RNS Number:0008Q
Sumus plc
23 January 2007
The following amends the release by Sumus Plc of its preliminary results for the
year ended 30th September 2006 made today at 0700 under RNS number 9506P
The release has been amended to include the following statement:
"The final dividend of 0.46pence per share will be proposed at the forthcoming
Annual General Meeting and will be paid on 27th February 2007 to shareholders
on the register as at 2nd February 2007."
23rd January 2007
For immediate release
Sumus Plc
Preliminary results for the year ended 30th September 2006
Delivering on the 'growth strategy'
Sumus Plc ('Sumus' or 'the Company'), the AIM listed holding company for IFA
businesses providing investment and financial advisory services and network
support services to IFA firms, today announces their preliminary results for
the year ended 30th September 2006.
Commenting on the results, Paul Bradshaw, Chairman, said;
2006 was a significant year for Sumus Plc. The Group has once again proved that
it can grow organically whilst maintaining the quality of its earnings; adding
to its 23 year history of sustained compound growth. It has also proved that it
can make substantial, immediately earnings enhancing acquisitions, without
compromising its balance sheet strength. The combination of the two elements is
extremely powerful and puts Sumus in a commanding position in today's IFA market
place.
Key Financials
Key performance indicator 2006 (#000) 2005 (#000) Change
Turnover 15,196 12,521 +21.4%
Gross profit 2,534 2,060 +23.0%
Operating profit 622 492 +26.4%
Profit before tax 840 628 +33.8%
Net assets 4,877 3,823 +27.6%
Operating margin 4.1% 3.9% +5.1%
Net operating cash flow 1,031 270 +281.9%
Earnings per share - basic 2.11 pence 1.78 pence +18.5%
Dividends paid / proposed 0.68p/share 0.527p/share +29.0%
Highlights
Number of advisers up by 140% to 315 (2005: 131)
Average revenue per adviser breaks #100,000 per year (2005: #96,000)
Acquisition of FSAS, the leading Scottish IFA network, for up to #2m -
immediately earnings enhancing
Addition of some #700m assets under advice, taking the group total to in excess
of #2bn funds under advice
Development of Brunel Funds 'Fund of Funds' investment proposition to be
launched in February 2007
Substantial cash resources of #3m available to fund strategic opportunities by
acquisition, joint venture, partnership and organic expansion
Continuing investment in senior management and infrastructure out of operating
cash flow
The final dividend of 0.46pence per share will be proposed at the forthcoming
Annual General Meeting and will be paid on 27th February 2007 to shareholders
on the register as at 2nd February 2007.
Contact
Allan Rosengren 0117 9330777
CEO - Sumus Plc 07973 511941
Paul Bradshaw
Chairman - Sumus Plc 07931 511936
Peter Smith 0117 9330777
FD - Sumus Plc 07713 885286
Tom Cooper / Paul Vann 0117 9200092
Winningtons Financial
CHAIRMAN'S STATEMENT
I was delighted to accept the Chairmanship of Sumus in December 2006 and these
sparkling results justify fully my enthusiasm for the group. During the year,
the group made its first major acquisition (FSAS) and has also begun the move
into added-value investment services. These are all excellent achievements and
the strong management team together with my Board predecessors are to be
congratulated on another year of solid progress.
Financial performance
Pre-tax profits have increased by 34% to #840,000 and net operating cash flow
exceeded #1 million for the first time, with cash balances rising by 9% to #4.3
million. We are recommending a final dividend of 0.46p per share, making a total
dividend for the year of 0.68p, an increase of 29% compared with last year and
covered 3 times.
Brunel Funds
A significant and well-received development in our product offering is the
Brunel Funds investment proposition which was approved by the FSA in December
2006 and which will be formally launched next month. This product gives Sumus an
opportunity to participate more actively and derive more value from offering
Independent Financial Advice and associated investment management services. We
anticipate that this will ensure both a fairer value distribution but, much more
fundamentally, an integrated incentive to the group to ensure quality over the
long term.
Market dynamics
Sumus is well-placed to benefit from the deep-seated and profound drivers of
growth in our market - ever increasing individual wealth, the demographic
inevitability of retirement for the 'baby boomer' generation and an appropriate
cynicism from younger people on the adequacy of State pensions and benefits. Our
industry is undergoing significant restructuring, not only with the
liberalisation of polarisation rules, but in more fundamental ways also.
