Impact Holdings (UK) plc
("Impact" or "The Group")
Interim Results
Impact (AIM: IHUK), the specialist lender, announces its unaudited interim
results for the six months ended 30 September 2013.
Financial Highlights
* Cash and cash equivalents of £0.78 million (£1.09 million 30 September 2012)
* Net assets of £5.65million (£5.40 million 30 September 2012)
* Debt reduced by 66% year on year to £1.58 million (£4.73 million September 2012)
* Profit after tax of £1,904 (£3,726 30 September 2012)
* Earnings per share 0.1p (0.2p 30 September 2012)
Operational Highlights
* Ongoing business re-aligned in line with expectations
* Continued reduction in borrowings from financial institutions
* Growth opportunities for new business lines identified
A copy of the interim results is also available on the Group's website
(www.impactholdings.net).
For further information:
Impact Holdings (UK) plc
Paul Davies, Chief Executive Officer Tel: 01928 793 550
Zeus Capital
Nick Cowles/Andrew Jones Tel: 0161 831 1512
30/12/13
CHAIRMAN'S STATEMENT
I am pleased to report our unaudited interim financial results for the six
months ended 30th September 2013. Revenue of £957,652 and pre-tax profit of
£1,904 were in line with expectations, as the management team continued its
realignment of the business.
We have previously advised that as a consequence of the ongoing credit crisis
and new economic environment in which we operate it has been necessary to seek
out additional revenue streams for the group.
BUSINESS OVERVIEW
The development of the strategic direction of the business has continued with a
reduction in our exposure to third party funders and a withdrawal from new
exposures in the specialty funding market.
The establishment of Midas Marketing Management Limited in September 2012 which
provides specialist marketing and business development services to both law
firms and individual business owners is seen as a growth area operating within
a highly compliant framework. This initiative will continue to be invested in
as we develop our product offering, increase our revenue streams and diversify
our product range.
We continue to incur upfront legal expenses in seeking to recover loans which
have been previously provided against by the Group. Litigated matters continue
to be concluded successfully.
OUTLOOK
The group remains focused on providing services to the legal and professional
sectors. The Board of Directors is committed to the future growth opportunities
earmarked and continues to develop this strategy which will provide the
foundation for controlled growth, improved profitability over time and enhanced
shareholder value.
Roger Barlow
Non-Executive Chairman
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 Months 6 Months Year
ended ended Ended
30/09/2013 30/09/2012 31/03/2013
£ £ £
Revenue 957,652 425,104 1,309,927
Cost of Sales (520,983) (112,793) (430,666)
Gross profit 436,669 312,311 879,261
Operating expenses (434,781) (308,585) (629,273)
Operating profit 1,888 3,726 249,988
Interest receivable 16 - 83
Profit for the period from
operations before tax 1,904 3,726 250,071
Tax - - -
Profit for the period 1,904 3,726 250,071
Earnings per share (pence)
Basic 0.1p 0.2p 10.1p
Fully Diluted 0.1p 0.2p 10.1p
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
As at As at As at
30/09/2013 30/09/2012 31/03/2013
£ £ £
Non-current assets
Goodwill 421,766 421,766 421,766
Property, plant and equipment 934,769 886,690 921,890
Deferred taxation 171,892 171,892 171,892
1,528,427 1,480,348 1,515,548
Current assets
Trade and other receivables
including amounts falling
due after more than one year 6,412,761 7,898,230 6,284,896
Cash and cash equivalents 782,214 1,095,999 688,413
7,194,975 8,994,229 6,973,309
Total assets 8,723,402 10,474,577 8,488,857
Capital and reserves
Share capital 6,411,201 6,411,201 6,411,201
Share premium account 5,125,291 5,125,291 5,125,291
Shares held by Employee Benefit Trust (45,070) (45,070) (45,070)
Retained earnings (5,842,751) (6,091,000) (5,844,655)
Equity attributable to equity 5,648,671 5,400,422 5,646,767
shareholders of the parent
Trade and other payables due after 526,930 548,958 540,261
more than one year
Trade and other payables due in less 2,547,801 4,525,197 2,301,829
than one year
8,723,402 10,474,577 8,488,857
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD
