TIDMMFX
RNS Number : 1617W
Manx Financial Group PLC
17 August 2015
FOR IMMEDIATE RELEASE 17(th) August 2015
Manx Financial Group PLC
Unaudited Interim Results for the 6 months ended 30 June
2015
Manx Financial Group PLC (LSE: MFX), the financial services
Group which includes Conister Bank Limited, Conister Card Services
Limited, and Edgewater Associates Limited, presents its interim
results for the six months ended 30 June 2015. Copies of the
Interim Report will shortly be available on our website
www.mfg.im.
Financial Highlights
Profit before GBP1.01 million - up 33% (2014: GBP0.76 million)
tax:
Net interest GBP6.87 million - up 36% (2014: GBP5.05 million)
income:
Operating GBP4.53 million - up 19% (2014: GBP3.8 million)
income:
Total assets: GBP126.17 million - up 24% (2014: GBP101.68
million)
Loans: GBP92.53 million - up 11% (2014: GBP83.07
million)
Customer GBP105.67 million - up 25% (2014: GBP84.51
accounts: million)
Total equity: GBP10.89 million - up 18% (2014: GBP9.25
million)
Contacts:
Manx Financial Group PLC
Denham Eke, Chief Executive
Tel: +44 (0)1624 694694
Britton Financial PR
Tim Blackstone
Tel: +44 (0)7957 140416
Beaumont Cornish Limited
Roland Cornish/Felicity Geidt
Tel: +44 (0)20 7628 3396
The financial information set out below comprises non-statutory
accounts. The financial information has been extracted from
published accounts for the six months ended 30 June 2015.
Dear Shareholders,
2015 Group Interim Results
I am pleased to announce that 2015 produced another record
interim profit before income tax of GBP1.01 million (2014: GBP0.76
million), a growth of 33%. After taxation, the profit for the
period was GBP0.89 million (2014: GBP0.72 million), a growth of
23%. As a result, our basic earnings per share were 0.87 pence
(2014: 0.71 pence) and 0.54 pence on a fully diluted basis (2014:
0.47 pence). Our total assets stand at GBP126.17 million (2014:
GBP101.68 million) and shareholder equity stands at GBP10.89
million (2014: GBP9.25 million), a growth of 24% and 18%
respectively. On an annualised basis, our return on equity at 16.3%
shows a continued improvement (2014 full year: 15.6%).
Manx Financial Group PLC
Our main operating subsidiaries, Conister Bank Limited and
Edgewater Associates Limited, continue to show excellent growth. In
the last twelve months the Group has also been incubating new
business streams to extend and diversify our product range. In
particular, we have formed Manx FX Limited to provide commercial
foreign exchange broking solutions; Manx Financial Solutions PCC
plc to provide retail and commercial loan broking services; Manx
Incahoot Limited to provide alternative payment solutions for both
the public and private sectors; and Manx Financial Limited, a
partnership to provide asset finance backed by our own capital. All
these initiatives are still in their infancy and we believe they
will make a positive contribution to the Group's performance in the
coming years. The set-up costs for each of these operations have
already been expensed within the first half. Our strategy, however,
is not only driven by a reliance on organic growth as we continue
to look for suitable acquisitions and partnerships to provide an
incremental business fit.
In the UK, consumer finance industry regulation changed from 1
April 2014 and the Financial Conduct Authority replaced the Office
of Fair Trading as the new regulator of consumer credit related
undertakings. The Group has Interim Permissions for all
subsidiaries engaged in this activity. We submitted our initial
application for Full Authorisation on behalf of Conister Bank in
May 2015, which will be followed by applications for the remaining
subsidiaries in the second half of 2015. All our applications will
be dealt with under a six month authorisation process.
Providing the utmost quality of service and treating customers
fairly has been the Group's continuing cornerstone since we started
out in 1935. Over time, we have developed and implemented formal
policies and procedures to ensure that the highest standards of
regulatory compliance are maintained. To further strengthen our
prudential governance and risk management, we have invested in
additional headcount to train and monitor the performance of all
staff in these essential areas. We are also in the process of
reviewing our existing IT platforms throughout to keep abreast of
the new functionality that is available to both enhance customer
experience and provide back-office efficiencies. Further investment
in this area will also allow us to differentiate our overall
product range and promote scalability, thus helping minimise any
pressure on our cost-base as we grow.
