TIDMCB.
RNS Number : 5967S
CBG Group Plc
14 September 2010
14 SEPTEMBER 2010
CBG GROUP PLC
(AIM: CB.)
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2010
CBG Group plc ("CBG" or the "Group") a leading independent advisory business
providing insurance broking, employee benefits, financial planning and
specialist sports injury insurance services to companies and private clients, is
pleased to announce their interim results for the six months to 30 June 2010.
HEADLINES
· Disposal of non-core elements of Personal Lines business in February 2010
· 11.6% fall in revenue to GBP4,089,000 (2009: GBP4,627,000 **)
· 34.1% increase in adjusted * EBITDA to GBP798,000 (2009: GBP595,000 **)
· Broking profit margin increased to 23.6% (2009: 16.4% **)
· 58.9% increase in adjusted * diluted earnings per share to 2.94p (2009:
1.85p **)
· Net cash inflow from operations GBP1,322,000 (2009: GBP232,000)
· Final deferred consideration payments settled, including cash payments
totalling GBP945,000
· Net debt reduced to GBP666,000 (31 December 2009: GBP891,000; 30 June
2009: GBP2,465,000)
* excludes the effect of exceptional operating expenses and share option charges
** note 3 provides an explanation of the prior year restatement
Robin Slinger, Chairman of CBG said:
"This has been a period of significant change for CBG and one in which I am
delighted to report good progress in delivering growth in operating profit,
margin improvement and cash flow generation. These results maintain the positive
momentum we have built up and I believe the Group is well placed to continue to
make progress in the face of the economic uncertainty ahead.
The strategic disposal of non-core activities has impacted adversely upon our
comparative revenues. This action however, alongside a programme of cost
reduction, ensured we successfully reduced the level of risk within the
business. We have a clear, focused strategy and our performance, together with
the decisions we have taken over the last two years to strengthen our balance
sheet, has placed us in a strong financial position and provided a solid
foundation for future growth."
---ends---
Enquiries:
+-----------------------------------+------------------+
| | |
+-----------------------------------+------------------+
| CBG Group plc | 0161 920 0200 |
+-----------------------------------+------------------+
| Mike Askew, Group Managing | 07720 400356 |
| Director | |
+-----------------------------------+------------------+
| Martyn Hughes, Group Finance | 07734 543454 |
| Director | |
+-----------------------------------+------------------+
| www.cbg-group.co.uk | |
+-----------------------------------+------------------+
| | |
+-----------------------------------+------------------+
| Zeus Capital (Nomad & Broker) | 0161 831 1512 |
+-----------------------------------+------------------+
| Alex Clarkson / Nick Cowles | |
+-----------------------------------+------------------+
| | |
+-----------------------------------+------------------+
| Daniel Stewart & Company plc | 020 7776 6550 |
| (Joint Broker) | |
+-----------------------------------+------------------+
| Martin Lampshire | |
+-----------------------------------+------------------+
| | |
+-----------------------------------+------------------+
| Bishopsgate Communications Ltd | 020 7562 3350 |
+-----------------------------------+------------------+
| Nick Rome / Laura Stevens | |
+-----------------------------------+------------------+
| | |
+-----------------------------------+------------------+
Chairman's Statement
In October this year CBG celebrates 10 years of providing value added insurance
services to corporate and private individuals and I am delighted to present my
first statement as Chairman of the Company. I must firstly place on record
tribute to my predecessor, Laurie Turnbull. In five years as non-executive
chairman Laurie made an enormous contribution to CBG, with invaluable wisdom,
guidance and experience passed on to our Executive team. I intend to ensure that
the organisation continues to develop the skills and capabilities necessary to
meet the increasingly complex challenges of the financial services sector.
It has indeed been an interesting last 12 months for CBG but I am pleased to
report we have once again delivered a strong set of results against a backdrop
of challenging economic conditions. Whilst we continue to evaluate growth
opportunities our main objective has been to deliver a stronger business for the
future. Our strategy continued to have two major themes, firstly focusing on
excellence in our core technical competencies of broking and secondly, improving
the effectiveness of our operations and standards of service.
Trading
Total revenue in the 6 months to 30 June 2010 fell by GBP538,000 (11.6%) to
GBP4,089,000 (2009: GBP4,627,000 as restated). The disposal of our unconnected
personal lines business accounted for GBP157,000 of this reduction and,
therefore, like for like income in the period fell by GBP381,000 (8.6%) to
GBP4,045,000 (2009: GBP4,426,000 as restated).
