JLF.L Regulatory News (JLF)

25 Jan 2005 07:00

Jelf Group PLC25 January 2005 Date: 25 January 2005On behalf of: Jelf Group PLC ("Jelf")Embargoed until: 0700hrs Jelf Group PLCPreliminary Results 2004For year ended 30 September 2004 Jelf Group PLC, an established corporate intermediary based in the West Countryand Wales offering a range of corporate services principally in the areas ofcommercial insurance, healthcare and financial services, today announced itsinaugural set of preliminary results as a listed company on AIM. The resultsare for the year ended 30 September 2004. The highlights are: • Turnover increased by 26% to £8.46m (2003: £6.72m) • Earnings before interest, tax, depreciation and amortisation (EBITDA) of £0.88m (2003: £0.71m) - up 24%. • Operating margins prior to charging goodwill have increased marginally, to 9.3% (2003: 9.1%), despite a year of heavy investment • Basic earnings per share up 39% to 3.2p (2003: 2.3p) • Acquisition of Pontin & Stein, a significant healthcare business Post Balance Sheet Events: • Admission to AIM raising £2.1m net • Approval by FSA of all relevant Jelf trading subsidiaries Commenting on the results, Christopher Jelf, Chairman of Jelf Group PLC, said: "I am delighted to report another period of excellent trading for the JelfGroup, delivering a strong set of results for the Group for the year ending 30September 2004. During the period under review, further significant advanceswere made in line with the Group's strategy of creating a profitable, corporateniche in the financial services sector through organic and acquisitive growth. "Whilst much has been achieved in the last year, this only serves to emphasisethe Group's potential and gives us confidence that 2005 should be another yearof significant progress." For further information: Redleaf Communications Tel: 020 7955 1410Emma Kane/Sanna Lehtinen Mob: 07876 338339 Jelf Group PLCAlex Alway (Group Chief Executive) Contactable via Redleaf on 25/01/2005John Harding (Group Finance and Operations Director) Contactable via Redleaf on 25/01/2005 Chairman's statement I am delighted to report another period of excellent trading for the Jelf Group,delivering a strong set of results for the Group for year ending 30 September2004. During the period under review, further significant advances were made in linewith the Group's strategy of creating a profitable, corporate niche in thefinancial services sector through organic and acquisitive growth. Our focuscontinues to be to build on our competitive advantages in respect of: • keeping a clear client focus;• achieving high customer retention;• delivering clear customer communications; and• developing our range of services. In December 2003, the Jelf Group further strengthened its presence in thecorporate healthcare market by acquiring and successfully integrating Pontin &Stein, a significant corporate healthcare business. In addition, the Group hasrecruited a number of high quality individuals to our team. Financial results For year ending 30th September 2004, the Group increased turnover by 26% to£8.46m (2003: £6.72m) and achieved earnings before interest tax, depreciationand amortisation (EBITDA) of £0.88 m (2003: £0.71m). This represents an increaseof 24%. Operating margins prior to charging goodwill have increased marginally, to 9.3%(2003: 9.1%), despite a year of heavy investment. Consolidated shareholders' funds as at 30th September 2004 amounted to £1.87m(2003: £1.52m) representing an increase of 23%. The basic earnings per shareamounted to 3.2p (2003: 2.3p). The balance sheet has been strengthened by the injection of £2.1m of funds fromthe placing of shares after the year-end. In line with the Group's stated dividend policy, the Directors intend tocommence payment of dividends only when it becomes commercially prudent to doso, having regard to the availability of the Company's distributable profits andthe retention of funds required to finance future growth. As a result, theBoard is not recommending the payment of a dividend. Operations The integration of acquired businesses, together