TIDMMFX
RNS Number : 2646O
Manx Financial Group PLC
15 September 2011
FOR IMMEDIATE RELEASE 15 September 2011
Manx Financial Group PLC
Unaudited Interim Results for the 6 months ended 30 June
2011
Manx Financial Group PLC (LSE: MFX), the financial services
Group which includes Conister Bank Limited, Conister Card Services
Limited, Edgewater Associates Limited and ECF Asset Finance PLC
presents its final results for the six months ended 30 June
2011.
Highlights
For the Group:
-- Financial performance before specific items improved by
19%.
-- Interest Income grew by 56% to GBP3,507,000 (2010:
GBP2,250,000).
-- Net Operating Income grew by 115% to GBP3,111,000 (2010:
GBP1,446,000).
-- Headcount reducing as IT efficiencies are being
leveraged.
For Conister Bank Limited:
-- Profit before impairment of goodwill increased by 53% to
GBP107,000 (2010: GBP70,000).
-- Net loans and advances increased by 52% to GBP49,934,000
(2010: GBP32,968,000).
-- Deferred income increased by 59% to GBP7,419,000 (2010:
GBP4,680,000).
For Conister Card ServicesLimited:
-- Profitability increased by 54% to GBP183,000 (2010:
GBP119,000).
-- Cards in issue increased by 52% to 153,747 (2010:
101,399).
-- Contract extended by primary customer.
For Edgewater AssociatesLimited:
-- Recorded profit of GBP94,000 (2010: not available).
-- Acquired a general insurer which broadens its insurance
offering and will increase profitability.
-- Well positioned to be a consolidator in the fragmented Isle
of Man IFA market place.
Other:
-- New lending IT system installed.
-- ECF Asset Finance PLC integration complete.
Contacts:
Manx Financial Group PLC
Denham Eke, Chief Executive
Tel: 01624 694694
Britton Financial PR
Tim Blackstone
Tel: 07957 140416
Beaumont Cornish Limited
Roland Cornish
Tel: +44 (0) 20 7628 3396
The financial information set out below comprises
non-statutory accounts. The financial information
for the six months ended 30 June 2011 has been extracted
from published accounts for the six months ended 30
June 2011.
Chairman's Statement
Moving forward in turbulent financial times
We are all familiar with the deepening gloom that surrounds the
outlook for Britain's economy. The labour market continues to be
much more fragile than expected and the Bank of England's Monetary
Policy Committee signalled increasing concern about the prospect of
recovery. The weak employment figures appear to be falling into
line with slower GDP growth data, according to which Britain's
economy has barely grown over the past nine months. Concerns about
the UK are echoed in similar fears for global growth, unemployment,
inflation and the long-term viability of the Economic and Monetary
Union. As an example of the effect of this climate of uncertainty,
Standard & Poor's decision to downgrade the USA's long term
sovereign debt to AA+ leaves the Isle of Man in the incredible
position of having a higher credit rating than the USA.
It is clear the current stagnation in the UK will continue for
far longer than originally envisaged. In comparison the Isle of
Man's economy has continued to grow and the Government remains
committed to further sector diversification. The most recent budget
reported a slightly better than expected financial position and
currently inflation is stable and the island continues to have a
low level of unemployment in comparison to the UK.
However the solutions to the current economic conditions don't
lie solely with governments. The private sector has a significant
role to play and we are committed to helping individuals and
companies by continuing to provide asset backed lending throughout
these difficult times. We will also continue to help those who wish
to save by providing secure fixed rate deposit rates over terms to
suit their needs.
We continue to strive for sustainable profit despite these
difficult times and by following our growth strategy adopted last
year we have seen our Interest Income increase by 56% to
GBP3,507,000 (2010: GBP2,250,000). At the same time we continue to
reduce the cost base. The full benefit of these actions will not
all flow through the Income Statement until the second half of this
year.
Financial Review
The Group delivered a very encouraging performance for the first
half of 2011 by recording an improvement in financial results
before specific items of 19% with Net Operating Income increasing
by 115% to GBP3,111,000 (2010: GBP1,446,000). Our operating margin
continues to grow and increased by 16% to 67% (2010: 51%).
Cost savings from further integration will flow through the
accounts during the second half of the year. Although the Interim
Accounts do not reflect these savings from integration it is
pleasing to note our income is increasing faster than our costs
which, in turn, will help profitability.
