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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 |
From Jul 2019 to Jul 2024
TIDMUFG
RNS Number : 4056A
Ultimate Finance Group PLC
30 March 2012
30 March 2012
Embargoed until 07:00
Ultimate Finance Group plc
("Ultimate Finance", the "Company" or the "Group")
Interim Results
Strong organic growth in difficult markets
Ultimate Finance Group plc (AIM:UFG), a leading provider of financial solutions to SMEs, is pleased to announce its Interim Results for the half-year ended 31 December 2011.
Financial Highlights
-- Adj-Operating Profit* increased 44% to GBP802,000 (H1 2010: GBP558,000)
o Operating Profit increased 28% to 502,000 (H1 2010: GBP391,000)
-- Turnover increased 25% to GBP5,395,000 (H1 2010: GBP4,321,000) -- Interim dividend of 0.40p per share (H1 2010: 0.35p)
-- PBT remained broadly flat at GBP329,000 (H1 2010 GBP337,000) due to amortisation associated with the acquisition of Ashley Commercial Finance and group reorganisation costs
-- Adj-Earnings per share* of 1.06p (H1 2010: 1.28p) -- GBP10.6m of headroom within GBP34m banking facility -- Basic earnings per share* of 0.47p (H1 2010: 0.80p)
Operational Highlights
-- Average client size has increased by 5%** and continues to grow
-- Healthy level of enquiries, bolstered by acquisition of Ashley Commercial Finance ("Ashley")
o Ashley successfully embedded and performing ahead of plan
-- Strong growth across Asset Finance division
o Increased external funding to total of GBP2m
-- Investment has been made into the business to support further growth
o Increased investment in the Head Office operational team
o The sales team has been strengthened and regional coverage expanded
-- Over-subscribed fundraising successfully completed in January 2012 to raise GBP1m to support future growth
-- Bad debt levels remain at traditional lows of around 1%
* excluding acquisition, amortisation and group reorganisation costs
** measured by average client turnover per annum
Jeremy Coombes, Chief Executive Officer of Ultimate Finance Group plc, commented, "I am delighted that Ultimate Finance has again delivered another set of strong financial results, demonstrating good organic growth and the successful embedding of the acquisition of Ashley Commercial Finance.
"There are many high quality small businesses who need a flexible approach to financing and as the UK economy emerges from recession there is an increasing demand for our expertise, products and services."
For further information please contact:
Ultimate Finance Group plc Tel: +44 (0)845 251 3030 Jeremy Coombes, Chief Executive Shane Horsell, Finance Director WH Ireland Tel: +44 (0) 117 945 3470 (Nominated Adviser and Broker) John Wakefield / Marc Davies Threadneedle Communications Tel. +44 (0) 20 7653 9850 (Financial PR) John Coles / Fiona Conroy
About Ultimate Finance Group plc
Ultimate Finance group is a leading provider of financial solutions to SMEs across the UK. The Company is headquartered in Bristol with regional offices in Manchester, Birmingham and Tunbridge Wells. Through its invoice finance and asset finance divisions it provides support to SMEs by funding their growth. As bank lending to SMEs is increasingly restricted in the current climate, the benefits of Ultimate Finance's flexible and fast-moving solutions become even more compelling.
The Company acquired Ashley Commercial Finance, an invoice finance company, in October 2010, which significantly broadened the Company's target market. This, alongside the facility of GBP34 million from Lloyds TSB Commercial Finance, provides a strong platform for growth.
The Company boasts an experienced management team coupled with a diverse offering of products and services now available to its clients, Ultimate Finance is well placed to capitalise on the increasing demand for finance for SMEs.
Chairman's Statement
Results
I am pleased to report that for the half year ended 31 December 2011 Ultimate Finance has achieved a 44% rise in adjusted operating profit (excluding group reorganisation, amortisation and acquisition costs) to GBP802,000 (H1 2010: GBP558,000). Operating profit grew 28% to GBP502,000 (H1 2010: GBP391,000).
Turnover for the half year was up 25% to GBP5,395,000 (2010: GBP4,321,000). Profit before tax (after acquisition, amortisation and group reorganisation costs) was broadly flat at GBP329,000 (H1 2010: GBP337,000) due to an increase in amortisation costs relating to the Ashley acquisition and group restructuring costs of GBP420,000 (H1 2010: GBP203,000)(see note 6).
