PCF.L Regulatory News (PCF)

3 Dec 2007 07:00

Private & Commercial Fin Group Plc03 December 2007 Private & Commercial Finance Group Plc ('PCFG' or 'the Group') PCF.L / Index: AIM / Sector: Speciality & other finance Private & Commercial Finance Group Plc ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS") 3rd December 2007 The Directors of Private & Commercial Finance Group Plc, the AIM quoted financehouse, are pleased to announce the adoption of IFRS. The IFRS presentation will have no material effect on the Group's Interimresults for the six months ending 30 September 2007, which will be released on11th December 2007, and which it has already been announced will significantlyexceed the profit for the preceding fifteen month period. The principal changes to the Group's reported financial information arising fromthe adoption of IFRS are detailed in the following pages. * * ENDS * * For further information visit www.pcfg.co.uk or contact: Private & Commercial Finance Group plc Tel: 020 7222 2426Scott Maybury, Finance Director St Brides Media & Finance Ltd Tel: 020 7242 4477Felicity Edwards Notes to Editors: Private & Commercial Finance Group plc, which is authorised and regulated by theFinancial Services Authority, is an independent AIM-listed finance house.Through its operating subsidiaries the Company provides a carefully selectedrange of high quality equipment finance products tailored for both business andpersonal customers. The range extends from financing cars for consumers toleasing a wide range of equipment to businesses. www.pcfshowroom.co.uk the Group's virtual car showroom offers a range ofattractively priced new and pre-registered cars on finance. 3 December 2007 PRIVATE & COMMERCIAL FINANCE GROUP PLC (the "Group" or "PCFG") ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS") Private & Commercial Finance Group plc ("PCFG" or "the Group") today announcesthe key areas of impact arising from its adoption of International FinancialReporting Standards ("IFRS") as a replacement for UK Generally AcceptedAccounting Practice ("UKGAAP"). The Group has adopted IFRS in this accounting period and expects to announce theInterim Results for the six months ending 30 September 2007, under IFRS, on 11December 2007. The principal changes to PCFG's reported financial information arising from theadoption of IFRS, which shows a small improvement on the final results publishedon 26 June 2007, is as follows: •Profit before tax £0.4 million (UK GAAP: £0.4 million) •Earnings per share 1.1p (UK GAAP: 1.0p) •Net assets at 1 January 2006 £3.3 million (UK GAAP): £3.4 million) •Net assets at 31 March 2007 £4.6 million (UK GAAP): £4.7 million) The key areas impacted from the adoption of IFRS are: •Goodwill is no longer amortised. •Short term employee benefits such as private medical insurance and annual leave entitlement are accrued as at balance date. •Early adoption of UK Financial Reporting Standard 26 (FRS 26) - 'Financial Instruments: Recognition and Measurement' in the period to 31 March 2007 means the Group has no transitional impact for income recognition, loss provisioning or hedging instruments, in the current year. •Presentational changes to the layout of the Financial Statements. •Re-classifications of assets or liabilities between balance sheet categories are shown in the detailed reconciliation of net assets. Whilst the adoption of IFRS has an impact on historic reported figures it isimportant to recognise that these changes do not impact on the Group's reportedoperating cash flows. The Board expects that the change to IFRS will have nomaterial effect on the Group's return on net assets or growth prospects. Private & Commercial Finance Group plc 3 December 2007 PRIVATE & COMMERCIAL FINANCE GROUP PLC UPDATE ON THE ADOPTION OF IFRS CONTENTS Introduction 1 Basis of Preparation 2 Key Impact Analysis 3 Re-stated IFRS Financial Information: •Consolidated Income Statement for the period ended 31 March 2007 4 •Consolidated Balance Sheet as at 1 January 2006 5 •Consolidated Balance Sheet as at 31 March 2007 6 •Consolidated Cash Flow Statement for the period ended 31 March 2007 7 •Reconciliation of Profit between UK GAAP and IFRS for the period ended 31 March 2007 8 •Reconciliation of Equity (net assets) between UK GAAP and IFRS as at 31 March 2007 9 •Reconciliation of Equity (net assets) between UK GAAP and IFRS as at 1 January 2006 10 INTRODUCTION Private & Commercial Finance Group plc is required to adopt InternationalFinancial Reporting Standards with effect from 1 January 2006. These newreporting standards represent a change from UK Generally Accepted AccountingPractice, previously adopted by the Group. PCFG's first results under IFRS willbe the Interim Results for the six months ending 30 September 2007 