ACE.L Regulatory News (ACE)

10 Jun 2005 09:30

Accident Exchange Group PLC10 June 2005 10 June 2005 Accident Exchange Group PLC ("Accident Exchange", the "Company" or the "Group") Preliminary Results for the Year Ended 30th April 2005 Announcement of Underwritten Conditional Placing of 3,478,261 new ordinary shares of 5p each at £2.30 to raise £7.7 million net of estimated expenses New Relationship Wins Announced Today Proposed Final Dividend of 1.0p per Share Financial Highlights • Earnings per share up 500% at 7.2p (2004 pro forma*: 1.2p, 2004statutory:0.8p): Adjusted earnings per share up 592% to 8.3p (2004 pro forma*:1.2p) • Adjusted profit before taxation and goodwill up 573% to £7.4million (2004 pro forma*: £1.1 million, 2004 statutory: £0.1 million) • Turnover increased by 429% to £21.7 million (2004 pro forma*: £4.1million, 2004 statutory: £0.3 million) • Profit before taxation up 509% to £6.7 million (2004 pro forma*:£1.1 million, 2004 statutory: £0.1 million) • Second half revenue of £14.0 million up 182% on the first half(First Half: £7.7 million) and adjusted profit before taxation and goodwill up192% to £4.8 million (First Half: £2.5 million) • Placing of 3,478,261 new ordinary shares at £2.30 to raise £7.7million (net of estimated expenses) to facilitate continued high rates of growth • First final dividend proposed at 1.0p (2004: nil) making 1.5p forthe year (2004: nil) Operational Highlights • Average fleet utilisation of 87.2% (2004: 78.4%) • Car fleet increased from 250 to 1029 vehicles as at today • Numerous new agreements signed in the period - see Chairman's Statement fordetails New Relationship Wins Announced Today • Agreement with Citygate Ltd, a subsidiary of HR Owen plc to provideaccident management and replacement vehicle service for the customers of its sixJaguar and Land Rover dealerships • Agreement with Holland Park Ltd and Heathrow Ltd, subsidiaries ofHR Owen plc to purchase 110 vehicles over the next twelve months whilstproviding credit hire and accident management services to the customers of theirfive BMW and five Mini dealerships in Chelsea, Chiswick, Holland Park, Heathrowand Western Avenue • Further agreement with Inchcape Retail, part of Inchcape plc, toprovide accident management and credit hire services to the customers of aselect number of their dealerships, which is expected to generate a significantincrease in our fleet during this year • Completed the lease on our Glasgow operations centre • Gained entry into the FTSE AIM 50 and FTSE AIM 100 indices • ITM Specialist Accident Management Company of the Year 2005 • Highly commended as IPO of the Year in the Barclays West MidlandsBusiness Awards • Appointment of Tim Eaves as Corporate Sales Director of AccidentExchange Limited Commenting on the results Lord Young of Graffham, Non-Executive Chairman, said: "This has been a year of unprecedented growth in terms of turnover,profitability, fleet size, staff and in delivering value to our shareholders.The outlook is for continued strong growth. Underpinning the strong financial performance has been the management's focus ondelivering at the operating level. The proposed fundraising will help sustainand consolidate the growth that the Company has seen as the Board strives tocontinue to deliver significant value to its shareholders." For further information, please contact: Steve Evans Martin AndrewsChief Executive, Accident Exchange Group Plc Finance Director, Accident Exchange Group Plc08700 116 719 / 07801 560 1560 08700 053 649 / 07730 517 699 Jonathon Brill, Financial Dynamics Billy Clegg, Financial Dynamics0207 269 7170 0207 269 7157 Christopher Wilkinson or Charles Farquhar, Numis 020 7776 1500Securities Limited * Pro forma results for the year ended 30 April 2004 prepared for comparativepurposes as if Accident Exchange Limited had been a wholly owned subsidiarythroughout the whole of the year. CHAIRMAN'S STATEMENT Introduction It has been a year of exceptional growth in terms of turnover, profitability,fleet size, our team and in delivering value to our shareholders. These results report on the first full year of trading for the Group since itacquired Accident Exchange Limited on 16th April 2004 (the "Acquisition") andsince, on the same day, Steve Evans became your Chief Executive and I becameyour Non Executive Chairman. The full year results have exceeded our highexpectations for the business. In the Interim Results on the 25th November 2004 I reported that we had had anextremely rewarding and profitable first half and I commented that I believed "the business remains on track to deliver a year of outstanding progress". I am