Final Results

RNS Number : 4941J

Frenkel Topping Group PLC

31 March 2010

 



FRENKEL TOPPING GROUP PLC

(the "Group" or the "Company")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009

Frenkel Topping Limited ("Frenkel Topping") is the trading subsidiary of Frenkel Topping Group Plc.  Frenkel Topping provides specialist independent financial advice on the investment of personal injury damages and clinical negligence awards. Frenkel Topping offers a complete service for all personal injury claims handlers, lawyers and individual clients, dealing with awards from a few thousand pounds to multi-million pound cases.  Frenkel Topping's expertise includes asset protection, bespoke investment portfolios, analysis of periodical payments, Court of Protection portfolios and provision and setting up of trustee and receivership bank accounts.

Financial Highlights

	Year ended 31 Dec 2009	Year ended 31 Dec 2008
Revenue	£2,992,803	£2,637,238
Gross Profit Profit from operations before share based compensation and provisions Profit before taxation	£1,441,278 £208,211 £123,437	£1,448,800 £196,461 £79,478
Cash generated from/(used in) operations	£175,389	£(5,641)
Funds in the Investment Management Service	£247m	£207m
Recurring Income	£1.6m	£1.4m

For further information:-

Frenkel Topping Group plc	Richard Fraser (Chief Executive) Tel No:  0161 886 8000
WH Ireland Limited	Robin Gwyn Tel No:  0161 832 2174

CHAIRMAN'S STATEMENT

Results

Despite continuing global financial uncertainty the Group is pleased to report a profit from operations before share based compensation of £208,211 (2008: £196,461) and a profit before taxation of £123,437 (2008: £79,478).  The second half of the year has proven to be much stronger than the first period.

The Group's income is derived from both the fees and the commission on our client's initial investment and the recurring income from servicing the client's portfolios within the Funds in the Investment Management Service (FIMS).  The Group revenue of £3.0m (£2008: £2.6m) includes the fees and the commission of £1.4m (2008: £1.2m) and £1.6m (2008: £1.4m) of the recurring income from FIMS.

The total FIMS has risen to £247m as at 31 December 2009 from £207m at the commencement of the year.  This increase is a very pleasing outcome and should ensure that our recurring income continues to increase over future years.  As a result we expect the recurring income to exceed £1.8m in 2010.

The Group generated £175,389 of cash from its operating activities during the year (2008: cash absorbed of £5,641) and the net asset value of the Group before non controlling interests as at 31 December 2009 was £4,774,008 (2008: £4,686,645). The Group is operating well within its current bank facilities and the Board expects this situation to continue into the future.

 

Dividends

The Board does not propose a dividend.

Prospects

The Group's aim is to increase the recurring income from FIMS and to continue to focus on revenue generation and cost control.  This strategy is showing signs of success, as demonstrated by the stronger performance in the latter half of 2009.  The Board believes that further progress can be made in future years in order to enhance shareholder value in the Group.

GROUP INCOME STATEMENT

For the year ended 31 December 2009

		2009	2008
	Notes	£	£
REVENUE		2,992,803	2,637,238
Direct staff costs		(1,551,525)	(1,188,438)
GROSS PROFIT		1,441,278	1,448,800
ADMINISTRATIVE EXPENSES
Share based compensation		(43,812)	(77,186)
Other		(1,233,067)	(1,252,339)
TOTAL ADMINISTRATIVE EXPENSES		(1,276,879)	(1,329,525)
Profit from operations before share based compensation		208,211	196,461
- share based compensation		(43,812)	(77,186)
profit from operations		164,399	119,275
Finance costs		(40,962)	(39,797)
profit BEFORE TAX		123,437	79,478
Income tax expense	4	(63,770)	(35,468)
profit and total comprehensive INCOME for the year		59,667	44,010
profit and total comprehensive INCOME ATTRIBUTABLE TO:
Owners of parent undertaking		34,987	34,923
Non controlling interest		24,680	9,087
		59,667	44,010
Earnings per ordinary share - basic (pence)	5	0.06p	0.06p
Earnings per ordinary share - diluted (pence)	5	0.06p	0.06p

The results for the period are derived from continuing activities.