6 Months 6 Months Year
ended ended Ended
30/09/2013 30/09/2012 31/03/2013
£ £ £
Operating activities
Cash generated from operations/(used 180,753 174,014 (302,839)
in operations)
Income taxes paid - - -
Net cash generated by operating 180,753 174,014 (302,839)
activities
Investing activities
Purchase of property, plant and (73,888) (19,865) (71,248)
equipment
Interest received 16 - 83
Net cash used in investing activities (73,872) (19,865) (71,165)
Financing Activities
Net decrease in amounts owed to
lending institutions (13,080) (454,332) (333,765)
Issue of share capital - 320,003 320,003
Net cash outflow from financing (13,080) (134,329) (13,762)
activities
Net increase/(decrease) in
cash and cash equivalents 93,801 19,820 (387,766)
Opening cash and cash equivalents 688,413 1,076,179 1,076,179
Closing cash and cash equivalents 782,214 1,095,999 688,413
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of parent company
Shares Profit and
Share Share held by loss
capital premium EBT account Total
£ £ £ £ £
Balance as at 31 March 6,211,201 5,005,288 (45,070) (6,094,726) 5,076,693
2012
Ordinary Shares Issued 200,000 - - - 200,000
Share Premium on Issued - 120,003 - - 120,003
Shares
Net Profit for the Year - - - 250,071 250,071
Balance as at 31 March 6,411,201 5,125,291 (45,070) (5,844,655) 5,646,767
2013
Net profit for the period - - - 1,904 1,904
Balance as at 30 6,411,201 5,125,291 (45,070) (5,842,751) 5,648,671
September 2013
Notes to the Interim Financial Statements
1. Accounting policies
This half-year report for the period ended 30 September 2013 has been prepared
on the basis of the accounting policies set out in Impact Holdings (UK) plc's
annual report and financial statements 2013 and in accordance with the
International Financial Reporting Standards as adopted by the European Union
and IAS34, 'Interim financial reporting'.
The half-year report does not constitute statutory financial statements as
defined in section 434 of the Companies Act 2006.
It does not include all of the information and disclosures required for full
annual financial statements, and should be read in conjunction with the annual
report and financial statements for the year ended 31 March 2013.
The financial information contained in this half-year report in respect of the
year ended 31 March 2013 has been produced from the annual report and financial
statements for that year which have been filed with the Registrar of Companies.
The financial statements have been prepared on the historical cost basis,
except for the revaluation of certain financial instruments. The principal
accounting policies adopted are set out below.
The financial statements have been prepared on a going concern basis.
New and revised accounting standards
The effect of changes on the group's financial statements as a result of new
standards issued since the last accounting reference date is not significant.
The group has elected not to adopt any other standards earlier than the
proposed effective dates.
Further detail in relation to the above International Accounting Standards is
available from the IASB's website, www.iasb.org.
Basis of consolidation
The consolidated financial statements of the Group incorporate the financial
statements of Impact Holdings (UK) plc (the "Company") and enterprises
controlled by the Company (its subsidiaries) made up to the balance sheet date.
Control is achieved where the company has the power to govern the financial and
operating policies of an investee enterprise so as to obtain economic benefit
from its activities. Subsidiaries are fully consolidated from the effective
date of acquisition or up to the effective date of disposal, as appropriate.
The acquisition method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred
or assumed at the date of exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are initially measured at fair
value at the acquisition date irrespective of the extent of any minority
interest.
The excess of cost of acquisition over the fair values of the Group's share of
identifiable net assets acquired is recognised as goodwill. Any deficiency of
the cost of acquisition below the fair value of identifiable net assets
acquired (i.e. discount on acquisition) is recognised directly in the income
statement.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used by
other members of the Group.