delighted to be able to report that our prediction of significantly highervolumes in the second half has proved correct. Revenue in the second half of theyear of £14.0 million was up 182% on the first half (£7.7 million), adjustedprofit before goodwill and before taxation in the second half of £4.8 millionwas up 192% on the first half (£2.5 million). Profit before taxation in thesecond half was £4.6 million (first half £2.1 million). Financial Results Full year revenue was £21.7 million (pro forma 2004: £4.1 million, statutory2004: £0.3 million) which has generated an operating profit before goodwill of£8.4 million (pro forma 2004: £1.4 million, statutory 2004: £0.1 million),profit before taxation and goodwill of £7.4 million (pro forma 2004*: £1.1million, statutory 2004: £0.1 million) and statutory profit before taxation of£6.7 million (pro forma 2004: £1.1 million, statutory 2004: 0.1 million). Basic earnings per share was 7.2p (pro forma 2004: 1.2p, statutory 2004: 0.8p)and adjusted earnings per share (based on profit after taxation and beforegoodwill amortisation) was 8.3p (pro forma 2004: 1.2p, statutory 2004: 1.4p) up500% and 592% respectively. Given the 429% increase in turnover and the generation of operating profitbefore goodwill of £8.4 million (pro forma 2004: £1.4 million) we are delightedwith generating £5.5 million of net cash inflow from operating activities (2004:£190,000). After the repayment of £5.2 million of hire purchase obligations inrelation to the expanding car fleet, the receipt of £1.0 million from the saleof cars, and the payment of £1.0 million of interest, together with sundrycapital expenditure, the payment of our interim dividend and taxationliabilities, the Group ended the year with a net consumption of cash of £339,000(2004: increase of £380,000). Our closing invoiced trade debtors (excluding work in progress) represent 119outstanding invoiced debtor days. Year end balance sheet net debt, includinghire purchase obligations, was £17.3 million (2004: £3.9 million) representing agearing level of 93.5% (2004: 26%). Following the maiden interim dividend of 0.5 pence per share (2004: nil)declared on 25th November 2004 and paid on 5th January 2005, I am pleased toannounce our maiden year end dividend of 1.0 pence per share (2004: nil), makinga total dividend of 1.5 pence per share for the year. We intend to pay the yearend dividend on 22nd July 2005 to shareholders on the register on 24th June2005. The shares will go ex dividend on 22nd June 2005. Operational highlights Underpinning the strong financial performance has been the management team'sfocus on delivering at the operating level. This approach has resulted in anumber of significant commercial deals and internal developments which havedriven the fleet size from 250 to 961 at the year end. In November 2004, the Company reached an agreement with Glasgow Audi for theprovision of accident management and business support services to its customersin Scotland. Glasgow Audi is the world's largest Audi retail venue. In December 2004, the Company launched a new service to BMW dealers, followingthe announcement by BMW that it intended to withdraw from its own BMW AccidentManagement service in January 2005. In March 2005, the Company reached an agreement with Helston Garages Ltd in theWest Country for the provision of credit hire and business support services.Helston is a privately owned franchised dealer group with 22 dealerships, 3bodyshop locations and a significant prestige customer base. In May 2005, after the balance sheet date, the Group reached a similar agreementwith The Cooper Group Ltd, one of the largest BMW retailers in the UK, witheight prestigious dealerships extending from Reading, across London, and intoKent. In addition, the business delivered fleet utilisation of 87.2% in the year(2004: 78.4%), we invested in internal strategic vision exercises for the salesand support teams to drive sustainable and defensible sales growth, we obtainedFinancial Services Authority authorisation for claims handling services and weagreed protocol agreements with Norwich Union Insurance. 