RNS Number:7053J
Invocas Group plc
12 December 2007
12 December 2007
INVOCAS GROUP PLC
("Invocas" or "the Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
Financial Highlights
6 months ended 28 week period 54 week period
30 September ended 30 ended 31 March
September
2007 2006 2007
�'000 �'000 �'000
Turnover 4,864 4,122 8,535
Operating profit 1,864 1,521 3,255
Earnings per
share (pence) 4.59 3.88 8.01
*Turnover increased by 18.0% to �4.86m (2006: �4.12m)
*Operating profit up by 22% to �1.86m (2006: �1.52m)
*Earnings per share up 18% to 4.59p (2006: 3.88p)
* Strong balance sheet with net cash of �4.49m (March 2007: �3.41m)
providing headroom for further growth
* New Protected Trust Deed appointments down by 17.0% to 583 (2006: 702),
with market share of approximately 15.0% (year to 31 March 2007: 16.8%).
*Total Trust Deed caseload up to 4,400 (March 2007:4,300 and Sept 2006:
3,700) - providing cash generation and highly visible future income
*Substantial progress on re-engineering our lead acquisition model -
already seeing a marked increase in the numbers of potential cases for
formal and informal solutions
*Successful launch of TIX compliant IVA, Debt Management and Full & Final
Settlement service lines - significant progress extending the Group's range
of personal debt solutions
*Invocas continues to enjoy industry-leading low creditor objections and
failure rates
*Underlying macro economic conditions point to a huge embedded consumer
debt problem which is likely to get worse
Howard Bell, Chairman, commented:
"During a period in which our sector has experienced difficult trading
conditions, we have not only delivered excellent growth in turnover and
profitability but have also continued to invest in the business and diversify
our product offering.
Macro economic conditions continue to move in our favour and, as the fall out
from the credit crunch continues, we expect demand for both our corporate and
personal debt solutions to increase significantly during 2008. With signs of a
more stable market emerging, our long and successful track record in this
sector, excellent relationships with creditors, ongoing investment in
strengthening and diversifying the business, a strong balance sheet and a first
class team, we look to the future with increased optimism."
Website: www.invocas.com
For further information:
Invocas Group plc Tel: 07971 578 195 (12 December only)
John Hall, Chief Executive Tel: 0131 222 2462 (thereafter)
Stephen Lightley, Finance Director
Fishburn Hedges Tel: 020 7544 3133 or 07747 113 930
(Financial PR adviser) invocas@fishburn-hedges.co.uk
James Benjamin
Andy Berry
Charles Stanley Securities Tel: 020 7149 6000
(Nominated Adviser)
Philip Davies
Henry Fitzgerald O'Connor
Note to Editors
Invocas is one of the UK's leading providers of personal and corporate debt solutions. Its Personal Insolvency Division
is firmly established as a leading provider of Protected Trust Deeds (Scottish equivalent of IVAs). It also operates a
Corporate Services Division which enjoys an excellent reputation in the Scottish market place.
Invocas applies stringent minimum case acceptance criteria to Trust Deeds and IVAs. It will only accept a case if it is
likely to progress smoothly to completion and result in a successful outcome which balances the interests of both the
indebted individual and their creditors.
The Group's Newtomorrow service aims to provide indebted individuals with the right advice, first time, every time.
This is achieved in a caring and professional manner by a team of highly experienced debt advisors delivering front
line advice. Further information on Newtomorrow can be found at www.newtomorrow.com.
Invocas Group plc
Interim results for the six months ended 30 September 2007
Chairman's Statement
I am delighted to present the interim results of Invocas Group plc for the six
month period ended 30 September 2007. During a period in which our sector has
experienced difficult trading conditions, we have not only delivered excellent
growth in turnover and profitability but have also continued to invest in the
business and diversify our product offering.
Our financial performance remains strong. Whilst the current turmoil in the
personal debt sector has not had as much of an impact on Invocas as it has on
many of our English based comparator businesses, we have not been immune to the
difficult market conditions of the last nine months. Along with others, we saw
the number of leads coming into the Group and the level of new cases signed
decrease over the summer. However, due to our significant cumulative case load
we have been able to maintain a strong financial performance.
