REG - Non-Standard Fin - Half-year Report <Origin Href="QuoteRef">NSF.L</Origin> - Part 2
03/08/2016 07:07
- Part 2: For the preceding part double click ID:nRSC0523Ga
£000 £000 £000 £000
Revenue 4 31,315 (2,192) 29,123 -
Cost of sales (9,891) - (9,891) -
Administrative expenses (18,500) (4,807) (23,307) (910)
Operating profit/(loss) 2,924 (6,999) (4,075) (910)
Exceptional items 5 - (626) (626) -
Profit/(loss) on ordinary activities before interest and tax 5 2,924 (7,625) (4,701) (910)
Net finance (cost)/income (1,301) - (1,301) 52
Profit/(loss) on ordinary activities before tax 1,623 (7,625) (6,002) (858)
Tax on ordinary activities 7 (316) 1,400 1,084 -
Profit/(loss) for the period 1,307 (6,225) (4,918) (858)
Total comprehensive profit/(loss) for the period 1,307 (6,225) (4,918) (858)
Loss attributable to:
- Owners of the parent (4,918) (858)
- Non-controlling interests - -
Loss per share
Six months ended 30 June Note 2016pence 2015pence
Basic and diluted 6 (1.67) (2.20)
There are no recognised gains or losses other than disclosed above and there
have been no discontinued activities in the period.
Consolidated statement of financial position as at 30 June 2016
Note 30 June 2016 31 December 2015
£000 £000
ASSETS
Non-current assets
Goodwill 9 10 132,071 23,318 3,937 40,176 14,119 1,718
Intangible assets
Property, plant and equipment
159,326 56,013
Current assets
Inventories 3 3
Amounts receivable from customers 11 168,790 28,412
Trade and other receivables 12,388 10,275
Cash and cash equivalents 5,002 7,320
186,183 46,010
Total assets 345,509 102,023
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 9,490 13,803
Deferred tax liability 12 9,205 3,057
18,695 16,860
Non-current liabilities 73,700 -
Total non-current liabilities 73,700 -
Equity attributable to owners of the parent
Share capital 13 15,852 5,264
Share premium 14 254,995 92,714
Retained loss (17,988) (13,070)
252,859 84,908
Non-controlling interests 255 255
Total equity 253,114 85,163
Total equity and liabilities 345,509 102,023
These financial statements were approved by the Board of Directors on 3 August
2016.
Signed on behalf of the Board of Directors
Nick Teunon
Chief Financial Officer
3 August 2016
Consolidated statement of changes in equity for the six months ended 30 June
2016
Share capital Share premium Retained loss Non-controlling interest Total
£000 £000 £000 £000 £000
At incorporation - - - - -
Total comprehensive loss for the period - - (858) - (858)
Transactions with owners, recorded directly in equity:
Issue of shares 5,264 92,714 - 255 98,233
At 30 June 2015 5,264 92,714 (858) 255 97,375
Total comprehensive loss for the period - - (12,212) - (12,212)
At 31 December 2015 5,264 92,714 (13,070) 255 85,163
Total comprehensive loss for the period - - (4,918) - (4,918)
Transactions with owners, recorded directly in equity:
Issue of shares 10,588 162,281 - - 172,869
At 30 June 2016 15,852 254,995 (17,988) 255 253,114
Consolidated statement of cash flows for the six months ended 30 June 2016
Six months ended 30 June Note 2016 2015
£000 £000
Net cash used in operating activities 16 (14,813) (545)
Cash flows used in investing activities
Purchase of property, plant and equipment (1,989) (58)
Acquisition of subsidiary 15 (230,784) -
Net cash used in investing activities (232,773) (58)
Cash flows from financing activities
Net finance (cost)/income (1,301) 52
Debt raising 73,700 -
Proceeds from issue of share capital 172,869 97,854
Net cash from financing activities 245,268 97,906
Net (decrease) increase in cash and cash equivalents (2,318) 97,303
Cash and cash equivalents at beginning of period 7,320 -
Cash and cash equivalents at end of period 5,002 97,303
Notes to the financial statements for the six months ended 30 June 2016
General Information
Non-Standard Finance plc is a public limited company incorporated and
domiciled in the United Kingdom. The address of the registered office is 5th
Floor, 6 St Andrew Street, London, EC4A 3AE.
