted 4 - 50.9
Consolidated Statement of Financial Position
At 30 June
2013 2012
GBP000 GBP000
ASSETS
Cash 117,724 129,137
Loans and advances to banks 82,168 50,249
Debt securities held-to-maturity 16,477 32,757
Loans and advances to customers 673,204 543,379
Current tax asset - 483
Other assets 17,110 10,141
Financial investments 3,358 3,269
Deferred tax asset 4,724 5,967
Intangible assets 14,014 8,618
Property, plant and equipment 22,352 6,055
--------------------------------------------- -------- --------
Total assets 951,131 790,055
--------------------------------------------- -------- --------
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 153 153
Retained earnings 51,245 48,358
Other reserves (1,198) (1,397)
--------------------------------------------- -------- --------
Non-controlling interests 15,805 8,640
--------------------------------------------- -------- --------
Total equity 66,005 55,754
--------------------------------------------- -------- --------
LIABILITIES
Deposits from banks 1,163 1,113
Derivative financial instruments 6 1,008
Deposits from customers 840,358 703,661
Current tax liability 290 -
Other liabilities 29,755 16,727
Deferred tax liability 974 -
Debt securities in issue 12,580 11,792
--------------------------------------------- -------- --------
Total liabilities 885,126 734,301
--------------------------------------------- -------- --------
Total equity and liabilities 951,131 790,055
--------------------------------------------- -------- --------
Consolidated Statement of Changes in Equity
Attributable to equity holders of the Group
-----------------------------------------------------------------------------------------------------------------
Foreign Cash
Share currency Capital flow
Share premium translation Revaluation redemption Available-for-sale hedging Treasury Retained Non-controlling
capital account reserve reserve reserve reserve reserve shares earnings interests Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------- -------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Balance at 1
January
2013 153 - - 140 20 81 (363) (1,131) 53,372 16,376 68,648
Total
comprehensive
income for the
period
Profit for the
six
months ended
30
June 2013 - - - - - - - - 5 1,399 1,404
Other
comprehensive
income, net of
income
tax
Revaluation
reserve
- Amount
transferred
to profit
and loss - - - 48 - - - - (48) - -
Cash flow
hedging
reserve
- Effective
portion
of changes
in fair
value - - - - - - 7 - - - 7
Total other
comprehensive
income - - - 48 - - 7 - (48) - 7
--------------- -------- -------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Total
comprehensive
income for
the period - - - 48 - - 7 - (43) 1,399 1,411
--------------- -------- -------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Transactions
with
owners,
recorded
directly in
equity
Contributions
by
and
distributions
to owners
Final dividend
relating
to 2012 - - - - - - - - (2,084) (1,970) (4,054)
Total
contributions
by and
distributions
to owners - - - - - - - - (2,084) (1,970) (4,054)
--------------- -------- -------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Balance at 30
June
2013 153 - - 188 20 81 (356) (1,131) 51,245 15,805 66,005
--------------- -------- -------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Attributable to equity holders of the Group
------------------------------------------------------------------------------------------------------------------
Foreign Cash
Share currency Capital flow
Share premium translation Revaluation redemption Available-for-sale hedging Treasury Retained Non-controlling
capital account reserve reserve reserve reserve reserve shares earnings interests Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Balance at 1
January
2012 153 21,085 (570) 140 20 - (329) (1,097) 21,571 5,998 46,971
Total
comprehensive
income for the
period
Profit for the
six
months ended
30
June 2012 - - - - - - - - 7,783 2,642 10,425
Other
comprehensive
income, net of
income
tax
Foreign
currency
translation
reserve - - 570 - - - - - - - 570
Cash flow
hedging
reserve
reserve
- Effective
portion
of changes
in fair
value - - - - - - (97) - - - (97)
--------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Total other
comprehensive
income - - 570 - - - (97) - - - 473
--------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Total
comprehensive
income for
the period - - 570 - - - (97) - 7,783 2,642 10,898
--------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Transactions
with
owners,
recorded
directly in
equity
Contributions
by
and
distributions
to owners
Transfer of
share
prtemium - (21,085) - - - - - - 21,085 - -
Purchase of
own
shares - - - - - - - (34) - - (34)
Final dividend
relating
to 2011 - - - - - - - - (2,081) - (2,081)
Total
contributions
by and
distributions
to owners - (21,085) - - - - - (34) 19,004 - (2,115)
--------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Balance at 30
June
2012 153 - - 140 20 - (426) (1,131) 48,358 8,640 55,754
--------------- -------- --------- ------------ ------------ ----------- ------------------- -------- --------- ---------- ---------------- --------
Consolidated Statement of Cash Flows
