JLF.L Regulatory News (JLF)

25 May 2006 07:03

Jelf Group PLC25 May 2006 Date: 25th May 2006On behalf of: Jelf Group plc ("the Company", "the Group" or "Jelf")Embargoed until: 0700hrs Jelf Group plcInterim Results for the six months ended 31 March 2006 Jelf Group plc, a corporate intermediary specialising in healthcare, commercialinsurance, employee benefits and wealth management, today announces its interimresults for the six months ended 31 March 2006. The highlights are: • Turnover up 53% to £7.5m (2005: £4.9m)• EBITDA up 75% to £0.82m (2005: £0.47m)• Operating margins increased to 9.8% from 8.5% (pre goodwill) The Group's acquisition strategy driven by regulatory change has continuedapace, with completion of the acquisition of Goss Group Ltd in March and B DThomas after the period end. Commenting on the results, Group Chief Executive of Jelf Group plc, Alex Alway,said: "This half year has seen the Group continue with its strategy of strengtheningits market position by acquiring and consolidating intermediary businesses alongwith extracting value through promoting organic growth activities across theGroup. We have more than doubled the revenue size of the Group over the last 12months. We have also managed to improve our operating margins along with makingsubstantial investment in readiness for the next stage in our growth. "The full year will include the beneficial effects of recent acquisitions,especially that of the Goss Group, which was acquired at the end of thisfinancial period. As previously stated integration is proceeding smoothly andthe financial results are in line with expectations. "The trends toward consolidation of market positions and intermediaries alongwith the increased need for awareness of the regulatory environment willcontinue to generate opportunities for acquisition activity whilst alsodemanding high levels of professionalism from all of our staff, who once again,have risen to the challenge this year. "The results for the first half of the Group's financial year give us confidencethat 2006 is going to be another year of progress." For further information: • Alex Alway (Group Chief Executive) - 01454 272799• John Harding (Group Finance Director) - 01454 272795• Ian Seaton, Bankside Consultants - 0207 367 8891. Notes to Editors: • Jelf Group was founded by Chris Jelf in 1989. Today, the Jelf Groupoperates from a number of premises in the Southern England and Wales and offersan extensive range of corporate and private client services; • The Group advises over 12,000 corporate clients, principally inrespect of healthcare, commercial insurance, employee benefits and wealthmanagement services. These clients cover the spectrum from significant publiccompanies to small owner managed businesses. Core Jelf Group clients are mediumsized owner-managed businesses, typically employing between one to 50 staff,with a turnover of up to £10 million; • The Group has developed a corporate support infrastructure that hasenabled it to make a number of acquisitions over the last five years. Theseacquisitions span all core areas of the Group's business and have been made toeither supplement existing operations or to acquire a corporate client base thatcan be utilised by the enlarged Group. The significant acquisitions made sincethe start of this period are as follows: o November 2005 - Healthwise Ltd - acquisition of independent corporatehealthcare adviser o March 2006 - Goss Group Ltd - acquisition of a substantial commercialinsurance and financial services intermediary based in the south east of England o May 2006 - Brian D Thomas Ltd - acquisition of South Wales commercialinsurance intermediary • Further information is available on Jelf at the Company's website:www.jelfgroup.com. Chairman's Statement I am delighted to be able to report that the Group has made a strong start toits trading year in what is a soft insurance market. I am particularly pleasedthat we have produced quantifiable results as a result of continuing with ourstrategy of referring clients to colleagues when they require additionalservices that we are able to provide. This approach has underpinned good organicgrowth across the Group for the first half of this year. The highlights of the financial half year so far include: • The acquisition of a substantial intermediary, Goss Group Ltd,in March 2006 accompanied by a successful fund raising exercise. Thisacquisition and the subsequent integration is going to plan • Overall performance in line with previous forecast • Strong operating cash-flows • The recruitment and establishment of a team of corporateemployment benefit advisers for our new Swindon operations • The acquisition of Healthwise Ltd in November 2005 These highlights together with the recent acquisition of the South Wales basedinsurance intermediary business, Brian D Thomas Ltd, are in line with ourdeclared strategy of acting as a consolidator within our core markets. Financial Results In the six-month period ending 31st March 2006, the Group increased its turnoverby 53% to £7.5m (2005: £4.9m) and achieved earnings before interest, tax,depreciation and amortisation (EBITDA) of £0.82m (2005: £0.47m). This representsa 75% increase over the same period in 2004/05. Operating margins prior to charging goodwill continue to improve, increasing to9.8% (2005: 8.5%) Operations The Group continues to invest in its IT infrastructure to ensure productivitygains are maximised and has a declared strategy of integrating all of ouroperations. One example of this is the establishment of a Group wide marketingdatabase to facilitate communications to our clients. Business development We have been able to extract value from a number of initiatives so far this yearalong with establishing others that will produce results in later periodsincluding: • Lead generation This continues to be a key development area