Unaudited results 2004
29 Avril 2005 - 6:19PM
UK Regulatory
RNS Number:7494L
Culver Holdings PLC
29 April 2005
Culver Holdings plc
Preliminary unaudited results for the year ended 31 December 2004
Chairman's Statement
The Board is pleased to announce the Group's results for the twelve months ended
31 December 2004.
TRADING SUMMARY
Turnover for the period was #3.441 million (2003 - #3.296 million). The
operating profit, excluding goodwill amortisation, on existing operations was
#238,000 (2003 - #252,000) and on acquisitions there was a loss relating to
higher than anticipated start up costs relating to the business of Aegis
Financial Services of #124,000. After goodwill amortisation of #202,000 (2003 -
#177,000) and interest, the retained loss was #25,000 (2003 - #385,000).
The impact of softening rates in the general commercial insurance market
mentioned in my interim statement was less severe than anticipated in the second
half of 2004 and as a result the income of the insurance broking business
improved over the previous year. However the impact of the development
expenditure of Bizcover did result in a diminution of profit for the full year
as compared to 2003. This will not be repeated in 2005 as the necessary action
to reduce that expenditure was taken in the second half of 2004.
In other ways, both the London and the Cardiff insurance broking businesses made
steady progress in increasing income and controlling costs over the year and
this is continuing into 2005
Significant management effort has been applied to improving the disappointing
performance of Aegis Financial Services, the income of which has been
significantly lower than anticipated. The cost base has been considerably
reduced, and the ongoing losses of the business have been eliminated.
Performance is improving and will continue to improve as the business develops.
CAPITAL RE-ORGANISATION
As a result, principally, of the Group's involvement in the travel business, the
Company's reserves have been eliminated and the Company's shares trade at below
their par value. As an initial step towards rectifying this and also creating a
class of shares which can be issued at par or above, your board has decided to
propose a re-organisation of the Company's share capital through a sub-division
and re-designation of the existing shares into ordinary shares and deferred
shares followed by a consolidation of the new ordinary shares. In practical
terms, this will leave shareholders with a smaller number of shares but the
value of their total shareholding should not be reduced. Full details of this
proposal will be included within the Group's Report and Accounts and the
necessary resolutions to implement the proposals will be proposed at the Annual
General Meeting.
The current price at which the Company's shares trade also acts as a
dis-incentive to members of the Company's share option schemes. It is intended
that at the time of the reconstruction of the share capital new option scheme
arrangements will also be proposed.
In due course, the Company will also seek your approval and that of the Courts
to offset the deficit on reserves against the Company's share premium account
and this should enable the Company to pay dividends at an earlier stage than
would otherwise have been the case.
PROSPECTS
So far as the insurance broking business is concerned, the review of the Group's
arrangements for placing insurance business was completed as planned during the
final quarter of 2004. The Group has completed its transition from membership of
the Willis Commercial Network with its associated burden of computer and other
costs to true independence and has now fully migrated its broking and accounting
systems to a new platform. Culver Insurance Brokers is just beginning to also
reap the benefits from the transition to computer systems which may be more
readily tailored to produce the information Culver requires to manage its
business. In addition, leaving membership of the Willis Commercial Network has
lead to Culver once more establishing direct working relationships with the
underwriters it traditionally dealt with and overall the change in the nature of
the relationship has been well received by underwriters and this should benefit
clients over coming years. The business obtained full authorisation from the
Financial Services Authority, which became the regulator of insurance mediation
activity on 14 January 2005, on schedule.
Further recruitment of high quality business production personnel has taken
place during the first quarter of 2005 and the benefit of these changes is
anticipated to be seen in 2005. New business performance continues to be strong
in London and has improved considerably in Cardiff.
The Group has reduced its interest in the business of providing independent
financial advice to individuals in South Wales but continues to develop its
employee benefits business both in Cardiff and the Thames Valley.
The Group needs to add further volume to make most profitable use of the
infrastructure which has been established. It is continuing actively to seek
further high quality business production personnel to join the group in all
areas of the business. The board therefore looks to the group's future with
optimism.
