Cleardebt Group PLC CLEA Final Results

  Cleardebt Group PLC (CLEA) - Final Results

RNS Number : 5039R
Cleardebt Group PLC
20 November 2012






ClearDebt Group plc("ClearDebt" or "the Group")



Preliminary announcement of un-audited results for the year ended 30 June 2012





ClearDebt presents another good set of financial results



Financial Highlights: Good  financial performance in  the year. Total  clients 
now number over 13,000. Disappointing numbers  of new IVAs in the second  half 
of the financial  year, which has  continued since the  year-end, offset by  a 
stronger debt management performance.




  % 
increase
2012 2011




Revenue
18           £9,203,453 
£7,776,362

                                                          Gross 
Profit
18           £4,678,074 
£3,963,959


EBITDA
23           £2,737,967 
£2,222,411



Operational Highlights: Disappointing new  IVA numbers, although revenue  from 
the provision of  consultancy services related  to the IVA  business has  been 
strong. Good performance from our debt management business which continues  to 
grow.



Number of new IVAs



Period                   % 
increase/(decrease)        2012 
 2011



First    quarter      
37                          488 
 355

Second    quarter     (15) 
                               345 
 407

Third          quarter 
(34)                          273 
 411

Fourth    quarter    (18) 
                               353 
 428





· Abacus, ClearDebt's debt management plan subsidiary continues to make a
profit and handles all of the Group's sales activity. It has benefited from an
increase in debt management clients.



· In line with trends in the market place ClearDebt has seen a  reduction 
in new IVA  numbers as  well as  average income  from new  IVAs. Revenue  from 
financial consultancy related to  the IVA business has  grown strongly in  the 
year although this is not expected to continue at current levels.



· ClearCash prepaid master  card successfully migrated  to a new  service 
platform giving cardholders  the ability to  set up direct  debits as well  as 
allocating them their own  sort code and account  number. Some duplication  of 
costs arising from migration was incurred. However we now have the ability  of 
offering similar facilities to those of a traditional bank account by the  use 
of ClearCash's on-line iCount.



Outlook



·The IVA  market has  plateaued and  the numbers  of new  cases are  not 
rising as expected due to declining  disposable incomes of consumers and  some 
resistance by certain creditors to the solution.New initiatives to  increase 
market penetration whilst also  considering new models to  offer IVAs at  much 
reduced levels of contribution are being examined.



· Revenue from financial consultancy related to the IVA business has been
excellent although part of this is one off in nature which is not expected  to 
continue at these  levels in the  current year. Now  focused on  accumulating 
cash to repay the convertible bond in April 2013 with cash balances in  excess 
of £1 m and increasing.



·Current economic outlook in the  UK with unemployment showing no  signs 
of falling together with high taxation and continued public sector cuts leaves
the Group well placed for another profitable year.











David Mond, CEO of ClearDebt commented



"The Group has enjoyed  a good year  in terms of  profitability and cash  flow 
although  this  has  to  be  tempered  by  lower  numbers  of  new  IVA  cases 
particularly  in  the  second  half  of   the  financial  year.  This  is   a 
disappointing result but  one that I  feel is  being mirrored by  many in  the 
sector as the IVA market as a whole remains flat at best. Against this we have
been successful in generating substantial  income from consultancy related  to 
the IVA business, although it is not  expected to continue at these levels  in 
the current financial year.



I am pleased  however to  report that  Abacus has  returned to  growth in  DMP 
client numbers and  profitability. Additionally  I am very  pleased with  the 
number of new clients taking up our ClearCash prepaid MasterCard which now has
similar features to  those of  a traditional  bank account  using its  on-line 
platform (iCount).



We are now focused on accumulating cash to repay the convertible bond in April
2013 with cash balances currently now in excess of £1m and increasing.



Given the current  economic outlook  in the  UK with  unemployment showing  no 
signs of  falling substantially,  together with  high taxation  and  continued 
public sector  cuts, I  believe the  Group is  still well  placed for  another 
profitable year."







Enquiries:



ClearDebt Group plc
 David
Mond, Chief Executive Officer


Tel No: 0161 968 6806



Seymour Pierce Limited
 Guy Peters
(Corporate Finance)

(Broker and Nominated Adviser)
David Banks/Katie Ratner (Corporate Broking)


Tel No: 020 7107 8000



































Chairman's Statement



I am delighted  to present  the Group's  results for  the year  ended 30  June 
2012.



