REG - CPPGroup Plc - Annual Financial Report <Origin Href="QuoteRef">CPPG.L</Origin> - Part 2
31/03/2015 07:40
- Part 2: For the preceding part double click ID:nRSe9253Ia
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Current tax credit on equalisation reserve movement - - - - - - 31 31
Equity settled share based payment charge - - - - - 50 - 50
Deferred tax on share based payment charge - - - - - - (1) (1)
Exercise of share options 11 9 (5) - - - - (9) (5)
At 31 December 2013 17,120 33,292 (100,399) 609 8,129 11,688 5,259 (24,302)
Total comprehensive expense - - - 111 - - (6,749) (6,638)
Movement on equalisation reserve - - - - (642) - 642 -
Current tax charge on equalisation reserve movement - - - - - - (138) (138)
Equity settled share based payment charge - - - - - 203 - 203
Deferred tax on share based payment charge - - - - - - 1 1
Exercise of share options 11 6 (1) - - - - (6) (1)
At 31 December 2014 17,126 33,291 (100,399) 720 7,487 11,891 (991) (30,875)
Consolidated cash flow statement
2014 2013
Note £'000 £'000
Net cash (used in)/generated by operating activities 12 (32,906) 20,158
Investing activities
Interest received 432 404
Purchases of property, plant and equipment (190) (332)
Purchases of intangible assets (406) (2,460)
Cash consideration in respect of sale of discontinued operation 7 275 26,086
Credit/(costs) associated with disposal of discontinued operation 7 28 (4,215)
Cash disposed of with discontinued operation 7 - (3,731)
Investment in joint venture 7 (1,000) (780)
Net cash (used in)/from investing activities (861) 14,972
Financing activities
Repayment of bank loans - (30,500)
Proceeds from new borrowings 8,831 11,249
Interest paid (514) (1,089)
Costs of refinancing - (4,633)
Cost of compromising the Commission Deferral Agreement (193) -
Issue of ordinary share capital and associated costs (499) (5)
Net cash from/(used in) financing activities 7,625 (24,978)
Net (decrease)/increase in cash and cash equivalents (26,142) 10,152
Effect of foreign exchange rate changes (159) (287)
Cash and cash equivalents at 1 January 66,900 57,035
Cash and cash equivalents at 31 December 8 40,599 66,900
Notes to condensed financial statements
1. General information
While the financial information included in this annual results announcement
has been computed in accordance with the recognition and measurement criteria
of International Financial Reporting Standards as adopted for use by the
European Union ('IFRS') and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS, this announcement does not
itself contain sufficient information to comply with IFRS. The Company will
publish full financial statements that comply with IFRS in April 2015.
The financial information set out above does not constitute the Company's
statutory financial statements for the years ended 31 December 2014 or 31
December 2013, but is derived from the 2014 financial statements. Statutory
financial statements for 2013 for the Company prepared under IFRS have been
delivered to the Registrar of Companies and those for 2014 for the Company
will be delivered following the Company's Annual General Meeting. The Auditor,
Deloitte LLP, has reported on these financial statements; their report was
unqualified, did not draw attention to any matters by way of emphasis and did
not contain statements under s498 (2) or (3) of the Companies Act 2006. These
2014 financial statements were approved by the Board of Directors on 30 March
2015.
2. Accounting policies
The same accounting policies, presentation and methods of computation are
followed in the condensed financial statements as were applied in the Group's
audited financial statements for the year ended 31 December 2013 except that
the following Standards and Interpretations have become effective and have
been adopted in these condensed financial statements. Their adoption has not
had any material impact on the Group. No Standards or Interpretations have
been adopted early in these condensed financial statements.
Standard/Interpretation Subject
Amendments to IAS 32 (December 2011) Offsetting financial assets and financial liabilities
Amendments to IAS 36 Recoverable amount disclosure for non-financial assets
3. Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying accounting policies
Going concern
The financial statements have been prepared on a going concern basis, as the
Board of Directors have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence for the
foreseeable future. The going concern assessment considered the risks and
uncertainties facing the Group, which include trading, residual customer
redress and the medium term strategy. Further details of the assessment are
provided in the going concern section earlier in this statement.
