RNS Number:3592I
Cattles PLC
06 March 2003
Thursday 6 March 2003
CATTLES plc
Preliminary Announcement Of Final Results
For The Year Ended 31 December 2002
CATTLES ANNOUNCES 23 PER CENT GROWTH IN PROFITS
"I am delighted with the excellent financial performance and stable credit
quality we have achieved during 2002. We have continued to invest in the
business, improving operating efficiency, opening new branches and establishing
new distribution channels, providing a strong platform for future growth. We
have made an encouraging start to the current year and, together with my senior
management team, I look forward to another successful year in 2003."
Sean Mahon, Chief Executive
Highlights:
Strong financial performance
* Profit before tax up 23.4% to #93.6 million, after goodwill
amortisation of #2.1 million
* Earnings per share up 20.4% to 21.95p
* Dividend up 15.6% with final at 7.00p making 10.40p for the year
* Gearing reduced from 3.7 times to 2.7 times
Stable credit quality
* Consumer Division arrears levels reduced from 12.9% to 11.1%
* Consumer Division bad debt charge unchanged at around 8% of net
receivables
* Drive to improve customer quality continues
Sustainable growth
* Group net receivables up 26% to #1.382 billion
* New acquisitions successfully integrated and performing well
* 57 new branches opened, increasing the national network to 495
Future
* Continued commitment to UK consumer credit market
* Focused on strong receivables growth and improved returns
* Further expansion of branch network into local communities
* Establishing new alliances and distribution channels
* Responsible lending and bad debt control remain fundamental
For further information:
On 6 March 2003
Sean Mahon, Chief Executive, Cattles plc 07733 124226
Mark Collins, Director-Treasury, Cattles plc until 3pm today
James Corr, Finance Director, Cattles plc
Geoffrey Pelham-Lane, Financial Dynamics 020 7269 7194
Emma Buchanan, Financial Dynamics 020 7269 7294
7 March 2003 onwards
Cattles plc 01924 444466
Financial Dynamics 020 7269 7194
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
Chairman's Statement
It gives me great pleasure to report another year of excellent results for the
group, with profit before tax of #93.6 million, representing an increase of
23.4% over profits of #75.8 million reported last year. Basic earnings per
share increased by 20.4% to 21.95p compared to 18.23p in 2001.
The directors are recommending an increased final dividend of 7.00p per share
payable on 9 May 2003, compared to 6.05p paid last year. This, together with
the interim dividend of 3.40p per share paid on 25 October 2002, gives a total
dividend for the year of 10.40p, representing an increase of 15.6%.
Shareholders will again be offered the opportunity to receive shares in the
company through our Dividend Reinvestment Plan, as an alternative to the cash
dividend.
The original five year plan, adopted by the group in 1998, is reaching the end
of its term. The principal goals we set ourselves almost five years ago have
been successfully achieved which is great credit to the quality and strength of
our senior management team and their determination to maintain the group's
impressive profit growth, particularly during this period of continuing
expansion of the group's activities.
Of particular note amongst the many achievements last year, I would like to
highlight the completion of the integration of the management and operations of
our monthly and weekly consumer credit businesses. In addition, we were
delighted to have announced in October 2002 the acquisitions of Dial4aloan
Limited, a specialist consumer credit broker, and of a motor finance portfolio
from Associates Capital Corporation plc, for which we received widespread
support from our shareholders in providing the necessary funding of #81 million,
by way of a share placing. These important acquisitions have been successfully
integrated and are both performing in line with our expectations.
Separate reviews of the Consumer Credit Act 1974 and the European Consumer
Credit Directive are currently underway and are in their consultative phases.
The indications are that the implementation of any major changes arising from
these reviews is unlikely to take effect before Autumn 2004 for the Consumer
Credit Act and 2007 for the European Consumer Credit Directive. In common with
other responsible lenders, we welcome these reviews and will continue to
contribute to the consultation process.
