RNS Number : 7026D
Accuma Group PLC
18 September 2008
18 September 2008
Accuma Group Plc
("Accuma" or "the Group")
Unaudited interim results to 30 June 2008
Chairman's Statement
Although trading conditions in our industry have remained difficult, I am pleased to
confirm a return to operating profitability (as
measured by EBITDA*) for the first half of this financial year.
This is in part a result of the operational review that was completed at the beginning of
2008. This significantly reduced the cost base
of our IVA division and has enabled us to report EBITDA profitability for the Group of
£185,418. In the same period, turnover reduced by
7.6% to £6.1m (£6.6m for the extrapolated 6 months to 31 December 2007). This fall in
revenue is the result of a very poor performance in
the period by our loan broking division, following which the Board has now taken the decision
to review the strategic options of this
business. In addition, the IVA business suffered reduced per case fees and a drop in the
number of new IVA cases being taken on
Our gross profit more than doubled in the period to £2.4m due to the benefits of the
operational changes made in the 5 month period to
December 2007 coming through, improved control of marketing expenditure and the continued
run-off of the supervisory book.
Our diluted adjusted earnings per share were 0.04p (0.0p).
Cash inflow from operations for the period was healthy at £424,000 (5 months to 31
December 2007: inflow: £454,000), with our balance
sheet showing net £1.5m of cash at the end of June. During the period £1.49m was paid to the
vendors of Byrom Keeley, the debt management
business we acquired in August 2006, in respect of the second earn out payment. The Group has
no further earn out commitments for the
remainder of the current financial year although the third and final earn out payment for this
business is due in March 2009. Whilst it is
too early to be specific about the likely quantum of this final payment, we expect it to be
significantly less than the payment this year,
and we are confident we will be able to settle it using our existing cash resources.
On a divisional basis, our revenues and EBITDA can be analysed as follows:
Turnover EBITDA
£'000s £'000s
Debt Management 1,745 570
Insolvency Division 3,019 449
Loan/Mortgage Broking 1,362 (196)
Referral /other 8 (10)
Group Overheads (628)
Total 6,134 185
Debt Management Division
Byrom & Keeley, our debt management business, posted a profit of £570,000 (5 months Dec
2007: £589,000) for the period despite average
new client payments decreasing from £261 in January 2008 to £217 in June 2008, which can be
directly attributed to general economic
conditions affecting household disposable incomes. Turnover was £1,745,000 (5 months Dec
2007: £1,423,000).
As monthly management fees are based on a percentage of the client payment, which we
expect to continue to fall, we anticipate a
negative effect on margins in this business, albeit mitigated by an anticipated increase in
the number of clients as more people struggle to
cope with the full impact of the credit crunch.
Insolvency Division
The Insolvency Division posted a profit of £449,000 (2007:£1,885,000), with 5,406 cases
under management. Turnover was £3,019,000 (5
months Dec 2007: £2,029,000)
New cases agreed in the period averaged 77 per month with an average client contribution,
on which the set up and management fees are
now based, of £324. The average contribution by new cases has declined during the period in
line with the reduction seen within our debt
management division, again as a result of inflationary pressure impacting household disposable
incomes. It would be prudent to assume that
this will also adversely affect the delinquency rate of our existing case bank, which stood at
£13.3m gross (i.e. before any provision for
delinquency) at the end of August 2008 and thus the future revenue there from. Within this
division there is surplus office space, with an
annual charge of £210,000, for which we have provided an additional £115,000, to represent a
total of approximately 11 months' charge. The
lease has seven years to run, and we are actively seeking a tenant for this space
In March 2008 we announced that the Group had received some indications of interest in the
IVA Division; however no credible offer
materialised and with the operational streamlining in this division complete, our intention is
to retain this Division.
