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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ultimate Fin. | LSE:UFG | London | Ordinary Share | GB0031685414 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 25.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:6171D
Ultimate Finance Group PLC
11 September 2007
11 September 2007
Ultimate Finance Group PLC
Final results for the 12 months 30 June 2007
Ultimate Finance Group PLC ("Ultimate" or the "Company"), the AIM company
serving the fast-growing invoice discounting and factoring cashflow solutions
market across the UK, announces its final results for the 12 months to 30 June
2007.
Highlights
* Profit before tax 8% ahead at #301,986 (2006: #278,710 as restated)
* Turnover ahead by 15% to #4m (2006: #3.5m)
* Client sales financed ahead 26% to #154.9m (2006: #123m) growth from
existing clients and increase in deal sizes among new clients
* Northwest of England office now well established
* Margins affected by fierce competition
* Profit growth affected by investment in sales team and northern office
* Medium-term prospects remain positive
Commenting on the results, Brian Sumner, Chief Executive, said:
"Overall, our expectations for the current year are low as we see no significant
growth for the foreseeable future, albeit we are confident for the medium term."
Further information:
Ultimate Finance Group PLC
Brian Sumner, Chief Executive +44 (0) 870 872 1010
bsumner@ultimatefinance.co.uk
Shane Horsell, Finance Director +44 (0) 870 872 1010
shorsell@ultimatefinance.co.uk
www.ultimatefinance.net
Media enquiries:
Capital MS&L
Peter Curtain / Annabel O'Connor +44 (0) 20 7307 5330
james.madsen@capitalmsl.com
Chairman's statement
Results
I am pleased to be able to report, that for the year ending 30th June 2007,
Ultimate Finance Group PLC ("Ultimate" or the "Company") achieved a profit
before tax of #301,986 (2006: #278,710, as restated). Client sales financed in
the year increased by 26 per cent to #154.9 million from the previous year
(2006: #123million), the increase a consequence of the growth experienced by
existing clients and the increase in size of transactions with new clients. This
is an acceptable performance in difficult trading conditions. However, margins
have been under pressure and lower on new business during the year as a result
of fierce competition.
Turnover for the period increased by 15% to #4,026,628 (2006: #3,500,594).
Profit before tax, however increased by only 8% year on year, due to lower
margins on new business and increased investment in growing the business.
Basic earnings per share for the year to 30 June 2007 amounted to 1.09p compared
to 1.94p for 2006. The after tax profit figure for 2006 incorporated the
recognition of a deferred tax asset increasing the profit after tax by #108,585
(as restated). In order to more accurately measure the earnings per share on the
trading performance of the group, an additional adjusted figure has been
included in note 10, to reflect the earnings before the impact of taxation. On
this basis, the earnings per share amounted to 1.51p compared to 1.40p in 2006.
Funding
It is pleasing to report the back to back receivables financing arrangement with
Lloyds TSB Commercial Finance has been renewed for a further two years. This
will continue to provide the flexibility to drive the business forward in terms
of growth and increase in shareholder value. At the year end the group had
utilised #11.8 million of the #18 million facility.
Management and employees
The main driver of the success of Ultimate has been the commitment and hard work
of my colleagues on the board and the employees of Ultimate. It is they who
have achieved these results. I would like to acknowledge and thank them for
their efforts in what has been a difficult year. We will continue to invest in
people in order to develop and expand our business.
Derek Ashford, who has been a director of the Company since its flotation, is
stepping down following the AGM. Derek's contribution has been invaluable and I
would like to thank him for his commitment to and efforts for Ultimate and to
wish him all the best in the future. Derek was also chairman of the audit
committee and I will be taking over that position.
Risk management
Ultimate continues to have a good record on minimising bad debts. With the
increasing number of liquidations in the SME market place Ultimate's risk
management procedures have remained the primary focus. Very high underwriting
standards ensure deals will not be taken on for short term growth at the expense
of long term shareholder value. Experienced client management and credit control
staff ensure both an excellent level of customer service and financial
stewardship in respect of Ultimate's client base.
Outlook
Current trading conditions remain difficult with lower margins and competitors
offering low priced deals to attract clients. Ultimate will continue to take all
necessary steps to build sustainable shareholder value without compromising on
the quality of its portfolio of clients. Costs continue to be controlled whilst
allowing for essential investment in sales and marketing activities.
Notwithstanding current conditions the board looks forward to the future with
confidence, but does not see any significant growth in the current year.