Basic earnings per share amounted to 0.47p (H1 2010: 0.80p). Adjusted earnings per share (excluding acquisition, amortisation costs and group restructuring costs) amounted to 1.06p (H1 2010:1.28p).
Bad debt levels remain below 1%.
Despite the economic and trading environment, I believe that this is a strong performance which reflects our approach to support quality businesses within the UK SME sector and our dedication to stringent risk management policies.
Dividend
I am pleased to announce that the Company is proposing to pay an interim dividend of 0.40p per share to be paid on 23 May 2012 to shareholders on the register at the close of business on 27 April 2012 with an ex-dividend date of 25 April 2012.
The Company will maintain a progressive dividend policy going forward and the Board has resolved that they intend to distribute to shareholders by way of dividend a significant proportion of retained profits in each financial year, subject to trading, profitability and the requirements of the business.
Funding
Ultimate Finance currently enjoys a strong relationship with Lloyds TSB Commercial Finance who provide a GBP34 million back-to-back financing facility, which has a minimum term to June 2014. The Company currently has GBP10.6m of headroom and therefore has no need to increase its finance arrangement.
In January 2012, the Group was pleased to announce the successful over-subscribed placing ofnew ordinary shares raising GBP1m to support future growth. The placing also was undertaken to strengthen the Group's's balance sheet and reduce the gearing ratio.
Risk Management
Risk management is crucial to the success of the business and Ultimate Finance maintains high standards of underwriting and management of risk. The Company's credit control staff are highly experienced in both client and risk management. Given the market conditions there has inevitably been a marked increase in the number of business failures across the UK.
As a result of this, Ultimate Finance has had to be increasingly careful in guarding against the risk of fraud and financial failure. We are selective in growing client numbers and continue to prudently review underwriting procedures.
This is reflected in our very low level of bad debt.
In the longer term the market for factoring, invoice discounting and complementary products continues to present real growth opportunities and the recession has increased the level of enquiries.
Our client base continues to represent an appropriate spread of risk in terms of size of investment, industry type and geographical location. The single largest investment at 31 December 2011 was GBP1,601,000 (H1 2010: GBP1,458,000), which constituted 6% (H1 2010: 5%) of total funds advanced.
Board Changes
As has previously been announced I am today standing down after 10 years as Chairman of Ultimate Finance. I am delighted to have seen the company established as one of the leading independent providers of receivable finance in the UK and am sure that it will continue to grow and prosper in the future.
I would like to welcome Roger McDowell and Matt Cooper to the board and wish the new chairman Roger McDowell and the Company every success in the years ahead.
The success of every company depends on its people and Ultimate is no exception. I would like to thank the entire staff and my board colleagues for their support and the contribution that they have made.
Outlook
Although trading conditions remain challenging, demand for our services remains strong. With the acquisition and successful integration of Ashley Commercial Finance, Ultimate Finance is well placed to continue to grow. The Group remains acquisitive, actively seeking appropriate acquisition opportunities.
We will continue to take the necessary steps to build solid, sustainable shareholder value from the opportunities that present themselves, with our growth rate tempered by our strict underwriting procedures and risk management.
There is evidence that some of our competitors are adopting short term tactics to buy market share at the expense of unacceptable risk. Ultimate Finance will not follow that path and will continue to maintain high standards of underwriting and risk management.
I have enjoyed my ten years as Chairman and am confident that the re-shaped Board will provide excellent guidance as the Company continues to progress with its growth strategy.
The Board is confident about the prospects for Ultimate Finance.
Clive R Garston
Chairman
Chief Executive's Review
Introduction
Since co-founding Ultimate Finance Group in 2002 and working as both Group Operations Director, and for the last four years as Group Managing Director, this is my first report as Chief Executive having been appointed in December 2011. I am delighted that Ultimate Finance has delivered another set of strong financial results.
Despite the challenging economic conditions it has been a good six months for the Group. SMEs continue to find it difficult to access funding through traditional means and there continues to be a healthy demand for alternative funding options. We are receiving an increasing number of enquiries as our flexible approach and expertise prove an attractive offering. We remain cautious in our underwriting practices and this is reflected in our very low bad debt provision, which continues to be around 1% of average funds in use.
