TIDMACS
RNS Number : 4224Z
AI Claims Solutions PLC
22 September 2009
Ai CLAIMS SOLUTIONS PLC
Preliminary Results for year ending 30 June 2009
Group Financial Summary and Highlights
+------------------------------------------+-----------+-----------+-------------+
| | 2009 | 2008 | 2007 |
+------------------------------------------+-----------+-----------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+-------------+
| | | | (see note) |
+------------------------------------------+-----------+-----------+-------------+
| Revenue | 55,744 | 40,835 | 34,326 |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Adjusted profit before taxation | 2,016 | 2,159 | 1,635 |
| and IFRS 2 charge | | | |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Profit before taxation | 1,874 | 2,046 | 1,540 |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Taxation charge | (573) | (657) | (308) |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Profit transferred to reserves | 1,301 | 1,389 | 1,232 |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Dividend | (368) | (338) | (295) |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Earnings per share | | | |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Basic before IFRS 2 | 2.36p | 2.45p | 2.16p |
| charge | | | |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Basic | 2.13p | 2.26p | 2.01p |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
| Dividend per share | 0.60p | 0.55p | 0.48p |
+------------------------------------------+-----------+-----------+-------------+
| | | | |
+------------------------------------------+-----------+-----------+-------------+
Note: The Group adopted IFRS for the first time in the year ended 30 June 2008.
The results for the year ended 30 June 2007 have been restated.
Financial Highlights
* Revenue increased by 37% to GBP55.7m from GBP40.8m
* Adjusted PBT (before IFRS 2 charge) of GBP2.016m (2008: GBP2.159m). EBITDA of
GBP3.031m (2008: GBP2.927m)
* Gross margin of 25.6% (2008: 32.3%) reflecting change in mix and lower risk
profile of business
* Return on shareholder's funds, based on PAT (before IFRS 2 charge), of 10% down
slightly from 11% in the previous year
* Adjusted basic EPS (before IFRS 2 charge) of 2.36p (2008: 2.45p)
* Proposed final dividend of 0.34p per share (2008: 0.34p per share). Interim and
final dividend in respect of 2009 is maintained at 0.60p (2008: 0.60p).
Operational Highlights
* Commencement of 2 new insurer relationships
* Commencement of 3 manufacturer schemes and significant progress into the broker
sector
* Development of fault repair based offering to insurance companies and successful
development of an in house engineering function
* Debtor days of 95 (2008: 82 days) continue to reflect Ai's strong relationship
with the insurance market, against the background of considerable market
turbulence, and are substantially better than our major quoted competitors
* Efficiency savings made from the continued roll out of the Claims Administration
and Recovery System to cover approximately 90% of transacted volume. Additional
modules implemented to extend services to include 'First Notification of Loss'
and award winning 'Defenda'
For further information, please contact:-
David Sandhu - Ai Claims Solutions PLC 0844 571 3108
Peter Harrison - Ai Claims Solutions PLC 0844 571 3200
Dru Danford - Shore Capital and Corporate Limited (NOMAD to the Company) 0207
468 7905
Chairman's Statement
In a difficult UK economic climate and against the background of considerable
turbulence in the sector, I am pleased to report that the Group has delivered a
profit before taxation (before IFRS 2 charge) of GBP2.016m (2008: GBP2.159m), in
line with management's expectation.
Results
Adjusted profit before tax (before IFRS 2 charge) was GBP2.016m (2008:
GBP2.159m). The result was, as expected, biased towards the second half of the
year.
Revenue increased by 37%, to GBP55.7m from GBP40.8m. Hire revenue increased from
GBP24.6m to GBP37.3m (52%) to comprise 67% of total revenue (2008: 60%) whilst
repair income increased from GBP11.1m to GBP13.1m (18%) but reduced to 24% of
revenue (from 27%). Other income lines grew slightly from GBP5.1m to GBP5.3m but
declined as a percentage of revenue from 13% to 9%.
Gross margin reduced from 32% to 26%. The significant factor in this is the
growth in our business written through an innovative lower risk lower margin
hire model developed with one of our key referrers. Administrative costs (before
depreciation and amortisation) reduced from 25.2% to 20.2% of revenue assisted
by efficiency savings from the new IT system and through leveraging the fixed
cost base. Return on shareholders funds of 10% declined slightly from the
previous year of 11%. Our efficient operating platform enables us to price
competitively and deliver a reasonable return on capital in the current economic
climate.
During the second half of the year, Ai implemented a new motor insurer contract
and continued to make progress in the broker market. As mentioned at the
interim, we have established ourselves in the vehicle manufacturer market with
the commencement of 3 new schemes. We also entered into a pilot with an insurer
to provide fault repair services, utilising Ai's own repair network and extended
our in house engineering team to support our growth in repair.