Through our four trade association bodies, Cattles is actively engaged and
working closely with the relevant DTI, European and consultative working groups.
The company continues to adopt the transitional arrangements of FRS 17 -
Retirement Benefits. If this standard had been fully operative in 2002, the
group's consolidated net assets of #346 million would have been reduced by #15
million primarily reflecting the recent decline in equity valuations. Adoption
of this standard would not have had any material effect on reported earnings.
The directors strongly believe that employee participation as shareholders in
the company is to be encouraged. Two all-employee share schemes, the Cattles
Employee Sharesave Scheme and the Cattles Employee Share Scheme, have operated
within the group since 1993 and 1994, respectively.
The lifespan of the 1993 sharesave scheme was for a fixed period of 10 years,
expiring in 2003. In addition, the beneficial UK tax reliefs available to
employees under the 1994 profit sharing scheme were withdrawn by the Inland
Revenue for any appropriation of shares after 31 December 2002. Consequently,
resolutions will be put forward at the forthcoming annual general meeting to
seek shareholders' approval to replace the existing schemes with the
introduction of a new Employee Share Incentive Plan and a new Employee Sharesave
Scheme.
The continuing success of the group has been possible only through the
commitment, dedication and enthusiasm of our employees. On behalf of the Board,
I should like to thank them for their invaluable contributions and support
during 2002.
We are very pleased with the group's performance during 2002 and I look forward
to another successful year in 2003.
Barrie Cottingham
Chairman
6 March 2003
Chief Executive's Review
The group's trading performance during the year to 31 December 2002 has been
particularly satisfactory. It is especially pleasing to see the benefits from
the integration of our consumer credit activities, as mentioned in the
Chairman's statement, beginning to show through. These benefits, together with
a good performance from Lewis, our debt recovery specialists, and improved
trading from the corporate division, have contributed to another excellent set
of results for the group.
I am also pleased with the encouraging start made by our new acquisitions,
Dial4aloan, our specialist consumer credit broker, and the Associates loan
portfolio.
Consumer Division
The consumer division has contributed the majority of the group's results for
the year, with profits increasing by 22.5% to #93.2 million, compared to #76.1
million reported last year. The division has continued to maintain its clear
focus on the UK consumer credit market and, during the year, increased net
customers' accounts receivable by #287 million to #1,274 million at 31 December
2002.
Consumer Credit
An important part of our strategy is to maintain credit quality, particularly
during the continued expansion of our consumer credit activities and in less
certain economic conditions. The success of this strategy is demonstrated by
the stability in our bad debt charge and the continuing reduction in the level
of customers' arrears. The consumer division's bad debt charge remains
unchanged, within our target at around 8% of net receivables, with customer
arrears falling in the year from 12.9% to 11.1%.
As part of our drive to improve branch operating cost ratios, we have
amalgamated 36 of our smaller weekly branches with their nearest, larger,
consumer division branch. A further 57 new branches were opened during the
year, increasing our total network to 495 branches, at 31 December 2002. Over
half of the branch network now provides both monthly and weekly products to
customers from shared office accommodation.
We have continued to expand our network of Local Collection Unit ('LCU')
branches and opened a further 10 LCUs during the year, increasing the total to
32 branches at 31 December 2002. The role played by LCUs is important in
maintaining our overall credit quality and improving customer arrears.
As stated in my report last year, we continue to review carefully the
profitability of our sources of business and individual product lines in order
to achieve our targeted levels of return and arrears. This review has resulted
in a reduction of around 37,000 customers during the year, bringing the total
planned reduction in the number of customers during the last 18 months to over
87,000. At 31 December 2002, the consumer division had 742,000 customers
compared with 715,000 at the previous year end.
Insurance
Progressive Insurance, our reinsurance company located in the Isle of Man, has
successfully completed its first full year of operations. The administration
benefits and cost savings we anticipated at the formation of Progressive are now
beginning to be realised and funds under management at 31 December 2002,
amounted to #33.4 million.
