RNS Number:3385N
Park Group PLC
09 June 2005
9 June 2005
PARK GROUP PLC
Preliminary Results for the Year
Ended 31 March 2005
Summary
2005 2004
Turnover #236.4m #217.0m
-------- --------
Profit before taxation #6.3m #5.0m
continuing activities #(0.8)m #(3.1)m
discontinued activities
-------- --------
#5.5m #1.9m
======== ========
Earnings per share 2.34p 0.74p
Final dividend per share 0.74p 0.675p
Total dividend per share 1.10p 1.00p
* Pre-tax profit from continuing operations 28 per cent higher
* Dividend up 10 per cent
* Interest receipts well up on previous year
Peter Johnson, Chairman, comments: 'The cash savings recruitment campaign for
Christmas 2005 is expected to result in an increase in orders of 7 per cent,
while agent retention rates, currently running at almost 80 per cent, continue
to exceed those achieved by our competitors. In cash lending, collections so far
in the current year are 9 per cent ahead of 2004-05.'
Enquiries: Peter Johnson, Executive Chairman
Chris Houghton, Group Managing Director
Park Group plc - Tel: 0151 653 1700
Issued on behalf of Park Group plc by Tavistock communications Limited
(contact: Keith Payne, tel: 020 7920 3150)
Chairman's Statement
I am pleased to present an excellent set of results, which build further on the
solid progress of the last few years.
Group turnover increased by 9 per cent to #236.4m while profit before tax was up
sharply at #5.5m from #1.9m in 2003-04. Earnings per share rose to 2.34p from
0.74p. The directors are pleased to recommend a final dividend of 0.74p per
share, payable on 3 October 2005 to shareholders on the register at the close of
business on 2 September 2005, making a total distribution of 1.1p per share.
Having last year disposed of the group's under performing assets, our core
financial services businesses continued to make progress in 2004-05, delivering
an improved performance year on year. In addition, we have continued to expand
the range of financial products available to our growing customer base.
As a result, profit before tax from continuing operations increased by 28 per
cent to #6.3m.
The group's cash flow remains strong. This underlying strength has enabled us to
continue to grow our loan book without recourse to external funding. Interest
receipts, at #2.0m, were 49 per cent above those of last year, driven by
increased cash balances and higher interest rates.
Cash Savings
The cash savings business increased its turnover by 9 per cent to #214.5m and
its operating profit by 13 per cent to #3.2m, on the back of a successful
marketing campaign that included both television and, for the first time, the
internet. These two methods of connecting with our customers have enabled us to
grow the client base, while our commitment to a high standard of service has
enabled us to improve customer retention rates.
The past year has also seen the successful launch of the 'Love2' range of
vouchers, complementing our extremely popular High Street Gift Voucher. Voucher
sales increased by 10 per cent to #188.9m. Sales of vouchers to corporate
customers increased by 11 per cent to #55.5m with those to the incentive market
again contributing significantly, recording a gain in sales to #23.5m. The newly
launched 'Love2travel' voucher is a welcome addition and will contribute to our
developing Park Travel business.
At the same time we have continued to expand the choice of retail outlets
available to voucher customers, underlining the position of Park's High Street
Gift Voucher as the most widely accepted multi-retailer voucher in the market.
Cash Lending
The cash lending business continued its growth of recent years with another
strong performance. Turnover increased by 52 per cent to #21.3m and operating
profit by 48 per cent to #1.1m. The loan book grew by 41 per cent to #34.8m.
Growth was centred on our core operating areas in the North of England, Scotland
and North Wales.
We now have 42 branches with two new branches opened during the year. From this
good-sized operating base, management is now concentrating on further improving
the performance of the business and the quality of the loan book. Our cheque
cashing revenues grew modestly during the year by 9 per cent, reflecting the
slow-down in the rate of branch openings. Our Cash Reserve unsecured loan book
grew to #1.3m.
During 2004-05 we saw the launch of our loan and mortgage broking business. As
well as widening the range of products available, this new operation will enable
us to utilise cross-selling opportunities between our cash savings and lending
businesses.
Park Direct Insurance, launched last year, continues to make steady progress.
Competition Commission Market Investigation
In December 2004 the Office of Fair Trading (OFT) referred the UK home credit
market to the Competition Commission for further investigation. We co-operated
fully with the OFT enquiry and are currently providing information to the
Competition Commission. It is anticipated that provisional findings will be
available in six months time. As I stated in my interim report, we believe that
the market is both transparent and highly competitive.
AIM Listing
The directors intend to change the company's stock exchange listing from the
London Stock Exchange Main Market to the Alternative Investment Market (AIM).
The directors have been advised that a company of Park Group's size is more
suited to a listing on AIM due to the increased flexibility and potential cost
savings.
International Financial Reporting Standards (IFRS)
From 1 April 2005, as a fully listed company we are required to prepare our
financial statements in accordance with international accounting standards.
It is the intention of the group to move towards a listing on AIM prior to the
publication of our interim results. As a result we will not be required to
prepare these statements in compliance with IFRS. We will continue to work
towards compliance with IFRS in accordance with the requirements of AIM.
Board Appointment
Following the appointment of Chris Houghton as group managing director in May
last year, we announced in September that Martin Stewart would be joining us as
group finance director on 1 November 2004. This completed our executive
management team and I have every confidence that under its strong leadership the
business will be able to make further progress.
