TIDMCB.
RNS Number : 8362X
CBG Group Plc
24 August 2009
24 AUGUST 2009
CBG GROUP PLC
(AIM: CB.)
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2009
CBG Group plc ("CBG" or the "Group") a leading independent advisory business
providing insurance broking, employee benefits, wealth management and specialist
sports injury insurance services to companies and private clients, is pleased to
announce interim results for the six months to 30 June 2009.
KEY FEATURES
* Consolidated offices and relocated Head office, considerably reducing overheads
* Trading agreement with Close Premium Finance
* Investor in People accreditation renewed
* Revenue GBP4.86m (2008: GBP5.66m)
* Adjusted * EBITD GBP831,000 (2008: GBP1,430,000)
* Adjusted * diluted earnings per share 2.93p (2008: 6.26p)
* Cash generated by operations GBP613,000 (2008: GBP525,000)
* Net assetsGBP12.44m (2008 half year: GBP10.53m; 2008 full year: GBP12.28m)
* To exclude the effect of amortisation, exceptional operating expenses,
negative goodwill credited and share option charges
Laurie Turnbull, Chairman of CBG said:
"CBG has responded positively and quickly to the current economic slowdown. The
recent period has seen earnings decline in many lines of business and, as a
result, we have put in place a significant cost reduction programme which has
been focused on the reorganisation of core functions.
"The current stage of the market cycle and broker consolidation is without doubt
driving systemic change in the industry. Major consolidators have capitalised on
soft market conditions to fully leverage their scale. CBG remains committed to
growth and we are confident that focusing management time on business processes
will provide a secure platform to take advantage when market conditions change."
=--ends---
Enquiries:
+--------------------------------------------------+--------------------------+
| CBG Group plc | 0161 920 0200 |
+--------------------------------------------------+--------------------------+
| Mike Askew, Group Managing Director | 07720 400356 |
+--------------------------------------------------+--------------------------+
| Laurie Turnbull, Chairman | 07768 641141 |
+--------------------------------------------------+--------------------------+
| www.cbg-group.co.uk | |
+--------------------------------------------------+--------------------------+
| | |
+--------------------------------------------------+--------------------------+
| Bishopsgate Communications Ltd | 020 7562 3350 |
+--------------------------------------------------+--------------------------+
| Nick Rome | |
+--------------------------------------------------+--------------------------+
| Gemma O'Hara | |
+--------------------------------------------------+--------------------------+
| | |
+--------------------------------------------------+--------------------------+
| Zeus Capital | 0161 831 1512 |
+--------------------------------------------------+--------------------------+
| Alex Clarkson | |
+--------------------------------------------------+--------------------------+
| Bobby Fletcher | |
+--------------------------------------------------+--------------------------+
| | |
+--------------------------------------------------+--------------------------+
| Religare Hichens, Harrison plc | 020 7382 4472 |
+--------------------------------------------------+--------------------------+
| Nicholas Malins-Smith | |
+--------------------------------------------------+--------------------------+
| James Wood | |
+--------------------------------------------------+--------------------------+
| | |
+--------------------------------------------------+--------------------------+
Notes to Editors: CBG Group plc, listed on AiM (Ticker: CB.) is a corporately
active business with its head office in Manchester, employing more than 145
people. It's core operating businesses are regulated by the Financial Services
Authority providing a full advisory service in insurance, employee benefits,
wealth management and specialist sports insurance to SME's, private clients and
professional sportsmen. Since becoming a public listed company in 2003 it has
completed 18 acquisitions and has an impressive record of delivering substantial
profits year on year.
Further information is available on CBG Group at the Group's website:
www.cbg-group.co.uk
Chairman's Statement
I am delighted to present another strong set of interim results, for the six
months ended 30 June 2009, despite the unparalleled market conditions. The Group
has yet again produced a substantial profit, which is especially pleasing in the
face of revenues moderated by the economic downturn.
