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Champion PLC (CMP)

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Tuesday 23 December, 2008

Champion PLC

Final Results

RNS Number : 6752K
Champion PLC
23 December 2008
 



Champion PLC

23 December 2008


Champion plc


Results for the year ended 30 June 2008



As Chairman of Champion Plc I am delighted to announce that the business continues to make good progress. The Group completed the acquisition of an accountancy practice based in Blackpool in July 2007 and an accountancy practice based in Preston in September 2008. As a result of these acquisitions the number of fee earners across the Group has risen to 149 from 129 at the same time last year. 


FINANCIAL PERFORMANCE


The Group experienced an increase in revenue during the year. The measures of growth in financial performance are Revenue and Profit before tax and interest. Group revenue has increased by 21.23% to £6.23 million and Group profit before tax and interest was £0.35 million resulting in an operating margin before interest and tax of 5.6%.


The basic earnings per share is 0.3842 pence.


The Consolidated Balance Sheet at the year end showed net assets of £3.86m. 


The Directors do not recommend the payment of a dividend.


The trading results and the Group's financial position at the year end are detailed in the financial statements that follow. 


DEVELOPMENT OF THE BUSINESS


During the year, the Group's revenue increased by £1.1m. This was due to organic growth within the existing offices and the acquisition of the practice in Blackpool. Recurring fees for the group have increased during the year both from internal growth and acquisition.


In July 2007 the Company acquired the goodwill and business assets of Haworth Moore, an accountancy practice based in Blackpool. The business will be carried on through Champion Haworth Moore Limited a subsidiary company established for the purpose of the transaction.The consideration of £0.42m was settled by an initial cash payment of £0.17m with the remainder being deferred to be paid over a two year period. Haworth Moore's revenue for the year to 31 March 2007 was £800,667. The office has settled well in to the Group structure and is achieving budgeted figures.


During the year the Group sold 5% of the issued share capital in Champion Business Solutions Ltd to Janice Hurst a director in that company. It also acquired 2.5% of the issued share capital in Champion Business Solutions Ltd from Dave Wood also a director in that company. The Groups total shareholding has reduced to 62.5%. 


During the year we employed an average of 143 people and have consistently recruited the right quality people resulting in a strong motivated team with the ability to deliver a quality service to our clients. We successfully maintain a high ratio of fee earners to administrative staff and I would like to place on record my sincere thanks to the whole team for their hard work, dedication and commitment to client service.


THE FUTURE


Since the year end, Champion Stokes Limited has changed its name to Champion Business Advisors Limited


In September 2008 the Group acquired the goodwill and business assets of Robinson Rose Limited from the company's administrators. The consideration of £0.017m was settled by an initial payment of £0.01m with the remainder deferred to be paid in six months time. The turnover for Robinson Rose Ltd for the year to 29 February 2008 was £212,803. The business will be carried on through Champion Business Advisors Ltd. 


 

In October 2008 the Group acquired 42.86% of the issued share capital of Champion Business Advisors Limited from John Stokes. The consideration was £0.160m and was settled by transfer of debtors and work in progress to John Stokes. At the same time John Stokes resigned as a director and employee of the company. This takes the Group's share holding in Champion Business Advisors to 100%

In these uncertain times we will look to grow organically and will still actively seek further acquisitions of the required quality. At the same time we will take whatever cost cutting measures are necessary to maintain profitability. Our focus will be to protect the positions of our quality team members and continue to train them to enable us to continue to deliver the service which will enable our clients' businesses across the North West to grow whilst creating wealth for their owners. We continue to regard prospects for the Group positively.




Kevin Philbin

Chairman

Champion Plc


Directors' Report


Year Ended 30 June 2008


The directors have pleasure in presenting their report and the financial statements of the company and the group for the year ended 30 June 2008.


PRINCIPAL ACTIVITY 


The principal activity of the company during the year was that of a holding company for the Champion Group which supplies accounting and other business services that enable a business to grow, and create wealth for the owners.


BUSINESS REVIEW


The income statement on page 11 shows revenue for the year of £6.23m and profit for the year before tax of £0.204m.


Revenue has increased by 21.23% from 2007, and further consideration of the financial performance can be found in the Chairman's Statement. 


The recurring fees for the group have increased during the year from both internal growth and acquisitions which are the areas the Directors see as quality sustainable revenue.


The Key Performance indicators are based on the group's business plan. Their main focuses are team members and client service. The Key Performance indicators are reviewed monthly, and are as follows:


  • The average revenue per fee earning director was £624,142 (2007: £632,044) 

  • The debtor days as at the year end were 73 (2007: 110)

  • The average productivity per fee earning team member is 80% (2007: 80%)


In the context of the current economic downturn the directors have considered the risks associated with the availability of credit and clients ability to pay, and do not consider that this will have a major impact on the group. We maintain tight control over our trade receivables and have found that we are attracting new clients from larger practices with higher fees.


During the year the company acquired the goodwill and business assets of Haworth Moore, an accountancy practice in Blackpool. This added £0.906m to the turnover of the group.


Since the balance sheet date the company has acquired the goodwill and business assets of Robinsons Rose Limited, an accountancy firm located adjacent to our Preston office. This company was in administration at the time of purchase and all assets where purchased from the administrators. The business will be carried on through Champion Business Advisors Ltd.


RESULTS AND DIVIDENDS


The group profit for the year, after taxation, was £125,318 (2007: £185,823).


The directors have not recommended a dividend.


FUTURE DEVELOPMENTS


The company continues to look for opportunities in acquiring new accounting practices.


Champion Plc


Directors' Report


Year Ended 30 June 2008



DIRECTORS AND THEIR INTERESTS


The directors who served the company during the year together with their beneficial interests in the shares of the company were as follows:




Ordinary Shares of £0.005 each




At 30 June 2008

At 1 July 2007

G Cosgrove


7,652,197

7,652,197

G Dallimore


-

-

K Baird


3,189,169

3,189,169

IW Currie (Non-Executive)


1,559,997

1,932,822

R Ward-Lilley 

  

1,461,439

1,461,439

K Philbin (Non-Executive) 


 -

-





IW Currie resigned as a director on 2 July 2007.


POLITICAL AND CHARITABLE DONATIONS


During the year, the group made charitable donations totalling £4,564 (2007: £13,128). 


PRINCIPAL RISK AND UNCERTANITY

  

The risks facing the business are assessed on an ongoing basis. The directors evaluate the likelihood and potential impact of each risk and ensure appropriate action is taken to mitigate them. These risks include procedures on the expenditure that can be incurred by directors and staff on behalf of the group. The group has budgets which are reviewed and any large expenditure incurred has to be approved by the board.


FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES


The group is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit control procedures. Refer to detailed note 24.


CREDITOR PAYMENT POLICY AND PRACTICE

It is the group's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the company and its suppliers, provided that all trading terms and conditions have been complied with.


At 30 June 2008, the company had an average of 60 day's purchases outstanding in trade creditors.


