TIDMUFG
RNS Number : 4900A
Ultimate Finance Group PLC
21 March 2013
21 March 2013
Embargoed until 07:00
Ultimate Finance Group plc
("Ultimate Finance", the "Company" or the "Group")
Interim Results
Record first half results, increasing opportunities to grow
market share
Ultimate Finance Group plc (AIM: UFG), a leading provider of
financial solutions to SMEs, is pleased to announce its unaudited
Interim Results for the six months ended 31 December 2012.
Financial Highlights
-- Adj-Operating Profit* increased 29% to GBP1,038,000 (H1 2011: GBP802,000)
o Operating Profit increased 49% to GBP747,000 (H1 2011:
GBP502,000)
-- PBT increased 70% to GBP560,000 (H1 2011 GBP329,000)
-- Adj-Earnings per share* of 1.19p (H1 2011: 1.06p)
-- Basic earnings per share* of 0.73p (H1 2011: 0.47p)
-- Interim dividend increased 12.5% to 0.45p per share (H12011: 0.40p)
Operational Highlights
-- Oversubscribed fund raise of GBP2.6m before expensescompleted to fuel growth products
o Asset Finance lending book increased to GBP3,379,000 (H1 2011:
GBP2,195,000)
o Ashley Business Cash lending book increased to GBP707,000 (H1
2011: GBP42,000)
-- Headroom of GBP5.4m within the GBP34m banking facility, which
has been extended to July 2015
-- Bad debt levels remain at traditional lows of less than 1% of total annual lending
* Excluding acquisition, amortisation and group reorganisation
related costs (see note 6)
Jeremy Coombes, Founder & CEO of Ultimate Finance Group plc,
commented:
"This is a record first half for Ultimate Finance, which has
seen the Group continue to deliver consistent growth, and has
performed above management expectations. We believe that our
results reflect the quality of our products and services, and our
industry-leading reputation.
"Demand continues to be strong for our invoice discounting and
factoring products and services. However we are prudent in our
approach and continue implementing our strict underwriting
criteria. I am particularly pleased with the initial performance of
our newer products, Ashley Business Cash and Asset Finance, which
have delivered encouraging growth.
"We believe that Ultimate Finance is well placed to capitalise
on its increased product set and continue to grow."
For further information please contact:
Ultimate Finance Group plc Tel: +44 (0)845 251 3030
Jeremy Coombes, Chief Executive
Shane Horsell, Finance Director
W H Ireland Tel: +44 (0) 20 7220 1666
(Nominated Adviser and Broker)
John Wakefield / Mike Coe
Newgate Threadneedle Tel. +44 (0) 20 7653 9850
(Financial PR)
John Coles. Fiona Conroy
About Ultimate Finance Group plc
Ultimate Finance Group is a leading provider of financial
solutions to SMEs across the UK. The Company is headquartered in
Bristol with offices in London, Manchester, Norwich and
Lutterworth. Through its five subsidiaries (Ultimate Invoice
Finance, Ultimate Asset Finance, Ultimate Trade Finance, Ashley
Commercial Finance and Ashley Business Cash), Ultimate supports
SMEs by funding their growth with a range of products and services
tailored to each client. In the current climate where bank lending
to SMEs is increasingly restricted the benefits of Ultimate
Finance's flexible and efficient solutions become even more
compelling.
Chairman's Statement
Results
Once again, Ultimate Finance has delivered a solid set of
results, ahead of management expectations. Good progress has been
made in expanding our product set and developing niche
offerings.
The newly launched divisions have achieved very pleasing initial
success, affirming the strategic rationale behind a niche and
specialist approach within the SME space. In particular, Ashley
Business Cash, launched in November 2011, and Asset Finance,
launched in July 2010, are performing well. The enhanced product
set tailors to specific needs, and includes: Construction, Haulage
and Recruitment.
These new products underpin our confidence that we will continue
our track record of consistent revenue growth and achievement of
expectations.
Dividend
I am pleased to announce that Ultimate Finance is proposing to
pay an interim dividend of 0.45p per share, an increase of 12.5% on
H12011 (H12011: 0.40p per share). It will be paid on 23 May 2013 to
shareholders on the register at the close of business on 2 April
2013 and the shares will trade on an ex-dividend basis with effect
from 27 March.