All parts of the economy are experiencing significant external pressures and our
sector has not been untouched by the severe financial conditions. However, the
proactive and positive actions we have taken over the years, by integrating
acquisitions at an early stage and maintaining a management structure have
clearly helped. We remain firmly focused on delivering service to our clients in
the most efficient manner, enabling us to partially mitigate the effects that we
have seen in our industry.
We have undoubtedly been able to benefit from strong foundations, enabling us to
immediately focus our efforts internally on establishing a cost and service base
to suit the market conditions. This is at the same time as ensuring that we
remain in the forefront of winning new business, and providing a competitive
service to our extensive client base.
In January 2009 we consolidated three Manchester offices with little disruption
to the business. The move to Southmoor House allowed us to pick up the pace of
our consolidation programme, introducing a number of actions including a cost
reduction programme and an income management strategy. The project included a
comprehensive IT review, on all sides of the business, extending into the
infrastructure and broking platforms that are essential to deliver service and
long-term efficiencies.
To conclude this project, as we rapidly entered a recession, clearly
demonstrates that we will continue to drive the business forward, and with a
willingness to take long term decisions that deliver value for the years ahead.
We have only seen some of the beneficial effects of this programme on these
interim results, and the full impact will only be clearly visible in the second
half of 2009 and forward into 2010.
Trading
Although in the first half of 2009 there has been very little change in the
general insurance market, the increasing number of corporate failures made the
landscape very unpredictable. These widespread failures have started to slow
down and we may indeed be seeing the first signs of a hardening market. The
financial services division has seen much of its recurring income eroded by the
sustained fall in fund values and has probably suffered the most from the lack
of UK investment, particularly in the property market.
In May 2009 we entered into a strategic partnership with Close Premium Finance
Limited ("CPF") to outsource the funding of our premium finance business traded
under Exius Limited. CPF was selected for a number of reasons, although central
to this decision was their technical expertise and financial stability. The
"white label solution" allows synergistic benefits to be enhanced, which will
have the effect of reducing our working capital requirements in the second half
of this year, whilst simplifying and complementing our banking facilities.
We have set ourselves clear objectives in the short and medium terms and remain
focused on managing long-term profitability. To achieve this we recognise that
we must continue to provide our clients with a professional and cost-effective
service expected of a well-organised business.
People
In February 2009 the Group's Investor in People accreditation was successfully
renewed for a further three years, demonstrating our commitment to all our staff
and recognising the development and aspirations of individuals.
The Board actively encourages the policy of building and maintaining a broad
skill base with specific expertise in important areas of our business. We
operate a clear policy of promoting from within but have also strengthened our
teams with senior management from our recent acquisitions, creating an excellent
balance, and adding greatly to our resources.
We also believe it is imperative in these recessionary times to have experience
of previous economic downturns and recoveries throughout our executive team, and
it is to this end that I am pleased to announce that notwithstanding our former
intentions Stuart Mollekin remains in an executive capacity, his management
skills being invaluable to the Group.
Prospects
I am confident that the Group is well prepared for the current market conditions
and will react quickly and decisively to changes, which we all hope will be an
end to recessionary times. An economic recovery is outside our control, but we
will continue to influence and control those aspects of our business that we are
able to. This should ensure that we continue to operate profitably and
efficiently to the mutual benefit of our shareholders, employees and clients.
