RNS Number : 4968D
Ultimate Finance Group PLC
16 September 2008
16 September 2008
Ultimate Finance Group plc
Full Year results
Ultimate Finance Group plc, the AIM-quoted factoring, invoice discounting and financial solutions provider to the SME sector, announces
its full year results for the year ended 30 June 2008.
Highlights
* Pre-tax profit before restructuring and severance costs increased by 29% in the second half of the financial year
* Pre-tax profit of �304,763 before restructuring and severance costs of �167,387 (30 June 2007 pre-tax profit: �301,986)
* Client turnover financed ahead 11% to �171.8million (30 June 2007: �154.9million)
* �6.8 million of �18 million banking facility remains available to grow client base
* Richard Pepler appointed as new Chief Executive in March to drive planned growth and develop strategy
* Sales force expanded to target key areas
* South-east office opened
* New international division operational
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
Strand Partners Limited
James Harris/David Altberg +44 (0) 20 7409 3494
Chairman's Statement
Results
As I mentioned in my statement which accompanied the announcement of the results for the six month period ended 31 December 2007 the
year ended 30 June 2008 has been impacted by restructuring and severance costs as a result of changes made during the period. However, I am
pleased to be able to report, that for the year ended 30 June 2008, Ultimate Finance Group plc (Ultimate) achieved a profit before tax of
�137,376 (2007: �301,986) after restructuring and severance costs of �167,387. These costs were incurred primarily as a result of the
departure of the former chief executive Brian Sumner. Without this charge profit before tax amounts to �304,763.
Client sales financed in the year increased by 11% to �171.8m (2007: �154.9m). This increase has been, as previously, a consequence of
the growth experienced by existing clients and the increase in size of transactions for new clients.
Turnover for the period increased by 3% to �4,145,734 (2007: �4,026,628).
Basic earnings per share for the year to 30 June 2008 amounted to 0.13p compared to 1.09p for 2007. Without the severance and
restructuring costs and before taxation the basic earnings per share would have amounted to 1.52p (2007:1.51p).
The Ultimate cost base continues to be contained as much as possible with the sole justification for any increase being to meet the
demands of an expanding business and growing portfolio.
In a difficult year and under trying conditions I regard this result as satisfactory.
These are the Group's first set of full year 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.
Funding
I am pleased to report that the back-to-back receivable financing arrangement with Lloyds TSB Commercial Finance has been extended until
the end of September 2009. At the financial year end the group had utilised �11.2m of the �18m facility.
Management and employees
As noted above, Brian Sumner left the company in October 2007 to pursue other interests. Following his departure Richard Pepler was
appointed as Chief Executive and he has shown enthusiasm and commitment to building the Ultimate business and developing shareholder value.
The sales force has been expanded from 3 to 7 and a new regional managing director has been recruited for the south east and a new office
opened in Tunbridge Wells. The south east of England is an area of importance to Ultimate as there is a very high concentration of SME
activity in that area, which I believe Ultimate will now be able to access. This expansion will enable our sales force to be more effective
in the regions where we operate.
I would like to thank my colleagues on the board and all employees of Ultimate in helping to achieve these results in what was a
difficult year both in terms of the economic climate and a change of chief executive. The success of Ultimate is entirely attributable to
its committed team. They deserve every credit.
Risk Management
Ultimate's record of minimising bad debt continues to be good. In the current economic climate, management of risk is increasingly
important and our risk management procedures have remained our primary focus and underwriting standards have remained exceptionally high.
This ensures that deals will not be taken on for short term growth at the expense of long term shareholder value. Experienced client
management and credit control staff ensure both an excellent level of customer service and financial stewardship.
Outlook
Although trading conditions remain challenging there was a significant recovery in the second half of the period under review. Whilst
the economic climate remains uncertain your board are still confident about the future of the Ultimate business and will continue to take
all necessary steps to build sustainable shareholder value.
We look forward to the future with some confidence.
Clive Garston
Chairman
Chief Executive's Review
Introduction
Ultimate Finance Group plc provides bespoke invoice discounting and factoring facilities to the SME market. Our hallmarks are a personal
approach and high levels of support, with regular contact, for all our clients. Our invoice discounting and factoring products, which also
provide for sales ledger credit management and our 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.
