TIDMLGT
RNS Number : 3949A
Lighthouse Group PLC
20 March 2013
Press Release 20 March 2013
Lighthouse Group plc
("Lighthouse", "the Group" or "the Company")
Financial Adviser Awards: Large IFA of the Year 2012, 2011 and
2010
Preliminary Results
Lighthouse Group plc (AIM: LGT) today announces its preliminary
results for the year ended 31 December 2012.
Summary
-- Average annualised revenue per adviser increased by 14
per cent.
-- Significant new affinity contracts secured by Lighthouse
Financial Advice with BA Clubs, the Royal College of
Nursing and the Allied Bakers Union
-- Significant investment (GBP1.4 million, including GBP0.5
million capitalised) in LFA 500 project launched to deliver
future growth using market leading technology
-- EBITDA* of GBP1.5 million (2011: GBP1.6 million)
-- Net cash balances of GBP10.5 million (2011: GBP11 million
after deduction of the LV= trade facility)
-- Impairment charge of GBP3.9 million in relation to the
carrying value of network intangible assets; the Board
believes this is a conservative approach with no impact
on trading or the Group's cash position
-- Non-recurring charge of GBP1.4 million arising primarily
from RDR preparation and investment
-- Additional new affinity contract signed in March 2013
with the trade union USDAW
-- Appointment of Fay Goddard as a Non-Executive Director,
announced 19 March 2013
*Earnings before interest, tax, depreciation, and amortisation
and non-recurring operating expenses
Commenting on the results, Richard Last, Chairman of Lighthouse
Group plc, said: "The Board is pleased with the progress made
during the period, in particular in terms of the growth in affinity
relationships that have been secured by LFA, as well as the
increase in average annualised revenue per adviser. The Group has
made considerable investment into IT and related new processes
during 2012, such investment totalling GBP1.4 million in the year.
This investment was targeted towards readying the Group and its
advisers for trading in the new RDR environment and in setting the
groundwork for future growth plans.
"Trading conditions remain uncertain in light of the recently
implemented RDR; however with a strong cash balance, operational
scale and a robust business model, Lighthouse is well positioned
within the industry to deliver future growth."
For further information, please contact:
Lighthouse Group plc
Richard Last, Chairman Tel: +44 (0) 20 7065 5640
richard.last@lighthousegroup.plc.uk
Malcolm Streatfield, Chief Executive Tel: +44(0) 20 7065 5642
malcolm.streatfield@lighthousegroup.plc.uk
Peter Smith, Finance Director Tel: +44 (0) 1392 457850
peter.smith@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
Patrick Castle
Media enquiries:
Abchurch Communications
Joanne Shears / Jamie Hooper Tel: +44 (0) 20 7398 7719
jamie.hooper@abchurch-group.com www.abchurch-group.com
OVERVIEW
I am pleased to present my first report on the full year results
of Lighthouse Group since being appointed as Chairman of the
Company in August 2012.
Lighthouse has made good progress during 2012, commencing the
implementation of its growth strategy for Lighthouse Financial
Advice ("LFA") under which the Group aims to double the number of
advisers in that division over the next two years. This has been
made possible by the successful deployment of new IT systems, where
we have invested almost GBP900,000 in the year, which will improve
the efficiency of our operations and practices and facilitate
improvements in the quality of advice to our customers. The
continued growth of LFA is a priority for the Group.
An important growth area for LFA is with affinity groups, where
three new contracts were secured in 2012 with BA Clubs, the
association for current and former employees of British Airways,
the Royal College of Nursing and the Allied Bakers Union, as well
as the renewal of the Association of School and College Leaders
contract for a further three years and the recent new contract with
the trade union USDAW.
At the same time we have created the foundations to grow and
broaden the client base of LighthouseCarrwood which specialises in
providing independent financial advice to high net worth
individuals and professional clients, and to maintain the market
position of our network division, Lighthouse Advisory Services,
whose members will benefit during 2013 from the systems
enhancements now deployed to LFA advisers.
I am delighted to report that for the third successive year
Lighthouse Group was named as "Large IFA of the Year" following a
detailed technical assessment by the FT publication, "Financial
Adviser". This is an excellent achievement against stiff
competition and provides a clear indication of the high level of
professionalism with which the Group operates.
These achievements were made whilst the Group successfully
addressed a number of industry related issues, including
preparation for the changes introduced on 1 January 2013 by the
Retail Distribution Review ("RDR"), the increasingly all-pervasive
regulatory environment and dealing with customer redress issues
arising primarily from historic trading within the Group's network
division.