AUDITORS AND DISCLOSURE OF INFORMATION TO AUDITORS


All of the current Directors have taken all steps that they ought to have taken to make themselves aware of any information needed by the Company's auditors for the purposes of their audit and to establish that the auditors are aware of the information. The Directors are not aware of any relevant audit information of which the auditors are not aware. 


BDO Stoy Hayward LLP have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the next annual general meeting.


Approved by the board on 22 December 2008 and signed on its behalf by






K Baird

Secretary

Champion Plc


Statement of directors' responsibilities


Year Ended 30 June 2008



STATEMENT OF DIRECTORS' RESPONSIBILITIES


The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company, for safeguarding the assets of the company, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of a Directors' Report which complies with the requirements of the Companies Act 1985.


The directors are responsible for preparing the annual report and the financial statements in accordance with the Companies Act 1985. The directors are also required to prepare financial statements for the group in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs) and the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market. The directors have chosen to prepare financial statements for the company in accordance with IFRSs.


International Accounting Standard 1 requires that financial statements present fairly for each financial year the company's financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's 'Framework for the preparation and presentation of financial statements'. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRSs. A fair presentation also requires the Directors to:


  • consistently select and apply appropriate accounting policies;

  • present information, including accounting policies, in a manner that provides relevant, reliable, comparable
    and understandable information; and

  • provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance. 


Financial statements are published on the group's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the group's website is the responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.




Champion Plc


Corporate Governance


Year Ended 30 June 2008



The directors are supportive of the general principles contained in the Combined Code on Corporate Governance as applied to smaller quoted companies and, although not required, consider it appropriate to provide corporate governance disclosures.


The Board of Directors

The board currently consists of a Non-executive Chairman, Managing Director, and three other Executive Directors. The board considers the Non-executive Director to be independent, and he is independent of the group's executive management and not involved with business or other relationships which could materially interfere with the exercise of objective judgement. Given its size, the board does not consider it necessary to have a Nomination Committee to make recommendations to the board on new board appointments. The board itself considers all such appointments and decides whether persons nominated have the appropriate skills and experience. The directors believe that the composition of the board is appropriate for the size of the group and its current stage of development.


The board meets twelve times a year and has adopted a formal schedule of matters reserved for its decision. The board directs and controls the group and is responsible for strategy, operating performance and stewardship of the group's resources. In order to discharge their duties, all directors receive full and regular information on the group's operational and financial performance, risk management, business plans, future strategy and executive management. All directors have access to the Company Secretary. Any director, who, in furtherance of his duties wishes to take external advice, may do so at the expense of the company.


Details of beneficial interests in shares of the company are included in the Directors' Report.



Remuneration Committee

The remuneration committee is chaired by K Philbin (Non-executive) Chairman and comprises of himself, G Cosgrove and K Baird. The committee is responsible for determining the group's policy for executive remuneration, and approving the terms and conditions of employment of the Executive Directors. The committee determines appropriate performance conditions for bonuses.


Audit Committee

The audit committee is chaired by K Philbin (Non-executive) Chairman and comprises of himself, G Cosgrove and K Baird. The committee's written terms of reference include any matters relating to the appointment, resignation or dismissal of the external auditors and their fees. They monitor the effectiveness and independence of the external auditors. The board is satisfied that the external auditor, BDO Stoy Hayward LLP, has adequate policies and safeguards in place to ensure that auditor objectivity and independence is maintained. The committee meets three times a year.  



Champion Plc


Corporate Governance


Year Ended 30 June 2008



INTERNAL CONTROL


The board has overall responsibility for internal control, including the system of risk management, and sets appropriate policies with regard to the objectives of the group. Executive management has responsibility for the identification, evaluation and management of risks and for the implementation and maintenance of control systems in accordance with the board's policies. The board meets frequently and has adopted a schedule of matters which are required to be brought to it for decision, thus ensuring that it maintains control over appropriate strategic, financial, operational, risk management and compliance issues.


During the year, the board has reviewed the overall effectiveness of the group's system of internal controls covering financial, operational, compliance and risk management matters. Such systems are designed to manage rather than eliminate the risk of failure to achieve the Group's strategic objectives and can only provide reasonable not absolute assurance against material misstatement or loss.


The group's external auditors, BDO Stoy Hayward LLP, contribute a further independent perspective on certain aspects of the group's internal control system and they annually report matters arising from their external audit work to the Audit Committee.


The size of the group ensures the knowledge of the activities of each of the service lines and regions by at least two members of the board. The board approves budgets and other performance targets, the components of which form the financial objectives for individual service lines and regions, in order that the board can review the performance of each area of the business, the financial results and forecasts of future performance and reported regularly to the board and explanations are sought for significant variances.


Throughout the organisation, procedures exist to ensure that significant events and potential claims that represent risks to the group's objectives are escalated to senior management and, if necessary the Board, on a timely basis to allow preventative or corrective action to be taken. Procedures also exist to ensure that the group complies with all applicable regulatory requirements.


Relations with shareholders

There will be an opportunity for individual shareholders to question directors at the annual general meeting and to discuss any issues on an informal basis at the conclusion of that meeting.



Going Concern

The directors consider that on the basis of the financial resources available to them, the company and the group can continue in operational existence for the foreseeable future and accordingly they have adopted the going concern basis in preparing the financial statements. The directors prepare annual budgets, cash flows and rolling budgets, they have made necessary arrangements to ensure sufficient facilities are in place and they have annual monthly management meetings to ensure smooth running of the businesses finances. Further details relating to the current facilities is disclosed in note 24. 

Champion Plc


Independent Auditor's Report to the Shareholders of Champion Plc


Year Ended 30 June 2008



Independent auditor's report to the shareholders of Champion Plc

We have audited the group and parent company financial statements (the ''financial statements'') of Champion Plc for the year ended 30 June 2008 which comprise the consolidated income statement, the consolidated and company statements of change in shareholders' equity, the consolidated and company balance sheets, the consolidated and company cash flow statements and the related notes. These financial statements have been prepared under the accounting policies set out therein. 

Respective responsibilities of directors and auditors

The directors' responsibilities for preparing the annual report and the consolidated financial statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union are set out in the Statement of Directors' Responsibilities.  

Our responsibility is to audit the consolidated financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view and have been properly prepared in accordance with the Companies Act 1985 and whether the information given in the Directors' Report is consistent with those financial statements. We also report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed.

We read other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. The other information comprises only the Directors' Report, the Chairman's Statement, and the Corporate Governance Statement. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of the Companies Act 1985 or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's and company's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.


Champion Plc


Independent Auditor's Report to the Shareholders of Champion Plc (Continued)


Year Ended 30 June 2008





Opinion

In our opinion:

  • the group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state of the group's affairs as at 30 June 2008 and of its profit for the year then ended;

  • the parent company financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union as applied in accordance with the provisions of the Companies Act 1985, of the state of the parent company's affairs as at 30 June 2008;

  • the financial statements have been properly prepared in accordance with the Companies Act 1985; and

  • the information given in the Directors' Report is consistent with the financial statements.