The unaudited condensed interim financial statements do not constitute the
statutory financial statements of the Group within the meaning of section 434
of the Companies Act 2006. The statutory financial statements for the period
ended 31 December 2015 were approved by the Board of Directors on 4 March 2016
and have been delivered to the Registrar of Companies. The report of the
auditors on those financial statements was unqualified, did not draw attention
to any matters by way of emphasis and did not contain any statement under
section 498(2) or (3) of the Companies Act 2006.
The unaudited condensed interim financial statements for the six months ended
30 June 2016 have been reviewed, not audited, and were approved by the Board
of Directors on 3 August 2016.
1. Basis of preparation
The unaudited condensed interim financial statements for the six months ended
30 June 2016 have been prepared in accordance with IAS 34 'Interim Financial
Reporting' as adopted by the European Union. The unaudited condensed interim
financial statements should be read in conjunction with the statutory
financial statements for the period ended 31 December 2015 which have been
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
The Directors have reviewed the Group's budgets, plans and cash flow forecasts
for 2016 together with outline projections for the three subsequent years.
Based on this review, they are satisfied that the Group has adequate resources
to continue to operate for the foreseeable future. For this reason, the
Directors continue to adopt the going concern basis in preparing the unaudited
condensed interim financial statements.
2. Accounting policies
The accounting policies applied in preparing the unaudited condensed interim
financial statements are consistent with those used in preparing the statutory
financial statements for the period ended 31 December 2015.
Taxes on profits in interim periods are accrued using the tax rate that will
be applicable to expected total annual profits.
New and amended standards and interpretations need to be adopted in the first
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 2016 which have a material impact
on the Group.
Intangible assets
Intangible assets include intangibles in respect of the customer lists and
agent relationships at Loans at Home and the Loans at Home brand and
acquisition intangibles in respect of the customer lists, broker relationships
and Credit Decisioning technology at Everyday Loans and the Everyday Loans
brand.
The fair value of the customer lists of Loans at Home and Everyday Loans on
acquisition has been estimated by calculating the Net Present Value (NPV) of
the discounted cash flows from each new re-loan provided to this, discrete set
of known customers. The Board of Directors will re-calculate the NPV at each
future accounting date using the same assumptions, limited to the then
existing customer lists.
The fair value of Loans at Home's agent relationships on acquisition has been
estimated by valuing the cost to set up a similar network of trained agents.
The fair value of Everyday Loans' broker relationships on acquisition have
been estimated by calculating the NPV of the discounted cash flows from the
cost avoided each year due to having the broker relationships in place on new
loan volumes written by existing brokers. The Board of Directors will
re-calculate the NPV at each future accounting date using the same
assumptions, limited to the then existing brokers.
The fair value of Everyday Loans' Credit Decisioning technology on acquisition
has been estimated by assessing the likely commercial level of royalties that
would be payable to a third party were the technology licenced rather than
owned, calculated as a percentage of forecast revenues and discounted to the
date of the transaction. The Board of Directors will re-value the technology
using the same methodology at each future accounting date.
The fair value of Loans at Home's brand and Everyday Loans' brand on
acquisition has been estimated by assessing the likely commercial level of
royalties that would be payable to a third party were the brand licenced
rather than owned, calculated as a percentage of forecast revenues and
discounted to the date of the transaction. The Board of Directors will
re-value the brand using the same methodology at each future accounting date.
Amortisation is charged to the statement of comprehensive income, unless
otherwise agreed, over their estimated useful lives as follows:
Customer lists Between 5 and 7 years
Agent network 20% reducing balance
Broker relationships 2 to 3 years
Credit Decisioning technology 4 years
Brand Between 1 and 5 years
The useful economic life and amortisation method of intangible assets are
reviewed at least at each balance sheet date. Impairment of intangible assets
is only reviewed where circumstances indicate that the carrying value of an
asset may not be fully recoverable.