Technology has had a significant impact in the IFA market and there are clearly
productivity gains and significant enhancements to the product offering for our
clients yet to come in all of our markets. The group's track record of strong
management and a strategy that works leaves us well placed to take advantage of
the many opportunities that the market dynamics will yield.
Current trading
Progress in the current year is satisfactory with turnover and profits
(including full contributions from FSAS) in line with expectations. Your Board
is currently assessing a number of exciting quality opportunities across all of
its corporate activity - organic expansion of existing operations, acquisitions,
joint ventures and partnership arrangements - which bodes well for the future
development of the group.
2007 promises to be exciting and dynamic for Sumus and I know that the whole
group relishes the challenges and the opportunities ahead.
Paul Bradshaw
Chairman
23rd January 2007
CHIEF EXECUTIVE'S REVIEW
We have continued to grow organically, strengthened our executive team,
increased the scope and geographic reach of the group through the acquisition of
FSAS in Scotland and broadened our wealth management offering with the imminent
launch of the Brunel Funds. Sumus has delivered on all of its objectives for the
year under review and we are delighted to present an excellent set of results
for the year ended 30th September 2006. As mentioned in the Chairman's
Statement set out on page 3, all the indicators of corporate health are
extremely positive. Group turnover and pre tax profit have increased by a
creditable 21% and 34% to #15.2 million and #840,000 respectively. Cash balances
are #4.3 million and the group has no debt.
I will comment on the main operating areas of the group as follows:
Acquisition of Financial Services Advisory and Support Limited (FSAS)
We acquired the total issued share capital of FSAS on 7th September 2006. FSAS
is a fellow founder member of the IFA Consortium and comprises an excellent fit
with our existing operations. Like Falcon Group, FSAS is committed to providing
independent financial advice, employing a somewhat different but complementary
operating model to that of Falcon. The integration of FSAS is proceeding well
and we warmly welcome all of our colleagues at FSAS to the group. This
acquisition, which is likely to add over #12 million of annual turnover, is
immediately earnings enhancing and provides a firm platform to further expand
our operations in a cost effective and profitable manner. The enlarged group
brings together in excess of 300 Independent Financial Advisers across the UK.
Board and Group Structure
Following completion of the FSAS acquisition, Andrew Snowball, Commercial
Director of FSAS, joined the Sumus Board as a Non-executive Director. We were
also delighted to appoint Paul Bradshaw as our Non-executive Chairman in
December 2006. Both Paul and Andrew have many years' financial services
experience in senior roles and we greatly look forward to working with them in
the years to come. Michael Innes and Iain Black resigned from the Board in
December 2006 and we thank them for their input and the quality of their counsel
over the last few years.
Sumus Plc owns 100% of Falcon Group Plc, 100% of Financial Services Advisory and
Support Limited and 70% of Financial Synergies Plc. We also work with other
large independent financial advisory businesses through the IFA Consortium,
which was launched in September 2005.
The Brunel Funds OEIC
A key objective for 2006 was to develop an asset management capability to
enhance returns on the assets advised upon. To this end we appointed Piers Denne
to review the positioning of the assets we have under advice and to develop
alternatives based on a value added management proposition.
This has led to our developing an exciting Fund of Funds capability in
conjunction with Premier Asset Management Plc. The Brunel Funds OEIC will be
formally launched in February 2007 with both Growth and Distribution sub-funds.
We believe these funds will offer an attractive, carefully risk managed
investment for clients, whilst enabling the group to start participating in
asset management revenues. The group continues to encourage the growth of
recurring income to reduce the dependency on initial commissions and advice
fees. We view the Brunel Funds as an important enabler for achieving this
objective.
Growth and Group Development
During 2006 we steadily increased our team of advisers, with the number of
Registered Individuals reaching 149 in Falcon and 166 in FSAS as at 30th
September 2006 (2005: 131 in Falcon only). Average annual revenues generated per
adviser at Falcon increased from #96,000 to over #100,000.
We have strengthened our senior management resources to manage this level of
growth. In addition to Piers Denne, we appointed Stephen Gazard as Head of Group
Development in July 2006. Stephen has considerable experience of network
operations at Director level and has already contributed significantly in
identifying and developing a number of key opportunities for future growth.
We have also added to the operations side of our businesses. Effective risk
management and the proactive provision of high levels of client care are of
central importance to the group.