Under the terms of the Insurance Mediation Directive, general insurance products
currently governed by the ABI code of practice, such as creditor insurance and
automobile warranties, will be regulated by the Financial Services Authority ('
FSA'), with effect from January 2005.
In preparation for FSA regulation, our application for membership of the General
Insurance Standards Council ('GISC') was approved in February 2003. We are
confident that our operating policies and procedures, together with our
commitment to quality training and compliance, will meet the monitoring and
auditing requirements of GISC, thereby ensuring a smooth transition to FSA
regulation.
Debt Recovery
Lewis, the group's debt recovery specialist, had another successful year and, on
a like for like basis, increased its contribution to group profits. Lewis
provides a full debt recovery service for both external clients and to our
consumer division. External clients currently generate around 75% of Lewis'
commission based debt collection activities.
The purchase of default debt portfolios from clients continues to form an
important part of Lewis' activities and, during 2002, #10.5 million was invested
in the purchase of such portfolios. Lewis has also successfully renewed its
contract with Companies House for the collection of late filing penalties for a
further three years to 2006.
Acquisitions
In October 2002, we announced the successful acquisitions of Dial4aloan Limited,
a specialist consumer credit broker, and a motor finance loan portfolio from
Associates Capital Corporation plc. These acquisitions meet our strategic
objectives for broadening the consumer division's distribution channels and
creating new opportunities to refer potential customers to our local branches.
Dial4aloan is an established market brand in direct distribution through press,
internet, radio and TV advertising and will create further opportunities to
recruit new customers for the consumer division. In addition, applications
received through our branch network which do not meet our own underwriting
criteria, will be referred to Dial4aloan for third party funding.
Since acquisition, Dial4aloan has successfully opened a new call centre in
Cheshire and launched a major national TV advertising campaign. In its first
three months of ownership by the group, Dial4aloan's traditional business
volumes have improved by over 40% on the corresponding period in the previous
year. In addition, new business of over #1 million per month is currently being
generated for the consumer division.
The Associates loan portfolio, consisting of 13,000 customers with net
receivables of #55 million, was well established in the UK. The transfer of
these accounts to our own customer management systems has been successfully
completed. We believe there are significant opportunities in the future to
re-serve these customers with the broad range of products offered by the
consumer division.
Both Dial4aloan and the Associates loan portfolio have been successfully
integrated into the consumer division and are performing well, in line with our
expectations.
Corporate Division
The corporate division has reported strong growth in profits to #5.3 million,
representing an increase of 32.6% ahead of the #4.0 million reported last year,
on receivables of #108 million, marginally down on the previous year.
Improved trading in the invoice finance business, which I reported last year,
has continued. During January 2003, a new regional office was opened in
Glasgow, to complement our operating centres in Manchester, Oxford and Leeds,
all three of which achieved significant increases in revenue and net
profitability during the year.
Cattles Commercial Finance, which is predominantly involved in hire purchase and
leasing advances, also had another satisfactory year in 2002. Careful focus on
arrears management and operating costs has enabled management to deliver
improved profitability on the previous year. Despite a challenging trading
environment, the business added 543 new clients during the year and established
21 new broker relationships.
Information Technology
The substantial investments we have made in developing the consumer division's
bespoke IT systems, such as SNAP and MIDA our credit underwriting and customer
relationship management software, have improved credit quality, created
significant additional time for branch staff to spend with customers, and
increased the number of customers each branch is able to manage effectively. We
are currently working towards the identification and selection of our next
generation of IT systems.
Funding
During the year the group successfully renewed one of its banking syndicates of
Euro125 million, in addition to negotiating a further funding line of #50 million.
In accordance with the group's treasury policy, the euro loan was immediately
converted to sterling to eliminate any foreign exchange exposure to the group.
