RNS Number:4973A
Prestbury Holdings PLC
19 July 2007
19 July 2007
PRESTBURY HOLDINGS PLC
("Prestbury" or "the Company")
Interim Results for the six months
ended 30 April 2007
Prestbury Holdings PLC, the AIM-listed intermediary company for low risk
financial products, announces its results for the six month period to 30 April
2007. The highlights were:
*Small reduction in turnover to #4.6 million (Six months to 30 April
2006: #4.8 million) as a direct result of change in revenue collection
*Improved profit margin to 21 per cent. (Six months to 30 April 2006:19.2 per
cent.)
*Small improved gross profit at #960,000 (Six months to 30 April 2006: #928,000)
*Net assets improvement to #2.36 million (31 October 2006: #1.45 million)
*Cash position improved to #355,000 (31 October 2006: #24,000)
*Overheads reduced to average #130,000 p.m. for last quarter - (2006:
#145,000 p.m.)
*New revenue and improved margin streams to be introduced via the launch of the
Moneybrain franchise proposition, expected to contribute to the second half of
2007 and 2008/9. www.moneybrain.com/franchise
Chairman's Statement
This has again been a challenging period, with an industry still adjusting to
the fluctuating requirements of regulation. It is good to be able to report that
Prestbury has grown its gross profit and increased its gross margin. With a
strengthened balance sheet following the placing in January 2007, Prestbury can
look to the future with confidence. Prestbury is fortunate to have as its CEO
one of the sector's more far-seeing leaders, whose vision of where the industry
needs to go has generally been vindicated. Lee Birkett leads a terrific team and
I am confident that Prestbury is well-placed for the future.
Chief Executive summary
Following the rises in interest rates and regulatory turmoil within the sector,
we are pleased with the progress made since last year, most notably a much
improved balance sheet, cash position, margin and reduction in overheads.
The reduction of revenue and related overhead is a direct result of the nil risk
Bsure proposition launched last year performing, whereby we no longer carry the
administrative burden of collecting and distributing life assurance commissions
for FSA directly authorised advisers, whilst also now mitigating the associated
indemnity commission claw back risks. This new model has impacted revenues by
approximately #400,000 for the period but the same historical 10 per cent. gross
profit still remains going straight to the bottom line.
Earlier this year the FSA published damning findings and flaws within the
current regulatory framework, stating that following their recent review of the
mortgage market, only 41 per cent. of small firms could be deemed to be treating
customers fairly.
I am proud to report that Prestbury have received confirmation from the FSA that
Prestbury and its advisers are deemed to be "Treating Customers Fairly".
It is highly unlikely that most small firms will be able to satisfy the FSA's
"Treating Customers Fairly" wish list. Prestbury does so with a team of six
dedicated solely to compliance.
How can a one man band/small firm;
1. Test him/herself to make sure he's competent to be an adviser,
2. Monitor him/herself for the advice he gives,
3. Maintain a training and competency regime,
4. Operate and maintain a customer relation management system,
5. Keep up to speed and record his/her knowledge of the ever changing regulatory
rules,
6. And actually meet with clients....?
The only way the majority can do all of the above is by being part of a well
funded and efficient network.
We hope to see in the second half of 2007 and throughout 2008 an increase in
Appointed Representative numbers at Prestbury, once the FSA message and
enforcement starts to hit home. We were shocked that the FSA allowed 59 per
cent. of small firms who have not engaged to the principles of treating
customers fairly to continue trading. We expected the March 2007 deadline to be
adhered to. This delay now to 2008 has impacted our growth of new firms in the
first half as firms are not immediately required to find a compliant home. This
however we feel is only delaying the inevitable.
Significant Developments
In addition to the growth plans for the forthcoming year of the Prestbury
Appointed Representative adviser base, we have launched today the Moneybrain
franchise proposition.
The FSA has finally announced plans to revolutionise the financial services
sector under the auspices of the RDR (Retail Distribution Review). The RDR
threatens to be the most significant change seen in the sector since
depolarisation. The FSA press release on the subject states there are no plans
as yet to include mortgages or general insurance in the proposals, good news for
Prestbury, bad news for the IFA market.
I went on record last year stating that 70 per cent. of IFAs should stick to the
sale of low risk "must have" mortgage and general insurance products and that
the FSA should permit the introduction of a low risk savings product to the
mortgage and insurance distribution arena, thereby considerably bridging the UK
savings gap. The RDR does exactly that.
The Moneybrain proposition is ideally suited to the troubled IFA market. The
Moneybrain adviser will have access to every low risk mortgage and insurance
product in the market via the proven low risk Prestbury electronic platform. The
advisers can just get on meeting with their clients and start rebuilding value
and credibility which he/she may have lost as an IFA.
