RNS Number:5703X
Claims People Group PLC
01 June 2007
NOT FOR RELEASE UNTIL 1 JUNE 2007
The Claims People Group plc
("Claims People" or "the Group")
FINAL RESULTS
The Board of Claims People, the AIM listed insurance claims facility provider,
announces today Final Results for the year to December 2006.
KEY POINTS
* Strengthened and realigned Board
* Turnover up 4% from #2.71m to #2.82m
* Pre tax profit declined from a profit of #52k to a loss of #62k
* Preparation for launch of new services: 'Motor Forensic' and 'Claims
People Recruitment'
* Expansion of consultancy services and range of loss adjusting services
* Board members take part in Placing to raise #500k in March 2007.
* Daniel Stewart appointed as new NOMAD/Broker on 1 May 2007; and
* Bishopsgate Communications Ltd. appointed as Financial PR on 1 March 2007.
Commenting, John French, Chairman of Claims People, said: "In addition to the
realigned and strengthened Board, the current financial year has started
strongly, with positive reaction to a number of our new initiatives and we look
forward to consolidating our current businesses and developing new businesses
during the year."
--ENDS--
Enquiries:
The Claims People Group plc
John French, Chairman Mobile: 07836 722 482
Bishopsgate Communications Ltd. Tel: 020 7562 3350
Dominic Barretto Mobile: 07930 450 156
Jenni Herbert
Daniel Stewart & Co Tel: 020 7776 6550
Lindsay Mair
CHAIRMAN'S STATEMENT
Along with Geoff Somervail, the Group's newly appointed CEO, I am pleased to be
able to report on the Group's results and performance for the financial year to
December 2006. Over the period, turnover increased by 4% to #2.82 million
(2005: #2.71million) and consultancy income lifted significantly to #1,241,846
(2005: #358,749).
Although initially disappointing, the small loss of #62k (2005: profit of #52k)
belies the positive strides we have made to developing the business overall, and
the Board is greatly encouraged by the outlook of the business.
During the year the Board faced the challenge of balancing the growth of the
consultancy business and rationalising the loss adjusting cost base. The Group
enjoyed the financial benefit of this in the second half of the year - in which
Claims People turned its half year loss of #67k to a loss of #62k at the year
end.
The Board continues to carefully monitor costs and cash-flow, and we believe
additional margin gains are achievable as our level of activity increases.
As announced on 1 March 2007, and as part of the Board's plan for the ongoing
development of the current Claims People business, the Group has appointed Geoff
Somervail as Chief Executive, with Barry Whyte moving to the position of Group
Managing Director. Robert Mitchell of Bluehone Investments has been appointed
as a Non-Executive Director, effective immediately. Dominic Boyce, the Group
Financial Director, is to assume the added responsibility of Company Secretary
from Peter Morgan who is giving up the role due to commitments outside the
Group. The Board also announces that Graham Cole, Non-Executive Director, has
stepped down from the Board with immediate effect due to increasing business
commitments elsewhere. I'd like to take this opportunity to thank all of the
directors for their combined efforts during what was a very busy period, and
wish Graham the best for the future.
We are encouraged that new and existing Directors have subscribed for new shares
in the Company as part of the Placing at 1.5p raising a total of #500k. Geoff
Somervail has subscribed for 11,121,667 shares, representing 8.16 per cent. of
the issued share capital of the Company. Bluehone Investments have subscribed
for 4,423,333 new ordinary shares, which increases their holding to 18,089,330
shares, representing 13.27 per cent. of the issued share capital of the Company.
Cornhill Shareholders Limited have subscribed for 11,121,667 new ordinary
shares, representing 8.16 per cent. of the issued share capital of the Company.
Founding Directors Barry Whyte and David Croston have each subscribed for
3,333,333 new ordinary shares taking their holdings to 8,850,014 shares (6.49
per cent.) and 6,835,014 shares (5.02 per cent.) respectively.
As highlighted at the time of the Placing, the Board has clearly identified a
number of interesting target markets to accelerate the growth of the Group. I
believe the changes, as outlined, will provide the foundations in terms of
management skills and other related resources to enable the Group to capitalise
on such opportunities, a number of which have been identified for exploration.
As always, I wish to thank our employees and shareholders for their continued
support.
JOHN FRENCH
Chairman
CHIEF EXECUTIVE'S STATEMENT
I am pleased to be commenting on my first set of results since being invited to
join the Board of Claims People as CEO on 1 March 2007.
The Claims People business is simply about reducing overall claims costs for
insurers; meeting all insurers claims requirements; providing services that
others either can't or don't; adding significant value to the claims process;
and exploiting every profitable niche of the claims market.
In short the strengths of the business lie in its newly realigned management
team and Board (both City and Sector expertise), as well as factors including
its established position in an expanding market, strong shareholder base and
Blue Chip client portfolio. The Group also boasts some of the best technology in
the adjusting market.
The Group presents growth opportunities in a number of claims management areas.
Intelligent in-sourcing as well as the more recent trend in out-sourcing, supply
chain claim provision, consultancy, recruitment and enhanced loss adjusting and
loss management products, all have significant opportunities in the vast
insurance services market.