We have continued to upgrade our systems and processes during the year under
review and have recently initiated a remotely hosted, web based server IT
environment which, once completed in the first quarter of 2007, will enable us
to deliver significantly increased functionality and data access for advisers
whilst enhancing security and data integrity features. Client demand for
appropriate and properly advised financial products and services remains high,
with particular emphasis being placed on investments and pensions and on tax
mitigation strategies, including inheritance tax planning. Overall some 76% of
our gross revenue in 2006 was derived from investment and pension products,
continuing the trend in recent years towards those areas, with some 24% being
from mortgage and protection products. Approximately 80% of all revenue is now
earned on a non-indemnified basis, and some 20% of all income is now derived
from client fees and recurring income from renewals, trail and fund based
sources.
Strategy and Prospects
The market for financial products in the UK was relatively benign during the
year under review and recent market commentaries indicate that the environment
in the current year should prove comparable, notwithstanding recent fiscal
tightening and current stock market levels. Such factors may become more
important in subsequent years, in which case the group(1)s demonstrable skills
in mitigating client risk and providing holistic and truly independent financial
advice across the whole of the market should stand us in good stead. Cash
resources remain substantial at #4.3 million having increased from #3.9 million
in 2005 - this despite the #416,000 initial net cash outlay in respect of the
FSAS acquisition and the move to payment of corporation tax on an instalment
basis. Allowing for the group(1)s capital adequacy requirements, significant
sums remain available for further acquisition and joint venture activity. Sumus
is profitable and self-sustaining and has no debt. The group is also used to
growing its revenues by on average 25% per annum or more, as it has done since
1994. Our aim is to be a cost effective and efficient provider of services and
associated benefits to those high quality advisers and businesses that are
looking to offer excellent client service manage their risks for the long-term
and build value. We will continue to focus on delivering transactions that fit
our business strategy, which means they should be earnings enhancing from an
early stage with strong growth prospects. Where new product and distribution
opportunities are identified - such as the Brunel Funds offering - we will
develop them in ways that maintain and enhance our existing operations whilst
always focusing on what is appropriate for the client. We intend to maintain our
core principles of sustainable profitable growth, effective risk management and
providing independent financial advice across the whole of the market in order
to serve the best interests of the group, our clients and stakeholders.
The Future
The Board is excited by the opportunities we see for developing the business
during the coming year and with the scale and capabilities we have within the
group, I am confident that we will enjoy continued success in 2007.
Our achievements are made possible by the efforts of a great many people across
the group. I thank them all for doing what they do so well.
Allan Rosengren
Chief Executive
23rd January 2007
SUMUS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2006
Year Year
ended ended
30 September 30 September
2006 2005
Notes #000 #000
Turnover 2
Continuing operations 14,425 12,519
Acquisitions 771 2
------ ------
15,196 12,521
Cost of sales (12,662) (10,461)
-------- --------
Gross profit 2,534 2,060
Administrative expenses (1,912) (1,568)
-------- --------
Operating profit 6 622 492
Continuing operations 614 495
Acquisitions 8 (3)
------ ------
622 492
------ ------
Other interest receivable
and similar 218 146
income
Interest payable and similar 7 - (10)
charges
------- ------
Profit on ordinary
activities before 840 628
taxation
Tax on profit on ordinary 9 (259) (190)
activities
------- ------
Profit on ordinary
activities after 581 438
taxation
Minority interest (1) -
------- ------
Profit for the financial 10 580 438
year
------- ------
Basic earnings per share 8 2.11p 1.78p
Fully diluted earnings per 8 2.02p 1.78p
share ======= =======
There are no recognised gains and losses other than those passing through the
profit and loss account.