Loan broking division
Our loan broking division, Loan Line, has experienced very difficult trading conditions
throughout the period under review, posting a
loss of £196,000 (5 months Dec 2007: £(375,000).) Lenders have withdrawn from the market,
cut commissions and toughened their acceptance
criteria. In particular First Plus, a major lender representing some 30% of Loan Line's
business, announced its intention in July 2008 to
withdraw from the market: consequently the Board are currently examining various strategic
options for Loan Line given the continued losses
and ongoing requirements for working capital. A further announcement will be made in due
course.
In the December 2007 accounts full impairment was made for the goodwill of Loan Line at
£11.8m.
Summary
In summary, conditions in our market places remain challenging and the return to
profitability of the Group is to be welcomed. The
losses within the loan broking division and the limited growth prospects in the IVA Division
means that our strategy is now focused on the
potential growth in the debt management division. The ongoing effects of the credit crunch
should provide an opportunity to increase client
numbers within this division particularly as the impact of increases in utility bills are
realised in the new year.
Charles Taylor
Chairman
18 September
* Calculated as profit before interest, tax, amortisation and depreciation.
For further information, please contact:
Charles Howson
Chief Executive
Accuma Group Plc Tel: 0845 202 6787
Lindsay Mair/Stewart Dick
Daniel Stewart & Company plc Tel: 0207 776 6550
Simon Rothschild/Oliver Winters
Bankside Consultants Tel: 0207 367 8888
Consolidated Income Statement
Period ended 30th June 2008
6 Months ended 5 Months ended 6 Months ended
30-Jun-08 31-Dec-07 31-Jan-07
Unaudited Unaudited
£ £ £
Revenue 6,134,157 5,546,953 10,578,446
Cost of sales (3,723,422) (4,602,806) (7,081,071)
Gross profit 2,410,735 944,147 3,497,375
Administrative expenses (2,225,317) (3,687,420) (1,794,061)
Earnings before interest, tax, 185,418 (2,743,273) 1,703,314
depreciation, amortisation and
impairment losses
Depreciation (192,229) (202,016) (148,192)
Amortisation (6,021) (4,963) (5,955)
Provision for impairment 0 (11,774,764) 0
losses
(Loss)/Profit from operations (12,832) (14,725,016) 1,549,167
Finance income 62,336 106,814 118,356
Finance costs (36,418) (165,084) (24,178)
Profit/(Loss) before tax 13,086 (14,783,286) 1,643,345
Taxation 0 253,186 (533,014)
Profit/(Loss) for the period 13,086 (14,530,100) 1,110,331
Earnings/(Loss) per share - 0.04p (44.43)p 1.99p
basic
Earnings per share - diluted 0.04p N / A 1.98p
Consolidated Balance Sheet
As at 30th June 2008
30 June 2008 31 December 2007
31 January 2007
Unaudited
Unaudited
£ £ £
£ £ £
Assets
Non-current assets
Intangible assets 15,554,919 15,560,940
23,638,089
Property, plant and equipment 636,146 789,630
826,142
Total non-current assets 16,191,065 16,350,570
24,464,231
Current Assets
Trade and other receivables 3,162,582 6,637,148
7,350,127
Deferred tax asset 309,807 309,807
0
Cash and cash equivalents 1,656,244 3,367,340
5,772,401
Total current assets 5,128,633 10,314,295
13,122,528
Total assets 21,319,698 26,664,865
37,586,759
Equity and liabilities
Current liabilities
Trade and other payables 2,080,107 2,271,596
2,142,035
Financial liabilities 75,596 2,259,027
0
Provision for onerous lease 530,486 510,687
0
commitment
Current tax liabilities 154,341 246,709
941,811
Total current liabilities 2,840,530 5,288,019
3,083,846
Non-current liabilities
Trade and other payables 0 2,898,536
2,000,000
Financial and other 53,717 78,911
238,320
liabilities
Total non-current liabilities 53,717 2,977,447
2,238,320
Total liabilities 2,894,247 8,265,466
5,322,166
Capital and reserves - equity
Share capital 3,269,673 3,269,673
3,269,673
Share premium account 28,407,877 28,407,877
28,412,004
Share option reserve 409,194 396,228
329,056
Retained earnings (12,398,698) (12,411,784)
1,516,455