Despite the fall in our top line we have increased Broking profit margin to
23.6% (2009: 16.4% as restated) (note 5) translating into a 34.1% increase in
adjusted * EBITDA to GBP798,000 (2009: GBP595,000 as restated).
The Group has managed its cost base and balance sheet well during this difficult
economic cycle reducing net debt by 25.2% (note 10) in the first six months of
2010, satisfying all outstanding deferred consideration payments from operating
cash flow.
* to exclude the effect of exceptional operating expenses and share option
charges
Our staff
As a direct result of the economic situation, and our pursuit of increased
efficiency, we have reduced resource levels across the Group, resulting in
headcount reductions in several areas. Notwithstanding these changes our
employees have continued to perform at their normal high standard and on behalf
of the Board, I would like to thank all staff for their tremendous work and
commitment throughout this period of change.
Dividend increase
In May 2010 the Board paid a final dividend of 0.7 pence per share, a 6% year on
year increase, underlining our commitment to shareholders whilst recognising the
need to retain a strong capital base.
Prospects
Whilst we are encouraged by some positive emerging trends across our principal
markets we will continue to manage the business in a way that reflects the
general uncertainty that surrounds the sustainability of the recovery of the UK
economy. We have further reduced operating costs since the end of June 2010 to
align our headcount and infrastructure to our operational needs. Despite a fall
in revenue CBG is currently on track to deliver an improvement in profits to
those achieved in 2009, albeit lower than market expectations.
Driven by strong cash generation, and a sound liquidity position, we are
confident that our long-term decisions stand us in good stead for future growth.
Whilst we continue to evaluate acquisition opportunities, valuation multiples
expected by vendors in many cases remain uneconomic and do not provide long term
value for our business.
The Board is pleased with the continued resilience of the Group in the
prevailing marketplace. With prudent control of capital expenditure and further
increases in operating margins in prospect, the Group is in an excellent
position to benefit from any upturn in economic and market conditions.
Robin Slinger
Chairman
14 September 2010
Consolidated income statement
for the half year ended 30 June 2010
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | Half | | Half | | Year |
| | | Year | | Year | | to |
| | | to | | to | | 31/12/09 |
| | | 30/06/10 | | 30/06/09 | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | Unaudited | | Unaudited | | Audited |
| | | | | and | | |
| | | | | restated | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | Note | | | GBP'000 | | GBP'000 |
| | | GBP'000 | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Revenue | | 4,089 | | 4,627 | | 8,961 |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Administrative expenses | | (3,829) | | (4,633) | | (8,774) |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Operating profit before | | 798 | | 595 | | 1,386 |
| amortisation, depreciation, | | | | | | |
| exceptional operating expenses | | | | | | |
| and share option charges | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Amortisation | | (313) | | (365) | | (704) |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Depreciation | | (121) | | (132) | | (253) |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Exceptional operating expenses | 4 | (67) | | (74) | | (177) |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Share option charges | | (37) | | (30) | | (65) |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Operating profit / (loss) | 5 | 260 | | (6) | | 187 |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Investment revenues | | 4 | | 44 | | 10 |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Finance costs | | (36) | | (103) | | (117) |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Profit / (loss) before tax | | 228 | | (65) | | 80 |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Income tax | | (65) | | 15 | | 106 |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Profit / (loss) attributable to | | 163 | | (50) | | 186 |
| ordinary shareholders in respect | | | | | | |
| of continuing operations | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Earnings per share: | | Pence | | Pence | | Pence |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Earnings / (loss) per share - | 7 | 1.04 | | (0.32) | | 1.19 |
| basic | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| Earnings / (loss) per share - | 7 | 1.03 | | (0.32) | | 1.18 |
| diluted | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------------+------+-----------+-+-----------+-+----------+
The Group has no items to be recognised in the "Consolidated statement of
comprehensive income" and consequently this statement has not been shown.
