RNS Number:8867P
Ultimate Finance Group PLC
12 March 2008
12 March 2008
Ultimate Finance Group plc
Interim results
Ultimate Finance Group plc, the AIM-quoted factoring, invoice discounting and
financial solutions provider to the SME sector, announces its Interim results
for the six months to 31 December 2007.
Highlights
* Significant increase in business towards end of 2007.
* Turnover increased 6% to �2,056,000 (31 Dec 2006: �1,939,000)
* Pre-tax loss of �335 after restructuring and severance costs of �133,000
(31 Dec 2006 pre-tax profit: �132,000)
* Continuation of strict cost control aimed at maximising returns
* Client turnover financed ahead 19% to �87.2m (31 Dec 2006: �73.3m)
* �6.1 million of �18 million banking facility remains available to grow
client base
* Richard Pepler appointed as Chief Executive to lead planned growth
* Sales force expanded to target key areas including South-east England
Clive Garston, Chairman, said: "Although, trading conditions remain challenging,
there was a significant recovery in the second half of the period. Your board
are confident about the future of the business and continue to take all
necessary steps to build sustainable shareholder value. Therefore
notwithstanding current economic conditions the board looks forward to the
future with some confidence."
Further information:
Ultimate Finance Group plc:
Richard Pepler, Chief Executive +44 (0) 845 251 3030
rpepler@ultimatefinance.co.uk
Shane Horsell, Finance Director +44 (0) 845 251 3030
shorsell@ultimatefinance.co.uk
www.ultimatefinance.co.uk
Media enquiries:
Allerton Communications
Peter Curtain +44 (0) 20 7812 4677
peter.curtain@allertoncomms.co.uk
Chairman's Statement
Results
The period under review has seen continuing development which has been impacted
by restructuring and severance costs as a result of changes we made during the
period.
For the six month period ended 31 December 2007 Ultimate made a loss before
taxation of �335 (after restructuring and severance costs of �133,000, which
included �120,000 paid to former chief executive Brian Sumner). Revenue for the
period increased from �1,939,000 to �2,056,000. The restructuring and severance
costs were incurred as a result of the departure of the former chief executive
Brian Sumner. Without this charge profit before tax would have amounted to
�133,000 compared with �132,000 for the six month period ended 31 December 2006.
Earnings per share amounted to 0.00p against 0.47p in 2006.
Client turnover financed in the period rose 19% to �87.2m (31 December 2006:
�73.3m) and total debtors under management rose 16% to �28.9m (31 December 2006:
�25m). Aggregate advances across the portfolio at the end of the period reached
�14.8m (31 December 2006: �12.9m).
Ultimate's cost base continues to be contained with the sole justification for
any increase being to meet the necessary demands of a growing portfolio and
expanding business.
These are the Group's first set of interim results published under International
Financial Reporting Standards as adopted by the European Union ("adopted
IFRSs"). The effect of transition to adopted IFRS is set out in the transition
statement at the end of this report.
People
As was announced in October 2007 Brian Sumner left the company to pursue other
interests. I would like to thank him for his contribution to the group since
its inception and to wish him well in the future. Following Brian's departure
Richard Pepler was appointed as acting chief executive and the board decided to
undertake a search in order to identify the most appropriate candidate to take
over as chief executive officer of Ultimate. A number of candidates were
interviewed and following that process the board have decided that Richard
Pepler is the most suitable and capable candidate for the post. Richard has
shown great determination and aptitude in assuming responsibility for the group
as acting chief executive. I am delighted to inform you that he has accepted
the position.
The importance of a well trained and dedicated work force cannot be
underestimated and I believe that the success of Ultimate Finance is entirely
attributable to its committed team. I would like to thank all my co-directors
and staff for their efforts and continued commitment to Ultimate in what has
been a difficult period.