The downturn in leads from our traditional work referrers was more pronounced
than we had anticipated. This caused us to accelerate the re-engineering of our
lead generation model. We have invested in our internet capability and utilised
search engine optimisation techniques. We have entered the lead purchase market
in a limited and controlled way via our call centre and website subsidiary,
Newtomorrow, and we have continued to build relationships with major creditors.
I am pleased to say that we are starting to see the benefits of these changes
and that our lead streams have increased substantially in the period since 30
September. Newtomorrow is now our biggest source of revenue opportunities on a
month to month basis, providing just over 50% of our current total revenue
opportunities and approximately 27% of our Trust Deed opportunities. We expect
these shares to continue to grow in the future.
We have also made significant progress in the period towards our strategy of
offering a full range of personal debt solutions in house. In early September we
opened a new office in Altrincham which houses our TIX compliant IVA, Debt
Management and Full & Final settlement operations. We believe that there is a
significant opportunity for us to leverage our unique caring and professional
ethos and approach into the English market and the early indications are that
these new service lines are being well received by the creditor community. Our
decision to build these service lines organically is, we believe, the right one
given the price expectations of vendors of potential targets, which have not
fallen in line with market sentiment. Nevertheless, we will continue to explore
acquisition opportunities which meet our criteria and, with a strong cash
position, we believe that we are in an excellent position to take advantage of
the opportunities which are likely to continue in the sector.
Macro economic conditions continue to move in our favour and, as the fall out
from the credit crunch continues, we expect demand for both our corporate and
personal debt solutions to increase significantly during 2008. With signs of a
more stable market emerging, our long and successful track record in this
sector, excellent relationships with creditors, ongoing investment in
strengthening and diversifying the business, a strong balance sheet and a first
class team, we look to the future with increased optimism.
Howard Bell
Non-Executive Chairman
12 December 2007
Invocas Group plc
Interim results for the six months ended 30 September 2007
Chief Executive's Statement
The six month period ended 30 September 2007 was a difficult and challenging
period for the Group, but one in which our well established ethos and approach
served us well and saw us deliver another set of excellent financial results. At
the same time, we have adapted to rapidly changing market conditions and made
significant progress with our chosen strategy of becoming a full service
provider of both personal and corporate debt solutions. We have diversified our
range of services significantly by opening an office in Altrincham to deliver
TIX compliant IVAs, Debt Management Plans and Full & Final Settlement solutions.
We expect this office to grow significantly in the coming year.
We are on record as saying we enjoy a good relationship with TIX and have
already agreed an ongoing fee basis for Trust Deeds, which is acceptable to us.
Results
Turnover for the 26 week period to 30 September increased to �4.86 million, up
by 18.0% when compared to the 28 week period to 30 September 2006 of �4.12
million. The operating profit of the Group before interest and tax for the six
months was �1.86 million, an increase of 22.6% from the profit for the 28 week
period to 30 September 2006 of �1.52 million. The pre tax profit was �1.93
million, an increase of 22.6% from the pre tax profit for the 28 week period to
30 September 2006 of �1.57 million. Our earnings per share increased by 18.3% to
4.59p from 3.88p for the 28 week period to 30 September 2006.
These are excellent figures, especially after having absorbed the initial set up
costs of the new office in Altrincham which amounted to some �0.1 million in
this period. These results have been achieved against a backdrop of turmoil in
the personal debt sector and at a time when new leads coming in to the Group
from traditional sources have decreased. However, our significant cumulative
case load has enabled us to maintain a strong financial performance.
The business manages a mixed portfolio of both personal and corporate insolvency
cases and is the major provider of Protected Trust Deeds (Scottish equivalent of
IVAs) ("PTDs"), with some 4,400 cases under management at 30 September 2007
(4,300 cases at 31 March 2007). Approximately 85% of our turnover for the period
was derived from PTDs, 11% from Sequestrations (the Scottish term for
bankruptcies) and other personal insolvency services, 3% from formal and
informal corporate insolvency services and 1% from IVAs.
