Interims results were announced Wednesday, Michael Walters is a fan, & Ofex will undergo huge changes soon, with the introduction of Winterfoolds making a market in all stocks....Furthermore Ofex hope to have 5 mm's by 2004 end.


Britannia I think will move forward strongly without the changes, & I estimate this company already with 5.5 years of impressive growth is on a prospective p/e of circa 10 or 11 & that is with conservative accounting, their peers take circa 500 per customer won for marketing incurred, BFH don't if they did you can add about 1m to profits for the year. As it is I think Michael Walters is expecting circa 700,000

However the really wise thing to do, is not take a word of anything I write as read, but ring the company & check it out for yourselves. Mark up is currently circa 500% which means huge profits are to come, & costs are broadly fixed which mean turnover will at a point drop to the bottom line, & that is yet to happen!

The interims:

BRITANNIA FINANCE HOLDINGS PLC
BUSINESS: NICHE FINANCE

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2003

Britannia Finance Holdings plc, the OFEX traded finance group, announces its
unaudited interim results for the six months ended 31 October 2003.

HIGHLIGHTS

* Profit before tax up 229% over the same period last year from GBP123,822 to
GBP407,795
* Turnover up 49% from GBP1,060,046 to GBP1,575,689
* Portfolio size up 70% from GBP5.3 million to GBP9 million
* GBP442,000 additional equity raised through the Private Placing of shares
within the period
* Focus on niche premium rate motor finance business and customer quality
produces record interim results

INTERIM STATEMENT

We are pleased to report a record set of interim results (for the six months
ended 31st October 2003) with profits before tax up 229% to GBP407,795. The
group has enjoyed solid growth in turnover, without the proportionate increase
in costs. Basic earnings per share were 1.7p and diluted earnings per share
were 1.3p.

REVIEW OF OPERATIONS

BROKERAGE DIVISION
The brokerage division continues to perform satisfactorily with brokerage
commission totalling GBP473,610 for the half year (GBP662,439 for the same
period in 2002). The commission income is lower than the same period last year
due to the continued focus on the instalment credit division. As a result a
higher proportion of deals have been written in-house resulting in lower
commission income, but significantly increased interest income. The brokerage
division provides a valuable commission income on those deals which fit outside
the group's underwriting parameters. The group aims to write premium rate, low
risk business in-house. However, applicants which require lower interest rates
or fall outside our underwriting criteria are placed with a third party lender
in return for a commission. The brokerage division enhances our offering to the
motor dealer, by providing a one-stop shop for a wide range of applicants
allowing the dealer to maximise car sales.

INSTALMENT CREDIT DIVISION
The main focus of the group remains the profitable growth of the instalment
credit division. The group conducts a vigorous verification procedure to ensure
the ability of the customer to service the hire purchase agreement. The group
focuses on customer quality but wins business by offering flexibility with
regard to the age / type of vehicle financed. As a result of the focus on
lending to low risk customers the portfolio continues to perform excellently.
Both arrears and bad debt levels remain at extremely low levels. As at 31
October 2003 the total receivables had grown to GBP9,025,799; the total number
of cases was 1905, bad debts/write-offs amounted to 0.26% of the loan book and
just 26 cases were more than one month in arrears (representing 1.36% of
cases).

EXCEPTIONAL ITEM
The sale of the Jubilee credit book debt has contributed GBP153,960 to profits
during the period. The Directors will continue to monitor the available
opportunities within this market place.

OTHER
INTERNET PROPOSAL SYSTEM
The company has recently employed an IT Manager with the brief of implementing
an internet based proposal system. The objective is to create a paperless
environment and to allow for the input of data just once throughout the credit
process. It is anticipated that the new system will allow volumes to double
without the need to increase headcount within the new business department.

CUSTOMER RETENTION SCHEME
We are currently piloting a new programme designed to retain existing good
Britannia customers. The programme involves contacting the customer by letter
and telephone prior to settlement of the agreement to offer further car
finance. The initial testing has been positive and we plan to achieve high
levels of customer retention in future periods.

RAPID REPORT WEB-SITE
The Rapid Report web-site (www.rapidreport.co.uk) has recently been launched
with the aim of providing corporate credit searches on UK businesses and
directors. The service will allow small to medium-sized businesses to run
credit reports and receive financial data with regard to potential customers
and suppliers. A marketing campaign for the web-site is currently underway and
we look forward to reporting on the progress in the new year.

REGIONAL / NATIONAL ACCOUNTS
Traditionally the company has concentrated on servicing the needs of small to
medium-sized motor dealers. In addition to our core business the company is now
specifically targeting a number of much larger regional / national dealer
groups. The Directors are pleased to report a successful start to this new
campaign. The company has secured a deal with one major national dealer group
and expect a number of other groups to follow suit. The Directors look forward
to reporting the positive effect on sales which will result from this new
strategy in future periods.

