Pointon York Group Limited

June 30, 2008 11:01 ET

Final Results

Pointon York Group Ltd                  Newstrack Announcements              30/06/2008


Chairman's statement

As we reported in our interim statement, the disposal of PYV Limited on 31 August 2007 marked a
significant change for the Group resulting in a strengthened balance sheet and reduced levels of
debt. The transaction allows us to concentrate on developing Pointon York SIPP Solutions Limited
("PYSS"), a provider of administration for Self Invested Personal Pension Schemes ("SIPPs").

In the year to 31 January 2008 the Group recorded a profit after tax of £1,265,525 (earnings per
share of 61.0p), compared with an after-tax loss of £872,786 (loss per share of 42.1p) in the
preceding year. The profit from the disposal of PYV amounted to £2,420,177 net of costs of
disposal.  At an operating level losses rose in the period to £1,135,236 from £791,599 in the
previous year.  This increase in the operating loss in the year was primarily a result of selling
PYV in August, without the benefit of strong results in September and October usually achieved by
that company.  However the sale price took into account these profitable months. Losses arising in
the SIPP business compared with profits in the preceding year also increased the consolidated
operating loss.

Discontinued activities

PYV achieved results up to the date of sale in line with expectations and an improvement compared
with the previous year.  Income was growing slightly through better client retention even though
premium rates had continued to fall.  In the 7 months of trading PYV's income was £1,678,095
(compared with £1,486,837 in the 7 months to 31 August 2006) with losses before tax of £392,504
(compared with £871,973 in the same period in 2006).

Continuing activities

Income  from  continuing operations rose 8% from £2,500,816 to £2,706,908.  PYSS is the  principal
continuing  business which focuses on providing a quality service whilst innovating  new  products
and  concepts.  The past year was one of consolidation with income growing by 7% compared with the
previous  year,  a  lower rate of growth than had been seen previously.    PYSS income  rose  from
£2,476,646 to £2,643,352.  At the year end there were 4,095 scheme members, compared with 3,560 at
31  January  2007, a rise of 15%.  Average revenue per scheme was lower than in the previous  year
reflecting the competitive market.

Costs  rose  more  significantly due to recruitment and training of new staff to meet  anticipated
increased  levels of business.  The average numbers of staff employed by PYSS rose to  59  in  the
current  year,  an  increase  of  20%.   Additionally, costs  were  also  incurred  following  the
relocation  in  late 2006 to new premises, and acquired further space to meet  growth  during  the
year.  April 2007 saw the regulation of SIPPs by FSA and this has resulted in additional costs  in
training and compliance.  PYSS has also continued to invest heavily in its core IT platforms.   As
a  result of the increased costs PYSS incurred a loss before tax of £184,981 compared with profits
before tax of £140,639 in the previous year.

During  the  year  the  service  department  was  restructured  in  order  to  provide  additional
improvements  in  processing capability.  Further developments in systems were brought  online  to
permit  more effective processing of individual schemes.   The property team had another  year  of
good  growth  in  terms of properties acquired into SIPPs, bringing the total owned  by  our  SIPP
members to more than 600.  A review of the property department has been undertaken and new systems
are  being introduced in the coming year to allow new services to be provided.  Gross asset values
within SIPPs now exceed £700m at the year end.

The business has continued to develop its Corporate SIPP product and recruited a head of corporate
SIPP  sales  who will work with companies seeking to replace their existing pension  arrangements.
Interest  in  this product continues to increase with large companies now beginning  to  establish
such  schemes.   We  therefore anticipate this will contribute significantly to  revenues  in  the
coming  years.  The Company has committed to further develop the systems to improve the  corporate
proposition, which has exciting prospects of enhanced scaleability.

As  the  SIPP  market  at the individual level becomes more competitive with  low  cost  operators
offering  less  flexible  products, it is important that PYSS  keeps  ahead  in  the  quality  and
sophistication  of  its individual product by maintaining its strength in technical  skills.   The
successful development of the corporate product should generate significant growth in revenues and
profits.   PYSS  will need to ensure that this target is achieved by focusing  on  developing  its
current resources and skills and driving development of the necessary systems.  The PYSS and Group
boards  will  actively monitor this as part of their risk management activities.  FSA  have  shown
increased interest in SIPPs since regulation and this also remains a key focus for management.

