TIDMIBB
RNS Number : 7652Z
Islamic Bank of Britain Plc
28 September 2009
ISLAMIC BANK OF BRITAIN PLC (the "Company")
Interim Results
Islamic Bank of Britain PLC (the "Company") is pleased to announce its interim
results for the 6 month period ended 30 June 2009.
The interim report will be available from the Company's website,
www.islamic-bank.com
For further information please contact:
Gerry Deegan, Islamic Bank of Britain Plc
(tel: 0121 452 7300)
Gerald Beaney, Grant Thornton UK LLP (Nominated Adviser)
(tel: 020 7383 5100)
Chairman's statement
I am pleased to present the Interim Report of Islamic Bank of Britain PLC for
the six months ended 30 June 2009. During the period, growth in finance assets
and customer deposits has been achieved through continued product innovation.
However the unprecedented market conditions have significantly impacted the
income of the Bank.
Highlights
* Customer numbers increased by 3% to over 48,000
* Deposits increased by 9% to GBP172m
* Customer financing increased by 24% to GBP29m
Current environment and trading performance
The challenging market conditions experienced in 2008 have continued this year.
The Bank's main source of revenue is the profits earned on deposits. Net margins
on these deposits continued to fall during the period due to the decline in
yields in the interbank market. This has significantly reduced the income of the
Bank.
The loss for the period increased to GBP4.6m (6 month period to 30 June 2008:
GBP3.1m) as net income from financing transactions fell by GBP1.6m compared to
the same period last year. Improvements in economic conditions and the Islamic
money markets are not expected until 2010, and therefore the results of the Bank
for the full year are likely to be similarly affected.
Products
Despite the difficult conditions, the Bank made progress against its key
business objectives of achieving growth in finance assets funded by longer term
customer deposits.
The Bank's Home Purchase Plan (HPP) product, launched in September 2008,
continues to be the key focus for achieving asset growth, with HPP assets
increasing to GBP14.4m (31 December 2008: GBP7.0m). The HPP range was expanded
during the period with a fixed rental product and a product adapted for the
Scottish market. The Bank now has the widest Sharia-compliant Home Finance range
in the UK. The growth in the HPP product has been achieved in accordance with
prudent credit policies, with currently no arrears within the secured finance
portfolios.
The realignment of the customer deposit base in favour of longer term products
has continued with the launch of an extended range of term deposits. This
follows the launch of the Notice Savings account in December 2008, which has
performed above expectation during the period. The Bank continues to use retail
deposits to fund all customer finance assets and has no reliance on wholesale
funding.
In the first half of the year, the Bank embarked on a number of initiatives that
are expected to contribute to future profitability and diversify income sources,
including the distribution of investment products and services. These
initiatives continue to be progressed, however significant contributions are not
expected until 2010.
Capital
New capital of GBP7.5m was raised via a placing of new shares in January 2009.
While the Bank continues to have sufficient capital for its current
requirements, the Board is in discussions with its advisors and interested
parties regarding the raising of additional capital to support planned future
growth. If additional capital is not raised, the Bank may need to scale back its
growth plans and operations during 2010 in order to ensure that regulatory
capital requirements continue to be achieved.
I would like to thank Islamic Bank of Britain's customers, shareholders, and
staff for their continued support and commitment to the Bank.