For a long time we have believed our VAT recovery rate at
Conister Bank to be neither fair nor reasonable. As a result, we
continue to carry a VAT debtor of GBP589,000 in relation to ongoing
negotiations with the Isle of Man Customs & Excise Division
('C&E'). In parallel, Volkswagen Financial Services Limited
('VWFS') have taken HM Revenue & Customs ('HMRC') to Court on a
substantially similar matter and we have agreed with C&E that
we will await the outcome of this case before proceeding with our
own. On 31 July 2015, the Court of Appeal overturned the Upper
Tribunal's decision and ruled in favour of VWFS. At this time it is
uncertain if HMRC will apply for permission to appeal, and if so,
whether their request will be granted. This recent judgement,
however, can only be seen as a positive outcome for us.
Conister Bank Limited
Interest income for our banking subsidiary grew by 31% to
GBP8.37 million (2014: GBP6.42 million) with operating income
increasing by 17% to GBP4.03 million (2014: GBP3.45 million) on a
loan book of GBP92.53 million (2014: GBP83.07 million). Overheads
increased by GBP0.31 million reflecting the increase in headcount
in our risk, compliance and internal audit teams' staffing to
ensure our anticipated growth is suitably controlled and prudently
managed. Our Integrated Wholesale Funding Arrangements continue to
prove popular with the market and underpinned our loan book growth
of 11% to GBP92.45 million (2014: GBP82.99 million). Whilst we
increased provisions by GBP0.14 million, our total provisioning as
a percentage of our loan book has decreased by 0.2% to 2.3% (2014:
2.5%). We match the maturity periods of our loan and deposit books
to the greatest extent possible which will help provide insulation
to the anticipated increase in interest rates expected in 2016. Our
depositors remain granular and loyal and this aspect of our
business will not restrict our growth ambitions. Our loan book is
based on strong collateral without large single exposures. We
continue to maintain our regulatory capital obligation in
sufficient surplus to support our projected growth.
The conclusion of the first half also saw the retirement of Don
McCrickard as Chairman of Conister Bank and independent
non-executive director of the Group board, a position he has held
since 2007. I would like to take this opportunity of thanking him
for his unstinting support as we restored profitability, wish him
well for the future and to also formally welcome Neil Duggan as the
Bank's new Chairman, joining the Group board as independent
non-executive director.
Edgewater Associates Limited
Our recent restructuring of Edgewater Associates continues to
bear fruit with the company generating record profits during the
period. Assets under management increased by 24% to GBP165.73
million (2014: GBP132.79 million). This formed the basis of a 23%
increase in commission income to GBP0.69 million (2014: GBP0.57
million). We have reduced operational costs to GBP0.51 million
(2014: GBP0.62 million), a decrease of 17%. As a result,
profitability increased 621% to GBP0.20 million (2014: loss of
GBP0.04 million). Edgewater Associates' balance sheet continues to
strengthen with total equity increasing by 62% to GBP1.00 million
(2014: GBP0.62 million), an increase in shareholder equity of 377%
since we acquired this business in 2010.
Our strategy of focusing on renewable commission income to
reduce earnings volatility and to drive growth has proved
successful. Our new business pipeline remains strong and we are in
the process of enhancing our IT platform to provide comprehensive
and customised reporting to customers. We continue to recruit
qualified and experienced Independent Financial Advisors ('IFA') to
ensure that the very best advice is given, a common thread that
links all of our operations. We intend to supplement this growth by
our continuous review of other profitable IFA businesses on the
Isle of Man as we wish to act as a consolidator in this market.
Edgewater Associates will move its offices to join the Group's
headquarters in September 2015. Apart from a rental saving, having
all our Isle of Man operations under one roof will ensure a
conformity of standards and simplify administration, providing an
enhanced customer experience.
Outlook
The Group has delivered excellent profitability for the first
half of 2015 and I have every confidence that the full year will
see this momentum maintained. Our new business opportunities remain
strong and we will continue to manage our operational costs as
prudently as possible.