'The relentless pursuit of excellence', a Group wide initiative to ensure thatour business relationships continue to thrive and that those relationships andthe business volumes that they bring are defensible and sustainable has beensuccessfully rolled out. We believe this initiative is protecting, strengtheningand expanding our customer referral base and related business volumes. We are delighted to be able to announce today several new relationship wins,details of which are given in the Chief Executive's statement. Management and Employees Our people remain our strongest asset. We started this financial year with 62employees, and as at today, this has risen to 164. We plan to recruit a further100 or so people within the next six months. In November your Board was strengthened by the appointment of Martin Andrews asFinance Director. Martin has already made a significant contribution to theCompany. I am pleased to welcome Tim Eaves to the Board of Accident ExchangeLimited as Corporate Sales Director. Tim has extensive sales experience withlarge corporate accounts having previously been employed as Sales Director ofEuropcar and as Sales Director of Kenning Car and Van Rental Limited. The ability and quality of our people is a prime driver of operationalefficiency and financial performance. A commitment and dedication to deliverconsistently in line with both operational targets and management expectationshas been a key component of our success this year. Whilst the rate of growth inpeople will continue to bring its own challenge I am confident in the ability ofour senior management to recruit, train, motivate and reward an expanding teamwhilst preserving the dedication, focus, spirit and commitment necessary to meetthe targets set by the Board. We will maintain, if not improve, on our deliverystandards which, I believe, lead the sector. The financial results that we achieved this year are a credit to our team and Iwould like to extend my personal thanks, and those of the Board andshareholders, to all of our people. Background to and Reasons for the Conditional Placing We are pleased to announce today a conditional placing of 3,478,261 new ordinaryshares ("New Ordinary shares") at £2.30 per share which, after estimatedexpenses, will raise approximately £7.7 million in new funds for the Group (the"Placing"). Since the Company acquired Accident Exchange Limited in April 2004, and theprincipal activity of the Group became the provision of prestige cars on credithire to victims of "non-fault" car accidents, we have grown at rates thatsignificantly exceeded the expectations of the market and of management. At thetime of this acquisition the Company raised £1.5 million (before expenses),which was used primarily to strengthen the balance sheet and to finance theworking capital requirements of the rapid growth of the business. There are several drivers for the fundraising announced today. The net proceedswill be used in the following areas: • To facilitate the financing of management's aggressive growth plansgoing forward as we continue to grow the fleet size unabated; • Strengthening the balance sheet to reduce gearing levels and to betterposition the Group in negotiating commercial terms on hire purchase and otherdebt to finance fleet growth; • To provide working capital flexibility during a continuing rapid growthphase; • To broaden the share ownership of the business to a wider audience ofinstitutional shareholders and to increase liquidity in the Company's shares;and • To better position the Group to respond to acquisition opportunitiesthat arise as the credit hire market place consolidates. The funds from the Placing will enable the Company to continue to capitalise onits strong growth prospects. The current financial year will benefit from thelevel of trading and profitability that we enjoyed in the final months of thelast financial year and from the commercial relationships closed in the lastquarter of this financial year, which are yet to generate volume at fullpotential. The Directors believe that this additional volume will flow during2006 and that the new referring partner wins also announced today will addmaterially to our growth prospects. We are negotiating a number of othercommercial relationships which we expect to announce in the first half of thisfinancial year. In addition, there is demand from our commercial partners to expand the reach ofthe business to include mainstream vehicles as well as prestige vehicles andthis is a market we expect to move into further during this financial year. The Secondary Placing Alongside the Placing, up to 3,043,479 existing shares have been placed withinstitutional investors on behalf of certain existing shareholders (the "Secondary Placing"). It is important to note that none of your Directors haveplaced any shares as part of the Secondary Placing. However, as a result ofdilution from the issue of the New Ordinary Shares, the shareholding of SteveEvans will reduce from 51.1% to 48.5% of the enlarged Ordinary share capital.Martin Andrews, the Group Finance Director, has acquired 17,391 shares as partof the Placing and Secondary