with the Group's organicexpansion through offering a wider range of services to clients, continues to beat the core of our strategy. The robust infrastructure that already existed within the Group has beenstrengthened even further with the introduction of improved complianceprocedures and a Group wide marketing database. These developments haveincreased the incidence of cross referral to existing clients. In addition, the creation of a group-wide compliance function has enabled us toembrace new regulatory environments, using the skills and knowledge gained fromoperating a Financial Services Authority (FSA) compliant financial services teamfor some years, without incurring exceptional incremental costs. Business development During this financial year, a combination of acquisitions, recruitment ofadditional advisers and the implementation of a strategic marketing plan havestrengthened the Group's new business development activities. Key milestones throughout the year include the: • Acquisition and integration of Pontin & Stein, a corporate healthcare brokerage; • Purchase of a book of corporate healthcare business from 'You at work', an online employee benefits business; • Recruitment of a number of additional advisers across the Group's client facing operations; • Development of a group-wide lead generation programme utilising a range of approaches including telemarketing, seminars, targeted mailings, cross referrals and a proactive press and PR strategy. The Group has a pipeline of acquisition and recruitment opportunities that willcontinue to be developed during the coming year. It is anticipated that theprofile and brand awareness that the Group has gained will continue to attractnew business development and recruitment opportunities. The Group's focus on existing clients remains at the heart of its businessstrategy. We intend building on this strong foundation through a number ofimprovements to our customer management practices across the Group in the comingyear. These developments will ensure that the Group continues to achieveimpressive client retention figures. Regulation The FSA assumed responsibility for regulation of both the general insurance andhealthcare intermediary sectors on 14th January 2005. I am pleased to be able toconfirm that, thanks to the efforts of our compliance team, all of the JelfGroup trading subsidiaries affected by this development have received theappropriate approvals from the FSA. Given the relatively straightforward application process prescribed by the FSA,introduction of an FSA regulated environment for the insurance and healthcaresectors has not generated many additional insurance acquisition opportunities.However, there is some early evidence of healthcare brokers reviewing theiroptions and approaching the Group. It is envisaged that operating within an FSA regulated environment will provechallenging for smaller insurance brokers; thus offering opportunities forconsolidation in this sector later in 2005. Spitzer The investigation by New York attorney general, Elliot Spitzer, into thepractices surrounding placement agreements has caused some concern amongstlarger, typically international, brokerages. These investigations have focusedon the insurance sector, which represents one of three sectors that the Groupoperates within. Due to the relatively small amount of insurance commission earned on acontingent basis, and the competitive nature of our target corporate clientmarkets, it is expected that the Group's performance will remain unaffected. Post balance sheet event - Admission to AIM On 21st October 2004, the Group was admitted to the Alternative InvestmentMarket (AIM). 