TIDMLGT
RNS Number : 1092Z
Lighthouse Group PLC
12 March 2012
Press Release 12 March 2012
Lighthouse Group plc
("Lighthouse" or "the Group")
Financial Adviser Awards: Large IFA of the Year 2011 and
2010
Preliminary Results
Lighthouse Group plc (AIM: LGT) today announces its preliminary
results for the year ended 31 December 2011.
Summary
-- Average annualised revenue per adviser up 11 per cent.
-- Like-for-like recurring revenues up a further 5 per cent.
to 30 per cent. of Group revenues
-- 21 per cent. increase in EBITDA* to GBP1.6 million (2010:
GBP1.3 million)
-- Net cash balances of GBP11 million
-- Final dividend of 0.27p per share to be paid in June
(2010: 0.24p)
-- Non-recurring charge of GBP3.4 million in respect of
historic trading of Sumus sub-group and network re-organisations
* Earnings before interest, tax, depreciation, and amortisation
and non-recurring operating expenses
Commenting on the results, David Hickey, Executive Chairman of
Lighthouse Group plc, said:
"Trading again progressed well during the period, with EBITDA
rising for the sixth consecutive results announcement. The
proportion of recurring revenues now exceeds 30 per cent. of the
Group's total and continues to rise; average revenue per adviser
rose noticeably; and the Group's operations continue to generate
significant cash.
"The non-recurring operating expense charge of GBP3.4 million
comprised principally the Falcon closure charge of GBP2.9 million
announced in September 2011 at the time of the Interim Results.
Subsequently the second Sumus regulated entity, FSAS, has also been
effectively wound down, and the Group now operates principally
through one regulated entity only.
"The Group balance sheet remains strong with substantial cash
deposits. As the industry approaches the introduction of the Retail
Distribution Review, it is increasingly evident that operational
scale and financial strength are becoming key differentiators in
the industry."
For further information, please contact:
Lighthouse Group plc
David Hickey, Executive Chairman Tel: +44 (0) 20 7065 5646
david.hickey@lighthousegroup.plc.uk
Peter Smith, Finance Director Tel: +44(0)1392 457850
peter.smith@lighthousegroup.plc.uk
Malcolm Streatfield, Chief Executive Tel: +44 (0) 20 7065 5646
malcolm.streatfield@lighthousegroup.plc.uk
www.lighthousegroup.plc.uk
Shore Capital and Corporate Limited Tel: +44 (0) 20 7408 4090
(Nominated Adviser to the Company)
Dru Danford
Stephane Auton
Media enquiries:
Abchurch Communications
Joanne Shears / Jamie Hooper Tel: +44 (0) 20 7398 7719
joanne.shears@abchurch-group.com www.abchurch-group.com
Chairman's Statement for the Year ended 31st December 2011
I am pleased to report another period of good trading progress
for Lighthouse.
2011 saw a substantial increase in the Group's EBITDA profits,
despite a modest reduction in revenues as a consequence of less
productive advisers leaving the Group. The 21 per cent. rise in
EBITDA was particularly notable and reflected the Group's continued
focus on gross margins and quality advisers. The rise in recurring
income continued to improve the quality of earnings and the ongoing
cash generation of the business continued to support the Group's
significant financial strength.
Subsequent to the rationalisation of two of its regulated
entities announced earlier in the year, the Group has made
provisions for certain aspects of the historical trading of the
Sumus sub-group. Both Falcon and FSAS have been effectively wound
down as trading entities.
During 2011 the Group was named "Large IFA of the Year", for the
second year running, following a competitive technical assessment
by the publication "Financial Adviser".
Trading Highlights 2011 2010
Revenue GBP60.4m GBP63.1m
Gross profit GBP15.6m GBP15.7m
Operating costs (before non-recurring items) GBP14.0m GBP14.4m
EBITDA * GBP1.6m GBP1.3m
Non-recurring operating expenses GBP3.4m GBP0.2m
Earnings per share
Gain on disposal of pensions administration
businesses - GBP1.2m
Basic before non-recurring operating expenses 0.72p 0.30p
Basic after non-recurring operating expenses (1.92)p 1.14p
Dividend per share 0.40p 0.36p
* Earnings before interest, tax, depreciation, and amortisation
and non-recurring operating expenses.
Results
Revenues and cost of sales fell by 4 and 5 per cent.
respectively compared to 2010, reflecting the reduction in average
adviser numbers from approximately 800 to 700. Gross profits
remained steady (as a percentage of revenues) while administrative
expenses before non-recurring costs fell by GBP474,000 following
the reorganisations of the Group's operations. The 21 per cent.
rise in EBITDA was particularly notable, and the Group continues
its focus on securing further improvement.
Depreciation and amortisation fell from GBP973,000 to GBP895,000
reflecting lower levels of capital expenditure in prior periods.