Placing. The shareholders who have participated in the Secondary Placing, together withSteve Evans and Martin Andrews, have all agreed to an extension of certain lockin provisions whereby they have irrevocably agreed not to sell shares, whichrepresent 73.3% of the enlarged share capital, until after 31st December 2005 ata price of £3 or lower, except with the consent of Numis Securities Limited andthereafter for a further period of 12 months only to sell such shares throughNumis (or the Company's broker at such time). Outlook The outlook for your Company is for continued strong growth. Trading during thefirst month of the new financial year has started strongly with the impact ofsome of the commercial agreements signed at the end of last year coming through. The proposed fundraising will sustain and consolidate the growth the Company hasseen as the Board strives to continue to deliver significant value to itsshareholders. The Rt Hon. Lord Young of GraffhamNon-Executive Chairman10th June 2005 CHIEF EXECUTIVE'S STATEMENT I believe that the startling progress we have made for our shareholders in ourfirst full year of trading as a publicly quoted company is attributable to foursimple factors. The first is that we did not over promise. Three times throughout the last yearwe have seen our expectations of the year end outturn upgraded positively.Despite that, our results show profit before taxation and goodwill of £7.4m andadjusted EPS of 8.3p against consensus forecasts of £7.01m and 7.84prespectively. Statutory profit before taxation and basic EPS were £6.7 millionand 7.2p respectively. Secondly, we have invested significantly in building both a talented andmotivated team whose efforts have helped us create a culture, shape a story andbuild a fortress which they defend passionately. After six months of attractingan enlarged customer base, our strategic vision exercise, which we started inNovember 2004, allowed us to focus our efforts on consolidating relationshipswith those customers and then on growing the level of organic business fromthem, before looking to increase the size of our distribution channel further. Thirdly, our senior management team, cumulatively, probably have more experiencein the sector than any of our competitors. We have strengthened that teamthrough the year and they have worked hard to define, implement and execute ourstrategy. Our use of technology is core to the level of commercial efficiencyat which we operate and I genuinely believe that to replicate our IPR wouldrequire significant investment by a competitor or new entrant over severalyears. And finally, over the last twelve months we have so differentiated our serviceproposition and our approach to our distribution channel that not only have wehelped define the competitive arena in terms of relationships with franchiseddealership groups but we have also built a significant amount of clear spacebetween us and our most direct competitors. In the next twelve months I amconfident that we will consolidate and grow our revenue opportunity and achievean even more influential position in the market place. I outlined the fundamental nature of our strategy in my last report. At thattime we felt that we would only prosper in this environment if we changed therules of the game and focused on taking a holistic approach to our customers.Today's superb results give me confidence in our strategy and for our future. We assess our performance rigorously against a series of factors: We testwhether our core business is generating sufficient earnings to allow us toinvest in further growth. We monitor whether we have engendered a strongperformance orientation to push profits higher in the next few years. We testwhether our cost structure is competitive with that of the rest of our industryand whether our operating performance has been stable. We consistently assesswhether our market share has grown and we insist that we are reasonably wellprotected from new competitors, technologies or regulations that could changethe rules of the game. We are satisfied with our performance against these metrics. We also recognisethat we operate in a competitive environment and we have respect for ourcompetitors and for their approach to the market. We continually assess ourcompetitors' approach and results against our own metrics to determine how weflex our strategic marketing philosophy. In three years we have built abusiness that has increased its annual turnover from £0.8m to £21.7m andprofitability (before taxation and goodwill) from £0.2m to £7.4m. It is clearthat we now represent a different scale of challenge to some of our