includingcomparative information re-stated under IFRS. The Group's first Annual Reportunder IFRS will be for the year ending 31 March 2008. A dedicated project team was formed early in 2007 to oversee the transition toIFRS. This team has worked closely with our advisors and auditors Ernst & YoungLLP to implement the accounting policies and other reporting changes that arerequired to ensure the Group complies with IFRS. Changes to the figures previously reported under UK GAAP are not significant forthe income statement and the balance sheet reclassifications are also minimal.The early adoption of FRS 26 in the previous period minimised the effect of thetransition to IFRS. The effect of adoption of FRS 26 is fully detailed in theAnnual Report of the Group as at 31 March 2007, issued on 26 June 2007. Whilst the adoption of IFRS has an impact on historic reported figures it isimportant to recognise that these changes do not impact on the Group's reportedoperating cash flows. The Board expects that the change to IFRS will have nomaterial effect on the Group's return on net assets or growth prospects. To explain how PCFG's reported figures are affected by the adoption of IFRS,attached are the Group's consolidated 2007 results and cash flows and theconsolidated balance sheets as at 1 January 2006 and 31 March 2007 convertedfrom UK GAAP to IFRS, including reconciliations of profit and equity. The IFRSfigures and reconciliations from UK GAAP are unaudited. This update alsoincludes detailed explanations of the key areas impact by IFRS. The IFRS figures show a small improvement on the results reported on 26 June2007 with profit before tax at £388,748 (UK GAAP: £366,343). BASIS OF PREPARATION IFRS applies to AIM listed companies for all financial reporting for accountingperiods beginning on or after 1 January 2007. The date of transition to IFRS is1 January 2006, being the start of the earliest period of comparativeinformation. The unaudited re-stated financial information has been prepared on the basis ofthe IFRS's expected to be applicable at 31 March 2008. These are subject toongoing review and endorsement by the European Union or possible amendment byinterpretive guidance from the International Accounting Standards Board andtherefore may be subject to change. Transitional arrangements IFRS 1, 'First Time Adoption of International Financial Reporting Standards',permits companies adopting IFRS for the first time to take certain exemptionsfrom the full requirement of IFRS in the transition period. PCFG's applicationof the optional exemptions is as follows: Business combinations The Group has elected not to apply IFRS 3 'Business Combinations'retrospectively to past business combinations that occurred prior to 1 January2004 and therefore no adjustment has been made. Presentation The unaudited re-statements included here are presented in accordance with IAS1, 'Presentation of Financial Statements'. However, where no definitive guidanceexists in respect of presentation, a UK GAAP approach has been followed in orderto maintain consistency with prior years. This format and presentation mayrequire modification in the event that further guidance is issued and as bestpractice develops. IAS 1 does not provide definitive guidance on the format of the income statementand the balance sheet, but states key lines that should be disclosed. It alsorequires additional line items and headings to be presented on the face of theincome statement when such presentation is relevant to an understanding of theentity's financial performance. KEY IMPACT ANALYSIS Taxation The adoption of IFRS has not had a material impact on the Group's effective taxrate for 2007, however, a deferred tax liability has been created in relation totransitional adjustments made at 1 January 2006 and the adoption of FRS 26. Thetransitional arrangements for spreading the deferred tax over a number of yearswill apply. Business combinations For qualifying business combinations IFRS requires that goodwill is notamortised but instead subject to an annual impairment review. Any impairmentloss would be recognised as an expense immediately through the income statement. The impact under IFRS is profit positive as goodwill is no longer amortised andhas been written back into income in the period to 31 March 2007. Employee Benefits Under IFRS, short term employee benefits such as private medical insurance andannual leave entitlement are an accrued expense at the balance sheet date. The impact under IFRS is profit negative as an additional accrual has beencharged to the income in the period to 31 March 2007. This amount is notsignificant. 