Our debtor days, which we calculate using the count-back method, average 95 days
(2008: 82 days), which remains substantially better than our quoted competitors
and are stable compared with our interim period of 91 days. Our relatively low
debtor days compared to our competitors reflects the success of Ai's
collaborative way of working with the insurance market and the emphasis placed
on cash collection. However we have been affected by the turmoil in the sector
over the last year, with our quoted competitors under considerable pressure and
litigating more frequently, which has in turn aggravated the significant
backlogs in processing claims payments at insurers all of which has restricted
our ability to improve debtor days as we had wished. Ai's claims remain very
well controlled and our average hire duration remains below 16 days.
The increase in average debtor days combined with growth in revenue has
increased the working capital funding requirement of the business.
Net debt increased by GBP6.2m during the year to GBP9.1m, after absorbing
GBP1.0m of capital expenditure on IT systems and infra-structure development.
The net overdraft of GBP8.1m (GBP1.8m) reflects an operating cash outflow of
GBP5.0m, due principally to a growth in debtors less creditor funding of
GBP7.9m. In anticipation of further growth during 2010, an increase in bank
facility to GBP15m on competitive terms was agreed in July 2009.
Strategy
The impact of credit hire claims on the insurance market has escalated up the
agenda of industry executives. There is greater recognition of the need to
control average claims costs and to control the behaviour of traditional credit
hire operators. Dissatisfaction with the traditional credit hire approach has
led to an increasing number of tender opportunities being presented to Ai. Our
positioning remains to work in alliance with the industry to develop innovative
solutions to manage claims costs down, while delivering attractive returns to
Ai's shareholders.
Our efficient operating and financial platform has proven our business model to
be resilient across the economic cycle. This platform is scalable and flexible
and enables us to secure business at lower margins whilst delivering an
acceptable return on capital in the current economic climate. Our policy of
partnering with major rental providers rather than owning our own fleet of
vehicles means we are not directly impacted by potential write downs from
falling car prices nor the challenge of achieving a profitable level of fleet
utilisation and gives us the benefit of a national network of vehicle locations.
We continue to invest in enhancing the customer journey and this has seen us
deliver market leading levels of conversion for our business partners.
We continue to invest in our operational capability and are utilising this to
develop new market niches. We offer a full end to end claims management solution
dealing with fault and non-fault customers and are rolling this out with our
manufacturer clients. This flexibility also enables us to manage various stages
of the claims cycle for insurer clients. In addition to our established Reserva
product we have recently extended our 'fault' solutions where through enhanced
pro-activity and control we are able to deliver cost savings when compared to
insurers' in house teams. We have set ourselves challenging plans to further
develop these business sectors in addition to servicing 'not at fault'
customers.
Some of our competitors have been having a very difficult time with substantial
write-offs and client losses and will be further stretched as average hire
periods are forced down. We believe greater examination of the different
business models by the industry will benefit Ai and we will continue to be both
flexible in working with the industry in meeting their goals and innovative in
helping them find better solutions.
Board Change
Bob Newton joined the Board on 1 November 2008 as a Non-Executive director. Bob
is an experienced insurance industry executive who brings a wealth of experience
to the Board. Adrian Palmer stepped down from the Board on 31 December 2008 and
the Board would like to thank Adrian for his significant contribution to the
Company over a long period.
Dividends
The Board is pleased to propose a final dividend of 0.34p per share for the year
to 30 June 2009 to be paid on 6 January 2010 to shareholders on the register at
11 December 2009 (2008: 0.34p), taking total dividends in respect of 2008/09 to
0.60p (2008: 0.60p)
Future Prospects
Current market developments are creating opportunities which we believe are
ideally suited to Ai because of our low operating cost model and partnership
approach. Whilst debt collection remains a challenge we are well placed to
capitalise on these opportunities as customers increasingly look at all aspects
of their operations for cost efficiencies and opportunities for value
generation. In pursuing these opportunities we will continue to address the
fundamentals of operational efficiency and working capital management. While
contract wins are difficult to predict, the range of opportunities being
presented to Ai and the spread of business we are currently delivering give me
considerable confidence in our future.
Steve Broughton
Chairman
Chief Executive's Review
Introduction
I am pleased to report that the Group made an adjusted profit before taxation of
GBP2.016m compared to GBP2.159m in the previous year.
Business and Commercial Development
Ai continues to broaden its distribution strategy, and to develop the range of
products it offers to the insurance and automotive sectors.
Ai is making solid progress and our brand awareness amongst insurance, broker
and the automotive sectors is leading to an increase in invitations to tender
and pre-tender dialogue.
