RNS Number:4110U
Prestbury Holdings PLC
20 January 2004
Prestbury Holdings plc doubles turnover
Preliminary results for the year ended 31 October 2003
Prestbury Holdings plc, the AIM-listed financial services company, today
announces its preliminary results for the 14 month period ended 31 October 2003.
Highlights:
* Turnover doubled from #2.34m to #4.63m (#5.1m for 14month period).
* Marketing joint ventures launched with Telegraph Group, Express
Newspapers & Severn Trent.
* #3 million cash raised for working capital, regulatory capital and
marketing.
* Nick Ansell ACA joins board as Strategic Development Director.
* Prudent accounting policies adopted.
* Pre-tax loss for the period of #2.2 million.
Francis Maude, Chairman of Prestbury Holdings plc, said:
"This has been a period of rapid growth in sales, coupled with investment in the
infrastructure to enable Prestbury to grow further in the new world of financial
services that is opening up. We have launched a number of joint marketing
ventures with consumer businesses and are consolidating our membership network
ahead of FSA regulation later in 2004. We enter the new financial services
world free of debt, with cash in the bank and continuing top line growth.
For further information:
Lee Birkett, Chief Executive, Prestbury Holdings plc 01625 591 401
Simon Robinson/Ana Ribeiro, Parkgreen Communications 020 7287 5544
Chairman's statement:
Overview
Turnover for the 12 month equivalent period doubled, in a year that was
exceptionally difficult for the financial services intermediary sector.
The operating loss reflects a number of factors. First, we have put in place
accounting policies whereby we recognise revenues only when the cash is
receivable. Unusually within the sector, we do not recognise work in progress
or future revenue. We believe this is the most conservative and demanding
accounting policy in the sector. Second, the life assurance industry has been
unusually slow in processing and completing applications; there has been an
unprecedented backlog, and the average time from application to the policy going
on risk is 12 weeks. This, combined with our conservative accounting policy,
has impacted our P&L. Third, implementation of our joint marketing ventures has
been slower than we envisaged. We have had to build up our overhead structure
to deal with the large growth in enquiries in advance of the revenues flowing
from the enquiries, but we maintain a firm grip on costs to ensure that we do
not sacrifice Prestbury's low cost of doing business.
The regulatory framework for mortgages and insurance is now clear. We remain
confident that the Prestbury's business model is exceptionally well-designed for
the new regulatory framework. We are one of the few businesses that is
debt-free, with the regulatory capital in the bank that will be required for the
new regime.
Solution Network
Turnover in Solution Network has grown steadily in 2003. A high degree of
regulatory uncertainty meant that many intermediaries were reluctant to commit,
and many have been dealing with a variety of networks. Geoff Iveson, who joined
as Managing Director of Solution Network during the year, has now left the
business. We are grateful to him for his efforts during that time.
With the date for FSA regulation of the sale of mortgages and life assurance
drawing ever closer, intermediaries are beginning to make firm decisions on
their future. We are delighted at the rate of commitment to Solution Network.
We want Solution Network to be the partner of choice for intermediaries for whom
FSA authorisation is unmanageable.
Moneybrain
Moneybrain, our consumer division, was effectively dormant at the beginning of
the period. Following the recruitment of Mark Rowlands as Moneybrain Managing
Director early in the period, and the launching of joint marketing ventures with
the Telegraph Group (May) and the Express Group (August), monthly revenues have
risen fivefold. These ventures required substantial up-front cash underwriting,
and delays in processing applications, a result of poor life office
administration, have pushed revenues back further than we hoped. However, both
enquiry and conversion rates have met or exceeded our expectations.
We launched a further joint venture with Severn Trent in November, and are
continuing to develop additional Moneybrain joint marketing opportunities.
Loans UK
Turnover in our LoansUK division has remained relatively stable, and we see
major opportunities to deploy further Prestbury's expertise in the high margin
non-conforming mortgages and loans sector during 2004.
People
Prestbury is located in an area of highly concentrated financial services
activity and expertise. This provides a ready supply of suitably qualified
personnel. During this financial period, the team and infrastructure has been
put in place which with minimal additions will cater for the anticipated growth
in the current financial year.
Outlook
The financial services intermediary sector will continue to be disrupted by
regulatory impacts and structural change, both of which provide substantial
opportunities for Prestbury. Prestbury anticipated these changes, and has
invested and prepared for them. We are delighted to welcome Nick Ansell to the
board. Nick has tremendous experience in the sector, and will help the company
to explore and develop new opportunities in this fast-changing marketplace.
Trading levels in the current year show continuing growth, which gives us
confidence for 2004.
