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Preliminary results for the year ended 31 March 2009

25 September 2009

IMPACT HOLDINGS (UK) PLC

Preliminary results for the year ended 31 March 2009

Impact Holdings (UK) plc, the specialist lending business,announces its preliminary results for the year to 31 March 2009.

FINANCIAL HIGHLIGHTS

The headline financial results reveal:-

• The Group’s first pre-tax profit of £290,634
• Cash and cash equivalents of £0.4 million
• Net assets of £3.4 million
• Consolidation of existing operations on track
• Earnings per share 26p

Commenting on the results Paul Davies, the Chief Executive,said “The Board and Management have spent considerable effortin improving the risk management, operational and financialcontrols within the business. This has resulted in a periodof controlled organic growth and the Group has been able toreport its first pre-tax profit in what has probably beenthe most challenging and uncertain economic environmentseen in recent times.

This performance is a credit to the management and staff,who have collectively worked with commitment and resilienceto deliver this performance.

TRADING

The credit and liquidity crisis which materialised in the latter part of 2007 has had a profound effect on the availability of funding in the market generally. Impact has continued to work closely with its funders and continues to have their full support and enjoy sufficient banking facilities for its operational needs. The proposed acquisition of Sutherland Professional Funding Limited will improve profitability and growth opportunities together with providing access to a further banking line. This acquisition underlines our strategic objective of delivering a Group of businesses that delivers integrated solutions to the legal sector and will provide a further avenue to grow the Group’s core activities.
We are seeing an increasing appetite for creative short term funding solutions primarily due to the economic environment. However, the present economic uncertainty, deteriorating credit risk of counterparties in general and the volatility in the property market have led us to continue to take a very conservative approach to funding new transactions or entering into new lending relationships. The Group’s strategy continues to be to develop the business and we have identified a number of new opportunities which will hopefully come to fruition should the proposed Legal Services Act be passed. This would offer the opportunity of investment in a Law firm that could monitor and manage the personal injury cases we fund.”
Further information:

Paul Davies
Chief Executive Officer

Tel: 0161 437 9499

Daniel Stewart & Company plc
Simon Leathers/Oliver Rigby

Tel: 020 7776 6550

CHAIRMAN’S STATEMENT

The financial markets have continued to see unprecedented turmoilwith the crisis stemming from the systematic failure of the worldinter banking system which has contributed to a lack of liquidityfor many businesses.

This lack of liquidity has continued to impact on the availabilityof much needed funding and has constrained growth across the worldeconomy as banks have systematically increased their margins. Inaddition to this increase in margins, Financial Institutions have reviewed their lending criteria and implemented more rigorouscredit processes which have reduced the availability of credit.

Impact has not been immune to this and the restriction on theavailability of increased banking lines and upward pressure oninterest rates within the market could restrict growth as thissituation is forecast to continue for the foreseeable future.

There remain considerable opportunities in our niche sector and the recent announcement that the Group had signed heads of terms to acquire Sutherland Professional Funding Limited reinforces this. The Group had been providing outsourced Loans Administration, Information Technology, Risk Management and Audit services to Sutherlands as part of its due diligence process. The directors of both businesses acknowledged the compelling merits of integrating the two businesses onto a common platform with the knowledge that this would deliver immediate growth and profitability.

We remain conscious of the uncertain economic environment in whichwe trade and the lack of liquidity many businesses are experiencing.

The business of solicitor lending, in relation to fundingdisbursements on personal injury cases, continues to be ourcore market albeit we have adopted a more conservative approachwithin the credit risk function.

The Group instigated its property bridging business to fundshort term property transactions in July 2007 but the severedownturn in the property market and the “credit crunch” hasresulted in an unprecedented effect on the marketplace. TheBanks and Building Societies reduced the availability of mortgagesand as a consequence the refinancing options for bridging loantransactions have diminished. This lack of liquidity has thereforeresulted in a strategic decision to restrict new exposures to lowerloan to values and only to lend where a refinancing is not perceivedto be problematic.

In recent months the Board has successfully renewed its bankingfacilities and the Group looks forward to continued support frombanks and shareholders alike as the business model evolves.

The management continues to work closely with its advisers tomaximise shareholder value.

OUTLOOK

I believe the Group is well positioned to react to and developnew niche opportunities and feel the proposed strategy ofproviding services to the legal sector and looking at nichelending opportunities will provide a foundation for controlledgrowth and enhanced profitability

I should like to place on record my appreciation for the efforts of the executive, management
and staff during this period. I also appreciate the enthusiasm and support of my fellow directors and thank them for their continued encouragement and counsel.

OPERATING AND FINANCIAL REVIEW

Impact has achieved another year of progress in the implementation of its restructuring strategy against what has been unprecedented economic turmoil.

The results achieved are a credit to the management team but the Board remains fully aware of the current economic climate and is focused on delivering its strategic objectives in a controlled and structured way.

Richard Kilsby
Non-Executive Chairman

CHIEF EXECUTIVE’S REPORT

PEOPLE

The key to the success of Impact’s ongoing business continues tobe its ability to attract high calibre individuals who can deliverthe strategy and growth.

Impact has continued to bolster its Board and management with theappointment of Roger Barlow as Non-Executive Chairman designate,David Hughes as Legal Director and the appointment on 22 September2009 of Stuart Burn as Operations Director.

Last 5 announcements

19/08/2010	Notice of AGM
02/07/2010	Preliminary results for the year ended 31 March 2010
01/04/2010	Grant of Options
19/02/2010	NOTIFICATION OF MAJOR INTERESTS IN SHARES
06/01/2010	Issue of Equity/Total Voting Rights

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Impact Holdings (UK) Plc Manchester International Office Centre Styal Road Manchester M22 5WB (t) +44 (0)161 437 9499 (f) +44 (0)161 437 9555 (e) enquiries@impactholdings.net