Operational Overview
The Group currently comprises the loss adjusting and claims management division
('Claims People'); the implant claims solution ('i-Team'); the sector-leading
fatal and serious injury accident investigation service ('Motor Forensic'), and
the unique claims-specific recruitment agency ('Claims People Recruitment').
Conditions for traditional loss adjusting remained exceptionally quiet
throughout 2006 within the UK, despite major incidents elsewhere in the world.
Arrangements with significant trading partners also proved somewhat
disappointing as a direct consequence of the benign local climatic conditions.
However, the flat market conditions did not prevent the Group from increasingly
deploying its resources into the consultancy area under its 'i-Team' branding.
This service supplies 'implant' teams to clients in order to facilitate the
maintenance of service standards.
Due to the high standards of performance that the Group was able to deliver in
consultancy, initial contracts were extended and enlarged, thus revenues
exceeded our preliminary expectations, offsetting the reduced loss adjusting
income.
Industry Perspective
The era of consolidation in the UK Insurance Industry is continuing in the
claims management and loss adjustment arena.
The use by Insurers of the 'supply chain' for goods and services, to the
detriment of loss adjusters, continued during the year although niches
undoubtedly remain to be filled by innovative players. Overall, it has become
increasingly clear that the employment of adjusters by Insurers is now reserved
for more significant losses where adjusters may best demonstrate their value.
Indeed, the demand for high level technical skills is increasing. The Group has
innovative products and services, which, in my opinion, allow for growth in
these conditions.
Blue Chip Client List
The Group continues to enjoy the support of a number of Blue Chip clients
including HSBC, Capita, Royal & SunAlliance and BT.
Conclusion
Finally, I would like to thank Barry Whyte for his considerable contribution as
Chief Executive and look forward to working with him as Group Managing Director,
allowing me to concentrate on the demands of my new role as Chief Executive.
From its initial foundation, Claims People has always strived to be innovative
and to bring intelligent products to the UK claims market. Now, more clearly
than ever, the Group is pressing forward with interesting new developments in
both the Claims Recruitment and Motor Sectors. The strengthened Board is also
exploring a number of other potential claims related markets in our continued
process of diversification, and I look forward in working alongside the team to
grow the business to the next level.
GEOFF SOMERVAIL
Chief Executive
THE CLAIMS PEOPLE GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Notes 2006 2005
# #
Revenue 2,824,784 2,714,937
Administrative expenses (2,876,935) (2,663,052)
(Loss)/profit from operations (52,151) 51,885
Finance costs
Interest receivable 1,079 1,958
Interest payable (11,075) (1,902)
(9,996) 56
(Loss)/profit before tax (62,147) 51,941
Taxation 2 - -
(Loss)/profit for the year (62,147) 51,941
Earnings per share 3 (0.06p) 0.05p
Fully diluted earnings per share 3 (0.06p) 0.05p
THE CLAIMS PEOPLE GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2006
Share Share Retained
capital premium earnings
account
# # #
Balance at 1 January 2005 1,500,000 833,778 (1,248,398)
Profit for the period - - 51,941
Issue of equity share capital 44,062 44,063 -
Balance at 31 December 2005 1,544,062 877,841 (1,196,457)
Balance at 1 January 2006 1,544,062 877,841 (1,196,457)
Loss for the period - - (62,147)
Balance at 31 December 2006 1,544,062 877,841 (1,258,604)
THE CLAIMS PEOPLE GROUP PLC
CONSOLIDATED BALANCE SHEET
31 DECEMBER 2006
2006 2005
# #
ASSETS
Non-current assets
Goodwill 265,661 265,661
Property, plant and equipment 85,369 128,029
351,030 393,690
Current assets
Work in progress 379,077 373,347
Trade and other receivables 1,274,290 691,263
Cash and cash equivalents 272 143,593
1,653,639 1,208,203
Total assets 2,004,669 1,601,893
EQUITY AND LIABILITIES
Equity
Share capital 1,544,062 1,544,062
Share premium account 877,841 877,841
Retained earnings (1,258,604) (1,196,457)
Total equity 1,163,299 1,225,446
LIABILITIES
Current liabilities 841,370 373,944
Non-current liabilities - 2,503
Total liabilities 841,370 376,447
Total equity and liabilities 2,004,669 1,601,893
THE CLAIMS PEOPLE GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Notes 2006 2005
# #
Cash flows from operating activities
(Loss)/profit from operations (52,151) 51,885
Adjustments for:
Depreciation of property, plant and equipment 72,934 78,093
Operating cash flows before movements in working capital 20,783 129,978
(Increase)/decrease in work-in-progress (5,730) 29,329
Increase in receivables (583,027) (42,298)
Increase/(decrease) in payables 17,659 (146,322)
Cash generated by operations (550,315) (29,313)
Interest paid (11,075) (1,902)
Net cash used in operating activities (561,390) (31,215)
Cash flows from investing activities
Interest received 1,079 1,958
Purchase of property, plant and equipment (30,274) (46,541)
Net cash used in investing activities (29,195) (44,583)
Cash flows from financing activities
Repayments of bank loan (7,510) (7,511)
Repayments of obligations under finance leases (6,472) (8,340)
Issue of equity share capital - 88,125
Net cash (used in)/from financing activities (13,982) 72,274
Net decrease in cash and cash equivalents (604,567) (3,524)
Cash and cash equivalents at beginning of year 143,593 147,117
Cash and cash equivalents at end of year 4 (460,974) 143,593
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
1. Accounting Policies
Basis of accounting
The financial statements have been prepared on a historical cost basis.