We welcome the enhanced regulatory framework in which we
operate, emphasising as it does the necessity to treat the
customers fairly, already a fundamental tenet of our business. Thus
we are well positioned to more than meet these regulatory
requirements and they will not dampen our expectations for further
sustainable growth.
Our clear vision for the Group's future combines organic growth
with the development of complementary business lines.
Notwithstanding, we are always on the lookout for meaningful and
affordable acquisitions as we continue our diversification into an
integrated banking and financial services group.
Jim Mellon
Executive Chairman
13 August 2015
Condensed Consolidated Income Statement
For the For the
6 6 For the
months months
ended ended year ended
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
Notes (unaudited) (unaudited) (audited)
---------------------------- ------ -------------------- -------------------- --------------------
Interest income 2 8,374 6,416 13,634
Interest expense (1,504) (1,370) (2,809)
Net interest income 6,870 5,046 10,825
Fee and commission income 770 576 1,276
Profit / (loss) on joint
venture 5 - (2)
Fee and commission expense (550) (491) (1,102)
Commission share schemes (2,601) (1,424) (3,749)
Net trading income 4,494 3,707 7,248
Other operating income 40 90 97
Operating income 4,534 3,797 7,345
Personnel expenses (1,751) (1,427) (2,931)
Other expenses (1,110) (1,016) (1,950)
Provision for impairment
on loan assets (634) (493) (550)
Depositors' Compensation
Scheme recovery - - 11
Depreciation (89) (130) (228)
Amortisation 11 (17) - -
Realised gains on
available-for-sale
financial assets 40 - 32
Unrealised gain / (loss)
on financial assets
carried
at fair value 34 24 (1)
Profit before income tax
expense 1,007 755 1,728
Income tax expense (118) (35) (139)
Profit for the period /
year 889 720 1,589
-------------------- -------------------- --------------------
Basic earnings per share
(pence) 4 0.87 0.71 1.56
Diluted earnings per share
(pence) 4 0.54 0.47 0.98
Condensed Consolidated Statement of Other Comprehensive
Income
For the For the
6
For the year ended
months 6 months
ended ended
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
Notes (unaudited) (unaudited) (audited)
------------------------------------- ------ ------------- ------------- --------------------
Profit for the period /
year 889 720 1,589
Other comprehensive income:
Items that will be reclassified
to profit or loss
Available for sale gains
taken to equity - - 6
Items that will never be
reclassified to profit
or loss
Actuarial losses on defined
benefit pension scheme
taken to equity - - (173)
------------- ------------- --------------------
Total comprehensive income
for the period / year attributable
to Shareholders 889 720 1,422
------------- ------------- --------------------
Basic earnings per share
(pence) 4 0.87 0.71 1.39
Diluted earnings per share
(pence) 4 0.54 0.47 0.89
Condensed Consolidated Statement of Financial Position
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
As at Notes (unaudited) (unaudited) (audited)
--------------------------------- ------- ------------- ------------- -----------
Assets
Cash and cash equivalents 5,603 2,982 6,123
Financial assets at a fair
value through profit or
loss 5 81 72 47
Available for sale financial
instruments 6 22,771 10,974 18,775
Loans and advances to customers 7 92,532 83,071 89,338
Commissions receivable 322 288 326
Property, plant and equipment 654 644 605
Intangible assets 11 83 - -
Trade and other receivables 8 1,005 944 1,166
Investment in joint venture 505 - 499
Deferred tax asset 167 359 284
Goodwill 11 2,444 2,344 2,344
Total assets 126,167 101,678 119,507
Liabilities
Customer accounts 105,671 84,509 100,259
Creditors and accrued charges 9 2,050 1,297 1,715
Loan notes 10 7,115 6,415 7,165
Deferred consideration 11 100 - -
Pension liability 339 203 388
Total liabilities 115,275 92,424 109,527
Equity
Called up share capital 12 18,933 18,933 18,933
Profit and loss account (8,041) (9,679) (8,953)
Total equity 10,892 9,254 9,980
Total liabilities and equity 126,167 101,678 119,507