Since Richard Pepler took over as acting chief executive in October the Ultimate
sales force has been expanded from three to seven. In addition a new regional
managing director has been recruited for the southeast. This expansion will
enable our sales force to be more effective in the regions in which we operate
and enable us to open a new office in the southeast before the end of the
current financial year. The southeast of England is an area of importance to
Ultimate as there is a very high concentration of SME activity which I believe
we will now be able to access.
Risk management
With high standards of underwriting, experience in client management and credit
control staff, risk management continues to be the primary focus for controlling
the business. Our clients continue to offer an appropriate spread of risk in
terms of size of investment, industry type and geographical location.
The single largest investment at the end of December 2007 was �938,000 which
constituted only 6% of total funds advanced.
Outlook
Although, trading conditions remain challenging, there was a significant
recovery in the second half of the period. Your board are confident about the
future of the business and continue to take all necessary steps to build
sustainable shareholder value.
Therefore notwithstanding current economic conditions the board looks forward to
the future with some confidence.
Clive R Garston
Chairman
Chief Executive's Review
Introduction
Ultimate Finance Group plc was formed to provide bespoke invoice discounting and
factoring facilities to the SME market. Its hallmarks are high levels of
personal support and regular contact from experienced staff with clients at all
levels of the Company. Our invoice discounting and factoring products, which
also provide for sales ledger credit management and our AIG-backed debtor
protection product, are supported by an IT infrastructure that enables clients
to access their account information in real time via the internet.
This comprehensive, open-door approach to providing a high quality service
continues to deliver successful new client wins. Our distinctive offering
delivers deals promptly, tailored to the clients needs and gives them full
access to the decision makers.
Since my appointment as acting Chief Executive in October of last year, there
have been a number of exciting changes and developments for the company. I have
sought to inject a new energy and enthusiasm into the team giving them a greater
sense of ambition in which we all share.
I am looking forward to taking a fresh approach to the company's direction,
implementing a range of new initiatives and developing opportunities that we
have not previously explored. One of which is our first white labelled product
where we have teamed up with the UK's largest specialist factoring broker. This
partnership approach, with leading organisations in their respective fields, is
something we will be developing throughout this financial year and thereafter.
Another exciting progression for us will be our expansion into international
factoring. This new offering will be managed from our South East office, which
will open in the second half of the financial year.
This new office will be staffed initially by the regional managing director
Maria Dunne, previously with Barclays Bank, and the regional director Tim
Chaplin, who has previously worked for GE Capital and Bank of Ireland. Our
business in the South East of England continues to expand and the opening of
this new centre underlines our strategy to provide high-quality and responsive
local service to clients both current and new.
We will also be relocating our Northern-based operation from Wilmslow, Cheshire
to the centre of Manchester in March 2008. This is an important move for the
company, positioning ourselves at the centre of the region's business community
and ensuring that we are closer to our key finance sector introducers. We are
committed to developing our profile in the North of England and our experienced
team are prepared for a positive period of growth.
Strategy
Our main target is the SME sector, taking in clients ranging from good quality,
well founded start-ups to established and mature medium-sized businesses. I
believe the overall quality of our client portfolio has never been better.
The SME marketplace has seen an increasing number of business failures since
July 2007, which has made us more selective in increasing client numbers.
However, longer-term, the market for factoring and invoice discounting products
presents growth opportunities and we fully expect to rise to these challenges.
The products which Ultimate offers are now seen as mainstream and I believe that
this market will continue to grow at the expense of the traditional bank
overdraft. In the light of developments in our market and our unrivalled
understanding of the needs of SMEs, the company is currently exploring a number
of other opportunities for growth, including partnerships with leading brokers
and white labelled products.
We shall continue to build the national sales team to take advantage of the
increasing opportunities becoming available in a fast-growing marketplace. In
the last few months the sales team has doubled, positioning us strongly to gain
more business in our sector.
With a market growing at more than 11% per year (source; ABFA), a determined and
highly experienced management team focused on expanding our portfolio and
profits, robust risk management and high levels of service, I am confident in
the prospects for this business.