Six months Six months
ended ended
30 June 30 June
2013 2012
GBP000 GBP000
-------------------------------------------------------- ----------- -----------
Cash flows from operating activities
Interest and similar income received 40,471 22,540
Interest and similar charges paid (11,185) (7,302)
Fees and commissions received 13,135 10,603
Net trading and other income 842 9,516
Cash payments to employees and suppliers (38,252) (29,061)
Taxation paid (689) (159)
-------------------------------------------------------- ----------- -----------
Cash flows from operating profits before changes in
operating assets and liabilities 4,322 6,137
Changes in operating assets and liabilities:
- net decrease in derivative financial instruments 192 1,959
- net increase in loans and advances to customers (91,678) (156,946)
- net (increase)/decrease in other assets (5,444) 2,178
- net increase in deposits from banks 790 1,105
- net (decrease)/increase in amounts due to customers (54,187) 9,861
- net increase in other liabilities 6,734 543
-------------------------------------------------------- ----------- -----------
Net cash outflow from operating activities (139,271) (135,163)
-------------------------------------------------------- ----------- -----------
Cash flows from investing activities
Disposal of financial investments - 567
Purchase of computer software (3,631) (152)
Purchase of property, plant and equipment (286) (1,251)
Disposal of property, plant and equipment 2,000 -
Proceeds from sale of property, plant and equipment 11 -
Purchases of debt securities (6,957) (43,127)
Proceeds from redemption of debt securities 4,006 50,449
-------------------------------------------------------- ----------- -----------
Net cash from investing activities (4,857) 6,486
-------------------------------------------------------- ----------- -----------
Cash flows from financing activities
Dividends paid (4,054) (2,081)
-------------------------------------------------------- ----------- -----------
Net cash used in financing activities (4,054) (2,081)
-------------------------------------------------------- ----------- -----------
Net decrease in cash and cash equivalents (148,182) (130,758)
Cash and cash equivalents at 1 January 348,074 310,144
-------------------------------------------------------- ----------- -----------
Cash and cash equivalents at 30 June 199,892 179,386
-------------------------------------------------------- ----------- -----------
1. Operating segments
The Group is organised into two main operating segments, arranged over two separate companies with each having its own specialised banking service, as disclosed below:
1) Retail banking - incorporating household cash management, personal lending and banking and insurance services.
2) UK Private banking - incorporating private banking and wealth management.
Transactions between the operating segments are on normal commercial terms. Centrally incurred expenses are charged to operating segments on an appropriate pro-rata basis. Segment assets and liabilities comprise operating assets and liabilities, being the majority of the statement of financial position.
Discontinued
operations Continuing operations
-------------- -------------------------------------------------
Group
Investment Retail UK Private (reconciling Group
banking banking banking items) Total Total
Six months ended 30 June 2013 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------- -------------- --------- ----------- -------------- --------- --------
Interest revenue - 33,171 7,876 50 41,097
Inter-segment revenue - - (116) (50) (166)
--------------------------------- -------------- --------- ----------- -------------- ---------
Interest revenue from external
customers - 33,171 7,760 - 40,931
--------------------------------- -------------- --------- ----------- -------------- ---------
Fee and commission income - 8,163 5,899 - 14,062
--------------------------------- -------------- --------- ----------- -------------- ---------
Revenue from external customers - 41,334 13,659 - 54,993
--------------------------------- -------------- --------- ----------- -------------- ---------
Interest expense - (6,602) (4,108) 50 (10,660)
Subordinated loan note interest - - - (208) (208)
Segment operating income - 33,989 9,483 (274) 43,198
Segment profit / (loss) before
tax - 6,207 970 (5,140) 2,037
Income tax (expense) / income - (1,375) 424 318 (633)
--------------------------------- -------------- --------- ----------- -------------- --------- --------
Segment profit / (loss) after
tax - 4,832 1,394 (4,822) 1,404 1,404
--------------------------------- -------------- --------- ----------- -------------- --------- --------
Segment total assets - 463,828 512,954 (25,651) 951,131 951,131
Segment total liabilities - 414,608 487,079 (16,671) 885,016 885,016
Other segment items:
Capital expenditure - (347) (453) - (800) (800)
Depreciation and amortisation - (1,524) (326) (6) (1,856) (1,856)
--------------------------------- -------------- --------- ----------- -------------- --------- --------
The "Group" segment above includes the parent entity and all intercompany
eliminations.
