TIDMUFG
RNS Number : 6991I
Ultimate Finance Group PLC
17 March 2010
17 March 2010
Ultimate Finance Group plc
Half Yearly Results Statement
Ultimate Finance Group plc ("Ultimate"), the AIM-quoted factoring, invoice
discounting and financial solutions provider to the SME sector, announces its
Interim Results for the half year ended 31 December 2009.
Highlights
· Pre-tax profit increased by 36% to GBP191,000 (31 Dec 2008: GBP140,000)
· Proposed first interim dividend of 0.30p (31 Dec 2008: 0.00p)
· Client turnover financed ahead 50% to GBP148.5million (31 Dec 2008:
GBP99.1million)
· Basic Earnings per share increased to 0.69p (31 Dec 2008: 0.51p)
· GBP5.1 million of GBP25 million banking facility remains available to grow
client base
· Sales force continues to grow both in numbers and regional coverage
· Current share price only equal to Net Asset Value
Clive Garston, Chairman, said: "Whilst the economic climate remains tough,
demand for our services is growing and we will continue to take the necessary
steps to build solid sustainable shareholder value from the opportunities that
present themselves. We therefore look forward to the future with confidence."
Further information:
Ultimate Finance Group plc:
+--------------------------------+----------------------------------+
| Richard Pepler, Chief | +44 (0) 845 251 3030 |
| Executive | |
| rpepler@ultimatefinance.co.uk | |
+--------------------------------+----------------------------------+
| Shane Horsell, Finance | +44 (0) 845 251 3030 |
| Director | |
| shorsell@ultimatefinance.co.uk | |
+--------------------------------+----------------------------------+
| www.ultimatefinance.co.uk | |
+--------------------------------+----------------------------------+
Media enquiries:
Allerton Communications
+-----------------------------------+---------------------------------+
| Peter Curtain | +44 (0) 20 3137 2500 |
| peter.curtain@allertoncomms.co.uk | |
+-----------------------------------+---------------------------------+
Nominated Adviser:
Arbuthnot Securities
+-----------------------------------+----------------------------------+
| John Prior | +44 (0) 20 7012 2000 |
| johnprior@arbuthnot.co.uk | |
+-----------------------------------+----------------------------------+
| Paul | +44 (0) 20 7012 2000 |
| Gillam paulgillam@arbuthnot.co.uk | |
+-----------------------------------+----------------------------------+
Chairman's Statement
Ultimate is a provider of finance services for small and medium sized companies,
with the main services provided being factoring and confidential invoice
discounting. It is a leading independent provider supported by a sophisticated
IT infrastructure and financed with a GBP25,000,000 back to back financing
arrangement with Lloyds TSB Commercial Finance, which is in place until July
2012. The main reason for Ultimate's success has been that it has concentrated
on its core business and has taken a relatively risk averse attitude. This has
not prevented its ability to grow as is demonstrated by the results for the
period ended 31 December 2009.
Results
I am pleased to report that for the half year ended 31 December 2009 Ultimate
made a profit before taxation of GBP191,000 (31 December 2008: GBP140,000).
Turnover for the half year was GBP2,854,000 (restated 31 December 2008:
GBP2,232,000) and client turnover financed in the half year rose 50% to
GBP148,500,000 (31 December 2008: GBP99,100,000). Basic earnings per share
amounted to GBP0.69p (31 December 2008: GBP0.51p). In the economic and trading
environment which existed in the period, I believe that this is a very strong
performance and reflects the efforts which have been made to grow the business
whilst taking account of the increased risks of the current situation. The
Ultimate client base grew during the period, with a substantial number of new
clients being gained in the period.
Dividend
The company paid its maiden dividend of 0.25p per share in December 2009 as a
final dividend for the year ended 30 June 2009. I am pleased to announce that
the company is proposing to pay an interim dividend of 0.30p per share to be
paid on 15 April 2010 to shareholders on the register at the close of business
on 26 March 2010.
The company will maintain a progressive dividend policy going forward and the
board has resolved that they intend to distribute to shareholders by way of
dividend 50% of retained profits in each financial year.