Earnings per share before the impact of non-recurring items
amounted to 0.72p (2010: 0.30p). The loss before taxation for the
period was GBP2,657,000 (2010: profit before tax of GBP129,000) and
basic loss per share was 1.92p (2010: profit of 1.14p per
share).
Non-recurring Operating Expenses
It was announced early in 2011 that the Group's regulated
entities were to be rationalised so as to process all of the
Group's business through a single regulated network - Lighthouse
Advisory Services ("LASER"). In my statement included with the 2011
Interim Results I reported that Falcon was being wound down as a
trading entity, and subsequently the advisers previously with FSAS,
the other remaining Sumus sub-group regulated entity, were also
transferred into LASER. Both Falcon and FSAS have now effectively
ceased trading. There is a small number of advisers who utilise the
Falcon brand for trading, and the Group will continue to make this
facility available to them.
Subsequent to these rationalisations, and as also announced in
the 2011 Interim Results released in September, certain aspects of
Falcon's historical trading became the subject of review and, as a
consequence, the Board deemed it prudent to recognise an aggregate
non-recurring charge of GBP2.93 million at that stage. Following
the closure of FSAS and other related matters, the charge has been
increased by GBP0.44 million to GBP3.37 million.
Recurring Income
The Board remains keen to improve further the visibility of its
revenues and hence places considerable emphasis on recurring
revenue. Typically this comprises regular income derived from
client investments and other products placed on their behalf.
Recurring revenues rose in 2011 to GBP18.4 million (2010: GBP17.6
million), an increase of some 5 per cent., and now represent just
over 30 per cent. of total Group revenues. In addition, the
LighthouseCapital project (which is designed to match investments
to a client's risk profile through a streamlined process) is
accelerating, and some GBP250 million has now been placed via this
mechanism.
Financial Position
Year end net cash balances (after deduction of a trade finance
facility) remained largely unchanged at GBP11.0 million (2010:
GBP11.2 million) notwithstanding some GBP500,000 of dividends paid.
The final instalment of the trade finance facility, being
GBP900,000, is expected to be retired fully from surplus operating
cash flows, in line with expectations, by mid-2012. The Group has
no bank debt.
Dividends
Group trading for 2011 was in line with expectations and the
Group's underlying cash generation has remained strong. Accordingly
your Board has decided to increase the final dividend for 2011 to
0.27p (2010: 0.24p) to reflect that progress. Subject to approval
at the Annual General Meeting on 2 May 2012 the dividend will be
paid on 8 June 2012 to shareholders on the register at close of
business on 11 May 2012.
While the Group expects to continue paying dividends in the
medium term, the potential short term trading changes expected to
arise after 1 January 2013, following the introduction of the
Retail Distribution Review, mean that there can be no certainty
about the appropriate level of dividend to be paid after that date.
Accordingly your Board will continue to review industry trading
conditions and prospects and will advise shareholders further, as
and when a decision about the appropriate future quantum of
dividends is made.
Affinity Relationships
The Group continues to develop its connections with major
employee, union, and other organisations requiring financial advice
for their employees and members, especially for the benefit of the
Lighthouse Financial Advice and Carrwood operations. In May and
June 2011 the Group announced three and two year exclusive
contracts respectively to provide financial planning advice to
members of The Association of Heads and Deputies ("AHDS") and the
Civil Service Motoring Association ("CSMA") Club. Also in June 2011
the Group signed a contract with Dains Chartered Accountants.
Further announcements of new contracts are expected to follow in
due course. As a consequence of the Group's success in this arena,
the flow of new clients emanating from these relationships
continues to grow and in 2011 some 15,000 new business leads
generating some 7,000 appointments were directed to Lighthouse
Financial Advice advisers; this number is expected to rise
significantly in 2012.
Strategy and Prospects
The Retail Distribution Review ("RDR"), due to come into effect
by 1 January 2013, continues to cast a shadow over the retail
financial industry. While the principal aims of RDR are to be
welcomed, the decision to introduce them all simultaneously on a
single date is proving extremely disruptive. Many advisers are
devoting substantial business time to academic study and
simultaneously their customer and business offerings have to be
redesigned. In parallel substantial systems re-alignments are
required throughout the industry, for both manufacturers and
distributers.
Post RDR, remuneration for each item of new business could well
decline across the industry, some advisers will fail to secure the
required qualifications in time and will be unable to carry on
advising, recurring income will carry explicit servicing
obligations to the client and clients may more easily cancel
investment trail payments. In aggregate therefore there will be
considerable industry dislocation in early 2013 and possibly
beyond.
For many remaining advisers this will require new lines of
business and additional clients. It is for this reason that
Lighthouse continues to expand its affinity relationships which in
turn continually increase the number of prospective new clients
available for advisers.
