REG - CPPGroup Plc - Half Yearly Report <Origin Href="QuoteRef">CPPG.L</Origin> - Part 2
29/10/2014 16:08
- Part 2: For the preceding part double click ID:nRSc2963Qa
(1.58) (1.50) (19.16)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Loss for the period (2,707) (2,576) (32,867)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations 146 264 387
Currency translation differences reclassified on disposal - (1,618) (1,618)
Other comprehensive income/(expense) for the period net of taxation 146 (1,354) (1,231)
Total comprehensive expense for the period attributable to equity holders of the Company (2,561) (3,930) (34,098)
CONSOLIDATED BALANCE SHEET
30 June 2014 30 June 2013 31 December 2013
£'000 £'000 £'000
Note (Unaudited) (Unaudited) (Audited)
Non-current assets
Goodwill 9 - 1,478 -
Other intangible assets 9 1,915 12,664 3,299
Property, plant and equipment 9 4,621 12,186 5,061
Investment in joint venture 8 - - -
Deferred tax asset 2 7 142
6,538 26,335 8,502
Current assets
Insurance assets 376 9,774 3,387
Inventories 121 312 149
Trade and other receivables 18,803 27,517 20,511
Cash and cash equivalents 10 53,613 62,554 66,900
72,913 100,157 90,947
Total assets 79,451 126,492 99,449
Current liabilities
Insurance liabilities (2,612) (6,823) (3,989)
Income tax liabilities (2,983) (2,817) (742)
Trade and other payables (44,502) (56,665) (49,004)
Borrowings 11 - (23,768) -
Provisions 12 (14,034) (26,532) (37,398)
(64,131) (116,605) (91,133)
Net current assets/(liabilities) 8,782 (16,448) (186)
Non-current liabilities
Borrowings 11 (32,016) - (22,597)
Deferred tax liabilities (529) (745) (527)
Trade and other payables (9,505) (3,250) (9,494)
(42,050) (3,995) (32,618)
Total liabilities (106,181) (120,600) (123,751)
Net (liabilities)/assets (26,730) 5,892 (24,302)
Equity
Share capital 13 17,123 17,118 17,120
Share premium account 33,290 33,293 33,292
Merger reserve (100,399) (100,399) (100,399)
Translation reserve 755 486 609
Equalisation reserve 7,834 8,140 8,129
ESOP reserve 11,886 11,708 11,688
Retained earnings 2,781 35,546 5,259
Total equity attributable to equity holders of the Company (26,730) 5,892 (24,302)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium account Mergerreserve Translation reserve Equalisation reserve ESOP reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
6 months ended 30 June 2014 (Unaudited)
At 1 January 2014 17,120 33,292 (100,399) 609 8,129 11,688 5,259 (24,302)
Total comprehensive income/(expense) - - - 146 - - (2,707) (2,561)
Movement on equalisation reserve - - - - (295) - 295 -
Current tax charge on equalisation reserve movement - - - - - - (63) (63)
Equity settled share based payment charge - - - - - 198 - 198
Exercise of share options 3 (2) - - - - (3) (2)
At 30 June 2014 17,123 33,290 (100,399) 755 7,834 11,886 2,781 (26,730)
6 months ended 30 June 2013(Unaudited)
At 1 January 2013 17,111 33,297 (100,399) 1,840 7,984 11,638 38,250 9,721
Total comprehensive expense - - - (1,354) - - (2,576) (3,930)
Movement on equalisation reserve - - - - 156 - (156) -
Current tax credit on equalisation reserve movement - - - - - - 36 36
Equity settled share based payment - - - - - 70 - 70
Exercise of share options 7 (4) - - - - (8) (5)
At 30 June 2013 17,118 33,293 (100,399) 486 8,140 11,708 35,546 5,892
Year ended 31 December 2013(Audited)
At 1 January 2013 17,111 33,297 (100,399) 1,840 7,984 11,638 38,250 9,721
Total comprehensive expense - - - (1,231) - - (32,867) (34,098)
Movement on equalisation reserve - - - - 145 - (145) -
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 9 (5) - - - - (9) (5)
At 31 December 2013 17,120 33,292 (100,399) 609 8,129 11,688 5,259 (24,302)
CONSOLIDATED CASH FLOW STATEMENT
Note 6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Net cash (used in)/generated by operating activities 14 (21,125) 11,279 20,158
Investing activities
Interest received 287 196 404
Purchases of property, plant and equipment (37) (240) (332)
Purchases of intangible assets (58) (1,677) (2,460)