Condensed Consolidated Statement of Cash Flows
For the
For the
6 months
ended year ended
For the
6 months
ended
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
--------------------------------- ---- --- ------------- ------------- ------------
RECONCILIATION OF PROFIT
BEFORE
TAXATION TO OPERATING CASH
FLOWS
Profit before tax on continuing
activities 1,007 755 1,728
Unrealised (gain) / loss
on financial assets carried
at fair value (34) (24) 1
Gain on disposal of property,
plant and equipment - (6) (5)
(Profit) / loss on joint
venture (5) - 2
Depreciation charge 89 130 228
Amortisation charge 17 - -
Realised gains on available
for sale investments (40) - (32)
Actuarial loss on defined
benefit pension scheme
taken to equity - - (173)
(Reduction) / increase
in pension liability (49) (49) 136
Share-based payment expense 23 - 24
Decrease / (increase) in
trade and other receivables 161 70 (152)
Increase in creditor and
accrued charges 335 543 934
Decrease / (increase) in
commission debtors 4 1 (37)
Net cash inflow from trading
activities 1,508 1,420 2,654
Increase in loans and advances
to customers (3,194) (7,252) (13,519)
Increase in deposit accounts 5,412 6,394 22,144
Cash inflow from operating
activities 3,726 562 11,279
For the
For the
6 months
ended year ended
For the
6 months
ended
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
--- --- ------------- ------------- ------------
CASH FLOW STATEMENT
Cash flows from operating
activities
Cash inflow from operating
activities 3,726 562 11,279
Taxation paid - - -
Net cash inflow from operating
activities 3,726 562 11,279
Cash flows from investing
activities
Purchase of property, plant
and equipment (138) (147) (208)
Purchase of available for
sale financial instruments (3,957) (1,974) (9,737)
Acquisition of Manx Incahoot (101) - -
business
Sale of property, plant
and equipment - 8 7
Investment in joint venture - - (501)
Net cash outflow from investing
activities (4,196) (2,113) (10,439)
Cash flows from financing
activities
Issue of loan notes 150 350 1,100
Repayment of loan notes (200) - -
Net cash (outflow) / inflow
from financing activities (50) 350 1,100
(Decrease) / increase in
cash and cash equivalents (520) (1,201) 1,940
-------- -------- ---------
Included in cash flows
are:
Interest received - cash
amounts 8,267 6,251 13,360
Interest paid - cash amounts (1,499) (1,369) (2,802)
Condensed Consolidated Statement of Changes in Equity
Total Total
Retained Total 30 June 31 Dec
30 June
earnings 2015 2014 2014
and
Share other
capital reserves GBP000 GBP000 GBP000
GBP000 GBP000 (unaudited) (unaudited) (audited)
------------------------- --------- ----------- ------------- ------------- -----------
Balance brought forward 18,933 (8,953) 9,980 8,534 8,534
Profit for the period
/ year - 889 889 720 1,589
Other comprehensive
income - - - - (167)
Transactions with
Shareholders:
Share-based payment
expense - 23 23 - 24
Balance carried forward 18,933 (8,041) 10,892 9,254 9,980
Notes to the Consolidated Financial Statements
1. Preparation of the interim statements
The financial information included in this interim financial
report for the six months ended 30 June 2015 is unaudited.
The interim financial statements have been prepared in
accordance with IAS 34 "Interim Financial Reporting". The
accounting policies have been applied consistently with those
presented in the Annual Report for the year ended 31 December 2014
and comply with IFRSs and IFRIC interpretations applicable to
companies reporting under IFRS.
2. Interest income
Interest income represents charges and interest on finance and
leasing agreements attributable to the period or year after
adjusting for early settlements and interest on bank balances.
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 British Isles (United
Kingdom and Isle of Man). The primary business segments are 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
other specialised secured credit facilities); a Prepaid Card
division, Conister Card Services Limited and Incahoot Limited; a
Wealth Management division, Edgewater Associates Limited; and
Foreign Exchange, Manx FX Limited.