Key sources of estimation uncertainty
Customer redress and associated costs
The customer redress and associated costs provision relates to costs
associated with residual redress exercises. At 31 December 2014 the remaining
balance of the provision is £6.4 million. The provision includes anticipated
compensation payable to customers through the residual customer redress
exercises together with professional fees associated with these exercises.
The residual customer redress exercises in some instances are dependent on
customer response rates; changes to the assumptions on response rates would
lead to a change in the customer redress provision which would be reflected
through the consolidated income statement.
Provision for onerous leases
The onerous lease provision relates to the expected non-utilisation of our
vacated offices in the UK. At 31 December 2014, the onerous lease provision is
£1.7 million, which includes future lease payments and other associated
costs.
Any changes to the estimate of the non-utilisation period of the properties or
other associated costs will be reflected in the consolidated income
statement.
4. Segmental analysis
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the Board
of Directors to allocate resources to the segments and to assess their
performance.
The Group is managed on the basis of three broad geographical regions:
- UK and Ireland (UK and Ireland);
- Europe and Latin America (Spain, Italy, Germany, Turkey, Mexico, Portugal,
France and Brazil);
- Asia Pacific (India, Hong Kong, China, Malaysia and Singapore).
Segment revenues and performance have been as follows:
UK and Ireland2014£'000 Europe andLatin America2014£'000 Asia Pacific2014£'000 Total2014£'000
Year ended 31 December 2014
Continuing operations
Revenue - external sales 69,690 32,463 6,653 108,806
Cost of sales (40,798) (16,357) (3,619) (60,774)
Gross profit 28,892 16,106 3,034 48,032
Depreciation and amortisation (1,325) (784) (34) (2,143)
Other administrative expenses (31,971) (10,160) (3,233) (45,364)
Regional operating (loss)/profit before exceptional items (4,404) 5,162 (233) 525
Exceptional items (note 5) (6,323)
Operating loss after exceptional items (5,798)
Investment revenues 432
Finance costs: non-derivative instruments (2,296)
Loss before taxation (7,662)
Taxation 1,698
Loss for the year from continuing operations (5,964)
Discontinued operations
Loss for the year from discontinued operations (note 7) (785)
Loss for the year (6,749)
For the purposes of resource allocation and assessing performance, operating
costs and revenues are allocated to the regions in which they are earned or
incurred. The above does not reflect additional net charges of central costs
of £1,845,000 presented within UK and Ireland in the table above which have
been charged to other regions for statutory purposes.
UK and Ireland2013£'000 Europe andLatin America2013£'000 Asia Pacific2013£'000 Total2013£'000
Year ended 31 December 2013
Continuing operations
Revenue - external sales 128,990 42,603 6,438 178,031
Cost of sales (87,825) (21,317) (3,032) (112,174)
Gross profit 41,165 21,286 3,406 65,857
Depreciation and amortisation (5,869) (548) (40) (6,457)
Other administrative expenses (43,402) (13,605) (4,199) (61,206)
Regional operating (loss)/profit before exceptional items (8,106) 7,133 (833) (1,806)
Exceptional items (note 5) (37,506)
Operating loss after exceptional items (39,312)
Investment revenues 394
Finance costs: non-derivative instruments (4,305)
Loss before taxation (43,223)
Taxation (2,112)
Loss for the year from continuing operations (45,335)
Discontinued operations
Profit for the year from discontinued operations (note 7) 12,468
Loss for the year (32,867)
For the purposes of resource allocation and assessing performance, operating
costs and revenues are allocated to the regions in which they are earned or
incurred. The above does not reflect additional net charges of central costs
of £1,983,000 presented within UK and Ireland in the table above which have
been charged to other regions for statutory purposes.
Segment assets
2014£'000 2013 £'000
UK and Ireland 51,673 85,913
Europe and Latin America 7,012 11,002
Asia Pacific 2,937 2,392
Total segment assets 61,622 99,307
Unallocated assets 2,248 142
Consolidated total assets 63,870 99,449
Deferred tax is not allocated to segments.