The Group  increased revenue  to £9,203,453  (2011: £7,776,362)  producing  an 
increased gross  profit  of £4,678,074  (2011:  £3,963,959).Earnings  before 
interest, tax, depreciation and amortisation  increased to £2,737,967 (2011:   
£2,222,411) resulting in a substantial pre-tax profit for the year of £834,758
(2011: £227,219)  after  finance  charges of  £585,611  (2011:  £532,404)  and 
amortisation relating to the acquisition  of back books and other  intangibles 
of £1,199,481 (2011: £1,388,809).Profit  after taxation was £591,257  (2011: 
£71,036).



During the first quarter  of the financial year  the Group acquired a  further 
tranche of new IVAs for  £259,880 resulting in a  gain on bargain purchase  of 
£27,089.



At the year  end the  group had net  assets of  £5,827,562 (2011:  £5,150,582) 
including cash of £462,459  (2011: £336,636) after  spending £259,880 on  back 
book acquisitions (2011: £1,088,783) in the year financed out of cash flow. In
addition £700,000 of  loans was repaid  in the  year (2011: net  new loans  of 
£315,000).



Following the  Paymex  ruling  the Group  received  some  £750,000,  including 
interest, prior to the year end in  respect of our claim to recover VAT  which 
had been incorrectly charged on IVAs. The money has been placed into a  client 
account although we have since the year  end refunded the VAT due to the  open 
cases and the element of VAT that is due to the Group in respective of nominee
fees. We will shortly commence the  process of distributing the VAT on  closed 
cases. At the 30  June 2012 the  Group had accrued  revenue of £338,000  based 
upon estimates of the revenues expected to  arise to the Group out of the  VAT 
refund process.



I am pleased  to say that,  excluding acquired back  books of debt  management 
clients, Abacus has  started again to  grow the number  of clients under  debt 
management despite current market conditions.



The numbers of new IVAs have, however, particularly in the second half of  the 
year, been disappointing with  only 1,459 new IVAs  passed in the year  (2011: 
1,601).Whilst sales  of  new IVAs  have  been disappointing  the  Group  has 
benefitted from  significant income  in the  year generated  from  consultancy 
related to the IVA business. This income  includes items which are one off  in 
nature and whilst it will continue in the current financial year we expect  it 
will be at lower levels than have been seen previously.



We continue to invest in various  marketing activities to increase the  number 
of new IVAs being passed and continue to concentrate on managing overheads  as 
we accumulate cash  in readiness to  repay the convertible  bond due in  April 
2013.







Gerald Carey FCIB

Chairman





19 November 2012





























Chief Executive's Statement



The Group has  enjoyed a good  year in  terms of profitability  and cash  flow 
although  this  has  to  be  tempered  by  lower  numbers  of  new  IVA  cases 
particularly in the second half of  the financial year. During the year  1,459 
(2011: 1,601)  new  IVAs were  passed.  In addition  some  120 new  IVAs  were 
acquired in the first quarter of the financial year and as at 30 June 2012 the
total number of IVAs and PTDs generating income was 6,504 (2011: 5,893).



The number of new IVAs is disappointing but I feel that this position is being
mirrored by many in the  sector as the IVA market  as a whole remains flat  at 
best. In  addition, clients'  average disposable  incomes after  basic  living 
expenses continue to fall as household food and energy costs remain high which
has the effect of reducing  fees for new IVAs as  they are geared towards  the 
level of contributions paid by clients.



I am pleased  however to  report that  Abacus has  returned to  growth in  DMP 
client numbers, excluding  acquired back books,  and as at  30 June 2012,  the 
total number of active DMPs under management was 6,566 (2011: 5,761).



We have  been successful  in generating  substantial income  from  consultancy 
related to the IVA business to offset the lower IVA numbers. Income from  this 
source has increased substantially in the current year with revenue  generated 
of £1,307,992 (2011: £361,341).  Whilst I expect revenue  from this source  to 
continue into  the new  financial year  it will  continue at  lower levels  as 
certain elements of a non-recurring nature drop out.



We continue to invest in the training  of our staff with many having  obtained 
the Certificate of Debt Resolution  (CertDR), exclusively offered by the  Debt 
Resolution  Forum  ("DRF"),  and  many   more  are  progressing  towards   the 
qualification. I am proud of the culture within our organisation for  training 
and the focus on the highest ethical  standards which will keep us well  ahead 
of industry standards and compliance in the United Kingdom. I am also pleased
with our commitment in supporting the DRF in all of its activities  especially 
ensuring representation on many government and industry wide committees in our
sector.