Mohsen Moustafa23 September 2009
Chairman
Condensed statement of comprehensive income
for the 6 month period ended 30 June 2009
+--------------------------------------------+------+-----------------+-------------+---------------+
| |Note | 6 month | 6 month | Year |
| | | period | period | ended |
| | | ended | ended | 31 Dec |
| | | 30 | 30 | 2008 |
| | | Jun 2009 | Jun 2008 | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | GBP | GBP | GBP |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Income receivable from Islamic financing | | 1,692,414 | 4,284,281 | 8,307,297 |
| transactions | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Returns payable to customers and banks | | (880,541) | (1,859,492) | (3,811,516) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Net income from Islamic financing | | 811,873 | 2,424,789 | 4,495,781 |
| transactions | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Fee and commission income | | 233,243 | 250,843 | 527,212 |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Fee and commission expense | | (37,974) | (51,345) | (94,783) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Net fee and commission income | | 195,269 | 199,498 | 432,429 |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Operating income | | 1,007,142 | 2,624,287 | 4,928,210 |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Net impairment loss on financial assets | 6 | (200,637) | (180,277) | (325,971) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Personnel expenses | | (2,601,307) | (2,385,682) | (4,831,978) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| General and administrative expenses | | (2,202,997) | (2,244,490) | (4,017,168) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Depreciation | | (370,228) | (399,805) | (775,007) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Amortisation | | (254,602) | (473,869) | (888,786) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Total operating expenses | | (5,629,771) | (5,684,123) | (10,838,910) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Loss before income tax | | (4,622,629) | (3,059,836) | (5,910,700) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Income tax expense | 4 | - | - | - |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Loss for the period | | (4,622,629) | (3,059,836) | (5,910,700) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Total comprehensive income for the period | | (4,622,629) | (3,059,836) | (5,910,700) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Loss attributable to Owners of the Company | | (4,622,629) | (3,059,836) | (5,910,700) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Total comprehensive income attributable to | | (4,622,629) | (3,059,836) | (5,910,700) |
| Owners of the Company | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Loss per ordinary share | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
| Basic and diluted (pence) | 3 | (0.87) | (0.73) | (1.41) |
+--------------------------------------------+------+-----------------+-------------+---------------+
| | | | | |
+--------------------------------------------+------+-----------------+-------------+---------------+
All income and expenditure relates to continuing operations.
Condensed statement of financial position
At 30 June 2009
+---------------------------------------+------+--------------+--------------+--------------+
| |Note | 30 | 30 | 31 Dec |
| | | Jun 2009 | Jun 2008 | 2008 |
+---------------------------------------+------+--------------+--------------+--------------+
| | | GBP | GBP | GBP |
+---------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Assets | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Cash | | 460,974 | 596,072 | 546,953 |
+---------------------------------------+------+--------------+--------------+--------------+
| Commodity Murabaha and Wakala | | 162,779,424 | 146,747,433 | 151,687,736 |
| receivables and | | | | |
| other advances due from banks | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Consumer finance accounts and other | 6 | 6,062,688 | 9,262,838 | 7,878,292 |
| advances to customers | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Net investment in home purchase plans | | 14,412,247 | - | 6,980,840 |
+---------------------------------------+------+--------------+--------------+--------------+
| Net investment in commercial property | | 8,774,552 | 8,523,880 | 8,597,893 |
| finance | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Property and equipment | | 2,961,012 | 3,361,790 | 3,265,745 |
+---------------------------------------+------+--------------+--------------+--------------+
| Intangible assets | | 426,405 | 912,938 | 578,713 |
+---------------------------------------+------+--------------+--------------+--------------+
| Other assets | | 1,061,613 | 2,310,996 | 1,263,128 |
+---------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Total assets | | 196,938,915 | 171,715,947 | 180,799,300 |
+---------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Liabilities and equity | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Liabilities | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Deposits from banks | 7 | 975,534 | 6,241,907 | 5,094,119 |
+---------------------------------------+------+--------------+--------------+--------------+
| Deposits from customers | 8 | 171,355,388 | 140,744,059 | 153,280,754 |
+---------------------------------------+------+--------------+--------------+--------------+
| Other liabilities | | 2,939,692 | 2,930,263 | 3,480,891 |
+---------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Total liabilities | | 175,270,614 | 149,916,229 | 161,855,764 |
