Press Release 20 July 2011
Not for release, publication or distribution in, or into, The United States,
Canada, Australia or Japan
Impact Holdings (UK) plc
("Impact" or "The Group")
Preliminary results for the year ended 31st March 2012
Impact Holdings (UK) plc. (AIM: IHUK), the specialist lender, announces its
preliminary results for the year ended 31st March 2012.
Financial Highlights
* Results in line with management expectations
* Group's pre-tax profit of £314,745, up 4% year on year
* Earnings per share 13.7p (2011: 13.4p)
* Reduced exposure to external debt providers from £7.5m to £5.2m
* Bank facilities successfully extended
* Cash and cash equivalents of £1.1 million
* Net assets of £5.1 million
Commenting on the results Paul Davies, the Chief Executive, said "The Board and
management team have spent considerable effort reshaping the strategic
direction of the business following the lack of liquidity in the banking
market. We will be cautiously and energetically repositioning the business over
a period of time, away from being purely a lender and thereby exposing
ourselves to balance sheet risk to one of a lower risk, higher return service
provider."
For further information:
Impact Holdings (UK) plc.
Paul Davies Chief Executive Officer Tel: +44 (0)1928 793 550
www.impactholdings.net
Zeus Capital
Tom Rowley / Andrew Jones Tel +44 (0)161 831 1512
Tel: +44 (0) 161 831 1512
The financial information detailed below has been extracted from the Annual
Report and Accounts for the year ended 31st March 2012, which are available
from Zeus Capital, 3 Ralli Courts
West Riverside, Manchester, M3 5FT and on the Company's website (
www.impactholdings.net).
CHAIRMAN'S STATEMENT
INTRODUCTION
As stated in previous reports the global economy and the financial markets
continue to see unprecedented turmoil and this is expected to continue for the
foreseeable future with the Banks still failing to stimulate growth as they
continue to reduce their exposure to small and medium sized businesses. This
situation has contributed to a continual lack of liquidity for many businesses
and consequently stifled growth. Financial Institutions globally continue to
increase their margins, review their lending criteria and implement more
rigorous credit processes, which has reduced the availability of credit.
The Impact group has not been immune to lenders restricting credit lines and
increasing margins with the consequent effect on the management's ability to
grow the business.
THE BOARD
The Board remains committed to adhering to strong Corporate Governance and
operating within a framework of prudent controls which ensures the future risks
of the business are controlled and managed.
STRATEGY
The business of solicitor disbursement funding has historically been our core
market albeit we have adopted a more conservative approach given the lack of
liquidity in the financial markets as a whole. This lack of liquidity has
constrained our ability to lend with the consequently negative implications for
growth, so moving forward, it is intended that our core market of short term
niche funding solutions will be supplemented by ancillary services as new
initiatives are pursued. The management team is in the process of developing
the business into one of a provider of services to the legal profession and
continues to develop other revenue streams in this arena both by organic growth
and by acquisition. The ability to do this is highlighted by the new
Alternative Business Structure regime allowing external ownership of law firms
which the management team is pursuing.
DIVIDEND
No dividend will be declared for the year.
OUTLOOK
I believe the Group is well positioned to capitalise on opportunities presented
by the new Alternative Business Structures regime and will evaluate potential
acquisitions in order to consolidate its position as a provider of funding and
other services to the legal profession.
I should like to place on record my appreciation for the efforts of the
executive management and staff during the year. I also appreciate the
enthusiasm and support of my fellow directors and thank them for their
continued support and counsel.
Roger Barlow
Non-executive Chairman
CHIEF EXECUTIVE'S REVIEW
INTRODUCTION
The Board and management team have spent considerable effort reshaping the
strategic direction of the business following the lack of liquidity in the
banking market. We will be cautiously and energetically repositioning the
business over a period of time, away from being purely a lender and thereby
exposing ourselves to balance sheet risk to one of a lower risk, higher return
service provider.
TRADING
Commentary on the Group's performance is contained within the Chairman's
Statement however the group continues to see ongoing progress with expenses
under control and is actively looking for alternative income streams to enhance
its profitability.
RISK MANAGEMENT
The risk management of the business continues to be strengthened with all new
and existing counterparty risks regularly assessed by an independent risk
committee. This committee consists of the key executives within the group who
between them have over 60 years experience in risk management, operational and
financial analysis.
Credit and fraud risk
The Group is exposed to the risk that clients owing the Group money will not
fulfil their obligations. The Group regularly reviews credit exposure for every
client, including the level of security available in the event of default.
Nevertheless, credit default risk may arise from events or circumstances that
are difficult to detect and handle, such as fraud.
Inadequate security
The Group is exposed to the risk that security and undertakings upon which its
loan advances are made may reduce in value, so that the Group may not recover
some or all of its loan advances in an event of default. This risk is mitigated
by the spread of loans and clients involved, along with a detailed assessment
of the value of the security and undertakings at the time the loans are made
and appropriate ongoing monitoring.
Funding and treasury
The group relies on a mix of equity funding and both committed and uncommitted
debt finance from Barclays Bank and Yorkshire Bank in order to maintain an
adequate level of working capital and to fund loan advances to the group's
clients.