Funding
The company currently enjoys a strong relationship with Lloyds TSB Commercial
Finance and has significant headroom within its current facility to fund the
growth of the business.
At 31 December 2009 the group had utilised GBP19,900,000 (31 December 2009:
GBP11,600,000) of the GBP25,000,000 back-to-back receivable financing
arrangement with Lloyds TSB Commercial Finance.
Risk Management
Risk management is crucial to the success of the Ultimate business and Ultimate
maintains high standards of underwriting and management of risk. Its credit
control staff are experienced in both client and risk management. With the UK
economy only just beginning to emerge from recession there has inevitably been a
marked increase in the number of business failures. As a result of this,
Ultimate has had to be increasingly careful in guarding against the risk of
fraud and financial failure. It is selective in growing its client numbers and
it continually keeps its underwriting procedures under review. We remain robust
in our strict underwriting procedures and risk management during these
challenging times for the UK economy. In the longer term the market for
factoring, invoice discounting and complementary products continues to present
real growth opportunities and the recession has increased the level and quality
of enquiries and reduced the pressure on margins. Our clients continue to
represent an appropriate spread of risk in terms of size of investment, industry
type and geographical location. The single largest investment at 31 December
2009 was GBP909,000 (31 December 2008: GBP828,000), which constituted 4% (31
December 2008: 5%) of total funds advanced.
People
Our senior management have performed well during the period and we continue to
attract new recruits with a proven track record in the industry. The importance
of a well trained and dedicated workforce cannot be underestimated and the
success of Ultimate is entirely attributable to its committed team. I would
like to thank all my co directors and staff for their efforts in what have been
difficult economic conditions.
Outlook
Our strategy is to continue to provide the services to our clients that they
require to support their businesses.
Whilst the economic climate remains tough, demand for our services is growing
and we will continue to take the necessary steps to build solid sustainable
shareholder value from the opportunities that present themselves. We therefore
look forward to the future with confidence.
Clive R Garston
Chairman
Chief Executive's Review
In the period under review, we continued to strengthen our nationwide sales team
and now have staff in nine locations across England and Wales. We have recruited
excellent people, who are already having a positive impact on inquiry and new
business levels.
In the same period our Northern office relocated to its new base in central
Manchester. This move not only demonstrates our commitment to the region but
puts us right at the heart of the North West business community. As a result, we
have seen an upturn in inquiries from across the North of England. I am
delighted that we have recently recruited highly-experienced Austin Thorp as our
new Commercial Director (North). His appointment further strengthens our North
of England team.
In the South East, we are about to move into larger offices in Tunbridge Wells.
This is a reflection of the success of the region under Managing Director (South
East) David Wright. The region has achieved significant growth since we opened
there last year.
Despite the challenging prevailing market conditions, enquiries increased by 21
per cent compared to the corresponding period of the previous year. Further, our
conversion rate has also improved and during the period we witnessed a 40 per
cent increase in new client numbers over the previous equivalent period - this
is significant as during that same half-year in 2008 we enjoyed a number of
record months for new business.
The prolonged economic downturn is continuing to impact on our core SME market.
However, we believe that the specialist help we provide brings major benefits to
that sector in such conditions.
Our approach, in both developing and executing our strategy, has enabled us to
achieve growth in a difficult economic climate in which others have encountered
significant problems.
