Albemarle & Bond Report & Accounts 2004 - Morningstar
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Albemarle & Bond Report & Accounts 2004
£5.02m
Pawnbroking 50%
£4.42m
£3.70m
Jewellery Retailing 12%
£2.46m
Cheque-cashing 10%
£1.97m
Unsecured Loans 28%
2000 2001 2002 2003 2004
Contribution to gross profit by sector Profit before tax
Pawnbroking
Highlights
Pawn-loans up £1m to £9.8m • Another record year
• Profit before tax increased 13%
Jewellery Retailing • Earnings per share increased 13%
• Dividends up 24%
2004 turnover up 8% to £8.45million • Total loans up 12%
• Two new branches opened
Cheque-cashing
Net income up 15%
Unsecured Loans
Speedloan rolled out across entire branch
network. Product range increased.
ii Albemarle & Bond7.65p 3.40p
6.74p
2.75p
5.70p
2.25p
3.77p
1.50p
2.99p 1.25p
2000 2001 2002 2003 2004 2000 2001 2002 2003 2004
Earnings per share Dividend per share
2004 2003
Profit before tax £5.02m £4.42m
Earnings per share 7.65p 6.74p
Dividend per share 3.40p 2.75p
Contents
History of Pawnbroking 02 Consolidated balance sheet 19
Company profile 03 Company balance sheet 20
Chairman’s statement 08 Consolidated cash flow 21
Chief executive’s review 10 Notes to the accounts 22
Directors 12 Five-year summary of results 32
Directors’ report 13 Professional advisers &
Independent auditors’ report 17 registered office 32
Consolidated profit & loss 18 Office locations IBC
Report & Accounts 2004 1History of
Pawnbroking
From the Medicis to
the modern day
‘Pop Goes the Weasel’ – a some of her country’s crown jewels
popular nursery rhyme, and as with to finance Christopher Columbus
many other songs we now sing to on his voyage that would discover
children, it has its roots in the street the Americas.
slang of Victorian times. So much for the name, but what
It is a song which tells the story of the traditional pawnbrokers’
of the cash-flow problems that symbol, the three golden balls. It is
often beset the working man. But, taken from the arms of the great
despite its familiarity, few people Medici banking family of Italy. One
are aware that it has to do with of the Medicis, in the employ of
“Half a pound of tuppenny rice, pawnbroking; a ‘weasel’ is a hatter’s
dummy and to ‘pop’ is to pawn.
Emperor Charles the Great, fought
and slew a giant with three rocks.
Lending cash against collateral These three rocks, balls or globes,
Half a pound of treacle, goes back many thousands of
years. It has long been a means of
became part of the family crest.
And pawnbroking is not the
raising money for both personal and preserve of the poor; people from
That’s the way the money goes… business use. all walks of life – renowned artists,
The word ‘pawn’ originates from authors and actors as well as
Pop goes the weasel.” the Latin word for clothing which,
500 years ago, was given as surety.
ordinary people – have used
pawnbrokers as bankers and
On a somewhat grander scale, sources of instant cash.
Queen Isabella of Spain pawned
2 Albemarle & BondAlbemarle & Bond:
a brief history
IN BRIEF: 1983: first shop Bristol; 1995: AIM-listed;
1998: rapid expansion begins; 2004: 55 shops.
Since the first shop was opened markedly when the directors took the man-and-woman-in-the-street realisation of a strategy aimed at
in Bristol in 1983, under the name the decision to become jewellery with rapid access to ready cash. doubling the size of the company
of Albemarle, to the latest opening retailers by selling unredeemed Today these newer products – from 25 to 50 outlets by opening
in 2004, Albemarle & Bond, has pledges from its outlets in the high cheque-cashing and a range of on greenfield sites. More recently
added 54 outlets to the network. In street. This decision proved unsecured loans, together with and continuing, there has been a
that time, the annual turnover has successful and the operation was retail jewellery sales – contribute focus on maximising the turnover
grown to exceed £22 million, and then further enhanced by the some 50% of the company's of individual branches by a
profits this year have topped £5 introduction of brand-new retail gross profit. combination of branch
million. Since 1992, the business merchandise to the shops' ex- In 1995, Albemarle & Bond was modernisation and, in some cases,
has grown steadily, being largely pledge merchandise. listed on the Alternative Investment relocation to better sites.
unaffected by economic fluctuations. In 1992, with 10 sites, the Market (A.I.M.). Albemarle & Bond continues to
The company's core business, management began to introduce The company has grown its grow, albeit at a more measured
pawnbroking, deals only in gold and products that are complementary to branch network by a mix of pace, through a strategy of new
diamond jewellery so their stock-in- its traditional pawnbroking service; acquiring established businesses, shop openings and acquisitions, and
trade is imperishable, free of products that are appropriate to its and opening on greenfield sites in the introduction of new products
obsolescence and always has established customer-base but areas which conform to a proven such as Speedloan and a Money
intrinsic and measurable value. The appeal to a wider market. These are set of demographic criteria. The Transfer Service.
profile of the business changed all based on the concept of providing years 1998 to 2001 saw the
Report & Accounts 2004 3Pawnbroking
THE ATTRACTION FOR OUR CUSTOMERS OF RAISING CASH
AGAINST JEWELLERY IS, OF COURSE, IMMEDIACY; THEY BRING
IN THEIR GOODS, WE EXAMINE AND PLACE A VALUE ON THEM
AND MAKE THE CUSTOMER A FIXED OFFER. IT ALL TAKES
ABOUT FIVE MINUTES – SO IT IS QUICK AND STRAIGHTFORWARD.
Not too many 'weasels' come their (easily portable) goods, we
through our doors these days (see make the customer a fixed offer. If
page 2) – which, apart from their they accept our offer, they are able
relative rarity, is not surprising since to leave with cash. It all takes about
Pawn-loans up £1 million Albemarle & Bond accept only gold
and diamonds as pledges.
five minutes – so it is quick and
straightforward. And it is all handled
to £9.8 million As gold and diamonds have
measurable intrinsic value (unlike
in a professional manner and with
friendliness and courtesy – so
weasels!) they are good for our customers are happy to come back.
balance sheet and good for the And they do return – either with
retail side of our business. Our staff the same goods, if they have repaid
are trained to efficiently weigh and their loan and redeemed their
£8m prove the purity of jewellery on the jewellery, or with other items. Some
spot, using accepted tests, and make 80% of goods are redeemed within
£7m valuations that are accurate and, the loan period – which can be up to
therefore, fair. Once received, the six months. Another attraction of our
£6m
goods are stored under sophisticated, service is that, if they do not repay
£5m 'high tech' security conditions. their loan, it does not affect their
Demand for pawn-loans has credit-rating – because we are able
£4m
grown considerably over the years to sell the goods in our shop to
£3m and we currently have some recover the loan and interest.