While the Board is concerned about the short term prospects for
the industry, and believes that it is too early to be able to give
reliable guidance about earnings levels relating to 2013 and
beyond, nonetheless the Board is satisfied that Lighthouse's scale,
new customer flows and financial strength continue to differentiate
the Group from most stand-alone organisations in the sector.
Accordingly the Board looks forward to reporting further progress
for the current year, and will update shareholders on expected
trading prospects thereafter, later in the year.
Finally, I would like to express my thanks to all the Lighthouse
financial advisers for their professionalism and loyalty to the
Group, and to all my fellow employees and directors for their
contributions during the period.
David Hickey
Executive Chairman
12 March 2012 Lighthouse Group plc
Consolidated statement of comprehensive income
for the year ended 31 December 2011
2011 2010
GBP'000 GBP'000
Revenue 60,383 63,125
Cost of sales (44,820) (47,368)
Gross profit 15,563 15,757
Administrative expenses
Other operating expenses (13,962) (14,436)
Earnings before interest,
tax, depreciation, amortisation
and non-recurring items 1,601 1,321
----------------------------------- --------- ---------
Non-recurring operating expenses (3,365) (164)
Total operating expenses (17,327) (14,600)
Depreciation and amortisation (895) (973)
Total administrative expenses (18,222) (15,573)
--------- ---------
Operating (loss)/profit (2,659) 184
Finance revenues 86 64
Finance costs (84) (119)
(Loss)/profit before taxation (2,657) 129
Tax credit 251 161
Gain on disposal of subsidiary
undertakings - 1,236
--------- ---------
(Loss)/profit for the year (2,406) 1,526
Other comprehensive income
(Diminution)/gain in fair
value of available-for-sale
financial asset (7) 15
--------- ---------
Total comprehensive (loss)/income
for the year (2,413) 1,541
========= =========
(Loss)/profit for the year
attributable to:
Equity holders of the parent (2,444) 1,452
Non-controlling interest 38 74
--------- ---------
(2,406) 1,526
----------------------------------- --------- ---------
Total comprehensive (loss)/income
for the year attributable
to:
Equity holders of the parent (2,451) 1,467
Non-controlling interest 38 74
--------- ---------
(2,413) 1,541
----------------------------------- --------- ---------
(Loss)/earnings per share
(basic) (1.92)p 1.14p
========= =========
(Loss)/earnings per share
(diluted) (1.92)p 1.13p
========= =========
Lighthouse Group plc
Consolidated statements of changes in equity
for the year ended 31 December 2011
Reserves
Special arising Total
non- from share attributable
Share distributable based Retained to equity Non-controlling
capital reserve payments earnings shareholders interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2011 1,277 1,999 919 9,659 13,854 106 13,960
--------- -------------- ------------- ---------- ------------- ---------------- ---------
Total recognised
income and
expense for
the period - - - (2,444) (2,444) 38 (2,406)
Decrease in
fair value
of
available-for-sale
financial
asset - - - (7) (7) - (7)
--------- -------------- ------------- ---------- ------------- ---------------- ---------
Total comprehensive
(loss)/income
for the year - - - (2,451) (2,451) 38 (2,413)
Share based
payment - - 32 - 32 - 32
Dividends
paid - - - (472) (472) (95) (567)
At 31 December
2011 1,277 1,999 951 6,736 10,963 49 11,012
-------------------- --------- -------------- ------------- ---------- ------------- ---------------- ---------
At 1 January
2010 1,277 1,999 874 8,601 12,751 90 12,841
--------- -------------- ------------- ---------- ------------- ---------------- ---------
Total recognised
income and
expense for
the period - - - 1,452 1,452 74 1,526
Increase in
fair value
of
available-for-sale
financial
asset - - - 15 15 - 15
--------- -------------- ------------- ---------- ------------- ---------------- ---------
Total comprehensive
income for
the year - - - 1,467 1,467 74 1,541
Share based
payment - - 45 - 45 - 45
Dividends
paid - - - (409) (409) (58) (467)
At 31 December
2010 1,277 1,999 919 9,659 13,854 106 13,960
-------------------- --------- -------------- ------------- ---------- ------------- ---------------- ---------
Lighthouse Group plc
Consolidated statement of financial position
at 31 December 2011
2011 2010
GBP'000 GBP'000
Assets
Non current assets
Intangible assets 10,460 11,228
Property, plant and equipment 146 202
Available-for-sale Investments 128 135
-------- --------
10,734 11,565
-------- --------
Current assets
Trade and other receivables 7,316 7,724
Cash and cash equivalents 11,895 13,924
-------- --------
19,211 21,648
-------- --------
Total assets 29,945 33,213
-------- --------
Current liabilities
Trade and other payables 9,671 10,198
Provisions 5,825 4,246
-------- --------
15,496 14,444
-------- --------
Non current liabilities
Trade and other payables - 912
Deferred tax liabilities 1,097 1,366
Provisions 2,340 2,531
-------- --------
3,437 4,809
-------- --------
Total liabilities 18,933 19,253
-------- --------
Net assets 11,012 13,960