All intra-group transactions, balances, and unrealised gains on transactions
between Group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate or jointly controlled entity
at the date of acquisition. Goodwill on acquisition of subsidiaries is
separately disclosed.
Goodwill is recognised as an asset and reviewed for impairment semi-annually or
on such other occasions that events or changes in circumstances indicate that
it might be impaired. Any impairment is recognised immediately in the income
statement and is not subsequently reversed. Goodwill is allocated to cash
generating units for the purpose of impairment testing.
Goodwill arising on acquisitions before the date of transition to IFRS has been
retained at the previous UK GAAP amounts subject to being tested for
impairment.
Intangible assets
The cost of developing or acquiring computer software including own labour
costs incurred directly in connection with software development, is capitalised
as an intangible asset where the related expenditure is separately identifiable
and where there is reasonable expectation that future economic benefits will
arise from the development. Software costs are amortised using the straight
line method over 3 years. The amortisation charge is included within operating
expenses.
Interest income and expense
Revenue shown in the profit and loss account represents interest, commission
and arrangement fees receivable on loans made to third parties. Interest income
and expense are recognised in the profit and loss account for all financial
assets and liabilities using the effective interest method, being the rate that
exactly discounts estimated future cash payments or receipts through the
expected life of the financial instrument to the net carrying amount of the
financial asset or financial liability. When calculating the effective interest
rate, the Group includes all establishment and arrangement fees, commissions
and administrative fees paid or received between parties to the contract that
are an integral part of the effective interest rate.
Interest on legal disbursement funding is added to the principal, is calculated
on a daily basis and is repaid to the Group at the end of the term of the
agreement.
Amounts received in respect of interest on property bridging loans relating to
future periods are held on the balance sheet as deferred income within trade
and other payables.
Revenue generated by Midas Marketing Management Limited represents marketing
fees generated by the business activities.
Financial assets and liabilities
Financial assets and liabilities used by the Group include loans made to third
parties and debt finance received by the Group. Financial assets are recognised
initially at fair value and measured subsequently at amortised cost using the
effective interest method, less provision for impairment. Financial liabilities
are recognised initially at fair value and measured subsequently at amortised
cost.
Bad and doubtful debts
Specific provision is made against all advances considered to be impaired. When
there is reasonable doubt over recovery, provision is made against the
outstanding debt including interest and further interest is suspended until the
directors are satisfied as to the recoverability of the total amount due.
Segmental reporting
No separate segmental reporting information is provided as in the directors'
opinion there are no material segments other than the provision of short term
niche funding solutions.
Leasing
Rentals payable under operating leases are charged to income on a straight line
basis over the term of the lease.
Retirement benefits costs
Payments to defined contribution retirement benefit plans are charged as an
expense as they fall due.
Taxation
The tax expense represents the sum of the current tax expense and deferred tax
expense.
The tax currently payable is based on taxable profit or loss for the year.
Taxable profit or loss differs from net profit as reported in the income
statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Group's liability for current tax is calculated by using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction which affects neither the tax profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled based upon tax
rates that have been enacted or substantively enacted by the balance sheet
date. Deferred tax is charged or credited in the income statement, except when
it relates to items credited or charged directly to equity, in which case the
deferred tax is also dealt with in equity.
Property, plant and equipment
Fixtures and equipment are stated at cost less accumulated depreciation.
Depreciation is charged so as to write off the cost or valuation of assets over
their useful economics lives, using the straight line method on the following
basis:-
Plant and machinery - 3 years
Fixtures, fittings & equipment - 3 years
The directors consider that the freehold property is maintained in such a state
of repair that its residual value is at least equal to its carrying value.
Accordingly, no depreciation is charged on the grounds of immateriality. Annual
impairment reviews are undertaken and provisions made at the end of each
reporting period where necessary.
Non-depreciation of freehold property is a departure from the Companies Act
2006 and is considered necessary by the directors to ensure that the financial
statements give a true and fair view.