The market remains highly competitive and this has seen referral fees increase
significantly in the insurer and broker non-fault markets in particular. I
believe that it is only possible to compete in this sector in the long run with
a very efficient operating platform and strict control over the management of a
claim which in turn makes the process of debtor recovery easier and reduces the
working capital required by the business model.
Within the insurer sector, our revenue and earnings reflect the first full year
of revenue from a major contract effective in January 2008. This contract has a
lower risk profile and margin than traditional credit hire. I am also pleased to
report that we have recently won 2 further contracts, the benefits of which will
flow through into next year's earnings.
The broker sector is largely already contracted to traditional credit hire
organisations; however, we are witnessing significant tender activity as brokers
have become disenchanted with the traditional credit hire approach and look to
achieve more favourable terms and a better partnership approach. Responsible
brokers are increasingly considering their own 'claims footprint' with insurers
on their panel. Ai is able to offer brokers an enhanced commercial offering but
also the knowledge that the claims they refer into the market are well
controlled. I am pleased to report that we have secured 3 mid tier broker
accounts in recent months.
Our Automotive division has made strong progress. We have now contracted to
provide services to 3 manufacturers.
We have continued to develop our repair network, which now stands at c150
repairers nationwide. Our repair related work grew by 18% during the year as we
have expanded our insurer sector work. At the same time we have increased our in
house engineering function and now handle 75% of eligible engineering
inspections in house. This has enabled us to achieve stronger control over the
repair process, saving costs and enhancing the customer journey. Ai is the first
motor claims management company to mandate the new PAS 125 Kitemark
accreditation for its repair network.
Our rental arrangements continue to work very successfully with our partner
Avis, supported by additional providers National/Guy Salmon and Nexus in
non-core fleet areas. This provides pricing certainty and favourable payment
terms as well as securing the highest level of customer service to our
customers. In the current economic climate it is important that Ai is also
protected from the risk of falling car values, vehicle funding and reduced
vehicle utilisation.
Our new operational system has now been rolled out to approximately 90% of our
business. This system was built in house, specific to Ai's needs, around
technologically advanced workflow software. The flexibility of the system allows
us to receive work electronically and drive process efficiencies. We continue to
invest in the system to support a broadening of our product range and are
introducing a full 'First Notification of Loss' (FNOL) module and manufacturer
schemes module.
People
Our headcount grew to an average of 368, from 328 in the previous year, a 12%
increase. This reflects underlying business growth together with efficiency
improvements realised from the roll out of our CARS system and also improvements
to other key efficiency drivers, such as attrition and sickness. Whilst
attrition in a call centre environment is running at c30% in some areas of the
country we have been able to reduce our rate from 32.8% to 25.5%.
Operational Performance
Referral levels increased overall by 20% during the year which included
significant growth in our non fault products (Mobilisa and BrokerAid).
Operational delivery of referrals is measured by three key metrics - conversion
rates, hire durations and customer satisfaction levels.
Overall hire conversion levels increased to c80% across our non fault book of
business. The success of implementing warm handovers, pre agreed conversion
criteria and the development of our new 'First Notification of Loss' (FNOL)
system has allowed operations to improve overall conversion rates which are
market leading within our sector. This provides us with the ability to
accurately predict conversion levels across our operation. Through advancements
commercially, with our supply chain, we are now able to offer enhanced
commissions for personal injury claims and again see higher levels of conversion
in this area.
Our intervention product (Reserva) has also benefitted from improved conversion
rates, leading to further savings for our insurer customers who purchase the
product. We now convert c50% of all non fault third parties into intervention
services, which is industry leading. Our ability to utilise free courtesy cars
from our repair network has also improved from 51% last year to 64% - delivering
further value to our insurer partners. Fee based claims handling income, which
includes Defenda, was slightly down on the previous year.
Our business model revolves around maintaining low average hire durations which
in turn allows us to collect our debtors quickly. During 2009, we maintained our
hire durations for Mobilisa and Reserva at 16 and 15 days respectively. Our
duration management is maintained by investment in our customer service
(pro-active downtime management) team and through strong repair network control.
Industry durations average 21 days, which leads to increased dispute, litigation
and ultimately longer payment cycles. Our non fault duration at 16 days is one
of the very lowest in the market and provides the bedrock to our sustainable
commercial proposals.
Customer satisfaction levels continue to be strong, demonstrating our investment
in the customer journey aspects of our processes and procedures.
Although our debtor days increased from 82 days to 95 days this reflects an
increase in the mix of business towards non-fault services and a payment backlog
witnessed at most insurers. Debt collection performance continues to be
significantly better than most credit hire organisations and this is down to
Ai's ethical approach to working in partnership with the insurance sector and
the effective control of claims submitted for payment.