Clive R Garston
Chairman
Chief Executive's review
Over the last year the Company has, in many ways, gone from strength to
strength, while growing both sales invoices assigned (up 26%) and turnover (up
15%). However, our margins have come under great pressure in what, for the time
being at least, is a very competitive market. As a result, Ultimate is not
currently seeing significant profit growth, which is disappointing.
Our ambitions continue to reflect the four cornerstones of our strategy:
1. A wealth of experience applied to risk management and
underwriting;
2. A strong service ethic enabling us to differentiate ourselves;
3. A recognition that only the best staff, developed to the full through
training and guidance, can deliver on the 'ultimate' promise; and
4. A sound and secure product range capable of being tailored to meet the
practical needs of the client throughout the business cycle.
Through our factoring and invoice discounting products and our AIG-backed debtor
protection product, which has been a great success over the last year, our
revenues have risen year on year.
We are of course still in the investment phase and are investing in people
generally, in particular in the sales team and our new full client sales and
service office in Northwest England which has been up and running for over a
year now, and is well established and an important part of our future growth
strategy.
As the portfolio has continued to mature so we have naturally always experienced
a degree of client losses, mostly smaller clients - often, but not exclusively,
start up businesses that have failed within their first two years of trading.
With national client failure statistics up markedly, this trend has increased
over this past year. Overall, we have experienced more client failures than
expected, which has itself put pressure on both incomes and profits.
To counteract this, and for the purpose of risk management, we have taken a
defensive posture and become more cautious in our underwriting criteria. This
has meant that we have taken on fewer clients, but bigger and of higher overall
quality.
Whilst there have been bad debt write-offs, these have been appropriately
managed and provided for. Once again this is testimony to our risk management
procedures, underwriting criteria, and the quality of our operations team.
Systems
We have enjoyed several productivity gains over the last year, particularly in
the area of IT, and we have more to come, now our main operations software
Aquarius is more established and functional. We have also extended our in house
scanning facility and now process our own bulk mail, bringing further
efficiencies.
Prospects
After five years in business I can confidently state that we are now well
established and running efficiently, with an excellent portfolio of clients and
a highly professional team of people assembled. Our current priority is to add
to the sales team to enable us to increase the rate of new business taken.
It remains for me to thank all the staff at Ultimate for their efforts over the
last year, which has been much appreciated by the Directors.
Brian Sumner
Chief Executive
Consolidated profit and loss account
for the year to 30 June 2007
* as restated
Note 2007 2006
# #
Turnover 4,026,628 3,500,594
ADVANCE /D
6.50
Administrative expenses (3,010,832) (2,647,109)
Operating profit 1,015,796 853,485
Other interest receivable and similar income 4,478 4,391
Interest payable and similar charges (718,288) (579,166)
Profit on ordinary activities before taxation 301,986 278,710
Tax on profit on ordinary activities 2 (84,151) 108,585
Profit on ordinary activities after taxation 217,835 387,295
Earnings per share 10
Basic 1.09p 1.94p
Diluted 1.09p 1.94p
* see note 1.
All amounts relate to continuing activities.
Consolidated statement of total recognised gains and losses
for the year to 30 June 2007
2007 2006
# #
Profit after tax, being total gains and losses 217,835 387,295
recognised in the year
Prior year adjustment (as explained in note 1)
Share-based payments charge (20,397)
Tax credit on share-based payments 6,119
Total gains and losses recognised since last annual 203,557
report
Consolidated balance sheet
At 30 June 2007
* as restated
Note 2007 2006
# #
Fixed assets
Tangible assets 128,950 116,695
Current assets
Debtors 3 15,031,704 12,176,624
Cash at bank and in hand 831 844
15,032,535 12,177,468
Creditors: amounts falling due within one year 4 (12,490,114) (9,852,627)
Net current assets 2,542,421 2,324,841
Net assets 2,671,371 2,441,536
Capital and reserves
Called up share capital 5 999,851 999,851
Share premium account 6 1,949,390 1,949,390
Profit and loss account 6 (277,870) (507,705)
Shareholders' funds (all equity) 2,671,371 2,441,536
* see note 1
These financial statements were approved by the board of directors on 10
September 2007 and were signed on its behalf by:
Brian Sumner Shane Horsell
Director Director
Consolidated cash flow statement
for the year to 30 June 2007
* as restated
Note 2007 2006
# #
Reconciliation of operating profit to net cash flow
from operating activities
Operating profit 1,015,796 853,485
Charge in respect of FRS20 12,000 11,784
Depreciation charges 72,210 45,545
Increase in debtors (2,909,783) (1,856,886)
Increase in creditors 61,211 290,574
Net cash outflow from operating activities (1,748,566) (655,498)
Cash flow statement
Cash flow from operating activities (1,748,566) (655,498)
Returns on investments and servicing of finance 8 (713,810) (574,775)
Capital expenditure 8 (84,465) (57,277)
Cash outflow before financing (2,546,841) (1,287,550)
Financing 8 2,546,828 688,372
Decrease in cash in the period (13) (599,178)
Reconciliation of net cash flow to movement in net debt
Decrease in cash in the period (13) (599,178)
Utilisation of credit facility/bank overdraft 9 (2,546,828) (688,372)
Movement in net debt in the period 9 (2,546,841) (1,287,550)
Net debt at the start of the period (9,240,551) (7,953,001)
Net debt at the end of the period 9 (11,787,392) (9,240,551)
* see note 1
Notes to the preliminary statement
1 Accounting policies
The following accounting policies have been applied consistently in dealing with
items which are considered material in relation to the group's financial
statements.