The Company intends to maintain a progressive dividend policy
whilst balancing the needs of a growing business.
Funding
Ultimate Finance enjoys a strong relationship with Lloyds TSB
Commercial Finance and is financed with a GBP34 million
back-to-back financing facility, which has recently been extended
to July 2015 =. The Group currently has GBP5.4m of headroom and no
current requirement to increase the finance arrangement.
As announced on 21 December 2012, Ultimate Finance completed an
over-subscribed fundraising of GBP2.6m before expenses to support
future growth. In view of the continuing demand for alternative
financial solutions the Group is experiencing, the Directors
considered it appropriate to raise additional finance at this stage
to develop the Group's strategy of building on its existing
business and widening its presence, as well as developing and
introducing new products and services. In addition, the net
proceeds strengthen the balance sheet and further improve the
gearing ratio to enable the Group to have more flexibility to
finance continued growth.
Risk Management
Risk management is crucial to the success of the business. The
Company's credit control staff are experienced in both client and
risk management and are careful in guarding against the risk of
fraud and financial failure. Ultimate Finance remains robust in its
strict underwriting procedures and risk management and this is
reflected in our very low level of bad debt.
Our client base continues 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 2012
amounted to GBP1,447,000 (H12011: GBP1,601,000), which constituted
5% (H12011: 6%) of total funds advanced.
People
We continue to strengthen our senior management team,
particularly in the Trade Finance division.
I would like to take this opportunity to thank the entire staff
and my board colleagues for their support and the contribution that
they have made over the half year period. The success of Ultimate
Finance is entirely attributable to its dedicated team.
Outlook
Ultimate Finance operates in a large market and there is growing
demand for our services. Our enhanced sales structure and broadened
product set provide great potential for further organic growth. In
addition, opportunities also exist to expand through
consolidation.
We are at an exciting stage in Ultimate Finance's development as
we are seeing increasing opportunities emerging across the Group,
particularly in the Asset Finance, Ashley Business Cash and Trade
Finance divisions.
Our outlook remains positive and the Board is confident of
Ultimate Finance's future prospects.
Roger McDowell
Chairman
Chief Executive's Review
Introduction
For the half year, Ultimate Finance has achieved a 70% increase
in PBT and a 49% rise in Operating Profit.
Bad debt levels remain consistently below 1% and we continue to
on average lend around 53% of a client's total ledger; this
demonstrates our cautious approach and provides us with
considerable contingent reserve. The quality of our service is
reflected in the outstanding client retention we continue to
achieve, and we are seeing an encouraging level of new client
enquiries and positive feedback from intermediaries.
Our clients operate across many sectors and over the last 18
months, Ultimate Finance has expanded its offering by launching new
divisions and has also developed solutions for the construction,
recruitment and transport sectors. We have been successful, and are
distinguished within the marketplace by our tailored SME focus
coupled with our exceptional service to clients. Service is
underpinned by a robust risk management IT system which also
provides clients with internet-based access to their account
information in real-time.
Whilst the economic climate has been challenging, it has created
opportunities for the Group to offer SMEs funding that has become
difficult to access through traditional means.
Developments and Prospects
I am delighted that the on-going operational progress across the
Group has delivered record first half results. The expanded product
set and new divisions have all performed well.
The reduction in lending by the banks, alongside the Enterprise
Finance Guarantee Scheme, has driven SMEs to look for alternative
and more flexible solutions, such as those provided by Ultimate
Finance. To address this, we have continued to strengthen our sales
operations so that prospects and clients can be responded to
expertly and efficiently on a local basis.
Operational functions have now been fully centralised at our new
Bristol headquarters. The marketing, lead generation, sales
processes and systems have all been refined and enhanced - and are
supported by a recently reinvigorated brand strategy and
investments in marketing collateral. The new customer relationship
management system measures Ultimate Finance's marketing, lead
generation, cross-sell opportunities and sales performance, and,
has evolved processes so that we can respond and adapt much better
than ever before.
