S & U Regulatory News (SUS)

6 Oct 2005 08:00

S & U PLC06 October 2005 IMMEDIATE RELEASE: S&U PLC Providers of Consumer Credit and Motor Finance INTERIM RESULTS FOR THE HALF YEAR TO 31ST JULY 2005 • HALF-YEAR PROFITS £5.3m *(£5.4m) ON REVENUE £26.1m* (£25.4m) A "COMMENDABLE ACHIEVEMENT" AGAINST FLAGGING CONSUMER DEMAND GENERALLY • EARNINGS PER SHARE 31.5p (31.8p) - INTERIM DIVIDEND 9P (UNCHANGED) • HOME COLLECTIONS - SLIGHT DECLINE IN PROFITS AFTER RECORD RESULTS LAST YEAR • MOTOR CAR FINANCE - PROFITS £1.19m (£1.18m) FURTHER INCREASE FOR YEAR EXPECTED • "STEADY PROGRESS IN PROFITABILITY AND RETURNS TO SHAREHOLDERS IN YEARS AHEAD" *NB. Figures are restated according to new International Financial ReportingStandards (IFRS) Issued on behalf of S&U Plc by Simon Preston 020 7655 0500 Enquiries: Derek Coombs or Anthony Coombs Executive Chairman Managing Director S&U PLC S&U PLC Tel: 020 7655 0500 Tel: 07767 687150 Date of issue: Thursday 6th October 2005 POLHILL COMMUNICATIONS TELEPHONE: 0207-655 0500DOME HOUSE FAX: 0207-655 050148 ARTILLERY LANE WWW.POLHILL.COMLONDON E1 7LS Polwoods Limited Registered In England Registration Number 1983318 CHAIRMAN'S STATEMENT Whilst the results for the half year ended on the 31st July 2005 show thatprofits before tax are slightly down from £5.4 million last year to £5.3 millionthis year, this result has to be seen against the background of flaggingconsumer demand generally. So in many respects it is a commendable achievement. Revenue totalled £26.1 million compared to £25.4 million for the comparableperiod last year. The earnings per share was 31.5p compared to 31.8p. The traditional home collection business is responsible for the slight declinein profits after a record result last year. Advantage Finance, our motor car finance subsidiary, achieved profits of £1.19magainst £1.18m last year and is expected to provide a more substantial increasefor the year, which is encouraging for an operation which I launched some sixyears ago. The interim dividend is unchanged at 9p per share. This will be paid on the 11thNovember 2005 to Ordinary Shareholders. The shares will go ex dividend on the12th October 2005. DM CoombsChairman 5 October 2005 MANAGING DIRECTOR'S STATEMENT As I anticipated at our full year results, when I advised caution for this year,the current slow-down in consumer confidence and High Street spending has beenreflected in S&U's half-year results. Profit before tax, adjusted for newInternational Financial Reporting Standards, is £5.3m against £5.4m a year ago.Whilst revenues across the Group are ahead of last year, the fall in profitprimarily derives from slightly lower consumer demand and marginally higherlevels of impairment and expenses - the latter due to investment in our motorfinance sales operation and to costs associated with the current CompetitionCommission Inquiry into the home credit industry. However, my confidence for the full year is buoyed by the trading trendsunderlying these figures. Whilst first quarter sales and impairment charges weresignificantly behind budget, results in the second quarter improvedsignificantly as consumer confidence tentatively returned. Indeed results forthe most recent period of trading confirm this, as trading particularly in ourhome credit business returns close to budget. This is not, however, to deny other challenges we face within the mature, andeven consolidating, home credit industry. These structural changes have beenevidenced in the past six months by the merger of Morses and London & Scottishand by branch closures amongst S&U's home credit competitors. A tighter labourmarket for Representatives, competition from main stream lenders and theactivities of commercial debt consolidators are constant challenges. Whilst wehave now bedded in the additional (and in reality superfluous) home creditdocumentation demanded by new secondary legislation, the industry still faceswithin the next six months another Consumer Credit Bill and the (hopefullycommon-sense and