Discontinued
operations Continuing operations
------------- ------------------------------------------------
Group
Investment Retail UK Private (reconciling Group
banking banking banking items) Total Total
Six months ended 30 June 2012 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------- ------------- --------- ----------- -------------- -------- --------
Interest revenue - 15,647 6,943 162 22,752
Inter-segment revenue - (73) (79) (162) (314)
--------------------------------- ------------- --------- ----------- -------------- --------
Interest revenue from external
customers - 15,574 6,864 - 22,438
--------------------------------- ------------- --------- ----------- -------------- --------
Fee and commission income - 5,390 5,467 - 10,857
--------------------------------- ------------- --------- ----------- -------------- --------
Revenue from external customers - 20,964 12,331 - 33,295
--------------------------------- ------------- --------- ----------- -------------- --------
Interest expense - (4,222) (2,573) 217 (6,578)
Subordinated loan note interest - - - (262) (262)
Segment operating income - 16,815 9,583 (511) 25,887
Impairment losses - (3,070) (609) - (3,679)
Segment profit / (loss) before
tax (210) 12,523 1,437 (3,192) 10,768
Income tax (expense) / income - (717) - 584 (133)
--------------------------------- ------------- --------- ----------- -------------- -------- --------
Segment profit / (loss) after
tax (210) 11,806 1,437 (2,608) 10,635 10,425
--------------------------------- ------------- --------- ----------- -------------- -------- --------
Segment total assets - 342,162 480,438 (32,545) 790,055 790,055
Segment total liabilities - 312,480 457,346 (35,525) 734,301 734,301
Other segment items:
Capital expenditure - (975) (379) (12) (1,366) (1,366)
Depreciation and amortisation - (324) (172) (8) (504) (504)
--------------------------------- ------------- --------- ----------- -------------- -------- --------
Segment profit is shown prior to any intra-group eliminations.
All the Group's operations are currently conducted wholly within the United Kingdom and geographical information is therefore not presented.
2. Other income
On 3 August 2012 the Group acquired freehold premises at 7-21 Wilson Street, London, EC2M 2TD for GBP15.7 million plus acquisition costs (including stamp duty) of GBP1.1m. It is intended that in due course the building will become the head office for Arbuthnot Banking Group PLC ("ABG"), the principal location for Arbuthnot Latham & Co., Limited ("AL") and London offices for Secure Trust Bank PLC. 7-21 Wilson Street is currently let at a rent of GBP1.65 million per annum. The lease is due to expire on 1 October 2013 and as the building will be 25 years old it is planned that a renovation and fit out programme will be undertaken. The lease on the Group's current premises at 20 Ropemaker Street, London, EC2Y 9AR has a break option in June 2015. The Group has exercised the break option and will move together with AL to Wilson Street in June 2015. As it is intended to use this building as the principal office for AL, the building has been classified as freehold land and buildings in these financial statements. Other income for 2013 mainly consist out of rental income received (GBP825k) from the letting of the premises at Wilson Street.
On 20 March 2012 ABG agreed terms for the sale of Arbuthnot AG. The company was sold to Ducartis Holding AG for a total cash consideration of CHF 2.0m which resulted in a profit for the Group of approximately GBP0.7m, which is recorded in other income in 2012. Up to the date of sale, the purchaser funded most of the running costs for this entity. This is also included in other income in 2012, and amounted to GBP0.3m.
On 8 June 2012 Secure Trust Bank PLC ("STB") acquired 100% of the shares in Everyday Loans Holdings Limited and its wholly owned subsidiaries Everyday Loans Limited and Everyday Lending Limited (together "ELL"). STB acquired ELL for consideration of GBP1. Upon acquisition STB provided funding so that ELL could redeem the remaining GBP34 million of subordinated debt and also provided a loan facility of GBP37 million to refinance ELL's existing bank debt and to fund future loans. Included in other income in 2012 is a gain on acquisition of GBP8.9m, which arose from fair value adjustments and the recognition of intangible assets. This is expected to amortise through the profit and loss account over the next 2 to 3 years.
3. Operating expenses
Included in operating expenses are GBP2.0m of share option scheme costs and GBP3.2m of costs relating to the amortisation of acquired intangibles and other accounting adjustments required as a result of the recent acquisitions.
4. Earnings per ordinary share
Basic and fully diluted
Earnings per ordinary share are calculated on the net basis by dividing the profit attributable to equity holders of the Company of GBP5,000 (2012: profit of GBP7,783,000) by the weighted average number of ordinary shares 15,279,322 (2012: 15,279,322) in issue during the year. There is no difference between basic and fully diluted earnings per ordinary share.
5. Acquisition of V12 Finance Group Limited
On 2 January 2013 Secure Trust Bank acquired 100% of the ordinary share capital of V12 Finance Group Limited, which along with its wholly owned subsidiaries V12 Retail Finance Limited and V12 Personal Finance Limited provide retail loans, typically for 12 months on an unsecured basis to consumers who are predominantly classified as prime borrowers. The cash consideration for the companies of GBP3.5 million was paid on completion. The acquisition is complementary to the Group's existing retail finance proposition and the V12 management team will continue in the business.
