TIDMCB.
RNS Number : 9605I
CBG Group Plc
23 March 2010
CBG GROUP PLC
(AIM: CB.)
PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2009
CBG Group plc ("CBG" or the "Group"), the Manchester based insurance broker and
financial services specialist, is pleased to announce full year results for the
year to 31 December 2009.
FINANCIAL HIGHLIGHTS
- Revenue GBP8,961,000 (2008: GBP11,148,000);
- Adjusted * EBITD GBP1,386,000 (2008: GBP2,602,000);
- Adjusted * pre-tax profits GBP1,026,000 (2008: GBP2,246,000);
- Diluted adjusted * earnings per share 4.69p (2008: 11.00p);
- Final dividend proposed 0.70p per share (2008: 0.66p);
- Net cash inflow from operations GBP2,998,000 (2008: GBP3,377,000).
* Adjusted to add back exceptional operating expenses, amortisation, negative
goodwill credited and share option charges.
OPERATIONAL HIGHLIGHTS
- Continued focus on operational efficiencies;
- Reduced borrowings by out-sourcing premium financing operations,
significantly de-gearing the Group's operations;
- New head office with over 100 staff transferred to Southmoor House,
Manchester resulting in significant cost savings and increased cross selling
opportunities; and
- GBP1,400,000 of annualised cost savings achieved.
POST PERIOD HIGHLIGHTS
- January 2010 - Introduction of the Acturis operating platform across the
insurance broking division;
- February 2010 - disposal of a non-core part of the insurance broking
operation; and
- Robin Slinger appointed as Non-Executive Chairman and Stephen Rees
appointed Financial Services Operations Director.
Mike Askew, Group Managing Director of CBG said:
"In a challenging marketplace we have taken the necessary steps to realign our
cost base to ensure that we remain financially strong, and suitably resourced
with appropriate technical and operational capability to service our client
portfolio. We continue to focus on improving our business systems to drive
efficiencies and are well positioned to invest in the business through targeted
acquisitions."
"Whilst it seems unlikely the broader economy will see significant improvement
in the short term I am confident that the underlying strength of CBG will
deliver long term, sustainable growth to create value for our shareholders."
---ENDS---
+----------------------------------------+--------------------+
| Enquiries | |
+----------------------------------------+--------------------+
| | |
+----------------------------------------+--------------------+
| CBG Group plc | 0161 920 0200 |
+----------------------------------------+--------------------+
| Mike Askew, Group Managing Director | 07720 400356 |
+----------------------------------------+--------------------+
| Martyn Hughes, Group Finance Director | 07734 543454 |
+----------------------------------------+--------------------+
| www.cbg-group.co.uk | |
+----------------------------------------+--------------------+
| | |
+----------------------------------------+--------------------+
| Zeus Capital (Nomad & Broker) | 0161 831 1512 |
+----------------------------------------+--------------------+
| Alex Clarkson / Bobby Fletcher | |
+----------------------------------------+--------------------+
| | |
+----------------------------------------+--------------------+
| Daniel Stewart & Company plc (Joint | 020 7776 6550 |
| Broker) | |
+----------------------------------------+--------------------+
| Martin Lampshire | |
+----------------------------------------+--------------------+
| | |
+----------------------------------------+--------------------+
| Bishopsgate Communications Ltd | 020 7562 3350 |
+----------------------------------------+--------------------+
| Nick Rome / Gemma O'Hara | |
+----------------------------------------+--------------------+
CHAIRMAN'S STATEMENT
I am delighted to be presenting my fifth and final Chairman's statement
following an eventful year for the Group.
Financial overview
Despite the effects of the financial turmoil and consequent recession that has
prevailed throughout the period under review, the Group has remained profitable,
albeit at lower levels than were achieved in 2008. We have managed the business
according to these circumstances and also strategically chose not to pursue one
component of our business model, namely our acquisition programme. Regrettably,
it was necessary to reduce our cost base in the course of 2009, to mitigate
falling revenues, and the full beneficial impact of this action will only be
seen in 2010. We also took steps to reduce borrowings by out-sourcing our
premium financing operations and this has had the effect of significantly
de-gearing the Group's operations.
Dividend
We intend to pay a final dividend for the year end 31 December 2009 of 0.70p
(2008: 0.66p). The dividend will be paid, subject to shareholders approval, on
28 May 2010 to shareholders on the register on 7 May 2010.
Board
I have thoroughly enjoyed my period as Chairman of CBG Group plc, and it has
been exciting to see the progression that the Group has made in that time. In
view of my personal commitments, I will stand down following the announcement of
these preliminary results and Robin Slinger, currently a Non-Executive Director,
will replace me as Non-Executive Chairman. In addition, Stuart Mollekin,
currently Executive Director, becomes a Non-Executive Director and Stephen Rees,
Managing Director of the Group's Financial Services division, is appointed
Financial Services Operations Director. I leave behind an extremely capable
team, well positioned to take the next steps in the Group's development, with a
strong ethos of building value for shareholders.