Cash consideration in respect of sale of discontinued operations 275 26,086 26,086
Credit/(costs) associated with disposal of discontinued operations 28 (4,841) (4,215)
Cash disposed of with discontinued operations - (3,731) (3,731)
Investment in joint venture (1,096) (226) (780)
Net cash (used in)/generated by investing activities (601) 15,567 14,972
Financing activities
Repayment of bank loans - (18,500) (30,500)
Proceeds from new borrowings 8,831 - 11,249
Interest paid (239) (529) (1,089)
Cost of refinancing - (2,724) (4,633)
Issue of ordinary share capital (2) 3 (5)
Net cash generated by/(used in) financing activities 8,590 (21,750) (24,978)
Net (decrease)/increase in cash and cash equivalents (13,136) 5,096 10,152
Effect of foreign exchange rate changes (151) 423 (287)
Cash and cash equivalents at start of period 66,900 57,035 57,035
Cash and cash equivalents at end of period 53,613 62,554 66,900
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1 General information
The condensed consolidated interim financial statements for the six months ended 30 June 2014 do not constitute statutory
accounts as defined under Section 434 of the Companies Act 2006. The Financial Statements for the year ended 31 December
2013 were approved by the Board on 23 April 2014 and have been delivered to the Registrar of Companies. The Auditor,
Deloitte LLP, reported on these financial statements; their report was unqualified, but contained an emphasis of matter
paragraph referring to material uncertainties relating to the Group's ability to continue as a going concern in the light
of the combined effect of restrictions on new regulated business sales as a result of the Voluntary Variation of
Permissions, uncertainty over the eventual cost of the redress scheme, and the ability to trade in line with forecasts and
comply with the terms of its borrowing facilities. The report of the auditor on these financial statements did not contain
statements under s498 (2) or (3) of the Companies Act 2006.
2 Accounting policies
Basis of preparation
The unaudited condensed consolidated interim financial statements for the six months ended 30 June 2014 have been prepared
in accordance with the Disclosure and Transparency Rules ("DTR") of the Financial Conduct Authority and with IAS 34
'Interim Financial Reporting' as adopted by the European Union.
The condensed consolidated interim financial statements should be read in conjunction with the Annual Report and Financial
Statements ("the Financial Statements") for the year ended 31 December 2013, which have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union.
The condensed consolidated interim financial statements were approved for release on 28 August 2014.
In preparing the condensed consolidated interim financial statements the comparative amounts for the six months ended 30
June 2013 have been restated to reflect the Home3 joint venture as discontinued and the re-organisation of the operating
segments to UK and Ireland, Europe and Latin America, and Asia Pacific.
New and amended standards and interpretations need to be adopted in the interim financial statements issued after their
effective date (or date of early adoption). There are no new IFRSs or IFRICs that are effective for the first time for the
six months ended 30 June 2014 which have a material impact on the Group.
Going concern
The Directors have considered the Group's business activities and financial resources, together with the principal risks,
uncertainties and other factors likely to affect its future development, performance and position. Having taken account of
these factors the Directors have, at the time of approving the condensed consolidated interim financial statements, a
reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable
future. For this reason they continue to adopt the going concern basis in preparing the condensed consolidated interim
financial statements. Further details of the Directors' assessment are set out in the Going concern section earlier in this
statement.