Capital expenditure
Intangible assets Property, plant and equipment
2014£'000 2013£'000 2014£'000 2013 £'000
Continuing operations
UK and Ireland 393 1,450 118 194
Europe and Latin America 13 128 61 42
Asia Pacific - 26 11 5
Additions from continuing operations 406 1,604 190 241
Revenues from major products
2014£'000 2013 £'000
Continuing operations
Retail assistance policies 82,652 117,066
Retail insurance policies 10,229 28,153
Packaged and Wholesale policies 15,080 32,272
Non-policy revenue 845 540
Revenue from continuing operations 108,806 178,031
Discontinued operations - 15,634
Consolidated total revenue 108,806 193,665
Major product streams are disclosed on the basis monitored by the Board of
Directors. For the purpose of this product analysis, "retail assistance
policies" are those which may be insurance backed but contain a bundle of
assistance and other benefits; "retail insurance policies" are those which
protect against a single insurance risk; "packaged and wholesale policies" are
those which are provided by Business Partners to their customers in relation
to an on-going product or service which is provided for a specified period of
time; "non-policy revenues" are those which are not in connection with
providing an on-going service to policyholders for a specified period of
time.
Geographical information
The Group operates across a wide number of territories, of which the UK and
Spain are considered individually material. Revenue from external customers
and non-current assets (excluding deferred tax) by geographical location are
detailed below:
External revenues Non-current assets
2014£'000 2013 £'000 2014£'000 2013 £'000
Continuing operations
UK 68,412 125,432 4,100 7,008
Spain 15,215 19,767 176 432
Other 25,179 32,832 352 920
Total continuing operations 108,806 178,031 4,628 8,360
Discontinued operations - 15,634 - -
108,806 193,665 4,628 8,360
Information about major customers
There are no customers either in the current or prior year from which the
Group earns more than 10% of its revenue.
5. Exceptional items
Note 2014£'000 2013 £'000
Customer redress and associated costs 10 3,000 18,168
Restructuring costs 2,579 5,503
Commission deferral compromise and associated costs 744 -
Impairment of IT assets - 8,058
Impairment of goodwill, intangible assets and freehold - 5,822
Other - (45)
Exceptional items included in operating loss 6,323 37,506
Tax on exceptional items (646) (222)
Total exceptional items after tax 5,677 37,284
The customer redress and associated costs of £3,000,000 (2013: £18,168,000)
relates to the latest estimate with respect to residual customer redress
activity.
The restructuring costs of £2,579,000 (2013: £5,503,000) principally relate to
redundancy programmes and associated costs across the Group, along with
onerous lease provisioning following closure of the Tamworth and Manchester
sites in the UK. The majority of this cost is located in the UK.
The commission deferral compromise and associated costs of £744,000 (2013:
£nil) relates to professional fees associated with the agreement to compromise
the Commission Deferral Agreement which has completed in 2015.
6. (Loss)/earnings per share
Basic and diluted (loss)/earnings per share have been calculated in accordance
with IAS 33 "Earnings per Share". Underlying (loss)/earnings per share have
also been presented in order to give a better understanding of the performance
of the business. In accordance with IAS 33, potential ordinary shares are only
considered dilutive when their conversion would increase the loss per share
from continuing operations attributable to equity holders. The diluted loss
per share is therefore equal to the basic loss per share for the current and
prior year.
(Loss)/earnings
Continuing operations Discontinued operations Total
2014£'000 2013£'000 2014£'000 2013£'000 2014£'000 2013 £'000
(Loss)/earnings for the purposes of basic and diluted (loss)/earnings per share (5,964) (45,335) (785) 12,468 (6,749) (32,867)
Exceptional items (net of tax) 5,677 37,284 (311) (10,389) 5,366 26,895
(Loss)/earnings for the purposes of underlying basic and diluted (loss)/earnings per share (287) (8,051) (1,096) 2,079 (1,383) 5,972
Number of shares
Number (thousands) Number (thousands)
Weighted average number of ordinary shares for the purposes of basic and diluted (loss)/earnings per share 171,622 171,546
Continuing operations Discontinued operations Total
2014Pence 2013Pence 2014Pence 2013Pence 2014Pence 2013 Pence
Basic and diluted (loss)/earnings per share (3.48) (26.43) (0.46) 7.27 (3.94) (19.16)
Basic and diluted underlying (loss)/earnings per share (0.17) (4.69) (0.64) 1.21 (0.81) (3.48)
On 13 January 2015, the Company's existing 10 pence ordinary share capital was
subdivided and redesignated into one new ordinary share of 1 penny each and
one new deferred share of 9 pence each. The new deferred shares have no rights
to receive dividends and will only have very limited rights on a return of
capital. Additionally they will not be admitted to trading on AIM or any other
stock exchange. Accordingly, the additional deferred shares have not been
considered in the calculation of (loss)/earnings per share.