111,000 loans in circulation at an This sector of our business has
£2m average value of £88, giving a loan- proven to deliver consistently resilient
£1m
book total of some £9.8m. earnings, comprising, as it does, a
The attraction for our customers large number of low-value repeat
0
2000 2001 2002 2003 2004
of raising cash against jewellery is, transactions. We see this pattern
of course, immediacy; they bring in continuing well into the future.
PAWNBROKING INCOME
4 Albemarle & BondJewellery Retailing
OUR JEWELLERY IS GOOD VALUE FOR MONEY AND NEW SHOP
OPENINGS ATTRACT AN IMMEDIATE RESPONSE FROM SHOPPERS
WHICH, IN TURN, DRAWS ATTENTION TO OUR OTHER SERVICES.
A shop window displaying a large was something of a departure in an
range of reasonably priced new and industry which had been in the habit
ex-pledge jewellery gives our shops of using auction-houses to recover
street appeal. And, human nature little more than scrap value for its
being what it is, people who might
hesitate to go into a pawn-shop are
gold/diamond goods. It created a
totally new income-stream by 2004 turnover up 8%
quite happy to be seen going into
a jewellery shop – whatever their
enabling us to achieve maximum
returns on our merchandise. to £8.45 million
true purpose. We also buy in new jewellery to
Our jewellery is good value-for- augment our ex-pledge stock; this
money and new shop openings gives customers a wider choice of
attract an immediate response from goods and improves our £9m
shoppers which, in turn, increases competitiveness with other jewellery £8m
local awareness and draws retailers. We have a central jewellery
attention to our other services. operation which processes £7m
Converting our pawnbroking merchandise and supplies the shops.
£6m
outlets to double as jewellery shops
£5m
£4m
£3m
£2m
£1m
0
2000 2001 2002 2003 2004
JEWELLERY SALES
Report & Accounts 2004 5Cheque-cashing
IN 85% OF CASES, AN INDIVIDUAL CAN PRESENT A CROSSED
CHEQUE AT A LOCAL BRANCH OF ALBEMARLE & BOND AND
LEAVE WITH CASH WITHIN A FEW MINUTES. THIS SERVICE CAN
MAKE THE DIFFERENCE BETWEEN A PLEASANT WEEKEND AND
A CASH-STRAPPED ONE.
Those of us who take our bank and an on-the-spot cheque-cashing
accounts and credit cards for granted service becomes invaluable to many
£35m of third-party cheques are often blissfully unaware that a
large number of people do not enjoy
people. In 85% of cases, an
individual can present a crossed
cashed in 2004 these luxuries.
And, with many high street banks
cheque at a local branch of
Albemarle & Bond and leave with
'being turned into trendy wine bars' cash within a few minutes. It is
(to quote a familiar TV commercial), simple, straightforward and handled
coupled with the growth of internet with a smile by our smart, well
£2.0m banking, many find it difficult to get trained staff. This service can make
to a conveniently located bank. the difference between a pleasant
Reaching a bank branch may require weekend and a cash-strapped one.
£1.5m the use of a car or a public transport Thanks to our access to an
service, neither of which may be extensive database, this fuss-free,
readily available to a significant user-friendly service cashed
£1.0m
minority of the population. £35 million of third-party cheques
Add other factors such as in 2004 with an average value of £350.
restricted business hours and
lengthy cheque-clearance delays,
£0.5m
0.0
2000 2001 2002 2003 2004
CHEQUE-CASHING INCOME
6 Albemarle & BondUnsecured Loans
THIS SERVICE IS FAST, CONVENIENT AND USER-FRIENDLY.
IT SATISFIES THE NEEDS OF A DIFFERENT MARKET FROM
THAT SERVED BY OUR OTHER PRODUCTS.
PAYDAY ADVANCES SPEEDLOAN
PayDay Advances help customers This complementary product
to bridge the 'liquidity-gap' between
their immediate needs and receiving
meets the demand for loans which
can be taken out over a longer-term
Unsecured loans account for
their wages.
Customers can borrow up to £600,
than a PayDay Advance. It is
managed through Speedloan
28% of our gross profit
secure in the knowledge that their Finance Limited, which was set up
personal cheques will be not be in 2002 to handle the new product.
presented to the bank for up to one A Speedloan is just as fast as our
month. And the period of the loan other services. It originally offered – £4.0m
can be extended to several months to customers who met specific criteria
£3.5m
by their replacing cheques with – a loan of £500, repayable by
new ones. direct debit over 12 months. £3.0m
This service is fast, convenient Originally trialed in fifteen of our
and user-friendly and enables us to branches, it was rolled out over the £2.5m
satisfy the needs of a different past year to our entire network. £2.0m
market from that served by our Following the success of the trial,
other products. And, like all our we have extended our product range £1.5m
services, it is provided with courtesy to include £300, £700 and
£1.0m
and friendliness. £900 loans.
£0.5m
0.0
2000 2001 2002 2003 2004
PAYDAY ADVANCES INCOME
Report & Accounts 2004 7Another
Chairman’s Statement
2004 has been another excellent
year for your company. Profit
before tax has increased by
over 13% to £5.02 million
compared with £4.42 million
in 2003. Earnings per share
increased by a similar amount to
7.65p against 6.74p in 2003.
Total net loans have grown by
12% to over £14m, of which
the pawn-loan book now
stands at £9.8m.
8 Albemarle & Bond£5.02m
£4.42m
£3.70m
£2.46m
£1.97m
excellent year 2000 2001
Profit before tax
2002 2003 2004
Speedloan continues
to be successful and is
making an increased
contribution to profit.
The Company has a continues to be successful Once again, I would like to
progressive dividend policy and is making an increased thank all our employees for
which reflects the success contribution to profit. The net the hard work and contribution
achieved. Therefore the Speedloan book at the year- they have made which has
directors recommend an end was £1.8m. produced these excellent results,
increased final dividend of We now have fifty-five and congratulate those who
2.25p (2003:1.75p), bringing branches, having opened two have passed their professional
the total dividend for the year new branches during the year; qualifications in the year.
to 3.4p (2003: 2.75p), an one in Edinburgh and the
increase of 24%. other in London. C L Nicolson
It is pleasing to report that In the course of the year we Chairman
all areas of the Company’s invested £1m in improvements
business have performed well. to our existing branch network.
