Ultimate Finance Group plc (AIM:UFG), a leading provider of financial solutions to SMEs, will be holding its Annual General Meeting in Bristolat 11am today.  At the meeting Clive Garston, Chairman of Ultimate Finance, will make the following statement:

“This year has been a period of significant progress for Ultimate Finance, as the transformational acquisition of Ashley Commercial Finance Limited significantly strengthens the Group’s offering and enables us to achieve considerable scale.  We are already capitalising on the cross-selling opportunities between the two companies.  These synergies, together with the cost savings that we have identified, bring major benefits to the Group.   

The increased facility of £34 million, which has recently been agreed with Lloyds, gives the Group the strength to continue to grow and expand its customer base both organically and through select acquisitions.  

Current trading is robust, and the Board continues to view the future with confidence.”

Ultimate Finance Group plc, the AIM-quoted factoring, invoice discounting, asset finance and trade finance company focused on the SME sector, has successfully acquired Ashley Commercial Finance Limited in a deal worth £4.75m.

Ultimate announced its intention to acquire the Manchester-based factoring company on 12 October; the resolution was passed by the shareholders at a General Meeting held on Thursday (28 October) and the deal was completed on Friday (29 October).

Richard Pepler, Chief Executive of Ultimate Finance Group plc, said: “We are pleased to announce the acquisition of Ashley Commercial Finance. Ashley has an excellent track record of providing funding solutions to small businesses, providing a perfect complement to our existing services. This acquisition will enhance our presence in the North West and further strengthen our UK-wide network of clients and introducers.”

It is anticipated that the 27-strong team from Ashley, currently based in Cheadle, will relocate to Ultimate’s offices in central Manchester within the next six months. Ashley will retain its own brand.

Arbuthnot, DAC, WH Ireland and BDO advised Ultimate on the deal, while Ford Campbellwere advisers to Ashley.

Ultimate Finance Group plc (the "Company"), the AIM-quoted factoring, invoice discounting and financial solutions provider to the SME sector, announces that it has conditionally agreed to acquire the whole of the issued share capital of Ashley Commercial Finance Limited for an Initial Consideration of £4,750,000, which will be satisfied as to £3,700,000 in cash and £1,050,000 by the issue of the Initial Consideration Shares. In addition, a Deferred Consideration of up to £2,700,000 may become payable.

The Acquisition constitutes a reverse takeover under the AIM Rules and will therefore require Shareholder approval.

Highlights

• Company to acquire Ashley Commercial Finance Limited for initial £4.75m (£3.7m cash and £1.05m in shares) conditional on shareholder approval;
• £2.75m raised through placing at 12p (£1.83m net of expenses) and acquisition finance facility entered into, of up to £2m;
• Advantages include access to new clients and introducers, strengthened presence in north-west England, opportunities in new markets, (joint marketing and cross-selling to respective client bases), client retention through mutual referrals and leveraging Ultimate’s wider product range;
• Ashley 2010 operating profit of £0.7m, loan book of £4.4m and net assets of £0.94m; acquisition expected to be earnings-accretive, with savings up to £0.4 annually from the second year;
• Enlarged Group in a good position to provide invoice finance as a viable alternative to bank overdraft facilities as conditions improve; 
• Lloyds to increase funding available to Enlarged Group to £34m.

Trading of the Existing Shares on AIM is expected to be restored at 7.30 a.m.this morning and a copy of the Admission Document, today being posted to Shareholders, is available to view here.

Clive Garston, Chairman of Ultimate said:

“Our focus remains the achievement of sustained growth and we see this acquisition as an opportunity to build shareholder value while minimising risk and extending our service into new markets.

Among the many opportunities we have seen over the years, Ashley stands out as highly complementary. For Ultimate, this is a transformational acquisition allowing it to achieve scale and synergistic benefits.

We believe we will continue to see growth in demand for our services as banks restrict the overdraft facilities available to SMEs. This deal also positions the Company well for any market upturn.

We are delighted to have secured the backing of existing and new investors for the placing and to see the offer over-subscribed.”

Please follow the link below to view the profile the Manchester Evening News recently did on Austin Thorp – Managing Director (North).

Manchester Evening News website

AIM-quoted ultimate finance group plc has reported a 35% increase in turnover in its annual results which were announced today (22 September 2010).

Turnover at ultimate finance group plc, which provides invoice discounting, factoring, asset finance and trade finance to SMEs across the UK, has increased from £4,757,000 (July 2008 to June 2009) to £6,441,000 over the last financial year (July 2009 to June 2010), representing a rise of 35%.