Prospects
The Board is satisfied that appropriate steps have been taken to address the
business in the light of prevailing economic conditions, and that the Group is
well placed to benefit from an economic recovery as and when it happens.
I wish the Group continued success.
Laurie Turnbull
Chairman
23 March 2010
GROUP MANAGING DIRECTOR'S REVIEW
In years to come many will look back on 2009 as a year when the real effect of
the economic slowdown of world markets impacted on businesses the length and
breadth of the globe. The resultant challenges have touched most, if not all,
business sectors here in the UK, including our own. Against that backcloth CBG
has had a satisfactory 2009 and produced a positive set of results.
Group Overview
The year started slowly and confidence in our markets was at a low ebb, both
corporately and on a private client level. Across all our activities we saw a
reduction in year on year revenue below our initial expectations. The general
insurance market saw the slowdown in activity levels first seen in the latter
part of 2008 continue with some of our clients sadly suffering failure.
Investment opportunities through our financial services division were similarly
lacklustre as confidence in the stock market and property sectors dramatically
eroded.
Nevertheless, we have a quality set of businesses, led by strong and experienced
individuals, who have developed new initiatives with our clients to face the
prevailing market conditions. We are confident that our core activities - those
of professional insurance broking and financial advisers - will enable us to
continue to perform as a successful Group and provide a platform for growth.
As a result of the weak macro conditions and a consequential fall in revenues,
the Group commenced a series of initiatives in the second quarter to reduce our
cost base and realign our expenditure; actions that were predominantly headcount
related. The annualised effect of these actions is approximately GBP1,400,000
and had an impact during the second half of the financial year, but the full
benefit will only be seen in 2010.
Summary of the results for the year
+--------------------------------------+--------------------------------------+---------+
| | | |
+--------------------------------------+--------------------------------------+---------+
| | 2009 | 2008 |
+ +--------------------------------------+---------+
| | GBP'000 |GBP'000 |
+--------------------------------------+--------------------------------------+---------+
| Revenue | 8,961 | 11,148 |
+--------------------------------------+--------------------------------------+---------+
| Adjusted * EBITD | 1,386 | 2,602 |
+--------------------------------------+--------------------------------------+---------+
| Adjusted * pre tax profit | 1,026 | 2,246 |
+--------------------------------------+--------------------------------------+---------+
| Adjusted * earnings per share - | 4.69 | 11.00 |
| diluted (pence) | | |
+--------------------------------------+--------------------------------------+---------+
| Earnings per share - diluted (pence) | 1.18 | 4.26 |
+--------------------------------------+--------------------------------------+---------+
| | | |
+--------------------------------------+--------------------------------------+---------+
* Adjusted to add back exceptional operating expenses, amortisation, negative
goodwill credited and share option charges.
Our focus remains on ensuring that we work to restore our operating margins in
our core businesses and grow the top line both organically and, when market
conditions stabilise and the right opportunity presents itself, through an
acquisition programme.
We have given ourselves greater flexibility within our own banking facilities by
signing a partnership agreement with Close Premium Finance (CPF) in May 2009, to
effectively outsource the premium financing activity that was previously funded
from the Group's own operations. CPF are a highly respected name within the
marketplace and were chosen for their technical expertise and financial
stability. This has provided a seamless transition for our clients. The
agreement has had the effect of lowering our operating gearing, and reducing the
need for funding from our bankers by over GBP2,000,000. The terms extended by
Close are highly competitive, and have enabled us to retain our attractive
margins. Our committed banking lines are only partially drawn and provide us
with material headroom to consider further acquisitions as and when
opportunities arise.
Acquisitions and Disposals
Market conditions in 2009 were not conducive to making further acquisitions.
Management resources were instead concentrated on internal cost efficiency and
maximisation of cross-selling opportunities within the Group.
The final deferred consideration payments for past acquisitions will be
satisfied early in quarter two 2010 from our existing resources.
In February 2010 the disposal of a non-core part of the insurance broking
operation was completed. This personal lines business, covering car and
household policies, competed in a highly competitive sector of the market, one
which sees a continual market shift towards internet operators. We have
therefore chosen not to tie resource to this declining area of the business.
Business Operations
Each of our core trading divisions continue to operate with dedicated Boards who
have responsibility for the day to day management of their division and who are
accountable for their financial performance to the main Board.
