RNS Number : 9282J
Impax Group PLC
11 December 2008
IMPAX GROUP PLC
PRELIMINARY STATEMENT OF RESULTS
FOR THE YEAR ENDED 30 SEPTEMBER 2008
Impax Group plc, the AIM quoted investment manager which focuses exclusively on the environmental and related energy markets sector,
today announces its preliminary results for the year ended 30 September 2008.
Highlights
* Significant increase in pre-tax profits to £3,857,448 (2007: £1,820,654).
* Expansion in funds under management and advisory ("AUM") to £1,098 million at 30 September 2008 (2007: £984 million; 2006: £434
million).
* Strong progress in building core business, particularly investment processes, new product launches, distribution channels and
support systems.
* Successful retention of clients notwithstanding weak equity markets. AUM was £898 million on 28 November 2008.
* Maiden final proposed dividend of 0.35 pence per share (for approval by shareholders at forthcoming AGM).
Commenting on the results, Keith Falconer, Chairman said:
"Impax has taken several major steps forward this year and I'm delighted that we are in a position to recommend our first dividend. In
spite of very weak equity markets, the environmental sector continues to offer investors excellent opportunities for out-performance over
the medium to long term."
For further information please contact
Keith Falconer, Chairman 07747 066637
Impax Group plc
Ian Simm, Chief Executive 020 7432 2619
Impax Group plc
John Riddell, Director 020 7763 2200
Noble & Company Limited
CHAIRMAN'S STATEMENT
A year ago I warned that we might be about to experience a slowing economy and, quite possibly, a bear market. I was, however, not
expecting either extreme stress in the banking system or the likelihood of a serious global recession. Against this background, Impax has
made solid progress, countering the effect of falling markets with new mandates, and maintaining our track record of strong performance
relative to benchmark.
Our assets under management and advisory ("AUM") started the year at £984 million on 1 October 2007 and rose to a peak of £1,258 million
in May 2008 before finishing the year at £1,098 million on 30 September 2008. Subsequently, at a time when equity markets have fallen
sharply, we have avoided significant redemptions by investors in our funds; on 28 November 2008, AUM were £898 million.
During 2008 there have been several positive developments in the drivers of the environmental sector which have further strengthened the
attractions of this area for our investors. Government commitment to increasing the adoption of renewable energy has advanced considerably,
in particular through the development of a new Renewable Energy Directive in the European Union and the extension of tax credits in the
United States. In parallel, several governments have taken significant steps forward in the development of policy to reduce greenhouse gas
emissions, notably Australia which ratified the Kyoto Protocol in March 2008. Furthermore, positive statements from President-elect Obama
suggest that the United States may follow the EU in implementing a cap-and-trade scheme for carbon dioxide emissions during his first term.
In spite of concerns that economies world-wide are heading for a deep recession and that the environmental sector will not be immune,
the breadth of our investment mandates allows us to reduce exposure to areas where news has been less encouraging. For example, although the
decline in the price of fossil fuels raises the bar for investment in energy efficiency measures and biofuels, renewable energy power
utilities will continue to benefit from falling interest rates and lower equipment costs. Similarly, while in a slowing economy industrial
capital expenditure is likely to be reined in, many environmental sectors (such as water treatment and waste treatment) are experiencing
robust demand underpinned by mandatory targets.
RESULTS FOR THE YEAR AND PROPOSED DIVIDEND
Turnover for the year was £11,389,264 (2007: £7,114,695), a 60% increase over the year. Profit before tax was £3,857,448 (2007:
£1,820,654). These results include a charge of £427,333 (2007: £357,000) relating to the Group's long-term employee incentive scheme.
Given a strong balance sheet and significant free cash flow, I am delighted to announce a proposal from the Board that Impax pay a
maiden dividend on the back of these results. In light of the current uncertainty in global equity markets, the Board recommends that the
dividend be a modest 0.35 pence per share, a level that, I hope, can be increased when more normal market conditions return.
