RNS Number : 2557U
Leo Insurance Services PLC
13 May 2008
LEO INSURANCE SERVICES PLC
13 May 2008
Leo Insurance Services plc ("LEO", the "Company" or the "Group")
Preliminary results for the year ended 31 January 2008
Chairman's Statement
In the year ended January 31 2008 the Group made a consolidated loss of £30,799 (2007: loss £174,989 including an exceptional
administrative expense of £169,912).
Leo's only investment continues to be a 50% share of Grafton Insurance Services Ltd, a brokerage specialising in property insurance. It
was announced during the year that one of Grafton's long term contracts with Bizspace Plc had been terminated. This leaves Safeland Plc as
its principle customer with whom it is contracted for the next five years and whose portfolio continues to grow.
The board continues to search for growth both organically and via acquisitions.
LG Lipman
Chairman
CONSOLIDATED INCOME STATEMENT for the year ended 31 January 2008
Unaudited Audited
Notes 2008
£ 2007
£
Revenue - -
Cost of sales - -
GROSS PROFIT - -
Administrative expenses
- Exceptional - (169,912)
- Other (100,496) (67,773)
OPERATING LOSS (100,496) (237,685)
Share of results of joint venture - post tax 70,543 61,215
LOSS BEFORE INTEREST (29,953) (176,470)
Finance income 3,187 5,648
Finance costs (4,033) (4,167)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (30,799) (174,989)
Taxation - -
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (30,799) (174,989)
LOSS PER ORDINARY SHARE
Basic and diluted 3 (0.43p) (2.44p)
The operating loss for the year arises from the group's continuing operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 January 2008
Share capital Share Premium Retained Earnings Total Equity
£ £ £ £
At 1 February 2006 70,624 5,761 (54,127) 22,258
Issue of share capital 1,536 - - 1,536
Loss for the year - - (174,989) (174,989)
Share based payment charge - - 169,912 169,912
At 31 January 2007 72,160 5,761 (59,204) 18,717
Loss for the year - - (30,799) (30,799)
At 31 January 2008 72,160 5,761 (90,003) (12,082)
CONSOLIDATED BALANCE SHEET 31 January 2008
Unaudited Audited
Notes 2008 2007
£ £
NON CURRENT ASSETS
Interests in joint ventures 16,041 65,520
CURRENT ASSETS
Trade and other receivables 3,759 16,111
Cash and cash equivalents 69,543 18,476
TOTAL CURRENT ASSETS 73,302 34,587
TOTAL ASSETS 89,343 100,107
CURRENT LIABILITIES
Trade and other payables (101,425) (81,390)
TOTAL CURRENT LIABILITIES (101,425) (81,390)
NET (LIABILITIES) / ASSETS (12,082) 18,717
_
EQUITY
Share capital 4 72,160 72,160
Share premium account 5,761 5,761
Retained losses (90,033) (59,204)
TOTAL EQUITY (12,082) 18,717
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 January 2008
Unaudited Audited
Notes 2008 2007
£ £
OPERATING ACTIVITIES
Net cash out from operations 5 (72,142) (92,174)
Interest paid - -
Net cash outflow from operating (72,142) (92,174)
activities
INVESTING ACTIVITIES
Interest received 709 1,393
Dividends received from joint venture 122,500 -
undertaking
Net cash inflow from investing 123,209 1,393
activities
FINANCING ACTIVITIES
Proceeds on issue of shares - 1,536
Net cash inflow from financing - 1,536
activities
NET INCREASE / (DECREASE) IN CASH AND 51,067 (89,245)
CASH EQUIVALENTS
Cash and cash equivalents at beginning 18,476 107,221
of year
CASH AND CASH EQUIVALENTS AT END OF YEAR 69,543 18,476
NOTES TO THE PRELIMINARY ANNOUNCEMENT for the year ended 31 January 2008
1 BASIS OF PREPARATION
This preliminary statement is not the Company's statutory accounts for the
year ended 31 January 2008 or the period ended 31 January 2007. The
statutory accounts for the year ended 31 January 2008 will be finalised
based on the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The statutory
accounts for the year ended 31 January 2007 have been delivered to the
registrar of companies and received an Auditors' Report which was
unqualified and did not contain statements under s237 (2) and (3) of the
Companies Act 1985.
This announcement is prepared applying International Financial Reporting
Standards as adopted by the European Union.