Outlook
The effects of the economic downturn still make it difficult to predict future
market developments at a consumer and financial service sector level. However I
believe there are significant commercial opportunities for Ai which we are well
positioned to exploit, through our commercial, financial and operating models
and ethical way of working with the insurance market.
David Sandhu
Chief Executive
Finance Director's Review
Financial Overview
Revenue of GBP55.7m (2008: GBP40.8m) increased by 37% over the previous year due
to growth in Ai's core vehicle replacement and repair services. Hire revenue
increased by 52% and repair revenue by 18% compared to the previous year.
Gross margin reduced from 32% to 26%. This is predominantly due to increases in
referral fees on lower risk rental business.
Administrative expenses of GBP12.2m increased by 10% over the previous year.
Staff numbers grew by 12%. Administrative expenses included additional
amortisation of the new Claims Administration and Recovery System (CARS), which
increased by GBP332,000 over the previous year. Administrative expenses (before
depreciation and amortisation) represented 20.2% of revenue, down from 25.2% in
the previous year. The Group benefited from greater efficiency in variable costs
as a result of the introduction of CARS as well as additional scale leveraging
the non-variable cost base.
The Group generated a pre-tax profit of GBP1.874m in the year (2008: GBP2.046m).
Profit before tax and IFRS 2 charge was GBP2.016m (2008: GBP2.159m).
Return on closing shareholders funds was 10%, down slightly from 11% in the
previous period.
Financing
Net financing costs increased by GBP133,000 as a result of additional working
capital related borrowings required to fund growth.
Taxation
The Group expects to make a corporation tax payment of GBP454,000. Due to
profits made during the year, the deferred tax asset of GBP152,000 has fallen to
GBP27,000.
Earnings Per Share
Basic Earnings Per Share (EPS) decreased by 0.13p to 2.13p (2008: 2.26p).
Adjusted EPS, which measures EPS before IFRS 2 charge, decreased by 0.09p to
2.36p (2008: 2.45p).
Dividends
The dividend charge of GBP368,000 is composed of the payment of a final dividend
in relation to the year ended 30 June 2008 of 0.34p and declaration of an
interim dividend in respect of the 6 months to 31 December 2008 of 0.26p. The
Board have proposed the payment of a final dividend for the year of GBP208,000
(0.34p per share) payable on 6 January 2010 to shareholders on the register at
11 December 2009.
In line with accounting standards, only dividends declared in the financial
period are reflected in the financial statements for that period. Accordingly,
the proposed payment of GBP208,000 is not reflected in these financial
statements.
Cashflow and Working Capital
Net cash outflow from operating activities was GBP5.0m (2008: inflow GBP0.8m).
This was driven by a growth in revenue of 37% and an increase in debtor days
from 82 to 95 days.
Debtor days are impacted by an increase in mix towards longer tail credit hire
debt. We have also witnessed increases in processing backlogs within insurance
company claims offices, which have resulted in receipts not keeping pace with
billings. We are taking steps to implement payment protocols where we can.
Intangible Assets
Intangible asset additions of GBP0.7m (2008: GBP1.2m) relate to the ongoing
development of Ai's in-house CARS, which went live as planned in October 2007
and is now used for approximately 90% of transacted business. Amortisation of
the system amounted to GBP0.5m (2008: GBP0.2m) during the year, a full year's
charge.
Property, Plant and Equipment
The Group has invested GBP0.3m in enhanced office space, IT and office
equipment. A virtualisation and thin client project were completed during the
year, providing infrastructure to support further growth and reduce income
statement expenses by GBP100,000 per annum. Assets with an original cost of
GBP1.2m and which were fully written down were disposed of during the year.
Asset replacements consisted of purchased assets and assets utilised under
operating leases.
Capital Structure and Financing
Borrowings stand at GBP9.3m (2008: GBP3.0m). Borrowings consist of a bank
overdraft of GBP8.3m and structured finance in the form of a property loan and
computer leases. The Group has a revolving overdraft funding facility with
Yorkshire Bank calculated as 80% of sub 240 day trade receivables, capped at
GBP10m. The facility was increased to GBP15m in July 2009, to restore growth
headroom.
The business differentiates itself from traditional credit hire organisations by
operating a lean financial model based around rapid collection and strong
management of debt, whilst avoiding the risks of maintaining a fleet of
vehicles. Accordingly, balance sheet gearing remains low, with a ratio of debt
to shareholders funds of 63% (2008: 22%).
Interest charges on the overdraft and property loan are variable, linked to
Yorkshire Bank's base rate.