Financial instruments
Amounts receivable from customers
Customer receivables, originated by the Group, are initially recognised at the
amount loaned to the customer plus directly attributable costs. Subsequently,
receivables are increased by revenue and reduced by cash collections and any
deduction for impairment. The Directors assess on an ongoing basis whether
there is objective evidence that customer receivables are impaired at each
balance sheet date.
Recognition of incurred losses
For Loans at Home objective evidence of impairment is based on the payment
performance of loans in the previous 13 weeks as this is considered to be the
most appropriate indicator of credit quality. Loans are deemed to be impaired
when the cumulative amount of between two and four contractual weekly payments
(depending on length of relationship with the customer) have been missed in
the previous 13 week period.
For Everyday Loans, the criteria that the Company uses to determine that there
is objective evidence of impairment loss include, but are not limited to, the
following:
· Delinquency in contractual payments of principal or interest;
· Cash flow difficulties experienced by the borrower; and
· Initiation of bankruptcy proceedings
An impairment loss is calculated by reference to arrears stages and is
measured as the difference between the carrying value of the loans and the
present value of estimated future cash flows discounted at the original
effective interest rate. The assumptions for estimating future cash flows are
based upon observed historical data and updated as management considers
appropriate to reflect current and future conditions. All assumptions are
reviewed regularly to take account of differences between previously estimated
cash flows on impaired debt and the eventual losses.
3. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with generally accepted
accounting practice requires management to make estimates and judgements that
affect the reported amounts of assets and liabilities as well as the
disclosure of contingent assets and liabilities at the year-end date and the
reported amounts of revenues and expenses during the reporting period.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
Determination of cash generating units
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). The Board of Directors consider Loans at Home, Everyday Loans and
Non-Standard Finance plc (central costs), as one unit. Everyday Loans is split
into two segments for segmental reporting, Everyday Loans and Trusttwo.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value
in use of the cash generating units (CGUs) to which goodwill has been
allocated. The value in use calculation requires the Group to estimate the
future cash flows expected to arise from the CGU and apply a suitable discount
rate in order to calculate the present value.
The assessment of impairment of goodwill reflects a number of key estimates,
which have a material effect on the carrying value of the asset. These
include:
· Cash flow forecast which have been extracted from the budget, which involves inherent uncertainty, particularly in respect of gross loan values, collections performance and the cost base of the business
· Estimates made on the disposal costs of the business.
· The Weighted Average Cost of Capital (WACC) applied to determine the Net Present Value (NPV) of future cash flows.
The nature and inherent uncertainty relating to the above judgements and
estimates means that the forecast cash flows may be materially different from
actual cash flows. A material future reduction in forecast surplus cash flows
would necessitate a full impairment review and the possibility of a material
impairment charge in future years.
The Group has produced a forecast to 31 December 2018 and applied three
valuation approaches to establish the recoverable amount of the CGU. These
were:
1. A Price/Total Net Asset Value (TNAV) multiple based on the Return on TNAV of the business, with the multiple calculated by using a regression analysis for comparable speciality finance company valuations over the last 2-years;
2. A Price/Earnings multiple based on the assumed Earnings Growth of the business in the following 2-years, with the multiple calculated by using a regression analysis for comparable speciality finance company valuations over the last 2-years; and
3. A 10-year average Price/Earnings multiple for comparable speciality finance companies.
Under the IAS 36 Framework both the Value in Use and Fair Value less Costs of
Disposal methods can be used to assess whether impairment is required, but if
the first approach used does not imply impairment it is not necessary to apply
the second approach. The lowest of the three valuations was used by the Group
to compare with the CGU's carrying value. This has not resulted in any
impairment of the carrying value at 30 June 2016 as the CGU's recoverable
amount exceeds its carrying value.
Amounts receivable from customers and recognition of incurred losses
The Group reviews its portfolio of loans and receivables for impairment at
each balance sheet date. For the purposes of assessing the impairment of
customer loans and receivables, customers are categorised into arrears stages
as this is considered to be the most reliable indication of payment
performance. The Group makes judgements to determine whether there is
objective evidence which indicates that there has been an adverse effect on
expected future cash flows.