GROUP STATEMENT OF FINANCIAL POSITION

As at 31 December 2009

		2009			2008
					(restated see note 6)
		£			£
assets NON CURRENT ASSETS
Goodwill Property, plant and equipment		5,095,287 28,697			5,095,287 42,072
Deferred taxation		20,675			35,075
		5,144,659			5,172,434
CURRENT ASSETS
Accrued income Trade receivables Other receivables		551,891 369,032 77,567			426,653 240,298 89,470
Cash		40			19
		998,530			756,440
total assets		6,143,189			5,928,874
equity and liabilities equity Share capital Share premium account Treasury share reserve Retained losses Other reserve		274,146 5,744,876 (16,667) (1,241,344) 12,997			273,915 5,744,876 (25,000) (1,320,143) 12,997
equity attributable to holder of parent		4,774,008			4,686,645
Non controlling interests		134,484			109,804
TOTAL EQUITY		4,908,492			4,796,449
NON CURRENT LIABILITIES Other payables Financial liabilities		25,000 -			50,000 208,214
		25,000			258,214
CURRENT LIABILITIES Amounts due to bankers and short term financial liabilities Current taxation Trade and other payables Provisions		379,409 90,894 707,495 31,899			244,354 101,941 463,810 64,106
		1,209,697			874,211
TOTAL LIABILITIES		1,234,697			1,132,425
TOTAL EQUITY AND LIABILITIES		6,143,189			5,928,874

GROUP STATEMENT OF CHANGE IN EQUITY

For the year ended 31 December 2009

	Share Capital	Share Premium	Treasury share reserve	Retained Losses	Other reserve	Non controlling Interests	Total
	£	£	£	£	£	£	£
Balance 1 January 2008 - as previously reported	273,915	5,744,876	(25,000)	(1,371,087)	12,997	113,421	4,749,122
Prior period adjustment (note 6)	-	-	-	(61,165)	-	(12,704)	(73,869)
	_______	__________	_______	___________	__________	__________	__________
Balance 1 January 2008 - restated	273,915	5,744,876	(25,000)	(1,432,252)	12,997	100,717	4,675,253
Share based compensation	-	-	-	77,186	-	-	77,186
Profit and total comprehensive income for the period	-	-	-	34,923	-	9,087	44,010
	_______	__________	_______	___________	__________	__________	__________
Balance 1 January 2009	273,915	5,744,876	(25,000)	(1,320,143)	12,997	109,804	4,796,449
New shares issued	231	-		-	-	-	231
Transfer of shares arising on exercise of options	-	-	8,333	-	-	-	8,333
Share based compensation	-	-	-	43,812	-	-	43,812
Profit and total comprehensive profit for the period	-	-	-	34,987	-	24,680	59,667
	_______	__________	_______	___________	__________	__________	__________
Balance 31 December 2009	274,146	5,744,876	(16,667)	(1,241,344)	12,997	134,484	4,908,492
	=============	================	=============	===================	=================	================	================

The share capital reserve represents the number of shares issued at nominal value.

The share premium reserve represents the amount received for shares issued over and above the nominal value of the shares issued.

The treasury share reserve represents the cost of 708,315 shares held by FTG EBT Trustees Limited, a subsidiary of Frenkel Topping Group Plc.  The open market value of the shares held at 31 December 2009 was £24,790.

Retained losses represent the loss generated by the Group since trading commenced.

The other reserve represents the fair value of the embedded option to convert the loan instrument into equity.

The non controlling interests represent the value of the subsidiary owned outside the Group.

The Group has conformed with all capital requirements as imposed by the FSA.