We have  continued  to  reduce  our dependency  on  internet  advertising  and 
increasingly are focused upon referral sources for client leads together  with 
the acquisition of good quality data for our now well established call centre.
We constantly try to diversify  and expand our referral  base in an effort  to 
boost the numbers of new clients to the business.



Cash flow remains good and  we are now focused  on accumulating cash to  repay 
the convertible bond in April 2013 with cash balances currently now in  excess 
of £1m and increasing.



OPERATIONAL REVIEW



ClearDebt - IVA Division



Since 1 July 2011 (2011: 1 July 2010), the following numbers of new IVAs  have 
been arranged through ClearDebt:-




Year ended Year ended


30 June 2012 30 June 2011

First
quarter
488 355

Second
quarter
345 407

Third
quarter
273 411

Fourth
quarter
353 428


____ ____


1,459 1,601


____ ____



The numbers of new  IVAs in the  second half of the  financial year have  been 
disappointing and this has  continued since the year  end. New IVAs passed  in 
the year declined by 9% to 1,459 from 1,601 new cases in 2010/11. We acquired
the income stream from some 120 IVAs in the year and, including this purchase,
we had  as at  30 June  2012 a  total of  6,566 (2011:  5,893) IVAs  and  PTDs 
generating income. 



Revenue of £1,307,992 (2011: £361,341) from consultancy income related to  the 
IVA business  has increased  substantially in  the year  to offset  the  lower 
numbers of new IVAs. This year has benefitted from items which are one off  in 
nature and whilst we continue to  expect significant revenue from this  source 
we expect income to be lower in the  new financial year as it returns to  more 
normal levels.



The Board  monitors  several  key performance  indicators  ("KPIs")  for  the 
business on a  monthly basis  including the  number of  cases passed,  various 
conversion ratios from lead  to cases passed, the  cost per case acquired  and 
the staff to caseload numbers. Whilst  reduced numbers of leads and  referrals 
has led to lower numbers of  cases passed, all other indicators remain  within 
expectations.



Abacus- Debt Management Division



The division made  a pleasing profit  in the period  with DMP client  numbers, 
excluding acquired back books, starting to increase again month on month since
January 2012.



As at 30  June 2012,  the total  number of  DMPs generating  income was  6,566 
(2011: 5,761).  Our  attrition  rates  on DMPs  are  well  within  our  normal 
expectations and we  continue to  look to  acquire back  books as  a means  of 
boosting income over the short and medium term.



The Board has KPIs to monitor the number of active income generating plans  as 
well as  the  value  of  monthly  payments made  by  debtors.  The  costs  of 
acquisition of cases  and plans  are also  monitored closely.  We continue  to 
resist the temptation to grow the book through lead sources providing leads at
what are, in our view, uneconomic prices.



ClearCash - prepaid MasterCard



Steady progress continues to be made with our Pre-Paid MasterCard,  ClearCash, 
although it has yet to  reach a break even  position. Increased losses in  the 
current year as compared to 2011 have  arisen due to the decision in  December 
2011 to switch service providers to  enhance the card functionality. This  has 
led to duplicated costs whilst we wind down the old card and switch clients to
the new ClearCash card which was successfully migrated in July 2012 - but  we 
believe the switch will be a worthwhile one for future card sales.



The new ClearCash card has increased functionality, in particular giving  card 
holders their own  unique sort code  and account number.  This not only  gives 
cardholders the feel of a traditional bank account but also allows them to set
up direct debits for  the first time giving  them the full functionality  they 
require. Following the successful  migration of current  card holders we  will 
start actively marketing the new card to our extensive database.



As card numbers increase we expect the card to produce a profit next year.



































FINANCIAL REVIEW





Group turnover increased  by 18%  to £9,203,453 (2011:  £7,776,362) and  gross 
profit by 18% to£4,678,074 (2011:  £3,963,959). The performance was driven  by 
the consultancy  income  related  to  the IVA  business  as  well  as  revenue 
generated from our substantial IVA and DMP back books. Amortisation charges in
respect  of  acquisitions  and   impairment  amounted  to  £1,199,481   (2011: 
£1,388,809).



Finance costs  rose to  £585,611 (2011:  £532,404 )  reflecting the  continued 
accrual of interest due in respect  of the three year 10% secured  convertible 
loan notes which are due for repayment in April 2013. Actual interest paid  in 
respect of  the  convertible  totalled  £230,000 with  the  balance  being  an 
accounting charge for the redemption premium due on maturity in 2013.