Total net loans have grown by We continue to consider
12% to over £14m, of which actively opportunities to
the pawn-loan book now acquire new shops or to open
stands at £9.8m. new branches and combined
Speedloan, our ‘small with previous openings these
unsecured loan’ product has should be an important part of
been rolled out across our our future growth.
entire branch network. It
Report & Accounts 2004 9Chief Executive’s Review
With all areas of the company’s
business performing well, profits
have continued to grow at a
satisfying level.
We are in great shape
PAWNBROKING we have built up business, the profit THIRD PARTY CHEQUE-CASHING mix between sales volume, pricing
The company’s roots are in should continue to grow. This market has become more and credit quality. We have also
pawnbroking and we remain Our success in meeting the needs stable in the last two years and it is explored ways to refine our customer
committed to what is an excellent of our customers is reflected in the pleasing to note that the value of profiling without impacting unduly
product providing for the very real fact that at our year end we had over cheques cashed in the year rose by on the speed and efficiency of our
needs of many thousands of 111,000 individual loans outstanding. 4.5% and in addition we were able service. Debt collection, through our
customers. Our average loan is just Our pledgebook has grown by 11% to secure better margins which took committed in house team, has also
under £90 and customers are able during the year. our net commission up by some 13%. been enhanced and greatly improved.
to obtain their loans within a matter Our product range has also been
of minutes without the need to JEWELLERY SALES UNSECURED LOANS diversified from the initial £500 loan
complete complex application forms An intrinsic part of any PayDay Advances have to incorporate £300, £700 and
or to pay any upfront fees. Very few pawnbroker’s business is the contributed slightly less income £900 loans. Although the amounts
products can match this disposal of unredeemed collateral. during this financial year. After the are still quite small and seem similar
convenience and flexibility in the Our business model is based on heady growth we have experienced they are actually targeted towards
small loans market. retailing as much second-hand with this product since 2001 we are specific groups of customers with
The level of service we provide jewellery as possible. This enables now finding growth much more quite differing risk/reward profiles.
requires considerable investment in the original loan to be recovered difficult. This was always likely to be The experience we have built up
security, both of customers’ jewellery together with outstanding interest the case and was a major factor over the last year with Speedloan
and our staff. Customers need to and a margin. We need constantly behind our push to develop has put us in good stead for the
know that their jewellery is safe to manage second-hand stock levels Speedloan, our small unsecured future although we will continue to
with us and our staff need to know and therefore sell at competitive loan product. adopt a cautious approach for some
they are secure in branches which prices making us an interesting and After a satisfactory trial in 2003, time to come.
handle high aggregate values. We different retail jeweller. we rolled out Speedloan to all our Our Speedloan range has
also invest heavily in our point of In the year just ended we sold branches during the financial year. contributed around £300k of profit
sale computer systems which is 14% more second-hand stock than The rollout has been cautious as we compared with £100k last year.
essential to enable transactions to in the previous year and at a better are still developing our knowledge
be processed speedily and margin. Sales of new jewellery base in regard to what for us is BRANCH OPENINGS
accurately. Few organisations are continue to be affected by the longer term unsecured lending. Two new greenfield openings
willing or able to make this level of success of second-hand sales and The challenge for us has been to were made late in the year, one in
investment which means that once were marginally below last year’s understand and manage the right Edinburgh and the other in London.
level albeit with better margins.
10 Albemarle & Bondas we move forward
The experience we have
built up over the last year
with Speedloan has put us
in good stead for the future.
CAPITAL EXPENDITURE Two new branches should open
We have continued to invest in shortly. In addition we have identified
updating and improving our a number of acquisition opportunities
infrastructure. Some £1m has been which should add at least four
spent in total on branch upgrades shops to our branch network.
and moving our computer systems
from a solid but ageing DOS based REGULATION
system to modern technology. The UK Government’s White
Paper on consumer credit was
BALANCE SHEET published in December 2003. This
Despite significant increases in was the outcome of a lengthy
the dividend, we have retained consultation process in which we
£1.9m of profit in the business. This participated and we recognise that
has enabled us to reduce gearing the DTI undertook thorough
from last year’s conservative level of research on the relevant issues. We
63% even further to 58%. fully support the strengthening of
Given our strong sales of second- existing consumer credit legislation.
hand jewellery we have maintained A Bill proposing legislation to replace
our levels of second-hand stock to the existing Consumer Credit Act is
within our sales capacity. expected to be announced in the
Queen’s Speech in November and
FUTURE DEVELOPMENTS should proceed through to
We have made huge strides in enactment shortly thereafter.
the last few years and are now in
excellent shape as we move
forward. This combined with strong
G V Nicholls
Chief Executive
With two new shops opening
cash flow means that a continuation
of the modest expansion should
shortly and another four in
see satisfactory profits-growth
combined with a reduction in gearing.
prospect, we will soon have
over 60 branches.
Report & Accounts 2004 11UK-based Directors
C L Nicolson G V Nicholls D A L Page D P Pattinson
CHAIRMAN CHIEF EXECUTIVE OPERATIONS DIRECTOR FINANCE DIRECTOR
N J Mardon Taylor P P Murphy
Directors
NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR
C L Nicolson, Chairman*+
G V Nicholls FCA, Chief Executive*+
D A L Page
D P Pattinson BCom, ACA (NZ)
P P Murphy
N J Mardon Taylor FCA*+
S B Brinkley Jnr (USA)+
A M Edwards (USA)*
The directors would like to P E Cohen BCom, MBA (USA)
thank all their employees for
the hard work and dedication Secretary
during 2004 that has M A Flanagan ACIS
produced another year of
growth and profitability. * Member of the Remuneration Committee
+
Member of the Audit Committee
12 Albemarle & BondDIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2004
The directors submit their report and the accounts of 2004 2003
the Company and its subsidiaries for the year ended Ordinary Ordinary
30 June 2004. 4p Shares 4p Shares
N J Mardon Taylor 1,424,933 1,624,933
PRINCIPAL ACTIVITIES AND REVIEW P P Murphy 1,121,000 1,171,000
OF THE BUSINESS C L Nicolson 780,698 780,698
The principal activity of the Company is that of a holding G V Nicholls 735,652 735,652
company for Albemarle & Bond Pawnbrokers Limited, D A L Page 437,352 437,352
Albemarle & Bond Cheque Cashers Limited, Speedloan
D P Pattinson 50,000 –
Finance Limited and Chantry Collections Limited. The main
activities of the group continue to be pawnbroking, retail A M Edwards 14,500 14,500
jewellery sales, unsecured lending and cheque cashing. All S B Brinkley Jnr – –
subsidiaries operate in the United Kingdom. P E Cohen – –
A review of the business is set out in the Chairman’s
Statement and Chief Executive’s Review on pages 8 to 11.