GROUP CASH FLOW STATEMENT

For the year ended 31 December 2009

	Year ended	Year ended
	31 December 2009	31 December 2008
	£	£
Profit for the year	59,667	44,010
Adjustments to reconcile profit for the year to cash (used in)/generated from operating activities Tax expense Finance cost	63,770 40,962	35,468 39,797
Share based compensation	43,812	77,186
Depreciation (Increase)/decrease in accrued income, trade and other receivables Increase/(decrease) in trade and other payables	16,820 (222,718) 173,076	20,338 50,935 (273,375)
Cash generated from/(used in) operations	175,389	(5,641)
Income tax paid	(56,424)	(58,630)
Cash generated from/(used in) operating activities	118,965	(64,271)
Investment activities Acquisition of property, plant and equipment	(3,444)	(10,740)
Cash (used in) investing activities	(3,444)	(10,740)
Financing activities Shares issued Repayments Interest on loans	231 - (18,230)	-    (99,500)  (26,609)
Cash (used in) financing	(17,999)	(126,109)
Increase/(decrease) in cash and cash equivalents	97,522	(201,120)
Opening cash and cash equivalents	(244,335)	(43,215)
Closing cash and cash equivalents	(146,813)	(244,335)
	=========================================	=========================================

Reconciliation of cash and cash equivalent
Cash at hand	40	19
Amounts due to bank	(146,853)	(244,354)
Closing cash and cash equivalents	(146,813)	(244,335)
	=========================================	=========================================

1.             General information

The preliminary financial information does not constitute full accounts within the meaning of section 434 of the Companies Act 2006 but is derived from accounts for the years ended 31 December 2009 and 31 December 2008. The figures for the year ended 31 December 2009 are audited.  The preliminary announcement is prepared on the same basis as set out in the statutory accounts for the year ended 31 December 2009.  Those accounts upon which the auditors issued an unqualified opinion, will be delivered to the Registrar of Companies following the Annual General Meeting.

Statutory accounts for the year ended 31 December 2008 have been filed with the Registrar of Companies.  The auditors' report on those accounts was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.

While the financial information included in this preliminary announcement has been prepared  in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), this announcement does not in itself contain sufficient information to comply with IFRS's. 

Frenkel Topping Group Plc is incorporated and domiciled in the United Kingdom.

At the date of the authorisation of the financial information the following standards and interpretations, which have not been applied in the financial information, were in issue but not yet effective:

IAS 1         Presentation of Financial Statements - Improvements

IAS 7         Statement of Cash Flows - Improvements

IAS17        Leases - Improvements

IAS 18       Revenue - Improvements

IAS 24

(revised)    Related Party Disclosures

IAS 27       Consolidated and separate financial statements - Amendment (endorsed)

IAS 32       Reclassification of Rights Issues - Amendment (endorsed)

IAS 36       Impairment of assets - Improvements

IAS 38       Intangible assets - Improvements

IAS 39       Financial Instruments: Recognition and Measurement - Improvements

IAS 39       Financial Instruments: Recognition and Measurement - Amendment; Eligible Hedged Items  (endorsed)

IFRS 1

(revised)   First-time Adoption of International Financial Reporting Standards (endorsed)

IFRS 1       First-time Adoption of IFRS - Amendment; Additional Exemptions for First-time Adopters

IFRS 2       Share-based Payments - Amendment; Cash-settled Share-based Payment Transactions

IFRS 3       Business Combinations - Amendment (endorsed)

IFRS 2       Share-based payment - Improvements

IFRS 5       Non-current Assets Held for Sale and Discontinued Operations - Improvements

IFRS 6       Exploration for and Evaluation of Mineral Resources - Improvements

IFRS 8       Operating Segments - Improvements

IFRS 9       Financial Instruments

IFRIC 9      Reassessment of Embedded Derivatives - Improvements

IFRIC 16    Hedges of a Net Investment in a Foreign Operation - Improvements

IFRIC 17    Distributions of Non-cash Assets to Owners (endorsed)

IFRIC 19    Extinguishing Financial Liabilities with Equity Instruments

IFRIC 14    Pensions accounting - Prepayment of a Minimum Funding Requirement

The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial information when the relevant standards and interpretations come into effect.