3,086,420 shares were placed, with a combination of private andinstitutional investors, at 81 pence per share, raising £2.1m (net of costs andexcluding VAT). This capital has been raised to support the Group's plans forcontinued organic growth and further acquisitions. People The performance of the Group reflects the quality and professionalism of itsemployees. The employees that make up the Jelf Group, along with theircommitment to our clients, remain our biggest assets. I would like to thank allJelf's employees for their tremendous energy and dedication over the last year. The future The Group will continue with its existing strategy of consolidating its positionin chosen markets with the acquisition and integration of quality businesses andpeople, whilst enhancing the range of services offered to clients. Looking forward, the Group faces a number of challenges within the regulatedenvironments in which it trades. The Group will strive to maintain above averageperformance and add real shareholder value through the introduction of new ITinfrastructure, improved procedures and additional corporate services. Whilst much has been achieved in the last year, this only serves to emphasisethe Group's potential and gives us confidence that 2005 should be another yearof significant progress. Christopher JelfGroup Chairman 25 January 2005 Notes to Editors: • Jelf Group was founded by Chris Jelf in 1989. Today, the Jelf Group operates from a number of premises in the West Country and Wales and offers an extensive range of corporate services; • The Group advises over 4,500 corporate clients across a range of disciplines. These clients cover the spectrum from significant public companies to small owner managed businesses. Core Jelf clients are medium sized owner-managed businesses, typically employing between one to 50 staff, with a turnover of up to £10 million; • The Group has developed a corporate support infrastructure that has enabled it to make a number of acquisitions over the last four years. These acquisitions span all core areas of the Group's business and have been made to either supplement existing operations or acquire a corporate client base that can be utilised by the enlarged Group. The significant acquisitions were as follows: o 2000 - IFM - IFA based in Bristol - relocated to Yate, Bristol; o 2001 - Corporate Healthcare Management - Healthcare partnership; o 2002 - Spring Gate Insurance - Purchase of a book of commercial insurance; o 2003 - Richard Levinge Associates - IFA business based in Cheltenham; o 2003 - SLF Insurance (Services) Ltd - Purchase of a book of commercial insurance; o 2003 - Kallender Walwyn Ltd - Purchase of commercial insurance business based in Trowbridge; and o 2003 - Pontin and Stein - Corporate Healthcare partnership. o 2004 - Managed Healthcare Ltd - acquisition of independent Somerset based brokerage specialising in healthcare and private medical insurance • Further information is available on Jelf at the Company's website: www.jelfgroup.com. CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 30 September 2004 Notes 2004 2003 £'000 £'000 £'000 £'000 TURNOVER 1,2 8,461 6,716- Existing 7,807 6,213- Acquired 654 503Cost of sales (372) (433) GROSS PROFIT 8,089 6,283 - Existing 7,436 5,784- Acquired 653 499Administrative expenses (7,533) (5,822) OPERATING PROFIT 3 556 461 Income from other investments 7 1Interest receivable 6 10 10Interest payable 7 (50) (31) PROFIT ON ORDINARY ACTIVITIES BEFORE 523 441TAXATION TAXATION ON PROFIT ON ORDINARY ACTIVITIES 8 (199) (193) PROFIT ON ORDINARY ACTIVITIES AFTER 324 248TAXATION DIVIDENDS - - RETAINED PROFIT FOR THE YEAR 18 324 248 Earnings per share : Basic 19b 3.2p 2.3p All amounts relate to continuing operations. There are no recognised gains and losses other than those reported in the profitand loss account. There is no material difference between the results as disclosed in the profitand loss account and the results on an historical cost basis. The notes on pages 13 to 30 form part of these financial statements. CONSOLIDATED BALANCE SHEETAs at 30 September 2004 2004 2003 Notes £'000 £'000 £'000 £'000 FIXED ASSETSIntangible fixed assets 10 1,736 1,122Tangible fixed assets 11 414 362Investments 12 35 25 2,185 1,509CURRENT ASSETSDebtors 13 3,178 2,549Cash at bank and in hand 1,401 1,265 4,579 3,814 CREDITORS: amounts falling due withinone year 14 (3,893) (3,341) NET CURRENT ASSETS 686 473 TOTAL ASSETS LESS CURRENT LIABILITIES 2,871 1,982 