Our Net Asset per share improved on the comparative period last
year but our share price has been a casualty of the UK and global
uncertainty. It continues to be our goal to develop a sustainable,
profitable financial services group which when achieved will allow
a sustainable dividend policy to be adopted.
We have invested heavily in IT in the last two years and this
investment is allowing us to achieve greater integration of the
acquired asset finance house, ECF Asset Finance PLC.
The Group's headcount excluding the IFA business is forecast to
reduce by 27% in this financial year.
Conister Bank Limited
The Bank's profitability before goodwill impairment continues to
improve, increasing by 53% to GBP107,000 (2010: GBP70,000). The
bank is on a solid footing with retained earnings generating
additional capital, leading to enhanced liquidity coupled with
buoyant deposit funding. By way of example, the Bank's Core 1
capital ratio at June month end was 17% which compares favourably
to Barclays published Core 1 capital ratio of 11%.
Our Loans and Advances to customers have increased by 52% to
GBP49,943,000 (2010: GBP32,968,000) by both acquisition and greater
market penetration. Our deferred income balance on these loans has
increased by 59% to GBP7,419,000 (2010: GBP4,680,000) which now
represents more than one year's income already earned.
Our deposit base continues to be loyal and growing having
increased to GBP56,601,000 (2010: GBP44,942,000). Our efficiency in
acquiring deposits to match our lending requirements has improved
thereby minimising the strain on the Income Statement of holding
excess deposits.
Edgewater Associates Limited
Edgewater's profits are traditionally biased to the second half
of the year. Edgewater generated a commendable profit of GBP94,000
(2010: not available) in the first half of 2011.
Edgewater acquired a small Isle of Man based general insurer,
Three Spires Insurance Services Limited on 21 June 2011. This
acquisition will allow both businesses' insurance books to be
consolidated and broaden the range of policies we can collectively
offer. In addition, the acquisition will allow Edgewater access to
another set of customers.
The Isle of Man is scheduled to implement the UK's Retail
Distribution Review (RDR) with effect from 1 January 2014. This
will require a higher standard of competency, more robust systems
and greater compliance reviews within IFA businesses. Edgewater
already has these skills within its business and is now well
positioned to take advantage of the fragmented IFA market place
within the Isle of Man as smaller businesses will find it difficult
to carry the increase in overhead that comes with RDR or achieve
the required level of competency prescribed.
Conister Card Services Limited
Conister Card's profitability improved by 54% to GBP183,000
(2010: GBP119,000). The re-structuring of this business is now
complete and I'm also delighted to report we have negotiated an
extension to our largest pre-paid card contract for a minimum of 12
months.
Our cards in issue grew by 52% to 153,747 (2010: 101,399).
Our people
Our integration policy has reduced our requirement for support
staff but we have where needed recruited professionals from banking
environments. We will continue to upgrade our teams through
personal development and training and we believe excellent customer
service generates repeat income to bolster profits.
On 14 January 2011 Oliver Hare joined the Board as a Non
Executive Director and he will bring a wealth of experience and
contacts for the Group to explore.
On 1 April 2011 the Bank's Managing Director Simon Hull resigned
and I would like to thank him for his drive and commitment during
his time with us. Douglas Grant, our Group Finance Director, is
acting as Managing Director for the Bank whilst we undertake a
comprehensive recruitment campaign to find a permanent Managing
Director. This task is almost complete.
Outlook
This is a testing economic environment but it brings
opportunities to us as we seek to find sustainable solutions to our
customers' problems. Last year we entered the Block Discounting
market and to-date we have grown a robust book with little to no
arrears. Presently we are considering other new product lines which
will complement our existing portfolio of lending.
We are constantly reviewing acquisitions, whether they be for an
asset backed loan book or a complete business. The Executive has a
number of opportunities under review and are diligently working
their way through them and we would shortly expect to release some
more news on their progress.
Opportunities are not restricted to the banking sector.
Edgewater has a clear sustainable profitable market position and is
well placed to capitalise on the introduction of RDR in the Isle of
Man. Also with Conister Cards we have a small niche profitable
business from which to grow our customer base.
Finally, I would like to thank you for your support as we
continue to develop your company.