On 11 February 2015, the Company issued 666,666,667 new ordinary shares as
part of a £20.0 million equity raise; further detail is available in note 13.
This share issue occurred after the period end and as such the shares are not
included in the current year (loss)/earnings per share calculation.
7. Discontinued operations
On 24 March 2014, the Group completed the sale of its 49% shareholding in
Home3 Assistance Limited (Home3). The gross consideration on disposal was
£275,000.
In accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued
Operations" this operation has been presented as discontinued operations,
which is consistent with the prior year. The comparative figure includes the
disposal of our North American operation which completed in May 2013.
The consolidated income statement, summary of cash flows and assets and
liabilities of this business is set out below:
(i) Consolidated income statement
2014 2013
Home3£'000 North America£'000 Total£'000 Home3£'000 North America £'000 Total£'000
Revenue - - - - 15,634 15,634
Cost of sales - - - - (7,962) (7,962)
Gross profit - - - - 7,672 7,672
Administrative expenses - - - - (3,902) (3,902)
Share of loss of joint venture (1,096) - (1,096) (780) - (780)
Operating (loss)/profit (1,096) - (1,096) (780) 3,770 2,990
Investment revenues - - - - 10 10
(Loss)/profit before taxation (1,096) - (1,096) (780) 3,780 3,000
Taxation - - - - (921) (921)
(Loss)/profit after tax (1,096) - (1,096) (780) 2,859 2,079
Profit/(loss) on disposal 265 46 311 (14) 10,403 10,389
(Loss)/profit for the year (831) 46 (785) (794) 13,262 12,468
On 24 March 2014, the Group completed the sale of its joint venture, Home3, to
Mapfre Abraxas Software Limited.
2014 2013
Home3£'000 North America£'000 Total£'000 Home3£'000 North America£'000 Total£'000
Proceeds 275 - 275 - 26,086 26,086
Net assets sold - - - - (14,042) (14,042)
(Costs)/credit associated with disposal (10) 46 36 (14) (3,259) (3,273)
Currency retranslation differences reclassified on disposal - - - - 1,618 1,618
Profit/(loss) on disposal 265 46 311 (14) 10,403 10,389
(ii) Summary of cash flows
2014£'000 2013 £'000
Net cash flows from operating activities - 2,216
Net cash flows from investing activities - (27)
Net cash flows from financing activities - (1,266)
Cash consideration in respect of sale of discontinued operation 275 26,086
Credit/(costs) associated with the disposal of discontinued operation 28 (4,215)
Cash disposed of with discontinued operation - (3,731)
Investment in joint venture (1,000) (780)
Net cash (outflow)/inflow (697) 18,283
(iii) Assets and liabilities
Movements in the Group's share in its joint venture are as follows:
2014£'000 2013 £'000
Carrying amount at 1 January - -
Increase in investment 1,096 780
Losses recognised for the year (1,096) (780)
Carrying amount at 31 December - -
The Group had a 50% economic interest in Home3, with 49% of the issued
ordinary share capital being allotted to the Group. As part of the disposal
transaction the Group invested a further £1,000,000 to absorb its share of
unrecognised losses as well as capitalising further residual balances due from
Home3 prior to disposal. These balances have been accounted for as investments
in Home3 with the trading losses recognised limited to the level of
investment.
8. Cash and cash equivalents
Cash and cash equivalents of £40,599,000 (2013: £66,900,000) comprises cash
held on demand by the Group and short term deposits.