We  have  been encouraged by the first quarter's results for the SIPP business in this  new  year,
with income, profits and numbers of new schemes all ahead of the first quarter last year.

With  the  sale  of  PYV Limited behind us we now have a renewed focus which,  together  with  our
motiviated  leadership and a supportive and dedicated workforce, should enable  us  to  build  our
financial strength and to improve results.

The board would like to take this opportunity to thank all Group Employees for their efforts.

Geoffrey Pointon
30 June 2008

Consolidated profit and loss account
                                               Cont    Discont       Total        Cont     Discont      Total
                                               Opns       Opns                    opns        Opns
                                               2008       2008        2008        2007        2007       2007
                                                                               (note 3)    (note 3)   (note 3)
                                              £'000      £'000       £'000       £'000       £'000      £'000
Turnover                                      2,707      1,678       4,385       2,501       3,769      6,270
Administrative expenses                      (3,391)    (2,142)     (5,533)     (2,986)     (4,239)    (7,225)
Other operating income                           13          -          13           -         163        173
                                             -------   --------     -------    --------     -------    -------
Group operating (loss)                         (671)      (464)     (1,135)       (485)       (307)      (792)
Profit on sale of discontinued operations         -      2,420       2,420           -           -          -
                                             -------   --------     -------    --------     -------    -------
Profit/(loss) on ordinary activities before    (671)     1,956       1,285        (485)       (307)      (792)
Net interest payable and similar charges                               (57)                               (34)
                                                                    -------                            -------
Profit/(loss)  on ordinary activities  before                                                             
 taxation                                                            1,228                               (826)
Tax on profit/(loss) on ordinary activities                             38                                (47)
                                                                    -------                            -------
Retained profit/(loss) for the period for the                                                             
 Group                                                               1,266                               (873)
                                                                    -------                            -------
                                                                    -------                            -------                                  
Loss per share (pence): basic and diluted                             61.0p                             (42.1)p
Loss  per  share before goodwill amortisation                                                             
 (pence): basic and diluted                                           62.8p                             (40.3)p

No dividend will be paid in respect of the year ended 31 January 2008 (2007: £nil)

Consolidated balance sheet
                                                                         2008             2007
                                                                        £'000            £'000
Fixed assets                                                                             
Intangible assets                                                         533              570
Tangible assets                                                           463              586
                                                                       -------          -------
                                                                          996            1,156
Current assets                                                                           
Debtors                                                                   619            6,829
Investments                                                                 -               19
Cash at bank and in hand                                                   27            2,204
                                                                       -------          -------

                                                                          646            9,052
Creditors: amounts falling due within one year                         (1,120)          (8,912)
                                                                       -------          -------

Net current assets/(liabilities)                                         (474)             140
                                                                       -------          -------

Total assets less current liabilities                                     522            1,296
Creditors: amounts falling due after more than one year                   (70)          (2,109)
                                                                       -------          -------
Net assets                                                                452             (813)
                                                                       -------          -------
                                                                       -------          -------

Capital and reserves                                                                     
Called up share capital                                                   105              105
Other reserves:                                                                          
   Non Revenue reserve                                                    137              137
Profit and loss account                                                   210           (1,055)
                                                                       -------          -------
Equity shareholders' funds                                                452             (813)
                                                                       -------          -------
                                                                       -------          -------


    1.  The above figures are an abridged version of the Company's audited consolidated accounts
        which carried an unqualified audit report. The financial information included in this document
        does not comprise statutory accounts within the meaning of s.240 of the Companies Act 1985.
    2.  Full statutory audited accounts are available on the PLUS Markets website.

    3.  Comparative figures for the period ended 31 January 2007 have been restated to show the
        effect of the disposal of PYV Risk Management Limited and PYV Limited as discontinued operations
    4.  The Directors of Pointon York Group Ltd. accept responsibility for this announcement.

    5.  Loeb Aron & Company Limited is acting as the Company's corporate advisor.

Contact Information

  • Pointon York Group Limited