The Group continues to execute its growth strategy of enhancing
existing products and broadening the range of bespoke cashflow
solutions for UK SME's. The Asset Finance division has grown ahead
of plan and Ashley, and its Ashley Business Cash product, continue
to perform well.
Ultimate Finance abides by strict codes of conduct and operates
best in class systems, products and services.
Strategy
We are focussed on achieving our long term goal of building a
leading SME finance company, with a range of innovative,
customer-friendly products and unrivalled service.
Ultimate Finance's stringent underwriting criteria focus on
quality businesses with credible management teams. This is a
sustainable approach for the long term health of the Ultimate
Finance Group plc.
We expect steady client growth as we continue to market our
broader range of products and services and expand our service
offering still further.
Jeremy Coombes
Chief Executive Officer
Consolidated Statement of Comprehensive Income (unaudited)
for the six months ended 31 December 2012
Note Six months ended Six months ended Year ended
31 Dec 2012 31 Dec 2011 30 June 2012
GBP000 GBP000 GBP000
Revenue 5,784 5,395 11,248
Cost of sales - finance costs (423) (416) (785)
Cost of sales - other (157) (133) (298)
------------------ ------------------ ---------------
Total cost of sales (580) (549) (1,083)
------------------ ------------------ ---------------
Gross profit 5,204 4,846 10,165
Administrative expenses (4,166) (4,044) (7,844)
Administrative expenses -
other
Group reorganisation costs 6 (140) (149) (572)
Amortisation 6 (151) (151) (302)
------------------ ------------------ ---------------
Total administrative expenses (4,457) (4,344) (8,718)
------------------ ------------------ ---------------
Operating profit 747 502 1,447
Finance income - - 8
Finance expense 6 (187) (173) (265)
------------------ ------------------ ---------------
Profit before tax 560 329 1,190
Taxation (134) (96) (464)
------------------ ------------------ ---------------
Profit for the year being
total comprehensive income 426 233 726
================== ================== ===============
Earnings per share 3
Basic 0.73p 0.47p 1.36p
Diluted 0.73p 0.46p 1.34p
All amounts are attributable to the owners of the parent.
Consolidated statements of financial position (unaudited)
At 31 December 2012
31 Dec 2012 31 Dec 2011 30 June 2012
GBP000 GBP000 GBP000
Non-current assets
Intangible assets 5,546 5,849 5,698
Property, plant and equipment 450 428 442
------------- ------------- --------------
5,996 6,277 6,140
------------- ------------- --------------
Current assets
Loans and other receivables 35,474 29,415 32,691
Cash and cash equivalents 3,932 2,188 1,482
------------- ------------- --------------
39,406 31,603 34,173
------------- ------------- --------------
Total assets 45,402 37,880 40,313
============= ============= ==============
Current liabilities
Bank borrowings and overdrafts (28,572) (23,408) (25,323)
Trade and other payables (2,332) (4,057) (2,573)
Contingent consideration (1,350) - (1,287)
Bank loans (400) (400) (400)
Tax payable (278) (455) (461)
------------- ------------- --------------
(32,932) (28,320) (30,044)
Non-current liabilities
Bank loans (714) (1,101) (914)
Contingent consideration - (1,105) -
Other payables (1,911) (792) (1,490)
Deferred tax liability (89) (111) (89)
------------- ------------- --------------
(2,714) (3,109) (2,493)
Total liabilities (35,646) (31,429) (32,537)
============= ============= ==============
Net assets 9,756 6,451 7,776
============= ============= ==============
Equity attributable to
owners of the parent
Share capital 3,319 2,479 2,886
Share premium 5,270 3,505 4,149
Retained earnings 1,167 467 741
------------- ------------- --------------
Total equity 9,756 6,451 7,776
============= ============= ==============
These financial statements were approved by the board of
directors on 20 March 2013
Consolidated Statement of Changes in Equity (unaudited)
for the six months ended 31 Dec 2012
Share Share Retained
Capital Premium Earnings Total
GBP000 GBP000 GBP000 GBP000
Balance at 30 June 2011 2,479 3,505 408 6,392
Total comprehensive income 227 227
Equity-settled share based payment
transactions 6 6
Dividend Paid relating to prior year (174) (174)