CREDITORS: amounts falling due after morethan one year 15 (903) (371) PROVISIONS FOR LIABILITIES AND CHARGES 16 (98) (89) 1,870 1,522NET ASSETS CAPITAL AND RESERVES Called up share capital 17 103 15Share premium account 18 1,011 1,075Capital reserve 18 13 13Capital redemption reserve 18 1 1Profit and loss account 18 742 418 SHAREHOLDERS' FUNDS 19a 1,870 1,522 - all equity The financial statements were approved by the board on and signed on its behalf The notes on pages 13 to 30 form part of these financial statements. COMPANY BALANCE SHEETAs at 30 September 2004 2004 2003 Notes £'000 £'000 £'000 £'000FIXED ASSETSInvestments 12 1,406 1,356 CURRENT ASSETSDebtors 13 940 358Cash at bank and in hand 161 237 1,101 595 CREDITORS: amounts falling due within oneyear 14 (1,003) (653) NET CURRENT ASSETS/(LIABILITIES) 98 (58) TOTAL ASSETS LESS CURRENT LIABILITIES 1,504 1,298 CREDITORS: amounts falling due after more than one year 15 (379) (191) NET ASSETS 1,125 1,107 CAPITAL AND RESERVES Called up share capital 17 103 15Share premium account 18 981 1,045Capital redemption reserve 18 1 1Profit and loss account 18 40 46 SHAREHOLDERS' FUNDS 19a 1,125 1,107- all equity The financial statements were approved by the board on and signed on its behalf CONSOLIDATED CASH FLOW STATEMENTFor the year ended 30 September 2004 2004 2003 Note £'000 £'000 Net cash inflow from operating activities (page 12) 854 560 Returns on investments and servicing of finance 20 (33) (20) Taxation (179) (155) Capital expenditure and financial investment 20 (129) (147) Acquisitions and disposals (373) (192) Cash inflow before use of liquid resources and financing 140 46 Financing:(Decrease)/increase in debt 20 (4) 134 Increase in cash in the period 136 180 CONSOLIDATED CASH FLOW STATEMENT INFORMATIONFor the year ended 30 September 2004 2004 2003 Note £'000 £'000 £'000 £'000 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Operating profit 556 461Amortisation of intangible assets 231 149Depreciation of tangible fixed assets 89 96Loss on disposal of tangible fixed assets 8 18(Increase) in debtors (629) (388)Increase in creditors 600 249(Decrease) in provisions (1) (25) Net cash inflow from operating activities 854 560 RECONCILIATION OF NET CASH FLOW TO MOVEMENTIN NET DEBT 21 Increase in cash in the period 136 180 Cash (inflow)/outflow from (increase)/ decrease indebt and lease financing 28 (47) New deferred consideration (548) (346)Revision of deferred consideration 23 31 Change in net debt resulting from cash flows (361) (182) Movement in net debt in the period (361) (182) Net funds at 1 October 2003 351 533 Net (debt)/funds at 30 September 2004 (10) 351 NOTES TO THE FINANCIAL STATEMENTSFor the year ended 30 September 2004 1. ACCOUNTING POLICIES The financial statements have been prepared in accordance with applicableaccounting standards in the United Kingdom. 1.1 Basis of accounting The financial statements have been drawn up using the historical cost conventionand include the results of the company's operations which are described in theDirectors' Report, all of which are continuing. 1.2 Basis of consolidation The group financial statements consolidate the financial statements of JelfGroup PLC and all its subsidiary undertakings drawn up to 30 September 2004.Intra-group transactions are eliminated on consolidation and all figures relateto external transactions only. 1.3 Investments Investments are stated at cost less any impairment. 1.4 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost or valuation less depreciation. Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets, less their estimated residual value, over their expected useful lives on the following basis: Leasehold buildings - 100% In year of purchaseMotor vehicles - 25% Reducing balanceFixtures & Fittings - 15% Reducing balanceComputer equipment - 20% Straight line 1.5 Goodwill Goodwill arising on the acquisition of certain subsidiary companies is beingamortised on a straight line basis over its estimated economic life of tenyears. 