A key strength in our ability to manage our business continues to be our highly
skilled Group finance function. We pride ourselves on the rigorous controls we
have in place and with the quality and timeliness of the management information.
As a centralised function it also allows us to evaluate and effectively manage
our corporate governance obligations.
As part of the 2010 budgeting process we took decisions to make significant
investment in our marketing functions. This will assist all business operations
and has resulted in the creation of a dedicated internal resource with the
support of external advisers and lead to a total rebranding of the business to
reflect its current and future status in the marketplace.
Insurance Broking
The Insurance Broking division is a provider of general insurance broking
services to corporate, SME and private individuals and is delivered through CBG
Insurance Brokers Limited. From the start of 2010 this division also
incorporates the activities of CBG London Limited and the Group's premium
finance revenues, previously generated under Exius Limited.
With the decision taken to dispose of the non-core personal lines business, as
mentioned earlier, we took the opportunity to rationalise our trading platforms
from three to one. The introduction of the Acturis platform across the rest of
the insurance broking division was implemented from 1st January 2010. This will
allow us to manage our business more effectively, as well as improve the
efficiencies within our Group finance function.
2009 saw little activity in the mergers and acquisitions marketplace and
therefore reduced opportunities for our Corporate Transaction Team. As soon as
we see an upturn in this area during 2010, we will use our improved marketing
capability to position ourselves to continue to attract instructions from
existing acquisitive clients and the professional adviser community.
Most areas of the insurance business suffered from the effects of the depressed
economy and increased competition resulting in margins being squeezed. The
insurance business continues to operate in an environment where market rates
remain soft. There does however, appear to be signs of some hardening of rates
as would be expected on the basis of previous pricing cycles. Nevertheless, we
remain cautious in our budgeting as undoubtedly it will take time to see if
these early indicators are part of a wider market trend.
Financial Services
The Group's financial advice offering is delivered through CBG Financial
Services Limited, operating in two distinct areas: Financial Planning and
Employee Benefits.
The measures we undertook to reduce our cost base in early 2009 impacted heavily
on our Financial Services business, where a lack of new business turned our
focus to improving our offering to existing clients and realigning the profile
of our team. It prompted a review of our overall client base which was
subsequently segmented according to future profitability.
Our decision at the end of 2008 to scale back our activity in mortgage advice
had a positive impact and the division which was loss making at the half year,
took the necessary actions to return it to profitability by year end.
Within our Financial Planning business we continue to focus on aggregating more
of our client's assets on to a common platform. This will improve efficiency
allowing us to increase the assets under advice for these clients.
The health care area, within the Employee Benefits business, enjoyed a strong
performance as a result of our strong cross selling ethos across the Group. We
view this a good indicator of the embedded potential within our existing client
base, which will continue to be a major focus during 2010.
The Retail Distribution Review (RDR) has significant implications for the IFA
sector but provides a great opportunity for our Financial Services business. A
minimum standard of qualification will be required for advisers to practice from
January 2013 and those with existing qualifications will also be subject to the
new standards. Our business is working to becoming "RDR ready" and we feel we
will see plenty of traditional IFA businesses unwilling or unable to make the
grade; this could leave a large number of clients looking for new advisers. Our
offering already sets us apart from the conventional IFA as we work on an agreed
fee basis providing a financial planning solution rather than selling products.
From the end of the first quarter 2010 the whole of our Financial Services
business will be centralised at our head office at Southmoor. The interface
between departments and the broadening of the skill base will bring enhanced
benefits.
Organisational Consolidation
We have continued with our commitment to consolidate the business into a tight
operating unit and the move to our new head office, Southmoor House, in January
2009, from three separate locations in Manchester has been invaluable. The head
office accommodates up to 100 employees with opportunity to expand at this site
as we build and grow the Group. The move has been highly successful in bringing
our operational teams together to engender improved relationship management and
broaden the number of opportunities to cross-sell to our client base.
In the coming weeks we will complete the consolidation of our operations in
Oldham and Macclesfield into our Manchester premises. This will leave the Group
operating from three locations in the North West: a head office and two
satellite offices in Liverpool and Poulton le Fylde, together with a presence in
London which concentrates on niche scheme development.
Compliance
Compliance is a significant and increasingly demanding obligation across the
core areas of the Group through the single regulatory body of the Financial
Services Authority (FSA). We ensure uniformity across all areas of the business
by applying in depth knowledge of the regulatory obligations.
Employees
My thanks go to all those who have worked hard and contributed to the success of
CBG in the past year through their unflagging effort, enthusiasm and commitment
to achieving our objectives. Sadly, we have had to make a number of roles
redundant during the year. We did not take such a severe action lightly, but the
nature of the recession left us with no alternative, and we have made every
effort to provide support to those affected by our action.