Basis of preparation
The above financial information does not constitute statutory accounts for the
year ended 30 June 2007 or 2006. Statutory accounts for the year ended 30 June
2006 have been delivered to the Registrar of Companies. The auditors have
reported on the year ended 30 June 2006 financial statements and their report
was unqualified and did not contain a statement under section 237(2) or (3) of
the Companies Act 1985. The statutory accounts for the year ended 30 June 2007
will be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost accounting rules.
The directors have confirmed the company will provide financial support to
Ultimate Finance Limited in order to meet liabilities as they fall due.
The board is required to report as to whether it is appropriate for the
financial statements to be prepared on a going concern basis. The executive
directors have prepared a budget which demonstrates a good future for the
company and that the finances are sound. The board therefore continues to adopt
the going concern basis in preparing the financial statements.
FRS20 Share-based Payments has been adopted for the first time.
Prior year adjustment - Share based payments
The share option programme allows employees to acquire shares of the Company.
Following the adoption of FRS 20 Share-based Payments, the fair value of options
granted after 7 November 2002 and not yet vested as at 1 July 2006 is recognised
as an employee expense with a corresponding increase in equity.
The fair value is measured at grant date and spread over the period during which
the employees become unconditionally entitled to the options. The fair value of
the options granted is measured using an option pricing model, taking into
account the terms and conditions upon which the options were granted. The
amount recognised as an expense is adjusted to reflect the actual number of
share options that vest except where forfeiture is only due to share prices not
achieving the threshold for vesting.
The adoption of the standard has resulted in a prior year adjustment to the
comparative amounts reported in these financial statements in respect of the
share based payments charge and the deferred tax asset thereon. The effect of
the prior year adjustment has been to reduce the profit before tax for the year
to 30 June 2006 by #11,784, reduce the tax charge for the year to 30 June 2006
by #3,535 and to increase shareholders' funds brought forward at 1 July 2006 by
#6,119.
2 Taxation
as restated
2007 2006
# #
UK Corporation Tax at 30% (2006: 30%)
2006/07 29,240 -
2005/06 208 -
Total current tax charge 29,448 -
Deferred tax - origination and reversal of timing differences (note 7) 54,703 (105,050)
Prior year adjustment (see note 1) - (3,535)
Total taxation on profit on ordinary activities 84,151 (108,585)
Factors affecting the tax charge for the current period
The current tax charge for the year is lower than the standard rate of
corporation tax in the UK (30%). The differences are explained below.