The average turnover of our clients is GBP1.4m for Ultimate Invoice Finance and GBP140,000 for Ashley Commercial Finance, which we acquired in October 2010. On average we lend up to 52% of a client's total ledger; this approach provides us with considerable contingency reserve. The demand for funding solutions from our core market is increasing and this is reflected by the 25% increase in the Group's turnover year-on-year.
The quality of our service is confirmed by the outstanding client retention we continue to achieve. We expect to continue our record of steady client growth without changing the Group's risk profile. We plan for the long term and will not lessen our strict underwriting criteria for the sake of buying market share, which some of our competitors appear to be doing.
Developments and Prospects
In November 2011 we agreed terms with Lloyds TSB, extending the banking facility through to 30 June 2014. We also increased the funding for our Asset Finance subsidiary by GBP1m, half of which is provided by a new relationship with Hitachi Capital, as announced in November 2011.
In July 2010 we launched Ultimate Asset Finance Limited to provide SMEs with commercial hire purchase facilities. We are pleased to report that it has grown ahead of management expectations and now has total external funding of GBP2m.
As reported by the Chairman, there has been considerable change to the Board, which we believe has strengthened the Group. As a joint founder of Ultimate Finance and Board Director for 10 years, I have a deep understanding of what drives our success. The quality of our services and strict underwriting practices are key and will continue to be maintained at the highest levels.
I believe Ultimate Finance is ideally placed to grow and benefit as the economy starts to recover.
Strategy
Our strategy remains to focus on the UK SME sector, from good quality start-up operations to more established businesses. As economic conditions continue to result in tightening credit for SMEs, our services become increasingly attractive - either to fund their growth or to support them through challenging times. Even in cases where traditional bank finance is available, many businesses seek alternative solutions which provide more flexibility.
Our clients are loyal and long-standing. We expect steady client growth as we continue to market our existing products and services, expand our sales team still further, and look for opportunities to develop additional complementary products to assist SMEs' financing. We believe that with our increased sales team, greater breadth of products and services and stronger market presence, we are ideally positioned as the economy recovers.
We have continued to see a rise in the number of enquiries as many more businesses are looking for alternative flexible solutions, and banks remain restrictive on lending. However, we continue to be selective in taking on clients, applying strict underwriting procedures and avoiding taking unnecessary risks. Our approach has always been to focus on quality businesses with credible management teams, building close relationships with them so that we are aware of any important changes in circumstances at an early stage.
Ultimate Finance is planning an increase in its marketing activity for the remainder of this financial year, and in doing so is also increasing the size and strength of its sales force. Our aim is to increase the number of quality enquires received by the Group, whilst continuing to develop the business across all products to drive organic growth. We anticipate the relocation of Group headquarters to larger premises in order to support our expansion. Furthermore, we have been delighted by the success of our acquisition of Ashley Commercial Finance, and continue to pursue appropriate acquisition opportunities.
Jeremy Coombes
Chief Executive
Consolidated Statement of Comprehensive Income (unaudited)
for the six months ended 31 December 2011
Hot Features
Premium
Note Six months Six months Year ended
ended 31 ended 31 30 June
Dec Dec 2011
2011 2010
GBP000 GBP000 GBP000
Revenue 5,395 4,321 9,706
Cost of sales - finance costs (416) (364) (730)
Cost of sales - other (133) (214) (403)
------------ ------------ ------------
Total cost of sales (549) (578) (1,133)
------------ ------------ ------------
Gross profit 4,846 3,743 8,573
Administrative expenses (4,044) (3,185) (7,289)
Administrative expenses -
other
Acquisition costs - (111) (118)
Group reorganisation costs 6 (149) - (60)
Amortisation 6 (151) (56) (202)
------------ ------------ ------------
Total administrative expenses (4,344) (3,352) (7,669)
------------ ------------ ------------
Operating profit 502 391 904
Finance expense 6 (173) (54) (186)
------------ ------------ ------------
Profit before tax 329 337 718
Taxation (96) (94) (210)
------------ ------------ ------------
Profit for the year being
total comprehensive income 233 243 508
============ ============ ============
Earnings per share 3
Basic 0.47p 0.80p 1.20p
Diluted 0.46p 0.77p 1.18p
All amounts are attributable to the owners of the parent.