CBG remains committed to our Investor in People accreditation having once again
been through the programme of audit of our staff training and communication
programmes in early 2009. It remains fundamental to us to ensure we attract,
retain and encourage development of our employees, and sustain a motivated
highly skilled team.
All of our qualifying employees are members of our Enterprise Management
Incentive Scheme, a scheme that has Group performance criteria to ensure all
efforts are focused on the achievement of Group objectives.
Outlook
These are interesting times with the economic environment still uncertain. We
remain proactive and continue to look at how best to drive our business forward.
We are appropriately structured to benefit from an upturn in market confidence
and across our client base we are committed to making further progress towards
our objective of creating long term shareholder value.
The Board will continue to work to our strengths of managing costs and enhancing
our client proposition. We aim to be active corporately during 2010, and are
considering a number of possible acquisition targets as vendors aspirations on
price return to more realistic levels.
Chairman
Finally, I would like to thank our Chairman, Laurie Turnbull, who today has
announced his decision to stand down from the Board, for his inspirational
leadership which has given us such a solid foundation to build upon. The Board
wishes him every success in the future.
Mike Askew
Group Managing Director
23 March 2010
Consolidated Income Statement
Year ended 31 December 2009
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| | | Year | | Year |
| | | to | | to |
+----------------------------------+------+-----------+-+-----------+
| | | 31/12/09 | | 31/12/08 |
+----------------------------------+------+-----------+-+-----------+
| | Note | | | GBP'000 |
| | | GBP'000 | | |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Revenue | 2 | 8,961 | | 11,148 |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Administrative expenses | | (8,774) | | (9,873) |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Operating profit before | | 1,133 | | 2,428 |
| amortisation, exceptional | | | | |
| operating expenses, negative | | | | |
| goodwill credited and share | | | | |
| option charges | | | | |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Amortisation | | (704) | | (675) |
+----------------------------------+------+-----------+-+-----------+
| Exceptional operating expenses | 3 | (177) | | (466) |
+----------------------------------+------+-----------+-+-----------+
| Negative goodwill credited | | - | | 48 |
+----------------------------------+------+-----------+-+-----------+
| Share option charges | | (65) | | (60) |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Administrative expenses | | (7,828) | | (8,720) |
| excluding exceptional items | | | | |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Operating profit | 2 | 187 | | 1,275 |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Investment revenues | | 10 | | 120 |
+----------------------------------+------+-----------+-+-----------+
| Finance costs | | (117) | | (302) |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Profit before tax | | 80 | | 1,093 |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Income tax | | 106 | | (467) |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Profit attributable to ordinary | | 186 | | 626 |
| shareholders in respect of | | | | |
| continuing operations | | | | |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Earnings per share: | | Pence | | Pence |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
| Earnings per share - basic | 4 | 1.19 | | 4.33 |
+----------------------------------+------+-----------+-+-----------+
| Earnings per share - diluted | 4 | 1.18 | | 4.26 |
+----------------------------------+------+-----------+-+-----------+
| | | | | |
+----------------------------------+------+-----------+-+-----------+
The Group has no items, other than the profit for the year, to be recognised in
the "Consolidated statement of comprehensive income" and consequently this
statement has not been shown.