2007 2006
Current tax reconciliation # #
Profit on ordinary activities before tax 301,986 278,710
Current tax at 30% 90,596 83,613
Effects of:
Expenses not deductible for tax purposes 15,192 12,624
Capital allowances for period in excess of depreciation 5,728 2,494
Provisions not deductible for tax purposes 366 (4,683)
Utilisation of tax losses (66,312) (97,583)
Difference in tax rates (16,330) -
Adjustment in relation to 2005/06 208 -
Prior year adjustment to deferred tax - 3,535
Total current tax charge (see above) 29,448 Nil
3 Debtors
as restated
Group Group
2007 2006
# #
Gross factored debts receivable 28,124,103 22,640,689
Due to clients on collection (13,380,274) (10,815,958)
Client commitments 14,743,829 11,824,731
Amounts owed by group undertakings - -
Deferred tax 128,209 182,912
Other debtors 27,035 28,685
Prepayments and accrued income 132,631 140,296
15,031,704 12,176,624
4 Creditors: amounts falling due within one year
Group Group
2007 2006
# #
Bank loans and overdrafts 11,788,223 9,241,395
Trade creditors 54,604 35,158
Taxation and social security 235,372 138,515
Other creditors 281,319 270,503
Accruals and deferred income 130,596 167,056
12,490,114 9,852,627
The group has a loan facility with Lloyds TSB Commercial Finance Ltd for an #18
million back-to-back receivables financing agreement the minimum period for
which expires on 19 August 2009.
The facility is secured against an all assets debenture given by Ultimate
Finance Limited and a deed of guarantee and indemnity has been given by Ultimate
Finance Group plc.
At the end of the year, the group utilised #11,809,112 of the facility (2006:
#9,213,516).
5 Called up share capital
2007 2006
# #
Authorised
Equity: 40,000,000 (2005: 40,000,000) ordinary shares of 5p each 2,000,000 2,000,000
Allotted, called up and fully paid
Equity: 19,997,018 ordinary shares of 5p each 999,851 999,851
6 Share premium and reserves
Group Group
share profit
premium and loss
account account
2007 2007
# #
At beginning of year 1,949,390 (513,824)
Prior year adjustment (see note 1) - 6,119
Beginning of year (restated) 1,949,390 (507,705)
Retained profit for the period - 217,835
Credit in relation to share-based payments - 12,000
At end of year 1,949,390 (277,870)
7 Deferred tax
Group Group
2007 2006
# #
Deferred tax asset at beginning of year 176,793 71,743
Prior year adjustment (see note 1) 6,119 -
Restated Deferred tax asset at beginning of year 182,912 71,743
Deferred tax asset recognised/(released) in the (54,703) 105,050
year
Deferred tax asset at end of year 128,209 176,793
8 Analysis of cash flows
2007 2006
# #
Returns on investment and servicing of finance
Interest received 4,478 4,391
Interest paid (718,288) (579,166)
(713,810) (574,775)
Capital expenditure
Purchase of tangible fixed assets (84,465) (57,277)
(84,465) (57,277)
Financing
Utilisation of credit facility/bank overdraft 2,546,828 688,372
2,546,828 688,372
9 Analysis of net debt
At 30 Cash flow At 30 June
June 2006 June 2007
# # #
Cash in hand, at bank 844 (13) 831
Utilisation of credit facility/bank (9,241,395) (2,546,828) (11,788,223)
overdraft
Total (9,240,551) (2,546,841) (11,787,392)
10 Earnings per share
The basic profit per share for the year to 30 June 2007 has been calculated from
the profit on ordinary activities after taxation of #217,835 (2006: #387,295 as
restated) and on the weighted average number of ordinary shares in issue during
the year (19,997,018) (2006: 19,997,018).
The company has dilutive potential ordinary shares in respect of the 'Company
Share Option Plan'. The diluted earnings per share amounts to 1.09p (2006:
1.94p as restated) and is based on profit on ordinary activities after taxation
of #217,835 (2006: #387,295, as restated) and 20,009,726 ordinary shares being
the weighted average of the shares in issue during the year adjusted to assume
conversion of all dilutive potential ordinary shares (2006: 20,054,325).
Adjusted earnings per share figures have been calculated in addition to the
basic and diluted figures since, in the opinion of the directors, these provide
further information on the understanding of the group's performance. A
reconciliation of the different earnings per share figures is shown below.
as restated
2007 2006
Pence Pence
Basic earnings per share 1.09 1.94
Adjustment for recognition of deferred tax asset and taxation 0.42 (0.54)
Earnings per share before recognition of deferred tax asset and taxation 1.51 1.40
11 Preliminary Statement of Results
This preliminary statement was approved by the Board on 10 September 2007. It is
not the company's statutory accounts.
The statutory accounts for the period ended 30 June 2007 have been audited and
have been approved by the Board of directors on 10 September 2007. Copies of the
Directors' Report and Consolidated Financial Statements will be sent to
shareholders shortly and will be available from the Group's Bristol office,
Bradley Pavilions, Pear Tree Road, Bradley Stoke, Bristol BS32 0BQ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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