Financial Risk Management
The Group does not enter into derivative transactions and does not trade in
financial instruments. The main risk arising from financial instruments is
interest rate risk, which is linked to movements in Yorkshire Bank's base rate.
The Group finances its operations from a mixture of equity, bank borrowings and
lease financing. The Group borrows at floating rates of interest up to 2.5 %
above Yorkshire Bank's base rate. No interest rate caps or swaps are used to
manage exposure to interest rate fluctuations.
The Group enters into contracts with customers, for which vehicle provision and
repair labour prices may be prescribed for periods of up to 12 months. The Group
secures supply arrangements with rental companies and repairers to mitigate the
impact of volatility in prices over broadly similar periods. In relation to
non-fault hires, the Company is a subscriber to the ABI's General Terms of
Agreement (GTA). GTA rates are agreed between insurers and credit hire companies
annually. When pricing contracts, the Company takes account of key potential
risks and sensitivities.
In order to maintain liquidity to ensure that sufficient funds are available for
ongoing operations and future developments, the Group uses a mixture of short
and long term debt finance.
Peter Harrison
Group Finance Director
Consolidated Income Statement
for the year ended 30 June 2009
+----------------+--------+----------+----------+
| | Note | 2009 | 2008 |
+----------------+--------+----------+----------+
| | | GBP000 | GBP000 |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
| Revenue - | | 55,744 | 40,835 |
| continuing | | | |
| activities | | | |
+----------------+--------+----------+----------+
| Cost | | (41,470) | (27,629) |
| of | | | |
| sales | | | |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
| Gross | | 14,274 | 13,206 |
| profit | | | |
+----------------+--------+----------+----------+
| Administrative | | (12,178) | (11,071) |
| expenses | | | |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
| Operating | | 2,096 | 2,135 |
| profit | | | |
+----------------+--------+----------+----------+
| Financial | 1 | - | 21 |
| income | | | |
+----------------+--------+----------+----------+
| Financial | 1 | (222) | (110) |
| expenses | | | |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
| Net | | (222) | (89) |
| financing | | | |
| costs | | | |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
| Profit | | 1,874 | 2,046 |
| before | | | |
| tax | | | |
+----------------+--------+----------+----------+
| Taxation | 2 | (573) | (657) |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
| Profit | | 1,301 | 1,389 |
| for | | | |
| the | | | |
| year | | | |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
| Basic | 3 | 2.13p | 2.26p |
| earnings | | | |
| per | | | |
| ordinary | | | |
| share | | | |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
| Diluted | 3 | 2.11p | 2.23p |
| earnings | | | |
| per | | | |
| ordinary | | | |
| share | | | |
+----------------+--------+----------+----------+
| | | | |
+----------------+--------+----------+----------+
Consolidated Balance Sheet
at 30 June 2009
+---------------+--------+----------+----------+
| | | 2009 | 2008 |
+---------------+--------+----------+----------+
| | | GBP000 | GBP000 |
+---------------+--------+----------+----------+
| Assets | | | |
+---------------+--------+----------+----------+
| Non-current | | | |
| assets | | | |
+---------------+--------+----------+----------+
| Goodwill | | 6,726 | 6,726 |
+---------------+--------+----------+----------+
| Other | | 2,894 | 2,679 |
| Intangible | | | |
| assets | | | |
+---------------+--------+----------+----------+
| Property, | | 2,463 | 2,610 |
| plant and | | | |
| equipment | | | |
+---------------+--------+----------+----------+
| Deferred | | 27 | 152 |
| tax | | | |
| assets | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| | | 12,110 | 12,167 |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Current | | | |
| assets | | | |
+---------------+--------+----------+----------+
| Trade | | 31,096 | 17,446 |
| and | | | |
| other | | | |
| receivables | | | |
+---------------+--------+----------+----------+
| Cash | | 130 | 53 |
| and | | | |
| cash | | | |
| equivalents | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| | | 31,226 | 17,499 |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Total | | 43,336 | 29,666 |
| assets | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Current | | | |
| liabilities | | | |
+---------------+--------+----------+----------+
| Financial | | (8,379) | (1,956) |
| liabilities | | | |
| - | | | |
| borrowings | | | |
+---------------+--------+----------+----------+
| Trade | | (18,988) | (13,011) |
| and | | | |
| other | | | |
| payables | | | |
+---------------+--------+----------+----------+
| Current | | (454) | (49) |
| tax | | | |
| liabilities | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| | | (27,821) | (15,016) |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Non-current | | | |
| liabilities | | | |
+---------------+--------+----------+----------+