The statement of group trading profit for the year is set out on In addition, P P Murphy, G V Nicholls, C L Nicolson and
page 18. A final dividend of 2.25p (2003: 1.75p) per share D A L Page are directors of Albemarle & Bond Trustee
has been proposed. This, when taken with the interim dividend Limited, a trustee of the Albemarle & Bond Pawnbrokers
of 1.15p (2003: 1p) per share, gives a total dividend of 3.4p Employee Benefit Trust which holds 614,250 (2003: 753,250)
(2003: 2.75p) per share for the year ended 30 June 2004. ordinary shares in the Company.
S B Brinkley Jnr is a director of EZCorp Inc. The interest of
EZCorp Inc in the share capital of the Company is disclosed
DIRECTORS AND THEIR INTERESTS on page 15.
The directors, who have held office during the year under There have been no changes in any of the share interests of
review to the date of this report and their notifiable interests in the directors between 30 June 2004 and the date of this
the share capital of the Company as at 30 June 2004, were: report except that following the exercise of options by
employees the Employee Benefit Trust’s shareholding has
reduced to 539,250 ordinary shares.
In accordance with the Articles of Association, N J Mardon Taylor,
P P Murphy and S B Brinkley Jnr retire by rotation, and being
eligible offer themselves for re-election.
Report & Accounts 2004 13DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2004
As a result of the Unapproved Share Option Scheme the following directors have a beneficial interest in the following options
granted over ordinary shares:
At Granted Exercised At Market Price Date from
Start of During During End of Exercise on Date which Expiry
Year Year Year Year Price Exercised Exercisable Date
P P Murphy 100,000 – – 100,000 45.5p – 28.06.01 27.06.08
100,000 – – 100,000 74.5p – 03.07.02 02.07.09
C L Nicolson 200,000 – – 200,000 45.5p – 28.06.01 27.06.08
100,000 – – 100,000 74.5p – 03.07.02 02.07.09
G V Nicholls 250,000 – – 250,000 45.5p – 28.06.01 27.06.08
200,000 – – 200,000 74.5p – 03.07.02 02.07.09
D A L Page 100,000 – – 100,000 47.5p – 23.06.02 22.06.06
200,000 – – 200,000 28.5p – 15.05.03 15.05.07
100,000 – – 100,000 45.5p – 28.06.04 27.06.08
100,000 – – 100,000 74.5p – 03.07.05 02.07.09
D P Pattinson 50,000 – – 50,000 33.5p – 19.02.04 18.02.08
50,000 – – 50,000 45.5p – 28.06.04 27.06.08
100,000 – – 100,000 74.5p – 03.07.05 02.07.09
As a result of the Executive Share Option Scheme one director has a beneficial interest in the following options granted over
ordinary shares:
At Granted Exercised At Market Price Date from
Start of During During End of Exercise on Date which Expiry
Year Year Year Year Price Exercised Exercisable Date
D P Pattinson 100,000 – 50,000 50,000 29.5p 93p 07.11.03 06.11.10
At 30 June 2004, the market price of the Company’s shares was 100p (2003: 74.5p). The maximum share price during the year
was 105.5p (2003: 86.5p) and the minimum price was 68.5p (2003: 59p).
Since the end of the financial year the following rights to subscribe for ordinary shares have been given under the Employee
Benefit Trust:
Date from
Options Date of Exercise which Expiry
Granted Grant Price Exercisable Date
D P Pattinson 50,000 12.07.04 93.5p 12.07.07 11.07.11
14 Albemarle & BondINTERESTS IN CONTRACTS CORPORATE GOVERNANCE
No director had an interest in any material contract during the The Company’s shares are traded on the Alternative
year relating to the business of the Company. Investment Market of the London Stock Exchange and the
Company is not therefore required to report on compliance
with the Combined Code (“the Code”). However the Board of
DONATIONS Directors supports the Code, and also the recommendations of
During the year the group made charitable donations of £nil the Quoted Companies Alliance (“QCA”) in its bulletin “Guidance
(2003: £nil). for Smaller Quoted Companies”. The bulletin provides a series
of recommendations for smaller quoted companies in
SUBSTANTIAL INTERESTS approaching the question of corporate governance.
The Board is aware of the following substantial interests in the Accordingly, the Board has established an Audit Committee
issued share capital of the Company as at the date of this and a Remuneration Committee, and complies with the Code
report, other than those of directors of the Company. in areas where it is felt justified by reference to the QCA
comments as being relevant to a business the size of
Albemarle & Bond Holdings PLC.
EZCorp International Inc
13,276,666 Ordinary shares 28.86%
INTERNAL CONTROL
The Bank of New York (Nominees) Ltd The directors acknowledge their responsibilities for the
2,568,874 Ordinary shares 5.58% Company’s system of internal control. In fulfilling these
Chase Nominees Ltd responsibilities the Board has continued to review the
effectiveness of the system of internal control on the basis of
2,530,000 Ordinary shares 5.50% the criteria set out in the Guidance for Directors “Internal
SBS Nominees Ltd Control and Financial Reporting”. The Board considered major
1,437,208 Ordinary shares 3.12% business and financial risks. The Company operates with an
executive committee, comprising the Chief Executive together
with the senior group executives, which meets regularly and
PERSONNEL reports to the Board. All strategic decisions are referred to the
Albemarle & Bond Holdings PLC and its subsidiaries maintain Board for approval. Accepting that no system of internal
a policy of equal opportunities and are committed to ensuring control can provide absolute assurance against material
that all individuals are treated fairly, with respect and are misstatement or loss, the directors believe that the established
valued. Employees of the group are regularly consulted by systems of internal control within the Company are appropriate
local managers and kept informed of matters affecting them to the business. No weaknesses have resulted in any material
and the overall development of the group. losses, contingencies or uncertainties which would require
disclosure as recommended by the Guidance for Directors.
EMPLOYMENT OF THE DISABLED
It is the policy of the group to give full and fair consideration to GOING CONCERN
the employment of disabled persons in jobs suited to their After making enquiries, the directors have formed a judgement
individual circumstances and, as appropriate, to consider them at the time of approving the accounts that there is a
for recruitment opportunities, career development and training. reasonable expectation that the Company has adequate
Where possible, arrangements are made for the continuing resources to continue for the foreseeable future. For this
employment of employees who have become disabled whilst in reason the directors continue to adopt the going concern basis
the group’s employment. in preparing the accounts.
