THE CLAIMS PEOPLE GROUP PLC ( Claims People or the Group ) INTERIM RESULTS FOR THE PERIOD TO JUNE 2007

Transcription

1 26 SEPTEMBER 2007 THE CLAIMS PEOPLE GROUP PLC ( Claims People or the Group ) INTERIM RESULTS FOR THE PERIOD TO JUNE 2007 The Board of Claims People, the AIM quoted insurance claims facility provider, announces today Interim Results for the period to June 2007 reflecting both growth in revenues and a return to profit. HIGHLIGHTS Profit before tax of 10,778 (2006: loss 66,565); Revenues up 47% to 1,929,729 (2006: 1,311,397); Successful share placing of 500,000; Improved cash balances 216,582 (2006: 235,281 overdrawn); Two new divisions launched - creating first mover advantage; Board strengthened through appointments and realignment; i-team consultancy revenues substantially increased by 150%; and Increase in loss adjusting revenues in the second half of the year as a result of floods across England. Commenting, John French, Chairman, said: The year has started well with the Group achieving a profit during the period despite the increased costs of strengthening the Board and the launching of two new divisions. With the appointment of Geoff Somervail as Chief Executive, Barry Whyte moving to the position of Group Managing Director and Robert Mitchell of Bluehone Investments joining as a Non- Executive Director, the future looks increasingly positive and the Board looks forward to updating all shareholders on progress in due course. ENQUIRIES: The Claims People Group plc John French, Chairman Mobile: Daniel Stewart & Company plc Tel: Lindsay Mair Bishopsgate Communications Ltd Tel: Dominic Barretto Nick Farmer 1

2 CHAIRMAN S STATEMENT I am pleased to report to shareholders today on the Group s Interim Results for the period to 30 June In short, the year has started well with the Group achieving a profit during the period despite the increased costs of strengthening the Board, the launching of two new divisions and increased marketing expenditure. The Group expects to benefit greatly from these activities in the second half of the year. Financials The Board is delighted to report pre-tax profits of 10,778 - a marked improvement on a loss of 66,565 reported for the equivalent period last year. Revenues are up 47% to 1,929,729 (2006: 1,311,397); demonstrating the Board s commitment to building shareholder value. The Group s cash position has greatly improved in the period under review and our current cash and cash equivalents stand at 216,582 (2006: 235,281 overdrawn). Placing of New Shares The Group completed a successful Placing of new shares at 1.5p raising a total of 500,000 from subscriptions by new and existing Directors. New Chief Executive Geoff Somervail subscribed for 11,121,667 shares, representing 8.16 per cent. of the issued share capital of the Company. Bluehone Investments subscribed for 4,423,333 new ordinary shares, increasing its holding to 18,089,330 shares, representing 13.27% of the issued share capital of the Company. Cornhill Shareholders Limited subscribed for 11,121,667 new ordinary shares, representing 8.16 per cent. of the issued share capital of the Company. Founding Directors Barry Whyte and David Croston each subscribed for 3,333,333 new ordinary shares taking their holdings to 8,850,014 shares (6.49 per cent.) and 6,835,014 shares (5.02 per cent.) respectively. Board strengthened through appointment and realignment The Group appointed to the Board Geoff Somervail as Chief Executive, with Barry Whyte moving to the position of Group Managing Director and Robert Mitchell of Bluehone Investments has been appointed as a Non-Executive Director.. Both bring with them experience which will be of tremendous value to the Group moving forward through the upcoming year end and beyond into Divisional Update In 2006, the Board made a strategic decision to shift upmarket within the loss adjusting sector in the form of lower volume but higher value technical claims, whilst simultaneously pursuing a policy of exploring niche areas of the claims market that had been largely unrecognised. With the successful launch of two new operations, a claims-specific recruitment agency (Claims People Recruitment) and a motor collision investigation service (Motor Forensic), the Group now has four divisions adding to Claims People Adjusting and i-team. Furthermore, the Group now has achieved critical first mover advantage in the potentially valuable implant support team market and in the fields of its two new operations. All divisions continue to perform strongly: i-team continues to go from strength to strength, and with a widened client base the Board expects continued good performance moving forward; Claims People loss adjusting division, has gained new clients since April 2007 (including DAS, Facilitas and AIG) and is set to increase revenues from the activity resulting from the much publicised flooding in the UK, as well as new client wins; and Investment in the two new divisions has impacted positively on the Group performance and new clients have been gained for all divisions - including Endsleigh, Allianz, St. Paul, MSL, Tradex and Primary Group. There has been increased marketing and sales activity, including cross selling of services between the divisions. The Board also remains focused on looking for additional opportunities to further enhance and widen the Group s range of services and client base. 2