Consolidated statement of financial position
as at 30 June 2010
+------------------------------+-----------+-+-----------+-+----------+
| | As at | | As at | | As at |
| | 30/06/10 | | 30/06/09 | | 31/12/09 |
+------------------------------+-----------+-+-----------+-+----------+
| | Unaudited | | Unaudited | | Audited |
| | | | and | | |
| | | | restated | | |
+------------------------------+-----------+-+-----------+-+----------+
| | | | GBP'000 | | GBP'000 |
| | GBP'000 | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Non-current assets | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Goodwill | 13,067 | | 13,210 | | 13,067 |
+------------------------------+-----------+-+-----------+-+----------+
| Other intangible assets | 2,285 | | 3,246 | | 2,907 |
+------------------------------+-----------+-+-----------+-+----------+
| Property, plant and | 475 | | 643 | | 550 |
| equipment | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Deferred tax asset | 27 | | 9 | | 27 |
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| | 15,854 | | 17,108 | | 16,551 |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Current assets | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Trade and other receivables | 4,617 | | 7,652 | | 4,652 |
+------------------------------+-----------+-+-----------+-+----------+
| Cash and cash equivalents | 1,609 | | 2,256 | | 1,844 |
+------------------------------+-----------+-+-----------+-+----------+
| | 6,226 | | 9,908 | | 6,496 |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Total Assets | 22,080 | | 27,016 | | 23,047 |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Current liabilities | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Trade and other payables | (6,040) | | (7,157) | | (5,825) |
+------------------------------+-----------+-+-----------+-+----------+
| Deferred consideration | - | | (1,714) | | (1,055) |
+------------------------------+-----------+-+-----------+-+----------+
| Current tax | (339) | | (347) | | (122) |
+------------------------------+-----------+-+-----------+-+----------+
| Borrowings | (275) | | (446) | | (410) |
+------------------------------+-----------+-+-----------+-+----------+
| | (6,654) | | (9,664) | | (7,412) |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Non-current liabilities | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Deferred tax | (736) | | (811) | | (820) |
+------------------------------+-----------+-+-----------+-+----------+
| Borrowings | (2,000) | | (4,275) | | (2,325) |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| | (2,736) | | (5,086) | | (3,145) |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Total liabilities | (9,390) | | (14,750) | | (10,557) |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Equity | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Ordinary shares | 636 | | 625 | | 627 |
+------------------------------+-----------+-+-----------+-+----------+
| Share premium account | 7,891 | | 7,780 | | 7,790 |
+------------------------------+-----------+-+-----------+-+----------+
| Merger reserve | 449 | | 449 | | 449 |
+------------------------------+-----------+-+-----------+-+----------+
| Retained earnings | 3,713 | | 3,412 | | 3,624 |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Shareholders' equity | 12,689 | | 12,266 | | 12,490 |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
| Total equity and liabilities | 22,079 | | 27,016 | | 23,047 |
+------------------------------+-----------+-+-----------+-+----------+
| | | | | | |
+------------------------------+-----------+-+-----------+-+----------+
Consolidated statement of changes in equity
for the half year ended 30 June 2010
+------------------------+------------------------+---------+---------+----------+---------+
| | Share | Share | Merger | Retained | Total |
| | capital | premium | reserve | earnings | equity |
| | | account | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Balance at 1 January | 620 | 7,675 | 449 | 3,534 | 12,278 |
| 2009 - Audited | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Net loss for the | | | | | |
| period attributable to | | | | | |
| equity shareholders | | | | | |
| (as restated) | | | | | |
+ +------------------------+---------+---------+----------+---------+
| | | | | | |
+ +------------------------+---------+---------+----------+---------+
| | - | - | - | (50) | (50) |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Transactions with | 620 | 7,675 | 449 | 3,484 | 12,228 |
| owners | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Dividends paid | - | - | - | (102) | (102) |
+------------------------+------------------------+---------+---------+----------+---------+
| Issue of ordinary | 5 | 105 | - | - | 110 |
| shares | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Other reserves | | | | | |
| movement due to share | | | | | |
| options charge | | | | | |
+ +------------------------+---------+---------+----------+---------+
| | - | - | - | 30 | 30 |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Balance at 30 June | 625 | 7,780 | 449 | 3,412 | 12,266 |
| 2009 - Unaudited and | | | | | |
| restated | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Net profit for the | | | | | |
| period attributable to | | | | | |
| equity shareholders | | | | | |
+ +------------------------+---------+---------+----------+---------+
| | - | - | - | 298 | 298 |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Transactions with | 625 | 7,780 | 449 | 3,710 | 12,564 |
| owners | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Issue of ordinary | 2 | 10 | - | - | 12 |
| shares | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Other reserves | | | | | |
| movement due to share | | | | | |