competitorsbut we will continue to stay loyal to our core beliefs. We will do all of thisbecause we believe in our mission, which is to become number one in our chosenmarket sector by continuing to build and develop an unbeatable team with sharedvalues and with accountability for consistently delivering record-breakinglevels of personal and operational performance. I believe that we currently have a market share of around 6% of the prestigecredit hire market. In terms of our future prospects, we have crafted ourstrategic plan recognising that to carry on growing we must master the art ofmanaging our pipeline so that income streams are replenished and strengthened atexactly the right moment. Our vision for the evolution of our sector, for ourposition in that marketplace and for controlling our revenue streams is veryclear to us and stretches into the next decade, although our emphasis willclearly be weighted this year towards further growing our market share inprestige vehicles and the future of the mainstream market. Operational Report Turning back to our performance over the last year, it is worth reflecting onthe fact that it was only in April 2004 that Accident Exchange moved into thepublic domain with its successful acquisition by the Company, which was listedon the Alternative Investment Market. Raising just £1.5 million before costs atthe time, we have developed and matured the business and increased the strengthof its senior management team whilst at the same time managing to propel theCompany from an initial market capitalisation of £15.4 million to a currentvalue of £154 million based on the placing price and the enlarged share capital. We believe that our vision, strategy and execution has created a significantreturn for those initial investors who purchased shares during the IPO. Ourprogress last year saw us enter both the FTSE AIM 50 and FTSE AIM 100 Indices inour first year as a public company. During the latter half of last year we focussed on defining and building ourstrategic vision and implemented the first phase of our strategy across oursales and development team. We are now building the development and successionplan for our management team to ensure that we deliver the increasedprofitability that we know we can generate and that we do so with an eye toother opportunities. During the year our growth in fleet, revenue and profitability showed how we canexecute on our strategy. It is rewarding for this success to be acknowledged by external observers.During the year we were awarded the prestigious Specialist Accident ManagementCompany of the Year by the Institute of Transport Management and we were alsoHighly Commended in the Barclays Bank West Midlands Business Awards as IPO ofthe Year in 2004. In December we announced that we were extending the product range to include awhite label Accident Management service which would be distributed to thecustomers of some of our new and existing dealers. Accident Management ismarketed under the dealers' own brand identities and we provide a complete 24/7response service to customers on behalf of the dealer. Having gone live veryrecently the service is already being extremely well received by our referringpartners and will contribute to the revenue and to the number of hire startsthat we will see as we progress through our 2006 financial year. In February 2005 we recruited a Performance Manager whose core responsibilitiesare helping us grow, train and develop the human resource that is so much afeature of our success. The Performance Management team now already comprisesfour people and is a significant aid to our operational managers as theyconfront the scale of our rapid growth. In April we completed on the lease of a new operations centre in Glasgow. We hadsome difficulties in terms of access to an earlier premise that we hadidentified but we are delighted to have completed in the unit based at CardonaldPark which will allow us to position several hundred cars in Scotland and buildstronger relationships in the far North of England and Scotland, areas that wehave hitherto served from Birmingham. New Relationship Wins Lord Young has outlined the relationship wins that we have already announcedthis year in his Chairman's report. I am delighted to be able to announce newrelationship wins as follows: We have signed an agreement with HR Owen plc for the provision of accidentmanagement and replacement vehicle services for the customers of their six Fordand Jaguar dealerships. The agreement extends our accident management customerbase. We have also signed a separate agreement with Holland Park Ltd and Heathrow Ltd,subsidiaries