R M H Read
Chairman
29 April 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
2004 2003
#'000 #'000
Note
Turnover 2
Existing operations 3,165 3,068
Acquisitions 276 -
--------------------- ----- --------- ---------
Continuing operations 3,441 3,068
Discontinued - 228
--------------------- ----- --------- ---------
3,441 3,296
Cost of sales
Existing operations (984) (879)
Acquisitions (114) -
--------------------- ----- --------- ---------
Continuing operations (1,098) (879)
Discontinued - (136)
--------------------- ----- --------- ---------
(1,098) (1,015)
Gross profit
Existing operations 2,181 2,189
Acquisitions 162 -
--------------------- ----- --------- ---------
Continuing operations 2,343 2,189
Discontinued - 92
--------------------- ----- --------- ---------
2,343 2,281
Administrative expenses
Existing operations (2,145) (2,114)
Acquisitions (286) -
--------------------- ----- --------- ---------
Continuing operations (2,431) (2,114)
Discontinued 2 (262)
--------------------- ----- --------- ---------
(2,429) (2,376)
Operating loss
Existing operations 36 75
Acquisitions (124) -
--------------------- ----- --------- ---------
Continuing operations (88) 75
Discontinued 2 (170)
--------------------- ----- --------- ---------
(86) (95)
Profit on sale of fixed assets
- continuing operations 1 12
Gain on sale or termination
of subsidiaries - discontinued 4 148 82
Amounts written off investments - (350)
--------------------- ----- --------- ---------
Profit/(loss) before interest and taxation 63 (351)
Interest receivable and similar income 26 27
Interest payable and similar charges (114) (60)
--------------------- ----- --------- ---------
Loss before taxation 3 (25) (384)
Taxation 5 - (1)
--------------------- ----- --------- ---------
Loss after taxation and retained loss (25) (385)
--------------------- ----- --------- ---------
Basic and diluted loss per share (pence) 6 (0.22) (3.38)
Shares in issue (millions) 11.44 11.44
Shares used in calculating eps (millions) 11.44 11.40
--------------------- ----- --------- ---------
There were no recognised gains or losses for the year other than those included
in the profit and loss account.
CONSOLIDATED BALANCE SHEET
Group Group
2004 2003
#000 #000
Fixed assets
Intangible assets 2,520 2,115
Tangible assets 32 119
Investments 7 7
--------------------- ------- -------
2,559 2,241
--------------------- ------- -------
Current assets
Debtors 1,155 2,028
Cash at bank and in hand 676 581
--------------------- ------- -------
1,831 2,609
Creditors: amounts falling due within one year (2,964) (3,625)
--------------------- ------- -------
Net current liabilities (1,133) (1,016)
--------------------- ------- -------
Total assets less current liabilities 1,426 1,225
Creditors: amounts falling due after more than one year (986) (729)
Provisions for liabilities and charges (484) (515)
--------------------- ------- -------
Net liabilities (44) (19)
--------------------- ------- -------
Capital and reserves
Called up share capital 2,859 2,859
Share premium account 4,403 4,403
Profit and loss account (7,306) (7,281)
--------------------- ------- -------
Equity shareholders' funds (44) (19)
--------------------- ------- -------
CONSOLIDATED CASH FLOW STATEMENT
2004 2003
Note #'000 #'000
Net cash inflow/(outflow) from
operating activities 7 178 (132)
Returns on investments and
servicing of finance (88) (23)
Taxation - (1)
Capital expenditure and
financial investment 28 (649)
Acquisitions and disposals (14) -
-------------------- ------ ------- -------
Net cash inflow /(outflow) before financing 104 (805)
Financing (126) 669
-------------------- ------ ------- -------
Decrease in cash in period (22) (136)
-------------------- ------ ------- -------
Represented by:
Increase/(decrease) in insurance broking balances 77 (18)
Decrease in other balances (99) (118)
-------------------- ------ ------- -------
(22) (136)
-------------------- ------ ------- -------
Reconciliation of net cash flow
to movement in net debt
Decrease in cash in the period (22) (136)
Cash inflow/(outflow) from movement in
debt and lease financing 126 (644)
-------------------- ------ ------- -------
Change in net debt
resulting from cash flows 104 (780)
New Hire Purchase agreements - (9)
Issue of Loan Stock (500) -
Conversion of existing debt to Loan Stock 160 -
-------------------- ------ ------- -------
Movement in net debt in the period (236) (789)
Net (debt)/funds at the start of the period (450) 339
-------------------- ------ ------- -------
Net debt at the end of the period 8 (686) (450)
-------------------- ------ ------- -------
NOTES
1. Basis of preparation of financial statements
The financial information has been prepared on the basis of the accounting
policies as set out in the group's statutory accounts for the year ended 31
December 2003.