Cash resources at  the year-end  amounted to £462,459  (2011: £336,636)  after 
back-book acquisitions of  some £259,880 (2011:  £1,088,783) and repayment  of 
loans of £700,000 (2011: net  loans advanced £315,000). Operational cash  flow 
remains strong and cash balances at the  end of September 2012 were in  excess 
of £1m as we continue to build cash for repayment of the convertible.



GOING CONCERN



As part of  its going  concern review the  Board has  followed the  guidelines 
published by  the  Financial Reporting  Council  entitled "Going  Concern  and 
Liquidity Risk:  Guidance for  UK  Companies 2009".  The Board  has  prepared 
detailed financial forecasts  and cash flows  for the three  years to 30  June 
2015 and in drawing  up these forecasts the  Board has made assumptions  based 
upon its view of  the current and  future economic conditions  in the UK  that 
will prevail over the forecast period -  given that the business is likely  to 
be solely focused on the UK market  for the foreseeable future. The timing  of 
the cash flows in respect of loans provided has been taken into  consideration 
and in  addition to  the forecasts  we have  produced sensitivities  to  these 
forecasts to test our  ability to trade  as a going concern  for at least  the 
following 12 months.



The Board believes that the  use of the going  concern basis of accounting  is 
appropriate based upon a  review of these forecasts  and finance available  to 
the Group.





FUTURE OUTLOOK



The IVA market has plateaued  and the numbers of new  cases are not rising  as 
expected due to declining disposable incomes of consumers and some  resistance 
by certain  creditors  to the  solution.We  are working  on  initiatives  to 
increase our penetration whilst also considering  new models to offer IVAs  at 
much reduced  levels  of  contribution  to  enable  consumers  to  enter  this 
solution.



We continue  to look  for acquisitions  of  client books  wherever we  can  at 
reasonable prices to  supplement our  growth as we  know these  can be  highly 
profitable given the ease with which we can assimilate them into our  scalable 
business model and systems.



Given the current  economic outlook  in the  UK with  unemployment showing  no 
signs of falling together with high taxation and continued public sector  cuts 
I believe the Group is still well placed for another profitable year.



I would  like to  take  this opportunity  to thank  all  our staff  for  their 
dedication and hard work  over the last year  and for their continuing  advice 
and assistance to our thousands of clients.





David Emanuel Merton Mond FCA FCCA

Chief Executive Officer



19 November 2012









CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2012








2012 2011


Notes £
 £

Revenue

-
on-going
2  9,056,403 
7,582,367

-
acquisitions
147,050  193,995


_________ _________


9,203,453  7,776,362



Cost                                                                        of 
sales
(4,525,379)  (3,812,403)


_________ _________

Gross
profit
4,678,074 3,963,959



Administrative
expenses
(1,854,384)  (1,678,623)

Share                              based                               payment 

(85,723) (62,925)


_________  _________

Profit before interest, tax,

depreciation                                                               and 
amortisation
2,737,967  2,222,411



Depreciation
(147,490)  (132,437)

Amortisation
(1,199,481)  (1,388,809)

Gain  on  bargain  purchase 
3
27,089 54,985


_________ _________

Profit                                                                    from 
operations         2 
           1,418,085 
 756,150



Profit                             from                             continuing 
operations
1,371,105 747,112

Profit                                                                    from 
acquisitions
46,980 9,038



Finance
costs
4         (585,611) 
 (532,404)

Finance
income
2,284 3,473


_________  _________

Profit                                                                  before 
taxation
834,758  227,219



Taxation
5        (243,501) 
 (156,183)


_________  _________

Profit after taxation and total comprehensive

income                                                                     for 
year
591,257  71,036


_________  _________

Amount attributable to:



Ownersoftheparent591,25771,036

_________ _________



Earnings   per    ordinary   share    -   basic    (pence) 
6
0.19p 0.02p

Earnings   per   ordinary   share   -   diluted   (pence)   6 

0.19p 0.02p


_________ _________

















CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2012




Notes 2012 2011



£ £

Assets



Non-current assets

Intangible
assets
5,626,779 6,476,691

Property,                              plant                               and 
equipment
375,593 252,998

Deferred taxation

72,034 78,188

 __________ _________


6,074,406 6,807,877

Current assets

Trade                                and                                 other 
receivables
3,428,878 2,181,959

Cash                                 and                                  cash 
equivalents
462,459 336,636