Richard Pepler
Chief Executive
Consolidated Statement of Comprehensive Income (unaudited)
For the six months ended 31 Dec 2009
+------------------------------+------+---------+------------+---------+
| | Note | | Six | |
| | | Six | months | |
| | | months | ended | Year |
| | | ended | (restated) | ended |
| | | 31 Dec | 31 Dec | 30 |
| | | 2009 | 2008 | June |
| | | | | 2009 |
+------------------------------+------+---------+------------+---------+
| | | GBP000 | GBP000 | GBP000 |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| Revenue | | 2,854 | 2,232 | 4,757 |
+------------------------------+------+---------+------------+---------+
| Cost of Sales | | (248) | (363) | (492) |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| Gross profit | | 2,606 | 1,869 | 4,265 |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| Administrative expenses | | (2,415) | (1,728) | (3,861) |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| Operating profit | | 191 | 141 | 404 |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| Finance income | | - | 2 | 2 |
+------------------------------+------+---------+------------+---------+
| Finance expenses | | - | (3) | - |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| Profit before tax | | 191 | 140 | 406 |
+------------------------------+------+---------+------------+---------+
| Tax Expense | 3 | (54) | (39) | (86) |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| Total comprehensive income | | 137 | 101 | 320 |
| and profit for the period | | | | |
| attributable to owners of | | | | |
| the parent | | | | |
+------------------------------+------+---------+------------+---------+
| | | | | |
+------------------------------+------+---------+------------+---------+
| Earnings per share | | | | |
+------------------------------+------+---------+------------+---------+
| Basic (pence) | 4 | 0.69 | 0.51 | 1.60 |
+------------------------------+------+---------+------------+---------+
| Diluted (pence) | 4 | 0.68 | 0.51 | 1.60 |
+------------------------------+------+---------+------------+---------+
There were no recognised income and expense items (2008: nil) other than those
reflected in the above income statement.
Comparatives for the 6 months ended 31 December 08 have been restated to reflect
the change in presentation of disbursements adopted in the year ended 30 June
2009 statutory accounts.
Consolidated Statement of Financial Position (unaudited)
at 31 Dec 2009
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
| | 31 Dec | | |
| | 2009 | 31 | 30 |
| | | Dec | June |
| | | 2008 | 2009 |
| | | | |
+-------------------------------------+----------+----------+----------+
| | GBP000 | GBP000 | GBP000 |
+-------------------------------------+----------+----------+----------+
| Non-current assets | | | |
+-------------------------------------+----------+----------+----------+
| Property, plant and equipment | 110 | 72 | 72 |
+-------------------------------------+----------+----------+----------+
| Deferred tax asset | 12 | 127 | 12 |
+-------------------------------------+----------+----------+----------+
| | 122 | 199 | 84 |
+-------------------------------------+----------+----------+----------+
| Current assets | | | |
+-------------------------------------+----------+----------+----------+
| Loans and other receivables | 22,767 | 14,176 | 19,020 |
+-------------------------------------+----------+----------+----------+
| Cash and cash equivalents | 405 | 329 | 237 |
+-------------------------------------+----------+----------+----------+
| | 23,172 | 14,505 | 19,257 |
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
| Total assets | 23,294 | 14,704 | 19,341 |
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
| Current liabilities | | | |
+-------------------------------------+----------+----------+----------+
| Bank overdraft | (19,866) | (11,605) | (16,008) |
+-------------------------------------+----------+----------+----------+
| Tax payable | (190) | (196) | (123) |
+-------------------------------------+----------+----------+----------+
| Trade and other payables | (241) | (221) | (303) |
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
| Total liabilities | (20,297) | (12,022) | (16,434) |
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
| Net assets | 2,997 | 2,682 | 2,907 |
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
| Issued capital and reserves | | | |
| attributable to owners of the | | | |
| parent | | | |
+-------------------------------------+----------+----------+----------+
| Share capital | 1,000 | 1,000 | 1,000 |
+-------------------------------------+----------+----------+----------+
| Share premium | 1,949 | 1,949 | 1,949 |
+-------------------------------------+----------+----------+----------+
| Retained earnings | 48 | (267) | (42) |
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
| Total equity | 2,997 | 2,682 | 2,907 |
+-------------------------------------+----------+----------+----------+
| | | | |
+-------------------------------------+----------+----------+----------+
Statement of Changes in Equity
+-------------------------------------+---------+---------+----------+--------+
| | | | | |
+-------------------------------------+---------+---------+----------+--------+
| | Share | Share | | |
| | Capital | Premium | Retained | Total |
| | | | Earnings | |
| | | | | |
+-------------------------------------+---------+---------+----------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------------+---------+---------+----------+--------+
| Balance at 30 June 2008 | 1,000 | 1,949 | (374) | 2,575 |
+-------------------------------------+---------+---------+----------+--------+