Performance
In the current period, our margins have come under some pressure in what has
been a very competitive market for rates. As a result, Ultimate is not currently
seeing significant profit growth, although we are optimistic that our new
strategy will provide margin improvement.
It has been the previous experience of the industry that in times of tightening
credit, companies turn to asset financiers such as ourselves in greater numbers,
and margins tend to increase. It is likely that current market conditions will
produce a similar outcome for the industry.
Our ambitions continue to reflect the four cornerstones of our business:
1. A wealth of experience applied to risk management and underwriting;
2. A strong service ethic enabling us to differentiate Ultimate;
3. A recognition that only the best staff, developed to the full through
training and guidance, can deliver an accessible, fast, flexible and friendly
service; and
4. A sound and secure product range, adaptable to the practical needs of clients
throughout the business cycle.
The Ultimate Finance Group team
Our staff are our greatest asset and we are fortunate to have a team of
experienced and skilled professionals, each of whom plays a key role in our
business strategy and continued success. We have strengthened the team again in
2008 and are committed to recruiting and developing the best talent in the
industry.
I would particularly like to thank the operations group, sales and finance teams
for their excellent contribution and delivery of personal service levels which
our major competitors are unable to match.
I also thank our new business introducers such as specialist brokers,
accountants and business consultants for their very important ongoing support.
Client Management
Client Management continues to form a core element of our business. High
standards of recruitment selection, combined with continuous training, underpin
our strategy and this applies to new business staff as well as operations staff.
The quality of our staff and strength of our underwriting procedures continue
to provide a diverse and stable portfolio.
Ongoing development of our core infrastructure and systems enables us
successfully to cope with the increasing demands made upon them. Meanwhile we
continue to look for opportunities to ensure the service and product offerings
we give to clients are of the highest standard.
Conclusion
The half year under review has been a period of development for Ultimate
Finance, consolidating its position as a provider of flexible finance solutions
to small and medium-sized business across England and Wales. The Company is now
particularly well placed to meet the opportunities and challenges of the next
period with a renewed sense of energy and enthusiasm and I look forward to
leading them.
Richard Pepler
Chief Executive
Consolidated Income Statement (unaudited)
For half year ended 31 Dec 2007
Note 31 Dec 31 Dec 30 June
2007 2006 2007
�000 �000 �000
Revenue 1 2,056 1,939 4,027
Administrative expenses 4 (1,623) (1,463) (3,011)
Operating profit 433 476 1,016
Financial income 3 2 4
Financial expenses (436) (346) (718)
Net financing expense (433) (344) (714)
Profit before tax 0 132 302
Taxation 5 0 (38) (84)
Profit for the period attributable to equity 0 94 218
holders of the parent
All items dealt with in arriving at profit attributable to equity holders of the
parent relate to continuing operations.
Consolidated Statement of Recognised Income and Expense (unaudited)
for half year ended 31 Dec 2007
Note 31 Dec 31 Dec 30 June
2007 2006 2007
�000 �000 �000
Profit for the period 0 94 218
Total recognised income and expense for the period attributable 0 94 218
to equity holders of the parent
Consolidated Balance Sheet (unaudited)
at 31 Dec 2007
Note 31 Dec 31 Dec 30 June
2007 2006 2007
�000 �000 �000
Non-current assets
Intangible assets 9 26 12
Property, plant and equipment 117 152 129
Deferred tax asset 128 145 128
Current assets
Loans and other receivables 28,990 25,060 28,144
Cash and cash equivalents 1 1 1
Total assets 29,245 25,384 28,414
Current liabilities
Borrowings (11,906) (10,269) (11,788)
Current tax liabilities (29) - (29)
Trade and other payables (14,633) (12,574) (13,925)
Total liabilities (26,568) (22,843) (25,742)
Net assets 2,677 2,541 2,672
Equity attributable to equity holders of the parent
Share capital 1,000 1,000 1,000
Share premium 1,949 1,949 1,949
Retained earnings (272) (408) (277)
Total equity 2,677 2,541 2,672
These financial statements were approved by the board of directors on 11 March
2008 and were signed on its behalf by:
Richard Pepler
Director