We also received strong support for our share placing to raise #81 million, net
of expenses, for the acquisitions of Dial4aloan and the Associates loan
portfolio. I should like to thank both our key investors and banking
relationships for their long standing and continuing support.
The group's exposure to the impact of interest rate rises on borrowings is
managed and reduced through the use of interest rate swaps and caps. In
accordance with our treasury policy, at 31 December 2002, approximately 80% of
the group's borrowings were hedged or fixed.
Group borrowings increased during the year by #83 million to #805 million and
shareholders' funds increased by #117 million to #346 million in the same
period. At 31 December 2002, the group's gearing ratio stood at 2.7 times
shareholders' funds, excluding capitalised goodwill, compared to 3.7 times at
the previous year end. Net receivables increased during the year by #285
million to #1.4 billion.
Consumer Credit Quality
Although there has been a significant increase in consumer borrowing in the UK
in recent years, the vast majority of this increase has occurred in areas where
we do not focus our operations, such as the remote lending activities of
mortgage lenders and credit card providers.
The consumer division's ability to maintain close contact with our customers and
our rigorous pre-lending verification and underwriting procedures are key to
maintaining effective arrears management and stability in the division's bad
debt charge. We believe that the presence of our branch network in the heart of
local communities we serve, together with our major commitment to training and
developing the credit granting, account management and compliance skills of our
branch staff are significant factors in mitigating the effects of adverse change
in economic conditions.
The products we offer depend on our assessment of the customer's ability to meet
their repayment terms. These continue to be small unsecured loans (average
advance #1,200), hire purchase loans for cars (#4,000) and secured products
(#7,500), typically for home improvements.
Customer repayments are made through the banking direct debit system, post
offices or by cheque and cash payments on a monthly, fortnightly or weekly
basis, depending on the circumstances of each customer. Cheque and cash
repayments are made either in person at one of our local branch offices or, in
the case of our home collected products (average advance #250), through one of
our agents calling at a customer's home.
We recognise that a number of our customers experience problems from time to
time in keeping up regular payments throughout the term of their loan. Branch
staff maintain close contact with customers to enable them to respond quickly
and sympathetically to any difficulties which customers may encounter. Customer
accounts are transferred from the branch to a specialist LCU branch when
customers experience longer-term adverse changes in their financial position, so
that the LCU may assist customers and establish revised payment programmes, more
suited to their changed circumstances.
The above approach is consistent with our strategy to be responsible lenders,
not wishing to over-indebt customers and treating them with understanding when
they experience financial difficulties.
It is important to us, that our customer satisfaction ratings remain
consistently high. For many years we have engaged independent consultants to
constantly monitor our customer profiles and satisfaction ratings. Their latest
report prepared in February 2003, shows that over 85% of our customers expressed
satisfaction with the services we provide.
Future
I am pleased with the group's progress this year and the excellent results which
have been achieved. I cannot thank our management and staff enough for their
total commitment and for the significant contribution they have made to the
group's continuing success. Without their dedication and hard work, achievement
of these results would not have been possible.
As we reach the end of our current five-year plan, we are pleased to have
achieved the principal goals which we set ourselves. During this period we have
seen significant changes in the lifestyles of traditional home collected
customers. An ever-increasing proportion of our target customers now have bank
accounts and require alternatives to a home collection service. We have
responded to these changes by developing new products and payment options,
whilst retaining our clear focus on close customer relationships.
Our strategy going forward will be to concentrate on achieving strong growth and
improving returns in the UK consumer credit market. The expansion of our branch
network into the local communities we currently do not serve will continue, with
each branch providing our full product range. Credit quality, responsible
lending and bad debt control will remain fundamental. We shall continue to
improve our customer service together with the quality of our customer base,
whilst expanding our distribution channels and establishing new alliances.
I believe there remain considerable opportunities for the group. We have made
an encouraging start to the current year and, together with my senior management
team, I look forward to another successful year in 2003.