benign) deliberations of the Competition Commission. Rarelyhas any industry, as demonstrably popular with its customers as home credit,been so unnecessarily investigated, scrutinised and generally fussed over byGovernment and its consumerist satraps. Against this background home credit new loans fell in the half-year althoughrecovering well over the past two months. Further, a slightly higher impairmentcharge, albeit offset by improved gross margins, led to divisional profits of£4.09m, against £4.18m last year. Improved trading performance is expected inthe second half, although much will depend on the general economic andregulatory climate mentioned above. Whilst also operating in a slowing market, Advantage Finance, our motorsubsidiary, continues to make good progress, in stark contrast to the recenttravails of its sub-prime competitors. Profits for the first half were £1.19magainst £1.18m last year on revenues impressively ahead by 8%. Collectionsproved robust and almost on budget whilst the fact that applications volume isup by no less than 35% demonstrates the quality and rigour of Advantage'sunderwriting. Significant investment has been made in expanding and reorganisingthe sales operation and in Compliance and Audit - the latter reflecting bothhigh quality future book debts and the new FSA compliance regime. Further investment in IT has seen the much awaited completion of new systems forhome credit and more timely and flexible management information throughout theGroup. This will be invaluable in enabling us to better analyse and communicatewith our customers and in managing and motivating the staff serving them. Indeed, this investment in information technology is already bearing fruit byallowing us to refine our Group debt provisioning (or under IFRS) "impairment"policies. This not only enables us to meet IFRS standards for reporting revenue,but also to improve our recognition of impairment. This will more accuratelyreflect the risk profile of our home credit debt and improve our management ofit, especially in maximising trading opportunities with every customer. The net effect of the change to IFRS is reflected in a £6m reduction in statednet assets at 31st January 2005 from £41m to £35m, a change of around 15%. Thisis conservative compared to our competitors and has no impact on our baseprofitability, cash flows or bank financing arrangements. The financial position of our Group will remain strong, with anticipated gearingon the new IFRS basis at 75%, a slight increase on restated figures for lastyear. This reflects further investment of £3m in our growing motor financebusiness. We have also secured funding for a pilot secured second mortgagebusiness (Communitas) and subsequent to 31st July 2005 have put interest ratehedging in place to cover £20m of our existing borrowing over the next 5 years. Thus, despite a slowing economy, these longer term improvements should lay theground for steady progress in both profitability and returns to shareholders inthe years ahead. Anthony Coombs5 October 2005 INDEPENDENT REVIEW REPORT TO S & U PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 31 July 2005, which comprises the consolidated interimincome statement, consolidated interim balance sheet, consolidated cash flowstatement and related notes 1 to 10. We have read the other informationcontained in the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolices and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. International Financial Reporting Standards As disclosed in note 1, the next annual financial statements of the group willbe prepared in accordance with International Financial Reporting Standards(IFRS) as adopted for use in the EU. Accordingly, the interim report has beenprepared in accordance with the recognition and measurement criteria of IFRS andthe disclosure requirements of the Listing Rules. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 July 2005. Deloitte & Touche LLPChartered AccountantsBirmingham5 October 2005 CONSOLIDATED INCOME STATEMENTSix months ended 31 July 2005 Unaudited Six Unaudited Unaudited months Six months Financial ended ended year ended 31.7.05 31.7.04 31.1.05 Note £000 £000 £000 Revenue 2 26,121 25,406 50,712 Cost of Sales (11,577) (11,162) (22,965) Gross Profit 14,544 14,244 27,747 Administrative expenses (8,422) (8,188) (16,679) Operating profit 6,122 6,056 11,068 Finance costs (841) (691) (1,518) Profit before taxation 2 5,281 5,365 9,550 Taxation 3 (1,586) (1,632) (2,919) Profit for the period 3,695 3,733 6,631 Earnings per share Basic and Diluted 4 31.5p 31.8p 56.5p Dividends per ordinary sharePaid during the period 5 22.0p 21.0p 30.0p Proposed 5 9.0p 9.0p 22.0p All activities and earnings per share derive from continuing operations. Thereare no recognised gains and losses for the six months ended 31 July 2005 andcomparative periods other than the profit for the period and the dividends shownabove. CONSOLIDATED BALANCE SHEETSix months ended 31 July 2005 Unaudited Unaudited Unaudited 31.7.05 31.7.04 31.1.05 Note £000 £000 £000ASSETSNon current assetsProperty, plant and equipment 2,364 2,432 2,357Amounts receivable from customers 6 17,080 15,297 15,994 19,444 17,729 18,351 Current assetsInventories 111 121 91Amounts receivable from customers 6 43,871 40,431 42,456Trade and other receivables 681 915 717Current income tax assets 2,093 2,207 2,234Cash and cash equivalents 24 91 14 46,780 43,765 45,512 Total assets 66,224 61,494 63,863 LIABILITIESCurrent liabilitiesBank overdrafts and loans (6,950) (5,389) (5,791)Trade and other payables (1,284) (1,238) (1,294)Tax liabilities (199) (190) (210)Accruals and deferred income (1,341) (1,180) (1,233) (9,774) (7,997) (8,528) Non current liabilitiesBank loans (20,000) (20,000) (20,000)Retirement benefit obligation (23) (23) (23)Deferred tax liabilities (83) (85) (81)Financial liabilities (650) (650) (650) (20,756) (20,758) (20,754) Total liabilities (30,530) (28,755) (29,282) NET ASSETS 35,694 32,739 34,581 EquityCalled up share capital 1,467 1,467 1,467Share premium account 2,136 2,136 2,136Profit and loss account 32,091 29,136 30,978 Total Equity 7 35,694 32,739 34,581 There interim statements were approved by the Board of Directors on 5 October2005. Signed on behalf of the Board of Directors D M COOMBS AMV COOMBS Directors CONSOLIDATED CASH FLOW STATEMENTSix months ended 31 July 2005 Unaudited Unaudited Six Unaudited Six Financial months ended months ended year ended 31.7.05 31.7.04 31.1.05 Note £000 £000 £000 Net cash from operating activities 8 1,726 1,000 1,779 Cash flows from investing activitiesProceeds on disposal of property,plant and equipment 50 54 133Purchases of property, plant and equipment (343) (286) (567) Net cash used in investing activities (293) (232) (434) Cash flows from financing activitiesDividends paid (2,582) (2,465) (3,521)Repayment of borrowings - (15,000) (15,000)Issue of new borrowings - 20,000 20,000 Net cash used in financing activities (2,582) 2,535 1,479 Net (decrease)/increase in cash and bank overdrafts (1,149) 3,303 2,824 Cash and bank overdrafts at the beginning of the period (5,777) (8,601) (8,601) Cash and bank overdrafts at the end of the period (6,926) (5,298) (5,777) Cash and bank overdrafts compriseCash 24 91 14Bank overdrafts (6,950) (5,389) (5,791) (6,926) (5,298) (5,777) NOTES TO THE INTERIM STATEMENTSSix months ended 31 July 2005 1. ACCOUNTING POLICIES 1.1 Basis of preparation Prior to 2005 S&U plc has prepared its financial statements under UK generally accepted accounting principles ("UK GAAP") but as a listed company we are now required to prepare our consolidated financial statements in accordance with international financial reporting standards (IFRS) as endorsed by the European Union. The date of transition to IFRS for S&U plc was 1st February 2004 and the group has prepared its opening balance sheet at that date. Reconciliations between previously reported UK GAAP results and IFRS as adopted are presented in note 9. This interim financial report has been prepared under the historical cost convention. The group has elected to retain the UK GAAP carrying values of certain freehold properties (including any historic revaluations) as deemed cost on the date of transition to IFRS. The consolidated financial statements incorporate the financial statements of the company and all its subsidiaries for the six months ended 31st July 2005. The financial information contained in this interim financial report does not constitute a set of statutory accounts and is unaudited, but subject to a review opinion. 