Consolidated Cash Flow Statement (unaudited)
for the period ended 31 Dec 2007
Note 31 Dec 2007 31 Dec 2006 30 June 2007
�000 �000 �000
Cash flows from operating activities
Profit for the period before taxation 0 132 302
Adjustments for:
Depreciation 40 35 72
Equity settled share-based payment expenses 5 6 12
Increase in loans and other receivables (846) (2,316) (5,400)
Decrease in balance carried forward in respect of amounts paid 3 21 36
to third parties in connection with the acquisition of customer
relationships
Increase/(decrease) in trade and other payables 708 1,164 2,515
Net cash from operating activities (90) (958) (2,463)
Cash flows from investing activities
Purchase of property, plant and equipment (28) (70) (84)
Cash flows from financing activities
Loan facility drawn down 118 1,028 2,547
Net increase/(decrease) in cash and cash equivalents - - -
Cash and cash equivalents at beginning of period 1 1 1
Cash and cash equivalents at end of period 1 1 1
Notes to the interim report
1. Preparation of interim accounts
The interim financial statements of Group for the period ended 31 December 2007
are unaudited and do not comprise statutory accounts within the meaning of
Section 240 of the Companies Act 1985.
Under the AIM rules, the Group is required to prepare its next set of
consolidated financial statements in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union ('adopted IFRSs').
This interim financial report has been prepared on the basis of the recognition
and measurement requirements of adopted IFRSs as at 1 July 2007 that are
effective (or available for early adoption) at 30 June 2008, the Group's first
annual reporting date at which it is required to apply adopted IFRSs.
Based on these adopted IFRSs, the directors have applied the accounting policies
set out below which they expect to apply when the first annual financial
statements are prepared in accordance with adopted IFRSs for the year ended 30
June 2008. However, the IFRS and International Financial Reporting
Interpretations Committee ("IFRIC") interpretations that will be applicable as
at 30 June 2008, including those that will be applicable on an optional basis,
are not yet known with certainty at the time of preparing this report.
Accordingly, the accounting policies for that annual period will be determined
finally only when the annual financial statements are prepared for the year
ending 30 June 2008.
Prior to 2007, the Group prepared its audited financial statements and unaudited
interim financial statements under UK Generally Accepted Accounting Principles
("UK GAAP"). From 1 July 2007, the Group is required to prepare its annual
consolidated financial statements in accordance with adopted IFRSs. The date of
transition to IFRS for the Group was 1 July 2006 and the Group has prepared its
opening IFRS balance sheet as at that date.
Reconciliations and descriptions of the effect of the transition from UK GAAP to
adopted IFRSs on the Group's balance sheet and its income statement are provided
at the back of this Interim Report. These are unaudited.
The interim financial report has been prepared under the historical cost
convention. In addition, this interim financial report does not comply with IAS
34 "Interim Financial Reporting", which is not currently required to be applied
under AIM rules.
The comparative figures for the financial year ended 30 June 2007 are not the
Company's statutory accounts for that financial year. Those statutory accounts,
which were prepared under UK GAAP, have been reported on by the company's
auditors and delivered to the registrar of companies. The report of the auditors
was (i) unqualified, (ii) did not include a reference to any matters to which
the auditors drew attention by way of emphasis without qualifying their report,
and (iii) did not contain a statement under section 237 (2) or (3) of the
Companies Act 1985.
2. Accounting policies
The Group's key accounting policies are set out below. These policies have been
prepared on the basis of the recognition and measurement requirements of IFRS
standards in effect that apply to accounting periods beginning on or after 1
July 2007.
Basis of Consolidation
The consolidated financial statements incorporate the assets, liabilities and
the results of the Company and of its subsidiary undertakings. Subsidiary
undertakings are those entities in which the Group directly or indirectly has
the power to govern the financial and operating policies in order to gain
benefits from their activities. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control
commences until the date that control ceases.
