RNS Number : 6752K
Champion PLC
23 December 2008
Champion PLC
23 December 2008
Champion plc
Results for the year ended 30 June 2008
As Chairman of Champion Plc I am delighted to announce that the business continues to make good progress. The Group completed the
acquisition of an accountancy practice based in Blackpool in July 2007 and an accountancy practice based in Preston in September 2008. As a
result of these acquisitions the number of fee earners across the Group has risen to 149 from 129 at the same time last year.
FINANCIAL PERFORMANCE
The Group experienced an increase in revenue during the year. The measures of growth in financial performance are Revenue and Profit
before tax and interest. Group revenue has increased by 21.23% to �6.23 million and Group profit before tax and interest was �0.35 million
resulting in an operating margin before interest and tax of 5.6%.
The basic earnings per share is 0.3842 pence.
The Consolidated Balance Sheet at the year end showed net assets of �3.86m.
The Directors do not recommend the payment of a dividend.
The trading results and the Group's financial position at the year end are detailed in the financial statements that follow.
DEVELOPMENT OF THE BUSINESS
During the year, the Group's revenue increased by �1.1m. This was due to organic growth within the existing offices and the acquisition
of the practice in Blackpool. Recurring fees for the group have increased during the year both from internal growth and acquisition.
In July 2007 the Company acquired the goodwill and business assets of Haworth Moore, an accountancy practice based in Blackpool. The
business will be carried on through Champion Haworth Moore Limited a subsidiary company established for the purpose of the transaction.The
consideration of �0.42m was settled by an initial cash payment of �0.17m with the remainder being deferred to be paid over a two year
period. Haworth Moore's revenue for the year to 31 March 2007 was �800,667. The office has settled well in to the Group structure and is
achieving budgeted figures.
During the year the Group sold 5% of the issued share capital in Champion Business Solutions Ltd to Janice Hurst a director in that
company. It also acquired 2.5% of the issued share capital in Champion Business Solutions Ltd from Dave Wood also a director in that
company. The Groups total shareholding has reduced to 62.5%.
During the year we employed an average of 143 people and have consistently recruited the right quality people resulting in a strong
motivated team with the ability to deliver a quality service to our clients. We successfully maintain a high ratio of fee earners to
administrative staff and I would like to place on record my sincere thanks to the whole team for their hard work, dedication and commitment
to client service.
THE FUTURE
Since the year end, Champion Stokes Limited has changed its name to Champion Business Advisors Limited
In September 2008 the Group acquired the goodwill and business assets of Robinson Rose Limited from the company's administrators. The
consideration of �0.017m was settled by an initial payment of �0.01m with the remainder deferred to be paid in six months time. The turnover
for Robinson Rose Ltd for the year to 29 February 2008 was �212,803. The business will be carried on through Champion Business Advisors Ltd.
In October 2008 the Group acquired 42.86% of the issued share capital of Champion Business Advisors Limited from John Stokes. The
consideration was �0.160m and was settled by transfer of debtors and work in progress to John Stokes. At the same time John Stokes resigned
as a director and employee of the company. This takes the Group's share holding in Champion Business Advisors to 100%
In these uncertain times we will look to grow organically and will still actively seek further acquisitions of the required quality. At
the same time we will take whatever cost cutting measures are necessary to maintain profitability. Our focus will be to protect the
positions of our quality team members and continue to train them to enable us to continue to deliver the service which will enable our
clients' businesses across the North West to grow whilst creating wealth for their owners. We continue to regard prospects for the Group
positively.
Kevin Philbin
Chairman
Champion Plc
Directors' Report
Year Ended 30 June 2008
The directors have pleasure in presenting their report and the financial statements of the company and the group for the year ended 30
June 2008.
PRINCIPAL ACTIVITY
The principal activity of the company during the year was that of a holding company for the Champion Group which supplies accounting and
other business services that enable a business to grow, and create wealth for the owners.
BUSINESS REVIEW
The income statement on page 11 shows revenue for the year of �6.23m and profit for the year before tax of �0.204m.
Revenue has increased by 21.23% from 2007, and further consideration of the financial performance can be found in the Chairman's
Statement.
The recurring fees for the group have increased during the year from both internal growth and acquisitions which are the areas the
Directors see as quality sustainable revenue.
The Key Performance indicators are based on the group's business plan. Their main focuses are team members and client service. The Key
Performance indicators are reviewed monthly, and are as follows:
* The average revenue per fee earning director was �624,142 (2007: �632,044)
* The debtor days as at the year end were 73 (2007: 110)
* The average productivity per fee earning team member is 80% (2007: 80%)
In the context of the current economic downturn the directors have considered the risks associated with the availability of credit and
clients ability to pay, and do not consider that this will have a major impact on the group. We maintain tight control over our trade
receivables and have found that we are attracting new clients from larger practices with higher fees.
During the year the company acquired the goodwill and business assets of Haworth Moore, an accountancy practice in Blackpool. This added
�0.906m to the turnover of the group.
Since the balance sheet date the company has acquired the goodwill and business assets of Robinsons Rose Limited, an accountancy firm
located adjacent to our Preston office. This company was in administration at the time of purchase and all assets where purchased from the
administrators. The business will be carried on through Champion Business Advisors Ltd.
RESULTS AND DIVIDENDS
The group profit for the year, after taxation, was �125,318 (2007: �185,823).
The directors have not recommended a dividend.
FUTURE DEVELOPMENTS
The company continues to look for opportunities in acquiring new accounting practices.
Champion Plc
Directors' Report
Year Ended 30 June 2008
DIRECTORS AND THEIR INTERESTS
The directors who served the company during the year together with their beneficial interests in the shares of the company were as
follows:
Ordinary Shares of �0.005 each
At 30 June 2008 At 1 July 2007
G Cosgrove 7,652,197 7,652,197
G Dallimore - -
K Baird 3,189,169 3,189,169
IW Currie (Non-Executive) 1,559,997 1,932,822
R Ward-Lilley 1,461,439 1,461,439
K Philbin (Non-Executive) - -
IW Currie resigned as a director on 2 July 2007.
POLITICAL AND CHARITABLE DONATIONS
During the year, the group made charitable donations totalling �4,564 (2007: �13,128).
PRINCIPAL RISK AND UNCERTANITY
The risks facing the business are assessed on an ongoing basis. The directors evaluate the likelihood and potential impact of each risk
and ensure appropriate action is taken to mitigate them. These risks include procedures on the expenditure that can be incurred by directors
and staff on behalf of the group. The group has budgets which are reviewed and any large expenditure incurred has to be approved by the
board.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The group is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit
control procedures. Refer to detailed note 24.
CREDITOR PAYMENT POLICY AND PRACTICE
It is the group's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the company
and its suppliers, provided that all trading terms and conditions have been complied with.
At 30 June 2008, the company had an average of 60 day's purchases outstanding in trade creditors.