SUMUS PLC
BALANCE SHEET
AS AT 30 SEPTEMBER 2006
Group Company
2006 2005 2006 2005
As restated As restated
Notes #000 #000 #000 #000
Fixed assets
Intangible assets 12 1,716 6 - -
Tangible assets 13 52 42 - -
Investments 14 27 27 1,918 109
----- ----- ----- -----
1,795 75 1,918 109
----- ----- ----- -----
Current assets
Debtors 16 1,286 1,091 20 149
Cash at bank and in hand 4,283 3,947 2,396 2,961
----- ----- ----- -----
5,569 5,038 2,416 3,110
Creditors: amounts
falling due within one
year 17 (1,932) (1,192) (137) (28)
----- ----- ----- -----
Net current assets 3,637 3,846 2,279 3,082
----- ----- ----- -----
Total assets less current
liabilities 5,432 3,921 4,197 3,191
Creditors: amounts
falling due after more
than one year 18 (408) - (408) -
Provisions for
liabilities and charges 19 (147) (98) - -
----- ----- ----- -----
Net assets 4,877 3,823 3,789 3,191
----- ----- ----- -----
Capital and reserves
Called up share capital 21 141 137 141 137
Shares to be issued 15 408 - 408 -
Share premium account 22 2,674 2,463 2,674 2,463
Other reserves 22 160 160 - -
Profit and loss account 22 1,493 1,063 566 591
----- ----- ----- -----
Shareholders' funds -
equity interests 24 4,876 3,823 3,789 3,191
Minority interest 23 1 - - -
----- ----- ----- -----
Net assets 4,877 3,823 3,789 3,191
----- ----- ----- -----
SUMUS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2006
Year Year
ended ended
30 September 30 September
2006 2005
Notes #000 #000
Net cash inflow from
operating 27 1,031 270
activities
Returns on investments and
servicing of finance
Interest received 218 136
Interest paid - (10)
----- -----
Net cash inflow for
returns on 218 126
investments and servicing
of finance
Taxation (325) (140)
Capital expenditure
Payments to acquire (22) (31)
tangible assets
----- -----
Net cash outflow for
capital (22) (31)
expenditure
Acquisitions and disposals
Purchase of subsidiary
undertakings (416) (6)
(net of cash acquired) 15
----- -----
Net cash outflow from
acquisitions and (416) (6)
disposals
Equity dividends paid (150) (255)
----- -----
Net cash inflow/(outflow)
before
management of liquid 336 (36)
resources and
financing
Financing
Issue of ordinary share capital - 3,000
Cost of share issue - (500)
----- -----
Issue of shares - 2,500
Repayment of other long term - (100)
loans
----- -----
Net cash inflow from - 2,400
financing
----- -----
Increase in cash in the 28 336 2,364
year
----- -----
SUMUS PLC
NOTES TO THE PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2006
1 Accounting policies
1.1 Accounting convention
The financial statements are prepared under the historical cost
convention.
1.2 Basis of consolidation
The consolidated profit and loss account and balance sheet include the
financial statements of the company and its subsidiary undertakings made
up to 30 September 2006. The results of subsidiaries sold or acquired
are included in the profit and loss account up to, or from, the date
effective control passes. The results and net assets of other subsidiary
undertakings acquired are included using the acquisition basis of
accounting except for the Falcon Group Plc, which was consolidated using
the merger basis of accounting.
1.3 Change in accounting policy
The group has adopted Financial Reporting Standard 21 'Events after the
balance sheet date' in these financial statements. This represents a
change in accounting policy in relation to the treatment of proposed
dividends and has resulted in a prior year adjustment. Further details
are set out in note 32 to the financial statements.
1.4 Turnover
Turnover represents fees and commissions receivable, excluding VAT.
Income is recognised on a receivable basis net of any claw backs, where
applicable, except for renewals where the income is recognised when it
is received. Commission earned on indemnity terms is included in the
financial statements when it is considered due. A provision for lapses
on commission received on an indemnity basis is included within the
financial statements, net of recoveries available from third parties
where reasonably certain. Turnover recognised but not yet received at
the year end is included as accrued income, when due from providers or
clients, or as trade debtors when due from Appointed Representatives.
1.5 Goodwill
Purchased goodwill arising on acquisitions is capitalised as an
intangible asset and is amortised to the profit and loss account in
equal annual instalments over its estimated useful economic life, which
can vary up to a maximum of 20 years.
1.6 Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation
is provided at rates calculated to write off the cost less estimated
residual value of each asset over its expected useful economic life,
as follows:
Leasehold improvements Over the period of the lease
Fixtures, fittings & equipment 25% straight line
1.7 Investments
Fixed asset investments are stated at cost less any necessary provision
for impairment.
1.8 Leasing
Rentals payable under operating leases are charged against income on a
straight line basis over the lease term.
1.9 Pensions
The group operates two defined contribution schemes for the benefit of
its employees. Contributions payable are charged to the profit and loss
account in the period to which they relate. Contributions are invested
separately from the group's assets.
1.10 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 by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that
have originated but not reversed at the balance sheet date. Timing
differences are differences between the group's taxable profits and its
results as stated in the financial statements and arise primarily from
the difference between accelerated capital allowances and depreciation.
The provision is not discounted.
2 Turnover
The total turnover of the group for the year has been derived from its
principal activity wholly undertaken in the United Kingdom.
United Kingdom.
3 Costs of acquired undertakings included within cost of sales and net
operating expenses. The total figures for continuing operations in 2006
include cost of sales of #704,742 (2005: #Nil) and administrative
expenses of #58,113 (2005: #4,492) in respect of subsidiary undertakings
acquired during the year.