Laurie Turnbull
Chairman
24 August 2009
Consolidated income statement
for the half year ended 30 June 2009
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | Half | | Half | | Year to |
| | | Year to | | Year to | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | 30/06/09 | | 30/06/08 | | 31/12/08 |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | Unaudited | | Unaudited | | Audited |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | Note | | | GBP'000 | | GBP'000 |
| | | GBP'000 | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Revenue | | 4,863 | | 5,660 | | 11,148 |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Administrative expenses | | (4,633) | | (4,645) | | (9,873) |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Earnings before interest, tax, | | 831 | | 1,430 | | 2,641 |
| depreciation, amortisation, | | | | | | |
| exceptional operating expenses, | | | | | | |
| negative goodwill credited and share | | | | | | |
| option charges (Adjusted EBITDA) | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Amortisation | | (365) | | (295) | | (675) |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Depreciation | | (132) | | (79) | | (213) |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Exceptional operating expenses | | (74) | | (13) | | (466) |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Negative goodwill credited | | - | | - | | 48 |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Share option charges | | (30) | | (28) | | (60) |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Operating profit | 4 | 230 | | 1,015 | | 1,275 |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Investment revenues | | 44 | | 137 | | 120 |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Finance costs | | (103) | | (222) | | (302) |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Profit before tax | | 171 | | 930 | | 1,093 |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Income tax expense | | (51) | | (269) | | (467) |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Profit attributable to ordinary | | 120 | | 661 | | 626 |
| shareholders in respect of continuing | | | | | | |
| operations | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Earnings per share: | | Pence | | Pence | | Pence |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Earnings per share - basic | 5 | 0.77 | | 4.75 | | 4.33 |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| Earnings per share - diluted | 5 | 0.76 | | 4.67 | | 4.26 |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
| | | | | | | |
+----------------------------------------+------+-----------+---+-----------+---+-----------+
The Group has no items to be recognised in the "Consolidated statement of
comprehensive income" and consequently this statement has not been shown.
Consolidated statement of financial position
as at 30 June 2009
+----------------------------------------+-----------+--+-----------+--+----------+
| | As at | | As at | | As at |
+----------------------------------------+-----------+--+-----------+--+----------+
| | 30/06/09 | | 30/06/08 | | 31/12/08 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | Unaudited | | Unaudited | | Audited |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | GBP'000 | | GBP'000 |
| | GBP'000 | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Non-current assets | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Property, plant and equipment | 643 | | 387 | | 607 |
+----------------------------------------+-----------+--+-----------+--+----------+
| Goodwill | 13,210 | | 13,473 | | 13,573 |
+----------------------------------------+-----------+--+-----------+--+----------+
| Other intangible assets | 3,246 | | 3,970 | | 3,611 |
+----------------------------------------+-----------+--+-----------+--+----------+
| Deferred tax asset | 9 | | 9 | | 9 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| | 17,108 | | 17,839 | | 17,800 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Current assets | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Trade and other receivables | 7,888 | | 9,419 | | 8,420 |
+----------------------------------------+-----------+--+-----------+--+----------+
| Cash and cash equivalents | 2,256 | | 1,331 | | 3,302 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| | 10,144 | | 10,750 | | 11,722 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Total assets | 27,252 | | 28,589 | | 29,522 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Current liabilities | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Trade and other payables | (7,157) | | (7,241) | | (7,806) |
+----------------------------------------+-----------+--+-----------+--+----------+
| Bank overdraft | - | | (1,260) | | - |
+----------------------------------------+-----------+--+-----------+--+----------+
| Short term borrowings | (446) | | (527) | | (456) |
+----------------------------------------+-----------+--+-----------+--+----------+
| Deferred consideration | (1,714) | | (2,552) | | (2,101) |
+----------------------------------------+-----------+--+-----------+--+----------+
