Paragon Group Of Companies PLC
21 February 2006
TRADING STATEMENT AND IFRS UPDATE
---------------------------------
The Paragon Group of Companies PLC today announces an update on its current
trading. It also announces that it will be briefing investors and analysts on
the key impacts of its adoption of International Financial Reporting Standards
('IFRS'). The Group has adopted IFRS for the year ending 30 September 2006.
Trading Statement
Lending activity has been strong in the year to date, with completions already
in excess of £1 billion, some 60% higher than a year ago. This growth is
principally attributable to the buy-to-let business, where application flows and
completed loans are significantly ahead of the comparable period last year,
whilst activity in the consumer finance businesses remains at similar levels to
last year in accordance with our expectations.
The Board is confident, at this stage, that our objectives for this year will be
achievable and we expect to be able to report good progress in our interim
report to shareholders during May.
IFRS Update
The IFRS briefing published today includes Income Statements for the six months
ended 31 March 2005 and the year ended 30 September 2005, Balance Sheets as at 1
October 2004, 31 March 2005, 30 September 2005 and 1 October 2005, Statements of
Recognised Income and Expense for the periods ended 31 March 2005 and
30 September 2005 and Reconciliations of Movements in Equity for the periods
ended 31 March 2005 and 30 September 2005 converted from UK GAAP to IFRS
together with detailed explanations of the key changes.
In accordance with the exemptions available in IFRS 1, the Group has not
restated its 2005 results for the effects of the adoption of IAS 32 and 39,
dealing with financial instruments. The figures which will be shown as
comparatives in the 2006 accounts and interims are:
30 September 2005 31 March 2005
IFRS UK GAAP IFRS UK GAAP
Profit for the period, excluding
amortisation of goodwill £71.8m £72.7m £33.5m £33.9m
* Profit after tax £55.8m £60.7m £25.9m £28.5m
* Basic earnings per share 48.9p 53.3p 22.7p 24.9p
Net assets £312.8m £308.0m £295.3m £291.3m
* The UK GAAP figures include a credit to the profit and loss account of £4.1
million for the year ended 30 September 2005, (£2.2 million for the six months
ended 31 March 2005) in respect of amortisation of negative goodwill, which is
excluded from the IFRS comparatives.
The principal changes reflected above are:
•Negative goodwill from the acquisition of Mortgage Trust no longer
carried in the balance sheet and amortised.
•Recognition of defined benefit pension scheme deficit in liabilities.
•Dividends payable not recognised until approved.
•Changes in treatment of leasehold assets.
•Additional charges for share based payment.
Whilst the effects of IAS 32 and 39 are not included in the statutory
comparatives, the Group has prepared pro forma comparatives which include the
impairment and amortised cost provisions of these standards. On this basis the
reported figures would have been as follows:
30 September 2005 31 March 2005
IFRS UK GAAP IFRS UK GAAP
Profit for the period, excluding
amortisation of goodwill £71.7m £72.7m £34.5m £33.9m
* Profit after tax £55.7m £60.7m £26.6m £28.5m
* Basic earnings per share 48.8p 53.3p 23.3p 24.9p
Net assets £244.4m £308.0m £227.7m £291.3m
* The UK GAAP figures include a credit to the profit and loss account of £4.1
million for the year ended 30 September 2005, (£2.2 million for the six months
ended 31 March 2005) in respect of amortisation of negative goodwill, which is
excluded from the IFRS comparatives.
The IFRS pro forma profit is similar to the IFRS comparative profit shown above
and results, through the application of IAS 32 and 39, from a £6.6 million
credit from income recognition being offset by a £6.7 million increase in
impairment charges. On a divisional breakdown, a benefit of £6.6 million arises
in the Group's ongoing buy-to-let and consumer finance businesses, offset by a
reduction in profit within the Group's discontinued businesses (comprising
primarily the unsecured personal loan book and the residual owner-occupied
mortgage portfolios) of £6.7 million against the comparative.
The reduction in net worth as a result of the application of IAS 32 and 39
arises principally from a reduction in the value of loans to customers within
the Group's discontinued business areas, particularly the unsecured personal
loan book where a high discount rate has been applied to expected cash flows.
Accounting under IFRS does not affect the fundamentals of the Group's business,
but reflects a different basis of measurement and presentation of its
performance in any one accounting period. The business, its cash flows and
hedging policies are unaffected by what is principally an issue of the timing of
recognition of income, costs, assets and liabilities.
For further information please contact:
Nigel S Terrington
Chief Executive - Telephone 0121 712 2024
or
Nicholas Keen
Finance Director - Telephone 0121 712 2060
This information is provided by RNS
The company news service from the London Stock Exchange
*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:
Obtains access to the information in a personal capacity;
Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
Please note, this site uses cookies. Some of the cookies are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but if you do, parts of the site may not work. To find out more about the cookies used on Investegate and how you can manage them, see our Privacy and Cookie Policy
To continue using Investegate, please confirm that you are a private investor as well as agreeing to our Privacy and Cookie Policy & Terms.