| Financial | | (879) | (1,027) |
| liabilities | | | |
| - | | | |
| borrowings | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| | | (879) | (1,027) |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Total | | (28,700) | (16,043) |
| liabilities | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Net | | 14,636 | 13,623 |
| assets | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Shareholders' | | | |
| equity | | | |
+---------------+--------+----------+----------+
| Share | | 6,142 | 6,142 |
| capital | | | |
+---------------+--------+----------+----------+
| Share | | 1,579 | 1,579 |
| premium | | | |
| account | | | |
+---------------+--------+----------+----------+
| Other | | 345 | 271 |
| reserves | | | |
+---------------+--------+----------+----------+
| Retained | | 6,570 | 5,631 |
| earnings | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Total | | 14,636 | 13,623 |
| shareholders' | | | |
| equity | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
Consolidated Cash Flow Statement
for the year ended 30 June 2009
+--------------------------------+--------+----------+---------+
| | Note | 2009 | 2008 |
+--------------------------------+--------+----------+---------+
| | | GBP000 | GBP000 |
+--------------------------------+--------+----------+---------+
| Cash | | | |
| flows | | | |
| from | | | |
| operating | | | |
| activities | | | |
+--------------------------------+--------+----------+---------+
| Profit | | 1,301 | 1,389 |
| for | | | |
| the | | | |
| year | | | |
+--------------------------------+--------+----------+---------+
| Adjustments | | | |
| for: | | | |
+--------------------------------+--------+----------+---------+
| Depreciation | | 432 | 621 |
| of property, | | | |
| plant and | | | |
| equipment | | | |
+--------------------------------+--------+----------+---------+
| Amortisation | | 503 | 171 |
| of other | | | |
| intangible | | | |
| assets | | | |
+--------------------------------+--------+----------+---------+
| Gain | | (2) | - |
| on | | | |
| sale | | | |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+--------------------------------+--------+----------+---------+
| Share | | 142 | 113 |
| compensation | | | |
| charge | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Financial | 1 | - | (21) |
| income | | | |
+--------------------------------+--------+----------+---------+
| Financial | 1 | 222 | 110 |
| expense | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Taxation | 2 | 573 | 657 |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Increase | | (13,650) | (4,285) |
| in trade | | | |
| and | | | |
| other | | | |
| receivables | | | |
+--------------------------------+--------+----------+---------+
| Increase | | 5,762 | 2,148 |
| in trade | | | |
| and | | | |
| other | | | |
| payables | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Interest | 1 | (222) | (110) |
| paid | | | |
+--------------------------------+--------+----------+---------+
| Taxation | | (51) | - |
| paid | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Net | | (4,990) | 793 |
| cash | | | |
| from | | | |
| operating | | | |
| activities | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Cash | | | |
| flows | | | |
| from | | | |
| investing | | | |
| activities | | | |
+--------------------------------+--------+----------+---------+
| Proceeds | | 3 | - |
| from | | | |
| sale of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+--------------------------------+--------+----------+---------+
| Interest | 1 | - | 21 |
| received | | | |
+--------------------------------+--------+----------+---------+
| Purchases | | (286) | (295) |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+--------------------------------+--------+----------+---------+
| Purchases | | (718) | (1,185) |
| of other | | | |
| intangible | | | |
| assets | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Net | | (1,001) | (1,459) |
| cash | | | |
| from | | | |
| investing | | | |
| activities | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Cash | | | |
| flows | | | |
| from | | | |
| financing | | | |
| activities | | | |
+--------------------------------+--------+----------+---------+
| Purchase | | (54) | - |
| of | | | |
| treasury | | | |
| shares | | | |
+--------------------------------+--------+----------+---------+
| Proceeds | | 215 | - |
| of | | | |
| borrowings | | | |
+--------------------------------+--------+----------+---------+
| Repayment | | (82) | (48) |
| of | | | |
| borrowings | | | |
+--------------------------------+--------+----------+---------+
| Payment | | (50) | (179) |
| of | | | |
| finance | | | |
| lease | | | |
| liabilities | | | |
+--------------------------------+--------+----------+---------+
| Dividends | | (368) | (338) |
| paid | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Net | | (339) | (565) |
| cash | | | |
| from | | | |
| financing | | | |
| activities | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Net | | (6,330) | (1,231) |
| increase | | | |
| in cash | | | |
| and cash | | | |
| equivalents | | | |
+--------------------------------+--------+----------+---------+