+---------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Equity | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Called up share capital | 9 | 5,464,700 | 4,190,000 | 4,190,000 |
+---------------------------------------+------+--------------+--------------+--------------+
| Share premium | | 54,806,652 | 48,747,255 | 48,747,255 |
+---------------------------------------+------+--------------+--------------+--------------+
| Retained deficit | | (38,646,801) | (31,188,401) | (34,046,165) |
+---------------------------------------+------+--------------+--------------+--------------+
| Profit stabilisation reserve | | 43,750 | 50,864 | 52,446 |
+---------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Total equity | | 21,668,301 | 21,799,718 | 18,943,536 |
+---------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+--------------+
| Total equity and liabilities | | 196,938,915 | 171,715,947 | 180,799,300 |
+---------------------------------------+------+--------------+--------------+--------------+
These financial statements were approved by the Board of Directors on 23
September 2009 and were signed on its behalf by:
Gerry Deegan
Managing Director
Condensed statement of changes in equity
for the 6 month period ended 30 June 2009
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | Note | Share | | Share | | Profit | | Profit | | Total |
| | | capital | | premium | | and | | stabilisation | | |
| | | | | account | | loss | | reserve | | |
| | | | | | | account | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | GBP | | GBP | | GBP | | GBP | | GBP |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Balance at 1 January 2008 | | 4,190,000 | | 48,747,255 | | (28,137,072) | | 25,126 | | 24,825,309 |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Total comprehensive income for | | - | | - | | (3,059,836) | | - | | (3,059,836) |
| the period | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Transfer to profit | | - | | - | | (25,738) | | 25,738 | | - |
| stabilisation reserve | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Credit in respect of share | | - | | - | | 34,245 | | - | | 34,245 |
| based payments charge | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Balance at 30 June 2008 | | 4,190,000 | | 48,747,255 | | (31,188,401) | | 50,864 | | 21,799,718 |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Balance at 1 July 2008 | | 4,190,000 | | 48,747,255 | | (31,188,401) | | 50,864 | | 21,799,718 |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Total comprehensive income for | | - | | - | | (2,850,864) | | - | | (2,850,864) |
| the period | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Transfer to profit | | - | | - | | (1,582) | | 1,582 | | - |
| stabilisation reserve | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Charge in respect of share | | - | | - | | (5,318) | | - | | (5,318) |
| based payments | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Balance at 31 December 2008 | | 4,190,000 | | 48,747,255 | | (34,046,165) | | 52,446 | | 18,943,536 |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Balance at 1 January 2009 | | 4,190,000 | | 48,747,255 | | (34,046,165) | | 52,446 | | 18,943,536 |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Total comprehensive income for | | - | | - | | (4,622,629) | | - | | (4,622,629) |
| the period | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Transfer to profit | | - | | - | | 8,696 | | (8,696) | | - |
| stabilisation reserve | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Credit in respect of share | | - | | - | | 13,297 | | - | | 13,297 |
| based payments charge | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Issue of ordinary share | 9 | 1,274,700 | | 6,059,397 | | - | | - | | 7,334,097 |
| capital | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| | | | | | | | | | | |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
| Balance at 30 June 2009 | | 5,464,700 | | 54,806,652 | | (38,646,801) | | 43,750 | | 21,668,301 |
+--------------------------------+------+-----------+-+------------+-+--------------+-+---------------+-+-------------+
Condensed statement of cash flows
for the 6 month period ended 30 June 2009
+--------------------------------------+------+--------------+--------------+--------------+
| |Note | 6 month | 6 month | Year ended |
| | | period | period | 31 Dec |
| | | ended | ended | 2008 |
| | | 30 | 30 | |
| | | Jun 2009 | Jun 2008 | |
+--------------------------------------+------+--------------+--------------+--------------+
| | | GBP | GBP | GBP |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Cash flows from operating activities | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Loss for the period | | (4,622,629) | (3,059,836) | (5,910,700) |
+--------------------------------------+------+--------------+--------------+--------------+
| Adjustments for: | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Depreciation | | 370,228 | 399,805 | 775,007 |
+--------------------------------------+------+--------------+--------------+--------------+
| Amortisation | | 254,602 | 473,869 | 888,786 |
+--------------------------------------+------+--------------+--------------+--------------+
| Net impairment loss on | | 200,637 | 180,277 | 325,971 |
| financial assets | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Share based payment charge | | 13,297 | 34,245 | 28,927 |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Change in Commodity Murabaha and | | (10,036,319) | (7,682,833) | (12,784,885) |
| Wakala receivables | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Change in consumer finance accounts | | 1,614,967 | 220,180 | 1,459,032 |