__________ _________


3,891,337 2,518,595


__________ _________

Total
assets
9,965,743 9,326,472


__________ _________



Equity and liabilities



Equity

Issued
capital
6,166,812 6,166,812

Share
premium
279,948 279,948

Share                                                                    based 
compensation
289,035 203,312

Other
reserves
96,495 96,495

Retained
losses
(1,004,728) (1,595,985)


__________ _________

Total     equity      attributable     to      the     owners      of      the 
parent
5,827,562 5,150,582


__________ _________



Current
liabilities
7

Trade                                and                                 other 
payables
912,166 698,255

Corporation                                                                tax 
payable
263,970 92,662

Current financial
liabilities
2,597,306 -

__________ _________


3,773,442 790,917

Non-current
liabilities

Financial
liabilities
8 315,000 3,318,309

Deferred
taxation
 49,739 66,664


__________ _________

Total
liabilities
4,138,181 4,175,890


__________ _________

Total                                equity                                and 
liabilities
9,965,743 9,326,472


__________ _________

























CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2012





 Issued
Share Share  Share Based Other
Retained Total


Capital Premium Compensation Reserves
Losses Equity


£ £ £
£ £ £



Balance    as    at    1    July    2010    6,166,812 
279,948 140,387 96,495 (1,667,021) 5,016,621





Share             based             compensation 
-      -       62,925 
- - 62,925





Total comprehensive income -
-         -         - 
71,036 71,036

for the year 


________    ________    ________    _______ 
________ ________



Balance as at 30 June 2011 6,166,812 279,948
203,312 96,495 (1,595,985) 5,150,582





Share             based             compensation 
-      -       85,723 
- - 85,723





Total comprehensive income -
- - -  591,257 
591,257

for the year 


________    ________     ________     _______ 
_________ ________



Balance   as    at    30   June    2012        6,166,812 
279,948 289,035 96,495 (1,004,728) 5,827,562


________    ________     ________     _______ 
_________ ________



Share capital

Share capital has  arisen on the  issue of shares  and represents the  nominal 
value of shares issued.



Share premium

The share premium  account arose  from the issue  of equity  shares above  the 
nominal value less share issue costs.



Share based compensation

This reserve is  the result  of the Company's  grant of  equity settled  share 
options and  warrants  and  measured  in  accordance  with  IFRS2  share-based 
payment.



Other reserve

This reserve is the result of the Company's issue of secured convertible  loan 
notes in  April  2010 in  accordance  with  IAS 32  -  Financial  Instruments: 
Presentation.



Retained losses

The retained losses reflect losses incurred to date.































CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2012


2012 2011


£ £

Cash flow from continuing operating activities

Profit                                                                  before 
taxation
834,758 227,219

Depreciation           of            property,            plant            and 
equipment
147,490 132,437

Amortisation                           of                           intangible 
assets
1,199,481 1,388,809

Gain                   on                   bargain                   purchase 

(27,089) (54,985)

Profit          on           sale          of           fixed           assets 

(1,739) -

Share                                                                    based 
payment
85,723 62,925

Increase             in              trade              and              other 
receivables
(1,246,980) (928,733)

Finance
costs
 585,611 532,404

Finance
income
(2,284) (3,473)

Increase/(decrease)in              trade               and               other 
payables        
213,973 (310,896)


_________ _________

Cash                               generated                                by 
operations
1,788,944 1,045,707

Corporation                                                                tax 
(paid)/refunded
 (91,995) 8,794


_________ _________

Net            cash             generated            by             operating 
activities
1,696,949 1,054,501



Investing activities

Acquisition                  of                  business                  and 
assets
(267,080) (1,088,783)

Acquisition                                                                 of 
intangibles
(46,370) (37,170)

Acquisition            of            property,            plant            and 
equipment
(270,085) (157,443)

Finance
income
2,284 3,473

Sale             of              property,              plant              and 
equipment
1,739 -


_________ _________

Net              cash              used              in              investing 
activities
(579,512) (1,279,923)



Financing activities

Repayment                             of                              existing 
loans
(700,000) -

Proceeds                   from                   new                    loans 
advanced
- 315,000

Interest                                                                    on 
loans
 (291,614) (294,446)


_________ _________

Cash          (used           by)/generated           from           financing 
activities
(991,614) 20,554



Increase/(decrease)           in            cash           and            cash 
equivalents         
125,823 (204,868)

Opening                    cash                    and                    cash 
equivalents
 336,636 541,504


_________ _________

Closing                    cash                    and                    cash 
equivalents
 462,459 336,636


_________ _________



1. Basis of Preparation



The preliminary financial information does not constitute full accounts within
the meaning  of  section434of the  Companies  Act2006but is  derived  from 
accounts for the years ended 30June2012and 30June2011 and is unaudited.