The dividend proposal will be submitted for formal approval by shareholders at the forthcoming Annual General Meeting. In line with
International Financial Reporting Standards, these financial statements do not reflect the dividend payable, which will be accounted for in
shareholders' equity as an appropriation of retained earnings in the year ended 30 September 2009.
INVESTMENT MANAGEMENT
Our business model remains focused on building shareholder value over the medium to long term by investing in both quoted and private
companies.
Quoted Equities
As I reported in the Interim results for the six month period ended 31 March 2008 ("Interims"), our quoted equities business is now
segmented into "pure play" funds investing in specialist companies active in the environmental sector, and "all cap" funds which have a
broader mandate and invest both in specialists and also in more diversified companies. In order to further strengthen our platform for
growth, we have continued to develop our investment processes and to engage with the leading consultants and gatekeepers in the
institutional market.
* Pure Play Funds
Although not immune to falling stock markets, our "pure play" funds once again out-performed the markets during the year. Between 1
October 2007 and 30 September 2008, the net asset value ("NAV") of Impax Environmental Markets plc ("IEM"), the investment trust that we
have managed since its launch in February 2002, fell 11.3%, while the MSCI World Index declined 17.0%. Our other "pure play" funds had
similar performance. Over the five years ending 30 September 2008, IEM's NAV has increased by 77.1% while the increase in the MSCI World
Index has been only 21.4%; this track record is particularly compelling to potential new investors in our funds.
Investor confidence in these funds has remained high. Flows into "pure play" open-ended funds have been positive and, at the end of the
period, we were managing or advising £876 million in funds with a "pure play" strategy (compared to £836 million at the start of the
period).
In August, we were delighted to commence management of a £35 million segregated account investing in our "pure play" portfolio for the
Environment Agency Pension Fund following a tender for new global equities managers. We believe that this is an important endorsement of
Impax's capabilities and should enhance our credibility with other prospective institutional clients.
* All Cap Funds
As I reported at the Interims, investor interest in our more recently established quoted equities strategy has been strong and we are
now managing or advising six pooled vehicles with an "all cap" strategy as well as a segregated account for Russell Investments Japan.During the year, total assets in All Cap funds or accounts grew from £43 million to £106 million.
Broadly speaking, these funds have performed in line with global equity markets. For example, between 1 May 2008 and 30 November 2008,
Impax Environmental Leaders Fund, our UK-domiciled open-ended fund, was down 26.0% while the MSCI World Index (in Sterling) was down 24.4%.
* Index Products
Our partnership with FTSE to build and promote a series of environmental indices is developing well. In January 2008, FTSE and Impax
launched the FTSE ET50 index, a basket of the 50 largest "pure play" stocks active in environmental markets. Subsequently in June 2008, we
established the FTSE Environmental Opportunities All Share Index, which comprises those stocks in Impax's "all cap" universe that pass
FTSE's standard liquidity requirements. In November 2008, FTSE announced the launch of nine additional indices covering inter alia the
water, waste, renewable energy and energy efficiency sub-sectors. We believe that this partnership will continue to raise Impax's profile
worldwide in the institutional investor community.
Hedge Fund
As I have reported in previous statements, our research in listed equities has provided a very interesting stream of "short ideas"
alongside our core longs, and we have continued to exploit these in our hedge fund. Although the past 12 months have been one of the worst
on record for long-short equity funds, this product has performed well in 2008. We are in dialogue with potential investors in this product
with the aim of raising additional capital once markets re-open.
Private Equity
Investment in private companies remains an important component of our business and a source of revenue that is uncorrelated with equity
markets.
Our team managing Impax New Energy Investors LP, a fund investing in renewable energy projects and related assets, has made excellent
progress this year. With EUR125 million of capital at its disposal, we have made eleven investments and committed almost EUR100 million.Many of these investments are in entities generating power from solar energy, a sector in which power prices remain very attractive.