15 months ended 31 March 2007 £ unaudited Group turnover 49,653,441Cost of sales 33,107,817 Gross profit 16,545,624Administration expenses (9,938,812) Operating profit 6,606,812Interest Receivable 14,030Interest Payable (6,232,094) Profit on ordinary activities before taxation 388,748Income tax expense (149,915) Profit on ordinary activities after taxation 238,833 Profit for the period attributable to equity holders 238,833 Earnings per 5p ordinary share 1.1p- basic and diluted There are no other recognised gains or losses other thanthe profit reported in the income statement for the period 1 January 2006 £ unaudited ASSETSNon-current assetsGoodwill 397,149Other intangible assets 290,896Property, plant and equipment 528,755Loans and receivables 40,805,784Deferred tax 2,239,086 44,261,670 Current assetsLoans and receivables 23,081,913Trade and other receivables 1,832,532Corporation tax 81,832Derivative financial instruments 227,477Cash and cash equivalents 200 25,223,954 Total assets 69,485,624 LIABILITIESCurrent liabilitiesInterest-bearing loans and borrowings 586,484Trade and other payables 2,797,906Provisions 100,900Bank overdrafts 822,593 4,307,883 Non-current liabilitiesInterest-bearing loans and borrowings 61,893,176 61,893,176 Total liabilities 66,201,059 Net assets 3,284,565 Capital and reserves Called up share capital 4,748,842Share Premium 2,474,051Capital reserve 74,394Own shares (243,160)Profit and loss account (3,769,562) Equity shareholders funds 3,284,565 31 March 2007 £ unaudited ASSETSNon-current assetsGoodwill 397,149Other intangible assets 270,888Property, plant and equipment 259,562Loans and receivables 58,210,631Deferred tax 2,371,623 61,509,853 Current assetsLoans and receivables 32,286,931Trade and other receivables 1,819,644Derivative financial instruments 203,419Cash and cash equivalents 200 34,310,194 Total assets 95,820,047 LIABILITIESCurrent liabilitiesInterest-bearing loans and borrowings 431,624Trade and other payables 2,810,686Corporation tax 363,696Provisions 16,200Bank overdrafts 1,177,108 4,799,314 Non-current liabilitiesInterest-bearing loans and borrowings 86,403,019 86,403,019 Total liabilities 91,202,333 Net assets 4,617,714 Capital and reserves Called up share capital 1,170,648Share Premium 3,347,488Capital reserve 3,873,467Own shares (243,160)Profit and loss account (3,530,729) Equity shareholders funds 4,617,714 15 months ended 31 March 2007 £ unauditedCash flows from operating activitiesProfit before taxation 388,748 Adjustments for: Amortisation of other intangible assets 250,342Depreciation 184,898Loss on sale of property, plant and equipment 42,600Decrease in derivatives 24,058Increase in loans and receivables (26,609,865)Decrease in debtors 12,889Decrease in creditors and provisions (71,919)Cash outflow from operating activities (25,778,249)Tax received 163,075Net cash outflow from operating activities (25,615,174) Cash flows from investing activitiesPurchase of property, plant and equipment (44,624)Proceeds from sale of property, plant and equipment 86,319Purchase of other intangible assets (230,334)Net cash outflow from investing activities (188,639) Cash flows from financing activitiesProceeds from issue of share capital 692,500Proceeds from borrowings 24,911,659Repayments of borrowings (154,861)Net cash inflow from financing activities 25,449,298 Net decrease in cash and cash equivalents (354,515)Cash and cash equivalents at beginning of the year (822,393)Cash and cash equivalents at end of the year (1,176,908) Cash at bank and in hand 200Bank overdrafts (1,177,108) (1,176,908) The amount of interest paid and received duringyear is as follows: Interest paid 6,604,713Interest received 14,030 Reconciliation of Profit between UK GAAP and IFRS for the period ended 31 March 2007 +---------------------------------------+----------------------+--------------------------------------+------------+|Previously reported UK GAAP balances in| IFRS Adjustments |Restated IFRS balances in IAS 1 format ||UK GAAP format | | |+---------------------------+-----------+-----------+----------+--------------------------------------+------------+| | £ | IAS 19| IAS 38| £ || | | Leave| Goodwill| || | | Accrual| | |+---------------------------+-----------+-----------+----------+---------------------------------------+-----------+|Turnover Cost of sales | 49,653,441| | |Turnover | 49,653,441|| | 33,107,817| | |Cost of sales | 33,107,817|+---------------------------+-----------+-----------+----------+---------------------------------------+-----------+|Gross profit | 16,545,624| | |Gross profit | 16,545,624||Administration expenses |(9,961,217)| (18,325)| 40,730|Administration expenses |(9,938,812)|+---------------------------+-----------+-----------+----------+---------------------------------------+-----------+|Operating profit | 6,584,407| (18,325)| 40,730| | 6,606,812||Interest receivable | 14,030| | |Interest Receivable | 