STRATEGIC AND FINANCIAL OBJECTIVES
Our objective remains for cautious, controlled, profitable growth with the
group concentrating on actively looking for additional income enhancing
opportunities as evidenced by the recent incorporation of Impact Costs Limited.
We continue to look for economies of scale and enhance risk management controls
in order to allow us to minimise the risks to the business.
Paul Davies
Chief Executive
IMPACT HOLDINGS (UK) PLC
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
Year Year
Ended Ended
31/03/12 31/03/11
£ £
Revenue 1,186,355 1,554,389
Cost of Sales (241,816) (377,518)
Gross Profit 944,539 1,176,871
Other operating expenses (630,054) (877,129)
Operating Profit 314,485 299,742
Interest receivable 260 1,477
Profit for the year from operations 314,745 301,219
before tax
Tax (charge)/credit (9,721) (3,996)
Profit for the year 305,024 297,223
Earnings per share (pence)
Basic 13.7p 13.4p
Fully diluted 13.4p 13.4p
Other than as disclosed in the consolidated Income Statement and the
Consolidated Statement of Changes in Equity there are no further gains or
losses. Accordingly, no separate statement of other comprehensive income has
been presented.
All activities are considered to be continuing.
IMPACT HOLDINGS (UK) PLC
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2012
2012 2011
£ £
Non-current assets
Goodwill 421,766 421,766
Other intangible assets - 46,263
Property, plant and equipment 866,825 599,820
Deferred taxation 171,892 181,613
1,460,483 1,249,462
Current assets
Trade and other receivables including 7,983,892 9,322,186
amounts falling due after more than one
year
Cash and cash equivalents 1,076,179 1,894,065
9,060,071 11,216,446
Total assets 10,520,554 12,465,713
Equity and liabilities
Share capital 6,211,201 6,211,201
Share premium account 5,005,288 5,005,288
Share based payment reserve - 172,199
Shares held by Employee Benefit Trust (45,070) (45,070)
Retained earnings (6,094,726) (6,571,949)
Issued capital and reserves attributable to 5,076,693 4,771,669
equity holders of the parent
Trade and other payables due after more 570,391 395,955
than one year
Trade and other payables due in less than 4,873,470 7,298,089
one year
Total equity and liabilities 10,520,554 12,465,713
IMPACT HOLDINGS (UK) PLC
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
31/3/12 31/3/11
£ £
Operating activities
Cash generated by operations 1,805,382 2,796,555
Income taxes paid - (4,635)
Net cash generated by operating 1,805,382 2,791,920
activities
Investing activities
Interest received 260 1,477
Acquisition of own shares by Employee - (45,070)
Benefit Trust
Purchases of property, plant and (288,246) (583,977)
equipment
Net cash used in investing activities (287,986) (627,570)
Financing activities
Net decrease in amounts owed to (2,335,282) (2,483,782)
lending institutions
Net cash outflow from financing (2,335,282) (2,483,782)
activities
Net decrease in cash and cash (817,886) (319,432)
equivalents
Cash and cash equivalents at 1 April 1,894,065 2,213,497
Cash and cash equivalents at end of 31 1,076,179 1,894,065
March
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2012
Attributable to the equity holders of parent company
Share Share Share Shares Profit and Total
capital premium based held by loss
payment EBT account
reserve
£ £ £ £ £ £
Balance as at 31 6,211,201 5,005,288 172,199 (11,645) (6,869,172) 4,507,871
March 2010
Net Profit for the - - - - 297,223 297,223
year
Movement on shares - - - (33,425) - (33,425)
held by EBT
Balance as at 31 6,211,201 5,005,288 172,199 (45,070) (6,571,949) 4,771,669
March 2011
Lapse of share - - (172,199) - 172,199 -
options
Net Profit for the - - - - 305,024 305,024
year
Balance as at 31 6,211,201 5,005,288 - (45,070) (6,094,726) 5,076,693
March 2012
The financial information set out in this announcement does not constitute the
group's financial statements (as defined by s434 of the Companies Act 2006) for
the year ended 31st March 2012. The results for the year ended 31st March 2012
are extracted from the Annual Report of Impact Holdings (UK) plc, on which the
auditors have issued an unqualified report.
Pursuant to AIM Rule 20 copies of the Annual Report may be downloaded from the
company's web site www.impactholdings.netand will be posted to shareholders on
or before 31st July 2012. Further copies will be available from Zeus Capital, 3
Ralli Courts, West Riverside, Manchester, M3 5FT.
The Annual General Meeting will be held at the Company's registered office,
7500 Daresbury Park, Daresbury, Warrington WA4 4BS on 28th September 2012 at
8.45am.
Notes to the Editor:
Impact Holdings (UK) plc through its individual subsidiaries provides finance
to fund niche lending opportunities including legal disbursements in relation
to personal injury cases and other related outsourcing and ancillary services
to the legal profession.
In addition Impact will fund other opportunities where debt instruments or
debentures provide the primary security and there are opportunities for short
term bespoke funding where serviceability precludes larger lenders from
entering this area.
Impact is regulated by the Office of Fair Trading through which it is licensed
to lend under the Consumer Credit Act 1974.