Last checked at 
11 Sep 2012 07:00
Date: 11 September 2012
On behalf of: Allanfield Group Plc ("Allanfield", "the Group" or "the Company")
Embargoed until: 0700hrs
Allanfield Group Plc
Interim Results for the six months ended 30 June 2012
Allanfield Group Plc (AIM: ALF), the specialist real estate insurance broker, is pleased to announce its unaudited interim results for the six months to 30 June 2012.
Financial & Operational Highlights
§ Net Revenue increased by 33.5% to £2.1m (H1 2011: £1.6m)
§ Adjusted* operating profit from trading increased 16.8% to £1.0m (H1 2011: £0.9m)
§ Established real estate terrorism facility
§ Continued to achieve further efficiencies following successful integration of acquisition of Industrial and Commercial Property Insurance Consultants Limited ("ICP")
*pre amortization and exceptionals
Commenting on the Group's results, John Dembitz, Chairman, said:
"I am pleased to report that the Group has delivered strong growth in revenue and operating profit from trading in the period. The investment in infrastructure that the Group has made since listing is now complete and bearing fruit.
"With the quality of our client base and the strength of the business' foundations, we are confident that the business will continue to deliver growth and operating cashflow. We are pleased with the performance of the Group during the period, and look forward to continuing to push on with our stated strategy of both organic and acquisitive growth, appraising those opportunities to create shareholder value wherever possible."
Enquiries:
Allanfield Group Plc | Tel: 020 7472 5999 |
Gary Field / Darryl Noik | |
finnCap |
Tel: 020 7220 0500 |
Charlotte Stranner / Matt Goode/Brian Patient | |
Redleaf Polhill |
Tel: 020 7566 6720 |
Emma Kane / David Ison | allanfield@redleafpolhill.com |
Notes to Editors:
§ The reinstatement value of the property portfolios insured through Allanfield is in excess of £18bn
§ The Group offers an innovative loyalty scheme to encourage clients to retain and grow insurance cover managed by the Group by "rewarding" them for their business by giving them shares in a subsidiary of Allanfield, which may be exchanged for cash and/or shares in Allanfield at the end of a three year period subject to certain conditions.
§ Allanfield's business model is based on having fewer larger clients, supported by leading industry technology and retaining clients through good service management.
§ Allanfield launched its own terrorism facility in June 2012 as an alternative to Pool Re.
Chairman's statement
I am pleased to announce that the Group's trading for the six-months to 30 June 2012 is in line with the Board's expectations.
Our strategic objective remains to provide exceptional service to substantial property owner/management clients - high value, low volume business. We seek to be innovative in our client relationships and we incentivise our clients by offering shares in the business in return for placing their insurance with the Group.
Since its Admission to AIM in August 2011, the Group has focused on ensuring that it has a solid infrastructure in place to support its longer term growth ambitions. This has included widening the Group's skills base and implementing new systems.
We have continued to reap benefits in terms of operational efficiencies and improved client service following the acquisition of ICP in August 2011, which has been fully integrated in terms of people, culture and process.
In June 2012, the Group established a real estate terrorism facility as an alternative to Pool Re, the terrorism cover managed by the government, and we are on target to meet the forecast Gross Written Premium. This facility is reinsured through Lloyd's of London and the capital has been secured from external providers meaning that there is no associated financial risk to the Group's balance sheet.
From an operational perspective, we monitor the performance of the Group on net revenue and EBITDA - the financial accounts are prepared in accordance with IFRS and include non-cash flow adjustments for the write off of intangible assets and for the cost of issuing share options to key staff.
The Group's revenue increased by 33.5% on a like for like basis to just over £2 million for the six months to 30 June 2012. Operating profit from trading increased from £894,000 to £1,044,000, a 16.8% increase.
We are continuing to grow our business both organically and through acquisitions. As such we are actively looking for acquisition opportunities which meet the criteria of being real estate specialists; insurance brokers, insurance divisions of property managers, broking teams and individuals.
I am confident that the business will continue along its current path delivering healthy growth in the top-line, with strong profitability and cash generation.