| and other advances to customers | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Change in net investment in | | (176,659) | (2,431,998) | (2,506,011) |
| commercial property finance | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Change in net investment in home | | (7,431,407) | - | (6,980,840) |
| purchase plans | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Change in other assets | | 201,515 | (113,172) | 934,696 |
+--------------------------------------+------+--------------+--------------+--------------+
| Change in deposits from banks | | (4,118,585) | | 2,601,729 |
| | | | 3,743,603 | |
+--------------------------------------+------+--------------+--------------+--------------+
| Change in deposits from customers | | 18,074,634 | 6,103,447 | 18,634,228 |
+--------------------------------------+------+--------------+--------------+--------------+
| Change in other liabilities | | (541,199) | (42,339) | 508,289 |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Net cash used in operating | | (6,196,918) | (2,174,752) | (2,025,771) |
| activities | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Cash flows from investing activities | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Purchase of property and equipment | | (65,495) | (318,240) | (597,397) |
+--------------------------------------+------+--------------+--------------+--------------+
| Purchase of intangible assets | | (102,294) | (124,576) | (205,268) |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Net cash used in investing | | (167,789) | (442,816) | (802,665) |
| activities | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Cash flows financing activities | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Issue of ordinary share capital | 9 | 7,334,097 | - | - |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Net cash generated from financing | | 7,334,097 | - | - |
| activities | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Net change in cash and cash | | 969,390 | (2,617,568) | (2,828,436) |
| equivalents | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Foreign exchange gains | | (3,012) | - | (221,586) |
+--------------------------------------+------+--------------+--------------+--------------+
| Cash and cash equivalents at | | 2,614,484 | 5,664,506 | 5,664,506 |
| beginning of period | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| Cash and cash equivalents at end of | 5 | 3,580,862 | 3,046,938 | 2,614,484 |
| period | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
| | | | | |
+--------------------------------------+------+--------------+--------------+--------------+
Notes to the condensed interim financial statements
1Accounting policies and basis of preparation
Islamic Bank of Britain PLC ('the Company') is a company incorporated in the UK.
The annual financial statements of the Company are prepared in accordance with
IFRSs as adopted by the EU. The interim financial information included in this
half-yearly report has been prepared in accordance with the disclosure
requirements of AIM Rules and the recognition and measurement requirements of
IFRSs as adopted by the EU excluding IAS34 'Interim Financial Reporting',
applying the accounting policies and presentation that were applied in the
preparation of the Company's published financial statements for the year ended
31 December 2008. The directors anticipate that these accounting policies will
be used in the preparation of the Company's annual financial statements for the
year ended 31 December 2009.
The interim financial statements are condensed and do not include all of the
information required for full annual financial statements. The information in
this interim report is unaudited.
Going Concern
The interim financial statements of the Company have been prepared on the going
concern basis. In making the going concern assessment, the directors have
prepared detailed financial forecasts of the Company, including its funding and
capital position, for the twelve months from the date of approval of these
interim financial statements.
As noted in the Chairman's Statement, the Board is in discussions with its
advisors and interested parties regarding the raising of additional capital to
support planned future growth. The directors have considered the effect upon the
Company of more pessimistic scenarios of its business, in particular the
worsening of the economic environment and if new capital is not raised as
planned. The scenarios show that if new capital is not raised, the directors may
need to scale back the Bank's growth plans and operations during 2010 in order
to ensure that regulatory capital requirements continue to be achieved. The
directors are prepared to implement appropriate management actions to address
any potential regulatory capital deficit as required, including a cost reduction
exercise.
Based on these forecasts, the directors are confident that the Company has
adequate resources to continue in operational existence and will continue to
comply with all relevant regulatory requirements for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the
interim financial statements.
2 Segmental Reporting
The company has one class of business and all other services provided are
ancillary to this. All business is conducted from the United Kingdom.
3 Earnings per ordinary share
Basic and diluted earnings per ordinary share are calculated by dividing the
loss for the financial period attributable to equity shareholders by the
weighted average number of ordinary shares in issue in the 6 month period ended
30 June 2009 of 530,272,155 (6 month period ended 30 June 2008: 419,000,000,
Year ended 31 December 2008: 419,000,000).