| Total comprehensive income | - | - | 101 | 101 |
+-------------------------------------+---------+---------+----------+--------+
| Equity-settled share based payment | - | - | 6 | 6 |
| transactions | | | | |
+-------------------------------------+---------+---------+----------+--------+
| Balance at 31 Dec 2008 | 1,000 | 1,949 | (267) | 2,682 |
+-------------------------------------+---------+---------+----------+--------+
| | | | | |
+-------------------------------------+---------+---------+----------+--------+
| Total comprehensive income | - | - | 219 | 219 |
+-------------------------------------+---------+---------+----------+--------+
| Equity-settled share based payment | - | - | 6 | 6 |
| transactions | | | | |
+-------------------------------------+---------+---------+----------+--------+
| Balance at 30 June 2009 | 1,000 | 1,949 | (42) | 2,907 |
+-------------------------------------+---------+---------+----------+--------+
| | | | | |
+-------------------------------------+---------+---------+----------+--------+
| Total comprehensive income | - | - | 137 | 137 |
+-------------------------------------+---------+---------+----------+--------+
| Equity-settled share based payment | - | - | 3 | 3 |
| transactions | | | | |
+-------------------------------------+---------+---------+----------+--------+
| Dividend Paid relating to prior | | | (50) | (50) |
| year | | | | |
+-------------------------------------+---------+---------+----------+--------+
| Balance at 31 Dec 2009 | 1,000 | 1,949 | 48 | 2,997 |
+-------------------------------------+---------+---------+----------+--------+
| | | | | |
+-------------------------------------+---------+---------+----------+--------+
| | | | | |
+-------------------------------------+---------+---------+----------+--------+
Consolidated Statement of Cash Flows (unaudited)
for the six months ended 31 Dec 2009
+---------------------------------------+----+-----------+------------+----------+
| | | | | |
+---------------------------------------+----+-----------+------------+----------+
| | | Six | Six | |
| | | months | months | Year |
| | | ended | ended | ended |
| | | 31 Dec | (restated) | 30 |
| | | 2009 | 31 Dec | June |
| | | | 2008 | 2009 |
| | | | | |
| | | | | |
+---------------------------------------+----+-----------+------------+----------+
| | | GBP000 | GBP000 | GBP000 |
+---------------------------------------+----+-----------+------------+----------+
| Cash flows from operating activities | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Profit for the period before taxation | | 191 | 140 | 406 |
+---------------------------------------+----+-----------+------------+----------+
| Adjustments for: | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Depreciation | | 32 | 37 | 70 |
+---------------------------------------+----+-----------+------------+----------+
| Financial Income | | - | (2) | (2) |
+---------------------------------------+----+-----------+------------+----------+
| Financial Expense | | - | 3 | - |
+---------------------------------------+----+-----------+------------+----------+
| Equity settled share-based | | 3 | 6 | 12 |
| payment expenses | | | | |
+---------------------------------------+----+-----------+------------+----------+
| | | 226 | 184 | 486 |
+---------------------------------------+----+-----------+------------+----------+
| (Increase)/decrease in loans and | | (3,747) | (308) | (5,113) |
| other receivables | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Increase/(decrease) in trade and | | (52) | (30) | 15 |
| other payables | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Tax Paid | | 3 | - | (7) |
+---------------------------------------+----+-----------+------------+----------+
| Net cash from operating activities | | (3,570) | (154) | (4,619) |
+---------------------------------------+----+-----------+------------+----------+
| | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Cash flows from investing | | | | |
| activities | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Purchase of property, plant and | | (70) | (5) | (38) |
| equipment | | | | |
+---------------------------------------+----+-----------+------------+----------+
| | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Cash flows from financing | | | | |
| activities | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Financial Income | | - | 2 | 2 |
+---------------------------------------+----+-----------+------------+----------+
| Financial Expense | | - | (3) | - |
+---------------------------------------+----+-----------+------------+----------+
| Dividends Paid | | (50) | - | - |
+---------------------------------------+----+-----------+------------+----------+
| | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Net increase/(decrease) in cash | | (3,690) | (160) | (4,655) |
| and cash equivalents | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Cash and cash equivalents at | | (15,771) | (11,116) | (11,116) |
| beginning of period | | | | |
+---------------------------------------+----+-----------+------------+----------+
| | | | | |
+---------------------------------------+----+-----------+------------+----------+
| Cash and cash equivalents at end | | (19,461) | (11,276) | (15,771) |
| of period | | | | |
+---------------------------------------+----+-----------+------------+----------+
| | | | | |
+---------------------------------------+----+-----------+------------+----------+
Comparatives for the 6 months ended 31 December 08 have been restated to reflect
the change in presentation of the consolidated cash flow statement adopted in
the year ended 30 June 2009 statutory accounts.