BDO Stoy Hayward LLP

Chartered Accountants and Registered Auditors

Manchester



22 December 2008

Champion Plc


Consolidated Income Statement


Year Ended 30 June 2008



 



Notes

2008

2007


£

£

Revenue

2

6,229,916

5,138,989




Staff costs4

(4,040,360)

(3,214,361)

Depreciation, amortisation and impairments

(61,935)

(74,177)

Other operating expenses

Other operating income

(1,777,256)

 11,500 

(1,444,838)

-



───────────

───────────

PROFIT FROM OPERATIONS

3

361,865

405,613

Finance costs 6

 (158,229)

 (133,324)

Share of (loss)/profit from associate

(48)

360


─────────

──────

PROFIT BEFORE TAX

203,588

272,649




Taxation

7

(78,270)

(86,826)


─────────

───────

PROFIT FOR THE YEAR

125,318

185,823


═════════

═══════




Attributable to:



Equity holders of the parent


120,010

185,823

Minority interests

5,308

-


─────────

───────


125,318

185,823


═════════

═══════




Basic earnings per share (pence) for profit attributable to the equity holders of the parent

8

0.3842

0.5948




==========


he results for the year are derived solely from continuing operations.




The notes on pages 18 to 34 form part of these financial statements

Champion Plc


Consolidated Statement of Changes in Equity


Year Ended 30 June 2008








Share capital

Share premium

Available for sale reserves

Retained earnings

Total

Minority interest

Total equity


£

£

£

£

£

£

£

Balance at 1 July 2007

  156,187

2,937,027


-

 

513,015


3,606,229


132,031


3,738,260


 ───

 ───

 ───

 ───

 ───

 ───

 ───

Changes to equity
















Profit for the year

  -

-

 -

 120,010

120,010

  5,308

125,318

 

 ───

 ───

 ───

 ───

 ───

 ───

 ───

Total recognised income and expense for the year

-

  

 -


-

  

 120,010


120,010

 5,308  


125,318










 ───

 ───

 ───

 ───

 ───

 ───

 ───

Balance at 30 June 2008

156,187

2,937,027


-


633,025


3,726,239


137,339


3,863,578


 ───

 ───

 ───

 ───

 ───

 ───

 ───





Share capital

Share premium

Available for sale reserves

Retained earnings

Total

Minority interest

Total equity


£

£

£

£

£

£

£

Balance at 1 July 2006

156,187

2,937,027

  

27,500

  

327,192


3,447,906


132,031


3,579,937


 

 ───

 ───

 ───

 ───

 ───

 ───

 ───

Changes to equity








Investments

-

 -

(27,500)

 -

(27,500)  

-

(27,500)

Profit for the year

  

  - 

 

 -


-


  185,823


185,823


-  


185,823


 ───

 ───

 ───

 ───

 ───

 ───

 ───

Total recognised income and expense for the year


-

  

 -


  (27,500)


 185,823


158,323


-  


158,323










 ───

 ───

 ───

 ───

 ───

 ───

 ───

Balance at 30 June 2007

 

156,187


 2,937,027

  

-

  

 513,015


3,606,229


132,031


3,738,260


 ───

 ───

 ───

 ───

 ───

 ───

 ───




The notes on pages 18 to 34 form part of these financial statements


Champion Plc


Company Statement of Changes in Equity


Year Ended 30 June 2008







Share capital

Share premium

Retained earnings

Total equity


£

£

£

£

Balance at 1 July 2007

156,187

2,937,027

(80,000)

3,013,214

Result for the year

-

-

-

-


-------------

-------------

-------------

-------------

Balance at 30 June 2008

156,187

2,937,027

(80,000)

3,013,214


========

========

========

========






Share capital

Share premium

Retained earnings

Total equity


£

£

£

£

Balance at 1 July 2006

156,187

2,937,027

(80,000)

3,013,214

Result for the year

-

-

-

-


-------------

-------------

-------------

-------------

Balance at 30 June 2007

156,187

2,937,027

(80,000)

3,013,214


========

========

========

========



The notes on pages 18 to 34 form part of these financial statements


Champion Plc


Consolidated Balance Sheet


As at 30 June 2008






Notes

2008

2007


£

£

ASSETS



NON CURRENT ASSETS



Property, plant and equipment

9

167,157

191,134

Intangible assets

10

4,695,194

4,278,571

Other investments

12

50

10,050


-------------

-------------


4,862,401

4,479,755

CURRENT ASSETS



Inventories 13

12,500

12,400

Trade and other receivables

14

3,216,515

2,712,177

Cash and cash equivalents

17

854

307,497


-------------

-------------


3,229,869

3,032,074

LIABILITIES



CURRENT LIABILITIES






Interest bearing borrowings 20

1,684,889

1,476,230

Current tax liabilities

176,858

202,556

Trade and other payables

22

1,565,027

1,291,011


-------------

-------------


3,426,774

2,969,797


-------------

-------------







NON CURRENT LIABILITIES



Deferred tax liabilities 21

1,918

3,772

Interest bearing borrowings20

800,000

800,000


-------------

-------------


801,918

803,772


-------------

-------------

NET ASSETS

3,863,578

3,738,260



================

=========




CAPITAL AND RESERVES ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE COMPANY



Share capital

18

156,187

156,187

Share premium 19

2,937,027

2,937,027

Retained earnings19

633,025

513,015


-------------

-------------


3,726,239

3,606,229

Minority interest

137,339

132,031


-------------

-------------

TOTAL EQUITY

3,863,578

3,738,260


=========

=========



 

The financial statements were approved and authorised for issue by the Board of directors on 22 December 2008 and were signed on its behalf by:


 

 

 

......................................

G Cosgrove, Director






The notes on pages 18 to 34 form part of these financial statements



Champion Plc


Company Balance Sheet


As at 30 June 2008






Notes

2008

2007


£

£

ASSETS



NON CURRENT ASSETS



Investments in subsidiaries 

11

2,476,600

2,476,600


-------------

-------------




CURRENT ASSETS



Trade and other receivables

14

734,355

309,905

Cash and cash equivalents

17

-

271,527


-------------

-------------


734,355

581,432

LIABILITIES



CURRENT LIABILITIES



Interest Bearing Borrowings

Trade and other payables

20

22

80,633

117,108

-

44,818


-------------

-------------

NET ASSETS

3,013,214

3,013,214



=========

=========




CAPITAL AND RESERVES ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE COMPANY



Share capital

18

156,187

156,187

Share premium 19

2,937,027

2,937,027

Retained earnings 19

(80,000)

(80,000)


-------------

-------------

TOTAL EQUITY

3,013,214

3,013,214


=========

=========




The financial statements were approved and authorised for issue by the Board of directors on 22 December 2008 and were signed on its behalf by:

 

 

 

 

......................................