The Company has established an HMRC approved Company Share Option Plan ('CSOP')
under which options to subscribe for the Company's ordinary shares of 1p each
have been awarded to certain employees. At 30 June 2009 1,481,037 options remain
outstanding (30 June 2008: 3,200,469, 31 December 2008: 1,600,230). Diluted loss
per share is the same as basic loss per share since the outstanding share
options have not been taken into account due to their anti-dilutive effect. This
arises since the Company is currently loss making.
4 Income tax expense
There were no taxable profits or recoverable losses for the 6 month period ended
30 June 2009 (6 month period ended 30 June 2008: GBPnil, Year ended 31 December
2008: GBPnil) and accordingly the Company has not provided for a tax charge or a
tax debtor.
As at 30 June 2009, the Company had potential deferred tax assets in respect of
tax losses carried forward of GBP8,734,271 (30 June 2008: GBP6,855,212, 31
December 2008: GBP7,555,394) and in respect of timing differences on capital
allowances of GBP1,518,551 (30 June 2008: GBP1,251,716, 31 December 2008:
GBP1,437,613). The corporation tax rate used to calculate potential deferred tax
assets was 28%.
In respect of the recognition of deferred tax assets, for the purposes of
applying the requirements of IAS 12 ('Income Taxes'), it has been considered
that the Company is not currently at a sufficiently advanced stage in its
development to confidently assert future offsetting tax liabilities. Capital
allowances to be claimed are being finalised and therefore the level of the
potential asset shown above may change.
5Cash and cash equivalents
+----------------------------------------------+-----------+------------+-----------+
| | 30 Jun | 30 Jun | 31 Dec |
| | 2009 | 2008 | 2008 |
+----------------------------------------------+-----------+------------+-----------+
| | GBP | GBP | GBP |
+----------------------------------------------+-----------+------------+-----------+
| | | | |
+----------------------------------------------+-----------+------------+-----------+
| Cash | 460,974 | 596,072 | 546,953 |
+----------------------------------------------+-----------+------------+-----------+
| Other advances to banks | 3,119,888 | 2,450,866 | 2,067,531 |
+----------------------------------------------+-----------+------------+-----------+
| | | | |
+----------------------------------------------+-----------+------------+-----------+
| Total cash and cash equivalents | 3,580,862 | 3,046,938 | 2,614,484 |
+----------------------------------------------+-----------+------------+-----------+
6Impairment allowance
+----------------------------------------------+-----------+-----------+-----------+
| | 6 month | 6 month | Year |
| | period | period | ended |
| | ended | ended | 31 Dec |
| | 30 Jun | 30 | 2008 |
| | 2009 | Jun 2008 | |
+----------------------------------------------+-----------+-----------+-----------+
| | GBP | GBP | GBP |
+----------------------------------------------+-----------+-----------+-----------+
| Specific allowances for impairment | | | |
+----------------------------------------------+-----------+-----------+-----------+
| Balance at beginning of period | 145,707 | 194,309 | 194,309 |
+----------------------------------------------+-----------+-----------+-----------+
| Charge for the period | - | 50,373 | 64,223 |
+----------------------------------------------+-----------+-----------+-----------+
| Amounts written off during the period | (105,734) |(112,825) | (112,825) |
+----------------------------------------------+-----------+-----------+-----------+
| Balance at end of period | 39,973 | 131,857 | 145,707 |
+----------------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------------+-----------+-----------+-----------+
| Collective allowances for impairment | | | |
+----------------------------------------------+-----------+-----------+-----------+
| Balance at beginning of period | 939,908 | 818,708 | 818,708 |
+----------------------------------------------+-----------+-----------+-----------+
| Charge for the period | 200,637 | 129,904 | 261,748 |
+----------------------------------------------+-----------+-----------+-----------+
| Amounts written off during the period |(476,046) | (86,166) | (140,548) |
+----------------------------------------------+-----------+-----------+-----------+
| Balance at end of period | 664,499 | 862,446 | 939,908 |
+----------------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------------+-----------+-----------+-----------+
| Total allowances for impairment | | | |
+----------------------------------------------+-----------+-----------+-----------+
| Balance at beginning of period | 1,085,615 | 1,013,017 | 1,013,017 |
+----------------------------------------------+-----------+-----------+-----------+
| Charge for the period | 200,637 | 180,277 | 325,971 |
+----------------------------------------------+-----------+-----------+-----------+
| Amounts written off during the period | (581,780) | (198,991) | (253,373) |
+----------------------------------------------+-----------+-----------+-----------+
| Balance at end of period | 704,472 | 994,303 |1,085,615 |
+----------------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------------+-----------+-----------+-----------+
This impairment allowance relates to consumer finance accounts and other
advances to customers.