Given the strong public sector support for these markets, we believe that renewable energy projects and the developers of such projects
will absorb a significant amount of capital for the foreseeable future, and that opportunities for private equity will remain attractive,
particularly for institutional investors. Accordingly, we are developing plans to raise additional capital for this strategy and I hope to
be able to report favourable news next year.
Separately, we continue to invest capital from IEM and its sister fund IEM (Ireland) in "late stage" private companies. As the track
record for this activity grows we will explore with investors the potential for raising additional capital.
INFRASTRUCTURE AND SUPPORT SYSTEMS
I am pleased to report that we have made good progress in extending our infrastructure in order to underpin further expansion. Our
support team has expanded from six to fifteen staff with key hires in marketing, finance, compliance and operations functions, and the
recruitment of Charlie Ridge as Chief Operating Officer in September 2008.
In order to accommodate a larger team, we recently moved to larger premises. Our new offices (which are also in Sackville Street,
London) have a floor plan of ca. 5,000 square feet, which represents approximately 70% more space and should give us room for expansion for
several years.
EMPLOYEE SHARE OWNERSHIP
In January this year shareholders approved an extension to the Company's long-term incentive scheme in order to reward key employees
with shares in the Company and thereby further align the interests of employees and shareholders. The extension provides for a further 18.25
million shares to be issued to employees over the three years ended 30 September 2011.
BOARD OF DIRECTORS
Earlier this year, I announced the appointment of three new directors, each of whom brings significant experience of the fund management
industry. I am delighted that all three are making an important contribution to the Company. As part of the Board's transition, David
Kempton will be stepping down at the conclusion of the Company's forthcoming Annual General Meeting. Since he joined the Board in June 2004,
David has provided valuable support in the development of the Company's growth plans and the oversight of their implementation. I wish him
well in his future endeavours.
PROSPECTS
I believe that Impax's strategy of developing and managing scalable investment products targeting the high-growth environmental sector
should enable us to deliver significant value for our shareholders over the medium to long term. In the short term, we will not escape
sustained bearish sentiment in equity markets and will be paying particular attention to the management of our cost base. At the same time,
we intend to make the most of the opportunity to engage with the key investors that are either exposed to or have expressed interest in our
funds, sharing our insights into the dynamics of environmental markets and, all being well, paving the way for further significant inflows
into current and new products.
In the medium term, provided that we continue to build on our excellent track record in multiple products, we should be well positioned
to leverage our strong distribution network and grow rapidly.
As usual, I must pay tribute to Ian Simm and the executive team who have managed the company prudently through more than one cycle, and
of course to my boardroom colleagues for their support and vision.
J Keith R Falconer
11 December 2008
CONSOLIDATED INCOME STATEMENT
Year ended 30 September 2008
2008 2007
Note £ £
REVENUE 11,389,264 7,114,695
Operating costs (7,813,648) (5,503,453
Operating profit 4 3,575,616 1,611,242
Investment income 281,832 209,412
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 3,857,448 1,820,654
Taxation 5 (1,069,049) (531,275)
PROFIT FOR THE YEAR ATTRIBUTABLE
TO EQUITY SHAREHOLDERS 2,788,399 1,289,379
EARNINGS PER SHARE 8
Basic 2.54p 1.20p
Diluted 2.54p 1.19p
CONSOLIDATED BALANCE SHEET
As at 30 September 2008
Note 2008 2007
ASSETS: £ £
Non-Current Assets
Goodwill 1,629,097 1,629,097
Intangible assets 72,816 34,545
Property, plant and equipment 537,004 47,206
Other financial assets 1,045,618 1,208,531
Investments 13,567 14,357
3,298,102 2,933,736
Current Assets