Once a loan is deemed to be impaired, judgement is required to determine the
quantum and timing of cash flows that will be recovered, which are discounted
to present value based on the effective interest rate (EIR) of the loan.
Customer accounts in Loans At Home are deemed to be impaired when between two
and four contractual weekly payments (depending on length of relationship with
the customer) have been missed in the previous 13 weeks. In the weekly home
credit business, receivables are deemed to be impaired when the cumulative
amount of two or more contractual weekly payments have been missed in the
previous 13 weeks, since only at this point do the expected future cash flows
from loans deteriorate significantly.
Customer accounts in Everyday Loans are impaired with reference to arrears
stages and are measured as the difference between the carrying value of the
loans and the present value of estimated future cash flows discounted at the
original effective interest rate. The assumptions for estimating future cash
flows are based upon observed historical data and updated as management
considers appropriate to reflect current and future conditions. All
assumptions are reviewed regularly to take account of differences between
previously estimated cash flows on impaired debt and the eventual losses.
Fair value of acquired loan book
The fair value of the acquired loan portfolio of Loans at Home and Everyday
Loans on acquisition has been estimated by discounting expected future cash
flows at a rate of 20%. The WACC used by the Group for Loans at Home is 15%
and for Everyday Loans (including Trusttwo) is 10%, with an additional market
risk premium being added for the specific loan assets. The difference between
fair value and carrying value of the loan portfolio on acquisition will be
unwound to revenue in the statement of comprehensive income on an effective
interest rate basis over the expected life of the acquired loans. The Board of
Directors will re-value, using the same assumptions, the remaining cash flows
from the loans that were in place at the time of acquisition, at each future
accounting date.
Intangible assets - customer lists
Loans at Home's and Everyday Loans' customer lists have been allocated a fair
value on acquisition as the existing customer base is an important influence
on the future prospects of the business.
The customer lists have been valued by calculating the NPV of the discounted
cash flows from each new loan sold to this discrete set of known customers.
The methodology is in-line with the Group's existing valuation model used for
budgeting purposes.
The valuation of the customer lists reflects a number of key estimates, which
have a material effect on the carrying value of the asset. These include:
· Cash flow forecast which have been extracted from the budget, which involves inherent uncertainty, particularly in respect of gross loan values, collections performance and the cost base of the business.
· Estimates made on the propensity to re-loan to the customer base.
· The WACC applied to determine the NPV of each new re-loan.
The nature and inherent uncertainty relating to the above judgements and
estimates means that the forecast cash flows may be materially different from
actual cash flows. A material future reduction in forecast surplus cash flows
would necessitate a full impairment review and the possibility of a material
impairment charge in future years.
4. Revenue
Revenue is recognised by applying the effective interest rate (EIR) to the
carrying value of a loan. The EIR is calculated at inception and represents
the rate which exactly discounts the future contractual cash receipts from a
loan to the amount of cash advanced under the loan, plus directly attributable
issue costs. In addition, the EIR takes account of customers repaying early.
Six months ended
30 June 2016
£000
Interest income 31,315
Fair value unwind on acquired loan portfolio (2,192)
Total revenue 29,123
5. Segment information
Management has determined the operating segments by considering the segment
information that is reported internally to the chief operating decision-maker,
the Board of Directors. For management purposes, the Group is currently
organised into four operating divisions Central, Loans at Home, Everyday Loans
and Trusttwo. These divisions are the operating segments for which the Group
reports its segment information internally to the Board of Directors. The
Group's operations are all located in the United Kingdom and all revenue is
attributable to customers in the United Kingdom.