Asset Prepaid Wealth Total
and
Personal Card Management Foreign Investing 30 June
2015
For the 6 months Finance Division Division Exchange Activities GBP000
ended 30 June
2015
GBP000 GBP000 GBP000 GBP000 GBP000 (unaudited)
Net interest
income /
(expense) 7,085 - - - (215) 6,870
Operating income
/ (loss) 4,034 (10) 699 26 (215) 4,534
Profit / (loss)
before income
tax
expense 1,166 (82) 198 (94) (181) 1,007
Capital
expenditure 124 102 - - 13 239
Total assets 125,001 312 758 27 69 126,167
Asset Prepaid Wealth Total
and
Personal Card Management Foreign Investing 30 June
2014
For the 6 months Finance Division Division Exchange Activities GBP000
ended 30 June
2014
GBP000 GBP000 GBP000 GBP000 GBP000 (unaudited)
Net interest
income /
(expense) 5,258 - - - (215) 5,046
Operating income
/ (loss) 3,482 (53) 576 - (208) 3,797
Profit / (loss)
before income
tax
recovery /
(expense) 1,562 (76) (38) - (693) 755
Capital
expenditure 132 - 15 - - 147
Total assets 100,596 106 902 - 12 101,616
Asset Prepaid Wealth Total
and
Personal Card Management Litigation Investing 31 Dec
2014
For the year Finance Division Division Finance Activities GBP000
ended 31 December
2014
GBP000 GBP000 GBP000 GBP000 GBP000 (audited)
Net interest
income 10,825 - - - - 10,825
Operating income 6,198 (108) 1,255 - - 7,345
Profit / (loss)
before income
tax
(expense) /
recovery 1,733 (150) 146 45 (46) 1,728
Capital expenditure 183 - 25 - - 208
Total assets 118,515 106 824 - 62 119,507
4. Earnings per share
For the
For the
6 months
ended year ended
For the
6 months
ended
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
(unaudited) (unaudited) (audited)
Profit for the period / year 889 720 1,589
---------------------------------------- ------------- ------------- ------------
Weighted average number of
ordinary shares in issue 102,070,252 102,070,252 102,070,252
Basic earnings per share 0.87p 0.71p 1.56p
Diluted earnings per share 0.54p 0.47p 0.98p
Total comprehensive income
for the period / year 889 720 1,422
---------------------------------------- ------------- ------------- ------------
Weighted average number of
ordinary shares in issue 102,070,252 102,070,252 102,070,252
Basic earnings per share 0.87p 0.71p 1.39p
Diluted earnings per share 0.54p 0.47p 0.89p
The basic earnings per share calculation is based upon the
profit for the period / year after taxation and the weighted
average of the number of shares in issue throughout the period /
year.
The diluted earnings per share calculation assumes that all
convertible loan notes, warrants and share options have been
converted / exercised at the beginning of the period where they are
dilutive.
5. Financial assets at fair value through profit or loss
The investment represents shares in a UK quoted company which
was elected to be classified as a financial asset at fair value
through profit or loss. The investment is stated at market value
and is classified as a level 1 investment in the IFRS 13 fair value
hierarchy. The cost of the shares was GBP471,000. The unrealised
difference between cost and market value has been taken to the
income statement. Dividend income of GBP350,000 has been received
from this investment since it was made.
6. Available for sale financial instruments
Available for sale financial instruments comprise UK Government
Treasury Bills which are stated at fair value and unrealised
changes in the fair value are reflected in equity.
7. Loans and advances to customers
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
As at (unaudited) (unaudited) (audited)
Hire purchase balances 54,932 48,306 51,178
Finance leases balances 11,615 8,825 10,708
Unsecured personal loans 3,966 2,557 3,366
Vehicle stocking plans 1,057 1,465 1,284
Block discounting 6,828 6,604 6,766
Secured commercial loans 6,497 8,922 7,285
Secured personal loans 7,637 6,392 8,751
92,532 83,071 89,338
8. Trade and other receivables
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
As at (unaudited) (unaudited) (audited)
Trade debtors 228 232 428
Prepayments and other debtors 311 246 272
VAT claim 466 466 466
1,005 944 1,166
Included in trade and other receivables is an amount of
GBP466,000 (30 June & 31 December 2014: GBP466,000) relating to
a reclaim of value added tax (VAT).