Trade and other receivables 65,094 65,094
due after one year
Trade and other receivables 2,096,620 1,664,836
due within one year
Other financial assets 247,671 175,781
Investments 9 3,005,845 1,619,854
Cash and cash equivalents 7,028,619 4,553,684
12,443,849 8,079,249
TOTAL ASSETS 15,741,951 11,012,985
EQUITY AND LIABILITIES:
Capital and Reserves attributable
to equity shareholders
Ordinary shares 1,155,824 1,094,991
Share premium 10 239,670 18,970
Exchange equalisation reserve (861,317) (1,002,117)
Treasury shares 10 (222,072) (167,771)
Other reserve 10 1,251,944 894,359
Retained earnings 9,997,137 7,208,738
11,561,186 8,047,170
Current Liabilities
Trade and other payables 4,180,765 2,965,815
4,180,765 2,965,815
TOTAL EQUITY AND
LIABILITIES 15,741,951 11,012,985
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 30 September 2008
Note Share capital Share premium Special reserve Exchange
equalisation Reserve
£ £ £ £
Balance at 1 October 2006 9,591,824 2,723,483 - (845,410)
Profit for the year - - - -
Exchange differences on - - - (156,707)
consolidation
Cancellation of deferred (8,516,583) (2,723,483) 3,788,477 -
shares and share premium
account
Transfer from special reserve - - (3,788,477) -
to retained earnings
Net issue of shares to 19,750 18,970 - -
Employee Benefit Trust
Accrued cash equivalent of - - - -
share options receivable by
NOMAD
Balance at 30 September 2007 1,094,991 18,970 - (1,002,117)
Profit for the year - - - -
Exchange differences on - - - 140,800
consolidation
Net issue of shares to 60,833 58,863 - -
Employee Benefit Trust
Net sale of shares from - 161,837 - -
Employee Benefit Trust
Accrued cash equivalent of - - - -
share options receivable by
NOMAD
Accrued cash equivalent of - - - -
share options cancelled by
NOMAD
Balance at 30 September 2008 1,155,824 239,670 - (861,317)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 30 September 2008 (continued)
Note Treasury shares Other reserve Retained Earnings Total
£ £ £ £
Balance at 1 October 2006 (148,801) 487,355 (5,320,707) 6,487,744
Profit for the year - - 1,289,379 1,289,379
Exchange differences on - - - (156,707)
consolidation
Cancellation of deferred - - 7,451,589 -
shares and share premium
account
Transfer from special reserve - - 3,788,477 -
to retained earnings
Net issue of shares to (18,970) 357,000 - 376,750
Employee Benefit Trust
Accrued cash equivalent of - 50,004 - 50,004
share options receivable by
NOMAD
Balance at 30 September 2007 (167,771) 894,359 7,208,738 8,047,170
Profit for the year - - 2,788,399 2,788,399
Exchange differences on - - - 140,800
consolidation
Net issue of shares to (58,863) 427,333 - 488,166
Employee Benefit Trust
Net sale of shares from 4,562 (3,077) - 163,322
Employee Benefit Trust
Accrued cash equivalent of - 33,336 - 33,336
share options receivable by
NOMAD
Accrued cash equivalent of - (100,007) - (100,007)
share options cancelled by
NOMAD
Balance at 30 September 2008 (222,072) 1,251,944 9,997,137 11,561,186
CONSOLIDATED CASHFLOW STATEMENT
Year ended 30 September 2008
Note 2008 2007
£ £
CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit 3,575,616 1,611,242
Adjustments for:
Depreciation of property, plant & equipment 45,631 16,715
Amortisation of intangible assets 21,355 5,998
Revaluation of investments 38,617 (40,251)
Profit on sale of investments (46,846) -
Share-based transactions 632,488 407,004
Translation differences 140,800 (156,707)
OPERATING CASH FLOWS BEFORE
MOVEMENT IN WORKING CAPITAL 4,407,661 1,844,001
(Increase)/decrease in receivables (397,562) 140,443
Increase in payables 1,160,154 1,381,542
CASH GENERATED FROM OPERATIONS 5,170,253 3,365,986
Corporation tax paid (956,631) -
NET CASH GENERATED BY
OPERATING ACTIVITIES 4,213,622 3,365,986
Investing activities:
Interest received 281,834 209,412
Share-based transactions (108,505) -
Proceeds on sale of investments 1,622,236 -
Purchase of investments (3,000,000) (1,506,851)
Purchase of property, fixtures & equipment (595,055) (80,031)
NET CASH USED IN
INVESTMENT ACTIVITIES (1,799,490) (1,377,470)
Financing activities:
Share capital issued 60,833 19,750
NET CASH GENERATED BY FINANCING
ACTIVITIES 60,833 19,750
NET INCREASE IN CASH AND 2,474,965 2,008,266
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS 4,553,654 2,545,388
AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS 7,028,619 4,553,654
AT END OF YEAR
IMPAX GROUP PLC
NOTES TO THE PRELIMINARY STATEMENT
1 BASIS OF PREPARATION
The preliminary results were approved by the Board of Directors on 11 December 2008. The financial information set out above does not
comprise the Group's statutory accounts for the year ended 30 September 2008 or 30 September 2007, but is derived from those accounts. The
auditors have reported on the 2008 and 2007 accounts and their report was unqualified.
These preliminary results have been prepared in accordance with the accounting policies normally adopted by the Group and which are
consistent with those adopted in the audited accounts for the year ended 30 September 2008. Where relevant the provisions of International
Financial Reporting Standards have been applied in the preparation of this preliminary announcement.
2 ACCOUNTING POLICIES
The financial statements have been prepared in accordance with International Financial Reporting Standards adopted for use by the
European Union. Key accounting policies are:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company (its
subsidiaries) made up to 30 September each year. Control is achieved where the Company has the power to govern the financial and operating
policies of a subsidiary.
Subsidiaries are accounted for using the acquisition method of accounting whereby the Group's results include the results of the
acquired business from the date of acquisition.
All intra-group transactions and balances are eliminated on consolidation.
As permitted under IAS 27, Consolidated and Separate Financial Statements, investments in funds are not consolidated where the Group
does not exercise control over the operation or financial operations of an entity or has no power to appoint members of the board of
directors. These investments are designated as fair value through profit and loss or available for sale on initial recognition in accordance
with IAS 39, Financial Instruments: Recognition and Measurement.
Investments in associates
An associate is an entity over which the Group has significant influence and is neither a subsidiary nor an interest in a joint venture.Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or
joint control.
Investments that are held by the Group are carried in the balance sheet at fair value even though the Group may have significant
influence over those companies. This treatment is permitted by IAS 28, Investment in Associates, which allows investments held by venture
capital and similar organisations to be excluded from the scope of IAS 28 investments in Associates provided that those investments upon
initial recognition are designated as fair value through profit or loss or available for sale and accounted for in accordance with IAS 39
Financial Instruments: Recognition and Measurement, with changes in fair value recognised in profit or loss or equity in the period of
change.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the fair value of the identifiable assets,
liabilities and contingent liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill is
recognised as an asset and is tested for impairment annually, or on such occasions that events or changes in circumstances indicate that its
value might be impaired.
On disposal of a subsidiary, the attributable amount of unamortised goodwill, which has not been subject to impairment, is included in
the determination of the profit or loss on disposal.
Positive goodwill arising on acquisitions before the date of the transition to International Financial Reporting Standards has been
retained at the previous UK GAAP amount and is tested for impairment annually.
Impairment
At the balance sheet date, the Group reviews the carrying amount of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss or if events or changes in circumstances indicate that the carrying value may
not be recoverable. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the impairment loss is recognised as an expense,
unless the relevant asset is land and buildings at a revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at
a revalued amount, in which case the reversal of the impairment loss treated as a revaluation increase. Impairment losses relating to
goodwill are not reversed.