Francis Maude
Chairman
Consolidated Profit and Loss Account
Memorandum
Period 21.8.02 Year Ended Year Ended
to 31.10.03 31.10.03 31.10.02
# # #
TURNOVER 5,088,454 4,632,336 2,344,833
Cost of sales 4,109,712 3,812,272 1,529,093
GROSS PROFIT 978,742 820,064 815,740
Administrative expenses 2,903,912 2,647,019 1,210,688
OPERATING LOSS (1,925,170) (1,826,955) (394,948)
Loss on disposal on fixed asset
investment (376,000) (376,000)
Interest receivable and
similar income 773 731 216
(2,300,397) (2,202,224) (394,732)
Interest payable and
similar charges 21,895 21,293 3,098
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION (2,322,292) (2,223,517) (397,830)
Tax on loss on ordinary
activities (359,012) (351,576) (38,228)
LOSS FOR THE FINANCIAL
PERIOD AFTER TAXATION (1,963,280) (1,871,941) (359,602)
Retained profit/ (loss)
brought forward (259,797) (351,136) 8,466
ACCUMULATED DEFICIT
CARRIED FORWARD (2,223,077) (2,223,077) (351,136)
Basic loss per share (12.8p) (14.4p)
Diluted loss per share (12.8p) (14.4p)
The group profit and loss account presents the results as if Prestbury Holdings
plc had been in existence and owned Prestbury Financial Limited throughout the
current and comparative years. Prestbury Holdings plc was established with the
initial objectives of effecting the acquisition of Prestbury Financial Limited
and the floatation on the Alternative Investment Market on 21st August 2002, as
referred to in note 22. A memorandum profit and loss account is presented above
for the group from 21st August 2002 to 31st October 2003.
CONTINUING OPERATIONS
Since the business combination has been accounted for as a merger, none of the
group's activities have been shown as acquired or discontinued during the
current period or previous period.
TOTAL RECOGNISED GAINS AND LOSSES
The group has no recognised gains or losses other than the loss for the current
and the previous period.
Consolidated Balance Sheet
31.10.03 31.10.02
# # # #
FIXED ASSETS:
Tangible assets 273,277 141,531
Investments - 750,000
273,277 891,531
CURRENT ASSETS:
Debtors 1,129,122 111,556
Cash in hand 913,586 -
2,042,708 111,556
CREDITORS: Amounts falling
due within one year 696,274 571,078
NET CURRENT ASSETS/
(LIABILITIES) 1,346,434 (459,522)
TOTAL ASSETS LESS CURRENT
LIABILITIES 1,619,711 432,009
CREDITORS: Amounts falling
due after more than one year (36,952) (10,830)
PROVISIONS FOR LIABILITIES
AND CHARGES (129,458) (48,583)
1,453,301 372,596
CAPITAL AND RESERVES:
Called up share capital 863,089 687,500
Share premium account 2,813,289 36,232
Profit and loss account (2,223,077) (351,136)
SHAREHOLDERS' FUNDS - EQUITY 1,453,301 372,596
Company Balance Sheet
31.10.03 31.10.02
# # # #
FIXED ASSETS:
Investments 625,000 1,375,000
CURRENT ASSETS
Debtors
(Including amounts falling
due after one year of
#2,877,910 (2002: Nil)) 3,262,278 -
CREDITORS: Amounts falling
due within one year 16,019 53,272
NET CURRENT ASSETS/
(LIABILITIES) 3,246,259 (53,272)
TOTAL ASSETS LESS
CURRENT LIABILITIES 3,871,259 1,321,728
CAPITAL AND RESERVES:
Called up share capital 863,089 687,500
Share premium account 3,437,840 660,783
Profit and loss account (429,670) (26,555)
SHAREHOLDERS' FUNDS - EQUITY 3,871,259 1,321,728
Consolidated Cash Flow Statement
Year Ended Year Ended
31.10.03 31.10.02
# # # #
Net cash (outflow)/ inflow
from operating activities (1,742,426) 48,243
Returns on investments and
servicing of finance (20,562) (2,882)
Taxation (969) (3,675)
Capex and financial investment (173,957) (48,053)
(1,937,914) (6,367)
Financing 2,938,798 (54,445)
Increase/(decrease) in cash in
the period 1,000,884 (60,812)
Reconciliation of net cash flow
to movement in net debt
Increase/(decrease)
in cash in the period 1,000,884 (60,812)
Cash inflow from decrease
in debt and finance leasing 13,848 28,177
Change in net debt resulting
from cash flows 1,014,732 (32,635)
New finance leases (50,161) (19,349)
Movement in net debt in
the period 964,571 (51,984)
Net debt at 1st November (101,979) (49,995)
Net debt at 31st October #862,592 (#101,979)
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END
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