of HR Owen plc to purchase 110 vehicles over the next twelve monthswhilst providing credit hire and accident management services to the customersof their five BMW and five Mini dealerships in Chelsea, Chiswick, Holland Park,Heathrow and Western Avenue. We have also today signed a further agreement with Inchcape Retail, part ofInchcape plc, to provide accident management and credit hire services to thecustomers of a select number of their dealerships, which is expected to generatea significant increase in our fleet during the year. We continue to negotiate a number of other significant contracts, which weexpect to announce in the first half of the year. Outlook The current year has started well. Without doubt, we are energised by theperformance we delivered in the last quarter of the financial year and themomentum of our business. We are encouraged by the relationships with ourexisting referral sources and by the number of new opportunities that we seebefore us. We are confident that the combination of our team, knowledge,partnerships, customers and strategic plan will enable us to executesuccessfully on our strategy for 2006 and beyond. Steve EvansChief Executive10th June 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 30th April 2005 Restated Pro forma Year ended 9 Months ended Year ended 30 April 30 April 30 April 2005 2004 2004 Note £'000 £'000 £'000TurnoverExisting operations 21,680 347 4,123Cost of sales 1 (8,749) (156) (1,498)Gross profit 12,931 191 2,625 Administrative expenses:Other administrative expenses 1 (4,554) (76) (1,242)Amortisation of goodwill (656) (25) (25)Administrative expenses (5,210) (101) (1,267) Operating profit 7,721 90 1,358Net interest payable (1,016) (20) (245)Profit on ordinary activities before taxation 6,705 70 1,113Taxation 2 (2,241) (34) (374)Profit on ordinary activities after taxation 4,464 36 739Equity dividends 3 (926) - -Profit on ordinary activities for the financial period 3,538 36 739Basic and diluted earnings per share 4 7.2p 0.8p 1.2pAdjusted earnings per share 4 8.3p 1.4p 1.2p There were no recognised gains or losses other than the profit for the financialperiods and therefore no separate Statement of Total Recognised Gains and Lossesis presented. There is no difference between the reported profit on ordinary activities beforetaxation and the historical cost profit on ordinary activities before taxation. CONSOLIDATED BALANCE SHEETAs at 30th April 2005 Note 30 April 2005 30 April 2004 £'000 £'000Fixed assetsIntangible assets 5 12,562 13,103Tangible assets 6 16,413 4,337 28,975 17,440 Current assetsDebtors 7 12,272 2,941Cash at bank and in hand - 322 12,272 3,263Creditors:Amounts falling due within one year 8 (9,736) (2,630)Net current assets 2,536 633 Total assets less current liabilities 31,511 18,073 Creditors:Amounts falling due after more than one year 9 (12,009) (2,815) Provisions for liabilities and charges 10 (936) (295) Net assets 18,566 14,963 Capital and reservesCalled up share capital 3,713 3,707Share premium 410 2,913Other reserves 10,856 10,846Profit and loss account 3,587 (2,503)Equity shareholders' funds 11 18,566 14,963 CONSOLIDATED CASH FLOW STATEMENTFor the year ended 30th April 2005 Year ended 9 Months ended 30 April 30 April 2005 2004 Note £'000 £'000 Net cash inflow from operating activities 12 5,552 190 Returns on investments and servicing of financeInterest received 2 2Interest on bank loans and overdrafts (39) -Interest element of finance leases (979) (22)Net cash outflow from returns on investments and servicing (1,016) (20)of finance Taxation (81) - Capital expenditure and financial investmentPurchase of tangible fixed assets (314) (15)Proceeds from sale of investments - 338Proceeds of disposals of fixed assets 987 -Net cash inflow from capital expenditure and financial 673 323investment AcquisitionsPurchase of subsidiary undertaking - (413)Overdraft acquired with subsidiary undertaking - (852)Net cash outflow from acquisitions - (1,265) Equity dividends paid (309) - Net cash inflow / (outflow) before financing 4,819 (772) FinancingIssue of ordinary shares - 1,500Share issue costs - (192)Capital element of hire purchase contracts (5,158) (156)Net cash (outflow) / inflow from financing (5,158) 1,152 (Decrease) / increase in cash 13 (339) 380 NOTES TO THE PRELIMINARY ANNOUNCEMENTFor the year ended 30th April 2005 1. BASIS OF PREPARATION The preliminary announcement has been prepared under the historical costconvention and in accordance with applicable accounting standards. Theprincipal accounting policies of the Group are set out in the Group's 2005annual report which will be sent to