Jim Mellon
Executive Chairman
15 September 2011
Manx Financial Group PLC
Condensed Consolidated Statement of Comprehensive Income
For the
For the period
period ended For the
ended 30 30 June year ended
June 2011 2010 31 Dec
GBP000 GBP000 2010 GBP000
Notes (unaudited) (unaudited) (audited)
Interest income 2 3,507 2,250 5,103
Interest expense 3 (970) (858) (1,866)
------------- ------------- -------------
Net interest income 3 2,537 1,392 3,237
Fee and commission
income Fee and 646 40 654
commission expense (351) (341) (700)
------------- ------------- -------------
Net fee and commission
income/(expense) 295 (301) (46)
------------- ------------- -------------
Net trading income 2,832 1,091 3,191
Other operating income 510 569 1,041
Programme costs (227) (233) (449)
Foreign exchange
(loss)/gain (4) 19 12
------------- ------------- -------------
Operating income 3 3,111 1,446 3,795
Personnel expenses -
recurring (1,215) (1,250) (2,449)
Personnel expenses -
acquired after 30 June
2010 (416) - (281)
Personnel
expenses/(write-back) -
non-recurring (295) 180 17
Other expenses (1,083) (886) (1,688)
Provision for impairment
on loan assets (100) 324 1,027
Realised gains on
available-for-sale
financial assets 14 24 26
Unrealised loss on
financial assets
carried at fair value (60) (55) (200)
Depreciation (115) (74) (163)
Depositors' Compensation
Scheme 4 (74) 2 2
-------------
(Loss)/profit before
specific items 3 (233) (289) 86
Restructuring costs 5 (13) - (274)
Impairment of goodwill 13 (111) -
------------- -------------
Loss before income tax
expenses (357) (289) (188)
Income tax expense - - -
------------- ------------- -------------
(357) (289) (188)
Loss for the period/year
Other comprehensive
income:
Available-for-sale gains
taken to equity 4 - -
Actuarial gain on
pension scheme - - 5
------------- ------------- -------------
Total comprehensive loss
for the period/year
attributable to owners (353) (289) (183)
Basic and diluted loss
per share (pence) 6 (0.40) (0.40) (0.24)
Manx Financial Group PLC
Condensed Consolidated Statement of Financial Position
30 June 2011 30 June 31 Dec
GBP000 2010 GBP000 2010 GBP000
Notes (unaudited) (unaudited) (audited)
Assets
Cash and cash
equivalents 4,357 20,521 4,795
Financial assets at
a fair value
through profit or
loss 7 115 319 174
Available-for-sale
financial
instruments 8 10,289 - 7,292
Loans and advances
to customers 9 49,934 32,968 48,467
Commissions
receivable 348 - 237
Property, plant and
equipment 696 569 760
Trade and other
receivables 10 410 490 449
Goodwill 13 2,344 - 2,414
------------------ ------------- -------------
Total assets 68,493 54,867 64,588
------------------ ------------- -------------
Liabilities
Customer accounts 56,601 44,942 52,745
Creditor and
accrued charges 11 1,015 637 978
Pension liability 60 66 60
Loan notes 12 2,210 1,710 1,710
Deferred
consideration 13 337 - 475
------------------ ------------- -------------
Total liabilities 60,223 47,355 55,968
------------------ ------------- -------------
Equity
Called up share
capital 14 18,433 17,783 18,258
Profit and loss
account and other
reserves (10,163) (10,271) (9,638)
------------------ ------------- -------------
Total equity 8,270 7,512 8,620
------------------ ------------- -------------
Total liabilities
and equity 68,493 54,867 64,588
------------------ ------------- -------------
Manx Financial Group PLC
Condensed Consolidated Statement of Cash Flows
For the For the
period year ended
For the period ended 30 31 Dec
ended 30 June June 2010 2010
2011 GBP000 GBP000 GBP000
Notes (unaudited) (unaudited) (audited)
Reconciliation of
loss before taxation
to operating cash
flows
Loss before income
tax expense (357) (289) (188)
Unrealised loss on
financial assets
carried at fair
value through
profit or loss 60 55 200
Realised gains on
available-for-sale
investments (14) - (26)
Available-for-sale
gains taken to
equity 4 - -
Issue of shares in
lieu of bonus - 26 26
Impairment of
goodwill 111 - -
Loss on disposal of
property, plant and
equipment - - 3
Depreciation charge 115 74 163
Share-based payment
expense/(credit) 3 (180) (178)
Actuarial gain on
defined benefit