As a consequence of the stringent acceptance criteria that we apply to all
cases, we continue to enjoy industry leading low creditor objections and failure
rates. Our objection levels for Trust Deed proposals that do not progress to
protection are approximately 7% for the six months ended 30 September 2007. We
understand from TIX that their overall objection rates have now stabilised at
between 20% and 25% of all Trust Deed proposals. More importantly, of our Trust
Deed proposals that do not proceed, a substantial percentage result in
sequestrations where Invocas provides the nominated insolvency practitioner.
These generate an income stream which, due to the nature of the process, is
higher than would have been earned from a PTD. Only 2.6% of our Trust Deed
proposals do not progress to a formal insolvency solution.
The Market
The market has been in a state of turmoil during most of 2007, with some of our
peers in the wider sector struggling and some failing. We expect to see
consolidation continue in the coming months, a trend we believe has been
accelerated by the fall in IVA acceptances due to the raising of hurdle rates by
consumer lenders who have started to appreciate the extent of their potential
exposure to over indebted consumers.
We see signs that the market is starting to stabilise. We strongly believe that
the underlying macro economic conditions point to a huge embedded consumer debt
problem which is likely to become much worse before it improves, an assertion
which is backed up by statistics and which is being increasingly espoused by
respected economic commentators. It also appears that the IVA protocol process
is nearing completion, with the BBA's members agreeing to reassess hurdle rates
in spring 2008.
UK personal debt at the end of October exceeded �1,391 billion. This represents
an annual growth rate of 9.7%. Secured lending on homes amounted to �1,169
billion, a growth rate of 10.5%. Consumer credit lending amounted to �222
billion, an increase of 5.8% over the last 12 months. Total credit card debt was
�54 billion (Source: Credit Action).
Debt enquiries to Citizens Advice Bureaux in England and Wales have hit a record
high, increasing by 20% in the last year and bringing the total to 1.7 million
in 2006/07. Debt is now the number one issue advised on in bureaux. (Source:
Credit Action)
Looking forward, post the Christmas season, when 17% of families will still be
paying for the previous Christmas, we expect to see a significant increase in
the demand for formal and informal debt solutions by those in financial
difficulties. (Source: Credit Action)
The deep turmoil in the credit markets continues to cause upward pressure on
mortgage repayments and leads us to expect that a significant number of
borrowers will face substantial increases in their monthly repayments when
existing fixed and discounted rate mortgage deals come to an end. The credit
crunch is likely to make it both harder and substantially more expensive for
anyone with a less than perfect credit history to obtain a re-mortgage, severely
hampering the ability of consumers to release equity to consolidate unsecured
debts. If these trends are combined with a fall in house prices, which many
commentators are now predicting, the increase in demand for our range of debt
solutions is likely to be significant.
There is usually a time lag before any downturn in consumer spending flows
through into signs of financial distress in the corporate market. Unusually, we
have already started to see signs of corporate failures starting to increase.
The last two months have seen an upturn in the number of corporate referrals
coming in to the Group and, along with other players in this market, we expect
to see a substantial uplift in activity and formal appointments in 2008.
New Work
We have not been immune to the general downturn in new leads and cases signed in
the personal debt sector. In Scotland, the total number of PTD appointments
decreased by 10.0% to 3,874 in the six months to 30 September 2007 (2006:
4,313).
Our own number of new PTD appointments fell by 17.0% to 583 in the six months to
30 September 2007 (2006: 702), giving us a market share of approximately 15.0%
(year to 31 March 2007: 16.8%).
The number of new Trust Deed proposals signed in the period was 420. This
represents approximately 57.5% of the number of cases signed in the equivalent
period in 2006 of 731.
This is an area of work in which we have traditionally been the pre-eminent
provider and, with some 4,400 cases under management (2006: 3,700), our
portfolio is still growing and represents some 16% of the total number of PTDs
extant at 30 September 2007 and is the largest in the marketplace. The reasons
for our relative fall in market share are threefold:
*Firstly, the levels of referrals from a number of our traditional
providers have reduced and we attribute this to the impact of commercial
pressures throughout the UK which have resulted in a general withdrawal from
the advertising of formal insolvency solutions.
*Secondly, a small number of English based work introducers have recruited
Scottish insolvency practitioners to provide Trust Deed services in-house.
One of these was a significant provider to Invocas.
*Lastly, we also understand that higher referral fees are being paid to
work providers that, in our experience, may not be commercially sustainable.