AUDITORS AND DISCLOSURE OF INFORMATION TO AUDITORS
All of the current Directors have taken all steps that they ought to have taken to make themselves aware of any information needed by
the Company's auditors for the purposes of their audit and to establish that the auditors are aware of the information. The Directors are
not aware of any relevant audit information of which the auditors are not aware.
BDO Stoy Hayward LLP have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the
next annual general meeting.
Approved by the board on 22 December 2008 and signed on its behalf by
K Baird
Secretary
Champion Plc
Statement of directors' responsibilities
Year Ended 30 June 2008
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial
position of the company, for safeguarding the assets of the company, for taking reasonable steps for the prevention and detection of fraud
and other irregularities and for the preparation of a Directors' Report which complies with the requirements of the Companies Act 1985.
The directors are responsible for preparing the annual report and the financial statements in accordance with the Companies Act 1985.
The directors are also required to prepare financial statements for the group in accordance with International Financial Reporting Standards
as adopted by the European Union (IFRSs) and the rules of the London Stock Exchange for companies trading securities on the Alternative
Investment Market. The directors have chosen to prepare financial statements for the company in accordance with IFRSs.
International Accounting Standard 1 requires that financial statements present fairly for each financial year the company's financial
position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and
conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the
International Accounting Standards Board's 'Framework for the preparation and presentation of financial statements'. In virtually all
circumstances, a fair presentation will be achieved by compliance with all applicable IFRSs. A fair presentation also requires the Directors
to:
* consistently select and apply appropriate accounting policies;
* present information, including accounting policies, in a manner that provides relevant, reliable, comparable
and understandable information; and
* provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to
understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance.
Financial statements are published on the group's website in accordance with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the
group's website is the responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the financial
statements contained therein.
Champion Plc
Corporate Governance
Year Ended 30 June 2008
The directors are supportive of the general principles contained in the Combined Code on Corporate Governance as applied to smaller
quoted companies and, although not required, consider it appropriate to provide corporate governance disclosures.
The Board of Directors
The board currently consists of a Non-executive Chairman, Managing Director, and three other Executive Directors. The board considers
the Non-executive Director to be independent, and he is independent of the group's executive management and not involved with business or
other relationships which could materially interfere with the exercise of objective judgement. Given its size, the board does not consider
it necessary to have a Nomination Committee to make recommendations to the board on new board appointments. The board itself considers all
such appointments and decides whether persons nominated have the appropriate skills and experience. The directors believe that the
composition of the board is appropriate for the size of the group and its current stage of development.
The board meets twelve times a year and has adopted a formal schedule of matters reserved for its decision. The board directs and
controls the group and is responsible for strategy, operating performance and stewardship of the group's resources. In order to discharge
their duties, all directors receive full and regular information on the group's operational and financial performance, risk management,
business plans, future strategy and executive management. All directors have access to the Company Secretary. Any director, who, in
furtherance of his duties wishes to take external advice, may do so at the expense of the company.
Details of beneficial interests in shares of the company are included in the Directors' Report.
Remuneration Committee
The remuneration committee is chaired by K Philbin (Non-executive) Chairman and comprises of himself, G Cosgrove and K Baird. The
committee is responsible for determining the group's policy for executive remuneration, and approving the terms and conditions of employment
of the Executive Directors. The committee determines appropriate performance conditions for bonuses.
Audit Committee
The audit committee is chaired by K Philbin (Non-executive) Chairman and comprises of himself, G Cosgrove and K Baird. The committee's
written terms of reference include any matters relating to the appointment, resignation or dismissal of the external auditors and their
fees. They monitor the effectiveness and independence of the external auditors. The board is satisfied that the external auditor, BDO Stoy
Hayward LLP, has adequate policies and safeguards in place to ensure that auditor objectivity and independence is maintained. The committee
meets three times a year.
Champion Plc
Corporate Governance
Year Ended 30 June 2008
INTERNAL CONTROL
The board has overall responsibility for internal control, including the system of risk management, and sets appropriate policies with
regard to the objectives of the group. Executive management has responsibility for the identification, evaluation and management of risks
and for the implementation and maintenance of control systems in accordance with the board's policies. The board meets frequently and has
adopted a schedule of matters which are required to be brought to it for decision, thus ensuring that it maintains control over appropriate
strategic, financial, operational, risk management and compliance issues.
During the year, the board has reviewed the overall effectiveness of the group's system of internal controls covering financial,
operational, compliance and risk management matters. Such systems are designed to manage rather than eliminate the risk of failure to
achieve the Group's strategic objectives and can only provide reasonable not absolute assurance against material misstatement or loss.
The group's external auditors, BDO Stoy Hayward LLP, contribute a further independent perspective on certain aspects of the group's
internal control system and they annually report matters arising from their external audit work to the Audit Committee.
The size of the group ensures the knowledge of the activities of each of the service lines and regions by at least two members of the
board. The board approves budgets and other performance targets, the components of which form the financial objectives for individual
service lines and regions, in order that the board can review the performance of each area of the business, the financial results and
forecasts of future performance and reported regularly to the board and explanations are sought for significant variances.
Throughout the organisation, procedures exist to ensure that significant events and potential claims that represent risks to the group's
objectives are escalated to senior management and, if necessary the Board, on a timely basis to allow preventative or corrective action to
be taken. Procedures also exist to ensure that the group complies with all applicable regulatory requirements.
Relations with shareholders
There will be an opportunity for individual shareholders to question directors at the annual general meeting and to discuss any issues
on an informal basis at the conclusion of that meeting.
Going Concern
The directors consider that on the basis of the financial resources available to them, the company and the group can continue in
operational existence for the foreseeable future and accordingly they have adopted the going concern basis in preparing the financial
statements. The directors prepare annual budgets, cash flows and rolling budgets, they have made necessary arrangements to ensure sufficient
facilities are in place and they have annual monthly management meetings to ensure smooth running of the businesses finances. Further
details relating to the current facilities is disclosed in note 24.
Champion Plc
Independent Auditor's Report to the Shareholders of Champion Plc
Year Ended 30 June 2008
Independent auditor's report to the shareholders of Champion Plc
We have audited the group and parent company financial statements (the ''financial statements'') of Champion Plc for the year ended 30
June 2008 which comprise the consolidated income statement, the consolidated and company statements of change in shareholders' equity, the
consolidated and company balance sheets, the consolidated and company cash flow statements and the related notes. These financial statements
have been prepared under the accounting policies set out therein.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the annual report and the consolidated financial statements in accordance with applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the European Union are set out in the Statement of Directors'
Responsibilities.
Our responsibility is to audit the consolidated financial statements in accordance with relevant legal and regulatory requirements and
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and have been properly prepared in
accordance with the Companies Act 1985 and whether the information given in the Directors' Report is consistent with those financial
statements. We also report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other
transactions is not disclosed.
We read other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements.
The other information comprises only the Directors' Report, the Chairman's Statement, and the Corporate Governance Statement. We consider
the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.
