Accuma Group plc

Accuma Group plc

March 28, 2006 01:06 ET

Accuma Group plc-Interim Results

LONDON, UNITED KINGDOM--(CCNMatthews - March 28, 2006) - Accuma Group Plc ("Accuma" or "the Group")(AIM:ACG), a leading provider of consumer financial solutions, today announces its Interim Results for the six months ended 31 January 2006.


- Turnover for the period increased 310% to Pounds Sterling 4.1m (H1 2005: Pounds Sterling 1.0m)

- Pre-tax profit of Pounds Sterling 304k - results higher than management expectations

- Gross profit has increased 236% to Pounds Sterling 1.4m (H1 2005: Pounds Sterling 0.4m)

- Future contracted revenue now stands at Pounds Sterling 12.1m at the end of February 2006

- Successful placing in February 2006 raising Pounds Sterling 4.7m net for the Group

- Strong balance sheet with Pounds Sterling 5.8m cash and net assets of Pounds Sterling 11.5m

- Cases completed in the period increased 345% to 1,170 (H1 2005: 263)

- Monthly run rate of 239 cases at February 2006

- Resource strengthened - staff numbers increased to 141

- Four additional Insolvency Practitioners appointed - total now eight

- Appointment of Operations Director within main operating subsidiary

- Acquisition of Wilson Phillips in August 2005

- Relocation of Head Office completed to accommodate future growth

- Established mortgage department in January 2006

Commenting on the results, Charles Howson, Chief Executive of Accuma Group said:
"I am delighted to announce our Interim Results which are ahead of management expectations and demonstrate the Group's continued strong performance. With the strengthening of our systems and operational resource, particularly Insolvency Practitioners, we are well placed to take advantage of a market that continues to experience significant growth."

For further information:
Accuma Group Plc
Charles Howson, Chief Executive Tel: +44 (0) 161 751 6787

Daniel Stewart & Company Plc
Tom Jenkins/Marc Young Tel: +44 (0) 20 7776 6550

Media enquiries:
Chris Lane / Sarah Hollins Tel: +44 (0) 20 7398 7700

Chief Executive's Statement

Financial Overview

I am pleased to report this strong set of Interim Results for Accuma. The Group has made significant progress and for the six months ended 31 January 2006 turnover has increased 310% to Pounds Sterling 4.1 million (H1 2005: Pounds Sterling 1.0 million). Gross profit has increased by 236% to Pounds Sterling 1.4 million (H1 2005: Pounds Sterling 0.4 million) with profit before tax of Pounds Sterling 304,000, which was higher than management expectations. The Group's balance sheet remains strong with Pounds Sterling 5.8 million cash and net assets of Pounds Sterling 11.5 million.

The Group's average monthly run rate has continued to grow to 239 in February 2006, an increase of 28% from the last reported average monthly run rate of 186 in December 2005.

Accuma's run rate has increased significantly as shown below:

New IVAs Monthly Case Run Rate:

2004 2005/2006

3 months to March 20 37
3 months to June 31 84
3 months to September 50 126
3 months to December 47 186
As of February 2006 239

Future contracted revenue has increased from Pounds Sterling 5.4 million at the end of July 2005 to Pounds Sterling 12.1 million at the end of February 2006. With an average 80% gross margin on supervisory fees, this will have a significant positive impact on earnings growth.

The Group acquired Wilson Phillips in August 2005, for a total consideration of Pounds Sterling 3.3 million. The acquisition was financed by a placing of 1,935,500 new shares at a price of 155p, and the issue of 161,290 shares to one of the vendors. Deferred consideration of Pounds Sterling 667,000 is payable of which Pounds Sterling 167,000 has been paid in cash, with the balance to be settled by the issue of 322,742 shares.

The acquisition of Wilson Phillips has enabled the Group to widen both its economic reach and provide opportunities to develop referral relationships. The integration has progressed well with the activities of Wilson Phillips being complimentary to those of Accuma with considerable synergies between the companies.