Following my appointment as Chief Executive in March 2008, I have worked hard to instil renewed energy and enthusiasm into the team,
with clear direction and focus.
Among initiatives undertaken was our first white-labelled product, in conjunction with the UK's largest specialist factoring broker. We
intend to develop this partnership approach, with leading organisations in their respective fields, throughout this financial year and
thereafter.
Another exciting advance is our expansion into international factoring, through our membership from July of Factors Chain International
(FCI), an established, worldwide network of 240 market leaders in more than 60 countries. We have since then made a number of import
factoring offers to FCI members on behalf of their clients in Turkey, Italy, Taiwan and Australia, and the first three will be active very
soon. These import factoring facilities do not involve funding the overseas client, but rather providing our expertise in credit management
with regard to their UK debtors. The FCI network handles more than 80% of the world's international factoring volume and we are delighted to
be one of only six UK members.
Our UK business in the South-East of England continues to expand and the opening of our new centre in the region underlines our strategy
to provide a local, high-quality and responsive service to clients both current and new, in the UK and overseas. The office is headed by
Maria Dunne, regional Managing Director and recently appointed to the Board of our main trading subsidiary, Ultimate Finance Limited, who
benefits from substantial experience of our sector, gained in larger organisations.
In March 2008 we successfully relocated our Northern-based operation from Wilmslow, Cheshire to the centre of Manchester. This was an
important move for the Company, positioning us in the centre of the region's business community and ensuring that we are close 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
growth.
Strategy
Our main focus remains the SME sector, taking in clients ranging from good-quality, well founded start-ups to established and mature,
medium-sized businesses. We are delighted that the quality of our client portfolio continues to grow.
Since July 2007 the SME marketplace has seen an increasing number of business failures, which has made us more selective in increasing
client numbers. However, longer-term, the market for factoring and invoice discounting products presents real growth opportunities and the
'credit crunch' has also increased the level of enquiries. We continue, however, to remain robust in our strict underwriting procedures and
risk management during these challenging times for the UK economy.
I believe that our market will continue to grow at the expense of the traditional bank overdraft. In the light of developments in our
sector and our thorough understanding of the needs of SMEs, the Company is currently exploring a number of other opportunities for growth,
including partnerships with leading brokers and further white-labelled products.
We have continued to build our national sales team and over the last year three additional members have joined us. During the second
half of the year the Company appointed a Sales Director, Paul Atkins and he joined the Board of our main trading subsidiary, Ultimate
Finance Limited in September 2008. The growth of the team shall continue this year, allowing us to take advantage of the increasing
opportunities in our fast-growing market place and position us strongly to take on further clients.
With a market growing at more than 16% per year (source; Asset Based Finance Association), a determined and highly experienced
management team focused on expanding our portfolio and profits, robust risk management and high levels of service, the Company has, I am
confident, strong prospects.
Performance
During the last year, our margins have come under some pressure in what has been a very competitive market for rates. However, Ultimate
did achieve a 29% increase in profit before tax (before restructuring/severance costs) in the second half of the year. We are optimistic
that our growth strategy and dedicated team will together provide margin improvement. We are seeing evidence of our bank competitors
starting to increase their rates, bringing prospects of increased competitive advantage for Ultimate.
Our experience shows 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: a wealth of experience applied to risk management and
underwriting; a strong, locally-based service ethic enabling us to differentiate Ultimate; recognition that quality staff, developed to the
full through training and guidance, deliver an accessible, fast, flexible and friendly service; and 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 have strengthened the team again in 2008 with some of the best in the industry. We shall
continue to ensure we recruit the best available people and that they are properly incentivised to achieve optimum results. We are also
committed to building and maintaining close relationships with our valued business introducers.
Conclusion
The well documented problems of the economy have produced difficult times for SMEs including some of our clients. It is at times such as
these that these businesses require specialist help and support, enabling us to build stronger relationships. Our robust approach to risk,
combined with initiatives such as white-label partnerships and international operations, equip us well to benefit from both current
uncertainties and, when it arrives, an improved business environment.