1.6 Leasing and hire purchase Assets obtained under hire purchase contracts and finance leases are capitalisedas tangible fixed assets. Assets acquired by finance lease are depreciated overthe shorter of the lease term and their useful lives. Assets acquired by hirepurchase are depreciated over their useful lives. Finance leases are those wheresubstantially all of the benefits and risks of ownership are assumed by thecompany. Obligations under such agreements are included in creditors net of thefinance charge allocated to future periods. The finance element of the rentalpayment is charged to the profit and loss account so as to produce a constantperiodic rate of charge on the net obligation outstanding in each period. 1.7 Operating leases Rentals applicable to operating leases where substantially all of the benefitsand risks of ownership remain with the lessor are charged to profit and lossaccount as incurred. 1.8 Turnover - Income recognition Income is recognised on a receivable basis. General insurance businessbrokerage is treated as earned when an invoice is raised for the premium. It istransferred to the office bank account: (i) when net premiums are paid to the insurers, or (ii) when commission is received from the insurer in those cases where clients pay premiums directly to the insurer. A clawback provision is made for brokerage repayable to insurance companieswhere it has been received and receivable on indemnity terms during the year. 1.9 Acquisitions Following acquisition, businesses are fully integrated into the existingactivities of the Group. As a result of this the Directors do not consider itpracticable to analyse the results of acquired entities beyond the level ofcontribution to overhead expenditure. In accordance with Financial Reporting Standard No.3 the turnover andcontribution to overhead expenditure of acquisitions is shown separately for theyear in which the acquisition occurred. 1.10 Pensions The group operates a defined contribution pension scheme for its directors andthe pension charge represents the amounts payable by the company to the fund inrespect of the year. The group also makes contributions to the personal pension plans of permanentemployees. These are charged to the profit and loss account as they arise. 1.11 Deferred taxation Provision is made in full for all taxation deferred in respect of timingdifferences that have originated but not reversed by the balance sheet date,except for timing differences arising on revaluations of fixed assets which arenot intended to be sold and gains on disposal of fixed assets which will berolled over into replacement assets. No provision is made for taxation onpermanent differences. Deferred tax assets are recognised to the extent that it is more likely than notthat they will be recovered 2. SEGMENTAL ANALYSIS The directors have identified three business sectors, insurance brokerage,financial planning and corporate healthcare. An analysis of turnover, profitbefore taxation and interest and net assets by business sector is set out below.Business sector data includes an allocation of corporate costs to the sector.There are no sales between business sectors. All turnover arose within the United Kingdom. NOTES TO THE FINANCIAL STATEMENTSFor the year ended 30 September 2004 2. SEGMENTAL ANALYSIS (CONTINUED) 2004 2003 £'000 £'000Turnover by business sectorInsurance broking - Existing 2,825 1,771 - Acquired - 372Financial planning - Existing 3,503 3,133 - Acquired - 131Corporate healthcare - Existing 1,479 1,309 - Acquired 654 - 8,461 6,716 Profit before tax by business sectorInsurance broking 340 198Financial planning 181 147Corporate healthcare 35 116Operating profit 556 461Investment income 7 1Net interest payable (40) (21)Profit before taxation 523 441Taxation (199) (193) Earnings 324 248 Net assets by business sectorInsurance broking 740 410Financial planning 422 326Corporate healthcare 718 435 1,880 1,171Net (debt)/funds (10) 351 Group net assets 1,870 1,522 3. OPERATING PROFIT The operating profit is stated after charging: 2004 2003 £'000 £'000 Amortisation of intangible assets 231 149Depreciation of