G Cosgrove, Director









The notes on pages 18 to 34 form part of these financial statements

Champion Plc


Consolidated Cash Flow Statement


Year Ended 30 June 2008




 
2008
2007
 
£
£
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Profit before tax
203,588
272,649
 
 
 
NON-CASH ADJUSTMENTS
 
 
Depreciation
Amortisation
43,685
8,250
61,677
-
Impairment of investments
Disposal of assets
10,000
(11,019)
-
12,500
 
───────
───────
NON-CASH ADJUSTMENTS
50,916
74,177
 
─────────
───────
CASH FLOWS BEFORE CHANGES IN WORKING CAPITAL
254,504
346,826
 
 
 
 
 
 
Increase in inventories
(100)
(6,000)
Increase in trade and other receivables
(504,338)
(205,842)
Increase in trade and other payables
78,189
201,738
 
───────────
───────────
DECREASE IN WORKING CAPITAL
(426,249)
(10,104)
 
───────
───────
CASH GENERATED FROM OPERATIONS
(171,745)
336,722
 
 
 
 
 
 
Income taxes paid
(105,822)
(23,044)
 
───────
───────
NET CASHFLOWS (USED IN) / FROM OPERATING ACTIVITIES
(277,567)
313,678
 
─────────
───────
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
Payments to acquire property, plant and equipment
(20,189)
(14,899)
Payments to acquire intangible assets
(249,587)
(338,718)
Receipts from Sale of investments
71,500
-
 
─────────
─────────
NET CASH FLOWS USED IN INVESTING ACTIVITIES
(198,276)
(353,617)
 
 
 
 
 
 
 
─────────
─────────
NET DECREASE IN CASH AND CASH EQUIVALENTS
(475,843)
(39,939)
 
 
 
Cash and cash equivalents as at 1 July 2007
(1,107,549)
(1,067,610)
 
 
 
 
───────────
───────────
CASH AND CASH EQUIVALENTS AS AT 30 JUNE 2008
(1,583,392)
(1,107,549)
 
═══════════

══════════



 


The notes on pages 18 to 34 form part of these financial statements

Champion Plc


Company Cash Flow Statement


Year Ended 30 June 2008


 
2008
2007
 
£
£
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
Result before tax
-
-
 
 
 
 
 
 
(Increase)/Decrease in trade and other receivables
(424,450)
146,650
Increase/(Decrease) in trade and other payables
72,290
(8,402)
 
-------------------------------
-------------------------------
(DECREASE)/INCREASE IN WORKING CAPITAL
(352,160)
138,248
NET CASHFLOWS (USED IN)/FROM OPERATING ACTIVITIES
(352,160)
138,248
 
-------------------------------
-------------------------------
NET (DECREASE) /INCREASE IN CASH AND CASH EQUIVALENTS
(352,160)
138,248
 
 
 
Cash and cash equivalents as at 1 July 2007
271,527
133,279
 
 
 
 
-------------------------------
----------------------
CASH AND CASH EQUIVALENTS AS AT 30 JUNE 2008
(80,633)
271,527
 
===============================
======================






Champion Plc




Notes to the Consolidated Financial Statements


Year Ended 30 June 2008



1.         ACCOUNTING POLICIES


Basis of preparation

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all years presented, unless otherwise stated.


Both the parent company financial statements and group financial statements have been prepared and approved by directors in accordance with International Financial Reporting Standards as endorsed for use in the EU ('Endorsed IFRSs'). On publishing the parent company financial statements here together with the group financial statements, the company is taking advantage of the exemption in s230 of the Companies Act 1985 not to present its individual income statement and related notes that form a part of these approved financials statements.


The parent company, Champion Plc is a non trading and non income generating company. 


Standards, amendments and interpretations to published standards not yet effective

All new standards, amendments and interpretations to existing standards that have been published, have been considered. Those that are mandatory for the group's accounting periods beginning on or after 1 January 2009 or later periods, which the group has decided not to adopt early are as follows:

 

-       IFRS 8, Operating Segments (effective for accounting periods beginning on or after 1 January 2009). This standard has now been endorsed by the EU and it sets out requirements for disclosure of information about an entity’s operating segments and also about the entity’s products and services, the geographical areas in which it operates, and its major customers. It replaces IAS 14, Segmental Reporting. The Group expects to apply this standard in the accounting period beginning on 1 January 2009. As this is a disclosure standard it will not have any impact on the results or net assets of the group.
 
-       Revised IFRS 3, Business Combination (effective for accounting periods beginning on or after 1 July 2009). This standard has yet to be endorsed by the EU, it includes much of the current guidance for the identification and recognition of intangible assets from goodwill. However, in some respects the revised standard may result in very significant changes, including; the requirement to write off all acquisition costs to the income statement instead of including them in the cost of investment; the requirement to recognise an intangible asset even if it cannot be reliably measured; and, an option to gross up the balance sheet for goodwill attributable to minority interests (which are deemed ‘non-controlling interests’). The revised statement does not require the restatement of previous business combinations, therefore will have no effect on the results or net assets of the group. The revised IFRS 3 must be adopted at the same time as the amendment to IAS 27, which sets out how to determine the costs of these investments. The group expects to apply this standard in the accounting period beginning on 1 July 2009.
 

 

             Basis of consolidation

Where the company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the non revenue generating company and its subsidiaries ('the group') as if they formed a single entity. Inter-company transactions and balances between group companies are therefore eliminated in full.


Associates

Champion Plc has the power to participate in (but not control) the financial and operating policy decisions of Champion Financial Management Limited, it is classified as an associate. Associates are initially recognised in the group balance sheet at cost. The group's share of the post-acquisition profits and losses are recognised in the consolidated income statement.


Profits and losses arising on transactions between the group and its associate are recognised only to the extent of unrelated investor's interests in the associate. The investor's share in the associate's profits and losses resulting from these transactions is eliminated against the carrying value of the associate.


Profit from operations

Profit from operations is stated after charging all operating costs including those separately disclosed by virtue of their size or unusual nature or to facilitate a more helpful understanding of the group's results. It is stated before investment income and finance costs. 


Champion Plc




Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008


1.         ACCOUNTING POLICIES (continued)


Business Combinations

The consolidated financial statements incorporate the results of the business combinations using the purchase method. In the consolidated balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained.


Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Revenue comprises the fair value for the sale of services, and commissions received, net of value added tax and in accordance with IAS 18.Unbilled revenue on client services is included as amounts recoverable on contracts within trade and other receivables.


 Pension costs

The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the income statement.


Property, plant and equipment

Items of property, plant and equipment are stated at cost of acquisition or production cost less accumulated depreciation and impairment losses.


Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the following method:

Plant and equip­ment    33% straight line

Fixtures and fittings    20% reducing balance

Leasehold improve­ments    12 to 15 years straight line


Investments

Available for sale investments are stated at fair value with changes in fair value being credited to available for sale reserves. Investments in subsidiary companies are shown at cost less any permanent diminution in value.


Goodwill

Goodwill is recognised as an asset from the acquisition date as the excess of the cost of acquisition over the fair value of identifiable assets, liabilities and contingent liabilities of a subsidiary, associate or joint venture.