As a result of these factors, we have undertaken a strategic review of our lead
generation sources and have made a number of significant changes, which we
believe will provide potentially significant opportunities for our personal debt
solutions offerings. These are explained in more detail below.
Principally as a result of the lower numbers of Trust Deed cases signed, the
overall value of new work won in the period ended 30 September 2007 was �2.26m,
a decrease of 35% from the level of �3.46m won in the equivalent six month
period to 30 September 2006.
Strategy
We have made considerable progress during the period towards our goal of
becoming a full service provider of personal debt solutions, all of which are
delivered with our caring and professional ethos. In our view, the turmoil in
the IVA sector, which stemmed from the BBA's secret shopper exercise, and which
resulted in a hardening of acceptance criteria by lenders which was implemented
via TIX, provides the Group with a potentially significant long term
opportunity.
We have always believed that our caring and professional approach was unique and
that, when the timing was right, we were well placed to bring this approach to
the IVA market in England and Wales. As noted above, the sector has seen some
fall out and, with the upsurge in demand which is anticipated in 2008, we
believe it is now time for Invocas to build an IVA presence. To this end we
acquired Adlington Insolvency, a sole practitioner business, in late July and in
October we launched an IVA service whose product was designed to be fully TIX
compliant from day one. In early December, we agreed terms for the acquisition
of a block of 100 existing IVA cases. We are looking to acquire a number of
similar blocks of both IVA and Debt Management cases.
At the same time, we had an opportunity through two key lateral hires to start
both Debt Management and Full & Final Settlement service lines. Again, these
services have been designed to address the key concerns of the creditor
community and considerably enhance the breadth of our service offering.
All three new service offerings are based in a newly established office in
Altrincham and, although it is still early in their development, are showing
encouraging signs that they will add significantly to our activity in the coming
years.
Whilst we have examined a number of potential acquisition opportunities and
remain keen to develop the business further through strategic acquisitions of
similar and complementary businesses, the turbulent conditions in the sector
over the last nine months have made it very difficult to evaluate with any
degree of certainty the synergies and other benefits which might flow from
acquisitions and vendors have not moved their price expectations in line with
the sector's overall rating. Nevertheless we are optimistic that we will be able
to make acquisitions to underpin further growth.
The level of new leads coming into the core Trust Deed business over the summer
months was unacceptably low. As a result, we have begun the process of
re-engineering our lead acquisition strategy with the aim of becoming self
sufficient in lead delivery during 2008. Since September, we have started
purchasing leads in a small and controlled way and we have seen a marked
increase in the numbers of potential cases for formal and informal solutions in
November. We expect this trend to continue.
In addition, we have redesigned our Newtomorrow website and have invested in
search engine optimisation techniques which are starting to drive significantly
more enquiries to our site. It is pleasing to report that, over the last three
months, Newtomorrow has contributed approximately 27% of our Trust Deed
referrals, making it the largest single source of Trust Deed referrals, and has
contributed just over 50% of the total revenue opportunities into the business.
We expect these shares to continue to grow.
We continue to explore strategic alliances with major affinity partners. We
expect to agree terms shortly to launch pilot schemes with two major third
parties, having reviewed the effectiveness of their recovery procedures to
identify the point at which their debtors who are either not paying or who have
deteriorating payment histories should be referred into our Newtomorrow advice
centre. If, as we expect, these pilots produce improved anticipated recoveries
for the third parties, the schemes will be extended during 2008 to cover the
organisations' full back books of debtors, providing potentially significant
opportunities for the Group.
Our new non-executive director, David Macmillan, who was part of the team which
helped to build Standard Life Bank, has considerable experience of marketing in
the financial services sector and we anticipate that he will contribute
significantly to the development and implementation of our sales and marketing
strategy.
The Accountant in Bankruptcy has announced that the Agency scheme (whereby in
excess of 100 nominated Insolvency Practitioners currently carry out
administration of sequestration cases on the Accountant's behalf) will be put
out to tender early in 2008, with a view to reducing significantly the number of
agents who, as a result, will each potentially handle a much larger volume of
cases. Suppliers with a network of offices throughout Scotland are likely to be
favoured, putting Invocas in a strong position to be one of the successful
tenderers. Total Agency appointments under the current scheme totalled 3,151 in
the year to 30 September 2007.