RESULTS
Against the backdrop of such significant change, the Group
recorded a creditable financial performance during 2012, with
EBITDA (before non-recurring charges) of GBP1.5 million (2011:
GBP1.6 million) on turnover of GBP55.0 million (2011: GBP60.4
million) being achieved. Gross margins increased by 1.6 per cent.
to 27.4 per cent. and average adviser production increased by 14
per cent. to GBP87,000 per annum whilst overheads continued to
reduce by GBP0.4 million, notwithstanding significant on-going
upward pressure in areas such as professional indemnity insurance
and regulatory costs.
Earnings per share before the impact of non-recurring operating
expenses and impairment charge amounted to 0.65p (2011: 0.72p). The
loss before taxation for the year was GBP4.6 million (2011: GBP2.7
million).
TRADING HIGHLIGHTS
2012 2011
Revenue GBP55.0m GBP60.4m
Gross profit GBP15.0m GBP15.6m
Operating costs (before non-recurring items) GBP13.5m GBP14.0m
*EBITDA GBP1.5m GBP1.6m
Depreciation and amortisation GBP0.8m GBP0.9m
Non-recurring operating expenses GBP1.4m GBP3.4m
Impairment of intangible assets GBP3.9m -
(Loss)/earnings per share:
Basic before non-recurring operating expenses
and impairment 0.65p 0.72p
Basic (2.76p) (1.92p)
Dividend per share - 0.40p
*Earnings before interest, tax, depreciation and amortisation
and non -recurring operating expenses (including impairment
charges)
Non-recurring operating expenses in 2012 included GBP0.9 million
in respect of professional advisory and consultancy costs incurred
in order to prepare the Group for RDR and regulatory change and
GBP0.5 million in respect of additional costs incurred during the
year arising from reorganisations and restructuring in prior
periods and from the proposed AIM de-listing process.
The non-recurring operating charge in 2011 was made to address
the potential liabilities arising out of the historic trading of
certain subsidiary companies. Significant progress has been made on
these matters during the year but substantive issues remain, in
particular those relating to Arch Cru, and therefore the residual
provision of GBP1.6 million has been retained. The Board has
reviewed the position in the light of information currently
available and the action now to be taken at the behest of the
regulator in contacting clients that bought the products involved
and has concluded that the provisions retained are appropriate and
adequate.
IMPAIRMENT
In line with other companies in the financial services sector,
the Board has undertaken the annual review of the carrying value of
the Group's intangible assets that previously arose on business
combinations, as is required by International Financial Reporting
Standards.
In undertaking this review the Board has had regard to the well
developed growth plans in place for LFA and LighthouseCarrwood and
the need for a more focused and risk-based approach to the
development of our network business.
The review indicated that no impairment charge was required for
intangible assets situated in either LFA or LighthouseCarrwood.
However, based on a conservative assessment of the impact of
reduced adviser numbers and changes in operating methods post RDR
as well as general economic uncertainty, an impairment charge of
GBP3.9 million has been taken against the carrying value of the
Group's network intangible assets acquired as a result of the
merger with Sumus Plc in May 2008, prior to the severe economic
downturn experienced later in that year. This is a non-cash item
and does not affect the Group's cash position or trading.
FINANCIAL POSITION
The Group's year end cash balances amounted to GBP10.5 million
(2011: GBP11 million after deduction of the LV= trade facility),
the reduction being due primarily to the investment of almost
GBP900,000 in new IT systems and processes and the payment of the
final 2011 dividend of GBP345,000 in May 2012. The final tranche of
the LV= trade facility amounting to GBP900,000 was fully repaid
during 2012.
As noted in the Interim Report in September 2012, the Group has
given undertakings to the Financial Services Authority ("FSA") that
no distributions or non-trading payments will be made from its
regulated subsidiaries without prior discussion with and assent
from FSA.
A substantial proportion of the Group's cash balances are
utilised in meeting our regulatory capital obligations and working
capital requirements. The Company believes that it is prudent to
retain the remainder of those funds (approximately GBP2 million)
within the business to support trading immediately post RDR as well
as to meet any potential claims for consumer redress that may arise
from the historic trading in regulated subsidiaries.
LOAN NOTES
The Group has invested considerable management time and some
GBP1.4 million (including a GBP0.5 million capitalised investment)
in its preparation for RDR and in augmenting its systems and
processes, particularly for its national (LFA) operation. In
addition in late 2012 the Company embarked upon plans to
significantly increase the number of advisers operating in LFA.
This will entail on-going investment in adviser recruitment and
training, as well as in the provision of fully integrated
technology solutions. To finance this, the Board has negotiated
funding from two provider institutions totalling GBP820,000.
The funding has been received in March 2013 and takes the form
of unsecured loan notes issued by the Company which is to be used
solely for the purposes of the LFA 500 project. The loan notes bear
interest at 8 per cent. per annum, rolled up until redemption in
2016, and a premium of 50 per cent. on the capital sum originally
advanced will be paid if LFA achieves pre-determined targets in
terms of revenues, adviser numbers and EBITDA for the year ending
31 December 2015. Such premium, if paid, is expected to be self
financing.