Goodwill is not amortised but is reviewed for impairment on an annual basis for events or changes in circumstances that indicate that the carrying value might be impaired and for subsequent changes in the fair 

value of identifiable assets, liabilities and contingent liabilities acquired. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Goodwill is stated at cost less accumulated impairment losses.


Goodwill arising before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.


    

Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008


1.        POLICIES (continued)

 

            Externally generated intangible assets


Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight line basis over their useful economic lives. The amortisation expense is included within the deprecation, amortisation and impairments line in the consolidated income statement.


Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques.


The significant intangibles recognised by the group, their useful economic lives and the methods used to determine the cost of intangibles acquired in a business combination are as follows:


Intangible asset                                 Useful economic life        Valuation method


Non- contractual customer lists      10 years                               Estimated discounted cash flow

and relationships



Impairment (excluding inventories and deferred tax assets)

The carrying values of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. Where the asset does not generate cash flows which are independent from other assets, the recoverable amount of the cash-generating unit to which the asset belongs is estimated.


The recoverable amount of an asset is the higher of its fair value less costs to sell, and its value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.


An impairment loss is recognised in the income statement whenever the carrying amount of an asset or cash-generating unit exceeds its recoverable amount.


Goodwill with an indefinite life is tested for impairment annually and whenever there is an indication that the asset may be impaired. 


Inventories

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

      

 Hire purchase agreements

Assets held under hire purchase agreements are capitalised and disclosed under property, plant and equipment at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the income statement on a straight line basis.


Trade and other receivables

Trade and other receivables are recognised by the group and carried at original invoice amount less an allowance for any uncollectible or impaired amounts.


Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties    on the part of the counterparty or default or significant delay in payment) that the group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within the operating expenses in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.



Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short term deposits. Short term deposits are defined as deposits with an initial maturity of three months or less.


Bank overdrafts that are repayable on demand and form an integral part of the group's cash management are included as a component of cash and cash equivalents for the purposes of the consolidated cash flow statement.

Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008


1.         ACCOUNTING POLICIES (continued)


Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Such interest bearing borrowings are subsequently measured at amortised cost using the effective rate of interest method, which ensures any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the balance sheet. Interest expense in this context includes initial transaction costs and premia payable on redemption, as well as any interest or coupon payable while the liability is outstanding.


Deferred tax

Deferred Tax is provided in full, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and the carrying amounts in the financial statements.


Deferred Tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than as a business combination) or other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.


Deferred Tax is charged or credited to the consolidated income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.


Deferred Tax is determined using the tax rates that are expected to apply in the period when the asset is realised or the liability is settled.


The carrying amount of deferred tax assets is reviewed at each consolidated balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.


Deferred Tax assets and liabilities are offset when they relate to income tax levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.


Trade and other payables

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.


Operating lease commitments

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.


Critical accounting estimates and assumptions

Impairment of goodwill

The group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows. More information including the carrying values is included in note 10.

Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008


1.             ACCOUNTING POLICIES (continued)
 
Critical accounting estimates and assumptions (continued)
 
Useful lives of intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are amortised and depreciated over their useful lives. 
Useful lives are based on the management’s estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. More details including the carrying values are included in the notes 9 and 10.
 
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured.  Unbilled revenue on client services is included as amounts recoverable on contracts within trade and other receivables. The unbilled revenue is adjusted in accordance with historical recoverability, which is periodically reviewed for continued appropriateness. The group believes that, based on past experience, the recoverability rates would not fall below 85.8% across the group.The group has therefore recognised unbilled revenue at these corresponding rates. If the estimate changes by 1%, revenue would be reduced/increased by £13,500.


2.          REVENUE

 

Revenue arises from:

2008

2007


£

£

Rendering of services

6,153,650

5,056,355

Commission receivable

76,266

82,634


───────────

───────────


6,229,916

5,138,989


═════════

═════════

All revenue arose from one business sector within the UK.

 

3.         PROFIT FROM OPERATIONS

 

This is arrived at after charging:


2008

2007


£

£

Depreciation of property, plant and equipment

Amortisation

Impairment of investments

43,685

8,250

10,000

61,677

-

-

Auditors' remuneration



-as auditors

25,616

36,645

Operating lease costs:



-Land and buildings

325,376

178,500

-Plant and equipment

22,222

98,098


═════════

═════════


4.    EMPLOYEE EXPENSES

Staff costs (including directors) comprise:

2008

2007


£

£

Wages and salaries

3,579,645

2,795,854

Social security costs

361,942

284,999

Defined contribution pension cost

98,773

133,508


───────────

───────────


4,040,360

3,214,361


═════════

═════════

Champion Plc recharges all employee costs to the subsidiary companies.


The average monthly number of employees during the year was made up as follows:


 

 
Group
Company
 
2008
2007
2008
2007
 
Number
Number
Number
Number
Management staff
4
4
4
4
Fee earners
139
129
-
-
 
------------------------------
--------------------------
------------------------------
--------------------------
 
143
133
4
4
 
==============================
==========================
==============================
==========================


Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008


5.      DIRECTORS' BENEFITS


Directors remuneration consists of:

2008

2007


£

£

Salaries

Defined contribution pensions 

Number of directors in the defined contribution pension scheme

293,483

5,871

2

94,552

5,871

2


═════════

═════════

The emoluments of directors disclosed above include the following in respect of the highest paid director:-



2008

2007


£

£

Salaries

161,755

27,500


═════════

═════════

6.    FINANCE COSTS












2008

2007



£ 

£ 

Interest payable on bank borrowing


152,045

124,572

Finance charges


4,326

4,700

Other similar charges payable


1,858

4,052



-------------

-------------



158,229

133,324



=========

=========

 

7.          TAXATION


Components of tax expense



2008

2007


£

£

Current tax expense



Current tax charge

80,124

95,047




Deferred tax expense



Relating to origination and reversal of temporary differences

(1,854)

(8,221)


────────

─────────

Income tax expense reported in income statement

78,270

86,826


═════════

═════════


Reconciliation of tax charge to accounting profit



2008

2007




£

£

Profit before taxation



203,588

272,649




═══════

═══════

Tax at the domestic income tax rate of 29.49% (2007: 30%)



60,038

81,795

Disallowable expenses



15,107

7,365

Marginal rate relief



(3,105)

(2,970)

Un-provided deferred tax assets



6,230

636




───────

───────

Total tax charge



78,270

86,826




═══════

═══════




Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008



8.          EARNINGS PER SHARE


Basic earnings per share is calculated by dividing net profit for the year attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year.


The following reflects the income and share data used in the total operations basic earnings per share computation:


2008

2007


£

£

Net profit attributable to equity shareholders for basic earnings per share

120,010

185,823


═════════

═══════



2008

2007


Pence

Pence

Earnings per ordinary share

0.3842

0.5948



Earnings per share have been calculated on the net basis on the profit on ordinary activities after taxation and 
after minority interest of £5,308 (2007 - £nil) using the weighted average number of ordinary shares in 
issue of 31,237,375 (2007 - 31,237,375).