Turning to the corporate insolvency and advisory market, we have seen a
significant increase in the number of companies seeking both our advice and
formal insolvency solutions during the last three months. This is a trend which,
along with many other commentators, we expect will continue in 2008 as the
credit squeeze and reduced consumer spending both continue to bite. Whilst the
proportion of our turnover derived from corporate work has been low during the
six months to 30 September, building a strong presence in this market remains a
cornerstone of our strategy going forwards.
People
In addition to appointing David Macmillan on 21 November, our headcount has
grown by 11 to 112 in the period to 30 September 2007 and now stands at 116.
The acquisition of Adlington Insolvency allowed us to further grow our number of
licensed insolvency practitioners to eight (March 2007: seven) and we have
another candidate who has just sat the December Joint Insolvency exam with a
view to obtaining his licence.
That our business is well-positioned to benefit from more favourable market
conditions is testament to the hard work, dedication and loyalty of our people.
I would like to extend the thanks of the Board and shareholders to all our
people, whether in management, operational or support functions, for their
efforts during this challenging period for the business.
Infrastructure
We continue to invest in our infrastructure and IT processes across the Group to
underpin our growth strategy. We expect to drive significant operational
efficiencies from IT investment which will bring real benefits following the
introduction of a quasi fixed fee regime on Trust Deeds by TIX.
We continue to review the capacity of our office accommodation. During the last
six months, we have relocated our Aberdeen office to larger premises in addition
to establishing our new office in Altrincham to house our TIX compliant IVA,
Debt Management and Full & Final Settlement service lines.
Outlook
I believe the outlook for the Group is extremely positive. We have expanded our
service lines in a controlled, low risk way and are now very well placed to
handle a much larger volume of referrals. We have examined our lead generation
processes and instigated some important changes as well as recruiting an
excellent non-executive director who has specific experience in marketing in the
financial services sector. Newtomorrow is already our single largest work
generator and we expect its share of referrals to continue to increase
significantly in the future.
We will continue to adopt an approach across all of our service lines which
seeks to balance the interests of debtors and their creditors and will also
continue to be selective about those cases we take on, operating stringent
minimum acceptance criteria. As a consequence, we expect to continue to enjoy
industry leading low case rejection and failure rates and also to pay a higher
than average dividend to creditors.
We anticipate that as the agreed IVA Forum processes are introduced form
February 2008 onwards, the tensions between lenders and IVA providers in England
will start to reduce and that this will lead to a re-acceptance of the status of
IVAs and Trust Deeds as appropriate voluntary solutions for consumer debtors.
Given that our IVA offering is already fully TIX compliant, we are also well
placed to become a major provider of the new Simplified Individual Voluntary
Arrangement, which is expected to be introduced sometime in 2008.
The opportunities for the strong players who can survive the current market
turmoil will be significant. Our healthy balance sheet, unique ethos and
approach and enlarged service offering mean that we are exceptionally well
placed to take advantage when the dam of pent up consumer debt problems breaks.
We have already seen a significant increase in corporate insolvency leads and we
expect this trend to continue during 2008. Consequently, it is with increased
confidence that the Board looks forward to reporting further good progress for
the Group in 2008.