pension scheme
taken to equity - - 5
Pension liability - - (6)
Decrease/(increase)
in trade debtors 39 (40) 69
Increase/(decrease)
in trade creditors 28 (145) (589)
(Increase)/decrease
in commission
debtors (111) - 55
------------------ ------------- ------------
Net cash outflow
from trading
activities (122) (499) (466)
(Increase)/decrease
in loans and
advances to
customers (1,467) 4,586 (13)
Increase/(decrease)
in deposit
accounts 3,855 (4,602) 3,202
Cash
inflow/(outflow)
from operating
activities 2,266 (515) 2,723
------------------ ------------- ------------
CASH FLOW STATEMENT
Cash flows from
operating
activities
Cash
inflow/(outflow)
from operating
activities 2,266 (515) 2,723
Taxation paid - - -
------------------ ------------- ------------
Net cash
inflow/(outflow)
from operating
activities 2,266 (515) 2,723
Cash flows from
investing
activities
Purchase of tangible
fixed assets (70) (42) (179)
Sale of tangible
fixed assets 20 - 12
(Purchase)/sale of
available-for-sale
financial
instruments 8 (2,983) 9,989 2,723
Payment of deferred
consideration on
acquisition of
subsidiaries (158) - -
Acquisition of
subsidiaries net of
cash required (12) - (11,573)
------------------ ------------- ------------
Net cash
(outflow)/inflow
from investing
activities (3,203) 9,947 (9,017)
Cash flows from
financing
activities
Issue of ordinary
share capital - 1,903 1,903
Repayment of
subordinated
liabilities - (500) (500)
Issue of loan notes 500 1,710 1,710
------------------ ------------- ------------
Net cash inflow from
financing
activities 500 3,113 3,113
------------------ ------------- ------------
(Decrease)/increase
in cash and cash
equivalents (437) 12,545 (3,181)
Manx Financial Group PLC
Condensed Consolidated Statement of Changes in Equity
Retained
earnings Total Total Total
Share and other 30 June 30 June 31 Dec
Capital reserves 2011 2010 2010
Notes GBP000 GBP000 GBP000 GBP000 GBP000
------------------ --------- ----------- --------- --------- --------
Balance brought
forward 18,258 (9,638) 8,620 6,052 6,052
Loss for the
period/year - (357) (357) (289) (188)
Other
comprehensive
income - 4 4 - 5
Transactions with
owners:
Arising on shares
issued in the
period/ year 14 175 (175) - 1,929 2,404
Share-based
payment
expense/(credit) - 3 3 (180) 347
Balance carried
forward 18,433 (10,163) 8,270 7,512 8,620
Manx Financial Group PLC
Notes to the Consolidated Financial Statements
1. Preparation of the interim statements
The interim financial statements are unaudited. The financial
information included in this interim financial report for the six
months ended 30 June 2010 was also unaudited.
The interim financial statements have been prepared in
accordance with IAS 34 "Interim Financial Reporting". The
accounting policies (unless stated otherwise) have been applied
consistently with those presented in the Annual Report for the
twelve months to 31 December 2010 and comply with IFRSs and IFRIC
interpretations applicable to companies reporting under IFRS.
2. Interest income
For the
For the period For the
period ended year ended
ended 30 30 June 31 Dec
June 2011 2010 2010
GBP000 GBP000 GBP000
Interest income comprises: (unaudited) (unaudited) (audited)
Interest income - asset financing 3,503 2,222 4,973
Interest income - deposits 4 28 130
------------- ------------- ------------
Total 3,507 2,250 5,103
3. Segmental analysis
Segment information is presented in respect of the Group's
business segments. The Directors consider that the Group currently
operates in one geographic segment, the Isle of Man and UK. The
primary format, business segments, is based on the Group's
management and internal reporting structure. The Directors consider
that the Group operates in four product orientated segments in
addition to its investing activities: Asset and Personal Finance
(including provision of HP contracts, finance leases, personal
loans, commercial loans, block discounting and premium finance);
Litigation Finance; a Prepaid Card division, Conister Card
Services; and a Wealth Management division, Edgewater Associates
Limited. The Group ceased to provide new Litigation Finance lending
in June 2007.
