RNS Number : 7397K
Impact Holdings (UK) PLC
24 December 2008
Not for release, publication or distribution in, or into, The United States, Canada, Australia or Japan
Impact Holdings (UK) plc
("Impact" or "The Group")
Interim Results
Impact Holdings (UK) plc. (AIM: IHUK), the specialist lender, announces its unaudited interim results for the six months ended 30
September 2008.
Financial Highlights
* results in line with management expectations
* cash and cash equivalents of £0.9 million
* consolidation of existing operations on track
* EBIT of £131,752
* earnings per share 0.17p
* pre-tax profit of £190,953
Operational Highlights
* successful conclusion to legal dispute as detailed in contingency matter raised in 2008 year end accounts
* bank debt facilities operational to support ongoing trading
* structured risk management controls in place to support monitoring of existing exposures
* potential growth opportunities for primary business lines
For further information:
Impact Holdings (UK) plc
Paul Davies Chief Executive Officer
Tel: +44 (0)161 437 9499
www.impactholdings.net
Daniel Stewart & Company plc
Simon Leathers, Corporate Finance
Tel: +44 (0) 20 7776 6550
simon.leathers@danielstewart.co.uk
The financial information for the half year ended 30 September 2008 has been extracted from the interim results, which is available from
Daniel Stewart & Company, 36 Becket House, Old Jewry, London EC2R 8DD and on the Company's website (www.impactholdings.net).
CHAIRMAN'S STATEMENT
We are pleased to report our unaudited interim financial results for the six months ended 30th September 2008. Revenue of £1,179,637 and
pre-tax profit of £190,953 were in line with expectations, as were cash flows and origination levels.
The general economic downturn in 2008 has continued to see unprecedented turmoil, with the collapse of the financial markets and the
general reduction in global confidence, together with the continuing reduced availability of inter-bank funding constraining the market
considerably. The linkage of inter-bank funding to LIBOR has restricted the Financial Institutions capacity to pass on recent base rate cuts
to its customers, indeed they continue to review their lending criteria with their credit capacity continuing to be somewhat restricted due
to capital constraints. This in itself is reducing liquidity and increases pressure on the continuing reduced availability of credit
facilities.
Business Overview
The liquidity and credit crisis which materialized far faster than anyone envisaged, continues to have a profound effect on the
availability of funding in the market generally but Impact has continued to secure banking facilities to operate on a day-to-day basis.Increased facilities are presently under negotiation but these facilities will only be taken and utilized on a selective basis due to the
present economic uncertainty. The Group remains concerned in particular about the volatility in the property market and the knock on effect
to other sectors, including the legal profession and this has led us to take a very conservative approach to funding all transactions until
the market returns to a more stable environment.
Impact's funding businesses for both solicitor lending and property bridging continue to operate in a controlled manner and in
accordance with management expectations. However, forecasts are for a flat second half of the financial year as a flight to quality is
actively managed and counterparties experience the difficult environment.
Through continued refinement and focus on marketing and strong risk management, Impact believes it can increase its market penetration
in both the pre-settlement and property arenas when the economic environment returns to some form of normality. Market research shows there
is a growing use of structured finance to resolve Personal Litigation, Matrimonial Disputes and Specialty Property related transactions and
it is our continued belief that the total addressable market for these aspects of our business can grow significantly in the future.
We are pleased to confirm the contingency referred to in the Statutory Accounts for the year ended 31st March 2008, where one party had
disputed the recoverability of the amounts, was successfully resolved in the period following these results.
Pre-Settlement Funding
Pre-settlement funding is the provision of disbursement funding in pending personal injury cases, as well as providing claimants with
advances on their compensation. Impact continues to develop its organic pre-settlement origination activity and continues to look at other
market opportunities in the solicitor and professional lending marketplace, while continuing to develop its vertically integrated model as
detailed in the March 2008 accounts.
Property Bridging
Bridging finance is the term used to describe non amortising, interest only, short term funding (usually up to 12 months) secured on
land or property. Impact's activities involve providing short term finance secured against residential and commercial property, typically
through one of the following types of transaction:
* Chain-breaking mortgage;
* Property development including site purchase and new-build projects;
* Property conversions and refurbishments;
* Acquiring properties where a surveyor recommends a retention;
* Buying from auctions;
* Equity release.