Six months ended 30 June Central Loans at Home Everyday Loans Trusttwo Total2016 Total2015
£000 £000 £000 £000 £000 £000
Interest income - 20,700 10,047 568 31,315 -
Fair value unwind on acquired loan portfolio - (213) (1,979) - (2,192) -
Total revenue - 20,487 8,068 568 29,123 -
Operating (loss)/profit before fair value unwind, amortisation and exceptional items (1,815) 836 3,634 269 2,924 (910)
Fair value unwind on acquired loan portfolio - (213) (1,979) - (2,192) (910)
Amortisation of intangible assets (4,807) - - - (4,807) -
Exceptional items (626) - - - (626) -
Operating (loss)/profit (7,248) 623 1,655 269 (4,701) (910)
Net finance cost/(income) (271) (176) (787) (67) (1,301) 52
(Loss)/profit before tax (7,519) 447 868 202 (6,002) (858)
Tax 1,377 (89) (164) (40) 1,084 -
(Loss)/profit for the period (6,142) 358 704 162 (4,918) (858)
Total assets 273,927 33,754 131,344 7,598 446,623 97,673
Total liabilities (1,039) (8,433) (89,705) (4,247) (103,424) (298)
Net assets 272,888 25,321 41,639 3,351 343,199 97,375
Capital expenditure 159 928 1,083 59 2,229 58
Depreciation of plant property and equipment 14 177 57 3 251 2
Amortisation of intangible assets 4,807 - - - 4,807 -
All inter-segment transactions are transacted on an arm's-length basis. The
results of each segment have been prepared using accounting policies
consistent with those of the Group as a whole.
6. Loss per share
Six months ended 30 June 2016 2015
Retained loss attributable to ordinary shareholders (£'000) (4,918) (858)
Weighted average number of ordinary shares 294,851,859 38,937,453
Basic and diluted loss per share (1.67p) (2.20p)
The loss per share was calculated on the basis of net loss attributable to
ordinary shareholders divided by the weighted average number of ordinary
shares. The basic and diluted loss per share is the same, as the exercise of
share options would reduce the loss per share and therefore, is
anti-dilutive.
Six months ended 30 June 2016 2015
Weighted average number of potential ordinary shares that are not currently dilutive 5,539 5,539
7. Taxation
The tax charge for the period has been calculated by applying the Directors'
best estimate of the effective tax rate for the financial year of 20% (2015:
20%), to the profit before tax for the period.
8. Dividends
The Directors have declared an interim dividend in respect of the six months
ended 30 June 2016 of 0.3 pence per share (2015: nil) which will amount to an
estimated dividend payment of £951,000. This dividend is not reflected in the
balance sheet as it will be paid after the balance sheet date.
9. Goodwill
As at
30 June 2016
£000
Cost and net book amountAt incorporation -
Acquisition of subsidiary (Loans at Home) 40,176
At 31 December 2015 40,176
Acquisition of subsidiary (Everyday Loans) 91,895
At 30 June 2016 132,071
The goodwill recognised represents the difference between the purchase
consideration and the net assets acquired (including intangible assets
recognised upon acquisition).
The Group tests goodwill annually for impairment or more frequently if there
are indications that goodwill might be impaired.
The recoverable amount has been determined based on a value in use
calculation. That calculation uses cash flow projections based on financial
budgets approved by management covering a period to 31 December 2018, disposal
costs have been estimated at 2% and a discount rate (WACC) of 15% used on the
acquisition of Loans At Home and a reduced discount rate of 10% for Everyday
Loans, which takes into account the introduction of debt into the Group. The
Directors have estimated the discount rate using pre-tax rates that reflect
current market assessments of the time value of money and the risks specific
to the market. None of the goodwill is expected to be tax deductible.
10. Intangible assets
Customer lists Agent network Brands Broker relationships Technology Total
£000 £000 £000 £000 £000 £000
Cost
At 1 January 2016 17,312 540 297 - - 18,149
Additions through acquisition 2,050 - 1,496 4,233 6,227 14,006
At 30 June 2016 19,362 540 1,793 4,233 6,227 32,155
Amortisation
At 1 January 2016 3,869 99 62 - - 4,030
Charge for the period 3,851 129 124 282 260 4,646
Impairment - - 161 - - 161
At 30 June 2016 7,720 228 347 282 260 8,837
Net book value
At 30 June 2016 11,642 312 1,446 3,951 5,967 23,318
At 1 January 2016 13,443 441 235 - - 14,119
Cost
At incorporation - - - - - -
Additions through acquisition 17,312 540 297 - - 18,149
At 31 December 2015 17,312 540 297 - - 18,149
Amortisation
At incorporation - - - - - -
Charge for the period 3,869 99 62 - - 4,030
At 31 December 2015 3,869 99 62 - - 4,030
Net book value
At 31 December 2015 13,443 441 235 - - 14,119
At incorporation - - - - - -
11. Amounts receivable from customers
As at30 June2016 As at31 December2015
£000 £000
Credit receivables 179,007 30,335
Loan loss provision (10,217) (1,923)
Amounts receivable from customers 168,790 28,412
Fair value adjustments 21,982 426
Loan book 146,808 27,986
The amounts receivable from customers were recognised at fair value (net loan
book value) at the date of acquisition, see note 15 for detail.