shareholders on or before 22nd June 2005. In the last month of the comparative period, on 16th April 2004, the Companycompleted the acquisition of Accident Exchange Limited, and changed its name toAccident Exchange Group Plc. For comparison purposes we have thereforedisclosed pro forma results for the year ended 30th April 2004, compiled on thebasis as if Accident Exchange had been owned for the whole of the comparativeperiod. The comparative figures for the nine months ended 30th April 2004 have beenrestated to reclassify certain costs from overheads to cost of sales so as to beconsistent with the classifications used for the current financial year. Thisreclassification has no impact on reported profitability for either period. The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The consolidated balance sheet at 30th April 2005 and the consolidatedprofit and loss account, consolidated cash flow statement and associated notesfor the year then ended have been extracted from the Group's 2005 statutoryfinancial statements upon which the auditors opinion, dated 10th June 2005, isunqualified and does not include any statement under Section 237 of theCompanies Act 1985. 2. TAXATION ON PROFIT ON ORDINARY ACTIVITIES The tax charge represents: Year 9 Months Pro ended ended Forma 30 April 30 April Year 2005 2004 ended £'000 £'000 UK corporation tax at 30% 1,636 9 103Prior year adjustment (36) - 16Total current tax 1,600 9 119Deferred taxation provision 641 25 278Prior year adjustment - - (23)Total deferred tax 641 25 255Taxation on profit on ordinary activities 2,241 34 374 The tax assessed for the period differs from the standard rate of corporation tax in the UK asfollows: Profit on ordinary activities before tax 6,705 70 1,113Profit on ordinary activities multiplied by standard rate of 2,012 21 334corporation tax in the UK of 30%Effect of:Expenses not deductible for tax purposes 260 12 58Capital allowances in excess of depreciation (627) (27) (267)Prior year adjustment (36) - 3(Utilised) / Unutilised losses (9) 4 -Marginal relief - (1) (9)Current tax charge for the period 1,600 9 119 3. EQUITY DIVIDENDS Pro forma Year 9 Months Year ended ended Ended 30 April 30 April 30 April 2005 2004 2004 £'000 £'000 £'000Ordinary sharesInterim dividend 0.5p per share paid - paid 5 January 2005 (2004: 309 - -nil)Proposed final dividend of 1p per share (2004: nil) 617 - - 926 - - The Directors are recommending the payment of a final dividend of 1p (2004: nil)per share. If approved at the AGM, payment will be made on 22nd July 2005 toshareholders on the register on 24th June 2005. 4. EARNINGS PER SHARE Basic and diluted earnings per share The calculation of the basic earnings per share is based on the earningsattributable to ordinary shareholders divided by the weighted average number ofshares in issue during the year. Whilst 197,861 share options were issued in aggregate in March and April 2005,the dilutive effect of these potential ordinary shares is not material, andconsequently there is no material difference between basic earnings per shareand diluted earnings per share. Details of the earnings and weighted average number of shares used in thecalculations are set out below: Pro forma 9 Months Year Year ended ended Ended 30 April 30 April 30 April 2005 2004 2004 Profit on ordinary activities after taxation (£'000) 4,464 36 739Weighted average number of shares 61,710,273 4,467,920 61,710,273Basic and diluted earnings per share (pence) 7.23 0.81 1.20 Adjusted earnings per share The calculation of the adjusted earnings per share is based on earnings before goodwill as set out below: Profit on ordinary activities after taxation (£'000) 4,464 36 739Goodwill (£'000) 656 25 25Adjusted profit on ordinary activities after taxation 5,120 61 764(£'000)Weighted average number of shares 61,710,273 4,467,920 61,710,273Basic and diluted earnings per share (pence) 7.23 0.81 1.20Goodwill (pence) 1.07 0.56 0.04Basic earnings per share (pence) 8.30 1.37 1.24 For comparison purposes, both earnings per share and adjusted earnings per sharefor the pro forma year ended 30th April 2004 have been calculated using the sameweighted average number of shares in issue as for the current year. 5. INTANGIBLE FIXED ASSETS Software Goodwill Total £'000 £'000 £'000CostAt 1 May 2004 - 13,128 13,128Transferred during the year 285 - 285Fair value adjustment - (50) (50)At 30 April 2005 285 13,078 13,363AmortisationAt 1 May 2004 - 25 25Transferred during the year 79 - 79Amortised in the year 41 656 697At 30 April 2005 120 681 801Net book amount at 30 April 2005 165 12,397 12,562Net book amount at 30 April 2004 - 13,103 13,103 