The Group Board continue to pursue a tight cost control and cash management
policy and are focussed entirely on the profitable insurance sector.
The Group has prepared its business plan on a conservative basis and the
directors have reached agreement with the Group's bankers and are confident that
adequate financial resources will be available to the Group until at least 31
December 2006.
Accordingly the financial statements have been prepared on a going concern
basis.
2. Analysis of turnover, and loss before taxation
2004 2004 2003 2003
Turnover Profit/ Turnover Profit
(loss) (loss)
#'000 #'000 #'000 #'000
Existing Insurance 3,165 241 3,068 494
Acquisitions Insurance 276 (124) - -
---------- ------------ ------- ------- ------- -------
Continuing Insurance 3,441 117 3,068 494
Unallocated central - (205) - (419)
costs
Discontinued Technology - 2 228 (170)
---------- ------------ ------- ------- ------- -------
3,441 3,296
---------- ------------ ------- ------- ------- -------
(86) (95)
Exceptional 149 (256)
items
Net Interest (88) (33)
---------- ------------ ------- ------- ------- -------
Loss before
taxation (25) (384)
---------- ------------ ------- ------- ------- -------
3. Loss on ordinary activities before taxation
2004 2003
#'000 #'000
Loss on ordinary activities before taxation is stated after
charging:
Remuneration of auditors and their associated firms
- audit (including parent company #5,000 (2003: #5,000) 32 22
- other 7 9
Depreciation of tangible fixed assets
- owned 43 85
- hire purchase 17 48
Amortisation of goodwill 202 177
Rentals payable under operating leases
Plant and machinery 9 21
Other 40 64
Exceptional items
Gain on sale or termination of subsidiaries (148) (82)
Profit on sale of fixed assets (1) (12)
Amounts written off investments - 350
4. Gain on sale or termination of subsidiaries
The gain in 2004 arises on the liquidation of Culver Technologies Limited. In
2003 the gain arose from the disposal of Wanbase Limited for a nominal
consideration and adjustment to the consideration for the sale of Wire 2
Limited.
5. Taxation
Provision for taxation has been made assuming current rates of Corporation Tax
based upon the estimated rate of taxation for the year. No deferred taxation
asset has been recognised in respect of tax losses carried forward.
6. Loss per share
The loss per share has been calculated on a weighted average of 11,437,894 (
2003: 11,396,227) ordinary shares in issue during the year based on a loss of
#25,000 (2003:# 385,000).
7. Reconciliation of operating loss to net cash inflow/(outflow) from
operating activities
2004 2004 2004 2003
Continuing Discontinued Total Total
#'000 #'000 #'000 #'000
Operating loss (88) 2 (86) (95)
Depreciation charge 60 - 60 133
Amortisation of goodwill 202 - 202 177
Payments to pension
mis-selling creditors (416) - (416) (466)
Receipts from PI insurers re
pensions mis-selling 228 - 228 248
Decrease/(increase) in debtors 869 - 869 (642)
(Decrease)/increase in
creditors (679) - (679) 513
-------------------- ------- -------- ------- -------
Net cash inflow/(outflow) from
operating activities 176 2 178 (132)
-------------------- ------- -------- ------- -------
8. Analysis of net debt
At beginning Cash Non cash At end
of year flow movements of year
#'000 #'000 #'000 #'000
Cash in hand, at bank
Insurance broking 533 77 - 610
Other 48 18 - 66
Overdrafts (99) (117) - (216)
--------------------- -------- ------- -------- -------
482 (22) - 460
--------------------- -------- ------- -------- -------
Debt due within one year (142) 138 (148) (152)
Debt due after one year (717) (77) 308 (486)
Loan Stock - - (500) (500)
Hire purchase (73) 65 - (8)
--------------------- -------- ------- -------- -------
(932) 126 (340) (1,146)
--------------------- -------- ------- -------- -------
Total (450) 104 (340) (686)
--------------------- -------- ------- -------- -------
9. Comparative figures
The comparative figures for the financial year ended 31 December 2003 are
extracted from the Company's statutory accounts. Those accounts have been
reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not contain a
statement under Section 237(2) or (3) of the Companies Act 1985.
10. Status of information
The financial information contained in this statement does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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