4 Directors' emoluments 2006 2005
#000 #000
Emoluments for qualifying services 301 238
Less amount capitalised as part of the cost of the (35) -
acquisition of subsidiary undertakings
Less amount charged to share premium account for services - (12)
re listing
----- -----
Net emoluments charged to profit and loss account 266 226
Company pension contributions to money purchase schemes 60 60
----- -----
326 286
Emoluments disclosed above include the following amounts paid to the
highest paid director:
Emoluments for qualifying services 101 97
Company pension contributions to money purchase schemes 30 30
----- -----
5 Employees
Number of employees
The average monthly number of employees (including executive directors)
during the year was:
2006 2005
Number Number
Management and administration 25 17
----- -----
Employment costs 2006 2005
#000 #000
Wages and salaries 707 505
Social security costs 66 48
Other pension costs 64 65
----- -----
837 618
----- -----
6 Operating profit 2006 2005
#000 #000
Operating profit is stated after charging:
Amortisation of goodwill (note 12) 17 -
Depreciation of tangible fixed assets 28 31
Operating lease rentals - land and buildings 97 108
-fixtures, fittings and equipment 1 -
Auditors' remuneration (company #6,000; 2005: #3,500)
Audit 28 21
Other services relating to taxation 8 -
Services relating to corporate finance transactions 14
(2006: an additional #20,000 has been capitalised)
-
All other services 8 -
Remuneration of prior auditors for non-audit work - - 46
other services
----- -----
7 Interest payable 2006 2005
#000 #000
Other interest (see note 26 for further details) - 10
----- -----
8 Earnings per share
Basic earnings per share has been calculated based on the profit for the
year (after tax and minority interest) of #580,000 (2005 - #438,000) and
on the weighted average number of shares in issue during the year of
27,544,660 (2005 - 24,643,836). Fully diluted earnings per share has
been calculated based on the profit for the year (after tax and minority
interest) of #580,000 (2005 - #438,000) and on the weighted average
number of shares in issue and potential shares to be issued during the
year of 28,744,660 (2005 - 24,643,836).
9 Taxation 2006 2005
#000 #000
U.K. corporation tax 259 193
Adjustment for prior years - (3)
----- -----
Current tax charge 259 190
----- -----
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation 840 628
----- -----
Profit on ordinary activities before taxation
multiplied by standard rate of UK corporation tax 252 188
of 30.00% (2004:30.00%)
----- -----
Effects of:
Non deductible expenses 2 2
Amortisation of goodwill on acquisition 5 -
Excess of depreciation over capital allowances 1 2
Utilisation of unrelieved losses brought forward (1) -
Losses not available for group relief - 1
Adjustments to previous periods - (3)
----- -----
7 2
----- -----
Current tax charge 259 190
----- -----
10 Profit for the financial year
As permitted by section 230 of the Companies Act 1985, the holding
company's profit and loss account has not been included in these
financial statements. The profit for the financial year is made up as
follows:
2006 2005
#000 #000
Holding company's profit for the financial year 125 846
----- -----
11 Dividends 2006 2005
As restated
#000 #000
Special interim dividend paid - #nil
(2005: 1p per share) - 200
Final dividend re 2005 at 0.327p per share
(re 2004: nil) 90 -
Interim dividend paid at 0.22p per share
(2005: 0.2p per share) 60 55
----- -----
150 255
----- -----
The directors propose a final divided for 2006 of #130,000, at 0.46
pence per share. This dividend is subject to approval by shareholders at
the Annual General Meeting on 22 February 2007 and, in accordance with
Financial Reporting Standard 21, has not been included as a liability in
these financial statements.
12 Intangible fixed assets - Group
Goodwill
#000
Cost
At 1 October 2005 6
Addition in year (note 15) 1,727
-----
At 30 September 2006 1,733
-----
Amortisation
At 1 October 2005 -
Amortisation in the year 17
-----
At 30 September 2006 17
-----
Net book value
At 30 September 2006 1,716
-----
At 30 September 2005 6
-----
13 Tangible fixed assets
Group
Leasehold Fixtures, Total
improvements fittings &
equipment
#000 #000 #000
Cost
At 1 October 2005 22 125 147
Acquisition of subsidiary undertaking (note 15) - 25 25
Additions - 22 22
----- ----- -----
At 30 September 2006 22 172 194
----- ----- -----
Depreciation
At 1 October 2005 17 88 105
Acquisition of subsidiary undertaking (note 15) - 9 9
Charge for the year 4 24 28
----- ----- -----
At 30 September 2006 21 121 142
----- ----- -----
Net book value
At 30 September 2006 1 51 52
----- ----- -----
At 30 September 2005 5 37 42
----- ----- -----
14 Fixed asset investments
Group Listed investments
#000
Cost
At 30 September 2005 and 30 September 2006 27
-----
Market value
#000
At 30 September 2006 113
-----
At 30 September 2005 97
-----
Company Shares in group
undertakings
#000
Cost
At 1 October 2005 109
Additions (see note 15) 1,809
-----
At 30 September 2006 1,918
-----
In the opinion of the directors, the aggregate value of the company's
investment in subsidiary undertakings is not less than the amount
included in the balance sheet.