PROSPECTS
Managing Director - Mark Burgess made the following comments about the future
prospects of the business.

"I am pleased to report significantly improved pre-tax profits for the half
year. The group's success is attributed to the entire team at Britannia. I feel
extremely proud of the energy and commitment displayed by each team member. The
outlook for the future is positive and I am confident that the increased
momentum will continue into the second half of the year"

The directors of the issuer accept responsibility for this announcement.

ENQUIRIES:

BRITANNIA FINANCE HOLDINGS PLC Tel: 0151 639 7666
Mark Burgess

RUEGG & CO LIMITED Tel: 020 7584 3663
Brett Miller

MIDAS INVESTMENT MANAGEMENT LIMITED Tel: 0161 228 1709
Mark Sheppard

BRITANNIA FINANCE HOLDINGS PLC
UNAUDITED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS TO 31 OCTOBER 2003
6 mths to 6 mths to
Note 31 October 31 October
03 02
(GBP) (GBP)
TURNOVER 1,575,689 1,060,046
Cost of sales (628,967) (306,038)
GROSS PROFIT 946,722 754,008
Administrative expenses (533,339) (574,818)
OPERATING PROFIT 413,383 179,190
Exceptional profits on selling Jubilee Credit
Ltd loan book 153,960 -
Professional fees relating to an aborted take
over offer (25,578) -
Interest payable and similar charges (133,970) (55,530)
Interest receivable and similar income - 162

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 407,795 123,822
Tax on profit on ordinary activities 1 (109,002) (20,919)
PROFIT FOR THE FINANCIAL PERIOD AFTER TAXATION 298,793 102,903

Basic Earnings Per Share 2 1.7p 0.9p

Diluted Earnings Per Share 2 1.3p 0.7p

BRITANNIA FINANCE HOLDINGS PLC
UNAUDITED BALANCE SHEET
AS AT 31 OCTOBER 2003
6 mths to 6 mths to
Note 31 October 31 October
03 02
(GBP) (GBP)
FIXED ASSETS
Tangible assets 108,040 127,302
CURRENT ASSETS
Stock - 7,850
Debtors 6,962,339 2,816,676
Bank and cash 248,541 139,314
7,210,880 2,963,840

CREDITORS : Amounts falling due within one year 4,676,450 1,066,432
NET CURRENT ASSETS 2,534,430 1,897,408

TOTAL ASSETS LESS CURRENT
LIABILITIES 2,642,470 2,024,710

CREDITORS : Amounts falling due after one year 1,021,977 1,211,196
1,620,493 813,514
CAPITAL AND RESERVES
Share capital 191,530 167,000
Share premium 813,220 450,000
Profit and loss account 3 732,643 313,414
Adjustment on consolidation (116,900) (116,900)
1,620,493 813,514

Notes:

1. Corporation tax has been provided on the adjusted results for period. The
tax assessed for the period is lower than the standard rate of corporation tax
in the UK. The difference is explained below:
Profit on ordinary activities before tax 407,795
Profit on ordinary activities multiplied by the
Standard rate of UK corporation tax of 30% 122,339
Effects of:
Marginal relief (16,038)
Expenses not allowable for tax purposes 4,333
Capital allowances in excess of depreciation (1,632)
Current tax charge 109,002

2. Basic earnings per share are calculated by reference to the profit after tax
and the weighted average number of one pence ordinary shares in issue
throughout the period of 17,291,798 ordinary shares (2002: 10,735,025 ordinary
shares). Diluted earnings per share are based on the weighted average number of
ordinary shares and share warrants in issue during the period of 22,281,926
(2002: 13,966,781).

3. Profit and loss account reconciliation:
Balance 31 October 2002 313,414
Retained profit - 6 months to 30 April 2003 120,436
- 6 months to 31 October 2003

Sorry Homer Oliverleftwingtit is Goldfinger on here, so he is here already.


By all means keep watch, it should be interesting especially when Winterflood's create a book, that will be most welcome.

Having checked the BFH interims properly this is my analysis:


Bear points answered:

Interest rates may rise further

No problem, BFH rates can rise also to protect the 25% margin.


Customers won't be able to meet payments

Well over 75% are insured, so that only leaves 25%, & of those extensive credit checks have been carried out, so it's unlikely any major problems will occur, however if they do, then vehicles can be recovered & sold. The 0.26% bad debt record adds plenty of weight to my reasoning, compared with 9.7% at Provident Financial, which they appear pleased with....Key strong management.