The financial information contained within this preliminary announcement
was approved by the board on 12 May 2008. Copies of this announcement are
available from the company's registered office at 94-96 Great North Road,
London, N2 0NL. The Annual Re
2 ACCOUNTING POLICIES
STANDARDS ISSUED BUT NOT YET EFFECTIVE
At the date of authorisation of these financial statements the following Standards and Interpretations which have not been applied in
these financial statements were in issue but not yet effective:
IFRS 2 Share Based Payment - Amendment relating to vesting conditions and
cancellations
IFRS 3 Business Combinations - Comprehensive revision on applying the
acquisition method
IFRS 8 Operating Segments
IFRIC 11 IFRS 2 - Group and Treasury Share Transactions
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer Loyalty Programmes
IFRIC 14 IAS 19 - The limit on a Defined Benefit Asset Minimum Funding
Requirements and their interaction
IAS 1 Presentation of Financial Statements - Comprehensive revision
including requiring a statement of comprehensive income
IAS 23 Borrowing costs - Comprehensive revision to prohibit immediate
expensing
IAS 27 Consolidated and Separate Financial Statements - Consequential
amendments arising from amendments to IFRS 3
IAS 28 Investments in Associates - Consequential amendments arising from
amendments to IFRS 3
IAS 31 Interests in Joint Ventures - Consequential amendments arising from
amendments to IFRS 3
IAS 32 Financial Instruments Presentation - Amendments relating to
puttable instruments and obligations arising on liquidation
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the
financial statements of the Group when the relevant standards and interpretations come into effect.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out
below.
FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS
In preparing these financial statements, the group has elected to apply the transitional arrangements permitted by IFRS 1 "First-time
adoption of International Financial Reporting Standards" as detailed below:
* business combinations prior to 1 February 2006 have not been restated to comply with IFRS 3 "Business Combinations";
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of Leo Insurance Services plc, its subsidiary undertaking and
the Group's share of profits and losses and net assets of its joint venture made up to 31 January each year.
JOINT VENTURES
A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint
control.
Jointly controlled entities are accounted for using the equity method. Investments in joint ventures are carried in the balance sheet at
the Group's share of the net assets of the joint venture.
OPERATING PROFIT
Operating profit is stated before share of results of joint ventures, interest and tax.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group has become a party to the
contractual priorities of the instrument.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and deposits held at call with banks.
BORROWINGS
All borrowing costs are recognised in the income statement in the period in which they are incurred.
FINANCIAL LIABILITIES AND EQUITY
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
EQUITY INSTRUMENTS
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
TRADE RECEIVABLES
Trade receivables are classified as 'loans and receivables', are measured on initial recognition at fair value and are subsequently
measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are
recognised in the income statement when there is objective evidence that the asset is impaired.
TRADE PAYABLES
Trade payables are classified as 'other financial liabilities', are measured on initial recognition at fair value and are subsequently
measured at amortised cost using the effective interest rate method.
DEFERRED TAXATION
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that
are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance
sheet liability method. 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 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 in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each 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 is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the 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.
SHARE BASED PAYMENT
The Group has applied the requirements of IFRS 2 Share based payment. The Group issues equity settled share based payments to certain
employees and third parties. Equity settled share based payments are measured at fair value at the date of the grant. The fair value
determined at the grant date of the equity settled share based payments is expensed on a straight line basis over the vesting period, based
on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's
best estimate, for the effects on non-transferability, exercise restrictions and behavioural considerations.
SEGMENTAL REPORTING
A business segment is a group of assets and operations that provide a product or service and that is subject to risks and returns that
are different from other business segments. A geographic segment is a group of assets and operations that provide a product or service
within a particular economic environment and that is subject to risks and returns that are different from segments operating in different
economic environments.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINITY
There are no critical accounting judgements or key sources of estimation and uncertainty.
Unaudited
Audited
3 LOSS PER ORDINARY SHARE 2008
2007
£
£
The calculations of loss per share are based on the following
losses and number of shares:
Loss for the financial period (30,799)
(174,989)
Number
Number
Weighted average number of shares for basic and diluted loss per 7,215,956
7,177,247
share
As there is a loss for the year, there is no dilutive effect of the share options and therefore no difference between the
basic and diluted loss
per share.
4 SHARE CAPITAL Unaudited
Audited
2008
2007
£
£
Authorised:
20,000,000 ordinary 200,000
200,000
shares of 1p each
65,000 preference 65,000
65,000
shares of £1 each
265,000
265,000
Allotted, issued and
fully paid:
7,215,956 ordinary 72,160
72,160
shares of 1p each
Share rights
The redeemable preference shares provide for a fixed cumulative dividend at a rate of 6% per annum which accrued on a daily basis. The
preference shares can be redeemed by the Company at any time on seven days written notice. The preference shares can be redeemed by the
holder if the dividend is in arrears for at least 12 months or, in any event the shares are redeemable, upon the second anniversary of
issue. If the preference shares are not redeemed by the appropriate date, the dividend rate will increase to 9% per annum. The preference
shares do not confer a right to attend, speak or vote at any general meeting of the Company.
Share options:
On 3 February 2005 L Lipman, E Lipman and P Davis were each conditionally granted options over 911,458 ordinary shares worth £175,000
as valued by reference to the average closing middle market quotation for an ordinary share for the three dealing days following admission.