2.             significant accounting policies

GOING CONCERN

The financial statements are prepared on a going concern basis, which assumes the Group will continue in operational existence for the foreseeable future. The Group's ability to meet its future working capital requirements and therefore continue as a going concern is dependent upon it being able to generate significant revenues and free cash flow and the availability of bank facilities.  The current facility has been secured until December 2010 and the Directors do not foresee a problem in securing funding after this date.  The Directors have prepared projections which they consider to be prudent and demonstrate that the business can operate within its existing cash resources, and have identified a series of realistically achievable actions that they are committed to taking to mitigate the rate of cash outflow should revenues not be secured as predicted.

3.             revenue

                 The total revenue, profit before tax and net assets are attributable to the one principal activity of the Group, the provision of advice regarding structured settlements and related financial services.  All revenue and costs originate within the United Kingdom.

4.             TAxation

		2009	2008
		£	£
Analysis of charge in year
Current Tax
	UK corporation tax	47,701	34,072
	Adjustments in respect of previous periods	1,669	856
	Total current tax charge	49,370	34,928
	Deferred tax
	Adjustments in respect of previous periods	15,762	-
	Timing differences, origination and reversal	(1,362)	540
	Total deferred tax charge	14,400	540
	Tax on profit on ordinary activities	63,770	35,468

                 Factors affecting tax charge for year

The tax assessed for the period is higher than the standard rate of corporation tax in the UK 28% (30%).  The differences are explained below:

	2009	2008
	£	£
Profit before taxation	123,437	79,478
Profit multiplied by standard rate of corporation tax in the UK of 28% (2008: 28%)	34,562	22,253
Effects of:
Expenses not deductible	22,655	23,789
Adjustments to tax charge in respect of previous periods	17,431	857
Unrelieved tax losses and other deductions in period	(1,876)	-
Marginal relief	(9,002)	(11,431)
Total tax expense for year	63,770	35,468

5.             EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share is based on the following data:

	2009	2008
	£	£
Earnings
Earnings for the purposes of basic earnings per share (net profit for the year attributable to equity holders of the parent)	34,987	34,923
Earnings for the purposes of diluted earnings per share	34,987	34,923
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share	54,794,616	54,782,947
Effect of dilutive potential ordinary shares:
- Share options	1,524,391	1,365,608
Weighted average number of ordinary shares for the purposes of diluted earnings per share	56,319,007	56,148,555

6.             PRIOR PERIOD ADJUSTMENT

During the year ended 31 December 2008 the Group became aware of cash receipts from a third party that it was not entitled to.  A provision was made in the accounts for the amounts that had been identified as due to that third party.  During the current year further analysis was conducted and an additional £73,869 was identified as being received by the Group prior to 1 January 2008.

A prior period adjustment has been made in the accounts during 2009 to reflect the overstatement of income in earlier periods.  The effect of the adjustment is to increase the retained losses of the Group by £61,165, increase other payables by £73,869 and decrease the minority interest by £12,704 as at 1 January 2008.

7.             Basis of the preliminary announcement

The board of directors of Frenkel Topping Group Plc approved the Preliminary Results on

30 March 2010.

The statutory accounts for the year ended 31 December 2009 will be delivered to the Registrar of Companies following the Annual General Meeting.   The statutory accounts will be posted to shareholders on 31 March 2010.  Further copies will be available to the public, free of charge, at the company's registered office, 4^th Floor, Statham House, Talbot Road, Old Trafford, Manchester, M32 0FP and the Company's website at www.frenkeltopping.co.uk

8.             ANNUAL GENERAL MEETING

The Annual General Meeting will be held on 12 May 2010 at 11 am at Addleshaw Goddard LLP, 100 Barbirolli Square, Manchester, M2 3AB.

 

END

 

 

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