tangible fixed assets- owned by the company 88 91- held under finance leases and hire purchase contracts 1 5Audit fees 28 33Auditors' remuneration - non-audit services 44 13Operating lease rentals- hire of plant & machinery 58 51- other 189 131 4. STAFF COSTS Staff costs, including directors' remuneration, were as follows: 2004 2003 £'000 £'000 Wages and salaries 4,279 3,249Social security costs 472 347Other pension costs 204 153 4,955 3,749 The average monthly number of employees, including directors, during the yearwas as follows: 2004 2003 No. No. Sales 46 44Administration 72 57Group Core 16 9 134 110 5. DIRECTORS' REMUNERATION 2004 2003 £'000 £'000 Aggregate emoluments 644 602Company pension contributions to money purchase schemes 87 86 731 688 During the year, retirement benefits were accruing to 7 directors (2003 - 7) inrespect of money purchase pension schemes. Included in the above are emoluments, excluding pension contributions paid to: Highest paid director 189 160 The accrued retirement benefits to the highest paid director are 21 32 6. INTEREST RECEIVABLE 2004 2003 £'000 £'000 Bank interest 7 7Other interest receivable 3 3 10 10 7. INTEREST PAYABLE 2004 2003 £'000 £'000 On bank loans and overdrafts 23 4On other loans 27 21 50 25On finance leases and hire purchase contracts - 6 50 31 8. TAXATION 2004 2003 £'000 £'000Analysis of tax charge in year Current tax (see note below)UK corporation tax on profits of the year 196 185Adjustments in respect of prior periods (7) - Total current tax 189 185 Deferred taxOrigination and reversal of timing differences 10 8Total deferred tax (see note 16) 10 8 Tax on profit on ordinary activities 199 193 Factors affecting tax charge for year The tax assessed for the year is higher than the standard rate ofcorporation tax in the UK (30%). The differences are explained below: 2004 2003 £'000 £'000 Profit on ordinary activities before tax 523 441 Profit on ordinary activities multiplied by standard rate of Corporation tax in the UK of 30% (2003: 30%) 157 132 Effects of:Expenses not deductible for tax purposes 62 68Capital allowances for period in excess of depreciation (9) (7)Marginal relief (14) (8)Adjustments to tax charge in respect of prior periods (7) -Current tax charge for year (see note above) 189 185 There were no factors that may affect future charges. 9. PROFIT FOR THE FINANCIAL YEAR As permitted by Section 230 of the Companies Act 1985, the profit and loss ofthe company is not presented as part of these financial statements. The consolidated profit for the financial year of £323,503 (2003 - £248,493)includes a loss of £5,597 (2003 - profit of £4,326), which is dealt with in thefinancial statements of the company. 10. INTANGIBLE FIXED ASSETS Group Negative Goodwill Total Goodwill £'000 £'000 £'000Cost At 1 October 2003 (28) 1,646 1,618Additions - 868 868Permanent diminution in value - (23) (23) At 30 September 2004 (28) 2,491 2,463 Amortisation At 1 October 2003 (3) 499 496Charge / (credit) for the year (3) 234 231 At 30 September 2004 (6) 733 727 Net Book ValueAt 30 September 2004 (22) 1,758 1,736 At 30 September 2003 (25) 1,147 1,122 The negative goodwill arose on the acquisition of the minority holding in JelfCorporate Healthcare Limited in the year ended 30 September 2002. 11. TANGIBLE FIXED ASSETS Land & Fixtures Motor Computer Buildings & Fittings Vehicles Equipment Total Group £'000 £'000 £'000 £'000 £'000 Cost At 1 October 2003 25 305 34 392 756Additions - 70 - 89 159Disposals - (47) (24) (159) (230) At 30 September 2004 25 328 10 322 685 Depreciation At 1 October 2003 25 128 17 224 394 Charge for the year - 32 2 55 89 Disposals - (40) (13) (159) (212) At 30 September 2004 25 120 6 120 271 Net book value At 30 September 2004 - 208 4 202 414 At 30 September 2003 - 177 17 168 362 The net book value of assets held under finance leases or hire purchasecontracts, included above, are as follows: 2004 2003 £'000 £'000 Motor vehicles - 12Computer equipment 3 4 3 16 Company The company held no tangible fixed assets in 2004 or 2003. 