Each option is exercisable at the market value at the date of the grant, being the par value of 1p per share, at any time after 18 months
and before 10 years following the date of grant.
The Company has also granted options to subscribe for ordinary shares in the Company equivalent to 1% of the issued share capital on
completion of an acquisition which exceeds 75% in any class test within the AIM rules. These options are only exercisable during the period
from date of acquisition to the period ending 18 months after that date at a price equivalent to the issue price in connection with the
acquisition.
As at 31 January 2008, the Company had 2,734,374 (2007: 2,734,374) outstanding unexpired options that are exercisable at 1p per ordinary
share.
5 CASH FLOWS Unaudited Audited
2008 2007
£ £
Operating loss (100,496) (237,685)
Adjustments for:
Share option charge - 169,912
Changes in working capital:
Decrease / (Increase) in trade and other 8,319 (14,797)
receivables
Increase / (Decrease) in trade and other 20,035 (9,604)
payables
Net cash flow from operations (72,142) (92,174)
6 INVESTMENT IN JOINT VENTURE
On 5 January 2006, the Company acquired 50 £1 "B" ordinary shares in Grafton Insurance Services Limited at par. The Company owns 100%
of the "B" ordinary shares which represents 50% of the issued ordinary shares.
The principal activity of Grafton Insurance Services Limited is to trade as a property insurance broker.
The Group's share of the joint venture results and net assets are set out below.
Unaudited Audited
2008 2007
£
£
Turnover 197,029 308,517
Operating profit 88,350 76,866
Interest received 2,478 4,255
Profit before tax 90,828 81,121
Tax (18,664) 15,651
Profit after tax 72,164 65,470
2008 2007
£ £
Interest in joint venture at 1 February 65,520 4,309
Share of profit for the year 73,021 61,215
Dividends (122,500) -
Interest in joint venture at 31 January 16,041 65,520
7 EXPLANATION OF TRANSITION TO IFRS
This is the first year that the Group has presented its financial statements under IFRS. The following disclosures are required in the
year of transition. The last financial statements under UK GAAP were for the year ended 31 January 2008 and the date of transition to IFRSs
was therefore 1 February 2007.
(a) Reconciliation of equity Notes UK GAAP Effect of transition to IFRS IFRS
at 1 February 2007 £ £ £
Non-current assets
Investment in joint ventures 50 - 50
Total non-current assets 50 - 50
Current assets
Trade and other receivables 1,264 - 1,264
Cash and cash equivalents 107,721 - 107,721
Total current assets 108,985 - 108,985
Total assets 109,035 - 109,035
Current liabilities
Trade and other payables 21,777 - 21,777
Total current liabilities 21,777 - 21,777
Non-current liabilities
Preference shares 65,000 - 65,000
Total non-current liabilities 65,000 - 65,000
Total liabilities 86,777 - 86,777
Net assets 22,258 - 22,258
Equity
Share capital 70,624 - 70,624
Share premium 5,761 - 5,761
Retained earnings (54,127) - (54,127)
Total equity 22,258 - 22,258
(b) Reconciliation of equity at 31 January Notes UK GAAP Effect of transition IFRS
2008 £ to IFRS £
£
Non-current assets
Investment in joint ventures 65,520 - 65,520
Total non-current assets 65,520 - 65,520
Current assets
Trade and other receivables 16,111 - 16,111
Cash and cash equivalents 18,476 - 18,476
Total current assets 34,587 - 34,587
Total assets 100,107 - 100,107
Current liabilities
Trade and other payables 16,390 - 16,390
Preference shares 65,000 - 65,000
Total current liabilities 81,390 - 81,390
Total liabilities 81,390 - 81,390
Net assets 18,717 - 18,717
Equity
Share capital 72,160 - 72,160
Share premium 5,761 - 5,761
Retained earnings (59,204) - (59,204)
Total equity 18,717 - 18,717
(c) Reconciliation of the Notes UK GAAP Effect of transition IFRS
Income Statement for the year £ to IFRS £
ended 31 January 2008 £
Revenue: Group and share of i 308,517 (308,517) -
joint venture's
Less: share of joint ventures (308,517) 308,517 -
- - -
Cost of sales - - -
Gross profit - - -
Administrative expenses 67,773 - 67,773
Exceptional administrative 169,912 - 169,912
expenses
Operating loss (237,685) - (237,685)
Share of results of associate 76,866 (15,651) (61,215)
and joint ventures - post tax
Loss before interest and tax (160,819) (15,651) (176,470)
Finance income 5,648 - 5,648
Finance costs (4,167) - (4,167)
Loss before tax (159,338) (15,651) (174,989)
Tax (15,651) 15,651 -
Loss for the period (174,989) - (174,989)
Basic and diluted earnings per (2.44)p - (2.44)p
share (pence) 2
i IAS 31 - Change in presentation within the Income Statement regarding accounting for Joint Ventures.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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