RNS Number:2470A
Claims People Group PLC
23 March 2006
THE CLAIMS PEOPLE GROUP PLC
PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2005
CHAIRMAN'S STATEMENT
Key Points
* Turnover for the year has increased from #2,665,677 to #2,714,937
* Consultancy income increased significantly from #49,096 to #358,749
* Profit after tax for the year has declined from #278,163 to #51,941
* Expansion of consultancy services and range of loss adjusting services
I am pleased to be able to announce our results for the financial year, which
demonstrate the Group's resilience in adverse trading conditions. As you will
see, turnover for 2005 increased modestly by 2% to #2.71 million (2004: #2.67
million) although profit after tax decreased to #51,941 (2004: #278,163).
Overall, we had a challenging year as the mild weather depressed claims volumes
which have, of course, traditionally been significantly dependant on weather
related losses. Nevertheless, we have continued our efforts to reduce our
reliance on such losses with significant success in the second half of the year.
Consultancy income increased to #359,000 (2004: #48,000) and we also commenced
the first stage of our partnership relationship with Capita Insurance Services
by entering into a contract to provide Liability adjusting services.
Costs and cash-flow continue to be monitored carefully and additional margin
gains are achievable as our level of activity increases.
Whilst the current financial year, commencing 1st January, continues to display
low volumes of weather related claims, we anticipate that the Group's results
will ultimately benefit from our efforts to diversify our services.
We remain committed to investment in our information technology infrastructure
and expect to make further advancements in the use of IT in our field adjusting
services.
As always, I wish to thank our loyal employees and our shareholders for their
support.
John French
Chairman
Further information contact:
The Claims People Group plc
John French, Chairman - Tel: 07836 722482.
Dominic Boyce, Finance Director - Tel: 020 7357 6636
Seymour Pierce Limited
Mark Percy / Liam O'Donoghue - Tel: 020 7107 8000
THE CLAIMS PEOPLE GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
Notes 2005 2004
# #
Revenue 2,714,937 2,665,677
Administrative expenses (2,663,052) (2,442,362)
Profit from operations 51,885 223,315
Finance costs
Interest receivable 1,958 8,785
Interest payable (1,902) (3,000)
56 5,785
Profit before tax 51,941 229,100
Tax 2 - 49,063
Profit for the year 51,941 278,163
Earnings per share 3 0.05p 0.28p
Fully diluted earnings per share 3 0.05p 0.28p
THE CLAIMS PEOPLE GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2005
Share Share Retained
capital premium earnings
account
# # #
Balance at 1 January 2004 1,500,000 833,778 (1,526,561)
Profit for the period - - 278,163
Balance at 31 December 2004 1,500,000 833,778 (1,248,398)
Balance at 1 January 2005 1,500,000 833,778 (1,248,398)
Profit for the period - - 51,941
Issue of equity share capital 44,062 44,063 -
Balance at 31 December 2005 1,544,062 877,841 (1,196,457)
THE CLAIMS PEOPLE GROUP PLC
CONSOLIDATED BALANCE SHEET
31 DECEMBER 2005
2005 2004
# #
ASSETS
Non-current assets
Goodwill 265,661 265,661
Property, plant and equipment 128,029 159,581
393,690 425,242
Current assets
Work in progress 373,347 402,676
Trade and other receivables 691,263 648,965
Cash and cash equivalents 143,593 147,117
1,208,203 1,198,758
Total assets 1,601,893 1,624,000
EQUITY AND LIABILITIES
Equity
Share capital 1,544,062 1,500,000
Share premium account 877,841 833,778
Retained earnings (1,196,457) (1,248,398)
Total equity 1,225,446 1,085,380
LIABILITIES
Current liabilities 373,944 522,140
Non-current liabilities 2,503 16,480
Total liabilities 376,447 538,620
Total equity and liabilities 1,601,893 1,624,000
THE CLAIMS PEOPLE GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
Notes 2005 2004
# #
Net cash (used in)/from operating activities 4 (31,215) 173,458
Investing activities
Interest received 1,958 8,785
Purchase of goodwill - (160,885)
Purchase of property, plant and equipment (46,541) (69,545)
Net cash used in investing activities (44,583) (221,645)
Financing activities
Repayments of bank loan (7,511) (5,007)
Repayments of obligations under finance leases (8,340) (16,652)
Issue of equity share capital 88,125 -
New bank loan raised - 22,532
Net cash from financing activities 72,274 873
Net decrease in cash and cash equivalents (3,524) (47,314)
Cash and cash equivalents at beginning of year 147,117 161,431
Cash and cash equivalents at end of year 143,593 147,117
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
1. Accounting Policies
Basis of accounting
The financial statements have been prepared on a historical cost basis.