14,030||Interest payable |(6,232,094)| | |Interest Payable |(6,232,094)|+---------------------------+-----------+-----------+----------+---------------------------------------+-----------+|Profit on ordinary | | | |Profit on ordinary activities before | ||activities before taxation | 366,343| (18,325)| 40, 730|taxation | 388,748||Corporation tax charge | (155,413)| 5,498| |Corporation tax charge | (149,915)|+---------------------------+-----------+-----------+----------+---------------------------------------+-----------+|Profit on ordinary | | | |Profit on ordinary actitivities after | ||actitivities after taxation| 210,930| (12,827)| 40, 730|taxation | 238,833|+---------------------------+-----------+-----------+----------+---------------------------------------+-----------+|Profit for the period | | | |Profit for the period attributable to | ||attributable to equity | | | |equity holders | 238,833||holders | 210,930| (12,827)| 40, 730| | |+---------------------------+-----------+-----------+----------+--------------------------------------++-----------+ Reconciliation of Equity (net assets) between UK GAAP and IFRS as at 31 March 2007 +-------------------------------------------------------------------------------------------+--------------------------+|Previously reported | IFRS Adjustments | Restated IFRS ||UK GAAP balances | | balances in ||in UK GAAP format | | IAS 1 format |+-----------------------------+-------------------------------------------------------------+--------------------------+| 31 March| IAS 12 IAS 19 IAS 38 IAS 37 IAS 38 Others | 31 March || 2007| Income Leave Goodwill Buy-back Computer | 2007 || £| Tax Accrual Obligations Software | £ |+-----------------------------+-------------------------------------------------------------+--------------------------+|ASSETS | |ASSETS ||Fixed Assets | |Non-current ||Intangible assets 356,419| 40,730 |assets || | 270,888 |Goodwill 397,149||Tangible assets 530,450| (270,888) |Other intangible ||Loans and | |assets 270,888||receivables 58,210,631| |Property, plant || |(68,243) 2,439,866 |and equipment 259,562|| | |Loans and || | |receivables 58,210,631|| | |Deferred tax 2,371,623|+-----------------------------+-------------------------------------------------------------+--------------------------+| 59,097,500|(68,243) 40,730 2,439,866 | 61,509,853||Current assets | |Current assets ||Loans and | |Loans and ||receivables 32,286,931| 270,888 |receivables 32,286,931|| 530,450| (270,888) |Trade and other ||Loans and | |receivables 1,819,644||receivables 58,210,631| |Derivative ||Debtors 1,803,444| 16,200 |financial ||Derivative | |instruments 203,419||Financial | |Cash and cash ||Instruments 203,419| |equivalents 200||Cash at bank | | ||and in hand 200| | ||Deferred Tax 2,439,866| 2,439,866 | |+-----------------------------+-------------------------------------------------------------+--------------------------+| 36,733,860| 16,200 (2,439,866)| 34,310,194|+-----------------------------+-------------------------------------------------------------+--------------------------+|Total assets 95,831,360|(68,243) 40,730 16,200 |Total assets 95,820,047|+-------------------------------------------------------------------------------------------+--------------------------+|LIABILITIES | |LIABILITIES ||Current | |Current ||liabilities | |liabilities ||Interest bearing | |Interest bearing ||loans and | |loans and ||borrowings 431,624| |borrowings 431,624||Creditors 3,085,106| 76,449 12,827 (363,696) |Trade and || | 363,696 |other payables 2,810,686|| | 16,200 |Corporation tax 363,696||Bank overdrafts 1,177,108| |Provisions 16,200|| | |Bank overdrafts 1,177,108|+-----------------------------+-------------------------------------------------------------+--------------------------+| 4,693,838| 76,449 12,827 16,200 4,799,314|+-----------------------------+-------------------------------------------------------------+--------------------------+|Non-current | |Non-current ||liabilities | |liabilities ||Interest | |Interest ||bearing | |bearing ||loans and | |loans and ||borrowings 86,403,019| |borrowings 86,403,019|+-----------------------------+-------------------------------------------------------------+--------------------------+| 86,403,019| | 86,403,019|+-----------------------------+-------------------------------------------------------------+--------------------------+|Total | |Total ||liabilities 91,096,857| 76,449 12,827 16,200 |liabilities 91,202,333|+-----------------------------+-------------------------------------------------------------+--------------------------+|Net assets 4,734,503|(144,692) (12,827) 40,730 |Net assets 4,617,714|+-----------------------------+-------------------------------------------------------------+--------------------------+|CAPITAL