 

9.    PROPERTY, PLANT AND EQUIPMENT


Group






Leasehold improve­ments

Plant and equip­ment

Fixtures and fittings

Total

At 30 June 2008

£

£

£

£

Cost



At 1 July 2007

109,832

208,466

267,700

585,998

Additions

Disposals

-

-

9,823

15,491

10,366

-

20,189

15,491


────────

────────

────────

────────

At 30 June 2008

109,832

202,798

278,066

590,696


════════

════════

════════

════════

Depreciation



At 1 July 2007

(16,917)

(163,070)

(214,877)

(394,864)

Charge for the year

Disposals

(8,385)

-

(16,447)

-

(18,853)

15,010

(43,685)

15,010


───────

────────

────────

────────

At 30 June 2008

(25,302)

(179,517)

(218,720)

(423,539)


═══════

════════

════════

════════

Net book value



At 30 June 2007

92,915

45,396

52,823

191,134


────────

────────

───────

────────

At 30 June 2008  

84,530

23,281

59,346

167,157


════════

════════

═══════

════════



Hire purchase agreement

Included within the net book value of £167,157 is £
4,247 (2007 - £14,439) relating to assets held under hire  
purchase agreements. The depreciation charged to the financial statements in the year in respect of such assets 
amounted to £10,192 (2007 - £10,192).



 


Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008


9.    PROPERTY, PLANT AND EQUIPMENT (continued)

 

Group

 





Leasehold improve­ments

Plant and equip­ment

Fixtures and fittings

Total

At 30 June 2007

£

£

£

£

Cost



At 1 July 2006

105,937

200,568

264,594

571,099

Additions

3,895

7,898

3,106

14,899


────────

────────

────────

────────

At 30 June 2007

109,832

208,466

267,700

585,998


════════

════════

════════

════════

Depreciation



At 1 July 2006

(8,612)

(133,236)

(191,339)

(333,187)

Charge for the year

(8,305)

(29,834)

(23,538)

(61,677)


───────

────────

────────

────────

At 30 June 2007

(16,917)

(163,070)

(214,877)

(394,864)


═══════

════════

════════

════════

Net book value



At 1 July 2006

97,325

67,332

73,255

237,912


────────

────────

───────

────────

At 30 June 2007  

92,915

45,396

52,823

191,134


════════

════════

═══════

════════


10. INTANGIBLE ASSETS

 
Goodwill
Other intangibles
Total
At 30 June 2008
£
£
£
Cost
 
 
 
At 1 July 2007
4,278,571
-
4,420,888
 
Additions
Disposal
 
394,873
(60,000)
 
90,000
-
484,873
(60,000)
 
----------------------------------------
----------------------------------------
----------------------------------------
At 30 June 2008
4,613,444
90,000
4,703,444
 
========================================
========================================
========================================
Amortisation
 
 
 
Charge for the year and at 30 June 2008
-
(8,250)
(8,250)
 
═════════
═════════
═════════
Carrying value
 
 
 
At 30 June 2007
4,278,571
-
4,278,571
 
───────────
───────────
───────────
At 30 June 2008
4,613,444
81,750
4,695,194
 
═════════
═════════
═════════

 

 
Goodwill
Other intangibles
Total
At 30 June 2007
£
£
£
Cost
 
 
 
At 1 July 2006
3,939,853
-
3,939,853
Additions
338,718
-
338,718
 
----------------------------------------
----------------------------------------
----------------------------------------
At 30 June 2007
4,278,571
-
4,278,571
 
========================================
========================================
========================================
 
 
 
 
Carrying value
 
 
 
At 30 June 2006
3,939,853
-
3,939,853
 
───────────
───────────
───────────
At 30 June 2007
4,278,571
-
4,278,571
 
═════════
═════════
═════════


    

Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008




  10. INTANGIBLE ASSETS (continued)


Goodwill relates to Champion Holdings Limited, Champion Allwoods Limited, Champion Stokes Limited, Champion Haworth Moore and Champion Consulting Limited and is tested for impairment at the balance sheet date. The recoverable amount of goodwill at 30 June 2008 was assessed on the basis of value in use. As this exceeded carrying value no impairment loss was recognised.


Other intangibles relates to the purchase of non contractual customer lists and relationships, as part of the purchase of Champion Haworth Moore Limited during the year. The remaining carrying value at the balance sheet date was £81,750, and the remaining estimated useful life was 9 years. 


Included within the additions is an increase in the shareholding of Champion Business Solutions, and the addition of Champion Haworth Moore a new shareholding during the year.


The key assumptions in the calculation are the future revenue and the ability to generate future cashflows. In assessing value in use, the most recent financial results and initial budgets for the next year were used and extrapolated for 10 further years with no subsequent growth assumed and discounted at 10%.



11. INVESTMENTS IN SUBSIDIARIES



Group companies



£

Cost at 1 July 2007 and 30 June 2008


2,476,600



══════════



Name

Country of Registration

Principal activity

Class and percentage of shares held

Champion Holdings Limited

UK

Holding Company

100% ordinary




shares

Champion Consulting Limited*

UK

Auditors and Accountants 

100% ordinary




shares

Champion Vehicle Solutions Limited*

UK

Dormant

100% ordinary




shares

Champion Marketing Services Limited*

UK

Marketing Services

90% ordinary




shares

Champion Business Solutions Limited*

UK

Auditors and Accountants

62.5% ordinary




shares

Champion Allwoods Services Limited*

UK

Auditors and Accountants

75.5% ordinary




shares

Champion Stokes Limited**

 UK

Auditors and Accountants 

 57.14% ordinary




shares

Champion Haworth Moore Limited*

 UK

Auditors and Accountants

51% ordinary




shares

*Investments held indirectly via Champion Holdings Limited.

** Champion Stokes Limited investment is held by Champion Business Solutions Limited.




 


Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008



12.    OTHER INVESTMENTS

 

Group


Shares in associated undertakings

 Investments

Total

Cost

 £

  £

 £

At 1 July 2007 and at 30 June 2008

50

50,000

50,050


────────

────────

────────


50

50,000

50,050


────────

────────

────────

Decrease in fair value brought forward

Decrease in fair value during the year

-

-

(40,000)

(10,000)

(40,000)

(10,000)


────────

────────

────────


-

(50,000)

(50,000)

Fair Value




At 30 June 2008

50

-

50


────────

────────

────────

At 30 June 2007

50

10,000

10,050


────────

────────

────────


The remaining £10,000 investment related to an investment in a Monkey Hangar, this company is no longer trading and has no value.

The £40,000 write down brought forward relates to the market value of listed investments - Healthcare PLC, during the year ended June 2007 Healthcare PLC delisted with a market value of £nil. 


    Associated Undertaking

    


Name

Country of Registration

Principal activity

Class and percentage of shares held

    

Champion Financial Management Limited

UK

Financial Advisors

50% ordinary




shares

 

The directors of Champion Plc consider they have the power to exercise significant influence and have treated their interests in Champion Financial Management as an associate.