Operating profit (excluding the costs and trade finance start-up costs) increased by 37% to £553,000 during the period (from £404,000 recorded in the previous financial year).

Chief Executive Richard Pepler said: “We are extremely pleased to be able to report another set of impressive results. We are ideally placed to be able to support businesses by taking a flexible and helpful approach to lending. In these challenging economic times, we provide a lifeline to many businesses while protecting ourselves and our clients with robust underwriting and risk management procedures and careful lending strategies. We have also invested in some of the best people the industry has to offer which enables us to offer a truly first rate service.

“We expect steady growth in the year ahead as we continue to market our newly expanded range of financial products and services, expand our sales team still further and open an office in the Midlands. As the market recovers, we believe we are very well placed to emerge with an even greater share of this highly competitive market.”

ultimate finance group plc has made several strategic investments this year, including:

• The launch of two new companies: ultimate trade finance Limited led by Hugh Francis and ultimate asset finance Limited, led by Andrew Ribbins. This has enabled the group to add new, allied services and products to its invoice discounting and factoring facilities, giving SMEs access to a much wider range of financial solutions under one roof
• The expansion of the team in Tunbridge Wells into new office premises
• The appointment of Austin Thorp, Managing Director (North) to run the Manchester office and expansion into new offices in the city centre.
• Continued expansion of the sales team including the appointment of new regional directors in many parts of the UK ensuring a personal presence across an even greater geographical area

Richard Pepler added: “By developing our range of services and extending our geographical reach, we are continuing to build our reputation and differentiate ourselves from our competitors.

“We are responding to the needs of our clients by providing a high-quality service that is responsive, flexible and local.”

Highlights

• Operating profit  (excluding acquisition costs and trade finance start up costs) increased by 37% to £553,000 (30 June 2009: £404,000)

• Turnover up 35% to £6,441,000 (30 June 2009: £4,757,000)

• Currently in advanced discussions on an acquisition which would be considered a reverse takeover resulting in the ordinary shares being suspended from 7.30 a.m. today

• Earnings per share on comparative basis (excluding acquisition costs and trade finance start up costs) increased to 1.83p (30 June 2009: 1.60p)

• Agreement in principle for the back-to-back financing facility to be increased to £30m and the minimum term extended to July 2013.

•  Proposed final dividend of 0.30p (30 June 2009: 0.25p)

• Sales force continues to grow both in numbers and regional coverage 
 
• A new trade finance business established during the year and an asset finance business launched in July 2010.

Ultimate Finance Group plc (“Ultimate”), the AIM-quoted factoring, invoice discounting and financial solutions provider to the SME sector, announces its Final Results for the year ended 30 June 2010.

Highlights

• Operating profit  (excluding acquisition costs and trade finance start up costs) increased by 37% to £553,000 (30 June 2009: £404,000)
• Turnover up 35% to £6,441,000 (30 June 2009: £4,757,000)
• Currently in advanced discussions on an acquisition which would be considered a reverse takeover resulting in the ordinary shares being suspended from 7.30 a.m. today
• Earnings per share on comparative basis (excluding acquisition costs and trade finance start up costs) increased to 1.83p (30 June 2009: 1.60p)
• Agreement in principle for the back-to-back financing facility to be increased to £30m and the minimum term extended to July 2013.
• Proposed final dividend of 0.30p (30 June 2009: 0.25p
• Sales force continues to grow both in numbers and regional coverage 
• A new trade finance business established during the year and an asset finance business launched in July 2010.

Clive Garston, Chairman, said: “Whilst the economic climate remains tough, demand for our services is growing and we will continue to take the necessary steps to build solid sustainable shareholder value from the opportunities that present themselves.  The increase in the back to back financing facility will assist expansion. The board therefore looks forward to the future with confidence."

 
To view the full report please click here

Well-intentioned plans to help businesses survive in this challenging economic climate could do more harm than good, according to Bristol-based finance specialists, ultimate finance group plc.

HM Revenue and Customs (HMRC), which threw many businesses a life line by allowing them to pay taxes, such as VAT and PAYE, at a later date through ‘Time to Pay’ plans, are now starting to call in these debts, with potentially widespread implications.

Craig Stritch, a regional director at ultimate finance group, which provides factoring, invoice discounting, asset finance and trade finance to SMEs, explained: “By extending payment deadlines and adopting a more lenient approach, HM Revenue and Customs has helped many businesses get through the last 18 months which have been some of the most difficult on record. However, with an estimated £5billion of deferred payments from around 300,000 companies now needing to be repaid, many businesses will face new - and in some cases unexpected – threats to their cash flow.