Richard Pepler
Chief Executive
Consolidated Income Statement
for year ended 30 June 2008
Note 2008 2007
�000 �000
Revenue 4,146 4,027
Cost of sales (784) (713)
Gross profit 3,362 3,314
Administrative expenses (3,224) (3,011)
Operating profit 138 303
Financial income 6 4
Financial expenses (7) (5)
Profit before tax 137 302
Taxation 2 (112) (84)
Profit for the year 25 218
Earnings per share 10
Basic 0.13p 1.09p
Diluted 0.13p 1.09p
All amounts relate to continuing activities and are attributable to equity holders of the parent.
There were no recognised income and expense items (2007: nil) other than those reflected in the above income statement.
Balance Sheets
At 30 June 2008
as restated as restated
Note Group Company
2008 2007 2008 2007
�000 �000 �000 �000
Non-current assets
Investment in subsidiary - - 45 33
Property, plant and equipment 104 129 - -
Deferred tax assets 127 186 - -
231 315 45 33
Current assets
Loans and other receivables 3 13,871 14,584 3,310 3,101
Cash and cash equivalents 4 88 136 1 1
13,959 14,720 3,311 3,102
Total assets 14,190 15,035 3,356 3,135
Current liabilities
Bank overdraft 4 (11,204) (11,923) - -
Trade and other payables 5 (265) (545) (1) (3)
Tax payable (146) (29) (54) (28)
Total liabilities (11,615) (12,497) (55) (31)
Net assets 2,575 2,538 3,301 3,104
Equityattributable to equity
holders of the parent
Share capital 6 1,000 1,000 1,000 1,000
Share premium 7 1,949 1,949 1,949 1,949
Retained earnings 7 (374) (411) 352 155
Total equity 2,575 2,538 3,301 3,104
These financial statements were approved by the board of directors on 15 September 2008 and were signed on its behalf by:
Richard Pepler
Director
Cash Flow Statements
for year ended 30 June 2008
Note Group Company
2008 2007 2008 2007
�000 �000 �000 �000
Cash flows from operating
activities
Profit before tax for the year 137 302 239 187
Adjustments for:
Depreciation, amortisation and 79 73 -
impairment
Financial income (6) (4) -
Financial expense 7 5 -
Equity settled share-based 12 12 -
payment expenses
Taxation (112) (84) (54) (28)
117 304 185 159
Decrease/(increase) in loans 772 (2,745) (209) (169)
and other receivables
(Decrease) in trade and other (280) (49) (2) (18)
payables
Increase in tax payable 117 29 26 28
609 (2,765) (185) (159)
Tax paid - - - -
Net cash from operating 726 (2,461) - -
activities
Cash flows from investing
activities
Acquisition of property, plant (54) (84) -
and equipment
Net cash from investing (54) (84) -
activities
Cash flows from financing
activities
Financial income 6 4
Financial expense (7) (5)
Net cash from financing (1) (1) - -
activities
Net increase/(decrease) in 671 (2,546) - -
cash and cash equivalents
Cash and cash equivalents at 1 (11,787) (9,241) 1 1
July
Cash and cash equivalents at (11,116) (11,787) 1 1
30 June
Notes
(forming part of the financial statements)
* Accounting policies
Basis of preparation and statement of compliance
Ultimate Finance Group plc (the "company") is a company incorporated in the UK.
The group financial statements consolidate those of the Company and its subsidiaries (together referred to as the "group"). The
financial statements were approved by the board of directors on 15 September 2008
The group and company financial statements have been prepared for the first time in accordance with International Financial Reporting
Standards as adopted in the European Union ("adopted IFRSs"), and its interpretations adopted by the International Accounting Standards
Board ("IASB") or the International Financial Reporting Interpretations Committee ("IFRIC") of their predecessors, which had been approved
by the European Commission at 30 June 2008. An explanation of how the transition to adopted IFRSs has affected the reported financial
position, financial performance and cash flows of the Group is provided in note 11.
On publishing the parent company financial statements here together with the group financial statements, the company is taking advantage
of the exemption in s230 of the Companies Act 1985 not to present its individual income statement and related notes that form a part of
these approved financial statements.
The financial statements are prepared on the historical cost basis and are presented in Pounds Sterling, the Group's functional and
presentational currency.