Our responsibilities do not extend to any other information.
Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other purpose. No person is entitled to
rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of the Companies Act
1985 or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report
to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also
includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and
of whether the accounting policies are appropriate to the group's and company's circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of
information in the financial statements.
Champion Plc
Independent Auditor's Report to the Shareholders of Champion Plc (Continued)
Year Ended 30 June 2008
Opinion
In our opinion:
* the group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state
of the group's affairs as at 30 June 2008 and of its profit for the year then ended;
* the parent company financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union as
applied in accordance with the provisions of the Companies Act 1985, of the state of the parent company's affairs as at 30 June 2008;
* the financial statements have been properly prepared in accordance with the Companies Act 1985; and
* the information given in the Directors' Report is consistent with the financial statements.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
Manchester
22 December 2008
Champion Plc
Consolidated Income Statement
Year Ended 30 June 2008
Notes 2008 2007
� �
Revenue 2 6,229,916 5,138,989
Staff costs4 (4,040,360) (3,214,361)
Depreciation, amortisation and impairments (61,935) (74,177)
Other operating expenses (1,777,256) (1,444,838)
Other operating income 11,500 -
*********** ***********
PROFIT FROM OPERATIONS 3 361,865 405,613
Finance costs 6 (158,229) (133,324)
Share of (loss)/profit from associate (48) 360
********* ******
PROFIT BEFORE TAX 203,588 272,649
Taxation 7 (78,270) (86,826)
********* *******
PROFIT FOR THE YEAR 125,318 185,823
********* *******
Attributable to:
Equity holders of the parent 120,010 185,823
Minority interests 5,308 -
********* *******
125,318 185,823
********* *******
Basic earnings per share (pence) for profit 8 0.3842 0.5948
attributable to the equity holders of the
parent
==========
he results for the year are derived solely from continuing operations.
The notes on pages 18 to 34 form part of these financial statements
Champion Plc
Consolidated Statement of Changes in Equity
Year Ended 30 June 2008
Share capital Share premium Available for sale reserves Retained earnings Total
Minority interest Total equity
� � � � �
� �
Balance at 1 July 2007 156,187 2,937,027
- 513,015 3,606,229
132,031 3,738,260
*** *** *** *** ***
*** ***
Changes to equity
Profit for the year - - - 120,010 120,010
5,308 125,318
*** *** *** *** ***
*** ***
Total recognised income and expense for the -
5,308
year - - 120,010 120,010
125,318
*** *** *** *** ***
*** ***
Balance at 30 June 2008 156,187 2,937,027
- 633,025 3,726,239
137,339 3,863,578
*** *** *** *** ***
*** ***
Share capital Share premium Available for sale reserves Retained earnings Total
Minority interest Total equity
� � � � �
� �
Balance at 1 July 2006 156,187 2,937,027
27,500 327,192 3,447,906
132,031 3,579,937
*** *** *** ***
*** ***
***
Changes to equity
Investments - - (27,500) - (27,500)
- (27,500)
Profit for the year
- - - 185,823 185,823
- 185,823
*** *** *** *** ***
*** ***
Total recognised income and expense for the
year - - (27,500) 185,823 158,323
- 158,323
*** *** *** *** ***
*** ***
Balance at 30 June 2007
156,187 2,937,027 - 513,015 3,606,229
132,031 3,738,260
*** *** *** *** ***
*** ***
The notes on pages 18 to 34 form part of these financial statements
Champion Plc
Company Statement of Changes in Equity
Year Ended 30 June 2008
Share capital Share premium Retained earnings Total equity
� � � �
Balance at 1 July 2007 156,187 2,937,027 (80,000) 3,013,214
Result for the year - - - -
------------- ------------- ------------- -------------
Balance at 30 June 2008 156,187 2,937,027 (80,000) 3,013,214
======== ======== ======== ========
Share capital Share premium Retained earnings Total equity
� � � �
Balance at 1 July 2006 156,187 2,937,027 (80,000) 3,013,214
Result for the year - - - -
------------- ------------- ------------- -------------
Balance at 30 June 2007 156,187 2,937,027 (80,000) 3,013,214
======== ======== ======== ========
The notes on pages 18 to 34 form part of these financial statements
Champion Plc
Consolidated Balance Sheet
As at 30 June 2008
Notes 2008 2007
� �
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 9 167,157 191,134
Intangible assets 10 4,695,194 4,278,571
Other investments 12 50 10,050
------------- -------------
4,862,401 4,479,755
CURRENT ASSETS
Inventories 13 12,500 12,400
Trade and other receivables 14 3,216,515 2,712,177
Cash and cash equivalents 17 854 307,497
------------- -------------
3,229,869 3,032,074
LIABILITIES
CURRENT LIABILITIES
Interest bearing borrowings 20 1,684,889 1,476,230
Current tax liabilities 176,858 202,556
Trade and other payables 22 1,565,027 1,291,011
------------- -------------
3,426,774 2,969,797
------------- -------------
NON CURRENT LIABILITIES
Deferred tax liabilities 21 1,918 3,772
Interest bearing borrowings20 800,000 800,000
------------- -------------
801,918 803,772
------------- -------------
NET ASSETS 3,863,578 3,738,260
================ =========
CAPITAL AND RESERVES ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE
COMPANY
Share capital 18 156,187 156,187
Share premium 19 2,937,027 2,937,027
Retained earnings19 633,025 513,015
------------- -------------
3,726,239 3,606,229
Minority interest 137,339 132,031
------------- -------------
TOTAL EQUITY 3,863,578 3,738,260
========= =========
The financial statements were approved and authorised for issue by the Board of directors on 22 December 2008 and were signed on its
behalf by:
......................................
G Cosgrove, Director
The notes on pages 18 to 34 form part of these financial statements
Champion Plc
Company Balance Sheet
As at 30 June 2008
Notes 2008 2007
� �
ASSETS
NON CURRENT ASSETS
Investments in subsidiaries 11 2,476,600 2,476,600
------------- -------------
CURRENT ASSETS
Trade and other receivables 14 734,355 309,905
Cash and cash equivalents 17 - 271,527
------------- -------------
734,355 581,432
LIABILITIES
CURRENT LIABILITIES
Interest Bearing Borrowings 20 80,633 -
Trade and other payables 22 117,108 44,818
------------- -------------
NET ASSETS 3,013,214 3,013,214
========= =========
CAPITAL AND RESERVES ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE
COMPANY
Share capital 18 156,187 156,187
Share premium 19 2,937,027 2,937,027
Retained earnings 19 (80,000) (80,000)
------------- -------------
TOTAL EQUITY 3,013,214 3,013,214
========= =========
The financial statements were approved and authorised for issue by the Board of directors on 22 December 2008 and were signed on its
behalf by:
......................................