Equity Instruments
Equity instruments, which are contracts that evidence a residual interest in
the assets of the Group after deducting all of its liabilities, are recorded at
the proceeds received, net of direct issue costs.
Provisions
Provisions are recognised when the Group has a present obligation as a result
of a past event which it is probable will result in an outflow of economic
benefits that can be reliably estimated.
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of equity-settled
share-based payments is expensed on a straight-line basis over the vesting
period, based on the Group's estimate of shares that will eventually vest. Fair
value is measured by use of a binomial model. The expected life used in the
model has been adjusted, based on management's best estimate, for the effect of
non-transferability, exercise restrictions, and behavioural considerations.
At each balance sheet date, the Group revises its estimates of the number of
options that are expected to become exercisable. It recognises the impact of
the revision of original estimates, if any, in the income statement and a
corresponding adjustment to reserves over the remaining vesting period. Costs
are recognised in the income statement with a corresponding credit to a share
based payment reserve.
Financial Risk Management
Interest rate risk
The interest rate risks are limited to the revolving credit facilities which
the Group has in place.
The Group has no exposure arising from trading overseas.
Liquidity risk
The Group has to monitor closely its access to bank and other funds and its
ongoing loans and overdrafts to ensure that there are sufficient funds to meet
its obligations.
The Board receives regular debt management forecasts which estimate the cash
inflows and outflows over the next eighteen months, so that management can
ensure that sufficient financing is in place as it is required.
Credit Risk
The Group is exposed to the risk that any counterparty to which the Group lends
money will be unable to repay the amounts when they fall due. These risks are
managed by ensuring that exposures to individual counterparties and particular
market sectors or loans exhibiting particular attributes are minimized wherever
possible. The Board and Risk Committee monitor such exposures on a regular
basis, with figures being regularly reviewed. In respect of property bridging
loans the Group enforces repossession of property where necessary with a view
to holding the asset for resale in order to extinguish the debt. In addition,
impairment provisions are made when it becomes evident that the Group may incur
losses at the balance sheet date.
2. Earnings per Ordinary A share
6 Months 6 Months Year
ended ended Ended
30/09/2013 30/09/2012 31/03/2013
Profit for the purposes of basic earnings
per ordinary share (£) 1,904 3,726 250,071
Average number of shares - 2,662,402 2,330,094 2,471,169
basic and diluted
EPS - basic (pence) 0.1p 0.2p 10.1p
EPS - diluted (pence) 0.1p 0.2p 10.1p
3. Trade and other receivables
30/09/2013 30/09/2012 31/03/2012
£ £ £
Trade receivables
-Disbursement funding loans 4,516,789 5,998,563 4,849,540
- Property bridging loans 818,970 917,547 818,286
- Other trade debtors 41,485 586,478 105,969
Prepayments and accrued income 1,035,517 395,642 511,101
6,412,761 7,898,230 6,284,896
4. Trade and other payables amounts falling due within one year
30/09/2013 30/09/2012 31/03/2013
£ £ £
Trade and other payables falling due within
one year
Trade payables 42,906 51,893 65,158
Bank loans 1,061,308 4,181,793 1,061,057
Other taxation and social security 82,128 18,258 17,061
Accruals and deferred income 1,361,459 273,253 1,158,553
2,547,801 4,525,197 2,301,829
Bank loans include a committed term loan secured by fixed and floating charges
over the assets of the Sutherland Professional Funding Limited supported by a
parent company guarantee.
Property bridging loans are uncommitted revolving credit facilities secured by
secondary charges over all properties where bank funding has been provided.
5. Trade and other payables falling due after more than one year
Mortgage 526,930 548,958 540,261
The mortgages for Impact Property Management Limited are secured on the group's
freehold properties and supported by a parent company guarantee.
6. The Board of Directors approved the interim report on 30 December 2013.
distributed by
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IMPACT HOLDINGS (UK) PLC 
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