Statement of compliance
The financial statements of The Claims people Group plc and all its subsidiaries
have been prepared in accordance with International Financial Reporting
Standards (IFRS).
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous
financial year except that the Group has adopted those standards designed to
form the 'stable platform' intended to be mandatory for financial years
beginning on or after 1 January 2005. The key changes to the accounting policies
as a result of the adoption of IAS are:
* Goodwill
* Work in progress
* Deferred tax
* Share-based payments
The principal effects of these changes are discussed below in note 5.
Basis of consolidation
The consolidated financial statements incorporate the results of the Company and
all its subsidiary undertakings as if they were a single entity. Subsidiary
undertakings are consolidated from the date of acquisition using the acquisition
method of accounting.
Revenue recognition
Revenue is recognised by reference to the stage of completion of the
transaction, in accordance with IAS 18, and represents the invoiced amount of
services provided in the period and is stated net of VAT.
Property, plant and equipment
Property, plant and equipment are stated at cost less provision for
depreciation. Depreciation is provided at rates calculated to write off the cost
of each asset less its estimated residual value evenly over its estimated useful
life, as follows:
Claims software over five years
Office equipment and fittings over three to five years
Website development over three years
Goodwill
Goodwill on acquisition is initially measured at cost being the excess of the
cost of the business combination over the acquirer's interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated
impairment losses. Goodwill on acquisitions after 31 March 2004 is not amortised
and goodwill already carried in the balance sheet is not amortised after 1
January 2004. Goodwill relating to acquisitions from 1 January 2004 is not
amortised. Goodwill is reviewed for impairment, annually or more frequently if
events or changes in circumstances indicate that the carrying value may be
impaired.
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
________________________________________________________________________________
Goodwill (continued)
As at the acquisition date, any goodwill acquired is allocated to each of the
cash-generating units expected to benefit from the combination's synergies.
Impairment is determined by assessing the recoverable amount of the
cash-generating unit, to which the goodwill relates. Where recoverable amount of
the cash-generating unit is less than the carrying amount, an impairment loss is
recognised. Where goodwill forms part of a cash-generating unit and part of the
operation within that unit are disposed of, the goodwill associated with the
operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of
in this circumstance is measured on the basis of the relative values of the
operation disposed of and the portion of the cash-generating unit retained.
Investments
Fixed asset investments are stated at cost less provision for diminution in
value.
Work in progress
Work in progress is valued at the lower of cost and net realisable value.
Leasing and finance lease commitments
Assets obtained under hire purchase contracts and finance leases are capitalised
in the balance sheet and depreciated over their useful economic lives. The
interest element of the rental obligations is charged to the profit and loss
account over the period of the contract and represents a constant proportion of
the balance of capital payments outstanding. Rentals paid under operating leases
are charged to the profit and loss account on a straight line basis over the
term of the lease.
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Timing
differences are differences between the Group's taxable profits and its results
as stated in the financial statements that arise from the inclusion of gains and
losses in tax assessments in periods different from those in which they are
recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised
only when, on the basis of all available evidence, it can be regarded as more
likely than not that there will be suitable taxable profits from which the
future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on a non-discounted basis at the average tax rates that
are expected to apply in the periods in which the timing differences are
expected to reverse.