Impact's lending decision is based on careful consideration of a client's track record and sector of activity, as well as the proposed
loan period and likely valuation of the underlying property at the time of repayment. Loans are usually repaid from refinance or proceeds of
sale following, for example, refurbishment or development.
Given the present uncertainty in the property market, strict underwriting and risk management assessment is adhered to with reduced
lending seen due to the present strategy of only lending on low loan to value, low risk transactions.
Outlook
Having regards to the present economic environment, our short term objective is to continue to bolster the credit and risk management
controls within the Group as well as ensuring present exposures are actively managed to a successful conclusion, whilst conserving cash for
the Group during these uncertain times.
In the longer term our strategic objective is to create a successful nationwide specialist lender capable of delivering profitable
results, whilst maintaining control over the commercial and financial risks facing the group.
Richard Kilsby
Non Executive Chairman
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT
6 Months 6 months Year
ended ended Ended
30/09/2008 30/09/2007 30/03/2008
£ £ £
Revenue 1,179,637 679,793 1,590,442
Cost of sales (498,291) (285,098) (615,593)
Gross profit 681,346 394,695 974,849
Exceptional bad debt recoveries/(write off) 13,296 615,287 1,250,345
Exceptional legal and professional fees - - (435,270)
Exceptional impairment of goodwill - - (1,246,529)
Employee benefit expense - (269,178) -
Share based compensation - (7,736) -
Other administrative expenses (562,890) (561,296) (1,590,612)
Total administration expenses (549,594) (222,923) (2,022,066)
Operating profit/(loss) 131,752 171,772 (1,047,217)
Interest receivable 59,201 24,477 74,034
Profit/(loss) for the period from operations before tax 190,953 196,249 (973,183)
Corporation Tax - - -
Profit/(loss) for the period 190,953 196,249 (973,183)
Profit/(loss) per share 0.17 0.17 (0.9)
Basic and Fully Diluted (pence) 0.17 0.17 (0.9)
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 September 2008
6 Months 6 months Year
ended ended Ended
30/09/2008 30/09/2007 30/03/2008
£ £ £
Non-current assets
Goodwill - 700,389 -
Plant and equipment 36,369 24,348 56,583
Intangible assets 55,001 101,388 66,001
91,370 826,125 122,584
Current assets
Trade and other receivables including amounts falling
due after more than one year 9,427,497 6,293,018 7,955,244
Cash and cash equivalents 863,504 1,351,713 1,127,688
10,291,001 7,644,731 9,082,932
Total assets 10,382,371 8,470,856 9,205,516
Capital and reserves
Share capital 5,666,667 5,666,667 5,666,667
Share premium account 4,759,823 4,759,823 4,759,823
Share based payment reserve 373,836 381,572 373,836
Retained earnings (7,495,679) (6,517,200) (7,686,632)
Equity attributable to equity shareholders of the parent 3,304,647 4,290,862 3,113,694
Creditors: amounts falling due within one year 7,077,724 4,179,994 6,091,822
10,382,371 8,470,856 9,205,516
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD
6 Months 6 months Year
ended ended Ended
30/09/2008 30/09/2007 30/03/2008
£ £ £
Operating activities
Cash generated from/(used) in operations (1,505,337) (3,048,765) (4,992,558)
Net cash absorbed by operating activities (1,505,337) (3,048,765) (4,992,558)
Investing activities
Receipts from sale of tangible assets - - 15,028
Purchase of property, plant and equipment 360 (13,908) (48,580)
Interest received 55,384 24,477 74,034
Net cash generated by/(used in) investing activities 55,744 10,569 40,482
Financing activities
Increase in amount owed to lending institutions 1,185,409 2,030,439 3,720,294
Net cash (used in)/from financing activities 1,185,409 2,030,439 3,720,294
Net (decrease)/increase in cash and cash equivalents (264,184) (1,007,757) (1,231,782)
Opening cash and cash equivalents 1,127,688 2,359,470 2,359,470
Closing cash and cash equivalents 863,504 1,351,713 1,127,688
This information is provided by RNS
The company news service from the London Stock Exchange
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