AND | |CAPITAL AND ||RESERVES | |RESERVES ||Called up | |Called up ||share | |share ||capital 1,170,648| |capital 1,170,648||Share | |Share ||premium 3,347,488| |premium 3,347,488||Capital | |Capital ||reserve 3,873,467| |reserve 3,873,467||Own shares (243,160)| |Own shares (243,160)||Profit and | |Profit and ||loss account (3,413,940)|(144,692) (12,827) 40,730 |loss account (3,530,729)|+-----------------------------+-------------------------------------------------------------+--------------------------+|Equity | |Equity ||shareholders | |shareholders ||funds 4,734,503|(144,692) (12,827) 40,730 |funds 4,617,714|+-----------------------------+-------------------------------------------------------------+--------------------------+ Reconciliation of Equity (net assets) between UK GAAP and IFRS as at 1 January 2006 +--------------------------+-------------------------------------------+------------------------+|Previously reported UK | IFRS Adjustments |Restated IFRS balances ||GAAP balances in UK GAAP | |in IAS 1 format ||format | | |+--------------------------+-------------------------------------------+------------------------+| 1 January | IAS 12 IAS 37 IAS 38 Others | 1 January || 2006 | Income Buy-back Computer | 2006 || £ | Tax Obligations Software | £ |+--------------------------+-------------------------------------------+------------------------+|ASSETS | |ASSETS ||Fixed Assets | |Non-current ||Intangible | |assets ||assets 397,149| |Goodwill 397,149|| | 290,896 |Other ||Tangible | (290,896) |intangible ||assets 819,651| |assets 290,896||Loans and | |Property, ||receivables 40,805,784| |plant and || |(68,243) 2,307,329 |equipment 528,755|| | |Loans and || | |receivables 40,805,784|| | |Deferred tax 2,239,086|+--------------------------+-------------------------------------------+------------------------+| 42,022,584|(68,243) 2,307,329 | 44,261,670||Current assets | |Current assets ||Loans and | |Loans ||receivables 23,081,913| |and ||Debtors 1,889,913|(76,449) 100,900 (81,832)|receivables 23,081,913|| | 81,832 |Trade and ||Derivative | |other ||Financial | |receivables 1,832,532||Instruments 227,477| |Corporation ||Cash at bank | |tax 81,832||and in hand 200| |Derivative ||Deferred Tax 2,307,329| (2,307,329)|financial || | |instruments 227,477|| | |Cash and || | |cash || | |equivalents 200|+--------------------------+-------------------------------------------+------------------------+| 27,506,832|(76,449) 100,900 (2,307,329)| 25,223,954|+--------------------------+-------------------------------------------+------------------------+|Total assets 69,529,416|(144,692) 100,900 |Total assets 69,485,624|+--------------------------+-------------------------------------------+------------------------+|LIABILITIES | |LIABILITIES ||Current | |Current ||liabilities | |liabilities ||Interest | |Interest ||bearing loans | |bearing ||and borrowings 586,484| |loans and ||Creditors 2,797,906| |borrowings 586,484|| | 100,900 |Trade and ||Bank | |other ||overdrafts 822,593| |payables 2,797,906|| | |Provisions 100,900|| | |Bank || | |overdrafts 822,593|+--------------------------+-------------------------------------------+------------------------+| 4,206,983| 100,900 | 4,307,883|+--------------------------+-------------------------------------------+------------------------+|Non-current | |Non-current ||liabilities | |liabilities ||Interest | |Interest ||bearing loans | |bearing ||and borrowings 61,893,176| |loans and || | |borrowings 61,893,176|+--------------------------+-------------------------------------------+------------------------+| 61,893,176| | 61,893,176|+--------------------------+-------------------------------------------+------------------------+|Total | |Total ||liabilities 66,100,159| 100,900 |liabilities 66,201,059|+--------------------------+-------------------------------------------+------------------------+|Net assets 3,429,257|(144,692) |Net assets 3,284,565|+--------------------------+-------------------------------------------+------------------------+|CAPITAL AND || |CAPITAL AND ||RESERVES | |RESERVES ||Called up | |Called up ||share capital 4,748,842| |share capital 4,748,842||Share premium 2,474,051| |Share premium 2,474,051||Capital | |Capital ||reserve 74,394| |reserve 74,394||Own shares (243,160)| |Own shares (243,160)||Profit and | |Profit and ||loss account (3,624,870)|(144,692) |loss account (3,769,562)|+--------------------------+-------------------------------------------+------------------------+|Equity | |Equity ||shareholders | |shareholders ||funds 3,429,257|(144,692) |funds 3,284,565|+--------------------------+-------------------------------------------+------------------------+ This information is provided by RNS The company news service from the London Stock Exchange