Aggregate amounts relating to associates are as follows:

 

 


2008

2007


£

£

Total assets

16,842

26,260




Total liabilities

900

20,223




Revenues

-

1,704




(Loss) / Profit

(95)

720

Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008



13.    INVENTORIES


Group

Company


2008

2007

2008

2007


£

£

£

£

Raw materials and consumables

12,500

12,400

-

-


========

========

========

========


14.    TRADE AND OTHER RECEIVABLES


Group

Company


2008

2007

2008

2007


£

£

£

£

Receivable from trade customers

1,539,474

1,548,385

-

-

Receivable from related parties

-

-

725,352

305,150

Prepayments

252,858

97,586

3,562

3,401

Other receivables

1,424,183

1,066,206

5,441

1,354


───────────

───────────

───────────

───────────


3,216,515

2,712,177

734,355

309,905


========

========

========

========

 

Company

 

Consideration has been given to amounts receivable from related parties and no provision is required against the amounts due.


 As at 30 June 2008, the ageing trade receivables was as follows:

    

     


 1-30 days 31-60 days 61-90 days 91-120 days 120 days+ Total

Trade receivables

  £000

 £000

 £000

 £000

 £000

 £000

2008

 649

338

170

100

282 

1,539

2007

 784

243

144

982

279

1,548


 

At the balance sheet date £890,000 (£786,000 : 2007) of the trade receivables have gone beyond their terms of 30 days. None of these assets are considered to be impaired and are stated at amortised cost which approximates to fair value.


 

15.    FINANCIAL INSTRUMENTS

 

Group






2008

2007




£

£

Financial assets





Cash and cash equivalents

Trade and other receivables



854

3,216,515

307,497

2,712,177




═════════

════════

Financial liabilities





Cash and cash equivalents



(1,584,246)

(1,415,046)

Trade and other payables



(1,565,027)

(1,291,011)

Floating rate borrowings



(900,643)

(861,184)




════════

════════

Company






2008

2007

Financial assets



£

£

Cash and cash equivalents



-

271,527

Trade and other receivables



734,355

309,905




════════

════════

Financial liabilities





Cash and cash equivalents

Trade and other payables



(80,633)

(117,108)

-

(44,818)




════════

════════

The carrying amounts are equal to the fair value therefore no impairment is required.



Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008


 

16.    RELATED PARTY TRANSACTIONS


          Company



            Consultancy payments of £18,000 (2007: £18,000) were paid to K Philbin a non-executive director of Champion 
            Plc.


Champion Plc also had a loan account with Champion Consulting Limited, a company in which G Cosgrove, K Baird, and R Ward-Lilley are directors. The amount due at the end of the year was £725,352 (2007: £305,150). Champion Plc also raised a management charge of £769,014 (2007: £209,447) to Champion Consulting Limited.


Champion PLC also had a loan account with Champion Holdings Limited, a company in which G Cosgrove and K Baird are directors. The amount due at the end of the year was £50,000 (2007: Nil). 


G Dallimore was paid consultancy fees during the year amounting to £60,000 (2007 : £45,000).


For consideration of key management compensation see note 5.


Group  

    

At the year end the group had a balance of £22 (2007:£Nil) owed to Champion Accountants LLP, a partnership in which G Cosgrove is a member. The group also, received management charges of £470,422 from Champion Accountants LLP.  

 

17.     CASH AND CASH EQUIVALENTS

 


Group

  Company


2007

2007

2008

2007


£

£

£

£

Cash in hand

854

448

  -

  -

Cash at bank

-

307,049

 -

271,527


───────────

─────────

───────────

───────────


854

307,497

 -

 271,527


═════════

═══════

════════

════════


18.    SHARE CAPITAL


Authorised share capital


2008


2007 


£ 


£ 

40,108,000 Ordinary shares of £0.005 each

200,540


200,540

49,460 Preference share of £1 each

49,460


49,460


-------------


-------------


250,000


250,000


=========


=========

      Allotted, called up and fully paid:


2008

2007

Ordinary shares fully paid of £0.005 each

Shares

£ 

Shares

£ 

At beginning and end of the year

31,237,375

156,187

31,237,375

156,187


=========

=========

=========

=========


 

    



 

Champion Plc


Notes to the Consolidated Financial Statements (Continued)


Year Ended 30 June 2008



19.RESERVES


Available for sale reserve

Share premium account 

Retained earnings



£ 

£ 

As at 1 July 2006

27,500

2,937,027

327,192

Profit for the year

  - 

-

185,823

Market value movement

(27,500)

  -

  -


-------------

-------------

-------------

As at 30 June 2007

2,937,027

513,015

Profit for the year

  - 

-

120,010

Market value movement

  - 

  -

  -


-------------

-------------

-------------

As at 30 June 2008

-

  2,937,027

633,025


=========

=========

=========


Company

Share premium account

Retained earnings


£ 

£ 

Balance brought forward and carried forward

2,937,027

(80,000)



============

============


The following describes the nature and purpose of each reverse within owners' equity


    Reserve                                   Description and purpose

    

    Share premium account        Amount subscribed for share capital in excess of its nominal value.

    
   Retained earnings                   Cumulative net gains and losses recognised in the consolidated income 
                                                      statement. 


                Available for sale reserve
     Gains/losses arising on financial assets classified as available for sale.


20.    INTEREST BEARING BORROWINGS


Group

Company


2008

2007

2008

2007


£

£

£

£

Non-current





Bank loans

800,000

800,000

-

-


────

────

────

────


800,000

800,000

-

-


────

────

────

────

Current





Bank overdrafts

1,584,246

1,415,046

80,633

-

Bank loans

100,643

61,184

-

-


────

────

────

────


1,684,889

1,476,230

80,633

-


────

────

────

────



Group

Company


2008

2007

2008

2007


£

£

£

£

Bank loans





Floating rate bank loan

900,643

861,184

-

-

Less: current instalments due on loans 

(100,643)

(61,184)

-

-


────

────

────

────


800,000

800,000

-

-


────

────

────

────



    

21. DEFERRED TAX


Group

Company


2008

2007

2008

2007


£

£

£

£

Provision brought forward

3,772

11,993

-

 -

Decrease in provision 

(1,854)

(8,221)

-

 -


────

────────

────

────

Provision carried forward

1,918

3,772

-

-


────

────

────

────

The decrease in the provision is in relation to temporary timing differences, relating to capital allowances on property, plant and equipment.


22.    TRADE AND OTHER PAYABLES

 

Group

Company


2008

2007

2008

2007


£

£

£

£

Payable to trade suppliers

338,996

219,294

9,081

3,603

Other payables

426,354

457,650

17,931

-

Accrued liabilities

67,347

49,332

50

-

Amounts due under finance leases

-

12,613

-

-

Other tax and social security taxes

704,240

548,819

40,046

41,215

Payable to associated parties

Payable to related parties

28,090

-

3,303

-

-

50,000

-


────

────

────

────


1,565,027

1,291,011

117,108

44,818


────

────

────

────


23. OPERATING LEASE COMMITMENTS


Commitments under operating leases as at 30 June 2008 were as follows:


2008

2007


£

£

Less than one year

205,600

224,501

Later than one year but less than five years

707,400

800,554

Later than five years

1,370,150

1,365,550


────

────

 

 

 

The group has entered into operating leases in respect of office space and equipment. These non-cancellable leases have remaining terms greater than 5 years.