G Cosgrove, Director
The notes on pages 18 to 34 form part of these financial statements
Champion Plc
Consolidated Cash Flow Statement
Year Ended 30 June 2008
2008 2007
� �
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 203,588 272,649
NON-CASH ADJUSTMENTS
DepreciationAmortisation 43,6858,250 61,677-
Impairment of investmentsDisposal of assets 10,000(11,019) -12,500
******* *******
NON-CASH ADJUSTMENTS 50,916 74,177
********* *******
CASH FLOWS BEFORE CHANGES IN WORKING CAPITAL 254,504 346,826
Increase in inventories (100) (6,000)
Increase in trade and other receivables (504,338) (205,842)
Increase in trade and other payables 78,189 201,738
*********** ***********
DECREASE IN WORKING CAPITAL (426,249) (10,104)
******* *******
CASH GENERATED FROM OPERATIONS (171,745) 336,722
Income taxes paid (105,822) (23,044)
******* *******
NET CASHFLOWS (USED IN) / FROM OPERATING (277,567) 313,678
ACTIVITIES
********* *******
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire property, plant and equipment (20,189) (14,899)
Payments to acquire intangible assets (249,587) (338,718)
Receipts from Sale of investments 71,500 -
********* *********
NET CASH FLOWS USED IN INVESTING ACTIVITIES (198,276) (353,617)
********* *********
NET DECREASE IN CASH AND CASH EQUIVALENTS (475,843) (39,939)
Cash and cash equivalents as at 1 July 2007 (1,107,549) (1,067,610)
*********** ***********
CASH AND CASH EQUIVALENTS AS AT 30 JUNE 2008 (1,583,392) (1,107,549)
*********** **********
The notes on pages 18 to 34 form part of these financial statements
Champion Plc
Company Cash Flow Statement
Year Ended 30 June 2008
2008 2007
� �
CASH FLOWS FROM OPERATING
ACTIVITIES
Result before tax - -
(Increase)/Decrease in trade (424,450) 146,650
and other receivables
Increase/(Decrease) in trade 72,290 (8,402)
and other payables
--------------------- -------------------------------
----------
(DECREASE)/INCREASE IN WORKING (352,160) 138,248
CAPITAL
NET CASHFLOWS (USED IN)/FROM (352,160) 138,248
OPERATING ACTIVITIES
--------------------- -------------------------------
----------
NET (DECREASE) /INCREASE IN (352,160) 138,248
CASH AND CASH EQUIVALENTS
Cash and cash equivalents as 271,527 133,279
at 1 July 2007
--------------------- ----------------------
----------
CASH AND CASH EQUIVALENTS AS (80,633) 271,527
AT 30 JUNE 2008
===================== ======================
==========
Champion Plc
Notes to the Consolidated Financial Statements
Year Ended 30 June 2008
1. ACCOUNTING POLICIES
Basis of preparation
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been
consistently applied to all years presented, unless otherwise stated.
Both the parent company financial statements and group financial statements have been prepared and approved by directors in accordance
with International Financial Reporting Standards as endorsed for use in the EU ("Endorsed IFRSs"). On publishing the parent company
financial statements here together with the group financial statements, the company is taking advantage of the exemption in s230 of the
Companies Act 1985 not to present its individual income statement and related notes that form a part of these approved financials
statements.
The parent company, Champion Plc is a non trading and non income generating company.
Standards, amendments and interpretations to published standards not yet effective
All new standards, amendments and interpretations to existing standards that have been published, have been considered. Those that are
mandatory for the group's accounting periods beginning on or after 1 January 2009 or later periods, which the group has decided not to adopt
early are as follows:
- IFRS 8, Operating Segments (effective for accounting periods beginning on or after 1 January 2009). This standard has now been
endorsed by the EU and it sets out requirements for disclosure of information about an entity*s operating segments and also about the
entity*s products and services, the geographical areas in which it operates, and its major customers. It replaces IAS 14, Segmental
Reporting. The Group expects to apply this standard in the accounting period beginning on 1 January 2009. As this is a disclosure standard
it will not have any impact on the results or net assets of the group.
- Revised IFRS 3, Business Combination (effective for accounting periods beginning on or after 1 July 2009). This standard has yet to
be endorsed by the EU, it includes much of the current guidance for the identification and recognition of intangible assets from goodwill.
However, in some respects the revised standard may result in very significant changes, including; the requirement to write off all
acquisition costs to the income statement instead of including them in the cost of investment; the requirement to recognise an intangible
asset even if it cannot be reliably measured; and, an option to gross up the balance sheet for goodwill attributable to minority interests
(which are deemed *non-controlling interests*). The revised statement does not require the restatement of previous business combinations,
therefore will have no effect on the results or net assets of the group. The revised IFRS 3 must be adopted at the same time as the
amendment to IAS 27, which sets out how to determine the costs of these investments. The group expects to apply this standard in the accounting period beginning on 1 July 2009.
Basis of consolidation
Where the company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or
business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the
results of the non revenue generating company and its subsidiaries ("the group") as if they formed a single entity. Inter-company
transactions and balances between group companies are therefore eliminated in full.
Associates
Champion Plc has the power to participate in (but not control) the financial and operating policy decisions of Champion Financial
Management Limited, it is classified as an associate. Associates are initially recognised in the group balance sheet at cost. The group's
share of the post-acquisition profits and losses are recognised in the consolidated income statement.
Profits and losses arising on transactions between the group and its associate are recognised only to the extent of unrelated investor's
interests in the associate. The investor's share in the associate's profits and losses resulting from these transactions is eliminated
against the carrying value of the associate.
Profit from operations
Profit from operations is stated after charging all operating costs including those separately disclosed by virtue of their size or
unusual nature or to facilitate a more helpful understanding of the group's results. It is stated before investment income and finance
costs.
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
1. ACCOUNTING POLICIES (continued)
Business Combinations
The consolidated financial statements incorporate the results of the business combinations using the purchase method. In the
consolidated balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their
fair values at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on
which control is obtained.
Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be
reliably measured. Revenue comprises the fair value for the sale of services, and commissions received, net of value added tax and in
accordance with IAS 18.Unbilled revenue on client services is included as amounts recoverable on contracts within trade and other
receivables.
Pension costs
The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the
company. The annual contributions payable are charged to the income statement.
Property, plant and equipment
Items of property, plant and equipment are stated at cost of acquisition or production cost less accumulated depreciation and impairment
losses.
Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the following
method:
Plant and equip�ment 33% straight line
Fixtures and fittings 20% reducing balance
Leasehold improve�ments 12 to 15 years straight line
Investments
Available for sale investments are stated at fair value with changes in fair value being credited to available for sale reserves.
Investments in subsidiary companies are shown at cost less any permanent diminution in value.
Goodwill
Goodwill is recognised as an asset from the acquisition date as the excess of the cost of acquisition over the fair value of
identifiable assets, liabilities and contingent liabilities of a subsidiary, associate or joint venture.