Consolidated Statement of Financial Position
31 December 2009
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| | | 2009 | | 2008 |
+------------------------------+------+----------+-+----------+
| |Note | | | |
| | | GBP'000 | | GBP'000 |
+------------------------------+------+----------+-+----------+
| Non-current assets | | | | |
+------------------------------+------+----------+-+----------+
| Goodwill | | 13,067 | | 13,573 |
+------------------------------+------+----------+-+----------+
| Other intangible assets | | 2,907 | | 3,611 |
+------------------------------+------+----------+-+----------+
| Property, plant and | | 550 | | 607 |
| equipment | | | | |
+------------------------------+------+----------+-+----------+
| Deferred tax asset | | 27 | | 9 |
| | | | | |
+------------------------------+------+----------+-+----------+
| | | 16,551 | | 17,800 |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| Current assets | | | | |
+------------------------------+------+----------+-+----------+
| Trade and other receivables | | 4,652 | | 8,420 |
+------------------------------+------+----------+-+----------+
| Cash and cash equivalents | | 1,844 | | 3,302 |
+------------------------------+------+----------+-+----------+
| | | 6,496 | | 11,722 |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| Total Assets | | 23,047 | | 29,522 |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| Current liabilities | | | | |
+------------------------------+------+----------+-+----------+
| Trade and other payables | | (5,825) | | (7,806) |
+------------------------------+------+----------+-+----------+
| Deferred consideration | | (1,055) | | (2,101) |
+------------------------------+------+----------+-+----------+
| Current tax | | (122) | | (554) |
+------------------------------+------+----------+-+----------+
| Borrowings | | (410) | | (456) |
+------------------------------+------+----------+-+----------+
| | | (7,412) | | (10,917) |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| Non-current liabilities | | | | |
+------------------------------+------+----------+-+----------+
| Deferred consideration | | - | | (1,418) |
+------------------------------+------+----------+-+----------+
| Deferred tax | | (820) | | (924) |
+------------------------------+------+----------+-+----------+
| Borrowings | | (2,325) | | (3,985) |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| | | (3,145) | | (6,327) |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| Total liabilities | | (10,557) | | (17,244) |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| Equity | | | | |
+------------------------------+------+----------+-+----------+
| Ordinary shares | 6 | 627 | | 620 |
+------------------------------+------+----------+-+----------+
| Share premium account | | 7,790 | | 7,675 |
+------------------------------+------+----------+-+----------+
| Merger reserve | | 449 | | 449 |
+------------------------------+------+----------+-+----------+
| Retained earnings | | 3,624 | | 3,534 |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| Shareholders' equity | | 12,490 | | 12,278 |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
| Total equity and liabilities | | 23,047 | | 29,522 |
+------------------------------+------+----------+-+----------+
| | | | | |
+------------------------------+------+----------+-+----------+
These financial statements were approved by the Directors on 23 March 2010.
Consolidated Statement of Changes in Shareholders' Equity
Year ended 31 December 2009
+------------------------+---------+---------+---------+---------+----------+---------+
| | Share | Share | Merger | Equity | Retained | Total |
| | capital | premium | reserve | reserve | earnings | equity |
| | | account | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Balance at 1 January | 549 | 6,010 | - | 100 | 2,874 | 9,533 |
| 2008 | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Dividends paid | - | - | - | - | (85) | (85) |
+------------------------+---------+---------+---------+---------+----------+---------+
| Issue of ordinary | 71 | 1,665 | 449 | - | - | 2,185 |
| shares | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Shares to be issued | - | - | - | (100) | - | (100) |
+------------------------+---------+---------+---------+---------+----------+---------+
| Other reserves | - | - | - | - | 60 | 60 |
| movement due to share | | | | | | |
| options charge | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Impact of deferred tax | - | - | | - | 59 | 59 |
| on share option charge | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Transactions with | 620 | 7,675 | 449 | - | 2,908 | 11,652 |
| owners | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Net profit and total | - | - | - | - | 626 | 626 |
| comprehensive income | | | | | | |
| for the period | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Balance at 31 December | 620 | 7,675 | 449 | - | 3,534 | 12,278 |
| 2008 | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Dividends paid | - | - | - | - | (102) | (102) |
+------------------------+---------+---------+---------+---------+----------+---------+
| Issue of ordinary | 7 | 115 | - | - | - | 122 |
| shares | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Other reserves | - | - | - | - | 65 | 65 |
| movement due to share | | | | | | |
| options charge | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Impact of deferred tax | - | - | - | - | (59) | (59) |
| on share option charge | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Transactions with | 627 | 7,790 | 449 | - | 3,438 | 12,304 |
| owners | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Net profit and total | - | - | - | - | 186 | 186 |
| comprehensive income | | | | | | |
| for the period | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| Balance at 31 December | 627 | 7,790 | 449 | - | 3,624 | 12,490 |
| 2009 | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
| | | | | | | |
+------------------------+---------+---------+---------+---------+----------+---------+
The Group has applied s131 of the Companies Act (1985) in respect of Merger
Relief in relation to a prior period acquisition.