Total
Asset and Conister 30
For the six months Personal Litigation Card Wealth Investing June
to 30 June 2011 Finance Finance Services Management Activities 2011
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Interest income
- asset financing 3,160 343 - - - 3,503
Interest income
- deposits 4 - - - - 4
Interest expense (970) - - - - (970)
------------- ----------- --------- ----------- ----------- -------
Net interest income 2,194 343 - - - 2,537
Operating income 1,871 343 279 618 - 3,111
Provision for
impairment (294) 194 - - - (100)
(Loss)/profit before
unallocated items (413) 538 183 98 - 406
Group central
costs - - - - (639) (639)
------------- ----------- --------- ----------- ----------- -------
Loss before specific
items (233)
------------- ----------- --------- ----------- ----------- -------
Capital
expenditure 70 - - - - 70
Total assets 66,062 1,543 183 590 115 68,493
------------- ----------- --------- ----------- ----------- -------
Asset
and Conister Total
Personal Litigation Card Investing 30 June
Finance Finance Services Activities 2010
For the six months
to 30 June 2010 GBP000 GBP000 GBP000 GBP000 GBP000
Interest income
- asset financing 2,103 119 - - 2,222
Interest income
- deposits 28 - - - 28
Interest expense (858) - - - (858)
--------- ----------- --------- ----------- -----------
Net interest income 1,273 119 - - 1,392
Operating income 979 119 348 - 1,446
Provision for
impairment 399 (75) - - 324
Profit/(loss) before unallocated
items 29 23 119 (31) 140
Group central
costs - - - - (429)
--------- ----------- --------- ----------- -----------
Loss before specific items (289)
--------- ----------- --------- ----------- -----------
Capital
expenditure 42 - - - 42
--------- ----------- --------- ----------- -----------
Total assets 54,080 187 281 319 54,867
--------- ----------- --------- ----------- -----------
Asset
For the twelve months and Conister Total
to Personal Litigation Card Wealth Investing 31 Dec
31 December 2010 Finance Finance Services Management Activities 2010
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Interest income -
asset financing 4,735 238 - - - 4,973
Interest income -
deposits 130 - - - - 130
Interest expense (1,866) - - - - (1,866)
--------- ----------- --------- ----------- ----------- --------
Net interest income 2,999 238 - - - 3,237
Operating income 2,357 238 579 621 - 3,795
Provision for
impairment 361 666 - - - 1,027
Profit/(loss) before
unallocated items 209 861 107 274 (200) 1,251
Group central costs - - - - - (1,165)
--------- ----------- --------- ----------- ----------- --------
Loss before specific
items 86
Capital expenditure 335 - - 1 - 336
--------- ----------- --------- ----------- ----------- --------
Total assets 61,042 1,011 116 2,245 174 64,588
--------- ----------- --------- ----------- ----------- --------
4.Depositors' Compensation Scheme
For the
For the period For the
period ended year ended
ended 30 30 June 31 Dec
June 2011 2010 2010
GBP000 GBP000 GBP000
Notes (unaudited) (unaudited) (audited)
Provision/(credit) in
respect of Kaupthing
Singer & Friedlander
(Isle of Man) Limited 11 74 (2) (2)
74 (2) (2)
On 27 May 2009, the Isle of Man Government Depositors'
Compensation Scheme ("the Scheme") was activated in connection with
the liquidation of Kaupthing Singer & Friedlander (Isle of Man)
Limited. A total of GBP150,000 had been paid into the scheme during
the prior year with a further call of GBP73,880 being made in the
period to 30 June 2011.
5. Restructuring costs
30 June 30 June 2010 31 Dec 2010
2011 GBP000 GBP000
GBP000 (unaudited) (unaudited) (audited)
Acquisition costs
Legal and professional
fees - - 181
Reorganisation of UK
operations Redundancy
costs 13 - 93
-------------------- ------------- ------------
13 - 274
-------------------- ------------- ------------
Acquisition and restructuring costs in prior periods related to
the purchase of Edgewater Associates Limited and ECF Asset Finance
PLC and the subsequent restructuring of the UK operation.
6. Loss per share
For the For the
period For the year ended
ended 30 period ended 31 Dec
June 2011 30 June 2010 2010
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Loss for the period/year (357) (289) (188)
Weighted average number of
ordinary shares in issue 88,824,754 64,373,206 76,143,178
Basic and diluted loss per
share (0.40)p (0.40)p (0.24)p
The basic loss per share calculation is based upon loss for the
period/year after taxation and the weighted average of the number
of shares in issue throughout the period/year.