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. The
estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results could differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
The directors have not adopted IFRS 8 Operating segments which although endorsed by the EU is not effective until 2009.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
consolidated financial statements and in preparing an opening IFRS balance sheet at 1 July 2006 for the purposes of the transition to
adopted IFRSs.
Prior year adjustment
The IFRIC interpretation 11 IFRS 2 Group and Treasury Share Transactions has been adopted and applied retrospectively in the current
year. The impact of adopting this policy is to increase the cost of investment in the company's subsidiary, for an amount equivalent to the
equity-settled share-based payment charge recognised in its consolidated financial statements with the corresponding credit being recognised
directly in equity. This has resulted in a restatement in the prior year of the carrying value of the company's investments and retained
earnings of �33,000. The accounting policy in respect of share based payments is included below.
First time adoption of IFRS
IFRS 1 First time adoption of IFRS outlines how the requirements of IFRS should be applied upon transition to IFRS and to the first
financial statements prepared in accordance with IFRS. The standard requires that accounting policies be adopted that comply with IFRS
effective at the first reporting date, and for those policies to be applied retrospectively to all periods presented in those first IFRS
financial statements. IFRS 1 does however provide a number of optional exemptions to this requirement that can be applied at the date of
transition to IFRS. Of these exemptions, the group and the company have chosen to take advantage of the following:
* IFRS 2 Share-based payment has not been applied to equity instruments that were granted before 7 November 2002 or those that were
granted after 7 November 2002 that vested before 1 January 2005.
Basis of consolidation
The financial information contained in the group financial statements represent the results, cash flows, assets and liabilities of the
company and its subsidiaries made up to 30 June each year. Subsidiaries are entities controlled by the Group. Control exists when the Group
has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The
financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the
date that control ceases.
All income and expenses and unrealised gains and losses arising on transactions between entities within the group, and balances between
entities within the group that exist at the balance sheet date, are eliminated on consolidation.
Revenue recognition
Revenue comprises fees for the provision of invoice financing services, net of Value Added Tax, and is recognised as follows:
a) Interest Income
Interest income and the set up fee income and associated directly attributable costs are recognised in the income statement for all
financial assets measured at amortised cost using the effective interest method. The effective interest method is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period. The effective interest rate (EIR) is
the rate that exactly discounts estimated future cash flows through the expected life, or contractual term if shorter, of the financial
asset to the net carrying amount of the financial asset. When calculating the EIR, the company estimates cash flows considering all
contractual terms of the financial instruments, but does not include an expectation for future credit losses. Interest income is calculated
and applied to clients' accounts on a daily basis.
b) Service fee income
The company charges its clients a factoring fee for managing their sales ledgers which is based on the value of invoices assigned. This
fee is recognised in the income statement on a straight line basis over the period in which the ledger management service is provided.
c) Other Fee Income
Other fee income, which includes disbursements, is credited to the income statement when the service has been provided or the
disbursement expenditure incurred.
Expenses
Operating lease payments
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 30 June 2007, 30 June 2008 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 temporary 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
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.
Share-based payment transactions
The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase recognised
in retained earnings within equity, over the period in which the employees become unconditionally entitled to the options. The fair value
of the options granted is measured at grant date using an option valuation model, taking into account the terms and conditions upon which
the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except
where forfeiture is due only to share prices not achieving the threshold for vesting.
Where the Company grants options over its own shares to the employees of its subsidiaries it recognises, in its individual financial
statements, an increase in the cost of investment in its subsidiaries equivalent to the equity-settled share-based payment charge recognised
in its consolidated financial statements with the corresponding credit being recognised directly in equity.
Segmental information
The group determines its business and geographical segments by reference to the nature of business risks and returns and the group's
system of internal financial reporting. All the group's operations are based in the United Kingdom and are considered to represent a single
geographical and business segment.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Leases in which the Group assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance
leases. Where land and buildings are held under leases the accounting treatment of the land is considered separately from that of the
buildings. Leased assets acquired by way of finance lease are stated at an amount equal to the lower of their fair value and the present
value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses. Lease payments are
accounted for as described below.
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of
property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:
* plant and equipment 3 years
* fixtures and fittings 2-5 years
Investments
Investments in subsidiaries are carried at cost less impairment.