Consolidated Statement of Cash Flows
Year ended 31 December 2009
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | |
+ +---------------------------------------------+----------+----------+
| | | | |
+ +---------------------------------------------+----------+----------+
| | 2009 | | 2008 |
+ +---------------------------------------------+----------+----------+
| | Note | GBP'000 | | GBP'000 |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Operating activities | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Cash generated by operations | 7 | 2,998 | | 3,377 |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Income taxes paid | | (507) | | (542) |
+----------------------------------+----------------------------------+----------+----------+----------+
| Interest paid | | (117) | | (302) |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Net cash inflow from operating | | 2,374 | | 2,533 |
| activities | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Investing activities | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Interest received | | 8 | | 120 |
+----------------------------------+----------------------------------+----------+----------+----------+
| Purchases of property, plant and | | (196) | | (465) |
| equipment | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Deferred consideration paid | | (1,850) | | (1,332) |
+----------------------------------+----------------------------------+----------+----------+----------+
| Acquisition of subsidiaries and | | - | | (2,679) |
| businesses net of cash acquired | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------------------------+----------+----------+----------+
| Net cash used in investing activities | (2,038) | | (4,356) |
+---------------------------------------------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Financing activities | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Dividends paid | | (102) | | (85) |
+----------------------------------+----------------------------------+----------+----------+----------+
| Proceeds from issue of shares (net of | 14 | | 1,587 |
| expenses) | | | |
+---------------------------------------------------------------------+----------+----------+----------+
| Receipt of bank loans | | - | | 3,500 |
+----------------------------------+----------------------------------+----------+----------+----------+
| Receipt of other loans | | - | | 900 |
+----------------------------------+----------------------------------+----------+----------+----------+
| Repayment of bank loans | | (1,250) | | (2,000) |
+----------------------------------+----------------------------------+----------+----------+----------+
| Repayment of other loans | | (420) | | (610) |
+----------------------------------+----------------------------------+----------+----------+----------+
| Repayment of hire purchase | | (36) | | (85) |
| obligations | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Net cash (used in)/generated by | | (1,794) | | 3,207 |
| financing activities | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Net (decrease) / increase in | | (1,458) | | 1,384 |
| cash and cash equivalents | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Cash and cash equivalents at | | 3,302 | | 1,918 |
| start of period | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| Cash and cash equivalents at end | | 1,844 | | 3,302 |
| of period | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
| | | | | |
+----------------------------------+----------------------------------+----------+----------+----------+
1. Results and accounting policies
The financial information set out in this announcement does not constitute the
statutory accounts of the Group for the year ended 31 December 2009. The
auditors reported on those accounts; their report was unqualified and did not
contain a statement under section 498 (2) or (3) of the Companies Act 2006. The
statutory accounts for the year ended 31 December 2009 will be delivered to the
registrar of Companies following the Company's Annual General Meeting.
Whilst the financial information included in this preliminary announcement has
been computed in accordance with International Financial Reporting Standards
(IFRS), this announcement in itself does not contain sufficient information to
comply with IFRS. Details of the accounting policies are those set out in the
annual report for the year ended 31 December 2008. These accounting policies
have remained unchanged for the financial year ended 31 December 2009.
2. Segment information
For management purposes, the Group is organised into three divisions; Insurance
Broking, Financial Services and Premium Finance. These divisions are the basis
on which the Group reports its major income generating and cash flow results to
its chief operating decision maker and are as follows.
Revenue and operating profit
+------------------------------+------------------------------+-----------+---------+-----------+
| | Year ended | Year ended |
+ +------------------------------------------+---------------------+
| | 31 December 2009 | 31 December |
| | | 2008 |
+------------------------------+------------------------------------------+---------------------+
| | Revenue | Operating | Revenue | Operating |
| | | profit | | profit |
+ +------------------------------+-----------+---------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+------------------------------+ + + + +
| By class of business: | | | | |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+------------------------------+------------------------------+-----------+---------+-----------+
| Insurance Broking | 6,795 | 1,461 | 8,181 | 2,134 |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+------------------------------+------------------------------+-----------+---------+-----------+
| Financial Services | 1,833 | 48 | 2,465 | 543 |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+------------------------------+------------------------------+-----------+---------+-----------+
| Premium Finance | 303 | 217 | 472 | 418 |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+------------------------------+------------------------------+-----------+---------+-----------+
| Other | 30 | 30 | 30 | 30 |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+ +------------------------------+-----------+---------+-----------+
| | 8,961 | 1,756 | 11,148 | 3,125 |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+------------------------------+ +-----------+ +-----------+
| Amortisation | | (704) | | (675) |
+------------------------------+ +-----------+ +-----------+
| Exceptional operating | | (177) | | (418) |
| expenses and negative | | | | |
| goodwill credited | | | | |
+------------------------------+ +-----------+ +-----------+
| Central costs | | (688) | | (757) |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+------------------------------+ +-----------+ +-----------+
| Operating profit | | 187 | | 1,275 |
+------------------------------+------------------------------+-----------+---------+-----------+
| | | | | |
+------------------------------+------------------------------+-----------+---------+-----------+
Assets and liabilities
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | Year ended | Year ended |
+ +-------------------------------------------------------------+-----------------------+
| | 31 December 2009 | 31 December |
| | | 2008 |
+------------------------------+-------------------------------------------------------------+-----------------------+
| | Assets | Liabilities | Assets | Liabilities |
| | GBP'000 | | GBP'000 | |
+ + +------------------------------+ +-------------+
| | | GBP'000 | | GBP'000 |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+ + + + +
| By segment: | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| Insurance Broking | 9,213 | (5,751) | 11,777 | (9,208) |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| Financial Services | 1,600 | (1,104) | 2,080 | (1,136) |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| Premium Finance | 286 | (477) | 2,727 | (2,362) |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| Eliminations | (1,674) | 1,674 | (5,233) | 5,233 |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| Segment assets and | 9,425 | (5,658) | 11,351 | (7,473) |
| liabilities | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| Unallocated corporate | 13,622 | (4,899) | 18,171 | (9,771) |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| Consolidated assets and | 23,047 | (10,557) | 29,522 | (17,244) |
| liabilities | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
| | | | | |
+------------------------------+------------------------------+------------------------------+---------+-------------+
3. Exceptional operating expenses
+----------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
| Redundancy costs | 100 | 12 |
+----------------------------------+----------+----------+
| Reorganisation costs | 35 | 454 |
+----------------------------------+----------+----------+
| Acquisition related | 42 | - |
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
| | 177 | 466 |
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
All redundancy and reorganisation costs have been charged against operating
profit derived from continuing operations.