As part of the acquisition Secure Trust Bank provided funding such that the V12 Finance Group could redeem GBP7.0 million of subordinated debt and repay existing bank finance amounting to GBP28.1 million.
The acquisition of V12 Finance Group Limited is accounted for in accordance with IFRS 3 'Business Combinations', which requires the recognition of the identifiable assets acquired and liabilities assumed at their acquisition date fair values. As part of this process, it is also necessary to identify and recognise certain assets and liabilities which are not included on the acquiree's balance sheet, for example intangible assets. The exercise to fair value the balance sheet is inherently subjective and required management to make a number of assumptions and estimates.
The following unaudited assets were acquired as part of the acquisition
of the V12 Finance Group Limited and its wholly owned subsidiary entities:
Acquired Recognised
assets Fair values
/ value on
liabilities adjustments acquisition
GBP000 GBP000 GBP000
----------------------------------------- ------------ ------------ ------------
Cash at bank 150 - 150
Loans and advances to customers 32,744 - 32,744
Property, plant and equipment 176 - 176
Intangible assets 17 5,443 5,460
Deferred tax assets 292 - 292
Prepayments and accrued income 546 - 546
Other assets 73 - 73
----------------------------------------- ------------ ------------ ------------
Total assets 33,998 5,443 39,441
Loans and debt securities 35,076 - 35,076
Deferred tax liability 34 1,252 1,286
Accruals and deferred income 126 - 126
Other liabilities 150 - 150
----------------------------------------- ------------ ------------ ------------
Total liabilities 35,386 1,252 36,638
Net identifiable (liabilities)/assets (1,388) 4,191 2,803
----------------------------------------- ------------ ------------ ------------
Consideration 3,507
Goodwill arising on acquisition 704
----------------------------------------- ------------ ------------ ------------
6. Acquisition of Debt Managers
On 15 January 2013 Debt Managers (Services) Limited (DMS), a wholly owned subsidiary of Secure Trust Bank PLC, acquired certain trade and assets from Debt Managers Holdings Ltd, Debt Managers (AB) Limited and Debt Managers Limited (together "Debt Managers"). Debt Managers collects debt on behalf of a range of clients including banks and utility companies.
Key benefits of this acquisition to Secure Trust Bank PLC include:
-- Broadening the income base of Secure Trust Bank PLC without the requirement for large amounts of capital;
-- The acquisition of a scalable collections platform through which Secure Trust Bank PLC intends to channel its delinquent debt; and
-- The acquisition of the latest call centre and collections technology, including market leading dialler capability, IVR technology and payment websites.
DMS acquired Debt Managers for an initial cash payment of GBP0.4 million paid on completion of the transaction. In addition deferred consideration of up to GBP0.3 million in cash is payable by the Secure Trust Bank PLC one year after completion subject in part to the business achieving certain income criteria. It is the opinion of the management of DMS that only GBP0.1 million of this deferred consideration is likely to be paid out.
The acquired assets included a software platform jointly developed with a third party. Upon completion the rights to this software were sold to that third party for consideration of GBP2 million. DMS then proceeded to lease back the internal rights to use this software. On completion Secure Trust Bank PLC provided DMS with GBP2.2 million of funding to clear an outstanding overdraft of GBP1.8 million and to fund the working capital requirements of DMS.
Acquired Recognised
assets values
/ Fair value on
liabilities adjustments acquisition
GBP000 GBP000 GBP000
--------------------------------------- ------------ ------------ ------------
Clients cash at bank 1,362 - 1,362
Trade debtors 664 - 664
Property, plant and equipment 67 - 67
Intangible assets 1,250 750 2,000
Prepayments and accrued income 246 - 246
Other assets 207 - 207
--------------------------------------- ------------ ------------ ------------
Total assets 3,796 750 4,546
Bank overdraft 1,846 - 1,846
Client account 1,301 - 1,301
Deferred tax liabilities - 173 173
Accruals and deferred income 194 - 194
Other liabilities 535 - 535
--------------------------------------- ------------ ------------ ------------
Total liabilities 3,876 173 4,049
Net identifiable (liabilities)/assets (80) 577 497
--------------------------------------- ------------ ------------ ------------
Consideration 519
Goodwill 22
--------------------------------------- ------------ ------------ ------------
7. Basis of reporting
The interim financial statements have been prepared on the basis of accounting policies set out in the Group's 2012 statutory accounts as amended by standards and interpretations effective during 2013. The statements were approved by the Board of Directors on 17 July 2013 and are unaudited. The interim financial statements will be posted to shareholders and copies may be obtained from The Company Secretary, Arbuthnot Banking Group PLC, Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EDLFFXDFXBBF
1 Year Secure Trust Bank Chart |
1 Month Secure Trust Bank 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