There is no difference between basic and diluted loss per
share.
7.Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss represents
shares in a UK quoted company, designated at fair value through
profit or loss on initial recognition. The investment is stated at
market value with the difference between cost and market value
included within the Condensed Consolidated Statement of
Comprehensive Income.
8. Available-for-sale financial assets
30 June 31 Dec
2011 30 June 2010
GBP000 2010 GBP000
(unaudited) GBP000(unaudited) (audited)
UK Government Treasury Bills 10,289 - 7,292
------------- ------------------- -----------
10,289 - 7,292
UK Government Treasury Bills are stated at fair value and
unrealised changes in fair value are reflected in equity.
9. Loans and advances to customers
30 June 30 June 31 Dec
2011 2010 2010
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Hire purchase balances 28,563 24,131 29,358
Finance lease balances 7,011 1,416 9,886
Premium financing - 670 -
Litigation funding 1,543 187 1,011
Unsecured personal loans 4,243 5,369 3,080
Vehicle stocking plans 1,503 1,195 1,341
Block discounting 3,184 - 989
Secured commercial loans 3,887 - 2,802
------------- ------------- -----------
49,934 32,968 48,467
10. Trade and other receivables
30 June 30 June 31 Dec
2011 2010 2010
GBP000 GBP000 GBP000
Notes (unaudited) (unaudited) (audited)
Trade debtors 185 - 207
Prepayments and other debtors 225 410 242
VAT recoverable - 80 -
------------- ------------- -----------
410 490 449
11. Creditor and accrued charges
30 June 30 June 31 Dec
2011 2010 2010
GBP000 GBP000 GBP000
Notes (unaudited) (unaudited) (audited)
Creditors and accruals 741 582 672
Short-term employee
benefits 90 55 69
VAT payable 4 184 - 135
Redundancy costs - - 102
------------- ------------- -----------
1,015 637 978
12. Loan Notes
On 31 May 2011 MFG entered into a loan agreement with a related
party company guarantee by Burnbrae Limited for GBP0.5 million. The
loan is repayable within one year and bears interest at a rate of
3.5%p.a.
On 3 March 2010 MFG entered into a convertible loan agreement
with J Mellon for GBP1.25 million. The loan is convertible into
shares from the first anniversary of the loan drawdown at GBP0.09
per share and bears interest until conversion at a rate of 9%p.a.
MFG also entered into an identical agreement with Rock Holdings
Limited (a company linked to A Banks) for GBP0.46 million on 26
March 2010. No amounts have been exercised as at the date of these
Interim Financial Statements.
13. Goodwill, deferred consideration and acquisitions
30 June 30 June 31 Dec
2011 2010 2010
GBP000 GBP000 GBP000
Goodwill unaudited) (unaudited) (audited)
Edgewater Associates Limited 1,849 - 1,849
ECF Asset Finance PLC 565 - 565
Three Spires Insurance Services
Limited (see below) 41 - -
------------ ------------- -----------
2,455 - 2,414
Impairment
ECF Asset Finance PLC (111) - -
2,344 - 2,414
Following a detailed review of the acquired ECF loan book at 30
June 2011 an adjustment has been made to the fair value of the
assets acquired under the provisions of IFRS 3. A reduction of
GBP211,000 was made to the value of certain loan assets where
evidence from the review identified that the recoverable value
assumed at the date of acquisition was overstated.
Goodwill on the ECF acquisition was reviewed for impairment
based on anticipated future business and an impairment provision of
GBP111,000 was made in the period to 30 June 2011. The comparative
information presented in these Interim statements for 31 December
2010 has been adjusted to reflect the revised fair values.
30 June 30 June 31 Dec
2011 2010 2010
GBP000 GBP000 GBP000
Deferred consideration (unaudited) (unaudited) (audited)
Edgewater Associates Limited 317 - 475
Three Spires Insurance Services
Limited (see below) 20 - -
------------- ------------- -----------
337 - 475
Three Spires Insurance Services Limited
On 21 June 2011 Edgewater Associates Limited acquired the entire
share capital of Three Spires Insurance Services Limited, an
Independent Financial Advisor and General Insurance broker based in
the Isle of Man. Three Spires Insurance Services Limited ("Three
Spires") is regulated by both the Financial Supervision Commission
and the Insurance and Pensions Authority.