Employee Benefit Trust
In accordance with SIC 12 "Consolidation - special purpose entities", the Company includes the assets and liabilities of that trust
within its balance sheet. In the event of the winding up of the Company, neither the shareholders nor the creditors would be entitled to the
assets of the employee benefit trust.
Investment in own shares held in connection with the Group's employee share schemes are deducted from the shareholders' funds in
accordance with IAS 32 "Financial instruments: disclosure and presentation" until such time as they vest unconditionally to participating
employees.
The fair value of employee services received in exchange for the grant of shares is recognised as an expense. The total amount to be
expensed rateably over the performance period is determined by reference to the fair value of the shares determined at the grant date.
3 GEOGRAPHICAL ANALYSIS OF REVENUE, OPERATING PROFIT AND NET ASSETS
Revenue relates solely to the principal activities of the Group.
Consolidated revenue
2008 2007
£ £
UK 10,998,245 6,772,827
Europe 391,019 341,868
USA - -
11,389,264 7,114,695
Consolidated operating profit
2008 2007
£ £
UK 3,627,363 1,611,787
Europe (379) -
USA (51,368) (545)
3,575,616 1,611,242
Consolidated net assets
2008 2007
£ £
UK 10,267,210 6,661,945
Europe 687 913
USA 1,293,289 1,384,312
11,561,186 8,047,170
4 OPERATING PROFIT
Operating profit is stated after charging £427,333 for a long term incentive scheme charge (2007: £357,000).
On 4 February 2005 shareholders approved the establishment by the Company of the Impax Group Employee Benefit Trust (the "EBT") as part
of the Company's employee incentive arrangements. The scheme provided for the issue of up to 18.25 million shares to employees over the
three years ended 20 September 2008.
On 31 January 2008 shareholders approved an extension to the existing EBT whereby a further 18.25 million shares can be issued to
employees over the three years ended 20 September 2011.
On 24 September 2008 the Company allotted 6,083,333 Ordinary Shares at a price equal to the nominal value of 1p per share to Sanne Trust
Company Limited, trustee of the EBT. The EBT subsequently sold 197,025 Ordinary Shares for £60,833 to provide funding relating to the
purchase of Ordinary Shares by the EBT. Following the sale the EBT is interested in 22,207,054 Ordinary Shares representing 19.21% of the
Ordinary Shares in issue at 30 September 2008. The potential beneficiaries of the EBT include the executive directors and employees of the
Group and their respective families.
On 30 September 2008 7,610,080 of the Ordinary Shares held by the EBT vested to employees and their families.
P&L charge - three years ended 30 September 2007
The allocation of Ordinary Shares to employees and their families via the EBT by the Company for the three years ended 30 September 2007
as part of the long term incentive scheme has given rise to a charge of £1,069,539 as follows:
- £463464 evenly spread over the three years to 30 September 2007 which is
the performance period for the 2005 share award
- £485143 evenly spread over the three years to 30 September 2008 which is
the performance period for the 2006 share award
- £120932 evenly spread over the three years to 30 September 2009 which is
the performance period for the 2007 share award
This charge has been calculated in accordance with the requirements of IFRS 2 "Share based payments" by reference to the mid market
price of an Ordinary Share of 6.375p on the approval date of 4 February 2005 and on the Directors' assumption that the EBT performance
criteria will be met and all of the shares will vest to employees and their families. The date of 4 February 2005 has been agreed to be the
grant date for all shares issued to employees and their families as this was the date when substantially all terms and conditions of the
scheme were agreed by all parties.