The Moneybrain model really is a back to basics concept, operating under one
trusted low risk brand, similar to St James Place, in that each adviser will
trade as Moneybrain and create their own practice value. There are 120 postcodes
for sale ranging from #5,000 to #25,000 and the acquiring adviser will own their
own specific postcode region. The postcode region will attain a practice value
over time and each adviser will need to commit to grow his/her postcode in
partnership with Prestbury to build the much needed adviser base in their
specific postcode region.
The economics are transparent and earnings enhancing for Prestbury. Each
postcode practice becomes an Appointed Representative i.e. Moneybrain (BB) Ltd
will appear on the FSA register as an Appointed Representative of Prestbury.
Prestbury will retain 20 per cent. of all income and the Moneybrain Practice
will retain 80 per cent..
The majority of the initial franchise fee, paid in advance to Prestbury, will be
used to promote the Moneybrain brand, lead origination and hardware for the
Moneybrain advisers. Prestbury incur no capital expenditure and increase the
internet savvy adviser base considerably.
I believe we have a solid and highly efficient platform for growth in a fast
moving environment; and this is due in no small part to the hard work of our
extremely dedicated staff, whom I thank for all they have done.
Outlook
We continue to recruit new advisers, and believe that Prestbury is on course to
meet expectations for the full year.
Rt. Hon. Francis A A Maude MP Lee J Birkett
Chairman Chief Executive Officer
19 July 2007
Enquires:
Prestbury Holdings Plc
Lee Birkett, Chief Executive Tel: 01625 591400
John East & Partners Limited
David Worlidge Tel: 020 7628 2200
Unaudited Interim Consolidated Profit and Loss Account
for the six months ended 30 April 2007
Six months to Six months to
30 April 2007 30 April 2006
-------- --------
# #
TURNOVER 4,590,276 4,824,622
Cost of sales (3,630,588) (3,896,305)
-------- --------
GROSS PROFIT 959,688 928,317
Administrative expenses (941,260) (882,865)
-------- --------
OPERATING PROFIT 18,428 45,452
Interest receivable and similar income 6,680 325
-------- --------
25,108 45,777
Interest payable and similar charges (1,439) (1,656)
-------- --------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 23,669 44,121
Tax on profit on ordinary activities (7,033) (8,384)
-------- --------
PROFIT FOR THE FINANCIAL YEAR AFTER TAXATION 16,636 35,737
Retained loss brought forward (3,985,728) (4,231,506)
-------- --------
RETAINED LOSS CARRIED FORWARD (3,969,092) (4,195,769)
======== ========
Basic earnings per share 0.06p 0.14p
======== ========
Unaudited Interim Consolidated Balance Sheet
30 April 2007
30 April 2007 30 April 2006
----------------------- -----------------------
Notes # # # #
FIXED ASSETS:
Tangible 3 134,516 169,226
assets
Intangible 4 888,460 997,252
assets
-------- --------
1,022,976 1,166,478
CURRENT
ASSETS:
Debtors due within one year
Amounts due from
related 188,592 -
undertaking
Other debtors 529,127 444,687
Debtors due
after one
year 754,368 377,810
-Amounts due
from related
undertaking
Deferred tax 1,041,908 1,221,413
asset
-------- --------
2,513,995 2,043,910
Cash at bank 354,728 20,646
-------- --------
2,868,723 2,064,556
CREDITORS:
Amounts (1,435,675) (1,854,618)
falling due
within one
year
-------- --------
NET CURRENT 1,433,048 209,938
ASSETS
-------- --------
TOTAL ASSETS
LESS CURRENT 2,456,024 1,376,416
LIABILITIES
CREDITORS:
Amounts (7,370) (17,457)
falling due
after more
than one year
PROVISIONS
FOR LIABILITIES (91,056) (120,255)
AND CHARGES
-------- --------
2,357,598 1,238,704
======== ========
CAPITAL AND
RESERVES:
Called up 1,517,389 1,267,389
share capital
Share premium 4,840,006 4,197,789
account
Treasury (30,705) (30,705)
shares
Profit and (3,969,092) (4,195,769)
loss account
-------- --------
SHAREHOLDERS' 2,357,598 1,238,704
FUNDS
======== ========
Unaudited Interim Consolidated Cash Flow Statement
for the six months ended 30 April 2007
Six months to 30 April Six months to 30 April
2007 2006
Notes # # # #
Net cash outflow
from operating
activities 1 (481,294) (16,136)
Returns on
investments and
servicing of
finance 2 5,241 (1,331)
Capital
expenditure 2 (29,631) (18,504)
and financial
investment
Financing 2 836,018 (6,278)
-------- ---------