The auditors  anticipate  issuing a  qualified  report  on the  30  June  2012 
financial statements  arising as  a  result of  a  limitation of  scope.  That 
limitation arises  from the  auditors' inability,  in respect  of  consultancy 
revenues recognised during the year totalling £1,307,992, to obtain sufficient
appropriate evidence as to:



1) the substance of the services provided; or



2) whether  the  amounts recognised  have  been correctly  stated  and/or 
recognised in the correct accounting period,  or in accordance with the  terms 
of the contract which governs these revenues.













While the financial information included in this preliminary announcement  has 
been prepared in accordance with  the recognition and measurement criteria  of 
International Financial Reporting Standards (IFRS), as adopted by the European
Union  (EU),  this  announcement  does   not  in  itself  contain   sufficient 
information to comply with IFRSs.



ClearDebt Groupplc is incorporated and  domiciled in theUnited Kingdom.  The 
consolidated financial  information ofClearDebt  Groupplc  set out  in  this 
announcement is presented in Pounds Sterling (£), which is also the functional
currency of  the  parent.  The consolidated  financial  information  has  been 
approved for issue by the Board of Directors on19 November 2012.



Statutory accounts for the  year ended30June2011 have  been filed with  the 
Registrar  of  Companies.   The  auditors'  report   on  those  accounts   was 
unqualified, did not include a reference to any matters to which the  auditors 
drew attention by way  of emphasis, without qualifying  their report, and  did 
not contain any statement under  Section 498 (2) or  498 (3) of the  Companies 
Act 2006.



2. Segmental Information



The Group's  total income,  profit before  taxation and  net assets  were  all 
derived from its principal  activities being the provision  of IVAs and  other 
financial  advice  and  appropriate  solutions  to  individuals   experiencing 
personal debt problems. All the Group's activities were undertaken wholly  in 
the United Kingdom.



During the year ClearDebt Limited had one customer which accounted for revenue
of £1,443,351 (2011: £361,341). Of  this revenue, £1,307,992 (2011:  £361,341) 
is from the provision  of consultancy services and  has been reported on  as 
part of  the  insolvency segment  of  the business  as  it is  not  separately 
identified to, and reviewed by, the Group's chief operating decision maker.  A 
further £135,359 (2011:  £nil) relates  to the management  of debt  management 
clients and is recorded within the debt management segment of the business.







Year ended 30 June 2012


Debt            Total 
Debt Total

   Insolvency 
Management  2012  Insolvency   Management 
2011


£   £   £ 
£ £ £

Revenue

-   On-going   6,144,226 
2,912,177   9,056,403   4,843,540    2,738,827 
7,582,367

-            Acquisition              
147,050   -147,050 
- 193,995 193,995


_________     _________     _________     _________ 
_________ _________



Total    Revenue    6,291,276 
2,912,177   9,203,453   4,843,540    2,932,822 
7,776,362



Cost   of   sales    (2,796,908) 
(1,728,471)(4,525,379)(2,355,997)           (1,456,406) 
(3,812,403)


_________     _________     _________     _________ 
_________ _________



Gross  Profit    3,494,368 
1,183,706   4,678,074   2,487,543    1,476,416 
3,963,959



Administrative                                         expenses 
(1,174,368)(680,016)(1,854,384)    (1,072,653) 
(605,970)(1,678,623)

Share            based            payment             
(47,310)(38,413)(85,723)
(30,380) (32,545)(62,925)


________     _________     _________      _________ 
_________ _________



Profit before interest, tax

depreciation     and     amortisation      2,272,690 
465,277   2,737,967    1,384,510    837,901 
2,222,411





Depreciation(106,183)(41,307)(147,490)
(59,674) (72,763) (132,437)

Amortisation(1,031,677)(167,804)(1,199,481)(892,425)
(496,384) (1,388,809)

Gain on bargain purchase   27,089 
-27,089   33,648    21,337 
54,985


________     _________     _________      _________ 
_________ _________



Profit  from   operations      1,161,919 
256,166  1,418,085  466,059   290,091 
756,150



Finance      costs(468,489) 
(117,122)(585,611)(374,368)       (158,036) 
(532,404)

Finance                         income 
2,284     -      2,284 
3,473 - 3,473


_________     _________     _________     _________ 
_________ _________



Profit  before   taxation   695,714 
139,044 834,758  95,164  132,055 
227,219



Taxation
(178,059)(65,442) (243,501)(121,849)
(34,334) (156,183)