Cash and cash equivalents includes the following:
i) £21,542,000 (2013: £27,815,000) cash maintained by the Group's insurance
businesses for solvency purposes; and
ii) £13,380,000 (2013: £32,706,000) cash held in the UK's regulated entities
CPPL and HIL which is restricted by the terms of the VVOP and cannot be
distributed to the wider Group without FCA approval. This restricted cash
whilst being unavailable to distribute to the wider Group, is available to the
regulated entity in which it exists including for operational and residual
customer redress purposes.
Concentration of credit risk is reduced, as far as practicable, by placing
cash on deposit across a number of institutions with the best available credit
ratings. Credit quality of counterparties are as follows:
2014£'000 2013 £'000
AA 1,537 1,607
A 37,069 62,444
BBB 1,000 2,559
BB 978 167
Rating information not available 15 123
40,599 66,900
Ratings are measured using Fitch's long term ratings, which are defined such
that ratings "AAA" to "BBB" denote investment grade counterparties, offering
low to moderate credit risk. "AAA" represents the highest credit quality,
indicating that the counterparty's ability to meet financial commitments is
highly unlikely to be adversely affected by foreseeable events.
9. Borrowings
The carrying value of the Group's financial liabilities, for short term
borrowings and long term borrowings, are as follows:
2014£'000 2013 £'000
Bank loans due outside of one year 13,000 13,000
Less: unamortised issue costs (969) (1,653)
Commission deferral agreement 20,702 11,250
Borrowings due outside of one year 32,733 22,597
Analysis of repayments:
2014£'000 2013 £'000
Within one year - -
In the second year 13,000 -
In the third to fifth years 20,702 24,250
Total repayments 33,702 24,250
Less: unamortised issue costs (969) (1,653)
Total carrying value 32,733 22,597
The Group's bank debt is in the form of a revolving credit facility (RCF). The
Group is entitled to roll over repayment of amounts drawn down, subject to all
amounts outstanding falling due for repayment on expiry of the facility on 31
July 2016.
The RCF bears interest at a variable rate of LIBOR plus a margin of 4%. It is
secured by fixed and floating charges on certain assets of the Group. The RCF
includes a prepayment fee which increases over the term of the loan to a
maximum level of 8% of the outstanding principal balance. The financial
covenants of the RCF are based on the interest cover, leverage and minimum
total cash balance of the Group. The Group has been in compliance with these
covenants since inception of the RCF.
All amounts outstanding in the Commission Deferral Agreement fall due for
repayment on expiry of the agreement on 31 July 2017. The Commission Deferral
Agreement bears interest at a fixed rate of 3.5% and is secured by charges
over the assets of CPPL in substantially similar form and terms to the
security granted under the RCF.
On 11 February 2015, the Amended and Restated RCF became effective following
prepayment in part of the existing RCF, extending the term to 28 February
2018. The Amended and Restated RCF is on substantially the same terms as the
facility it replaced, with the exception of the available balance reducing to
£5.0 million, the removal of the leverage covenant and the removal of the
prepayment fee. At the same time the Group agreed to settle all the
liabilities of the Commission Deferral Agreement with certain Business
Partners for a compromise payment of £1.3 million and further deferral of
commission of up to £1.3 million. The Second Commission Deferral Agreement has
a repayment date of 31 January 2017 and is on the same terms as the Commission
Deferral Agreement. Further detail is provided in note 13.
The weighted average interest rates paid during the year were as follows:
2014% 2013 %
Bank loans 4.5 3.8
Commission deferral agreement 3.5 3.5
Weighted average 3.9 3.8
At 31 December 2014, the Group does not have any undrawn committed borrowing
facilities (2013: £nil).
10. Provisions
Onerous leases2014£'000 Customer redress and associated costs 2014 £'000 Total 2014 £'000 Restructuring costs 2013 £'000 Customer redress andassociated costs 2013 £'000 Total2013 £'000
At 1 January - 37,398 37,398 - 28,967 28,967
Charged to the income statement 1,658 3,000 4,658 1,750 18,168 19,918
Customer redress and associated costs paid in the year - (34,042) (34,042) - (9,737) (9,737)
Transfer to trade and other payables - - - (1,750) - (1,750)
At 31 December 1,658 6,356 8,014 - 37,398 37,398
The customer redress and associated cost provision comprises anticipated
compensation payable to customers through residual customer redress exercises
and associated professional fees. The outstanding regulatory fine of £8.5
million is included in non-current payables.