Goodwill is not amortised but is reviewed for impairment on an annual basis for events or changes in circumstances that indicate that
the carrying value might be impaired and for subsequent changes in the fair
value of identifiable assets, liabilities and contingent liabilities acquired. Any impairment is recognised immediately in the income
statement and is not subsequently reversed. Goodwill is stated at cost less accumulated impairment losses.
Goodwill arising before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for
impairment at that date.
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
1. POLICIES (continued)
Externally generated intangible assets
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight line basis over their
useful economic lives. The amortisation expense is included within the deprecation, amortisation and impairments line in the consolidated
income statement.
Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other
contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques.
The significant intangibles recognised by the group, their useful economic lives and the methods used to determine the cost of
intangibles acquired in a business combination are as follows:
Intangible asset Useful economic life Valuation method
Non- contractual customer lists 10 years Estimated discounted cash flow
and relationships
Impairment (excluding inventories and deferred tax assets)
The carrying values of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any
such indication exists, the recoverable amount of the asset is estimated. Where the asset does not generate cash flows which are independent
from other assets, the recoverable amount of the cash-generating unit to which the asset belongs is estimated.
The recoverable amount of an asset is the higher of its fair value less costs to sell, and its value in use. Value in use is the present
value of the future cash flows expected to be derived from an asset or cash-generating unit.
An impairment loss is recognised in the income statement whenever the carrying amount of an asset or cash-generating unit exceeds its
recoverable amount.
Goodwill with an indefinite life is tested for impairment annually and whenever there is an indication that the asset may be impaired.
Inventories
Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
Hire purchase agreements
Assets held under hire purchase agreements are capitalised and disclosed under property, plant and equipment at their fair value. The
capital element of the future payments is treated as a liability and the interest is charged to the income statement on a straight line
basis.
Trade and other receivables
Trade and other receivables are recognised by the group and carried at original invoice amount less an allowance for any uncollectible
or impaired amounts.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the
counterparty or default or significant delay in payment) that the group will be unable to collect all of the amounts due under the terms
receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected
cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a
separate allowance account with the loss being recognised within the operating expenses in the income statement. On confirmation that the
trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short term deposits. Short term deposits are defined as deposits with an
initial maturity of three months or less.
Bank overdrafts that are repayable on demand and form an integral part of the group's cash management are included as a component of
cash and cash equivalents for the purposes of the consolidated cash flow statement.
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
1. ACCOUNTING POLICIES (continued)
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Such interest bearing borrowings are subsequently
measured at amortised cost using the effective rate of interest method, which ensures any interest expense over the period to repayment is
at a constant rate on the balance of the liability carried in the balance sheet. Interest expense in this context includes initial
transaction costs and premia payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Deferred tax
Deferred Tax is provided in full, using the balance sheet liability method, on temporary differences arising between the tax bases of
assets and liabilities and the carrying amounts in the financial statements.
Deferred Tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than
as a business combination) or other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred Tax is charged or credited to the consolidated income statement, except when it relates to items charged or credited directly
to equity, in which case the deferred tax is also dealt with in equity.
Deferred Tax is determined using the tax rates that are expected to apply in the period when the asset is realised or the liability is
settled.
The carrying amount of deferred tax assets is reviewed at each consolidated balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred Tax assets and liabilities are offset when they relate to income tax levied by the same taxation authority and the group
intends to settle its current tax assets and liabilities on a net basis.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective
interest rate method.
Operating lease commitments
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged
against profits on a straight line basis over the period of the lease.
Critical accounting estimates and assumptions
Impairment of goodwill
The group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined
based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate in
order to calculate the present value of the cash flows. More information including the carrying values is included in note 10.
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
1. ACCOUNTING POLICIES (continued)
Critical accounting estimates and assumptions (continued)
Useful lives of intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are amortised and depreciated over their useful lives.
Useful lives are based on the management*s estimates of the period that the assets will generate revenue, which are periodically reviewed
for continued appropriateness. More details including the carrying values are included in the notes 9 and 10.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably
measured. Unbilled revenue on client services is included as amounts recoverable on contracts within trade and other receivables. The
unbilled revenue is adjusted in accordance with historical recoverability, which is periodically reviewed for continued appropriateness. The
group believes that, based on past experience, the recoverability rates would not fall below 85.8% across the group.The group has therefore
recognised unbilled revenue at these corresponding rates. If the estimate changes by 1%, revenue would be reduced/increased by �13,500.
2. REVENUE
Revenue arises from: 2008 2007
� �
Rendering of services 6,153,650 5,056,355
Commission receivable 76,266 82,634
*********** ***********
6,229,916 5,138,989
********* *********
All revenue arose from one business sector within the UK.
3. PROFIT FROM OPERATIONS
This is arrived at after charging:
2008 2007
� �
Depreciation of property, plant and equipment 43,685 61,677
Amortisation 8,250 -
Impairment of investments 10,000 -
Auditors' remuneration
-as auditors 25,616 36,645
Operating lease costs:
-Land and buildings 325,376 178,500
-Plant and equipment 22,222 98,098
********* *********
4. EMPLOYEE EXPENSES
Staff costs (including directors) comprise: 2008 2007
� �
Wages and salaries 3,579,645 2,795,854
Social security costs 361,942 284,999
Defined contribution pension cost 98,773 133,508
*********** ***********
4,040,360 3,214,361
********* *********
Champion Plc recharges all employee costs to the subsidiary companies.
The average monthly number of employees during the year was made up as follows:
Group Company
2008 2007 2008 2007
Number Number Number Number
Management staff 4 4 4 4
Fee earners 139 129 - -
-------------------- -------------------- -------------------- --------------------------
---------- ------ ----------
143 133 4 4
==================== ==================== ==================== ==========================
========== ====== ==========
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
5. DIRECTORS' BENEFITS
Directors remuneration consists of: 2008 2007
� �
Salaries 293,483 94,552
Defined contribution pensions 5,871 5,871
Number of directors in the defined contribution pension 2 2
scheme
********* *********
The emoluments of directors disclosed above include the following in respect of the highest paid director:-
2008 2007
� �
Salaries 161,755 27,500
********* *********
6. FINANCE COSTS
2008 2007
� �
Interest payable on bank borrowing 152,045 124,572
Finance charges 4,326 4,700
Other similar charges payable 1,858 4,052
------------- -------------
158,229 133,324
========= =========
7. TAXATION
Components of tax expense
2008 2007
� �
Current tax expense
Current tax charge 80,124 95,047
Deferred tax expense
Relating to origination and reversal of temporary (1,854) (8,221)
differences
******** *********
Income tax expense reported in income statement 78,270 86,826
********* *********
Reconciliation of tax charge to accounting profit
2008 2007
� �
Profit before taxation 203,588 272,649
******* *******
Tax at the domestic income tax rate of 29.49% (2007: 30%) 60,038 81,795
Disallowable expenses 15,107 7,365
Marginal rate relief (3,105) (2,970)
Un-provided deferred tax assets 6,230 636
******* *******
Total tax charge 78,270 86,826
******* *******
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
8. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net profit for the year attributable to ordinary equity holders by the weighted
average number of ordinary shares outstanding during the year.
