APP.L Regulatory News (APP)

9 Jun 2005 07:00

Park Group PLC09 June 2005 9 June 2005 PARK GROUP PLC Preliminary Results for the Year Ended 31 March 2005 Summary 2005 2004 Turnover £236.4m £217.0m -------- --------Profit before taxation £6.3m £5.0mcontinuing activities £(0.8)m £(3.1)mdiscontinued activities -------- -------- £5.5m £1.9m ======== ======== Earnings per share 2.34p 0.74p Final dividend per share 0.74p 0.675p Total dividend per share 1.10p 1.00p • Pre-tax profit from continuing operations 28 per cent higher • Dividend up 10 per cent • Interest receipts well up on previous year Peter Johnson, Chairman, comments: 'The cash savings recruitment campaign forChristmas 2005 is expected to result in an increase in orders of 7 per cent,while agent retention rates, currently running at almost 80 per cent, continueto exceed those achieved by our competitors. In cash lending, collections so farin the current year are 9 per cent ahead of 2004-05.' Enquiries: Peter Johnson, Executive Chairman Chris Houghton, Group Managing Director Park Group plc - Tel: 0151 653 1700 Issued on behalf of Park Group plc by Tavistock communications Limited(contact: Keith Payne, tel: 020 7920 3150) Chairman's Statement I am pleased to present an excellent set of results, which build further on thesolid progress of the last few years. Group turnover increased by 9 per cent to £236.4m while profit before tax was upsharply at £5.5m from £1.9m in 2003-04. Earnings per share rose to 2.34p from0.74p. The directors are pleased to recommend a final dividend of 0.74p pershare, payable on 3 October 2005 to shareholders on the register at the close ofbusiness on 2 September 2005, making a total distribution of 1.1p per share. Having last year disposed of the group's under performing assets, our corefinancial services businesses continued to make progress in 2004-05, deliveringan improved performance year on year. In addition, we have continued to expandthe range of financial products available to our growing customer base. As a result, profit before tax from continuing operations increased by 28 percent to £6.3m. The group's cash flow remains strong. This underlying strength has enabled us tocontinue to grow our loan book without recourse to external funding. Interestreceipts, at £2.0m, were 49 per cent above those of last year, driven byincreased cash balances and higher interest rates. Cash Savings The cash savings business increased its turnover by 9 per cent to £214.5m andits operating profit by 13 per cent to £3.2m, on the back of a successfulmarketing campaign that included both television and, for the first time, theinternet. These two methods of connecting with our customers have enabled us togrow the client base, while our commitment to a high standard of service hasenabled us to improve customer retention rates. The past year has also seen the successful launch of the 'Love2' range ofvouchers, complementing our extremely popular High Street Gift Voucher. Vouchersales increased by 10 per cent to £188.9m. Sales of vouchers to corporatecustomers increased by 11 per cent to £55.5m with those to the incentive marketagain contributing significantly, recording a gain in sales to £23.5m. The newlylaunched 'Love2travel' voucher is a welcome addition and will contribute to ourdeveloping Park Travel business. At the same time we have continued to expand the choice of retail outletsavailable to voucher customers, underlining the position of Park's High StreetGift Voucher as the most widely accepted multi-retailer voucher in the market. Cash Lending The cash lending business continued its growth of recent years with anotherstrong performance. Turnover increased by 52 per cent to £21.3m and operatingprofit by 48 per cent to £1.1m. The loan book grew by 41 per cent to £34.8m.Growth was centred on our core operating areas in the North of England, Scotlandand North Wales. We now have 42 branches with two new branches opened during the year. From thisgood-sized operating base, management is now concentrating on further improvingthe performance of the business and the quality of the loan book. Our chequecashing revenues grew modestly during the year by 9 per cent, reflecting theslow-down in the rate of branch openings. Our Cash Reserve unsecured loan bookgrew to £1.3m. During 2004-05 we saw the launch of our loan and mortgage broking business. Aswell as widening the range of products available, this new operation will enableus to utilise cross-selling opportunities between our cash savings and lendingbusinesses. Park Direct Insurance, launched last year, continues to make steady progress. Competition Commission Market Investigation In December 2004 the Office of Fair Trading (OFT) referred the UK home creditmarket to the Competition Commission for further investigation. We co-operatedfully with the OFT enquiry and are currently providing information to theCompetition Commission. It is anticipated that provisional findings will beavailable in six months time. As I stated in my interim report, we believe thatthe market is both transparent and highly competitive. AIM Listing The directors intend to change the company's stock exchange listing from theLondon Stock Exchange Main Market to the Alternative Investment Market (AIM). The directors have been advised that a company of Park Group's size is moresuited to a listing on AIM due to the increased flexibility and potential costsavings. International Financial Reporting Standards (IFRS) From 1 April 2005, as a fully listed company we are required to prepare ourfinancial statements in accordance with international accounting standards. It is the intention of the group to move towards a listing on AIM prior to thepublication of our interim results. As a result we will not be required toprepare these statements in compliance with IFRS. We will continue to worktowards compliance with IFRS in accordance with the