Combined statement of comprehensive income
For the six months ended 30 June 2012
Six months ended | Six months ended | Year ended | ||||
30 June | 30 June | 31 December | ||||
2012 | 2011 | 2011 | ||||
(unaudited) | (unaudited) | (audited) | ||||
£ | £ | £ | ||||
Revenue | ||||||
Continuing operations | 2,083,402 | 1,560,435 | 2,279,880 | |||
Administrative expenses | 1,655,150 | 666,580 | 2,643,916 | |||
Operating profit/(loss) | 428,252 | 893,855 | (364,036) | |||
Analysed as: | ||||||
Operating profit before amortisation and exceptional items | 1,041,516 | 893,855 | 856,224 | |||
Amortisation of intangible assets | (613,264) | - | (459,948) | |||
Exceptional items | - | - | (760,312) | |||
Operating profit/(loss) | 428,252 | 893,855 | (364,036) | |||
Finance income | - | 369 | - | |||
Finance costs | (89,524) | (1,569) | (90,897) | |||
Profit/(Loss) before taxation | 338,728 | 892,655 | (454,933) | |||
Income tax expense | 207,656 | 45,084 | 21,479 | |||
Profit/(Loss) for the period and total comprehensive income | 131,072 | 847,571 | (476,412) | |||
Consolidated Earnings per share | ||||||
Basic (pence) | 0.77p | 13.34p | 7.50p | |||
Diluted (pence) | 0.77p | 13.34p | 7.50p | |||
Consolidated EBITDAE per share | ||||||
Basic (pence) | 6.22p | 14.20p | 13.92p | |||
Diluted (pence) | 6.22p | 14.20p | 13.92p | |||
Combined statement of financial position
As at 30 June 2012
As at 30 June | As at 31 December | |||||
2012 | 2011 | 2011 | ||||
(unaudited) | (unaudited) | (audited) | ||||
£ | £ | £ | ||||
ASSETS | ||||||
Non current assets | ||||||
Property, plant and equipment | 75,419 | 62,995 | 68,040 | |||
Intangible assets | 7,201,206 | - | 7,814,470 | |||
7,276,625 | 62,995 | 7,882,510 | ||||
Current assets | ||||||
Trade and other receivables | 1,864,147 | 6,759,851 | 1,046,988 | |||
Cash and cash equivalents (note 4) | 2,615,822 | 772,069 | 2,526,774 | |||
4,479,969 | 7,531,920 | 3,573,774 | ||||
TOTAL ASSETS | 11,756,594 | 7,594,915 | 11,456,272 | |||
LIABILITIES | ||||||
Current liabilities | ||||||
Current income tax liability | 385,661 | 254,090 | 141,066 | |||
Deferred income tax liability | 318,897 | - | 318,897 | |||
Deferred consideration | 1,233,000 | - | 1,252,103 | |||
Borrowings | 700,000 | - | 700,000 | |||
Trade and other payables | 1,975,027 | 600,849 | 1,643,678 | |||
4,612,585 | 854,939 | 4,055,744 | ||||
Non Current liabilities | ||||||
Deferred income tax liability | 478,346 | - | 518,208 | |||
Deferred consideration | 337,000 | - | 337,000 | |||
Long term borrowings | 2,275,000 | - | 2,625,000 | |||
| 3,090,346
| - | 3,480,208 | |||
Total liabilities
| 7,702,931 | 854,939 | 7,535,952 | |||
Net Assets | 4,053,663 | 6,739,976 | 3,920,320 | |||
SHAREHOLDERS' EQUITY | ||||||
Share capital | 253,731 | 2,100 | 253,731 | |||
Share premium | 3,333,156 | - | 3,333,156 | |||
Merger reserve | (198,000) | - | (198,000) | |||
Share based payments reserve | 2,271 | - | - | |||
Retained earnings | 662,505 | 6,737,876 | 531,433 | |||
Total shareholders' equity | 4,053,663 | 6,739,976 | 3,920,320 | |||
Combined statement of cash flows
For the six months ended 30 June 2012
Six months ended | Six months ended | Year ended | ||||
30 June | 30 June | 31 December | ||||
2012 | 2011 | 2011 | ||||
(unaudited) | (unaudited) | (audited) | ||||
£ | £ | £ | ||||
Cash flows from operating activities | ||||||
Profit/(loss) before income tax expense | 338,728 | 892,655 | (454,933) | |||
Adjustment for: | ||||||
Amortisation | 613,264 | - | 459,948 | |||
Depreciation of tangible assets | 10,772 | 7,721 | 22,681 | |||
Loss on disposal of tangible asset | - | - | 5,139 | |||
Share based payments expense | 2,271 | |||||
Finance income | - | (369) | - | |||
Finance expense | 89,524 | 1,569 | 90,897 | |||
1,054,559 | 901,576 | 123,732 | ||||
Movement in working capital | ||||||
Increase in receivables | (817,159) | (1,019,868) | (39,898) | |||
Increase in creditors within one year | 331,348 | 429,657 | 918,368 | |||
Cash generated from operations | 568,748 | 311,365 | 1,002,202 | |||
Interest paid | (89,524) | (1,569) | (90,897) | |||
Income tax paid | (2,923) | 1,311 | (207,695) | |||
Net cash generated from operating activities | 476,301 | 311,107 | 703,610 | |||
Cash flows from investing activities | ||||||
Interest received | - | 369 | - | |||
Purchase of property, plant and equipment | (18,150) | (4,694) | (29,838) | |||
Acquisition of subsidiary Initial consideration | - |
- |
| (3,500,000) | ||
Net assets, net of cash | (19,103) | - | (91,536) | |||
Net cash used in investing activities | (37,253) | (4,325) | (3,621,376)) | |||
Cash flows from financing activities | ||||||
Issue of Ordinary shares | - | 1,120,221 | ||||
Bank borrowings | - | - | 3,500,000 | |||