Pension costs
The Group contributes to two Group Personal Pension Schemes for Directors and
senior employees. Pension contributions are charged to the profit and loss
account as they are incurred.
Share-based payment transactions
Employees (including directors) of the Group receive remuneration in the form of
share-based payment transactions, whereby employees render services in exchange
for shares or rights over shares ('equity-settled transactions') as detailed in
note 5.
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
2. Taxation
No liability to taxation arises due to tax losses available from previous
periods. The Company has approximately #1,047,371 of tax losses available for
relief against future trading profits.
2005 2004
# #
Current
UK corporation tax - -
Deferred tax
Charge arising on valuation of deferred tax assets - 84,495
Credit arising on recognition of deferred tax asset - 133,558
- 49,063
Deferred tax asset comprises:
Accelerated capital allowances 34,729 35,681
Short term timing differences 2,837 2,837
Trading losses 95,992 95,040
133,558 133,558
Factors affecting the tax charge for the period:
Profit on ordinary activities before taxation 51,941 229,100
Corporation tax at 30% 15,582 68,730
Effects of:
Disallowed expenditure 8,554 16,938
Depreciation and amortisation 23,428 23,754
Capital allowances (24,380) (27,852)
Losses Utilised (23,184) (79,850)
Other tax adjustments - (1,720)
- -
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
3. Earnings per share
The earnings per share is based on the profit for the period and the weighted
average number of ordinary shares in issue and ranking for dividend.
2005 2004
# #
Profit for the year 51,941 278,163
Weighted average number of shares 102,848,973 100,000,000
Fully diluted average number of shares 102,876,641 100,037,736
During the period 2,937,500 shares were issued at a premium of 1.5p.
4. Reconciliation of profit to net cash generated from operations
2005 2004
# #
Profit for the year 51,885 223,315
Adjustments for:
Depreciation 78,093 79,181
Operating cash flows before movements in working capital 129,978 302,496
Decrease/(increase) in work in progress 29,329 (155,160)
Increase in receivables (42,298) (84,398)
(Decrease)/increase in payables (146,322) 113,520
Cash generated by operation (29,313) 176,458
Interest paid (1,902) (3,000)
Net cash (used in)/from operating activities (31,215) 173,458
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
5. Reconciliation from UK GAAP to IFRS
a) Goodwill
Goodwill arose on the acquisition of the trade and assets of CCS Global UK.
Under UK GAAP goodwill would be subject to amortisation however none was charged
for the year ended 31 December 2004. This was on the basis that the amounts were
deemed immaterial to the financial statements both for the year and on an
accumulated basis.
The Group has taken advantage of the exemption under IFRS 1 not to restate
previous business combinations and has brought forward the balance of goodwill
at amortised cost and reviewed it for impairment both at 31 December 2004 and 31
December 2005. No impairment of goodwill has been identified.
Had the accounts been prepared under UK GAAP a goodwill amortisation charge for
the year ended 31 December 2005 of #18,172 would have been charged to the profit
and loss account, which would have reduced the profit for the year ended 31
December 2005 to #33,769.
b) Work in Progress
Work in progress is recognised only to the extent of costs incurred that are
expected to be recoverable. This is not deemed to be significantly different to
the previous UK GAAP valuation of work in progress which was based on the lower
of cost and net realisable value. As a result the financial information shown
above has no significant differences to UK GAAP financial information.
c) Deferred Tax
There are not considered to be any significant differences between the treatment
of deferred tax amounts in the financial information above under IAS compared to
UK GAAP. As a result the financial information shown above has no significant
differences to UK GAAP financial information.
d) Share based payments
The Group has taken advantage of the exemption under IFRS 1 not to apply IFRS 2
Share based payments to share options granted on or before 7 November 2002.
Share options granted subsequent to this date, as detailed in Note 20 to the
accounts, have not been adjusted to fair value due to the current market value
of the shares being significantly lower than the exercise price and the minimal
impact of any fair value adjustment on the results for the year.
This information is provided by RNS
The company news service from the London Stock Exchange
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