1.2 Revenue recognition Credit charges are recognised in the income statement for all loans and receivables measured at amortised cost using the effective interest rate method (EIR). The EIR is the rate that exactly discounts estimated future cash flows of the loan back to the present value (the advance). Acceptance fees charged to customers are included as credit charges in the calculation and any direct transaction costs are added to the advance. Under IAS 39 credit charges on loan products continue to accrue at the EIR on all outstanding capital balances including arrears throughout the life of the agreement irrespective of the terms of the loan and whether the customer is actually being charged arrears interest. This is referred to as the gross up adjustment to revenue and is offset by a corresponding gross up adjustment to the loan loss provisioning charge to reflect the fact that this additional revenue is not collectable. Commission received from third party insurers for brokering the sale of insurance products, for which the group does not bear any underlying insurance risk is recognised and credited to the income statement when the brokerage service has been provided. Sales of goods are recognised in the income statement when the product has been supplied. 1.3 Amounts receivable from customers All customer receivables are initially recognised at the amount loaned to the customer plus direct transaction costs. After initial recognition the amounts receivable from customers are subsequently measured at amortised cost. Amortised cost is the amount of the customer receivable at initial recognition less customer repayments, plus revenue earned less any deduction for impairment. The directors assess on an ongoing basis whether there is objective evidence that a loan asset or group of loan assets is impaired and requires a deduction for impairment. A loan asset or a group of loan assets is impaired only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the loan. Impairment is then calculated by estimating the future cash flows for such impaired loans, discounting the flows to a present value using the original EIR and comparing this figure with the balance sheet carrying value. All such impairments are charged to the income statement. 1.4 Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation. Certain freehold property is held at previous revalued amounts less accumulated depreciation as the group has elected to use these amounts as the deemed cost as at the date of transition to IFRS under the transitional arrangements of IFRS1. Depreciation is provided on the cost or valuation of property,plant and equipment in order to write such cost or valuation over the expected useful lives as follows; Freehold Buildings 2% per annum straight line Computers 20% per annum straight line Fixtures and Fittings 10% per annum straight line or 20% per annum reducing balance Motor Vehicles 25% per annum reducing balance 1.5 Inventories Inventories are stated at the lower of cost or net realisable value. 1.6 Taxation Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates and laws that have been enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. 1.7 Goodwill Any goodwill which arises on future acquisitions will be capitalised. Such goodwill will not be amortised but will be subject to annual review for impairment and the carrying value of goodwill will be cost less accumulated impairment losses. 