Holdings of 20% or more
The company holds 20% or more of the share capital of the following
companies:
Company Country of Shares held
registration or
incorporation
Class %
Subsidiary undertakings
The Falcon Group Plc England and Wales Ordinary 100
Financial Services
Advice and Support Ltd Scotland Ordinary 100
Financial Synergies Plc England and Wales Ordinary 70
15 Acquisition of subsidiary undertaking
On 7 September 2006 the company acquired 100% of the ordinary share
capital of Financial Services Advice and Support Limited ("FSAS").
This was acquired for an initial consideration of #859,000 in cash and
shares, and further deferred consideration up to a maximum #1,141,000
in cash and shares. The amount of goodwill arising on the acquisition
is being amortised through the profit and loss account on a straight
line basis over a period of 10 years, being the estimated useful
economic life of the investment. The fair values of the identifiable
assets and liabilities of the new subsidiary at the date of acquisition
were as follows:
Net assets acquired Book value Accounting Other Fair value
policy adjustments
adjustments
#000 #000 #000 #000
Intangible
fixed assets 53 (53) - -
Tangible fixed
assets 16 - - 16
Debtors 215 - - 215
Cash at bank
and in hand 362 - - 362
Current liabilities
excluding corporation
tax (484) - - (484)
----- ----- ----- -----
Corporation tax (12) - 4 (8)
Provisions for
liabilities
and cha (19) - - (19)
----- ----- ----- -----
Net assets
acquired 131 (53) 4 82
----- ----- ----- -----
Estimated total consideration
(see below) 1,675
Acquisition costs 134
-----
Total cost of investment 1,809
-----
Goodwill arising on acquisition 1,727
-----
Satisfied by #000
Initial consideration:
Cash 644
Shares issued 215
Deferred consideration:
Cash 408
Shares to be issued 408
-----
1,675
-----
The following adjustments to the values of the net assets of FSAS were
made to arrive at fair values on acquisition: #53,000 in respect of the
write off of software development costs capitalised as an intangible
asset in FSAS, to bring the treatment into line with group policy, and
#4,000 being an adjustment to corporation tax provision to establish the
correct pre-acquisition position. The deferred consideration is capped
at #1,141,000, to be calculated based on the Earnings Before Interest
and Taxation ("EBIT") of FSAS for the year ending 30 September 2007
after deducting the initial consideration paid, and is to be
satisfied as to 50 per cent. in cash and as to the remaining 50 per cent.
by the issue of new ordinary shares of 0.5p each in Sumus Plc, issued as
fully paid and valued at the average closing mid-market price in the
five days immediately prior to the date of issue. The estimated deferred
consideration is based on the latest forecast of EBIT for FSAS.
The summarised profit and loss account of the acquired entity for the
period from the beginning of its financial year on 1st November 2005 to
the effective date of acquisition, and for its previous financial year,
is set out below:
44 weeks to Year ended
7 September 31 October 2005
2006
#000 #000
Turnover 10,039 7,523
Cost of sales (9,203) (6,745)
---------- ----------
Gross profit 836 778
Administrative expenses (761) (735)
---------- ----------
Operating profit 75 43
Net interest payable (1) -
---------- ----------
Profit on ordinary activities
before taxation 74 43
Taxation (24) -
---------- ----------
Profit on ordinary activities
after taxation 50 43
Dividends paid (57) -
---------- ----------
(Loss)/profit for the period
transferred to reserves (7) 43
---------- ----------
The above information has been extracted from the audited financial
statements of FSAS for 2005 and 2006, and is stated after reclassifying
professional indemnity premiums and FSA fees paid from costs of sales to
administrative expenses, in order to be consistent with the presentation
in the group's consolidated profit and loss account.