Sean Mahon
Chief Executive
6 March 2003
Consolidated Profit and Loss Account
For the year ended 31 December 2002
2002 2001
Notes #'000 #'000
Turnover 2 499,192 421,972
Cost of sales (254,964) (211,736)
_______ _______
Gross profit 244,228 210,236
Administrative expenses (150,619) (134,408)
_______ _______
Profit before taxation and goodwill amortisation 95,693 77,468
Goodwill amortisation (2,084) (1,640)
_______ _______
Profit before taxation 2 93,609 75,828
Taxation (26,957) (22,091)
_______ _______
Profit after taxation 66,652 53,737
Dividends 3 (32,993) (27,552)
_______ _______
Retained profit for the year 33,659 26,185
_______ _______
Earnings per share - basic 4 21.95p 18.23p
- diluted 4 21.90p 18.17p
_______ _______
The results shown in the profit and loss account above derive wholly from
continuing operations. The only recognised gains and losses for the year are
those dealt with in the profit and loss account above. There is no material
difference between the profit before taxation and the retained profit for the
year as shown above and their historical cost equivalents.
Consolidated Balance Sheet
As at 31 December 2002
2002 2001
Notes #'000 #'000
Fixed assets
Intangible assets 50,663 34,183
Tangible assets 35,563 42,395
Investments - own shares held 3,740 3,228
________ ________
89,966 79,806
________ ________
Current assets
Customers' accounts receivable:
Amounts falling due after more than one year 725,546 504,599
Amounts falling due within one year 656,602 592,316
________ ________
5 1,382,148 1,096,915
Less: deferred revenue (237,518) (187,880)
________ ________
1,144,630 909,035
Stocks 1,526 2,325
Debtors 25,195 30,436
Investments 9 33,421 17,384
Cash at bank and in hand 7,395 9,686
________ ________
1,212,167 968,866
Creditors - amounts falling due within one year (334,059) (204,299)
________ ________
Net current assets 878,108 764,567
________ ________
Total assets less current liabilities 968,074 844,373
Creditors - amounts falling due after more than one year (622,414) (615,998)
________ ________
345,660 228,375
Provisions for liabilities and charges - (80)
________ ________
Net assets 345,660 228,295
________ ________
Capital and reserves
Called up equity share capital 32,766 29,893
Share premium account 139,258 57,403
Revaluation reserve 251 286
Profit and loss account 173,385 140,713
________ ________
Equity shareholders' funds 6 345,660 228,295
________ ________
Consolidated Cash Flow Statement
For the year ended 31 December 2002
2002 2001
Notes #'000 #'000
Net cash outflow from operating activities 7 (25,130) (142,442)
Taxation (21,591) (22,784)
Capital expenditure and financial investment 9 8,612 (10,974)
Acquisitions (59,141) (7,814)
Equity dividends paid (28,161) (20,100)
_______ _______
Cash outflow before use of liquid resources and financing (125,411) (204,114)
Management of liquid resources 9 (28,766) (4,655)
Financing 74,481 185,163
_______ _______
Decrease in cash in the period (79,696) (23,606)
_______ _______
Reconciliation of net cash flow to movement in net debt
Decrease in cash in the period (79,696) (23,606)
Cash outflow from increase in liquid resources 28,766 4,655
Cash outflow/(inflow) from movement in debt and lease
financing 9,225 (145,100)
_______ _______
Movement in net debt in the period resulting from cash
(41,705) (164,051)
flows
Loan notes issued on acquisition of subsidiaries (11,500) -
New finance leases (497) (11,794)
Accrual for finance cost of debt (175) (175)
Net debt at 1 January 2002 (717,364) (541,344)
_______ _______
Net debt at 31 December 2002 8 (771,241) (717,364)
_______ _______
Notes on the Financial Information for the year ended 31 December 2002
1 Basis of preparation
The financial information included in this preliminary announcement does not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985. The financial information for the year ended 31 December 2002 has
been extracted from the group financial statements on which the auditors have
given an unqualified opinion and which do not contain a statement under Sections
237(2) or 237(3) of the Companies Act 1985. The announcement has been agreed
with the company's auditors for release. The financial information has been
prepared on a basis consistent with the previous year, except for the adoption
of the new FRS 19 - Deferred Tax which has had no material impact on the
reported results.