_________     _________     _________     _________ 
_________ _________



Profitaftertax517,65573,602591,257(26,685)97,72171,036
_________
_________ _________ _________ _________ _________



Net operating assets are reconciled to equity funds as follows:




2012 2011


£ £

Gross assets

Insolvency
9,717,031 7,492,638

Debt
management
 248,712 1,833,834


_________ _________


9,965,743 9,326,472


_________ _________

Gross
liabilities

Insolvency
3,242,955 2,530,762

Debt
management
895,226 1,645,128


_________ _________


4,138,181 4,175,890


_________ _________

Capital expenditure to acquire property, plant and equipment

Insolvency
240,240 152,063

Debt
management
29,845 5,380


_________ _________


270,085 157,443


_________ _________

Capital expenditure to acquire intangible assets

Insolvency

349,569 799,806

Debt
management
- 300,647


_________ _________


349,569 1,100,453


_________ _________

Depreciation of property, plant and equipment

Insolvency
106,183 59,674

Debt
management
41,307 72,763


_________ _________


147,490 132,437


_________ _________

Amortisation of intangible assets

Insolvency
1,031,677 892,425

Debt
management
167,804 496,384


_________ _________


1,199,481 1,388,809


_________ ________



3. Acquisition



Between July and November  2011 a number  of new IVA  cases were purchased  by 
ClearDebt Limited from Invocas Group plc.



The assets acquired were  intangible assets represented  by the future  income 
due from the book of IVA cases. At the date of acquisition the fair values  of 
the assets purchased comprised the following:



                                    Fair value                              

                          Book value Adjustment         Fair Value
                                   £          £  £
Other intangible assets-           -    295,999        295,999
Debt Management
Deferred taxation                  -    (9,030)     (9,030)
Gain on bargain purchase           -   (27,089)      (27,089)
- negative goodwill
                                                
                                   -    259,880        259,880
Settled by:                                      £
Cash consideration                                     259,880









The intangible IVA assets acquired are being amortised over 4 years which,  in 
the directors' opinion, is the useful economic life of the assets.



Included in the results for the year are revenues of £147,050 (2011: £193,995)
and a pre-tax profit of £46,980 (2011: £9,038) excluding the gain on  purchase 
of a bargain asset of £27,089 (2011: £54,985).The gain on purchase of  bargain 
assets represents the excess of the directors' assessment of the fair value of
the assets acquired over the acquisition price.



We have estimated the timing of, and the expected future income due from,  the 
back books acquired less a provision for future expected delinquency  together 
with the estimated  costs necessary to  collect in the  income. This has  been 
produced on a net present value basis to provide an estimate of the fair value
of the intangible assets acquired.



The fair value of the  net assets acquired was  £259,880 which equates to  the 
cash consideration.



4.                                                                  Finance 
Costs


2012 2011


£ £



Interest                              payable                               on 
loans
61,614 64,444

Interest           payable            on           convertible            loan 
notes
230,000 230,000

Interest     payable      on      redemption     of      convertible      loan 
notes
293,997 237,960


________ _______


585,611 532,404


________   _______



5.
Taxation


2012  2011   
£
£

Analysis                              of                               current 
year



Current tax

UK                               corporation                               tax 
payable
 264,637 92,662

Over            provision             from             prior             years 

(667) (422)


________ ________



Total                             corporation                              tax 

263,970 92,240


________ ________



Deferred tax

Temporary              differences,              origination               and 
reversal
(14,851) (7,170)

Provision                          for                           irrecoverable 
losses
- 75,000

Effect       of        tax        rate       changing        on        opening 
balance
(5,618) (3,887)


________ ________



Total                               deferred                               tax 
charge
(20,469) 63,943


________ ________



Tax               on               profit               for                the 
year
243,501 156,183


________ ________



Factors                 affecting                  charge                  for 
year


2012 2011


£ £



Profit                                                                  before 
taxation
 834,758 227,219


________ ________

Profit multiplied by standard rate of corporation tax

in           the           UK            of           25.75%            (2011: 
26%)
 214,950 59,077













Effects of:



Expenses                                                                   not 
deductible
6,169 4,878

Adjustment          due          to           change          of           tax 
rate
(5,618) (3,887)

Unrelieved                             tax                              losses 

- 75,000

Otheradjustments28,00021,115

___________ __________



Current                   tax                   expense                    for 
year
243,501 156,183