Conister Bank Limited (the Bank), as the Group VAT registered
entity, has for some time considered the VAT recovery rate being
obtained by the business as neither fair nor reasonable,
specifically regarding the attribution of part of the residual
input tax relating to the HP business not being considered as a
taxable supply. Queries have been raised with the Isle of Man
Government Customs & Excise Division ("C&E"), and several
reviews of the mechanics of the recovery process were undertaken by
the Company's professional advisors.
The decision of the First-Tier Tax Tribunal released 18 August
2011 in respect of Volkswagen Financial Services (UK) Limited v HM
Revenue & Customs (TC01401) ("VWFS Decision") added significant
weight to the case put by the Bank and a request for a revised
Partial Exemption Special Method was submitted in December 2011.
The proposal put forward by the Bank was that the revised method
would allocate 50% of costs in respect of HP transactions to a
taxable supply and 50% to an exempt supply. In addition at this
time a Voluntary Disclosure was made as a retrospective claim for
input VAT under-claimed in the last 4 years.
In November 2012, it was announced that the HMRC Upper Tribunal
had overturned the First-Tier Tribunal in relation to the VWFS
Decision. VWFS has subsequently been given leave to appeal and this
was scheduled to be heard in October 2013. However, this was
delayed by HMRC pending reference to a relevant European Court of
judgement in the case of Banco Mais (C183/13). The judgement in
this case was released on 10 July 2014 and ruled against the
taxpayer; however the impact of the judgement on the VWFS case was
unclear and VWFS continued to appeal to the Court of Appeal. The
case was heard by the court of appeal on 17 April 2015 who
overturned the Upper Tribunal's decision ruling in favour of VWFS.
The Bank now awaits to see whether HMRC will appeal this
decision.
The Bank's total exposure in relation to this matter is
GBP589,000, comprising the debtor balance referred to above plus an
additional GBP123,000 VAT reclaimed under the partial Exemption
Special Method, in the period from Q4 2011 to Q3 2012 (from Q4 2012
the Bank reverted back to the previous method). On the basis of the
discussions and correspondence which have taken place between the
Bank and C&E, in addition to the VWFS appeal, the Directors are
confident that the VAT claimed referred to above will be
secured.
9. Creditors and accrued charges
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
As at (unaudited) (unaudited) (audited)
Commission creditors 1,610 996 1,389
Other creditors and accruals 440 301 326
2,050 1,297 1,715
10. Loan notes
30 June 30 June 31 Dec
2015 2014 2014
GBP000 GBP000 GBP000
As at Notes (unaudited) (unaudited) (audited)
Related parties
J Mellon JM 1,750 1,750 1,750
Burnbrae Limited BL 1,200 1,200 1,200
Southern Rock Insurance
Company Limited SR 460 460 460
Copper Development Corporation CDC 500 500 500
3,910 3,910 3,910
Unrelated parties UP 3,205 2,505 3,255
7,115 6,415 7,165
JM - Two loans, one of GBP500,000 maturing on 31 July 2017 with
interest payable of 7% per annum, and one of GBP1,250,000 maturing
on 26 February 2020, paying interest of 6.5% per annum. Both loans
are convertible at the rate of 4 pence and 9 pence respectively. JM
is also entitled to 8.3 million warrants at an exercise price of 6
pence which lapse on 31 July 2017.
BL - One loan consisting of GBP1,200,000 maturing on 31 July
2017 with interest payable of 7% per annum. Jim Mellon is the
beneficial owner of BL and Denham Eke is also a director. The loan
is convertible at a rate of 4 pence. BL is also entitled to 20
million warrants at an exercise price of 6 pence which lapse on 31
July 2017.
SR - One loan consisting of GBP460,000 maturing on 26 February
2020 with interest payable of 6.5% per annum. The loan is
convertible at a rate of 9 pence. SR is also entitled to 8.3
million warrants on a previously converted loan note at an exercise
price of 6 pence which lapse on 24 October 2017. Arron Banks, a
significant Shareholder, holds a major stake in SR. John Banks, a
non-executive Director is also a director of SR.
CDC - One loan of GBP350,000 maturing on 5 September 2017 with
interest payable of 5% per annum, and another loan of GBP150,000
maturing on 3 October 2017 paying interest of 5% per annum. Denham
Eke is a director of CDC.