P&L charge - three years ended 30 September 2010
The allocation of Ordinary Shares to employees and their families via the EBT by the Company for the three years ended 30 September 2010
as part of the long term incentive scheme will give rise to a charge of £1,060,964 as follows:
- £545,705 evenly spread over the three years to 21 December 2010, which is
the performance period for the 2008 share award
- £309,155 evenly spread over the four years to 21 December 2011, which is
the performance period for the 2009 share award
- £206,103 evenly spread over the five years to 21 December 2012 which is
the performance period for the 2010 share award
This charge has been calculated in accordance with the requirements of IFRS 2 "Share based payments" by reference to the mid market
price of an Ordinary Share of 38.5p on the approval date of 31 January 2008. The charge has been calculated using the Monte Carlo simulation
method. The date of 31 January 2008 has been agreed to be the grant date for all shares issued to employees and their families as this was
the date when substantially all terms and conditions of the scheme were agreed by all parties.
5 TAXATION
Analysis of charge for the year 2008 2007
£ £
Current tax:
UK corporation tax on profits for the period 923,851 288,218
Deferred tax:
Release of deferred tax asset 145,198 243,057
Taxation 1,069,049 531,275
2008 2007
£ £
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation 3,857,448 1,820,654
Tax at 28% of profit on ordinary activities before 1,080,085 546,196
Taxation (2007: 30%)
Effects of:
Non-deductible expenses 63,543 118,713
Capital allowances (24,533) (9,540)
Non chargeable income (13,117) -
Losses utilised (163,978) (367,151)
Prior year over-provision (18,149) -
Total current tax 923,851 288,218
The Group has tax losses of approximately £1.6m (2007: £2.7m) available for offset against future taxable profits in the UK. No
deferred tax asset has been recognised at 30 September 2008 (2007: £145,198).
There are timing differences of £351,406 (2007: £248,306) in respect of EBT charges of £1,255,021 (2007: £827,688) that have been
recognised in the Group accounts but which have been disallowed for tax purposes. No tax benefit is expected to arise in the near future in
respect of these charges.
6 FOREIGN CURRENCIES
The results of subsidiary undertakings reporting in foreign currencies are translated at the average rate ruling in the accounting year
and the assets and liabilities at the rate ruling at the balance sheet date.
The average rate ruling in the accounting period for US Dollars was US$ 1.97: £1 (2007: US$1.98: £1); the rate ruling at the balance
sheet date was US$ 1.82: £1 (2007: US$2.05: £1).
The average rate ruling in the accounting period for Euros was EUR 1.30: £1 (2007: EUR1.48: £1); the rate ruling at the balance sheet
date was EUR1.26: £1 (2007: EUR1.44: £1).
7 DIVIDEND
The directors propose a dividend of 0.35p per share (totalling £404,539) for the year ended 30 September 2008. The dividend will be
submitted for formal approval at the Annual General Meeting to be held on 2 February 2009. These financial statements do not reflect this
dividend payable, which will be accounted for in shareholders' equity as an appropriation of retained earnings in the year ending 30
September 2009.
No dividend was paid during the year.
8 EARNINGS PER SHARE
In order to show results from operating activities on a comparable basis, an adjusted profit per share has been calculated which
excludes the long term incentive scheme charge of £427,333 (2007: £357,000).
Profit for the year Ordinary shares in Earnings per share
issue (weighted
average)
£
2008
Basic and diluted 2,788,399 109,615,764 2.54p
Adjusted 3,215,732 109,615,764 2.93p
2007
Basic 1,289,379 107,616,084 1.20p
1,289,379 108,504,299 1.19p
Diluted
Adjusted 1,646,379 107,616,084 1.53p
There are no potential dilutive instruments (2007: 888,215 options granted to the Company's former nominated advisor and broker
("NOMAD"), Landsbanki Securities (UK) Limited).