16 Debtors
Group Company
2006 2005 2006 2005
#000 #000 #000 #000
Trade debtors 90 - - -
Amounts owed by subsidiary - - 3 86
undertaking
Group relief receivable - - - 45
Other debtors 100 111 - -
Prepayments 178 119 17 18
Accrued income - commission 918 861 - -
receivable
----- ----- ----- -----
1,286 1,091 20 149
----- ----- ----- -----
17 Creditors: amounts falling due within one year
Group Company
2006 2005 2006 2005
As As
restated restated
#000 #000 #000 #000
Trade creditors 910 711 - 9
Amounts owed to subsidiary - - 86 -
undertaking
Corporation tax 135 193 - -
Taxes and social security 31 17 8 8
costs
Accruals and deferred 538 271 43 11
income
Other creditors 318 - - -
----- ----- ----- -----
1,932 1,192 137 28
----- ----- ----- -----
18 Creditors: amounts falling due after more than one year
Group Company
2006 2005 2006 2005
#000 #000 #000 #000
Deferred cash 408 - 408 -
consideration (note 15)
----- ----- ----- -----
The deferred consideration represents the director's best estimate of
the additional cash amount payable in respect of the acquisition of
Financial Services Advice and Support Limited. Further details are set
out in note 15 above.
19 Provisions for liabilities and charges
Group
Client Lapses Total
compensation
claims
#000 #000 #000
Balance at 1 October 2005 50 48 98
Acquisition of subsidiary undertaking - 19 19
(note 15)
Utilised during the year (41) (276) (317)
Movement in provision 71 276 347
----- ----- -----
Balance at 30 September 2006 80 67 147
----- ----- -----
Client compensation claims
A provision is held in relation to current and future client complaints
across all product types. The assumptions used have been based on
previous experience and factors prevailing currently in the financial
services industry. The amount provided is the net obligation, taking
into consideration recovery from financial advisers and insurers where
it is reasonably certain.
Lapses for indemnity commissions
The provision for lapses reflects the estimated clawback of indemnity
commissions by product providers for future policy lapses. The provision
is recognised net of any recovery available from financial advisers and
insurers where that recovery is reasonably certain.
Deferred taxation
Neither the company nor the group had any liability to deferred taxation
at either 30th September 2005 or 2006. The potential deferred tax asset,
which comprised excess accelerated capital allowances and is not
recognised in the financial statements, at 30th September 2006 was
#4,597 (2005:#4,940).
20 Pension costs
Defined contribution
The group operates two defined contribution pension schemes for its
directors and employees. The assets of the schemes are held separately
from those of the company in an independently administered fund. The
pension cost charge represents contributions payable by the group to the
funds.
2006 2005
#000 #000
Contributions payable by the group for the year 64 65
----- -----
21 Share capital 2006 2005
#000 #000
Authorised
200,000,000 Ordinary shares of 0.5p each 1,000 1,000
----- -----
Allotted, called up and fully paid
28,208,745 Ordinary shares of 0.5p each (2005: 141 137
27,500,000)
----- -----
On 7th September 2006 708,745 new ordinary shares of 0.5p each were
issued,fully paid, at a price of 30.3 pence per share pursuant to the
acquisition of Financial Services Advice and Support Limited
(see note 15). The nominal value of these shares (#3,544) has been
credited to share capital and the resultant premium on issue (#211,206)
has been credited to the share premium account.