In January 2006 the Group raised Pounds Sterling 4.7 million net from a placing of 2,500,000 ordinary shares at 200 pence per share in a significantly oversubscribed offer. These funds will be used to continue to grow the business organically but in particular to increase the focus on developing third party referral relationships and ensuring we capitalise on all areas of our marketing expenditure, broadening our offering where necessary.

Operational Review

The Group now employs eight licensed Insolvency Practitioners (IPs), four having been appointed in the period. The monthly capacity for IVA cases will increase to over 500 from 350 with the appointment of further IVA drafting team members.

Two further IT development staff were appointed in the period to ensure that we continue to strengthen our systems and processes. This will ensure future robustness as case volumes continue to increase whilst driving further efficiencies within the business.

Andrew Bland was appointed Operations Director of our main operating subsidiary in February 2006. He is both a chartered accountant and a qualified insolvency practitioner, although he has spent the past few years in a commercial role with operational responsibility for a privately owned group of companies. Andrew will focus on improving operational efficiencies whilst continuing to grow the case run rate.

The Group now employs 141 staff compared to 41 at the time of flotation. The relocation of our head office to Manchester city centre from previous serviced office premises was completed in December 2005. This, together with the imminent relocation of Wilson Phillips, will allow the Group to increase staff numbers to over 300 without incurring a material increase in premises costs.

The major positive impact of this will be reflected in the next financial year when staff numbers are expected to have increased significantly in line with expected increases in case volumes.

The Group now has referral relationships in place with nine organisations, four of which have been signed within the past three months. In line with our stated strategy, whilst individually these organisations will not provide significant volume, combined, our referral relationships will provide a growing percentage of our new case run rate therefore reducing our reliance on high cost advertising campaigns thus reducing client acquisition costs. We expect to announce further new referral relationships over the next few months.

In January 2006 we established a mortgage department in order to maximise on the enquiries we receive where best advice dictates a lending solution. Currently we have five staff in this department and whilst this has increased our overhead in the short term, the department is making excellent progress and will make a positive impact, net of costs, against the referral fees we have historically achieved in this area.


The Group operates in a market that doubled in size during 2005 and is widely predicted to grow at a similar rate in 2006. We have consistently outpaced the market growing three-fold in 2005 and in fact recent growth has seen a four-fold increase. Our market share has increased significantly since flotation and we estimate that this now stands at 12%.

We are confident however that with our head office relocation complete, the increase to eight IPs and further strengthening of our senior management and operational resource, the Group will continue to see further gains in market share.

Charles Howson
Chief Executive

Accuma Group Plc
Consolidated Profit and Loss Account
For the period 1 August 2005 to 31 January 2006

Period 1 August 2005 Year ended
to 31 January 2006 31 July 2005
Unaudited Audited

Pounds Pounds
Sterling Sterling

'000 '000

Turnover 4,110 2,846

Cost of sales 2,678 2,204

Gross profit 1,432 642

Administrative expenses 1,020 1,081

EBITDA 412 (439)

Depreciation (57) (34)
Goodwill amortisation (70) (10)

Operating profit/(loss) 285 (483)

Interest receivable 35 40
Interest payable and similar charges (16) (30)

Profit/(loss) on ordinary activities 304 (473)

Tax on profit/(loss) on ordinary activities (65) 83

Profit/(loss) for the financial period 239 (390)

Profit/(loss) per share - basic 1.08p -2.28p
Profit/(loss) per share - diluted 1.04p n/a
Profit/(loss) per share - diluted and adjusted 1.30p n/a

The group has no recognised gains or losses other than the results
for the period as set out above.

All of the activities of the group are classed as continuing.