9 CURRENT ASSET INVESTMENTS
Unlisted Investment Listed Investment Total
£ £ £
Cost or Valuation
At 1 October 2007 11,344 1,608,510 1,619,854
Additions - 3,000,000 3,000,000
Revaluations - (38,617) (38,617)
Disposals (1,575,392) (1,575,392)
At 30 September 2008 11,344 2,994,501 3,005,845
Net book value
At 30 September 2008 11,344 2,994,501 3,005,845
At 30 September 2007 11,344 1,608,510 1,619,854
On 21 May 2007, the Company made an investment of EUR2,200,000 (£1,506,851) in the Impax Absolute Return Fund ("IARF"). The investment
took the form of a subscription of 22,000 Euro Class A shares in the IARF, at EUR100 per share. The IARF, which is managed by a subsidiary
undertaking of the Company, launched on 21 May 2007 and had a total net asset value ("NAV") of £3,807,166 at 30 September 2008. The Group's
investment in the IARF represents 44.2% of the NAV at 30 September 2008. The Directors are of the opinion that this investment does not
constitute an associate undertaking due to insignificant influence.
On 3 March 2008, the Company made an investment of £1,500,000 in the Impax Environmental Leaders Fund ("IEL"). The investment took the
form of 1,500,000 £1 accumulation Retail A shares. This investment was subsequently sold on 26 June 2008 and on the same day the Company
made a new investment in IEL of £1,500,000 consisting of 1,500,000 £1 accumulation Institutional B shares.
IEL, which is managed by a subsidiary undertaking of the Company, launched on 3 March 2008 and had a total net asset value ("NAV") of
£2,491,104 at 30 September 2008. The Group's investment in the IEL represents 53.8% of the NAV at 30 September 2008. These shares are held
in custody under the control of the fund's depository and the Directors are therefore of the opinion that this investment does not
constitute a subsidiary undertaking as it is not controlled by the Group.
These listed investments are revalued to market value.
The Group disposed of its only other listed investment, Ivanhoe Energy Inc. ("Ivanhoe"), during the year for £108,736 giving rise to a
profit of £33,346.
The unlisted investment is valued at the lower of cost and net realisable value.
10 RESERVES
In accordance with the requirements of SIC 12 "Consolidation - special purpose entities" and IAS 32, the assets and liabilities of the
EBT have been included in the Company's and Group's accounts resulting in the inclusion of £222,072 treasury shares, £239,670 share premium,
£4,025 retained earnings and £1,251,944 included in other reserves.
During the year ended 30 September 2007, the Company carried out a balance sheet reorganisation which was approved by shareholders in
June 2007 and which received High Court approval on 22 August 2007. The result of this reorganisation was to eliminate the deficit on
reserves by cancellation of the deferred shares and share premium account. The surplus arising from this cancellation created a special
reserve of £3,788,477.
The Company gave undertakings to the Court to maintain this special reserve until all creditors outstanding on 22 August 2007 had either
been paid or given their consent to the Company to transfer the balance to revenue reserves. The Company made creditor payments and obtained
the necessary consents to enable it to transfer £3,788,477 from the special reserve to revenue reserves.
On 31 May 2006, the Company appointed Landsbanki Securities (UK) Limited ("Landsbanki"), (formerly Bridgewell Securities Limited) as
nominated advisor and broker ("NOMAD") to the Group. For the twelve months following their appointment they received an option over 500,000
shares in the Company, exercisable at 20p within three years. For the period between twelve and twenty-four months following their
appointment they received a further option over 388,215 shares in the Company exercisable at 25.76p within three years.
In 2008, £33,336 (2007: £50,004) was charged to the Income Statement and credited to other reserve to reflect the cash equivalent of
this compensation.
On 30 June 2008, Landsbanki and the Company agreed to cancel the warrants on the payment in cash of £108,505 by the Company to
Landsbanki. To reflect this transaction, £8,498 was charged to the Income Statement and £100,007 was debited to other reserves.
Copies of the report and accounts of the Company for the year ended 30 September 2008 will be sent to shareholders. Copies will also be
available on the Company's web site www.impax.co.uk and may be collected from the Registered Office.
Registered Office:
Mezzanine Floor
Pegasus House
37-43 Sackville Street
London W1S 3EH
This information is provided by RNS
The company news service from the London Stock Exchange
END
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