Interim Results
RNS Number : 7397K
Impact Holdings (UK) PLC
24 December 2008
Impact Holdings (UK) plc
("Impact" or "The Group")
Interim Results
Impact Holdings (UK) plc. (AIM: IHUK), the specialist lender, announces its unaudited
interim results for the six months ended 30 September 2008.
Financial Highlights
* results in line with management expectations
* cash and cash equivalents of £0.9 million
* consolidation of existing operations on track
* EBIT of £131,752
* earnings per share 0.17p
* pre-tax profit of £190,953
Operational Highlights
* successful conclusion to legal dispute as detailed in contingency matter raised
in 2008 year end accounts
* bank debt facilities operational to support ongoing trading
* structured risk management controls in place to support monitoring of existing
exposures
* potential growth opportunities for primary business lines
For further information:
Impact Holdings (UK) plc
Paul Davies Chief Executive Officer
Tel: +44 (0)161 437 9499
www.impactholdings.net
Daniel Stewart & Company plc
Simon Leathers, Corporate Finance
Tel: +44 (0) 20 7776 6550
simon.leathers@danielstewart.co.uk
The financial information for the half year ended 30 September 2008 has been extracted
from the interim results, which is available from Daniel Stewart & Company, 36 Becket
House, Old Jewry, London EC2R 8DD and on the Company's website (www.impactholdings.net).
CHAIRMAN'S STATEMENT
We are pleased to report our unaudited interim financial results for the six months ended
30th September 2008. Revenue of £1,179,637 and pre-tax profit of £190,953 were
in line with expectations, as were cash flows and origination levels.
The general economic downturn in 2008 has continued to see unprecedented turmoil, with
the collapse of the financial markets and the general reduction in global confidence,
together with the continuing reduced availability of inter-bank funding constraining
the market considerably. The linkage of inter-bank funding to LIBOR has restricted
the Financial Institutions capacity to pass on recent base rate cuts to its customers,
indeed they continue to review their lending criteria with their credit capacity
continuing to be somewhat restricted due to capital constraints. This in itself is
reducing liquidity and increases pressure on the continuing reduced availability of
credit facilities.
Business Overview
The liquidity and credit crisis which materialized far faster than anyone envisaged,
continues to have a profound effect on the availability of funding in the market
generally but Impact has continued to secure banking facilities to operate on a
day-to-day basis. Increased facilities are presently under negotiation but these
facilities will only be taken and utilized on a selective basis due to the present
economic uncertainty. The Group remains concerned in particular about the volatility
in the property market and the knock on effect to other sectors, including the legal
profession and this has led us to take a very conservative approach to funding all
transactions until the market returns to a more stable environment.
Impact's funding businesses for both solicitor lending and property bridging continue
to operate in a controlled manner and in accordance with management expectations.
However, forecasts are for a flat second half of the financial year as a flight to
quality is actively managed and counterparties experience the difficult environment.
Through continued refinement and focus on marketing and strong risk management,
Impact believes it can increase its market penetration in both the pre-settlement
and property arenas when the economic environment returns to some form of normality.
Market research shows there is a growing use of structured finance to resolve Personal
Litigation, Matrimonial Disputes and Specialty Property related transactions and it is
our continued belief that the total addressable market for these aspects of our business
can grow significantly in the future.
We are pleased to confirm the contingency referred to in the Statutory Accounts for the
year ended 31st March 2008, where one party had disputed the recoverability of the
amounts, was successfully resolved in the period following these results.
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 develop its organic pre-settlement origination activity and
continues to look at other market opportunities in the solicitor and professional
lending marketplace, while continuing to develop its vertically integrated model as
detailed in the March 2008 accounts.
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 with reduced lending seen due to the present strategy of only
lending on low loan to value, low risk transactions.
Outlook
Having regards to the present economic environment, our short term objective is to
continue to bolster the credit and risk management controls within the Group as well
as ensuring present exposures are actively managed to a successful conclusion, whilst
conserving cash for the Group during these uncertain times.
In the longer term our strategic objective is to create a successful nationwide
specialist lender capable of delivering profitable results, whilst maintaining control
over the commercial and financial risks facing the group.
Richard Kilsby
Non Executive Chairman
IMPACT HOLDINGS (UK) PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT
6 Months 6 months Year
ended ended Ended
30/09/2008 30/09/2007 30/03/2008
£ £ £
Revenue 1,179,637 679,793 1,590,442
Cost of sales (498,291) (285,098) (615,593)
Gross profit 681
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