The following reflects the income and share data used in the total operations basic earnings per share computation:
2008 2007
� �
Net profit attributable to equity shareholders for basic 120,010 185,823
earnings per share
********* *******
2008 2007
Pence Pence
Earnings per ordinary share 0.3842 0.5948
Earnings per share have been calculated on the net basis on the profit on ordinary activities after taxation and
after minority interest of �5,308 (2007 - �nil) using the weighted average number of ordinary shares in
issue of 31,237,375 (2007 - 31,237,375).
9. PROPERTY, PLANT AND EQUIPMENT
Group
Leasehold Plant and equip�ment Fixtures and Total
improve�ments fittings
At 30 June 2008 � � � �
Cost
At 1 July 2007 109,832 208,466 267,700 585,998
Additions - 9,823 10,366 20,189
Disposals - 15,491 - 15,491
******** ******** ******** ********
At 30 June 2008 109,832 202,798 278,066 590,696
******** ******** ******** ********
Depreciation
At 1 July 2007 (16,917) (163,070) (214,877) (394,864)
Charge for the year (8,385) (16,447) (18,853) (43,685)
Disposals - - 15,010 15,010
******* ******** ******** ********
At 30 June 2008 (25,302) (179,517) (218,720) (423,539)
******* ******** ******** ********
Net book value
At 30 June 2007 92,915 45,396 52,823 191,134
******** ******** ******* ********
At 30 June 2008 84,530 23,281 59,346 167,157
******** ******** ******* ********
Hire purchase agreement
Included within the net book value of �167,157 is �4,247 (2007 - �14,439) relating to assets held under hire
purchase agreements. The depreciation charged to the financial statements in the year in respect of such assets
amounted to �10,192 (2007 - �10,192).
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
9. PROPERTY, PLANT AND EQUIPMENT (continued)
Group
Leasehold Plant and equip�ment Fixtures and Total
improve�ments fittings
At 30 June 2007 � � � �
Cost
At 1 July 2006 105,937 200,568 264,594 571,099
Additions 3,895 7,898 3,106 14,899
******** ******** ******** ********
At 30 June 2007 109,832 208,466 267,700 585,998
******** ******** ******** ********
Depreciation
At 1 July 2006 (8,612) (133,236) (191,339) (333,187)
Charge for the year (8,305) (29,834) (23,538) (61,677)
******* ******** ******** ********
At 30 June 2007 (16,917) (163,070) (214,877) (394,864)
******* ******** ******** ********
Net book value
At 1 July 2006 97,325 67,332 73,255 237,912
******** ******** ******* ********
At 30 June 2007 92,915 45,396 52,823 191,134
******** ******** ******* ********
10. INTANGIBLE ASSETS
Goodwill Other intangibles Total
At 30 June 2008 � � �
Cost
At 1 July 2007 4,278,571 - 4,420,888
AdditionsDisposal 394,873(60,000) 90,000- 484,873(60,000)
-------------------- -------------------- ------------------------
-------------------- -------------------- ----------------
At 30 June 2008 4,613,444 90,000 4,703,444
==================== ==================== ========================
==================== ==================== ================
Amortisation
Charge for the year and at 30 - (8,250) (8,250)
June 2008
********* ********* *********
Carrying value
At 30 June 2007 4,278,571 - 4,278,571
*********** *********** ***********
At 30 June 2008 4,613,444 81,750 4,695,194
********* ********* *********
Goodwill Other intangibles Total
At 30 June 2007 � � �
Cost
At 1 July 2006 3,939,853 - 3,939,853
Additions 338,718 - 338,718
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
At 30 June 2007 4,278,571 - 4,278,571
==================== ==================== ====================
==================== ==================== ====================
Carrying value
At 30 June 2006 3,939,853 - 3,939,853
*********** *********** ***********
At 30 June 2007 4,278,571 - 4,278,571
********* ********* *********
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
10. INTANGIBLE ASSETS (continued)
Goodwill relates to Champion Holdings Limited, Champion Allwoods Limited, Champion Stokes Limited, Champion Haworth Moore and Champion
Consulting Limited and is tested for impairment at the balance sheet date. The recoverable amount of goodwill at 30 June 2008 was assessed
on the basis of value in use. As this exceeded carrying value no impairment loss was recognised.
Other intangibles relates to the purchase of non contractual customer lists and relationships, as part of the purchase of Champion
Haworth Moore Limited during the year. The remaining carrying value at the balance sheet date was �81,750, and the remaining estimated
useful life was 9 years.
Included within the additions is an increase in the shareholding of Champion Business Solutions, and the addition of Champion Haworth
Moore a new shareholding during the year.
The key assumptions in the calculation are the future revenue and the ability to generate future cashflows. In assessing value in use,
the most recent financial results and initial budgets for the next year were used and extrapolated for 10 further years with no subsequent
growth assumed and discounted at 10%.
11. INVESTMENTS IN SUBSIDIARIES
Group companies
�
Cost at 1 July 2007 and 30 June 2008 2,476,600
**********
Country of Principal activity Class and percentage of shares held
Name Registration
Champion Holdings Limited UK Holding Company 100% ordinary
shares
Champion Consulting Limited* UK Auditors and Accountants 100% ordinary
shares
Champion Vehicle Solutions UK Dormant 100% ordinary
Limited*
shares
Champion Marketing Services UK Marketing Services 90% ordinary
Limited*
shares
Champion Business Solutions UK Auditors and Accountants 62.5% ordinary
Limited*
shares
Champion Allwoods Services UK Auditors and Accountants 75.5% ordinary
Limited*
shares
Champion Stokes Limited** UK Auditors and Accountants 57.14% ordinary
shares
Champion Haworth Moore UK Auditors and Accountants 51% ordinary
Limited*
shares
*Investments held indirectly via Champion Holdings Limited.
** Champion Stokes Limited investment is held by Champion Business Solutions Limited.
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
12. OTHER INVESTMENTS
Group
Shares in associated undertakings Investments Total
Cost � � �
At 1 July 2007 and at 30 June 50 50,000 50,050
2008
******** ******** ********
50 50,000 50,050
******** ******** ********
Decrease in fair value brought - (40,000) (40,000)
forward - (10,000) (10,000)
Decrease in fair value during
the year
******** ******** ********
- (50,000) (50,000)
Fair Value
At 30 June 2008 50 - 50
******** ******** ********
At 30 June 2007 50 10,000 10,050
******** ******** ********
The remaining �10,000 investment related to an investment in a Monkey Hangar, this company is no longer trading and has no value.