Report & Accounts 2004 15DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2004
CREDITOR PAYMENT POLICY • state whether applicable accounting standards have been
The group aims to maintain good relations with all of its followed, subject to any material departures disclosed and
trading partners. In particular, it is the group’s policy to abide explained in the accounts; and
by the terms of payment agreed with each of its suppliers. The • prepare the accounts on the going concern basis unless it
number of days taken to pay suppliers, calculated on the basis is inappropriate to presume that the group will continue
of trade creditors as at 30 June 2004 and average daily in business.
purchases for the year ended 30 June 2004 is 19 days The directors are responsible for keeping proper accounting
(2003: 17 days). records which disclose with reasonable accuracy at any time
the financial position of the Company and the group and
CAPITAL enable them to ensure that the accounts comply with the
Companies Act 1985. They are also responsible for
Included within the group accounts is a balance of £263,000 safeguarding the assets of the group and hence for taking
(2003: £303,000) relating to 614,250 (2003: 753,250) reasonable steps for the prevention and detection of fraud and
ordinary 4 pence shares in Albemarle & Bond Holdings PLC other irregularities.
held on behalf of the Albemarle & Bond Pawnbrokers Employee
Benefit Trust. This represents a holding of 1.3% (2003: 1.6%)
of the issued ordinary share capital of the Company. AUDITORS
A resolution to reappoint Solomon Hare LLP as the
DIRECTORS’ RESPONSIBILITIES Company’s auditor will be put to the Annual General Meeting.
The directors are required by company law to prepare
accounts for each financial period which give a true and fair BY ORDER OF THE BOARD
view of the state of affairs of the Company and the group and M A Flanagan
of the profit or loss of the group for that period. In preparing
Secretary
the accounts, the directors are required to:
• select suitable accounting policies and apply them consistently;
22nd September 2004
• make judgements and estimates that are reasonable
and prudent;
16 Albemarle & BondINDEPENDENT AUDITORS’ REPORT
TO THE SHAREHOLDERS OF ALBEMARLE & BOND HOLDINGS PLC
We have audited the accounts of Albemarle & Bond Holdings BASIS OF AUDIT OPINION
PLC for the year ended 30 June 2004 which comprise the We conducted our audit in accordance with United Kingdom
Profit and Loss Account, the Balance Sheets, the Cash Flow Auditing Standards issued by the Auditing Practices Board.
Statement and the related notes. These accounts have been An audit includes examination, on a test basis, of evidence
prepared under the historical cost convention as modified by relevant to the amounts and disclosures in the accounts. It
the revaluation of certain fixed assets and the accounting also includes an assessment of the significant estimates and
policies set out therein. judgements made by the directors in the preparation of the
This report is made solely to the Company’s members, as a accounts, and of whether the accounting policies are
body, in accordance with Section 235 of the Companies Act appropriate to the Company’s and the group’s circumstances,
1985. Our audit work has been undertaken so that we might consistently applied and adequately disclosed.
state to the Company’s members those matters we are We planned and performed our audit so as to obtain all the
required to state to them in an auditor’s report and for no other information and explanations which we considered necessary
purpose. To the fullest extent permitted by law, we do not in order to provide us with sufficient evidence to give
accept or assume responsibility to anyone other than the reasonable assurance that the accounts are free from material
Company and Company’s members as a body, for our audit misstatement, whether caused by fraud or other irregularity or
work, for this report, or for the opinions we have formed. error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the accounts.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS
AND AUDITORS OPINION
The directors’ responsibilities for preparing the Annual Report In our opinion the accounts give a true and fair view of the
and the accounts in accordance with applicable law and state of the Company’s and the group’s affairs as at 30 June
United Kingdom Accounting Standards are set out in the 2004 and of the group’s profit for the year then ended and
Statement of Directors’ Responsibilities. have been properly prepared in accordance with the
Our responsibility is to audit the accounts in accordance with Companies Act 1985.
relevant legal and regulatory requirements and United
Kingdom Auditing Standards.
Solomon Hare LLP
We report to you our opinion as to whether the accounts give Chartered Accountants
a true and fair view and are properly prepared in accordance Registered Auditors
with the Companies Act 1985. We also report to you if, in our Oakfield House
opinion, the Directors’ Report is not consistent with the Oakfield Grove
accounts, if the Company has not kept proper accounting Clifton
records, if we have not received all the information and Bristol
explanations we require for our audit, or if information BS8 2BN
specified by law regarding directors’ remuneration and
transactions with the Company and other members of the
22nd September 2004
group is not disclosed.
We read other information contained in the Annual Report and
consider whether it is consistent with the audited accounts.
This other information comprises only the Chairman’s
Statement, the Chief Executive’s Review and the Directors’
Report. We consider the implications for our report if we
become aware of any apparent misstatements or material
inconsistencies with the accounts. Our responsibilities do not
extend to any other information. We are not required to
consider whether the Board’s statements on internal control
cover all risks and controls, or form an opinion on the
effectiveness of the group’s corporate governance procedures
or its risk and control procedures.
Report & Accounts 2004 17CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2004
2004 2003
Note £'000 £'000
Turnover 3 22,345 20,234
Cost of sales (6,480) (6,069)
Gross profit 15,865 14,165
Administrative expenses (10,297) (9,223)
Operating profit 6 5,568 4,942
Interest payable and similar charges 5 (550) (517)
Profit on ordinary activities before taxation 5,018 4,425
Tax on profit on ordinary activities 7 (1,557) (1,382)
Profit on ordinary activities after taxation 3,461 3,043
Dividends 8 (1,563) (1,262)
Retained profit for the year 1,898 1,781
Earnings per share 24
Basic 7.65p 6.74p
Diluted 7.46p 6.67p
All of the above relates to continuing activities.
The company has no recognised gains or losses other than the results for the year as set out above.
The notes on pages 22 to 31 form part of these accounts.
18 Albemarle & BondCONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2004
2004 Restated 2003
Note £'000 £'000 £'000 £'000
Fixed assets
Intangible assets 9 349 387
Tangible assets 10 4,436 4,554
4,785 4,941
Current assets
Stocks 12 4,918 4,425
Debtors 13 18,886 16,393
Cash at bank and in hand 976 1,084
24,780 21,902
Creditors: amounts falling due within one year 14 (4,070) (2,379)
Net current assets 20,710 19,523
Total assets less current liabilities 25,495 24,464
Creditors: amounts falling due after more than one year 15 (8,535) (9,472)
Provisions for liabilities and charges 16 (277) (278)
Net assets 16,683 14,714
Capital and reserves
Called up share capital 18 1,840 1,836
Share premium account 19 3,652 3,625
Capital redemption reserve 21 1,018 1,018
Other reserve 20 (263) (303)
Profit and loss account 20 10,436 8,538
Equity shareholders' funds 22 16,683 14,714
These accounts were approved by the board of directors.