Prospects
The cash savings recruitment campaign for Christmas 2005 is expected to result
in an increase in orders of 7 per cent. In addition, agent retention rates,
currently running at almost 80 per cent, continue to exceed those achieved by
our competitors.
The principal focus of our lending business this year will be to improve the
quality of our loan book.
On 5 October 2004 the board announced that I was exploring options with regard
to my 74 per cent shareholding in Park. I am pleased to confirm that I and the
executive directors of Park, with third party financial support, are now in
discussions to acquire the company. This may or may not lead to a formal offer
for the company.
Christopher Baker and George Marcall, Park Group's two independent non-executive
directors, have formed a committee to look after the interests of third party
shareholders. N M Rothschild & Sons Limited is advising this committee.
Our success is due in no small measure to the work and dedication of our staff
and I would like to thank all employees for their hard work and continued
support.
Peter Johnson
Chairman
9 June 2005
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31 MARCH 2005
2005 2004
Notes #'000 #'000
-------- --------
Turnover 235,802 210,051
- Continuing operations 588 6,942
- Discontinued operations
-------- --------
1 236,390 216,993
======== ========
Operating profit
- Continuing operations 4,320 3,590
- Discontinued operations (817) (2,803)
-------- --------
1 3,503 787
Loss on disposal of business - (251)
Interest receivable 2,026 1,361
Interest payable (3) (1)
-------- --------
Profit on ordinary operations before taxation 5,526 1,896
Taxation 2 (1,694) (683)
-------- --------
Profit on ordinary operations after taxation 3,832 1,213
Dividends (1,806) (1,634)
-------- --------
Retained profit/(loss) for the financial year 2,026 (421)
======== ========
Earnings per share
- basic 3 2.34p 0.74p
- diluted 3 2.29p 0.73p
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2005
2005 2004
#'000 #'000
Fixed assets
Intangible assets 2,824 2,221
Tangible assets 7,440 8,726
Investments 2 2
------- -------
10,266 10,949
------- -------
Current assets
Stocks 685 1,461
Debtors 42,994 32,378
Cash 4,694 4,640
------- -------
48,373 38,479
Creditors (61,334) (54,266)
------- -------
Net current liabilities (12,961) (15,787)
Provisions (24) -
------- -------
Net liabilities (2,719) (4,838)
======= =======
Capital and reserves 3,283 3,267
Called up share capital
Share premium account 969 892
Profit and loss account (6,971) (8,997)
------- -------
Shareholders' deficit (2,719) (4,838)
======= =======
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2005
2005 2005 2004 2004
#'000 #'000 #'000 #'000
Net cash inflows/(outflows) from
operating 1,279 (596)
activities
Returns on investments and servicing
of finance
Interest received 2,027 1,362
Interest paid (3) (1)
2,024 1,361
-------- --------
Taxation (945) (895)
Capital expenditure and
financial investment
Purchase of tangible fixed assets (697) (1,016)
Sale of tangible fixed assets 872 944
175 (72)
-------- --------
Acquisitions and disposals (938) (1,926)
Equity dividends paid (1,634) (1,219)
Financing
Issue of ordinary share capital 93 93
-------- --------
Increase/(decrease) in cash 54 (3,254)
-------- --------
Notes
1. Analysis of turnover and operating profit
Year ended Year ended
31.03.05 31.03.04
Turnover Operating Turnover Operating
profit/(loss) profit/(loss)
#'000 #'000 #'000 #'000
Cash savings 214,517 3,237 196,089 2,859
Cash lending 21,285 1,083 13,962 731
-------- -------- -------- --------
Continuing operations 235,802 4,320 210,051 3,590
Discontinued operations 588 (817) 6,942 (2,803)
-------- -------- -------- --------
236,390 3,503 216,993 787
======== ======== ======== ========
Continuing Discontinued Continuing Discontinued
operations Operations operations Operations
Operating
profit/(loss) 4,320 (817) 3,590 (2,803)
Loss on disposal of
business - - - (251)
Net interest
receipts 2,023 - 1,356 4
-------- -------- -------- --------
Profit before taxation 6,343 (817) 4,946 (3,050)
======== ======= ======== ========
Cash lending result includes -
#'000 #'000
Charge for bad and doubtful debts (6,340) (2,856)
-------- ---------
2. Taxation
#'000 #'000
Charge for the year - current
and deferred 1,757 687
Prior year adjustments (63) (4)
-------- ---------
1,694 683
======== =========
3. Earnings per share
The calculation of basic and diluted earnings per share is based on the profit
on ordinary operations after taxation of #3,832,000 (2004 - #1,213,000) and on
the weighted average number of shares, calculated as follows:
2005 2004
Basic eps - weighted average number of shares 163,716,419 162,901,411
Diluting effect of employee share options 3,398,958 3,204,822
------------ ----------
Diluted eps - weighted average number of shares 167,115,377 166,106,233
------------ ----------
4. The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 March 2005 or 2004 but is derived from
those accounts. Statutory accounts for 2004 have been delivered to the Registrar
of Companies and those for 2005 will be delivered following the company's annual
general meeting. The auditors have reported on those accounts; their reports
were unqualified and did not contain statements under section 237(2) or (3) of
the Companies Act 1985.
5. The annual report will be posted to shareholders on 14 July 2005 and the
annual general meeting of the company will be held in Birkenhead on Tuesday 20
September 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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