| options charge | | | | | |
+ +------------------------+---------+---------+----------+---------+
| | - | - | - | 33 | 33 |
+------------------------+------------------------+---------+---------+----------+---------+
| Impact of deferred tax | | | | | |
| on share option charge | | | | | |
+ +------------------------+---------+---------+----------+---------+
| | - | - | - | (119) | (119) |
+------------------------+------------------------+---------+---------+----------+---------+
| | | - | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Balance at 31 December | 627 | 7,790 | 449 | 3,624 | 12,490 |
| 2009 - Audited | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Net profit for the | | | | | |
| period attributable to | | | | | |
| equity shareholders | | | | | |
+ +------------------------+---------+---------+----------+---------+
| | - | - | - | 163 | 163 |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Transactions with | 627 | 7,790 | 449 | 3,787 | 12,653 |
| owners | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Dividends paid | - | - | - | (111) | (111) |
+------------------------+------------------------+---------+---------+----------+---------+
| Issue of ordinary | 9 | 101 | - | - | 110 |
| shares | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Other reserves | | | | | |
| movement due to share | | | | | |
| options charge | | | | | |
+ +------------------------+---------+---------+----------+---------+
| | - | - | - | 37 | 37 |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| Balance at 30 June | 636 | 7,891 | 449 | 3,713 | 12,689 |
| 2010 - Unaudited | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
| | | | | | |
+------------------------+------------------------+---------+---------+----------+---------+
The Group has applied s131 of the Companies Act (1985) in respect of Merger
Relief.
Consolidated statement of cash flows
for the half year ended 30 June 2010
+----------------------------------+------+-----------+-----------+----------+
| | | Half | Half | Year |
| | | Year | Year | to |
| | | to | to | 31/12/09 |
| | | 30/06/10 | 30/06/09 | |
+----------------------------------+------+-----------+-----------+----------+
| | | Unaudited | Unaudited | Audited |
| | | | and | |
| | | | restated | |
+----------------------------------+------+-----------+-----------+----------+
| |Note | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Operating activities | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Cash generated by operations | 8 | 1,287 | 613 | 2,998 |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Income taxes received / (paid) | | 68 | (281) | (507) |
+----------------------------------+------+-----------+-----------+----------+
| Net interest paid | | (33) | (100) | (117) |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Net cash inflow from operating | | 1,322 | 232 | 2,374 |
| activities | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Investing activities | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Interest received | | 4 | 44 | 8 |
+----------------------------------+------+-----------+-----------+----------+
| Purchases of property, plant and | | (45) | (168) | (196) |
| equipment | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Deferred consideration paid | | (945) | (1,332) | (1,850) |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Net cash used in investing | | (986) | (1,456) | (2,038) |
| activities | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Financing activities | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Dividends paid | | (111) | (102) | (102) |
+----------------------------------+------+-----------+-----------+----------+
| Proceeds from issue of shares | | - | - | 14 |
+----------------------------------+------+-----------+-----------+----------+
| Receipt of bank loans | | - | 500 | - |
+----------------------------------+------+-----------+-----------+----------+
| Repayment of bank loans | | (250) | - | (1,250) |
+----------------------------------+------+-----------+-----------+----------+
| Repayment of other loans | | (210) | (210) | (420) |
+----------------------------------+------+-----------+-----------+----------+
| Repayment of hire purchase | | - | (10) | (36) |
| obligations | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Net cash generated by financing | | (571) | 178 | (1,794) |
| activities | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Net decrease in cash and cash | 10 | (235) | (1,046) | (1,458) |
| equivalents | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Cash and cash equivalents at | | 1,844 | 3,302 | 3,302 |
| start of period | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
| Cash and cash equivalents at end | | 1,609 | 2,256 | 1,844 |
| of period | | | | |
+----------------------------------+------+-----------+-----------+----------+
| | | | | |
+----------------------------------+------+-----------+-----------+----------+
Notes to the Consolidated Financial Statements
1. Nature of operations and general information
CBG Group plc ("CBG") and subsidiaries' (together the "Group") principal
activities are those of insurance broker, financial advisor and premium finance
provider, providing advice on insurance cover, pensions and employee benefits
to predominantly small and medium sized companies operating in the UK. The Group
also provides a range of financial planning and personal high net worth
insurances for company directors, senior executives and business owners. Refer
to note 5 for further information about CBG's operating segments.
These consolidated condensed interim financial statements have been approved for
issue by the Board of Directors on 14 September 2010.