C L Nicolson G V Nicholls
Director Director
22nd September 2004
The notes on pages 22 to 31 form part of these accounts.
Report & Accounts 2004 19COMPANY BALANCE SHEET
AS AT 30 JUNE 2004
2004 Restated 2003
Note £'000 £'000 £'000 £'000
Fixed assets
Investments 11 210 210
Current assets
Other debtors 11 –
Amounts due from subsidiary undertakings
– due within one year 1,300 1,440
– due after more than one year 8,423 7,824
9,734 9,264
Creditors: amounts falling due within one year
Corporation tax (67) (83)
Proposed dividend (1,033) (803)
Other creditors (54) (38)
(1,154) (924)
Net current assets 8,580 8,340
Total assets less current liabilities 8,790 8,550
Provisions for liabilities and charges 16 (54) (54)
Net assets 8,736 8,496
Capital and reserves
Called up share capital 18 1,840 1,836
Share premium account 19 3,652 3,625
Capital redemption reserve 21 1,018 1,018
Other reserve 20 (263) (303)
Profit and loss account 20 2,489 2,320
Equity shareholders' funds 22 8,736 8,496
These accounts were approved by the board of directors.
C L Nicolson G V Nicholls
Director Director
22nd September 2004
The notes on pages 22 to 31 form part of these accounts.
20 Albemarle & BondCONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2004
2004 Restated 2003
Note £'000 £'000 £'000 £'000
Net cash inflow from operating activities 26 3,459 3,861
Returns on investments and servicing of finance
Interest paid (531) (498)
Interest element of hire purchase payments (19) (18)
Net cash outflow from returns on investments and (550) (516)
servicing of finance
Taxation
Tax paid (1,441) (1,423)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (1,169) (1,302)
Receipts from sale of tangible fixed assets 622 12
Net cash outflow from investing activities (547) (1,290)
Equity dividend paid (1,333) (1,147)
Net cash outflow before financing (412) (515)
Financing
Capital element of hire purchase payments (91) (74)
Exercise of share options 60 –
Purchase of shares by Employee Benefit Trust – (45)
(Decrease)/increase in secured loans (938) 1,275
Net cash (outflow)/inflow from financing (969) 1,156
(Decrease)/increase in cash 27 (1,381) 641
The notes on pages 22 to 31 form part of these accounts.
Report & Accounts 2004 21NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2004
1 PRINCIPAL ACCOUNTING POLICIES g) Pension costs
a) Basis of accounting Pension costs are charged to the profit and loss account
The accounts have been prepared under the historical cost on the basis of the amount of contribution payable to the
convention, as modified by the revaluation of certain fixed pension scheme in respect of the accounting year.
assets, and in accordance with applicable accounting standards. h) Basis of consolidation
b) Change in accounting policy The group accounts consolidate the accounts of the Company
UITF 38, Accounting for ESOP Trusts has been adopted and its subsidiaries for the financial year ended 30 June 2004.
during the year. Prior to this the Company's own shares i) Goodwill
held by the Employee Benefit Trust were recognised as Goodwill represents the difference between the amount
assets and held as an investment of the Company and paid on the acquisition of a business and the fair value of
group. The change in accounting policy is to treat the the net assets acquired.
shares held by the Employee Benefit Trust as a deduction
Goodwill arising on acquisition of new branches prior to
in arriving at shareholders' funds.
1 July 1998 has been written off to reserves in the year of
The effect of this change in policy is to reduce purchase, and will be charged to profits on the subsequent
shareholders’ funds by £303,000 as at 30 June 2003. For disposal of the related business.
the year to 30 June 2004, the effect is to increase
Goodwill arising on acquisition of new branches from
shareholders’ funds by £40,000. The change in accounting
1 July 1998 is capitalised and amortised over estimated
policy has no effect on the profit attributable to
useful economic life, which is expected to be between
shareholders for either the current or prior year.
10 – 20 years.
c) Turnover
j) Investments
Interest on pledges, payday advances and other unsecured
Investments are stated at cost less any provision made for
loans is accounted for as it becomes due. Interest
any impairment in value.
anticipated to be received on pledges unredeemed at the
balance sheet date is accrued and included in the results k) Leased assets
for the year. Retail sales and third party cheque cashing Where assets are financed by leasing agreements that
commissions earned are recognised at the time of sale. give rights approximating to ownership (“finance leases”),
d) Depreciation the assets are treated as if they had been purchased
outright. The amount capitalised is the present value of the
Depreciation is calculated so as to write off the cost of
minimum lease payments payable during the lease term.
tangible fixed assets by equal annual instalments over their
The corresponding leasing commitments are shown as
estimated useful lives at the following rates:
amounts payable to the lessor. Depreciation on the
Freehold property – 2% per annum relevant assets is charged to the profit and loss account.
Leasehold property improvements – 10% per annum
Lease payments are analysed between capital and interest
Long leasehold property – Over the period of
components so that the interest element of the payment is
the lease
charged to the profit and loss account over the period for
Fixtures, fittings and equipment – 10 – 33% per
the lease and represents a constant proportion of the
annum
capital repayments outstanding. The capital amount
Motor vehicles – 25% per annum
reduces the amount payable to the lessor.
On adoption of FRS 15 the group has followed the transitional
All other leases are treated as operating leases. Their
rules to retain the book values of revalued property.
annual rentals are charged to the profit and loss account
e) Stocks on a straight-line basis over the term of the lease.
Retail stocks are valued at the lower of cost and net
realisable value.
2 PROFIT OF THE PARENT COMPANY
f) Deferred taxation
As permitted by section 230 of the Companies Act 1985,
Deferred tax is recognised on a full provision basis in the profit and loss account of the parent Company is not
respect of all timing differences which have originated, but presented as part of these accounts. Retained profits, before
not reversed at the balance sheet date. Timing differences dividends payable, of £1,732,000 (2003: profit of £1,484,000)
represent the accumulated differences between the group are dealt with in the accounts of the parent Company.
taxable profits and its financial profit and arise primarily
from the difference between accelerated capital
allowances and depreciation. The provision is not discounted.