“With most banks still reluctant to lend or provide reasonable terms, an increasing number of businesses are exploring alternative forms of finance, such as invoice finance which guarantees their cash flow and releases vital funds back into the business.”

From a recent survey carried out by Bristol-based accountants and business advisers BDO, Simon Girling, partner, revealed that almost half (47%) of senior managers and professionals surveyed highlighted poor cash flow as the greatest threat facing businesses, followed by HMRC’s potentially toughening stance on tax payments (22.5%).  He commented that “as time moves on, this looks more like a typical economic cycle, where the biggest threats to business in terms of insolvency and to the economy in terms of unemployment are likely to come at the tail end of the recession – and the availability of cashflow funding to businesses will be critical in mitigating the damage these structural issues may cause.”

AIM-quoted ultimate finance group, which provides invoice finance services to hundreds of small and medium-sized businesses, has recruited two major players to head its new subsidiary companies as well as a new head for its Manchester office.  

Newly launched ultimate trade finance and ultimate asset finance will provide even more choice to cash-strapped SMEs looking for funding – for example to fulfil an order by paying an overseas supplier up front for a large shipment of goods, or to release cash tied up in plant and machinery to fund further expansion.

These companies will enhance and support ultimate’s core invoice discounting and factoring services. 

Hugh Francis MBA has been appointed to head ultimate trade finance, having previously set up and run two successful trade finance companies, Bibby Trade Finance Limited in 1998 and Liquidity Import Finance Limited in 2005. 

ultimate asset finance will be led by Andrew Ribbins who was involved in the formation of Voss Finance Limited, a niche operator in the asset finance market, becoming its Managing Director in 2007. With 26 years in the finance industry, predominately in the provision of asset finance to SMEs, Andrew has major experience of both new business acquisition and the running of a niche finance company.   

The ultimate finance group is expanding rapidly with bases across the UK, including Bristol, Tunbridge Wells and Manchester. Commercial director Austin Thorp has joined the Group to head a team of nine which recently relocated to new premises in Mosley Street, Manchester. Austin has 24 years experience in the finance sector, having worked for NatWest and Davenham Group plc.  

The Group’s Chief Executive Richard Pepler said: “We are extremely pleased to have been able to boost our senior management team with some of the best people in our industry.  We have every confidence that our Manchester operation will expand and flourish under the leadership of Austin Thorp while our new trade and asset finance businesses will benefit enormously from the significant experience which Hugh Francis and Andrew Ribbins will bring to existing and future clients. 

“ultimate finance group is one of only a few companies able to offer a comprehensive range of funding options under one roof to small and medium-sized businesses which are increasingly looking for a flexible approach and alternatives to bank loans and other more traditional forms of lending.”   

ultimate trade finance purchases goods from foreign suppliers on behalf of their clients, who do not have sufficient resources to fulfill these orders themselves. All purchases are made against confirmed orders from credit-worthy companies, primarily (but not always) in the UK. ultimate trade finance can assist with all of their clients’ import financing requirements, as well as providing additional shipping, delivery and goods inspection services.

ultimate asset finance provides hire purchase and leasing facilities to SMEs, including manufacturers, distributors, catering companies and many other businesses – for example using their plant, machinery or heavy goods vehicles as security against the loan. 

Overview

The recession has really shaken up the factoring and invoice discounting industry. The reasons for the unprecedented successes of some companies and the outright failure of others are complex and various, but there does appear to be a common theme emerging – their attitude to risk!

As economic trading conditions have worsened and maintaining a steady cash flow has become even more critical but difficult to achieve, businesses have started giving more serious thought to their funding options. Many SMEs are struggling to deal with late payments and bad debt, and in some cases the knock-on effects of their own customers and suppliers going to the wall. With banks no longer a viable source of finance for many businesses, there has been a marked rise in the number of companies turning to factoring and invoice discounting providers for help.

The significant rise in the number of new business enquiries has provided our industry with a very real opportunity. However this has been undermined by the quality of some of these enquiries.  Finance providers who have ignored the threat posed by many of these potential new clients, have done so at their peril. 

Opportunities and challenges

The majority of new business enquiries this year have been from cash hungry businesses looking for a bail-out rather than capital to grow. While many of these companies are good, solid businesses with credible management teams who will survive and thrive with the right funding solutions in place, others have much shakier foundations.