Goodwill above relates to the following: Date of Period of Original cost acquisition amortisation £'000 Accident Exchange Limited 16 April 2004 20 Years 13,128 On the basis of the strength of the relationship Accident Exchange Limited haswith both its customers and the major insurance companies, and its underlyingtechnology platform, the Directors consider that the useful economic life of thegoodwill is at least 20 years. During the year a review of fair values of the assets and liabilities acquiredin relation to Accident Exchange Limited was undertaken. As a result tradecreditors acquired have been reduced by £50,000 impacting both goodwill and theparent company value of investment. During the year certain software was transferred from tangible fixed assets tointangible fixed assets, and the useful life extended to five years reflectingthe value to the business. 6. TANGIBLE FIXED ASSETS Group Computer Fixtures and Motor Equipment Fittings Vehicles Total £'000 £'000 £'000 £'000CostAt 1 May 2004 310 88 3,984 4,382Additions in the year 221 93 15,453 15,767Transferred in the year (285) - - (285)Disposals in the year - - (1,473) (1,473)At 30 April 2005 246 181 17,964 18,391DepreciationAt 1 May 2004 7 1 37 45Charged in the year 78 37 2,297 2,412Transferred in the year (79) - - (79)Disposals - - (400) (400)At 30 April 2005 6 38 1,934 1,978Net book amount at 30 April 2005 240 143 16,030 16,413Net book amount at 30 April 2004 303 87 3,947 4,337 The figures stated above include assets held under hire purchase contracts asfollows: Motor Vehicles £'000Net book amount at 30 April 2005 16,030Net book amount at 30 April 2004 3,947 7. DEBTORS 30 April 30 April 2005 2004 £'000 £'000 Trade debtors 11,810 2,722Other debtors 265 152Prepayments and accrued income 197 67 12,272 2,941 8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 30 April 30 April 2005 2004 £'000 £'000 Bank loans and overdrafts 17 -Trade creditors 1,124 524Corporation tax 1,636 119Social security and other taxes 650 187Other creditors 179 198Dividends payable 617 -Amounts due under hire purchase contracts 5,323 1,451Accruals and deferred income 190 151 9,736 2,630 9. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 30 April 30 April 2005 2004 £'000 £'000 Amounts due under hire purchase contracts 12,009 2,815 Borrowings are repayable as follows: Within one year:Bank loans and overdrafts 17 -Hire purchase 6,665 1,745After one and within two years:Hire purchase 12,274 2,561After two and within five years:Hire purchase 52 341Less hire purchase interest on the above (1,659) (381) 17,349 4,266 10. PROVISIONS FOR LIABILITIES AND CHARGES Deferred taxation £'000 At 30 April 2004 295Provided in the year 641At 30 April 2005 936 11. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 30 April 30 April 2005 2004 £'000 £'000 Retained profit for the period 3,538 36Cost of employee share schemes 10 -Issue of ordinary share capital (including movement on other 55 14,866reserves)Net increase in shareholders' funds 3,603 14,902Equity shareholders' funds at 30 April 2004 14,963 61Equity shareholders' funds at 30 April 2005 18,566 14,963 12. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATINGACTIVITIES Year 9 Months ended ended 30 April 30 April 2005 2004 £'000 £'000Reconciliation of operating profit to net cash inflow from operating activitiesOperating profit 7,721 90Amortisation and impairment of goodwill 656 25Amortisation of intangible assets 41 -Depreciation 2,412 45Profit on disposal of investments - (18)Loss on sale of tangible fixed assets 20 1Increase in debtors (6,446) (24)Increase in creditors 1,148 71Net cash inflow from operating activities 5,552 190 13. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS / (DEBT) Year 9 Months ended ended 30 April 30 April 2005 2004 £'000 £'000 (Decrease) / increase in cash in period (339) 380Capital element of hire purchase contracts 5,158 156Cash flow from liquid resources - (338)Change in net debt resulting from cash flows 4,819 198Hire purchase acquired with subsidiary - (3,804)Inception of hire purchase contracts (18,224) (433)Other non-cash items - (167)Movement in net debt in period (13,405) (4,206)Net debt at 30 April 2004 (3,944) 262Net debt at 30 April 2005 (17,349) (3,944) 14. ANALYSIS OF CHANGES IN NET FUNDS / (DEBT) As at Non-cash As at 30 April 2004 Cashflows items 30 April 2005 £'000 £'000 £'000 £'000 Cash at bank and in hand 322 (322) - -Bank overdraft - (17) - (17) 322 (339) - (17)Hire purchase (4,266) 5,158 (18,224) (17,332)Net debt (3,944) 4,819 (18,224) (17,349) This information is provided by RNS The company news service from the London Stock Exchange