BOARD CHANGES
My appointment as Chairman was announced on 30 August 2012
following the resignation of David Hickey as Executive Chairman and
Director. The Board and I would like to thank David for his
considerable contribution to the development of Lighthouse and we
wish him well for the future.
In the Group's Interim Report issued in September 2012, I
commented that the Board would seek to appoint additional
Non-Executive Directors in due course. I am delighted to report the
Group's announcement on 19 March 2013 that Fay Goddard, until
recently the Chief Executive of the Personal Finance Society
("PFS"), has agreed to join the Board of Lighthouse as a
Non-Executive Director with effect from 1 April 2013. Fay brings a
wealth of experience, both from her time at the PFS and her
previous role with the Association of Independent Financial
Advisers and she will assist the Company in further embedding and
enhancing professional standards and customer focus within the
Group's operations.
DIVIDEND
Although significant progress has been made since the
publication of the Interim Report in September 2012, trading
conditions following the implementation of the changes brought
about by the RDR remain uncertain. In addition there remains
uncertainty regarding the extent of any consumer redress that may
be required as a result of the past trading of the Group's
regulated entities, albeit the Board believes that the current
level of provisioning for such costs is appropriate and
adequate.
As a consequence of these issues the Board considers that it
remains inappropriate to recommend a dividend payment at this time
and accordingly no final dividend in respect of the current year is
proposed (2011: GBP345,000 or 0.27 pence per share). The Board is
however committed to returning the Company to the dividend list as
soon as trading and regulatory conditions allow.
STRATEGY AND PROSPECTS
The Group has made significant progress in positioning itself to
thrive in the post RDR world of Retail Financial Services,
particularly through the anticipated growth in LFA and the benefits
of the investment in IT systems made last year coming through into
current year business performance.
Whilst in the short-term the Group expects a reduction in the
level of business written, due to market uncertainties and the
reduction in the number of advisers at the beginning of 2013 due to
retirements as a result of RDR, improvements are expected in the
quality of the business written and consequently in margins
achieved as well as an increase in the number of advisers as the
LFA growth plans are realised. Initial evidence here is encouraging
as is the increase in the number of affinity group relationships
which the Board believes is an important area for growth. In
addition, the Group is investing in its specialist services
business, LighthouseCarrwood, in order to broaden its operating
base.
Finally, I would like thank all of our advisers for their
continuing professionalism and loyalty to the Group and my fellow
directors and all employees of Lighthouse for their considerable
hard work and support during the year.
Richard Last
Chairman
20 March 2013
Lighthouse Group plc
Consolidated statement of comprehensive income
for the year ended 31 December 2012
2012 2011
GBP'000 GBP'000
Revenue 55,045 60,383
Cost of sales (39,988) (44,820)
Gross profit 15,057 15,563
Administrative expenses
Other operating expenses (13,548) (13,962)
Earnings before interest,
tax, depreciation, amortisation
and non-recurring items 1,509 1,601
----------------------------------- --------- ---------
Non-recurring operating expenses (1,401) (3,365)
Total operating expenses (14,949) (17,327)
Impairment charge on intangible (3,909) -
assets
Depreciation and amortisation (813) (895)
Total administrative expenses (19,671) (18,222)
--------- ---------
Operating loss (4,614) (2,659)
Finance revenues 87 86
Finance costs (54) (84)
Loss before taxation (4,581) (2,657)
Tax credit 1,084 251
Loss for the year (3,497) (2,406)
Other comprehensive income
Increase/(diminution) in fair
value of available-for-sale
financial asset 7 (7)
--------- ---------
Total comprehensive loss for
the year (3,490) (2,413)
========= =========
(Loss)/profit for the year
attributable to:
Equity holders of the parent (3,516) (2,444)
Non-controlling interest 19 38
--------- ---------
(3,497) (2,406)
----------------------------------- --------- ---------
Total comprehensive (loss)/income
for the year attributable
to:
Equity holders of the parent (3,509) (2,451)
Non-controlling interest 19 38
--------- ---------
(3,490) (2,413)
----------------------------------- --------- ---------
Loss per share (basic) (2.76)p (1.92)p
========= =========
Loss per share (diluted) (2.76)p (1.92)p
========= =========
Lighthouse Group plc
Consolidated statements of changes in equity
for the year ended 31 December 2012
Share Special Reserves Retained Total Non-controlling Total
capital non- arising earnings attributable interest
distributable from share to equity
reserve based shareholders
payments
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2012 1,277 1,999 951 6,736 10,963 49 11,012
--------- -------------- ------------ ---------- ------------- ---------------- ----------
Total recognised
income and
expense for
the period - - - (3,516) (3,516) 19 (3,497)
Increase in
fair value
of
available-for-sale