Comparative figures for the year ended 31 December 2001 have been extracted from
the group financial statements on which the auditors gave an unqualified opinion
and which did not contain a statement under Sections 237(2) or 237(3) of the
Companies Act 1985. Those financial statements have been filed with the
Registrar of Companies. The group financial statements for the year ended 31
December 2002 will be delivered to the Registrar of Companies following the
company's Annual General Meeting.
This preliminary announcement will be published on the company's website, in
addition to the paper version. The maintenance and integrity of the Cattles plc
website is the responsibility of the directors. The work carried out by the
auditors does not involve consideration of these matters. Legislation in the
United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
2 Segmental analysis
2002 2001
Profit before Profit
taxation
before
#'000 taxation
Turnover Turnover
#'000
#'000 #'000
Consumer Division 477,856 93,169 401,595 76,067
Corporate Division 21,336 5,314 20,377 4,009
Central Support Services - (4,874) - (4,248)
________ ________ ________ ________
Group 499,192 93,609 421,972 75,828
________ ________ ________ ________
The company and its subsidiary undertakings operate wholly in the United
Kingdom.
The post acquisition trading results of acquisitions made during 2002 were not
material and hence, in accordance with FRS 3 - Reporting Financial Performance,
have not been separately disclosed in the consolidated profit and loss account.
3 Dividends
2002 2001
Pence #'000 Pence #'000
Interim 3.40 10,146 2.95 9,537
Final 7.00 22,847 6.05 18,015
________ ________ ________ ________
10.40 32,993 9.00 27,552
________ ________ ________ ________
Notes on the Financial Information for the year ended 31 December 2002
4 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders of #66.7 million (2001: #53.7 million) by the weighted
average number of ordinary shares in issue during the period, excluding 'own
shares held' which are treated, for this purpose, as being cancelled.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares.
The weighted average number of shares used in the calculations is set out as
follows:
2002 2001
Weighted average number of shares '000 '000
In issue during the period 304,680 295,490
Held by the QUEST (1,080) (782)
_______ _______
Used in basic EPS calculation 303,600 294,708
Issuable on conversion of outstanding options 754 963
_______ _______
Used in diluted EPS calculation 304,354 295,671
_______ _______
5 Customers' accounts receivable
Customers' accounts receivable, after deducting provisions for 2002 2001
bad and doubtful debts, analysed by division, is as follows: #'000 #'000
Consumer Division 1,274,180 987,403
Corporate Division 107,968 109,512
________ ________
1,382,148 1,096,915
________ ________
Gross customers' accounts receivable,
analysed by product, is as follows:
Hire purchase contracts 620,405 474,350
Other instalment credit agreements 791,290 608,159
Default debt 24,814 24,775
Finance leases 29,516 30,827
Factoring 43,649 43,176
________ ________
1,509,674 1,181,287
Provision for bad and doubtful debts (127,526) (84,372)
________ ________
1,382,148 1,096,915
________ ________
Notes on the Financial Information for the year ended 31 December 2002
5 Customers' accounts receivable (continued)
The charge for bad and doubtful debts in the profit and loss 2002 2001
account, analysed by division, is as follows: #'000 #'000
Consumer Division 94,366 76,296
Corporate Division 2,263 2,154
_______ _______
96,629 78,450
_______ _______
6 Reconciliation of movements in equity shareholders' funds
2002 2001
#'000 #'000
Profit after taxation for the year 66,652 53,737
Dividends (32,993) (27,552)
Contribution to the QUEST (1,022) (240)
Increase in share capital and share premium account 84,728 44,911
_______ _______
117,365 70,856
Equity shareholders' funds as at 1 January 2002 228,295 157,439
_______ _______
Equity shareholders' funds as at 31 December 2002 345,660 228,295
_______ _______
On 22 October 2002, the group placed 27.6 million shares at 300p, raising #81.5
million net of costs, to finance acquisitions made in 2002 and provide related
working capital.