22 Statement of movements on reserves
Group
Share premium Capital reserve Profit and loss
account on merger account
#000 #000 #000
Balance at 1 October 2005 2,463 160 973
Prior year adjustment
(note 32) - - 90
----- ----- -----
Restated balance at
1 October 2005 2,463 160 1,063
Profit for the financial
year - - 580
Dividends paid - - (150)
Premium on shares issued 211 - -
during the year
----- ----- -----
Balance at
30 September 2006 2,674 160 1,493
----- ----- -----
Company Share premium Profit and loss
account account
#000 #000
Balance at 1 October 2005 2,463 501
Prior year adjustment (note 32) - 90
----- -----
Restated balance at 1 October 2005 2,463 591
Profit for the financial year - 125
Dividends paid - (150)
Premium on shares issued during the year 211 -
----- -----
2,674 566
----- -----
23 Minority interest 2006 2005
#000 #000
Minority interest share of net assets and liabilities in a subsidiary
undertaking is:
At 1 October 2005 - -
On acquisition - 1
Less share of post acquisition profits /(losses) 1 (1)
----- -----
At 30 September 2006 1 -
----- -----
24 Reconciliation of movements in Group Company
shareholders' funds
2006 2005 2006 2005
Group #000 #000 #000 #000
Profit for the financial year 580 438 125 846
Dividends (150) (345) (150) (345)
Prior year adjustment (note 32) - 90 - 90
----- ----- ----- -----
Retained profit/(loss) for the 430 183 (25) 591
financial year
Proceeds from issue of shares 215 3,000 215 3,000
Cost of share issue written
off to share premiun account - (500) - (500)
----- ----- ----- -----
Net addition to shareholders'
funds 645 2,683 190 3,091
Shares to be issued (note 15) 408 - 408 -
Opening shareholders' funds 3,823 1,140 3,191 100
----- ----- ----- -----
Closing shareholders' funds 4,876 3,823 3,789 3,191
----- ----- ----- -----
25 Financial commitments
At 30 September 2006 the group had annual commitments under
non-cancellable operating leases as follows:
Other Land and buildings
2006 2005 2006 2005
#000 #000 #000 #000
Expiry date:
Between two and five years 11 - 11 -
In over five years - - 96 96
----- ----- ----- -----
Total 11 - 107 96
----- ----- ----- -----
26 Related party transactions
The group paid SMS Advisory Ltd, a company in which Peter Smith owns a
significant shareholding, fees and expenses totalling #95,051 including
VAT (2005:#46,010) in respect of director's services supplied and in
connection with advisory work undertaken in respect of the acquisition of
Financial Services Advice and Support Limited (2005: AIM admission). At
the year end the amount due to SMS Advisory Ltd was #4,554 (2005: #nil).
The group paid rents to Capitecs Limited, a company under common ownership
and of which A Rosengren and J P Telling are directors. The total paid
during the period in respect of properties occupied by the group was
#96,000 (2005: #89,260).
There was no balance due to or from Capitecs Limited as at 30 September
2006 (2005: #19,259 within other debtors).
In 2005 interest of #9,320 was paid in respect of a loan provided to the
group, amounting to #100,000, by a pension scheme to which the group
contributes and of which A Rosengren and J P Telling are beneficiaries.
The loan was repaid in full in December 2004.
27 Reconciliation of operating profit to net cash
inflow from operating activities
2006 2005
#000 #000
Operating profit 622 492
Depreciation of tangible assets* 28 31
Amortisation of goodwill 17 -
Decrease/(increase) in debtors* 20 (193)
Increase/(decrease) in creditors within one year* 314 (74)
Movement in provisions* 30 14
----- -----
Net cash inflow from operating activities 1,031 270
----- -----
*net of balances acquired in Financial Services Advice and Support Limited.
28 Analysis of net funds 1 October Cash flow 30 September
2005 2006
#000 #000 #000
Cash at bank and in hand being net 3,947 336 4,283
funds
----- ----- -----
29 Non cash consideration
708,745 new ordinary shares of 0.5 pence each were issued during the year
fully paid in part consideration for the acquisition of Financial Services
Advice and Support Limited (see note 15 for further details).
30 Reconciliation of net cash flow to movement in net 2006 2005
funds
#000 #000
Increase in cash in the year 336 2,364
Net funds inflow from decrease in debt - 100
----- -----
Increase in net funds in the year 336 2,464
Opening net funds 3,947 1,483
----- -----
Closing net funds 4,283 3,947
----- -----
31 Client money
The total balance on client bank accounts managed by the group at 30
September 2006 was #217,285 (2005 - #632,945).
32 Prior year adjustment
Financial Reporting Standard 21, Events After the Balance Sheet Date,
became applicable for the current year, and accordingly proposed dividends
are now not included as liabilities in the financial statements. The prior
year figures have been restated for this adjustment, with the result of
decreasing dividends payable in the prior year by #90,000.
33 Statutory accounts
The financial information set out in this announcement does not constitute
the Group's statutory financial statements for the year ended 30 September
2006. The financial information for the year ended 30 September 2005 is
derived from the financial statements of the group for that period, which
were reported on by the auditors without qualification and such report did
not contain any statement under section 237(2) or (3) of the Companies Act
1985.
The financial statements for the year ended 30 September 2005 have been
delivered to the Registrar of Companies; those for the year ended 30
September 2006 will be finalised on the basis of the financial information
contained in this preliminary announcement and will be delivered to the
Registrar of Companies after the forthcoming Annual General Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKNKBQBKDKDB
Sumus (LSE:SUMU)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Sumus (LSE:SUMU)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024