John Hall
Chief Executive
12 December 2007
Group balance sheet
as at 30 September 2007
As at As at As at
30 September 30 September 31 March
2007 2006
Unaudited Unaudited 2007
�'000 �'000 Audited
�'000
Assets
Non-current assets
Property, plant and
equipment 306 162 348
Intangible assets 4,175 4,135 4,153
Deferred tax assets 32 12 18
----------- ---------- --------
Total non-current assets 4,513 4,309 4,519
----------- ---------- --------
Current assets
Inventories 21 28 68
Trade and other receivables 5,629 4,623 5,242
Cash and cash equivalents 4,491 2,594 3,405
----------- ---------- --------
Total current assets 10,141 7,245 8,715
----------- ---------- --------
Total assets 14,654 11,554 13,234
----------- ---------- --------
Equity & liabilities
Equity attributed to equity holders of
parent company
Share capital 71 71 71
Share premium 8,642 8,642 8,642
Share-based payments
reserve 108 37 60
Retained earnings 3,599 1,109 2,288
----------- ---------- --------
Total equity 12,420 9,859 11,061
----------- ---------- --------
Non-current liabilities
Deferred tax liabilities 20 - 19
----------- ---------- --------
Total non-current
liabilities 20 - 19
Current liabilities
Trade and other payables 420 792 946
Current tax payable 1,794 903 1,208
----------- ---------- --------
Total current liabilities 2,214 1,695 2,154
Total liabilities 2,234 1,695 2,173
----------- ---------- --------
Total equity and
liabilities 14,654 11,554 13,234
----------- ---------- --------
Group income statement
for the six month period ended 30 September
2007
For the 6 month For the 28 week For the 54 week
period ended period ended period ended
30 September 30 September 31 March
2007 2006 2007
�'000 �'000 �'000
Revenue 4,864 4,122 8,535
Direct costs (1,241) (1,018) (2,050)
----------- ----------- -----------
Gross profit 3,623 3,104 6,485
Marketing expenses (420) (314) (711)
Administrative expenses (1,291) (1,232) (2,459)
Share-based payments (48) (37) (60)
----------- ----------- -----------
Profit from operations 1,864 1,521 3,255
Investment income 64 54 109
Finance costs - (2) -
----------- ----------- -----------
Profit before taxation 1,928 1,573 3,364
Income tax expense (617) (464) (1,076)
----------- ----------- -----------
Profit for the period 1,311 1,109 2,288
----------- ----------- -----------
Basic earnings
per share 4.59p 3.88p 8.01p
Diluted
earnings per
share 4.49p 3.81p 7.85p
Group statement of changes in equity
Share capital Share premium Share-based Retained Total
payment reserve earnings
�'000 �'000 �'000 �'000 �'000
Balance at 1 - - - - -
April 2006
Shares 71 8,642 - - 8,713
issued
Profit for
the - - - 1,109 1,109
period
Employee
share
incentive
charges - - 37 - 37
------- -------- --------- ------- ------
Balance at
30 September 2006 71 8,642 37 1,109 9,859
------- -------- --------- ------- ------
Profit for
the period - - - 1,179 1,179
Employee share
incentive
charges - - 23 - 23
------- -------- --------- ------- ------
Balance at
31 March 2007 71 8,642 60 2,288 11,061
------- -------- --------- ------- ------
Profit for
the - - - 1,311 1,311
period
Employee share
incentive
charges - - 48 - 48
------- -------- --------- ------- -------
Balance at
30 September 2007 71 8,642 108 3,599 12,420
------- -------- --------- ------- -------
Group cash flow statements
for the six month period ended 30 September 2007
For the 6 month For the 28 week For the 54 week
period ended period ended period ended
30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited Audited
�'000 �'000 �'000
Cash flow from operating � � �
activities
Profit before tax 1,928 1,573 3,364
Adjustment for:
Depreciation of property,
plant & equipment 47 26 58
Amortisation of intangibles 3 - 4
Loss on disposals of
plant and equipment - - 6
Share based payments charges 48 37 60
Investment income (64) (54) (109)
Financing costs - 2 -
----------- ----------- -----------
Operating cash flow before
movement in working capital 1,962 1,584 3,383
Decrease/(increase) in
Inventories 47 4 (36)
Increase/(decrease) in trade
and other payables 15 (1,517) 865
(Increase)/decrease in trade
and other receivables (387) 1,005 (2,135)
----------- ----------- -----------
Movement in working capital (325) (508) (1,306)
----------- ----------- -----------
Net cash flow from operating
activities 1,637 1,076 2,077
Taxation paid (525) - -
Investment activities
Purchase of property,
plant & equipment (64) (93) (316)
Purchase of intangibles (26) - (22)
Purchase of businesses - (6,656) (6,656)
Interest received 64 54 109
----------- ----------- -----------
Net cash used in investing
activities (26) (6,695) (6,885)
Financing activities
Proceed of share issue - 8,713 8,713
Repayment of loans - (500) (500)
----------- ----------- -----------
Net cash generated from
financing activities - 8,213 8,213
Net increase in cash
& cash equivalents 1,086 2,594 3,405
Cash and cash equivalents
at beginning of period 3,405 - -
----------- ----------- -----------
Cash and cash equivalents at
end of period 4,491 2,594 3,405
----------- ----------- -----------
Accounting policies
The accounting policies used in the preparation of the accounts for the six
months ended 30 September 2007 are consistent with those which have been adopted
in the annual statutory financial statements for the period ended 31 March 2007.