Copies of this statement will be sent to shareholders shortly and are available
to the public from the Registered Office at: Southmoor House, Southmoor Road,
Manchester M23 9XD.
2. Basis of preparation
These interim condensed consolidated financial statements are for the six months
ended 30 June 2010. They have been prepared in accordance with IAS 34 Interim
Financial Reporting. They do not include all of the information required for
full annual financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended 31 December
2009.
These condensed consolidated interim financial statements (the interim financial
statements) have been prepared under the historical cost convention and in
accordance with the accounting policies adopted in the last annual financial
statements for the year to 31 December 2009 except for the adoption of IFRS 3
Business Combinations (Revised 2008).
The adoption of IFRS 3 Business Combinations (Revised 2008) does not affect the
financial position or profits of the Group as there have been no acquisitions
during the period.
The accounting policies have been applied consistently throughout the Group for
the purposes of preparation of these condensed consolidated interim financial
statements.
The financial information for the six months ended 30 June 2010 and 30 June 2009
are unaudited. The financial information for the year ended 31 December 2009 is
derived from the Group's audited annual report and accounts. As a result of a
change in accounting treatment identified and disclosed in note 3 of these
interim financial statements, the Consolidated income statement and the
Consolidated statement of financial position for six months ended 30 June 2009
have been adjusted. No adjustments are necessary to the audited financial
statements for the year ended 31 December 2009.
The resultant changes are set out in note 3 of this interim report.
3. Adjustments to restate comparative financial information
In the financial statements for the 6 month period ended 30 June 2009, advance
commission of GBP500,000 was received pursuant to the agreement reached with
Close Premium Finance ("CPF"), of which half was recorded as revenue, the
balance to be recorded as revenue in the second half of the financial year.
However, when the financial statements for the year ended 31 December 2009 as a
whole were prepared, it was considered to be more technically correct to record
the benefit over the term of the 3 year contract with CPF which commenced 29 May
2009. The financial statements for the year ended 31 December 2009 were duly
prepared on this basis. Accordingly, in order to aid better understanding of the
2010 figures, and revenue in particular, the financial statements for 6 months
ended 30 June 2009 have been re-stated to reflect this change in treatment. The
adjustments affect the Consolidated income statement, the Consolidated statement
of financial position and the Consolidated statement of cash flows for six
months ended 30 June 2009.
The restatements identified in the consolidated financial statements arose as
follows:
Consolidated income statement
The adjustments to the Consolidated income statement at 30 June 2009, which
reduced Profit attributable to ordinary shareholders in respect of continuing
operations at that date by GBP170,000, are as follows:
· Advance commission received in respect of premium finance operations of
GBP236,000 was recorded incorrectly within Trade and other receivables resulting
in an overstatement of Revenue.
· A reduction in corporation tax payable of GBP66,000 resulting from the
adjustment described above.
Consolidated statement of financial position
The principal adjustments to the Consolidated statement of financial position at
30 June 2009, which reduced Total equity at that date by GBP170,000, are as
follows:
· Advance commission received in respect of premium finance operations was
recorded incorrectly within Revenue resulting in an overstatement of Trade and
other receivables of GBP236,000.
· A reduction in the provision for corporation tax payable of GBP66,000
resulting from the adjustment described above.
Movement in shareholder's equity
As a result of the above the opening Consolidated shareholders equity as at 1
July 2009 has been reduced by GBP170,000.