They won't be able to maintain growth

Well if points 1 & 2 are valid, they will, for the foreseeable future, 9m is already loaned out, a 70% increase on last year & with profit margins rising quickly as a percentage of turnover & more in house (at much higher margins) business being written the immediate future looks very bright. I expect the banks will be very pleased with the growth & especially bad debt & I really can't see BFH having a problem increasing their loan facility to expand the loan book significantly.


So what does the immediate future hold?

My calculations are if the loan book gets to 20m, with a gross margin of 25% that should produce 5m per year, Deduct costs of say 1.5m (including any bad debts) gives pre-tax of 3.5m. If broking income runs at the current rate with no increase, (in fact we will deduct a bit) add 750,000.
That then acheives profits of 4.25m.

In summary the loan book goes up 123%
Profits (assuming 700,000 for this year to April 04)
go up 503%





This is what I have been saying about the benefit of fixed costs....It is clear to see from the example above their effect, & even if you want to allow for a little to go wrong or a few hiccups, then simply shave the profits by a percentage that suits. The profits may reach more, they may be less, but the model is clear & any Ofex investor should give Britannia serious consideration in my opinion before dissmissing it.


No wonder the market cap is 7.5m they only have to just over double the loan book & let the profits feed through & 4.25m profit can be acheived.


Btw I haven't factored in anything for the new website business or other new ventures areas.



Happy to debate any points with any poster who usually posts in a responsible, reasoned & constructive manner

edit

From : https://www.unquoted-analyst.com/default.asp

Britannia Finance announces it has reached an agreement with Barclays Bank to increase its credit facility from 6m to 10m. The loan is secured against Britannia's book debt which is 13m. Barclays will increase the amount as a proportion of the book, which means Britannia can expand the credit division faster than we had expected with a lower equity requirement. At a borrowing rate of 5.9% and a hefty average lending rate of 31%, Britannia stands to make 1m profit from the additional 4m loan.

The news will boost confidence after Managing Director Mark Burgess repeatedly offloaded shares earlier this month. He sold 690,000 shares at 36p. In light of our conversation Burgess today, we predict current year profits for year end April 2004 to be around 1 million (we had been looking for 700,000). Given today's announcement, quite plausibly this could push April 2005 profits up to 2 million and April 2006 profits up to 3million - we had been looking for 1.2 million and 1.9 million respectively. The new numbers equate to earnings per share of 10.4p in 2005 and 15.6p in 2006.

Britannia trades at 36p - 38p valuing the company at 7.1m. On a 2006 PE of 2.3, we maintain that this is good value.

Some questions that need answers, please, seems this article has "changed":

ThirdEye - 18 Mar'04 - 07:31 - 9 of 9

From : https://www.unquoted-analyst.com/default.asp

The news will boost confidence after Managing Director Mark Burgess repeatedly offloaded shares earlier this month. He sold 690,000 shares at 36p. In light of our conversation Burgess today, we predict current year profits for year end April 2004 to be around 1 million (we had been looking for 700,000). Given today's announcement, quite plausibly this could push April 2005 profits up to 2 million and April 2006 profits up to 3million - we had been looking for 1.2 million and 1.9 million respectively. The new numbers equate to earnings per share of 10.4p in 2005 and 15.6p in 2006.

BUT currently the article, which was dated 17th March, says:

The news will boost confidence after Managing Director Mark Burgess repeatedly offloaded shares earlier this month. He sold 690,000 shares at 36p. In light of our conversation Burgess today, we predict current year profits for year end April 2004 to be marginally higher than our previous 700,000 forecast. Given today's announcement, quite plausibly this could push April 2005 profits up to 1.5 million and April 2006 profits up to 2.2million - we had been looking for 1.2 million and 1.9 million respectively. The new numbers equate to earnings per share of 7.8p in 2005 and 11.4p in 2006

I think we need an explanation as the numbers have either been sharply DOWNGRADED by the authors, in a very odd manner indeed, OR were lock, stock and barrel altered by Third Eye.

Check www.finfoex.com Britannia thread all detailed in there about the changes by Unquoted Analyst, sorry not got time to type it all out....hey all date & timestamped too including edits :-)


In fact I was the one who pointed out that that UQA had their eps too high.....damn why do I deramp BFH?

So it is a major downgrade, on your say so, lol. Well that is three different forecasts from them in a matter of months.

If they take your advice instead of mr burgess's heaven help them, but hey their inexperience is showing. Forecasts are far too high that i do agree with you on, and they ignore the effect of a dreadful 20% or so dilution

I didn't say downgrade I said they had it wrong. No use trying the twisting words tactic again dear boy.

In fact that is another lie, you have no evidence at all I have said "Major downgrade"

If I accuse someone of lying I have proof. And nowhere will you find I have made that statement.