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. 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.
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 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.
Impairment of loans & receivables
In respect of loans and receivables, the Group assesses on an ongoing basis whether there is objective evidence that an individual loan
asset is impaired. 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.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral
part of the Group's cash management are included as a component of cash and cash equivalents for the purpose only of the statement of cash
flows. Bank overdrafts are shown current liabilities in the balance sheet.
Foreign currency
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date.
Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
2. Taxation
Recognised in the income statement
2008 2007
�000 �000
Current tax expense
Current year 53 55
Adjustments for prior years - -
53 55
Deferred tax expense
Origination and reversal of temporary differences 50 29
Adjustment in respect of prior year 9 -
59 29
Total tax in income statement 112 84
Reconciliation of effective tax rate
2008 2007
�000 �000
Profit for the period 25 218
Total tax expense 112 84
Profit excluding taxation 137 302
Tax using the UK corporation tax rate of 29.5 %1 (2007:30 %) 41 91
Small companies tax rate allowance (4) (17)
Non-deductible expenses 8 21
Other timing differences 12 -
Effect of tax losses utilised (3) (11)
Reversal of IFRS adjustment to deferred income 58 -
Total tax expense 112 84
1 Tax rate reflects change in UK corporation tax rate from
30% to 28%
3. Loans and other receivables
Group Company
2008 2007 2008 2007
�000 �000 �000 �000
Loans and receivables 13,584 14,422 - -
Prepayments 260 135 11 9
Other Receivables 27 27 3,299 3,092
13,871 14,584 3,310 3,101
4. Cash and cash equivalents / bank overdrafts
Group Company
2008 2007 2008 2007
�000 �000 �000 �000
Cash and cash equivalents per 88 136 1 1
balance sheet
Bank overdrafts (11,204) (11,923) - -
Cash and cash equivalents per (11,116) (11,787) 1 1
cash flow statements
5. Trade and other payables
Group Company
2008 2007 2008 2007
�000 �000 �000 �000
Other trade payables (13) (208)
Non-trade payables and accrued (252) (337) (1) (3)
expenses
Interest payable - -
(265) (545) (1) (3)
6. Share capital
2008 2007
�000 �000
Authorised
40,000,000 Ordinary shares of �0.05 each 2,000 2,000
Allotted, called up and fully paid
19,997,018 Ordinary shares of �0.05 each 1,000 1,000
7. Capital and reserves
Reconciliation of movement in capital and reserves - Group
Share Share Retained Total
capit Premi earnings equit
al um y
�000 �000 �000 �000
Balance at 1 July 2006 1,000 1,949 (641) 2,308
Total recognised income and expense - - 218 218
Equity-settled share based payment - - 12 12
transactions
Balance at 30 June 2007 1,000 1,949 (411) 2,538
Balance at 1 July 2007 1,000 1,949 (411) 2,538
Total recognised income and expense - - 25 25
Equity-settled share based payment - - 12 12
transactions
Balance at 30 June 2008 1,000 1,949 (374) 2,575
8. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
2008 2007
�000 �000
Tax value of losses carry-forward 121 134
Other timing differences 6 52
Net tax (assets) / liabilities 127 186
Movement in deferred tax during the year
�000
Brought forward 186
Origination and reversal of timing differences (1)
Reversal of IFRS adjustment (58)
127
Movement in deferred tax during the prior year
�000
Brought forward 241
Origination and reversal of timing differences (55)
186
9. Preliminary Statement of Results
This preliminary statement was approved by the Board on 15 September 2008. It is not the company's statutory accounts.
The statutory accounts for the year ended 30 June 2008 have been audited and have been approved by the Board of directors on 15
September 2008. Copies of the Directors' Report and Consolidated Financial Statements will be sent to shareholders shortly and will be
available on the company's website www.ultimatefinance.co.uk and from the Group's Bristol office, Bradley Pavilions, Pear Tree Road, Bradley
Stoke, Bristol BS32 0BQ.
10. Earnings per share
The basic profit per share for the year to 30 June 2008 has been calculated from the profit on ordinary activities after taxation of
�25,409 (2007: �217,835) and on the weighted average number of ordinary shares in issue during the year (19,997,018) (2007: 19,997,018).