Consolidated statements of financial position (unaudited)
At 31 December 2011
Company number 04350565
Note 31 Dec 31 Dec 30 June
2011 2010 2011
(restated)
GBP000 GBP000 GBP000
Non-current assets
Intangible assets 5,849 6,090 6,000
Property, plant and equipment 428 352 499
---------- ------------- ----------
6,277 6,442 6,499
---------- ------------- ----------
Current assets
Loans and other receivables 29,415 32,143 34,656
Cash and cash equivalents 2,188 1,564 963
---------- ------------- ----------
31,603 33,707 35,619
---------- ------------- ----------
Total assets 37,880 40,149 42,118
========== ============= ==========
Current liabilities
Bank borrowings and overdrafts (23,408) (27,831) (27,937)
Trade and other payables (4,057) (1,767) (4,186)
Bank loans (400) (400) (400)
Tax payable (455) (401) (310)
---------- ------------- ----------
(28,320) (30,399) (32,833)
Non-current liabilities
Bank loans (1,101) (1,071) (1,288)
Contingent consideration (1,105) (1,053) (1,053)
Other payables (792) (1,326) (441)
Deferred tax liability (111) (8) (111)
---------- ------------- ----------
(3,109) (3,458) (2,893)
Total liabilities (31,429) (33,857) (35,726)
========== ============= ==========
Net assets 6,451 6,292 6,392
========== ============= ==========
Equity attributable to
owners of the parent
Share capital 2,479 2,479 2,479
Share premium 3,505 3,502 3,505
Retained earnings 467 311 408
---------- ------------- ----------
Total equity 6,451 6,292 6,392
========== ============= ==========
These financial statements were approved by the board of directors on 29 March 2012
Consolidated Statement of Changes in Equity (unaudited)
for the six months ended 31 Dec 2011
Share Share
Capital Premium Retained Total
Earnings
GBP000 GBP000 GBP000 GBP000
Balance at 30 June 2010 1,000 1,949 122 3,071
Total comprehensive income - - 243 243
New shares issued 1,479 1,556 - 3,035
Equity-settled share based payment
transactions - - 6 6
Dividend Paid relating to prior year (60) (60)
Balance at 31 Dec 2010 2,479 3,505 311 6,295
Total comprehensive income - - 265 265
Equity-settled share based payment
transactions - - 6 6
Dividend Paid relating to prior year - - (174) (174)
Balance at 30 June 2011 2,479 3,505 408 6,392
Total comprehensive income - - 227 227
Equity-settled share based payment
transactions - - 6 6
Dividend Paid relating to prior year - - (174) (174)
---------- ---------- ----------- --------
Balance at 31 Dec 2011 2,479 3,505 467 6,451
Consolidated Statement of Cash Flows (unaudited)
for the six months ended 31 Dec 2011
To Six months Six
ended months Year ended
31 Dec ended 30 June
2011 31 Dec 2011
2010
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit for the period before taxation 329 337 718
Adjustments for:
Depreciation 89 61 324
Financial income - - -
Financial expense 173 54 186
Loss on sale of plant, property and
equipment - (1) 1
Equity settled share-based payment
expenses 6 6 12
------------ ------------- -------------
597 457 1,241
(Increase)/decrease in loans and other
receivables 5,241 (1,702) (3,449)
Increase/(decrease) in trade and other
payables 217 142 1,223
(Decrease)/increase in tax payable 96 71 (18)
Tax (Paid)/Received 49 (80) (158)
------------ ------------- -------------
Net cash from operating activities 6,200 (1,112) (1,161)
Cash flows from investing activities
Acquisition of subsidiary net of cash
acquired - (6,524) (6,524)
Proceeds from sale of equipment - 4 5
Purchase of property, plant and equipment (18) (112) (336)
------------ ------------- -------------
Net cash from investing activities (18) (6,632) (6,855)
Cash flows from financing activities
Proceeds from issue of share capital - 2,750 2,750
Issue costs on issue of ordinary shares - (648) (648)
Financial expense (54) - (65)
Repayment of long term borrowings (200) - (200)
Proceeds from long term borrowings - 1,867 1,871
Dividends paid (174) (60) (234)
------------ ------------- -------------
Net cash from financing activities (428) 3,909 3,474
Net increase/(decrease) in cash and
cash equivalents 5,754 (3,835) (4,542)
Cash and cash equivalents at beginning
of period (26,974) (22,432) (22,432)
Cash and cash equivalents at end of
period (note 5) (21,220) (26,267) (26,974)
Notes to the half yearly report
1 Preparation of half yearly report
The financial information in the half yearly report has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The principal accounting policies used in preparing the half yearly report are those the Group expects to apply in its financial statements for the year ending 30 June 2012 and are unchanged from those disclosed in the Group's Director's report and consolidated financial statements for the year ended 30 June 2011. The financial information for the year ended 30 June 2011 does not constitute the Group's statutory financial statements for that period. It has, however, been derived from the audited statutory financial statements for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) and (3) of the Companies Act 2006. While the financial figures included in this half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.