| Current tax | (413) | | (478) | | (554) |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| | (9,730) | | (12,058) | | (10,917) |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Net current assets / (liabilities) | 414 | | (1,308) | | 805 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Non-current liabilities | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Long term borrowings | (4,275) | | (2,695) | | (3,985) |
+----------------------------------------+-----------+--+-----------+--+----------+
| Deferred consideration | - | | (2,181) | | (1,418) |
+----------------------------------------+-----------+--+-----------+--+----------+
| Deferred tax | (811) | | (1,127) | | (924) |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| | (5,086) | | (6,003) | | (6,327) |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Total liabilities | (14,816) | | (18,061) | | (17,244) |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Net assets | 12,436 | | 10,528 | | 12,278 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Equity | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Share capital | 625 | | 564 | | 620 |
+----------------------------------------+-----------+--+-----------+--+----------+
| Share premium account | 7,780 | | 6,486 | | 7,675 |
+----------------------------------------+-----------+--+-----------+--+----------+
| Merger reserve | 449 | | - | | 449 |
+----------------------------------------+-----------+--+-----------+--+----------+
| Profit and loss account | 3,582 | | 3,478 | | 3,534 |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| | | | | | |
+----------------------------------------+-----------+--+-----------+--+----------+
| Equity shareholders' funds | 12,436 | | 10,528 | | 12,278 |
+----------------------------------------+-----------+--+-----------+--+----------+
Consolidated statement of changes in equity
for the half year ended 30 June 2009
+----------------------------+----------------------------+---------+---------+----------+---------+
| | Share | Share | Merger | Retained | Total |
| | capital | premium | reserve | earnings | equity |
| | | account | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Balance at 30 June 2008 - | 564 | 6,486 | - | 3,478 | 10,528 |
| Unaudited | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Net loss for the period | | | | | |
| attributable to equity | | | | | |
| shareholders | | | | | |
+ +----------------------------+---------+---------+----------+---------+
| | - | - | - | (36) | (36) |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Total recognised income | 564 | 6,486 | - | 3,442 | 10,492 |
| and expense | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Issue of ordinary shares | 56 | 1,189 | 449 | - | 1,694 |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Other reserves movement | | | | | |
| due to share options | | | | | |
| charge | | | | | |
+ +----------------------------+---------+---------+----------+---------+
| | - | - | - | 32 | 32 |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Impact of deferred tax on | | | | | |
| share option charge | | | | | |
+ +----------------------------+---------+---------+----------+---------+
| | - | - | - | 60 | 60 |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Balance at 31 December | 620 | 7,675 | 449 | 3,534 | 12,278 |
| 2008 - Audited | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Net profit for the period | | | | | |
| attributable to equity | | | | | |
| shareholders | | | | | |
+ +----------------------------+---------+---------+----------+---------+
| | - | - | - | 120 | 120 |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Total recognised income | 620 | 7,675 | 449 | 3,654 | 12,398 |
| and expense | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Dividends paid | - | - | - | (102) | (102) |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Issue of ordinary shares | 5 | 105 | - | - | 110 |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Other reserves movement | | | | | |
| due to share options | | | | | |
| charge | | | | | |
+ +----------------------------+---------+---------+----------+---------+
| | - | - | - | 30 | 30 |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| Balance at 30 June 2009 - | 625 | 7,780 | 449 | 3,582 | 12,436 |
| Unaudited | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
| | | | | | |
+----------------------------+----------------------------+---------+---------+----------+---------+
The Group has applied s131 of the Companies Act (1985) in respect of Merger
Relief.
Consolidated statement of cash flows
for the half year ended 30 June 2009
+----------------------------------------+------+-----------+-----------+----------+
| | | Half | Half | Year |
| | | Year | Year | |
+----------------------------------------+------+-----------+-----------+----------+
| | | to | to | to |
| | | 30/06/09 | 30/06/08 | 31/12/08 |
+----------------------------------------+------+-----------+-----------+----------+
| | | Unaudited | Unaudited | Audited |
+----------------------------------------+------+-----------+-----------+----------+
| |Note | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Operating activities | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Cash generated by operations | 6 | 613 | 525 | 3,377 |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Income taxes paid | | (281) | (193) | (542) |