The onerous lease provision reflects the future lease payments and associated
costs in the expected non-utilisation period at our vacated offices in the
UK.
Customer redress and associated costs are expected to be settled within one
year of the balance sheet date and onerous lease provisions are expected to be
settled within three years of the balance sheet date.
Provisions are expected to be settled in the following periods:
Onerous leases2014£'000 Customer redress and associated costs 2014 £'000 Total 2014 £'000 Restructuring costs 2013 £'000 Customer redress andassociated costs 2013 £'000 Total2013 £'000
Within one year 685 6,356 7,041 - 37,398 37,398
Outside of one year 973 - 973 - - -
At 31 December 1,658 6,356 8,014 - 37,398 37,398
11. Share capital
2014 Number(thousands) 2014£'000 2013 Number(thousands) 2013 £'000
Called-up and allotted: Ordinary Shares of 10 pence each
At 1 January 171,588 17,120 171,487 17,111
Issue of shares in connection with:
Exercise of share options 62 6 101 9
At 31 December 171,650 17,126 171,588 17,120
During the year, the Company issued 61,529 shares to option holders for total
consideration of £6,000.
Of the 171,649,941 ordinary shares issued at 31 December 2014, 171,149,942 are
fully paid and 499,999 are partly paid.
The ordinary shares are entitled to the profits of the Company which it may
from time to time determine to distribute in respect of any financial year or
period.
All holders of ordinary shares shall have the right to attend and vote at all
general meetings of the Company. On a return of assets on liquidation the
assets (if any) remaining, after the debts and liabilities of the Company and
the costs of winding up have been paid or allowed for, shall belong to, and be
distributed amongst, the holders of all the ordinary shares in proportion to
the number of such ordinary shares held by them respectively.
As announced on 13 January 2015, subsequent to the year end and prior to
admission to the AIM market, each of the Company's existing 10 pence ordinary
share capital was subdivided and redesignated into one new ordinary share of 1
penny each and one new deferred share of 9 pence each. Each new ordinary share
of 1 penny will carry the same rights as each existing ordinary share. Each
deferred share will have no voting rights, no rights to receive dividends and
will only have very limited rights on a return of capital. The deferred shares
will not be admitted to trading on AIM or listed on any other stock exchange
and will not be freely transferable. Further detail is included in note 13.
12. Reconciliation of operating cash flows
2014£'000 2013 £'000
Loss for the year (6,749) (32,867)
Adjustment for:
Depreciation and amortisation 4,155 9,552
Equity settled share based payment expense 203 50
Impairment loss on goodwill, intangible assets and property, plant and equipment 86 5,822
Impairment of IT assets - 8,058
Loss on disposal of property, plant and equipment 43 200
Profit on disposal of discontinued operations (311) (10,389)
Commission deferral compromise and associated costs 744 -
Share of loss of joint venture 1,096 780
Investment revenues (432) (404)
Finance costs: non-derivative instruments 2,296 4,305
Income tax (credit)/expense (1,698) 3,033
Operating cash flows before movements in working capital (567) (11,860)
Decrease in inventories 56 150
Decrease in receivables 5,202 8,464
Decrease in insurance assets 2,794 23,854
Decrease in payables (9,892) (2,526)
Decrease in insurance liabilities (1,970) (3,535)
(Decrease)/increase in provisions (29,384) 8,431
Cash (used in)/generated by operations (33,761) 22,978
Income taxes repaid/(paid) 855 (2,820)
Net cash (used in)/generated by operating activities (32,906) 20,158
13. Events after the balance sheet date
On 23 December 2014, the Group announced a number of proposals, which were
subject to shareholder approval in a general meeting. These proposals were
formally approved by the shareholders at a general meeting on 13 January 2015
and were subsequently completed on 11 February 2015. The transaction
comprised the following elements:
i)an equity placing to raise in aggregate £20.0 million (approximately £17.9
million net of expenses) by way of a non-preemptive placing of 666,666,667
placing shares at a price of 3 pence per placing share (the Placing);
ii)the reorganisation of CPPGroup Plc share capital to subdivide and
re-designate each of the existing ordinary shares of 10 pence each into one
new ordinary share of 1 penny each and one deferred share of 9 pence each.