4. Earnings per share
The calculation of basic earnings per share for the year ended 31 December 2009
is based on the profit attributable to ordinary shareholders of GBP186,000
(2008: GBP626,000) divided by the weighted average number of shares in issue of
15,576,570 (2008: 14,454,978), amounting to 1.19p (2008:4.33p)
At 31 December 2009, there were 1,046,000 (2008: 805,250) share options in issue
of which 195,622 (2008: 254,548) were dilutive potential ordinary shares on
average during the year. At the year end there were 239,130 (2008: 292,362)
shares to be issued in respect of deferred consideration for acquisitions made
during or prior to the current year, and there were nil (2008: nil) dilutive
potential ordinary shares on average during the year. At 31 December 2009, there
were therefore a total of 195,622 (2008: 254,548) dilutive potential ordinary
shares on average during the year. The calculation of diluted earnings per share
for the year ended 31 December 2009 is based on the profit attributable to
ordinary shareholders of GBP186,000 (2008: GBP626,000) divided by the weighted
average number of diluted shares in issue of 15,772,192 (2008: 14,709,526),
amounting to 1.18p (2008: 4.26p)
The adjusted earnings per share is based on the profit attributable to ordinary
shareholders, after adding back amortisation, exceptional operating expenses,
negative goodwill credited, share option charges and reflecting an ongoing tax
charge of 28% (2008: 28%), as follows:
+------------------------------+--------+--------+--------+--------+
| | | |
+------------------------------+-----------------+-----------------+
| | 2009 | 2008 |
+------------------------------+-----------------+-----------------+
| | GBP000 | Pence | GBP000 | Pence |
+------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------+--------+--------+--------+--------+
| Profit for the year | 186 | 1.19 | 626 | 4.33 |
+------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------+--------+--------+--------+--------+
| Amortisation | 704 | 4.52 | 675 | 4.67 |
+------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------+--------+--------+--------+--------+
| Exceptional operating | 177 | 1.14 | 418 | 2.89 |
| charges and negative | | | | |
| goodwill credited | | | | |
+------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------+--------+--------+--------+--------+
| Share option charge | 65 | 0.42 | 60 | 0.42 |
+------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------+--------+--------+--------+--------+
| Adjustment to reflect an | (393) | (2.52) | (161) | (1.12) |
| ongoing tax charge of 28% | | | | |
+------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------+--------+--------+--------+--------+
| Adjusted earnings per share | 739 | 4.75 | 1,618 | 11.19 |
+------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------+--------+--------+--------+--------+
| Diluted adjusted earnings | 739 | 4.69 | 1,618 | 11.00 |
| per share | | | | |
+------------------------------+--------+--------+--------+--------+
| | | | | |
+------------------------------+--------+--------+--------+--------+
There have been no changes to the shares in issue since 31 December 2009.
5. Dividends
Amounts recognised as distributions to equity shareholders in the year:
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
| Dividend paid per share in the | 102 | 85 |
| period 0.66 pence (2008: 0.60p) | | |
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
A final dividend of 0.70p per share (2008: 0.66p per share) amounting to
GBP109,000 (2008: GBP102,000) in respect of the year ended 31 December 2009 is
proposed. If approved at the Annual General Meeting, it will be paid on 28 May
2010 to those shareholders on the register on 7 May 2010.