requirements of AIM. Board Appointment Following the appointment of Chris Houghton as group managing director in Maylast year, we announced in September that Martin Stewart would be joining us asgroup finance director on 1 November 2004. This completed our executivemanagement team and I have every confidence that under its strong leadership thebusiness will be able to make further progress. Prospects The cash savings recruitment campaign for Christmas 2005 is expected to resultin an increase in orders of 7 per cent. In addition, agent retention rates,currently running at almost 80 per cent, continue to exceed those achieved byour competitors. The principal focus of our lending business this year will be to improve thequality of our loan book. On 5 October 2004 the board announced that I was exploring options with regardto my 74 per cent shareholding in Park. I am pleased to confirm that I and theexecutive directors of Park, with third party financial support, are now indiscussions to acquire the company. This may or may not lead to a formal offerfor the company. Christopher Baker and George Marcall, Park Group's two independent non-executivedirectors, have formed a committee to look after the interests of third partyshareholders. N M Rothschild & Sons Limited is advising this committee. Our success is due in no small measure to the work and dedication of our staffand I would like to thank all employees for their hard work and continuedsupport. Peter JohnsonChairman9 June 2005 PRELIMINARY ANNOUNCEMENT OF RESULTSFOR THE YEAR ENDED 31 MARCH 2005 2005 2004 Notes £'000 £'000 -------- --------Turnover 235,802 210,051 - Continuing operations 588 6,942 - Discontinued operations -------- -------- 1 236,390 216,993 ======== ========Operating profit - Continuing operations 4,320 3,590 - Discontinued operations (817) (2,803) -------- -------- 1 3,503 787Loss on disposal of business - (251)Interest receivable 2,026 1,361Interest payable (3) (1) -------- --------Profit on ordinary operations before taxation 5,526 1,896Taxation 2 (1,694) (683) -------- --------Profit on ordinary operations after taxation 3,832 1,213Dividends (1,806) (1,634) -------- --------Retained profit/(loss) for the financial year 2,026 (421) ======== ========Earnings per share- basic 3 2.34p 0.74p- diluted 3 2.29p 0.73p CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2005 2005 2004 £'000 £'000Fixed assetsIntangible assets 2,824 2,221Tangible assets 7,440 8,726Investments 2 2 ------- ------- 10,266 10,949 ------- -------Current assetsStocks 685 1,461Debtors 42,994 32,378Cash 4,694 4,640 ------- ------- 48,373 38,479Creditors (61,334) (54,266) ------- -------Net current liabilities (12,961) (15,787)Provisions (24) - ------- -------Net liabilities (2,719) (4,838) ======= =======Capital and reserves 3,283 3,267Called up share capitalShare premium account 969 892Profit and loss account (6,971) (8,997) ------- -------Shareholders' deficit (2,719) (4,838) ======= ======= GROUP CASH FLOW STATEMENTFOR THE YEAR ENDED 31 MARCH 2005 2005 2005 2004 2004 £'000 £'000 £'000 £'000Net cash inflows/(outflows) fromoperating 1,279 (596)activitiesReturns on investments and servicingof financeInterest received 2,027 1,362Interest paid (3) (1) 2,024 1,361 -------- --------Taxation (945) (895)Capital expenditure and financial investmentPurchase of tangible fixed assets (697) (1,016)Sale of tangible fixed assets 872 944 175 (72) -------- --------Acquisitions and disposals (938) (1,926) Equity dividends paid (1,634) (1,219)Financing Issue of ordinary share capital 93 93 -------- --------Increase/(decrease) in cash 54 (3,254) -------- -------- Notes 1. Analysis of turnover and operating profit Year ended Year ended 31.03.05 31.03.04 Turnover Operating Turnover Operating profit/(loss) profit/(loss) £'000 £'000 £'000 £'000Cash savings 214,517 3,237 196,089 2,859Cash lending 21,285 1,083 13,962 731 -------- -------- -------- -------- Continuing operations 235,802 4,320 210,051 3,590 Discontinued operations 588 (817) 6,942 (2,803) -------- -------- -------- -------- 236,390 3,503 216,993 787 ======== ======== ======== ======== Continuing Discontinued Continuing Discontinued operations Operations operations OperationsOperatingprofit/(loss) 4,320 (817) 3,590 (2,803)Loss on disposal ofbusiness - - - (251)Net interestreceipts 2,023 - 1,356 4 -------- -------- -------- --------Profit before taxation 6,343 (817) 4,946 (3,050) ======== ======= ======== ======== Cash lending result includes - £'000 £'000Charge for bad and doubtful debts (6,340) (2,856) -------- --------- 2. Taxation £'000 £'000Charge for the year - currentand deferred 1,757 687Prior year adjustments (63) (4) -------- --------- 1,694 683 ======== ========= 3. Earnings per share The calculation of basic and diluted earnings per share is based on the profiton ordinary operations after taxation of £3,832,000 (2004 - £1,213,000) and onthe weighted average number of shares, calculated as follows: 2005 2004Basic eps - weighted average number of shares 163,716,419 162,901,411Diluting effect of employee share options 3,398,958 3,204,822 ------------ ----------Diluted eps - weighted average number of shares 167,115,377 166,106,233 ------------ ---------- 4. The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 March 2005 or 2004 but is derived fromthose accounts. Statutory accounts for 2004 have been delivered to the Registrarof Companies and those for 2005 will be delivered following the company's annualgeneral meeting. The auditors have reported on those accounts; their reportswere unqualified and did not contain statements under section 237(2) or (3) ofthe Companies Act 1985. 5. The annual report will be posted to shareholders on 14 July 2005 and theannual general meeting of the company will be held in Birkenhead on Tuesday 20September 2005. This information is provided by RNS The company news service from the London Stock Exchange