________ ________



6. Earnings per Ordinary Share


2012 2011


£ £



Profit                   for                   the                   financial 
year
591,257 71,036


__________ __________



Weighted  average  number  of  ordinary  shares  in  issue  during  the   year 
 308,340,567 308,340,567



Dilutive           potential            of            share            options 

- -

Dilutive           potential           of           convertible           loan 
notes
- -


__________ __________


308,340,567 308,340,567


__________ __________

Earnings                                                                   per 
share



Basic
0.19p 0.02p

Diluted
0.19p 0.02p


__________ __________





The calculation of  the basic  earnings per  ordinary share  of 0.19p  (2011: 
0.02p) each has been based on the  profit for the relevant financial year  and 
on 308,340,567  shares  (2011:  308,340,567). This  represents  the  weighted 
average number of ordinary shares in issue. The profit for the period for the
purpose of calculating the diluted earnings per  share is the same as for  the 
basic earnings  per share  calculation  adjusted in  respect of  the  interest 
charges in relation to the convertible  loan notes. After using this  adjusted 
profit the diluted earnings  per share is higher  than the basic earnings  per 
share and would therefore not be dilutive under the terms of IAS 33.





7. Current Liabilities


2012 2011


£ £

Trade and other payables:



Tradepayables224,903167,700

Accruals391,213
331,845

Other
payables
296,050 198,710


________ ________




912,166 698,255



________ ________



The directors consider  that the carrying  value of trade  and other  payables 
approximates to their fair value.





Corporation                                                                tax 
payable
263,970 92,662



________ ________

Current financial liabilities



Secured           convertible            loan           notes            (note 
8)
2,597,306 -



________ ________

8. Financial Liabilities



Loans outstanding at the reporting date were as follows:-




2012 2011


£ £



Secured                            convertible                            loan 
notes
- 2,303,309

Loans
315,000 1,015,000


________ ________




315,000 3,318,309


________ ________



On 16 April  2010 £2.3m  of 3  year 10%  Secured Convertible  Loan notes  were 
issued by  CDG (Guernsey)  Limited, a  wholly owned  subsidiary of  ClearDebt 
Group plc, to investors. Holders of the loan notes are entitled to interest on
the loan notes at  a rate of 10%  per annum payable on  a quarterly basis  and 
have an option to convert all or  part of their holdings at par into  ordinary 
shares of ClearDebt Group plc at any time at a price of 1.8p per share. At the
end of the 3 year period the principal is repayable in cash plus a premium  of 
25% in respect of any holdings that are not converted into ordinary shares  at 
the loan note holder's option.



The Loan Notes are secured by way of a debenture dated 19 April 2010 over  the 
assets of the Group.The Company has also entered into a cross guarantee  with 
CDG (Guernsey) Limited in respect of the convertible loan notes.



In 2010 the  directors determined  the financial liability  component of  this 
compound instrument by calculating the net present values of the cash flows in
respect of the interest and principal  payments (assuming all are redeemed  in 
cash and not taken as shares) over the next three years using a discount  rate 
of 17% which the directors consider would have been the interest payable on  a 
bank loan  without the  convertible element.  Accordingly the  loan notes  are 
recorded at £2,597,306 (2011: £2,303,309).



At 30  June  2012 D  E  M  Mond was  interested  in £500,000  of  the  secured 
convertible loan notes (2011: £500,000).



The loan from D  E M Mond  of £315,000 (2011: £1,015,000)  is repayable on  31 
March  2014  or  earlier  at  the  Group's  discretion  although  there  is  a 
confirmation in place that this support will continue should the Group not  be 
in a position to repay the loan and continue to meet other liabilities as they
fall due. Loan repayments of £700,000 (2011: nil) were made in the year  with 
the approval of the secured convertible loan note holders. Interest at a rate
of 10.5% totalling £60,984 (2011: £64,444) was paid by the Group to D E M Mond
in the year  in respect of  his loans. Interest  of £230,000 was  paid to  the 
secured convertible loan note holders in the year (2011: £230,000).





9. Copies of the Annual Report



Copies of  the  Annual Report,  when  posted  to shareholders,  will  also  be 
available from  the  Company  Secretary  at the  registered  office  which  is 
situated at Nelson House, Park Road, Timperley, Cheshire WA14 5BZ. The annual
report and AGM  notice will also  be available for  download on the  Company's 
website www.cleardebtgroup.co.uk at that time.







                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


FR BKCDQOBDDNDD -0- Nov/20/2012 07:00 GMT
 
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