+----------------------------------------+------+-----------+-----------+----------+
| Net interest paid | | (100) | (210) | (302) |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Net cash inflow from operating | | 232 | 122 | 2,533 |
| activities | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Investing activities | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Interest received | | 44 | 137 | 120 |
+----------------------------------------+------+-----------+-----------+----------+
| Purchases of property, plant and | | (168) | (106) | (465) |
| equipment | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Deferred consideration paid | | (1,332) | (325) | (1,332) |
+----------------------------------------+------+-----------+-----------+----------+
| Acquisition of subsidiaries and | | - | (2,469) | (2,679) |
| businesses | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Net cash used in investing activities | | (1,456) | (2,763) | (4,356) |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Financing activities | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Dividends paid | | (102) | (85) | (85) |
+----------------------------------------+------+-----------+-----------+----------+
| Proceeds from issue of shares (net of | | | | |
| expenses) | | - | 294 | 1,587 |
+----------------------------------------+------+-----------+-----------+----------+
| Receipt of bank loans | | 500 | - | 3,500 |
+----------------------------------------+------+-----------+-----------+----------+
| Receipt of other loans | | - | 900 | 900 |
+----------------------------------------+------+-----------+-----------+----------+
| Repayment of bank loans | | - | - | (2,000) |
+----------------------------------------+------+-----------+-----------+----------+
| Repayment of other loans | | (210) | (290) | (610) |
+----------------------------------------+------+-----------+-----------+----------+
| Repayment of hire purchase obligations | | (10) | (25) | (85) |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Net cash generated by financing | | 178 | 794 | 3,207 |
| activities | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Net (decrease)/increase in cash and | 7 | (1,046) | (1,847) | 1,384 |
| cash equivalents | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Cash and cash equivalents at start of | | 3,302 | 1,918 | 1,918 |
| period | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| Cash and cash equivalents at end of | | 2,256 | 71 | 3,302 |
| period | | | | |
+----------------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------------+------+-----------+-----------+----------+
Notes to the Consolidated Financial Statements
1. Nature of operations and general information
CBG Group plc ("CBG") and subsidiaries' (together the "Group") principal
activities are those of insurance broker, financial advisor and premium finance
provider, providing advice on insurance cover, pensions and employee benefits to
predominantly small and medium sized companies operating in the UK. The Group
also provides a range of wealth management and personal high net worth
insurances for company directors, senior executives and business owners. Refer
to note 3 for further information about CBG's operating segments.
These consolidated condensed interim financial statements have been approved for
issue by the Board of Directors on 24 August 2009.
Copies of this statement will be sent to shareholders shortly and are available
to the public from the Registered Office at: Southmoor House, Southmoor Road,
Manchester, M23 9XD.
2. Basis of preparation
These interim condensed consolidated financial statements are for the six months
ended 30 June 2009. They have been prepared in accordance with IAS 34 Interim
Financial Reporting. They do not include all of the information required for
full annual financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended 31 December
2008.
These condensed consolidated interim financial statements (the interim financial
statements) have been prepared under the historical cost convention and in
accordance with the accounting policies adopted in the last annual financial
statements for the year to 31 December 2008 except for the adoption of IAS 1
Presentation of Financial Statements (Revised 2007) and IFRS 8 Operating
Segments.
The adoption of IAS 1 (Revised 2007) does not affect the financial position or
profits of the Group, but gives rise to additional disclosures. The measurement
and recognition of the Group's assets, liabilities, income and expenses is
unchanged. IAS 1 (Revised 2007) affects the presentation of changes in equity
and in accordance with the new standard the entity does not present a "Statement
of recognised income and expenses", however a "Consolidated Statement of
Changes in Shareholders' Equity" is presented.
The adoption of IFRS 8 has not changed the segments that are disclosed in the
interim financial statements. The accounting policy for identifying segments is
based on the internal management reporting information that is regularly
reviewed by CBG's Board of Directors.
The accounting policies have been applied consistently throughout the Group for
the purposes of preparation of these condensed consolidated interim financial
statements.