Inter-company income, expenses, balances and unrealised gains and losses on
transactions between group companies are eliminated on consolidation.
Business combinations
The Group uses the purchase method to account for the acquisition of
subsidiaries. The cost of the acquisition is measured at the fair value of the
assets given, equity instruments issued and liabilities incurred or assumed at
the date of exchange, plus costs directly attributed to acquisition.
Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the
acquisition date.
Foreign currencies
Foreign currency transactions are translated into sterling, the Groups'
functional and presentational currency, using exchange rates prevailing at the
date of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period end exchange
rates of monetary assets and liabilities denominated in foreign currencies are
reflected in trade receivables.
Intangible assets
The initial amounts paid to third parties in connection with the acquisition of
customer relationships ("introducer fees") are classified as a separate category
of intangible fixed assets, to the extent that it is probable that the expected
future economic benefits that are attributable to such fees will flow to the
group. The intangible asset is recognised at cost and amortised on a straight
line basis over the minimum contracted period. The intangible asset is
regularly reviewed for impairment. Impairment is measured as the excess of
carrying amount over the recoverable amount of the intangible asset and is
recognised in the Income Statement.
Property, Plant and Equipment
Property, plant and equipment is stated at cost net of accumulated depreciation
and any provision for impairment. Cost comprises purchase cost together with any
incidental costs of acquisition.
Depreciation is provided to write off the cost less the estimated residual value
of property, plant and equipment by equal instalments over their estimated
useful economic lives. The assets residual values and useful economic lives are
reviewed, and adjusted as appropriate, at each balance sheet date. The following
rates are applied
Office equipment including network equipment - 2-5 years
Computer equipment excluding network equipments - 3 years
The carrying values of property plant and equipment are reviewed for impairment
if events or change in circumstances indicate that the carrying value may not be
recoverable.
Any impairment in the value of property plant and equipment is dealt with in the
income statement in the period in which it arises
Financial instruments
All financial assets and liabilities are recognised at the time when the Company
becomes a party to the contractual provisions of the instrument. Financial
assets are de-recognised when the Company loses control of the contractual
rights that comprise the financial assets. Financial liabilities are
de-recognised when they are extinguished i.e. when the obligation specified in
the contract is discharged, cancelled or expired. Any gain or loss on
derecognition of the financial assets and financial liabilities is taken to the
income statement. The particular measurement methods adopted are disclosed in
the individual policy statements associated with each item.
Financial assets
Management determine the classification of the Group's financial assets at
initial recognition into one of the following categories - loans and other
receivables, held-to-maturity financial assets, available-for-sale financial
assets and financial assets at fair value through profit or loss, and
re-evaluates this designation at each reporting date.
All financial assets are initially measured at fair value plus, in the case of
financial assets not classified as a fair value through income statement,
transaction costs that are directly attributable to their acquisition.
The Group initially recognises advances to clients and deposits on the date that
they are originated. These balances are included in loans and other receivables
and are initially recognised at fair value and subsequently measured at
amortised cost less impairment losses.
The amortised cost of a financial asset is the amount at which the financial
asset is measured at initial recognition, minus principal repayments, plus the
cumulative amortisation using the effective interest method of any difference
between the initial amount recognised and the maturity amount, minus any
reduction for impairment.
The Group has not held any held-to-maturity, available for sale financial assets
or financial assets at fair value through profit or loss at any point during the
year.
The Group derecognises a financial asset when the contractual rights to the cash
flows from the asset expire, or it transfers the rights to receive the
contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are
transferred.
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently
at amortised cost using effective interest rate method.
Offsetting
Financial assets and liabilities are set off and the net amount presented in the
balance sheet when, and only when, the group has a legal right to set off the
amounts and intends to either settle on a net basis or to realise the asset and
settle the liability simultaneously.