6. Share capital
+--------------------------+------------+----------+------------+----------+
| Authorised share capital: |
+--------------------------------------------------------------------------+
| | 2009 | 2008 | | |
+--------------------------+------------+----------+------------+----------+
| | GBP'000 | GBP'000 | | |
+--------------------------+------------+----------+------------+----------+
| | | | | |
+--------------------------+------------+----------+------------+----------+
| 20,000,000 (2008: | 800 | 800 | | |
| 20,000,000) Ordinary | | | | |
| shares of GBP0.04 each | | | | |
+--------------------------+------------+----------+------------+----------+
| | | | | |
+--------------------------+------------+----------+------------+----------+
| Allotted, called up and fully paid: |
+--------------------------------------------------------------------------+
| | 2009 | 2008 |
+--------------------------+-----------------------+-----------------------+
| | No | GBP'000 | No | GBP'000 |
+--------------------------+------------+----------+------------+----------+
| | | | | |
+--------------------------+------------+----------+------------+----------+
| Ordinary shares of | 15,665,161 | 627 | 15,497,006 | 620 |
| GBP0.04 each | | | | |
+--------------------------+------------+----------+------------+----------+
| | | | | |
+--------------------------+------------+----------+------------+----------+
| Allotted, called up and fully paid: |
+--------------------------------------------------------------------------+
| | 2009 | 2008 | | |
+--------------------------+------------+----------+------------+----------+
| | GBP'000 | GBP'000 | | |
+--------------------------+------------+----------+------------+----------+
| | | | | |
+--------------------------+------------+----------+------------+----------+
| At 1 January | 620 | 549 | | |
+--------------------------+------------+----------+------------+----------+
| | | | | |
+--------------------------+------------+----------+------------+----------+
| Issued in the year: | | | | |
+--------------------------+------------+----------+------------+----------+
| Acquisitions | 5 | 16 | | |
+--------------------------+------------+----------+------------+----------+
| Fund raising | - | 55 | | |
+--------------------------+------------+----------+------------+----------+
| Share option exercises | 2 | - | | |
+--------------------------+------------+----------+------------+----------+
| | | | | |
+--------------------------+------------+----------+------------+----------+
| At 31 December | 627 | 620 | | |
+--------------------------+------------+----------+------------+----------+
| | | | | |
+--------------------------+------------+----------+------------+----------+
There were no issues of shares following the end of the financial year.
7. Reconciliation of profit before taxation to cash generated from operations
+----------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
| Profit before taxation | 80 | 1,093 |
+----------------------------------+----------+----------+
| Depreciation and loss on | 253 | 213 |
| disposal of property plant & | | |
| equipment | | |
+----------------------------------+----------+----------+
| Amortisation | 704 | 675 |
+----------------------------------+----------+----------+
| Negative goodwill | - | (48) |
+----------------------------------+----------+----------+
| Share option charge | 65 | 60 |
+----------------------------------+----------+----------+
| Investment income | (10) | (120) |
+----------------------------------+----------+----------+
| Finance charges | 117 | 302 |
+----------------------------------+----------+----------+
| Movements in working capital: | | |
+----------------------------------+----------+----------+
| Decrease in receivables | 3,770 | 361 |
+----------------------------------+----------+----------+
| (Decrease) / increase in | (1,981) | 841 |
| payables | | |
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
| Cash generated by operations | 2,998 | 3,377 |
+----------------------------------+----------+----------+
| | | |
+----------------------------------+----------+----------+
8. Reconciliation of net cash flow to movement in net debt
+--------------------------------------+----------+----------+
| | 2009 | 2008 |
+--------------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+--------------------------------------+----------+----------+
| | | |
+--------------------------------------+----------+----------+
| Net debt at 1 January | (1,139) | (462) |
+--------------------------------------+----------+----------+
| | | |
+--------------------------------------+----------+----------+
| (Decrease) / Increase in cash in the | (1,458) | 1,384 |
| period | | |
+--------------------------------------+----------+----------+
| Cash outflow / (inflow) from | 1,706 | (1,705) |
| decrease / (increase) in debt | | |
| financing | | |
+--------------------------------------+----------+----------+
| Loans acquired with subsidiary | - | (235) |
| undertakings | | |
+--------------------------------------+----------+----------+
| Hire purchase obligations acquired | - | (121) |
| with subsidiary undertakings | | |
+--------------------------------------+----------+----------+
| | | |
+--------------------------------------+----------+----------+
| Net debt at 31 December | (891) | (1,139) |
+--------------------------------------+----------+----------+
| | | |
+--------------------------------------+----------+----------+
9. Copies of the Financial Statements
The annual report will be posted to shareholders on or around the 30 April 2010
and will at the same time also be available from the Group's website
(www.cbg-group.co.uk) or from the Company Secretary at the Company's registered
office: Southmoor House, Southmoor Road, Manchester M23 9XD.
23 March 2010
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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