3 Segmental analysis
Segment revenue and performance for the current and comparative periods have been as follows:
UK and Ireland Europe and Latin America Asia Total
Pacific
Six months ended 30 June 2014 (Unaudited) £'000 £'000 £'000 £'000
Continuing operations
Revenue - external sales 38,490 17,034 3,143 58,667
Regional operating (loss)/profit before exceptional items (3,298) 3,271 24 (3)
Exceptional items (note 4) (262)
Operating loss after exceptional items (265)
Investment revenues 287
Finance costs (1,164)
Loss before taxation (1,142)
Taxation (780)
Loss for the period from continuing operations (1,922)
Discontinued operations
Loss for the period from discontinued operations (note 8) (785)
Loss for the period (2,707)
UK and Ireland Europe and Latin America Asia Total
Pacific
Six months ended 30 June 2013 - restated (note 2) (Unaudited) £'000 £'000 £'000 £'000
Continuing operations
Revenue - external sales 73,582 22,840 3,283 99,705
Regional operating (loss)/profit before exceptional items (7,216) 4,687 (738) (3,267)
Exceptional items (note 4) (6,231)
Operating loss after exceptional items (9,498)
Investment revenues 185
Finance costs (2,113)
Loss before taxation (11,426)
Taxation (4,181)
Loss for the period from continuing operations (15,607)
Discontinued operations
Profit for the period from discontinued operations (note 8) 13,031
Loss for the period (2,576)
UK and Ireland Europe and Latin America Asia Total
Pacific
Year ended 31 December 2013 (Audited) £'000 £'000 £'000 £'000
Continuing operations
Revenue - external sales 128,990 42,603 6,438 178,031
Regional operating (loss)/profit before exceptional items (8,106) 7,133 (833) (1,806)
Exceptional items (note 4) (37,506)
Operating loss after exceptional items (39,312)
Investment revenues 394
Finance costs (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 8) 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 annual net charges of central costs of
£1,983,000 presented within UK and Ireland in the tables above which has been charged to other regions for statutory
purposes.
Segmental assets
30 June 2014 30 June 2013restated (note 2) 31 December 2013
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
UK and Ireland 68,254 111,573 85,913
Europe and Latin America 8,455 11,028 11,002
Asia Pacific 2,740 2,406 2,392
Total segment assets 79,449 125,007 99,307
Unallocated assets 2 1,485 142
Consolidated total assets 79,451 126,492 99,449
Goodwill, deferred tax and investments in joint ventures are not allocated to segments.
Revenue from major products
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Continuing operations
Retail assistance policies 43,546 61,801 117,066
Retail insurance policies 6,092 16,411 28,153
Packaged and wholesale policies 8,655 20,719 32,272
Non-policy revenue 374 774 540
Revenue from continuing operations 58,667 99,705 178,031
Discontinued operations - 15,634 15,634
Consolidated total revenue 58,667 115,339 193,665
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 revenue" 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 investments in joint ventures and deferred tax) by
geographical location are detailed below.
External revenues Non-current assets
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013 30 June 2014 30 June 2013 31 December 2013
£'000 £'000 £'000 £'000 £'000 £'000
(Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) (Audited)
Continuing operations
UK 37,751 71,637 125,432 5,415 24,328 7,008
Spain 8,079 10,650 19,767 358 508 432
Other 12,837 17,418 32,832 763 1,492 920
Total continuing operations 58,667 99,705 178,031 6,536 26,328 8,360
Discontinued operations - 15,634 15,634 - - -
58,667 115,339 193,665 6,536 26,328 8,360
4 Exceptional items
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Restructuring costs 262 3,926 5,503
Customer redress and associated costs - 2,350 18,168
Impairment of IT assets - - 8,058
Impairment of goodwill, intangible assets and freehold property - - 5,822
Strategic project costs - (45) (45)
Exceptional items included in operating loss 262 6,231 37,506
Tax on exceptional items (54) - (222)
Total exceptional items after tax 208 6,231 37,284
The £262,000 (H1 2013: £3,926,000) restructuring costs in the six month period relate to redundancy programmes and
associated costs across the Group.
5 Taxation
Our effective tax rate at the half year is negative 68.3% (H1 2013: negative 36.6%, year ended 31 December 2013: negative
4.9%) as a result of UK trading losses and overseas trading profits which cannot be offset. No deferred tax asset has been
recognised on surplus taxable losses arising in the period due to the uncertainties of future UK taxable profits. All
taxable profit has been generated in overseas territories. The 2014 full year rate may vary from this due to the territory
mix of future 2014 profits.
6 Dividends
The Directors have not proposed an interim dividend for 2014.
7 (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. Due to losses after tax in continuing operations, diluted (loss)/earnings per share are equal to basic
(loss)/earnings per share.