4. Exceptional Operating Expenses
+--------------------------------------+----------+----------+----------+----------+-----------+
| | | | | | |
+--------------------------------------+----------+----------+----------+----------+-----------+
| | Half | | Half | | Year |
| | Year | | Year | | to |
| | to | | to | | |
+--------------------------------------+----------+----------+----------+----------+-----------+
| | 30/06/10 | | 30/06/09 | | 31/12/09 |
+--------------------------------------+----------+----------+----------+----------+-----------+
| | | | | | |
+--------------------------------------+----------+----------+----------+----------+-----------+
| Proceeds from the sale of | (281) | | - | | - |
| unconnected personal lines business | | | | | |
+--------------------------------------+----------+----------+----------+----------+-----------+
| Associated write down of customer | 311 | | - | | - |
| related intangibles | | | | | |
+--------------------------------------+----------+----------+----------+----------+-----------+
| Acquisition related | - | | - | | 42 |
+--------------------------------------+----------+----------+----------+----------+-----------+
| Redundancy costs | 8 | | 67 | | 100 |
+--------------------------------------+----------+----------+----------+----------+-----------+
| Reorganisation costs | 29 | | 7 | | 35 |
+--------------------------------------+----------+----------+----------+----------+-----------+
| | | | | | |
+--------------------------------------+----------+----------+----------+----------+-----------+
| | | | | | |
+--------------------------------------+----------+----------+----------+----------+-----------+
| Total exceptional operating charges | 67 | | 74 | | 177 |
+--------------------------------------+----------+----------+----------+----------+-----------+
| | | | | | |
+--------------------------------------+----------+----------+----------+----------+-----------+
5. Segment information
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | Half year | Half year | Year ended |
| | ended | ended | |
+-------------------------+---------------------+---------------------+---------------------+
| | 30/06/10 | 30/06/09 | 31/12/09 |
| | | (restated) | |
+-------------------------+---------------------+---------------------+---------------------+
| | Revenue | Operating | Revenue | Operating | Revenue | Operating |
| | | profit | | profit / | | profit |
| | | | | (loss) | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| By class of business: | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| Insurance Broking | 3,141 | 827 | 3,668 | 772 | 7,098 | 1,678 |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| Financial Services | 948 | 137 | 944 | (26) | 1,833 | 48 |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| Other | - | - | 15 | 15 | 30 | 30 |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| Broking revenue / | 4,089 | 964 | 4,627 | 761 | 8,961 | 1,756 |
| profit | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| Amortisation | | (313) | | (365) | | (704) |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| Exceptional operating expenses | (104) | | (104) | | (177) |
| and share option charges | | | | | |
+-----------------------------------+-----------+---------+-----------+---------+-----------+
| Central costs | | (287) | | (298) | | (688) |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| Profit / (loss) from | | 260 | | (6) | | 187 |
| operations | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| | | | | | | |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
| |
+-------------------------+---------+-----------+---------+-----------+---------+-----------+
6. Dividends
+--------------------------------------+----------+----------+----------+
| | Half | Half | Year |
| | Year | Year | |
+--------------------------------------+----------+----------+----------+
| | 30/06/10 | 30/06/09 | 31/12/09 |
+--------------------------------------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Dividend paid per share in the | 111 | 102 | 102 |
| period 0.7p (2009: 0.66p) | | | |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
7. Earnings per share
The calculation of basic earnings per share for the half year ended 30 June 2010
is based on the profit attributable to ordinary shareholders of GBP163,000 (2009
half year: loss GBP50,000; 2009 full year: GBP186,000) divided by the weighted
average number of shares in issue of 15,737,545 (2009 half year: 15,517,653;
2009 full year: 15,576,570).
The adjusted earnings per share is based on the profit attributable to ordinary
shareholders, after adding back amortisation, exceptional operating expenses,
share option charges and reflecting a normal tax charge of 28% (2009 half year:
28%; 2009 full year: 28%) as follows:
+----------------------------+---------+--------+---------+--------+---------+--------+
| | Half Year | Half Year | Year |
+----------------------------+------------------+------------------+------------------+
| | to | to | to |
| | 30/06/10 | 30/06/09 | 31/12/09 |
| | | (restated) | |
+----------------------------+------------------+------------------+------------------+
| | GBP'000 | Pence | GBP'000 | Pence | GBP'000 | Pence |
+----------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| Retained profit / (loss) | 163 | 1.04 | (50) | (0.32) | 186 | 1.19 |
| for the year | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| Amortisation | 313 | 1.99 | 365 | 2.35 | 704 | 4.52 |
+----------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| Exceptional operating | 67 | 0.43 | 74 | 0.48 | 177 | 1.14 |
| charges and negative | | | | | | |
| goodwill credited | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| Share option charge | 37 | 0.23 | 30 | 0.19 | 65 | 0.42 |
+----------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| Adjustment to reflect an | (116) | (0.74) | (128) | (0.83) | (393) | (2.52) |
| ongoing tax charge of 28% | | | | | | |
| (2009 half year: 28%; 2009 | | | | | | |
| full year: 28%) | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| Adjusted earnings per | 464 | 2.95 | 291 | 1.87 | 739 | 4.75 |
| share | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| Diluted adjusted earnings | 464 | 2.94 | 291 | 1.85 | 739 | 4.69 |
| per share | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
| | | | | | | |
+----------------------------+---------+--------+---------+--------+---------+--------+
At 30 June 2010 there were 1,393,625 (2009 half year: 553,750; 2009 full year:
1,046,000) share options in issue of which 40,630 (2009 half year: 194,200; 2009
full year: 195,622) were dilutive potential ordinary shares on a weighted
average during the period.