Notes to the half yearly report
1. Preparation of half yearly report
The financial information in the half yearly report has been prepared using the
recognition and measurement principles of International Accounting Standards,
International Financial Reporting Standards and Interpretations adopted for use
in the European Union (collectively Adopted IFRSs). The principal accounting
policies used in preparing the half yearly report are those the group expects to
apply in its financial statements for the year ending 30 June 2010 and are with
the exception of the adoption of IAS1 (Revised) and IFRS8 unchanged from those
disclosed in the group's Director's report and consolidated financial statements
for the year ended 30 June 2009. The financial information for the year ended 30
June 2009 does not constitute the group's statutory financial statements for
that period. It has, however, been derived from the audited statutory financial
statements for that period. A copy of those statutory financial statements has
been delivered to the Registrar of Companies. The auditors' report on those
accounts was unqualified, did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
did not contain a statement under section 498 (2) and (3) of the Companies Act
2006.While the financial figures included in this half-yearly report have been
computed in accordance with IFRSs applicable to interim periods, this
half-yearly report does not contain sufficient information to constitute an
interim financial report as that term is defined in IAS 34.
2 Going Concern
As noted in the prior year financial statements the Board is pleased to report
that the back-to-back receivable financing arrangement with Lloyds TSB
Commercial Finance has been renewed and enhanced until July 2012, this provides
the opportunity for future growth. In the longer term, the market for factoring
and invoice discounting products continues to present real growth opportunities,
and the recession has increased the level and quality of enquiries. We continue,
however, to remain robust in our strict underwriting procedures and risk
management during these challenging times for the UK economy.
The backing of Lloyds TSB Commercial Finance in the short to medium term
supports the directors in their opinion that the going concern basis of
preparation is appropriate.
At 31 December 2009 the group had utilised GBP19.9m of the GBP25m facility.
3 Taxation
Taxation has been provided for at 28% (2008: 28%).
4 Earnings per share
The basic earnings per share of 0.69p (31 Dec 2008: 0.51p) has been calculated
from the profit after taxation of GBP137,000 and on the weighted average number
of shares in issue during the reporting period. The fully diluted earnings per
share of 0.68p (31 Dec 2008: 0.51p), has been calculated from the profit after
taxation of GBP137,000 and on the weighted average number of the shares in issue
during the period adjusted for all dilutive potential ordinary shares.
5 Dividends
+------------------------------+--------+--------+
| Ordinary Shares | 2009 | 2008 |
+------------------------------+--------+--------+
| | GBP000 | GBP000 |
+------------------------------+--------+--------+
| | | |
+------------------------------+--------+--------+
| Final dividend paid for the | 50 | - |
| prior year of 0.25p per | | |
| share | | |
+------------------------------+--------+--------+
| | | |
+------------------------------+--------+--------+
| Proposed interim dividend of | 60 | - |
| 0.30p per share | | |
+------------------------------+--------+--------+
| | | |
+------------------------------+--------+--------+
| | | |
+------------------------------+--------+--------+
The proposed interim dividend has not been accrued as the dividend was declared
after the balance sheet date.
6 Half Yearly Report
Copies of this report are available 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 or on the company's
website at www.ultimatefinance.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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