1.8 Pensions The group contributes to a defined benefit pension scheme and the defined benefit pension liability at the balance sheet date is calculated as the present value of the defined benefit obligation less the fair value of the plan assets. The group also operates several defined contribution pension schemes and the pension charge represents the amount payable by the company for the financial year. 1.9 Leases Rental costs under operating leases are charged to the profit and loss account when incurred. 2. ANALYSES OF REVENUE AND PROFIT BEFORE TAXATION All operations are situated in the United Kingdom. Analyses by class of business of revenue and profit before taxation are stated below: Six months Six months Financial ended ended year ended 31.7.05 31.7.04 31.1.05 £000 £000 £000Class of businessConsumer credit, rentals and other retail trading 21,068 20,732 41,746Car finance 5,053 4,674 8,966 26,121 25,406 50,712 Six months Six months Financial ended ended year ended 31.7.05 31.7.04 31.1.05 £000 £000 £000Class of businessConsumer credit, rentals and other retail trading 4,092 4,180 7,485Car finance 1,189 1,185 2,065 5,281 5,365 9,550 3. TAXATION The actual tax charge for the period has been calculated by applying the estimated effective tax rate for the year of 30.0% (31st July 2004 30.4%) to the profit before taxation for the six months. 4. EARNINGS PER ORDINARY SHARE The calculation of earnings per Ordinary share is based on profit for the period of £3,695,000 (for the period ended 31 July 2004 - £3,733,000 and the year ended 31 January 2005 - £6,631,000). The number of shares used in the calculation is the average number of shares in issue during the period of 11,737,228 (for the period ended 31 July 2004 and the year ended 31 January 2005 - 11,737,228). Diluted earnings per share is the same as basic earnings per share as there are no dilutive shares. 5. DIVIDENDS The directors have declared an interim dividend of 9p per share (2004: 9p per share). The dividend, which amounts to approximately £1,056,000 (July 2004: £1,056,000), will be paid on 11 November 2005 to shareholders on the register at 14 October 2005. The shares will be quoted ex dividend on 12 October 2005. The interim financial information does not include this proposed dividend as it was declared after the balance sheet date. 6. ANALYSIS OF AMOUNTS RECEIVABLE FROM CUSTOMERS All operations are situated in the United Kingdom. Six months Six months Financial ended ended year ended 31.7.05 31.7.04 31.1.05 £000 £000 £000Class of businessConsumer credit, rentals and other retail trading 32,512 31,363 33,076Car finance 28,439 24,365 25,374 60,951 55,728 58,450 Analysed as:- due within one year 43,871 40,431 42,456 - due in more than one year 17,080 15,297 15,994 60,951 55,728 58,450 7. ANALYSIS OF CHANGES IN SHAREHOLDERS' EQUITY Six months Six months Financial ended ended year ended 31.7.05 31.7.04 31.1.05 £000 £000 £000 Profit for the period 3,695 3,733 6,631Dividends paid (2,582) (2,465) (3,521) Net addition to shareholders' equity 1,113 1,268 3,110Opening shareholders' equity 34,581 31,471 31,471 Closing shareholders' equity 35,694 32,739 34,581 8. RECONCILIATION OF PROFIT BEFORE TAX TO CASH FLOW FROM OPERATING ACTIVITIES Six months Six months Financial ended ended year ended 31.7.05 31.7.04 31.1.05 £000 £000 £000 Profit before taxation 5,281 5,365 9,550Tax paid (1,454) (1,556) (2,854)Depreciation on plant,property and equipment 260 242 493Loss on disposal on plant,property and eqpmt 26 32 58Increase in amounts receivable from customers (2,501) (3,253) (5,975)Increase in inventories (20) (16) 14Decrease in trade and other receivables 36 (111) 87Decrease in trade and other payables (10) (24) 32Increase in accruals and deferred income 108 386 439Decrease in retirement benefit obligations - (65) (65) Cash flow from operating activities 1,726 1,000 1,779 RECONCILIATIONS BETWEEN IFRS AND UK GAAP Income Statement Unaudited Reclassifications Revenue& Dividends Unaudited31st