Increase/(decrease) in cash in
the period 330,334 (42,249)
======== =========
Reconciliation of net cash flow
to movement in
net debt 3
Increase
/(decrease) in
cash in the
period 330,334 (42,249)
Cash outflow
from decrease in
debt and lease
financing 2,867 6,278
-------- -------
333,201 (35,971)
-------- ---------
Movement in net
funds/(debt) in
the period 333,201 (35,971)
Net funds/(debt)
at 1 November
2006 4,070 (23,682)
-------- ---------
Net funds/(debt)
at 30 April 2007 337,271 (59,653)
======== =========
Notes to the Unaudited Interim Consolidated Cash Flow Statement
for the six months ended 30 April 2007
1. RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
Six months to Six months to
30 April 2007 30 April 2006
# #
Operating profit 18,428 45,452
Depreciation charges 36,890 43,301
Amortisation of goodwill 54,395 49,394
Increase in debtors (132,853) (266,282)
(Decrease)/ increase in creditors (443,712) 123,478
Decrease in provisions (14,442) (11,479)
-------- ---------
Net cash outflow from operating activities (481,294) (16,136)
======== =========
2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
Six months to Six months to
30 April 2007 30 April 2006
# #
Returns on investments and servicing of finance
Interest received 6,680 325
Interest paid (1,011) (768)
Hire purchase interest (428) (888)
-------- ---------
Net cash inflow / (outflow) for returns on
investments and servicing of finance 5,241 (1,331)
======== =========
Capital expenditure and financial investment
Net purchase of tangible fixed assets (29,631) (18,504)
-------- ---------
Net cash outflow for capital expenditure (29,631) (18,504)
======== =========
Financing
Share issue 892,217 -
Deferred consideration repayment (53,332) -
Capital element of hire purchase and finance
lease rental payments (2,867) (6,278)
-------- ---------
Net cash inflow/ (outflow) from financing
836,018 (6,278)
======== =========
3. ANALYSIS OF CHANGES IN NET DEBT
At 1 November Cash flow At 30 April
2006 2007
# # #
Cash at bank 24,394 330,334 354,728
======== ======== =========
Debt:
Hire purchase (20,324) 2,867 (17,457)
======== ======== =========
Total 4,070 330,201 337,271
======== ======== =========
Notes to the Unaudited Interim Accounts
for the six months ended 30 April 2007
1. BASIS OF PREPARATION
The interim results for the six months ended 30 April 2007, which are unaudited,
have been prepared in accordance with the accounting policies adopted by
Prestbury Holding Plc for the period ended 30 April 2007.
The financial information for the period ended 30 April 2007 is an abridged
version of Prestbury Holding Plc's published statutory financial statements
which received an unqualified auditors' report, contained no statement under
section 237(2) or (3) of the Companies Act 1985 and which have been filed with
the Registrar of Companies.
2. EARNINGS PER ORDINARY SHARE
The calculation of the profit per share is based on the profit attributable to
ordinary shareholders divided by the weighted average number of shares in issue
during the period.
3. TANGIBLE FIXED ASSETS
Computer Website Fixtures Motor Total
and
equipment Costs fittings vehicles
# # # # #
COSTS:
At 1 November 2006 191,206 300,437 41,055 21,249 553,947
Additions 1,154 19,587 8,890 - 29,631
------- ------- ------- -------- -------
At 30 April 2007 192,360 320,024 49,945 21,249 583,578
------- ------- ------- -------- -------
DEPRECIATION:
At 1 November 2006 162,961 217,164 19,488 12,559 412,172
Charge for the period 13,984 19,963 1,857 1,086 36,890
------- ------- ------- -------- -------
At 30 April 2007 176,945 237,127 21,345 13,645 449,062
------- ------- ------- -------- -------
NET BOOK VALUE:
At 30 April 2007 15,415 82,897 28,600 7,604 134,516
======= ======= ======= ======== =======
At 1 November 2006 28,245 83,273 21,567 8,690 141,775
======= ======= ======= ======== =======
4. INTANGIBLE FIXED ASSETS
Goodwill
-------
#
COSTS:
At 1 November 2006 1,077,910
Additions -
-------
At 30 April 2007 1,077,910
-------
AMORTISATION:
At 1 November 2006 135,055
Charge for the period 54,395
-------
At 30 April 2007 189,450
-------
NET BOOK VALUE:
At 30 April 2007 888,460
=======
At 1 November 2006 942,855
=======
5. DIVIDENDS
No dividends are proposed for the six months ended 30 April 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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