Each new ordinary share of 1 penny carries the same rights as the old 10 pence
ordinary share. Each deferred share of 9 pence has no voting rights, no rights
to receive dividends and only has very limited rights on a return of capital.
The deferred shares have not been admitted to trading on AIM or any other
stock exchange and are not freely transferable. The Placing shares represented
new ordinary shares of 1 penny each;
iii)the inter-conditional cancellation of the Group's shares from the Main
Market and admission to trading on AIM;
iv)prepayment in part of the Group's current bank facility and related costs
of £8.5 million, together with the refinancing of the remaining £5.0 million
through an Amended and Restated Facility; and
v)settlement of all the liabilities of the Commission Deferral Agreement with
certain of its Business Partners for a compromise payment of £1.3 million and
further deferral of commission of up to £1.3 million. This element of the
transaction will result in the recognition of an exceptional gain of
approximately £19 million in the 2015 consolidated income statement.
Included in the Placing shares of 666,666,667 were acquisitions by Phoenix
Asset Management Partners Limited (335,326,643), Mr Hamish Ogston
(264,144,352), through his family investment vehicle Milton Magna Limited, and
Schroder Investment Management Limited (61,437,285). Mr Hamish Ogston and
Schroder Investment Management Limited were both substantial shareholders in
the Group prior to the Placing; therefore their participation in the Placing
constituted related party transactions.
Following the Placing, the ordinary share capital of the Group is 838,316,608,
with Phoenix Asset Management holding 40.00% of this capital. Mr Hamish Ogston
holds 43.00% (reduced from 56.12% prior to the Placing) and Schroder
Investment Management hold 9.99% (reduced from 13.00% prior to the Placing).
14. Related party transactions and control
Ultimate controlling party
During the year, the Group was controlled by the Company's majority
shareholder, Mr Hamish Ogston. On 11 February 2015, Mr Hamish Ogston's holding
in the Company reduced to 43.00%, resulting in the Group no longer having a
controlling party, see note 13.
Transactions with joint ventures
During the year the Group disposed of its shareholding in its joint venture
entity, Home3. Transactions between the Group and its joint venture prior to
disposal represent related party transactions.
The Group undertook the following transactions with its joint venture entity,
Home3, prior to the disposal:
2014£'000 2013 £'000
Costs rechargeable to Home3 incurred by the Group - 138
Balance receivable from Home3 at 31 December - 2,299
The disposal of Home3 completed on 24 March 2014. As part of the disposal
agreement the balance receivable from Home3 prior to disposal of £2,350,000
was capitalised as an investment in the joint venture. £2,254,000 of this
balance has already been provided through the consolidated income statement
between 2011 and 2013. The remaining balance of £96,000 has been recognised in
the consolidated income statement in the year ended 31 December 2014.
Transactions with related parties
There have been no transactions with related parties in the year, other than
the remuneration of key management personnel. Subsequent to the year end, Mr
Hamish Ogston and Schroder Investment Management Limited participated in the
Placing; further detail is provided in note 13.
Remuneration of key management personnel
The remuneration of the Directors and senior management team, who are the key
management personnel of the Group, is set out below:
2014£'000 2013 £'000
Short term employee benefits 2,133 3,769
Post employment benefits 100 184
Termination benefits - 547
Share based payments 8 (144)
2,241 4,356
Cautionary statement
This announcement has been prepared solely to provide additional information
to shareholders as a body to meet the relevant requirements of the UK Listing
Authority. The announcement should not be relied on by any other party or for
any other purpose.
The announcement contains certain forward-looking statements. These statements
are made by the Directors in good faith based on the information available to
them up to the time of approval of the announcement but such statements should
be treated with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such forward-looking
information. Subject to the requirements of the UK Listing Authority, CPP
undertakes no obligation to update these forward-looking statements and it
will not publicly release any revisions it may make to these forward-looking
statements that may result from events or circumstances arising after the date
of this announcement.
This information is provided by RNS
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