3 Outlook The Board continues to evaluate complementary acquisitions and is in a strong position with the support of a range of blue chip clients including CAPITA, HSBC and BT plus several major UK insurers - and the Board hopes to continue to build on the overall profile of all activities. With new clients in the insurance sector being gained by each division, the future looks increasingly positive and the Board looks forward to updating all shareholders on progress in due course at the time of the full year results, to be reported next year. John French Chairman Date 26 September

4 INDEPENDENT REVIEW REPORT TO THE CLAIMS PEOPLE GROUP PLC Introduction We have been instructed by the company to review the financial information for the six months ended 30 June 2007 on pages 5 to 12 which comprises the income statement, the balance sheet, the cash flow statement and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the AIM Rules of the London Stock Exchange which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. This report, including the conclusion, has been prepared for and only for the company for the purpose of the AIM Rules of the London Stock Exchange and for no other purpose. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Standards on Auditing and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June Saffery Champness Chartered Accountants Lion House Red Lion Street London WC1R 4GB 26 September

5 CONSOLIDATED INCOME STATEMENT 6 months ended 30 June months ended 30 June 2006 Year ended 31 December 2006 Audited Revenue 1,929,729 1,311,397 2,824,784 Administrative expenses (1,915,408) (1,377,974) (2,876,935) Profit/(loss) from operations 14,321 (66,577) (52,151) Finance costs - net Interest receivable 3,303 1,078 1,079 Interest payable (6,846) (1,066) (11,075) (3,543) 12 (9,996) Profit/(loss) before tax 10,778 (66,565) (62,147) Taxation Profit/(loss) for the period 10,778 (66,565) (62,147) Profit/(loss) per share p (0.06p) (0.06p) Fully diluted profit/(loss) per share p (0.06p) (0.06p) 5

6 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY Share capital Share premium account Retained Earnings Balance at 1 January 2006 Loss for the period 1,544, ,841 - (1,196,457) (66,565) Balance at 30 June ,544, ,841 (1,263,022) Balance at 1 July ,544, ,841 (1,263,022) Profit for the period - - 4,418 Balance at 31 December ,544, ,841 (1,258,604) Balance at 1 January ,544, ,841 (1,258,604) Profit for the period ,778 Issue of equity share capital 500, Share issue costs - (5,000) - Balance at 30 June ,044, ,841 (1,247,826) 6

7 CONSOLIDATED BALANCE SHEET 30 JUNE 2007 ASSETS 30 June June December 2006 Audited Non-current assets Goodwill 265, , ,661 Property, plant and equipment 78,852 96,206 85,369 Current assets 344, , ,030 Work in progress 386, , ,077 Trade and other receivables 1,133, ,134 1,274,290 Cash and cash equivalents 216,582 1, ,736,664 1,349,626 1,653,639 Total assets 2,081,177 1,711,493 2,004,669 EQUITY Capital and reserves attributable to the Company s equity shareholders Share capital 2,044,062 1,544,062 1,544,062 Share premium account 872, , ,841 Retained earnings (1,247,826) (1,263,022) (1,258,604) Total equity 1,669,077 1,158,881 1,163,299 LIABILITIES Current liabilities 412, , ,370 Non-current liabilities Total liabilities 412, , ,447 Total equity and liabilities 2,081,177 1,711,493 2,004,669 7