Sectors which have been particularly hard-hit by the recession have provided new opportunities for the invoice finance industry. We have also seen a rise in the number of enquiries from large businesses which have historically relied on the banks for finance.

The key for factoring and invoice discounting providers has been to successfully identify which companies to back.

ultimate finance’s recently published annual results showed a 196 per cent rise in pre-tax profit which drove its share price up by 112 per cent. This achievement was due in no small part to our prudent approach to lending. We have put stringent risk assessment systems in place and stayed very close to our clients, monitoring their businesses so that we can pre-empt, or react quickly, when problems occur. While we, like others in our industry, have experienced a significant increase in new enquiries, we have been very selective about which clients we’ve taken on. We have avoided unnecessary risks, chasing market share for its own sake, and straying into unfamiliar territory. This approach, together with our close working relationship with clients and our enforcement of strict underwriting and risk management procedures, has proved to be the right one in these challenging times.

Many providers have also taken this opportunity to review their business models. We have invested in new systems to streamline our operations and improve the service we offer – for example, by enabling clients to access their account information online, in real time, any time. We have also tightened our account handling procedures, and spend even more time monitoring our customers’ business activities and chasing and collecting debts – vital in today’s market where late payment is rife.

Market instability and difficulties experienced by some industry players, has enabled the more successful factoring and invoice discounting companies to recruit talented people, particularly in sales, operations and marketing.

The Future

I see further opportunities for growth in the invoice finance market. Brokers and intermediaries, such as accountants and corporate finance advisers, are increasingly looking for new ways to add value to their business clients, and there is more work to be done in terms of introducing these important introducers to the benefits of invoice financing. Many providers will also be looking to bring new white-labelled products to the market, and introducing complementary forms of lending, such as asset finance and trade finance.

The industry needs to learn the lessons of the last 12 months and remain vigilant. Despite talk of green shoots, next year is likely to be difficult for many businesses and providers will need to be cautious in their approach to new business.  Consolidation, service excellence and maintaining client loyalty will be key.

If interest base rates remain very low, providers may be forced to review the deals they are currently offering.

Conclusion

At ultimate finance, we are cautiously optimistic that we can capitalise on the challenges and opportunities ahead by focussing on the fundamentals of good business and sound lending, and by adhering to our long-term strategy for growth. We look forward to the New Year with a truly national sales force that is not only bigger, but also substantially better. We benefit from a seasoned risk management and support team, plus a robust portfolio of sound clients. We believe we are well positioned to emerge from this recession as an even stronger player, with an improved market share.

Shares in ultimate finance group, the Bristol-based factoring and invoice discounting provider, were among the top regional performers on the London Stock Exchange’s AIM market between the start of 2008 and the end of 2009, new research shows.

ultimate’s share price closed at 14.5p on December 31, 2009 – an increase of 107 per cent on its opening position on January 2, 2008, according to the latest WHI Wales and West Share Watch report. Only two other companies among the 43 from the South West and Wales listed on AIM achieved faster share price growth. In overall terms, just 19 per cent of all AIM-quoted companies recorded a share price increase over the two-year period.

The WHI Wales and West Share Watch, which is produced by broker WH Ireland’s Bristol office, tracks the performance of all quoted companies across Wales and the South West on a quarterly and annual basis.

But for the latest report it was decided to also analyse the records of regional companies over two years to allow for the effects of the downturn in stock markets which started in 2008 and to find out if they have since recovered.

ultimate’s share price growth over the period came as a result of a series of strong financial results which demonstrated continued growth in a difficult market.

The firm’s latest results, released on March 17 for the half-year to December 31, 2009, showed pre-tax profits up 36 per cent to £191,000 on turnover up 27.8 per cent to £2.8 million. Following these results WH Ireland gave the shares a ‘buy’ recommendation while house brokers Arbuthnot rated them as a ‘strong buy’.

ultimate’s share price has continued to increase since the beginning of the year and now stands at 17p (closing price April 28).

ultimate chief executive Richard Pepler said: “Being in the top three best-performing AIM shares in the region underlines what a great two years ultimate finance has had against very challenging market conditions.

“We have seen continued growth in inquiry numbers and conversions and last year enjoyed a number of record months for new business which came at a time when many of our competitors were encountering significant problems. We believe this is due to our understanding of our core SME market and the specialist help we can provide entrepreneurial businesses.

“It’s good to see these achievements reflected in our share price, which is, of course, great news for our investors.”