July 2004 UKGaap Note 9a Impairment Note 9c IFRS£'000 Note 9b Revenue 17,738 7,668 25,406Cost of sales (1,505) (9,657) (11,162)Gross Profit 16,233 (1,989) 14,244Administrative expenses (10,705) 2,517 (8,188)Operating profit 5,528 528 6,056Finance costs (614) (77) (691)Profit before taxation 4,914 (77) 528 5,365Taxation (1,474) (158) (1,632)Profit for the period 3,440 (77) 370 3,733 Income Statement Audited Reclassifications Revenue& Dividends Unaudited31st January 2005 UK Gaap Note 9a Impairment Note 9c IFRS£'000 Note 9b Revenue 36,363 14,349 50,712Cost of sales (3,067) (19,898) (22,965)Gross Profit 33,296 (5,549) 27,747Administrative expenses (22,174) 5,495 (16,679)Operating profit 11,122 (54) 11,068Finance costs (1,364) (154) (1,518)Profit before taxation 9,758 (154) (54) 9,550Taxation (2,936) 17 (2,919)Profit for the period 6,822 (154) (37) 6,631 9. RECONCILIATIONS BETWEEN IFRS AND UK GAAP (CONTINUED)1st February 2004 Audited Reclassifications Revenue& Dividends Unaudited£'000 UK Gaap Note 9a Impairment Note 9c IFRS Note 9bNET ASSETS Property plant and equipment 2,474 2,474Amounts receivable from customers 14,520 (704) 13,816Non current assets 16,994 (704) 16,290Inventories 105 105Amounts receivable from customers 50,006 (11,347) 38,659Trade and Other Receivables 804 804Current Income tax assets 144 (53) 2,252 2,343Cash at bank and in hand 10 10Current assets 51,069 (53) (9,095) 41,921Total assets 68,063 (53) (9,799) 58,211Bank overdrafts and loans (23,611) (23,611)Trade and other payables (3,815) 88 2,465 (1,262)Tax liabilities (1,612) 1,363 (249)Accruals and Deferred Income (794) (794)Current liabilities (29,832) 88 1,363 2,465 (25,916)Bank loansRetirement benefit obligation (88) (88)Deferred tax liability (86) (86)Financial liabilities (650) (650)Non current liabilities (824) (824)Total liabilities (29,832) (736) 1,363 2,465 (26,740)NET ASSETS 38,231 (789) (8,436) 2,465 31,471Called up share capital 2,117 (650) 1,467Share premium account 2,136 2,136Revaluation Reserve 501 (501) -Profit and loss account 33,477 362 (8,436) 2,465 27,868SHAREHOLDERS' EQUITY 38,231 (789) (8,436) 2,465 31,471 9. RECONCILIATIONS BETWEEN IFRS AND UK GAAP (CONTINUED) 31st July 2004 Unaudited Reclassifications Revenue& Dividends Unaudited£'000 UK Gaap Note 9a Impairment Note 9c IFRS Note 9bNET ASSETSProperty plant and equipment 2,432 2,432Amounts receivable from customers 15,981 (684) 15,297Non current assets 18,413 (684) 17,729Inventories 121 121Amounts receivable from customers 51,270 (10,839) 40,431Trade and Other Receivables 915 915Current Income tax assets 54 (54) 2,207 2,207Cash at bank and in hand 91 91Current assets 52,451 (54) (8,632) 43,765Total assets 70,864 (54) (9,316) 61,494Bank overdrafts and loans (5,389) (5,389)Trade and other payables (2,317) 23 1,056 (1,238)Tax liabilities (1,440) 1,250 (190)Accruals and Deferred Income (1,180) (1,180)Current liabilities (10,326) 23 1,250 1,056 (7,997)Bank loans (20,000) (20,000)Retirement benefit obligation (23) (23)Deferred tax liabilities (85) (85)Financial liability (650) (650)Non current liabilities (20,000) (758) (20,758)Total liabilities (30,326) (735) 1,250 1,056 (28,755)NET ASSETS 40,538 (789) (8,066) 1,056 32,739Called up share capital 2,117 (650) 1,467Share premium account 2,136 2,136Revaluation Reserve 501 (501) -Profit and loss account 35,784 362 (8,066) 1,056 29,136SHAREHOLDERS' EQUITY 40,538 (789) (8,066) 1,056 32,739 9. RECONCILIATIONS BETWEEN IFRS AND UK GAAP (CONTINUED) 31st January 2005 Audited Reclassify Revenue& Dividends Unaudited£'000 UKGaap Note 9a Impairment Note 9c IFRS Note 9bNET ASSETSProperty plant and equipment 2,357 2,357Amounts receivable from customers 16,758 (764) 15,994Non current assets 19,115 (764) 18,351Inventories 91 91Amounts receivable from customers 53,799 (11,343) 42,456Trade and Other Receivables 717 717Current Income tax assets 123 (58) 2,169 2,234Cash at bank and in hand 14 14Current assets 54,744 (58) (9,174) 45,512Total assets 73,859 (58) (9,938) 63,863Bank overdrafts