Revenue
Revenue comprises fees, net excluding Value Added Tax, and discount income. Fees
are recognised when the service is provided and discount income is recognised in
the income statement for all financial assets measured at amortised cost using
the effective interest rate method
Operating leases
Leases are categorised as operating leases where the lessor retains
substantially all the risks and rewards of ownership of the leased asset. All
leased assets held by the group at 31 December 2007, at 30 June 2007 and the
date of transition to IFRS are categorised as operating leases.
Payments made under operating leases are recognised in the income statement on a
straight-line basis over the term of the lease. Lease incentives received are
recognised in the income statement as an integral part of the total lease
expense over the term of the lease.
Taxation
Income tax expense comprises current and deferred tax. Income tax expense is
recognised in the income statement except to the extent that relates to items
recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the balance sheet date, and
any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet method, providing for temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is
not recognised for the following temporary differences: the initial recognition
of goodwill, the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor
taxable profit, and the differences relating to investments in subsidiaries to
the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilized. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
Employee benefits
The group operates a defined contribution scheme.
The defined contribution scheme is a pension scheme under which the Group pays
fixed contributions into a separate entity. The Group has no legal or
constructive obligation to pay further contributions if the fund does not hold
sufficient assets to pay all employees the benefits relating to employment in
the current or prior periods. The pension expense for defined contribution
schemes represents contributions payable in the year.
Share based payments
The group issues equity settled share options to certain employees which must be
measured at fair value and recognised as an expense in the income statement with
a corresponding increase in equity. The fair values of these payments are
measured at the dates of grant using option pricing models, taking into account
the terms and conditions upon which the awards are granted. The fair value is
recognised over the period during which employees become unconditionally
entitled to the awards subject to the Group's estimate of the number of awards
which will lapse, either due to employees leaving the Group prior to vesting or
due to non-market based performance conditions not being met.
Proceeds received on the exercise of share options are credited to share capital
and share premium.
Finance cost
Interest income and interest payable is recognised in income statement as it
accrues, using the effective interest method.
Impairment of assets
The carrying amounts of the Group's assets which are not carried at fair value
are reviewed at each balance sheet date to determine whether there is any
indication of impairment. If any such indication exists, the assets' recoverable
amount is estimated. An impairment loss is recognised whenever the carrying
amount of an asset exceeds its recoverable amount. Impairment losses are
recognised in the income statement.
Impairment losses are reversed through the income statement if there is a change
in the estimates used to determine the recoverable amount. Such losses are
reversed only to the extent that these assets' carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or
amortisation where applicable, if no impairment loss had been recognized.
Borrowings
Borrowings are recognised initially at fair value, less transaction costs and
are subsequently stated at amortised cost. The difference between the carrying
value on initial recognition and the redemption value is recognised in the
income statement over the borrowing period on an effective interest rate basis.
Dividends
Dividend distributions to the company's shareholders are recognised as
liabilities in the period in which the dividends are paid, and, for the final
dividend, when approved by the Company's shareholders at the annual general
meeting.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks
and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities on the balance sheet.
Share capital
Shares are classified as equity when there is no obligation to transfer cash or
other assets. Incremental costs directly attributable to the issue of equity
instruments are shown in equity as a deduction from the proceeds, net of tax.
Incremental costs directly attributable to the issue of equity instruments, as
consideration for the acquisition of a business, are included in the cost of
acquisition.
Segmental reporting
All revenue is derived in the United Kingdom and relates to fees and discount
income.
3. Use of estimates and assumptions
The preparation of these financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue during the reporting period. Actual results could differ from these
estimates. Information about such judgments and estimation is contained in
individual accounting policies.
Key sources of estimation uncertainty that could cause an adjustment to be
required to the carrying amount of asset or liabilities are
- Recoverability of loans and other receivables;
- Fair values of share options granted under employees schemes
There are regular reviews of the recoverability of loans and other receivables
and appropriate allowances for irrecoverable amounts are recognized in the
income statement where recoverability is doubted. The fair values of share
options granted are measured at the dates of grant using option pricing models,
taking into account the terms and conditions upon which the awards are granted.