It's one thing debating, but when you have to resort to lies, doesn't it mean you are getting a bit desperate?

From, 2 million DOWN to 1.5 for 2005 and 3 million DOWN to 2.2 million for 2006, what else are we to call it.................. no twisting there.

You said it's a major downgrade on my say so, I repeat I have never said such a thing.


UQA is new, it has revised loads of articles BFH being just one. It has even forgotten to deduct tax from the eps.

You can't keep lying by saying I have said things I haven't,(not for the first time) where is your credibilty?


I understand you are getting frustrated that your negative posts have had no effect on the BFH shareprice, but please don't resort to lies.

They have cut their profit forecast from 3 million to 2.2 million, nowhere does the article say pre or post tax. It is normal for analysts to use post tax, so that is what I will read from it, that is what they must be expecting them to make. I'd love to see ALL share prices go up, but when a company is overvalued, like britannia, then it is hard to imagine how that can happen. The shares have factored in huge future growth, having risen sharply on the hype. Needs everything to go exactly right simply to justify the current share price. And I expect interest rates to really bite as a result new customers will stop appearing.
That is the downgrade as it is for 2 million, SLASHED by 25% for 2005 to 1.5 million, i am not talking about eps calculations. They have downgraded Britannia, whether you advised it or not i could not care, this is a VERY CLEAR DOWNGRADE. And by year end i exect further downgrades. And i read on another site talk of a persistent large overhang. All reasons to worry.
Company Eye is reporting that britannia "requires imminent funding" possibly just to survive. I suspect therefore they have obviously got cashflow difficulties - not unusual in this type of business.

So we are going from 300k last year to 2.2m in 2006 according to your article.

That's great, superb growth.

2.2m for an 8m mkt cap, with massive growth like that is very very undervalued.


This share will get discovered by the masses, especially when new market makers come on board in a few weeks.



Reminds me of ex-Ofex stock Telecom Plus now announcing 10m profit, who'd have thought that when they were on Ofex, This share has the sort of potential in my opinion, with their loan book giving almost a guarantee of the next three years profits, hey & if they accounted like their peers you can add between 1-2m to your profit figures.

Masses of shorters here and in Berlin I expect. Has the sort of volumes that will attract them.

And i do not accept that the downgrade goes nearly far enough. By the end of this year these numbers will have to fall further. Forecasts for what a business can achieve in 2006 are often pie in the sky anyway imho. No value left in this one, 750,000 would be a p/e of 13+ diluted. Most of the sector trades on half this.

Berlin are now shorting Ofex stocks are they?

As I said I understand you getting frustrated at your negative comments not having an effect, but isn't that a bit desperate? (It shows you have very little undwerstanding of stockmarkets)

Well just in case the cow does jump over the moon & you are correct I will be there to buy many more.

Real Small cap quality is rare & value always outs in the end :-)

Sorry no value left in this one, have to keep going back to the institutions to borrow money for working capital. At some point they are going to say enough is enough. Dilution is enormous.

Better value elsewhere, hasnt increased in price since last results.

This sector is now under enormous pressure from rate rises and we could get another, yes another the next time the BofE meet.

cheers GF.

Needs imminent financing according to Market Eye, and only scores 38 out of 50, well down the list of top Ofex stocks and not number 1 as touted by thirdeye.

cheers GF.

Needs imminent financing according to Market Eye, and only scores 38 out of 50, well down the list of top Ofex stocks and not number 1 as touted by thirdeye.

cheers GF

Actually it is even poorer, 33 GF. And yes it is a case that the company is listed as requiring "imminent" funding. I suspect they will try to get results out and then drop it on investors a few weeks after. Talk of hefty overhang down on the finny farm. I think you were confusing it with such Ofex leading lights (lol!!) as Williamson Tea, Aquasource Algae (!!), and even Glasgow Rangers FC, all of which rate higher!
Likely to struggle to win new customers as interest rates rise. Recent downgrade from UQ-A. Any growth already in share price. Expect further downgrades late this year. Storm clouds gathering, one to avoid.
J. Tullett you have a p-m.

Agreed my appologies for getting the market eye figure wrong.

Thing is aswell this one didnt go up on its last results it actually went down so why should holders still cling on to the beleive that it will rise any further.

cheers GF.

Re to UQ analyst.com edits, 17th of March to the 14th of June is a very long time for someone to let an edited piece of journalism go amiss on the site and only acknowledged when another poster (hawick) discovered it.

Been a lot of talk of ramping on this site over the last couple of days, wrongly in my opinion as I feel its been Hyping rather than the crimminal offence of ramping. This act above though!!!!!!!!!!!!!!!!!!

cheers GF