and loans (5,791) (5,791)Trade and other payables (3,900) 23 2,583 (1,294)Tax liabilities (1,674) 1,464 (210)Accruals and Deferred Income (1,233) (1,233)Current liabilities (12,598) 23 1,464 2,583 (8,528)Bank loans (20,000) (20,000)Retirement benefit obligation (23) (23)Deferred tax liabilities (81) (81)Financial liabilities (650) (650)Non current liabilities (20,000) (754) (20,754)Total liabilities (32,598) (731) 1,464 2,583 (29,282)NET ASSETS 41,261 (789) (8,474) 2,583 34,581Called up share capital 2,117 (650) 1,467Share premium account 2,136 2,136Revaluation Reserve 496 (496) -Profit and loss account 36,512 357 (8,474) 2,583 30,978SHAREHOLDERS' EQUITY 41,261 (789) (8,474) 2,583 34,581 9. RECONCILIATIONS BETWEEN IFRS AND UK GAAP (CONTINUED) a) Reclassifications The following reclassifications have been made within the income statement andthe balance sheet on transition from UK GAAP to IFRS; - Under UK GAAP preference share capital was shown as part of the issued sharecapital but under IFRS is now shown as a non current liability. - Under UK GAAP, excess depreciation on certain revalued properties was set offagainst a revaluation reserve. Under IFRS1 the group has elected to use therevalued amounts as the deemed cost of these properties and the balance on therevaluation reserve is transferred to accumulated profit and loss. - Under IFRS we have reanalysed deferred tax as a non current liability.Deferred tax at 30% has been provided on the net book value of those propertiesacquired as part of a business acquisition. b) Revenue and Impairment Under UK GAAP credit charges were recognised on a received or receivable basisusing the sum of the digits method and acceptance fees in our car financebusiness were recognised upfront. Under IFRS, credit charges and acceptance feesare recognised in the income statement for all loans and receivables measured atamortised cost using the effective interest rate method (EIR). The EIR is therate that exactly discounts estimated future cash flows of the loan back to thepresent value (the advance). Under IAS 39 credit charges on loan productscontinue to accrue at the EIR on all outstanding capital balances includingarrears throughout the life of the agreement irrespective of the terms of theloan and whether the customer is actually being charged arrears interest. Thisis referred to as the gross up adjustment to revenue and is offset by acorresponding gross up adjustment to the impairment charge to reflect the factthat this additional revenue is not collectable. Under UK GAAP, a specific reserve being the difference between the carryingvalue of the debt and the expected actual cash flows was made on all debts whichare considered doubtful . Under IFRS, debts are assessed for impairment and theimpairment charge to the income statement is then calculated by estimating thefuture cash flows for such impaired loans, discounting the flows to a presentvalue using the original EIR and comparing this figure with the balance sheetcarrying value. c) Dividends Under UK GAAP dividends declared after the date of the balance sheet wererecorded in the balance sheet as at the balance sheet date. Under IFRS,dividends declared after the date of the balance sheet cannot be included as aliability at the balance sheet date. 10. INTERIM REPORT The figures for the year ended 31 January 2005 are not the group's statutoryaccounts for that financial year. Those accounts which were prepared inaccordance with UK GAAP and for which the auditors to the Group have issued anunqualified audit report which did not contain a statement under section 237(2)or (3) of Companies Act 1985, have now been delivered to the Registrar ofCompanies. A copy of this Interim Report will be posted to all shareholders and will bemade available to the public on our website at www.suplc.co.uk and at theCompany's registered office at Royal House, Prince's Gate, Solihull, B91 3QQ. This information is provided by RNS The company news service from the London Stock Exchange