7 Reconciliation of profit before taxation to operating cash flows
2002 2001
#'000 #'000
Profit before taxation 93,609 75,828
Depreciation charges 11,478 10,680
Amortisation of goodwill 2,084 1,640
Loss on disposal of tangible fixed assets 162 16
Increase in customers' accounts receivable (179,882) (246,855)
Decrease/(increase) in stocks 799 (48)
Decrease/(increase) in debtors 7,760 (6,543)
Increase in creditors 38,860 22,840
_______ _______
Net cash outflow from operating activities (25,130) (142,442)
_______ _______
Notes on the Financial Information for the year ended 31 December 2002
8 Analysis of net debt
2002 2001
#'000 #'000
Cash at bank and in hand 7,395 9,686
Overdrafts (6,851) (5,633)
_______ _______
544 4,053
_______ _______
Investments realisable within one year 33,421 4,655
Debt due after more than one year (343,300) (336,800)
Debt due within one year (161,937) (92,250)
Debentures and other loan capital due after more than one year (271,185) (269,510)
Debenture loans due within one year (20,998) (16,168)
Finance leases (7,786) (11,344)
_______ _______
(771,785) (721,417)
_______ _______
Total (771,241) (717,364)
_______ _______
9 Current asset investments
At 31 December 2002, the managed fund investments held by Progressive Insurance
Company Limited amounted to #33.4 million, an increase of #16 million in the
year. In addition, #12.7 million of the investments held at the start of the
year have been reinvested in short-term investments. In accordance with FRS1 -
Cash Flow Statements, this reinvestment is disclosed as a disposal of financial
investments and, together with the increase in managed fund investments referred
to above, as a 'management of liquid resources' cash outflow of #28.8 million in
the cash flow statement.
The regulators and the Trust Deed of this company require #24.6 million of these
investments to be retained within the company. These monies, which are invested
and held on deposit pending future claims payments, cannot be applied to finance
other parts of the group or to repay group borrowings.
10 FRS 17 - Retirement Benefits
The company continues to adopt the transitional arrangements of FRS 17 and will
disclose the impact of this standard as a note to the accounts. Early adoption
of the standard in 2002 would have reduced the group's consolidated net assets
of #345.7 million (2001: #228.3 million) by #14.8 million (2001: #6.5 million)
which primarily reflects the recent decline in equity valuations. There would
have been no material effect on reported earnings as a consequence of the early
adoption of FRS 17 as current pension funding rates under SSAP 24 are not
materially different to those under FRS 17.
Shareholder Information
The final dividend will be paid on 9 May 2003 to shareholders on the register on
21 March 2003. Shareholders can again reinvest their cash dividend in shares
through the Dividend Reinvestment Plan ('the plan'). Shareholders who have not
previously completed a mandate and who require details of the plan should
contact the Registrars, Computershare Investor Services PLC, PO Box 435, Owen
House, 8 Bankhead Crossway North, Edinburgh, EH11 4BR (telephone: 0870 702
0010). New mandates must be received by close of business on 15 April 2003 to
be included in the plan for the final dividend.
The annual report and financial statements for 2002 will be posted to
shareholders on 1 April 2003. Further copies are available on request from the
company's registered office, Kingston House, Centre 27 Business Park, Woodhead
Road, Birstall, Batley, WF17 9TD.
The Annual General Meeting will be held at 12 noon on Thursday 1 May 2003 at
Oulton Hall Hotel, Rothwell Lane, Oulton, Leeds, LS26 8HN.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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