Bank loan repayments | (350,000) | - | (175,000) | |||
Net cash (utilised)/generated in financing activities | (350,000) | - | 4,445,221 | |||
Net increase in cash and cash equivalents | 89,048 | 306,782 | 1,527,427 | |||
Cash and cash equivalents at start of period | 2,526,774 | 465,287 | 999,317 | |||
Cash and cash equivalents at end of period | 2,615,822 | 772,069 | 2,526,774 |
Statement of Changes in Shareholders' Equity
For the six months ended 30 June 2012
Share capital | Share premium | Retained earnings |
Merger reserve |
Share based payments reserve | Total | |
£ | £ | £ | £ | £ | £ | |
Equity at 1 January 2011 | 2,100 | - | 5,890,305 | - | - | 5,890,305 |
Comprehensive income | ||||||
Profit for the period | - | - | 847,571 | - | - | 847,571 |
Total comprehensive income for the period | - | - |
847,571 | - |
- | 847,571 |
Equity as at 30 June 2011 | 2,100 | - | 6,737,876 | - |
- | 6,739,976 |
Comprehensive income | ||||||
Profit for the period | - | - | (6,206,443) | - | - | (6,206,443) |
Total comprehensive income for the period | - | - | (6,206,443) | - |
- | (6,206,443) |
Transactions with owners | ||||||
Shares issued re shares for share exchange with Allanfield Property Insurance Services Limited | 198,000 | - | - | (198,000) |
- | - |
Shares issued on the acquisition of Real Estate Property Brokers Limited | 33,831 | 2,232,835 | - | - |
- | 2,266,666 |
Other share issues | 19,800 | 1,180,100 | - | - | - | 1,199,900 |
Share issue costs | - | (79,779) | - | - | - | (79,779) |
Total transactions with the owners | 251,631 | 3,333,156 | - | (198,000) |
- | 3,386,787 |
Equity as at 31 December 2011 | 253,731 | 3,333,156 | 531,433 | (198,000) |
- | 3,920,320 |
Comprehensive income | ||||||
Profit for the period | - | - | 131,072 | - | - | 131,072 |
Total comprehensive income for the period | - | - | 131,072 | - |
- | 131,072 |
Transactions with owners | ||||||
Share based payments reserve | - | - | - | - |
2,271 | 2,271 |
Total transactions with the owners | - | - | - | - |
2,271 | 2,271 |
Equity as at 30 June 2012 | 253,731 | 3,333,156 | 662,505 | (198,000) |
2,271 | 4,053,663 |
Notes to the interim financial statements
1 General information
Allanfield Group Plc is a company incorporated in the United Kingdom, which is listed on AIM, a market operated by the London Stock Exchange Plc. The address of its registered office is 99 Heath Street, London, NW3 6ST.
2 Financial information
The interim combined financial information for the six months ended 30 June 2012 has not been audited or reviewed and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.
The individual statutory accounts for Allanfield Property Insurance Services Limited (APIS) for the year ended 31 December 2011 and for Industrial & Commercial Property Insurance Consultants Limited (ICP) for the period ended 17 August 2011 have been delivered to the Registrar of Companies. The reports of the independent auditors on those financial statements was unqualified and did not contain a statement under Sections 498 (2) or (3) of the Companies Act 2006.
The combined financial information had been prepared by aggregating the relevant assets, liabilities, results, share capital and reserves of PLC, APIS and ICP.
The combined financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRSs as adopted by the EU') except as described below.
IFRSs as adopted by the EU do not provide for the preparation of combined financial information and accordingly in preparing the combined financial information certain accounting conventions commonly used for the preparation of historical financial information have been applied. The application of these conventions results in the following material departures from IFRSs as adopted by the EU. In other respects IFRSs as adopted by the EU have been applied.
Comparatives
For the six month period to 30 June 2011, the entities comprising Allanfield Group Plc did not include an overall holding company and therefore did not form a legal group. However, their results and net assets had been combined and, where applicable, consolidation adjustments had been included to show this combination of companies as a group when presenting the financial information for that period (the comparatives in this interim report).
3 Cash and cash equivalents
The Group holds fiduciary cash totalling £1,780,120 (December 2011:1,375,090) on behalf of its clients in statutory and non-statutory trust accounts.
4 Dividends
The directors do not propose to declare a dividend in respect of the period.
5 Copies of interim results
Copies of the interim results can be obtained from the website www.allanfieldgroup.com. From this site you may access our financial reports and presentations and details about the company and its operations.