Notes to the accounts
1 Interim accounts
The interim financial information has not been audited and does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985
but has been reviewed by the auditors in accordance with ISRE 2410 issued by the
Auditing Practices Board. The Group's statutory financial statements for the
period ended 31 March 2007 have been delivered to the Registrar of Companies.
The report of the auditors on these accounts was unqualified and did not contain
a statement under section 237(2) or (3) of the Companies Act 1985.
2 Comparatives
Administration expenses include indirect salary costs that have previously been
included in cost of sales. Comparative figures have been restated accordingly.
The effect of this adjustment on the financial statements has been to reclassify
salary costs of �147,000 ( 30 September 2006: �84,000 and 31 March 2007:
�176,000) into administration expenses. There has been no effect upon operating
profit.
3 Segmental Reporting
There are identifiable business segments within the Group but they are not
considered significant in terms of IFRS 8, as they are below the 10 per cent
threshold and so not separately reportable.
4 The tax charge is based on the current rate of UK corporation tax applicable
to the Group and comprises:
6 month 28 week 54 week
period ended period ended period ended
30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited Audited
�'000 �'000 �'000
UK corporation tax at 30% 630 476 1,075
Deferred tax (13) (12) 1
----------- ----------- -----------
617 464 1,076
----------- ----------- -----------
5 Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
6 month 28 week 54 week
period ended period ended period ended
30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited Audited
�'000 �'000 �'000
----------- ----------- -----------
Profit for the period 1,311 1,109 2,288
No. No. No.
Weighted average number of shares (000's) (000's) (000's)
in issue: ----------- ----------- -----------
For basic earnings per share 28,567 28,567 28,567
Effect of share options issued 646 567 567
For diluted earnings per share 29,213 29,134 29,134
Earnings per share: Pence Pence Pence
----------- ----------- -----------
Basic 4.59 3.88 8.01
Diluted 4.49 3.81 7.85
6 The interim report was approved for issue by the Board of Directors on 11
December 2007.
7 A copy of this interim report is being sent to shareholders and copies are
available from the Company's Registered Office or by visiting our website at
www.invocas.com.
INDEPENDENT REVIEW REPORT TO INVOCAS GROUP PLC
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the interim financial report for the six months ended 30 September
2007 which comprises the Group Balance Sheet, Group Income Statement, Group
Statement of Cash Flows, Group Statement of Changes in Equity and the related
explanatory notes. We have read the other information contained in the interim
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
This report, including the conclusion, has been prepared for and only for the
Company for the purpose of meeting the requirements of the AIM Rules for
Companies and for no other purpose. We do not, therefore, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Directors' Responsibilities
The interim financial report is the responsibility of, and has been approved by,
the directors. The directors are responsible for preparing and presenting the
interim financial report in accordance with the AIM Rules for Companies.
As disclosed in the Accounting Policies, the annual financial statements of the
Group are prepared in accordance with International Financial Reporting
Standards and International Financial Reporting Interpretations Committee
("IFRIC") pronouncements as adopted by the European Union. The condensed set of
financial statements included in this interim financial report has been prepared
in accordance with the measurement and recognition criteria of International
Financial Reporting Standards and IFRIC pronouncements, as adopted by the
European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the interim financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the interim financial report
for the six months ended 30 September 2007 is not prepared, in all material
respects, in accordance with the measurement and recognition criteria of
International Financial Reporting Standards and IFRIC pronouncements as adopted
by the European Union, and the AIM Rules for Companies.
Baker Tilly UK Audit LLP
Chartered Accountants
Brazennose House
Lincoln Square
Manchester
M2 5BL
11 December 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKDKNCBDDQBD
Invocas (LSE:INVO)
Historical Stock Chart
From Oct 2024 to Nov 2024
Invocas (LSE:INVO)
Historical Stock Chart
From Nov 2023 to Nov 2024