12. FIXED ASSET INVESTMENTS 2004 2003 £'000 £'000Group Other investments 35 25 The aggregate market value of listed investments at 30 September 2004, shown atcost above, was £24,836 (2003: £16,756). Company Shares in group undertakings £'000Cost At 1 October 2003 1,356Additions 50At 30 September 2004 1,406 Net book value At 30 September 2004 1,406 At 30 September 2003 1,356 Details of the investments, all of which are held by Jelf Group PLC, where thecompany holds more than 20% of the nominal value of any class of share capitalare as follows, or where the company is the ultimate parent company: Name of company Holding % Nature of business holdingJelf Financial Planning Limited £1 Ordinary shares 100% Independent Financial AdvisersJelf Insurance Brokers Limited £1 Ordinary shares 100% Insurance BrokersJelf Insurance Brokers (Wessex) Limited £1 Ordinary shares 100% Insurance BrokersJelf Corporate Healthcare Limited £1 Ordinary shares 100% Healthcare Financial ServicesKallender Walwyn Limited £1 Ordinary shares 100% DormantJelf Financial Services Limited* £1 Ordinary shares 100% DormantSLF Insurance (Services) Limited* £1 Ordinary shares 100% DormantJelf Professional Consultancy Limited £1 Ordinary shares 100% DormantIFM / RLS Partnership Limited* £1 Ordinary shares 100% DormantDrinkpalace Limited* £1 Ordinary shares 100% DormantBath Financial Planning Limited £1 Ordinary shares 100% DormantCorporate Healthcare Management Group £1 Ordinary shares 100% DormantLimited*Corporate Healthcare Services Limited* £1 Ordinary shares 100% DormantThe Corporate Healthcare Management £1 Ordinary shares 100% DormantLimited*Jelf Corporate Consultancy Limited £1 Ordinary shares 100% DormantJelf Credit Insurance Services Limited £1 Ordinary shares 100% DormantJelf Private Clients Limited £1 Ordinary shares 100% Dormant 12. FIXED ASSET INVESTMENTS (CONTINUED) The holding in each subsidiary undertaking represents that both for the companyand the group as a whole. All of the subsidiary undertakings shown above havebeen included in the group consolidation. Each of the above shown subsidiaryundertakings is such by virtue of the company's holding in their issued sharecapital. \* These companies were dissolved on 28 December 2004. 13. DEBTORS 2004 2003 £'000 £'000Group Due within one year Trade debtors 2,110 2,299Other debtors 138 118Prepayments and accrued income 930 132 3,178 2,549 2004 2003 £'000 £'000Company Due within one year Other debtors 350 358Prepayments and accrued income 590 - 940 358 Included within other debtors due within one year are loans of £nil (2003 -£111) to directors of the Group. The maximum amount outstanding during the yearwas £111 (2003 - £111). 14. CREDITORS: 2004 2003 £'000 £'000Amounts falling due within one year Group Bank loans and overdrafts 246 105Net obligations under finance leases and hire purchase contracts - 13Trade creditors 1,931 1,998Corporation tax 194 184Social security and other taxes 150 111Other creditors 333 544Accruals and deferred income 1,039 386 3,893 3,341 Company Bank loans and overdrafts 121 51Amounts owed to group undertakings 314 347Other creditors 568 255 1,003 653 The company is party to a cross guarantee given to the group's bankers and assuch there is a contingent liability at the balance sheet date for the bankborrowing of all group undertakings with the exception of IFM/RLS PartnershipLimited and Drinkpalace Limited, who are not part of this cross guaranteestructure. 15. CREDITORS: 2004 2003Amounts falling due after more than one year £'000 £'000 Group Bank loans and overdrafts 493 358Net obligations under finance lease and hire purchase contracts - 1Other creditors 410 12 903 371 2004 2003 £'000 £'000Company Bank loans and overdrafts 379 191 15. CREDITORS (CONTINUED): 2004 2003 £'000 £'000GroupIncluded within the above are amounts falling due as follows: In 1 - 2 years:Loan instalments 183 109Finance lease and hire purchase obligations - 1 In 2 - 5 years:Loan instalments 310 233 In more than 5 years:Loan instalments - 16 Loan instalments include a loan, originally for £179,000 repayable in monthlyinstalments by