 

24.       FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

   All the following considerations have been given to the company’s balances and risks as well as the group.
 
          The group holds or issues financial instruments in order to achieve three main objectives, being:
 
          (a) to finance its operations;
          (b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance; and
          (c) for trading purposes.
 
          In addition, various financial instruments (e.g. trade receivables, trade payables, accruals and prepayments) arise directly from the group's operations.
 
          Transactions in financial instruments result in the group assuming or transferring to another party one or more of the financial risks described on page 29.
 

    

 

24.    FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

    

        Interest rate risk

        At 30 June 2008 the group's borrowings comprised of a bank overdraft and a bank loan.


        The net cash balance as at 30 June 2008 amounted to a borrowing of £2,430,391(2007: £1,968,733).

        The following table sets out the carrying amounts by repricing/maturity dates and effective interest rates (when 
        applicable) of the group's financial instruments that are exposed to interest rate risk:

    


Expiry within

1 yr

Expiry within

1 and 2 years

Expiry in more than 2 years

Total


2008





Sterling





    

Floating rate current bank overdrafts

 (1,584,246)

-

-

(1,584,246)





────

Floating rate business loan

Interest payable over the term of the loans not payable on demand

  (82,644)

-


 (17,999)

-


  (800,000)

(319,617)


(900,643)

(319,617)






────


2007





Sterling





    

Floating rate current bank overdrafts

  (1,415,046)

-

-

(1,415,046)





────

Floating rate business loan

Interest payable over the term of the loan not payable on demand

(64,182)



 (47,002)



 (750,000)


 ( 168,750)

(861,184)


(168,750)





────

    

Interest rate of all bank borrowings is 3.5% above Natwest Bank PLC base rate. The loan is a fixed 12 year loan, payable by monthly capital repayments the first of which is payable after two years.


Company


Consideration has been given to the company's overdraft of £80,633 and it does not carry material risks.


Credit risk

The group monitors credit risk closely and considers that its current policies of credit checks meet its objectives of managing exposure to credit risk.

The group has no significant concentrations of credit risk. Amounts shown in the balance sheet best represent the maximum credit risk exposure in the event other parties fail to perform their obligations under financial instruments.


Liquidity risk

The group's objective is to maintain a balanced working capital cycle to ensure that the level of funding requireddoes not exceed that available, new facilities were agreed with the bank in September 2008 for a further 12 months.


Currency risk

The group has no overseas assets or liabilities.


Fair values of financial assets and liabilities

The book value of financial instruments held or issued to finance the group's operations are not materially different from the fair value of those instruments.


Hedging activities

The group has an interest rate swap in place to hedge the cash flow risk in relation to interest rates. These instruments are summarised below.

A cash flow hedge with a total principal of £2.4m reducing over the term, the swap starts from 30 June 2009 and matures on 30 June 2017. The interest rates have a range of 4.5% to 6%, with a higher swap rate of 6% and a lower swap rate of 5.44%. If the average monthly base rate is within the range the company pays the lower swap rate and if the average monthly base rate is outside the range the company pays the higher swap rate.
    


25    CONTINGENT LIABILITIES


The company has entered into cross guarantees with other group companies in respect of bank loans and overdraft facilities. At the balance sheet date, the contingent liability amounted to £1,503,613 (2007: £1,107,549).


26     PENSION COMMITMENTS


The group operates a defined contribution pension scheme whose assets are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group and amounted to £91,573 (2007: £133,508).

27     ACQUISITIONS DURING THE PERIOD


On 30 July 2007 the subsidiary Champion Holdings Limited acquired 51% of the voting equity in Champion Haworth Moore Limited, a company whose principal activity is audit and accountancy. Champion Plc has an effective interest of 51%. 


Fair value of the consideration is equal to £416,307. Other than the intangible assets of £90,000 as detailed in note 10, no assets or liabilities were purchased in this acquisition. Therefore goodwill recognised on consideration is £326,307.


        Details are as follows:


Consideration paid 



  £

Cash

408,340

Cost of acquisition

7,967


 416,307



Net assets (at fair value)




Other Intangibles

90,000



Goodwill

326,307


The goodwill recognised on consolidation relates to the ability of the purchased entity to create increased cashflows for the group via the acquisition of the entitlement to future profits.


£163,336 of the cash consideration was paid on the date of completion. The remaining £245,004 is payable in four instalments on each six month anniversary following the date of completion, dependant on the level of turnover over a two year period following the date of acquisition. The amount outstanding at the year end is £183,753.

        

Since the acquisition date, Champion Haworth Moore Limited has contributed £906,804 to the group's revenue. There has been profit of £28,515 for the period.


28.
    ACQUISITIONS IN PRIOR PERIOD

  

On 1 February 2007 the subsidiary Champion Business Solutions Limited acquired 57% of the voting equity in Champion Stokes Limited, a company whose principal activity is audit and accountancy. Champion Plc has an effective interest of 43.4%. 


Fair value of the consideration is equal to 300 £1 ordinary shares issued on acquisition.No assets or liabilities were purchased on acquisition, therefore the deemed valuation is £300 £1 ordinary shares.


The Preston part of Champion Business Solutions Limited was transferred in to Champion Stokes Limited; there was no gain or loss on the transfer as the net assets equated to nil.  


Since the acquisition date, Champion Stokes Limited has contributed £357,000 to the group's revenue. There has been no profit or loss for the period, therefore if the acquisition had occurred on 01 July 2006 there would be no effect on the group profit for the period.  

29.   POST BALANCE SHEET EVENTS


Since the year end Champion Stokes Limited has changed its name to Champion Business 
 Advisors Limited


In September 2008 the Group acquired the goodwill and business assets of Robinson Rose Limited from the company's administrators. The consideration of £0.017m was settled by an initial payment of £0.01m with the remainder deferred to be paid in six months time. The turnover for Robinson Rose Ltd for the year to 29 February 2008 was £212,803. The business will be carried on through Champion Business Advisors Ltd. 


In October 2008 the Group acquired 42.86% of the issued share capital of Champion Business Advisors Limited from John Stokes. The consideration was £0.160m and was settled by transfer of debtors and work in progress to John Stokes. At the same time John Stokes resigned as a director and employee of the company. This takes the Group's share holding in Champion Business Advisors to 100%. 


Copies of the 2008 Annual Report will be despatched to shareholders today and will also be available on the Company's website (www.champion-accountants.co.uk)


They will also be available at the following address;

1 Worsley Court, 
High Street, 

Worsley, 

Manchester 

M28 3NJ

For further information please contact:

Ged Cosgrove/Karen Baird, Champion plc        Tel: 0161 703 2500

Nick Cowles, Zeus Capital Limited                   Tel: 0161 831 1512









This information is provided by RNS
The company news service from the London Stock Exchange
 
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