======== ========
Capital and reserves
Called up share capital 1,277 1,277
Special non-distributable
reserve 1,999 1,999
Other reserves - share based
payments 951 919
Retained earnings 6,736 9,659
Total equity attributable
to equity holders of the
Company 10,963 13,854
Non-controlling interest 49 106
-------- --------
Total equity 11,012 13,960
======== ========
The interim financial information was approved by the Board of
Directors on 12 March 2012 and was signed on its behalf by
David Hickey
Executive Chairman
Peter Smith
Finance Director
Lighthouse Group plc
Consolidated statement of cash flows
For the year ended 31 December 2011
2011 2010
GBP'000 GBP'000
Operating activities
Group (loss)/profit before tax
for the period (2,657) 129
Adjustments to reconcile group
profit for the period to net cash
inflows from operating activities
Finance revenues (86) (64)
Finance costs 84 119
Loss on disposal of property, plant
and equipment 2 2
Depreciation of property, plant
and equipment 127 200
Amortisation of intangible assets 768 773
Share based payments 32 45
Change in trade and other receivables 407 270
Change in trade and other payables 532 (128)
Change in provisions 1,388 269
--------- --------
Cash generated from operations 597 1,615
Finance costs paid (84) (121)
Income taxes (paid)/received (44) 102
--------- --------
Net cash inflow from operating
activities 469 1,596
--------- --------
Investing activities
Payments to acquire trade and certain
assets under business combination
- deferred consideration (144) (144)
Proceeds from disposal of subsidiary
undertakings - 1,452
Purchase of property, plant and
equipment (73) (130)
Finance revenues received 86 64
Net cash (outflow)/inflow from
investing activities (131) 1,242
--------- --------
Financing activities
Repayments of trade facility (1,800) (1,800)
Dividends paid to equity shareholders (472) (409)
Dividends paid to non-controlling
interests (95) (58)
--------- --------
Net cash outflow from financing
activities (2,367) (2,267)
--------- --------
(Decrease)/increase in cash and
cash equivalents (2,029) 571
Cash and cash equivalents at the
beginning of the period 13,924 13,353
Cash and cash equivalents at period
end 11,895 13,924
========= ========
Lighthouse Group plc
Notes to the preliminary financial information for the year
ended 31 December 2011
1. Basis of preparation
The preliminary financial information, which comprises the
Consolidated Statement of Comprehensive Income, the Consolidated
Statements of Changes in Equity, the Consolidated Statement of
Financial Position and the Consolidated Statement of Cash Flows and
the related explanatory notes has been prepared on the basis of the
accounting policies set out in the audited financial statements for
the year ended 31 December 2011 and International Financial
Reporting Standards and interpretations issued by the International
Accounting Standards Board as adopted for use in the EU
("IFRS").
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2011
or 2010 but is derived from those accounts. Statutory accounts for
2010 have been delivered to the registrar of companies, and those
for 2011 will be delivered in due course. The auditor has reported
on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
2 (Loss)/earnings per ordinary share
The calculation of the basic and diluted (loss)/earnings per
share attributable to equity shareholders of the parent company is
based on the following data:
2011 2010
(Loss)/earnings for the purposes of
basic and dilutive earnings per share
(GBP'000) (2,444) 1,452
Weighted average number of ordinary
shares for the purpose of basic earnings
per share 127,700,298 127,700,298
Effect of the dilutive potential on
ordinary shares: Share options - 525,099
Weighted average number of ordinary
shares for the purpose of diluted earnings
per share 127,700,298 128,225,397
As at 31 December 2011, there were 8,092,189 (2010: 8,223,710)
options that existed which could potentially dilute basic earnings
per share in the future, but were not included in the calculation
of dilutive shares as their impact was anti-dilutive.
3. Dividends
The directors recommend the payment of a final dividend of 0.27p
per share, totalling GBP345,000 (2010: 0.24p, totalling
GBP306,000), which, subject to approval at the Annual General
Meeting, will be paid on 8 June 2012 to shareholders on the
register at the close of business on 11 May 2012. With the interim
dividend of 0.13p per ordinary share paid during the year, this
makes a total dividend for 2012 of 0.40p per ordinary share (2010:
0.36p per share).
4. Annual Report
The Annual report and audited financial statements will be
posted to shareholders on or about 5 April 2012 and copies are
available for collection indefinitely from the Company's registered
office at 26 Throgmorton Street, London, EC2N 2AN) or at the
Group's website (www.lighthousegroup.plc.uk).
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAPDNEEPAEFF
Lighthouse (LSE:LGT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Lighthouse (LSE:LGT)
Historical Stock Chart
From Jul 2023 to Jul 2024