4. Administration costs
Included in the administration costs for the current period are severance and
restructure costs of �133,000, of which �120,000 were incurred as a result of
the departure of the former chief executive.
5. Taxation
A deferred tax asset has been valued at �128,209 at 31st Dec 2007 (Dec 2006
�145,297), as the directors believe it is more probable than not that it will be
recovered in the future. The deferred tax asset was recognised in full, using
the liability method, on tax losses carried forward and on share based payments
at 30 June 2007.
6. Earnings per share
The basic earnings per share of nil pence (31 Dec 2006: 0.47p) has been
calculated from the loss after taxation of �335 and on the ordinary shares in
issue at 31 December 2007. The fully diluted earnings per share of nil pence
(31 Dec 2006: 0.47p), has been calculated from the loss after taxation of �335
and on the ordinary shares being the weighted average of the shares in issue
during the period adjusted for all dilutive potential ordinary shares.
7. Interim Report
Copies of this report are being sent to shareholders. Additional copies may be
obtained from the Ultimate Finance Group plc registered office: Bradley
Pavilions, Pear Tree Road, Bradley Stoke, Bristol BS32 0BQ.
Independent Review Report to the Ultimate Finance Group plc
Introduction
We have been engaged by the Ultimate Finance Group plc to review the condensed
set of financial statements in the half-yearly report for the six months ended
31 December 2007 which comprises the Consolidated Income Statement, the
Consolidated Statement of Recognised Income and Expense, the Consolidated
Balance Sheet, the Consolidated Cash Flow Statement and the related explanatory
notes. We have read the other information contained in the half-yearly report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with the terms of our
engagement. Our review has been undertaken so that we might state to the company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the half-yearly report in
accordance with the AIM Rules.
As disclosed in note 1, the next annual financial statements of the Group will
be prepared in accordance with IFRSs as adopted by the EU.
The accounting policies that have been adopted in preparing the condensed set of
financial statements are consistent with those that the directors currently
intend to use in the next annual financial statements. There is, however, a
possibility that the directors may determine that some changes to these policies
are necessary when preparing the full annual financial statements for the first
time in accordance with IFRSs as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly 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 UK. 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 half-yearly report for the
six months ended 31 December 2007 is not prepared, in all material respects, in
accordance with the recognition and measurement requirements of IFRSs as adopted
by the EU and the AIM Rules.
KPMG Audit Plc
Chartered Accountants
1 The Embankment
Neville Street
Leeds
LS1 4DW
Date: 11 March 2008
IFRS Restatement report (unaudited)
Ultimate Finance Group plc transition to IFRS
From 30 June 2007 Ultimate Finance Group plc ('the Group') is required to
prepare its consolidated accounts under International Accounting Standards and
International Financial Reporting Standards (collectively referred to as "
adopted IFRS's" throughout this document) as adopted by the European Union
("EU") having previously prepared its accounts under UK Generally accepted
Accounting Principles ("UK GAAP"). The transition date for the Group is 1 July
2006 and the following notes and accompanying transition table describe the UK
GAAP to adopted IFRS reconciliation for profit for the six month period ending
31 December 2006 and for the year ended 30 June 2007 and a reconciliation of
total equity as at 1 July 2006, 31 December 2006 and 1 July 2007.
Transitional arrangements- Application of IFRS 1
The Group's financial statements for the year ending 30 June 2008 will be the
Group's first annual financial statements in compliance with adopted IFRSs.
On transition to adopted IFRSs an entity is generally required to apply adopted
IFRSs retrospectively, except where an exemption is available under IFRS 1 '
First-time Adoption of International Financial Reporting Standards'.
The key election from IFRS 1 that the Group elected to adopt was in relation to
the valuation of property, plant and equipment by taking the UK GAAP FRS 15
revaluation as deemed cost.