The following summarises the major classes of consideration
transferred, and the recognised amounts of assets acquired and
liabilities assumed at the acquisition date:
Consideration transferred GBP000
Cash 57
Deferred consideration 20
-------
77
Deferred consideration
The deferred element of the consideration is payable in cash
over the three month period from July to September 2011 on the last
day of the month.
Identifiable assets acquired
and liabilities assumed GBP000
Cash 45
Trade and other receivables 4
Trade and other payables (13)
-------
Total identifiable net assets 36
Goodwill GBP000
Total consideration transferred 77
Fair value of identifiable net
assets (36)
-------
Goodwill 41
The goodwill attributable to Three Spires is in relation to its
established IFA and General Insurance client base and the skills
and experience of its staff.
14. Called up share capital and share premium
Authorised: Ordinary shares
and no par value Number
At 31 December 2010 150,000,000
At 30 June 2011 150,000,000
Issued and fully paid: Ordinary
shares of no par value Number GBP000
At 31 December 2010 88,186,853 18,258
Issued in relation to deferred
consideration for acquisition
of Edgewater Associates 1,383,399 175
------------ -------
At 30 June 2011 89,570,252 18,433
15. Regulatory
The Company's wholly owned subsidiary Conister Bank Limited is
licensed to undertake banking activity by the Isle of Man
Government Financial Supervision Commission. The Financial
Supervision Commission reviews the appointment of all Directors of
Conister Bank Limited.
16. Contingent liabilities
Conister Bank Limited is required to be a member of the Isle of
Man Government Depositors' Compensation Scheme which was introduced
by the Isle of Man Government under the Banking Business
(Compensation of Depositors) Regulations 1991. The Scheme creates a
liability on the Company to participate in the compensation of
depositors should it be activated (note 4).
17. Related party transactions
Cash Deposits
During the period Conister Bank Limited held cash on deposit on
behalf of J Mellon and a company related to Denham Eke. Normal
commercial interest rates are paid on these deposits.
Subordinated loan and convertible loan notes
On 31 May 2011 MFG entered into a loan agreement with Burnbrae
Limited, a significant Shareholder, see note 12. Loan notes were
issued to two Directors on 3 March 2010, see note 12.
On 22 December 2008 the Bank entered into a subordinated loan
agreement for GBP500,000 with J Mellon. The loan was unsecured,
carried interest on commercial terms and no repayment of the loan
was necessary on the first five years. This loan was repaid on 3
March 2010.
Premium Finance (prior year)
Conister Bank had an agreement with Group Direct Limited, a UK
insurance broker, to provide premium financing of insurance
policies brokered by Group Direct. The majority of these policies
were issued by Southern Rock Insurance Company Limited. Lending
under this agreement ceased on 6 January 2010. The group provided
financing of GBP16,446 and earned interest income of GBP91,140
during 2010.
Group Direct Limited and Southern Rock Insurance Company Limited
are related parties of A Banks. A Banks is a Director and
significant shareholder of MFG.
Key management personnel (including Executive Directors')
compensation
30 June 30 June 31 Dec
2011 2010 2010
GBP000 GBP000) GBP000
(unaudited) (unaudited) (audited)
Short-term employee benefits 274 322 395
Share-based payments - 26 26
Total 274 348 421
The share-based payments expense in prior periods related to
shares issued in lieu of cash bonuses to two of the Executive
Directors.
18. Litigation
The Bank is vigorously pursuing the repayment of litigation
funding loans made to clients of other solicitor firms and further
litigation may be required in this regard. Counter claims have been
received and there is the possibility of litigation being
necessary. There is a risk of an adverse outcome in all litigation
and the costs and timescale to resolve these matters are
uncertain.
19. Approval of interim statements
The interim statements were approved by the Board on 15
September 2011. The interim report will be available from that date
at the Group's Registered Office: Conister House, Isle of Man
Business Park, Cooil Road, Braddan, Isle of Man, IM2 2QZ.
The Group's nominated adviser is Beaumont Cornish Limited, 2nd
Floor, Bowman House, 29 Wilson Street, London, EC2R 7DE. The
Group's broker is Fairfax I.S. PLC, 46 Berkeley Square, London, W1J
5AT. The Interim and Annual reports along with other supplementary
information of interest to Shareholders, are included on our
website. The address of the website is www.mfg.im which includes
investor relations information and contact details.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QZLFFFKFLBBD
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