Analysis of overdue receivables from customers
As at30 June2016 As at31 December2015
£000 £000
Not past due or impaired 146,033 7,055
Past due but not impaired 9,172 13,538
Impaired 13,585 7,055
168,790 28,412
Loans at Home past due not impaired:
One week overdue 3,173 4,571
Two weeks overdue 1,558 1,696
Three weeks or more overdue 2,051 1,552
6,782 7,819
Everyday Loans past due not impaired:
One month overdue 2,335 -
2,335 -
Trusttwo past due not impaired:
One month overdue 55 -
55 -
Analysis on movement on loan loss provision
£000
At incorporation -
Charge for the period 3,896
Unwind of discount (1,973)
At 31 December 2015 1,923
Charge for the period 10,199
Unwind of discount (1,905)
At 30 June 2016 10,217
The EIR used during the period to 30 June 2016 for Loans at Home was 383%, for
Everyday Loans was 39.72% and for Trusttwo was 30.49%.
Deferred tax
£000
At incorporation -
Recognition of intangible assets at acquisition of Loans at HomeCredit for the period (4,828)1,771
At 31 December 2015 (3,057)
Recognition of intangible assets at acquisition of Everyday LoansCredit for the six month period (7,551)1,403
At 30 June 2016 (9,205)
£000
At incorporation -
Recognition of intangible assets at acquisition of Loans at Home (4,828)
Credit for the period 1,771
At 31 December 2015 (3,057)
Recognition of intangible assets at acquisition of Everyday Loans (7,551)
Credit for the six month period 1,403
At 30 June 2016 (9,205)
The deferred tax liability for the six months to 30 June 2016 was recognised
on the intangible assets upon acquisition of Everyday Loans. The intangible
assets will be amortised in future periods for which tax deductions will not
be available.
12. Share capital and share premium
On 7 January 2016, the share capital was increased by the issuance of
188,235,825 Ordinary Shares of £0.05 each at a premium of £0.80 each.
Upon completion of the acquisition of the Everyday Loans Group from Secure
Trust Bank PLC on 13 April 2016, the share capital was further increased by
the issuance of 23,529,412 Ordinary Shares of £0.05 each at a premium of £0.80
each to Secure Trust Bank PLC.
The Company's share capital is denominated in Sterling. The Ordinary Shares
rank in full for all dividends or other distributions, made or paid on the
ordinary share capital of the Company.
Share movements
Number
Balance at date of incorporation -
Shares issued 105,284,445
Balance at 31 December 2015 105,284,445
Shares issued 211,765,237
Balance at 30 June 2016 317,049,682
13. Reserves
Details of the movements in reserves are set out in the statement of changes
in equity. A description of each reserve is set out below.
Share premium
The share premium account is used to record the aggregate amount or value of
premiums paid when the Company's shares are issued at a premium. Transaction
costs of £7,131,000 directly relating to raising finance have been deducted
from share premium in the six months to 30 June 2016.
Total
£000
Balance at date of incorporation -
Premium arising on issue of ordinary shares 97,854
Issue costs (5,140)
Balance at 31 December 2015 92,714
Premium arising on issue of ordinary shares 169,412
Issue costs (7,131)
Balance at 30 June 2016 254,995
14. Acquisition of subsidiary
On 13 April 2016, the Group obtained control of the Everyday Loans Holdings
Limited group, which consists of Everyday Loans Holdings Limited, Everyday
Loans Limited and Everyday Lending Limited. The Group obtained control through
the purchase of 100% of the share capital. The Everyday Loans group
acquisition satisfies two of Non-Standard Finance plc's target sectors,
branch-based unsecured lending and guaranteed loans (Trusttwo).