7Deposits from banks
+----------------------------------------------+-------------+---------------+-------------+
| | 30 | 30 | 31 Dec |
| | Jun 2009 | Jun 2008 | 2008 |
+----------------------------------------------+-------------+---------------+-------------+
| | GBP | GBP | GBP |
+----------------------------------------------+-------------+---------------+-------------+
| | | | |
+----------------------------------------------+-------------+---------------+-------------+
| Repayable on demand | 319,637 | 6,175 | 94,119 |
+----------------------------------------------+-------------+---------------+-------------+
| 3 months or less but not repayable on demand | 655,897 | 6,000,000 | 5,000,000 |
+----------------------------------------------+-------------+---------------+-------------+
| 1 year or less but over 3 months | - | 235,732 | - |
+----------------------------------------------+-------------+---------------+-------------+
| | | | |
+----------------------------------------------+-------------+---------------+-------------+
| Total deposits from banks | 975,534 | 6,241,907 | 5,094,119 |
+----------------------------------------------+-------------+---------------+-------------+
| | | | |
+----------------------------------------------+-------------+---------------+-------------+
| Comprising: | | | |
+----------------------------------------------+-------------+---------------+-------------+
| Non profit sharing | 319,637 | 6,000 | 94,119 |
+----------------------------------------------+-------------+---------------+-------------+
| Profit sharing/paying accounts | 655,897 | 6,235,907 | 5,000,000 |
+----------------------------------------------+-------------+---------------+-------------+
| | | | |
+----------------------------------------------+-------------+---------------+-------------+
| Total deposits from banks | 975,534 | 6,241,907 | 5,094,119 |
+----------------------------------------------+-------------+---------------+-------------+
8Deposits from customers
+----------------------------------------------+-------------+-------------+-------------+
| | 30 | 30 | 31 Dec |
| | Jun 2009 | Jun 2008 | 2008 |
+----------------------------------------------+-------------+-------------+-------------+
| | GBP | GBP | GBP |
+----------------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------------+-------------+-------------+-------------+
| Repayable on demand | 102,867,109 | 87,885,144 | 94,232,981 |
+----------------------------------------------+-------------+-------------+-------------+
| 3 months or less but not repayable on demand | 47,651,745 | 43,097,222 | 45,392,618 |
+----------------------------------------------+-------------+-------------+-------------+
| 1 year or less but over 3 months | 20,836,534 | 9,761,693 | 13,655,155 |
+----------------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------------+-------------+-------------+-------------+
| Total deposits from customers | 171,355,388 | 140,744,059 | 153,280,754 |
+----------------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------------+-------------+-------------+-------------+
| Comprising: | | | |
+----------------------------------------------+-------------+-------------+-------------+
| Non profit sharing | 32,413,000 | 26,237,158 | 24,755,496 |
+----------------------------------------------+-------------+-------------+-------------+
| Profit sharing/paying accounts | 138,942,388 | 114,506,901 | 128,525,258 |
+----------------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------------+-------------+-------------+-------------+
| Total deposits from customers | 171,355,388 | 140,744,059 | 153,280,754 |
+----------------------------------------------+-------------+-------------+-------------+
9Called up share capital
+----------------------------------------------+-----------+-------------+-----------+
| | 30 Jun | 30 Jun | 31 Dec |
| | 2009 | 2008 | 2008 |
+----------------------------------------------+-----------+-------------+-----------+
| | GBP | GBP | GBP |
+----------------------------------------------+-----------+-------------+-----------+
| Authorised: | | | |
+----------------------------------------------+-----------+-------------+-----------+
| Equity: 725,00,000 (30 June 2008: | 7,250,000 | 5,000,000 | 7,250,000 |