8 CONSOLIDATED CASH FLOW STATEMENT 6 months ended 30 June months ended 30 June 2006 Year ended 31 December 2006 Audited Cash flows from operating activities Profit/(loss) from operation 14,321 (66,577) (52,151) Adjustments for: Depreciation of property, plant and equipment 21,167 41,214 72,934 Operating cash flows before movements In working capital 35,488 (25,363) 20,783 Increase in work in progress (7,713) (44,052) (5,730) Decrease/(increase) in receivables 140,998 (239,871) (583,027) Increase/(decrease) in payables 34,480 (53,218) 17,659 Cash used in operations 203,253 (362,504) (550,315) Interest paid (6,846) (1,066) (11,075) Net cash used in operating activities 196,407 (363,570) (561,390) Cash flows from investing activities Interest received 3,303 1,078 1,079 Purchase of property, plant and equipment (14,650) (9,391) (30,274) Net cash flows used in investing activities (11,347) (8,313) (29,195) Cash flows from financing activities Issue of equity share capital 500, Cost of issue of equity share capital (5,000) - - Repayments of bank loan (2,504) (3,755) (7,510) Repayment of obligations under finance lease - (3,236) (6,472) Net cash from/(used in) financing activities 492,496 (6,991) (13,982) Net decrease in cash and cash equivalents 677,556 (378,874) (604,567) Cash and cash equivalents at beginning of year (460,974) 143, ,593 Cash and cash equivalents at end of year 216,582 (235,281) (460,974) 8

9 NOTES TO THE INTERIM FINANCIAL INFORMATION 1. Accounting Policies Basis of accounting The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. The most significant accounting policies are described below. Basis of consolidation The consolidated financial statements incorporate the results of the Company and all its subsidiary undertakings as if they were a single entity. Subsidiary undertakings are consolidated from the date of acquisition using the acquisition method of accounting. Turnover Turnover represents the invoiced amount of services provided in the period and is stated net of VAT. Tangible fixed assets Tangible fixed assets are stated at cost less provision for depreciation. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost of each asset less its estimated residual value evenly over its estimated useful life, as follows: Claims software over five years Office equipment and fittings over three to five years Website development over three years Goodwill Goodwill is stated at cost prior to adoption of International Accounting Standards and is reviewed at each period end for impairment. Work in progress Revenue arising from the rendering of services is recognised only to the extent of the expenses recognised that are recoverable. Work in progress is valued at its recoverable amount. Leasing and finance lease commitments Assets obtained under hire purchase contracts and finance leases are capitalised in the balance sheet and depreciated over their useful economic lives. The interest element of the rental obligations is charged to the profit and loss account over the period of the contract and represents a constant proportion of the balance of capital payments outstanding. Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the term of the lease. 9

10 NOTES TO THE INTERIM FINANCIAL INFORMATION 1. Accounting Policies (continued) Deferred taxation Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Group s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements. A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured on a non-discounted basis at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse. Pension costs The Group contributes to two Group Personal Pension Schemes for Directors and senior employees. Pension contributions are charged to the profit and loss account as they are incurred. 2. Financial Information The financial information above does not constitute statutory accounts within the meaning of Section 240 of the Companies Act The interim financial information has not been audited but has been reviewed by the Company s auditors. The interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. These interim statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective as at the time of preparing these statements. 10

11 NOTES TO THE INTERIM FINANCIAL INFORMATION 3. Taxation No liability to taxation arises due to tax losses available from previous periods. The company has approximately 954,000 of tax losses available for relief against future trading profits. 6 months ended 30 June months ended 30 June 2006 Year ended 31 December 2006 Audited Current UK corporation tax Deferred tax Charge arising on valuation of deferred tax assets Credit arising on recognition of deferred tax asset Deferred tax asset comprises: Accelerated capital allowances 34,729 35,681 34,729 Short term timing differences 2,837 2,837 2,837 Trading losses 95,992 95,040 95,992 Factors affecting the tax charge for the period: 133, , ,558 Profit/(loss) on ordinary activities before taxation 10,778 (66,565) (62,147) Corporation tax at 30% 3,233 (19,970) (18,644) Effects of: Disallowed expenditure 3,580 8,984 6,374 Depreciation and amortisation 6,350 12,364 21,880 Capital allowances (3,663) (9,877) (25,367) Losses Utilised (9,500) - 15,757 Other tax adjustments - (11,471)

12 NOTES TO THE INTERIM FINANCIAL INFORMATION 4. Earnings per share The earnings per share is based on the profit for the period and the weighted average number of ordinary shares in issue and ranking for dividend. 6 months ended 30 June months ended 30 June 2006 Year ended 31 December 2006 Audited Profit/(loss) for the period 10,778 (66,565) (62,147) Weighted average number of shares 125,405, ,937, ,937,500 Fully diluted average number of shares 136,270, ,937, ,937, Cash and cash equivalents 6 months ended 30 June months ended 30 June 2006 Year ended 31 December 2006 Audited Cash and bank balances 216,582 1, Bank overdraft - (236,374) (461,246) 216,582 (235,281) (460,974) 12