UP - Fourteen loans consisting of an average GBP228,929, with an
average interest payable of 5.54% per annum. The earliest maturity
date is 1 October 2015 and the latest maturity is 30 April
2020.
With respect to the convertible loans, the interest rate applied
was deemed by the Directors to be equivalent to the market rate at
that time with no conversion option hence no equity component has
been recognised with respect to any of these loans.
11. Goodwill and intangible assets
30 June 30 June 31 Dec
2015 2014 2014
Goodwill GBP000 GBP000 GBP000
As at (unaudited) (unaudited) (audited)
Edgewater Associates Limited 1,849 1,849 1,849
ECF Asset finance PLC 454 454 454
Manx Incahoot Limited 100 - -
Three Spires Insurance Services
Limited 41 41 41
2,444 2,344 2,344
30 June 30 June 31 Dec
2015 2014 2014
Intangible assets GBP000 GBP000 GBP000
As at (unaudited) (unaudited) (audited)
Balance brought forward - - -
Acquired in period 100 - -
Amortisation in period / year (17) - -
83 - -
On 13 March 2015, a newly incorporated subsidiary of the Group
acquired the business of Incahoot Limited, which is a company
invested in prepaid debit cards, comparison and discount sites in
England and Wales. These assets included intangibles of business
intellectual property rights, valued at GBP24,000, and a customer
contract assigned, valued at GBP76,000. The customer contract is
amortised over the term of the agreement. Up to 30 June 2015,
GBP17,000 has been amortised. Therefore the net book value of
intangibles is GBP83,000.
In addition to the aforesaid purchases, further deferred
contingent consideration, subject to a maximum of GBP100,000, is
due to the vendor on any pipeline business being realised post
acquisition within 2 years of the acquisition date. As at 30 June
2015, no pipeline business had been realised but the full deferred
consideration is still estimated to be paid.
30 June
2015
Acquisition of Manx Incahoot business GBP000
As at (unaudited)
Fair value of consideration:
* Cash 101
* Deferred consideration 100
----
201
Fair value of separable assets
and liabilities acquired:
* Customer contract 76
* Intellectual property 24
* Property, plant and equipment 1
----
(101)
Goodwill on acquisition 100
12. Called up share capital
Authorised: ordinary shares of no par Number
value
--------------------------------------- ------------
At 30 June 2014 150,000,000
At 31 December 2014 150,000,000
At 30 June 2015 150,000,000
--------------------------------------- ------------
Issued and fully paid: ordinary shares Number GBP000
of no par value
---------------------------------------- ------------ -------
At 30 June 2014 102,070,252 18,933
At 31 December 2014 102,070,252 18,933
At 30 June 2015 102,070,252 18,933
---------------------------------------- ------------ -------
There are a number of convertible loans at 30 June 2015 of
GBP3.41 million (30 June and 31 December 2014: GBP3.41 million)
including warrants of 28.3 million (30 June and 31 December 2014:
28.3 million) (see note 10 for further details). The total number
of warrants in issue at 30 June 2015 is 36.6 million (30 June and
31 December 2014: 36.6 million) (see note 10 for further
details).
On 23 June 2014, 1.75 million share options were issued to
Executive Directors and senior management within the Group at an
exercise price of 14 pence. The options vest over three years with
a charge based on the fair value of 8 pence per option at the date
of grant.
13. Regulator
Conister Bank Limited is licensed to undertake banking
activities and Edgewater Associates Limited is licensed to conduct
investment business by the Isle of Man Financial Supervision
Commission.
14. Contingent Liabilities
Conister Bank Limited is required to be a member of the Isle of
Man Government Depositors' Compensation Scheme (the 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.
15. Approval of Interim Statements
The Interim Statements were approved by the Board on 13 August
2015. The interim report will be available from that date at the
Group's website - www.mfg.im and at the Registered Office:
Clarendon House, Victoria Street, Douglas, Isle of Man, IM1 2LN.
The Group's nominated adviser and broker is Beaumont Cornish
Limited, 2nd Floor, Bowman House, 29 Wilson Street, London, EC2M
2SJ. The Interim and Annual reports along with other supplementary
information of interest to Shareholders, are included on the
Group's website. The website includes investor relations
information and contact details.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRGDIXSBBGUS
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