| Cash | | (1,796) | (565) |
| and | | | |
| cash | | | |
| equivalents | | | |
| at 1 July | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
| Cash | | (8,126) | (1,796) |
| and | | | |
| cash | | | |
| equivalents | | | |
| at 30 June | | | |
+--------------------------------+--------+----------+---------+
| | | | |
+--------------------------------+--------+----------+---------+
Consolidated Statement of Changes in Equity
for the year ended 30 June 2009
+-------------------------+---------+---------+---------+----------+--------+
| | Share | Share | Other | Retained | Total |
| | capital | premium | reserve | earnings | |
+-------------------------+---------+---------+---------+----------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------+---------+---------+---------+----------+--------+
| | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| At | 6,142 | 1,579 | 158 | 4,565 | 12,444 |
| 1 | | | | | |
| July | | | | | |
| 2007 | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Profit | - | - | - | 1,389 | 1,389 |
| and | | | | | |
| total | | | | | |
| recognised | | | | | |
| income and | | | | | |
| expense | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Equity-settled | - | - | 113 | - | 113 |
| share based | | | | | |
| payment | | | | | |
| transactions | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Deferred | - | - | - | 15 | 15 |
| tax on | | | | | |
| share | | | | | |
| options | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Dividends | - | - | - | (338) | (338) |
+-------------------------+---------+---------+---------+----------+--------+
| | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| At | 6,142 | 1,579 | 271 | 5,631 | 13,623 |
| 30 | | | | | |
| June | | | | | |
| 2008 | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| At | 6,142 | 1,579 | 271 | 5,631 | 13,623 |
| 1 | | | | | |
| July | | | | | |
| 2008 | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Profit | - | - | - | 1,301 | 1,301 |
| and | | | | | |
| total | | | | | |
| recognised | | | | | |
| income and | | | | | |
| expense | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Equity-settled | - | - | 142 | - | 142 |
| share based | | | | | |
| payment | | | | | |
| transactions | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Transfer | - | - | (68) | 68 | - |
| between | | | | | |
| reserves | | | | | |
| upon | | | | | |
| lapse of | | | | | |
| share | | | | | |
| based | | | | | |
| payment | | | | | |
| options | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Purchase | - | - | - | (54) | (54) |
| of | | | | | |
| treasury | | | | | |
| shares | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Deferred | - | - | - | (8) | (8) |
| tax on | | | | | |
| share | | | | | |
| options | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| Dividends | - | - | - | (368) | (368) |
+-------------------------+---------+---------+---------+----------+--------+
| | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| At | 6,142 | 1,579 | 345 | 6,570 | 14,636 |
| 30 | | | | | |
| June | | | | | |
| 2009 | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
| | | | | | |
+-------------------------+---------+---------+---------+----------+--------+
Notes
1. Finance income and expense
+-------------------+--------+--------+
| | 2009 | 2008 |
+-------------------+--------+--------+
| | GBP000 | GBP000 |
+-------------------+--------+--------+
| Bank | - | 21 |
| interest | | |
| receivable | | |
+-------------------+--------+--------+
| | | |
+-------------------+--------+--------+
| Financial | - | 21 |
| income | | |
+-------------------+--------+--------+
| | | |
+-------------------+--------+--------+
| Interest | 219 | 98 |
| expense | | |
| on bank | | |
| loans | | |
| and | | |
| overdrafts | | |
+-------------------+--------+--------+
| Interest | 3 | 12 |
| expense | | |
| on | | |
| obligations | | |
| under | | |
| finance | | |
| lease and | | |
| similar | | |
| hire | | |
| purchase | | |
| contracts | | |
+-------------------+--------+--------+
| | | |
+-------------------+--------+--------+
| Financial | 222 | 110 |
| expenses | | |
+-------------------+--------+--------+
| | | |
+-------------------+--------+--------+
2. Taxation
Analysis of charge for the year
+----------------------+--------+--------+
| | 2009 | 2008 |
+----------------------+--------+--------+
| | GBP000 | GBP000 |
+----------------------+--------+--------+
| Current | | |
| tax | | |
| expense: | | |
+----------------------+--------+--------+
| Current | 454 | 43 |
| year | | |
+----------------------+--------+--------+
| Prior | 2 | 6 |
| year | | |
| adjustment | | |
+----------------------+--------+--------+
| | | |
+----------------------+--------+--------+
| | 456 | 49 |
+----------------------+--------+--------+
| | | |
+----------------------+--------+--------+
| Deferred | | |
| tax | | |
| expense: | | |
+----------------------+--------+--------+
| Prior | 6 | (19) |
| year | | |
| deferred | | |
| tax | | |
| charge | | |
| adjustments | | |
+----------------------+--------+--------+
| Origination | 111 | 627 |
| and | | |