Balance at 31 Dec 2011 2,479 3,505 467 6,451
Total comprehensive income - - 499 499
New shares issued 407 697 - 1,104
Share issue costs - (53) - (53)
Equity-settled share based payment
transactions - - 6 6
Dividend Paid - - (231) (231)
Balance at 30 June 2012 2,886 4,149 741 7,776
Total comprehensive income - - 420 420
Equity-settled share based payment
transactions - - 6 6
New shares issued 433 1,169 - 1,602
Share issue costs - (48) - (48)
Balance at 31 Dec 2012 3,319 5,270 1,167 9,756
Consolidated Statement of Cash Flows (unaudited)
for the six months ended 31 Dec 2012
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 June
2012 2011 2012
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit for the period before taxation 560 329 1,190
Adjustments for:
Depreciation, amortisation and impairment 131 89 482
Financial income - - -
Financial expense 187 173 265
Loss on sale of plant, property and - - -
equipment
Equity settled share-based payment
expenses 6 6 12
------------ ------------ -------------
884 597 1,949
(Increase)/decrease in loans and other
receivables (2,783) 5,241 1,855
Increase/(decrease) in trade and other
payables 67 217 952
(Decrease)/increase in tax payable 134 96 -
Tax (Paid)/Received (317) 49 (335)
------------ ------------ -------------
Net cash from operating activities (2,015) 6,200 4,421
Cash flows from investing activities
Payment of contingent consideration - - (1,250)
Proceeds from sale of equipment - - -
Purchase of property, plant and equipment (102) (18) (123)
------------ ------------ -------------
Net cash from investing activities (102) (18) (1,373)
Cash flows from financing activities
Proceeds from issue of share capital 1,602 - 1,000
Issue costs on issue of ordinary shares (48) - (53)
Financial expense (36) (54) (56)
Repayment of long term borrowings (200) (200) (400)
Dividends paid - (174) (406)
------------ ------------ -------------
Net cash from financing activities 1,318 (428) 85
Net increase/(decrease) in cash and
cash equivalents (799) 5,754 3,133
Cash and cash equivalents at beginning
of period (23,841) (26,974) (26,974)
Cash and cash equivalents at end of
period (note 5) (24,640) (21,220) (23,841)
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 2013 and are unchanged from those disclosed
in the Group's Director's report and consolidated financial
statements for the year ended 30 June 2012. The financial
information for the year ended 30 June 2012 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. Taxation
Taxation has been provided for at 24% (H1 2011: 28%).
3. Earnings per share
The basic earnings per share of 0.73p (31 Dec 2011: 0.47p) has
been calculated from the profit after taxation of GBP426,000 and on
the weighted average number of shares in issue during the reporting
period. The fully diluted earnings per share of 0.73p (31 Dec 2011:
0.46p), has been calculated from the profit after taxation of
GBP426,000 and on the weighted average number of the shares in
issue during the period adjusted for all dilutive potential
ordinary shares.
4. Dividends
Ordinary Shares 2012 2011
GBP000 GBP000
Final dividend paid for the
prior year of 0.40p (2011:
0.35p per share) - 174
Proposed interim dividend of
0.45p (2011:0.40p) per share 336 232
The proposed interim dividend has not been accrued as the
dividend was declared after the balance sheet date.
5. Cash and Cash equivalents/Bank borrowings and overdrafts
H1 2012 H1 2011
GBP000 GBP000
Cash and cash equivalents 3,932 2,188
Bank borrowings and overdrafts (28,572) (23,408)
Total per Consolidated Statement
of Cash Flows (24,640) (21,220)
6. Amortisation, Financing and Acquisition Costs related to the
Ashley acquisition and Group Restructuring Costs
H1 2012 H1 2011
GBP000 GBP000
Amortisation of Ashley intangible
assets 151 151
Financing costs relating to
Ashley acquisition 60 120
Ashley Acquisition costs - -
Group restructuring costs 140 149
--------- ---------
351 420
7. Half Yearly Report
Copies of this report are available to shareholders. Additional
copies may be obtained from the Ultimate Finance Group plc
registered office: 1 Westpoint Court, Great Park Road, Bradley
Stoke, Bristol BS32 4PS 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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