Unaudited Interim Results
Impact Holdings (UK) plc
('Impact' or 'The Group')
Not for release, publication or distribution in, or into,
The United States, Canada, Australia or Japan
Impact Holdings (UK) plc
('Impact' and, together with its subsidiaries, 'the Group')
Unaudited Interim Results
Impact Holdings (UK) plc. (AIM: IHUK), the specialist lender, announces its
unaudited interim results for the six months ended 30th September 2007.
Financial Highlights
- results in line with management expectations
- origination levels remain strong
- EBIT of £171,772*
- earnings per share 0.17p*
- pre-tax profit of £196,249
* restated to reflect the adoption of IFRS as per note 4
Operational Highlights
- structured recovery process for provisioned exposure well progressed
- good growth in primary business lines
- successful incorporation of property bridging subsidiary
- bank debt facilities operational to support continued growth
For further information:
Impact Holdings (UK) plc
Paul Davies Chief Executive Officer Tel: +44 (0)161 437 9499
Chris Williams, Finance Director www.impactholdings.net
Daniel Stewart & Company plc
Alastair Cade, Corporate Finance Tel: +44 (0)207 776 6550
CHAIRMAN'S STATEMENT
We are pleased to report our unaudited interim financial results
for the six months ended 30th September 2007. Revenue of £679,793 and pre-tax
profit of £196,249 were in line with expectations as were cash flows and
origination levels. The pre tax profit is after taking account of gross loan
recoveries totalling £615,287, provided against in the previous period.
The period post flotation was extremely difficult and the new
management team has addressed all the problematical inherited issues,
progressed the recovery process in line with a structured recovery strategy
and ensured the organic lending is back on track with strong risk management
processes now in place.
We are not intending to pay an interim dividend.
Business Overview
Impact's funding divisions for both solicitor lending and property
bridging have been growing in accordance with management expectations.
Through continued refinement and focus on marketing and strong risk
management, Impact believes it can continue to increase its market penetration
in both the pre-settlement and property bridging arenas. Market research shows
there is a growing use of structured finance to resolve Personal Litigation
and Matrimonial Disputes and it is our belief that the total addressable
market for these aspects of our business will grow significantly.
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 continues to grow its organic pre-settlement
origination activity and will continue to look at other market opportunities
in the solicitor and professional lending marketplace.
Property Bridging
Bridging finance is the term used to describe non amortising,
interest only, short term funding (usually up to 12 months) secured on land or
property. Impact's activities involve providing short term finance secured
against residential and commercial property, typically through one of the
following types of transaction:
- Chain-breaking mortgage;
- Property development including site purchase and new-build projects;
- Property conversions and refurbishments;
- Acquiring properties where a surveyor recommends a retention;
- Buying from auctions;
- Equity release.
Impact's lending decision is based on careful consideration of a
client's track record and sector of activity, as well as the proposed loan
period and likely valuation of the underlying property at the time of
repayment. Loans are usually repaid from refinance or proceeds of sale
following, for example, refurbishment or development. Given the present
uncertainty in the property market, strict underwriting and risk management
assessment is adhered to.
Outlook
We expect to experience steady growth in the professional and
property funding arena and management has successfully sourced sufficient
funding facilities from its bankers to capitalise on the ongoing strong demand
for Impact's products.
The key to the successful exploitation of the market opportunities we have
identified will be the further development of our risk management controls and
the expansion of our IT platform. These, together with the agreed bank debt
facilities, will enable a well controlled, growing and profitable future for
the Group.
Richard Kilsby
Non Executive Chairman
13 December 2007
Consolidated income statement
6 Months 6 Months
ended ended Year ended
30-Sep-07 30-Sep-06 31-Mar-07
Unaudited Unaudited Unaudited
Note £ £ * £ *
REVENUE 679,793 663,426 1,079,967
Cost of sales (285,098) - (108,881)
Gross Profit 394,695 663,426 971,086
Employee benefits expense (269,178) (9,501) (341,308)
Other administrative expenses (532,965) (149,992) (383,851)
Share based compensation (7,736) (111,275) (94,836)
Bad debt recoveries 615,287 - -
Bad debt provision - - (5,378,772)
Impairment of goodwill - (21,377) (1,288,802)
Amortisation of intangible assets (20,278) - -
Depreciation (8,053) (3,149) (12,695)
TOTAL ADMINISTRATION EXPENSES (222,923) (295,294) (7,500,264)
PROFIT/(LOSS) FROM OPERATIONS 171,772 368,132 (6,529,178)
Financial income 24,477 9,869 23,071
Financial costs - (1,145) (3,113)
PROFIT/(LOSS) BEFORE TAXATION 196,249 376,856 (6,509,220)
Income tax expense - - -
PROFIT/(LOSS) FOR THE PERIOD 196,249 376,856 (6,509,220)
Profit/(Loss) per share
- basic (pence) 2 0.17 0.72 (7.9)
Profit /(Loss) per share
- diluted (pence) 2 0.17 0.67 (7.9)
The results for the period are derived from continuing activities
* Restated to reflect the adoption of IFRS as per note 4
Consolidated Balance Sheet
As at 30 September 2007 30 Sep-07 30 Sep-06 31 March-07
Unaudited Unaudited Unaudited
£ £* £*
ASSETS
NON CURRENT ASSETS
Plant and equipment 24,348 23,985 26,131
Intangible assets 101,388 - 114,028
Goodwill 700,389 1,967,814 700,389
826,125 1,991,799 840,548
CURRENT ASSETS
Trade receivables 6,150,417 7,519,235 2,745,777
Other receivables 142,601 21,719 53,955
Cash 1,351,713 1,596,284 2,359,470
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