There were also nil (2009 half year: 146,667; 2009 full year: 239,130) shares to
be issued in respect of deferred consideration for acquisitions made during or
prior to the current year, and there were nil (2009 half year: nil; 2009 full
year: nil) dilutive potential ordinary shares on average during the period.
At 30 June 2010, there were therefore a total of 40,630 (2009 half year:
194,200; 2009 full year: 195,622) dilutive potential ordinary shares on average
during the period. The calculation of diluted earnings per share for the period
ended 30 June 2010 is based on the profit attributable to ordinary shareholders
of GBP163,000 (2009 half year: loss GBP50,000; 2009 full year: GBP186,000)
divided by the weighted average number of diluted shares in issue of 15,778,175
(2009 half year: 15,711,853; 2009 full year: 15,772,192).
8. Reconciliation of operating profit to net cash inflow from operating
activities
+--------------------------------------+----------+------------+----------+
| | Half | Half | Year |
| | Year | Year | |
+--------------------------------------+----------+------------+----------+
| | 30/06/10 | 30/06/09 | 31/12/09 |
| | | (restated) | |
+--------------------------------------+----------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+----------+------------+----------+
| | | | |
+--------------------------------------+----------+------------+----------+
| Profit / (loss) before tax | 228 | (65) | 80 |
+--------------------------------------+----------+------------+----------+
| Depreciation and loss on disposal of | 121 | 132 | 253 |
| property, plant and equipment | | | |
+--------------------------------------+----------+------------+----------+
| Amortisation | 313 | 365 | 704 |
+--------------------------------------+----------+------------+----------+
| Write down of customer related | 311 | - | - |
| intangibles | | | |
+--------------------------------------+----------+------------+----------+
| Share option charge | 37 | 30 | 65 |
+--------------------------------------+----------+------------+----------+
| Investment income | (4) | (44) | (10) |
+--------------------------------------+----------+------------+----------+
| Finance charges | 36 | 103 | 117 |
+--------------------------------------+----------+------------+----------+
| | | | |
+--------------------------------------+----------+------------+----------+
| Movements in working capital: | | | |
+--------------------------------------+----------+------------+----------+
| Decrease in receivables | 32 | 768 | 3,770 |
+--------------------------------------+----------+------------+----------+
| Increase / (decrease) in payables | 213 | (676) | (1,981) |
+--------------------------------------+----------+------------+----------+
| | | | |
+--------------------------------------+----------+------------+----------+
| | | | |
+--------------------------------------+----------+------------+----------+
| Net cash inflow from operating | 1,287 | 613 | 2,998 |
| activities | | | |
+--------------------------------------+----------+------------+----------+
| | | | |
+--------------------------------------+----------+------------+----------+
9. Reconciliation of net cash flow to movement in net debt
+--------------------------------------+----------+----------+----------+
| | Half | Half | Year |
| | Year | Year | |
+--------------------------------------+----------+----------+----------+
| | 30/06/10 | 30/06/09 | 31/12/09 |
+--------------------------------------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Net debt at start of period | (891) | (1,139) | (1,139) |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Decrease in cash in the period | (235) | (1,046) | (1,458) |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Cash outflow/(inflow) from | 460 | (280) | 1,706 |
| decrease/(increase) in debt | | | |
| financing | | | |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Net debt at end of period | (666) | (2,465) | (891) |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
10. Analysis of net debt
+--------------------------------------+----------+----------+----------+
| | As at | As at | As at |
+--------------------------------------+----------+----------+----------+
| | 30/06/10 | 30/06/09 | 31/12/09 |
+--------------------------------------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Cash at bank and in hand | 1,609 | 2,256 | 1,844 |
+--------------------------------------+----------+----------+----------+
| Hire purchase obligations | - | (26) | - |
+--------------------------------------+----------+----------+----------+
| Amount due under revolving credit | (2,000) | (4,000) | (2,250) |
| facility | | | |
+--------------------------------------+----------+----------+----------+
| Other loans | (275) | (695) | (485) |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Net debt | (666) | (2,465) | (891) |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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