Statement of compliance
The financial statements of The Claims people Group plc and all its subsidiaries
have been prepared in accordance with International Financial Reporting
Standards (IFRS).
Basis of consolidation
The consolidated financial statements incorporate the results of the Company and
all its subsidiary undertakings as if they were a single entity. Subsidiary
undertakings are consolidated from the date of acquisition using the acquisition
method of accounting.
Revenue recognition
Revenue is recognised by reference to the stage of completion of the
transaction, in accordance with IAS 18, and represents the invoiced amount of
services provided in the period and is stated net of VAT.
Property, plant and equipment
Property, plant and equipment are stated at cost less provision for
depreciation. Depreciation is provided at rates calculated to write off the cost
of each asset less its estimated residual value evenly over its estimated useful
life, as follows:
Claims software over five years
Office equipment and fittings over three to five years
Website development over three years
Goodwill
Goodwill on acquisition is initially measured at cost being the excess of the
cost of the business combination over the acquirer's interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated
impairment losses. Goodwill on acquisitions after 31 March 2004 is not amortised
and goodwill already carried in the balance sheet is not amortised after 1
January 2004. Goodwill is reviewed for impairment, annually or more frequently
if events or changes in circumstances indicate that the carrying value may be
impaired.
As at the acquisition date, any goodwill acquired is allocated to each of the
cash-generating units expected to benefit from the combination's synergies.
Impairment is determined by assessing the recoverable amount of the
cash-generating unit, to which the goodwill relates. Where recoverable amount of
the cash-generating unit is less than the carrying amount, an impairment loss is
recognised. Where goodwill forms part of a cash-generating unit and part of the
operation within that unit are disposed of, the goodwill associated with the
operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of
in this circumstance is measured on the basis of the relative values of the
operation disposed of and the portion of the cash-generating unit retained.
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
______________________________________________________________________________________
Investments
Fixed asset investments are stated at cost less provision for diminution in
value.
Work in progress
Work in progress is valued at the lower of cost and net realisable value.
Leasing and finance lease commitments
Assets obtained under hire purchase contracts and finance leases are capitalised
in the balance sheet and depreciated over their useful economic lives. The
interest element of the rental obligations is charged to the profit and loss
account over the period of the contract and represents a constant proportion of
the balance of capital payments outstanding. Rentals paid under operating leases
are charged to the profit and loss account on a straight line basis over the
term of the lease.
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Timing
differences are differences between the Group's taxable profits and its results
as stated in the financial statements that arise from the inclusion of gains and
losses in tax assessments in periods different from those in which they are
recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised
only when, on the basis of all available evidence, it can be regarded as more
likely than not that there will be suitable taxable profits from which the
future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on a non-discounted basis at the average tax rates that
are expected to apply in the periods in which the timing differences are
expected to reverse.
Pension costs
The Group contributes to two Group Personal Pension Schemes for Directors and
senior employees. Pension contributions are charged to the profit and loss
account as they are incurred.
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
2. Taxation
No liability to taxation arises due to tax losses available from previous
periods. The Company has approximately #953,667 of tax losses available for
relief against future trading profits.
2006 2005
# #
Current
UK corporation tax - -
Deferred tax
Charge arising on valuation of deferred tax assets - -
Credit arising on recognition of deferred tax asset - -
- -
Deferred tax asset comprises:
Accelerated capital allowances 34,729 34,729
Short term timing differences 2,837 2,837
Trading losses 95,992 95,992
133,558 133,558
Factors affecting the tax charge for the period:
(Loss)/profit on ordinary activities before taxation (62,147) 51,941
Corporation tax at 30% (18,644) 15,582
Effects of:
Disallowed expenditure 6,374 8,554
Depreciation and amortisation 21,880 23,428
Capital allowances (25,367) (24,380)
Losses Utilised 15,757 (23,184)
- -
THE CLAIMS PEOPLE GROUP PLC
NOTES TO PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
3. Earnings per share
The earnings per share is based on the profit for the period and the weighted
average number of ordinary shares in issue and ranking for dividend.
2006 2005
# #
(Loss)/Profit for the year (62,147) 51,941
Weighted average number of shares 102,937,500 102,848,973
Fully diluted average number of shares 102,937,500 102,876,641
4. Cash and cash equivalents
2006 2005
# #
Cash and bank balances 272 143,593
Bank overdraft (461,246) -
(460,974) 143,593
This information is provided by RNS
The company news service from the London Stock Exchange
END
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