| 500,000,000, 31 December 2008 725,000,000) | | | |
| ordinary shares of GBP0.01 each | | | |
+----------------------------------------------+-----------+-------------+-----------+
| | | | |
+----------------------------------------------+-----------+-------------+-----------+
| Allotted, called up and fully paid: | | | |
+----------------------------------------------+-----------+-------------+-----------+
| Issued ordinary share capital | 5,464,700 | 4,190,000 | 4,190,000 |
+----------------------------------------------+-----------+-------------+-----------+
On 19 December 2008, an ordinary resolution was passed at an extraordinary
general meeting increasing the authorised share capital of the Company from
GBP5,000,000 to GBP7,250,000 by the creation of an additional 225,000,000 new
Ordinary Shares. On 23 January 2009, an additional 127,470,000 shares were
allotted for consideration of GBP7,488,863 before expenses. Expenses of
GBP154,766 were incurred in the placing resulting in an increase to equity of
GBP7,334,097.
10Related party disclosures
At 30 June 2009, directors of the Company and their immediate relatives
controlled 0.03% of the voting shares of the Company (30 June 2008: 0.04%, 31
December 2008: 0.04%).
Transactions with key management personnel
Key management of the Company are the Board of Directors and Management
Committee members. The compensation of key management personnel, including the
directors, is as follows:
+---------------------------------------+---+-----+----------+----------+-----------+
| | | | 6 month | 6 month | Year |
| | | | period | period | ended |
| | | | ended | ended | 31 Dec |
| | | | 30 | 30 | 2008 |
| | | | Jun 2009 | Jun 2008 | |
+---------------------------------------+---+-----+----------+----------+-----------+
| | | | GBP | GBP | GBP |
+---------------------------------------+---+-----+----------+----------+-----------+
| | | | | | |
+---------------------------------------+---+-----+----------+----------+-----------+
| Key management emoluments | | | 735,161 | 788,216 | 1,376,291 |
| including social security | | | | | |
| costs | | | | | |
+---------------------------------------+---+-----+----------+----------+-----------+
| Company contributions to | | | 27,722 | 21,950 | 49,251 |
| pension plans | | | | | |
+---------------------------------------+---+-----+----------+----------+-----------+
| | | | | | |
+---------------------------------------+---+-----+----------+----------+-----------+
| Total | | | 762,883 | 810,166 | 1,425,542 |
+---------------------------------------+---+-----+----------+----------+-----------+
Deposit balances, operated under standard customer terms and conditions, held by
key management personnel, including directors, totalled GBP399,571 as at 30 June
2009 (30 June 2008: GBP162,379, 31 December 2008: GBP242,923). The highest
balance during the 6 month period ended 30 June 2009 was GBP458,601 (6 month
period ended 30 June 2008: GBP279,043, Year ended 31 December 2008: GBP322,988).
Total returns paid on these accounts for the 6 month period ended 30 June 2009
totalled GBP1,221 (6 month period ended 30 June 2008: GBP1,664, Year ended 31
December 2008: GBP2,895).
Outstanding consumer finance and home purchase plan account balances relating to
key management personnel, including directors, totalled GBP225,195 as at 30 June
2009 (30 June 2008: GBP63,638, 31 December 2008: GBP54,302). Returns recognised
and rent received on these accounts for the 6 month period ended 30 June 2009
totalled GBP2,816 (6 month period ended 30 June 2008: GBP1,941, Year ended 31
December 2008: GBP3,553). All consumer finance and home purchase plan facilities
taken by key management personnel and directors were offered in line with
standard customer terms and conditions.
11 Interim Report and statutory accounts
The comparative figures for the financial year ended 31 December 2008 are not
the company's statutory accounts for that financial year. Those accounts have
been reported on by the company's auditors and delivered to the registrar of
companies. The report of the auditors was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.
- END -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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