22 Albemarle & Bond3 TURNOVER The difference between exercise price and the market
Turnover represents pawnbroking revenue, income from price on the date options were exercised by directors
cheque cashing and other unsecured loans and retail resulted in a total gain made by those directors of £31,750
jewellery sales excluding value added tax. All turnover (2003: £nil).
arises within the UK. The emoluments of the highest paid director were
Turnover split between business segments is: £189,000 (2003: £198,000) which includes gains of £nil
(2003: £nil) on share options exercised during the year.
Contributions to the defined contribution pension scheme
2004 2003 in respect of the highest paid director were £14,200
£'000 £'000 (2003: £13,500).
b) The average number of people employed by the group
Pawnbroking, unsecured lending
(including directors) during the year was as follows:
and cheque cashing 13,893 12,377
Retail jewellery sales 8,452 7,857
2004 2003
22,345 20,234 No No
Administration 48 42
Further segmental information on profit and net assets is Sales 221 221
not possible due to the fact that the segments are
effectively run as one business and any split of the 269 263
common costs of the two segments would not give a true
comparison of performance of one segment against the
other. The individual company accounts give results based The aggregate payroll expenses of these people were
on clearly identifiable costs only, with all overheads as follows:
common to both segments being included in the
pawnbrokers segment. All net assets arise in the UK.
2004 2003
£'000 £'000
4 INFORMATION REGARDING DIRECTORS
AND EMPLOYEES Wages and salaries 4,525 4,279
a) Directors' emoluments Social security 443 407
2004 2003 Other pension costs 101 101
£'000 £'000
5,069 4,787
Aggregate emoluments for
qualifying services 628 670
5 INTEREST PAYABLE AND SIMILAR CHARGES
Pension contributions to defined
contribution scheme 40 41
2004 2003
Fees payable to
£'000 £'000
non-executive directors 86 61
Interest payable on bank borrowing 531 499
754 772
Interest on finance leases and hire
Number of directors who purchase contracts 19 18
are members of a defined
contribution scheme 5 5 550 517
Report & Accounts 2004 23NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2004
6 OPERATING PROFIT b) Factors affecting tax charge for year
2004 2003 The UK standard rate of corporation tax is 30% (2003:
£'000 £'000 30%) whereas the current tax assessed for the financial
year as a percentage of profit before tax is 31.1% (2003:
This has been arrived 31.7%). The differences are explained below:
at after charging: 2004 2003
Depreciation of owned assets 768 669 £'000 £'000
Depreciation of assets held
Profit on ordinary activities before tax 5,018 4,425
under finance leases and hire
purchase contracts 62 56 Profit on ordinary activities
Amortisation of goodwill 38 38 multiplied by the standard rate of
corporation tax 30% (2003 – 30%) 1,505 1,327
Operating lease costs:
Effects of:
Land and buildings 1,267 1,088
Expenses not deductible 23 22
Hire of plant and machinery 19 18
Profit on disposal in excess of
Auditors' remuneration
capital gain (17) –
– audit 34 34
Capital allowances less depreciation 35 28
– other services 67 30
Marginal rate relief (4) (5)
(Profit)/loss on sale of fixed assets (114) 66
Provision adjustments 19 6
Adjustments to tax charge in respect
Fees paid to the auditors in respect of non-audit work in
the year are for the preparation of corporation tax returns, of previous periods (3) 25
corporation and indirect taxation advice and the provision
Current tax charge for the year 1,558 1,403
of nominated advisor services. These services are reviewed
by the Board of Directors to ensure that the independence
of the auditors is not compromised. 8 DIVIDENDS
2004 2003
7 TAX ON PROFIT ON ORDINARY ACTIVITIES
£'000 £'000
a) UK corporation tax on profits for the year
Ordinary Dividends:
2004 2003
£'000 £'000 Interim 1.15p per share (2003: 1p) 528 459
Final proposed 2.25p per share
Current tax
(2003: 1.75p) 1,035 803
UK corporation tax at 30%
(2003 – 30%) 1,561 1,378 1,563 1,262
Adjustment relating to earlier periods (3) 25
1,558 1,403
Deferred taxation (note 16) (1) (21)
1,557 1,382
24 Albemarle & Bond9 INTANGIBLE FIXED ASSETS
Goodwill
£'000
Cost
At 1 July 2003 500
Additions –
30 June 2004 500
Amortisation
At 1 July 2003 113
Charge for year 38
30 June 2004 151
Net book value
At 30 June 2004 349
At 30 June 2003 387
10 TANGIBLE ASSETS
Long Fixtures,
Freehold leasehold fittings & Motor
property property equipment vehicles Total
£'000 £'000 £'000 £'000 £'000
Cost (or valuation)
At 1 July 2003 827 1,270 5,395 248 7,740
Additions 42 54 1,068 56 1,220
Disposals (483) – (6) (33) (522)
At 30 June 2004 386 1,324 6,457 271 8,438
Depreciation
At 1 July 2003 44 287 2,793 62 3,186
Charge for the year 21 101 646 62 830
Eliminated on disposals – – (3) (11) (14)
At 30 June 2004 65 388 3,436 113 4,002
Net book value
At 30 June 2004 321 936 3,021 158 4,436
At 30 June 2003 783 983 2,602 186 4,554
Report & Accounts 2004 25NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2004
10 TANGIBLE ASSETS continued 12 STOCKS
Freehold property with a historical cost of £15,000 is 2004 2003
included at a valuation of £45,000. All other properties are £'000 £'000
included at cost. The net book value of freehold property
on a historical cost basis is £301,000 (2003: £625,000). Retail stock 4,918 4,425
The difference between depreciation of the revalued
amount, charged in the accounts, and depreciation on
historical cost is not material. There is no significant difference between the book cost
and replacement cost of retail stock.
The freehold property was revalued in 1987 in accordance
with a valuation prepared by an independent estate agent
and surveyor. 13 DEBTORS
The net book values of fixed assets include the following in 2004 2003
respect of assets held under finance leases and hire £'000 £'000
purchase contracts. The depreciation charged to the
accounts in the year in respect of such assets amounted to Trade debtors 14,812 13,251
£62,000 (2003: £56,000).
