Unaudited Interim Results
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* cash positive (cash position at 30th September £1,596,284) * successful AiM listing and fund raising in June 2006
Chairman's Statement We are very pleased to report our unaudited interim financial results for the period ended 30th September 2006. Cash flow and origination levels were in line with management expectations. Revenue of £663,426 and pre-tax profit, prior to an FRS 20 charge for share based payments of £111,275, of £488,131 were better than expected, which was particularly pleasing as the business had effectively only been trading for three months, following the acquisition of Impact Holdings towards the end of June 2006. Consistent with our growth strategy at this stage of the company's development we are not intending to pay an interim dividend. Business Overview Impact's recently acquired pre-settlement funding division has been growing nicely, in accordance with management expectations. Impact is active in various specialty factoring/funding markets. The main drivers of revenue were the funding of structured legal disbursements and discounting insurance claim invoices. In addition, we have been actively funding in the Right to Buy marketplace. Through continued refinement and focus on marketing, Impact believes it can continue to increase its market penetration in the pre-settlement arena. We believe that there will be a growing use of structured finance to resolve Personal Litigation, Matrimonial Disputes and the funding of the beneficiaries of deceased estates. It is our belief that the total addressable market for these aspects of our business will grow significantly and are in principle counter-cyclical. Pre-Settlement Funding Pre-settlement funding is the provision of disbursement funding in pending personal injury cases, as well as providing claimants with advances on their compensation. Impact intends to grow its pre-settlement origination activity and will be expanding its sales team in the next quarter in order to address the market opportunities. Right to Buy (RTB) Funding RTB funding is the provision of disbursement funding in order to facilitate an individual's purchase of their Council property. Impact intends to maintain its expansion in RTB market by continuing its origination activity. New Chief Executive During the period we have successfully recruited our new CEO, Paul Davies. Paul was formerly Deputy Chief Executive of Manchester Building Society and brings with him 24 years of banking and business experience. He has been hired to help drive the business forward and implement the Company's growth strategy. Outlook Impact expects to experience steady growth, particularly in the pre-settlement area and also in the commercial bridging finance arena. Management is thus actively pursuing new credit capacity to capitalise on the ongoing strong demand for Impact's products. By continuing to seek broader access to the capital markets with competitive financing rates and terms, and by maintaining a high level of service to our customers, Impact believes it can establish itself as a leader in the personal factoring and pre-settlement lending market. The key to the successful exploitation of the market opportunities we have identified will be the further development of our risk management and the expansion of our IT platform. These, together with bank debt facilities, will enable a well controlled, growing and profitable future for the group. Enquiries:
IMPACT HOLDINGS (UK) PLC UNAUDITED INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2006 GROUP PROFIT AND LOSS ACCOUNT
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