Accuma Group Plc
Consolidated Balance Sheet
As at 31 January 2006

As at As at
31 January 31 July 2005
2006 Audited

Pounds Pounds
Sterling Sterling

'000 '000

Fixed assets
Intangible assets 3,155 114
Tangible assets 589 111
3,744 225

Current assets
Debtors 4,280 2,112
Cash at bank 1,345 2,041
5,625 4,153

Creditors: amounts falling due within one year (2,297) (816)

Net current assets 3,328 3,337

Total assets less current liabilities 7,072 3,562

Creditors: amounts falling due after
more than one year (322) (178)

Net assets 6,750 3,384

Capital and reserves
Called up equity share capital 2,252 2,042
Share premium account 6,130 3,213
Other reserve (1,262) (1,262)
Profit and loss account (370) (609)

Shareholders' funds 6,750 3,384

Accuma Group Plc
Consolidated Cash Flow Statement
For the period 1 August 2005 to 31 January 2006

Period 1 August Period ended
2005 31 July 2005
to 31 January Audited

Pounds Pounds
Sterling Sterling

'000 '000

Net cash outflow from operating
activities (970) (1,529)

Returns on investments and
servicing of Finance

Interest received 35 40
Interest paid (15) (27)
Interest element of finance lease
rental payments (1) (3)

Net cash inflow from returns on
investments and servicing of finance 19 10

Capital expenditure

Payments to acquire tangible fixed assets (169) (110)

Net cash outflow from capital expenditure (169) (110)

Acquisition of Debt Solver Limited - (24)
Acquisition of Wilson Phillips Limited (2,495) -

Net cash outflow from acquisitions (2,495) (24)

Net cash outflow before financing (3,615) (1,653)


Proceeds from issue of ordinary shares 3,000 4,140
Share issue costs (124) (495)
Capital element of finance lease rentals (7) (9)
Repayments of loans (19) (6)

Net cash inflow from financing 2,850 3,630

(Decrease)/increase in cash (765) 1,977

Reconciliation of operating profit/(loss)
to net cash outflow from operating activities

Operating profit/(loss) 285 (483)
Amortisation of intangible assets 70 10
Depreciation of tangible assets 57 34
(Increase) in debtors (1,681) (1,392)
Increase in creditors 299 302

Net cash outflow from operating activities (970) (1,529)

Reconciliation of net cash flow to movement
in net debt
(Decrease)increase in cash in period (765) 1,977

Cash outflow/(inflow) from decrease/(increase)
in debt and
Lease financing (92) 7

Acquired with subsidiary (29) -

Change in net funds (886) 1,984

Net funds/(debt) at 1 August 2005 1,780 (204)

Net funds at 31 January 2006 894 1,780

Accuma Group Plc
Consolidated Accounts for the period 1 August 2005 to 31 January 2006


1. Earnings per share

The earnings per share (basic) has been calculated using the profit for the financial period and a weighted average number of ordinary shares in issue during the six month period to 31 January 2006 of 22,144,813 (17,160,935 for the period ended 31 July 2005).

The diluted EPS number takes the weighted average number of ordinary shares in issue during the six month period to 31 January 2006 as adjusted to take account of the dilutive share options existing at 31 January 2006, resulting in a denominator of 23,047,210. The share options in issue at 31 July 2005 would decrease the loss per share and were therefore anti dilutive.

The diluted and adjusted EPS number uses the same number of shares as above, but the goodwill amortisation figure has been added back to profit.

2. Comparative figures

Where comparative figures for H1 2005 are included, these have been extracted from the management accounts for the six months to 31 January 2005. Detailed comparative figures within the profit and loss account, balance sheet and cashflow statement for the period are not available.

3. Status of financial information

The interim results of the Group for the six months to 31 January 2006 were approved by the Board on 27 March 2006.

The interim financial statements have not been audited and do not constitute statutory accounts as defined under s240 of the Companies Act 1985.

The interim financial statements have been prepared in accordance with applicable accounting standards and are consistent with those adopted and disclosed in the Group's statutory accounts for the period ended 31 July 2005. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.

4. Distribution of the Interim Report

Copies of the Interim Report are being sent to shareholders. Further copies on the Interim Report and Accounts may be obtained from the Company's Registered Office, City Tower, Piccadilly Plaza, Manchester, M1 4BT. In addition, an electronic version will be available on the Company's website,

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