2 Taxation
Taxation has been provided for at 28% (H1 2010: 28%).
3 Earnings per share
The basic earnings per share of 0.47p (31 Dec 2010: 0.80p) has been calculated from the profit after taxation of GBP233,000 and on the weighted average number of shares in issue during the reporting period. The fully diluted earnings per share of 0.46p (31 Dec 2010: 0.77p), has been calculated from the profit after taxation of GBP233,000 and on the weighted average number of the shares in issue during the period adjusted for all dilutive potential ordinary shares.
4 Dividends
Ordinary Shares 2011 2010
GBP000 GBP000
Final dividend paid for the
prior year of 0.35p (2010:
0.30p per share) 174 60
Proposed interim dividend of
0.40p (2010:0.35p) per share 232 174
The proposed interim dividend has not been accrued as the dividend was declared after the balance sheet date.
5 Cash and Cash equivalents/Bank borrowings and overdrafts
H1 2011 H1 2010
GBP000 GBP000
Cash and cash equivalents 2,188 1,564
Bank borrowings and overdrafts (23,408) (27,831)
Total per Consolidated Statement
of Cash Flows (21,220) (26,267)
6 Amortisation, Financing and Acquisition Costs related to the Ashley acquisition and Group Restructuring Costs
H1 2011 H1 2010
GBP000 GBP000
Amortisation of Ashley intangible
assets 151 56
Financing costs relating to
Ashley acquisition 120 36
Ashley Acquisition costs - 111
Group restructuring costs 149 -
420 203
7 Prior period adjustment
Subsequent to the prior period end, the directors reviewed the classifications of bank loan balances and identified a proportion that relate to current liabilities. These balances totalled GBP400k and have been adjusted in the December 2010 period end comparatives. The effect of this is to reduce non-current bank loans payable by GBP400k and increase current bank loans payable by GBP400k. The effect of these reclassifications on the income statement is GBPnil.
8 Half Yearly Report
Copies of this report are available to shareholders. Additional copies may be obtained from the Ultimate Finance Group plc registered office: Bradley Pavilions, Pear Tree Road, Bradley Stoke, Bristol BS32 0BQ or on the Company's website at www.ultimatefinance.co.uk.
INDEPENDENT REVIEW REPORT TO ULTIMATE FINANCE GROUP PLC
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2011 which comprises of the consolidated statement of comprehensive income, the consolidated statement of financial position, the statement of changes in equity and the consolidated statement of cash flows.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The Directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2011 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.
BDO LLP
Chartered Accountants and Statutory Auditors
Bristol
United Kingdom
29(th) March 2011
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Company information and advisers
Auditors Solicitors
BDO LLP Osborne Clarke
Fourth Floor 2 Temple Back East
One Victoria Street Temple Quay
Bristol Bristol
BS1 6AA BS1 6EG
Principal Bankers Hammonds
Lloyds TSB Bank plc 7 Devonshire Square
PO Box 112 Cutlers Gardens
Canons House London
Canons Way EC2M 4YH
Bristol
BS99 7LB
Registered Office
Nominated Adviser & Broker Bradley Pavilions
W.H. Ireland Limited Pear Tree Road
11 St James's Square Bradley Stoke
Manchester Bristol
M2 6WH BS32 0BQ
Registrars Company Offices
Neville Registrars Limited Bradley Pavilions
Neville House Pear Tree Road
18 Laurel Lane Bradley Stoke
Halesowen Bristol
West Midlands BS32 0BQ
B63 3DA
8th Floor, 80 Mosley Street
St Peter's Square
Manchester
M2 3FX
Calverley House
55 Calverley Road
Tunbridge Wells
Kent
TN1 2TU
43 Temple Row
Birmingham
B2 5LS
Website & Email Addresses
www.ultimatefinance.co.uk
info@ultimatefinance.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
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