Prepayments and accrued income 3,751 3,094
Other debtors 323 48
2004 2003
£'000 £'000 18,886 16,393
Motor vehicles 158 186
14 CREDITORS: amounts falling due within one year
11 INVESTMENTS
Summary of investments at 30 June 2004: 2004 2003
£'000 £'000
Company Bank overdraft and loans 1,273 26
2004 2003 Trade creditors 602 483
£'000 £'000
Corporation tax 763 646
Unlisted 210 210 Proposed dividend 1,033 803
Balance at 30 June 2004 210 210 Other creditors including taxation
and social security 145 130
Unlisted
Obligations under finance leases
The unlisted investments consist of the whole of the and hire purchase contracts 56 71
issued share capital of the subsidiaries, Albemarle & Bond
Pawnbrokers Limited, Albemarle & Bond Cheque Cashers Accruals 198 220
Limited, Speedloan Finance Limited and Chantry Collections
Limited, all being consolidated into the group accounts. 4,070 2,379
NATURE OF TRADE
Albemarle & Bond Pawnbrokers Ltd Pawnbroking, unsecured
lending and jewellery sales
Albemarle & Bond Cheque Cashers Ltd Cheque-cashing
Speedloan Finance Ltd Unsecured lending
Chantry Collections Ltd Recovery of debts
The Company also holds an investment in Albemarle &
Bond Trustee Limited which acts as corporate trustee for
the Albemarle & Bond Pawnbrokers Employee Benefit Trust.
26 Albemarle & Bond15 CREDITORS: amounts falling due after more No provision for deferred taxation has been made in
than one year relation to the surplus on the revaluation of freehold
property. If freehold property was disposed of at the
2004 2003
balance sheet amounts it is estimated that the liability
£'000 £'000 would amount to £nil (2003: £nil).
Bank loan 8,500 9,412
Obligations under finance leases Company – Deferred Taxation
and hire purchase contracts 35 60 2004 2003
£'000 £'000
8,535 9,472
Short term timing differences 54 54
Obligations under overdrafts, loan agreements and hire
purchase contracts are due as follows: 17 CONTINGENCIES
The loan facilities of Albemarle & Bond Pawnbrokers
2004 2003
Limited including the overdraft facility are secured by an
£'000 £'000 omnibus guarantee and set-off agreement between the
parent company and its subsidiaries, along with an
Within one year 1,329 97
unlimited debenture incorporating a first legal charge over
One to two years 8,524 9,077 freehold properties. At 30 June 2004 the group's secured
borrowings were £9,773,000 (2003: £9,438,000).
Two to five years 11 98
More than five years – 297
18 SHARE CAPITAL
9,864 9,569 2004 2003
£'000 £'000
16 PROVISION FOR LIABILITIES AND CHARGES
Authorised:
Group – Deferred Taxation
75,000,000 (2003: 75,000,000)
The amounts provided for deferred taxation calculated on
the liability method, are set out below: ordinary shares of 4p each 3,000 3,000
2004 2003 Allotted, called up and fully paid:
£'000 £'000 46,001,556 (2003: 45,891,556)
Accelerated capital allowances 278 287 ordinary shares of 4p each 1,840 1,836
Other timing differences (1) (9)
277 278
Report & Accounts 2004 27NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2004
18 SHARE CAPITAL continued
During the year 110,000 ordinary shares of 4p each were allotted for cash on the exercise of share options. The options were
exercised at 28.5p and 29.5p.
At 30 June 2004, the following share options were outstanding in respect of the ordinary shares:
Date of grant Number of shares Period of exercise Exercise price
1999 100,000 23.06.02 – 22.06.06 47.50p
2000 200,000 15.05.03 – 14.05.07 28.50p
2000 50,000 07.11.03 – 06.11.10 29.50p
2000 60,000 27.11.03 – 26.11.10 28.50p
2001 150,000 28.06.04 – 27.06.08 45.50p
2001 50,000 19.02.04 – 18.02.08 33.50p
2001 550,000 28.06.01 – 27.06.08 45.50p
2001 50,000 29.06.04 – 28.06.08 46.50p
2001 50,000 25.10.04 – 24.10.11 48.00p
2002 400,000 03.07.02 – 02.07.09 74.50p
2002 244,062 03.07.05 – 02.07.09 74.50p
2002 80,938 03.07.05 – 02.07.12 74.50p
2003 150,000 26.06.06 – 25.06.10 74.50p
19 SHARE PREMIUM ACCOUNT
£'000
Balance at 1 July 2003 3,625
Relating to share issues in the year 27
Balance at 30 June 2004 3,652
20 RESERVES
GROUP Profit
Other and loss
reserve account
£'000 £'000
At 1 July 2003 as previously reported – 8,538
Change in accounting policy (note 1(b)) (303) –
As restated (303) 8,538
Profit for the year – 1,898
Issue of shares by the Employee Benefit Trust 40 –
At 30 June 2004 (263) 10,436
28 Albemarle & Bond20 RESERVES continued
Cumulative goodwill written off against reserves amounting to £435,000 (2003: £435,000) acquired prior to adoption of FRS
10 has not been reinstated, as permitted by the transitional provisions of FRS 10.
The other reserve relates to ordinary shares in Albemarle & Bond Holdings PLC held on behalf of the Employee Benefit Trust.
The group has provided funds to the Trust of £263,000 (2003: £303,000) to facilitate the purchase of the shares. The market
value of the shares at 30 June 2004 was 100 pence per share, giving a total market value of the investment of £614,250. The
nominal value of these shares is £24,570.
All costs incurred are dealt with in the group's profit and loss account.
The Employee Benefit Trust was set up to encourage the employees of the group to participate in the ownership and
development of the group. During the year options over 139,000 shares have been exercised.
COMPANY Profit
Other and loss
reserve account
£'000 £'000
Balance at 1 July 2003 as previously reported – 2,320
Change in accounting policy (note 1 (b)) (303) –
As restated (303) 2,320
Profit for the year after tax and dividends – 169
Issue of shares by the Employee Benefit Trust 40 –
Balance at 30 June 2004 (263) 2,489
21 CAPITAL REDEMPTION RESERVE
£'000
Balance at 1 July 2003 and 30 June 2004 1,018
22 RECONCILIATION OF MOVEMENTS OF SHAREHOLDERS' FUNDS
Group Company Group Company
2004 2004 2003 2003
£'000 £'000 £'000 £'000
Shareholders' funds at the start of the year as previously reported 15,017 8,799 13,236 8,577
Effect of change in accounting policy (303) (303) (258) (258)
As restated 14,714 8,496 12,978 8,319
Profit for the financial year 1,898 169 1,781 222
New share capital subscribed 31 31 – –
Shares issued/(acquired) by Employee Benefit Trust 40 40 (45) (45)
Shareholders' funds at 30 June 2004 16,683 8,736 14,714 8,496
Report & Accounts 2004 29You can also read