| reversal of | | |
| temporary | | |
| differences | | |
+----------------------+--------+--------+
| | | |
+----------------------+--------+--------+
| | 117 | 608 |
+----------------------+--------+--------+
| | | |
+----------------------+--------+--------+
| Total | 573 | 657 |
| tax | | |
| in | | |
| income | | |
| statement | | |
+----------------------+--------+--------+
| | | |
+----------------------+--------+--------+
Reconciliation of effective tax rate
+----------------+--------+--------+
| | 2009 | 2008 |
+----------------+--------+--------+
| | GBP000 | GBP000 |
+----------------+--------+--------+
| | | |
+----------------+--------+--------+
| Profit | 1,301 | 1,389 |
| for | | |
| the | | |
| period | | |
+----------------+--------+--------+
| Total | 573 | 657 |
| tax | | |
| expense | | |
+----------------+--------+--------+
| | | |
+----------------+--------+--------+
| Profit | 1,874 | 2,046 |
| excluding | | |
| taxation | | |
+----------------+--------+--------+
| | | |
+----------------+--------+--------+
| | | |
+----------------+--------+--------+
| Tax | 525 | 614 |
| using | | |
| the UK | | |
| corporation | | |
| tax rate of | | |
| 28 % (2008: | | |
| 30%) | | |
+----------------+--------+--------+
| Non-deductible | 58 | 69 |
| expenses | | |
+----------------+--------+--------+
| Ineligible | 27 | - |
| depreciation | | |
+----------------+--------+--------+
| Research | (45) | - |
| and | | |
| development | | |
| relief | | |
+----------------+--------+--------+
| Adjustments | 2 | 6 |
| for under | | |
| provision | | |
| of tax | | |
| charge in | | |
| prior year | | |
+----------------+--------+--------+
| Adjustments | 6 | (19) |
| to deferred | | |
| tax to | | |
| reflect | | |
| changes to | | |
| prior | | |
| charge | | |
+----------------+--------+--------+
| Deferred | 3 | - |
| tax on | | |
| share | | |
| schemes | | |
+----------------+--------+--------+
| Marginal | (3) | (13) |
| relief | | |
+----------------+--------+--------+
| | | |
+----------------+--------+--------+
| | | |
+----------------+--------+--------+
| Total | 573 | 657 |
| tax | | |
| expense | | |
+----------------+--------+--------+
| | | |
+----------------+--------+--------+
3. Earnings per share
Basic earning per ordinary share
The calculation of basic earnings per ordinary share at 30 June 2009 is based on
the profit for the period attributable to equity holders of the parent and a
weighted average number of ordinary shares outstanding during the year,
calculated as follows:
+-----------------+--------------+--------------+
| | 2009 | 2008 |
+-----------------+--------------+--------------+
| | | |
+-----------------+--------------+--------------+
| Profit | GBP1,301,000 | GBP1,389,000 |
| for | | |
| the | | |
| year | | |
| attributable | | |
| to ordinary | | |
| shareholders | | |
+-----------------+--------------+--------------+
| Weighted | 61,201,394 | 61,416,189 |
| average | | |
| number | | |
| of | | |
| ordinary | | |
| shares | | |
+-----------------+--------------+--------------+
| Basic | 2.13p | 2.26p |
| earnings | | |
| per | | |
| share | | |
+-----------------+--------------+--------------+
Diluted earnings per ordinary share
The calculation of diluted earnings per ordinary share at 30 June 2009 is based
on the profit for the period attributable to equity holders of the parent and a
weighted average number of ordinary shares outstanding during the year including
share options with a dilutive effect, calculated as follows:
+------------------+--------------+--------------+
| | 2009 | 2008 |
+------------------+--------------+--------------+
| | | |
+------------------+--------------+--------------+
| Profit | GBP1,301,000 | GBP1,389,000 |
| for | | |
| the | | |
| year | | |
| attributable | | |
| to ordinary | | |
| shareholders | | |
+------------------+--------------+--------------+
| Weighted | 61,761,908 | 62,157,956 |
| average | | |
| number | | |
| of | | |
| potential | | |
| ordinary | | |
| shares - | | |
| diluted | | |
+------------------+--------------+--------------+
| Basic | 2.11p | 2.23p |
| earnings | | |
| per | | |
| share | | |
+------------------+--------------+--------------+
4. Preliminary Announcement
The unaudited preliminary statement, which has been agreed with the auditors,
was approved by the Board of Directors on 21 September 2009. It is not the
Company's statutory accounts. Copies of the Group's audited statutory accounts
for the year ended 30 June 2009 will be despatched to shareholders shortly. The
auditors have not yet reported on these accounts. Copies will also be available
to the public at the Company's registered office; Indemnity House, Sir Frank
Whittle Way, Blackpool Business Park, Blackpool, FY4 2FB.
The statutory accounts for the period ended 30 June 2008 received an unqualified
audit report and did not contain statements under Section 237 (2) or Section 237
(3) of the Companies Act 1985. The statutory accounts for the period ended 30
June 2008 have been delivered to the Registrar of Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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