3. Segment information
Revenue and operating profit
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | Half year ended | Half year ended | Year ended |
| | | | |
+-----------------------------+---------------------+---------------------+---------------------+
| | 30/06/09 | 30/06/08 | 31/12/08 |
+-----------------------------+---------------------+---------------------+---------------------+
| | Revenue | Operating | Revenue | Operating | Revenue | Operating |
| | | profit / | | profit | | profit |
| | | (loss) | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| By class of business: | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| Insurance Broking | 3,701 | 847 | 4,205 | 1,177 | 8,181 | 2,134 |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| Financial Services | 944 | (26) | 1,216 | 289 | 2,465 | 543 |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| Premium Finance | 203 | 161 | 224 | 198 | 472 | 418 |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| Other | 15 | 15 | 15 | 15 | 30 | 30 |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | 4,863 | 997 | 5,660 | 1,679 | 11,148 | 3,125 |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| Amortisation | | (365) | | (295) | | (675) |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| Exceptional operating expenses and | | | | | |
| negative goodwill credited | (104) | | (13) | | (418) |
+---------------------------------------+-----------+---------+-----------+---------+-----------+
| Central costs | | (298) | | (356) | | (757) |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| Profit from operations | | 230 | | 1,015 | | 1,275 |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-----------------------------+---------+-----------+---------+-----------+---------+-----------+
4. Dividends
+---------------------------------------+-----------+-----------+-----------+
| | Half Year | Half Year | Year |
+---------------------------------------+-----------+-----------+-----------+
| | 30/06/09 | 30/06/08 | 31/12/08 |
+---------------------------------------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------+-----------+-----------+-----------+
| | | | |
+---------------------------------------+-----------+-----------+-----------+
| Dividend paid per share in the period | 102 | 85 | 85 |
| 0.66p (2008: 0.6p) | | | |
+---------------------------------------+-----------+-----------+-----------+
| | | | |
+---------------------------------------+-----------+-----------+-----------+
5. Earnings per share
The calculation of basic earnings per share for the half year ended 30 June 2009
is based on the profit attributable to ordinary shareholders of GBP120,000 (2008
half year: 661,000; 2008 full year: GBP626,000) divided by the weighted average
number of shares in issue of 15,517,653 (2008 half year: 13,911,777; 2008 full
year: 14,454,978).
The adjusted earnings per share is based on the profit attributable to ordinary
shareholders, after adding back amortisation, exceptional operating expenses,
share option charges and reflecting a normal tax charge of 28% (2008 half year:
30%; 2008 full year: 28.5%) as follows:
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | Half Year | Half Year | Year |
+----------------------------------+------------------+------------------+------------------+
| | to 30/06/09 | to 30/06/08 | to 31/12/08 |
+----------------------------------+------------------+------------------+------------------+
| | GBP'000 | Pence | GBP'000 | Pence | GBP'000 | Pence |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| Profit retained for the year | 120 | 0.78 | 661 | 4.75 | 626 | 4.33 |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| Amortisation | 365 | 2.35 | 295 | 2.12 | 675 | 4.67 |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| Exceptional operating charges | 74 | 0.48 | 13 | 0.09 | 418 | 2.89 |
| and negative goodwill credited | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| Share option charge | 30 | 0.19 | 28 | 0.20 | 60 | 0.42 |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| Adjustment to reflect an ongoing | (128) | (0.83) | (111) | (0.79) | (161) | (1.12) |
| tax charge of 28% (2008 half | | | | | | |
| year: 30%; 2008 full year: | | | | | | |
| 28.5%) | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| Adjusted earnings per share | 461 | 2.97 | 886 | 6.37 | 1,618 | 11.19 |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| Diluted adjusted earnings per | 461 | 2.93 | 886 | 6.26 | 1,618 | 11.00 |
| share | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------------+---------+--------+---------+--------+---------+--------+
At 30 June 2009 there were 533,750 (2008 half year: 839,250; 2008 full year:
805,250) share options in issue of which 194,200 (2008 half year: 246,261; 2008
full year: 254,548) were dilutive potential ordinary shares on a weighted
average during the period.
There were also 146,667 (2008 half year: nil; 2008 full year: 292,362) shares to
be issued in respect of deferred consideration for acquisitions made during or
prior to the current year, and there were nil (2008 half year: nil; 2008 full
year: nil) dilutive potential ordinary shares on average during the period.