March 2009. Interest is payable at 2% above the Base Rate. Theloan is unsecured. A further loan, originally for £200,000 is repayable in monthly instalments byOctober 2006. Interest is payable at 1.75% above the Base Rate. A further loan, originally for £280,000 is repayable in monthly instalments byJanuary 2008. Interest is payable at 1.75% above the Base Rate. A further loan, originally for £350,000 is repayable in monthly instalments byDecember 2008. Interest is payable at 1.95% above the Base Rate. Security for these further loans is provided by a cross guarantee and debenturecovering the group companies. 2004 2003 £'000 £'000CompanyIncluded within the above are amounts falling due as follows: In 1-2 years:Loan instalments 127 55 In 2-5 years:Loan instalments 252 136 In more than 5 years:Loan instalments - - 16. PROVISIONS FOR LIABILITIES AND CHARGES Deferred Clawback Total tax provisions £'000 £'000 £'000 Group At 1 October 2003 20 69 89Additions 10 - 10Reversal - (1) (1) At 30 September 2004 30 68 98 Deferred Tax The deferred tax provision is made in respect of accelerated capital allowances. Clawback provision Provision is made for brokerage repayable to insurance companies where it hasbeen received and receivable on indemnity terms during the year. 17. CALLED UP SHARE CAPITAL 2004 2003 £'000 £'000Authorised998,998 Ordinary 'A' shares of £1 each - 999 1,001 Ordinary 'B' shares of £1 each - 1 1 Ordinary 'C' share of £1 each - -100,000,000 Ordinary shares of £0.01 each 1,000 - 1,000 1,000 Allotted, called up and fully paid14,580 Ordinary 'A' shares of £1 each - 15 1,001 Ordinary 'B' shares of £1 each - - 1 Ordinary 'C' shares of £1 each - -10,283,700 Ordinary shares of £0.01 each 103 - 103 15 On 17 December 2003, the Company issued 110 ordinary "A" £1 shares for cash witha total premium of £24,000 on the issue. On 25 August 2004, by way of special resolution, the Company resolved that thethree classes of ordinary shares (A, B and C) were re-designated as one class ofordinary shares. Each issued and unissued ordinary share of £1 was subdividedinto 100 ordinary shares of 1p each. At the same time, there was a capitalisation of £88,416 of share premium by theissue of 8,814,600 additional ordinary shares of 1p each, credited as fullypaid. 18. RESERVES Group Company £'000 £'000 Share Premium Account At 1 October 2003 1,075 1,045Premium on shares issued 24 24Capitalisation of share premium (88) (88) At 30 September 2004 1,011 981 Capital Reserve At 1 October 2003 13 - At 30 September 2004 13 - Capital Redemption Reserve At 1 October 2003 1 1 At 30 September 2004 1 1 Profit and Loss Account At 1 October 2003 418 46Profit / (Loss) for the year 324 (6) At 30 September 2004 742 40 19(a).RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2004 2003 £'000 £'000Group Profit for the year 324 248Share premium on shares issued 24 88Shares redeemed during the year - (1) 348 335 Opening shareholders' funds 1,522 1,187 Closing shareholders' funds 1,870 1,522 Company (Loss) / Profit for the year (6) 5Share premium on shares issued 24 88Shares redeemed during the year - (1) 18 92 Opening shareholders' funds 1,107 1,015 Closing shareholders' funds 1,125 1,107 19(b).EARNINGS PER SHARE 2004 2003 Computation of basic EPSNumeratorEarnings - £'000 324 248 DenominatorWeighted average number of ordinary shares 10,264,555 10,905,480 Basic EPS 3.2p 2.3p The calculation of the weighted average number of ordinary shares takes accountof the new shares issued in December 2003, and of the reconstruction of theshare capital in August 2004. Details of these transactions are set out in note17. 20. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT 2004 2003 £'000 £'000 Returns on investments and servicing of finance Interest received 10 10Interest paid (50) (25)Interest element of finance lease rentals - (6)Income received from investments 7 1 Net cash outflow for returns on investments andservicing of finance (33) (20) Capital expenditure and financial investment Purchase of tangible fixed assets (139) (185)Sale of tangible fixed assets 10 38