Other reserve (1,262,595) (1,262,595)
(1,262,595)
Total equity 18,425,451 18,399,399
32,264,593
Total equity and liabilities 21,319,698 26,664,865
37,586,759
Consolidated Cash Flow Statement
Period ended 30th June 2008
6 Months ended 5 Months
ended 6 Months ended
30-Jun-08
31-Dec-07 31-Jan-07
Unaudited
Unaudited
£
£ £
Operating activities
Profit / (Loss) from operations (12,832)
(14,725,016) 1,549,167
Impairment provision 0
11,774,764 0
Depreciation 192,229
202,016 148,192
Amortisation 6,021
4,963 5,955
Decrease / (Increase) in trade and other receivables 3,474,566
1,901,165 (802,157)
( Decrease ) / Increase in trade and other payables (3,253,434)
1,267,584 (247,104)
Provision for share options 12,966
28,977 47,242
Cash inflow from operations 419,516
454,453 701,295
Interest paid (58,832)
(73,216) (14,118)
Income taxes paid
(110,000) (566,024)
Interest element of finance leases (7,000)
(8,113) (9,067)
Net cash inflow from operating activities 353,684
263,124 112,086
Payments to acquire property, plant and equipment (38,742)
(136,100) (197,366)
Acquisition of subsidiary companies 0
0 (15,997,178)
Deferred consideration in respect of acquisitions (2,004,530)
0 0
Interest received 25,914
106,814 119,387
Net cash used in investing activities (2,017,358)
(29,286) (16,075,157)
Cash flow from financing activities
Capital element of finance lease agreements (47,422)
(33,040) (38,047)
Cash deposit in respect of loan notes 0
(164,960) 0
Proceeds of issue of ordinary shares 0
0 17,968,000
Share issue costs 0
0 (579,257)
Net cash (used in) / received from financing activities (47,422)
(198,000) 17,350,696
Net change in cash equivalents (1,711,096)
35,838 1,387,625
Cash and cash equivalents at the beginning of the period 3,367,340
3,331,502 2,041,515
Cash and cash equivalents at the end of the period 1,656,244
3,367,340 3,429,140
Reconciliation of net cash flow to movement in net funds
Net (decrease) / increase in cash and cash equivalents (1,711,096)
35,838 1,387,625
Movement in lease financing 54,422
41,154 (108,226)
Movement in net (debt) / funds during the period (1,656,674)
76,992 1,279,399
Net funds at the beginning of the period 3,183,605
3,106,613 1,779,743
Net funds at the end of the period 1,526,931
3,183,605 3,059,142
Notes to the Interim Accounts
1. Basis of Preparation of Interim Accounts
The unaudited interim accounts have been prepared in accordance with International
Financial Reporting Standards and International
Accounting Standards (collectively IFRS) as adopted by the EU and the accounting policies set
out in Accuma Group PLC's Annual Report for
the year ended 31 December 2007. These interim accounts have been prepared in accordance with
International Accounting Standard 34 "Interim
Financial Reporting" they do not include all the statements required for full annual accounts,
and should be read in conjunction with the
consolidated accounts of the Group as at 31 December 2007.
The interim accounts have been prepared on the going concern basis, which assumes that the
Group will continue in operational existence
for the foreseeable future.
The financial information contained in these interim accounts are unaudited and do not
constitute statutory accounts as defined in
section 240 of the Companies Act 1985. The financial information for the year ended 31
December 2007 has been extracted from the Group's
published accounts for that year. Those accounts, upon which the auditors issued an
unqualified opinion, have been delivered to the
Registrar of Companies.
2. Earnings Per Share
Earnings per share has been calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of
shares in issue during the period. For diluted earnings per share, the weighted average number
of ordinary shares is adjusted to take
account of the dilutive effect of share options at that date.
3. Distribution of the Interim Report
Copies of the Interim Report will be available on the Company's website, www.accumair.com
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