At 30 June 2009, there were therefore a total of 194,200 (2008 half year:
246,261; 2008 full year: 254,548) dilutive potential ordinary shares on average
during the period. The calculation of diluted earnings per share for the period
ended 30 June 2009 is based on the profit attributable to ordinary shareholders
of GBP120,000 (2008 half year: GBP661,000; 2008 full year: GBP626,0000) divided
by the weighted average number of diluted shares in issue of 15,711,853 (2008
half year: 14,158,038; 2008 full year: 14,709,526).
6. Reconciliation of operating profit to net cash inflow from operating
activities
+------------------------------------------+-----------+-----------+-----------+
| | Half Year | Half Year | Year |
+------------------------------------------+-----------+-----------+-----------+
| | 30/06/09 | 30/06/08 | 31/12/08 |
+------------------------------------------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| Operating profit | 171 | 930 | 1,093 |
+------------------------------------------+-----------+-----------+-----------+
| Depreciation and loss on disposal of | 132 | 79 | 213 |
| property, plant and equipment | | | |
+------------------------------------------+-----------+-----------+-----------+
| Amortisation | 365 | 295 | 675 |
+------------------------------------------+-----------+-----------+-----------+
| Negative goodwill | - | - | (48) |
+------------------------------------------+-----------+-----------+-----------+
| Share option charge | 30 | 28 | 60 |
+------------------------------------------+-----------+-----------+-----------+
| Investment income | (44) | (137) | (120) |
+------------------------------------------+-----------+-----------+-----------+
| Finance charges | 103 | 222 | 302 |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| Movements in working capital: | | | |
+------------------------------------------+-----------+-----------+-----------+
| Decrease / (increase) in receivables | 532 | (623) | 361 |
+------------------------------------------+-----------+-----------+-----------+
| (Decrease) / increase in payables | (676) | (269) | 841 |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| Net cash inflow from operating | 613 | 525 | 3,377 |
| activities | | | |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
7. Reconciliation of net cash flow to movement in net debt
+------------------------------------------+-----------+-----------+-----------+
| | Half Year | Half Year | Year |
+------------------------------------------+-----------+-----------+-----------+
| | 30/06/09 | 30/06/08 | 31/12/08 |
+------------------------------------------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| Net debt at start of period | (1,139) | (462) | (462) |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| (Decrease) / increase in cash in the | (1,046) | (1,847) | 1,384 |
| period | | | |
+------------------------------------------+-----------+-----------+-----------+
| Cash outflow from decrease in debt | (280) | (585) | (1,705) |
| financing | | | |
+------------------------------------------+-----------+-----------+-----------+
| Debt acquired with subsidiary | - | (257) | (356) |
| undertakings | | | |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
| Net debt at end of period | (2,465) | (3,151) | (1,139) |
+------------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------------+-----------+-----------+-----------+
8. Analysis of net debt
+-------------------------------------+-----------+-----------+-----------+
| | As at | As at | As at |
+-------------------------------------+-----------+-----------+-----------+
| | 30/06/09 | 30/06/08 | 31/12/08 |
+-------------------------------------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------+-----------+-----------+-----------+
| | | | |
+-------------------------------------+-----------+-----------+-----------+
| Cash at bank and in hand | 2,256 | 1,331 | 3,302 |
+-------------------------------------+-----------+-----------+-----------+
| Bank overdraft | - | (1,260) | - |
+-------------------------------------+-----------+-----------+-----------+
| Hire purchase obligations | (26) | (96) | (36) |
+-------------------------------------+-----------+-----------+-----------+
| Amount due under revolving credit | (4,000) | (2,000) | (3,500) |
| facility | | | |
+-------------------------------------+-----------+-----------+-----------+
| Bank loans | - | (19) | - |
+-------------------------------------+-----------+-----------+-----------+
| Other loans | (695) | (1,107) | (905) |
+-------------------------------------+-----------+-----------+-----------+
| | | | |
+-------------------------------------+-----------+-----------+-----------+
| Net debt | (2,465) | (3,151) | (1,139) |
+-------------------------------------+-----------+-----------+-----------+
| | | | |
+-------------------------------------+-----------+-----------+-----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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