International Financial Reporting Standards - Changes in accounting policies
The interim results for the period ended 31 December 2007 have been prepared in
accordance with accounting policies under adopted IFRS's. The Group's revised
accounting policies under IFRS are included in note 2 to the interim financial
statements.
Reconciliation of income statement from UK GAAP to adopted IFRS's (unaudited)
There is no adjustment to the income statement from UK GAAP to adopted IFRS's.
Reconciliation of cash flow statements from UK GAAP to adopted IFRS's
(unaudited)
With the exception of reclassifications, there were no material differences
between cash flows presented under adopted IFRS's and the cash flows presented
under UK GAAP
for the six months ended 31 December 2006 and for the year ended 30 June 2007 as
a result of the conversion to adopted IFRSs.
Reconciliation of retained earnings from UK GAAP to adopted IFRS's (unaudited)
The is no adjustment to retained earnings from UK GAAP to adopted IFRS's.
Reconciliation of balance sheet from UK GAAP to adopted IFRS's (unaudited)
The adjustments to the consolidated balance sheet from UK GAAP to adopted IFRS's
are described below:
* Recognition of an intangibles asset in respect of introducer fees
incurred that relate to future periods (1 July 2006: �48,000; 31 Dec 2006:
�26,000; 30 June 2007: �12,000);
* Deferred tax asset and corporation tax liabilities are shown
separately on face of balance sheet (Deferred tax: 1 July 2006: �183,000;
31 Dec 2006: �145,000; 30 June 2007: �128,000 and corporation tax: 1 July
2006: �Nil; 31 Dec 2006: �Nil; 30 June 2007: �29,000);
* Borrowings are shown separately on the face of the balance sheet (1
July 2006: �9,241,000; 31 Dec 2006: �10,269,000; 30 June 2007: �11,788,000)
* Grossing up of trade payables and receivables for amounts owed to clients
previously netted off debtors (1 July 2006: �10,816,000; 31 Dec 2006:
�12,084,000; 30 June 2007: �13,380,000), and;
* Grossing up trade receivables and trade payables for credit balances in
respect of unallocated cash received previously included in trade debtors (1
July 2006: �253,000; 31 Dec 2006: �200,000; 30 June 2007: �153,000).
UK GAAP IFRS IFRS UK GAAP as IFRS IFRS as UK GAAP as IFRS IFRS as
as at as at 1 transition at 31 at at 30
1 July transition July 2006 at 31 Dec adjustments Dec 2006 30 June transition June 2007
2006 adjustments 2006 2007 adjustments
�000 �000 �000 �000 �000 �000 �000 �000 �000
Non-current assets
Property, plant and 117 - 117 152 - 152 129 - 129
equipment
Intangible assets - 48 48 - 26 26 - 12 12
Deferred tax assets - 183 183 - 145 145 - 128 128
Current assets
Tax receivable
Loans and other 11,906 10,838 22,744 12,947 12,113 25,060 14,751 13,393 28,144
receivables
Cash and cash 1 - 1 1 - 1 1 - 1
equivalents
Total assets 12,024 23,093 13,100 25,384 14,881 28,414
Current liabilities
Bank overdraft - (9,241) (9,241) - (10,269) (10,269) - (11,788) (11,788)
Trade and other (9,582) (1,828) (11,410) (10,559) (2,015) (12,574) (12,209) (1,716) (13,925)
payables
Tax payable - - - - 0 (29) (29)
Total liabilities (9,582) (20,651) (10,559) - (22,843) (12,209) - (25,742)
Net assets 2,442 2,442 2,541 2,541 2,672 2,672
Equity attributable to
equity holders of the
parent
Share capital 1,000 - 1,000 1,000 - 1,000 1,000 - 1,000
Share premium 1,949 - 1,949 1,949 - 1,949 1,949 - 1,949
Retained earnings (507) - (507) (408) - (408) (277) (277)
Total equity 2,442 2,442 2,541 2,541 2,672 2,672
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KFLFFVXBFBBL
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