The company has dilutive potential ordinary shares in respect of the 'Company Share Option Plan'. The diluted earnings per share amounts
to 0.13p (2007: 1.09p as restated) and is based on profit on ordinary activities after taxation of �25,409 (2007: �217,835) and 20,000,934
ordinary shares being the weighted average of the shares in issue during the year adjusted to assume conversion of all dilutive potential
ordinary shares (2007: 20,009,726).
Adjusted earnings per share figures have been calculated in addition to the basic and diluted figures since, in the opinion of the
directors, these provide further information on the understanding of the group's performance.
2008 2007
Pence Penc
e
Basic earnings per share 0.13 1.09
Basic earnings per share before restructuring/severance costs 1.52 1.51
and taxation
11. Explanation of transition to Adopted IFRSs - Group
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 year ended 30 June 2007 and a reconciliation of total equity as at 1 July 2006 and 1 July
2007.
Transitional arrangements- Application of IFRS 1
The Group's financial statements for the year ended 30 June 2008 are 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 results for the year ended 30 June 2008 have been prepared in accordance with accounting policies under adopted IFRS's. The Group's
revised accounting policies under IFRS are included in note 1.
Reconciliation of income statement from UK GAAP to adopted IFRS's
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
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 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
An adjustment to retained earnings under UK GAAP to adopted IFRS's is explained below and relates to the recognition of deferred income
and associated deferred tax asset.
Reconciliation of balance sheet from UK GAAP to adopted IFRS's
The adjustments to the consolidated balance sheet from UK GAAP to adopted IFRS's are described below:
a) Deferred tax asset and corporation tax liabilities are shown separately on face of balance sheet (Deferred tax: 1 July 2006:
�183,000; 30 June 2007: �128,000 and corporation tax: 1 July 2006: �Nil; 30 June 2007: �29,000);
b) Borrowings are shown separately on the face of the balance sheet (1 July 2006: �9,241,000; 30 June 2007: �11,788,000, net of positive
cash balances)
c) 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; 30 June 2007: �153,000).
d) Service fee income deferred to future periods has been recognized in loans and receivables to reflect the period over which the
ledger management service is provided (1 July 2006: �192,000; 30 June 2007: �192,000)
e) Recognition of the deferred tax asset on the income adjustment noted in d above (1 July 2006: �58,000; 30 June 2007: �58,000)
Of the adjustments noted above, items a to c relate to re-classifications of amounts in the balance sheet and do not effect the
measurement or recognition of the balances involved.
There were no adjustments to the company balance sheet or profit or loss accounts as a result of adopting IFRS.
11. Explanation of transition to Adopted IFRSs - Group
Consolidated balance sheets
1 July 06 30 June 07
UK GAAP Effect of Adopted IFRSs UK GAAP Effect of transition Adopted IFRSs
transition to to Adopted IFRSs
Adopted IFRSs
Note �000 �000 �000 �000 �000 �000
Non-current assets
Property, plant and equipment 117 - 117 129 - 129
Deferred tax assets a,e - 241 241 - 186 186
117 241 358 129 186 315
Current assets
Tax receivable
Trade and other receivables a,c,d 11,906 (122) 11,784 14,751 (167) 14,584
Cash and cash equivalents 1 - 1 136 - 136
11,907 (122) 11,785 14,887 (167) 14,720
Total assets 12,024 119 12,143 15,016 19 15,035
Current liabilities
Bank overdraft b,c - (9,241) (9,241) - (11,923) (11,923)
Trade and other payables b (9,582) 8988 (594) (12,344) 11,799 (545)
Tax payable a (29) (29)
Current liabilities (9,582) (253) (9835) (12,344) (153) (12,497)
Total liabilities (9,582) (253) (9,835) (12,344) (153) (12,497)
Net assets 2,442 (134) 2,308 2,672 (134) 2,538
Equity attributable to equity
holders of the parent
Share capital 1,000 - 1,000 1,000 - 1,000
Share premium 1,949 - 1,949 1,949 - 1,949
Retained earnings d,e (507) (134) (641) (277) (134) (411)
Total equity 2,442 (134) 2,308 2,672 (134) 2,538
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFLEEISASELU
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