for the Group. We have investedsubstantially in both people and technology to produce an increasing flow of newbusiness leads. • Employee Benefits During the latter part of 2005 the Group acquired an established team ofEmployee Benefits consultants for our new Swindon office. The introduction ofthese experienced individuals has expanded our capability to deal with theemployee benefits needs of our larger clients. This has already produced somesubstantial tangible benefits. • Goss Group Ltd The integration of Goss Group Ltd, a substantial intermediary based in the SouthEast that was purchased in late March, is proceeding to plan and we are on trackto capture the benefits identified at the time of the deal. • Acquisitions The Group has managed to expand its pipeline of acquisition and recruitmentopportunities and is now looking to complete those deals that offer enhancedshareholder value. The Group has refused to overpay for acquisitions and has ona few occasions not completed deals due to unreasonable expectations fromvendors. The changes in the regulatory environment for insurance and healthcarebroking have increased the number of acquisition opportunities in this market asvendors have re-appraised strategies in light of the increased burden ofadministration. In addition, the Group has been able to take advantage of the upheavalexperienced by national rivals by attracting high quality sales resources. People The performance of the Group reflects the quality and professionalism of all itsemployees who, along with their commitment to our clients, continue to remainour biggest asset. During the course of the year we have introduced an Employee Benefit trust andhave used it to attract and retain key people. Other equity based incentivessuch as share options have enabled us to differentiate our approach from that ofcompetitors. I am pleased to announce that an additional 50 employees havepurchased shares over the last three months. The Future The Group will continue with its strategy of strengthening its market positionby acquiring and consolidating businesses along with extracting value throughorganic growth activities. The results for the first half of our financial year, whilst pleasing, onlyserve to establish new benchmarks for the Group and give us confidence that 2006will be another year of significant progress. Christopher JelfGroup Chairman25th May 2006 Consolidated profit and loss accountFor the six months ended 31 March 2006 Unaudited Unaudited Audited Six months Six months Year ended ended ended 30 September 31 March 2006 31 March 2005 2005 £'000 £'000 £'000TURNOVER 7,487 4,908 11,501Cost of sales (330) (247) (661) ------ ------ ------GROSS PROFIT 7,157 4,661 10,840Administration expenses (6,673) (4,378) (9,870) ------ ------ ------OPERATING PROFIT 484 283 970Interest receivable 6 22 41PROFIT ON ORDINARYACTIVITIES BEFORE TAXATION 490 305 1,011TAXATION ON PROFIT ONORDINARY ACTIVITIES (157) (116) (348) ------ ------ ------PROFIT ON ORDINARYACTIVITIES AFTER TAXATION 333 189 663DIVIDENDS - - - ------ ------ ------RETAINED PROFIT FOR THEFINANCIAL PERIOD 333 189 663 ====== ====== ====== EBITDA 824 472 1,119 Consolidated Balance SheetAs at 31 March 2006 Unaudited Audited 31 March 2006 30 September 2005 £'000 £'000FIXED ASSETSIntangible fixed assets 17,012 3,340Tangible fixed assets 1,820 678Investments 41 35 ------ ------ 18,873 4,053CURRENT ASSETSDebtors 12,590 6,159Cash at bank & in hand 4,322 1,946 ------- ------- 16,912 8,105CREDITORS: amounts falling due within oneyear (17,649) (6,975) ------- -------NET CURRENT (LIABILITIES) / ASSETS (737) 1,130 ------ ------TOTAL ASSETS LESS CURRENT LIABILITIES 18,136 5,183CREDITORS: amounts falling due after morethan one year (2,144) (605)PROVISIONS FOR LIABILITIES AND CHARGES (141) (146) ------ ------NET ASSETS 15,851 4,432 ====== ====== CAPITAL AND RESERVESCalled up share capital 244 134Share premium account 13,855 2,879Capital reserve 13 13Capital redemption reserve 1 1Profit and loss account 1,738 1,405 ------ ------SHAREHOLDERS' FUNDS - all equity 15,851 4,432 ====== ====== Consolidated cash flow statementFor the six months ended 31 March 2006 Unaudited Audited Six months Year ended ended 30 September 31 March 2006 2005 £'000 £'000Net cash inflow from operating activities 2,916 1,185Returns on investment and servicing offinance 6 41Taxation - (204)Capital expenditure and financialinvestment (208) (378)Acquisitions and disposals (7,244) (1,049) ------ ------Cash (outflow) before use of liquidresources and financing (4,530) (405)FinancingIncrease / (decrease) in debt 40 (949)Issue of shares 6,866 1,899 ------ ------Increase / (decrease) in cash in theperiod 2,376 545 ====== ====== Consolidated cash flow statement informationFor the six months ended 31 March 2006 Unaudited Audited 31 March 2006 30 September 2005 £'000 £'000Reconciliation of operating profit to netcash inflow from operating activitiesOperating profit 484 970Amortisation of intangible assets 252 321Depreciation of tangible fixed assets 87 125Loss on disposal of tangible fixed assets - 10(Increase) in debtors (6,431) (2,925)Increase in creditors 8,529 2,662(Decrease) / increase in provisions (5) 22 ------ ------Net cash inflow from operating activities 2,916 1,185 ====== ====== Reconciliation of net cash flow tomovement in net debtIncrease in cash in the period 2,376 545Cash (inflow) / outflow from movement indebt and lease financing (40) 949New deferred consideration (3,321) (920)Revision of deferred consideration - 9 ------- -------Change in net debt resulting from cashflows (3,361) 38 ------ ------Movement in net debt in the period (985) 583 ====== ======Net funds / (debt) at 1 October 2005 573 (10) ------ ------Net (debt) / funds at 31 March 2006 (412) 573 ====== ====== This information is provided by RNS The company news service from the London Stock Exchange