The �40,000 write down brought forward relates to the market value of listed investments - Healthcare PLC, during the year ended June
2007 Healthcare PLC delisted with a market value of �nil.
Associated Undertaking
Country of Principal activity Class and percentage of shares held
Registration
Name
Champion Financial Management Limited UK Financial Advisors 50% ordinary
shares
The directors of Champion Plc consider they have the power to exercise significant influence and have treated their interests in
Champion Financial Management as an associate.
Aggregate amounts relating to associates are as follows:
2008 2007
� �
Total assets 16,842 26,260
Total liabilities 900 20,223
Revenues - 1,704
(Loss) / Profit (95) 720
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
13. INVENTORIES
Group Company
2008 2007 2008 2007
� � � �
Raw materials and consumables 12,500 12,400 - -
======== ======== ======== ========
14. TRADE AND OTHER RECEIVABLES
Group Company
2008 2007 2008 2007
� � � �
Receivable from trade 1,539,474 1,548,385 - -
customers
Receivable from related - - 725,352 305,150
parties
Prepayments 252,858 97,586 3,562 3,401
Other receivables 1,424,183 1,066,206 5,441 1,354
*********** *********** *********** ***********
3,216,515 2,712,177 734,355 309,905
======== ======== ======== ========
Company
Consideration has been given to amounts receivable from related parties and no provision is required against the amounts due.
As at 30 June 2008, the ageing trade receivables was as follows:
1-30 days 31-60 days 61-90 days 91-120 days 120 days+ Total
Trade receivables �000 �000 �000 �000 �000 �000
2008 649 338 170 100 282 1,539
2007 784 243 144 982 279 1,548
At the balance sheet date �890,000 (�786,000 : 2007) of the trade receivables have gone beyond their terms of 30 days. None of these
assets are considered to be impaired and are stated at amortised cost which approximates to fair value.
15. FINANCIAL INSTRUMENTS
Group
2008 2007
� �
Financial assets
Cash and cash equivalents 854 307,497
Trade and other receivables 3,216,515 2,712,177
********* ********
Financial liabilities
Cash and cash equivalents (1,584,246) (1,415,046)
Trade and other payables (1,565,027) (1,291,011)
Floating rate borrowings (900,643) (861,184)
******** ********
Company
2008 2007
Financial assets � �
Cash and cash equivalents - 271,527
Trade and other receivables 734,355 309,905
******** ********
Financial liabilities
Cash and cash equivalents (80,633) -
Trade and other payables (117,108) (44,818)
******** ********
The carrying amounts are equal to the fair value therefore no impairment is required.
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
16. RELATED PARTY TRANSACTIONS
Company
Consultancy payments of �18,000 (2007: �18,000) were paid to K Philbin a non-executive director of Champion
Plc.
Champion Plc also had a loan account with Champion Consulting Limited, a company in which G Cosgrove, K Baird, and R Ward-Lilley are
directors. The amount due at the end of the year was �725,352 (2007: �305,150). Champion Plc also raised a management charge of �769,014
(2007: �209,447) to Champion Consulting Limited.
Champion PLC also had a loan account with Champion Holdings Limited, a company in which G Cosgrove and K Baird are directors. The amount
due at the end of the year was �50,000 (2007: Nil).
G Dallimore was paid consultancy fees during the year amounting to �60,000 (2007 : �45,000).
For consideration of key management compensation see note 5.
Group
At the year end the group had a balance of �22 (2007:�Nil) owed to Champion Accountants LLP, a partnership in which G Cosgrove is a
member. The group also, received management charges of �470,422 from Champion Accountants LLP.
17. CASH AND CASH EQUIVALENTS
Group Company
2007 2007 2008 2007
� � � �
Cash in hand 854 448 - -
Cash at bank - 307,049 - 271,527
*********** ********* *********** ***********
854 307,497 - 271,527
********* ******* ******** ********
18. SHARE CAPITAL
Authorised share capital
2008 2007
� �
40,108,000 Ordinary shares of �0.005 each 200,540 200,540
49,460 Preference share of �1 each 49,460 49,460
------------- -------------
250,000 250,000
========= =========
Allotted, called up and fully paid:
2008 2007
Ordinary shares fully paid of Shares � Shares �
�0.005 each
At beginning and end of the 31,237,375 156,187 31,237,375 156,187
year
========= ========= ========= =========
Champion Plc
Notes to the Consolidated Financial Statements (Continued)
Year Ended 30 June 2008
19.RESERVES
Available for sale Share premium account Retained earnings
reserve
� �
As at 1 July 2006 27,500 2,937,027 327,192
Profit for the year - - 185,823
Market value movement (27,500) - -
------------- ------------- -------------
As at 30 June 2007 - 2,937,027 513,015
Profit for the year - - 120,010
Market value movement - - -
------------- ------------- -------------
As at 30 June 2008 - 2,937,027 633,025
========= ========= =========
Company Share premium account Retained earnings
� �
Balance brought forward and carried forward 2,937,027 (80,000)
============ ============
The following describes the nature and purpose of each reverse within owners' equity
Reserve Description and purpose
Share premium account Amount subscribed for share capital in excess of its nominal value.
Retained earnings Cumulative net gains and losses recognised in the consolidated income
statement.
Available for sale reserve Gains/losses arising on financial assets classified as available for sale.
20. INTEREST BEARING BORROWINGS
Group Company
2008 2007 2008 2007
� � � �
Non-current
Bank loans 800,000 800,000 - -
**** **** **** ****
800,000 800,000 - -
**** **** **** ****
Current
Bank overdrafts 1,584,246 1,415,046 80,633 -
Bank loans 100,643 61,184 - -
**** **** **** ****
1,684,889 1,476,230 80,633 -
**** **** **** ****
Group Company
2008 2007 2008 2007
� � � �
Bank loans
Floating rate bank loan 900,643 861,184 - -
Less: current instalments due on loans (100,643) (61,184) - -
**** **** **** ****
800,000 800,000 - -
**** **** **** ****
21. DEFERRED TAX
Group Company
2008 2007 2008 2007
� � � �
Provision brought forward 3,772 11,993 - -
Decrease in provision (1,854) (8,221) - -
**** ******** **** ****
Provision carried forward 1,918 3,772 - -
**** **** **** ****
The decrease in the provision is in relation to temporary timing differences, relating to capital allowances on property, plant and
equipment.
22. TRADE AND OTHER PAYABLES
Group Company
2008 2007 2008 2007
� � � �
Payable to trade suppliers 338,996 219,294 9,081 3,603
Other payables 426,354 457,650 17,931 -
Accrued liabilities 67,347 49,332 50 -
Amounts due under finance leases - 12,613 - -
Other tax and social security taxes 704,240 548,819 40,046 41,215
Payable to associated parties 28,090 3,303 - -
Payable to related parties - - 50,000
**** **** **** ****
1,565,027 1,291,011 117,108 44,818
**** **** **** ****
23. OPERATING LEASE COMMITMENTS
Commitments under operating leases as at 30 June 2008 were as follows:
2008 2007
� �
Less than one year 205,600 224,501
Later than one year but less than five years 707,400 800,554
Later than five years 1,370,150 1,365,550
**** ****
The group has entered into operating leases in respect of office space and equipment. These non-cancellable leases have remaining terms
greater than 5 years.
24. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
All the following considerations have been given to the company*s balances and risks as well as the group.
The group holds or issues financial instruments in order to achieve three main objectives, being:
(a) to finance its operations;
(b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance; and
(c) for trading purposes.
In addition, various financial instruments (e.g. trade receivables, trade payables, accruals and prepayments) arise directly from
the group's operations.
Transactions in financial instruments result in the group assuming or transferring to another party one or more of the financial
risks described on page 29.
24. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Interest rate risk
At 30 June 2008 the group's borrowings comprised of a bank overdraft and a bank loan.
The net cash balance as at 30 June 2008 amounted to a borrowing of �2,430,391(2007: �1,968,733).
The following table sets out the carrying amounts by repricing/maturity dates and effective interest rates (when
applicable) of the group's financial instruments that are exposed to interest rate risk:
Expiry within Expiry within Expiry in more than 2 years Total
1 yr 1 and 2 years
2008
Sterling
Floating rate current bank (1,584,246) - - (1,584,246)
overdrafts
****
Floating rate business loan (82,644) (17,999) (800,000) (900,643)
Interest payable over the term - - (319,617) (319,617)
of the loans not payable on
demand
****
2007
Sterling
Floating rate current bank (1,415,046) - - (1,415,046)
overdrafts
****
Floating rate business loan (64,182) (47,002) (750,000) (861,184)
Interest payable over the term
of the loan not payable on
demand ( 168,750) (168,750)
****
Interest rate of all bank borrowings is 3.5% above Natwest Bank PLC base rate. The loan is a fixed 12 year loan, payable by monthly
capital repayments the first of which is payable after two years.
Company
Consideration has been given to the company's overdraft of �80,633 and it does not carry material risks.
Credit risk
The group monitors credit risk closely and considers that its current policies of credit checks meet its objectives of managing exposure to
credit risk.
The group has no significant concentrations of credit risk. Amounts shown in the balance sheet best represent the maximum credit risk
exposure in the event other parties fail to perform their obligations under financial instruments.
Liquidity risk
The group's objective is to maintain a balanced working capital cycle to ensure that the level of funding requireddoes not exceed that
available, new facilities were agreed with the bank in September 2008 for a further 12 months.
Currency risk
The group has no overseas assets or liabilities.
Fair values of financial assets and liabilities
The book value of financial instruments held or issued to finance the group's operations are not materially different from the fair value of
those instruments.
Hedging activities
The group has an interest rate swap in place to hedge the cash flow risk in relation to interest rates. These instruments are summarised
below.
A cash flow hedge with a total principal of �2.4m reducing over the term, the swap starts from 30 June 2009 and matures on 30 June 2017. The
interest rates have a range of 4.5% to 6%, with a higher swap rate of 6% and a lower swap rate of 5.44%. If the average monthly base rate is
within the range the company pays the lower swap rate and if the average monthly base rate is outside the range the company pays the higher
swap rate.
25 CONTINGENT LIABILITIES
The company has entered into cross guarantees with other group companies in respect of bank loans and overdraft facilities. At the
balance sheet date, the contingent liability amounted to �1,503,613 (2007: �1,107,549).
26 PENSION COMMITMENTS
The group operates a defined contribution pension scheme whose assets are held separately from those of the group in an independently
administered fund. The pension cost charge represents contributions payable by the group and amounted to �91,573 (2007: �133,508).
27 ACQUISITIONS DURING THE PERIOD
On 30 July 2007 the subsidiary Champion Holdings Limited acquired 51% of the voting equity in Champion Haworth Moore Limited, a company
whose principal activity is audit and accountancy. Champion Plc has an effective interest of 51%.
Fair value of the consideration is equal to �416,307. Other than the intangible assets of �90,000 as detailed in note 10, no assets or
liabilities were purchased in this acquisition. Therefore goodwill recognised on consideration is �326,307.
Details are as follows:
Consideration paid
�
Cash 408,340
Cost of acquisition 7,967
416,307
Net assets (at fair value)
Other Intangibles 90,000
Goodwill 326,307
The goodwill recognised on consolidation relates to the ability of the purchased entity to create increased cashflows for the group via
the acquisition of the entitlement to future profits.
�163,336 of the cash consideration was paid on the date of completion. The remaining �245,004 is payable in four instalments on each six
month anniversary following the date of completion, dependant on the level of turnover over a two year period following the date of
acquisition. The amount outstanding at the year end is �183,753.
Since the acquisition date, Champion Haworth Moore Limited has contributed �906,804 to the group's revenue. There has been profit of
�28,515 for the period.
28. ACQUISITIONS IN PRIOR PERIOD
On 1 February 2007 the subsidiary Champion Business Solutions Limited acquired 57% of the voting equity in Champion Stokes Limited, a
company whose principal activity is audit and accountancy. Champion Plc has an effective interest of 43.4%.
Fair value of the consideration is equal to 300 �1 ordinary shares issued on acquisition.No assets or liabilities were purchased on
acquisition, therefore the deemed valuation is �300 �1 ordinary shares.
The Preston part of Champion Business Solutions Limited was transferred in to Champion Stokes Limited; there was no gain or loss on the
transfer as the net assets equated to nil.
Since the acquisition date, Champion Stokes Limited has contributed �357,000 to the group's revenue. There has been no profit or loss
for the period, therefore if the acquisition had occurred on 01 July 2006 there would be no effect on the group profit for the period.
29. POST BALANCE SHEET EVENTS
Since the year end Champion Stokes Limited has changed its name to Champion Business
Advisors Limited
In September 2008 the Group acquired the goodwill and business assets of Robinson Rose Limited from the company's administrators. The
consideration of �0.017m was settled by an initial payment of �0.01m with the remainder deferred to be paid in six months time. The turnover
for Robinson Rose Ltd for the year to 29 February 2008 was �212,803. The business will be carried on through Champion Business Advisors Ltd.
In October 2008 the Group acquired 42.86% of the issued share capital of Champion Business Advisors Limited from John Stokes. The
consideration was �0.160m and was settled by transfer of debtors and work in progress to John Stokes. At the same time John Stokes resigned
as a director and employee of the company. This takes the Group's share holding in Champion Business Advisors to 100%.
Copies of the 2008 Annual Report will be despatched to shareholders today and will also be available on the Company's website
(www.champion-accountants.co.uk)
They will also be available at the following address;
1 Worsley Court,
High Street,
Worsley,
Manchester
M28 3NJ
For further information please contact:
Ged Cosgrove/Karen Baird, Champion plc Tel: 0161 703 2500
Nick Cowles, Zeus Capital Limited Tel: 0161 831 1512
This information is provided by RNS
The company news service from the London Stock Exchange
END
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