Six months ended 30 June 2014 (Unaudited) Continuing operations Discontinued operations Total
(Loss)/earnings £'000 £'000 £'000
Loss for the purposes of basic and diluted loss per share (1,922) (785) (2,707)
Exceptional items (net of tax) 208 (311) (103)
Loss for the purposes of underlying basic and diluted loss per share (1,714) (1,096) (2,810)
Number of shares Number
(thousands)
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share 171,605
Loss per share Continuing operations Discontinued operations Total
Pence Pence Pence
Basic and diluted loss per share: (1.12) (0.46) (1.58)
Basic and diluted underlying loss per share: (1.00) (0.64) (1.64)
Six months ended 30 June 2013 - restated (note 2) (Unaudited) Continuing operations Discontinued operations Total
(Loss)/earnings £'000 £'000 £'000
(Loss)/earnings for the purposes of basic and diluted (loss)/earnings per share (15,607) 13,031 (2,576)
Exceptional items (net of tax) 6,231 (10,398) (4,167)
(Loss)/earnings for the purposes of underlying basic and diluted (loss)/earnings per share (9,376) 2,633 (6,743)
Number of shares Number
(thousands)
Weighted average number of ordinary shares for the purposes of basic and diluted (loss)/earnings per share 171,515
(Loss)/earnings per share Continuing operations Discontinued operations Total
Pence Pence Pence
Basic and diluted (loss)/earnings per share: (9.10) 7.60 (1.50)
Basic and diluted underlying (loss)/earnings per share: (5.47) 1.54 (3.93)
Year ended 31 December 2013 (Audited) Continuing operations Discontinued operations Total
(Loss)/earnings £'000 £'000 £'000
(Loss)/earnings for the purposes of basic and diluted (loss)/earnings per share (45,335) 12,468 (32,867)
Exceptional items (net of tax) 37,284 (10,389) 26,895
(Loss)/earnings for the purposes of underlying basic and diluted (loss)/earnings per share (8,051) 2,079 (5,972)
Number of shares Number
(thousands)
Weighted average number of ordinary shares for the purposes of basic and diluted (loss)/earnings per share 171,546
(Loss)/earnings per share Continuing operations Discontinued operations Total
Pence Pence Pence
Basic and diluted (loss)/earnings per share: (26.43) 7.27 (19.16)
Basic and diluted underlying (loss)/earnings per share: (4.69) 1.21 (3.48)
8 Discontinued operations
On 24 March 2014, the Group completed the sale of its 49% shareholding in Home3 Assistance Ltd (Home3). The gross
consideration on disposal was £275,000.
(Loss)/profit from discontinued operations comprises the following:
6 months ended 30 June 2014 6 months ended 30 June 2013restated (note 2) Year ended 31 December 2013
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
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) (226) (780)
Operating (loss)/profit (1,096) 3,544 2,990
Investment revenues - 10 10
(Loss)/profit before taxation (1,096) 3,554 3,000
Taxation - (921) (921)
(Loss)/profit after tax (1,096) 2,633 2,079
Profit on disposal 311 10,398 10,389
Total (loss)/profit (785) 13,031 12,468
6 months ended 30 June 2014 Year ended 31 December 2013
Home3 North America Total Home3 North America Total
£'000 £'000 £'000 £'000 £'000 £'000
(Unaudited) (Unaudited) (Unaudited) (Audited) (Audited) (Audited)
Proceeds 275 - 275 - 26,086 26,086
Net assets sold - - - - (14,042) (14,042)
Costs associated with disposal (10) 46 36 (14) (3,259) (3,273)
Currency retranslation differences reclassified on disposal - - - - 1,618 1,618
Profit on disposal 265 46 311 (14) 10,403 10,389
Movements in the Group's share in its joint venture prior to disposal are as follows:
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Carrying amount at beginning of period - - -
Increase in investment 1,096 226 780
Losses recognised for the period (1,096) (226) (780)
Carrying amount at the end of the period - - -
9 Tangible and intangible assets
Goodwill Other intangible assets Property, plant and equipment Total
£'000 £'000 £'000 £'000
Six months ended 30 June 2014 (Unaudited)
Carrying amount at 1 January 2014 - 3,299 5,061 8,360
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