The provisional fair values of the identifiable assets and liabilities of
Everyday Loans (including Trusttwo) as at the acquisition date were as
follows:
Amounts recognised at acquisition date Fair value adjustments Total
£000 £000 £000
Intangible assets (a) - 14,006 14,006
Plant and equipment 563 - 563
Amounts receivable from customers (b) 115,563 23,749 139,312
Trade and other receivables 4,259 - 4,259
Cash and cash equivalents 1,807 - 1,807
Trade and other payables (7,342) - (7,342)
Corporation tax (1,949) (1,949)
Deferred tax liabilities (c) - (7,551) (7,551)
112,901 30,204 143,105
Goodwill 91,895
Total consideration 235,000
Satisfied by:
Cash 235,000
Net cash outflow arising on acquisition:
Cash consideration 215,000
Share consideration 20,000
Cash and cash equivalents acquired (1,807)
Corporation tax credit (1,864)
Other acquired assets (545)
230,784
(a) £2,050,000 has been attributed to the fair value of Everyday Loans' customer lists, £4,233,000 to the broker relationships, £1,447,000 to the Everyday Loans brand and £49,000 to Trusttwo and £6,227,000 to the technology. See intangible assets note 10.
(b) An adjustment to receivables of £23,749,000 has been made to reflect the fair value of the receivables book at the acquisition date.
(c) Deferred tax liability £7,551,000 recognised on the intangibles and the fair value adjustment of the receivable book at acquisition
Everyday Loans (including Trusttwo) contributed £10,615,000 to the Group's
revenue and £3,049,000 profit before tax (before fair value adjustments) to
the Group's operating profit for the period from the date of acquisition to
the period ended 30 June 2016.
The fair value measurement of acquired assets is based upon financial
forecasts, which are categorised as level 3 within the IFRS 13 fair value
hierarchy.
On 4 August 2015, the Group obtained control of SD Taylor Limited, trading as
Loans at Home (formally Loansathome4u) through the purchase of 100% of the
share capital.
A detailed conversion of Loans at Home's financial statements, to align
accounting policies, was completed post acquisition which reduced Loans at
Home's net assets on acquisition by £5,956,000, principally in respect of
higher impairment provisions due to the impact of a more conservative approach
to recognising impairment.
The provisional fair values of the identifiable assets and liabilities of
Loans at Home as at the acquisition date were as follows:
Amounts recognised at acquisition date Fair value adjustments Total
£000 £000 £000
Intangible assets (a) - 18,149 18,149
Plant and equipment 1,627 - 1,627
Inventories 9 - 9
Amounts receivable from customers (b) 22,591 5,882 28,473
Trade receivables 277 - 277
Cash and cash equivalents 1,296 - 1,296
Trade and other payables (c) (2,040) (732) (2,772)
Deferred tax liabilities (d) (22) (4,806) (4,828)
23,738 18,493 42,231
Goodwill 40,176
Total consideration 82,407
Satisfied by:
Cash 82,407
Net cash outflow arising on acquisition:
Cash consideration 82,407
Cash and cash equivalents acquired (1,296)
Amounts receivable from customers 81,111
(a) £17,312,000 has been attributed to the fair value of Loans at Home's customer list £540,000 to the agent network and £297,000 to the brand.
(b) An adjustment to receivables of £5,882,000 has been made to reflect the fair value of
- More to follow, for following part double click ID:nRSC0523GcRecent news on Non-Standard Finance
See all newsREG - Non-Standard Fin - De-listing and Cancellation of Trading
AnnouncementREG - Official List Non-Standard Fin - Removal - Non-Standard Finance Plc
AnnouncementREG - Stock Exch Notice Non-Standard Fin - Cancellation - Non-Standard Finance plc
AnnouncementREG - Non-Standard Fin - Notice of Delisting
AnnouncementREG - Official List - Temporary Suspension - Non-Standard Finance Plc
Announcement