financial
asset - - - 7 7 - 7
--------- -------------- ------------ ---------- ------------- ---------------- ----------
Total comprehensive
(loss)/income
for the year - - - (3,509) (3,509) 19 (3,490)
Share based
payment - - 32 - 32 - 32
Dividends
paid - - - (345) (345) (25) (370)
At 31 December
2012 1,277 1,999 983 2,882 7,141 43 7,184
-------------------- --------- -------------- ------------ ---------- ------------- ---------------- ----------
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
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
-------------------- --------- -------------- ------------ ---------- ------------- ---------------- ----------
Lighthouse Group plc
Consolidated statement of financial position
at 31 December 2012
2012 2011
GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 6,346 10.460
Property, plant and equipment 215 146
Available-for-sale investments 135 128
-------- ---------
6,696 10,734
-------- ---------
Current assets
Trade and other receivables 8,808 7,316
Cash and cash equivalents 10,489 11,895
-------- ---------
19,297 19,211
-------- ---------
Total assets 25,993 29,945
-------- ---------
Current liabilities
Trade and other payables 10,748 9,671
Provisions 5,785 5,825
-------- ---------
16,533 15,496
-------- ---------
Non-current liabilities
Deferred tax liabilities - 1,097
Provisions 2,276 2,340
-------- ---------
2,276 3,437
-------- ---------
Total liabilities 18,809 18,933
-------- ---------
Net assets 7,184 11,012
======== =========
Capital and reserves
Called up share capital 1,277 1,277
Special non-distributable
reserve 1,999 1,999
Other reserves - share based
payments 983 951
Retained earnings 2,882 6,736
Total equity attributable
to equity holders of the
Company 7,141 10,963
Non-controlling interest 43 49
-------- ---------
Total equity 7,184 11,012
======== =========
The financial information was approved by the Board of Directors
on 20 March 2013 and was signed on its behalf by
Richard Last
Chairman, Non-Executive
Peter Smith
Finance Director
Lighthouse Group plc
Consolidated statement of cash flows
For the year ended 31 December 2012
2012 2011
GBP'000 GBP'000
Operating activities
Group loss before tax for the year (4,581) (2,657)
Adjustments to reconcile Group
loss for the year to net cash inflows
from operating activities
Finance revenues (87) (86)
Finance costs 54 84
Loss on disposal of property, plant
and equipment - 2
Impairment charge on intangible 3,909 -
assets
Depreciation of property, plant
and equipment 96 127
Amortisation of intangible assets 717 768
Share based payments 32 32
Change in trade and other receivables (1,489) 407
Change in trade and other payables 2,003 532
Change in provisions (104) 1,388
----------------- -----------------
Cash generated from operations 550 597
Finance costs paid (55) (84)
Income taxes paid (31) (44)
----------------- -----------------
Net cash inflow from operating
activities 464 469
----------------- -----------------
Investing activities
Payments to acquire trade and certain
assets under business combination
- deferred consideration (12) (144)
Purchase of intangible assets (512) -
Purchase of property, plant and
equipment (165) (73)
Finance revenues received 89 86
----------------- -----------------
Net cash outflow from investing
activities (600) (131)
----------------- -----------------
Financing activities
Repayments of trade facility (900) (1,800)
Dividends paid to equity shareholders (345) (472)
Dividends paid to non-controlling
interests (25) (95)
----------------- -----------------
Net cash outflow from financing
activities (1,270) (2,367)
----------------- -----------------
Decrease in cash and cash equivalents (1,406) (2,029)
Cash and cash equivalents at the
beginning of the year 11,895 13,924
----------------- -----------------
Cash and cash equivalents at year
end 10,489 11,895
================= =================
Lighthouse Group plc
Notes to the preliminary financial information for the year
ended 31 December 2012
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 2012 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 2012
or 2011 but is derived from those accounts. Statutory accounts for
2011 have been delivered to the registrar of companies, and those
for 2012 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 per ordinary share
The calculation of the basic and diluted loss per share
attributable to equity shareholders of the parent company is based
on the following data:
2012 2011
Loss for the purposes of basic and
dilutive earnings per share (GBP'000) (3,516) (2,444)
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 - -
Weighted average number of ordinary
shares for the purpose of diluted earnings
per share 127,700,298 127,700,298
As at 31 December 2012, there were 8,019,615 (2011: 8,092,189)
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 do not recommend the payment of a final dividend
for the year ended 31 December 2012 (2011: 0.27p, totalling
GBP345,000, total dividend for 2011 of 0.40p per ordinary
share).
4. Annual report
The annual report and audited financial statements will be
posted to shareholders on or about 5 April 2013 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 EAPDNFADDEFF
Lighthouse (LSE:LGT)
Historical Stock Chart
From May 2024 to Jun 2024
Lighthouse (LSE:LGT)
Historical Stock Chart
From Jun 2023 to Jun 2024
